德意志银行_关于中国空调产业的报告

GEMS:AsiaChinaTechnologyHardware&Equipment19October2006IndustryconsolidationisacceleratingMichaelFengResearchAnalyst(+86)[e-mail]lyst(+852)[e-mail]:WinneroftheindustryconsolidationWearelaunchingcoverageontheairconditionerindustryaswebelieveitistherighttimetorevisittheindustryfollowingtheconsolidation.WebelievetheacceleratingconsolidationandchangingcompetitiveenvironmenthavebecomemorefavorabletobigplayerssuchasGree.WeareinitiatingcoverageonGree/BuyandMidea/Holdrating.WebelieveGreewillbethelargestbeneficiaryoftheconsolidationbygainingmoremarketsharewhilemaintainingitsprofitability.DeutscheBankAG/HongKongAllpricesarethosecurrentattheendoftheprevioustradingsessionunlessotherwiseindicated.PricesaresourcedfromlocalexchangesviaReuters,Bloombergandothervendors.DataissourcedfromDeutscheBankandsubjectcompanies.DeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Independent,third-partyresearch(IR)oncertaincompaniescoveredbyDBSI'sresearchisavailabletocustomersofDBSIintheUnitedStatesatnocost.CustomerscanaccessthisIRat(000651.SZ),CNY8.23BuyMidea(000527.SZ),CNY8.83HoldCompaniesfeaturedGree(000651.SZ),CNY8.23Buy2005A2006E2007EP/E(x)5.511.710.7EV/EBITDA(x)5.513.012.9Price/book(x)1.12.01.8Midea(000527.SZ),CNY8.83Hold2005A2006E2007EP/E(x)7.413.111.4EV/EBITDA(x)2.95.84.7Price/book(x)0.91.41.12005domesticmarketshare28%18%19%35%GreeMediaHaierothersGree'sdistributionchannel34%33%33%GreeBrandedStoreNormalStoreBigretailerCompanyResearchIndustryFocusAcceleratingconsolidationandchangingcompetitiveenvironmentWebelieve:1)theacceleratingindustryconsolidationisbecomingmorefavourabletobigplayerssuchasGree,2)competitiveenvironmenthaschangedwithafocusonbetterproductqualityandserviceaswellasdistributionchannelsinsteadoflowprice,and3)bigplayershavebeenincreasingtheirmarketshares.GreeisthelargestbeneficiaryoftheconsolidationGreeisthelargestbeneficiaryoftheindustryconsolidationwithitsincreasingmarketshareandimprovedprofitability.2,500Greebrandedstoresallowittoreachthegrowthmarket.Itwillmaintainstrongsalesgrowth,drivenbythesalesofhigher-margincentralairconandtheinternationalmarkets.InitiatingcoverageonGreewithaBuyandMideawithaHoldGree’sTPofRMB11.3isderivedfromtheDCFmodelusing8.3%WACCand2%terminalgrowth.Midea’sTPofRMB8.1isderivedfromDCFmodelwith8.6%WACCand2%terminalgrowth.Keyrisksincludemarginerosion,RMBappreciation,int’lbusinessrisk,newenvironmentalstandards,andlossofclients.Figure1:CentralairconditionersmarketshareinthedomesticmarketYork16%Daikin15%Trane5%Others32%Haier5%Hisense3%Gree5%Carrier11%Midea8%Source:DeutscheBankestimates19October2006Hardware&EquipmentAirConditionerIndustryPage2DeutscheBankAG/HongKongTableofContentsInvestmentthesis..............................................................................3Outlook.....................................................................................................................................3Valuation...................................................................................................................................3Risks.........................................................................................................................................3Valuation............................................................................................4TargetpriceofRMB11.3onGreebasedonDCFandtargetFY07EPERof14.7x....................4Industrytrend....................................................................................7Industryconsolidationisaccelerating.......................................................................................7Domesticmarket......................................................................................................................8Growthtomoderategoingforward..........................................................................................9Exportmarket..........................................................................................................................11Exportgrowthalsoexpectedtomoderate.............................................................................12Industrycoststructure............................................................................................................13Pricing.....................................................................................................................................15RMBappreciationandnewenvironmentalstandards............................................................16Competition.....................................................................................17G