Essay on China Compressor

Submitted By bichngoc90
Words: 1168
Pages: 5
Open Document
www.parthenon.com

PARTHENON PERSPECTIVES

Boston | London | Mumbai | San Francisco | Shanghai

Opportunities in China’s Air Compressor Industry

NOVEMBER 2013

Contents

Chinese Air Compressor Industry Opportunities
Introduction to the Parthenon Industrial Practice

©2013 Parthenon Group LLC | 2

Now Is an Ideal Time to Consider an Investment in the Chinese Compressor Industry

Market Rebound Will
Drive Sustained
Growth

Local Market Leaders
Are Well Positioned to Capitalize on
Future Growth

Select Cost Efficient
Players Will Be Able to
Outgrow the Market

•

The China screw compressor market experienced a downturn in 2012 due to the end of economic stimulus-funded demand and the overall economic slowdown in China.
However, industry insiders expect the market to rebound and grow at 8-10% annually over the next three to five years, driven by increasing investment in downstream industries and additional replacement of piston compressors

•

Local leading players are expected to outpace market growth and continue to gain share in the domestic oil-flooded screw compressor market by offering reliable products with relatively low prices compared to multinational competitors. These companies possess the capability to expand into developing adjacent markets such as oil-free screw and centrifugal compressor, which is a key growth lever for further expansion •

Some recent market entrants are gaining share from both local and multinational players by providing very cost effective products which enables them to quickly gain market share and economies of scale

©2013 Parthenon Group LLC | 3

Screw Compressors Is the Most Attractive Segment for Investment Given the
Abundance of Local Companies of Investment Scale and Higher Margins
Piston Compressors
活塞空压机
Industry
Localization

Screw Compressors
螺杆空压机

Centrifugal Compressors
离心空压机

HIGH

MID-HIGH

LOW

• Local player market share: 90%+

Commentary

Industry
Profitability

• Has been gradually replaced by screw compressors due to lower efficiency in 15+ kW applications, higher maintenance costs and noise issues

• Local player market share:
60-70%
• Has fully replaced piston compressors in above 55 kW sector and will further take share from piston compressors driven by end users increasing efficiency requirements and government energy saving policies

LOW

MID

• Local player market share: 20%

•
•
•
•

Sales: RMB 150-200M
Net profit: RMB 20-30M
Net margin: 10-15%
CAGR ’09-’13E: 5-10%

•
•
•
•

Sales: RMB 100-200M
Net profit: RMB 15-30M
Net margin: 10-15%
CAGR ’09-’13E: 10-15%

Largest local screw air compressor producer after Kaishan (listed) with broad product range
Strong position in drilling & digging equipment providing significant customer synergies in mining sector
Starting to develop solution providing capabilities to capture increasing demand from heavy industries

•

High brand awareness as an early entrant in double screw compressor market Reliable product quality with mature screw cutter production technology
Local leading OFS producer to better serve light industries such as food & beverage, pharmaceuticals, electronics, etc. •

High net margin owing to nation-wide direct sales and large amount of aftermarket spare parts sales
No. 1 local player in single screw air compressor market with in-house screw cutter production capability
Developing centrifugal air compressors to extend business coverage

Source: Parthenon interviews and analysis

•

•
•

•

•

•

©2013 Parthenon Group LLC | 9

Companies We Like: Add-on Acquisitions
Kangkeer
康可尔

Business Scope

•
•

Air compressors (OIS)
Air cooling machines

Company
Background

•
•
•

Xinlei
鑫磊

Jufeng
巨风

•

Air compressors (piston, OIS)

•

Air compressors (OIS)

•

•
•

Established: 1996 (started to produce
Show More

Related Documents: Essay on China Compressor

Matsushita vs. Sony Essay

differentiated itself by focusing on product leadership.” Matsushita is the largest home appliances and household equipment (HAHE) producer in the world. Some of Matsushita’s products include: microwave ovens, refrigerators, irons, fax machines, air compressors, automatic washers and dryers, vacuum cleaners, air…

