Dong Mingzhu emphasized that Gree Electric does not care about the stock price, "we do not rely on the stock price to survive".
Author |Liu Liang.
Edit |Fun about business.
During this time, the comedy movie "The Annual Meeting Can't Stop" resonated with many "workers". And just recently, Gree Electric (000651SZ) held its own annual meeting - "2024 Global Dream Festival" under the "high expectations", and sparked heated discussions on the Internet.
Among them, the most discussed by netizens is that Gree employees sang "My mother is Dong Mingzhu" at the annual meeting, and the clips spread during the same period also included "Wang Ziru maintained order at the annual meeting". In this regard, Gree's official response saidThe show is an allegro in which the performers make a little joke in order to add to the humorous atmosphere
Screenshot of Weibo.
Another highlight is that Dong Mingzhu, chairman of Gree Electric Appliances, announced at the scene:Gree will take out an extra 200 million yuan to give employees a year-end bonus。After this news was announced, the capital market also gave a positive reactionOn January 29, the stock price of Gree Electric opened higher
However, after the incident, it was revealed that the 200 million year-end bonus was not cash, but deducted with Gree G3 mobile phone and online ** points; Gree also immediately issued an official statement to refute the rumors, saying that "the 200 million year-end bonus is actually Gree's mobile phone" is a false report.
Gree Culture "WeChat***
The luxurious annual meeting, pompous programs and related hot topics on the Internet have been the topic of Gree Electric Appliances and its head Dong Mingzhu since the beginning of 2023, which has also made "Miss Dong" a veritable "topic queen" in China's home appliance industry. WhileWith Dong Mingzhu's personal efforts and active participation, Gree's "live broadcast delivery" has also done well, and the brand seems to be gradually moving towards "Internet celebrity".
As one of the most well-known entrepreneurs in China, the hot topics related to Dong Mingzhu are basically related to Gree, but since entering 2023, the hot spots around Dong Mingzhu seem to have "gone astray".
First, the "love and hate" with the "future **" Meng Yutong was hyped. In the first half of 2023, Meng Yutong posted on social ** that he had resigned from Gree Electric and would continue to study in the future. Then netizens began to speculate about the "real insider": some netizens said that Meng Yutong resigned in order to do live broadcasts and realize traffic, but he denied it; There are also self-** revelations that Meng Yutong was expelled by Gree instead of voluntarily resigning.
Until December, Dong Mingzhu spoke at the induction ceremony of the 2023 college students of Gree Electric Appliances, and used Meng Yutong as a negative case to criticize him for not doing his job as a secretary, saying that he just "became an Internet celebrity with the help of our platform, and could not tolerate such a person in Gree, so he fired her".
Screenshot of Weibo.
Regarding Dong Mingzhu's remarks, many netizens expressed their disagreement. Some netizens pointed out that although Meng Yutong's performance at work may not be satisfactory, considering that she has been leaving her for a long time and has not had any obvious illegal behavior, it seems inappropriate to criticize her frequently.
Screenshot of Weibo.
After that, Dong Mingzhu was deeply involved in the "scandal" with Wang Ziru. Some time ago, Dong Mingzhu and Wang Ziru participated in a ** dialogue program on a satellite TV. At the scene of the program, Wang Ziru, who transformed into the "person in charge of the channel reform project of Gree Electric Appliances", unabashedly expressed his admiration and admiration for Dong Mingzhu; And Dong Mingzhu also compared Wang Ziru with other Internet celebrity employees, saying that the two are not on the same starting line at all.
Screenshot of Weibo.
However, Wang Ziru's speech was linked by netizens to Luo Yonghao's "life advice" before, which caused widespread discussion. For a time, some well-known ** people, Internet celebrities and technology big V ridiculed Wang Ziru; At the same time, rumors about Dong Mingzhu and Wang Ziru spread.
Screenshot of Moments.
