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White goods sales drop, but profits jump

TWO white-goods giants reported drops in first-half sales due to the global economic crisis but profits jumped thanks to plunging prices for raw materials.

"The improved profits were mainly attributable to the falling raw material prices and increased profit margins after turning their focus on energy-saving products, which boast higher profit margins," said Guo Haiyan, an analyst at China International Capital Corporation.

But Guo warned that the prices of raw materials such as copper are picking up with an optimism economic outlook boosting materials demand, which may hurt earnings.

GD Midea Holdings Co said revenue in the first six months fell 11.33 percent to 24.9 billion yuan (US$3.66 billion). But net income jumped 18.63 percent to 1.15 billion yuan in the same period, according to a statement filed to the Shenzhen Stock Exchange.

Gree Electric Appliances Inc of Zhuhai reported its sales declined 19.89 percent to 19.99 billion yuan in the January-June period while net profit rose 29.18 percent to 1.23 billion yuan, according to a separate filing to the Shenzhen Stock Exchange.


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