Southern Finance and Economics all-media reporter Wu Liyang and Xi Wang Haiqing report from Shanghai
2023 has reached the end of the year, but the new news in the home appliance industry is still frequent and active.
On December 23, the Shenzhen Stock Exchange issued an announcement to terminate the review of the initial public offering of shares and listing on the Growth Enterprise Market of Meizhi Optoelectronics, and the lighting and intelligent front-loading products company under the Midea Group failed in its IPO again. Shortly before that, on December 19, Ande Zhilian Supply Chain Technology Co., Ltd. was registered with the Anhui Securities Regulatory Bureau, which is 73.85% owned by Midea Zhilian (Shanghai) Supply Chain Technology Co., Ltd., which is 100% owned by Midea Group.
Also in December, two other white power giants also made dynamic announcements. On the 14th, Haier Smart Home announced that it would acquire Carrier Refrigeration, a subsidiary of Carrier Global engaged in commercial refrigeration business, at a consideration of about US$640 million (4.559 billion yuan), and on the 19th, Gree Electric announced that it would spend 1.015 billion yuan to increase its holdings of about 271 million shares of Gree Titanium, and after the transaction is completed, Gree Electric will control 72.47% of the voting rights of Gree Titanium's total share capital.
New energy, automobiles, robots, ...... Looking at the investment and financing operations of home appliance enterprises in recent years, it not only includes the upstream and downstream extension layout of the home appliance industry chain itself, but also has quite a lot of cases of outward expansion. Behind the frequent capital operations, is it an expedient measure for home appliance companies to boost sluggish stock prices or seek cash-out, or a long-term layout for the future?
Manufacturing investment transformation "hard technology" oriented
In order to further sort out the layout of the home appliance industry in recent years, the Southern Finance and Economics all-media reporter has completely sorted out the capital operations such as acquisition, increase of holdings, and promotion of listing of major home appliance companies from 2021 to 2023 (see the figure below).
From the perspective of the company's main business and industry involved in these operations, most of the enterprises have a clear "hard technology" label orientation, which is highly related to the concept of new energy, chips and other scientific and technological hot spots; on the other hand, a detailed study of their specific products is often highly related to the industrial chain of household appliances in the subdivision field.
For example, Hisense's Qingdao Xinxin Microelectronics Technology Co., Ltd., which announced in January this year and submitted a prospectus on the Shanghai Stock Exchange in June, has a main business that includes display chips and AIoT intelligent control chips, providing display chip solutions for various display panels and display terminals, and providing frequency conversion and main control solutions for smart home appliances. As a black electricity giant, Hisense's Hisense Video is not only the parent company of Xinxin Micro, but also its first and second largest customers.
Also this year,Hisense Video through foreign investment,Obtained control of Qianzhao Optoelectronics and became its controlling shareholder,The latter's main business is full-color LED epitaxial wafers and chips and gallium arsenide solar cell epitaxial wafers and chips。
Hisense Video said in the announcement,Increasing holdings and obtaining control of Qianzhao Optoelectronics is "to further strengthen the strategic layout of Hisense Video in the display industry chain,Accelerate the research and development and product promotion of new technologies such as Mini LED、Micro LED,Establish future resource advantages in the market and supply chain。
Also pushing its own chip business to the foreground is Konka. In October this year, Hefei Kangxinwei, incubated by Konka Group, announced the completion of more than 100 million yuan in Series A+ financing. And Konka Group said that after the A round of capital increase, the group company no longer holds Hefei Kangxinwei, and Kangxinwei has started market-oriented operation and began to promote operation and management in accordance with the specifications of the enterprises to be listed.
Different but similar to Hisense Group's layout of the two display chip manufacturers, Kangxinwei's main business is self-developed storage controller chips and storage modules, which are also highly related to the upstream supply chain of Konka's solid-state drives, embedded storage and other products.
Time back to about ten years ago, the home appliance industry with abundant cash flow has already started the pace of "buying, buying, buying", but most of its acquisition targets are concentrated in the home and foreign brands in the home appliance industry itself. For example, in 2012, Haier acquired Japan's Sanyo refrigerator business, in 2015, Hisense acquired Sharp's Americas TV business, and in 2016, Midea acquired Japan's Toshiba household appliances business.
