The actual controller has just completed the plan to increase its holdings, and news of Midea Group (000333) to increase its robotics and automation business follows one after another.
On the evening of November 23, the company announced that it intends to fully acquire and privatize the shares of kuka Aktiengesellschaft (hereinafter referred to as "KUKA"), a company listed on the Frankfurt Stock Exchange in Germany, through a wholly-owned subsidiary.
At present, Midea Group indirectly holds 94.55% of KUKA through its overseas subsidiary MECCA. If the acquisition is completed, KUKA will be wholly-owned, and the latter will also be delisted from the Frankfurt Stock Exchange.
As an important carrier of Midea's robotics and automation business, KUKA's wholly-owned acquisition this time will help focus on business operations and at the same time enhance the collaboration and sharing of internal resources of Midea Group in related business areas.
Proposed privatization of KUKA
Back in 2017, KUKA officially entered the Midea Group. This move is regarded by the outside world as a key step for Midea to promote its "dual intelligence" strategy and further deploy its robotics industry.
At that time, Midea made a comprehensive offer to acquire 32,233,500 shares of KUKA through its wholly-owned overseas subsidiary MECCA, accounting for 81.04% of KUKA’s total share capital. The tender offer price was 115 euros per share, and the total consideration for the transaction was 3.7 billion euros, which were paid in cash. .
Prior to this, MECCA already held 13.51% of KUKA's shares. After the completion of the aforementioned acquisition, the shareholding ratio rose to 94.55%.
According to the announcement, this time Midea Group will continue to acquire the remaining 5.45% equity to achieve a wholly-owned holding in KUKA, which will also delist from the Frankfurt Stock Exchange.
● Public information shows that KUKA is one of the world's leading suppliers of robotics and automated production equipment and solutions. Its customers cover many sub-sectors such as medical, electronics, food, consumer goods, aviation, and solar energy. Midea Group has high hopes for the joining of KUKA. The company stated that it can take advantage of KUKA's technological advantages to promote manufacturing upgrades and expand the B2B industry space. The two parties will jointly explore markets in multiple fields including service robots.
It is worth mentioning that in the few years after the acquisition, KUKA's performance did not rise but fell. Wind data shows that KUKA entered a downward channel after hitting a new high of 690 million yuan in profit in 2017. The net profit in 2018 was still less than 100 million yuan, a drop of over 80%; in 2020, it also fell into a loss, with a loss of more than 800 million yuan.
In 2021, thanks to the global economic recovery, the increase in industrial automation investment by downstream customers, and the improvement of its own efficiency, the scale of KUKA's business has increased. It is reported that the number of new business opportunities obtained by KUKA China in the first half of the year increased by nearly 50% year-on-year, and the proportion of new customer orders increased to 15%. In terms of performance, KUKA achieved revenue of 11.76 billion yuan, a year-on-year increase of 31%; net profit was 117 million yuan, a year-on-year turnaround.
Controlling shareholders increase their holdings by more than 1 billion yuan
What needs attention is that among the many business sectors of Midea, air conditioners and consumer appliances still account for the majority. Although the robotics and automation business is a profit growth point that is focused on building, it does not account for a large proportion of the overall revenue. In the first half of this year, the segment achieved revenue of 12.7 billion yuan, accounting for 7.3% of the total revenue, and the gross profit margin was 33.28%, which was higher. The company's overall gross profit margin was 11.57 percentage points.
Regarding the proposed wholly-owned holding of KUKA, Midea Group stated that it will realize the synergy and sharing of internal resources. Sitting on diversified medical and logistics industries such as Wandong Medical and Ande Logistics, Midea has clearly proposed related solutions for medical, entertainment, and new consumption in the field of robotics and automation, and KUKA, which has key robotics technologies, is among them. The role of nature should not be underestimated.
In the first half of this year, KUKA won orders for Livzon Pharmaceutical Cold Storage Renovation and Anta Fila's omni-channel central warehouse in the logistics and warehousing field, and successfully obtained the Changchun Guowen New District Hospital project order in the medical field, and achieved new customers in the heavy-duty truck industry in the automotive field. . At the same time, KUKA actively assists Midea Group to improve its intelligent manufacturing level. As of July 2021, Midea's robot usage density has exceeded 320 units per 10,000 people, and plans to achieve the goal of 530 units per 10,000 people in 2023.
Business integration is accelerating, but the recent stock price trend of Midea Group is not satisfactory. In the past six months, it has fluctuated downward, with a drop of 13%. In May of this year, He Xiangjian, the actual controller, released a plan to increase his holdings and plans to increase his holdings by no less than 800 million yuan within six months. On November 22, He Xiangjian fulfilled the contract as scheduled, accumulatively increasing his holdings of 14.313 million shares, accounting for 0.21% of the total share capital, and increasing his holdings amounted to 1.05 billion yuan, with an average price of about 73.4 yuan per share.
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