Maximum product price increase of 10%: Bull Group raises prices again

Recently, Bull's wholly-owned subsidiary Ningbo Bull Electrician Sales Co., Ltd. (hereinafter referred to as "Ningbo Bull") issued several price adjustment notices in succession.

The notice indicates that due to the continuous rise in raw material prices, price adjustments will be made for certain products, including hardware (Sales) channel, wall switch full (Sales) channel, and Decorative lighting LED full (Sales) channel.

The cutoff time for the original product prices is 17:00 on April 28, 2022 (subject to receipt of order and payment). The new prices for certain series and models of wall switches will take effect on the B2B platform on May 10, 2022.

According to a Bull Dealer, "The entire series of Bull switches and sockets, Bull LED lighting, and household appliances have seen a collective price increase of 3-10%. Orders for existing warehouse inventory placed before May 10 will still be honored at the original prices."

This is the second time this year that Bull Group has officially announced a price increase. In January this year, Bull Group issued a price adjustment notice stating that prices for certain series of wall switches would be adjusted. The new prices officially took effect on January 7, 2022, and the adjustment applies nationwide (including e-commerce).

At the same time, Bull issued a "Notice on Price Adjustments for Certain Household Appliance Products" to its dealers/distributors, announcing that prices for household appliance products—mainly including fan lights, bathroom heaters, cooling masters, and exhaust fans—would be adjusted starting February 22, 2022.

The main reason for Bull Group's price increase is related to the continuous rise in commodity prices. In previous price adjustment announcements, Bull Group stated that the adjustments were made to alleviate the pressure of rising material costs.

It has been observed that price increases are relatively common in the lighting industry.

Over the past year, the LED decorative lighting and electrical industry has seen multiple price increases. According to incomplete statistics, since June 2021, companies such as Bull Group, Grand Canyon Lighting, Silan Microelectronics, Unilumin Technology, and GE Current have successively announced price hikes.

Entering 2022, the industry has seen another wave of price increases. On January 1, 2022, Siemens adjusted prices for 24 product series, including VDI box, Zhiyi, Lingyun, General, Damped Floor Socket, Haorui, Floor Socket, and Zhiqi, with an increase of approximately 3%-5%.

Simon Electric (Simon) announced that, effective January 1, 2022, ERP prices for most products will increase by 5%–10%, and the 2% annual rebate for the DO channel will be cancelled. Cidoni Lighting stated that it will adjust lighting product prices starting January 1, 2022, with an overall increase of 3–5%. Price increases for commercial lighting products, home decoration products, and industrial and public building products are all approximately 3–5%.

In fact, not only foreign brands, but also many well-known domestic lighting brands have successively announced price increases. These include Foshan Lighting, Qiyi Group, and Orvibo, among others. The price increase notices from these lighting companies all took effect on January 1, 2022, with increases ranging from 3% to 10%.

At the same time, the price increases are invariably linked to the continuous rise in raw material prices. Taking copper as an example, data shows that the price of copper rose from 36,000 yuan per ton at the beginning of last year to over 70,000 yuan per ton by the end of the year, reaching a ten-year high in 2021. The same applies to aluminum; since the end of December last year, global aluminum prices have been on a steady upward trend.

Reflected in the financial report, Bull's gross profit margin has declined. It has been observed that since being affected by the pandemic in 2020, Bull Group first experienced sluggish performance growth, and subsequently, as raw material prices continued to rise, Bull's gross profit margin declined.

The financial report shows that Bull Group's revenue in 2021 was RMB 12.385 billion, a year-on-year (YoY) increase of 23.22%, with net profit attributable to shareholders of the listed company reaching RMB 2.78 billion, a year-on-year (YoY) increase of 20.18%.

In terms of gross profit margin, Bull Group's gross profit margins in 2020 and 2021 were 40.12% and 36.95%, respectively, representing year-on-year decreases of 3.12% and 7.9%.

Faced with the continuous rise in raw material prices, even leading enterprises cannot escape the dilemma of declining gross profit margins. Therefore, how to stabilize prices amid rising costs has become an urgent issue for many lighting companies.

Source: Jiemian News