How does Gree Electric Appliance break through the “thin ice”

After announcing Wang Jingdong’s resignation the night before, Gree’s share price closed at 56.02 yuan / share, down 1.37% on August 18. For the reason of Wang Jingdong’s resignation, the announcement said it was personal reason, but some analysis said it was Teng space of CFO of dongpai new shares after the mixed reform. The novel coronavirus pneumonia outbreak this year has brought impact on the air conditioning market and the offline channel. The company expects net profit in the first half of to drop by about 50%. In the first year of the mixed reform, Dong Mingzhu, chairman of Gree Electric Appliance Co., Ltd., will eventually hand over a semi annual report and a year-end report card, which will also attract the attention of the industry. < p > < p > Gree Electric announced that the board of directors received a written resignation report from Wang Jingdong, a director, vice president and Secretary of the board of directors. Wang Jingdong applied to resign from the position of director, vice president and Secretary of the board of directors for personal reasons. After resignation, Wang Jingdong no longer holds any position in the company. Gree Electric said that in order to ensure the normal work of the board of directors, Zhang Wei, a director of the company, will temporarily perform the duties of the Secretary of the board of directors on behalf of the company during the period of not formally appointing a new secretary of the board of directors. The subsequent company will employ a new secretary of the board of directors as soon as possible in accordance with the relevant provisions of laws, regulations and the articles of association of Zhuhai Gree Electric Co., Ltd. < p > < p > in fact, Wang Jingdong’s departure had already had symptoms. Ten days ago, Gree Electric issued an announcement announcing the dismissal of Wang Jingdong as the financial director and Liao Jianxiong as the company’s financial director. < p > < p > Wang Jingdong is the “old man” of Gree Electric appliances, and is also regarded as the successor of Dong Mingzhu in the industry. According to the public information, from November 2002 to April 2006, Wang Jingdong successively served as the director of finance department, procurement department and Audit Department of Gree Electric Appliance Co., Ltd.; in April 2006, he was promoted to the assistant to the president of the company; in January 2008, Wang Jingdong began to serve as the financial director of Gree Electric Appliance; in July 2009, he also served as the Secretary of the board of directors; since October of the same year, Wang Jingdong has been serving as the vice president and Finance Officer of Gree Electric Responsible person and Secretary of the board of directors. In other words, wangjingdong has been working in Gree for nearly 18 years and is one of the core executives of Gree. As of August 17, wangjingdong directly held 884674 shares of Gree Electric appliances, accounting for 0.01% of the company’s total share capital. On the further reasons for Wang Jingdong’s resignation, a reporter from Beijing Business Daily also interviewed Gree Electric, and the other party said that the announcement would prevail. No one answered the phone in the office of the director and Secretary of Gree. < / P > < p > the first is related to Gree’s performance. “This year, Gree’s revenue and net profit have declined significantly. On the one hand, the epidemic has brought a heavy blow to the whole household appliance industry. On the other hand, China’s air conditioning market has been seriously saturated, with little growth or even a certain degree of decline since 2019. If the performance declines, maybe some of Gree’s senior executives will take responsibility, or their positions will be adjusted to a certain extent. ” Liang Zhenpeng said. At present, Gree Electric has not released this year’s semi annual report, but according to the company’s previous performance forecast, its total operating revenue was 69.5 billion yuan-72.5 billion yuan, compared with 98.341 billion yuan in the same period of last year. The net profit attributable to shareholders of listed companies was 6.3-7.2 billion yuan, down 48% – 54% from 13.75 billion yuan in the same period of last year.

GREE Electric said novel coronavirus pneumonia was the main reason for the decrease in revenue and profit in the first half of 2020. The new market is limited by terminal sales and installation activities, and the consumption demand of terminal consumers is weakened. In 2020, “Gree dongmingzhu store” will promote the new retail mode nationwide. The company will steadily promote the reform of sales channels and internal management, and continue to implement positive promotion policies. < / P > < p > Second, it is related to the mixed reform of Gree electrical appliances. Liang Zhenpeng pointed out that Wang Jingdong used to be the Secretary of the board of directors of Gree Electric Appliance Co., Ltd., and the entry of Hillhouse capital into Gree Electric Co., Ltd. may adjust the senior management team of Gree Electric Appliances to a certain extent, and the members of the board of directors may change in structure. Under this background, it is also possible for Wang Jingdong to resign. On the evening of October 28, 2019, Gree Electric announced that Zhuhai Mingjun was the transferee of Gree Group’s 15% equity transfer; on December 2, 2019, Gree announced that Gree Group and Zhuhai Mingjun, the ultimate transferee, had signed a share transfer agreement. In addition, Hong Shibin, an industry observer, added: “Gree Electric has made some changes in marketing methods and sales channels this year. It is normal for internal executives to form a situation of disagreement, which leads to differences in some aspects. Wang Jingdong may have resigned for this reason.” < / P > < p > this year is undoubtedly a difficult year for Gree. From the industry point of view, the entire air conditioning market downturn, serious decline in sales. According to the H1 summary report of China’s air conditioning market in 2020 released by Aowei cloud. Com, the retail volume of domestic air conditioning market in the first half of 2020 was 28.86 million units, a year-on-year decrease of 14.3%, and the scale of retail sales was 83.1 billion yuan, a year-on-year decrease of 26.9%. < / P > < p > when it comes to the single business model, Gree’s air conditioning business accounts for nearly 70% of the total revenue. According to the data, Gree Electric Appliances achieved a revenue of 1981.53 billion yuan in 2019, of which the air conditioning business income was 138665 billion yuan. In the past few years, smart home appliances have been developing rapidly. But now speaking of Gree, most of our impression is air conditioning. Dong Mingzhu also admitted that “at present, it is still ‘insignificant’, but there is a lot of room for improvement.” < p > < p > Liang Zhenpeng suggested that Gree should speed up the diversified development of its own company. If there are more small appliance product lines like Haier and Midea, the company’s anti risk ability will be stronger. < / P > < p > when it comes to channels, Gree’s huge dealer system is very famous in the industry, but it is precisely because of this intricate system that Gree’s online channels are not dominant. As a result, we can see from the many live broadcast activities of Gree this year that Gree is rapidly changing its sales channels, actively moving closer to the Internet e-commerce channels, hoping to rely on the flow of online e-commerce channels to drive sales. From the first live broadcast in April to now, Gree has carried out seven live delivery activities this year, including Dong Mingzhu. Hong Shibin also pointed out that there is no way to balance the interests between the online live delivery mode and the traditional agents. However, if Gree does not break through, it will not be able to achieve greater progress. “I still support Gree innovation and carry out flat reform of sales channels. In the past, agents helped, but now it is a constraint. Only by unswervingly going on, can we have a breakthrough in the future.”.