In the early morning of December 21, Gree Electric (000651.SZ) issued another announcement to disclose the 2023 performance forecast. At the close of the day, Gree's share price rose 2.24%, reversing the previous day (December 20) when it closed down more than 7%. Market analysts generally believe that Gree's move is aimed at "stabilizing the stock price", because its total market value evaporated about 13.2 billion yuan in a single day on the 20th.
Behind the rise and fall of the stock price, it is inseparable from the acquisition of Gree Titanium disclosed on December 19. According to the announcement, Gree intends to acquire 24.54% of the equity of Gree Titanium held by 12 shareholders at a transaction consideration of 1.015 billion yuan. However, the shares of Gree Titanium held by Dong Mingzhu, chairman of Gree, do not participate in the transaction.
This transaction made Dong Mingzhu's "circle of friends" resurface, and Lu Chunquan, Wang Jianlin, Jingdong and other "old friends" who invested in Yinlong in the past Dong Mingzhu's bureau are among the shareholders who plan to withdraw this time. Among them, only the three companies of the "Purun Department" will "cash out" about 363 million yuan through this equity transfer.
Gree said in the announcement that Gree titanium is an important part of the company's new energy sector, and Dong Mingzhu has expressed his optimism about Gree titanium in public several times. However, in the face of such an acquisition with a premium of nearly 62 times, Gree Titanium, which lost 1.905 billion yuan last year, has suffered market doubts about Gree's acquisition.
Gree's Acquisition Bureau
Dong Mingzhu's "circle of friends"
According to the announcement, as of June 30, 2023, the owner's equity of Gree Titanium is only 66 million yuan. Based on this calculation, the premium rate of this transaction is as high as 6169.7%.
Prior to the transaction, Gree had directly held 607 million shares of Gree Titanium, accounting for 55.01% of the latter's total share capital, and Gree also owned the voting rights corresponding to the 193 million shares held by Dong Mingzhu, accounting for 17.46% of the latter's total share capital, through a voting rights entrustment arrangement. If the transaction is completed, Gree will control the voting rights corresponding to nearly 800 million shares of Gree Titanium, accounting for 72.47% of its total share capital.
Among the 12 shareholders, the actual controller behind the three "Purun" enterprises, Beijing Purun, Hangzhou Purun and Purun No. 1, is Lu Chunquan.
According to public information, Lu Chunquan previously served as an associate professor in the accounting department of Chinese People's University, and subsequently served in the China Securities Regulatory Commission and the State Electricity Regulatory Commission; since 2015, Purun Capital has been established, and its investment direction includes new energy and new materials and other industries.
According to a previous report by the "Enterprise Observer", Lu Chunquan once introduced the Yinlong project to Dong Mingzhu and others. Before the transaction, the "Purun system" enterprises held a total of 96,920,500 shares of Gree Titanium, with a corresponding equity ratio of 8.78%; after the transaction, they no longer held Gree Titanium shares, and would "cash out" 363 million yuan through equity transfer.
Beijing Automobile Guangxing Information Technology is a 100% subsidiary of Jingdong Century Trading, with Liu Qiangdong as the legal representative, holding 21.12 million shares of Gree Titanium, behind Chuangzhi Liancheng is CIMC Group, holding 16.4677 million shares, and behind Beijing Honghang is Wang Jianlin, holding 41.1692 million shares. All the shares held by the three companies participated in the transaction, and finally completely withdrew from Gretitanium.
Previously, in 2016, Gree had planned to acquire Yinlong by issuing shares at a price of 13 billion yuan. However, the acquisition was opposed by Gree's board of directors, and finally ended with Dong Mingzhu inviting Wang Jianlin and Liu Qiangdong to raise 3 billion yuan to invest in Yinlong New Energy.
In 2018, Dong Mingzhu publicly said, "After joining Yinlong, I only knew how big Yinlong's hole was in the later stage, and it was really hard in the past year." ”
In 2021, Gree finally auctioned 30.47% of Yinlong's equity for 1.828 billion yuan to become the controlling shareholder, and in November of the same year, Yinlong changed its name to Gree Titanium.
At the shareholders' meeting in June this year, Dong Mingzhu still said that "this pit is too big, and we will fill in the pit (of Gretitanium) as soon as possible."
According to public information, in December 2016, Dong Mingzhu, Wang Jianlin, Liu Qiangdong, CIMC and other five investors invested a total of 3 billion yuan and obtained 22.39% of the equity of Gree Titanium.
According to this calculation, the valuation of Gree Titanium by Dong Mingzhu and other investors at that time was about 13.39 billion yuan.
Judging from the latest announcement that Gree can acquire 24.54% of Gree Titanium's equity with only 1.015 billion yuan, Gree's valuation has dropped to about 4.138 billion yuan, that is, three discounts.
Combined with the 3.731% equity transfer of Beijing Red Airlines actually controlled by Wang Jianlin and the 2.239% equity transfer of Beijing Automobile Guangxing actually controlled by Jingdong announced by Gree, the investment of these two companies in Gree Titanium may have a floating loss of about 345 million yuan and 207 million yuan respectively.
In addition to Purun, Wang Jianlin, CIMC and JD.com, the 12 shareholders also include Zhuhai Cold Spring, Zhuhai Tuojin, Hengqin Yongrun, Jinshi Haowei, Yuanchequanfeng and Hengqin Bullet.
Among them, the cold spring system, the Tuojin system, and the Hengqin department are all professional investment institutions, while behind Yuanche Quanfeng is Sino-Ocean Holdings Li Guoju, and behind Jinshi Haowei is CITIC Securities.
