Dong Mingzhu pinned the re-election of chairman Gree Electric Appliances plans to issue "10 billion red envelopes" in three years

In the blink of an eye, the eleventh term of the board of directors elected by Gree Electric Appliances in early 2019 expired, and Dong Mingzhu will begin a new journey of three years. On the evening of January 24, Gree Electric issued a number of announcements, involving shareholder return planning for the next three years, the election of the company's board of directors, and the cancellation of the remaining repurchased shares for the employee stock ownership plan. It is proposed that the total cumulative cash dividend from 2022 to 2024 is not less than 50% of the net profit of the year. This is undoubtedly a great gift for the majority of investors.

Dong Mingzhu is expected to be re-elected and is expected to pay a total dividend of not less than 30 billion yuan in the next three years

Dong Mingzhu will begin a new term. On the evening of January 24, Gree Electric Announced that the company will hold an extraordinary shareholders' meeting on February 28, when the company's board of directors will be re-elected. To this end, the 11th Board of Directors of the Company nominated Dong Mingzhu, Zhang Wei, Deng Xiaobo, Zhang Jundu and Guo Shuzhan as candidates for non-independent directors of the 12th Board of Directors of the Company. Nominated Liu Shuwei, Wang Xiaohua, Xing Ziwen and Zhang Qiusheng as independent director candidates for the 12th board of directors of the company.

The Beijing News Shell financial reporter noted that in January 2019, Gree Electric Elect elected the eleventh board of directors, of which Dong Mingzhu, Huang Hui, Wang Jingdong, Zhang Wei, Zhang Jundu and Guo Shuzhan were non-independent directors, and Liu Shuwei, Xing Ziwen and Wang Xiaohua were elected as independent directors. However, Board Secretary Wang Jingdong left in August 2020, and CEO Huang Hui also left in February 2021. In December 2020, Deng Xiaobo was appointed as the vice president and secretary of the board of directors of the company.

From the announcement, it can be seen that the non-independent directors of the twelfth board of directors of Gree Electric Appliances decreased by one seat, while the independent directors increased by one seat. Liu Shuwei, Wang Xiaohua and Xing Ziwen continued to nominate for appointment, and Zhang Qiusheng was a new independent director candidate. Zhang Qiusheng is currently a professor at the School of Economics and Management of Beijing Jiaotong University, the dean of the National Institute of Transportation Development, the director of the Research Center for Mergers and Acquisitions of Chinese Enterprises, and an independent director of Jinneng Holdings Shanxi Coal Industry Co., Ltd.

At the same time, Gree Electric Appliance announced that the company comprehensively considered the profitability of the enterprise, business development planning, shareholder returns and other factors, and formulated the "Shareholder Return Plan for the Next Three Years (2022-2024)". The company will distribute profits twice a year from 2022 to 2024, namely annual profit distribution and interim profit distribution. Under the premise that the company's cash flow meets the normal operation and long-term development of the company, the total accumulated cash dividend of the company from 2022 to 2024 is not less than 50% of the net profit of the year.

In fact, dividends have always been a hot topic of Gree Electric Appliances. In April 2018, the 2017 annual report of Gree Electric Appliances was released, and Gree Electric Appliances, which had been paying dividends for 10 consecutive years, suddenly announced that it would not pay dividends, which caused investors to be dissatisfied, and also received a "Letter of Concern" issued by the Shenzhen Stock Exchange. Subsequently, Gree Electric Appliance replied that it will fully consider the demands of investors and carry out interim dividends in 2018.

In January 2019, Dong Mingzhu said, "Ten years of dividends, one year of no dividends, blame me, from 1996 to 2000, we paid more than 500 million dividends, from 2012 to 2018, the cumulative dividend was 40.006 billion." ”

Shell financial reporter noted that Gree Electric Appliances in 2020 annual distribution of gold 23.420 billion yuan, 2019 annual distribution of gold of 7.219 billion yuan, 2018 annual distribution of gold of 12.633 billion yuan.

