After entering the Zhuhai Yinlong, Dong Mingzhu has made new moves on the road to realize the dream of making a car. On September 17, the rumors of the Gree team’s participation in Tianjin FAW, the Beijing Commercial Daily reporter’s information from people close to FAW Xiali showed that this rumor is not groundless. In view of the fact that Gree has not invested in Zhuhai Yinlong and Dong Mingzhu has invested in Zhuhai Yinlong’s background, some insiders believe that this is probably Dong Mingzhu’s personal investment. Since September 8th, FAW Xiali announced that it has suspended trading due to major events, and Gree Electric has not suspended trading until the press release, and has not issued relevant announcements.
Dong Mingzhu is afraid to shoot again
There is no doubt that the most striking thing about this incident is Dong Mingzhu, who has brought her aura, whether it is her achievements in Gree. Or, Gree’s mobile phone, car, and advertising for Gree products under her leadership have made her a well-deserved focus on every occasion.
Gree has always been a leader in the air conditioning industry. Gree Electric’s 2016 annual report shows that Gree’s home air conditioner production and sales have been ranked first in China’s air-conditioning industry for 22 consecutive years since 1995. Since 2005, it has led the world for 12 consecutive years. According to the “Industry Online” data, the domestic market share of Gree household air conditioners reached 42.73% in 2016. According to the data of HVAC Information, the domestic market share of Gree commercial air conditioners reached 16.2%, ranking first for five consecutive years.
However, while the air-conditioning industry is booming, Gree is also questioned that the business structure is too singular, and most of the revenue depends on air-conditioning business. Therefore, in these two years, Gree is gradually developing towards diversification. It is understood that Gree has been involved in refrigerators, air purifiers, water purifiers, rice cookers, humidifiers, mobile phones and many other home appliances last year.
When it comes to cars, Gree has tried to get involved, but eventually turned into a personal attempt by Dong Mingzhu. In April last year, Gree issued a notice saying that the company is planning to issue shares to purchase assets, the transaction target is Zhuhai Yinlong; in August, Gree finally officially announced the detailed plan for the acquisition of Zhuhai Yinlong, Gree intends to the whole of Zhuhai Yinlong Shareholders issue shares and acquire 100% of the total shares of Zhuhai Yinlong held by them. The purchase price is about 13 billion yuan.
However, Gree’s plan to acquire Zhuhai Yinlong was questioned by the outside world. The Shenzhen Stock Exchange also sent a letter of reconciliation to Gree. On October 28 last year, Gree held the first extraordinary shareholders meeting in 2016. The proposal to raise funds was not passed, which led to the arrest of Gree’s acquisition of Zhuhai Yinlong, which caused the CSRC to issue a letter of concern. Finally, on November 16, 2016, Gree Electric announced that it had decided to suspend the planned issuance of shares to purchase Zhuhai Yinlong. A month later, Dong Mingzhu officially announced that she would invest in Zhuhai Yinlong in her personal capacity. Today she is already the company’s second shareholder.
Recently, Gree continued to expand on the path of diversification. Following the investment of 15 billion yuan in Yinlong to build a new energy vehicle in Luoyang in August this year, Dong Mingzhu will spend another 15 billion yuan to build a robot in Luoyang, and will also participate in the reform of state-owned enterprises. This time, Gree Electric Appliances Co., Ltd. will jointly build Luoyang’s independent innovation and intelligent manufacturing industry base in China. This is the third large-scale investment of Gree in Henan. The project covers an area of 5,000 mu with a total investment of about 15 billion yuan. Implementation, after completion, it is expected to achieve an annual output value of more than 30 billion yuan.
Manufacture of Dream Cars
In fact, for Dong Mingzhu, the acquisition of Tianjin FAW Xiali shares is also of great significance. Since Dong Mingzhu joined the car, she has frequently heard news on the layout of the automobile industry. Especially at the end of 2016, Dong Mingzhu suddenly announced that he would personally take Dalian Wanda Group, CIMC Group, Beijing Yanzhao Huijin International Investment Co., Ltd., Jiangsu Jingdong Bangneng Investment Management Co., Ltd., and sign a capital increase agreement with Zhuhai Yinlong to jointly increase capital. 3 billion yuan, obtained a 22.388% stake in Zhuhai Yinlong. Among them, Dong Mingzhu personally invested about 1 billion yuan and won a 7.46% stake in Zhuhai Yinlong.
