Corporate Profile
Introduction
Haier Electronics Group Co., Ltd. (Stock code: 1169) (“Haier Electronics Group” or the “Group”), a subsidiary of Haier Group, is listed on the Main Board of the Stock Exchange of Hong Kong Limited. The Group is principally engaged in the research, development, production and sale of top loading washing machines under the brand name of "Haier".
Corporate Milestoness
• September and October 2000 - Two joint venture companies were established in Hong Kong and Qingdao respectively between Haier Group and CCT Telecom Holdings Limited for the mobile handsets business
• December 2001 - Haier Group injected its 49% stake of Pegasus Hong Kong into the Hong Kong listed Haier Electronics Group; At the same time, CCT Telecom injected its 51% stake of Pegasus Hong Kong and 49% stake of Pegasus Qingdao into the Company, making Pegasus Hong Kong a wholly-owned subsidiary of Haier Electronics Group, and Pegasus Qingdao owned as to 49% by Haier Electronics Group; Haier Group effectively has a 22% interest in the Hong Kong listed company
• October 2002 - Haier Group injected its 15.5% stage of Pegasus Qingdao into Haier Electronics Group, increasing its shareholding of the Hong Kong listed company to 29.9%
• January 2005 - Haier Group injected its remaining 35.5% of Pegasus Qingdao and the majority of its washing machine business into Haier Electronics Group, further increasing its shareholding of 1169 to 50.3%
• February 2005 - The Group changed its name from Haier-CCT Holdings Limited to Haier Electronics Group Co. Ltd.. Haier Group remains the Group's major shareholder with 50.3% stake
• November 2005 - The Group entered into an agreement with Deutsche Bank to sell 3,926,774,819 shares, representing approximately 23.98% of the issued share capital of the Group, at a consideration of HK$557,602,024,298 (equivalent to HK$0.142 per Share).
• April 2006 - The Group entered into agreements with a subsidiary of the Haier Group to dispose of its mobile handset business for an aggregate consideration of approximately HK$420 million.
• June 2006 - A Special General Meeting of shareholders of the Group was convened and the resolution regarding the sale of the Group’s mobile handset business was duly passed.
• August 2006- The Group entered into an agreement with Haier Group to acquire its business of research, development, production and sale of front loading washing machines and water heaters for a consideration of HK$900 million, signifying a further step has been taken by Haier Group to transform the Group into the listed flagship of its white goods businesses.
Key businesses
Top loading washing machine business
In 2006, the Group’s top loading washing machine business continued to report substantially improved financial results. The strong performance was the result of successful product positioning and marketing strategies whilst focusing effort on technology innovation, leading to higher growth in sales of high end products.
Our environmentally friendly dual-drive washing machines, which are invented by our own research team and do not require the use of washing powder, in particular, recorded a robust growth in sales and established a sound reputation both domestically and internationally for its environmentally friendly, safety and energy efficient features. In recognition of its excellence in both technology and quality, our dual-drive washing machines have been awarded quality and technology certificates from international organizations in more than 10 countries. Moreover, our environmentally friendly dual-drive washing machines were awarded a golden prize in 2006 China International Patent Fair, adding another trophy to the already long list of awards we have on our washing machine products.
To cope with our strong growth in sales, a new factory with annual production capacity of approximately 1 million units was recently established in Jiaonan, Shandong Province, the PRC. Production has commenced in the fourth quarter of 2005, boasting our annual production capacity to more than 6 million units. To cater for further growth in sales, another factory with annual production capacity of approximately 1 million units is being constructed in Chongqing and is scheduled to commence production in the fourth quarter of 2006. This will further increase our annual production capacity to more than 7 million units by the end of 2006.
Outlook and prospects
Upon completion of the asset injection from Haier Group, in addition to the top loading washing machine business currently undertaken by the Group, the Group will also be engaged in the business of research, development, production and sale of front loading washing machines and water heaters. The management of the Group believes that such consolidation of businesses will create a comprehensive product portfolio and significantly strengthen the overall competitiveness of the Group’s washing machine business while eliminating potential competition and conflict of interests between the Group and the Haier Group on the management of the washing machines businesses. Moreover, as both washing machines and water heaters are consumer white goods with similar sales and marketing strategies, the asset injection will create synergies and increase the value of the Group as a whole. The asset injection is also expected to significantly improve the financial performance of the Group.
Further ahead, the Group is also actively looking for further asset injection opportunities from the Haier Group, in particular, the Haier Group’s equity interests in Qingdao Haier Co., Ltd. (a joint stock company listed on the Shanghai Stock Exchange) which is principally engaged in the research, development, production and sale of air-conditioners, refrigerators and other small home appliances. However, no definite time schedule has been set and no binding agreement has yet been entered into with the Haier Group in respect of further asset injections.
It is the Haier Group’s intention to turn the Group into the listed flagship of its white goods business and ultimately become a global top 3 white goods manufacturer. The Haier Group has so far adopted a prudent strategy in bringing its quality white goods assets to the international capital markets by injecting the same into the Group, as evident from its step-by-step approach in its injection of several white goods assets into and divestment of the mobile handset business from the Group. Going forward, the Haier Group intends to adopt a similar strategy in further asset injection of its other potential white goods assets into the Group at such time as it considers appropriate.