The stock price of Gree Electric Appliances has plummeted, and the market is not optimistic about Dong Mingzhu's "new energy dream"?

In recent days, Gree Electric (000651. SZ) is really a wave of unevenness. On the other hand, the news of increasing the holdings of the holding subsidiary Gree Titanium has caused the stock price to plummet.

At the opening of trading on December 20, the share price of home appliance giant Gree Electric suddenly crashed. On the news side, Gree Electric announced that it plans to increase its shareholding in its holding subsidiary Gree Titanium New Energy Co., Ltd. (hereinafter referred to as "Gree Titanium"). The market interprets that Gree will further increase its energy storage business and increase investment in the new energy track.

Compared with Gree's determination, market confidence is slightly lacking. Gree's share price fell 7.09% today, and the Red Star Capital Bureau noticed that in the Gree Electric Appliance stock bar, many investors questioned the practice of increasing their holdings, believing that Gree Titanium's performance was not satisfactory and the profit prospects were still unclear.

The stock price of Gree Electric Appliances has plummeted, and the market is not optimistic about Dong Mingzhu's "new energy dream"?

Data with picture according to Visual China

Gree's share price fell sharply to a new low for the year

Issued an announcement to increase its holdings in Gretitanium

At the opening of the market on December 20, the share price of the home appliance giant Gree Electric Appliances suddenly crashed, and as of the close, the downward trend has not improved, falling by 7.09%, and the turnover exceeded 3.8 billion.

On the news side, on the evening of December 19, Gree Electric announced that it intends to increase its shareholding in its holding subsidiary Gree Titanium, and has signed a share transfer agreement with 12 shareholders a few days ago to acquire about 270 million shares of Gree Titanium at a price of 1.01 billion yuan, accounting for 24.54% of Gree Titanium's total share capital.

After the transaction, Gree Electric's shareholding in Gree Titanium will increase to 55.01%. Together with the voting rights of 17.46% of the shares held by Dong Mingzhu, the voting rights of Gree Electric in Gree Titanium will increase to 72.47%.

This is also interpreted by the market as Gree further increasing its energy storage business and increasing investment in the new energy track. Gree Titanium, formerly known as Yinlong New Energy, was established in 2009, and its core product is lithium titanate battery, which is mainly used in the field of electric vehicles and energy storage, which is another technical route that is different from the current mainstream lithium iron phosphate and ternary lithium battery.

Gree also mentioned the reason for the increase in the announcement, simply put, on the one hand, based on the long-term confidence in the new energy industry, firmly promote the implementation of the new energy strategy, on the other hand, full of confidence in the future development of Gree Titanium, which will help the company strengthen the management and control of Gree Titanium, and reduce internal management costs.

Red Star Capital Bureau noted that the 12 shareholders who transferred the equity of Gree Titanium include Beijing Purun Cube Equity Investment Center (Limited Partnership), Beijing Honghang Cultural and Creative Co., Ltd., Hangzhou Purun Cube Equity Investment Partnership (Limited Partnership), Zhuhai Cold Spring Investment Partnership (Limited Partnership), Beijing Automobile Guangxing Information Technology Co., Ltd. and Beijing Purun Cube No. 1 Equity Investment Center (Limited Partnership).

It is worth mentioning that Gree also revealed the idea of continuing to increase its holdings in Gree Titanium. According to the announcement, in addition to the above 12 shareholders, the company will continue to communicate with other Gree Titanium shareholders on the transfer of their Gree Titanium shares (excluding the Gree Titanium shares held by Chairman Ms. Dong Mingzhu).

From the information disclosed in the announcement, it can be seen that after the transaction, the remaining shareholders of Gree Titanium also include Yinlong Investment Holding Group (1.645%), Sunshine Life Insurance (11.601%), Houming Investment (3.846%), Bus Media (2.9%), Daze Investment (2.612%), Xingge Capital (1.704%), etc.

Acquired Yinlong New Energy and changed its name to Gretitanium

Dong Mingzhu and Gree's "car-making dream"

Gree Titanium has always been regarded as a part of Dong Mingzhu and Gree's "car-making dream". Looking back on the "fate" of Gree and Gree Titanium, it is necessary to start from 2016, when Gree Electric Appliances had suspended trading and planned to acquire 100% of the shares of Zhuhai Yinlong at a price of 13 billion yuan, but the acquisition plan was opposed by the small and medium-sized shareholders of Gree Electric Appliances and was finally stranded.

But Dong Mingzhu did not give up. In December 2016, Dong Mingzhu invested in Zhuhai Yinlong in his personal name, and also attracted Wang Jianlin, chairman of Wanda Group, Liu Qiangdong, chairman of Jingdong, and others to inject 3 billion yuan to obtain 22.388% of Zhuhai Yinlong's equity. Since then, Zhuhai Yinlong has increased its capital again, and Dong Mingzhu's shareholding ratio has increased to 17.46%.

