Haier IR09_cover layout.indd - Haier Electronics Group Co., Ltd.

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Haier Electronics Group Co., Ltd
Management Discussion and Analysis (Cont’d)
Group Results
The net profit attributable to the shareholders increased 27.15% from
HK$128 million in the first half of 2008 to HK$163 million in the first
half of 2009. The Group made significant improvement in the gross
profit margin of products from 28.7% to 34.0% due to diversification
of product mix, effective cost control by standardization of products and
maintaining low inventory level so as to benefit from the reduction of raw
material price in the market. In order to strengthen its competitiveness
in the long term, the Group persistently increased the investment on
research and development of high value-added and innovative products,
expanded the construction of “sales to rural” sales networks, “door to
door” logistics networks and “service to door” services networks in the
3rd to 4th tier markets, increased investment on global brand building
and marketing activities, as well as enhanced the ERP system, with an
aim to transforming itself from “an enterprise under informatization”
to “an informatized enterprise”.
163,000,000
128,000,000
27.15%
28.7%
34.0%
The Group also implemented various measures to maintain healthy
operating cashflow. An innovative business model was implemented to
reduce inventory level by a make-to-order policy, thereby enhancing the
Group’s operating efficiency and eventually achieving the zero distance
between the Group and its customers. As a result, the inventories of
the Group dropped 72.6% from HK$307 million as at 31 December
2008 to HK$84 million as at 30 June 2009, and the inventory turnover
days dropped 71.4% from 14 days as at 31 December 2008 to 4 days
as at 30 June 2009.
307,000,00072.6%
84,000,000
1471.4%
4
Business Review
Washing Machine Business
The Group’s washing machine business comprises the manufacture
and sale of top loading and front loading washing machines, which in
aggregate accounted for approximately 78.6% of the total revenue for
the first half of 2009 (1H2008: 80.3%). Despite the global economic
slowdown, sales from Washing Machine business for the first half of 2009
maintained at HK$4,173 million (1H2008: HK$4,263 million) which was
better than the industry average. The sales were mainly contributed by
sales in the 3rd and 4th tier markets and the rural market driven by the
Group’s well established distribution networks and continuous product
innovation. The Group continued to maintain its leading position in the
washing machine market in the PRC with market share of approximately
29.6% according to China Market Monitor.
78.6% 80.3%
4,173,000,000
4,263,000,000
29.6%
Interim Report 2009