Dong Mingzhu and Lei Juns one billion bet five-year period is approaching, which makes the Grees quarterly results of concern. Can the turnover of millet defeat GREE? Spectators cant wait to see some clues from the three quarterly report.
On the evening of Oct. 30, Gree Electric released its third quarter report for 2018, which showed that Gree Electrics revenue in the first three quarters of this year was 148.699 billion yuan, up 34.11% from a year earlier, and net profit was 21.118 billion yuan, up 36.59% from a year earlier.
Up to now, millet has not yet released the three quarterly report. But Millets semi annual report shows that its revenue in the first half of the year amounted to 79 billion 600 million yuan, up by 75.4% over the same period last year. GREE Electrics total revenue in the first half of the year was 92 billion 5 million yuan, an increase of 31.40% over the same period last year.
If millet maintains its growth rate in the first half of the year, its third-quarter revenue is expected to be close to 140 billion yuan, less than 9 billion yuan from Gree. In addition, on October 27, Miley Jun micro-blogged that millet mobile phone shipments this year exceeded 100 million units, ahead of schedule to complete the year-round task. In this regard, the contrast between GREE and millet is becoming more and more delicate.
Although Dong Mingzhu and Lei Jun are playing down the betting thing, but millet and Grey two enterprises seem to be riveted vigorously to seek performance by leaps and bounds. In the past five years, millet has become one of the mobile phone giants in China with its Internet model of light assets and heavy marketing. Grey Electric has gone further and further on the road of diversification, taking over Jinghong Refrigerator and marching into the chip industry. However, Greys diversification has also caused some controversy.
Revenue in the first three quarters was 148 billion 700 million, lower than market expectations.
On Oct. 8, Gree Electric announced that its total revenue for the first three quarters was estimated to be 149.051 billion to 150.855 billion yuan, compared with 112.227 billion yuan in the same period last year. In the first three quarters of this year, it is expected to make a profit of 20.578-21.568 billion yuan, up 33-40% from the same period last year to 15.461 billion yuan.
On the evening of October 30, Gree Electric released a third-quarter report showing that its revenue in the first three quarters rose 34.11% year-on-year to $148.699 billion. Obviously, Grees operating income level is slightly lower than the previous forecast of the lowest value of 149.051 billion yuan, lower than the previous estimate of 150 billion yuan.
Profits, the first three quarters, GREE electric net profit of 21 billion 118 million yuan, an increase of 36.59% over the same period last year. In the annual report of 2017 and the quarterly report of 2018, the profit growth rate of Gree Electric Appliances was 44.87% and 39.04%, respectively. In the middle of 2018, the profit growth rate of Gree Electrical Appliances was 35.48%, the rate of decline was slightly, but both were in the high position.
In addition to Gree, the other two home appliance giants Qingdao Haier and the United States Group also issued a three-quarter report on October 30. In the first three quarters of the year, the groups revenue was 205.757 billion yuan, up 10.06% from a year earlier; net profit was 17.9 billion yuan, up 19.35%. Qingdao Haiers revenue in the first three quarters was 138.139 billion yuan, an increase of 12.77% over the same period of the year; net profit was 6.127 billion yuan, an increase of 9.35%.
From the revenue point of view, Qingdao Haier and Grees data are very close, the United States Groups revenue is higher than Grees, but Grees revenue growth rate than the other two more than 10 percentage points. Not only that, GREE Electrics net profit is 3 times more than that of Qingdao Haier, which is 17.98% higher than that of the US group.
Insiders said that the net interest rate of white household appliances is generally around 7%. From 2015 to 2017, Qingdao Haiers net interest rates were 6.60%, 5.62% and 5.68% respectively, while the US group was 9.84%, 9.97% and 7.73% respectively, while the Gree group was 12.91%, 14.33% and 15.18% respectively. GREEs net interest rate is higher than the industry average, which is also better than its main competitors.
CITIC Construction Investment and Research Report believes that Gree Electric Air Conditioning Industry sales are robust, the third quarter of 2018, scale advantages and industry moat obvious, more profitable. At the same time, the external factors (raw material costs, RMB exchange rate fluctuations) showed an optimizing trend, the companys product gross margin and exchange gains and losses are expected to significantly improve, performance growth is expected to increase.
Millet camp to tighten up and chase, 1 billion gambling agreement is still hard to see.
Many people remember Dong Mingzhu and Lei Juns 1 billion gambling agreement vividly.
Ask the people of the whole country to testify that within five years, if we beat Grey in turnover, Dong Mingzhu will lose a dollar to me. On December 12, 2013, at the Peoples Award Ceremony of the Year for Chinas Economy, Lei Jun, chairman of the millet board, called out to Dong Mingzhu, chairman of Gree Electrical Appliances. Dong Mingzhu immediately responded, First, I tell you its impossible. Second, Ill bet you a billion dollars instead of a dollar. The 1 billion bet between GREE and millet began.
