Supor Group Realizes Home Appliance Giant to Advance to “Upper Upstream”

Suning bids for Beijing's hotbed of land; Supor announced that it will spend 1.5 billion yuan to participate in the CBD plan of northern Shenyang; Changhong Technology Building expects to start construction in Chengdu in September; at the Qingdao Housing Exchange, Hisense and Haier will launch more than a dozen new properties......

"Building home appliances to set up real estate, real estate development but involved in the "mine" to go." Recently on the market there has been such an interesting phenomenon.

Selling electricity is not as good as sellers. In today's home appliance industry, no matter manufacturers or sales chain channels, almost all of them kill the real estate industry. Even some companies have changed their “sex”.

Following the acquisition of land in Shenyang in the second half of last year, on June 23, the Supor Group, which started with small household appliances, generously took over land in Shenyang, and won the Shenyang with transaction prices of 1,000 yuan/m2 and 970 yuan/m2 respectively. Two plots of the New North Station area. At the same time, Supor did not hesitate to spend 1.5 billion to participate in the CBD plan of northern Shenyang.

Supor Electrical Appliances representative Guo Jie told reporters: “At present, there is no pressure on the performance. For the acquisition of land, most of them are group-level things. The company still focuses on home appliances.”

In February of this year, with the transfer of 7.83% of the equity held by Supor’s founder, Su Zengfu, the chairman of Supor Group, the SEB Group, one of the world’s largest small home appliance manufacturers, had successfully transferred 12.17% of shares held by the major shareholder Supor Group. Into the main Supor, a total holding? 71.31% of shares.

The Su family began to reduce their holdings in large scale since 2008, and they have cashed in nearly 3.6 billion yuan before exiting. Market participants pointed out that Su Zengfu has completely retired from the company he founded, and the Soviet family and his son have frequently reduced their holdings or are linked to their investment in real estate.

Under the circumstances that the Supor Group’s hardware manufacturing and financial commerce industry chain is not effective, real estate has become a new source of profit. In the first two years, the father and son of Sue were able to enter real estate on a large scale. As early as 2002, Supor Group began to establish real estate subsidiaries in Wuhan and Zhejiang. Although Su Zengfu has now withdrawn, the real estate business still remains at the group level, and it also becomes the platform for the Supor Group's gold rush in real estate.

After the financial crisis in 2008, small home appliances, kitchen appliances, and other products, which originally had little profit margin, could hardly contribute to greater profits. Under the regulation of the property market, real estate companies once fell into trouble. The series of reduction actions of the Su family and even the sale of shares in listed companies have been deemed by the industry to be the only choice to make up for real estate funds.

The real estate profit rate is 3 times that of home appliances. The preference for real estate is not a special case. On June 27, Suning Real Estate, a subsidiary of Suning Appliance, competed with 15 real estate companies for the Chongwenmen Vegetable Market. Although unsuccessful, Suning's trajectory from the expansion of Nanjing Core Camp real estate to other core cities has clearly shown itself.

It is nothing new for home appliance companies to enter real estate. Haier, Midea, Gree, Hisense, etc. established real estate companies in 2002, 2004, 1991, and 1995 respectively. Galanz, Changhong, Oaks also have "engaged in" real estate.

“A lot of home appliance companies that are already well-known are doing real estate or home appliances in the end. We are also confused.” One investor asked the reporter questioningly.

“Under the trend of high profits, home appliance companies with meager profits have stepped into real estate this “fertile land”, real estate gross profit is above 35%, some high-end projects even exceed 50%, and manufacturing industry is also about 10%. The profit margin pales in comparison," industry analysts pointed out.

Xu Dongsheng, secretary-general of the China Household Electrical Appliances Association, said in an interview with the “Securities Daily” reporter: “In the past two years, the real estate industry has developed at a faster rate and has higher profits. Enterprises use real estate as a form of support for the main business. Although it is worth controversy, the current economy The pattern is also a kind of intellectual phenomenon.With the acceleration of urbanization, the implementation of land policies, etc., household appliances companies can engage in the real estate industry and can understand it.

He believes that: "Including home appliances manufacturing is a kind of helpless choice under a large economic structure. However, every household electrical appliance company must understand its own situation and must not blindly converge."

Large-scale home appliance giants gradually reduce their dependence on real estate. As home appliance companies invest large sums of money in real estate, they can easily become overly dependent on real estate. The profitability of some home appliance companies in the real estate background has been largely influenced by the real estate “barometer”.

Appliance companies seem to have realized this. In recent years, large-scale home appliance companies have almost deliberately adjusted their layout and strategies to reduce dependence on real estate. Industry analysts pointed out that the overall sales revenue of Suning Appliance should continue to decline in its sensitivity to real estate regulation. A person in the branding department of Suning Appliance told the reporter: “Commercial real estate projects serve as supporting businesses and the company’s business focus is still in the retail industry.”

Chunlan Group executives said: "Home appliances and real estate are a combination of models adopted in recent years, Chunlan air conditioning is the company's signature products, its main position will not change, real estate as ancillary business is mainly used to make up for the performance gap."

“The majority of home appliance companies are large in size and have thin margins. When home appliance companies enter real estate, if they are properly handled, they can make up for low profit margins. We must correct the relationship between the main business and the sub industry. The business structure is clear, and the auxiliary business is ultimately a subsidiary business. However, household electrical appliance companies cannot rely too much on real estate, government regulation, and the interests of all parties in the game. There is a certain degree of risk in real estate in the next few years, said Lu Jiebo, deputy secretary-general of the China Electronic Chamber of Commerce.

Xu Dongsheng believes: “The development of the auxiliary industry in the home appliance industry can not contain the main business at the same time. Looking at the medium-long-term and short-term industry development relationship to choose the sideline business, different companies operate in different ways. Not every company is a winner.”

Interestingly, in non-residential industries such as home appliance companies, large-scale stepping military real estate, there are many real estate companies suffering from the main industry, are trying to jump out of the circle, involved in gold, energy, finance......

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