However, due to the repeated epidemics in recent years, the rise of raw materials, and the diversification strategy, the performance of Gree Electric Appliances has been under pressure. Gree Electric Appliance's revenue in 2020 was 168.199 billion yuan, down 15.12% year-on-year; the net profit attributable to shareholders of listed companies was 22.175 billion yuan, down 10.21% year-on-year. In the first three quarters of 2021, the revenue of Gree Electric Appliances was 138.135 billion yuan, an increase of 9.73% year-on-year, and the net profit attributable to the shareholders of listed companies was 15.645 billion yuan, an increase of 14.21% year-on-year.

According to the "company's total accumulated cash dividends from 2022 to 2024 are not less than 50% of the net profit of the year", with the current growth rate of Gree Electric Appliances' performance estimated, the total dividends of Gree Electric Appliances in the next three years are not less than 30 billion yuan.

Employees were not enthusiastic about the stock ownership plan, and the remaining shares were written off

The aftermath of the employee stock ownership plan rippled. On the evening of January 24, Gree Electric Appliances also announced that the company intends to use the remaining 15.67 million shares after the completion of the share purchase of the first phase of the employee stock ownership plan for cancellation to reduce the registered capital. According to the announcement, the first phase of the share repurchase began in April 2020 and was implemented as of February 2021, with a total transaction amount of 6 billion yuan.

This is not the first time that Gree Electric appliances have adjusted the use of repurchased shares. In June 2021, Gree Electric Announced that the use of 100 million shares of the second phase of the share repurchase plan was adjusted from the original plan "repurchased shares will be used for employee stock ownership plans or equity incentives" to "repurchased shares will be used for cancellation to reduce the registered capital". In September of that year, the company intended to cancel 70% of the purchased shares repurchased in the third phase to reduce the registered capital, and the remaining repurchased shares would still be used to implement the employee stock ownership plan.

The cause of this is the employee stock ownership plan of Gree Electric Appliances. In June 2021, Gree Electric Appliance announced that it intends to launch the first phase of the employee stock ownership plan, and the scale of funds will not exceed 3 billion yuan. It is worth noting that the price of Gree Electric Appliance employees to buy the company's repurchased shares is 27.68 yuan per share, which is equal to 50% of the average price of the company's repurchased shares.

At the stock price at that time, the net profit per share could be doubled, which was equivalent to giving away employees for free. In addition, Dong Mingzhu's proposed capital is capped at 830 million yuan, accounting for 27.68% of the plan. The news superimposed on the trend of the broader market, Gree Electric Appliances fell by 4.79% on the day, and then once fell below 50 yuan / share, and there were many objections from small and medium-sized investors to the plan.

Dong Mingzhu urgently "extinguished the fire", and Gree Electric Appliance adjusted the use of the repurchased shares, from the original plan "repurchased shares will be used for employee stock ownership plans or equity incentives" to "repurchased shares for cancellation to reduce the registered capital". The appraisal period for the design of the employee stock ownership plan will also be two years, and employees can only exercise their rights after retirement.

At the second extraordinary shareholders' meeting of Gree Electric Appliances in 2021, some investors believed that the employee stock ownership plan of Gree Electric Appliances was not smooth. In this regard, Dong Mingzhu responded that there are many reasons, one is that employees do not have money to participate in the plan; the second is that the biggest difficulty of the Gree Electric Appliance Employee Stock Ownership Plan is to exercise rights after retirement, the reason for this is to hope that enterprises and employees will develop together, and they will leave without reaching retirement age, and the equity should be fully recovered for cancellation.

For the view of "changing hands to get 800 million yuan", Dong Mingzhu said that he did not get 800 million, even if he got 800 million, there was nothing wrong. Encourage employees to participate in the stock ownership plan, and if there is a situation that they cannot hold it, they will do it themselves, without considering personal interests at all. "When other people's stock prices rise, they sell, and when my stock price falls, they close." Listing is for development, not for the sake of making money. ”

Beijing News shell financial reporter Chen Weicheng Editor Xi Lili Proofreader Liu Jun