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Debon Securities--Home Appliances Industry Weekly: Trade wars are rising again, white electric kitchen appliances are more stable [industry research]

Click volume:Number of reply: 0Report Peony burst Published on 2019-05-14 10:20:17

[Summary of research report content]

    This week, the risk of trade wars has risen again. The US intends to raise the tariff of 200 billion US dollars of Chinese exports to the United States from 10% to 25% on May 10.

    From the perspective of production and sales, China is the world's largest producer of home appliances, and the United States is China's largest exporter. In 2018, China's exports of household appliances reached US$75.1 billion, a year-on-year increase of 9.6%. Among them, exports of household appliances to the US reached 38.2 billion yuan, up 4.9% year-on-year, accounting for 23%. The United States is China's largest exporter. Air conditioners, refrigerators, washing machines, televisions, etc., which are exported to the United States, account for 7%, 9%, 1%, and 35% of the total output, respectively. Microwave ovens, fans, and vacuum cleaners accounted for 23%, 24%, and 44%, respectively. From the dependence of export volume on production, white electricity has a low dependence on US exports. The United States is the second largest consumer of electricity in the world and has a high dependence on Chinese household electrical appliances. US household appliance consumption accounts for about 18% of global home appliance consumption, second only to China's 30%, but production accounts for only about 2% of global home appliance production. The annual total import value of air conditioners, refrigerators and washing machines in the United States is about 20 billion US dollars, of which China contributed about 5 billion US dollars, accounting for about 25%, ranking second among all trading countries.

    From the perspective of individual stocks, listed companies' export sales accounted for a relatively low proportion, and their earnings were weak. Overseas bases could be transferred. Overall, performance was less dependent on the US. (1) White electricity sector: The proportion of export sales is low, and the profit mainly depends on domestic sales. And overseas production bases can be transferred. Gree Electric has a Brazilian production base, and Midea Group has a Southeast Asian production base. The two exports to the United States account for only about 5%. After Qingdao Haier acquired GE, its domestic exports to the US accounted for less than 1% of revenue. In addition, the gross profit margin of export sales is only half of that of domestic sales, and the company's earnings still rely mainly on the domestic market. (2) Black power sector: The proportion of export sales is high, but overseas production bases can be circumvented. TV sets and set-top boxes have not appeared on the tax collection list, and the impact on the performance of listed companies is relatively limited. At the same time, overseas production bases are being circumvented. (3) Kitchen appliances sector: The proportion of export revenue is low. The company is mainly domestic sales, the export revenue of boss electrical appliances is only 0.4%, the export of Vantage shares is 2.3%, and the export of Wanhe Electric is relatively high, 33%. It accounts for a high proportion of the US export market, but its main products The water heater does not appear on the tariff list. (4) Small household appliances sector: Foreign sales account for a relatively high proportion. The customs declaration is based on FOB mode, and taxes and fees can be passed on to buyers. The export of small household electrical appliance companies accounted for a relatively high proportion. Among them, Xinbao, Laike Electric and Rongtai Health started their OEMs, and their current export sales accounted for about 84%, 66% and 41%. Although the FOB declaration is theoretically taxed and passed on to the buyer, the order volume will still be affected. Overall, white electricity and kitchen electricity are less affected by trade wars than other sub-sections, and their profitability is relatively stable.

    Risk warning: macroeconomic downturn, real estate continued to slump, industry competition intensified, export trade risk

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