Hisense acquired the Toshiba TV business, which itself has been heavily indebted, while the core technology and brand influence are not attractive enough, so the acquisition of the Hisense many investors doubts
It is questionable whether it is possible to take a missed vessel to the other side.
On November 14, Hisense Electric (600060.SH) announced that it will acquire a 95% stake in Toshiba Video Solutions Co., Ltd., a subsidiary of Toshiba TV Co., Ltd. After the transfer, Hisense Electric will acquire Toshiba's TV products, brands and operation services Such as the entire chain of business and has Toshiba Television global brand authorization for 40 years.The transaction price of 12.9 billion yen, or about 763 million yuan, the acquisition is expected to be completed by the end of February 2018 delivery.
Liu Hongxin, president of Hisense Group and chairman of Hisense Electric said that after the completion of the acquisition, Hisense will integrate the R & D, supply chain and global channel resources of both parties to rapidly increase the market size and speed up the internationalization process.
However, the industry does not seem so optimistic about the acquisition, the senior analyst Liang Zhenpeng appliance industry told the "Investor Report" Reporters: 'Hisense does not have the core technology, Toshiba did not, and Toshiba in recent years have plans to withdraw from the appliance industry, R & D investment Toshiba has been insolvent, Hisense has spent huge sums of money to buy.In addition, Toshiba will home appliances sales authorized Skyworth, TCL and many other manufacturers, dealing with the licensing of these enterprises also need to spend huge amounts of money, the acquisition of Toshiba is Irresponsible to investors. '
For a variety of market perspectives and questions, "Investor" correspondent sent a written interview letter to Hisense Electric on related issues, and then repeatedly call Hisense Electric PR staff on the phone, the other said: all information subject to the announcement.
Hisense International
According to the announcement, Hisense said it will further expand its global R & D, branding and marketing network in the future by integrating its R & D, supply chain and global channel resources with each other and leveraging each other in display technologies , Comprehensively enhance the company's global influence and comprehensive competitiveness.
The reason why Hisense can take over Toshiba's TV business is also related to Toshiba's experience in recent years. In recent years, Toshiba's TV business has shrunk dramatically. As early as 2015, Toshiba Television shut down overseas manufacturing factories and substantially abolished its employees. Europe, Southeast Asia and other regions trademark (due 2019-2021 years, respectively) for sale.
Toshiba suffered a nearly devastating blow to the global nuclear disaster in Fukushima in 2010. The Japanese government immediately shut down all nuclear power plants and a global shutdown of nuclear power plants was also ushered in.
Toshiba owns the United States Westinghouse Electric, mainly engaged in nuclear power construction business in 2015 Toshiba broke a loss of 4.4 billion US dollars, the largest loss in history, mainly due to the nuclear power business dragged down in 2016, the huge loss of the Westinghouse also let Toshiba business Reputation impairment as high as 61 billion US dollars, a direct result of Toshiba non-debts in 2016. Recently, Japan's Toshiba publicly said that the end of March 2018 fiscal year 2017, the company will net loss of about 1 billion USdollars. If the fiscal year 2017 can not turn around, Toshiba loss for two consecutive years, there is danger of delisting.
At this point the acquisition of Toshiba, seems to be a good time to pick up cheap, but the acquisition of Toshiba is conducive to the internationalization of Hisense, but also need to observe.
Two years ago, Hisense had an unsuccessful case of acquiring a well-known Japanese home appliance brand: In 2015, Hisense invested $ 23.7 million in acquiring Sharp's entire Mexican plant and its assets and acquiring the rights to use Sharp's Americas brand Brazil) However, it was not long before the quality of television products produced under the management of Hisense was poorly qualified by consumers for many times as Sharp seized its rights to use North American brand names from Hisense and transferred it to Foxconn.
Toshiba expensive
Toshiba sold in such circumstances, the general acquisition of its assets will drive down prices.But Hisense does not take advantage of the danger of the situation, but may have sent a big cheaper Toshiba.
As for Hisense Electric is able to get from the transaction how much technological advantage, Liang Zhenpeng expressed disappointment, first of all, Hisense has no core technology, the core components of the panel is a TV, Hisense does not have its own panel production technology, which is relative to the BOE, TCL Toshiba also did not have the appropriate technology, and the past 10 years, Toshiba in the planned withdrawal from the home appliance business, into the 2B direction, the technology research and development have not much investment.
On the evening of August 17, Hisense Electric released the semi-annual report, with net profit of 390 million yuan in the first half of 2017, down 46% from the same period of last year. The net profit of the three quarters was only 600 million yuan, down 47% year-on-year.
Panel prices led to the company's overall net profit fell an important factor, according to Liang Zhenpeng introduction, the panel is the highest cost of TV products parts, accounting for nearly 70% of the total cost, and Hisense does not have the panel technology, it does not produce the panel, so When the core components and parts costs rose sharply, their anti-risk ability and coping ability were weaker, while Toshiba acquired Toshiba did not have panel technology this time, so it is worrying whether the acquisition of Toshiba will help its development.
According to TCL2017 semi-annual report shows that its net profit of 1.03 billion yuan in the first half, an increase of 70.7%, TCL said that because of the panel business boom, the panel makers profits surge due to can be seen that the panel technology and production capacity for television The importance of the business.
Integration effect to be tested
Hisense has been trying to move toward internationalization in recent years, but the overall progress is minimal.
Many people in the industry believe that the choice of Toshiba, Hisense brand, but Toshiba's brand power has been greatly worse, and Toshiba in Southeast Asia has been authorized to Skyworth, in the domestic production and sales is entirely responsible for the TCL, and Hisense The first thing to be solved in the future is how to deal with the relationship with these enterprises.Liang Zhenpeng believes that Hisense in the integration of domestic and Southeast Asian markets, production and sales, will inevitably have to pay a large fee.
In addition, 40 years of Toshiba brand use rights, in the end to give Hisense Electric how much market share?
From the development of recent years, Toshiba's profitability and brand influence is also declining.Liang Zhenpeng said Toshiba TV investment in research and development on the lower, or even long ago there are plans to give up the television business, it gradually authorized to all local enterprises, Toshiba's brand power in this process is also undermined.
In addition, the decline in revenue in recent years, Toshiba, a serious loss, has been insolvent debt.Liang Zhenpeng believes that Hisense dropped profits and downs in the case, to buy Toshiba's business, will only deepen the loss.Once the completion of the transaction, the two sides consolidated , 763 million yuan in cash plus Toshiba TV business 8.9 billion in debt, Hisense's balance sheet will evaporate nearly 1.7 billion yuan in net assets, which net profit has been declining Hisense Electric performance Is a huge drag, but also irresponsible behavior for investors.