Product era of high growth or will end
Half of 2011 has already passed halfway through the year of the Twelfth Five-Year Plan. According to statistics, in the first half of 2011, the electrical industry in China still maintained a rapid growth in the total economic indicators such as production and sales, a high rate of product sales, a significant increase in import and export trade, and a good overall quality of economic operations. However, there was a slight increase in profits. Decline. According to the analysis and prediction of relevant data, the China Electrical Appliance Industry Association may conclude that the era of high growth in major electrical products may end.
Industry profit growth declines
Looking at the economic performance of China's electrical industry in the first half of the year, it presents five distinct features:
First, the increase in production and sales are all above 31%, and the characteristics of rapid growth are obvious.
From January to February of 2011, China's electrical industry accumulated a total industrial output value of 530 billion yuan, an increase of 31.60% year-on-year; industrial output value of 512.965 billion yuan, an increase of 31.91%. From January to March, the industrial output value was 885.928 billion yuan, a year-on-year increase of 32.79%; the industrial sales value was 858.749 billion yuan, a year-on-year increase of 32.53%. From January to April, the total industrial output value was 1,239.042 billion yuan, an increase of 31.56% year-on-year; the industrial sales value was 1201.212 billion yuan, a year-on-year increase of 31.86%. From January to May, the industrial output value was 1.617704 trillion yuan, an increase of 31.08% year-on-year; the industrial sales value was 1.506095 trillion yuan, a year-on-year increase of 31.12%.
From the first quarter of 2011, the growth rate of production and sales in each month exceeded 30%. Compared with the increase in the same period of 2010, from January to February 2011, the cumulative increase in the total industrial output value of the electrical industry increased by 0.51 percentage points, and the increase in sales output decreased by 1.27 percentage points; from January to March, the total industrial output value and sales value of the The cumulative growth rate increased by 2.73 and 0.67 percentage points respectively; from January to April, the cumulative increase in industrial output value increased by 1.13 percentage points, the cumulative increase in sales output decreased by 0.24 percentage points, and from January to May, the cumulative increase in total industrial output value. Increased by 0.42 percentage points, the cumulative increase in sales output decreased by 0.59 percentage points.
From the perspective of the growth rate of production and sales in the first five months of 2011, with the exception of more than 32% from January to March, the remaining months remained at 31% or more, showing rapid growth characteristics.
Second, the product sales rate was close to 97%, and the convergence between production and sales was basically satisfactory. In May, the production and sales ratio was significantly reduced in the month.
From January to February of 2011, the cumulative sales ratio was 96.79%, from January to March was 96.93%, from January to April 97.03%, from January to May was 96.68%, both were close to 97%, and the connection between production and sales was basically good; but The monthly production and sales rate for the month saw a monthly increase in the first three months, a decline in April, and a decrease to 96.00% in May.
Third, in terms of output of major products, although the high-speed growth of power generation equipment from the beginning of the year has been falling month by month but still higher than 23%, the transformer has always maintained a low growth rate of around 6%.
First, since the beginning of the year, the growth rate of power generation equipment has been very high, especially the growth rate of wind power equipment is the most eye-catching, and the increase rate has reached 60%. From the perspective of hydropower equipment, the growth rate of hydro-generator units has increased month by month; the number of turbine generators in thermal power equipment has increased. The high-speed, low-to-high, declining month by month reduced the overall output of power generation equipment from 65.28% in January to February to 23.43% at the end of May.
The second is transformers, which are the main transformers of power transmission and transformation equipment. Since the beginning of this year, the monthly output increase has been around 6%, and it has not been possible to achieve a breakthrough from the low growth status in 2010.
Fourth, import and export trade grew steadily, exports exceeded imports, and the cumulative surplus increased month by month. As import growth continued to fall, the increase in total imports and exports decreased from March onwards.
From January to May 2011, the import and export trade of the electrical industry grew steadily. The year-on-year growth of imports, exports, and imports and exports remained above 20%. Exports exceeded imports, and the surplus increased month by month, accumulating the first five months. The surplus has reached 10.761 billion U.S. dollars, an increase of 39.72% compared with the same period in 2010.
Among them, from January to February, the import value was 7.798 billion U.S. dollars, an increase of 28.15% year-on-year; the export volume was 11.128 billion U.S. dollars, an increase of 20.89% year-on-year; the import and export volume was 18.929 billion U.S. dollars, an increase of 23.78% year-on-year. From January to March, the import value was 12.741 billion U.S. dollars, up 24.28% year-on-year; the export value was 18.61 billion U.S. dollars, up 26.34% year-on-year; the import and export volume was 30.802 billion U.S. dollars, up 25.48% year-on-year. From January to April, the import value was 17.317 billion U.S. dollars, an increase of 19.86% year-on-year; the export value was 25.308 billion U.S. dollars, an increase of 26.43% year-on-year; the import and export volume was 42.625 billion U.S. dollars, an increase of 23.68% year-on-year. From January to May, the import value was 21.884 billion U.S. dollars, an increase of 19.32% year-on-year; the value of exports was 32.645 billion U.S. dollars, an increase of 25.35% year-on-year; the import and export volume was 54.529 billion U.S. dollars, an increase of 22.86% from the same period of last year.
In addition, due to the continued decline in import growth, the total import and export growth has fallen from March onwards (see Table 4 and Figure 2 for details).
5. The increase in the prices of raw materials and labor and the increase in production costs have led to an increase in profits that is lower than the increase in production and sales. However, in view of the quality of economic operation, it is still relatively good.
