announcement shows that as of July 31, 2021, the company's third phase repurchase plan has repurchased approximately 202 million shares of the company through a centralized bidding through a special securities account, accounting for 3.3584% of the company's total share capital as of July 31, 2021. The highest transaction price is 56.11 yuan/share, the lowest transaction price is 46.16 yuan/share, and the total amount paid exceeds 10.069 billion yuan (excluding transaction fees).
Red Star Capital Bureau noticed that since April 2020, Gree Electric Appliances has repurchased shares three times, which has exceeded 22 billion yuan.
However, while spending huge amounts of money to repurchase shares, the stock price of Gree Electric Appliances continues to be sluggish. As of the close of August 6, it was 47.74 yuan per share, which was a significant decline compared with the highest price of 69.79 yuan per share on December 2 last year.
share price has fallen all the way
three repurchases
cost more than 22 billion yuan, and has become the "repurchase king"
On April 13, 2020, Gree Electric Appliances issued an announcement stating that it will use its own funds to repurchase the company's shares through centralized bidding transactions. The type of repurchased shares is the A-share shares issued by the company, with the total amount of funds not less than 3 billion yuan (including) and no more than 6 billion yuan (including), and the repurchased shares price shall not exceed 70 yuan per share.
announcement revealed that based on the maximum repurchase funds of RMB 6 billion, the number of repurchasable shares is expected to be approximately 85,714,285 shares, accounting for approximately 1.42% of the company's current total share capital; based on the minimum repurchase funds of RMB 3 billion, the number of repurchasable shares is expected to be approximately 42,857,143 shares, accounting for approximately 0.71% of the company's current total share capital.
was stimulated by the repurchase news, and the stock price then rose all the way.
In October 2020 and May 2021, Gree Electric Appliances successively issued share repurchase announcements.
According to calculations, the three repurchases of Gree Electric Appliances cost more than 22 billion yuan, and has become the well-deserved "repurchase king" of A-shares.
As for its purpose, Gree Electric Appliances revealed in the announcement that it will be used to implement the company's employee stock ownership plan or equity incentives. Gree Electric Appliances Chairman and President Dong Mingzhu told the media at the 2020 Annual Shareholders' Meeting that Gree 's equity incentives are different from those of other companies. "Our equity incentives are to tie employees to enterprises, which is an innovation in the equity incentives of listed companies. (Employees participating in the stockholding plan) can only conduct equity transactions when they retire. If they leave Gree in the middle, the equity will be taken back."
However, professional investor Cheng Yu and industry observer and senior home appliance industry analyst Ding analyzed in an interview with the Red Star Capital Bureau that this move is more important to support the stock price and establish confidence in the long-term and stable development of Gree Electric Appliances .
stock price fell
has reached Hillhouse cost line
However, in the view of the above two people, the effect of this round of repurchase is very little.
Red Star Capital Bureau noticed that on October 10 last year, after Gree Electric Appliances announced the second share repurchase plan, its stock price rebounded.
data shows that on October 10 last year, the Gree Electric Appliances 's opened at 's share price of was 54.75 yuan per share. On December 2 last year, the share price reached its highest point of 69.79 yuan per share. Since then, its stock price has been in a correction. At the same time, since 2021, the cumulative share price of Gree Electric Appliances has fallen by more than 20%, and the closing price on August 6 was 47.74 yuan per share.
In this regard, Major General Ding told the Red Star Capital Bureau that although the repurchase stock price can stimulate the stock price in a short period of time, whether the stock price rises has no decisive connection with the repurchase of stocks. "The medium and long term still depends on its performance and whether the transformation is successful."
Currently, Gree's stock price has approached Hillhouse's cost line. It is understood that as early as 2019, Gree Electric Appliances launched mixed reform, and Hillhouse spent 41.662 billion yuan to acquire 215% of Gree Electric Appliances html (the transfer price per share is RMB 46.17).
