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Electrical Appliances

Sector China

March 2014



Table of Contents

I. Sector Overview

1. Sector Highlights

2. Economic Importance

3. Revenues & Profit

4. Sector Forecast

5. Sector Costs Overview

6. Output & Sales Value

7. Foreign Trade

8. Household Appliances Market Segmentation

9. Employment

10.Prices

11.Raw Materials Prices

12.Government Policy

II. Product Subsectors

1. Industrial Production

2. Exports

3. Penetration

4. Air Conditioners

1. Refrigeration Appliances

2. Kitchen Appliances

3. Cleaning Electrical Appliances

4. Ventilation & Beauty Electrical Appliances

5. Other Electrical Appliances

III. Main Players

1. Gree Electric Appliances, Inc.

2. Gree Electric Appliances, Inc. (cont’d)

3. Haier Group

4. Haier Group (cont'd)

5. TCL Corporation

6. TCL Corporation (cont'd)

7. Midea Group

8. Midea Group (cont'd)

9. GOME Electrical Appliances Holding Ltd.

10.GOME Electrical Appliances Holding Ltd. (cont'd)

11.GOME Electrical Appliances Holding Ltd. (cont'd)



I. Sector Overview



Sector Highlights

The electrical appliances industry in China has continued its steady growth, underpinned by the ongoing urbanisation and rising purchasing power of consumers in low-tier cities and rural areas. China is the world leader in both the production and consumption of electrical appliances, as the country's appliance manufacturers have been dominating the global market for over a decade, and the future for the sector over the next few years looks promising.

Development

While regionally separated, new demand and replacement demand in the sector remain strong. Replacement demand is the major

driver in mature markets in major cities across the country, while in poorer regions, especially in the central and western parts of

China, penetration remains generally low and demand for new appliances remains steady.

A number of subsidy programs for electrical appliances ended in 2013, which has somewhat dampened the purchasing drive of

consumers and to some extent affected the overall market, especially in the second half of the year. However, the industry appears to

be quickly recovering from the slowdown and the dominant sentiment on the market is one of optimism.

Local players dominate in the Chinese market, with some of the main companies also being among the world's leading appliance

manufacturers. Such big players are seen as mostly targeting the mid- to high segment where - in order to accommodate the solid

demand for product upgrades - new launches take place often and marketing campaigns are aggressive.

Online sales of household electrical appliances are gaining speed as delivery areas are widening, payment conditions are gaining

attractiveness and the quality of after-sale services is rising. In the meantime, high-end customers are displaying an increasing interest

in smart appliances such as refrigerators and washing machines which have only recently been introduced in China.

Demand

Subsidies

Competition

Technologies



Source:

Economic Importance

Economic Importance

National Bureau of Statistics

2009 2010 2011 2012 2013

GDP, RMB tn 34.1 40.0 47.0 52.0 56.9

Revenues, RMB bn 714.9 927.8 1,086.8 1,128.6 1,284.3

Revenues as share of GDP 2.1% 2.3% 2.3% 2.2% 2.3%

Total assets (at year end), RMB bn 468.1 614.8 720.7 775.1 897.6

Current assets (at year end), RMB bn 310.4 430.3 508.0 531.4 615.1

Accounts receivable (at year end), RMB bn 75.5 95.6 101.6 114.9 132.2

Total liabilities (at year end), RMB bn 297.4 405.2 474.6 498.0 574.4

Product Inventories (at year end), RMB bn 34.8 49.9 52.2 58.3 68.9

No of employees (average, thou) 1,097.1 1,288.4 1,373.0 1,331.8 n/a

No of enterprises (at year end) 3,180 3,267 2,463 2,531 2,586

No of loss making enterprises (at year end) 424 340 270 310 355



Comments

Source:

Revenues & Profit

In spite of some slowdown taking place after subsidies being withdrawn by the government, 2013 has still managed to top the industry

performance from 2012 convincingly and the sector appears to have overcome the slowdown in growth following the global crisis.

Disparity in profit distribution remains in place as major players enjoy much higher margins while smaller companies are under pressure and

most of them are experiencing near-zero or single-digit growth.

