At the age of 67, Dong Mingzhu, chairman of Gree Electric, was re elected again. This is also her third re-election after 2015 and 2019.

On February 28, Gree Electric held the first extraordinary general meeting of shareholders in 2022 at its headquarters in Zhuhai, and elected the members of the 2022 board of directors. After that, the first board meeting of the year was held. The directors unanimously approved the proposal of Dong Mingzhu as chairman and President, and a new three-year term of office was opened.

This is a result without much suspense.

The capital market has also been quite calm. On March 1, Gree Electric Appliance’s share price opened higher and fell slightly. As of the close, it rose slightly by 0.16% to 36.83 yuan / share. This is a relatively rare rise since the company’s continuous decline in February.

Dong Mingzhu has been the chairman of Gree Electric since 2012. Her re-election means that she will be in charge of the company for 13 years. She joined Gree as a salesman in 1990 and will spend at least 35 years in the company.

She has always been regarded by the outside world as the “Iron Lady” of the writer’s circle. She has a strong management style and often makes amazing remarks. Her unique style has raised the attention of the outside world and made her a rare “online Red” entrepreneur in the household appliance industry.

Looking forward to the new three years, the situation of Gree Electric appliance is not optimistic. The scale of the domestic home appliance market decreases year by year, and its old rival Midea has surpassed gree in all aspects. Can Dong Mingzhu safely spend a new round of term of office and even lead Gree to overturn against the wind?

Aging management and prominent contradictions in channel reform

“We must gradually transfer management power to young people and let the new generation of management aged 30-40 go to the front stage. We should not put all the spotlight on ourselves.” Liu buchen, who has been observing Gree Electric for a long time, told interface news that this is a major problem that Dong Mingzhu must solve during her term of office.

Judging from the age of the management, according to the 2020 annual report of Gree Electric Appliance, its internal senior managers are all around the age of 50. According to the internal information obtained from the interface news, most of the company’s leading cadres are old employees who have been in Gree for many years.

But older employees do not necessarily have more management rights. In this board of directors, there are only three from Gree Electric: Dong Mingzhu, Deng Xiaobo and Zhang Wei. Deng Xiaobo is a new face. He joined the post in December 2020, replacing Wang Jingdong, a former Gree veteran, and concurrently serving as the Secretary of the chairman of the board. According to public information, he served as the chairman of Shaanxi coal chemical industry group finance Co., Ltd. from July 2015 to November 2020. Another Zhang Wei is the Secretary of the Party committee of Gree. He comes from purchasing. The public information does not specify the specific business he is currently responsible for.

Non independent directors except Dong Mingzhu, drawing: interface news

Huang Hui, who originally had a technical background, and Wang Jingdong, who had a financial background, both left office in the past year. Judging from the current structure of the board of directors, Dong Mingzhu has a greater voice than ever before.

It is worth mentioning that the other two non independent directors: Governor Zhang junzhan and Guo shuzhan, aged 61 and 65 respectively, are the core personnel of Gree Electric appliance distribution company. Zhang Jundu is the chairman of Zhejiang Chengtong of Gree provincial distribution company, and Guo shuzhan is the general manager of Henan provincial distribution company. At the same time, he is also the chairman of Jinghai Internet Technology Development Co., Ltd. (hereinafter referred to as “Jinghai Internet”).

Jinghai Internet was established by Gree Electric Appliance in 2007 to deeply bind the interests of dealers. It was jointly established by 10 important dealers. At that time, Gree transferred 10% of the company’s equity, and Jinghai Internet also became the second largest shareholder of Gree Electric appliance. As of September 30, 2021, Jinghai Internet held 8.20% equity of the company, which decreased to the third largest shareholder.

The two core dealers in the board of directors also reflect a major problem that Dong Mingzhu needs to face from the side: how to reconcile the contradiction between channel reform and dealer system.

The regional sales company initiated by Gree Electric Appliance was once its trump card of continuous profitability. According to the 2019 Huachuang Securities Research Report, the company’s distribution system is roughly: 26 regional sales companies - agents - dealers. These regional sales companies, namely the role of “provincial agents”, win over their dealers to form a community of interests, balance and bind the interests of dealers, so as to reduce the vicious competition in the distribution system and achieve a win-win situation for the company and dealers.

