Car Phone Wireless Charging Coil,Circuit Board Induction Coils,Intersection Induction Coils,Induction Coil Set Shenzhen Sichuangge Magneto-electric Co. , Ltd , https://www.scginductor.com
The first three quarters report card issued black and white power "two heavy days"
Since November, several home appliance companies have released their financial reports for the first three quarters of 2017. While some are celebrating their results, the most impressive performances have come from the "White Power" giants—Gree, Haier, and Midea. These three companies have all exceeded the 100 billion yuan revenue mark in the first nine months of the year. In contrast, the performance of black power brands has been less impressive, with some TV manufacturers experiencing sharp declines in profits.
The White Power Trio: Breaking Records
According to public data, Midea Group reported an operating income of 186.95 billion yuan in the first three quarters of 2017, a year-on-year increase of 60.6%. Its net profit reached 14.998 billion yuan, up 17.1% compared to the same period last year. Haier achieved 119.19 billion yuan in operating income, a 41.27% increase, and a net profit of 5.68 billion yuan, rising by 48.48%. Gree's operating income was 110.875 billion yuan, up 34.51%, with a net profit of 15.46 billion yuan, reflecting a 37.68% growth.
Each company has its own strengths. Midea leads in total revenue, Gree tops in net profit, and Haier shows the fastest growth in net profit. This success is closely tied to their expansion strategies and internal development models.
After acquiring KUKA (a German robotics company), Midea has transitioned into a group focused on HVAC, consumer electronics, robotics, and automation. The KUKA division now accounts for about one-ninth of Midea’s overall revenue, and this share is expected to grow in the future. For 2017, Midea is projected to exceed 200 billion yuan in annual revenue for the first time, a clear result of its aggressive expansion.
Haier also saw strong growth across multiple segments. Refrigerator and freezer sales increased by 34%, washing machines by 41%, air conditioners by 61%, and kitchen and toilet products by 76%. The company continues to dominate in refrigerators and washing machines, while air conditioning and home appliances have also seen rapid growth. In contrast, Gree remains heavily reliant on air conditioning, which contributes the majority of its revenue. Its return on net assets reached 25% in the first three quarters.
Interestingly, the appliance industry is full of shifting alliances. Previously, Gree and Midea were involved in patent disputes over air conditioning technology. Recently, however, Gree took the lead in forming the first intellectual property alliance in China’s air-conditioning industry, joining forces with Haier, Midea, Oaks, Chigo, TCL, Changhong, Galanz, and Hisense.
Black Power Struggles
While the white power giants are thriving, the black power brands are struggling. For example, Changhong reported an operating income of approximately 54.448 billion yuan in the first three quarters, up 12.27% year-on-year, but its net profit fell sharply to just 167 million yuan, down 67.97% compared to the same period last year. Skyworth, on the other hand, saw a 20.98% rise in operating revenue to 5.143 billion yuan, but its net profit dropped by 85.90% to 48.914 million yuan.
Changhong cited rising raw material and labor costs as the main reasons for the decline in net profit. Additionally, exchange rate fluctuations and reduced non-recurring gains contributed to the drop. Both Changhong and Skyworth have pointed out that the rising cost of panels and memory chips has significantly impacted their operations.
The price of TV panels has been increasing since the end of 2016, and domestic manufacturers have gradually moved away from price wars. However, panel prices have not dropped significantly after peaking in the third quarter, and memory prices continue to rise. As a result, TV prices are being pushed higher.
This trend poses a challenge for consumers who have become accustomed to lower TV prices. High prices may hinder upgrades and make it difficult for TV companies to find a quick turnaround in the short term.