Revenues Profit, RMB bn


715

928

1,087 1,129

1,284

5.6%

29.8%

17.1%

3.8%

13.8%

2009 2010 2011 2012 2013

Sales revenues, RMB bn Annual growth

38.7

58.1 60.4

66.9

78.4

2009 2010 2011 2012 2013



Source:

Comments

Sector Forecast

The industry potential for future growth remains high as internal demand, accelerating construction of affordable houses and product

innovations, coupled with a recovery in global spending, will continue to drive the market forward. A CAGR of 9.9% is expected over the

forecast period. Meanwhile, in the mid-term, researchers from CEInet expect each of refrigerators, air-conditioners and washing machines to

retain an annual growth rate of between 4% and 11% by 2015.

Household Appliances Market Value

Marketline

11.8% 9.7% 9.4% 9.3% 9.1%

0

20

40

60

80

100

120

140

2013 2014 2015 2016 2017

Household appliances market value, USD bn Annual growth



Source:

Sector Costs Overview

Cost of Sales Other Costs


2009 2010 2011 2012 2013

Total taxes paid, RMB bn n/a 28.8 32.1 29.3 39.3

Sales taxes and surcharges, RMB bn 4.1 4.3 3.9 5.2 6.2

Selling and distribution costs, RMB bn 46.4 63.4 65.9 72.3 87.9

Administration expenses, RMB bn 32.9 40.7 45.6 47.9 53.1

Financial expenses, RMB bn 4.3 4.7 6.2 5.4 5.8

595

783

919 933

1,066

6.5%

7.4%

6.6%

7.2%

7.4%

2009 2010 2011 2012 2013

Cost of sales, RMB bn Profit to cost ratio



Source:

Output & Sales Value

Gross Industrial Output Industry Sales Value


597

692

739

952

1,105

24.7%

15.9%

6.8%

28.9%

16.1%

2007 2008 2009 2010 2011

Gross industrial output, RMB bn Growth, y/y

683 703

912

1,077 1,105

230 205 262

296 295

17.4%

2.9%

29.8%

18.1%

2.6%

2008 2009 2010 2011 2012

Industrial sales value, RMB bn

Industrial sales, delivery value for exports, RMB bn

Industrial sales value, annual growth



Comments

Source:

Foreign Trade

Following a slowdown in export growth between 2010 and 2012, in the first three quarters of 2013 the trend has reversed due to adjustments

of the export structure made by Chinese manufacturers as well as the recovery in major export markets such as the United States and

Europe. Demand from emerging markets is also looking promising.

Exports Imports

Ministry of Commerce, CHEAA

31.3

40.0

47.2 50.3

42.1

-13.3%

28.1%

18.0%

6.5% 8.7%

2009 2010 2011 2012 2013 Jan-Sep

Exports, RMB bn Annual change

2.8 2.9

3.2 3.1

2.4

-12.1%

3.9%

9.0%

-3.4%

0.0%

2009 2010 2011 2012 2013 Jan-Sep

Imports, RMB bn Annual change



Source:

Household Appliances Market Segmentation

Asia Pacific Market Segmentation (2012)

Distribution Channel Segmentation (2012)

Market Segmentation by Product Type (2012)

Marketline

Electricals & electronics

retailers 47.1%

Department stores 31.1%

Hypermarket, supermarket &

discounters 4.8% Discount,

variety & general

merchandise 1.0%

Others 16.0%

China 61.2%

Japan 17.9%

South Korea 5.3%

India 2.7%

Rest of Asia-Pacific 12.9%

Major domestic

appliances 89.6%

Minor domestic

appliances 10.4%



Source:

Employment

Number of Employees Biggest Employers (2013)

MIIT, Fortune China

Employer Number of Employees

Gree Electric Appliances, Inc. 72,671

Midea Holding Co., Ltd. 66,497

Changhong Electric Co.,Ltd. 60,398

Haier Co.,Ltd. 59,814

GOME Electrical Appliances Holding Ltd. 59,624

TCL Corporation 56,190

1,093 1,097

1,288

1,373 1,332 0.14% 0.14%

0.17%

0.18%

0.17%

2008 2009 2010 2011 2012

Sector employees, th Share of total workforce, %



Source:

Comments

Prices

Prices have largely remained stable over the past few years and much of this is due to the raw material prices staying at a relatively low level.

For an extended period, price has been the leading factor for Chinese consumers. However, at present prices are starting to lose their role in

consumers' decisions at the expense of exterior design, features and functionalities of the product and branding, as well as the environmental

friendliness of the purchased appliances.

