15% of Gree Electric’s 15% shareholding has gone high. On the evening of October 28, Gree Electric announced that on October 28, Gree Group informed the company that after the review committee conducted a comprehensive review of the two intended transferees participating in the public solicitation, the Zhuhai Mingjun Investment Partnership (Limited Partnership) (hereinafter referred to as "Zhuhai Mingjun") is the ultimate transferee.
It is worth noting that Hopu Investment, which had been highly vocal before, unexpectedly exited. According to business information, Zhuhai Mingjun Investment Partnership (Limited Partnership) is backed by Hillhouse Capital, Industrial Bank, Pacific Life Insurance, and Shanghai Automotive Group, as well as Midea, Gome, and Gree Electric Appliances dealer system.
Calculated according to the announced transfer price, the transfer price of Gree Electric’s 15% equity will not be less than 39.857 billion yuan. On October 29, Gree Electric drove high and closed at 59.39 yuan per share, an increase of 4.38%.
Does Hillhouse Capital's ownership affect Dong Mingzhu's position in the company? Will it help Gree Electric's diversification and internationalization? What is the impact on future company dividends and company management?
花落高瓴
Behind Zhuhai Mingjun is Hillhouse Capital
Zhuhai Mingjun Investment Partnership (Limited Partnership) was established on May 11, 2017 , The business scope is equity investment. The main shareholders are Zhuhai Xianying and Shenzhen Gaoling Hanying. Zhuhai Xianying’s major shareholders include Zhuhai Hillhouse Tiancheng Phase II Equity Investment Management Center (Limited Partnership) and Zhuhai Yuxiu. The controlling shareholder of the two companies is Zhuhai Hillhouse. The company’s shareholders include Ma Cuifang, Li Liang and Cao Wei, which are Hillhouse Capital Executives.
Shenzhen Hillhouse Hanying's main shareholder is Zhuhai Hillhouse Tiancheng Phase II Equity Investment Fund (Limited Partnership), behind the company Hillhouse Capital, Industrial Bank, Pacific Life Insurance, SAIC Motor, Tsinghua University Education Foundation, etc. .
Industrial and commercial information shows that behind the Zhuhai Gaoling Zeyuan Asset Management Center (Limited Partnership), which holds 13.79% of Shenzhen Hilling Hanying, there are He Xiangjian, Gome Dujuan and other figures behind it.
In addition, industrial and commercial information shows that Gree Electric's dealer system also appeared in this company. Zhang Jinlong, the shareholder of Zhuhai Gaoling Zeyuan Asset Management Center, is the legal representative and shareholder of Tianjin Bohai Gree Electric Appliance Marketing Co., Ltd., Tianjin Gree Air Conditioning Sales Co., Ltd., and Tianjin Gree Electric Appliance Sales Co., Ltd. Du Hongfei, the shareholder of Zhuhai Gaolingzeyuan Asset Management Center, is the shareholder and legal representative or executive of several Gree Electric Appliance dealer companies, including Beijing Mingzhu Shengxing Gree Central Air Conditioning Sales Co., Ltd., Hebei Xinxing Gree Electric Appliance Sales Co., Ltd.
Hillhouse Capital is not targeting home appliance companies for the first time. Hillhouse Capital is also a shareholder of the three major white power giants Midea Group. According to Midea's 2019 semi-annual report, Hillhouse Capital Management Co., Ltd.-HCM China Fund Holds 0.89% equity of Midea Group, ranking 8th among the top ten shareholders.
In addition, Hillhouse Capital itself is already a shareholder of Gree. Gree Electric's 2019 semi-annual report shows that Hillhouse Capital Management Co., Ltd.-HCM China Fund holds 0.72% of Gree Electric's equity, ranking 8th among the top ten shareholders, one place ahead of this year's quarterly report.
Home appliance industry observer Major General Ding believes that when new major shareholders come in, Dong Mingzhu must consider the interests and demands of major shareholders; it is likely to strengthen cooperation with major shareholders, including strengthening cooperation with major shareholders-related technology Internet companies to achieve business Innovation linkage.
Why is it high?
Hillhouse Capital tends to invest in value and has helped enterprises upgrade
Since the mixed reform of Gree Electric, HOPU Investment has beenIs a hot topic. The upset and exit this time also surprised the market. Home appliance brokerage analyst Yang Shi (pseudonym) believes that “HOPU is more like a financial investor. Compared with HOPU, Hillhouse is more beneficial to Gree.”
