Haier's Bold Bet: Over 15 Billion Yuan Expansion

In an era where capital markets are constantly shifting and industries evolve at an unprecedented pace, certain companies demonstrate relentless determination in their pursuit of transformation and expansionHaier Group stands out prominently in this regard, having recently announced a plan to acquire controlling stakes in multiple enterprisesJust after declaring its intent to secure control of a company valued at approximately 2.519 billion yuan (about $390 million), Haier made headlines again with a bold move to acquire a significant stake in Automotive Home, the leading online platform for automotive services in China, for about $1.8 billionWithin the span of a week, the company is poised to invest around 15.569 billion yuan (approximately $2.4 billion) in its expansion efforts, capturing keen attention in the capital markets.

In a matter of days, Haier Group achieved two noteworthy acquisitions that solidified its ambitions in distinct marketsThe more widely discussed acquisition of Automotive Home became official following a prolonged period of speculation in the marketplaceDetails reveal that Haier's subsidiary, KATAI, reached an agreement with Ping An’s Yuncheng Capital to purchase around 41.91% of Automotive Home's outstanding shares, thus making KATAI the controlling shareholder.

Both the founder, Li Xiang, and his subsequent investor, Ping An, have amplified Automotive Home's visibility and stature within the capital universeUnder Ping An's stewardship, Automotive Home successfully listed on the Hong Kong stock exchange in 2021. For Haier, focusing on Automotive Home underscores an emphasis on the rapidly expanding digital economyFor more than four decades, Haier has evolved beyond its roots in household appliances, establishing platforms in smart home ecosystems, healthcare industries, and the digital economyCapturing control of Automotive Home represents a crucial step toward enhancing KATAI's automotive ecosystem and expanding Haier's overall digital economy landscape.

A glance at Automotive Home’s financial outlook shows a minor downturn leading into 2024, with revenues dipping to approximately 7.04 billion yuan and net profits around 1.62 billion yuan, according to financial data service iFinD

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Prior to the Automotive Home acquisition announcement, Haier revealed strategic investments in another high-tech enterpriseQingdao Haier KAIOS Industrial Intelligence Co., a subsidiary of the Haier Group, will gain a 10% stake and 19.24% voting rights in New Times, effectively becoming the controlling entity of this listed companyThe total investment for this acquisition hovers around 2.519 billion yuan.

These two acquisitions, amounting to a combined sum of over 15 billion yuan, highlight Haier Group's aggressive approach to capital expansionThis strategy aligns with the company's reported global revenue of 401.6 billion yuan for 2024, representing an 8% increase, and a total profit of 30.2 billion yuan, reflecting a 13% growthThese figures depict a remarkable trajectory for the company, marking a notable milestone as it crosses the threshold of 400 billion yuan in revenue for the first time in its four-decade history.

As inquiries were made concerning these recent developments at Haier Group, attempts for official commentary remained unanswered by the time of publicationThe Executive Director of the High-Quality Development Promotion Program for Specialized and Novel Enterprises, Yuan Shuai, remarked that Haier's rapid succession of capital acquisitions could indicate a pivotal moment of rapid expansion for the conglomerateYuan suggests that such grand acquisitions could facilitate enhanced diversification and ecological integrationThe benefits derived from these mergers may bolster competitiveness and yield sustainable profitability.

In immediate succession to these two significant acquisitions, it appears that Haier is moving swiftly to secure its position in untapped marketsIf the Automotive Home acquisition reinforces its foothold in the automotive sector, the acquisition of New Times symbolizes Haier's escalating ambition within the robotics industry.

Interestingly, while Haier Group is stepping aggressively into robotics, notable players in the home appliance industry—such as Gree Electric Appliances and Midea Group—have long since ventured into this domain

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Midea, for instance, has been active in robotics since 2015, with Chairman Fang Hongbo recently indicating that Midea's robotics and automation division surpassed 30 billion yuan in revenueThis segment now ranks among the world’s top four industrial robot manufacturers, housing brands such as KUKA and Rethink Robotics.

Gree Electric also demonstrated significant advancements in its robotics solutions tailored to various sectorsTheir semi-annual report for 2024 showcased innovations specifically aimed at the assembly lines for new energy vehicles and shipbuilding, presenting intelligent robotic automation applications to meet client needsThe acquisition of New Times, which is grounded in algorithm-driven technology, fortifies Haier's capabilities in the automation space, alongside its already flourishing household appliance sector.

In the robotics landscape, New Times ranks fourth among domestic manufacturers in 2023, and twelfth in the global market, according to consultancy firm MIRThe company is also recognized as one of the pioneering firms in the domestic sector to possess fully independent control technologiesAcquiring New Times provides Haier access to an array of global supply chain resources, digital marketing frameworks, lean management practices, and brand synergies, enhancing New Times's ability to lead in industrial automation.

Market analysts predict that Haier’s interest in the robotics space, coupled with the sturdy launch trajectory of New Times, could reflect the company's vision for augmenting smart solutions across increasingly intelligent home and manufacturing settingsThis strategy aligns well with current trends showing a pressing need for automation driven by real-time data in an increasingly digitalized world.

To date, Haier Group has expanded into a conglomerate with eight listed companies, valued at approximately 350 billion yuan collectivelySince the inception of Qingdao Refrigerator Factory (the predecessor of Haier) in 1984, where founder Zhang Ruimin initially focused on the home appliance industry, Haier has undergone constant evolution, diversifying into multiple spheres

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Today, the listed entities include Haier Smart Home, Thunder God Technology, and Haier Biology among others.

The total market capital of these eight entities, including both A-share and overseas listings, reflects the shift and adaptation in Haier’s operational philosophyWith such a wide-ranging portfolio, each acquisition is not merely a financial maneuver but rather a strategic effort to cultivate an interconnected ecosystem that bolsters technological innovation and enhances market competitiveness.

As we look ahead, how Haier Group integrates these expansions will be pivotal in determining their long-term viability as a capital powerhouseThe firm's commitment to adapting to market fluctuations, embracing transformative strategies, and leveraging technological advancements will inevitably shape the future landscape of the industries it operates within, stirring significant interest among investors and industry observers alike.