This Chinese hot stock is about to get even better after rallying over 140 per cent in Hong Kong, thanks to record heatwaves

Name: Record temperatures expected globally in 2023 as El Nino weather pattern returns
Uploaded: 2023-07-26T03:55:12.000Z
Duration: 2 min 26 s
Description: Record temperatures expected globally in 2023 as El Nino weather pattern returns

Hisense, a leading air-conditioner manufacturer, has surged more than 140 per cent in Hong Kong this year, boosting its market value to HK$33.8 billion (US$4.3 billion)

Heatwaves in China have fuelled air-conditioner sales, which have risen 12 per cent to 90.9 million units in the first half from a year earlier

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The Hisense exhibit is seen is seen on opening day of the 2020 Consumer Electronics Show in Las Vegas. Photo: AFP

Jiaxing Li

Published: 11:55am, 26 Jul 2023Updated: 5:07pm, 26 Jul 2023

China’s top air-conditioner manufacturers are having their best summer in years as sales multiply amid extreme heatwaves. That is about to make the market-beating rally in Hisense Home Appliances Group even better in the months ahead, analysts said.

Hisense, one of the largest industry players, has appreciated 141.6 per cent in Hong Kong this year through Wednesday, boosting its market value to HK$33.8 billion (US$4.3 billion), according to Bloomberg data. That has outgunned the broader market’s 2.1 per cent loss and the 60 per cent gain in PetroChina, the best performer among the Hang Seng Index’s 80 members.

Hisense is not a Hang Seng Index member. Its Shenzhen-listed stock, a member of the Shenzhen Composite Index, has risen 81.5 per cent this year. Rival Midea Group has appreciated 13 per cent while Gree has climbed 20.2 per cent this year in Shenzhen.

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Record temperatures expected globally in 2023 as El Nino weather pattern returns

Overall air-conditioner sales increased by 12 per cent to 90.9 million units in the first half this year from a year earlier, outpacing the 4 per cent gain in the broader home-appliance market, according to data provider All View Cloud. Demand is likely to keep growing as heatwaves are likely to persist, it added.

“The domestic air-conditioner market is booming this year, thanks to the hot summer and low inventory,” said Su Chen, an analyst based in Shanghai at Sinolink Securities. The momentum shows no signs of slowing down and will aid Hisense’s profitability, he wrote in a note to clients last week.

Record temperatures caused by the El Nino weather phenomenon this year are baking many mainland Chinese cities, pushing households to install more air-conditioners or replace older ones, making Hisense and rival producers like Midea, Gree and Haier the envy of producers in other sectors of the struggling Chinese economy.

Air conditioners installed outside a residential building in Kwun Tong, Hong Kong. Photo: Edmond So

Home ventilation and air-conditioners accounted for 45 to 47 per cent of Hisense annual sales over the past two years, according to its annual reports.