In the next two years, Yinlong ushered in a short period of glory. In 2017, Yinlong new energy buses ranked fourth in the country with annual sales of 6,626 units, and in 2018, they ranked third only after Yutong and BYD with sales of 7,278 units.

But in 2018, Yinlong was exposed to the news of defaulting on supplier payments, and then experienced the escape of Yinlong's founder, the imprisonment of executives, equity disputes and other events. Yinlong has auctioned its shares for several times, and the average price of shares has dropped from the initial 35 yuan per share to 5.43 yuan.

In October 2021, Gree Electric Appliances announced that Gree Electric Appliances won 30.47% of the equity of Yinlong New Energy by participating in judicial auction and public bidding, and Yinlong New Energy will become a holding subsidiary of the listed company. In the 2021 annual report, Gree said: through the acquisition of Gree Titanium, it will further improve the layout of the new energy industry.

A month later, Yinlong New Energy Co., Ltd. changed its name to Gree Titanium New Energy Co., Ltd., and the binding with Gree was further deepened.

But Gretitan's performance is not ideal. Gree disclosed in its 2021 annual report that as of October 31, the fair value of Yinlong's identifiable net assets attributable to the owners of the parent company was 1.215 billion yuan, and the difference between the acquisition cost of 1.828 billion yuan and the fair value of Gree's identifiable net assets formed goodwill of 613 million yuan. The fair value of Yinlong's net book assets on the purchase date was 2.469 billion yuan, and the operating income and net loss from November to December 2021 were 694 million yuan and 321 million yuan, respectively.

In 2022, Greti's revenue and net loss will be 2.587 billion yuan and 1.905 billion yuan, respectively. The company's total assets decreased from 27.282 billion yuan at the beginning of the year to 25.024 billion yuan, and total liabilities decreased from 25.135 billion yuan at the beginning of the year to 24.786 billion yuan. Based on this calculation, net assets shrank from 2.147 billion yuan at the beginning of the year to 237 million yuan. In addition, in 2022, the listed company will make a goodwill impairment provision of 150 million yuan for Gree Titanium.

However, Gree also mentioned in the above announcement that in 2022, the scale and gross profit of Gree Titanium's business will be greatly improved. In the first half of this year, Greti's business continued to improve, with a year-on-year increase of 23.31%.

Gree is optimistic about "optical air storage" products

Dong Mingzhu: Gree titanium extends the Gree industrial chain

Some market voices believe that the acquisition of Yinlong is one of Dong Mingzhu's Waterloos.

In 2019, Dong Mingzhu said on the CCTV program that "the facts of this period of time have proved that the decision of the board of directors (refusing to acquire Yinlong) is correct": "For the long-term development of Gree, it is necessary to enter the automotive field." Over the years, Gree has not been recognized in the automotive air conditioning business, but Yinlong provides a platform for automotive air conditioning, through which the door of Gree automotive air conditioning is opened, which is the real benefit. ”

Judging from the action of this increase, Gree has not been affected by external voices, which is also related to Gree's optimism about the direction of "optical storage" products.

The combination of photovoltaic, energy storage and air conditioning "optical air storage" products is the business that Gree Electric focuses on. According to the first financial report, the relevant person in charge of Gree Electric's overseas business shared photos of the latest trends in Gree's "optical air storage" products in the Middle East market expansion on December 19 in the WeChat circle of friends.

Dong Mingzhu also mentioned optical storage and Gree titanium many times. In May this year, according to Xinhua Daily, at the Yangtze River Business Summit of the 3rd Jiangsu Development Conference, Dong Mingzhu also focused on the "optical air storage" technology. "We have been developing this technology for 12 years, and it took three generations of technology to realize the combination of photovoltaics, air conditioning, and energy storage to become an independent carrier, and this technology can recover all the costs in just five years. ”

According to the first financial report, at an investor exchange meeting in August, Dong Mingzhu also mentioned, "Gree Titanium's energy storage and other technologies are fine, otherwise Gree's optical storage air conditioning can't be done." At that time, Gree acquired Yinlong to increase the application channel for Gree automotive air conditioners, automotive motors, and automotive capacitors, because it was difficult to sell automotive air conditioners to car manufacturers. Gree Titanium's platform has extended the Gree industrial chain a lot. Dong Mingzhu said.

On December 13, an investor asked Gree Electric on the interactive platform, "How many projects has Gree Optical Storage landed and what are the prospects at home and abroad?" Gree replied that at present, the company's optical storage air conditioner, optical storage all-in-one machine and other equipment categories are complete, and the system products have been expanded to 14 series, covering industrial, commercial, household, cold chain and other fields, and actively applied to low-carbon community park energy systems, green DC buildings, Scenarios such as zero-carbon and Meixin Villages, covering different types of typical climate zones around the world, have served more than 35 countries and regions around the world.

But judging from today's stock price performance, it will take some time for the market to be optimistic about Gree Titanium.

Red Star News reporter Qiang Ya Milling

Edited by Yang Cheng