CCID Consulting: China's UPS Market Expected to Rise Following Stagnancy in H1 2012

BEIJING--(BUSINESS WIRE)--In the first half of 2012, the revenue of China's UPS (uninterruptible power supply) market reached RMB 1.658 billion, representing a year-on-year growth of only 1.7%, much lower than the previous year’s 11.0% and worse than expected.

In the first half of 2011, the sales of China's UPS market increased by a wide margin year-on-year, driven by the constant recovery of China's economy and the rapid expansion of industrial production and investment. In the second half of 2011, however, the year-on-year growth rate saw a decline as the increasing uncertainties in the domestic and global economy affected China’s UPS sales.

The main factors currently influencing China’s UPS market include: the impact of macro economy on the entire UPS industry, the slowed growth of investment in data center construction in 2012, the government’s prudence in investment, and slowed development of SMEs. In addition, the government's investment cycle also exerted impacts on performance of the UPS market.

As far as macro economy is concerned, the domestic and global economic situations have been very complicated since the beginning of 2012. In the first half of 2012, China's GDP reached RMB 22.7098 billion, up 7.8% year-on-year, representing a growth rate 1.8 percentage points down from the previous year’s 9.6%. The first quarter saw an increase of 8.1%, while the second 7.6%. The investment in fixed assets (rural households excluded) experienced a nominal growth of 20.4% year-on-year, 5.2 percentage points down from the previous year.

Figure 1 Sales Revenue of China's UPS Market, Q1 2011-Q2 2012

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Source: CCID Consulting, July 2012

The performance of Eastern China, Northern China and Southern China remained stable in the first quarter of 2012, and the three regions together contributed more than 70% of the total sales revenue. Eastern China holding a 26.8% market share was the biggest winner, while in the first quarter of 2012, Northeastern China and Central China each witnessed a slight increase in their market share year-on-year, while Southwestern China experiences a decline.

Meanwhile, UPS demand from the financial industry increased noticeably in the first quarter of 2012, accounting for 24.2% of total market sales revenue, and such a rapid growth continued in the second quarter as well. However, the demand from the telecommunications industry both declined year-on-year, with their UPS market share standing at 24.2% and 5.0% respectively in the first quarter of 2012. The decline in the demand from the transportation industry was quite significant due to the shrunk investment in large road and railway projects.

In the first half of 2012, UPS products with a power range of 10-20KVA and 20-60KVA were the best sellers, which accounted for 48% of total sales. Meanwhile, the growth of the sales of 100KVA, 120KVA and 200KVA products was highly impressive. It is expected that the market share of high-power products will further increase in 2012. The high-power UPS products are mainly applied in large-scale data centers of telecommunications, industrial, financial and government sectors and high-end markets.

CCID Consulting estimates that China's UPS market growth will slow down in 2012. Based on preliminary estimations, the UPS market will achieve a 4.1% year-on-year growth in 2012, with a higher growth rate in the second half than the first. The overall market demand is expected to bounce back in the third quarter and be further enlarged in the fourth quarter.

Figure 2 China's UPS Market Size and Growth, 2007-2012E (Unit: RMB 100 Million)

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Source: CCID Consulting, July 2012

About CCID Consulting Co., Ltd.

CCID Consulting Co., Ltd., the first Chinese consulting firm listed in the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong (HKSE: 08235) and the first consulting firm which gets ISO 9001 international and national quality management system standard certification, is directly affiliated to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Xi’an, Wuhan and Nanjing with over 300 professional consultants. The company’s business scope has covered over 200 large and medium-sized cities in China. CCID Consulting provides customers with public policy establishment, industry competitiveness upgrade, development strategy and planning, marketing strategy and research, HR management, IT programming and management services, investment and financing, and M&A. The company's customers range from government departments at all levels and diversified industrial parks, to industrial users in strategic emerging industries in new generation information technology, energy saving and environmental protection, biological science and technology, high-end equipment manufacturing, new materials, and new energy. CCID Consulting commits itself to become the No. 1 advisor for urban economy, the No. 1 consultancy for enterprise management, and the No. 1 branch for informatization consulting in China.