The three "helmsmen" of the A-share white power triumvirate are very interesting.
Dong Mingzhu of Gree Electric Appliances is extremely well-known, and his ability in the early years is obvious to all, but there have been many controversies in the past two years.
Fang Hongbo of Midea Group is relatively low-profile, but his ability is extremely strong, and he has the least doubts.
Soon after the change of helm of Haier Smart Home, the new chairman Li Huagang is not well-known at present.
Moreover, since taking office for a year and a half, Li Huagang has not yet delivered enough convincing results, and naturally there is not much controversy. He is just like Haier Smart Home, a company that is decent.
Dong Mingzhu, Fang Hongbo, and Li Huagang are all professional managers.
Different leadership styles have created different development trends of Gree, Midea and Haier.
For example, Dong Mingzhu, who has a sharp style, has created Gree Electric Appliances with strong profitability; The low-key and forbearant Fang Hongbo has created a stable and efficient Midea Group.
Haier Smart Home, which is good at "talking about concepts", has become the weakest profitability among the three giants.
Recently, Gree Electric has announced that it will create a profit of 29 billion yuan in 2023, a record high, and the corresponding operating income will be about 205 billion yuan.
Haier Group, the parent company of Haier Smart Home, announced that the group's global revenue in 2023 will be 371.8 billion yuan, but the total global profit will be only 26.7 billion yuan.
From the perspective of market capitalization, the latest market value of Midea Group has reached about 410 billion yuan, and Gree Electric Appliances and Haier Smart Home are both around 200 billion yuan.
Although Haier Smart Home is not the whole of Haier Group, it is also the core business segment of Haier Group.
In the first three quarters of 2023, Haier Smart Home's revenue is 130% of that of Gree Group, but its market value is basically the same. Haier Smart Home accounts for nearly 70% of Midea Group's revenue, but its market value is only half of that of Midea Group.
Haier Smart Home's net profit is less than half of Midea's
On June 5, 2019, Qingdao Haier issued an announcement to change the full name and abbreviation of the company.
The name of the company has changed from Qingdao Haier Co., Ltd. to Haier Smart Home Co., Ltd., and the abbreviation has changed from Qingdao Haier to Haier Smart Home.
The reason given by Haier for the name change was:In order to better reflect the company's global development, promote the implementation of the company's Internet of Things smart home ecological brand strategy.
The Internet of Things is not a new concept, and almost every home appliance company is mentioning it, but not many people like Haier Smart Home have changed their company names.
Five years have passed, and Haier Smart Home's financial report is still full of various lofty elements. Terms such as Internet of Things, personalization, digitalization, technology-driven, three-winged bird, scenario, and solution are frequently mentioned.
It is difficult to evaluate how well Haier's intelligence has advanced.
But to test the operating status of a company, there is a very intuitive indicator, that is, profitability. In more detail, there are net profit, gross margin, and profit margin.
And these three happen to be the weaknesses of Haier Smart Home.
In the first three quarters of 2023, Haier Smart Home's revenue is close to 200 billion yuan, ranking second among the three giants, more than 40 billion yuan higher than Gree Electric Appliances.
But its net profit was only 131500 million yuanIt is less than half of Midea Group and only 65% of Gree Electric.
In the first three quarters of 2023, Haier Smart Home's profit margin (net profit and operating income) is only 66%, much lower than Midea and Gree.
According to statistics, the profit margin of the A-share home appliance industry in the first three quarters of 2023 is 78%, Haier Smart Home's profitability is lower than the industry average.
This is not something that will happen in 2023. Take 2019 before the epidemic, and the profit margin of Haier Smart Home was 6 that year1%，During the same period, the profit margins of Midea Group and Gree Electric Appliances were about. 4%。
In 2019, Haier Smart Home's revenue was 200.8 billion yuan, almost the same as Gree Electric's 200.5 billion yuan. But the profit of Haier Smart Home that year was 123300 million yuan, less than half of Gree Electric's 24.8 billion yuan.
Five years have passed, what has changed in Haier Smart Home, which is under the banner of intelligence?
Haier Smart Home's sales expense ratio is 5% higher than that of Midea6%
In terms of brand appeal, there is no obvious gap between Haier, Midea, and Gree.
In terms of products, the three also have their own merits, Gree and Midea air conditioners, Haier refrigerators, washing machines, each has obvious market advantages.
So, what causes Haier Smart Home to lag behind in its earning power?
The answer is management ability.
As mentioned earlier, the three indicators that reflect profitability are net profit, gross profit margin and profit marginAlthough Haier Smart Home can't compete in net profit and profit margin, its gross profit margin is not lagging behind.
For example, in the first half of 2023, the overall gross profit margin of Haier Smart Home will be 304%；In the same period, the gross profit margin of Gree Electric's manufacturing industry was 344%, and the gross profit margin of the air conditioning business was 357%；Midea Group's manufacturing gross profit margin was 2675%, gross profit margin of consumer appliances 3199%。
Obviously, there is no significant gap in the gross profit margin of the three giants.
