On June 24, the Beijing No. 1 Intermediate People's Court ruled that Huang Guangyu should be released on parole for a probationary period from the date of his release until February 16, 2021.
Huang Guangyu is a former veteran of China's retail industry, noted for his business achievements. He was also sentenced to 14 years in prison for operating illegally, insider trading and bribery of an employer.
There are high concerns about when Huang Guangyu will be released from prison. In fact, this isn't the first time that news of Guangyu's release from prison has surfaced. Each time, the rumors have quickly stirred up a storm in the capital market.
However, Huang Guangyu has been in jail for more than a decade, and the retail landscape has already changed. The new retail has broken the boundary between online and offline, and e-commerce and the real economy are converging across all channels.
So, is Huang Guangyu still passionate about entrepreneurship after his release from prison on parole? Is it still keeping pace with e-commerce?
According to public records, in November 2008, Huang Guangyu, then Chairman of the Board of Directors of Gome Electrical Appliances, was investigated for stock price manipulation and subsequently detained.
Subsequently, the Beijing Municipal No. 2 Intermediate People's Court publicly tried the case of Huang Guangyu and sentenced him to 14 years in prison, a fine of 600 million yuan and confiscation of 200 million yuan of assets for illegal operation, insider trading and bribery of an organization.
However, even though Huang Guangyu is in prison, his influence on Gome is still there.
Based on the length and reduction of his sentence, Huang Guangyu will be released from prison in February 2021 at the latest. But since 2014, there have been rumors of "Huang Guangyu's impending release" almost every year.
The latest rumor appeared in February 2019, and the stock price of Gome's listed companies rose for three days. In response, Gome Holding Group officials said they have not yet received the official news from the judiciary.
Huang Guangyu was born in 1969 in Tong Yu Town, Chaoyang County, Shantou City, in a family of four siblings, and he is the second oldest.
The second oldest of four siblings, Huang Guangyu grew up in a poor family and started recycling old electrical appliances with his older brother, Huang Junqin, to supplement his family's income.
In 1985, at the age of 16, Huang Guangyu has not yet graduated from junior high school, he dropped out of school and Huang Junqin together "Northern Drift". ". First, they went to Inner Mongolia to start a small business, and then they moved to Beijing to start a clothing sales business.
In 1986, the two brothers opened a 100 square meter clothing store on Zhu Shi Kou East Street in Qianmen, Beijing, and named it Gome.
On January 1, 1987, they decided to return to their old profession of selling electrical appliances. Changed the name to Gome Electrical Store.
It was during this time that Huang Guangyu's daring and entrepreneurial flair began to manifest itself.
In 1991, Huang Guangyu began advertising in the "Middle Stitch" section of the Beijing Evening News, posting real-time prices of electrical appliances, which is considered to be the first of its kind for a newspaper, and successfully made Gome a household name in the area.
In 1992, Huang Guangyu expanded by opening a chain of stores, and Gome quickly became the largest private electrical appliance store in Zhusikou.
Huang shifted his focus to the real estate industry, while Huang Guangyu, who parted with his "Gome" brand name and hundreds of thousands of dollars in cash, continued to work in the electrical appliances sales industry.
By 1999, Gome had become the largest home appliance chain in the Beijing market and began to expand abroad.
In 2004, Gome opened more than 200 stores in more than 60 cities across the country, with sales of 23.9 billion yuan, becoming the country's largest electrical appliance chain enterprises, a moment of great popularity.
In that year, Gome landed on the Hong Kong Stock Exchange as a shell company, and at the age of 35, Huang Guangyu's personal assets exceeded 10 billion yuan, making him the richest man in China that year.
In 2005 and 2008, Guangyu was twice ranked as the richest man in China on the Hurun Report's list of the richest people in China, and was also ranked No. 1 on Forbes China's list of the richest people in 2006.
Under Guangyu's leadership, Gome has grown rapidly and quickly become the dominant player in China's electronics retail industry. . But that momentum came to an abrupt halt after he was jailed.
According to the annual report, in the first year of listing, Gome's revenue reached 45.889 billion yuan.
By 2019, Gome's retail revenue was only 59.483 billion yuan, not much growth in a decade.
At the same time, the domestic home appliance retail landscape has changed dramatically.
Suning, once a competitor, began exploring the transition to the Internet in 2009.
A year later, Suning Tesco was officially launched, and continued to maintain a rapid development trend.In 2019, Suning Tesco achieved operating income 269.2 billion.
On the other hand, with the development of e-commerce economy, the Internet e-commerce platform represented by Jingdong has gradually become an important platform for the sale of home appliances. Channel. Due to the late transformation, Gome's position as a leader in the appliance industry is gone for good.
However, since entering 2020, the long-silent Gome has also made new moves.
On the evening of April 19, Pinduoduo released an announcement announcing that it had officially entered into a deep strategic cooperation with Gome Retail.
Pinduoduo made a strategic investment in Gome in the form of convertible bonds totaling $200 million, with an initial share conversion price of HK$1.215 per share, representing a decrease of HK$1.215 per share over the closing price of Gome Retail on 17 April 2020 and the closing price of Gome Retail as at 16 April 2020, respectively. Average closing price premiums of 66.44% and 68.75% over the last five consecutive trading days.
On the evening of May 28, BOE announced that it would subscribe for US$100 million of foreign convertible bonds issued by Gome Retail, which is approximately RMB1.5 billion. 715 million yuan.
The company has entered into strategic cooperation with leading e-commerce platforms, which is also regarded as a preparation for Huang Guangyu's return.
However, after more than ten years of absence, the market has already been changing, can Huang Guangyu make a comeback? Everyone is waiting to see what happens.
According to Pan Helin, executive director of the Digital Economy Research Institute at Zhongnan University of Economics and Law, the family that runs Gome - Huang Guangyu's wife Dujuan - has played a key role during the time Guangyu was in jail.
Throughout the multiple crises, from the initial struggle for control to the subsequent e-commerce, the company has been able to stay on the straight and narrow.
According to Pan Helin, it's unclear whether Guangyu will be able to replace Azalea, who is now familiar with the business, after his parole, or whether he will be able to restructure Gome's business to keep up with the times.
But investors are clearly dissatisfied with the defensive stance Gome took while Huang Guangyu was in jail.
Data show that in 2019, Gome Retail achieved revenue of 59.483 billion yuan, with a significant loss in net profit; in the same period, Suning Tesco Achieving revenue of 269.2 billion yuan, the scale of the two has long been incomparable.
Meanwhile, the financial report shows that in 2019, Jingdong's revenue was 576.89 billion yuan and Pinduoduo's revenue was 30.14 billion yuan.
Gome's relatively lagging strategy and track record have been a bit lackluster indeed, as the market is sending out signals that the return of Huang Guangyu will lead to a turnaround. So, does the market signal that Huang Guangyu's return will lead to a turnaround for Gome?
"With Huang Guangyu on parole, investors are excited and the stock is flying high. They believe that once Huang Guangyu gets out, Gome will blow the attack."
Pan Helin pointed out that currently, the market believes that Huang Guangyu can allow Gome to take advantage of the current e-commerce residual heat, cut into more hot technology concepts, integration of today's underperforming listed companies resources to recreate a Gome, but can win, success or not, remain to be seen.
