The red sea battle of household appliance enterprises is highlighted in the 2021 annual report of listed companies. According to the data of choice, by the end of 2021, the book inventory amount of 81 listed companies of household appliances (the total of inventory and issued goods under inventory details, hereinafter referred to as inventory) totaled about 126.7 billion yuan, an increase of about 36% year-on-year, the highest level in a decade. Among them, there are two companies with an inventory amount of more than 30 billion yuan. The total inventory amount of these two companies is about 71 billion yuan, accounting for nearly 60% of the total inventory amount of the industry.
Zhang Jianfeng, Executive Deputy Secretary General of China household appliance business association, told reporters: "the front end cannot be sold, the back end is still in mass production, and more and more goods are hoarded, which puts great pressure on enterprises. Excessive inventory will affect subsequent continuous production and form a vicious circle. Reducing inventory will become the main theme for household appliance manufacturers to improve operation quality this year."
inventory hit a ten-year high
Data show that in 2021, the total revenue of 81 listed companies in the household appliance industry was 11951 billion yuan, an increase of 17% over the previous year, but its revenue growth has been significantly lower than the overall inventory growth. In the past three years (20192021), the inventories of 81 listed household appliance companies were 90.2 billion yuan, 93.4 billion yuan and 126.7 billion yuan respectively, showing an increasing trend year by year. In 2021 alone, the overall inventory of household appliance enterprises increased by nearly 40% compared with the previous year.
"The higher growth of inventory of household appliance enterprises is usually related to the booming production and sales and slow-moving sales. It may also be because enterprises speed up production under the rising price trend of raw materials." Wang Jiyue, a former Huatai co sponsor representative and senior investment banker, told the Securities Daily.
However, according to the report released by the Electronic Information Industry Development Research Institute, in 2021, the scale of China's home appliance market was 881.1 billion yuan, a year-on-year increase of 5.7%. However, the home appliance market is still under pressure, overseas sales are also gradually falling, and the prosperity of production and sales has not appeared.
"The high inventory in the home appliance industry is mainly due to the slow sales of products under the downturn of market demand. During the epidemic, the transportation and sales channels were blocked, but many home appliance enterprises did not give up their production capacity and the pull of the sales side did not keep up, resulting in a large backlog of goods in the warehouse." A person in charge of a household appliance enterprise disclosed to the reporter of Securities Daily.
Looking at the inventory data over the past decade, the inventory of listed household appliance companies has gradually increased. Last year, its inventory scale doubled from 53.9 billion yuan in 2016, at the highest level in history.
In this regard, Liu buchen, former chief consultant of Kuafu enterprise management consulting agency, believes that: "The increase of household appliance inventory year after year is due to both the enterprise's own factors and the general environmental factors. Most enterprises formulate growth plans every year to directly promote the growth of revenue, which is the source of high inventory. Since 2019, the sales volume of mainstream household appliances has experienced negative growth year after year, and the inventory outflow has narrowed year by year. Especially last year, enterprises increased production sharply, but the export volume fell suddenly, and the demand in the Chinese market is sluggish, resulting in The inventory of home appliance enterprises has surged unprecedentedly. "
According to choice data, 97% of listed home appliance companies have increased their inventory. Among them, there are 2 companies with inventory of more than 30 billion yuan, 4 companies with inventory of more than 5 billion yuan and 14 companies with inventory of more than 1 billion yuan. The inventory of head enterprises occupies a large volume.
From the specific performance of the company, last year, Ecovacs Robotics Co.Ltd(603486) , Zhejiang Sanhua Intelligent Controls Co.Ltd(002050) , Xiamen Comfort Science & Technology Group Co.Ltd(002614) inventory increased relatively rapidly, increasing by 100%, 50% and 47% respectively over the previous year.
Pan Helin, executive director of the Digital Economy Research Institute of Central South University of economics and law, believes that from the inventory composition, it can be seen that the household appliance industry is in the current situation of Red Sea competition, and there is a situation of head concentration and diversification of small household appliances. Large enterprises should continue to adjust the structure, digest inventory, and small enterprises promote the promotion of emerging categories with better sales.
From the four mainstream categories, the inventory of listed companies of white appliances was 78.2 billion yuan last year, up 40% year-on-year; The inventory of black household appliances was 12.4 billion yuan, a year-on-year decrease of 3%; The inventory of small household appliance enterprises was 10.6 billion yuan, up 45% year-on-year; Kitchen electricity inventory was 2.9 billion yuan, up 24% year-on-year. Among them, the inventory volume of white household appliances is the largest, accounting for about 62%, and the inventory growth of small household appliances is the fastest.
At present, the traditional mode of pressing goods has been difficult to continue. Household appliance enterprises need to improve the channel structure through a series of channel changes. "In addition to clearing inventory in the promotion season, enterprises should strengthen fine management, reduce intermediate links and increase warehousing operation efficiency." Yang Chao, director of air conditioning products of Aowei cloud network's household appliances division, said.
high inventory occupies funds or erodes profits
The substantial growth of inventories has also "dragged down" the cash flow and net profit of some listed companies to a certain extent.
