On January 4, the first trading day of 2021, Midea Group (000333.SZ) once touched a record high of 101.95 yuan per share in the intraday trading session. The total market value exceeded 700 billion yuan, ranking 12th in the total market value of A shares. It has become the most expensive home appliance concept stock in A-shares, which has a market value of 300 billion yuan higher than Gree Electric (000651.SZ), which is the second-largest home appliance sector in terms of total market value.
At the beginning of 2020, due to the impact of the epidemic, the supply of the upstream industrial chain of home appliances was blocked and construction could not be started normally. Downstream physical stores were basically unable to open for business from the end of January to mid-April. Services such as online shopping and distribution, home appliance installation, and maintenance were blocked one by one, and the epidemic killed people. The force can be imagined. The leaders headed by Midea Group broke out collectively, showing certain market resilience and development potential.
According to the statistics of the Times Weekly, in 2020, the household appliance industry will have “sorrows and joys”, and there will be many hidden champions who “make a fortune”. Some companies have seized the new healthy consumer demand brought about by the epidemic, have achieved outstanding results in their respective categories and tracks, and some have achieved corner overtaking.
In the home appliance sector, Cobos (603486.SH), Beiding Co., Ltd. (300824.SZ), Xinbao Co., Ltd. (002705.SZ), Aucma (600336.SH), Stone Technology (688169.SH), Xiaoxiong Electric (002959) .SZ) Stock price gains are among the top, with cumulative gains for the whole year of 2020 being 336%, 305%, 163%, 131%, 121% and 115%.
Industry high growth is no longer
A number of third-party data show that the black swan in the first half of 2020 has hit the home appliance industry severely.
According to AVC data, in the first half of 2020, domestic retail sales of household air conditioners fell by 14.3% year-on-year, and retail sales fell by 26.9% year-on-year. Among them, offline channels can be called the hardest hit areas. In the first half of the year, offline channel sales fell by 31.8% year-on-year, and sales fell by 37.1% year-on-year. According to the “HVAC Information” data, in the first half of the year, the domestic central air-conditioning market fell 22% year-on-year.
According to data from the National Household Electrical Appliances Industry Information Center, among other major home appliance categories in the first half of the year, the retail sales of washing machines were approximately 29.94 billion yuan, a year-on-year decrease of 16.4%; the refrigerator market retail sales were 40.75 billion yuan, a year-on-year decrease of 11.4%; kitchen appliances Retail sales were approximately 65.15 billion yuan, a year-on-year decrease of 15.1%.
The epidemic is one of the keywords throughout the year in 2020, and its impact is undoubtedly revealed in the performance of the leader.
In the first three quarters of 2020, Midea Group’s revenue was 216.761 billion yuan, a slight drop of 1.88%; net profit was 22.018 billion yuan, an increase of only 3.29%.
In the first three quarters of the same year, Gree Electric’s revenue was 125.889 billion yuan, down 18.8%; net profit was 13.699 billion yuan, down 38.06%. As the impact of the epidemic weakened, Gree’s performance in the third quarter was restored, but it has not yet come out of a downward trend.
The golden age of high growth in the industry is gone. How to save themselves will test the operational capabilities of the giants.
Driven by the new model of live broadcast and goods delivery, Gree Electric’s new retail transformation is proceeding quietly.
Under the situation that sales in February 2020 are “almost zero”, as Gree’s living brand, Dong Mingzhu rises up and personally enters the live broadcast industry. During the recent Double 12 period, Dong Mingzhu’s 13th live broadcast continued to bring 2.5 billion yuan in goods. In the 13 live broadcasts in 2020, Dong Mingzhu brought a total of 47.6 billion yuan in goods. Despite the controversy over the order, the record clearly contributed to Gree’s overall revenue.
