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Smarter Energy Was Determined to Build Energy Networking Benchmark within the Industry
Clicks:727Add time:2015-12-30

Link of original text: http://stock.jrj.com.cn/2015/12/29113820316875.shtml


Smarter Energy, Smart City System Service, Internet Plus, Energy Internet closed loop…a series of current hot words all focus on a listed company-Far East Smarter Energy (Stock code: 600869). This service provider is specially sparkling. As for it, many investors may consider it as just “hyping concept”. Nevertheless, whether it is Smarter Energy following the trend of speculation or not? Or it is the transformation for enterprise development? In order to practice the idea of “let investment be more simple”, break through asymmetric information between investor and listed company, website journalist of financial circle recently had a exclusive interview to Smarter Energy CFO and President Secretary Wan Jun to know strategic planning and transformation progress of Smarter Energy in detail.


“One net based on two platforms” of Smarter Energy in transformation develops rapidly


Under the background of Internet wave and energy revolution, in the listed company Smarter Energy started by electric wire business, the strategy transformation with on-line and offline combination early began quietly from 2010, and it sought strategy transition in 2013, positioning in smart energy and smart city system service provider, and actively built two main platforms, “Energy Internet and Internet Plus”. CFO and President Secretary of Smarter Energy Wan Jun indicated that as for energy, the purpose of the transformation of company, was mainly to hope to break through industrial value chain of Smarter Energy with the assistance of 25 years’ resource and experience of the main industry of cable in professional field, in order to gain real high gross margin and the sustainable development of enterprise. As we know, in the past 18 years, Smarter Energy was always the leading enterprise in cable industry, but market share was still very low, net profit margin always maintained at about 3%, which mainly because that the blind expansion of cable industry had resulted in serious overplus of productivity.


According to what we know, E-commerce of “one net based on two platforms” is the important plate for transformation of Smarter Energy strategy, which consists of cableabc.com, exchange platform and mmbao.com.com. Wan Jun introduced that, “through the transformation for nearly 5 years, the Internet platform of Smarter Energy has achieved great performance, for example, cableabc.com has been a guidance website for industrial price, grasping the web portal of speaking right in the industry. The flow capital for deal of exchange platform in 2014 was 52 billion yuan, the revenue of mmbao.com in 2014 was 1.49 billion yuan, net profit about 21 million yuan, moreover, the performance of these two platforms both increased greatly in 2015.” 


What should be noted, at present, there are many E- business platforms with comprehensive nature owning large transaction scale but in loss state, how could E-business platform of Smarter Energy have profit in short term? Wan Jun indicated that, it was because of the professional background of our platform, “the successful combination between future Internet and traditional industries, which could only appear in leading industry or the Top 3 companies in the industry, because the understanding and familiarity of these enterprises to industry, what was so-called ‘tradition’, was just the barrier of Internet Plus.”


Under the premise of having “barrier”, Wan Jun had great confidence in the prospect with combination between cable industry and Internet. He said, “take the exchange platform of Smarter Energy for example, only in cable production value, only the yearly productivity not including trade could be about 1.2 trillion yuan, and 75% of them were raw materials, which amounted to a market with the scale of 900 billion yuan.”


Online and offline integration helps supply chain finance


As indicated by an insider, at present, the golden decade of pure online E-business platform had passed, and the O2O era of online and offline integration was coming. In this respect, Smarter Energy arranged in advance, got through industrial chain on line, got through value chain off line, which were just the pursuit of Smarter Energy. Wan Jun indicated that, since 2011, Smarter Energy had begun to build the online closed loop ecosphere of contract flow, information flow, capital flow and logistics from “raw material end to manufacture end to consumption end”, and in order to match online platform construction, on the basis of building many delivery warehouses and many exclusive shops, it continued to make more efforts to arrange offline delivery system.


Wan Jun said that, over 200 offline exclusive shops of Smarter Energy were equipped with touch screen, which was the significant leading port of on-line platform. In addition to this, the purpose of Smarter Energy to build offline system, firstly, was to build storeroom in the gathering place of cable production to reduce logistics cost. Secondly, was to establish offline pledge risk control system, to support building the supply chain finance of Smarter Energy.


