"The transformer situation in 2011 is increasingly not optimistic." People in the interview mentioned this to the reporter without any explanation. Excessive capacity, price suffocation, and many hidden dangers in quality, under the influence of multiple factors, the survival status of the transformer industry is in jeopardy.
If the hands of time are reversed back to a year ago, people may not have thought that the development of wind power suddenly slowed down during the year, nuclear power projects were suddenly put into the “cold houseâ€, and large-scale high-speed railway construction was “speed-limitedâ€. At the same time, the pace of construction of UHV has slowed down... In 2011, which was placed on high hopes, it seems that it has evolved into a "Rhapsody" full of "Mirroring the Moon". The abrupt changes in the external environment, coupled with the self-contradictions of the transformer industry, have made this industry more passive in 2011, and have continued to reveal the bizarre phenomenon of “inverted†market prices and the universality of production costs.
At the same time, the increase in the cost of financing, labor costs, and the cost of running a business makes it even more difficult for this tangled industry to be on the verge of survival.
In this moment of crisis, people have to be reconsidered: Who is in the hands of the power of the transformer industry?
When will usher in "dawn"?
The above topic seems to be a bit heavy. Let’s talk about the good news first: the deposit reserve ratio has finally been lowered!
Referring to this point, many company executives can hardly hide their excitement in their words: "Although this is fashionable and it cannot be judged whether it is a signal of national monetary policy adjustment, it is a step in any case!"
On December 5, the central bank decided to cut the deposit reserve ratio of deposit-taking financial institutions by 0.5%. This financial news seems to be the only good news for this industry in recent days. Will the 35-month hard-won days end? Does this mean that the industry is struggling for the "dawn" in the dark?
An executive of a listed company, who declined to be named, told reporters: “Many projects planned for construction this year have been postponed or delayed. On the one hand, the pressure on the transformer company’s inventory is really not small. On the other hand, transformer companies also Unable to recover the accounts receivable in time, the cost of liquidity is relatively large. The central bank raised the deposit reserve ratio for 35 consecutive months, which is a very big pressure for manufacturing companies.â€
Therefore, in the situation where the financing of the company is gradually becoming more difficult, any “swept event†may become the company’s “last straw that crushed the camelsâ€. Therefore, due to comprehensive consideration of factors such as relieving capital pressure, reducing inventory compression, and aggressively seeking down payment, many companies choose to sell products below the cost price.
“This year our company’s operating income dropped by as much as 30% year-on-year, and the decline in net profit was more than that. The most frightening thing is that the current winning bid price is actually lower than the material price, not to mention the labor force and management costs. Not only does it appear in our company, but many brothers do not like this?†said the listed company’s executives.
According to the above-mentioned sources, the sales price of the whole industry will be lower than the cost price by 10% on average this year. Even in some companies, this figure is as high as 30%. The normal market order has been seriously disrupted.
“Under the low market price, we often make it difficult for bids. If the bids mean losses, if there is no bid, there will be no orders.†He was helpless.
People can not help but ask, what causes this problem? It is not difficult to see that when some companies deal with pressure, they sacrifice their products for the purpose of “creating their hands and feet†in production, and then sell them at low prices to gain market share. For a long time, companies in the industry had to “follow the trendâ€. Each of these transformer companies is a victim, but it is also a participant. Therefore, we have to say that if the industry does not form a consensus that “the snow is in front of the houseâ€, I am afraid that this situation will hardly change in the short term.
When does the price dispute break?
At the end of September this year, the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China (AQSIQ) announced a sampling inspection report for the transformer industry (for details, please refer to "Electric China", September 2011). According to the report, the overall pass rate of the sampled 29 companies is only 69.0%. , The product pass rate is not high. Among them, the sampling rate of large-scale enterprises' products is 75%, and that of medium and small-sized enterprises is 63.6% and 71.4%, respectively.
During the interview, the reporter learned that people pointed to the low bid rate of the product to the tendering method of “low-price winning bid†by the grid company. For this reason, the journal has also made special reports. What is gratifying is that under the multi-party appeal, the two major power grid companies have changed the past “price set the world†approach, and changed to a more fair and transparent “middle price bid.â€
It stands to reason that after the change in the bidding method, the market orientation gradually shifted from emphasis on price to emphasis on quality. However, why is there still a phenomenon of “inverted sales prices and production costs?â€
Industry knowledge tells the reporter that transformers are currently facing severe overcapacity pressures. Under the wide gap between supply and demand, who will write high bids in the bidding process?
