Beauty becomes light: KUKAs pain continues to be scientific and technological on the way

category:Finance
 Beauty becomes light: KUKAs pain continues to be scientific and technological on the way


The more obvious difference between Gree and Midea is the style of the two companies: the high-profile Dong Mingzhu brings its own flow, which attracts numerous attention of Gree; while Midea is more low-key and pragmatic, as the financial report shows, although the absolute amount of net profit in the first three quarters is slightly less than Gree, but the growth rate of net profit in Midea leaves Gree behind.

When countless people exclaim that the traditional household appliances have been in the dilemma of growth, Midea has quietly embarked on a lighter path.

Ants dance with elephants

According to the third quarter report of Midea, the companys main business revenue increased by 6% during the reporting period, mainly due to the good performance of air conditioning business. This quarter is the peak season of air conditioning sales. Due to the price reduction and promotion, the market share of Mideas air conditioning increased significantly. According to the statistics of Orville, the market share of Mideas air conditioning increased by 4.6% in this quarter; in addition, thanks to the product upgrading The ice washing and small household appliances business grew steadily; however, the German KUKA purchased in 2017 is still in the adjustment period, with the revenue declining by 2% and the order declining by 16.7% during the reporting period. With the production of Shunde factory and the promotion of Chinas integration, the company expects that the subsequent KUKA will gradually stabilize and recover.

It is worth noting that despite the price reduction and promotion of air conditioning, the gross profit margin of the company increased by 0.4% in the quarter, which is mainly benefited from the impact of raw material price reduction and exchange rate fluctuation. In addition, the growth of net profit also benefited from the growth of scale and optimization of cost control, with the cost rate falling by 0.2 percentage points during the period.

In Midea Groups business sector, the small household appliances sector is also very impressive, which is another transformation direction Midea has chosen after everyones electricity growth slows down, such as ice washing, air conditioning, etc. from the perspective of operation, the contribution of this sector to the companys profits is more and more important.

It is said that if the refrigerator, washing machine and other big appliances are elephants, then the electric rice cooker, hot water kettle and other small appliances are ants. Midea Group is still a general in the elephant battlefield, but in the past two years, people have suddenly found that in the ant battlefield, Midea Groups figure has become more and more clear.

This is also the outside worlds understanding of the lightness of beauty - the younger the product line, the lighter the product itself. After strengthening the R & D design and brand marketing, the brand premium of Mideas small household appliances also began to work, which is crucial to improve the companys overall gross margin.

There is a long way to go

In recent years, Midea has been committed to the transformation of science and technology. In the first three quarters of 2019, the R & D cost of the company was 6.99 billion yuan, and the R & D cost rate was 3.2%, up 0.1 percentage point year on year. In September 2019, the company set up a European R & D center in Stuttgart, Germany. On the one hand, it is conducive to the investigation of European local user market, and on the other hand, it also integrates Stuttgarts technical resources into the companys R & D system. At present, Midea Group has set up 10 R & D centers in China and 18 R & D centers abroad.

On the way to technological transformation, Midea Groups most famous battle in recent years is to acquire the world-famous robot company KUKA, Germany. In 2016, Midea Group started the M & A of KUKA and completed the delivery in January 2017. At present, Midea Group holds about 95% of KUKA.

However, in 2018, after Midea won the KUKA, KUKAs performance was poor, with order revenue of 3.3 billion euros, down 8.5% year-on-year; revenue of 3.2 billion euros, down 6.8% year-on-year; after tax profit of 16.6 million euros, down 81.2%.

Although cross-border M & A of similar size is difficult to avoid the fluctuation of performance in the process of integration. However, in addition to the reasons for running in, the weak internal R & D investment and unclear R & D direction of KUKA have also been regarded as the real reason for the decline of performance in 2018 by the outside world.

In the third quarter of this year, the decline in orders and revenue of KUKA continued, but in 2018, the R & D investment of KUKA increased by 18% to 152 million euros. However, the dividend generated by R & D investment usually lags behind, and its contribution to Midea Groups performance should be reflected in the financial statements, which seems to take a long time.

Interestingly, on October 30, Gree Electric announced that it planned to hold an extraordinary general meeting of shareholders at 14:30 p.m. on November 18 to consider proposals including the proposal on Amending the articles of association and the proposal on Amending the company. In the revised articles of association, Gree Electric intends to add new R & D, manufacturing and sales of new energy power generation products, energy storage system and charging piles in its business scope, and delete the operation of telecommunication business and value-added telecommunication business.

It can also be seen from this announcement that Midea and Gree are gradually moving away in the direction of transformation. When Midea is committed to improving the technological content and brand premium of small household appliances through research and development, and entering the robot field through the acquisition of KUKA in Germany, Grees diversified attempts in recent years involve mobile phones, new energy and other fields.

In addition, in terms of new energy business, although Grees acquisition of Zhuhai Yinlong, a new energy vehicle enterprise, was rejected by the general meeting of shareholders, in recent two years, Gree and Yinlong have conducted a large number of related transactions. Gree Electric Grid exports intelligent equipment and bus air conditioning to Yinlong new energy, while Yinlong new energy provides gree with new energy vehicles and energy storage equipment. Finally, the two sides went to court for disputes.

Affected by these disturbances, Grees progress in the field of new energy is not ideal. It can be seen that Gree will continue to explore its way in the field of new energy by adding new energy power generation products, energy storage systems and charging piles in its business scope.

Source: editor in charge of science and technology innovation board Daily: Yang bin_nf4368