Making a 'core' dream of home appliance companies
On May 21st, at a press conference held in Shenzhen, many media outlets focused on a company whose main business was color TV. However, this conference did not seem to be related to 'color TV'. Under the spotlight, the president of Konka Group. Zhou Bin announced that Konka has restructured its business and reorganized it into four business groups: the “Technology Park Business Group”, the “industrial product business group”, the “platform service business group” and the “investment financial business group”.
In Zhou Bin's commentary, Konka Group will get rid of the traditional "consumer electronics" traditional manufacturing label, and then grow into a 'platform company driven by technological innovation'.
Standing in the spotlight, Konka Group announced the establishment of a new environmental protection technology division, Semiconductor Technology Division. In recent years, environmental protection, technology has become a hot word, companies are also competing to enter this hot spot. In Konka view, these two new areas Will bring considerable profits to Konka. Zhou Bin believes that although the current chip core technology is in foreign countries, but in the field of IoT chips, China may have the opportunity to overtake the corner in the next few years.
In the semiconductor industry, it is known to the public that Dongming Zhu’s high profile externally stated that Gree will invest RMB 50 billion into the chip field. In fact, this industry has long had a “low-key” layout for home appliance companies. According to the latest data from Gartner, a well-known global market research organization, In 2017, the global semiconductor industry revenue totaled 420.4 billion U.S. dollars, which was 21.6% higher than the 345.9 billion U.S. dollars in 2016. This is the first time that the semiconductor industry has exceeded the 400 billion U.S. dollar mark, which is of landmark significance. At the same time, China’s semiconductor industry scale Increasingly, according to data from the China Semiconductor Industry Association, sales revenue reached 535.52 billion yuan in 2017, a year-on-year increase of 23.5%, a record high.
Since the "ZTE chip event" fermentation, the chip has become a 'hot word' for domestic companies. Not only Huawei, Ziguang and other technology companies have accelerated chip R&D and design, Gree, Konka and other home appliance companies are also eager to try. Konka claims to plan to use 5 to 10 years, Became among the ranks of international excellent semiconductor companies, committed to becoming China's top 10 semiconductor companies, achieving annual revenue of more than 10 billion yuan.
In fact, the semiconductor industry is an industry with a high barrier to entry, and it is 'burning money'. At the same time, there are technical barriers. From the transition from home appliance companies to semiconductors, questions from the outside world have come one after another. Konka Group Vice President, Semiconductor Technology The department head Li Hongyi responded by saying: 'Konka's semiconductors are not groundless.' He further pointed out that Konka has a reserve in chip technology and released 8K chips at this year's CES (United States Consumer Electronics Show), and won the CES Innovation Award. , Konka has a leading edge in chip technology.
With the advent of the Internet of Things and artificial intelligence, the intelligent upgrade of home appliances has become an inevitable trend. The development of smart home appliances will lead to a substantial increase in the demand for chips. At present, domestic home appliances use imported chips. Take Konka as an example. Konka spends US$1 billion annually to purchase semiconductor devices. It is estimated that it will reach 10 billion yuan in 2018, an increase of more than 30%. The demand for the next five years will further increase.
A science and technology commentary columnist once said in an interview with this reporter: 'In terms of the current situation of home appliance companies, whether in responding to the government's call or breaking through the bottleneck of the original development, it is natural to choose to make chips. The matter. 'The home appliance manufacturers subdivide the chips according to the characteristics of their products, customize the research and development, and make home appliances have differentiated functions, which is expected to enhance the home appliance companies' own core competitiveness and profitability. Bell said in an interview with this reporter: 'As far as the current situation of home appliance companies is concerned, whether in responding to the government's call or breaking through the bottleneck of the original development to achieve transformation, choosing to do chips is a natural thing. ' Home appliances Based on the characteristics of its products, the vendors subdivided the chips and customized R&D to make the home appliances have differentiated functions, which is expected to enhance the core competitiveness and profitability of the home appliance companies.
There are differences between chips used in the home appliance industry and those used in Huawei, ZTE and other communications industries. Home appliances have relatively lower access thresholds than PCs and mobile phones in terms of the Internet of Things and storage, but they also need adequate preparation.
In the semiconductor industry, Konka chose to use a “smart way” to do it. Li Hongyi stated that Konka focuses on investment in memory chips, packaging and measurement, etc. “We do our own R&D, we will also consider acquisitions, etc., but wafer fabrication We will not vote for these heavy assets. 'He further pointed out that storage, the Internet of Things chip is the future direction of Konka Semiconductor's two major business.
'Semiconductors do not happen overnight. They can't be achieved quickly, but they can be protracted.' In this regard, Zhou Bin also frankly stated.
Self-build + merger and acquisition
When entering new industries, Konka is accustomed to self-construction and acquisition of companies 'walking on two legs'.
Taking the semiconductor industry as an example, Konka not only has its own R&D team, but also plans to acquire 'a team with core competencies'.
In the new strategic plan, Konka is no longer a simple household electrical appliance company, but a technology-driven platform company. Zhou Bin said: 'The innovation of the mechanism system has brought us a huge dividend. Konka is a platform, welcome. All kinds of partners have come to cooperate with Konka. '
In the early stages of entering the new industry, Konka is keen to try through mergers and acquisitions, and other methods such as the formation of joint venture companies later. Take the environmental protection industry as an example, Konka Group stated that it has started contributing 240 million yuan in succession on December 11 last year. Shares in Tianyuan Environmental Protection, a company listed on the New Third Board. This is not the first time Konka has been in the environmental protection field. As early as 2015, Konka had already invested in Wanrong Technology. The latter is a solid that is mainly engaged in the recovery, treatment and reuse of solid wastes. Waste disposal company officially listed on the New Third Board on August 20, 2015.