Regarding the "scandal", Dong Mingzhu has publicly spread rumors many times, but with little effect; For this reason, Gree Electric chose to report the case directly to the public security. On January 30, according to ** reports, a number of self-aided enterprises, including Gong Wenxiang, Fu Sheng and "Make a Friend-Luo Shi", were fined or detained by the public security organs for insulting and slandering Gree Electric Appliances and company executives。Since then, the matter has come to an end for the time being.
Screenshot of Shanghai Securities News China** network.
For a long time, Dong Mingzhu's entrepreneurial image has been deeply bound to the Gree brand; Unlike other Chinese home appliance companies, Gree often directly uses "Dong Mingzhu IP" for brand promotion.
However, the use of entrepreneurs' personal IP for brand marketing has very high requirements for the personal image of entrepreneurs, which should not only show people with a positive image and convey the positive value of the brand to consumers, but also be consistent with the brand positioning and values of the enterprise.
However, since 2023,The controversial topics surrounding Dong Mingzhu have appeared many times, which may also have a negative impact on Gree's brand image; Hexun.com previously reported that "Dong Mingzhu's IP is backing up Gree Electric".
Screenshot of Hexun.com.
Under the heated discussion,Dong Mingzhu has also changed from the former "Iron Lady" to an "Internet celebrity entrepreneur"; And Gree, under her helm, seems to be gradually "Internet celebrity".
Since 2020, Gree Electric has tried to bring goods live on Douyin. During the "618" period of that year, Gree's "Zhihui 618 Healthy Life Home" theme live broadcast activity hit 102The sales record of 700 million yuan also gave Gree a taste of the "sweetness" of live broadcasting.
Canned Gallery.
Gree's "Internet celebrity road" has made a good start, and since then, Gree has begun to tilt its marketing and channels online, and even started an "unprecedented" national tour live broadcast in China's home appliance industry.
In 2020, Gree's 13 live broadcasts recorded a total sales of 47.6 billion yuan, while the company's total revenue that year was 1704$9.7 billion; In other words, live streaming revenue accounts for about 28% of total revenue.
StillGree's most popular live broadcast account is still the "Pearl Yutong Selection" Douyin live broadcast room led by Meng Yutong and deeply participated by Dong Mingzhu (renamed "Gree Pearl Selection" after Meng Yutong's resignation)., which has accumulated nearly 3 million followers so far.
Screenshot of Douyin.
After nearly 3 years of exploration, Gree seems to have found the "traffic password" for live broadcasting. In the "Post-Meng Yutong" era, Gree actively invited well-known anchors and top influencers to participate in live broadcasts; Whether it is Dong Mingzhu and the knowledge paid head blogger with more than 80 million fans on the whole network, or the cordial conversation with Zhang Lan at the event, it can be seen that Dong Mingzhu "spares no effort" and "is full of tricks" in mining new traffic.
Gree's "Internet celebrity" temperament is also reflected in a series of "eye-catching" new products. Among them, perhaps the most typical is the rose series air conditioner designed by Dong Mingzhu, which was ridiculed by netizens as "90s aesthetics" and "ugly, earthy and expensive". It is worth mentioning that Gree officially responded that the air conditioner is a work of art that has undergone three generations and four upgrades.
Screenshot of Weibo.
However, unlike the pure "Internet celebrity" brand, for a long time, Gree's home appliances have been recognized and loved by consumers not by traffic and hot speculation, but by real cost performance and quality, as well as strong brand power.
However, in recent years, Gree has rarely launched popular products that have been recognized by the industry and the market, and seems to have spent more energy on marketing. The use of new marketing methods such as live streaming will bring about an increase in product sales in the short term, but in the long run, in the context of the increasingly "involution" of the home appliance industry, players still have to rely on product power and brand power to win.
Labeling "Internet celebrity" seems to weaken Gree's "Made in China" brand power, not a blessing. For a brand like Gree, online celebrity live streaming may not be a "life-saving straw", but may become "the straw that breaks the camel's back".
