Text丨Zhou Wenmeng of Sina Technology

The core management under Hisense Group Chairman Jia Shaoqian welcomed “female generals” after the 80s.

Recently, Hisense Home Appliances announced that Dai Huizhong, the chairman of the company, no longer holds the position of chairman due to his retirement age, and the board of directors voted to elect Gao Yuling as the new chairman of the company. According to data, Gao Yuling was born in 1981 and is currently 43 years old. She is the youngest chairman of the board since Hisense Home Appliances went public in 2007, and the only woman so far.

As one of the five listed companies under the Hisense Group, Hisense Home Appliances play an important role. According to Hisense Home Appliance Financial Report, from January to September 2024, Hisense Home Appliance revenue was 70.579 billion yuan, up 8.75% year over year. It is the group company with the highest revenue under the Hisense Group, and has shown a growth trend in previous quarters. However, since the last quarter, Hisense Home Appliance's revenue growth rate and profit have declined sharply, and operating cash flow has also continued to grow negatively for many quarters.

At the same time as rapid growth, the growth in the performance of Hisense home appliances also harbors hidden concerns. From 2015 to 2019, when Jia Shaoqian was the vice president of Hisense Home Appliances and promoted to president, Gao Yuling was the financial manager of Hisense Home Appliances. The two had a “hierarchical” relationship. Can Gao Yuling, who returned to Hisense's power center after becoming the chairman of Hisense Home Appliances, help Jia Shaoqian achieve the ambitious goal of “Hisense's revenue of 300 billion yuan in 2025”?

The “old department” returns to the center of power

Before becoming the chairman of Hisense Home Appliances, there were almost no reports on Gao Yuling on the internet. However, through her work experience at Hisense, she was able to outline her life trajectory in general, and even discovered that Gao Yuling and Jia Shaoqian, the current chairman of Hisense Group, have many overlapping work trajectories, and it can even be called his “old department” in the past.

Around 2006, Hisense took over Colon Electric through mergers and acquisitions. Subsequently, Jia Shaoqian was appointed to Colon's headquarters in Shunde as Kelon's vice president, responsible for manpower and administration. Over the next period of time, Jia Shaoqian led Kelon Electric to turn a loss into a profit by reforming the company's salary and human resources system, increasing the revenue scale of Kelon Electric from about 7 billion yuan at the beginning of the merger and acquisition to more than 36 billion yuan at the end of 2018, and officially changed its name to Hisense Home Appliances. During this period, Jia Shaoqian was also promoted to the position of vice president of Hisense Group Co., Ltd. in 2017 due to his work performance. He also served as president of Hisense Colon Electric Co., Ltd. and president of Hisense Home Appliance Group.

Judging from the work timeline, the intersection between Jia Shaoqian and Gao Yuling appeared in 2014. At that time, Gao Yuling began to join Hisense Home Appliances as the company's supervisor. Later, in December 2015, Gao Yuling was transferred from Hisense Home Appliance Supervisor to Hisense Home Appliance Finance Director. During this period, Jia Shaoqian, who was in charge of human resources and administrative resources for Hisense Home Appliances in the early days, probably participated in the work related to Gao Yuling's transfer. After Jia Shaoqian was promoted to the position of vice president of Hisense Group Co., Ltd. in 2017 and became the president of Hisense Home Appliance Group, the hierarchical relationship between the two was further clarified.

Today, along with Gao Yuling officially assuming the position of Chairman of Hisense Home Appliances, she has become a key figure in serving the company's shareholders like Jia Shaoqian, Chairman of Hisense Group. Jia Shaoqian is currently the chairman of the group and oversees all matters of the Hisense Group, while Gao Yuling, as the leader of Hisense Group's core business group, has become the “general manager” in charge of the side.