Judging from the net cash flow generated from the operating activities of 81 listed companies of household appliances, 18 companies had negative values by the end of last year, of which Whirlpool (China) Co.Ltd(600983) was - 340 million yuan, Foshan Electrical And Lighting Co.Ltd(000541) was - 277 million yuan and Shannon Xinchuang was - 110 million yuan.
Foshan Electrical And Lighting Co.Ltd(000541) 2021 financial report shows that the net cash flow generated by the company's operating activities during the period was -277 million, a year-on-year decrease of 170.16%. This is also the first time that Foshan Electrical And Lighting Co.Ltd(000541) has had negative cash flow since it was listed in 1993.
For the decrease in this data, Foshan Electrical And Lighting Co.Ltd(000541) explained that it was mainly due to the increase in taxes paid due to the rise in the price of raw materials, the payment of cash and the sale of some shares.
The analysis of the financial report shows that the increase of its inventory is also an important factor leading to the significant decrease of the company's net cash flow. The amount of inventory will increase from RMB 546.3 billion in 2020 to a certain extent. At the same time, Foshan Electrical And Lighting Co.Ltd(000541) the cost of lighting appliances and other raw materials reached 3 billion yuan last year, a year-on-year increase of 34.54%. Last year, the company's net profit was 250 million yuan, a year-on-year decrease of 21.09%.
Kuang Yuqing, founder of lens research, said that while the inventory of household appliance enterprises increases, the purchase of raw materials will also increase significantly. If the cost of raw materials rises again, it will directly lead to the accelerated outflow of enterprise operating cash and affect the level of net profit.
"Home appliance enterprises should pay close attention to cleaning up the old inventory. If it is difficult to clean up, they should make provision for inventory impairment in time. Otherwise, the capital will be seriously occupied by the inventory and the capital turnover rate will decline, which will lead to the low overall efficiency of the enterprise and erode the profits." Pan Helin said that in seeking product increment, home appliance enterprises can combine it with digital intelligence technology to launch an overall smart home solution and form differentiated competition.
reporter's observation: household appliance enterprises have high inventories. Should raw materials be hoarded
Not only the inventory of commodities, but also the inventory of raw materials hoarded by listed household appliance companies is also at a high level.
According to choice data, the inventory amount of raw materials of 81 listed household appliance companies in 2021 totaled 47.7 billion yuan, an increase of 32% over 36 billion yuan last year, the highest in the same period in history in recent ten years.
Although China's sales demand is sluggish, affected by the shutdown of some overseas local factories, the export orders of household appliances soared in 2021, and even became a bright color in the household appliance industry. According to the data released by the General Administration of customs, in 2021, China's exports of household appliances reached US $98.72 billion, a year-on-year increase of 22.3%. According to the statistics of consulting agency GfK, under the complex environment, China's home appliance industry has overcome the difficulties of trade protection, logistics and rising material costs, and the export scale and growth rate have reached a new high in recent ten years.
However, due to the overdraft of overseas consumer demand in advance, combined with the high maritime freight and the shortage of transport capacity, the export situation began to be severe at the end of last year. As most home appliance enterprises were optimistic about the global market forecast last year, they hoarded in advance, leaving their raw material inventory at a high price.
In addition to the "Deviation" in the export prediction, the rising price of raw materials has made home appliance enterprises generally adjust the sectorau material inventory to deal with the risk. However, with the repeated epidemic, the decline of the real estate industry and the obstruction of logistics, the market has fallen into a downturn again, resulting in a large hoarding of raw materials, which is difficult to "show their strength" at the production end.
Even though foreign home appliance manufacturers are highly dependent on China's home appliance manufacturing, the situation outside China is complex and changeable. Home appliance enterprises also need to improve the flexibility of inventory control, reasonably adjust the inventory level of raw materials and enhance their pressure resistance.
From the above series of data, it can be seen that high inventory has become a common phenomenon in the home appliance industry. At present, the head household electrical appliance enterprises have a large volume and large scale, and occupy a large scale in the inventory, but their turnover and operation ability is stronger. Reasonable inventory is a powerful weapon to ensure market competition, while small brands have a small volume and relatively weak anti risk ability. If the inventory is too large, it is more likely to have capital turnover problems. Therefore, inventory is not suitable for excessive hoarding of goods or raw materials.
Although at present, the modest increase in inventory of household appliance enterprises will help them deal with the risk of raw material price rise, shutdown and shutdown and adjust the product structure to a certain extent, the sharp rise in raw material inventory will also lead to a large amount of operating cash outflow and increase financial risks.
The core task of traditional household electrical appliance enterprises is still to destock and further realize the digital intelligent transformation of household electrical appliance products, while the emerging small household electrical appliance enterprises mainly focus on enhancing liquidity and exploring new markets. The product iteration is rapid, and the inventory is not easy to be too high.
