Text | Xie Zefeng
Edit | Yang Xuran
After winning the controlling stake of Kelu Electronics, the He Xiangjian family has controlled 7 A-share listed companies, plus the KUKA Group acquired overseas and the Hong Kong-listed Midea Real Estate. Coupled with being the largest shareholder of E Fund, the He family has built a huge wealth empire.
After retreating to the second line, he Xiangjian, who is increasingly low-key, did not really idle, but together with his son He Jianfeng, he used his capital advantages to frequently sweep goods, and a capital map covering home appliances, real estate, new energy, medical care, robotics, environmental protection, finance and other fields was presented and was still expanding.
Unlike the so-called "disorderly expansion" of Internet capital, the He family's industry is supported by the industrial manufacturing industry of the Midea Group, but its whip is far more than the manufacturing industry.
"We want to go from making products to doing business, from doing business to doing capital." The entrepreneur, whom Dong Mingzhu regards as the "biggest enemy", tried to complete the transformation from an entrepreneur to an investor after handing over the Midea Group to Fang Hongbo to take care of it.
Outside the He family, there are more and more industrial entrepreneurs who hope to use capital to expand the boundaries of the industry after completing the original accumulation of wealth, and the United States is not the first, nor will it be the last. Even this transition won't necessarily go smoothly.
01 After home appliances, expand the territory
In addition to the United States, He Xiangjian has used the capital bloodline to build a huge industrial map.
In 2012, the 70-year-old He Xiangjian announced his retirement and was succeeded by professional manager Fang Hongbo.
"Product-Enterprise-Capital", behind the scenes, the He Xiangjian family immediately gathered momentum in the capital market. "The world now relies on science and technology and capital, as long as there is money and technology, you can do anything." According to this logic of He Xiangjian, the capital operation of the He family is mainly concentrated in high-tech related industries.
As early as 2015, the successor Fang Hongbo made it clear that Midea had more than 40 billion yuan in cash in its hands, and it was impossible not to invest. But in the next three years, Midea will not buy an acre of land or build a new factory. Where does the money go? "It's all about invisible projects."
Since August of that year, Midea has continued to acquire shares in the industrial robot giant KUKA Group, and by May this year, Midea is close to wholly owning KUKA, with a cumulative cost of more than 30 billion yuan.
From 2020 to 2021, Midea successively included Hekang Xinneng and Wandong Medical as its actual controllers. On May 23 this year, Midea Group spent another 2.223 billion yuan to acquire 29.96% of the equity and voting shares of Kelu Electronics in the form of "proxy voting rights + fixed increase", becoming its controlling shareholder, and He Xiangjian became the actual controller of Kelu Electronics.
It can be seen that He Xiangjian personally or through the United States to make strategic investments. Although He Xiangjian has withdrawn from the management, he is still the "spiritual leader" of the Midea Group, and Fang Hongbo's "invisible project" is also focused on the technology industry.
Last year, Midea Group re-divided its business segments into five major sub-clusters – smart home business group, industrial technology business group, building technology business unit, robot and automation business unit and digital innovation business. Although home appliance revenue still accounts for 80%, Midea is no longer the home appliance company in people's impression, but a comprehensive industrial group.
Since the beginning of this year, based on the judgment of the macro-economy, Midea has chosen to shrink the front, to C business, and carry out category optimization; in the To B business that focuses on force, the "four big and four small" are retained, and the others are shut down and turned.
The so-called "big four" refers to robots and industrial automation, building technology, new energy auto parts, energy storage; "four small" refers to Wandong Medical, Ande Zhilian, Meiyun Zhishu, Meizhi Optoelectronics.
In addition, He Xiangjian also indirectly owns the German listed company KUKA Group (KUKA); Midea has also promoted the listing of its subsidiary Meizhi Optoelectronics on the Chi Technology Enterprise Market, but the current review status has become "suspended".
The Ho family has also made a big splash on the Sci-Tech Board through financial investment. So far, Midea has invested in semiconductor espressif technology, robotics company Eft-U, and industrial Internet of Things company Youfang Technology.
