Consumer Discretionary Author：Yue Liu Editor：Luke Sheehan Aug 31, 2020 11:51 AM (GMT+8)

The epidemic has brought a negative impact on the offline retail market of the air-conditioning industry.

Image credit: EqualOcean

On August 31, Gree Electric released its financial report for the first half of 2020. The data showed that Gree achieved revenue of CNY 70.60 billion, a decrease of 28.21% from the same period last year; total profit was CNY 7.70 billion, a decrease of 53.11% YoY.

In terms of specific products, Gree’s air-conditioning product revenue was CNY 41.33 billion, down 47.89% year-on-year; household appliances revenue was CNY 2.22 billion, down 13.36% year-on-year; smart equipment revenue was CNY 209 million, down 49.60% year-on-year; others primary operating income was CNY 5.95 billion, a year-on-year increase of 476.42%.

The main reason is that the sales of the main product, air conditioners, have fallen sharply, almost cut in half. In 2020, the HVAC industry has suffered from the impact of the pandemic. Domestic retail sales of household air conditioners fell by 14.30% year-on-year, and retail sales fell by 26.90% year-on-year. In terms of disassembly, online channel sales volume increased by 9.60% year-on-year, and sales revenue fell by 9.1% year-on-year. Offline channel sales volume fell 31.8% year-on-year, and sales revenue fell 37.1% year-on-year.

It is worth mentioning that Midea Group disclosed the transcript of the 2020 semi-annual performance yesterday.  The company achieved revenue of CNY 139.70 billion, a year-on-year decrease of 9.47%, and an attributable net profit of CNY 13.90 billion, a year-on-year decline of 8.29%. The gap between Gree and Midea is gradually widening.