- Full-year net income increases at slowest pace since 2008
- Sales decline 6.4%, first drop in more than a decade
Haier Electronics Group Co. profit grew last year at the slowest pace since 2008 as a slumping economy eroded sales at the home appliances distributor and maker.
Net income rose 10 percent to 2.7 billion yuan ($416 million) in 2015, in line with the 2.7 billion yuan average analyst estimate, the Hong Kong-listed subsidiary of Haier Group said in a statement Tuesday. Sales dropped 6.4 percent, the first decline since 2005. The company didn’t provide a forecast for 2016.
The appliances unit of Haier Group, which agreed in January to buy General Electric Co.’s appliance business for $5.4 billion, said the current year will be tough as well as businesses and consumers are squeezed by the deepest economic slowdown since 1990. It now takes about 83 days for the typical Chinese firm to collect cash for completed sales, almost twice as long as emerging-market peers, according to data compiled by Bloomberg.
“The market will still be challenging in 2016 as the industry is facing fierce competition and the white appliance sector is still under de-stocking pressure,” said Andrew Song, an analyst at Guotai Junan Securities Co. The property market has been improving since the second quarter of 2015, but the market may only start to show some recovery in the second half of this year, he said.
Haier Electronics shares fell as much as 2 percent to HK$12.84 and was down 0.5 percent at the mid-day break in Hong Kong trading. The shares have plunged 17 percent so far this year, underperforming the 6 percent drop in the city’s benchmark Hang Seng Index.
Sales for 2015 dropped to 62.8 billion yuan, missing the 64.8 billion yuan average estimate compiled by Bloomberg.
This year will be a “tough” for companies as the Chinese economy goes through a structural shift,” Haier Electronics Chairman Zhou Yun Jie said in a statement.
Washing machines contributed 43 percent of Haier Electronics’s earnings in 2015, with integrated channel services, the company’s businesses comprising distribution, e-commerce and logistics, accounting for 39 percent.