TWO Chinese white goods giants reported positive financial results for the first half of this year despite of the tough export environment and rising material costs.
Zhuhai-based Gree Electric Appliance Inc, China's biggest household air conditioner maker, said its net income jumped 104.67 percent to 1 billion yuan (US$146 million), or 1.20 yuan a share, compared with last year, the company said in a statement to the Shenzhen Stock Exchange yesterday. Its revenue grew 24.7 percent to 25 billion yuan, the statement said.
"The company's sales growth was slower than our expectation as its second-quarter revenue only gained 9 percent, but its profit kept a robust growth powered by advantages in channel resources," said Fu Juan, an analyst of Shenyin & Wanguo Securities Co.
Despite the climbing steel price, Gree's gross profit margin gained 0.1 percentage points in the second quarter from the first quarter thanks to its optimized product structure.
"The company's new products enjoyed high gross profit margin, which secured a stable profitability," Fu said.
"Gree's domestic sales rose 30 percent in the first half, outweighing the 15-percent export growth because of the slowdown in overseas markets."
The company has invested US$625,000 in a production base in Vietnam for a 20-percent stake, and the base, capable of producing 200,000 air conditioners annually, was put into use in April, it said in the statement.
Guangdong Midea Electric Appliances Co jumped 6.94 percent yesterday to 8.78 yuan a share after disclosing that its first-half profit gained 39.42 percent on a yearly basis.
Midea's net income rose to 991 million yuan, or 0.52 yuan apiece, and sales gained 43.5 percent to 27.5 billion yuan, the company said in a statement to the Shenzhen bourse.
Its sales of refrigerators and washing machines accounted for 15 percent of its total revenue, compensating for the slower growth of air conditioners.
Midea's domestic sales grew 53.47 percent to 17.8 billion yuan and sales in overseas markets rose 28.22 percent to 9.68 billion yuan.
"The slowed growth of European and United States economy decreased export demand, which is a major challenge Midea would meet in future development," Greatwall Securities Co analyst He Qifeng said.
The yuan has accelerated about 6.5 percent in the first half of this year, triggering widespread worries among exporters and partly caused the bankruptcy of 67,000 domestic companies in the first half. Export growth in the first half of this year slowed to 21.9 percent from 27.6 percent a year earlier.