Home Business Midea announces “privatization” and KUKA accelerates localized operations|Midea|Privatization|Midea Group_Sina Technology_Sina.com

Midea announces “privatization” and KUKA accelerates localized operations|Midea|Privatization|Midea Group_Sina Technology_Sina.com

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Original title: Midea announces “privatization” of KUKA to accelerate localized operations

Both unexpected and expected.

Four years after the acquisition, Midea has a new position on KUKA.

On the evening of November 23, Midea Group (000333.SZ) announced that it intends to fully acquire and privatize the equity of KUKA Aktiengesellschaft (hereinafter referred to as “KUKA”), a German Frankfurt exchange-listed company controlled by the company, through a wholly-owned subsidiary. After the completion of the acquisition, KUKA will become a wholly-owned overseas subsidiary of Midea Group and will be delisted from the Frankfurt Stock Exchange.

Midea Group believes that this acquisition will help KUKA focus on business operations and enhance the company’s internal resource collaboration and sharing in robotics and automation-related business areas.

Affected by the weakness of the home appliance market, Midea Group’s third-quarter revenue and net profit increased year-on-year, but the net profit growth rate was only single digits. Since March of this year, Midea’s stock price has continued to decline. The current share price has fallen by 33.5% from the highest of 105.54 in February. For this reason, Midea has initiated share repurchases. As of August 12 this year, Midea has spent nearly 5 billion yuan on repurchasing shares. .

Midea’s privatization of KUKA at this time was both unexpected and expected. On the one hand, the conditions attached to the acquisition of KUKA have not yet expired. At this time, I do not know whether the move will cause resistance in Germany; on the other hand, as Midea continues to promote the integration of KUKA, the integration of overseas business is also inevitable. Row.

Li Hongwei, CTO of KUKA China, said in an exclusive interview with a reporter from the 21st Century Business Herald that one of KUKA’s work priorities in the future is to promote localized operations. “In the past 10 years, KUKA has experienced local assembly, procurement, and application. Local R&D, and then we will move towards the full localization of the entire value chain.”

According to his disclosure, the Chinese market currently accounts for nearly half of KUKA’s share. “From this year’s perspective, the sales of KUKA robots in China may surpass that of Germany, but 90% of the company’s products are designed in Germany. As more and more products are produced in China, we hope that in the future, the proportion of design and R&D in China will increase from 10% will increase to 20% and 30%,” said Li Hongwei.

“Privatization” KUKA

In recent years, after the official bid farewell to the subsidy era, the growth rate of the home appliance market has been much slower than before.

According to AVC data, the retail sales growth rate of the home appliance market has slowed since 2017, and the entire industry has entered the era of stock. In 2018, the retail scale of the home appliance market was 810.4 billion yuan, a year-on-year increase of only 1.9%. By 2019, this number has become 803.2 billion yuan, a year-on-year decrease of 2.2%. The impact of the epidemic in the past two years has made the home appliance market even worse. In 2020, the size of China’s home appliance retail market will be 705.6 billion yuan, a year-on-year decrease of 11.3%.

The growth ceiling of the home appliance business has become increasingly prominent. After several years of taking over from the founder, He Xiangjian, Fang Hongbo began to find a second track for Midea.

On August 4, 2015, Midea Group and Yaskawa Electric signed a joint venture signing ceremony to establish Guangdong Yaskawa Mei Industrial Robot Co., Ltd. as a joint venture. At that time, Midea planned to learn from Yaskawa Electric’s technology to develop economical robots suitable for China’s 3C industry, and at the same time cultivate the joint venture company as a leader in domestic robots. In addition to the robot company, Midea Group has also established a service robot company with Yaskawa Electric, whose main business is to develop and promote service robots in the fields of medical health and helping the elderly and the disabled.

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During the cooperation with Yaskawa, Midea further realized the development potential of the robot track, so after the second year of cooperation with Yaskawa Electric, Midea made an invitation to acquire KUKA. After several increases in holdings, Midea’s acquisition of KUKA’s equity was completed in January 2017, and Midea Group obtained 94.55% of KUKA’s issued share capital for 3.707 billion euros.