From January to February of 2011, the profits of the electrical industry were up by 33.54% year-on-year. From January to March, the profits of the electrical industry were up by 34.26% year-on-year, and the profit growth was higher than the increase of about 2% during the same period. However, from January to April, the industry’s accumulated total profits amounted to RMB65.901 billion, a year-on-year increase of 29.81%, and the increase in profits was about 2 percentage points lower than the increase in sales during the same period, which was significantly lower than before.
According to enterprises, the reduction in profit growth is related to the increase in production costs (including rising raw material prices, rising labor costs, and administrative expenses, financial expenses, etc.).
From the perspective of several indicator changes reflecting the quality of economic operations, profit margins, cost-cost margins, and total asset contribution rates of main business operations have increased month by month, and the liquidity turnover rate has accelerated, and asset maintenance value-added rates and assets have increased. The debt ratio is also at a reasonable level. In the first half of this year, the economic performance of the electrician industry is still relatively good.
Low price bid encourages vicious competition
China Electric Industry Association believes that in the future, the electrician industry will face the following major problems:
First of all, the rising prices of raw materials and labor and the increase in financial costs have pushed up corporate costs, and the shortage of power supply has seriously affected the normal production of enterprises.
The domestic and international macroeconomic environment has determined that China’s de facto inflation situation will not be alleviated in the near future. The higher and higher prices of raw materials in the electrical industry have occasionally declined, but the continuous increase in prices of raw materials has become an indisputable fact. Taking copper prices as an example, the weighted average price of the Shanghai Futures Exchange in June 2010 was 53,077 yuan/ton, and in June this year it was 67,700 yuan/ton, up by 27.5%. Looking at the price of cold-rolled silicon steel, the 30Q130 grade produced by Wuhan Iron & Steel was In June 2010, it was 19,800 yuan/ton, and in June this year, it was 22,000 yuan/ton, up 11.1%.
What needs attention is that due to factors such as the industrial gradient shift, the change in the employment outlook of the new-born labor force after the 1990s, and the rising cost of living in the company's location, the Yangtze River Delta and the Pearl River Delta region have caused serious work shortages, so that companies must increase their wages in a significant manner. People retain, causing the company's labor costs to soar. Some companies report that in the first half of this year alone, workers’ wages have risen by more than 20%. In the first four months of this year, in the case of an increase of 31% in the production and sales of electrical companies, financial expenses increased by 36% and interest expenses increased by 43%. Therefore, in addition to the factors of rising prices of raw materials and labor, the increase in financial expenses, especially bank loan interest, has also played a role in boosting corporate costs to a certain extent. According to the reflection of a member company in Shanghai, the problem of power supply shortage this year has been particularly serious in the Yangtze River Delta Region, and has become a prominent issue affecting the normal operation of the company.
Second, the low-cost vicious competition in the industry is serious and the market order is chaotic. In recent years, due to the market monopoly of power transmission and transformation equipment users in the project bidding process, the implementation of low-cost bids, resulting in the current power transmission equipment manufacturing industry, there are serious low-cost vicious competition. As the bid price is too low, some successful bidders even ignore the product quality, cut corners, and shoddy.
These practices will first disrupt the normal market order and undermine the fair competition environment. Second, they will cause quality problems for the project (especially the grid project). Industry experts believe that the near future must be the frequent occurrence of power grid accidents.
Again, difficulties in loans have become a bottleneck in the development of SMEs. At the end of 2010, the Central Economic Work Conference proposed that a prudent monetary policy be implemented in 2011. To cope with this policy, the central bank has increased the deposit reserve ratio of commercial banks six times this year, which has reached a total of 21.5%.
In a sense, the policy has become the primary factor constraining the development of small and medium-sized enterprises. Since the majority of electrical and electronics industry companies are small and medium-sized enterprises, this policy is not conducive to the development of the electrician industry.
It is recommended to regulate the market order
In view of the above-mentioned problems in the electrical industry, the China Electrical Appliance Industry Association recommends that relevant government departments should standardize the market order and lead the electrical industry to continue its healthy development.
First of all, it is recommended that users of power transmission and transformation equipment be more rational in the future bidding process and change the current practice of low-price winning bids. Secondly, relevant government departments should increase the penalties for those companies that disregard product quality and unilaterally pursue low-cost, low-price enterprises, so that integrity becomes the most fundamental standard for the quality of electrical products and become the most basic morality for every electrician entrepreneur. .
In short, it is hoped that the competent authorities of the government can take the work of regulating the market order of the electrician industry as a systematic project. In this process, the role of the trade association can be fully utilized through authorization and the work can be done in a down-to-earth manner.
In addition, it is recommended that the relevant government departments in the process of managing liquidity should issue targeted policies to provide necessary guarantees for liquidity loans of manufacturing enterprises, and prevent the manufacturing companies from being over-funded due to the excessive control of commercial banks.
Since the fourth quarter of last year, the country has adjusted its monetary policy, especially since the central bank has raised the deposit reserve ratio six times this year, and it has now reached 21.5%. Under such circumstances, commercial banks generally strengthen their efforts in the inspection and lending process when they lend money. As a result, it has become increasingly difficult for manufacturing companies (especially small and medium-sized enterprises) to obtain loans, which has made the company’s funds tight and difficult to operate. In order to prevent problems in the capital chain of manufacturing companies, it is recommended that relevant government departments in the process of managing liquidity be able to support the introduction of targeted policies that guarantee liquidity loans to manufacturing enterprises.
This policy should include three aspects: First, manufacturing companies should simplify procedures for loan guarantees. When necessary, local governments can set up special funds for the development of manufacturing enterprises to give guarantees; second, SMEs should obtain loans over large enterprises. More difficult, we need to pay special attention to policies, at least to emphasize that commercial banks must treat all SMEs equally; third is to study the feasibility and specific policies of developing private financial institutions as soon as possible.
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