Dong Mingzhu, Chairman And President Of GREE Electric Appliances Co., Ltd.: High-End Manufacturing Will Account For 20% Of The World'S Share Of Air Conditioning.

Intern Xu Haojie, Zhuhai

Since the eighteen, the state has attached great importance to the transformation and upgrading of manufacturing industry, and has defined the direction of development from "made in China to China", "the transformation of China's speed to China's quality", and "the transformation of Chinese products to Chinese brands".

For GREE electric, 2019 is the key year for its new transformation. After nearly eight months of promotion, GREE has finally ushered in a new major shareholder. In December 2, 2019, Zhuhai Ming Jun took a 15% stake from GREE group in the hands of GREE group for about 41 billion 700 million yuan, and formally signed a cooperation agreement with GREE electric management department, headed by Dong Mingzhu.

Dong Mingzhu

Dong Mingzhu led GREE management to invest in the final control entity, in turn, as the largest shareholder or GP in Zhuhai Yuxiu, Zhuhai Xian Ying and Zhuhai Ming Jun to carry out the transmission of echelon control. By introducing innovative long-term value investors and embracing private capital, GREE Electric will open up a more modern and market-oriented governance situation for listed companies.

In December 28, 2019, Dong Mingzhu, chairman and President of GREE electric appliances, attended the 2019 Summit Forum of "let the world love China" and hosted the GREE headquarters in Zhuhai, and disclosed GREE's new strategic layout.

"The success of equipment manufacturing means that the right to speak in China is increasing, and the development and manufacturing of high-end equipment is still a short board of Chinese industry. GREE will continue to increase its R & D investment in high-end equipment, and boost the development of China's manufacturing industry." Dong Mingzhu said that GREE is reconstructing its four major business segments, combining the original air conditioners, household appliances and communications business into the consumer domain, expanding the original intelligent equipment into the industrial field, and together with the consumer sector to form GREE's two new businesses.

The role of management is more obvious.

What changes will GREE take after the new major shareholder takes over? Dong Mingzhu believes that the steady development of the company for many years is not because of a shareholder, but mainly depends on its management team. "The position of Zhuhai SASAC's withdrawal from major shareholders is also hoped that GREE Electric will become a more market-oriented listed company."

In her view, the relationship between the government and enterprises, as Guo Yonghang, Secretary of the Zhuhai municipal Party committee, said, "the government should" immediately appear when the enterprise needs it. When the enterprise does not need it, you are far away from the horizon and maintain friendly and clear political and business relations. Dong Mingzhu accepted the twenty-first Century economic report reporter's question, stressed that the focus of GREE's mixed reform is not the withdrawal of state assets, but the establishment of a market-oriented system for listed companies to better operate and develop.

It is worth noting that since GREE was limited to ownership and shareholding structure, it did not carry out normal management shareholding or equity incentive. With this equity transfer, Dong Mingzhu and other 17 GREE executives will form a key seat in the new control structure.

The cooperation agreement shows that 41% of the fund management remuneration and profit sharing of Zhuhai Ming Jun will be invested by GREE electrical management, and 8% of them will be allocated to management members and employees who have made important contributions to GREE electric appliances in an appropriate way. Meanwhile, Zhuhai Ming Jun has invested about 2 billion 400 million yuan in investing in Ge Zhen.

In response to the management of the outside world as the biggest winner of the GREE mix, Dong Mingzhu said that GREE's management team was very chaste, and never thought about it because of its shares. In her view, the development of an enterprise is not supported by capital, but by the innovation culture of enterprises.

Dong Mingzhu emphasized that GREE will persist in reform and innovation, but it can not change the integrity of society, it can not change the cultivation of employees, and the protection of the legitimate interests of shareholders can not be changed. She also revealed that the company plans to build GREE building in Hengqin, Zhuhai, to further enhance the company's R & D strength, and provide a platform for the talents of Macao University and Macao University of science and technology to boost Macao's development.

Business track change

In the first three quarters of 2019, GREE achieved 155 billion 39 million yuan in revenue, an increase of 4.26% over the same period last year, and a net profit of 22 billion 117 million yuan, an increase of 4.73% over the same period last year. Among them, the air conditioning business is still the main source of revenue. In the first half of 2019, GREE air conditioning business revenue of 79 billion 325 million yuan, accounting for more than 80% of the company's total revenue (81.5%).

Over the years, in order to get rid of the excessive dependence on air conditioning business, GREE has set foot in household appliances, mobile phones, intelligent equipment, chips, etc., and even Dong Mingzhu personally promoted the acquisition of Zhuhai Silver Dragon by a listed company. Just as GREE Electric is about to usher in a new major shareholder, the company has also adjusted its business.

According to the latest business division, GREE Electric will set up two major areas of consumption and industry in the future. The field of consumption covers household air conditioners, HVAC, refrigerators, washing machines, water heaters, kitchen appliances, environmental appliances, communication products, intelligent buildings and smart homes. The industry covers high-end equipment, precision molds, refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision casting, basic materials, industrial energy storage and renewable resources.

On the day of December 28th, GREE released the new strategy of all things connected smart home, displaying its application scene of smart home appliances in the form of VCR. In the short film, GREE smart home uses air conditioners, mobile phones, picture frames, etc. as the entrance, and interact with fridge, washing machine, dishwasher, rice cooker, steaming machine, water purifier, intelligent door lock, humidifier, dehumidifier, fan, purifier, electric heater, gas cooker, range hood and other appliances.

"The key to economic downturn is to find opportunities and find short boards. For instance, the interconnection of all things brings new opportunities." Dong Mingzhu said. Reporters noted that in the new business division, the status of smart home and high-end equipment is once again highlighted.

According to the newly released "China manufacturing high quality development report (2019)", thanks to the active support of policies, the development of advanced manufacturing industry and the digitalization, networking and intelligent upgrading of traditional industries accelerated in China. In the first three quarters of 2019, investment in high-tech manufacturing increased by 12.6% over the same period last year, and investment in manufacturing technology increased by 8.9%; the growth of industrial strategic emerging industries and high-tech manufacturing industries increased by 8.4% and 8.7% respectively; the advanced manufacturing industry and the modern service industry are accelerating integration; production + service has become the main direction to promote the transformation and upgrading of traditional manufacturing enterprises, and manufacturing enterprises continue to extend their R & D, design, marketing, monetary and financial services to the upstream and downstream value chains.

However, the problem of "big but not strong" in China's manufacturing industry still exists. The dependence of key core technologies and high-end equipment is high. The "two skin" phenomenon of technology and economy is more prominent, and the labor productivity of manufacturing industry still lags behind that of traditional manufacturing power.

In the GREE exhibition hall, the high-end equipment covers industrial robots, precision CNC machines, intelligent equipment core components, automatic injection molding machines, flexible manufacturing systems, etc. For the two major plates in the future, Dong Mingzhu said that the consumption sector is the source of GREE's rise, and the industrial sector is a heavy tool for the country. Without high-end equipment, there will be no perfect consumer products. There is no conflict between them. She hopes that one day, high-end equipment can also be air-conditioned, accounting for more than 20% of the world.

"GREE air conditioning technology has been in the forefront of the world, but this does not mean that we have reached the highest end. Innovation is endless. There are still many potentials to be explored. " Dong Mingzhu believes that enterprises must have their own core competitiveness and become healthy national cells, so that our country will be strong.