China's Small Home Appliance Manufacturers Eagerly Fill Cash Flow in 2012

As a distributor of small home appliances, due to the tight cash in the hands of upstream companies, the pressure on the dunning parties is different. Yesterday, a dealer in Jiuyang admitted to the reporter: “Before the settlement of bills with companies, the pressure on corporate bills and repayments was relatively large, and we had to pay early.”

“The small home appliance industry has fallen back from the climax of development, and now the operating cash flow of the company is particularly important,” said Su Er’er, a secret secretary of Supor.

Concerned about corporate cash flow

In the first half of this year, the overall performance of mainstream small home appliances declined. For example, the sales revenue of Jiuyang fell by 4.5%, and its profit dropped by 5%; ASD 002403, its share sales revenue decreased by 15%, operating profit decreased by 58%; Supor sales revenue decreased by 4.04%, and profits decreased by 4.33%.

"The overall performance of small home appliances has fallen. For us, we are mainly concerned with the company's cash flow." A home appliance industry researcher at a Shanghai fund company told a reporter of "Gold Securities" yesterday. The reporter was informed that during the latest conference on small home appliances and institutions, Supor also emphasized “good cash flow performance” when recommending to organizations.

Supor’s operating cash flow actually increased by more than four times in the first half of this year. In the first half of 2011, operating cash flow was 70.80 million yuan, up from 300 million yuan in 2012.

In contrast, nine Yang shares 002242, the stock's cash flow dropped sharply. In the first half of 2011, there were 200 million yuan. In the first half of this year, there were only 78.02 million yuan, a decrease of over 200 million yuan.

Regarding the sharp reduction in operating cash flow, a person from the Securities Department of Jiuyang Securities told reporters yesterday: “The main reason is that the bills receivable should be increased.” From the financial report, the reporter found that Jiuyang’s bills receivable in the first half of the year amounted to RMB 700 million. However, accounts receivable are not much, only about 90 million yuan.

Supor Bills receivable is 600 million yuan, accounts receivable is 100 million yuan, with no significant changes in the past.

A member of the Jiuyang Securities Department admitted to the reporter: “In terms of money collection, Supor has done a better job.”

Half-year payment is not credited

"Actually, settlement of bills has always been a common practice among home appliance companies." The above-mentioned Jiuyang dealer told the "Golden Securities" reporter: "After we purchase, we have no cash in hand, but we have a bank acceptance bill. Then I use this bill to pay the money, this is the settlement of the bills."

In general, the final maturity date of the bill is six months. Jiuyang Securities Department official confirmed: “We generally require the dealer’s bills to be cashed out in 3 to 6 months.”

Upstream companies have demanded that dealers pay back as much as they can within 3 months because of tight cash flow in their own financial reports.

"The decrease in revenue, the decline in gross profit margin, and the increase in bill receivables, the operating cash flow of home appliance companies must be reduced." However, the above-mentioned fund company researchers told reporters that the current operating cash flow for small household appliances enterprises Don't worry too much.

The researcher frankly stated that for example, the cash on the nine-yang account has 1.2 billion yuan and the current liabilities are 1 billion yuan, so there will not be much problem in the capital chain.

"If small-scale small home appliance companies are limited in their ability to operate due to financial constraints, they will also actively seek mergers and acquisitions to find a large backing," the researcher reminded reporters.

Open source and throttling into mainstream

Small household appliances market is recognized as "China's home appliance industry last profit cheese", and now is also difficult to seek the road to development, one of the policies is: to increase revenue and reduce expenditure.

Secretary Supor's secretary Ye Jide laments how the future of small appliances is hard to say. For Supor, bedding is relatively mature and stable, but the future will be relatively low growth. In the event that performance cannot be achieved at a high speed, "shrinking dieting" has become the strictest standard in the industry.

Although Supor's cash flow is relatively substantial, in the case of a bad economy, not only attention to cash flow receipts, but also the control of management costs are also trying to control.

However, some fees are still evasive. Take Supor as an example. In the case of poor sales abroad, it began to increase domestic sales. However, the relative increase in the proportion of domestic sales requires a certain amount of marketing, which also led to a 1.36% year-on-year increase in sales expense ratio in the first half of 2012. The cost rate is still high.

“The promotion of new products is an important source of small household appliances to increase gross profit margin and increase revenue.” The above-mentioned fund company researcher pointed out that “so, even if the pressure on receipts increases, the promotion of new products will not be reduced.”

A dealer in Supor told the reporter: “The current situation is that before September to October, we will focus on pushing new products. Now it is open until the whole year. We push new products every quarter. We hope that the speed of new product sales will increase. The liquidity can also be improved."