The market value of Gree, the domestic appliance industry giant, has shrunk, which is 50% behind the competition of Midea. Now it is difficult to conceal the downward trend of share price with a 27 billion repurchase of shares. What happened to Gree?
The market value of is less than half of Midea
On September 15 this year, the share price of Gree Electric continued to fall, once per share fell below 40 yuan, a drop of 2.29%, and in the previous three days, Gree also announced that it has passed three rounds of stock repurchases.
It is understood that the company’s recent repurchase bought 316 million shares, accounting for 5.25% of the company’s total share capital. Starting from the second quarter of 2020, Gree has started a stock repurchase plan. So far, three phases have been completed, and 's cumulative repurchase amount has reached RMB 27 billion.
Friends who know the stock market will know that the high probability of every company buying back shares is that the company's development status is favored by investors, and the stock price can be increased through buybacks. Gree's three large-scale buybacks have not only failed to achieve a stock price rebound. Instead, it dropped from 65.25 yuan at the end of 2020 to 39.29 yuan today.
As of September 17 this year, Gree's market value is 229.8 billion yuan, while the market value of Midea is 460.4 billion yuan, a gap of about 50%.
Gree has always been a rival in the field of air-conditioning manufacturing. Even the development of Midea is comparable to its own. Why is there such a large market value contrast now?
Net profit fell by 31.22%
In fact, in response to Gree’s stock price and market value, some professionals said,The repurchase of shares by a company is actually conveying business confidence to investors, and has nothing to do with the actual operating conditions of the company. The final rise or fall of the stock price is determined by the company's actual receivable performance.
So what was Gree's performance in the first half of this year? The first is the revenue performance. Gree's total revenue in the six months was 91.05 billion yuan, the growth rate increased to 31.01%, and the net profit was 9.46 billion yuan.
Although Gree is an improvement compared to 2020, Gree’s revenue and net profit were 97.3 billion and 13.75 billion as early as 2019, which is not a small gap compared with the present.
In this way, Gree’s revenue actually fell by 6.44%, and its net profit was also reduced by 31.22%.
Of course, it is normal for the stock price to fall after the repurchase plan. As long as Gree’s capital chain is not broken and there is sufficient cash flow to support the business, the stock price may continue to rise in the long run.
It’s not just Gree’s problem. Financial giants like Ping An also showed a downward trend in the stock price. As of September 15 this year, Ping An’s stock price fell below 50 yuan, a cumulative drop of 42.07%.
Therefore, it is normal for companies with large scale of operations and frequent cash flow to experience short-term operating fluctuations and stock price declines. After all, Gree has also improved its operating level from 2020. There is still hope to continue to follow in the air-conditioning field in the future. Midea launches competition for status.
However, in the face of Gree's temporary predicament, its founder Dong Mingzhu did not appear to be so nervous, but devoted himself to the manufacture of Gree's mobile phone brand.
Gree mobile phone new product exposure
On September 11 this year,A well-known social platform blogger announced a photo of Gree’s mobile phone entering the Ministry of Industry and Information Technology. This white-panel mobile phone uses a hole-digging straight screen design. The news also said that the mobile phone’s processor is Snapdragon 870, and the display screen size is 6.67 inches.
The selfie lens is 8 million pixels, the main lens is 64 million pixels, the battery specification is 4200mAh, and the total body weight is 190 grams. The new information displayed by the Ministry of Industry and Information Technology also confirms this point.
In fact, Gree has a precedent for making mobile phones. Gree created its own mobile phone brand in 2015. Since then, it has been able to launch a new mobile phone every year, but the market share of Gree mobile phones in the market is still unsatisfactory after years of development.
Dong Mingzhu publicly stated that Gree will not give up the business and will continue to update Gree’s new products in the future, and in an interview, Dong Mingzhu said that making mobile phones is too easy, it is a matter of minutes. .
According to analysis by industry insiders, Dong Mingzhu continues to promote the development of the mobile phone business because he wants to build a smart home ecosystem based on home appliances, just like Huawei 's Hongmeng Ecologically the same.
I have to say that if Gree can achieve rapid improvement in its mobile phone business, it may really hope to create an ideal ecological environment with its own products in the future.
At present, Gree's market value and stock price are far away from Midea. It is still unknown whether it can regain its surpass in the future. At that time, what kind of development trend the domestic home appliance industry will show, let us wait and see the changes.
.