House Appliance Prices, 36 Cities Average, RMB

Price Monitoring Center, NDRC

3,043 3,113 3,108 3,203 3,152 3,191 3,234

3,547 3,434

3,541 3,498 3,583 3,562 3,536 3,545 3,210 3,215 3,274 3,246 3,135

3,068 3,088

3,137

2,870 3,090 3,136 3,128 3,213 3,187 3,182

1,797 1,816 1,778 1,780 1,731 1,732 1,699 1,651 1,469

1,681 1,752 1,760 1,693 1,729 1,727

586 562 576 573 568 574 571 730 721 735 743 751 751 751 780

3,075 3,056 3,000 3,072 3,038 3,081 3,085

2,756 2,680 2,724 2,647 2,728 2,758 2,752 2,730

Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 Dec 2011 Mar 2012 Jun 2012 Sep 2012 Dec 2012 Mar 2013 Jun 2013 Sep 2013 Dec 2013

Air Conditioner, 1.5P Refrigerator, 210-250L Electric water heater, 50l Microwave oven, 700w Roller washing machine, 5kg



Source:

Raw Materials Prices

Copper

Aluminum

Indexmundi

6,000

6,500

7,000

7,500

8,000

8,500

9,000

Feb2012

Mar2012

Apr2012

May2012

Jun2012

Jul2012

Aug2012

Sep2012

Oct2012

Nov2012

Dec2012

Jan2013

Feb2013

Mar2013

Apr2013

May2013

Jun2013

Jul2013

Aug2013

Sep2013

Oct2013

Nov2013

Dec2013

Copper, grade A cathode, LME spot price, CIF European ports, USDollars/metric ton

1,600

1,800

2,000

2,200

2,400

Feb2012

Mar2012

Apr2012

May2012

Jun2012

Jul2012

Aug2012

Sep2012

Oct2012

Nov2012

Dec2012

Jan2013

Feb2013

Mar2013

Apr2013

May2013

Jun2013

Jul2013

Aug2013

Sep2013

Oct2013

Nov2013

Dec2013

Jan2014

Aluminum, 99.5% minimum purity, LME spot price, CIF UK ports, USD/metric ton



Source:

Government Policy

Five-year

Plan

According to the central government’s 12th Five-year Plan (2011-2015), the output value of the industry is planned to reach

RMB 1.5 trillion by the end of 2015, implying an average annual growth of 9.2%. Appliance exports are to grow by 8.4%

annually during the period to USD 60bn annually and account for 35% of the global market. The plan urges technical

innovations to shore up the quality of Chinese-made appliances and preferential treatment from government policies to

back the growth of the industry. Besides, the plan also envisages the construction of 36 million so called "social houses" for

low-income families. According to regulations, such homes must be provided with a full set of kitchen and bathroom

appliances.

End of

Subsidies

Subsidies for five categories of energy-saving household electrical appliances, including air conditioners, flat-panel television sets, refrigerators, washing machines and hot water heaters, ended in June 2013, after being in place for a period of one year . According to the program, consumers could be subsidised by RMB 70 to 550. The effects have been notable: market shares of energy-efficient air conditioners and washing machines have increased, with sales of such appliances rising from 1.6mn units in June 2012 to an average of about 7mn in the first five months of 2013. The major long-lasting effect is to be the increased consumer awareness of the benefits of eco-friendly products.

Ministry of Commerce representatives have stated that no similar subsidies are planned for the near future. Another subsidy policy, "Household appliances go rural", ended in January 2013 after a five year run.

New Air

Conditioner

Standard

In September 2013, China introduced GB21455:2013, a new standard for inverter air conditioners which is expected to

raise requirements on energy-saving performance of inverter air conditioners and eventually boost their popularity among

consumers. China has planned to increase the energy efficiency of inverter air conditioners by 20% over the current

planning period which ends in 2015.

