Why does Haier want someone to pick up the cheap? What does KKR bring?

Absrtact: Buy Vanke. Temasek buys Maotai. Yale buys Gree. KKR buys Haier. October 1, the introduction of Qingdao Haier foreign strategic investors KKR, is seen as the assets of overseas business integration. However, the discount of 10% by some institutions as buyers and sellers of listed companies issued

Buy Vanke. Temasek buys Maotai. Yale buys Gree. KKR buys Haier.

October 1, the introduction of Qingdao Haier foreign strategic investors KKR, is seen as the assets of overseas business integration.

However, the discount of 10% by some institutions as buyers and sellers on the development of listed companies lack of confidence. "With confidence, the additional price can be a little higher, said very confident, but to take money out of the less confidence, KKR like to pick up a big bargain." Why does Haier want someone to pick up the cheap? What does KKR bring? "A home appliance researcher at the agency's meeting questioned.

Qingdao Haier said, "comply with the provisions of relevant laws and regulations, and follow market practices." ”

In the outside world, in recent years, the can-do of Qingdao Haier has not been as strong as earlier. 5 years ago, Qingdao Haier, whether the market value or performance are the same as Gree, now the relevant indicators only half of gree.

In this respect, according to the long-term tracking of Qingdao Haier's home appliance researcher analysis, "and management, and equity structure, including Haier or a state-owned enterprises, equity reform of some changes, the number one personal style, has a great relationship." ”

There's nothing to see, Haier.

October 1, the suspension of the days of Qingdao Haier announced to KKR Group's wholly-owned subsidiary of KKR (Luxembourg) to add about 305 million shares (11.29 yuan/share, the first 20 trading day average price 90%), to raise capital of 3.382 billion yuan to supplement liquidity. After the release, KKR (Luxembourg) will hold a 10% per cent stake in the company and become a strategic shareholder. The private issue has yet to be approved by the Ministry of Commerce and the CSRC.

The story of KKR is not small.

It is disclosed that KKR Group is one of the largest private equity investment institutions in the world, and has been established in 37 and has its business worldwide,kkr& CO.L.P. Listed on the New York Stock Exchange.

As of June 30, 2013, the group managed total assets of 83.5 billion U.S. dollars, completed 25 industries, more than 200 companies, the total turnover of more than 470 billion U.S. dollars of investment, annual return of 26%. KKR (Luxembourg) is a project company specifically incorporated in Luxembourg for this transaction.

The nearly 3.4 billion investment is by far the most generous of KKR's in China.

Qingdao Haier said in the announcement, "The future KKR group will use its global resources to conduct a series of strategic cooperation with Qingdao Haier in such areas as strategic positioning, Internet intelligence appliances, incentive system and performance appraisal mechanism, capital market and capital structure optimization and fund utilization, overseas business and mergers and acquisitions, and potential operation promotion. ”

Qingdao Haier chairman Haishan when talking about the transaction also pointed out that, "the end of 2012 Qingdao Haier entered the network strategy stage." The KKR is a long-term strategic partner is the implementation of the "network strategy" in the capital level of the important measures to promote the company to the Internet era platform-oriented enterprise transformation. ”

In July this year, Zhang, who has rarely been active in the public eye, attended the industry conference held in Qingdao, and spoke personally about the changes to be made by the big data age and Haier, the internet age.

The Galaxy Securities Research Department data show that the introduction of KKR just in the Internet and the field of things have more investment operations, may be Qingdao Haier in the development phase of the IoT to provide experience.

The day before the national Day, September 30 4 o'clock in the afternoon, Qingdao Haier special for this major event-oriented agencies (buyers and sellers) convened a global conference call to explain why the introduction of KKR. As the home appliance analyst later reported in the research, Qingdao Haier's action was completely unexpected, "the introduction of KKR as a strategic investor, from the point of view of time and object selection than we expected." ”

"Haier's additional issue is mainly to attract institutional attention." "One household appliance industry analyst at the meeting told reporters," too conservative and smooth, this is Haier has been not too many institutional investors fans. KKR came in, the table said that can bring a lot of resources, the Internet has a deeper understanding, to promote the company's understanding of the industry, adapt to the traditional industry in the Internet age upgrade, the second is the improvement of corporate governance structure and management efficiency. The table is estimated to be two things, one is not to promote the company's asset securitization speed, capital operation speed, such as the overall listing, the other is not before the foreign investment in the industry to attract attention, and now its institutional fans are indeed a little more. ”

According to reporter statistics, after the national Day, Guotai, Great Wall Securities, Bohai Securities and other 8 brokerages have on the Qingdao Haier and KKR cooperation issue published research report.