However, at the end of 2013 after the launch of the gambling contract, Lei Jun said on his micro-blog, Dong Mingzhu is the entrepreneur I respect in Zhuhai, and Gree is the pillar enterprise in Zhuhai. Later, only talk about Millets own development, do not talk about the 1 billion gamble. Previously, when Dong Mingzhu was interviewed by the Beijing News, he also said that gambling was media hype, boring and would not say much more.
The parties may want to play down the betting contract, but during the five years, Gree Electric and Millet developed rapidly in their respective fields.
Since 2012, Dong Mingzhu has been in charge of GREE electric. During this period, GREE Electrics revenue was 1.9 times that of the past 21 years, its profit was close to 4 times, and its net profit rate reached 15%. GREE appliances maintains an oligopoly position in HVAC and home appliances. According to the first half of 2018 annual report of Gree Electric Appliance, the market share of Gree Electric Commercial Air Conditioning occupies the first place in the domestic market from 2012 to now.
At the same time, millet by virtue of light assets, heavy marketing Internet model, in just five years into one of the domestic mobile phone giants, to the outside world. On October 27, Milejun released a micro-blog, said that as of October 26, millet mobile phone shipments exceeded 100 million this year, ahead of schedule to complete the year-round task.
Up to now, millet has not yet released the three quarterly report, and its third quarter revenue remains unknown. However, according to the revenue and growth rate of millet and Gree semi-annual report, the revenue of millet three-quarter report may be close to Gree hand-to-hand.
Millet semi annual report shows that the first half of the years revenue amounted to 79 billion 600 million yuan, up to 75.4% year-on-year growth. In the first half of, the total revenue of GREE electric appliances reached 92 billion 5 million yuan, an increase of 31.40% over the same period last year. If millet keeps growing in the second quarter, its revenue in the third quarter is expected to be close to 140 billion yuan, less than 9 billion yuan away from the grid.
Now that the gamble is coming, the result will be considerable expectation from the outside world.
This years two sessions, Dong Mingzhu and Lei Jun on behalf of the channel on the same platform, gambling again aroused a wave of discussion. For millet performance catch up with GREEs situation. Dong Mingzhu said, hot pursuit? A difference is also a gap. I think this is basically not on a platform, because he is basically a foundry.
Take over Jinghong, enter the chip, the road of diversification Qie Yuan
Recently, the household appliances industry is booming, the United States Group to absorb the merger of cygnets, integrated washing machine business; Qingdao Haier merger of Italian household appliances company Candy, more landed in the D-share market. The strategy of globalization and diversification is further developed.
GREE appliances are not idle. On October 11, the sole shareholder of Jinghong Electrical Appliance was changed from Beijing Shengshi Hengxing Gree International Trade Co., Ltd. to Zhuhai Gree Electrical Appliance Co., Ltd. The legal representative and chairman of the board were also changed to Hu Wenfeng, assistant president of Gree Electrical Appliance.
Jinghong electric appliance was founded in 2006. It is a refrigerator manufacturer. It was founded by GREE electric dealer, Beijing Shengshi Hengxing GREE International Trade Co., Ltd.. Shengshi Hengxings shareholders are Beijing Mingzhu Xinxing Gree Air Conditioning Sales Co., Ltd. and Zhejiang Tongcheng Gree Electrical Appliance Co., Ltd. The legal representative is Zhou Tianyu, general manager of GREE electric appliances, Beijing.
Gree Electric has always had a delicate relationship with Jinghong Electric, and so far Gree Electric has not announced its takeover of Jinghong Electric. But Jinghong Refrigerator has fully entered the Gree e-commerce platform, Gree Electric official mall is shown that online sales of Gree, Jinghong, TOSOT three major brands, mainly air conditioning, refrigerators, household appliances, mobile phones and other household appliances products.
This year, the topic of chip has been heating up, and GREE Electric has joined the core army. On August 14, the Industrial and Commercial Information Platform showed that Zhuhai Zero Boundary Integrated Circuit Co., Ltd. was established with a registered capital of 1 billion yuan, covering semiconductor, integrated circuit, chip, electronic components and other businesses. The sole shareholder of the company is Zhuhai GREE electric Limited by Share Ltd.
Diversification has also caused some confusion to GREE. At the end of April this year, GREE electric company, which has been paying dividends for ten consecutive years, suddenly announced that it would not pay dividends in 2017. Gree said the companys remaining funds will be used to build production bases, upgrade smart factories, as well as smart equipment, smart appliances, integrated circuits and other new industries technology research and development and marketing.
For a time, GREE stood on the cusp of public opinion. Later, Dong Mingzhu said, We will pay dividends in the future, but when and how much, we have to think, this year may pay dividends, maybe no dividends. To be honest, I support no dividends. Sustainable development of enterprises requires the guarantee of funds. Gree now invests in chips, which is money.
In fact, the investment chip is a project which is hard to see in the short term and is not valued by the outside world. In addition, Gree Electric Appliances from the establishment of Dasong Life Electrical Appliances in 2013, to 2014 clearly put forward the diversification, and then to 2015 to push Gree mobile phone... Dong Mingzhu has been trying in other areas, but from 2013 to 2016, the proportion of Gree air conditioning revenue to the overall revenue dropped from 89% to 81%, the road to diversification is still far away.