Economic Operation Analysis of Low-voltage Electrical Appliance Industry in the First Half of 2011

Introduction: The low-voltage electrical appliance industry has entered a period of rapid development, especially in the year of the “Twelfth Five-Year Plan” in 2011. Enterprises should use the industry’s “Twelfth Five-Year” development plan as a guide, and must lead the company in a comprehensive way by using technology leadership. Therefore, the company's own management standards, product quality and market competitiveness have been rapidly improved.

In 2011, half of the time, in order to objectively reflect the production and sales status of the low-voltage electrical appliance industry and the trend of the second half of the year, the branch conducted a survey and analysis of the production and operation of major members of the industry, and put forward suggestions for the development of the industry in the second half of the year.

First, the first half of the economic operation analysis

According to the survey results, the total production and sales of the industry and the sales volume of major products in the first half of the year increased compared with the same period of 2010, and the major production enterprises in the industry continued to maintain steady growth. The growth in production and sales of many enterprises exceeded 30%. In terms of profit indicators, compared with the first half of last year, the number of corporate profit losses has been decreasing. Many companies in the industry have tapped their potentials internally, reduced energy consumption, and controlled cost management, so that the company's economic returns have been effective and its profits have grown steadily. However, at the same time, we also found that a considerable number of small and medium-sized enterprises in the industry are affected by the increase in raw material prices. As a result, the cost of products has increased, the profit margin has become smaller, and sales growth has become negative. The profits and economic benefits of enterprises have been affected.

According to analysis, the impact of raw material prices in the industry is still relatively large. According to the Shanghai Futures Market, the futures electrolytic copper price has been at a high price of over 70,000 yuan/ton from the beginning of the year to May, and reached 75,000 yuan/ton in May. The year-on-year increase was 29.31%. The price of silver also rose from 6,580 yuan/kg at the beginning of the year to 100,095 yuan/kg in April, an increase of 145.32% year-on-year. As the prices of major raw materials are still at high prices, the production costs of a large number of small and medium-sized enterprises and the increase in interest on bank loans have caused the increase in corporate financial costs. In addition, for the sake of orders, the situation of price competition has continued for several years. These unfavorable factors have affected the economic benefits of most SMEs in the industry for many years. Our analysis suggests that due to the dramatic increase in product costs, it is difficult to increase the sales price of its products.

Especially in the medium and low-end product markets with low technology added value, price reductions and marketing (including price wars for homogeneous products, etc.) are quite common. The main factors are low-voltage electrical technology content is not high, many SMEs are still producing low-end high-consumption products, lack of economies of scale and core competitiveness, leading to corporate profits and losses. In addition, many small and medium-sized companies can't get rid of the methods of reducing production and raising prices (or reducing prices). This kind of short-term behavior is difficult to get rid of the decline in corporate profits and economic losses, which has caused the industry's enterprises to attach great importance to it.

Reflecting from the survey, companies are generally affected by the price of raw materials, resulting in increased product costs, especially for small and medium-sized enterprises with labor-intensive and low added value, and increasing labor costs and additional wage costs. The profitability of enterprises has further narrowed. There are still a large number of SMEs, under the influence of rising raw material prices and industry competition, they are still facing a situation of cutting production or stopping production. According to our understanding, these enterprises are the first generation of products that have long been lacking in technological transformation, single products, and even producing low-performance and high-consumption materials. These companies are still struggling in the fierce market competition and deserve our attention.

In the first half of the economic operation, we also found that many companies in the industry have optimized the product flow through internal digging, improved the technology, reduced the cost of product management by focusing on energy saving and consumption reduction, increased the technological upgrading and transformation of equipment, and developed new products, strengthening Cost management and cost control work actively take measures to improve product cost-effectiveness, expand market share, and other aspects to actively fight for initiative, it is worthy of industry companies to promote.

Based on the above, we believe that in the first half of 2011, the total production and sales volume of the industry as a whole has maintained a steady growth compared with the same period of last year, and the profit has also grown to varying degrees compared to the same period of last year. With the rapid development of China's power industry and the full implementation of the smart grid, the industry is facing new opportunities and challenges, the survival of the fittest, the reorganization of resources, it should be worthy of close attention of all industries. Therefore, existing companies should correctly target their own development goals. Most of the companies in the industry should focus on industrial restructuring and asset restructuring. Second, under the new situation of the "Twelfth Five-Year Plan", enterprises should take product restructuring as an urgent task. It is forbidden to repeat the production of middle and low-end products and rely on price and sales to carry out disorderly competition, and even use counterfeiting to obtain profits. Third, a high starting point for technological transformation and improving the manufacturing level of enterprises are the basis for new product development and market development, and they are also the main signs of the development potential of enterprises. Fourth, we must realize modern enterprise management and continuously create a management system that suits the characteristics of our company.

Second, the development of the second half of the forecast

According to the survey, most companies in the industry are confident of the economic operation in the second half of the year. Overall, the economic development trend is clearly better than the first half of the year, showing an upward trend. Comprehensive industry surveys, we analyzed that:

1. With the rapid development of electric power in our country, the prospects for the sustainable development of low-voltage electrical appliances are promising.

