Appliance industry boom picked up moderately

Since 2013, the prosperity of the home appliance industry has continued to increase, and the production and sales of major home appliances have steadily increased. Affected by the New Deal's withdrawal from subsidies, sales in May showed a swift growth. After the full withdrawal of stimulus policies, the year-on-year growth in sales in the third quarter fell slightly, still maintaining a high growth rate since 2013, and the overall operation of the industry maintained a steady growth trend.

In 2014, as the external economy continued to stabilise and the product structure was further upgraded, the business climate was expected to maintain a steady upward trend. Among them, the black-box industry is supported by domestic demand for updates, but it is expected to increase slightly but the space for improvement will be relatively limited. The white-electricity industry will benefit from the continued recovery of real estate, in-depth urbanization, and a vast amount of space in the rural market to enhance the space, which is expected to maintain rapid growth. From the perspective of supply, the investment in fixed assets in the industry is not expected to be strong, the investment behavior of enterprises is more cautious, inventory is at a relatively low level, and there is little pressure on the supply of the industry. The prices of raw materials such as steel, copper and panels are expected to continue to operate at low levels; labor costs continue to rise strongly, but there is limited impact on companies and the overall cost pressures of the industry are controllable. At the policy level, the leader policy is expected to be launched in the near future. However, due to the limited number of companies, the industry will gradually return to the origin of market development. In terms of competition, products developed by new entrants in the smart TV market are listed on the market and impact the traditional TV market at a relatively low price. At present, the future development trend of industry competition is not yet clear, but the overall situation will intensify competition and impact the existing pattern.

In terms of finance, with the steady recovery of industry prosperity, industry revenue and profitability rebounded rapidly, cash flow conditions improved, industry investment growth rate rebounded slightly, but the overall leverage ratio was not further amplified, and the industry’s short-term debt repayment indicators were better. At the same time, long-term debt repayment has been improved, and the debt-recovery capability of white power companies is better than black power. In the future, with the industry continuing to recover, the financial performance of the household appliance industry is expected to continue to improve.

In terms of differentiation of credit quality, compared with the black-box industry, White-Electricity has a broader room for growth in demand in the future, and the home appliance industry will continue to exhibit the pattern of “white strong and weak” in the future. In addition, with the emergence of emerging online channels, companies with strong online + offline channel integration capabilities will also be expected to maintain relatively good sales and earnings, and support their credit levels.

On the whole, the fundamental factors supporting the development of the household appliance industry have not changed. The impact of the three major home appliances policies on the industry after the withdrawal of the industry gradually narrowed, and the degree of industry recovery was better than the general expectation at the beginning of policy withdrawal. In the next 1-2 years, the implementation of a wide range of stimulus policies is not expected to be strong. The subsidy of the New Deal and the improvement of energy efficiency standards will effectively promote the upgrade of energy efficiency of products. The industry will gradually return to the origin of market development. The industry is expected to recover moderately, and credit quality is expected to be maintained. China Bonds Credit maintains the "general" assessment of the credit quality of the home appliance industry, and the industry outlook remains "stable."