Words 1167 - Pages 5

Volkswagen Case Study: Volkswagen

brands under its giant corporate umbrella. It has 106 production plants in various countries around the world with 39,350 vehicles produced daily and vehicles marketed in 153 countries around the world. Besides vehicle manufacturing, turbochargers, compressors, chemical reactors and diesel engines for marine and other purposes are among some of the items that are also manufactured by…

Words 997 - Pages 4

Essay about informativespeechoutline 110911055656 phpapp01

oxidation of many metals C. Uses of DHMO include: As an industrial solvent and coolant In nuclear power plants In the production of Styrofoam As a byproduct of hydrocarbon combustion in furnaces and air conditioning compressor operations In WWII prison camps in Japan and in prisons in China for various forms of torture In pesticide production and distribution Conclusion A. The American government has refused to ban the production, distribution, or use of this damaging chemical due to its "importance…

Words 800 - Pages 4

Whirlpool Case Study Essay

a more global approach would encourage economies of scale in the firm’s manufacturing and assembly operations. * The firm sought cost reduction mechanisms in R&D, manufacturing, and services by locating plants in lower-cost locations like China,…

Words 1233 - Pages 5

Haier Case Study Essay

Haier Case Study 1. Discuss the primary reasons why Haier moves from a single and dominant business strategy to a diversified strategy. The single and dominant business strategy, which denote relatively low levels of diversification, more fully diversified firms are classified into related and unrelated categories. A firm is related through its diversification when there are several links between its business units; for example, units may share products or services, technologies, or distribution…

Words 1325 - Pages 6

Essay on Industry Mapping

portfolio of vehicles with which we aim to be among the leaders in fuel efficiency in every segment in which we compete. Smaller vehicle sales are increasing and Ford is taking advantage of these emerging markets in Brazil, Russia, India, and China. It is expected that vehicle sales in these areas will increase at a faster rate than in the mature markets. Ford is increasing production capacity either directly or in joint ventures to accommodate this growth. The smaller and more fuel-efficient…

Words 2480 - Pages 10

Business report Essay

burden OPPORTUNITIES Develop new software Customer demand Business partnerships (resellers) Room for innovative design Expansion to other appliances Technological breakthrough New customers New channels to markets Improve to higher quality compressors Achieve awards and certifications Export to different countries Increase in sales to implement economies of scale Lower price Establish board of directors with knowledge in business Increase market share Capitalize on growing economies…

Words 4559 - Pages 19

Toyota Final Corporation Analysis Essay

Executive Summary • The Toyota Motor Corporation is leading the way to future mobility through innovation, productivity, quality and efficiency. Toyota uses a self-developed strategy known as the Toyota Production System (TPS) to guide business process improvements. TPS has been utilized by a variety of industries all over the world. The advantages of TPS are savings in time, space and resources resulting in increased efficiency and revenue. Toyota Motor Corporation is a leading global automobile…

Words 5174 - Pages 21

Coal Fired Power Plant General Technical Specifications Essay

1.0 General Description 1.1 General 1.1.1 Project Capacity This project is planning to install 2×300MW units, The configuration of unit is Pulverized coal fired boiler with condensing steam type turbine, and Limestone-gypsum wet Flue Gas Desulphurization system adopted. 1.1.2 Site Conditions(supposed for the technical proposal for the present.) 1. Location The power station is located at Boalkhali Chittagong Bangladesh 2. Fuel & Transportation The source of coal for the power station…

Words 3901 - Pages 16

Employee Satisfaction Internship Report

Internship Report on “A STUDY ON EMPLOYEE SATISFACTION”, AT SVS ALLOY CASTING PVT LTD, NELLORE. BY JAGADEESH.P (1IC13MBA38) Submitted to VISVESVARAYA TECHNOLOGICAL UNIVERSITY, BELGAUM In partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION Under the guidance of INTERNAL GUIDE EXTERNAL GUIDE VIJU SAMUEL G.SRIDHAR Assistant professor Managing Director Department of MBA IMPACT COLLEGE OF ENGINEERING AND APPLIED SCIENCE (2013-2015) TABLE OF CONTENT…

Words 9677 - Pages 39