Product and Service

Companies included in HVAC manufacturer sector in household equipment industry primarily are manufacturers and marketers of HAVC products.

Demand for Product and Service

As indicated by typical sales data, the demand for HAVC products has been stable and growing in the past several years. It seems that sales performance of companies have been related to demand for replacement as a result of nature of life of those equipment and higher efficient equipment (higher price).

The Sector

Sector’s current, trend, causes behind trend, and future

Current and Trend

  • Generally, the demand for heating and cooling products has presented a solid growth in North America area as indicated by the increase in sale volume in the past several years.
  • It seems that there is trend in product mix to be shifting to higher price (more efficient products).
  • Demand has mainly come from replacement of existing equipment, especially from replacement for residential equipment.
  • The growth has presented accelerating trend but have to undertake pressure of raising price due to increasing steel costs.


Causes behind the trend

The demand for residential replacement for HAVC equipment is primarily a result of the aging of the installed equipment and products’ upgrading to higher energy efficient models.

The increasing realizations of health life and increase household income have also been behind the trend of increasing demand for HAVC products.

Housing market including new construction and the remodeling existing homes should have contributed to the increasing demand as well.

Industry Future

Supported by favourable factors, demand in this sector may go up. 


General Financial Performance of Companies In the Sector

This company, which is primarily a manufacturer and marketer of HAVC products, has been grouped into household appliance sector in household equipment industry.

It seems that there has been a strong growth in demand from US market for residential and commercial heating and cooling products in the past several years. This has been reflected by the sale volume increase as indicated by the data of the typical company in this sector, which presents a more than 5% annual growth in sales volume during the same period and it seems that the growth is accelerating in 2018. Sales have also benefited from rising selling price due to product mix’s shifting.

As a result of lower products costs (material costs) and increased sales and rising average selling price, the typical companies’ gross margin has gone up to about 29% in 2018 and the typical operating margin up to about 13% with a SG&A as percentage of sales of about 16% in 2018.

The typical average enterprise price/EBI ratio is: 29(interest/EBI ratio of 9%) and stock price/sales ratio is about 2.3.

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