He Xiangjian's son He Jianfeng controls the Infore environment and Hualu Baina through its Subsidiary Infore Holdings; the eldest daughter He Qianchang's Huitong shares are an important upstream supplier of midea; and daughter-in-law Lu Deyan sits in the real estate sector.
In addition to the United States, He Xiangjian has used the capital bloodline to build a huge industrial map.
02 Mysterious Infore, continuous expansion
Compared with He Xiangjian's main investment industry, He Jianfeng's Infore Holdings is more like an "octopus" spanning industry and finance.
Like many second-generation founders, their parents loved industry, but their sons preferred finance and capital operations.
Fang Hongbo and He Jianfeng were both born in 1967, but He Xiangjian eventually handed over the beauty to Fang Hongbo, while He Jianfeng "started a new stove" and founded Infore Holdings. But it has always been inextricably linked to beauty.
He Jianfeng has become a low-key sneaky financial tycoon
Compared with He Xiangjian's main investment industry, He Jianfeng's Infore Holdings is more like an "octopus" that spans industry and finance, the industry is more complex, and there is not much correlation between them.
At present, Infore Holdings' business footprint involves the environmental, consumption, investment, culture and technology fields. Among them, the environment is Infore Environment, the cultural sector is Hualu Baina as the bridgehead; consumer business includes auction, mother and baby, children's clothing; technology industry includes powder metallurgy parts, robots and financial technology.
In the early days of entrepreneurship, He Jianfeng benefited from the Midea Group many times. Infore Group initially produced small household appliances for Midea's OEM, and then Midea transferred the controlling stake of Shangfeng Hi-Tech, a listed company, to Infore Holdings free of charge. In March 2016, Shangfeng Hi-Tech changed its name to Infore Environment, and two years later, He Jianfeng spent another 1.8 billion yuan to join Hualu Baina.
Infore Environment also announced that it intends to promote the listing of its wind turbine industry, and if the trip is successful, He Jianfeng will gain 3 listed companies.
In recent years, Infore Holdings has become increasingly prosperous and its industrial territory has been expanding. Compared with the previous generation, He Jianfeng is better at capital operation and prefers financial licenses.
As early as 2007, He Jianfeng established Heying Investment and acquired 25% of the equity of E Fund from Midea Electrical Appliances for 165 million yuan, and Infore Holdings is currently the largest shareholder of E Fangda. Infore Holdings is also one of the initiators of Guangdong Min investment, a joint investment platform for private enterprises in Guangdong Province.
Infore Capital is its private equity firm, Infore Investment makes equity investment, and SenseTime, Cloud Whale Intelligence, Ruiwei Technology, and Kuwa Robot have all received capital injection from Infore Investment.
Not only that, He Jianfeng also jointly invested in Shunde Rural Commercial Bank with the United States, and three private equity funds of Infore Capital also participated in the bond issuance and subscription of Bank of Jiangsu.
Shunde Rural Commercial Bank is one of the most important financial assets of Midea Group
He Jianfeng is also keen to speculate in stocks, during the "stock market crash" in July 2015, Infore was involved in "short-selling" rumors, and 34 accounts on the Shanghai and Shenzhen exchanges were restricted from trading, including 4 quantitative hedge fund accounts of Infore Capital.
It has been reported that the financial tentacles of He Xiangjian's father and son have extended to banks, securities companies, funds, private equity, venture capital and other fields, involving 2 public funds, 6 commercial banks and 1 securities company.
From industry to capital, from listed companies to financial licenses, He Xiangjian is realizing what he calls his dream of "doing capital".
03 Broaden the boundaries and take risks
Not all acquisitions are successful.
In the past three years, He Xiangjian has ranked in the top 10 of The Rich List of Hurun, and his family assets will reach 213 billion yuan in 2021.
After accumulating huge wealth through the home appliance industry, the He Xiangjian family began to use capital to increase wealth appreciation, throughout the years of operation, the He family's investment results are uneven, but it is also a useful attempt at a time when the growth rate of home appliances is slowing down.
A benign investment closed loop should be, "purchase assets - integration empowerment - enhance asset value - achieve capital appreciation", but the investment ability of the He Xiangjian family seems to need to be improved.
The first is the purchase of assets, several A-share companies it controls have poor performance, and after years of development, the He family does not seem to have any "panacea".
