Changhong plans to increase revenue by 1.5 times for 3 years

Chengdu Changhong, which has not paid dividends for 10 years, now welcomes financing opportunities in the secondary market.

Changhong CWB1 on the eve of the trading day, Changhong released to the market three great benefits, highlighting the importance of this exercise: determine the success of Sichuan Changhong 3 billion financing. There is no doubt that 3 billion yuan is a major event for Changhong, which urgently needs to improve its performance.

"The impact of a scale of 100 billion in three years" is a difficulty for an appliance company.

Recently, Sichuan Changhong held a two-day “value-to-double-growth-to-one-billion-thousand-hundred-plus-changhong” media meeting. High-profiled that Changhong Group strives to achieve sales revenue that exceeds 100 billion yuan in 2013 and net assets will double to 40 billion yuan in 2013. By 2015, the total planned revenue will exceed 150 billion yuan.

Looking at the leading enterprises of Chinese home appliances, there are two proposals for reengineering a company: one is beautiful and the other is Changhong. However, recreating a company is not a simple matter.

"Changhong's goal is too aggressive. At present, the Changhong Group's operating income has just exceeded 40 billion yuan, achieving a 60 billion yuan increment in three years. I don't know where to implement it," said one industry insider.

Prior to this, Sichuan Changhong has been committed to building several major industrial platforms focusing on consumer electronics, home appliances, and IT communications. The multimedia business has always been Changhong’s core business segment. According to Changhong's 100 billion yuan plan, in the multimedia industry, sales revenue in 2013 will exceed 30 billion yuan, and the market share of color TVs will regain the nation's first place. Last year, Changhong's core multimedia industry television products sold 23.737 billion yuan.

"Compared with other sectors, multimedia platforms are considered more conservative. At present, Changhong Multimedia is not completely free from micro-profits." Industry analysts told reporters.

In another major business, the home appliance industry, Changhong has also shown little ability. Changhong said that this plate sales revenue in 2013 will strive to exceed 28 billion yuan. Last year, sales revenue of Changhong's white goods (including refrigerator compressors, air conditioners, refrigerators, etc.) was only 12.844 billion yuan.

"From the market perspective, the outbreak of the air-conditioning market has not really arrived yet, and air-conditioning has not yet achieved full-scale high-speed growth. At present, it is no exaggeration to say that Changhong inverter air conditioner has mastered the core plan and has been the first in the industry." Changhong air conditioning Tao Jun, a news spokesman, said in an interview with reporters.

In addition, in the 100 billion plan of Changhong, IT/Communications, 2013 sales revenue will strive to exceed 30 billion yuan. Among them, Changhong Jiahua's sales revenue has strived to exceed 23 billion yuan. In terms of service industry, Changhong will focus on the construction of two major networks of e-commerce and franchised stores. It will provide a package of solutions for internal and external customers in terms of logistics, after-sales services, and recycling. In 2013, revenues other than IT will reach 6.5 billion yuan. According to Changhong's annual report last year, the IT product sales revenue was 6.92 billion yuan, which is far from the Changhong "big plan."

According to Liu Buchen's analysis, if it reaches a scale of 100 billion yuan in 2013, the next three years (including 2011) will require an increase of about 60 billion yuan, an average annual increase of 20 billion yuan. This is undoubtedly a huge test for the current Changhong.

The plasma panel industry was also considered to be a new growth point for Changhong. However, we have seen that although Changhong once relied on the panel to turn over, it was always counterproductive. While most domestic TV brands use LCD screens, Changhong injected 1.5 billion "PDP" plasma items. In April 2011, Changhong stated that the PDP screen project was depreciated in the first year and was still in a loss state, and the scale effect would reduce losses.

"Changhong has not been able to achieve the expected output after entering the plasma panel field and would like to transition into the liquid crystal field. However, it suffers from insufficient investment capacity to enter." said Changhong.

Real estate as a support

Most of the 3 billion yuan are invested overseas?

Yang Jun, chief investment officer of Sichuan Changhong, previously stated that after the success of the exercise, the fund will be invested in the industry and overseas expansion to accelerate the realization of the goal of 100 billion yuan.

In fact, the pace at which Chinese household appliances explore overseas has never stopped, and overseas branches are used as a base for expansion. In the strategy of “internationalization” of the company, it has not been in recent years. According to Changhong’s one-hundred-twenty billion plan, in overseas markets, Changhong strives to achieve a sales ratio of more than 20% in 3 to 5 years, while its own brand sales ratio gradually increases. At present, Sichuan Changhong is brewing in some emerging markets such as South America and Africa to achieve rapid distribution through mergers and acquisitions.

“The pain of Changhong International’s Great Leap Forward is still vivid and I don’t know how much Changhong can learn.” One market person expressed concern.

At the same time, Changhong stated that the internal power and support are mainly derived from real estate. Yang Jun said previously that in the goal of Changhong Group's three-year income of RMB100 billion, except for the military and real estate businesses, Changhong Group and most other industries are listed companies.

Tan Mingxian, secretary of Sichuan Changhong, said directly: Changhong's PDP will also succeed because we have real estate profits to make up for it.

"Can real estate make the PDP successful? Real estate prices are sluggish. Making money from real estate is actually difficult." Liu Buchen raised doubts.

Urgently need funds for blood transfusion

Changhong Ho King returned?

In any case, the successful completion of the 3 billion financing is a big event for Sichuan Changhong.

The 2010 Sichuan Changhong Annual Report impressively showed that the net cash flow from operating activities was -740 million, and the company's lack of money was quite obvious. Tianxiang Investment Analyst pointed out that in 2010, the company's “net operating cash flow/net profit” ratio was -25.27%, and the overall performance of the indicator did not improve significantly.

At the beginning, Changhong was hindered by the development of the plasma panel industry. It has not been scaled up to a large extent and is largely constrained by insufficient funds. "Changhong would like to enter the LCD panel field, but it has been unable to enter because of lack of money." The industry insiders pointed out.

When Changhong announced high-profile external "100 billion scale" plan, but the "no dividend for 10 years" is particularly prominent. “I have two predictions for the future development of Changhong: First, this is an impossible goal, which is typical of the Great Leap Forward. It is very harmful. Second, to achieve this goal, Changhong needs huge amounts of funding from the government level. Then, Changhong launched a large-scale merger and acquisition and launched a new project. Otherwise, it is impossible to achieve such a huge increase." Liu Buchen thinks.