But other institutions are less enthusiastic than expected. The reporter contacted a number of home appliance researcher expressed not big interest. A broker in north China told reporters, "These years Haier seems a bit twilight, a long time did not follow." This time I would like to go to research, think about it is not too much meaning, Haier now nothing to watch, not like Gree, beautiful. ”

The price of KKR's shares was questioned at the meeting, according to people familiar with the matter. "Why do you want to get a discount of 10 points, if you have confidence in strategic investment, you should buy it at the same price as the level two market?" KKR additional price is lower than the price before the suspension, indicating that the strategic cooperation of some cautious, foreign capital pressure too much, is not optimistic or pick up cheap are possible. But this is the price of the agreement between the two sides, indicating that the company is also not confident. ”

In response, Qingdao Haier in the reply to reporters said, "from the past cases, the strategic investors stake in a shares listed companies, the vast majority of the price of the board of Directors of the first 20 trading days of the 90%;kkr of the period of three years, and two of the market to buy different, but also more than the traditional a-share private issue for 1 years of lock-up period. On the whole, giving a certain discount is reasonable. ”

But analysts don't see it that way. "The essence of the problem is that Haier is an ice-washing (refrigerator, washing machine) faucet, ice washing has developed to a bottleneck." The whole market may have reached a consensus, its future development rate may be 10% annual growth; unlike air-conditioning, the future of the market is very large, but the quantity of Haier air-conditioning is relatively small. The main aspect of Haier is the Internet smart home, but not much help for short-term performance. On the other side, there is no bright spot from now on, so the agency is not particularly excited. ”

From a gree to half a gree.

In fact, as a global appliance faucet, Haier was so famous. 2004 Haier Group to 101.6 billion yuan sales to China's home appliance industry's first "hundred billion club members." And the United States Group (before the reorganization), Gree group to achieve the same goal is in the distant 8 years.

But when a business reaches its peak, it tends to fall back.

Haier's once unshakable status is gradually lost. The listed company Qingdao Haier as the Haier Group's main household appliances assets-ice wash air (refrigerators, washing machines and air-conditioning) carrier, also difficult to escape the trend of influence.

The industry has changed.

A well-known domestic fund company investors told reporters, "home appliances industry belongs to the winning and losing industry, it will not say or the Army melee, competition has been more stable." Now it's like the most of the kingdoms. Gree Electrical Appliances is Wei, the United States Group (after reorganization) is the East Wu, Qingdao Haier may be Shu, the strength is relatively weak. Investment, the rating is white Horse stock, but more preference for gree a bit, because gree do more focused, and air-conditioning market, the company's competitiveness is also strong. The second is beautiful, then Haier. This sort should be a high degree of recognition. ”

The starting point of these three big appliances is actually extremely close.

Qingdao Haier and Gree electrical appliances with the establishment in 1989, the United States electrical appliances (reorganization before, the same below) to establish a little later, in 1992 years. Since then, Qingdao Haier and the United States of electrical appliances with the listing in 1993, 3 years later, Gree also realized the listing.

Market capitalisation, the first-day Qingdao Haier is 2.174 billion yuan, is the United States the first day of the market value of electric appliances 1.2 times times, is gree electrical appliances 60%. With the Haier Group diversified operation and expansion of the scale (1991-1998), 1997 years of Qingdao Haier ushered in the outbreak period. At the end of this year, Haier's market value reached 11.982 billion yuan, equivalent to 3.7 beautiful appliances and 2 gree appliances.

After the entire Haier Group entered the international Strategic development phase (1998-2005), the early expansion of some of the problems and abuses are also beginning to be exposed, Qingdao Haier market value of the advantage is gradually narrowed, has been leading to 2006 years. Qingdao Haier at the end of the year's market value of 11.031 billion yuan, close to 1.5 beautiful and 1 gree.

Since 2007, Qingdao Haier began to slowly be the beauty of electrical appliances and gree to shake off. At the end of this year, Qingdao Haier's market value is 30.063 billion, just equivalent to 0.64 beautiful appliances and 0.73 gree appliances.

Subsequently, Haier Group gradually deepen the global brand strategy development phase (2005-2012), this period is also the rapid development of gree electrical appliances, the United States the stage of in-depth electrical adjustment. 5 years later (2012), Haier Group's market value is basically equal to a beautiful and half gree.

In other words, this 5 years, Qingdao Haier from 1 gree electrical appliances developed into half gree electrical appliances.

Changes in revenue and net profits follow similar trends. From the profit point of view, 2012 Haier achieved a net profit of 3.269 billion yuan, only about half of Gree.

2012-2019, Haier Group will step into the networked strategic development stage.

"Haier these years is really backward, old, has been not plague." Each year's performance, market share can explain the problem. Haier refrigerator market share is the first in the country, but this industry is not as good as air-conditioning. Said the home appliance industry analyst who attended the meeting.