According to incomplete estimates, the total capacity of the domestic brands of only TBEA (600089), Baoding Tianwei, and China West (601179) is about 600 million kVA, plus 500 kV, 220 The total capacity of the transformer industry in China is about 3 billion kVA, but the annual market demand is only about 1.3 billion kVA. The naked contradiction between supply and demand makes enterprises have to sell their own interests in the market competition.
"A lot of companies still dare not show real prices during the bidding process, so the so-called 'middle price' still does not reflect the overall level of the industry, but what can we do?" For the chaotic market order, the above companies are high. The tube is very helpless.
It is reported that in the bidding process of some countries in Europe, if the bid price of the project is too low, relevant industry organizations will intervene. However, under the current market environment in China, prices are completely market-driven. No one or any industry organization can intervene freely in product prices. Then price issues naturally become a problem of self-consumption in the industry.
In the past, some industry experts also proposed that "from the perspective of industry fairness, the cost of transformers should be calculated for the user's reference so as to achieve a vicious competition to suppress low-price competition." This method has actually received the support of many people in the industry. However, because different companies have different design principles, financing costs, labor costs, etc., it is difficult to reach a "middle price" that is recognized by all parties.
The situation of overcapacity is severe and the market order is chaotic. Under such an aggressive market situation, if the participants do not take active self-help behavior, who else will save?
Of course, the need for industry self-rescue is by no means limited to a chaotic industrial order, and core technology is another area where the industry has to save itself. For example, as China has not yet been able to break through the relevant technologies of certain key components, "technology hollowing out" severely restricts the development of the transformer industry.
"If high-tech prices cannot be purchased today, related technology will make transformer enterprises more helpless if they have technical problems. The bushings can be as high as 50% of the total price of a DC converter transformer. Since related technologies have not been realized, only With foreign companies asking for prices, how do other core technologies become worthless?†said the executives of the listed companies. It is understood that the same conditions exist for insulation molded parts, silicon steel sheets and other raw materials, and the road to localization is still long.
Some experts predict that during the “12th Five-Year Plan†period, the transformer industry will gradually enter a “strategic contraction period,†and the transformation of enterprises and product structure adjustment will be the only way. Therefore, whether it is to further increase investment, or choose to retreat from the body, can only be achieved by the company's self-rescue and salvation. In the final analysis, after all, it was because of its frequent problems that it caused the industry to “recessionâ€. If you do not choose to save yourself, who will save?
If the hands of time are reversed back to a year ago, people may not have thought that the development of wind power suddenly slowed down during the year, nuclear power projects were suddenly put into the “cold houseâ€, and large-scale high-speed railway construction was “speed-limitedâ€. At the same time, the pace of construction of UHV has slowed down... In 2011, which was placed on high hopes, it seems that it has evolved into a "Rhapsody" full of "Mirroring the Moon". The abrupt changes in the external environment, coupled with the self-contradictions of the transformer industry, have made this industry more passive in 2011, and have continued to reveal the bizarre phenomenon of “inverted†market prices and the universality of production costs.
At the same time, the increase in the cost of financing, labor costs, and the cost of running a business makes it even more difficult for this tangled industry to be on the verge of survival.
In this moment of crisis, people have to be reconsidered: Who is in the hands of the power of the transformer industry?
When will usher in "dawn"?
The above topic seems to be a bit heavy. Let’s talk about the good news first: the deposit reserve ratio has finally been lowered!
Referring to this point, many company executives can hardly hide their excitement in their words: "Although this is fashionable and it cannot be judged whether it is a signal of national monetary policy adjustment, it is a step in any case!"
On December 5, the central bank decided to cut the deposit reserve ratio of deposit-taking financial institutions by 0.5%. This financial news seems to be the only good news for this industry in recent days. Will the 35-month hard-won days end? Does this mean that the industry is struggling for the "dawn" in the dark?
An executive of a listed company, who declined to be named, told reporters: “Many projects planned for construction this year have been postponed or delayed. On the one hand, the pressure on the transformer company’s inventory is really not small. On the other hand, transformer companies also Unable to recover the accounts receivable in time, the cost of liquidity is relatively large. The central bank raised the deposit reserve ratio for 35 consecutive months, which is a very big pressure for manufacturing companies.â€
Therefore, in the situation where the financing of the company is gradually becoming more difficult, any “swept event†may become the company’s “last straw that crushed the camelsâ€. Therefore, due to comprehensive consideration of factors such as relieving capital pressure, reducing inventory compression, and aggressively seeking down payment, many companies choose to sell products below the cost price.