Figure source: 2019 Huachuang Securities Research Report

In addition, Gree Electric also encourages dealers to “stock up” through off-season rebates and other measures to reduce seasonal fluctuations in the company’s production and sales.

The above-mentioned traditional distribution model is obviously difficult to avoid many problems such as hoarding pressure and corruption. Therefore, at the end of 2019, Dong Mingzhu began to plan channel reform, and constantly touched the “cheese” of dealers by canceling provincial representatives, reducing the threshold for opening stores, reducing dealer inventory and other measures.

A representative example is that in the national tour live broadcast and delivery activity held by Gree Electric in 2020, the top ten orders are almost all “XX dongmingzhu stores” around the country, that is, dealers do not purchase through provincial agents, but directly place orders with Zhuhai Gree headquarters. Previously, some dealers confirmed to the interface news that the product price of Gree live broadcast is even lower than the previous purchase price. In addition, according to dealers quoted by the IT times, Gree has gradually abolished the role of “provincial representative” in many places across the country.

The other side of the channel reform is the new retail business advocated by Dong Mingzhu, and its specific measures are online GREE Dong Mingzhu store, Meng Yutong’s tiktok live, and so on. It can be predicted that Dong Mingzhu will still promote the development of new retail in the next three years, while balancing the interests with dealers.

Diversified business, large-scale acquisition, quality geometry?

“If we still (main business) single air conditioner, it is likely to be a dead end.” At the general meeting of shareholders on February 28, Dong Mingzhu took the initiative to put forward this view.

At the meeting, she also put forward two major confidence of the company in the next few years: one is business diversification, and the other is Yinlong new energy (now renamed “Gree titanium”).

In terms of business diversification, Dong said that the company has developed ice washing and household electrical products outside air conditioning, and diversification has “entered the harvest period”.

Is that really the case?

According to the 2021 semi annual report of Gree Electric Appliance, the company’s air conditioning business revenue in the first half of the year was as high as 67.194 billion yuan, accounting for 73.79% of the total revenue and 29.79% of the gross profit margin. Living appliances, intelligent equipment and their

At the age of 67, Dong Mingzhu, chairman of Gree Electric, was re elected again. This is also her third re-election after 2015 and 2019.

On February 28, Gree Electric held the first extraordinary general meeting of shareholders in 2022 at its headquarters in Zhuhai, and elected the members of the 2022 board of directors. After that, the first board meeting of the year was held. The directors unanimously approved the proposal of Dong Mingzhu as chairman and President, and a new three-year term of office was opened.

This is a result without much suspense.

The capital market has also been quite calm. On March 1, Gree Electric Appliance’s share price opened higher and fell slightly. As of the close, it rose slightly by 0.16% to 36.83 yuan / share. This is a relatively rare rise since the company’s continuous decline in February.

Dong Mingzhu has been the chairman of Gree Electric since 2012. Her re-election means that she will be in charge of the company for 13 years. She joined Gree as a salesman in 1990 and will spend at least 35 years in the company.

She has always been regarded by the outside world as the “Iron Lady” of the writer’s circle. She has a strong management style and often makes amazing remarks. Her unique style has raised the attention of the outside world and made her a rare “online Red” entrepreneur in the household appliance industry.

Looking forward to the new three years, the situation of Gree Electric appliance is not optimistic. The scale of the domestic home appliance market decreases year by year, and its old rival Midea has surpassed gree in all aspects. Can Dong Mingzhu safely spend a new round of term of office and even lead Gree to overturn against the wind?

Aging management and prominent contradictions in channel reform

“We must gradually transfer management power to young people and let the new generation of management aged 30-40 go to the front stage. We should not put all the spotlight on ourselves.” Liu buchen, who has been observing Gree Electric for a long time, told interface news that this is a major problem that Dong Mingzhu must solve during her term of office.

Judging from the age of the management, according to the 2020 annual report of Gree Electric Appliance, its internal senior managers are all around the age of 50. According to the internal information obtained from the interface news, most of the company’s leading cadres are old employees who have been in Gree for many years.