“Hillhouse has always been known for its'value investment'. Hopu’s characteristic is that most of its holdings do not exceed 4 years," Zhao Dong (pseudonym), an investor in a PE institution, told reporters.
Hillhouse Capital's investment cases include Tencent, JD, Baidu, Meituan Dianping, Didi Chuxing, Mobike, etc. Covering many fields such as TMT, energy, medical, etc., there have also been successful cases of helping enterprises realize transformation.
In 2008, the household laundry market was still dominated by P&G and Unilever. However, Zhang Lei, founder of Hillhouse Capital, believed that there would be vacancies in the domestic high-end market, so he found Blue Moon founder Luo Qiuping and convinced him He does not want to make short-term money, but to enter a new category to defeat multinational companies, and invest in Blue Moon to develop laundry detergent. After the investment of
, Blue Moon defeated Procter & Gamble and Unilever in the laundry detergent market. From 2007 to 2013, Blue Moon’s operating income increased from 400 million yuan to 4.3 billion yuan, a compound annual growth rate of 49%. The market share of Blue Moon laundry detergent ranked first for six consecutive years from 2008 to 2013.
At the same time, Hillhouse will also integrate the resources of its invested companies to achieve a win-win situation. In fact, after Hillhouse Capital invested in JD.com, it has also matched up, allowing Blue Moon executives to approach JD.com to achieve a win-win situation in terms of brand promotion and sales promotion. At the marketing level, the two parties have cooperated many times in the "Super Brand Day" marketing activities. In the 2017 event, the monthly average sales of a product under Blue Moon increased by 60 times.
"Buy high-quality assets and hold them for a long time. This is Hillhouse's investment philosophy. It is the best choice for investors, management and original shareholders." Bu Rixin, partner of Essence Capital Said.
Hopu Investment is quite mysterious in the field of private equity. There is no public website and no contact information. The most widely known is that this institution was founded by Fang Fenglei, the former chairman of Goldman Sachs Gao Hua Securities. Previously, he participated in the preparatory work of China International Capital Corporation, the first Chinese-foreign joint venture investment bank in China, and was quite influential in the venture capital industry.
By combing through the public investment cases of Hopu Investment, it can also be found that this institution is accurate, good at capital operation, and holding projects for a short period of time.
Hopu invested in Mengniu in 2009. In 2012, Hopu sold its shares to European dairy giant Ai's Chenxi, with a profit of HK$370 million in three years. Similarly, in December 2014, Junhe Hopu Fund Management (Shenzhen) Co., Ltd., a subsidiary of Hopu Investment, invested US$1.1 billion in Xiaomi together with Yunfeng Fund, GIC Industrial Investment, and DST. In July 2018, after Xiaomi landed on the Hong Kong Stock Exchange, Hopu Investment also completed its exit.
Dong Mingzhu’s C position
Gree management may continue to be stable
Anxin Finance's partner Bu Rixin analyzed that maintaining the stability of the management is high. The best choice, Hillhouse did not intervene in this transaction as a "barbarian" acquirer. On the basis of continuous tracking and investment in Gree for many years, if the management is turbulent, the loss is greater than the gain for investors. .
Zhao Dong also holds a similar view: “Generally speaking, Hillhouse Capital will not significantly change the original management team of the company.” He believes that Hillhouse Capital and Gree Electric have maintained a relatively good interaction before. To understanding.
Yang Shi told the Beijing News reporter that Hillhouse Capital will take over Gree Electric, and Gree’s dividends may increase in the future. "Hillhouse Capital puts out so much money, it should increase the amount of dividends."
Previously, it was no secret that Dong Mingzhu's relationship with Zhuhai SASAC was not harmonious. Home appliance industry analyst Liang Zhenpeng believes that Hillhouse Capital will maintain the stability of Gree Electric’s current management after becoming Gree’s largest shareholder, but Hillhouse Capital, as a market-oriented investment institution, will have a strong Gree Electric’s major decision will definitely make a statement.
Zhang Jianfeng, Executive Deputy Secretary-General of China Household Electrical Appliances Business Association, told the Beijing News reporter that Hillhouse Capital will take over Gree Electric, and Dong Mingzhu's right to speak in Gree Electric will change, and the relationship between Gree brand and Dong Mingzhu may also be weakened.