The well-targeted company Konka is 'in the bag', for example, Yikang Technology has become the holding company of Konka. According to the data, Yikang Science and Technology is mainly committed to providing customers with solutions for water projects and related environmental projects, which means Konka is gradually expanding the scope of development in the field of environmental protection.
KONKA's environmental protection industry is not merely chasing hot spots, but also has its own needs. Under the strategy of 'technology+industry+urbanization', KONKA initially formed Konka Dongguan Smart Appliance Industrial Park, Konka Luzhou Kechuang Center, Konka Kunshan Logistics Industrial Park, etc. across the country. With the layout, these science and technology industrial parks also have wastewater treatment, waste gas, and solid waste disposal needs. Konka's development of environmental protection industries is conducive to complementing each other.
The environmental protection industry is a typical policy-driven industry, and it has grown rapidly with the strong support of the government. According to the 2017 Annual Report of China's Environmental Protection Industry Listed Companies, the annual growth rate of operating income growth rate for environmental protection listed companies from 2013 to 2017 More than 20%, especially since 2016, the growth rate of the environmental protection industry has increased.
However, there are many kinds of environmental protection areas, and the industries are complex, involving water, gas, soil, solid wastes, and monitoring and management. As a result, some media question whether Konka may be over-extended, and Liu Xitian, Director of the Strategic Development Center, also stated: 'The scope of the environmental protection field Very wide, Konka can't do everything. At present, the water is done by ICON Technologies. Konka is working with the environmental protection companies on waste gas treatment.
KONKA has certain advantages in entering environmental protection enterprises. It not only has the background and strong support of central SOEs, but also has sufficient capital preparation and good industry synergy. Environmental protection occupies an important position in Konka's new strategy. It is said that Konka will be in the late 13th five-year plan. Realize annual revenue of 60 billion yuan, which means that if the original main industry does not have large-scale growth, then the newly entered semiconductor and environmental protection industry should generate at least 30 billion yuan in revenue.
Zhou Bin declared that Konka's environmental protection business plans to achieve annual revenues of 8 to 12 billion yuan in 1 to 2 years, and set a magnificent goal, that is, hopes to use 3-5 years to build first-class domestic environmental protection operation and maintenance high-end Brand, achieve the annual revenue of 18 billion to 26 billion yuan of strategic goals.
Concomitant with the ambitious goals, Konka needs large sums of money to invest in new industries. This will be a long process, and Konka’s current performance profit is not accompanied by ambitious goals. Konka needs to be large. It is a long process to invest funds in new industries, and Konka’s own current profit is not sufficient. The large-scale transformation plan also puts forward new requirements for Konka’s financing capabilities.
What is the connotation of the 100 billion yuan layout?
Technological innovation requires a lot of funds for research and development. Konka's transition is not easy. According to Li Hongyi, 'Konka will release an IoT chip this year, and only a 40x32 chip will require more than one million US dollars in investment.' This is only part of the personnel expenditure. R&D needs high-intensity, continuous input, and every year we need to save money for research and development.
According to the 2017 earnings report of Konka, the annual research and development expenses amounted to 329 million yuan, up 72.02% year-on-year. Konka paid more attention to research and development than ever before. For a long time, Konka's performance was not good, and its profits were also high. Not enough, but since last year, Konka's revenue has achieved a breakthrough of 20 billion yuan to 30 billion yuan, and net profit has also reached 5.057 billion yuan, setting a record high.
According to Li Chunlei, Chief Financial Officer of Konka Group, Konka is not short of funds and the funds are in good condition. One of the reasons why Konka has emboldened to say 'not bad money' is the strong support of OCT, a major shareholder, according to Li Chunlei, since 2015. At the beginning, OCT provided nearly 10 billion yuan worth of credit lines to Konka, and Konka can obtain relatively low-cost funds by issuing ultra-short credits.
Outside the major shareholder, Konka itself has continued to expand its own financing channels, such as the announcement of May 22 Shenzhen Konka A (5.390, 0.00, 0.00%) (000016.SZ) announcement, the company’s total nominal face value of the non-public offering of corporate bonds. Total not more than RMB 5 billion (including RMB 5 billion). As a listed company, Konka has multiple financing methods.
Li Chunlei believes that Konka itself has assets securitization business, including loans for industrial mergers and acquisitions, or funds for the development of science and technology parks, and some industries in science and technology parks. Konka considered 'raise' and 'return' when it was voted.
At the government level, Konka is also expected to receive financial support. Zeng Jing believes that: 'With Konka's original technical foundation and R&D team in the chip field, coupled with the background of state-owned enterprises, there is ample opportunity for government funding support.'
Taking the semiconductor field as an example, as early as 2014, the government established the National Integrated Circuit Industry Investment Fund (the “large fund”). The fund's goal is to enable the Chinese chip industry to be self-sufficient and to meet the needs of the huge manufacturing supply chain. With the increase in domestic demand for chip technology, the second phase of the big fund is planned to raise 200 billion yuan to invest in domestic chip companies. This shows that the government attaches importance to chip technology, and Li Hongyi also revealed that Konka is currently cooperating with major funds.
Industrial economy critic Hong Shibin further pointed out that the central government’s support funds for chips need to be implemented on local governments. How much financial support can enterprises get depends on the financial strength of local governments.