As one of the four major families of industrial robots in the world, KUKA Robotics has more than 20 subsidiaries around the world. Its industrial robots are located in almost all manufacturing plants in Germany and around the world, including Tesla, Mercedes-Benz, BMW, Volkswagen, Bosch, Companies such as General Motors are its customers. Therefore, Midea’s acquisition of KUKA was generally favored by the industry at that time.

Tianfeng Securities pointed out at the time that KUKA has a strong influence and technological advantages in the automotive industry, logistics, medical treatment, energy and other fields. Midea’s acquisition of KUKA can, on the one hand, rely on KUKA’s technological advantages in the fields of industrial robots and automated production. , To improve the company’s production efficiency, promote the company’s manufacturing upgrade, and expand the B2B industry space; on the other hand, Midea’s Ande Logistics and KUKA’s Swisslog can in-depth cooperation in logistics equipment, system solutions, efficiency improvement and other aspects. At the same time, Midea can also help KUKA further expand its business in China.

It is understood that in the 2016 fiscal year, KUKA’s new orders valued at 3.4 billion euros, an increase of more than 20% and a record high. But then, KUKA’s development was not smooth. Wind data shows that after KUKA set a new profit of 690 million yuan in 2017, it began to decline continuously. In 2018, the group’s net profit was still less than 100 million yuan, a drop of more than 80%; in 2020, it was once in a loss dilemma, with a loss of more than 800 million. Yuan.

During this period, Midea carried out a series of integrations on KUKA. This includes: In March 2018, Midea announced that it will inject capital into KUKA China’s subsidiary business and jointly establish three joint ventures to expand its businesses in the three major areas of industrial robots, medical care and warehousing automation. The rapid development of intelligent logistics, new retail and other aspects. In addition, the demand for intelligent transformation within the Midea Group in recent years has gradually shifted to KUKA procurement, which has provided KUKA China with a considerable amount of business. At the same time, Midea has also vigorously expanded its ToB business in recent years, exporting intelligent transformation solutions to the outside world, which will also bring business support to KUKA China.

In response to Midea’s privatization of KUKA, Guotai Junan believes that Midea’s estimated payment for the tender offer is limited and will have little impact on the company’s performance in the short term. “KUKA currently has a market value of 3.13 billion euros, equivalent to 22.52 billion yuan. With the privatization of the total equity of 5.45% and the customary 30% market premium acquisition, the amount required for this transaction is approximately 1.6 billion yuan, which is a significant impact on the company’s cash flow. The impact is small. And the current profitability of KUKA is low. If it is fully recovered, the company’s short-term performance will be less thick.” Guotai Junan pointed out that considering that the implementation of privatization needs to pass the review of the KUKA shareholders meeting in May 2022, it is for 2021. Midea Group’s overall performance has no significant impact.

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It is worth noting that at the beginning of the acquisition of KUKA, the “Investment Agreement” signed by Midea and KUKA had a series of additional conditions, including a commitment to continue to retain KUKA’s current management team, and support the independence of the KUKA Board of Supervisors and the Executive Management Committee. The independence of the group’s financing strategy; at the same time, it promises to respect KUKA’s brand and intellectual property rights, enter into a segregation prevention agreement, keep KUKA’s trade secrets and customer data confidential, and restrict the transfer of technical knowledge from Germany to China. In addition, Midea also promised that it will not change the number of KUKA’s existing global employees, close the base or have any relocation actions. It is understood that the validity period of the investment agreement is seven and a half years.

The current agreement has not yet expired, and Midea has accelerated the pace of integration, and KUKA’s privatization may have related risks. Midea also stated in the announcement that because the acquisition still has to perform certain filing and approval procedures in accordance with relevant domestic and foreign laws and regulations, there is uncertainty, the company will disclose the progress of the acquisition in a timely manner to make investors pay attention to investment risk.

Accelerate localized operations

In fact, Midea paid much attention to the robotics business represented by KUKA and used it as an opportunity for overtaking in a curve. To this end, Midea also established Guangdong Midea Intelligent Robot Co., Ltd. in 2017 and acquired the high-tech company Servotronix.

