(Yicai) Aug. 18 -- Hisense Home Appliances Group announced the Chinese white goods company will change the head of its air conditioner business on the same day it reported a 20 percent drop in net profit for the first half of the year.

Yin Biton has submitted his resignation due to work arrangement adjustments, and he will no longer hold any position at the company, Hisense said in a statement yesterday. President Yu Zhitao will replace Yin as head of the aircon business unit, Yicai learned from insiders.

Hisense yesterday reported a first-half net profit of CNY1.7 billion (USD245.9 million), down over 20 percent from a year earlier. Revenue fell 5.2 percent to CNY46.8 billion (USD6.9 billion).

In May last year, Hisense merged its household and commercial aircon businesses and appointed Yin as the president of the unit. Yin had worked at competitor Midea Group as senior vice president and president of its home aircon business unit for 23 years. He resigned from all positions at Midea at the end of 2022.

The aircon business unit is Hisense’s largest business segment. Last year, its revenue fell 3.6 percent to CNY38.8 billion from the year before, accounting for just over 44 percent of the total. In the first half of this year, it further narrowed 5.7 percent to CNY22.4 billion from a year earlier, with the gross profit margin down to 24.2 percent from 27.1 percent.

Before Hisense merged its household and commercial aircon businesses, their Chinese market shares were squeezed by Xiaomi and Aux Group and lagged far behind Midea, Gree Electric Appliances, and Haier Group. In March, Yin announced Hisense’s aircon business goal is to enter the top echelon of the global aircon industry by 2031.

“The competition in the aircon industry is intense now,” an insider close to Hisense told Yicai. “Since the merger of the company’s household and commercial aircon businesses last year, the depth of specialization is not enough.”

The aircon business unit is one of Hisense’s most promising segments, so having the firm’s president serving as the president of the aircon business unit is expected to help it integrate more resources, the insider noted.

China’s household aircon industry entered a period of deep adjustments in the first half, under pressure from deepening stock competition, slowing global demand, and running at high costs, according to data provider ChinaIOL. Aircon sales in China fell 5.6 percent to 62.8 million units in the six months ended June 30 from a year earlier, with exports down 6.8 percent to 52.7 million.

Climate, inventory, economy, and policy cycle mismatches are the core factors influencing the market, with geopolitical conflicts and policies in different countries amplifying market uncertainty, according to ChinaIOL.

Editor: Futura Costaglione