Electrical Industry Economic Operation in 2011

In 2011, the economic operation of the electrical industry remained stable on the whole, and production and sales showed rapid growth and good convergence. In particular, the leading product—the growth rate of power generation equipment tends to be stable; the single-digit low-growth power transmission equipment has entered the double-digit growth stage.

According to industry analysts, despite last year's continuous growth in the output and sales of the electrical industry, total profit margins have declined, and profit growth has been significantly lower than growth in production and sales. This trend deserves attention.

Indicators—Steady growth statistics show that in the first 10 months of 2011, the growth rate of production and sales indicators in the electrical industry was significant: the industrial output value reached 358.281 billion yuan, an increase of 28.59% year-on-year; the industrial sales output value reached 348.381 billion yuan, a year-on-year increase of 28.54%. .

In general, the economic trends of the electrical industry in 2011 presented three major characteristics:

First, the output of power generation equipment is showing a “low-elevation, high-going” trend, and hydropower equipment growth is evident.

Up to now, the output of power generation equipment has dropped from 65.28% at the beginning of 2011 to 20.80%, of which the year-on-year growth rate of turbo-generators has continued to decline since last year, and the growth rate has remained stable at 18% since recently; the output of wind turbines has passed. After “crazy” growth in 2010 and early 2011, it has now returned to rationality.

It is worth mentioning that the hydro-generator set achieved a month-long recovery growth from the “negative growth” at the beginning of 2011, and is currently in a positive growth stage with an increase of 32.47%.

Second, transmission and transformation equipment has begun to show significant growth.

Since the second half of 2011, the output of transformer-based power transmission and transformation equipment in the electrical industry has emerged from the state of single-digit low-speed growth over a long period of time, and has seen double-digit growth. Among them, the output of high-voltage switchboards has increased significantly. The year-on-year increase has increased from 1.94% in the first quarter of 2011 to the current level of 22.66%, an increase of 20.72 percentage points; in particular, the increase in output of high-voltage switchgears over 110,000 volts is even greater. Since the beginning of last year, all the way up; the increase in low-voltage switchboard production has also increased by 58 percentage points.

Third, the increase in costs caused the increase in profits to be lower than the increase in sales.

The profit margins of profit margins and cost expenses of the main business of the electric industry in 2011 have been lower than the same period of 2010, especially the profit margin of the overcapacity industries has been even more pronounced.

According to statistics, the total profit of the electrical industry in the first 10 months of 2011 reached 190.931 billion yuan, a year-on-year increase of 16.58%. However, compared with the increase in the same period in 2010, it has decreased by 12 percentage points. The reason is that rising costs have become one of the key factors.

The growth rate of the total profits of the electrician industry began to narrow, beginning in the second half of 2011, and this trend of lower than the growth in production and sales is becoming increasingly apparent. Industry analysts believe that the main reason for the decline in profits is a substantial increase in costs and expenses, especially in relation to the excessive increase in financial expenses (mainly interest expenses): Take the first three quarters of 2011 as an example. The business income increased by 29.50%, but the main business cost increased by 30.26%, which was higher by 0.76 percentage points over the same period. In particular, the financial expenses increased by 41.45% over the same period, including an increase of 46.89% in interest expenses.

At the same time, raw material price increases are also one of the factors. According to many companies, the decrease in profit growth is based on the increase in production cost (including raw materials, labor price, etc.), but the product sales price cannot be increased accordingly.

Trends—Not to be optimistic At present, the overall decline in the profit margin of the electrical industry, and at the same time some problems brought about by changes in the country’s macroeconomic situation, also make the electrical industry face severe challenges.

Question one: Imports and exports of electrical products will be affected by the recent signs that the RMB may appreciate, which will, to a certain extent, reduce the competitiveness of China's electrical products in the international market. Recently, the United States Senate passed the "Currency Exchange Rate Supervision Reform Act of 2011." This is actually because the United States has used the appreciation of the renminbi to pressure China to pass on to the domestic crisis. However, the effect of such an approach in some countries cannot be underestimated. This will play a role in fueling the increasingly serious trade protectionism in the world today, thereby aggravating trade frictions and trade disputes. It will also have great influence and interference on the export trade of electrical products in China. Question 2: Loan difficulties will restrict the development of SMEs In 2011, China adopted a prudent monetary policy. To cope with this policy, the central bank has increased the deposit reserve ratio of commercial banks six times, which in a sense restricts the development of SMEs.

At present, there are a large number of small and medium-sized enterprises in electrical companies. In particular, some small-scale enterprises are difficult to get loans from banks under China’s current monetary policy. It is obligatory that these enterprises can only obtain loans through private loans, and private lending often has to pay very much. High interest. The use of this method of borrowing has made some companies more strained with funds, and has even led to the disruption of the capital chain, making production and management difficult to sustain. Therefore, it is difficult for SMEs to make loans, and many companies are trapped in a shortage of funds.