According to media reports, Gree Electric Chairman Dong Mingzhu proposed a new goal at an internal meeting not long ago - sales target of 600 billion yuan by 2023.
The reporter asked the Gree official about this news and did not get a clear answer.
Some people close to Gree Electric confirmed the proposal of the target to the reporter of International Finance News.
Prior to this, Dong Mingzhu had set a goal for Gree Electric to hit 200 billion yuan in 2018.
Gree Electric's revenue in 2017 was 148.286 billion yuan, a year-on-year increase of 37%. Dong Mingzhu's goal of 600 billion yuan means that Gree Electric will achieve three times the revenue in six years.
Why did Dong Mingzhu propose this goal that is considered impossible? Can Gree’s performance be as high as Dong Mingzhu’s expectations?
1
Why put the words again?
Cailian·Interface reported that Dong Mingzhu pointed out that 'in the market economy, we need a wolf culture. In the work, we must remember the word 'preemption' anytime and anywhere, and dare to fight for it, so that we can adapt to the vagaries of the market, to achieve 2023 The goal of 600 billion in the year is to expand the territory and contribute strength. '
Many home appliance industry experts told the International Finance News that this goal is impossible to complete.
Dong Mingzhu, who has been engaged in the air-conditioning industry for nearly 30 years, will not be unclear, and the possibility of reaching the 600 billion sales target.
Industrial observer Hong Shibin believes that Zhuhai Yinlong, which Dong Mingzhu invested recently, has encountered a series of negative reports and doubts. Dong Mingzhu proposed that the goal of 600 billion yuan is to release signals to the outside world, return to the core business, and convey confidence to the outside world. Too high, too exaggerated.
According to public information, Dong Mingzhu is the second largest shareholder of Yinlong New Energy Co., Ltd. (hereinafter referred to as 'Zhuhai Yinlong'), with a shareholding ratio of 17.46%. Although the largest shareholder of Zhuhai Yinlong is the founder Wei Yincang, With the adjustment of the Yinlong executives, the Gree system has fully entered. From the outside world, Dong Mingzhu is the real controller of Zhuhai Yinlong.
Since 2018, Zhuhai Yinlong has suffered negative news such as arrears, work stoppages and layoffs. On July 18, the Jiangsu Higher People's Court seized the new energy commercial vehicle real estate project in Nanjing Yinlong. However, the project has been Unblocked on July 22.
Some insiders revealed to the reporter of the International Finance News that the reelection of the Gree Board of Directors was delayed because the Zhuhai Municipal Government and Gree still have concerns about the dual status of Dong Mingzhu as the chairman of Gree Electric and the actual controller of Zhuhai Yinlong.
On August 2, Gree Electric said on the investor interaction platform: 'The company did not make equity investment in Zhuhai Yinlong', and said that Dong Mingzhu's investment behavior against Yinlong is an individual behavior, and there is no violation of laws and regulations.
The above-mentioned person said that Dong Mingzhu's sales target of 600 billion yuan at this time may also be a call to Gree, and his focus is still on Gree Electric.
2
600 billion can be achieved
Gree Electric's 2017 annual report shows that in the revenue of 148.286 billion yuan, air-conditioning revenue was 123.41 billion, accounting for 83.22%, and life appliances, intelligent equipment and other main business accounts for 1.55%, 1.43% and 2.94% respectively.
From the perspective of revenue structure, Gree Electric is still an air-conditioning enterprise in essence. If Gree Electric Appliances wants to reach 600 billion yuan in revenue, the air-conditioning business must first set off the banner.
Hong Shibin said that the development of the air-conditioning industry to a certain high scale will enter a stagflation period, after which the growth will become more and more difficult, and the air-conditioning market will not be eaten by the Gree family.
According to Liu Buchen, Gree Electric has less than 30% chance of achieving 200 billion yuan revenue in 2018. He said that China is strictly implementing real estate regulation and control, and the development of air-conditioning industry will be restricted. In addition, China's air-conditioning industry will soon enter the new market. It is even more impossible for Gree to achieve 600 billion revenues in 2023.
Gree, the top three brands in China's air-conditioning industry, and the share of the air-conditioning market owned by Midea and Haier are around 70%. The operating income of these three companies in 2017 was 123.41 billion yuan, 95.35 billion yuan and 28.74 billion yuan, respectively. 2475 billion yuan.
This also means that the 600 billion target set by Dong Mingzhu is nearly double the market size of the entire Chinese air-conditioning industry.
In addition to the core air-conditioning business, can Gree Electric help cultivate new industries and help Dong Mingzhu achieve its great goal of 600 billion yuan in revenue?
Gree Electric's 2017 annual report reveals that the revenue generated by living appliances, smart equipment and other main businesses adds up to less than 10 billion. Gree Electric said in its annual report that it will expand in smart equipment, smart home, and new energy fields. However, the above industry experts are not optimistic about the development of these businesses in the past five years.
3
Dealers will bear the pressure
Liu Buchen told reporters that this year the air-conditioning industry did not develop well last year. However, many air-conditioning manufacturers announced that their revenues have increased. The actual situation is that dealers get goods from manufacturers, and manufacturers receive payment, but the goods are all pressed. In the dealer warehouse, it seems that the sales volume is growing, but the current air conditioning inventory is larger than at any time in history.
If Gree really wants to triple its revenue growth in six years, it means that Gree's dealers will be under greater pressure.
"International Finance News" reporter had previously reported on the operation of Hangzhou Gree dealers. At that time, Gree had said that the dealer had suffered losses due to poor personal management and lost money, which led to the loss of consumer interests.
Hong Shibin said that excessive growth targets mean that dealers will take greater pressure, and the goal of 600 billion revenue will be borne by dealers nationwide.
Liu Buchen said that if Dong Mingzhu is willing to go his own way, it is not a case for dealers to run.
For Dong Mingzhu’s 600 billion target, some investors laughed. Although Dong Mingzhu and Xiaomi founder Lei Jun (the industry laughed at it as Rebs) did not expire this year, did they consider opening another game?