Dong Mingzhu: Investing 1 billion yuan in the production of high-end medical devices

Forget about one yuan; if you're investing, invest 10 billion.

Gree produces high-end medical equipment.

On March 17, during the "Entering Gree, Dialogue with Dong Mingzhu" livestream, Gree Electric Appliances Chairman and President Dong Mingzhu announced that Gree Electric Appliances will invest 1 billion yuan in the medical device field to research and develop high-end medical equipment.

According to reports from the 21st Century Business Herald, a Gree spokesperson previously stated that in addition to masks, Gree also produces thermometers and goggles. The spokesperson did not elaborate on the "high-end medical equipment" recently mentioned by Dong Mingzhu.

Most notably, Gree Electric Appliances is not targeting ordinary medical devices but high-end medical equipment. However, whether Gree Electric Appliances can successfully Enter the high-end medical device industry remains questionable.

Currently, the competition in China's medical device market is fierce for ordinary medical devices, while the high-end medical device market, such as CT and MRI, is still mainly occupied by multinational medical device companies like GE Healthcare, Philips, and Siemens. Furthermore, high-end medical equipment is a technology-intensive industry with high barriers to entry.

Simultaneously, there are significant differences between the sub-fields of medical devices, making simultaneous cross-border expansion difficult. Therefore, for Gree Electric Appliances, choosing which sub-field to Enter, how to Enter that field, and how to compete with established medical device companies are all crucial questions.

Long-term production of medical devices.

Gree Electric Appliances' entry into the medical device industry is not unexpected. According to Caibo Lan Medical Device inquiries, Gree Electric Appliances has established a wholly-owned subsidiary engaged in the design, manufacturing, and sales of Class II medical devices.

According to Qichacha, on February 18, Gree Electric Appliances contributed 20 million yuan to establish Zhuhai Grejian Medical Technology Co., Ltd.

Grejian Medical's business scope includes the design, manufacturing, and sales of Class II medical and nursing personnel protective products, ultraviolet disinfection equipment, physiological parameter analysis and measurement equipment, and operating room infection control supplies (projects that require approval according to law can only be operated after approval by the relevant departments).

Qichacha information shows that Grejian Medical's management personnel are almost all from Gree Electric Appliances.

It is noteworthy that other companies have modified or added new production lines to produce masks, but Gree Electric Appliances is different; it has established a wholly-owned subsidiary, suggesting a long-term intention to Enter the medical device industry.

This speculation has been confirmed. Recently, Wang Jingdong, chairman of Grejian Medical, told the media that the establishment of the subsidiary is indeed a long-term plan.

Equipment that kills 99% of the novel coronavirus.

Gree is already producing medical devices, currently focusing on equipment for combating the novel coronavirus pandemic.

According to Dong Mingzhu's social media, during the livestream, Dong Mingzhu stated that Gree has developed a novel coronavirus-killing air purifier. Samples were taken from the CT examination room of Wuhan Jinyintan Hospital and verified by the Chinese Academy of Sciences Key Laboratory of Aerosol Chemistry and Physics; the purifier kills 99% of the novel coronavirus within one hour.

Dong Mingzhu stated that around January 21, she began considering that Gree's air purifiers, which filter PM2.5 and kill common viruses, improve air quality. Given this technical foundation, it is possible to develop an air purifier that can kill the novel coronavirus.

Therefore, during the Spring Festival, Gree Electric Appliances' R&D team spent about two months developing technology based on existing antiviral air purifiers that effectively kills the novel coronavirus.

In addition to purifiers, Gree Electric Appliances, after application and registration, also produced thermometers, mask production equipment, goggles, and other products needed for epidemic prevention.

According to Dong Mingzhu's social media, Gree Electric Appliances has adjusted its production lines to focus on epidemic prevention-related products; after mass production, Gree can produce millions of masks per day.

On March 9, Gree Electric Appliances launched KN95 and medical-grade disposable masks, using a reservation and purchase system.

According to the "Dong Mingzhu's Store" WeChat mini-program, a box of KN95 disposable masks with free shipping costs 275 yuan, equivalent to 5.5 yuan per mask; a box of medical disposable masks with free shipping costs 150 yuan, equivalent to 3 yuan per mask.

From 7:30 am to 6:00 pm on March 16, a total of 1568 people purchased masks from Gree's e-commerce platform.

Meanwhile, Gree Electric Appliances produced molds for thermometers in 10 days and currently produces 20,000-30,000 units per day.