China's domestic air conditioners' internal reductions continued to grow in August after the continuous increase and slowdown, and gradually expanded to 8% in September. In the current situation where there is no obvious external positive factor, this data is really surprising. What contributed to the current growth? Can this kind of restorative growth be sustainable? What kind of development trend will be presented in the fourth quarter of 2019? The driving force behind 8% From January to April, there was a wave of “Xiaoyangchun” growth. After May, under the pressure of weak demand and high inventory, the growth rate narrowed rapidly. In the peak seasons of June and July, the demand did not improve due to the lack of weather. In the case of an alternating amplitude change occurs.
The three-month-long year-on-year decline has once caused the industry's concerns about the second half of the market to be rampant. In view of the unexpected increase in the first half of the year, some people have pessimistically predicted that the factory can rest in the second half of this year. However, the year-on-year decline was reversed in August, and the domestic sales growth rate in September even reached the highest in the year. What are the driving forces behind growth? The first is directly related to the base of the same period last year. Domestic sales in September 2018 fell by 23% year-on-year. The space for further decline on this basis has been very limited. Therefore, although it increased year-on-year in September this year, it is in line with the size of 2017. The ratio is still down 7%. Secondly, although the retail of air-conditioning terminals this year is sluggish, the overall retail scale of online and offline has not shrunk significantly under the higher base of last year. The demand base is relatively stable, and the situation of the engineering machine market has improved slightly. Demand is the most critical factor in the production and shipment of air conditioners.
Fourth quarter development forecast In the first three quarters of 2019, the total domestic sales of household air conditioners in China was 75.52 million units, a slight decrease of 0.7% year-on-year. Does the substantial growth in September have room for sustainable growth in the fourth quarter? When can it last? We also use data to judge: In the second and third quarters of 2019, domestic sales and shipments continued to decline year-on-year. In the fourth quarter of 2018, the overall domestic sales volume decreased by 10.3% year-on-year, which is also a large base callback. In addition, we must also consider the scheduling trend of the upstream and downstream industries of air conditioners. According to the online monitoring of the industry, the production of air conditioners and rotor compressors has shown an increasing trend in October and November 2019, especially the growth rate of compressors. Both are in double digits.
Significant differences in brand development Over the years, the stable brand structure of the air-conditioning industry has undergone many changes in 2019. The difference in strategic direction and competitive means between enterprises has led to a completely different performance of brand development. Beauty is undoubtedly the most eye-catching brand this year, and Oaks has also achieved a counter-market growth. More growth is focused on a few brands, and it is the growth of a few brands that has largely affected and changed the general trend of industry development. Take the cumulative domestic shipment data as of September 2019. If you remove Midea and Oaks, the cumulative growth of other brands is -8.2% instead of the current -0.7%. If you look at the September data alone, and remove the two, the total shipment size of other brands is a year-on-year decline of -6.2%, rather than a positive growth of 8.1%. Whether the future brand competition will undergo more changes is still uncertain. The strategic direction of the company is constantly adjusted and optimized according to the situation. However, according to the financial report data disclosed by the listed company, the comprehensive large enterprise is in the product system. In addition to these, the channel model is also an important competitive factor in terms of construction and development.