China Daily, Xinhua



II. Product Subsectors



Source:

Industrial Production

Industrial Production by Subsector, units th


Appliance 2009 2010 2011 2012 2013

Air conditioner 81,533 112,198 139,125 132,811 143,329

Household refrigerator 60,636 75,462 86,992 84,270 93,406

Freezer 12,580 17,099 18,728 19,075 20,847

Household washing machine 49,358 62,080 66,712 67,415 72,019

Vacuum cleaners 56,694 75,965 83,169 80,665 84,779

Household electric water heater 19,892 18,915 24,419 24,240 33,686

Microwave oven 60,382 67,817 66,921 69,994 70,847

Electric cooker 149,569 170,862 183,294 184,048 214,834

Household electrothermal baking apparatus 149,329 170,269 157,298 188,561 187,029

Household electric fan 143,653 161,346 174,295 148,136 139,083



Source:

Exports

Air Conditioners Refrigerators

General Administration of Customs

5,136

7,816

9,747 9,873 10,278

28.1

42.7

44.8 43.8

44.6

2009 2010 2011 2012 2013

Exports, USD mn Exports, units mn

3,001

3,805

4,365

4,779

5,045

23.6

30.8

32.7 33.2

35.5

2009 2010 2011 2012 2013




Source:

Exports (cont'd)

Washing Machines

Microwave Ovens

Electric Fans

General Administration of Customs

2,404

2,994

3,562 3,697

4,165

404.7

520.7

547.0 535.5

561.4

2009 2010 2011 2012 2013


1,859 2,203

2,549 2,592 2,608 44.9

53.1 53.9 53.8 54.3

2009 2010 2011 2012 2013


1,736

2,328

2,802 3,323 3,433

13.9

17.9

21.1 22.8

21.3

2009 2010 2011 2012 2013




Source:

Comments

Penetration

The penetration rate of electrical appliances in China is notably lower than the average in developed countries, which implies a significant

future growth potential. One somewhat extreme example is the dish washing machine segment where the penetration rate of 60-70% in

developed countries compares to less than 1% in China.

Ownership of Electrical Appliances Per 100 Urban Households at Year-end by Level of Income (2012)


Appliance Average

Lowest

Income

households

Poor

households

Low

income

households

Lower

middle

income

households

Middle

income

households

Upper

middle

income

households

High

income

households

Highest

income

households

Washing Machine 98.0 90.0 87.4 94.7 97.3 98.8 99.8 101.0 103.6

Refrigerator 98.5 83.3 79.2 92.8 97.2 99.9 102.1 104.2 107.9

Microwave Oven 62.2 30.1 24.0 43.7 54.2 65.1 74.1 80.6 86.3

Air Conditioner 126.8 52.5 42.0 77.1 98.9 124.6 151.1 181.1 223.6

Boiler 91.0 65.8 59.6 78.7 87.1 92.9 98.1 103.0 109.8

Disinfection Cupboard 19.5 8.4 6.5 12.3 14.2 17.8 22.8 29.9 37.7

Dishwasher 0.9 0.3 0.2 0.4 0.5 0.7 1.1 1.5 2.1



Source:

Air Conditioners

Revenues & Profit

The air conditioners segment remains in a stage of

adjustment which is likely to resume into the

upcoming quarters.

Some support for the segment has come from the

hottest summers on record in China in the last

couple of years, especially in many places in the

southern part of the country.

In 2013, the sales volumes in major cities have

reversed the trend and are back on the rise.

The proportion of inverter air conditioners has

reached 51.6% of total sales volume in 2013, up

from 47.3% in the previous year. This is seen as a

sign that customers are now increasingly turning

their preference toward high-end products and are

more willing to pay the respective higher prices for

them.

With the aggravating situation with air quality across

the country and especially in industrial cities,

demand for air purifiers is rising among urban

households.

AirCon market shares in 35 major cities (2013)

National Bureau of Statistics, Sinomonitor

231.7

314.3

403.3 407.5

465.8

12.8 20.6 23.2 27.1 35.9

252

273

236 239

242

210

220

230

240

250

260

270

280

0

100

200

300

400

500

2009 2010 2011 2012 2013

Sales revenues Total profit, RMB bn No of enterprises

Gree 25.2%

Haier 10.9%

Midea 9.3%

Changhong 6.3%

AUX 5.5%

Galanz 5.1% Chunlan 4.2%

Others 33.5%



Source:

Refrigeration Appliances

Revenues & Profit

The country's refrigerator market is dominated by

local brands, with Haier consolidating its leading

position in 2013.

In the more mature markets in larger cities, the main

factors consumers consider before purchasing

refrigerators are brand, performance, quality and

eco-friendliness.

Recently, one of the main key growth drivers in the

sector has been the demand for high-end and low

energy products. On the other hand, some traditional

segments are approaching saturation levels and

deliver a diminishing contribution.