Zhang Jianfeng believes that although Hillhouse Capital will not make major adjustments to the management at the initial stage of its ownership, there will be appropriate personnel changes, or it will train Gree Electric's successor echelon. The company's strategic planning may be adjusted in the future.
also tested Dong Mingzhu’s team on how to deal with new shareholders. Yang Shi believes that after Gree Electric’s mixed reform, the company’s management is more concerned about corporate governance. However, Dong Mingzhu's management team is relatively strong. Hillhouse Capital, as a major shareholder, may also participate in corporate governance. The degree of harmony between the two will affect the stability of Gree Electric's management.
It is worth noting that on September 30, Dong Mingzhu and 17 Gree executives registered and established the company "Zhuhai Gezhen Investment Management Partnership (Limited Partnership)", a shareholder of Gezhen Investment In the list, Dong Mingzhu Holdings is as high as 95.2%.
focus
What changes will Hillhouse Capital bring to Gree Electric?
"Gree will inevitably make an attempt to upgrade the industry after Hillhouse becomes a shareholder." Zhao Dong said. He believes that this can be foreseen from the changes in Belle Footwear, which is also a 2C business and a manufacturing company, after Hillhouse became a shareholder.
In 2017, Belle delisted from the Hong Kong Stock Exchange and Hillhouse Capital began to digitally transform Belle after it became a shareholder of Belle. Belle has achieved positive growth for two consecutive years by improving supply chain capabilities and optimizing omni-channel systems using big data.
Diversification has always been a key point for external comments on Gree Electric. At the general meeting of shareholders on January 16, Dong Mingzhu mentioned that Gree Electric’s industrial plan includes four major sectors: air conditioners, household appliances, high-end equipment, and communication equipment.
The Beijing News reporter noted that since then, Gree Electric’s discussion of the company’s main business has changed. The latest report of the 2019 semi-annual report shows that Gree Electric is a diversified and technologically-oriented global industrial group with three brands, Gree, TOSOT, and Jinghong. The industry covers four major fields including HVAC, household appliances, high-end equipment, and communication equipment. . In the semi-annual report this year, Gree Electric's household appliances revenue increased by 63.60%, and the diversified layout showed initial results.
In addition, internationalization is also the weakness of Gree Electric. At present, Gree Electric’s international business revenue accounts for the lowest proportion of the "big three white appliances". Qingdao Haier’s first financial report was released after it was renamed Haier Zhijia. In the first half of 2019, it achieved revenue of 98.98 billion yuan, a year-on-year increase of 9.38%; and realized a net profit of 5.15 billion yuan, a year-on-year increase of 7.58%. Overseas revenue increased by 24% year-on-year, and revenue accounted for 47%.
After absorbing Little Swan, Midea Group's 2019 semi-annual report shows that the company's total operating income is 154.3 billion yuan, a year-on-year increase of 7.37%; net profit attributable to the parent company is 15.2 billion yuan , An increase of 17.39% year-on-year. Midea’s overseas sales account for more than 40% of the company’s total sales.
Gree Electric’s financial report for the first half of 2019 shows that the company achieved total operating income of 98.341 billion yuan, an increase of 6.89% over the same period of the previous year; net profit attributable to shareholders of listed companies was 13.75 billion yuan, an increase of 7.37% over the same period of the previous year ; Export sales revenue is 13.869 billion yuan, accounting for about 15% of revenue.
"Hillhouse Capital has a variety of resources and controls many companies in the technology sector. After Hillhouse Capital becomes the controlling shareholder of Gree Electric Appliances, it will benefit Gree Electric's standardized governance and help Gree Electric Appliances. Electrical appliances are transforming into technology, diversification and internationalization.” said Liang Zhenpeng, an analyst in the home appliance industry.
Western Securities also stated that Hillhouse Capital is rich in industrial resources, which can bring opportunities for Gree Electric's industrial upgrading. The artificial intelligence companies invested by Hillhouse Capital include Yitu Technology (computer vision), Horizon (autonomous driving), Siling Robot (development of intelligent robot systems), and Agile Robots AG (development of robot vision intelligent systems). Hillhouse Capital InvestmentThe artificial intelligence company will bring more possibilities for Gree Electric’s manufacturing upgrade.
The Beijing News reporter Chen Weicheng Zhang Shuxin
(Original title: Gree Electric’s 15% shareholding is the winner, Gree or Dong Mingzhu?)
(Responsible editor: Qiao Jun_NBJ11279 )
