Who is abandoning Sacon kitchen appliances? Sunrise in the East is not the savior

For Sunrise East, which is eager to get out of the loss-making quagmire of solar water heaters, Sacon kitchen appliances have become a "lifeline", supporting the company from the dilemma of "volume decline and profit loss". However, for the Chinese kitchen appliance industry, the industry, the market and consumers have begun to abandon Sacon, a once-old kitchen appliance brand.

Sacon Kitchen Appliances, once one of the "Fang, Lao Shuai" three giants in China's high-end kitchen appliance market, has encountered strong squeeze from its peers, ruthless abandonment by merchants and rapid forgetting by consumers in the fierce market competition in just a few years.

According to the recently released semi-annual report of Sunrise East, Sacon, once one of the top three high-end kitchen appliance companies in China, achieved revenue of 485 million yuan in the first half of this year, a year-on-year increase of 17.9%, and a net profit of 41.47 million yuan after being sold to Sunrise East, a solar water heater company. Compared with the decline in volume and profit of Sunrise East's traditional solar water heater business, the performance is good. However, compared with its former kitchen appliance peers Robam Electric, Vatti Shares and Vanward Electric, it has been left far behind.

Robam Electric's 2017 semi-annual report shows that the company achieved revenue of 3.198 billion yuan, a year-on-year increase of 27%; net profit of 598 million yuan, a year-on-year increase of 41%. Vatti's 2017 semi-annual report shows that the company achieved operating income of 2.708 billion yuan, a year-on-year increase of 30.36%; net profit attributable to shareholders of listed companies was 236 million yuan, a year-on-year increase of 52.63%. Vanward Electric's 2017 semi-annual report shows that the company achieved revenue of 3.066 billion yuan, a year-on-year increase of 28.82%; net profit of 214 million yuan, a year-on-year decrease of 7.20%.

In addition, according to internal information, the unlisted Fotile Group has achieved revenue of over 5 billion yuan in the first half of the year, continuing to lead the high-end market. Meanwhile, Haier and Midea, two giants in the home appliance industry, have continued to increase their kitchen appliance business in the past two years, achieving double-digit growth in revenue, and both have achieved annual revenue of over 10 billion yuan. The curtain has opened on the era of "big brands, large scale, and big capital" for China's kitchen appliance industry.

It can be seen that whether in terms of revenue scale, operating profit, or year-on-year growth rate, Sacon Kitchen Appliances, once one of the three giants of high-end kitchen appliances, has been left far behind by its peers in the market. Sacon's revenue scale is less than one-tenth of Fotile and less than one-sixth of Robam; at the same time, Sacon's operating profit is less than a fraction of Robam Electric. This shows that it has not only completely fallen in scale, but also has no competitiveness in the mid-to-high-end market. Although at the end of March 2017, Sunrise Oriental, the big brother of the water heater industry, Taineng, acquired 75% of Sacon's shares for 735 million yuan and entered the kitchen appliance industry (including range hoods, gas stoves, disinfection cabinets and water heaters).

However, compared with the declining position of Sacon in the kitchen appliance industry, Sunrise East is not having a good time in the solar water heater industry. In the first half of this year, the company's revenue was 1.176 billion yuan, a year-on-year increase of 10.36%, and the net profit attributable to shareholders of listed companies was 76.1 million yuan, a year-on-year decrease of 43.7%. However, the net profit attributable to shareholders after deducting non-recurring items (i.e., deducting special income not related to the main business) was only 16.39 million yuan, a year-on-year drop of 77.15%.

Specifically, Sunrise East's subsidiaries, including Sunrain Group, Shandong Sunrain Solar Energy, Lianyungang Sunrain Trading, and Jiangsu Four Seasons Solar Energy, which are involved in the sales of solar water heaters, all suffered losses, with net profits of -11.898 million yuan, -1.6797 million yuan, -518,600 yuan, and -30.5564 million yuan, respectively, with a total loss of more than 44.65 million yuan. The newly acquired Sacon Kitchen Appliances contributed the most profit, at 21.9621 million yuan (profit in the consolidated statements from April to June).

That is to say, in the first half of this year, if the revenue report of Sacon Kitchen Appliances was not merged, Sunrise East's original main business of solar water heaters would have suffered a loss in volume, which was quite embarrassing. Under the circumstance that Sunrise East's main business was "unsustainable", Sacon Kitchen Appliances wanted to use Sunrise East's platform, including channels, marketing, human resources and other resources, to achieve kitchen appliance business and revenue scale in the future, which was obviously just "a game and a dream".

At present, the Chinese kitchen appliance industry where Sacon is located is developing rapidly on the road to becoming bigger and stronger. In addition to the continued expansion of a number of professional leading companies such as Fotile, Robam, and Vatti, a large number of comprehensive home appliance companies including Midea, Haier, Hisense, and even Joyoung and Supor have increased their investment in the kitchen appliance industry. Since last year, the Chinese kitchen appliance industry has taken the lead in launching a reshuffle campaign in the third and fourth tier markets.

Data calculated by China Market Research Group shows that the overall kitchen appliance market will reach RMB 90 billion in 2017. Among them, the retail sales of range hoods increased by 6.88% year-on-year in the first half of this year, and the sales of gas stoves increased by 4.31% year-on-year. Although the growth rate of Sacon Kitchen Appliances in the first half of this year outperformed the market, its current revenue is too small and it is no longer qualified to participate in the mainstream kitchen appliance market.

Next, for Sunrise East, although the idea of ​​doing the Dashuaikang kitchen appliance business is good, it is unlucky. Just like its transformation from solar water heaters to air-energy water heaters and water purifiers in the past few years, it always rushes into it and then finds that it has missed the best entry period!

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.