Shenzhou Computer Trek: How far can low price strategies go

In the capital market after the "last stroke" failure, the Shenzhou computer low-cost strategy How far can go?　　Sunyan Shenzhou Computer founder, Chairman Wu Haijun may not think, their own 10 years ago for the Shenzhou computer set the Low-cost model, in 10 years after the company has become a cause of the gem. March 22 evening, the China Securities Regulatory Commission issued an audit committee external announcement, Shenzhou computer GEM listing application has not been approved.　　Prior to this, Shenzhou computer has two times to go on the market experience. "(March) 22nd the same day they (Shenzhou computer top) also said that there is no problem.　　"A person close to Wu Haijun, said the first financial daily," The Shenzhou computer lost this opportunity, the future listing opportunities are not much, because the overseas capital markets on the concept of Chinese manufacturing is not a cold. A computer hardware enterprise's general manager pointed out that from the Shenzhou computer nearly 10 years of history, this is the most computer manufacturers disdain for the market expansion model, is indeed one of the computer industry survival, but there are fatal defects. The product lacks the market pricing power, forever only can become the market follower or the catch-up person.　　But in today's computer industry transformation period, this model future market development space has the extremely limited and the uncertainty. Outstanding Goods manufacturing Low-cost products "as early as 5 years ago, the computer market has entered the era of meager profit."　　"A domestic PC manufacturers middle-level yesterday to our correspondent said that the Shenzhou computer can maintain low-cost signs in the era of meager profit, one is to rely on the international computer market in the outstanding goods and inventory accessories, the second is to use the country's export tax rebate policy. Shenzhou Computer Prospectus (report) shows that, 2008 ~2010 years, the Shenzhou computer access to tax concessions, including export tax rebates accounted for its net profit ratio of 92.07%, 16.78%, 25.12% respectively.　　However, the Shenzhou computer prospectus on the closure of goods, the practice of "according to supply production" theory.　　Shenzhou Computer said that the company closely follow the key components of the market trend, when some parts due to various reasons (generally lack of supporting product support) caused by lower prices, timely procurement, and research and development of ancillary products, the formation of Shenzhou computer unique product update speed and price advantage. In the third quarter of 2009, Shenzhou Computer purchased a group of 13.3-inch LCD screens from the market, the screen specifications are more special, the previous has been the special supply of Apple computers, because of Apple's product line adjustment, the cancellation of orders, no longer procurement, and other companies do not fit the screen use of products, resulting in the screen due to the backlog and low price sales. Shenzhou Computer purchased after the development of the screen can use the elegant A300 series notebook computer.　　Reporter found on the internet, the notebook price of 3000 yuan, the price than other brands corresponding size of the product more favorable. "The example of the Shenzhou computer in the prospectus is to illustrate the quality of its core components," the statement said. "The above-mentioned hardware Enterprise General Manager pointed out that in fact, most of the inventory parts are obsolete parts, there are some" not fatal "quality defects, whichOne of the reasons for the low price of Shenzhou computer products.　　Wu Haijun Undertaking in fact, Shenzhou computer's low-cost survival is also derived from the Wu Haijun in the IT industry more than 16 years of history. In the early 90 's, after graduating from Southeast University of Wu Haijun south of Shenzhen, in Nanjing Bank Shenzhen Office is responsible for purchasing computer accessories.　　And then reselling floppy drive, hard disk, memory and other computer accessories is a fairly lucrative business. "Including seven-Hi computer, the founder of Deep Blue computer, and then the domestic computer industry celebrities, are relying on scalping computer accessories to earn the life of the first bucket of gold, while in the IT industry has accumulated a wide range of contacts." Also for the later Shenzhou computer to find inventory accessories in time to provide information base.　　Said the general manager of the hardware business. 