While subsidies for energy saving products have

already expired, the subsidy program has helped

raise general awareness about the benefits of such

products and is seen as having long-lasting impact

on consumer demand.

Refrigerator market shares in 35 major cities (2013)

National Bureau of Statistics, Sinomonitor

175.3

224.6 254.8

276.1

317.4

8.7 14.4 13.4 16.1 17.8

280

291

248

255

267

2009 2010 2011 2012 2013


Haier 25.0%

Midea 8.2%

Ronshen 5.6%

Toshiba 5.0%

Siemens 4.7%

Aucma 4.3%

Changling 4.2%

Othes 43.0%



Source:

Kitchen Appliances

Revenues & Profit

The mainland’s kitchen appliance market is mainly

supported by urban households with stronger

purchasing power. Urban residents started buying

kitchen appliances in the 1990s. With an assumed

lifespan of kitchen appliances of 10-15 years, kitchen

appliances of urban consumers have now entered

the replacement period and this has been driving

demand in the segment.

According to Euromonitor, among cooking

appliances, built-in large cooking appliances have

become the most desirable and account for some

70% of the total market for large cooking appliances.

In the microwave ovens segment, computerised

products have accounted for the majority of sales

volumes for 2013.

Competition in the mainland kitchen appliance

market has escalated from price war to technology

war, with the focus of competition shifting towards

the medium- to high-end market. In order to make

breakthroughs, many manufacturers on the mainland

have devoted a lot of efforts to R&D, and are

designing products of different models and functions

to meet consumers’ cooking habits and household

conditions.

Microwave ovens market shares in 35 major cities (2013)

National Bureau of Statistics, CMRC, HKTDC

115.2

143.7 145.0 141.1 165.4

5.7 7.4 8.2 7.5 7.5

840 842

610 652 651

2009 2010 2011 2012 2013


Galanz 31.1%

Midea 16.3%

Haier 6.9%

Whirlpool 4.6%

Aucma 4.2% Panasonic

3.3% Kelon 3.1%

Others 30.5%



Source:

Kitchen Appliances (cont'd)

Washing machines market shares in 35 major cities (2013) Absorber market shares in 35 major cities (2013)

Sinomonitor

Fotile 16.9%

Midea 12.9%

Haier 7.8%

Robam 7.1%

Aucma 4.9%

Vatti 4.8%

Chujie 4.1%

Others 41.5%

Haier 24.8%

Little Swan 10.0%

Siemens 7.1%

LG 6.2%

TCL 5.7%

Ariston 4.4%

Panasonic 4.3%

Others 37.5%



Source:

Cleaning Electrical Appliances

Revenues & Profit

Like in other segments, high-end products have

recently been the main growth drivers. Handheld

vacuum cleaners, upright vacuum cleaners and

especially robotic vacuum cleaners are in high

demand from mid- to high income households, with

robotic vacuum cleaners being particularly appealing

in spite of their prices being notably above average

levels.

While local companies constitute the vast majority of

players in the sectors, it is foreign businesses that

lead the market, backed by their technological and

branding advantages.

Three regions in China account for over 98% of total

vacuum cleaner production in the country: Jiangsu

with 50.5% of all production, Guangdong with 27.8%

and Zhejiang with 19%.

Vacuum cleaners market shares in 35 major cities (2013)

National Bureau of Statistics, Sinomonitor, CHYXX

288 286

218 225 231

4.1 5.8 6.1 6.9 7.4

59

84

99

115 127

2009 2010 2011 2012 2013


Phillips 24.4%

Midea 18.3%

Haier 16.0%

Panasonic 12.7% Lexy 5.7%

Electrolux 4.1%

Sanyo 4.0%

Others 14.9%



Source:

Ventilation & Beauty Electrical Appliances

Ventilation Appliances, Revenues & Profit Beauty & Health Appliances, Revenues & Profit


29.6

38.1 39.1

35.8

43.3

1.5 2.3 2.1 2.0 2.6

256

267

206 198

222

2009 2010 2011 2012 2013


16.2

24.4

25.9

27.5

28.7

1.2 1.8 1.4 1.3 1.3

174

191

154

173 171

2009 2010 2011 2012 2013




Source:

Other Electrical Appliances

Clothing iron market shares, 2012

Gas water heater market shares in 35 major cities (2013)

