Yin Limei, Tong Haihua
In June this year, Zhuhai Gree Electrical Appliances Co., Ltd. (hereinafter referred to as “Gree”, “000651.SZ”) publicly reported that Ox Air Conditioning Co., Ltd. (hereinafter referred to as “Ox”) had falsified the energy efficiency label of the air-conditioning industry and opened the “cover”. Recently, the problem of energy efficiency label of the air-conditioning industry has aroused renewed concern.
Recently, the Beijing Consumer Association (hereinafter referred to as “Beijing Consumer Association”) tested 25 samples of 16 air-conditioning brands, including Ox, Mei and Gree, with the label of 1.5. The results show that all the samples, including Gree and Ox brands, have measured values that do not meet or exceed the rated values (i.e., the actual refrigeration effect does not meet the publicity standards).
As soon as the comparative test results were released, public opinion became uproarious. Whether Gree, previously known as both a player and a referee, has the same problem of energy efficiency failure has become the focus of public attention. In response to this challenge, Gree quickly issued a clarification statement, saying that the two Gree products released by the Beijing Consultative Association sampling test met the requirements of national regulations and belonged to qualified products allowed to be listed and sold, and there was no problem of false labels mentioned by some media.
At the same time, Gree said in its clarification statement that media reports confused the nature of “reasonable fluctuations in industrial production allowed by national standards” with “energy efficiency does not meet national mandatory standards”. It said that the eight models of Oakes air conditioning products do not meet the requirements of the national mandatory standards, which is completely different from the reasonable fluctuation nature of the industrial production allowed by the national standards, and belongs to the production and sales of unqualified products. According to Gree, the market supervision and management department is still investigating and verifying the contents of public reports.
In view of the comparative test results released by Beijing Consumer Association and the problems related to Gree’s “Energy Efficiency False Standard” war, the correspondent of China Business Daily called Ox, and the relevant person in charge did not give a positive response, saying only that all the information released by the company should prevail.
Enter the storm again
The long-standing problem of energy efficiency deficiency in air-conditioning industry has been pushed to the front of the stage again recently.
Recently, Beijing Consumption Association released the results of the comparative test of household air conditioning. After testing, the rated refrigeration capacity, rated refrigeration consumption power, rated intermediate refrigeration capacity, rated intermediate refrigeration consumption power and SEER index of all samples meet the standard requirements, but all samples including Gree and Oaks have measured values that do not meet or exceed the rated values.
It is reported that the relevant standards clearly require that the manufacturer should mark the SEER value and the measured refrigeration capacity should not be less than 95% of the rated refrigeration capacity, and the refrigeration consumption power should not be greater than 110% of the rated refrigeration consumption power.
It is understood that the comparative test samples were purchased by Beijing Consumer Association staff as ordinary consumers from Beijing East Mall, Tianmao Mall, Suning Easy-to-buy, Gome Online and other online shopping platforms, involving 25 samples of 16 brands such as Haier, Oaks, Gree, Mei, TCL and so on. Beijing Consumer Association said that the test was commissioned by a third-party testing agency, and the test results were only responsible for the samples purchased.
Sample test results show that the actual refrigeration effect of the tested products, including Oaks and Gree, can not meet the propaganda standards.
Specifically, the actual refrigeration capacity of the two inspected models of Gree is lower than the rated value, which is 3500W, but the measured values are 3405.3W and 3406.9W. On the index of rated intermediate refrigeration capacity (the larger the error range specified in the standard), the measured values of seven samples such as “Ox” are lower than the rated values of products. At the same time, on the index of energy consumption efficiency (SEER) in the refrigeration season, the measured value of Ox air conditioning products is lower than the rated value.
For this sampling result, Gree responded face-to-face that the performance parameters of the two products released by the Beijing Consumption Association test meet the requirements of the national standards and belong to the qualified products allowed to be listed and sold. There is no problem of false labels mentioned by some media. All products of the company are strictly designed in accordance with the National standards. Production and testing are welcomed to be supervised by government departments and all sectors of society.
At the same time, it said that the media reports confused the nature of “reasonable fluctuation in industrial production allowed by national standards” and “energy efficiency can not meet the national mandatory standards”, thus diluting the serious consequences of the product disqualification caused by the false standard energy efficiency of Ox products, and also making the public mistake Ox as empty. The field of mediation is universal.
According to Gree, the market supervision and management department is still investigating and verifying the contents of public reports. “We look forward to publishing the results of the survey as soon as possible, safeguarding the national energy efficiency standards and market health order, and safeguarding the vital interests of consumers.”
For the test results released by Beijing Consumer Association and the “virtual energy efficiency” war with Gree, the relevant Oaks officials did not respond, and they declined the interview on the grounds of “all information released by the company is prevailing”.
