The Research On The Financial Strategy In Digital Transformation Of Midea

The digital economy is an important driver of the steady growth of the global economy,and the scale of the digital economy in many countries has continued to increase in recent years.In the face of the challenges and opportunities brought by the digital economy and digital technology,China insists on developing industrial digitalization and digital industrialization to enhance the country’s value creation ability.Driven by the innovation of the times and economic benefits,all traditional industries are actively carrying out digital transformation to enhance the core competitiveness of enterprises.Financial strategy is crucial to corporate capital planning and enhancing financial competitiveness,and is an important means to coordinate and arrange corporate financial resources,which has a significant impact on the success of enterprise digital transformation.Midea Group began to try digital transformation in 2012 to improve profit growth points,achieved great success,and took a leading position in the home appliance industry.This article summarizes Midea’s public reports and corporate annual reports to sort out the relevant situation of its digital transformation.The first is the motivation for Midea Group’s digital transformation,including achieving the positioning goal of the world’s leading technology group,transforming and upgrading its profit model,catering to consumer demand,and achieving cost reduction and efficiency increase.Second,according to the focus of digital transformation,Midea Group’s digital transformation implementation process is divided into three stages,namely the digital 1.0 stage based on IT consistency(2013-2015),the digital 2.0 stage based on the "T+3" strategy(2016-2018),and the5G-driven digitalization 3.0 stage(2019-2021).Next,we will comprehensively analyze the evolution of each module of Midea’s group financial strategy.The first is the investment strategy,which is manifested in the "632" information system investment and construction in the 1.0 stage,reducing fixed asset investment,and increasing investment in intangible assets.In the 2.0 stage,invest in the construction of the "T+3" model,improve operational efficiency,pay attention to enterprise R&D investment,continue to reduce fixed asset investment,and increase the trend of intangible asset investment.In the 3.0 stage,we will continue to carry out diversified investment,focus on R&D investment and industrialized Internet construction.The second is the financing strategy,and the 1.0 stage is asset restructuring and listing to increase equity financing,notes payable and accounts payable financing.The salient change in the 2.0phase is to increase debt financing and borrow large amounts of long-term borrowing.In the3.0 stage,maintain the trend of large-scale borrowing and long-term borrowing,and issue short-term bonds for financing.The third is the operation strategy,and the capital operation cycle of enterprises continues to decline in the 1.0 stage.Innovate the sales model in the 2.0stage and start "smart home + intelligent manufacturing".During the 3.0 phase,the proportion of expenses decreased,and the capital operation cycle continued to decrease.The fourth is the profit distribution strategy,the three stages have adopted a stable growth high dividend distribution strategy,the amount of cash dividends continues to rise,the dividend distribution ratio remains between 40%-46%,in the digital 2.0 stage,the dividend distribution ratio has increased slightly.The stable dividend distribution strategy conveys the positive information of the company’s development to investors and attracts investors to invest funds.Finally,using the financial strategy matrix to evaluate the implementation of the financial strategy from the dimension of capital and value creation,it is found that Midea Group has outstanding value creation ability,but insufficient utilization of funds.In addition,a comprehensive analysis of a number of indicators of the enterprise shows that the main problems in each stage are higher dividend distribution,increased financial risk,and slowdown in growth ability.Based on this,the optimization suggestions of Midea Group’s digital transformation financial strategy are put forward from four aspects.In summary,as one of the representative enterprises of successful digital transformation,Midea Group’s research on its financial strategy in digital transformation can provide practical guidance for the transformation of other home appliance companies.