Other Electrical Appliances Revenues & Profit

Askci, Sinomonitor, National Bureau of Statistics

43.6

46.3

54.3 52.6

58.1

2.3 3.0 3.0 2.8 2.5

559 548

400 392

406

0

100

200

300

400

500

600

0

10

20

30

40

50

60

70

2009 2010 2011 2012 2013


Phillips 27.1%

Panasonic 11.8%

Ruitian Shengda 9.2%

Hongxin 5.6%

Tefal 4.8%

Haier 4.2% FLYCO 3.6%

Others 33.7%

Haier 6.7%

A.O.Smigh 2.6%

Ariston 2.6%

Midea 2.1% Shenhua 2.0%

Changhong 1.5%

Aucma 1.2%

Others 81.3%



III. Main Players



Source:

Gree Electric Appliances, Inc.

Financial performance

Gree Electric was founded in 1991 in Zhuhai and

was listed on the Shenzhen Stock Exchange in

1996. The company is a major global electrical

appliances manufacturer and has been the world

leader in sales of residential air conditioners since

2005 as well as China’s top appliance maker by

sales.

In September 2013, Gree Electric announced that

was considering an expansion into the banking

sector with its unit Zhuhai Gree Group Finance Co

Ltd entering talks for setting up its own private bank.

In 2013, Gree launched a new photovoltaic-driven

inverter centrifuge system for air-conditioners which

has been labelled as “internationally leading”. This is

the first time for the Chinese industry when solar

energy is used in air conditioning.

Most recently, the company announced a

considerable annual increase of 19.9% in sales for

2013, which Gree Electric attributed to the

technological focus of its development strategy.

Major competitors include Midea Electric Appliances

Co., Ltd., Haier Group Company and Samsung

Group.

Other Financials

Highlights

Company data

2008 2009 2010 2011 2012

Total operating expenses, RMB

mn 5,759 7,267 10,079 10,381 18,221

Cost of revenue, RMB mn 33,733 31,956 47,409 68,132 73,203

Total assets, RMB mn 30,800 51,530 65,604 85,212 107,567

Total liabilities, RMB mn 23,322 41,560 52,302 67,605 80,824

Total stockholders' equity, RMB

mn 7,478 9,970 13,303 17,607 26,743

Earnings per share 1.12 1.55 1.52 1.86 2.47

42,200 42,637

60,807

83,517

100,110

2,75

0

3,28

8

2,86

7

4,67

3

8,44

8

2,10

3

2,91

3

4,27

6

5,23

7

7,38

0

2008 2009 2010 2011 2012

Revenues, RMB mn EBITDA, RMB mn Net income, RMB mn



Source:

Gree Electric Appliances, Inc. (cont’d)

Revenues by product, 2012

Regional distribution of sales, 2012

Company data

China 82.7% Rest of the

world 17.3%

Product Revenues

Air conditioner, RMB mn 88,886

Small appliances, RMB mn 1,453

Others, RMB mn 909

Expenses by type

8,050

14,626

2,783

4,055

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2011 2012

Overheadexpenses,RMB mn

Salesexpenses,RMB mn



Source:

Haier Group

Qingdao Haier Co. Ltd. financial performance

Qingdao Haier Co. Ltd. other financials

Highlights

Company data

Haier was founded in Qingdao, Shandong province

in 1984 and received its present name in 1992. The

company’s product range includes air conditioners,

microwave ovens, washing machines, refrigerators,

mobile phones, computers, and TV sets.

Haier Group operates its business via two listed

companies: Qingdao Haier, which specializes in

appliance development, and Haier Electronics, which

represents an integrated service platform combining

retailing, e-commerce, and logistics as well as after

sales services.

Haier Group was the largest company in the global

market for large appliances for the fifth consecutive

year in 2013 with a share of 9.7%. In the same year,

the company also became the biggest manufacturer,

according to Euromonitor, with a global share of

11.6%.

In a major strategic move in 2013, the company

signed a partnership with the Chinese market leader

in online retail Alibaba with the latter investing HKD

2.82bn in Haier. The deal is expected to give a boost

to Haier’s position in the struggle with its local

competitors.

