This week's research focuses on the resumption of raw material prices and the calculation of the impact on household appliance enterprises
We believe that although the price of raw materials has recently increased month on month since 22 years, which has dealt a certain blow to the expectation of profit improvement, it can be seen from the statement end of the first three quarters of 21 years that at present, most household appliance enterprises have effectively hedged the cost pressure through cost control and terminal price increase measures. At the same time, through calculation, under the price increase of 8% - 12%, most household appliance enterprises are expected to achieve year-on-year repair of gross profit margin in 22q1. Superimposed enterprises may hedge cost pressure by means of partial hedging and industrial chain price sharing. We believe that the impact of recent high cost fluctuations on the actual operation of household appliance enterprises is less than expected. Based on the high concentration of some major power industries and the relatively strong cost sharing ability of corresponding enterprises to the upstream, in order to maintain the relatively stable profitability, it is expected that the price increase of small household appliance enterprises will be greater than that of white power and kitchen power enterprises this year.
Combing: two rounds of raw material price change cycle since 2016
In this round of raw material price cycle, the starting point of the rise was in June of 20 years and reached a high level in 21q2. Among them, the price rise of copper, aluminum, plastics, hardware and glass was greater than that in the previous round of upward cycle. In the second half of 21, the prices of many core materials ushered in a second-order inflection point and entered a high-level fluctuation stage. As of March 24 this year, except that the price of aluminum / copper increased by 55.9% / + 17.6% compared with the same period last year, and the price of plastics fell by 0.5% year-on-year, the prices of core raw materials increased moderately, but enterprises still face upward pressure on costs.
Calculation: the impact of raw material price changes on the cost of household appliance enterprises
On the category side, considering the stock cycle of household appliance enterprises in one quarter, we calculate the impact of the price change of core raw materials on the overall cost of household appliances. The impact of the price rise of bulk raw materials on the cost of this round basically exceeded that of the previous round. Accordingly, the cost rise of 21q3 electronic products also exceeded the level of 17h1, among which the upward pressure on the cost of air washing, integrated stoves and civil electricians is great.
On the brand side, assuming that other factors remain unchanged, the time point when the price rise of raw materials has the greatest impact on the cost of household appliance enterprises in this round is concentrated in 21q3. Among them, Gree Electric Appliances Inc.Of Zhuhai(000651) with high proportion of air conditioners corresponds to a large rise in the manufacturing cost of household appliances, followed by Zhejiang Supor Co.Ltd(002032) with large proportion of cookware products (the main raw materials are steel) and integrated stove enterprises with sectors and hardware as the main raw materials. With the gradual downward movement of the fluctuation range of raw material prices in this round, the superposition corresponds to the increase of the base in the same period of 20 years, and the year-on-year increase of raw material prices has gradually slowed down since 21q3. It is expected that the cost transmitted to household appliance enterprises will return to a moderate increase in the second quarter of this year. However, due to the positive impact of raw material prices on the cost of various electrical products, the cost side of enterprises still faces certain pressure.
Comparison: the current round of raw material rise theory affects the actual performance of v.s. enterprise statement end
Since 20q3, most enterprises have achieved the stability of overall profitability through cost release control, futures hedging, promoting product price linkage with downstream customers and cost sharing with upstream suppliers. Because the price increase of raw materials in this round is higher than that in the previous round, the number of enterprises choosing terminal price increase is also higher than that in the previous round. For small household appliance enterprises, Xinbao is mainly engaged in OEM business, so the cost pressure is reflected earlier. For white power enterprises, Gree and hemedie account for a relatively high proportion of air-conditioning business, so their profitability is relatively sensitive to the price change of copper. Therefore, the gross sales difference and net interest rate of Meidi 21h1 decreased year-on-year. The gross sales difference of gree in the first half of the year was better than that in the same period of last year, but the decline was greater than that in the same period of history. Haier's copper and non ice washing business mainly lags behind that of Haier's copper and non ice washing business, so the price of raw materials lags behind that of Benxi's own, which is reflected in the rise of raw materials. In the kitchen power sector, the profitability of enterprises in 21q3 fell year-on-year. The main reason is that nearly 30% of the cost of kitchen power is sector, and the production cost is closely related to the price of stainless steel. Therefore, the performance of profitability is basically similar; In the civil electrical sector, the bull used futures hedging to lock the price in the early stage. With the expiration of the early contract and the increase of the execution price of the later contract, the performance end has been under pressure since 21q3.
Sensitivity analysis: changes in gross profit margin of 21q4-22q2 household appliance enterprises under different price increases
Based on the fact that several household electrical appliance enterprises have raised the price of the whole line or some products by 3% - 15% since 21 years ago, we assume that each enterprise adopts the terminal price increase of 0% / 5% / 8% / 10% / 12% / 15% and the price increase has not formed a contraction. We conduct static calculation without considering the allocation of the industrial chain, and get the results: 1) assuming that the price increase of each household electrical appliance enterprise is 5%, most enterprises in 22q2 can realize the year-on-year increase of gross profit margin; 2) Assuming that the price of household electrical appliance enterprises increases by 10%, the gross profit margin of other enterprises in 22q1 rises year-on-year except Gree and Zhejiang Supor Co.Ltd(002032) and; 3) Assuming that the price of household electrical appliance enterprises increases by 15%, the gross profit margin of seven household electrical appliance enterprises such as 21q4 Midea, Haier and boss has improved year-on-year.
Considering the high concentration of the industry pattern of most home appliance industries, and the strong bargaining power of enterprises for the upstream and the price increase ability for the downstream, in real case, the price increase corresponding to the balance point of year-on-year flat gross profit margin may be less than the calculated value. At present, the concentration of each sub category of household appliances is ranked as empty ice washing kitchen power kitchen small power. Therefore, the upstream cost sharing ability is also empty ice washing kitchen large power kitchen small power. In order to maintain relatively stable profitability, it is expected that the price increase of small household appliance enterprises will be greater than that of white power and kitchen large power enterprises this year.
Investment suggestions: we suggest to focus on 1) stocks with relatively low valuation in 18 years, such as [ Midea Group Co.Ltd(000333) ], [ Haier Smart Home Co.Ltd(600690) ], [ Hangzhou Robam Appliances Co.Ltd(002508) ]; 2) After experiencing the ups and downs caused by the epidemic in 20 / 21 years, the business fundamentals of some small household appliances have gradually returned to normal, but the valuation has been adjusted to a low level. If the income can return to growth after the abnormal base, the valuation will be repaired to some extent, such as [ Zhejiang Supor Co.Ltd(002032) ], [ Bear Electric Appliance Co.Ltd(002959) ], [ Joyoung Co.Ltd(002242) ], [ Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) ], etc; 3) The penetration rate of emerging products has increased, such as [ Marssenger Kitchenware Co.Ltd(300894) ] and [ Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) ] in the integrated stove and [ Ecovacs Robotics Co.Ltd(603486) ] and [ Beijing Roborock Technology Co.Ltd(688169) ] in the floor sweeper.
Risk warning: the calculation is subjective and there is a risk of deviation; The epidemic has expanded, and there are risks of fluctuations in the real estate market, exchange rate and raw material prices.
