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The Riddle of Gree's Reelection: Dong Mingzhu's Future Development Problem

via:博客园     time:2019/1/8 11:48:34     readed:398

Times Weekly reporter Wang Yuan from Shenzhen

On the night of New Year's Day 2019, Gree Electric issued several announcements, announcing the list of candidates for the Eleventh Board of Directors of Gree Electric.

According to the announcement, Zhuhai Gree Group Co., Ltd., the largest shareholder of Gree Electric Appliances, recommended Dong Mingzhu, Huang Hui, Wangjingdong and Zhang Wei as candidates for non-independent directors of the 11th board of directors; Hebei Jinghai Guarantee Investment Co., Ltd., the second largest shareholder of Gree Electric Appliances, recommended Zhang Jundu and Guo Shuzhan as candidates for non-independent directors of the 11th board of directors

In accordance with established practice, the new chairman of Gree Electric Appliances will be selected from the above-mentioned non-independent director candidates. In the outside world, Huang Hui, Wangjingdong, Zhang Wei, Zhang Jundu and Guo Shuzhan are not enough candidates to compete for Dong Mingzhu's re-election. This may mean that Dong Mingzhu's re-election as chairman of the Eleventh Board of Directors of Gree Electric Appliances has little suspense.

From the current situation, in addition to re-election gains, diversification, successors and other top issues related to the development of Gree are not clear and optimistic. The target of running from 200 billion yuan to 600 billion yuan in revenue in five years is equivalent to rebuilding two Gree. The challenge is conceivable. Even if Dong Mingzhu succeeds in re-election, there is still a long way to go.

An election seven months late

Dong Mingzhu's term of office should have expired on May 31 last year, but the change did not come as scheduled.

At that time, Gree Electric announced that, in view of the fact that the nomination of candidates for the new board of directors, board of supervisors and board of supervisors is still in progress, in order to facilitate the relevant work arrangements and maintain the continuity and stability of the work of the board of directors and board of supervisors, the election of the board of directors and board of supervisors will be appropriately postponed and seven months will pass.

On January 16, Gree Electric will hold its first temporary shareholders'meeting in Zhuhai in 2019 to elect new board members. This means that ten days later, Dong Mingzhu's re-election will be settled.

It is understood that three of the new non-independent directors of Gree have been nominated for the first time, including Dong Miwang Jingdong, Zhang Wei, who joined Gree Electric in 1999, Zhang Wei, who is currently the managing vice president of Gree Group, and Guo Shuzhang, who is currently the chairman of Jinghai Guarantee Board and the supervisor of Gree Electric Appliances.

Ye Zhixiong, a 61-year-old current director, withdrew from the board's re-election, while Meng Xiangkai and Xu of the tenth board resigned spontaneously in 2016 and 2017, respectively.

In the past three board elections, four candidates for directors have been nominated by Gree Group, a major shareholder with 18.22% shareholding. As the second largest shareholder of Gree, Hebei Jinghai Guarantee Investment Co., Ltd. is also the representative of Gree Electric Appliances Distributor. In the past two sessions, two candidates for directors have been nominated annually, and one candidate has been nominated by the ninth board of directors seven years ago.

In the latest session, Dong Mingzhu, Huang Hui and Wangjingdong are all the candidates for the board of Directors recommended by Gree Group. Zhang Wei has also entered Gree Electric since 1999 and has been promoted to vice president and assistant president of Gree Electric Group. He is currently the vice president of Gree Group. This means that in the new election, the color from Gree Electric is stronger than before.

In fact, according to the list of candidates for non-independent directors who will be the next chairman, Huang Hui, Wangjingdong, Zhang Wei, Zhang Jundu and Guo Shuzhan are not enough to compete for Dong Mingzhu's re-election.

Of course, Dong Mingzhu's upcoming third term also requires the support of minority shareholders, who jointly rejected the Gree acquisition of Yinlong in 2016, triggering a dramatic scene of Dong Mingzhu's angry denunciation of minority shareholders.

Regarding re-election, Liu Bucheng, a well-known analyst in the household appliances industry, told TIME Weekly that the current situation shows that Dong Mingzhu's re-election is very likely. If not assured, the board's re-election may continue to be postponed, and the seven-month postponement of the re-election is in hand.

In Liu Bucheng's opinion, regardless of the business performance or official attitude in 2018, Dong Mingzhu's re-election will benefit. The only disadvantage is that he has the dual status of a state-owned Gree Electric Gatekeeper and a private enterprise Yinlong New Energy Actual Controller. However, with Wei Yincang and Sun Guohua's counterclaim against Dong's voice weakening, it no longer poses a substantial threat to Dong's re-election.

But the latest clear signal came in May last year, just before the scheduled date of the new term.

In addition, another attraction of Grey Electric's re-election is the entry of Liu Shuwei, who has a close personal relationship with Dong Mingzhu. Liu Shuwei is currently the director and researcher of the China Enterprise Research Center of the Central University of Finance and Economics. She is also an independent director of Vanke. She has become one of the three independent directors candidates for the re-election of the board of directors of Gree Electric Appliances.

Pi Haizhou, a well-known columnist, wrote that as an independent director of a listed company, he should represent the interests of small and medium-sized investors more, protect the interests of small and medium-sized investors, and make private contacts with Dong Mingzhu. Whether Liu Shuwei can maintain his independence will be a realistic issue.

Dong Mingzhu's Seven Years

2018 is undoubtedly a proud year for Dong Mingzhu. The total revenue of Gree Electric Appliances in the first three quarters was 150 billion yuan, an increase of 33.94% and a net profit of 21.118 billion yuan, an increase of 36.59%. It is not only a foregone conclusion that revenue will exceed 200 billion yuan in 2018, but also a five-year contract with millet.

In the past six or seven years, Dong Mingzhu has devoted a lot of energy to two major areas besides air conditioning. One is the introduction of Gree mobile phones, and the other is the decision to enter the field of new energy vehicles. Although Dong Mingzhu has repeatedly advocated the outstanding advantages of Gree mobile phones, it is still difficult to hide the embarrassing sales of Gree mobile phones. The plan to lead Gree into new energy was aborted by the joint rejection of small and medium-sized shareholders, so that Dong Mingzhu had to take part in Yinlong in Zhuhai as an individual.

The semi-annual report of 2018 shows that the contribution of Gree air-conditioning category to revenue is 83.33%, that of small household appliances is 1.72%, and that of intelligent equipment is 0.39%.

In order to challenge the ambitious goal of 600 billion yuan, Dong Mingzhu continued to lead Gree on the road of diversification in the last year of her second term of office. At the end of the year, it also announced that it would invest 3 billion yuan to participate indirectly in the acquisition of Anshi Semiconductor, a world-renowned semiconductor company, by investing in Wentai Science and Technology, in order to realize its chip dream.

Challenges for the next three years

In the next three years, Dong Mingzhu will face three major challenges in her new term of office: the goal of 600 billion yuan, diversification of business and successor of Gree.

Huang Hui was born in technology. He joined Gree Electric Appliances in 1992, only two years later than Dong Mingzhu. He has been the core figure in Gree technology field before. He has persuasive professional ability and qualifications. But a more realistic problem is that Huang Hui is 55 years old, reaching 59 at the next general election and approaching 60.

Liu Bucheng believes that Dong Mingzhu has a strong sense of responsibility for Gree, which is worthy of affirmation from a positive point of view, but the other side of the coin is that a strong control, so that successors can not grow, will become a shortboard for the development of Gree Electric Appliances.

In his view, whether Dong Mingzhu is re-elected or not, there are certain uncertainties in the future of Gree.

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