Some investors may be curious, Qingdao Haier lags behind the peers is not because some of the home appliance business is not listed companies?

The reporter obtains the Haier Group 2006-2011 Year Audit report to show, Qingdao Haier's volume in the whole group important. From the perspective of total asset size, Qingdao Haier accounted for the entire group of 60%, from the revenue point of view, accounting for 83%-93%; The key to the obvious problem is Qingdao Haier itself.

Haier Group insiders told reporters, "Although Zhang has not been listed companies in the position, but in fact, the listed company's strategic problem or his hand in the tube." He is the chairman of the Group board. In the past few years, Haier and no so-called transformation, is more stable, a bit of a conservative, has been the white power, the growth of power is not very sufficient, no gree so enterprising, every year to do so much profit is satisfied, not like Gree to set a goal for themselves, 5 years to double or something. Haier does not grow about 10% a year, it's enough. In fact, it can not be any big change, because the management mechanism, the system is there, in the reform is also difficult, want to change the existing business model, to improve competitiveness may be more difficult. ”

In this regard, Qingdao Haier responded to reporters, "the company's overall performance is good, between 2006 and 2012, Qingdao Haier business income to achieve a composite growth of 26.35%, net profit to achieve a composite growth of 55%; Net profit margin from 1.6% to 5.46%, achieving a sound growth in performance." In the future, the company will achieve continuous, steady and quality growth through business model innovation and product innovation. ”

A old that can't be helped.

"To tell the truth, these years Haier's speed is slow, not as fast as before." "The appliance industry experts said frankly," and why Haier these years by the United States, gree beyond, mainly because of air-conditioning business. In fact, home appliances in short is, the industry you see the air-conditioning data, plate you see gree. ”

From the product structure, gree main air conditioner, and the production of a part of small household appliances and other products, the shortest product line, the United States electrical appliances at the same time the layout of air ice washing 3 major business, and Qingdao Haier in the air ice washing, but also the production of small household electrical appliances, water heaters,

Specifically, the refrigerator has been Qingdao Haier's fist products. Haier is the refrigerator started, in the industry, including the formation of consumers in the Word-of-mouth is good; the second is its washing machine, its washing machine is also after a period of vigorous development, in the market has a better response.

2012 Haier's China market share of 27.2%, ranked second is the beauty of 13.5%. Haier global market share of 9.6%, with the United States SP QI.

"Almost no one denies that Haier's washing machine is the world's first, Haier's fridge world first." For example, its refrigerator sales are at least second, third, the sum of the fourth, the washing machine, once the United States has threatened it, and now it is not too much threat. In short, the ice-washing Haier's advantage is too big, other appliances and it is not a horizontal line. ”

"But the problem is that Gree is the first air conditioner in the world," said a person close to the Qingdao Haier. Air conditioning This piece of space is really much larger than ice washing, ice wash volume to basically reach a high level, and then increase the resistance is relatively large. So Gree from behind. Air conditioning is the representative of Gree, the second is beautiful, Haier is ranked third bar, but also often faced with the possibility of being overtaken, ranked in the back of the intellectual high (air-conditioning), ox (air-conditioning) are staring at Haier. There is also the view that consumers can only remember the top two brands. Before going to the store, you must think about it, I go to see which brand, your mind flash and only 2 brands, the 3rd is not. So say is really, everyone mention air conditioning is gree first, beauty second. You have to ask the average consumer, he may also want to think about, can say the third is who. ”

Reporter statistics years of annual report found that as early as 2004, Qingdao Haier, the United States and gree electrical appliances and air conditioning sales income is also close, respectively, Gree 13.572 billion yuan, the United States 10.13 billion yuan, Qingdao Haier 7.663 billion yuan. Later, because of the related transaction and competition, the situation of the air conditioning business is misjudged and the gap between the peers is widening. ”

Later, Haier encountered development bottlenecks, and began to focus on air-conditioning business. Changed a lot of leadership, in exchange for, the two years a little better, air-conditioning, and the gap between the United States and Gree has shrunk a lot. People close to Qingdao Haier told reporters.

Last year, thanks to the beauty of the electrical restructuring freed up market space, Haier air-conditioning sales growth is good.

However, reporter statistics 2012 Annual report found that, from the sales, Qingdao Haier air-conditioning sales only 14.769 billion yuan, only the United States of electrical appliances 1/4 (51.464 billion yuan), gree electrical appliances 1/6 (88.886 billion yuan).

From the main business contribution, Gree electrical air-conditioning business accounted for the overall revenue of 88.79%, the United States electrical 75.6%, and Qingdao Haier only contribution 18.49% (ice wash accounted for 48.14%).