The most tragic is Hualu Baina, which is not the head of the industry itself, and even began to decline in 2017 before Infore Holdings became the owner, and the net profit of that year fell by more than 70%, and in 2018, it was a huge loss of 3.417 billion yuan.
Infore Holdings, which does not have film and television culture genes, is difficult to inject new ideas into it, and the epidemic has made it worse. In the 4 years at the helm, Hualu Baina has not seen any improvement, and the deduction of non-net profit has always struggled on the edge of profit and loss. The company's share price has fallen to its lowest level since its listing, with a book loss of 56% at the time of Therme Holdings' purchase.
As He Jianfeng's first listed platform, Infore Environment has maintained performance growth by relying on many epitaxial mergers and acquisitions, but this kind of external strength is only in vain, and its non-net profit fell by 62.8% last year. Due to frequent mergers and acquisitions, its latest goodwill has reached 6.033 billion yuan, accounting for 35% of net assets, plus 5.728 billion accounts receivable, the two together reach 68% of net assets.
Frequent mergers and acquisitions, the back and forth replacement of the main business, the risk of goodwill impairment remains high, its performance is increasingly unstable, and in the 16 years after Infore Holdings took ownership, a total of 18 billion yuan of dividends were only 1.5 billion, which is difficult to say generous.
Compared with his son, he Xiangjian controlled the beauty department, and the integration effect was not very good. In particular, the world robot star KUKA Group, which cost more than 30 billion yuan to acquire, fell into a state of disorientation, and in the past 5 years since the acquisition, KUKA has fallen to the altar, profits have declined year after year, and the Chinese region with high hopes has not seen any improvement.
The acquisition of KUKA Robots in that year attracted much attention from all parties
In May, Midea broke its eight-year commitment to guarantee its independence and non-delisting when it first acquired KUKA, acquiring its remaining shares for 150 million euros, and plans to privatize KUKA so that it can be managed with its own ideas.
The bitter fruit of Midea's swallowing of KUKA also has a lot to do with its corporate culture. "Many of Midea's executives came in when they were recruited, and then they stepped into management step by step. Over the years, many executives have left the airborne. A home appliance analyst once said.
Kuka's Meritorious CEO Til Royt left early at the end of 2018, which led to subsequent decline. In the past year, Midea has changed two CFOs, which have a lot to do with Midea's corporate culture.
In the A-share market, Hekang Xinneng, which Midea acquired in 2020, lost 556 million yuan after deducting non-deductions; the net profit of Wandong Medical, which was won in February last year, just happened to have a double-digit decline in this year. After the Midea department became the owner, Hekang Xinneng accelerated the divestiture of assets, and the performance improved; while the net profit of Wandong Medical in the first quarter fell sharply by 50%.
However, these two investments have a lot of floating profits on the books, and since the acquisition of the controlling interest, Midea has doubled its income.
The newly purchased Kelu Electronics has deducted non-losses of more than 4 billion yuan in the past 5 years, although the performance is weak, but after the resumption of trading, it has gained 5 up and down boards. Regardless of the future business situation, the stock price "rises first".
Share Price Performance of Kelu Electronics (January 2014 to present)
It can be found that the listed company assets purchased by the He Xiangjian family, except for KUKA, are not high-quality enough, generally on the verge of loss or downward stage, and the integration has not seen much improvement for many years.
Medical equipment, energy storage, new energy, energy conservation and environmental protection, finance and even film and television culture, and white goods are not much related, through capital, He Xiangjian broadened his industrial scope, and experienced in several investments in the short term doubled investment returns, which is difficult to achieve in industrial operations.
04 Write at the end
"In the future of American investment, we must dare to make subversive investments."
Fang Hongbo once said, "The development of midea is from a single product to a plurality of products, from a single industry to a diversified industry. Entering new industries is a useful attempt within one's own capabilities. ”
The industry makes money steadily, and the rate of return on capital is higher, but the risk is also randomly amplified, and the steps taken by the United States in order to try are also very large.
Why the home appliance sector enjoys a healthy attempt to play enough confidence. This reservoir of profits, which generates nearly $30 billion a year, allows him to tolerate multiple failures.