At that time, on the one hand, under the general trend of increasing the concentration of household appliance brands, the leading appliances consolidated their industry position through acquisitions, and on the other hand, under the background of the peak of the domestic market increment, they also began to try to get involved in the overseas market through the acquisition of overseas brands. Although these acquisitions also include some demand for the technical reserves of the acquisition target, the main purpose is still to lay out the manufacturing and brand side, which is significantly different from the current style of emphasizing the scientific and technological attributes of the operating object and focusing on "hard technology".
"From the perspective of financing, the layout of these 'hard technology' businesses can not only obtain policy support, but also mobilize market enthusiasm. A long-term observer of the home appliance industry in the field of communication with reporters pointed out that home appliances are one of the few industries in which almost all leading companies have been listed, and this also means that the traditional home appliance industry pattern is close to saturation, and it is difficult to mobilize the investment enthusiasm and enthusiasm of the secondary market.
In this context, the layout of key links in the upstream supply chain or the promotion of subsidiaries that have mastered core technologies can further endow and strengthen their own "science and technology" attributes, and play a leading role in financing and secondary market investment.
In July this year, at the regular policy briefing of the Information Office of the State Council, the financial management department said that in the stock market, more science and technology enterprises will be encouraged to issue and go public...... Encourage more science and technology enterprises to refinance and M&A financing, and hope that banks can provide more credit support for M&A financing activities.
In recent years, with the real estate, small household appliances and other concepts of heat have dissipated, the stock price of household appliances enterprises has been at a relatively low point, in the home appliance industry itself in the short term is difficult to get a boost in the background, spin-off subsidiaries listed, on the one hand, if its stock price is highly valued, can also improve the valuation of the parent company; on the other hand, based on the optimism of the expectation, it is also conducive to stimulating investors' enthusiasm for investment.
Shift to multiple application scenarios
In addition to the layout of key nodes in the upstream supply chain, on the downstream product side, the home appliance industry has also launched multiple rounds of layout.
For example, in June 2022, Midea launched its home service robot brand "WISHUG" and its first-generation home service robot product Xiaowei, and half a year ago, after taking a stake in German robotics company KUKA in early 2015, Midea also completed its comprehensive acquisition and privatization. In the C-end home robot and B-end industrial robot market, Midea has launched landing products.
If household robots can still be regarded as a part of household appliances, compared with Midea, Gree's strategy in expanding the product field is more jumpy. In December last year, Zhuhai Gree Prefabricated Food Equipment Technology Development Co., Ltd. was established, catching up with the industrial development outlet of prefabricated dishes being written into the No. 1 document of the central government.
In December this year, after becoming Gree Titanium New Energy Holding Company in 2021, it planned to increase its holdings of Gree Titanium by transferring about 271 million shares of 12 counterparties, with a transaction price of about 1.015 billion yuan. The main products of the latter are all kinds of new energy buses, logistics vehicles and power batteries for vehicles and construction machinery, which are also shallow in connection with Gree's well-known white electricity industry chain.
"Midea's acquisition of KIKU is also a vertical extension of the industrial chain to the upstream, transforming KIKU's technical reserves into Midea's manufacturing capabilities; Pan Helin, co-director and researcher of the Digital Economy and Financial Innovation Research Center of the International Business School of Zhejiang University, pointed out in an interview with a reporter from Southern Finance and Economics that under normal circumstances, the diversification of household appliance enterprises should focus on the existing technical capabilities and industries of the enterprise, which can cross borders, but not too far.
It is worth noting that among the above-mentioned combing of the operating objects of home appliance enterprises, many businesses are highly related to automobile production, although no home appliance enterprises have directly gone to the field to build cars, but have laid the groundwork in the industrial chain through various ways.
For example, in addition to Greti's new energy bus business, in November 2021, Gree obtained control of DunAn Environment, which is a leader in the refrigeration components industry, and has focused on expanding new energy vehicle thermal management components in recent years;At the end of May 2021, Hisense Home Appliances, a subsidiary of Hisense Group, completed the acquisition of Japan's Sanden Holding Company and became its controlling shareholder, the latter's main products are automotive air conditioning compressors and automotive air conditioning systems;In December 2023, Highly announced the completion of the acquisition of Marelli Marelli (Hong Kong) Holdings Co., Ltd.60The full closing of the % stake is valued at US$203 million, and the latter's main business is also automotive air conditioning compressors and automotive air conditioning systems......
"In the home appliance industry, the focus is on 'electricity', not at 'home'. The above-mentioned industry insiders pointed out that in addition to traditional categories such as black electricity, white electricity, small household appliances, kitchen appliances, and even consumer electronics, which are often mentioned together with household appliances, the product extension covered by household appliance companies in recent years is still expanding.