Although live streaming is doing "booming", the current market environment facing Gree is not optimistic。Today's home appliance industry has entered the Red Sea market, and has shifted from incremental expansion to stock game, and the growth of home appliance leaders, including Gree, has also slowed down significantly.
From the perspective of operating income, regardless of the special circumstances in 2015, from 2011 to 2018, the revenue growth rate of Gree Electric Appliances was generally more than 15%, and even increased by more than 30% in many years. However,Since 2019, Gree Electric's revenue growth has slowed down significantly, and the growth rate has dropped to single digits
Data**: Gree Electric Appliances Financial Report.
In terms of profits, 2019 was another watershed. Gree Electric's net profit attributable to the parent company maintained a high year-on-year growth rate before 2019However, after 2019, it fell sharply, and even showed negative growth for two consecutive years in 2019-2020
Data**: Gree Electric Appliances Financial Report.
What cannot be ignored is that Gree has also been surpassed by Midea and Haier, which are also the "three giants of Chinese home appliances".
Let's start with the change in market capitalization. At the end of 2015, the market value of Gree Electric was higher than that of Midea Group (000333SZ) and Haier Smart Home (600690SH), which is the first of the Big Three；By the end of 2017, the market value of Gree ** had already caught up with the United States. Since then, the gap between the market value of Gree and Midea has become wider and wider, and the market value of Haier has been catching up at an accelerated pace; By the end of 2023, Gree's market value will be overtaken by Haier, ranking at the bottom of the Big Three
Data**: wind
In terms of financial data, Gree's performance growth in the past five years has significantly lagged behind that of Midea and Haier. From the perspective of year-on-year revenue growth, in the past five years, Gree's revenue growth rate has only surpassed Haier in one year, and the rest of the years are lower than Midea and Haier.
Data**: Gree, Midea, Haier financial reports.
It can be seen that Gree has been surpassed by major competitors such as Midea and Haier. So why is this happening?
Perhaps the main problem lies in the strategic transformation. Household appliance giants seem to have predicted that the traditional home appliance industry will soon hit the ceiling, if you don't want to "roll" this stock market, you need to explore new growth poles, layout new tracks.
For example,In the field of major appliances, Haier deployed high-end home appliances and smart home appliances earlier。Its high-end brand Casarte has become the most well-known and competitive high-end home appliance brand in China, and has incorporated GEA of the United States and FPA of European home appliances into its command to create a global layout of high-end home appliance brands. At the same time, Haier has also expanded to the downstream of home appliances, spent 15 years exploring and cultivating a full-scene whole-house smart solution brand - Three-winged Bird, and released a "1+3+5+N" whole-house smart full-scene solution in 2022; Haier has also gradually transformed from a simple home appliance manufacturer to a smart life scene service provider
Canned Gallery.
And Midea is "taking a bigger step" in the pace of strategic transformation. As early as 2016, Midea began to open the "buy, buy, buy" model at home and abroad, spending tens of billions of yuan to launch a number of diversified mergers and acquisitions, and most of them were direct acquisitions of mature enterprises.
According to the incomplete combing of "Fun Solution Business", the companies acquired by Midea in recent years include: in 2017, it spent 30.5 billion yuan to acquire the international industrial robot giant KUKA Group to enter the robot and automation market; In 2020, it successively acquired Lingwang Elevator and Hekang New Energy to enter the building elevator and new energy vehicle market; In 2021, it acquired Wandong Medical, a provider of imaging products and services, to expand its medical imaging business; In 2023, it will acquire the listed company CLOU Electronics (002121SZ), entered the energy storage industry. Midea has defined itself as "a global technology group covering smart home, industrial technology, building technology, robotics and automation and other innovative businesses"; In October last year, Midea Group also submitted a listing application to the main board of the Hong Kong Stock Exchange.
Screenshot of Midea Group's Hong Kong stock prospectus.