Facing two business problems

In fact, being the chairman of Hisense Home Appliances is more like a “hot potato” for Gao Yuling after the 80s. For some time to come, how to get rid of the low gross margin of Hisense Home Appliance's overseas business while stabilizing the current situation where cash flow continues to decline will become two “test questions” for Gao Yuling's ability to operate.

According to Hisense Home Appliances's financial report for the third quarter of 2024, in the third quarter of 2024, Hisense Home Appliance revenue and net profit to mother both experienced rare declines in growth, falling 0.08% and 26.67% year-on-year respectively, making the biggest drop in net profit of Hisense Home Appliances since 2022. While the company's net profit declined in the third quarter, Hisense's home appliance revenue from January to September 2024 was 70.579 billion yuan, up 8.75% from the same period last year, while the company's operating cash flow declined for three consecutive quarters, falling 40.15% year-on-year in the first three quarters of this year.

Furthermore, in the first half of 2024, Hisense Home Appliance's overseas market revenue accounted for 37.43%, and the revenue growth rate was 27.87%, higher than the domestic growth rate of 3.52%. Judging from the gross margin level, the gross margin of the domestic market of Hisense Home Appliances is 31.92%, and the gross margin overseas is 11.13%, which is far lower than that of the domestic market.

In fact, the domestic home appliance industry is growing at its peak, and competition in the industry is intensifying, and going overseas continues to be the competitive layout direction for various home appliance companies. Among leading domestic home appliance brands, the overall product gross margin of Hisense Home Appliances is lower than that of leading companies such as Midea and Haier Smart Home. Taking the 2021-2023 revenue/net profit as an example, Hisense Home Appliance's profit margin was 675.6/9.726, 741.2/14.35, and 856.0/28.37 respectively; in comparison, Midea was 3434/285.7, 3457/295.5, 3737/337.2, and Haier Smart Home was 2271/130.8, 2436/147.1, and 2614/166.0. Hisense's profit margin was far lower than the latter two. The difference was as high as 6 times.

Many companies are constantly fighting price wars, and Hisense Home Appliances, whose profits are relatively meager, will inevitably face new challenges in such a competition.

When it comes to going out to sea, Gao Yuling seems to have some advantages. Over the past 20 years, Hisense Group has frequently purchased companies such as Colon Electric, Toshiba TV, Gorenje, Nippon Sanden, Qianzhao Optoelectronics, and Colin Electric through mergers and acquisitions, and has continuously integrated and expanded its corporate footprint. After being promoted to the position of chairman of Hisense Home Appliances, whether she can use her rich financial management experience and overseas mergers and acquisitions integration capabilities to bring Hisense Home Appliances to reverse the sharp decline in revenue and profit in the third quarter, and at the same time effectively increase the gross profit of overseas products, has become a problem it needs to overcome.

Can the target of huge revenue be achieved?

At the 2019 Hisense Group Customer Conference, Hisense Group revealed the Group's new strategic goal of reaching 300 billion in revenue by 2025. Over the next few years, this goal became Jia Shaoqian and his group's goal for a long time. However, the Hisense Group is currently far from reaching this goal.

According to Jia Shaoqian's earlier disclosure, it wasn't until 2023 that Hisense Group surpassed 200 billion yuan in sales revenue for the first time in history. According to public information, in 2018, Hisense Group's revenue was 126.6 billion yuan; from 2018 to 2023, Hisense's revenue exceeded 200 billion yuan in 5 years, and its performance increased by 74.4 billion yuan. Currently, several Hisense core listed companies, Hisense Home Appliances, Hisense Vision, Colin Electric, and Qianzhao Optoelectronics, have accumulated revenue of 115.71 billion yuan from January to September this year.

Between the gap between ideals and reality, the growth of the domestic home appliance industry has stalled and the slowing of collective development has become a topic that cannot be avoided. According to industry insiders, even if Gao Yuling takes the helm of Hisense Home Appliances and makes new contributions in overseas markets and more diversified business fields, it is still difficult to achieve the revenue target of 300 billion by 2025.