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China's Hisense sees revenue doubling by 2010

http://www.qingdaonews.com 2006-07-07 15:16:22

¡¡¡¡QINGDAO, China, July 6 (Reuters) - Hisense Group, one of China's top home appliance makers, is aiming to double its sales by 2010, banking in part on its newly acquired Kelon unit that it also plans to use as an overseas listing vehicle.

¡¡¡¡The company is aiming for annual sales
of 100 billion yuan in 2010, 40 percent of which would be exports, Hisense vice president Cheng Kaixun told Reuters in an interview on Thursday in the company's headquarters in the coastal city of Qingdao.

¡¡¡¡That goal would compare with the company's target of 50 billion yuan in sales this year, of which 15 percent would be exports.

¡¡¡¡The target for this year also includes about 10 billion yuan from its recent acquisition of Kelon , a troubled but well-known appliance maker in south China.

¡¡¡¡"For the last 10 years the company has grown about 20 to 25 percent each year," Cheng said. "We think we can continue that."

¡¡¡¡As part of the Kelon acquisition, Hisense also acquired Kelon's Hong Kong-listed unit. It is now planning to inject its own refrigerator and air-conditioning assets into the unit to tap overseas capital markets. ADVERTISEMENT

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¡¡¡¡"This is definitely something we will do," Cheng said. "We hope to do this by year-end, but there are lots of procedures we have to go through."

¡¡¡¡He said Hisense's air-conditioner and refrigerator units are expected to generate more than 5 billion yuan in sales this year compared with less than 4 billion yuan in 2005.

¡¡¡¡Hisense is one of China's top appliance makers, but has had only limited success exporting as it looks for new markets in the face of growing competition at home where it faces domestic firms like Haier Group, and international giants like Electrolux , Siemens and LG Electronics .

¡¡¡¡The group posted 33.88 billion yuan ($4.2 billion) in revenue last year, but only about $350 million -- or less than 10 percent of that -- was exports. It is aiming to nearly double its exports this year to $600 million.

¡¡¡¡Among last year's exports, only about 40 percent of products shipped abroad carried the Hisense brand name, while the rest carried names of other companies that Hisense manufactures for, including Hewlett-Packard Co. , Japan's NEC Corp. and France's Carrefour .

¡¡¡¡The company scored a small victory last year when U.S. retailer Best Buy agreed to sell Hisense branded TVs in addition to Hisense models bearing its own in-house brand name.

¡¡¡¡Many of China's manufacturing powerhouses are pushing to boost exports of their own-brand sales over products bearing other companies' names, as own-brand sales typically carry fatter profit margins but require more marketing expense.

¡¡¡¡Hisense, which counts Western Europe as its largest export market, previously said it hopes to become a globally recognised brand by 2010 by beefing up its international distribution channels and spending more to popularise its name outside China.

¡¡¡¡The company has a publicly traded unit in China, but is aiming for an overseas public listing as well to raise money and gain access to larger foreign capital markets.

¡¡¡¡To that end, it was planning to inject some of its assets into the Hong Kong-listed but scandal-ridden Kelon , whose assets it was acquiring earlier this year.

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