(Yicai) Aug. 31 -- Midea Group, Haier Smart Home, and Gree Electric Appliances, three major home appliance makers in China, all posted over 10 percent growth in net profit in the first half as busy air conditioning unit sales helped buoy weak demand for other types of white goods.

Among the three, Midea recorded the highest growth, followed by Haier and Gree, according to the firms' interim earnings reports.

Sales of household appliances in China rose just 3 percent to CNY371.1 billion (USD50.9 billion) in the first six months of this year from a year ago, per data from the China Household Electric Appliance Research Institute. But sales of air con units surged by 16 percent to CNY90.7 billion (USD12.4 billion).

Midea logged a 14 percent increase in net profit to CNY18.2 billion in the six-month period while its revenue rose by 8 percent to CNY197 billion. Revenue from the Foshan-based firm's air con business rose by 11 percent to CNY92 billion and the gross profit margin widened to 23.4 percent, up from 21.1 percent, resulting in a major profitability boost.

Haier recorded CNY9 billion in net profit, a 13 percent addition. Revenue rose by 8 percent to CNY131.6 billion. But operating income from the air con segment jumped as much as 19 percent to CNY23.1 billion.

Gree expanded its net profit by 11 percent to CNY12.7 billion and its revenue rose by 4 percent to CNY99.2 billion. Income from the Zhuhai-based firm's A/C business rose just by 2 percent to CNY70 billion but the related gross profit margin jumped to 35.7 percent, up from 29.9 percent. Although Gree's A/C business grows slower than the above-mentioned two rivals, its profit margin is higher.

Diversification Efforts

Home appliance firms are seeking new avenues of growth via diversification. Midea is allocating resources to business-to-business products such as robotics and automation while Haier is expanding its business of small home appliances. Meanwhile, Gree develops industrial and new energy products.

In the first half, Midea's B2B business segments all grew quicker than its business-to-consumer segments. More specifically, revenue from Gree's electro-mechanical business rose by 12 percent, that from building technologies surged by 21 percent, and that from robotics and automation leaped by 24 percent.

Haier has been offering more complete sets of white goods and new products such as clothes dryers, dishwashers and cleaning robots. From January to June, the company opened almost 1,960 experience stores for complete sets of household appliances in China, expanding its business by over CNY1 billion.

Gree has been successful in entering new fields as the firm boosted its revenue from industrial products by 90 percent to CNY5.5 billion while its income from green energy products rose by 51 percent. In comparison, that from household appliances rose merely by 0.02 percent to CNY2.2 billion.

Overseas Developments

Makers of white goods are coping with lower export orders. China exported USD43.1 billion of home appliances in the first half, down by 2 percent, according to customs data.

Midea recorded a 3 percent increase in overseas revenue to CNY80.5 billion, lower than its domestic growth. The gross profit margin of its foreign business climbed by 3.3 percentage points to 25.8 percent. The firm continued building plants in Brazil and Mexico, and opened a new washing machine factory in Egypt.

Haier managed to grow quicker abroad than on the home turf as the firm recorded a nearly 9 percent increase in overseas revenue to CNY66.9 billion due to a shift to high-end products with updated prices.

Gree worked on branding, sought new distributors around the world, and won bids for many large-scale engineering projects such as the Jakarta-Bandung High-Speed Railway. However, growth was better at home than abroad as revenue from core exports dropped by 7 percent to CNY12.8 billion.

Editor: Emmi Laine