Depth report

　　

"Nanyang" is becoming the trend of Chinese electronics and home appliances enterprises.

This year, Xinbao Shares (002705.SZ) built its first overseas plant in Indonesia; Wanhe Electric (002543.SZ) has also laid out its first overseas production base in Thailand, which is expected to be put into production next year; Midea Group (000333.SZ) is expanding the production of air conditioning plants in Thailand... As a key market along the "Belt and Road" and a region adjacent to China, ASEAN (Association of Southeast Asian Nations) has become an important stop for China's electronic home appliance industry exports.

Asean is the first choice for Chinese enterprises to set up overseas factories

Xinbao Shares is one of the leading enterprises of small home appliance export in China. In the first half of 2023, it came under growth pressure. According to its semi-annual report, the revenue of Xinbao shares in the first half of this year was 6.355 billion yuan, a decrease of 10.83%. Net profit attributable to the parent was 390 million yuan, down 18.81% year-on-year. Its main business is Western-style small home appliance exports, mainly in the European and American markets, the first half of the overseas small home appliance demand is weak, Xinbao shares foreign operating income of 4.66 billion yuan, down 14.42%, the same period of domestic revenue increased 0.82% to 1.69 billion yuan.

"The main changes we are facing now are twofold, on the one hand, changes in the international market. "Multiple factors such as trade frictions, de-globalization and international geopolitical changes have led to dramatic changes in the current international market environment, which are reflected in the decoupling of industrial chains, the restructuring of supply chains, exchange rate fluctuations and increased market access barriers." Zhu Xiaomei, chief marketing officer of overseas marketing of Guangdong Xinbao Electric Appliance Co., LTD., said on September 22 at the 2023 International Summit Forum of China's electronics and home appliances enterprises, on the other hand, the domestic market is also changing, and the lack of demand makes the competition of enterprises increasingly fierce. Companies face many challenges, of course, but also opportunities.

Zhu Xiaomei said that Xinbao shares used to focus on small household appliance foundry, and now it is building its own brand, from simple manufacturing to value creation of the whole industrial chain. In 2022, Xinbao shares proposed to acquire Mofei and reached an acquisition intention, and the merger was completed in the first half of 2023. Nowadays, the overseas cooperative brand and domestic independent brand business of Xinbao shares have become an important growth point of the company. In the first half of this year, the R&D expenses of Xinbao shares increased by 15.69% year-on-year, accounting for about 4% of sales revenue, supporting the transformation of foundry to independent brands.

Xinbao is also expanding overseas production bases. This year, Sinpo acquired an Indonesian plant to build its first overseas plant. Zhu Xiaomei expects the next year, Xinbao shares Indonesia factory sales scale will grow rapidly.

"At present, part of the industrial chain is transferred to Southeast Asia and other regions, mainly due to the impact of factors such as the tariff increase of some products in the United States and the balance of supply chains by some customers." In response to investor questions at the analyst meeting on June 13, 2023, Xinbao Shares said that the industrial chain of small household appliances is long, China has a relatively complete supporting supply chain advantage, and it is unlikely that the large-scale industrial chain of small household appliances will be transferred to Southeast Asia and other regions in the short term. Xinbao shares have made some layout of production capacity in Indonesia, and cooperated with vacuum cleaners and other products in the early stage, which are currently running well, and the company will adjust according to market needs.

The layout of ASEAN is developing in depth

Compared with Xinbao shares, Wanhe Electric, the United States Group layout in Southeast Asia earlier. Midea Group set up its first overseas production base in Vietnam as early as 2007, mainly producing small household appliances. In recent years, Thailand has become a major country for Midea Group to increase investment in Southeast Asia. At present, the United States has formed four bases in Thailand and achieved the integration of "research, production and marketing".

On October 10, Midea Air conditioning global Customer Conference and Midea Air conditioning Thai factory 1 million sets of products offline ceremony was held in Thailand. Located in Chonburi Province, Thailand, Mei's air conditioning factory, with an investment of more than 1 billion yuan, was started in November 2022, and it took less than one year to achieve 1 million sets of production.

Based on the Thai factory, Midea air conditioning has also established an ASEAN research and development center to upgrade the factory to an overseas base integrating "research, production and marketing". At present, the local employees of Midea Air conditioning factory in Thailand account for about 85%; 90% of the members of the ASEAN Research and Development Center come from Thailand, the Philippines, Indonesia and other ASEAN countries, in response to the rising electricity costs and power shortages in ASEAN, research and development of high energy efficiency products.

So far, Midea Group has a total of four overseas production bases in Thailand, which are located in the big city, Meizhi compressor and Welling motor factory, refrigerator and washing machine factory in Pathun Thani, refrigerator, microwave oven, household appliances factory and air conditioning factory in Chonburi, forming a vertical integrated industry chain from upstream core components to downstream home appliances.

The layout of China's leading electronics and home appliances enterprises in ASEAN is developing in depth, not only extending from production To the integration of "research, production and marketing", extending from the assembly of terminal products To the integration of the upstream and downstream industrial chain, but also extending from the To C business to the To B business.

The key fulcrum of the Belt and Road Initiative

"Asean is one of the key regions of China's Belt and Road Initiative cooperation, and Chinese electronics and home appliances enterprises deepen their layout in ASEAN, not only considering the factors of European and American trade barriers, but also based on cost and brand building considerations." Zhou Nan said that the United States, Haier, Hisense and other Chinese home appliance leaders continue to promote overseas business expansion this year, and constantly improve the global supply chain layout, they set up bases in ASEAN, Turkey, Mexico and other places, in order to be closer to the market, faster response, lower costs, in order to better support their own brand business.

He believes that this year is the tenth anniversary of China's "One Belt, One Road" initiative, and China and ASEAN have signed the RCEP agreement, in the face of European and American market export growth pressure, Chinese electronics and home appliances enterprises to expand including ASEAN "One Belt, One Road" market, is an inevitable choice to optimize the export market structure.