2008 2009 2010 2011 2012


mn 5,869 7,092 11,239 13,268 14,796





mn 6,774 7,721 7,020 8,338 11,129


30,408 32,979

60,588

73,853 79,857

1,58

4

1,96

6

3,42

5

4,75

6

5,87

5

768

1,14

9

2,03

5

2,69

0

3,26

9

2008 2009 2010 2011 2012




Source:

Haier Group (cont'd)

Revenues distribution by business (2012, RMB mn)

Revenues distribution by region (2012)

Manufacturing costs (RMB mn)

Company data

34,592

36,315

1,620

1,597

268

303

289

337

1,298

1,469

31,000

32,000

33,000

34,000

35,000

36,000

37,000

38,000

39,000

40,000

2011 2012

Others

Energy

Ammortisation

Staff

Rawmaterials

Air-conditioners

14,769

Refrigerators 25,170

Small appliances

1,686

Washing machines

13,273

Water heaters 4,486

Parts 7,172

Channel integration

12,596

China 89.5%

Rest of the world 10.5%



Source:

TCL Corporation


TCL Corp. was founded in 1981 in Huizhou,

Guangdong province. The company operates in four

business areas: multimedia, communications,

electrical appliances and TV/video electronics;

additionally TCL also has two affiliated business

areas: real estate and investment and logistics and

services. TCL Corporation has three listed units: TCL

Corporation, TCL Multimedia and TCL

Communication.

In 2012, TCL owned the number one TV brand

China, with a brand value of RMB 58.3bn.

In 2013, TCL reported a 21.96% growth in the sales

of air-conditioners, a 19.47% growth in sales of

refrigerators and a 27.45% growth in the sales of

washing machines. Still, the main driver of revenue

growth for the year was smartphone sales.

The company expects its profit to more than double

in 2013, with revenues surpassing RMB 100bn for

the first time.

TCL is shifting its focus to expansion on international

markets as the share of its foreign business has

been constantly rising over the past few years.

Other financial indicators

Highlights

Company data, Morningstar

44,295 51,870

60,834 69,629

85,504

1,08

1

501

1,86

2

2,65

6 4,56

9

470

433

1,01

3

796

2,10

9

2009 2010 2011 2012 2013


2008 2009 2010 2011 2012


mn 5,988 7,295 8,193 10,773 13,256





mn 5,293 10,274 11,306 11,746 14,168




Source:

TCL Corporation (cont'd)

Electrical appliances sales (thou)

Revenues by region (2013)

Expenses

Company data

3,691 4,502

912

1,090 985

1,256

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2012 2013

Washingmachine

Refrigerator

Airconditioner

6,583

8,081

3,839

4,997 351

178

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2012 2013

Financialexpenses

Administrativeexpenses

Salesexpenses

Mainland China 57.8%

Hong Kong & the rest of the world 42.2%



Source:

Midea Group

Midea Electrical Appliance financial performance

Midea, established in 1968 in Foshan, Guangdong

province, is currently present in over 200 countries

and regions and its publicly listed division, GD Midea

Holding, holds the world’s second place in global

household appliances sales.

The company’s business scope includes fans, air

conditioners, microwave ovens, dishwashers, rice

cookers, water dispensers, domestic gas appliances,

cooker hoods, heaters and vacuum cleaners and

electronic controllers, as well as other industries like

real estate, logistics, finance and machinery

manufacturing.

Midea Group went public on the Shenzhen Stock

Exchange in September 2013, while its former listed

subsidiary, Midea Electric Appliances Co., Ltd, was

written off, as new shares of the group company

were issued to the shareholders of the subsidiary.

Midea projected a 15% sales growth for the three to

five years following 2012.

Major competitors include Whirlpool Corporation,

Global-Tech Advanced Innovations Inc. and Haier

Group Co.

Midea Electrical Appliance Financials

Highlights

Company data

45,313 47,278

74,559

93,108

68,071

,1033 1,892 3,127 3,709 3,477

2008 2009 2010 2011 2012

Revenue, RMB mn Net income, RMB mn

2008 2009 2010 2011 2012

Total operating costs, RMB mn n/a 62,114 72,255 88,846 63,600




mn 4,757 9,451 12,336 13,394 14,193




Source:

Midea Group (cont'd)

Production Distribution of expenses, RMB mn

Company data

Product Indicator 2011 2012

Air-conditioners Sales volume, units mn 32.48 23.81

Production volume, units mn 33.73 23.69

Refrigerators Sales volume, units mn 11.08 5.60


Washing machines Sales volume, units mn 12.41 7.66


61,476

42,802

2,860

2,512

864

1,023

438

412

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2011 2012

Energy and power

Depreciation

Labour costs

Raw materials



Source:

GOME Electrical Appliances Holding Ltd.


