Double drop in revenue and net profit Gree Electric Appliances has the worst Q3 performance in three years. Q4 pressure still exists.

On the evening of October 26th, 000651.SZ released its three-quarter report for 2021. In the third quarter of this year, Gree's revenue and return net profit were the worst in the same period in nearly three years, and this "report card" obviously did not meet the expectations of investors. An analyst told the Financial Associated Press that the inflection point of raw materials is difficult to appear during the year, the operating pressure of white power enterprises is still very huge, and the occasional emergence of domestic novel coronavirus cases will also bring uncertainty to the white power market.

According to the third quarterly report, Gree Electric Appliance Q3 achieved operating income of 47.083 billion yuan and net profit of 6.199 billion yuan, down 16.50% and 15.86% respectively from the same period last year. Investors are less prepared for a decline in revenue than a decline in profitability. after all, the impact of rising raw materials has been reflected in the first half of the year.

Home appliance industry analyst Liang Zhenpeng told the Financial Associated Press: "Gree performance decline, on the one hand, COVID-19 caused a greater negative impact." On the one hand, the base is relatively high in the same period last year, home appliance enterprises basically did not have any actual sales in the first half of last year, and there was a relatively large rebound in the third quarter. "

Industry online data show that against the backdrop of sluggish demand, the growth rate of Q3 sales of household air conditioners in China in 2021 is at a low level compared with the same period last year. Three quarterly data show that Gree Electric Appliance inventory book value of 39.675 billion yuan in the first three quarters, inventory turnover days reached 87.02 days, the highest level in nearly five years.

As for the future operating pressure of the white electricity business, home appliance industry analyst Liang Zhenpeng further pointed out that for more than a year, the sharp rise in the supply prices of upstream raw materials and core components has affected the profit level of white goods enterprises. Take air conditioners as an example, the cost of manufacturing has increased by more than 20%, but the retail price may only increase by more than ten percent, because it is difficult for consumers to accept a large range.

Liang said that the inflection point of Q4 raw materials is difficult to appear, that is, the rate of increase slows down or no longer rises, and the operating pressure is still very great. And COVID-19 cases appear from time to time, which also brings a lot of uncertainty to the white electricity market.

It is worth noting that according to the first phase of the employee stock ownership plan of Gree Electric Appliances, an increase of no less than 10% in net profit in 2021 over 2020 is one of the performance assessment targets for the first attribution period. This means that if the target is to be achieved, the net profit of the company's Q4 should not be less than 8.818 billion yuan.

However, historical data show that the fourth quarter is the company's traditional off-season, revenue levels are generally lower than the second and third quarters, Gree Electric Appliance is under a lot of pressure to meet its performance review targets.