On the other hand, Gree has carried out a series of diversified transformation and reform attempts in the past ten years, involving mobile phones, refill equipment, chips, industrial equipment, medical equipment, and new energy vehicles, which seem to have achieved little and lackluster results overall.
Liu Buchen, a senior home appliance industry analyst, believes that Gree's diversified transformation began before 2010, but by the first half of 2023, products other than air conditioners will contribute less than 10% to Gree's revenue, and its operating performance is still highly dependent on the air conditioning business, which to a certain extent reflects that Gree's diversification is not successful.
Data**: Gree Electric Appliances Financial Report.
Specifically, from the perspective of Gree's income structure, industrial products and green energy are growing rapidly, although they are small. In this regard, Liu Buchen thinks:At present, there is no sign of the outbreak of Gree's industrial products and green energy businesses; Gree has been in these two fields for many years, and has not made a big contribution to revenue, let alone profit contribution, and basically has no sense of existence
Taking Yinlong New Energy (renamed "Gree Titanium New Energy" after being acquired by Gree) acquired by Gree in 2021 as an example, Dong Mingzhu took a fancy to its lithium titanate battery technology, believed that it had broad market prospects, and hoped to help Gree transform its business from household air conditioners to new energy vehicles; However, lithium titanate battery technology has always been difficult to solve the disadvantages of low energy density and high cost, and finally lost in the fierce competition in China's power battery market. According to the financial report data of Gree Electric Appliances, Yinlong New Energy will lose 1.9 billion yuan in 2022, with a cumulative loss of nearly 3 billion yuan in three years.
Screenshot of Weibo.
As for the reasons why Gree's diversified transformation is not very successful, Liu Buchen believes that there are two main points:First, the transformation to some tracks is relatively late with its peers, and it lacks first-mover advantages; The second is that Gree's transformation obviously lacks internal logic, and often follows social hot spots, "a hammer in the east and an ax in the west".
The deeper problem may lie in Gree's corporate governance structureLiu Buchen believes that the decision-making mechanism of Gree enterprise is not a modern enterprise decision-making mechanism, but a decision-making mechanism of human governance；Gree's highest decision-making is not like other peers, which is a scientific and prudent collective decision of the board of directors, but an expression of Dong Mingzhu's personal willAt the board level, Gree lacks a checks and balances and error correction mechanism that should be in place for the company's decision-makers when making major decisions
It is worth mentioning that the current dynamic P/E ratio of Gree Electric is only 755 times. In comparison, Midea and Haier have dynamic P/E ratios of 1248 times and 1300 times; is also a leading household appliance company, and Gree's valuation is much lower. Liu Buchen believes that the capital market is reluctant to give Gree a high valuation, in addition to not being able to see the future transformation direction of Gree, but also feeling that there are big problems in its governance structure, which brings great uncertainty to the company's development.
Canned Gallery.
In the past, Gree Electric Appliances was synonymous with "Made in China", a representative of national household appliances, and a flaunt for Chinese brands to go overseas; Today's Gree seems to be lost on the road of strategic transformation, and it is difficult to see high-quality explosive new products.
On the evening of January 28, at the "Gree 2024 Global Dream Ceremony", Dong Mingzhu revealed that Gree's profit in 2023 will be about 29 billion. Tax revenue in 2023 will hit a record high, and "it is hoped that the tax revenue to the country in 2024 will exceed 20 billion". She also said, "Looking ahead, in 24 years, 25 years, in the next five years, we will strive to double."
Dong Mingzhu also emphasized that Gree Electric does not care about the stock price, "we do not rely on the stock price to survive"; For shareholders, Dong Mingzhu shouted that if you have confidence in Gree, you should hold Gree for a long time.
Dong Mingzhu, who has led Gree Electric Appliances from an unknown local small brand to the "peak" of China's home appliance industry, is now 70 years old Whether she can lead Gree to "return to the top" again, we will wait and see.
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