"We have also studied this in depth."Kuang Yuqing, founder of Lens Company, revealed in an interview with the Red Star Capital Bureau that at the end of 2019, Zhuhai Mingjun took over 15% of Gree's equity (902 million shares) from Zhuhai State-owned Assets for a price of 41.662 billion yuan and became Gree's largest shareholder, Zhuhai Mingjun's own funds were only 19.8 billion yuan, and the rest of the funds were bank loans. "Zhuhai Mingjun needed to borrow about 20 billion yuan from the bank to complete this transaction. At the same time, shortly after the completion of the "mixed reform", Zhuhai Mingjun announced that he would pledge all of his Gree Electric Appliances shares to China Merchants Bank . "Kuang Yuqing analyzed to the Hongxing Capital Bureau that, from the public information, this is a typical equity pledge financing: Zhuhai Mingjun used 902 million shares of Gree Electric Appliances as a pledge, and borrowed about 20 billion yuan from the bank. This amount may set a record for the highest level of similar financing in the A-share market.
Kuang Yuqing revealed that once the market value of 902 million shares of Gree held by Zhuhai Mingjun fell below 41.6 billion yuan, the book investment will suffer a floating loss on the books. At the same time, the day when Hillhouse, the investment behind Zhuhai Mingjun officially completed the transfer was January 23, 2020. It has paid dividends three times so far, with a total dividend of 5.2 yuan per share, and the current "loss line" is 40.99 yuan (i.e.: 416.62 RMB 100 million/902 million shares - 5.2 yuan/share = 40.99 yuan/share). From the current stock market, the stock price is getting closer and closer to Hillhouse's "loss line".
In addition, Kuang Yuqing revealed that although Gree Electric Appliances and Hillhouse have not disclosed the "closing line" to the public, theoretically - according to the general industry operation practices of equity pledge financing, if the pledge market value is lower than 1.3 times the financing amount, it will generally be forced to close the position. "Theoretically, as long as the market value of its pledge target falls to around 26 billion yuan, that is, when the stock price reaches 28.82 yuan/share (i.e.: 26 billion/902 million shares), pledge may forcefully close the position. "
Gree and Hillhouse
Are they "trust" with real money and silver
However, for Hillhouse, Dong Mingzhu, chairman of Gree Electric Appliances , has supported many times.
At this year's shareholders' meeting, in response to the impact of investor Hillhouse's entry into the stockholders will bring to the development of Gree Electric Appliances , Dong Mingzhu responded, "The biggest impact is that we trust our senior management team, and trust itself is a kind of support. Hillhouse supports our entire team very much. Conversely, because we are respected by others, we should respect others more. Our only respect is to build a good company. In fact, we are not only responsible for Hillhouse but also for all shareholders. For example, the dividends we give to shareholders are goals that our employees can achieve by working hard. ”
At the same time, at the Global Mulan Forum and the 2021 (13th) China Business Mulan Annual Meeting, Dong Mingzhu also said, "The tacit understanding between us and Hillhouse is also an invisible force. "
In this regard, Cheng Yu believes that although Dong Mingzhu supports Hillhouse, whether Hillhouse wants to "verify" Dong Mingzhu with real money and silver losses depends on the real relationship between the two. In Cheng Yu's view, "If Gree Electric Appliances cannot get rid of the current dilemma as soon as possible, Hillhouse will escape sooner or later. "
Public information shows that Gree Electric Appliances , established in 1991, was formerly Zhuhai Haili Air Cooling Engineering Co., Ltd. In 1991, it was reorganized into "Zhuhai Gree Electric Appliances Co., Ltd.". In 1996, the company was listed on Shenzhen Stock Exchange , which is affiliated with Gree Group . At present, the company owns three major brands: Gree, TOSOT, and Jinghong, and mainly sells household air conditioners, central air conditioners, air energy water heater , mobile phones, household appliances, refrigerators and other products.
According to the first quarter report of 2021 released by Gree Electric Appliances , the company achieved operating income of 33.189 billion yuan during the reporting period, a year-on-year increase of 62.73%. The net profit attributable to shareholders of listed companies was 3.443 billion yuan, a year-on-year increase of 120.98%. However, this growth is largely due to the company's short-term performance pressure due to the impact of the new crown epidemic in the first quarter of 2020.
At the same time, in the home appliance industry, companies such as Midea have developed rapidly. As the former "overlord" of air conditioners, its status has been shaken.
Subsequently, Gree Air Conditioner began to promote diversification of industrial structure, test the waters of live streaming to promote sales channel e-commerce, and implement equity incentives for repurchasing equity. However, from the moment, the results are not obvious.
So, we will wait and see how the future development of Gree Electric Appliances will be.
Red Star News Reporter Li Weiming Li Chen
Edit Yang Cheng
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