But older employees do not necessarily have more management rights. In this board of directors, there are only three from Gree Electric: Dong Mingzhu, Deng Xiaobo and Zhang Wei. Deng Xiaobo is a new face. He joined the post in December 2020, replacing Wang Jingdong, a former Gree veteran, and concurrently serving as the Secretary of the chairman of the board. According to public information, he served as the chairman of Shaanxi coal chemical industry group finance Co., Ltd. from July 2015 to November 2020. Another Zhang Wei is the Secretary of the Party committee of Gree. He comes from purchasing. The public information does not specify the specific business he is currently responsible for.

Non independent directors except Dong Mingzhu, drawing: interface news

Huang Hui, who originally had a technical background, and Wang Jingdong, who had a financial background, both left office in the past year. Judging from the current structure of the board of directors, Dong Mingzhu has a greater voice than ever before.

It is worth mentioning that the other two non independent directors: Governor Zhang junzhan and Guo shuzhan, aged 61 and 65 respectively, are the core personnel of Gree Electric appliance distribution company. Zhang Jundu is the chairman of Zhejiang Chengtong of Gree provincial distribution company, and Guo shuzhan is the general manager of Henan provincial distribution company. At the same time, he is also the chairman of Jinghai Internet Technology Development Co., Ltd. (hereinafter referred to as “Jinghai Internet”).

Jinghai Internet was established by Gree Electric Appliance in 2007 to deeply bind the interests of dealers. It was jointly established by 10 important dealers. At that time, Gree transferred 10% of the company’s equity, and Jinghai Internet also became the second largest shareholder of Gree Electric appliance. As of September 30, 2021, Jinghai Internet held 8.20% equity of the company, which decreased to the third largest shareholder.

The two core dealers in the board of directors also reflect a major problem that Dong Mingzhu needs to face from the side: how to reconcile the contradiction between channel reform and dealer system.

The regional sales company initiated by Gree Electric Appliance was once its trump card of continuous profitability. According to the 2019 Huachuang Securities Research Report, the company’s distribution system is roughly: 26 regional sales companies - agents - dealers. These regional sales companies, namely the role of “provincial agents”, win over their dealers to form a community of interests, balance and bind the interests of dealers, so as to reduce the vicious competition in the distribution system and achieve a win-win situation for the company and dealers.

Figure source: 2019 Huachuang Securities Research Report

In addition, Gree Electric also encourages dealers to “stock up” through off-season rebates and other measures to reduce seasonal fluctuations in the company’s production and sales.

The above-mentioned traditional distribution model is obviously difficult to avoid many problems such as hoarding pressure and corruption. Therefore, at the end of 2019, Dong Mingzhu began to plan channel reform, and constantly touched the “cheese” of dealers by canceling provincial representatives, reducing the threshold for opening stores, reducing dealer inventory and other measures.

A representative example is that in the national tour live broadcast and delivery activity held by Gree Electric in 2020, the top ten orders are almost all “XX dongmingzhu stores” around the country, that is, dealers do not purchase through provincial agents, but directly place orders with Zhuhai Gree headquarters. Previously, some dealers confirmed to the interface news that the product price of Gree live broadcast is even lower than the previous purchase price. In addition, according to dealers quoted by the IT times, Gree has gradually abolished the role of “provincial representative” in many places across the country.

The other side of the channel reform is the new retail business advocated by Dong Mingzhu, and its specific measures are online GREE Dong Mingzhu store, Meng Yutong’s tiktok live, and so on. It can be predicted that Dong Mingzhu will still promote the development of new retail in the next three years, while balancing the interests with dealers.

Diversified business, large-scale acquisition, quality geometry?

“If we still (main business) single air conditioner, it is likely to be a dead end.” At the general meeting of shareholders on February 28, Dong Mingzhu took the initiative to put forward this view.

At the meeting, she also put forward two major confidence of the company in the next few years: one is business diversification, and the other is Yinlong new energy (now renamed “Gree titanium”).

In terms of business diversification, Dong said that the company has developed ice washing and household electrical products outside air conditioning, and diversification has “entered the harvest period”.

Is that really the case?

According to the 2021 semi annual report of Gree Electric Appliance, the company’s air conditioning business revenue in the first half of the year was as high as 67.194 billion yuan, accounting for 73.79% of the total revenue and 29.79% of the gross profit margin. Living appliances, intelligent equipment and their