How Can The White Power Leader Go Through The "Cycle Fog" Under The Mode Of Continuous Rising Raw Material Prices?

Commodity price rising tide has begun to conduct to the middle and lower reaches, and the secondary market also fluctuates.

Recently, affected by the rising prices of bulk raw materials and fund positions, the share price of household appliances continued to fluctuate greatly. In the four trading days after the Spring Festival alone, the cumulative decline of wind appliance sector was close to 10%. Among them, Baidian leader Midea Group, Gree Electric appliances and Haier Zhijia all fell continuously, which caused the market to worry about the company's performance.

The 21st century economic reporter has noticed that in the forecast of 2020 annual report, many home appliance companies have mentioned the impact of raw material prices. For example, Ashtar said that affected by the price fluctuation of raw materials, the product cost was affected to a certain extent; Hejing technology mentioned that during the reporting period, efforts were made to overcome the difficulties of labor, logistics and raw material cost increase caused by the epidemic.

How does the fluctuation of raw material price affect the home appliance industry? The root cause is that the prices of copper, aluminum, steel, iron and other bulk raw materials in the upstream continue to rise, and gradually transmit to the middle and lower reaches.

How will the rising price of raw materials affect the home appliance industry? Will price raising strategy become a common measure for household appliance enterprises? Are there any other hedging measures for household appliance leaders? What other uncertain factors will affect the trend of price rise in the household appliance industry? The reporter interviewed a number of shopping malls and a number of insiders to answer the above questions as much as possible.

Rising prices of raw materials

Chip shortage leads to price rise, paper price rise, chemical raw material rise This wave of price rise seems to affect the whole industry. At present, the price rise has spread to the household appliance industry, which makes the whole household appliance industry chain under obvious pressure.

Recently, in response to questions from investors, appliance manufacturer Changhong Meiling said, "facing the pressure brought by the increase of raw material cost and logistics cost in upstream, the company actively responded from the aspects of products, technology and market."

When facing the pressure from the cost side, vantage, one of the leading kitchen electric appliances, said frankly, "the company implements the price linkage mechanism of raw materials with suppliers, and shares the risk and cost of raw material price rise with suppliers."

Raw material procurement has always been the "big head" in the cost side of manufacturing enterprises. According to the 2020 interim report of Gree Electric Appliance, the largest transaction with its related parties is the purchase of raw materials from Haili, a compressor enterprise, reaching 840 million yuan.

In December 2020, Haili issued a price increase notice, saying that the prices of raw materials related to the compressor industry have risen sharply recently, which can not be fully digested internally at present, and there is still great pressure for the prices of raw materials to continue to rise in the future.

The price increase letter shows that the prices of major raw materials such as copper, electrical steel, aluminum, rare earth and other major raw materials have risen substantially, with the cumulative increase of 30% - 60% since April 2020.

Coincidentally, the compressor enterprises Meizhi and Lingda also issued a price increase notice, and a new price system will be implemented from January 1, 2021.

How much impact does the price fluctuation of raw materials have on the household appliance industry?

The 21st century economic report reporter learned of a material may intuitively feel the position of raw material cost in household appliances. If the cost of the refrigerator is disassembled, the cost of steel plate accounts for more than 10%, plastic accounts for 12% - 15%, and expanded material accounts for 10% - 12%. Taking air conditioning as an example, the total cost of copper, aluminum, steel, plastic and other materials is about 30%.

It can be seen from the above material price rise that the cost of products is suppressed.

Under the gradual conduction, the production enterprises also began to follow.

However, according to the investigation of 21st century economic reporter, the price rise of home appliance terminal has not been fully spread.

The reporter learned from a large-scale e-commerce that at present, no notice of price increase of relevant home appliance brands has been received.

The person in charge of a large home appliance mall in Nantong also told reporters, "at present, only Huawei mobile phones have increased prices since the end of last year, and other products have not been raised at present."

How to cross the cycle

In the face of the fierce price rise, how should the household appliance industry face?

From the point of view of institutions, the pressure may be transferred through price increase. However, the 21st century economic report reporter learned that enterprises are still relatively cautious about price raising strategies.

HALS, a listed company engaged in the production of stainless steel vacuum utensils, told reporters, "the company's procurement will make plans in advance, and there will be a certain degree of raw material reserves. If the price of raw materials rises sharply, we will consider to increase the price through consultation with customers. "

In the interview, the relevant person in charge of Supor stressed that "the rise of raw material prices will not have a very big impact on the company, and the whole industry is now facing such a situation."

In the face of a reporter's question, the relevant staff of Midea Group also said, "this round of price increase is mainly due to the rise of commodity prices. The overall price rise trend and signs have existed since the second half of last year. Judging from the company's three quarterly reports last year, the company's gross profit and net profit level have not been greatly affected at present. "

When asked whether it would adopt a price increase strategy, the person said, "the company will take into account various factors. On the one hand, the price rise of raw materials will also be considered according to its own product iteration and market conditions."

In the interview, the reporter learned that leading enterprises have more countermeasures to the rise of raw material prices.

The reporter of the 21st century economic report learned the relevant countermeasures from a leading household appliance enterprise. "For the rising prices of raw materials, the company has the ability and means to resolve it, and the available methods are more abundant. The control ability of the advantageous industries on the industry is better than before," said the relevant person of the leading enterprise. The company has also prepared the relevant raw materials in advance, and has also done hedging and price increase, which has little impact on the gross profit margin in the first quarter of this year. "

A securities company home appliance industry analysts to the reporter analysis, "raw material prices on different products have different effects. Large factories will be better to avoid, because part of the cost can be undertaken through the midstream. The terminal price will also be raised, but more performance is to push new and buy expensive, the price of the original product will not rise hard directly. "

The analyst further analyzed that "the impact of raw material price increase on the terminal will be relatively lagging. After all, the purchase order with the midstream is signed once a year, and the upstream and downstream will negotiate to raise the price only if the increase exceeds a certain extent. As far as air conditioning is concerned, prices have been raised slowly in September last year, but raw materials are not the main reason for the price increase. The main reason is that they are at the end of the price war and the rise in product prices after the new energy efficiency comes out. "

CICC is also relatively optimistic about the impact of the rise in raw material prices.

The research report points out that under the background of better market demand and better competition pattern, household appliance enterprises can generally successfully transfer the cost pressure, but there is a certain lag in the transfer process, which leads to the temporary fall of gross profit rate. From the historical experience, the rapid rise of cost has some negative effects on the household appliance leaders in the short term, but it is not significant. In the long run, it has no effect. Because of the rich types of household appliances, enterprises have flexible means of price adjustment; in addition, the company can also maintain the stability of net interest rate by improving production efficiency and controlling expenses.

However, it is worth noting that the changes in the epidemic situation still cause uncertainty to the development of the home appliance industry.

"The export of home appliances began to grow in the second quarter of last year, and the orders were constantly transferred to China. At present, the industry generally expects that the overseas epidemic situation will be under control in the second half of the year. The market is worried that the overseas epidemic situation will improve, and the orders will go back, and the prices of raw materials will be increased, so the export enterprises will be greatly affected. " The analyst said.

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