Gree Electric Appliances Inc. and GD Midea Holding Co. paced losses by Chinese household appliance makers after Citic Securities Co. cut its recommendation on air-conditioner stocks.
Gree, China’s largest maker of home air-conditioners, slid 3.2 percent to 17.99 yuan, its lowest close since Oct. 21. Midea, the nation’s second-biggest publicly traded appliance maker, retreated 3.1 percent to 12.11 yuan, the lowest level since July 16, 2010. The benchmark Shanghai Composite Index fell 0.1 percent.
Citic Securities, China’s biggest publicly traded brokerage, lowered its rating on air-conditioner makers to “neutral,” saying a warm winter is expected to hurt sales and buyers are less willing to spend money as the economy slows.
“A combination of slowing growth in October’s air-conditioner production and sales and other negative factors have weighed on sentiment on the industry,” Hu Yali, an analyst at Citic Securities, wrote in a report today, without saying what the previous rating for the industry was.
Output of household air-conditioners dropped 21 percent from a year earlier last month and sales fell 19 percent, according to the report. Exports slid 24 percent, a third consecutive month of declines, as Europe’s debt crisis and a slowing U.S. economy sapped demand, it said.
Europe and the U.S. account for about 30 percent of China’s overseas shipments of air-conditioners, the report said.