According to introduction, the online platform owned by Smarter Energy had run for many years, and accumulated a large amount of industrial data. How to use these barriers well, and give play to more value? Finally, Smarter Energy selected the mode of supply chain finance. In 2015, Smarter Energy became a shareholder in Beijing SSRONG, joined hands with Quick Money, and speeded up the layout in supply chain finance and third party payment. Wan Jun also emphasized that, many investors misunderstood that the purpose of our investment in SSRONG was to use the capital of P2P project, but it was not the fact. The cost of capital of P2P was very high, but what we attached importance to was the professional team value of SSRONG, which could build online customer credit system for Smarter Energy, and promote supply chain finance of company to enlarge scale and control risk.


As for payment, Smarter Energy and third party payment platform Quick Money had cooperation, but Wan Jun claimed that, the company wasn’t satisfied with it. He said that, the payment in B2B E-business platform had two obvious characteristics, the first is large amount, the second is bill, for example, the involved general amounts of E-orders for goods of the raw materials similar to copper were several millions yuan, and enterprise usually adopted the mode of payment in bill type such as acceptance bill, and common third party payment couldn’t solve payment in bill type well, therefore, company also pushed some cooperation in promoting large-amount payment.


Carry out merger and acquisition around operation and maintenance end, end-user, data entry, and realize energy closed loop in networking


Purchase is a kind of effective modes for enterprise in rapid development and enlarging scale. In recent 2 years, Smarter Energy capital purchases frequently, and successively purchase, invested 6 companies of different categories. What is the internal logic of capital operation with so high density and so major movement?


Wan Jun indicated that, during that process of transformation, Smarter Energy should transform from a company which purely researched and developed, manufactured, and sold cable, into a profit model which took new energy, especially clean energy as object, and finally formed whole industrial chain service of “planning and design-supply of products-construction and installation-operation and maintenance supervision-energy efficiency management-main contractor service”, insist on the strategy of endogeny + extension merger and acquisition, and seek integration opportunities in fields such as “power supply, stored energy, power transmission, power distribution, power sales, end-user energy efficiency management, energy conservation cloud platform”, form complete closed loop of energy Internet, moreover, the external merger and acquisition carried out by company which began from 2014, were all along this industrial chain.


To be specific, Smarter Energy purchased privately operated electric power project company-Intelligence Power Electric Engineering Corporation with class A design qualification in 2014, got involved in distributed generation terminal, and gave priority to develop EPC business from 2015, transformed “clean energy and the overall solution service provider of smart power grids”, entered electricity sales field; purchased the new high-tech enterprise- SEMEUREKA with primary and secondary equipment integration capacity such as fault detection and data analysis, got involved in operation and maintenance business in power distribution end; purchased new energy of First with whole capital, inserted into new energy automobile industrial chain, arranged energy storing business, developed battery cloud platform; invest TrafficData, limited the entrance of smart city, smart transportation data flow, built transportation cloud platform , grasp traffic user data; purchased Far East Yineng Electric Co., Ltd in distribution network end of production ring main unit and distribution network unit, reinforced operation and maintenance management; invested Tianjin Zhongxiang Tenghang Science and Technology Ltd. which produced UAV, reinforced distribution network end data collection, and further strengthened operation maintenance terminal.


Wan Jun also indicated that, within the next 3 years, all external purchases of Smarter Energy would focus on operation and maintenance terminal and end-user, data entrance in merger and acquisition. The good strategic layout was beneficial to the confidence in capital market; Wan Jun said that, “the employee stock ownership plan of 3 billion yuan pushed by the company also based on the confidence in future strategy”




Smarter Energy attaches a series of market hot spots. It seems to have the suspicion of following the trend, but actually there is early layout. The renaming of Far East Smarter Energy actually maybe a year earlier than “Smarter Energy” concept put forward in state level, and the company breaks through its all chains between industries according to the previous development planning, and it is determined to build energy networking benchmark within the industry. Far East Smarter Energy doesn’t follow the trend blindly, even if for the current very hot charging pile, it also insists on its own individuation judge.


CFO and President Secretary of Smarter Energy Wan Jun said that, the company purchased First mainly for 3 orientations, firstly, to use the rapid development of current new energy automobile to let 18650 cylindricity lithium battery of First be the leader of market; secondly within 3 years, to carry out battery cloud operation and battery UBER (battery pack fragmentization) by use of BMS, finally to realize business model of separation of electricity and vehicle; thirdly, to become the stored energy plate in the whole grand strategy of Far East.


An important judgment among it is the investment charging pile which makes a splash at present considered by Wan Jun, but it is just revelry of capital in a short term, and the electricity changing mode of autonomous charging with battery cloud and separation between vehicle and electricity is really the field which needs to invest most.