“This year our company’s operating income dropped by as much as 30% year-on-year, and the decline in net profit was more than that. The most frightening thing is that the current winning bid price is actually lower than the material price, not to mention the labor force and management costs. Not only does it appear in our company, but many brothers do not like this?†said the listed company’s executives.
According to the above-mentioned sources, the sales price of the whole industry will be lower than the cost price by 10% on average this year. Even in some companies, this figure is as high as 30%. The normal market order has been seriously disrupted.
“Under the low market price, we often make it difficult for bids. If the bids mean losses, if there is no bid, there will be no orders.†He was helpless.
People can not help but ask, what causes this problem? It is not difficult to see that when some companies deal with pressure, they sacrifice their products for the purpose of “creating their hands and feet†in production, and then sell them at low prices to gain market share. For a long time, companies in the industry had to “follow the trendâ€. Each of these transformer companies is a victim, but it is also a participant. Therefore, we have to say that if the industry does not form a consensus that “the snow is in front of the houseâ€, I am afraid that this situation will hardly change in the short term.
When does the price dispute break?
At the end of September this year, the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China (AQSIQ) announced a sampling inspection report for the transformer industry (for details, please refer to "Electric China", September 2011). According to the report, the overall pass rate of the sampled 29 companies is only 69.0%. , The product pass rate is not high. Among them, the sampling rate of large-scale enterprises' products is 75%, and that of medium and small-sized enterprises is 63.6% and 71.4%, respectively.
During the interview, the reporter learned that people pointed to the low bid rate of the product to the tendering method of “low-price winning bid†by the grid company. For this reason, the journal has also made special reports. What is gratifying is that under the multi-party appeal, the two major power grid companies have changed the past “price set the world†approach, and changed to a more fair and transparent “middle price bid.â€
It stands to reason that after the change in the bidding method, the market orientation gradually shifted from emphasis on price to emphasis on quality. However, why is there still a phenomenon of “inverted sales prices and production costs?â€
Industry knowledge tells the reporter that transformers are currently facing severe overcapacity pressures. Under the wide gap between supply and demand, who will write high bids in the bidding process?
According to incomplete estimates, the total capacity of the domestic brands of only TBEA (600089), Baoding Tianwei, and China West (601179) is about 600 million kVA, plus 500 kV, 220 The total capacity of the transformer industry in China is about 3 billion kVA, but the annual market demand is only about 1.3 billion kVA. The naked contradiction between supply and demand makes enterprises have to sell their own interests in the market competition.
"A lot of companies still dare not show real prices during the bidding process, so the so-called 'middle price' still does not reflect the overall level of the industry, but what can we do?" For the chaotic market order, the above companies are high. The tube is very helpless.
It is reported that in the bidding process of some countries in Europe, if the bid price of the project is too low, relevant industry organizations will intervene. However, under the current market environment in China, prices are completely market-driven. No one or any industry organization can intervene freely in product prices. Then price issues naturally become a problem of self-consumption in the industry.
In the past, some industry experts also proposed that "from the perspective of industry fairness, the cost of transformers should be calculated for the user's reference so as to achieve a vicious competition to suppress low-price competition." This method has actually received the support of many people in the industry. However, because different companies have different design principles, financing costs, labor costs, etc., it is difficult to reach a "middle price" that is recognized by all parties.
The situation of overcapacity is severe and the market order is chaotic. Under such an aggressive market situation, if the participants do not take active self-help behavior, who else will save?
Of course, the need for industry self-rescue is by no means limited to a chaotic industrial order, and core technology is another area where the industry has to save itself. For example, as China has not yet been able to break through the relevant technologies of certain key components, "technology hollowing out" severely restricts the development of the transformer industry.
"If high-tech prices cannot be purchased today, related technology will make transformer enterprises more helpless if they have technical problems. The bushings can be as high as 50% of the total price of a DC converter transformer. Since related technologies have not been realized, only With foreign companies asking for prices, how do other core technologies become worthless?†said the executives of the listed companies. It is understood that the same conditions exist for insulation molded parts, silicon steel sheets and other raw materials, and the road to localization is still long.
Some experts predict that during the “12th Five-Year Plan†period, the transformer industry will gradually enter a “strategic contraction period,†and the transformation of enterprises and product structure adjustment will be the only way. Therefore, whether it is to further increase investment, or choose to retreat from the body, can only be achieved by the company's self-rescue and salvation. In the final analysis, after all, it was because of its frequent problems that it caused the industry to “recessionâ€. If you do not choose to save yourself, who will save?
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