The factors that lead to the backwardness of Haier Smart Home's profitability are in the expenses of management and sales.
In the first half of 2023, Haier Smart Home's sales expense ratio will be 143%, management expense rate 42%。Both figures are significantly higher than those of Gree and Midea.
This is still the result of optimization, for the whole of 2022Haier Smart Home's sales expense ratio is as high as 159%, and more than 16% in 2021.
Li Huagang's "predecessor" Liang Haishan has served as the chairman of Haier Smart Home for more than 9 years since April 2013.
During his tenure, he also wanted to promote the optimization of sales and management rates. But the results are also not obvious. In 2014, Haier's sales expense ratio was about 13%, and by 2021, it will rise to 16% instead of falling.
During the same period, the sales expense ratio of Midea Group under the leadership of Fang Hongbo increased from 1035% down to 834%。
The high selling and administrative expenses directly illustrate a problem: the inefficiency of business operations.
Further, this reflects a problem with the company's management capabilities.
One of the simplest numbers to compare:
In 2022, Haier Smart Home 10Of the 90,000 employees, 1880,000 are salespeople.
In the same period, Midea Group 16Of the 60,000 employees, there are only about 9,000 salespeople; 7Of the 20,000 employees, there are only about 3,000 employees.
Doing the same business, why are the sales staff of Haier Smart Home much higher than their peers? This is worth sorting out the management of Haier Smart Home.
In fact, Zhang Ruimin, the founder of Haier Group, was initially known for his management ability. But later, with the development and growth of the company, the management of Haier Smart Home seems to have failed to inherit the fine tradition.
The new management has a lot to offer
In June 2022, Li Huagang was appointed as the new chairman of Haier Smart Home.
Since Zhang Ruimin in 1993, Haier has only experienced 4 chairmen in more than 30 years, and the changes are not frequent.
Li Huagang is Haier's "old man". He has been the Chief Operating Officer of Haier Electric Group since 2009It should be said that he is very familiar with Haier's state.
Soon after taking office, Li Huagang mentioned in Haier Smart Home's 2022 semi-annual report that he spent a lot of time communicating with customers, employees, and partners, and also communicated with important shareholders, including Haier Group.
He deeply felt that all stakeholders expected that under the leadership of this board of directors, Haier Smart Home would cross the economic cycle, maintain its advanced nature, and achieve long-term success.
Li Huagang said franklyThis means that in the next three years, Haier Smart Home will maintain higher growth than the industry.
This can be said to be the first goal set by Li Hua after he took office.
In fact, for an industry leader like Haier Smart Home, higher than the industry growth rate should only be a basic requirement.
However, with the current operational efficiency of Haier Smart Home, it is indeed not easy to achieve this goal.
Haier Smart Home is not devoid of operational efficiency.
In November 2021, when Li Huagang participated in a talk show, he specifically mentioned:Internal efficiency is paramount.
Li Huagang said that instead of using the traditional enterprise management method, we should use digitalization to reconstruct the enterprise process, mobilize the enthusiasm of employees, and stimulate everyone's potential through digitalization.
In September last year, Li Huagang mentioned again when summarizing the achievements of Haier Smart Home at a meeting:Haier Smart Home uses digital transformation and upgrading to achieve the first efficiency of enterprises.
Over the years, Haier Smart Home has also been emphasizing the transformation of enterprises through intelligence and digitalization.
However, judging from the current financial performance, Haier Smart Home has not yet ushered in the expected "qualitative change".
Can Haier Group's 4-year goal of 500 billion yuan be achieved?
Time is running out for Li Huagang and Haier Zhijia.
In March 2020, Haier Group held a meeting and put forward the goal of "500 billion yuan in 4 years and a new Haier".
To accomplish this goal, Haier Smart Home is undoubtedly an important part of it.
In 2021, 2022, and 2023, Haier Group's revenue will be 332.7 billion yuan, 350.6 billion yuan, and 371.8 billion yuan, respectivelyIt is still too far away from the goal of 500 billion yuan in four years.
A large part of Haier's past growth has come from extended mergers and acquisitions. Haier Group's M&A strategy has also continued to the present.
On December 29, 2023, Haier Group announced that it would acquire 20% of Shanghai RAAS Blood Products Co., Ltd. at a total price of 12.5 billion yuanand a total of 2658% of the voting rights will become the actual controller of Shanghai RAAS.
The same is true for Haier Smart Home.
On December 14, 2023, Haier Smart Home announced that it will use a wholly-owned subsidiary to increase the cost of about 6$400 million to acquire 100% of Carrier Worldwide's commercial refrigeration business.
This is also the first major merger and acquisition operated by Haier Smart Home after Li Hua took office.
But M&A is not a buy-in-the-money purchase. Poor integration can lead to more serious efficiency problems.
As of the third quarter of 2023, Haier Smart Home's goodwill has exceeded 24 billion yuan.
Moving forward with a heavy burden, Li Huagang and Haier Zhijia have a lot of burden.