The reason is that the application range of electrical products itself continues to expand with the electrification and intellectualization of social life. Taking automobiles as an example, as the number of cars in mainland China exceeds 330 million, the interior space is gradually becoming the third largest space for car owners in addition to public space and living space.
On the one hand, the electrical appliances used in the car do not belong to the category of "household appliances" in the narrow sense, on the other hand, the space in the car is relatively small and difficult to configure large equipment, and the highly integrated characteristics of automobile manufacturing itself, so that home appliance companies have to start from the upstream B-end industry chain. This has not left the production scope of the old manufacturing industry, but it is also far from the marketing path of traditional household appliances focusing on the C-end.
Therefore, although they already have mature product lines in the field of traditional home appliances, most of the home appliance companies still choose to enter the supply chain of automotive equipment components with relatively familiar technical paths such as thermal management and display by way of investment or acquisition when they enter new scenarios such as automobiles.
Focus on scientific and technological breakthroughs in the "ecology"
However, compared with directly building cars, cutting into the supply chain is separated by several layers after all, and an intuitive impact is that when the software and hardware ecology in the car is controlled by the vehicle manufacturer, how much market share and voice can the home appliance companies as suppliers have in it.
This kind of anxiety about ecology is no stranger to the home appliance industry, and it already exists when many Internet companies and consumer electronics companies are involved in the field of home appliances.
In 2017, Fang Wei, then CFO of Gome Electric Appliances and CEO of Gome Internet, said in an interview with the media that from the perspective of the 10 trillion smart home market, Gome's real competitor is Xiaomi, because Xiaomi does omni-channel and all-retail.
"Mijia is a future-oriented smart appliance brand. In 2019, Lei Jun said at the Xiaomi Mijia Smart Life New Product Launch Conference that the intelligence of home appliances will be an industrial upgrading revolution, and Mijia's goal is to fully promote this great process.
Pan and Lin pointed out that taking Xiaomi as an example, it seeks product ecology, not manufacturing capacity, compared with traditional home appliance companies, Xiaomi as an Internet platform assets are lighter, more flexible, and the software advantages condensed by the product ecological chain are also more obvious.
In this regard, the home appliance industry has also pinned its hopes on building its own ecological moat. Previously, Dong Mingzhu led Gree to enter the mobile phone, which was once regarded as an irrational move across borders. However, when the Gree mobile phone brand was changed to Dasong and was divided into the brand platform of Gree's main household appliances, it was obvious that its intention was to connect the smart home product ecology through mobile phones, so as to break through the user ecological entrance that was almost monopolized by Internet companies and mobile phone manufacturers.
Earlier2012year,Hisense has released the smart TV operating system HisenseAndroidTV Pro,That is, Haian operating system,Support the promotion of smart TV development and application,It can also be regarded as an attempt by home appliance companies to build an ecological platform from the software side。 In addition, Haier, Midea and other companies have also embedded their own system platforms with the help of intelligent services in the whole house smart home customization and other businesses.
However, whether it is the development idea of relying on manufacturing technology and scale effect to survive the fierce market competition in the early years, it is difficult to adapt to the consumption characteristics of the Internet era that focuses on personalization and experience in a short time, or as a device terminal, it is much more difficult to build a product ecology from traditional home appliances than from smart phones. At least at the current stage, although intelligence has greatly improved the performance of many household appliances, whether in public spaces such as houses, cars or offices, home appliance companies still have a long way to go before forming a complete, collaborative and market-competitive ecology.
As a result, looking back at the industrial layout and capital operation of major appliance enterprises, most of the behaviors seem to have returned to the label of "science and technology". From being ridiculed as an assembly plant in the early years to R&D and acquisition of various core technologies, it is undeniable that China's home appliance enterprises have long been different from what they used to be in the field of science and technology.
But on the other hand, as a manufacturing industry, the word "home appliances" has been difficult to arouse the market's excessive attention and enthusiasm, so it should also highlight chips, artificial intelligence and other technical labels to attract attention; at the same time, in the face of new electronic consumption trends and use scenarios, the home appliance industry also needs to continue to Xi learn from Internet companies and move closer, in order to gain a higher voice in the future platform ecology.
Whether it is vertical technology cultivation or horizontal diversified layout, the home appliance industry in 2023 has been groping for its own way forward in the throes of the real estate downturn, and whether these explorations can really help it become a "technology company" in actual and market perception may take longer to give an answer.
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