GOME Electrical Appliances Holding Ltd. was

founded in Hong Kong in 1987, adopted its brand

name GOME in 1993, and was listed on the Hong

Kong Stock Exchange in 2004.

The company specializes in consumer electronics

and electrical appliances retail and has a wide

network of outlets across China. GOME is currently

actively expanding the channels of its e-commerce

platform.

In late 2013, GOME entered a strategic partnership

with US-based global semiconductor company

Qualcomm Inc. to jointly develop the 4G smartphone

market. The company has already established over

50 4G experience centres and their number is

expected to reach 300 in 2014.

Following a tough period, GOME has been

aggressively cutting costs over the last year with a

number of underperforming stores being closed. As a

result, the company is expecting notably better

financial results for 2013, in spite of the overall

slowdown in the appliance retail industry.

GOME Financials

Highlights

Company data

45,889 42,668

50,910

59,821

47,867

1,099 1,426 1,962

1,801 -810 2,052 2,536 3,293 3,123 34

2008 2009 2010 2011 2012


2008 2009 2010 2011 2012

Total Operating Expenses,

RMB mn 5,831 5,688 6,655 8,535 8,595


Total Assets, RMB mn 27,495 35,763 36,210 37,227 36,379

Total Liabilities, RMB mn 18,795 23,961 21,475 21,309 21,624

Total stockholders' equity,

RMB mn 8,700 11,802 14,735 15,918 14,754

Earnings per share 0.08 0.10 0.13 0.11 -0.04



Source:

GOME Electrical Appliances Holding Ltd. (cont'd)

Number of stores

Regional distribution of sales revenue, 2012

Regional distribution of stores, 2012 Year End

Company data

Region Flagship Standard Specialized

Total Stores Stores Stores

Beijing 21 25 8 54

Shanghai 38 20 18 76

Tianjin 13 18 10 41

Chengdu 12 29 18 59

Chongqing 8 22 16 46

Xian 18 16 56 90

Shenyang 9 13 15 37

Qingdao 8 15 15 38

Jinan 6 7 18 31

Shenzhen 20 42 28 90

Guangzhou 19 45 65 129

Wuhan 7 19 18 44

Kunming 4 12 13 29

Fuzhou 7 15 19 41

Xiamen 4 15 20 39

Henan 4 20 17 41

Nanjing 2 17 20 39

Wuxi 1 5 8 14

Changzhou 3 8 5 16

Suzhou 4 6 12 22

Hefei 2 11 6 19

Xuzhou 1 3 12 16

Tangshan 2 – 7 9

Lanzhou 3 6 8 17

Wenzhou 2 2 8 12

826 726

859

726

1,079 1,049

2007 2008 2009 2010 2011 2012

Number of stores at year end

Shanghai 11% Beijing 10%

Guangzhou 11%

Shenzhen 10%

Chengdu 6%

Xian 6%

Tianjin 5%

Others 41%



Source:

GOME Electrical Appliances Holding Ltd. (cont'd)

Revenues by product Operating expenses (as share of total revenues)

Company data

14.0%

13.8%

14.1%

9.6%

15.9%

4.5%

11.9%

13.8%

14.3%

14.6%

9.4%

16.8%

8.3%

11.7%

AV

Air-conditioner

Refrigerator and washing machine

Telecommunication

Small white appliances

IT

Digital

2012 2011

11.5%

14.2%

2.0%

3.0%

0.7%

0.9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2011 2012

Otherexpenses

Administrativeexpenses

Selling anddistributioncosts



Contact:

Corporate Headquarters

Nestor House

Playhouse Yard

London EC4V 5EX

UK

Voice: +44 207 779 8471

Fax: +44 207 779 8224

Americas Headquarters

225 Park Avenue South

New York, New York 10003

US

Voice: +1 212 610 2900

Fax: +1 212 610 2950

Asia Headquarters

Eucharistic Congress Bldg. No.

III

4th Floor, 5 Convent Street

Mumbai 400 001

India

Voice: +91 22 22881123

Fax: +91 22 22881137

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