When Li Shufu gradually withdrew from the management and board of directors of hundreds of companies under geely holding group, the geely territory he single-handedly built was entering more fields and looking for more opportunities in the storm of industrial transformation.
Wen | Wang Xuanxuan, a reporter for China Entrepreneur
Edited | Ma Jiying
Image source| respondents
"People will always grow old, and I am no exception, but enterprises can always maintain youth and long-term sustainable development." At the time of this, 59-year-old Li Shufu had just resigned as a director of Geely Automobile Group.
In recent years, it is difficult to see Li Shufu in public, but Geely is almost one of the most newsworthy auto companies in 2021. Established joint ventures with Baidu and Foxconn respectively, launched a new smart car brand Krypton, and entered the mobile phone industry... Li Shufu is gradually withdrawing from the management and board of directors of hundreds of companies under Geely Holding Group, while entering more fields and looking for opportunities in the storm of industrial transformation.
Li Shufu felt the urgency of change, and he wrote in his New Year's speech, "In 2022, global scientific and technological innovation will enter an unprecedented period of intensive activity. "In the midst of it, Gilly must speed up.
On March 23, Geely Automobile released its 2021 financial report, the listed company achieved revenue of 101.6 billion yuan, the first annual revenue exceeded 100 billion yuan, an increase of 10.3% year-on-year, and the net profit was 4.35 billion yuan, down 22% year-on-year. As a result of operating cash inflows and Pre-A external financing by Extreme Kr Holdings, the Group's total cash increased by 46% year-on-year to $28 billion.
After the release of the financial report, the company's stock price did not change significantly, and it fell slightly.
In fact, Geely's stock price has been depressed for some time. Since the beginning of 2021, Geely Automobile's share price has reached a maximum of HK$36.45 and is currently HK$11.96, with a market capitalization of HK$119.8 billion (about 97.6 billion yuan). The decline in stock prices is related to the overall decline in the industry and the global political and economic environment, but compared with other car companies, the market value of Geely Automobile is not high. As of the close of trading on March 23, Great Wall Motor's market value was 209.7 billion yuan, and BYD reached 650.9 billion yuan.
"I believe there is a big gap between the current level of [market capitalization] and the actual value of the company." Gui Shengyue, CEO of Geely Automobile Holdings Co., Ltd., said at the results meeting on the afternoon of March 23. He stressed that with the passage of time, the heritage of a dynamic traditional global car company will be significantly reflected, and the valuation level will change fundamentally after the advantages are broken.
Team changes and challenges
Before resigning as a director of Geely Automobile Group, Li Shufu had resigned from the board of directors and management of several companies, including stepping down as chairman of Geely Automobile Commercial Vehicle Group, legal representative of Geely Technology Group Co., Ltd., legal person of Zhejiang Geely Holding Group Co., Ltd., chairman of Geely Automobile Group, and CEO of Geely Holding Group.
On March 14, Li Shufu said in the Geely Lecture Hall that this is to promote modern corporate governance, his main work is focused on Zhejiang Geely Holding Group, as the chairman, under the establishment of hundreds of independent accounting of domestic and foreign enterprises, will gradually withdraw from the management and board of directors.
According to public information, Li Shufu is still serving as chairman of Zhejiang Extreme Kr Intelligent Technology Co., Ltd., Hubei Xingji Times Technology Co., Ltd. and Zhejiang Space-time Daoyu Technology Co., Ltd., etc., behind which are intelligent electric vehicles Krypton, mobile phones and satellites.
Behind Li Shufu's withdrawal, Geely's management is also iterating.
Taking An Conghui as an example, after graduating in 1996, he entered Geely Group, successively served as the commander-in-chief of the infrastructure engineering department of Geely Group, the assistant to the chairman of the board, etc., and is currently the chairman of Geely Automobile Group, the executive director of Geely Automobile Holdings Co., Ltd., and the CEO of Extreme Kr Intelligent Technology.
Gan Jiayue, the current CEO of Geely Automobile Group, joined Geely after graduating from university in 2003 and has served as vice president of Geely Automobile and general manager of the procurement company.
Earlier, the acquisition of Volvo had also brought a lot of new faces to Geely's senior management team. For example, Yuan Xiaolin, who is currently the global senior vice president of Volvo Cars Group and the president and CEO of Volvo Cars Asia Pacific, works for the British multinational oil giant BP company, initially as a consultant to Li Shufu, and then joined Volvo.
However, with the increasingly prominent trend of industrial transformation, how to maintain the stability of the team has also become a top priority.
Earlier, in 2014, Shen Hui, then chairman of Volvo China, left Volvo and later founded WM Motors, becoming a member of the new car-making force. Prior to joining Volvo, Hui Shen was a Director and Vice President of Fiat Group China and CEO of Fiat Power Technologies China.