1995 Wu Haijun founded New World Group, its main business is still reselling computer accessories. The difference is that the domestic computer industry has entered the DIY era, with the Taiwan resources, Wu Haijun began to try to build their own brand, from the initial board card OEM, to organize human development and production.　　By 2001, the New World Group has become the annual income of 2 billion yuan, with Mercedes-Benz motherboards, Pan-British motherboard, Shenlong motherboard, xiaoying, such as graphics card, such as a number of brands of the group, its branch has 8. "These card brands for the New World Group to create a nationwide marketing channels for the Shenzhou computer listing laid the foundation." "A person who has worked in the new World Group said that, in August 2001, Wu Haijun set up Shenzhou Computer Co., Ltd., a debut will be directed at the domestic computer leading boss Lenovo."　　Shenzhou computer played "4998 Yuan, Shenzhou Ben 4 computer hold Home" slogan, and at that time Lenovo Ben 4 computer price of almost 8000 yuan. Shenzhou computer This move, also opened the Chinese computer low price era. With the Low-cost strategy, Shenzhou Computer in 2002 to achieve 200,000 units of sales, into the national desktop PC sales top five.　　2003, the Shenzhou home desktop PC sales have ranked second in the country, the annual sales of 500,000 units. In the coming notebook era, the Shenzhou computer's low-cost strategy is still unique.　　Former competitors, in addition to Lenovo, including founder, Tsinghua Tongfang, Haier, TCL, etc., are Shenzhou computer beyond. "Shenzhou Computer low-cost operation of large manufacturers are generally afraid to use, because the product quality risk is very large." But the Shenzhou computer is playing low price card, the consumer is more inclusive of product quality.　　"A domestic PC manufacturer middle-level said, Shenzhou computer brand is still only one of the computer brands, from the brand still some gaps."　　How long will the Shenzhou model last?　　In fact, Wu Haijun also know that the Shenzhou computer "to inventory products" model there are very big defects. Therefore, in June 2006, Wu Haijun also specially invited the former president of Dell China to join the Shenzhou computer, Ren Shenzhou computer president. At that time, the reporter said to our correspondent, Wu is always very generous, the annual salary let himself have a kind of surprise. And Wu Haijun also said that the hope character advertised according to the Shenzhou computer's feelings, the experience of the integrated international Enterprise leads the company to the global market, creating a new "Shenzhou mode". However, it is a matter of hope, only 9 months later, the character advertised on the screen to leave, back to the old club Hewlett-Packard.　　What's more, the domestic computer market has gone through a period of rapid growth. Today, the computer industry is a sunset industry. "The rise of Apple's ipad, the global computing industry is in a transition period, and the size of Chinese computer manufacturers is shrinking," said a senior executive at a domestic computer-listed company yesterday.　　Shenzhou computer's prospectus also shows that the Shenzhou computer notebook, desktop PC and LCD machine in the 2010-year sales are different degrees of decline than in 2009. "This kind of performance is hard to build investor confidence. Unless Shenzhou computer can develop a new computer with hardware and software, like Apple. The above computer company's top estimate, the Shenzhou computer application in the Gem listing, is also the last move.　　The Shenzhou computer, which had hit IPOs in 2005 and 2008, ended in failure. The high-level also said that the domestic computer manufacturers to promote the market mainly by advertising and a wide range of market channels to go, the cost is very large.　　But the data of the Shenzhou computer prospectus show that its net interest rate is close to the gross profit margin of its products, which is completely against the general situation of the computer industry in China. This reporter according to the prospectus data calculated, Shenzhou computer 2008, 2009 and 2010 product gross profit margin of 5.78%, 6.04%, 6.31%, and three years of net interest rates of 5.32%, 5.3% and 5.58% respectively. On the contrary, Lenovo Group (00992.HK) published in February of the 2010/2011 Third quarter of the quarterly data show that Lenovo computer products gross profit margin of 11.16%, and net interest rate of 2.1%.　　The same party shares (600100.SH) 2010.5 Annual report also showed that its gross profit margin was 17% in the first half of last year, while the net interest rate was only 2.08%. Although it is difficult to draw from the prospectus data, the Shenzhou computer net interest rate is close to the root cause of gross margin, but its alternative market model should be one of the reasons.