The Dong Mingzhu team is now focusing on the acquisition of FAW Xiali, and has to say that it has a lot of strength. As a part of the FAW Group’s large independent sector, FAW Xiali has been very unsatisfactory in the market performance these years. In the state of sustained losses, FAW Xiali attributed the loss to “the product replacement has not kept up with the rapid changes in market development, the production and sales scale is small, the profitability is weak, and the production capacity is not fully utilized.
Yan Jinghui, an expert in the automotive market, said that the performance of FAW Xiali in recent years was not satisfactory, but FAW Xiali is still relatively strong in terms of product and brand power. Dong Mingzhu has invested in Tianjin FAW, with sufficient funds, advanced management and clear target market. It is a way out for FAW Xiali.
The acquisition of FAW Xiali has made Dong Mingzhu’s car making plan a big step forward. At the same time, Dong Mingzhu also said that the acquisition of Zhuhai Yinlong shares is due to the company’s advanced lithium titanate battery technology. However, from the actual situation, Zhuhai Yinlong is very weak in the manufacturing experience of the whole vehicle, and the automobile production line is not perfect. FAW Xiali has built cars for many years, and has mature technology and personnel to realize the early mass production of new energy vehicles, which will greatly accelerate the layout of Dong Mingzhu in the automotive industry. Therefore, some insiders commented that the real intention of Dong Mingzhu to acquire FAW Xiali shares is to use the existing vehicle production line of FAW Xiali to lay the upstream and downstream industries and realize the mass production of new energy vehicles as soon as possible.
FAW Xiali faces transformation
For Tianjin FAW, the favor of capital has undoubtedly provided a transformation opportunity for FAW Xiali, which is on the verge of delisting.
It is understood that FAW Xiali is mainly engaged in the development, manufacturing and sales of complete vehicles and powertrains. The main products are “Junpai Brand, &Ldquo; Weizhi brand and “ Xiali brand SUV and sedan, CA4GA, CA3GA series engine and 5T065 series transmission and other products. For a long time, FAW Xiali’s vehicle manufacturing and sales accounted for more than 80% of total revenue. Therefore, the gross profit margin of the vehicle business almost determines the performance of the entire company. In the past ten years, FAW Xiali has not seized the development opportunities of the Chinese auto industry. The gross profit margin of the whole vehicle has been declining. Especially in the last four years, the gross profit margin has fallen into a negative value area. The scale of the loss is greater for each car. The bigger it is.
In recent years, due to the lag in product development and unclear brand positioning, FAW Xiali’s overall product sales performance has become worse and worse, and FAW Group has long been planning for the reform of FAW Xiali. According to FAW Xiali’s semi-annual report, its overall vehicle sales in the first half of 2017 was only 11,500 units, down 39.4% year-on-year, while FAW Xiali’s revenue in the first half of the year was 623 million yuan, down 37.9% year-on-year, net profit attributable to shareholders of listed companies. The loss was 868 million yuan, and the development of FAW Xiali is worrying.
With Xu Liuping officially attending the chairman and party secretary of China FAW Group Corporation in August this year, the rumors about FAW Group’s reorganization of its core business and revision of its own sector are endless, and in the independent sector business, FAW Xiali, Pentium and Hongqi brands will become the core of Xu Liuping’s core processing.
On September 8, FAW Xiali announced that it had suspended trading due to major issues. Its announcement stated that it received a notice from the company’s controlling shareholder China First Automobile Co., Ltd. that FAW is planning major events involving the company. The company will suspend trading on September 8, but FAW Group has not suspended trading. At that time, many investors speculated that Tianjin FAW may have a major move such as equity acquisition, which led to various speculations, and was related to the poor performance of FAW Xiali’s current market.
However, Dong Mingzhu’s move to FAW Xiali is not going well. After the release of the announcement by Tianjin FAW insiders, Tianjin FAW also issued a notice on September 15th, as of the disclosure date of this announcement. The above-mentioned major issues are still under discussion and argumentation. In view of the large uncertainties in the matter, in order to ensure fair information disclosure, safeguard the interests of investors, and avoid abnormal fluctuations in the company’s stock price, the company’s stock will continue to be suspended. During the suspension period, the company will perform its information disclosure obligations in a timely manner in accordance with the relevant laws and regulations and the requirements of the regulatory documents in accordance with the progress of the matter.
The industry believes that for the FAW Group’s own brands, the focus on new energy will be a shortcut to turn over. FAW Xiali said in the semi-annual report disclosed on August 30 that “the company is implementing new product planning and will upgrade its product structure and new energy, and the average bicycle price will increase.
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