In 2011, China’s power infrastructure will continue to maintain a large scale of investment. The nation’s infrastructure will increase by 90 million kilowatts, and the installed capacity of the country by the end of the year will exceed 1.04 billion kilowatts. Production of such power generation equipment will inevitably require corresponding low-voltage electrical components. In addition, the new round of rural power grid transformation and upgrading project, and the next three years rural power grid transformation investment 300 billion yuan of new initiatives, the future development of the low-voltage electrical industry is a great opportunity. The key still depends on whether the company can cater to the market's much-needed products and product quality stability, operational reliability, etc. in the independent innovation products. From the survey of major companies in the industry, the sales output value in the second half of the year is promising. It is estimated that the overall sales of low-voltage electrical appliances in 2011 will continue to increase compared to 2010, and will be about 45 billion yuan. Corporate profits will also grow steadily and moderately.

2. The trend of rising raw material prices will continue.

It is expected that the price of raw materials in the second half of the year will continue to hover around 70,000 yuan per ton, and the silver price will be around 8,500 yuan per kg. With the arrival of the high-cost era, the rise in the price of production factors has become an inevitable trend, coupled with the increasing demand, so it is unrealistic to expect raw material prices to return to their original levels. For enterprises to order, product price competition will continue. At the same time, factors such as the increase in the production costs of corporate products and the increase in bank loan interest rates will increase the financial costs of companies and other factors. These unfavorable factors are still an impact on the economic efficiency of most SMEs in the industry and should arouse the concern of the company. It is hoped that enterprises will intensify their efforts in standardizing production and sales practices, advocating fair competition, winning brands, winning quality, adjusting industrial structure, developing new products with independent intellectual property rights, and starting from a high starting point to carry out technological transformation. Opportunity to promote the healthy and sustainable development of the company.

3. Market competition is still fierce.

Throughout the industry, high-end products or differentiated products and companies with independent intellectual property rights are few, and technology and production equipment are relatively backward. Most companies only maintain homogenization and low-level repetitive production, which directly leads to fierce competition. price competition. In terms of analysis of the actual situation of industrial enterprises, the fundamental way out lies in the hard work, adjustment and optimization of product structure, speeding up the transformation and upgrading, and seizing new markets. It is worth mentioning that improving independent innovation capability is a central link in advancing structural adjustment and transforming the mode of growth. We believe that companies should foster new competitive advantages by increasing their investment in basic research and key common technologies; vigorously developing advanced equipment manufacturing; cultivating and developing strategic emerging industries; accelerating the development of producer services and extending the value chain. It is very important to have independent intellectual property rights based on independent development. And there are major breakthroughs in product performance, structure, miniaturization, features, and functions. In addition, in the development of new products, we must actively target cutting-edge technologies, increase research and development efforts, further increase technological content, develop from labor-intensive to technology-intensive, and strive to establish itself in high-end markets at home and abroad. Therefore, only by increasing the technological strength, expanding the production scale, and improving the quality of products, and comprehensively upgrading their own brand value, can they obtain the higher opportunities in the high-end market of low-voltage electrical appliances and international large-scale enterprises, so that the enterprises are in fierce competition. Market competition is invincible.

4. To firmly grasp the opportunities for smart grid development In 2011, the smart grid will enter the full implementation stage with a total investment of nearly 4 trillion yuan. These all show once again the determination and will of the Chinese government to rationally use resources, vigorously promote energy-saving and emission reduction, and actively develop a low-carbon economy. At the same time, the investment in power grid construction will also enter a period of rapid growth. The long-term development potential of the primary equipment sub-sector and secondary equipment sub-sector will be huge. Therefore, industry companies must firmly grasp the opportunities for smart grid development, and with the development of smart grid, companies must clearly realize that the development of low-voltage electrical appliances in the future must first be considered from the perspective of system development. And we must work hard on everything from the system to all power distribution, protection, and control components, from strong to weak power solutions.

In short, the low-voltage electrical appliance industry has entered a period of rapid development, especially in the year of the “Twelfth Five-Year Plan” in 2011. Enterprises should use the industry’s “Twelfth Five-Year” development plan as a guide, and must lead the company in a comprehensive way by using technology leadership. Therefore, the company's own management standards, product quality and market competitiveness have been rapidly improved. It is necessary to strictly control business risks and strive to maintain a stable operation of production and operations; strengthen cost control, and strive to reduce operating costs of enterprises; strengthen capital management and enhance the ability to resist risks; open up markets and actively expand the company's living space; strengthen fine management, and solidly promote potential expansion. Effective work; strengthen scientific and technological innovation, improve core competitiveness; optimize the adjustment structure, and comprehensively promote industrial upgrading and other specific work. At the same time, we must strive to achieve a new generation of development products, product performance and functional breakthroughs; product structure breakthroughs; product design concept of a breakthrough. To maintain appropriate performance indicators, significantly reduce the cost of product manufacturing, product development towards miniaturization, energy conservation and material conservation. It also requires the elimination of low-performance and high-consumption products in the first-generation and second-generation products as soon as possible. We must always pay close attention to the development trend of smart grids and the development trend of product standards, and strive to combine the characteristics of the company to formulate goals that are suitable for the company's own development and achieve sustainable development.

Finally, we sincerely hope that all enterprises in the industry will grasp new opportunities and meet new challenges. In the opening year of the “Twelfth Five-Year Plan”, we will use science and innovation as the driving force to overcome difficulties and make progress. Together to promote low-voltage electrical products to intelligent, communicable, networked, highly reliable, green environmental protection and the industry's healthy, sustained and rapid development to contribute.