It should be noted that Gree said in the announcement that in addition to the 271 million shares held by the above 12 shareholders, the company will continue to communicate with other Gree shareholders about the transfer of Gree shares held by them, which involves no more than 27.53% of the total share capital of Gree Titanium. It is estimated that if Gree Electric buys back, it will hold 100% of the shares of Gree Titanium.
Nearly 62 times premium acquisition
What is the intent?
In the view of senior industry observer Major General Ding, the withdrawal of these 12 shareholders from the list of shareholders of Gree Titanium is related to the different views of different enterprises on the new energy industry and the phased needs of their own operations.
"Gree Titanium's current technical characteristics in the lithium titanate industry and the actual operating pressure of Gree Titanium need to be comprehensively considered for shareholders. He noted.
Hong Shibin, an observer of the household appliance industry, believes that the investment logic of shareholders such as Wang Jianlin and Jingdong is fundamentally different from the investment logic of Dong Mingzhu and others, "They mainly invest in return on investment, and Gree is mainly based on industrial investment." ”。
In his view, these two investment logics have led to the two results of different shareholders now "withdrawing" and "increasing holdings" of Greti, "new energy is a big outlet, as a future development trend will not change, there is no problem from the perspective of investment logic." ”
Hong Shibin believes that with the cooling of real estate, air conditioners and other household appliances have encountered development bottlenecks, and Gree urgently needs to find a second growth curve, and Gree titanium is an important part of its exploration.
"From the initial acquisition of Gree Titanium to the current increase in shares, although Gree Titanium has suffered serious losses and looks like a non-performing asset, it is still an important opportunity for Gree. He added.
According to the data of the "2022 Global Residential Air Conditioning Market Annual Summary Report" of AVC, the global household air conditioning market will sell 164 million units in 2022, a year-on-year decrease of 3.6%, and the omni-channel retail volume of the domestic air conditioning market will be 57.14 million units, a year-on-year decrease of 3.3%.
In fact, in 2021, Gree Titanium was acquired by Gree Electric Appliances to achieve consolidation, but its performance was unsatisfactory. Judging from the latest data disclosed in the announcement, in the first half of this year, Gree Titanium achieved revenue of 1.44 billion yuan, a year-on-year increase of 23.31%. The net loss still reached 177 million yuan, a year-on-year decrease of 74%, while in 2022, Greti's revenue will be 2.587 billion yuan and the net loss will be 1.905 billion yuan.
Hong Shibin believes that the biggest reason why Gree Titanium is not profitable at present is that the product logic and business path have not been passed, and the product has not been widely recognized by the market. ”
Major General Ding believes that in addition to Gree Electric's optimism about the new energy track, it is also related to the current low valuation of Gree Titanium. "At present, Gree Titanium is in a state of continuous loss, and the company's valuation has shrunk seriously compared with when Gree started, so at this time to repurchase, Gree costs less and is more cost-effective. ”
However, the performance of the lithium titanate market is less than expected, in the view of Major General Ding, Gree titanium mainly produces lithium titanate batteries, but compared with lithium iron phosphate, ternary lithium and other technologies in the consumer model large number of applications, lithium titanate is more used in large buses and logistics vehicles, buses and other special vehicles.
(Image source: Caixin Data)
According to Caixin data, lithium carbonate (battery grade) has fallen to 99,500 yuan/ton, lithium hydroxide (battery grade) has fallen to 92,200 yuan/ton, and lithium titanate, of which the price of lithium carbonate has fallen to a new low in two years. From the perspective of market share, lithium iron phosphate and ternary lithium batteries still occupy the mainstream of the new energy market, and lithium titanate relatively does not have an advantage.
According to the statistics of the China Automotive Power Battery Industry Innovation Alliance, in the first half of 2023, the production and sales of power batteries in mainland China will reach 293.6GWh and 256.5GWh respectively, an increase of 36.8% and 17.5% year-on-year, respectively.
Major General Ding believes that in the medium and long term, if Gree Titanium can continue to cultivate in the new energy track through technological innovation and customer expansion, and expand its business layout to more consumer-grade new energy models, it will be of far-reaching significance to Gree's diversified development and the cultivation of the second growth curve.
"However, in the short term, Gree Titanium's operation is still under great pressure, and if it cannot be improved rapidly, it will drag down the performance of Gree Electric. He noted.
In the future, from the perspective of performance improvement, it should rely on Gree's brand pull, channel resources, government and enterprise customer resources, etc., on the basis of maintaining technological innovation, to develop a broader consumer vehicle new energy market. He said.
Hong Shibin pointed out that if Gree Titanium wants to grow in performance, it should first solve the product problem, "To make the product, to gain market share, and finally to the user, there is the possibility of profitability." ”
Judging from Gree's latest performance forecast, it is expected that the company's net profit attributable to the parent company in 2023 will be 27 billion yuan to 29.3 billion yuan, a year-on-year increase of 10.2%-19.6%, and the total operating income will be 205 billion yuan to 210 billion yuan, compared with 190.151 billion yuan in the same period last year.
This performance forecast also exceeded market expectations, after the market generally expected the total revenue of Gree Electric Appliances to be 204 billion yuan, and the net profit attributable to the parent company was 27.085 billion yuan.
For example, the performance of Gree Titanium announced by Gree, from the perspective of net profit, Gree Titanium has not yet come out of the quagmire of losses. In the face of the situation of investors "voting with their feet", is Gree titanium a good medicine to increase the weight of new energy, or is it an asset package that drags down the development of Gree? The answer to this question still needs to be answered by Gree with time and performance.
Produced by | Sohu Finance
Author | Li Baoming
Operations Editor | Xue Suwen
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