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Gree is "in danger", the share price is "flying in the sky"

via:博客园     time:2019/4/22 9:59:29     readed:339


Author, Director of Tiger Smell Research, Eastland

On April 1, 2019, Gree Electric Appliances (00651. SZ) issued the Notice of Cessation of Major Matters. According to the Bulletin, the controlling shareholder, Gree Group, is planning to transfer part of its Gree Electric Equity, which may involve the change of control rights of the company.

After the resumption of trading on April 9, Gree Electric rose strongly. It closed at 65 yuan on April 19, 37.7% higher than the closing price on March 29 before the suspension, and its market value increased by 107 billion yuan.

Individual securities companies also significantly increased the target price of Gree electrical appliances. Huatai Securities Forest World

What else did researcher Lin say?

There are only two possibilities for the new owner of Gree Electric:

If is the former, Dong Mingzhu is really the master, Gree electric appliance performance will be better than before? In addition to selling air-conditioning, building air-conditioning, Dong Mingzhu in other areas of lacklustre. Mobile phones, new energy, chips.

If it was the latter, would Dong Mingzhu be willing to quit

Gree Electric is faced with great uncertainty, in the next three or five years, the performance of large fluctuations are inevitable, can be described asCatcher still

Dong Mingzhu and Fang Hongbo each got one point.

Dong Mingzhu and Zhuhai SASAC resentful past, please see tiger smell December 29, 2015 Japanese < dong="" mingzhu="" />

Fang Hongbo was born in 1967, 13 years younger than Dong Mingzhu. In 1992, he joined the American Group and began to be in charge of advertising, marketing and sales in 1995. Since 1997, he has been the Minister of Air Conditioning, CEO of the American Refrigeration Group and the Chairman and President of the American Group. It is almost at the same time that Dong Mingzhu began to dominate Gree Electrical Appliances.Dong Mingzhu and Fang Hongbo are just temporary Yoliang.

In 2012, Gree and America had revenues of 99.3 billion and 106 billion, the equivalent of 96.8 percent. Dong Mingzhu proposed

According to the situation of that year, if the revenue of Gree Electric Appliances reaches 200 billion in 2018, it will be expected to surpass the American Group and win the first prize in China's household appliances. Nowadays,Dong Mingzhu's dream has come to naught.

In the three years from 2012 to 2014, Gree's revenue almost catches up with that of the United States, but it is only two or three percentage points behind each year. In 2015, Gree Electric's revenue plunged by 40 billion yuan, falling back to the level of 2012. By 2017, Gree Electric's revenue had increased by 40 billion yuan to 148.3 billion yuan, but the group's revenue had reached 24.7 billion yuan, and Gree Electric was 92.4 billion behind.

In H1 in 2018, Gree's and Meili's revenue were 91 billion and 142.6 billion respectively, which corresponded to 63.8% of Meili's.


Gree's performance forecast shows revenue of 200 billion to 201 billion in 2018. According to the 2018 Annual Report released by the American Group on April 20, revenue in 2018 was 259.66 billion, about 30% higher than that of Gree.

Gree lost scale, but its profits exceeded those of the United States. Gree's earnings forecast for 2018 shows a net profit of 26 billion to 27 billion yuan. The annual report of the United States discloses that it will make a profit of 20.06 billion yuan in 2018. Grey is 30% higher than Mei.

The Diversification of Beauty is Relatively Successful

The U.S. leads in revenue, but there is still a gap between air-conditioning sales and Gree.

In 2012, US and Gree air conditioning sales were 51.5 billion yuan and 88.9 billion yuan respectively, equivalent to 58% of Gree. In H1 in 2018, sales of the two air conditioners were 63.9 billion and 75.8 billion, respectively, representing 84% of Gree's. In the whole year of 2018, air-conditioning sales in the United States amounted to 109.4 billion yuan, 14 billion less than in 2017. If you want to surpass Gree, you have to look at 2019.


Beauty starts from small appliances and gradually transits to walking on two legs of small appliances and air conditioning. The acquisition of Kaku Robots and Swans has enabled Mei to make great strides in robotics and washing machines.

By the end of 2017, American washing machines, refrigerators, microwave ovens, water heaters, rice cookers, water purifiers and other household appliances market share had entered the industry's top 3.


The reason why Gree lost the battle of scale was that diversification was unsuccessful and business outside air conditioning was not worth mentioning.

In 2015, Dong Mingzhu praised Haikou:

Another one of Dong Mingzhu

Dong Mingzhu's investment in Yinlong was first mistaken and did not show any improvement after the actual control of Yinlong in 2017. The facts show that Dong Mingzhu's vision and ability are poor except for selling and manufacturing air conditioners.

Mobile phone, two pots of rice for a car.

But the success of the diversity of beauty is only relative to the strength of the power, turn around and do not leave home appliances

Grey's Double Concerns

1) Expansion of receivables

Dong Mingzhu lost to Fang Hongbo, but in

The overstock means that the goods exceeding the market demand are overstocked in the warehouse of the distributor, and the cost of funds needs to be shared by Gree through negotiation with the distributor. Therefore, with the increasing pressure of goods, Gree's Book receivables and receivables will inevitably expand.

[口] though


In order to seek re-election and win the bet with Lei Jun, Dong Mingzhu needs a beautiful

Note: It is absolutely no coincidence that Gree's revenue in 2015 is 40 billion yuan lower than that in 2014 (a 29% decline), and accounts receivable and bills at the end of the year are 35.4 billion less than that in 2014.

2) Billions of cash

Net liquidity capital NWC (current assets minus current liabilities) is Graham's most concerned index, even the cornerstone of his life practice and theory.

In 2012, Gree NMC was 20% higher than Mei. After Dong Mingzhu took office, Gree NWC began to be significantly lower than the United States. By the end of June 2018, Gree and Merrill NWC were 32.8 billion and 48 billion respectively, 68% of which were beautiful, up 21 percentage points from the end of 2017.


Strangely, Gree NWC is far lower than the United States, but holds far more money than the United States. The purpose of cash holding is to meet the payment demand in the future: paying taxes, paying wages, purchasing energy, and settling accounts with suppliers according to contracts. The overwhelming majority of the above expenditures can be classified as revenue costs, with cash equivalent to three or four months'revenue costs on the books, plus sales returns, sufficient to deal with them.

Since 2012, US book cash has fluctuated between 9% and 30% of annual revenue costs, within a reasonable range. In Gree, however, in 2015 and 2016, book cash exceeded 130% of annual revenue costs, reaching 101.9 billion at the end of June 2018, which is estimated to be 73% of annual revenue costs. Although it has fallen, it is still on the high side.


Dong Mingzhu is on the book of Gree Electric Appliances.

If become Gree electric appliance actual control person, Dong Mingzhu must do a big job, do not know what astonishing action. Given the record of making mobile phones and leading Yinlong,

To sum up, Gree Electric faces two hidden worries: one is that after revenue reached 200 billion in 2018, the other is that Dong Mingzhu will bring great turbulence to Gree Electric no matter whether it is advanced or retreated. It is true that it will bring great turbulence to Gree Electric Appliances.

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