Nov. 21 (Bloomberg) -- Gree Electric Appliances Inc. and GD Midea Holding Co. paced losses by Chinese household appliance makers after Citic Securities Co. cut its recommendation on air- conditioner stocks.
Gree, China’s largest maker of home air-conditioners, slid 4.2 percent to 17.81 yuan as of 2:01 p.m., set for its lowest close since February 9. Midea, the nation’s second-biggest publicly traded appliance maker, retreated 3.8 percent to 12.02 yuan. The benchmark Shanghai Composite Index fell 0.5 percent.
Citic Securities, China’s biggest publicly traded brokerage, lowered the rating on air-conditioner stocks to “neutral,” saying a warm winter is expected to hurt sales and buyers are less willing to spend money amid the economic slowdown.
“A combination of slowing growth in October’s air- conditioner production and sales and other negative factors have weighed on sentiment on the industry,” Hu Yali, an analyst at Citic Securities, wrote in a report today, without saying what the previous rating for the industry was.
Output of household air-conditioners dropped 21 percent from a year earlier last month and sales fell 19 percent, according to the report. Exports slid 24 percent, a third consecutive month of declines, as Europe’s debt crisis and the slowing U.S. economy sapped the demand, it said. Europe and the U.S. account for about 30 percent of China’s overseas shipments of air-conditioners, the report said.
--Zhang Shidong. Editor: Richard Frost
To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at email@example.com
To contact the editor responsible for this story: Darren Boey at firstname.lastname@example.org