Content top criteria for web users: Report
Shares of China’s largest air conditioner maker Gree Electric Appliances Inc closed at its highest level in three weeks on Tuesday after the company announced its Stateowned parent company Gree Group sold a 15 percent stake in the subsidiary, a move that will boost the company’s market competitiveness, improve operating efficiency and diversify its product portfolio.
The shares of Gree Electric surged 5.35 percent to close at 60.8 yuan ($8.6), having risen during the session by 6.03 percent to trade at the day’s peak of 61.19 yuan. It was the best close for the shares since Nov 11, 2019 when the stock ended at 61.17 yuan.
Analysts said the stake sale of Gree Electric is part of the country’s push to pare down government ownership in highly competitive industries such as home appliances.
Gree Electric said in a statement on Monday night that Zhuhai Mingjun Investment Partnership, a private equity fund backed by Hillhouse Capital, won the bid to acquire the 15 percent stake from its largest shareholder Gree Group. The deal has an estimated value of 41.66 billion yuan ($5.9 billion).
After the sale, Gree Group will no longer be the controlling shareholder with its holdings reduced to 3.2 percent from 18.2 percent. Hillhouse Capital, which already had a 0.72 percent stake in the company, will become the biggest shareholder, as the Zhuhai, Guangdong provincebased Gree Electric undergoes a mixed-ownership reform.
Li Jin, chief researcher at the China Enterprise Research Institute in Beijing, said the ownership change in Gree Electric is of great significance as the company is facing tough competition in the domestic home appliance sector.
“The mixed-ownership reform will help Gree Electric enhance its competitiveness and push forward the internationalization of the Chinese manufacturing industry,” Li explained.
“What Gree Electric lacks most is the ability to keep abreast of the retail market and the post-1990s and post-2000s consumers’ preferences. Hillhouse Capital has invested in some internet giants such as Tencent Holdings Ltd and JD, so the introduction of strategic investors will help the company further innovate,” Everbright Securities analyst Jin Xing said.
Founded in 2005, Hillhouse Capital is known for its investments in top Chinese technology firms such as Tencent, Baidu, Didi Chuxing and Meituan-Dianping.
At this time, Dong Mingzhu, the chairwoman and president of Gree Electric Appliances, holds a 0.74 percent stake in the firm and is ranked as the seventh-largest shareholder of the company.
The shift of controlling shareholders in Gree Electric will help optimize the company’s management structure and diversify its businesses, said Liu Buchen, an independent researcher in the home appliances sector.
Gree Group is a State-owned enterprise supervised by the Assets Supervision and Administration
Commission of the Zhuhai local government.
In April, Gree announced its plan to sell the stake, and firms such as Baidu, Singapore’s Temasek Holdings, and Hopu Investment Management all sought to buy the shares.
Gree Electric is ramping up efforts in intelligent manufacturing by setting up unmanned factories and using industrial robots in a variety of production cycles as part of its broader push to upgrade the country’s manufacturing industry.
It has also worked on diversifying its business and entered fields such as mobile phones, automobiles, and microchip production. Air conditioner sales, though, still make up for more than 80 percent of its total annual revenue.
Company revenue reached 200 billion yuan last year, a year-on-year increase of 33.33 percent.
A growing number of Chinese internet users are willing to pay for digital content, with a rising need for high-quality products, video content and better user experiences brought about by new technologies, a report said on Tuesday.
The new 2019 content trend report released by Chinese internet giant Tencent Holdings Ltd showed that 53.3 percent of surveyed netizens are dissatisfied with online content, and they require higher-quality online information.
Among the surveyed internet users, high-end consumers have a stronger demand for better quality and customized content. Mass content consumers desire more knowledge content.
Specifically, 34.8 percent of the surveyed group said they want useful and interesting content, especially on topics related to lifestyle, health and culture.
The report said 26.8 percent of those living in first-tier and second-tier cities said they probably or are very likely to pay for highquality content. For those living in fourth-tier and fifth-tier cities and those who have middle school degrees or less, they care more about content quality, learning knowledge and whether the content they get is real.
“As users have increasingly higher demands for high-quality content, reducing low-quality content will be the main task for content producers,” Tencent vice-president Chen Juhong said during the 2019 Tencent ConTech technology conference held on Tuesday in Beijing.
“Against this backdrop, we will see major growth and development in content production and consumption technologies. It will be a natural next step to introduce a variety of technical means to offer better consumer experiences and enhance content production efficiency,” Chen said.
In first-tier and second-tier cities, 56.1 percent of netizens aged between 21 and 40 said they spend more time on smartphones, and 45.8 percent of them said video content is their top choice or the only choice when viewing online information, the report said.
A growing number of emerging groups are actively embracing the digital world, including elderly adults and those who did not complete middle school.
Of the 249 million elderly people aged above 60, some 59 million are internet users, with a 39.9 percent year-on-year increase seen compared to the previous year. The number of netizens who have middle school degrees or less has reached 479 million, up by 26.7 percent year-on-year.
“Today, residents of lower-tier cities and towns have become the new growth engine to boost the consumption market. And we do see huge potential in that,” said Zheng Qingsheng, a partner at Sequoia Capital China.
According to the report, Chinese internet users now love embracing new technologies such as the nextgeneration 5G technology. This will generate new growth engines in the content consumer market in the coming year.
Wu Hequan, an academician of the Chinese Academy of Engineering, said the 5G network will enable the combination of terminals with artificial intelligence technologies, which will help foster new applications and businesses for digital content such as intelligent and high-definition news content.