Recently, the contents of a telephone conference of Midea Group (000333) were exposed on the Internet, at which executives explained and interpreted the company's strategic plan for 2022. People familiar with the matter disclosed to times finance that the contents of the meeting were used for internal reference to Midea investors.
At the meeting, Fang Hongbo, chairman of Midea Group, said that in 2022, the company's goal is to have reasonable income and restore profitability, focusing on improving profitability. The specific goal is to return to the profitability of 2019, including raising prices, adjusting product structure and digesting the impact of raw materials.
Situation and Strategy: the cold winter in the next three years will be more difficult than before, and the biggest challenge is uncertainty
Financial commentator Guo Shiliang told times finance that affected by the epidemic, many enterprises have made corresponding business adjustments. Midea, as a leading enterprise in the industry, is also shrinking some non core strategic businesses. In fact, beautiful is not the first time mentioned. "At the end of 2021, we made the judgment that the next three years will be a cold winter. At present, it is caused by the superposition of multiple factors of the heavy cycle of the environment and the self-development of Midea. Innovation and efficiency should be carried out simultaneously to deal with the risk of uncertainty." Midea Group executives said in the above exchanges.
Although Midea Group did not make a clear definition of non core business and non operational investment, Fang Hongbo, chairman of Midea, said, "the industry will face great difficulties in the next three years, which is an unprecedented cold winter. The company's response strategy is to change B2C on the one hand and transform to B2B on the other hand to create a second growth curve."
The gross profit margin is only 20%. The product structure will be optimized this year, and the effect remains to be seen
According to the financial report, Midea achieved a total operating revenue of 341.233 billion yuan in 2021, with a year-on-year increase of 20.06%; The net profit was 28.574 billion yuan, a year-on-year increase of 4.96%; The overall gross profit margin of manufacturing business is 24.05%, and the financial data in 2019 is 30.55%.
At the aforementioned teleconference, Midea executives said that in 2022, the company's goal is to restore profitability to 2019. Restoring profitability is not to reduce investment, but to improve efficiency and optimize product structure. Investment in R & D will continue to increase.
Midea executives mentioned that the brand premium is pursued by all enterprises, but it can not be achieved overnight. Midea is also doing this. The average price of air conditioning increased in the first quarter of this year, and the speed of effectiveness remains to be seen.
Optimistic about overseas ice washing Market and e-commerce trading business
According to the contents of the telephone conference, Midea Group reviewed the business laws of the past few decades and hundreds of years, believed that the recent years were a period of superposition of various cycles, and predicted that the next three years would be a cold winter of the industry, so the planning focused on improving efficiency and profitability.
Midea executives said that e-commerce trading business has encountered a ceiling. No matter how it develops at home, it is difficult to achieve great growth in scale and volume. Therefore, it is necessary to develop with high quality at home and actively go abroad.
In 2021, more than 80% of Midea's operating revenue came from HVAC and consumer appliances businesses, both of which were e-commerce trading businesses. In the same period, 40.34% of the group's revenue came from abroad.
As for B2B business, Midea executives said that excluding internal transactions in 2021, B2B business had a revenue of 75 billion yuan. At present, the group's B2B business is laying a foundation and has not set revenue and profit targets for 2022.
Previously, Midea spent a lot of money on B2B business for acquisition. In 2017, it acquired 94.55% of KUKA's shares with 3.707 billion euros, held WINONE elevator in 2020, and invested nearly 2.3 billion yuan to become the controlling shareholder of Wandong(WDM) (600055) at the beginning of this year.
Business and objectives: all resource allocations are matched around four business blocks
At present, Midea’s B2B business is focusing on four core businesses: automation and robotics, building technology, new energy auto parts and energy storage management. Midea executives said that now, in addition to auto parts, there is basically no need for group investment.
In addition, Midea executives said that although e-commerce trading business has a large investment, once it forms a scale, its profitability will be relatively stable and less affected by economic fluctuations. This year, the group's B2B end business growth will also exceed B2C, and its profitability will be relatively good.