The appliance industry professionals to explain to reporters, "air-conditioning market is very special, its channel is mainly in the store mode, in the United States, suning inside, Haier air conditioning is not lower than the share of gree and beauty, but outside the other channels, Haier is too weak." Haier requirements of zero inventory, demand cash, is the downstream business orders to Haier, Haier, according to the volume of the order to produce, so its inventory is very low. This has an advantage, in the off-season when it will not cause too much loss, will not backlog too much of the goods, but in the peak season, because of the reproduction of orders, it is obvious that its supply speed will have a certain lag. If the product suddenly burst, then there is no inventory it can not carry out the goods. Many of the air conditioning channels are more opposed to Haier's approach. You and Gree, the United States of air-conditioning than not much advantage, then I do not represent you, only to do beautiful, gree. ”

For Qingdao Haier, the home appliance market has reached a consensus to give 10-11 times the valuation, the value of change is not small, if the performance did not exceed expectations, the stock price is not rising momentum. "So it can only be stimulated by news like the KKR partnership." The North China household appliance analyst told reporters.

Reorganization shelve

"Qingdao Haier has been no big moves, the reporter contacted a South China household appliance researcher also said," This time it suspended and KKR cooperation, we just started to guess is restructuring, may be the group's quality assets into the listed companies, because it has been said this. ”

2011 years, Qingdao Haier has clarified the way and timetable of the integration of assets, showing the group will be listed companies to do a strong goal, the announcement includes the following 6 points:

Haier Group overseas white electricity assets: Plans since 2011, Haier Group in five years to the overseas white goods business integration into the company, mainly in the group's overseas 4 control manufacturing companies. Accelerate the company's business globalization layout process.

Haier Group share of the shares of the white power enterprises transfer to the company: the group shares of Mitsubishi Heavy industry Haier (Qingdao) Air-conditioning Co., Ltd. and Qingdao Haier Refrigeration Equipment Co., Ltd. and other white Power enterprises, the group will strive for 5 years to hold the corresponding equity transfer to the company, reduce minority shareholders profit and loss.

Injection of electrical appliances upstream assets and business: since 2011, Haier Group plans to spend five years to complete with the company's business closely related to the upstream assets and business-including molds, special steel, new materials into the company's work. Promote the company to take full advantage of the industrial chain synergy.

Reduce associated transactions: Haier Group supports the import of overseas trade operations into the company or company's holding company Haier electrical appliances, reduce export-related transactions, support companies to reduce procurement of raw materials related transactions, the completion of the company's associated transactions will be reduced to less than 30%.

Injection of other household appliances related assets: Haier Group to consider from 2011 onwards, with five years of white household appliances and other household appliances related assets and business-such as color TV, home business, etc. into the company.

Haier Group in the acquisition of mergers, investment in new appliances business projects, the company has the right to choose.

Now that 2 years have passed, you can see that 1th, 4 and 5 have not yet been completed.

In response to this, Qingdao Haier in the reply to reporters, said, "In early 2011, in order to further promote the sustainable and healthy development of Qingdao Haier as a global leading enterprises, Haier Group pledged to Qingdao Haier as its home appliance business integration platform, since 2011, within five years to be injected through the assets, Equity restructuring and other ways to support Qingdao Haier to solve the competition, reduce related transactions, bigger and stronger, June 2011 the company took the first step, the acquisition of Haier Group and its subsidiaries held in Qingdao Haier Mold Co., Ltd., and other 10 companies equity. The introduction of KKR, the two sides signed a strategic cooperation agreement, including the assets of overseas business integration is an important area of strategic cooperation between the two sides. The future company will continue to promote the relevant work according to the promised content.

"Haier later actually reorganized this piece has been no movement." "The South China researchers said," but the group of relatively good assets in Hong Kong stocks (Haier Electric), a-share (Qingdao Haier) two companies, the remaining assets in fact, the investors may not be a good thing. To be honest, it's less profitable than the assets of an existing listed company, such as its color TV, mobile phones, which can pull down the valuations of listed companies. ”

The reporter obtains the Haier Group 2011 Year Audit report to show, as of December 31, 2011, the entire Haier Group's total assets reached 69.141 billion yuan. Only long-term equity investment in this area, Haier Group has invested 65 companies, involving a variety of industries. By contrast, Gree group only three major plate business, respectively, industry, tourism, real estate industry, the pattern is relatively clear.

This has been the Haier Group insiders agree, "Haier this enterprise is really strange, it has action in every battlefield, but it may be because the product line is longer, and then go around, shop too wide, what all do, diversify too dispersed, a little waste of resources." ”

Can KKR, who gets a 10% stake, change all this?