Coincidentally. In 2017, Shen Feng, President of Volvo China R&D, also chose to bid farewell to Li Shufu and join NIO as Executive Vice President of NIO and Chairman of the Global Quality Committee.
In 2021, Hu Zhengnan, former president of Geely Research Institute, joined Shunwei Capital, and Lei Jun is the founding partner and chairman of Shunwei Capital. Prior to this, Xiaomi car manufacturing has been widely known.
With the intensification of industry transformation, one of the problems facing Li Shufu is how to retain and attract more people next?
Compete for new energy
Like other traditional automobile companies, new energy is also the main battlefield of Geely Automobile.
A year ago, on March 23, Extreme Krypton was founded. When Li Shufu withdrew from the directors of several subsidiaries, he still served as the chairman of Extreme Kr, and An Conghui was appointed as CEO.
Insiders of a new car-making force believe that this is Li Shufu once again hoping to get rid of the impression of the "Geely" brand through the new brand.
Source: Visual China
The investors of Extreme Kr are luxury, and the investors are Intel Capital, CATL, Bilibili, Hongshang Group and Boyu Investment. The five investors invested a total of US$500 million, accounting for about 5.6% of the krypton stock ratio after the investment, according to which the valuation of krypton is about US$8.9 billion.
Extreme Krypton's growth path may have made Li Shufu mixed. On the one hand, extreme krypton products have just been exposed to negative news. First, the user questioned its reduction, and An Conghui urgently issued an apology letter. After the delivery of the first batch of orders in October, some car owners defended their rights because the canopy did not match the publicity, and some users defended their rights due to delayed delivery. On the other hand, the sales growth rate of Extreme Kr has refreshed the growth record of new brands.
At the performance meeting on March 23, An Conghui introduced that the cumulative delivery of products from October 23 last year to February this year reached 12,453 units. "It should be said that this is the fastest enterprise in the high-end intelligent electric vehicle industry that has reached a cumulative delivery volume of more than 10,000." An Conghui said. In 2022, the sales target of Extreme Kr is 70,000 units.
In addition, the price of extreme krypton bicycles reached 335,000 yuan, "last year when we released our prices, many investors said that they could not do it." An Conghui sighed. An Conghui said that the gross profit of Extreme Kr is positive, in line with expectations, and the gross profit level will be better as sales increase this year.
Bank of America Securities issued a report in December last year to maintain Geely's "buy" rating, mainly due to the strong sales growth of Star Viet and Lynk & Co, followed by the release of the product channel of Extreme Kr, which has more potential for sales growth.
At the same time, An Conghui also pointed out two major problems facing Extreme Krypton. First, due to the impact of the epidemic and supply chain, many orders cannot be delivered; second, the software needs to be greatly improved. At present, the number of krypton R&D personnel is about 7100 people, pure R & D personnel are more than 3900 people, software R & D personnel are more than 2600 people, the proportion of software R & D personnel increased from 35% last year to the current 65%, is expected to increase to 70% by the end of the year. Over the next three years, Krypton will launch two models per year to achieve a target of 650,000 units by 2025.
If Lynk & Co is a brand breakthrough completed by Geely in the era of fuel vehicles, JiKr carries the heavy responsibility of Geely to the era of intelligent cars and determines Geely's right to speak on the field many years later.
Another notable brand is Polar Star. In 2017, Volvo launched the independent brand of high-performance luxury electric cars, "Polestar has an important responsibility within the Volvo Car Group and is a breakthrough point for volvo Car Group to continuously lead innovation in electrification." Yuan Xiaolin, Senior Vice President of Volvo Cars Group Worldwide and President and CEO of Volvo Cars Asia Pacific in 2020, said in an interview with China Entrepreneur.
However, the sales of Polestar are not ideal, and there are two models of Polestar 1 and Polestar 2, the former is a plug-in hybrid sports car, priced at up to 1.45 million yuan, limited to 500 vehicles per year, and has been discontinued. The latter is a pure electric model of the model 3. According to the data released by Polarstar, in 2021, Polestar achieved global sales of 29,000 vehicles, with a year-on-year growth rate of more than 185%. According to the plan, within three years, Polestar will also launch three new models.
Strike everywhere
12 years ago, Geely's acquisition of Volvo coincided with the change of the global automotive industry pattern, a new round of mergers and acquisitions came, Geely seized the opportunity of the global layout of Chinese car companies. Now, the industry has once again come to the cusp of transformation, and Li Shufu is attacking everywhere, trying to grasp more initiative in the industrial transformation.