In the group’s 2019 annual report, Midea redefined the robotics and automation system business as “centered on KUKA Group, Midea Robotics, etc.”. Naturally, the cooperation between Midea and Yaskawa (especially in the field of industrial robots) has also come to an end. In July 2020, Midea announced the dissolution of the industrial robot company, a joint venture with Yaskawa Electric.

However, the performance of the “Robots and Automation Systems” track was not satisfactory. From the financial report point of view, from 2017 to 2020, Midea’s revenue in this sector was 27.037 billion yuan, 25.678 billion yuan, 25.192 billion yuan, and 21.589 billion yuan, showing a downward trend year by year.

At the end of 2020, Midea re-divisions its business structure, but it still presents its financial reports according to the old sectors. Data show that in the first half of this year, Midea’s TOB business revenue from robotics, automation systems and other manufacturing industries was 12.7 billion yuan, a year-on-year increase of 33.3%. In the first three quarters, KUKA’s operations continued to improve, with global sales revenue of 2.36 billion euros, a year-on-year increase of 26.8%, and after-tax profit of 29.8 million euros, a year-on-year increase of more than 100%. After 4 years of running-in, KUKA’s performance finally ushered in a pick-up.

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At the investor exchange meeting in July this year, Midea Group revealed that “Kuka’s various data indicators have recovered significantly. It is expected that orders for the whole year of 2021 will achieve year-on-year growth, and the annual revenue will achieve a small year-on-year increase, and the full-year EBIT will be achieved. The data show that in the first half of this year, Midea’s “robots and automation systems” recorded a profit of 242 million yuan.

Analysis believes that the “privatization” of KUKA is expected to bring new profit growth points for Midea. It is reported that Midea is stepping up its investment and refined operations in the sector in terms of its existing business scale. In the latest third quarter report, Midea Group stated that it will promote KUKA’s localized operation in China, increase investment in product development and application, and research and innovation of core components and software systems.

“KUKA has invested a lot of resources to study what the local demand is. Many foreign products are not absolutely competitive in the Chinese market. So we need to know what kind of products KUKA wants to manufacture for the Chinese market.” In Li Hongwei’s view, The future direction of robot development must be intelligence and digitization, which involves core technologies and core components. “For example, no company can do all of the three core parts of robots, controllers, motors, and reducers.”

“Under this circumstance, I think the next focus of KUKA China is to tackle some of the stuck neck technologies. Only after these are resolved, we will talk about how to introduce vision, artificial intelligence, and the Internet of Things.” According to Li Hongwei It was revealed that the current R&D system of KUKA has formed a “dual center” in Shanghai and Shunde.

He said that these two places are not only KUKA’s R&D center and testing center, but also factories, and each R&D center has formed a “closed loop” of production. In addition, China’s R&D center will complement Germany. China focuses on the blank area formed outside of six-axis robots, such as four-axis robots required by the 3C electronics industry, data and parallel robots required by the food industry, and A large number of collaborative robots, etc.

In addition, according to the reporter’s understanding, in April this year, the second phase of Midea KUKA Intelligent Manufacturing Technology Park started construction. According to the plan, the science and technology park will produce and sell 14,000 robots this year, with an output value exceeding 2 billion yuan.

“KUKA (China) has basically built a very independent and complete R&D system, with many new technologies, chips and software architectures.” Li Hongwei told the 21st Century Business Herald reporter that a robot from discovering market demand to launching on the market, In about 10 to 14 months, “we can completely make products that meet the quality of KUKA, and these new technologies and chips will be used in new products.”

It is understood that the current average domestic robot usage density is 94 units per 10,000 people. Even the manufacturers that use more domestic robots like Midea only have 200 units per 10,000 people, while in developed countries it is basically 625 units per 10,000 people, with the largest number in South Korea. It has reached 700 units per 10,000 people, which means that there is still considerable room for Midea to expand in the robotics circuit.

(Author: Ye Bihua, Liang Raochuan Editor: Zhang Weixian)


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