However, the reporter noted that Joint Credit Assessment Co., Ltd. (hereinafter referred to as “Joint Credit”) recently released the “Credit Rating Report” (hereinafter referred to as “Report”) for Ox Group Co., Ltd. Joint Credit pointed out in the “Report” that Gree Electric reported the air-conditioning product incident of the company is still pending the investigation conclusion of the relevant regulatory authorities, which may have a negative impact on the company’s operation.
Regarding the results of the sampling, Beijing Consumption Association said that although the measured values of the samples did not exceed the error range prescribed by the state, they still had a negative impact on consumers’choice of low-energy products.
In June this year, after the “Great War of Georgia” attracted wide attention, seven departments such as the National Development and Reform Commission jointly issued the Action Plan for Green and High Efficiency Refrigeration, which clearly pointed out that they would severely crack down on such acts as false energy efficiency standards, false certification and testing, and false propaganda, and increase the strength of spot checks of refrigeration products.
Concern gradually became evident.
In recent years, by seizing the dividend of e-commerce channel, Oakes online market has achieved “curve overtaking”. In terms of scale, Ox air conditioning sales in 2018 have reached 28% and 38% of the total air conditioning sales of Gree and Mei respectively, rising to the third place in China’s air conditioning market, becoming a force that can not be ignored in the air conditioning industry.
However, Oakes, which has a deep foundation in the online market, is still facing development concerns.
Reporters learned from the “Report” document that the current development of Ox air conditioning business has been slow. According to the report, from January to March 2019, Oakes Group realized 9.613 billion yuan in revenue, an increase of 39.60% over the same period last year, mainly from the air-conditioning business sector. However, its gross domestic air-conditioning interest rate fell by 3.79 percentage points over the same period last year.
The report also points out that during the tracking period (from 2016 to January-March 2019), Oaks Group’s profit declined sharply due to the rapid growth of operating costs and sales expenses, while the profitability of its main business (air-conditioning business) continued to decline. During the period, the company’s operating costs and other costs were relatively high, which eroded the company’s profits to a certain extent.
Everbright Securities reported that the decline in dividends of e-commerce and the intensification of competition caused by leading e-commerce companies are the main reasons for the decline in the profitability of Oakes air conditioning. “Although Gree and Mei’s power generation e-commerce channel is later, but the share is higher, and gross interest rate stability is significantly stronger, highlighting its stronger pricing power in the industrial chain. Considering the leading profitability and absolute control over the supply of compressors for core components, the barrier of air conditioning leading is still deep.
At the same time, Everbright Securities analysis found that the net interest rates of Gree Electric Appliances and Mei Group in 2018 were 13% and 8%, respectively, much higher than that of Ox Group’s 2%. And the net cash on the accounts of Gree Electric Appliances and Mei Group is more than 100 billion yuan, while Ox Group does not have much “surplus grain” (“report” shows that the cash assets of Ox Group in 2018 are 5.579 billion yuan). Once the dragon head launches an offensive, Ox will face greater financial pressure.
In addition, the lack of core components compressor voice is also one of the constraints to the development of Ox air conditioning.
According to the report, in 2018, all the air conditioning compressors of Oaks Group were purchased from Zhejiang Meizhi Compressor Co., Ltd. (hereinafter referred to as “Meizhi”) and Nanchang Haili Cooling and Heating Technology Co., Ltd. (hereinafter referred to as “Haili”). Among them, Meizhi’s supply accounts for about 69% of the total purchases, Haili accounts for about 15%, and other brands account for about 16%.
Joint Credit believes that Ox Group’s main raw material compressors are all dependent on external extraction, the purchase price of the main raw materials is on the rise as a whole, and the cost side of Ox Group is facing some pressure.
At the same time, it is worth noting that Meizhi is the second largest shareholder of Haili Compressor Company. “By exerting influence on these two related compressor enterprises, Meihe Gree can restrict the development of its competitors by controlling the supply of compressors with core components.” Everbright Securities.
In addition, the current development trend of the air conditioning industry also exerts pressure on Oaks. According to the latest data released by AVC, in the first half of 2019, the domestic air-conditioning market was weak, with 33.7 million units retailed, an increase of 1.5% compared with the previous year, while the retail sales of 113.7 billion yuan, a decrease of 1.4% compared with the previous year.
According to Zhongyikang’s forecast, the online retail sales of air-conditioning industry are expected to decline by 14.3% and 8.3% in 2019 compared with the same period last year. With the high inventory of air-conditioning industry and other factors, the operating pressure of household appliances enterprises is expected to further intensify in 2019.
Everbright Securities analysis believes that in this market trend, second and third-tier brands may be under pressure, in the long run, air conditioning concentration is still possible to further converge to TOP2. “Only when the brand manufacturing or high-efficiency retail end really has the high-quality leading edge of barriers can it occupy a place in the value distribution of the industrial chain.”