In September 2021, Hubei Xingji Times Technology Co., Ltd., founded by Li Shufu, signed a strategic cooperation agreement with Wuhan Economic and Technological Development Zone, officially announcing its entry into the field of mobile phones and positioning high-end mobile phones. At the beginning of this year, the news of the acquisition of Meizu was even more reported.
Li Shufu once talked about the reasons for entering the mobile phone industry: in the future, it will not only realize the close interaction between car machine and mobile phone software technology, but also create a user ecological chain across borders, and mobile phones can link the Internet of Vehicles and satellite Internet to create a rich consumption scenario.
Some industry insiders told China Entrepreneur that the reasons why car companies do mobile phones may have several points: found that car machines can not replace mobile phones, still hope to enhance user viscosity through mobile phones, obtain user data; mobile phones that match car machines can also optimize the user's experience of using car machines; ecological layout, mobile phones, cars have become part of the intelligent terminal, etc.
A person engaged in intelligent driving related work within the car company also pointed out that there may be another technical route, using the mobile phone as the computing power allocation unit of the car machine. Because the development cycle of the vehicle is relatively long, the chip is easier to become obsolete, and the external mobile phone is easy to be replaced, so some high-computing operations can be completed by the external mobile phone. In addition, Geely's Yijiatong is also making chips, and it is not excluded that geely cars and mobile phone chips are done.
In 2018, Yijiatong began to lay out high-end in-vehicle chips and joined hands with Anmou China to establish Core Engine Technology. In October 2021, the first domestic vehicle-grade 7nm intelligent cockpit chip Dragon Eagle No. 1 independently designed by CoreTek technology successfully streamed.
Building mobile phones and chips is not "super-program" for Li Shufu, who has built satellites and flying cars.
In 2017, Geely acquired Taili Flying Automobile Company Terrafugia, which had said it would be mass-produced in 2019, but it has not yet been realized, but the second generation of Transition has been allowed to be used commercially by the US aviation authorities. This is a segment that has attracted the attention of capital, Androm's Xiaopeng Huitian announced in October last year that it had completed more than $500 million in Series A financing, with a pre-investment valuation of more than $1 billion.
In 2018, Geely strategically invested in aerospace technology company Space-time Daoyu, and in September 2021, the first star of The Taizhou Star Intelligent Connected Satellite Factory under Geely Technology Group officially rolled off the production line, which Geely said marked that Geely's commercial satellites entered the stage of mass production.
There are not many car companies that continue to enrich the scene around travel, and there is no shortage of domestic and foreign entrepreneurs who are interested in space "business", but at the same time, the layout of online car-hailing, chips, satellites, flying cars, mobile phones and other fields may only be Geely. Financial writer Wu Xiaobo asked in a 2019 interview with Li Shufu, do you feel that you are a radical person or a conservative person? Li Shufu said that the overall conservative, if from the perspective of decision-making risk, may be more radical. Because I can afford to take risks, but in the end I still want to be safe and save my life.
In order to improve the safety factor of enterprises in the period of industrial change, Li Shufu is also constantly expanding financing channels.
Photo: Shi Xiaobing
In October 2021, Volvo was officially listed on the Stockholm Stock Exchange in Sweden, which belongs to the NASDAQ Group. Li Shufu called it "ten years of grinding a sword, the dream has finally become a reality." According to the market value on the day of listing, in the 11 years since Geely Automobile acquired Volvo, the market valuation of the latter has increased by almost 11 times.
But Sweden's Stockholm Stock Exchange has limited appeal, and Volvo, as the exchange's "largest IPO in 20 years", has been listed for nearly five months, and its current stock price has dropped slightly from the first day of listing, with a market value of about $18.7 billion.
Volvo's high-end smart electric vehicle brand Polar star has set its sights on the NASDAQ. In September 2021, Polestar announced its intention to merge with Gores Guggenheim, a U.S. special purpose acquisition company (SPAC), with a combined valuation of approximately $20 billion. The transaction is expected to close in the first half of 2022.
In addition, recently there are also media reports that Yijiatong will also be listed through SPAC. According to Geely's previous announcement, the revenue of Yijiatong in 2019 was 2.258 billion yuan, and the pre-tax loss was 674 million yuan; the income in 2020 was 2.241 billion yuan, and the pre-tax loss was 478 million yuan.
"We don't want to be subverted by the world, so we have to be ahead of the curve." In his 2022 New Year's speech, Li Shufu wrote such a paragraph, "With a sense of urgency to seize the day, closely focus on the electrification and intelligent transformation of the automobile industry, strengthen the technology ecosystem, create sustainable competitiveness of enterprises, and create a value experience that exceeds expectations for users." ”
Resources:
Activate Volvo, Source: Global Entrepreneur, by Shen Ying