On December 30, 2020, Midea Group released a new business structure on its official WeChat account under the theme of “Restarting”: Midea Group’s overall business structure includes consumer electronics, HVAC, robotics and automation systems, and innovative business. The major sectors have been transformed into five major sectors: Smart Home Business Group, Electromechanical Business Group, HVAC and Building Business Unit, Robotics and Automation Business Unit, and Digital Innovation Business.
This time Midea re-division of its business, from distinguishing based on different product lines to distinguishing by different user scenarios and industries, is regarded by Midea as “subverting itself and making changes again.”
Haier, among the three giants of white power, has also ushered in a new stage of global competition and layout.
On December 23, 2020, Haier Smart Home (06690.HK) was listed on the Hong Kong stock market, becoming the first company to be listed in Shanghai, Hong Kong and Frankfurt, realizing the “A+D+H” global capital market layout.
In fact, before realizing the overall listing, Haier Zhijia (600690.SH) and Haier Electric (01169.HK) overlap in their businesses. The integration of the “Haier Brothers” has just passed a full year after Haier Zhijia issued an announcement saying that it would “discuss the privatization of Haier Appliances”.
As Haier Zhijia achieves its overall listing, key issues such as its equity, internal management, and business will be reorganized. In the future, whether the competitive landscape of the three giants of Midea, Gree, and Haier White will change, has also become the focus of the industry.
Struggling to break the game
While the epidemic has brought difficulties to the home appliance industry, it also contains new opportunities.
“Safety and health” has become a rigid demand of consumers. For a time, health appliances have also become special “wartime” necessities like masks.
Fresh air conditioners, sterilizing washing machines, clothes dryers, fresh-keeping refrigerators, dishwashers, disinfection cabinets, sweeping robots and other healthy home appliances have won the favor of more consumers under the background of the overall pressure operation of the home appliance market, showing More obvious growth trend.
Experts predict that products with the concept of healthy home appliances will usher in huge market opportunities.
“Affected by the epidemic in 2020, people will spend longer at home. On the one hand, Galanz will continue to popularize healthy appliances represented by convection ovens and steam ovens through cloud classrooms and webcasts, including usage skills, recipe cooking, etc., to carefully guide consumption. Participants pay attention to household hygiene and produce healthy food; on the other hand, they organize and train shopping guides all over the country to “be an anchor”, introduce products to customers and netizens through “screen-to-screen”, and live broadcast the goods.” Relevant person in charge of Galanz Introduced to the Times Weekly reporter.
The Times Weekly reporter learned that in order to continue to meet the new expectations of national health in the post-epidemic era, since the beginning of 2020, Galanz has strengthened the research and development of OTR microwave ovens, air frying and micro steaming ovens, retro refrigerators and other products for the North American market. In 2020, Galanz’s microwave oven exports maintained a double-digit growth. The export of electric steam ovens and bread machines increased by more than 200%, and its own brands achieved a growth of more than 300% in the TOP5 retail channels in North America.
Stone Technology, another invisible champion of the smart home appliance track, also became the “most beautiful boy” in the entire home appliance concept stocks last year with its impressive sales and capital market performance.
On January 4, 2021, Roborock Technology, which is mainly engaged in sweeping robots and landed on the capital market for only 10 months, reported closing at RMB 978.04 per share, becoming the A-share stock whose share price is second only to Kweichow Moutai (600519.SH).
Behind the steadily rising stock price is its performance beyond expectations. The financial report shows that its revenue in the first three quarters of 2020 was 2.98 billion yuan, down 1.66% year-on-year; but the net profit attributable to the parent was 899 million yuan, an increase of 54.49% year-on-year.
Statistics from the General Administration of Customs show that from January to September 2020, China has exported 100 million vacuum cleaners (including sweeping robots), a year-on-year increase of 15.8%. According to industry insiders, from a global perspective, more than 90% of the production and manufacturing of sweeping robots are concentrated in China, and overseas markets have a strong dependence on China’s supply chain. Therefore, with the surge in global demand for sweeping robots, it is difficult to change the situation in which domestic manufacturers’ orders are in short supply in a short period of time.