Dong Mingzhu will work for another three years Gree to find the second curve of growth

Dong Mingzhu will work for another three years.

Gree Electric Appliances issued a series of announcements on the evening of January 24, revealing that Gree Electric Appliances will hold an extraordinary shareholders' meeting on February 28, and consider the proposal for the change of the board of directors, and intend to elect Dong Mingzhu, Zhang Wei, Deng Xiaobo, Zhang Jundu, Guo Shuzhan, etc. as a new non-independent director, which means that Dong Mingzhu, chairman and president of Gree Electric Appliances, will be expected to work in the position of chairman for another three years. Analysts believe that the key to Dong Mingzhu's new tenure is to improve the efficiency of the air conditioning business and look for the second growth curve of Gree.

China's domestic air conditioning market sales in 2021 fell by 8.7% year-on-year, and the addition of M&A experts in the candidate directors of Gree Electric Appliances is expected to help Gree diversify. Among them, Zhang Qiusheng, who is currently a professor at the School of Economics and Management of Beijing Jiaotong University, the dean of the National Transportation Development Research Institute, the director of the Research Center for Mergers and Acquisitions of Chinese Enterprises, and the independent director of Shanxi Coal Industry of Jinneng Holdings, is on the list of the new independent directors of Gree Electric Appliances. Gree Electric Also announced its shareholder return plan for the next three years, planning to pay dividends twice a year, and the total amount of cash dividends is not less than 50% of the net profit.

According to the data provided by AVC to the first financial reporter, in 2021, the online retail volume of china's domestic air conditioners was 24.68 million units, a year-on-year decrease of 6.7%, and the retail sales were 70.7 billion yuan, an increase of 4.5% year-on-year; offline retail sales were 22.21 million units, a year-on-year decrease of 10.8%, retail sales were 82 billion yuan, a year-on-year decrease of 5.6%; omni-channel retail sales were 46.89 million units, a year-on-year decrease of 8.7%, and retail sales were 152.7 billion yuan, a year-on-year decrease of 1.2%.

According to the 2021 semi-annual report of Gree Electric Appliances, air conditioners accounted for 73.79% of the total revenue of Gree Electric Appliances, and the proportion of living electrical appliances and intelligent equipment in the revenue of Gree Electric Appliances accounted for only 2.42% and 0.21% respectively.

A senior analyst in the home appliance industry told the first financial reporter that there will still be room for growth in China's air-conditioning market in the next three years, because it is now relatively close to the "ceiling", and it is expected that the annual growth rate in the next few years will be between 3% and 5%, and the growth rate will fluctuate greatly. The short-term goal of Gree Electric Appliances is to explore a new channel model for air conditioning business and improve operational efficiency.

"The medium-term goal of Gree Electric Appliances must come out of its own second growth curve." The second growth curve may be "going to sea", or To B businesses such as new energy, and it is expected that Gree Electric appliances will continue to layout in the future. The above analysts said that the message conveyed by the change of the board of directors is that the development of Gree Electric Appliances is still based on Dong Mingzhu as the core, and has not been interfered with by the outside world.

The analyst also believes that Gree Electric Appliances will definitely further layout the industrial chain, but whether this is related to the merger and acquisition experts who will soon enter the board of directors of Gree Electric Appliances, there is uncertainty.

It is worth noting that Zhang Jundu and Guo Shuzhan, representatives of the core dealers of Gree air conditioners who have been "partnered" with Dong Mingzhu for many years, are still on the new non-independent director candidate list of Gree Electric Appliances. Dong Mingzhu publicly stated last year that he would actively promote the reform of Gree new retail. This year is close to the Spring Festival, Dong Mingzhu's secretary Meng Yutong frequently broadcast live on Douyin's "Pearl Yutong Selection". Obviously, Gree is strengthening its online independent e-commerce channels on the one hand, and on the other hand, it wants to continue to stabilize the resources of offline core retailers.

In terms of diversification, Gree Electric Appliances acquired the controlling rights of Yinlong New Energy (which has been renamed "Gree Titanium New Energy") and DunAn Environment last year, increasing the layout of new energy. Dong Mingzhu said not long ago that the energy storage business will be a new growth point for Gree Electric Appliances.

Due to the contraction of China's air-conditioning market, the price increase of raw materials, the employee stock ownership plan to subscribe to the company's repurchase of shares at half price and other factors, the stock price of Gree Electric Appliances fell sharply by more than 30% in 2021, Gree Electric Appliances released the shareholder return plan for the next three years, enhanced the shareholder dividend commitment, and wanted to further stabilize investor confidence.

On January 25, the stock price of Gree Electric Appliance rose by 0.1% to 38.89 yuan per share.