Dong Mingzhu took the initiative to throw out a 6 billion repurchase for the first time, what did she smell?

The pattern of Sister Dong is not comparable to that of ordinary gentlemen!

Just after the uproar of Gree’s report on Oaks, Dong Mingzhu, chairman of Gree Electric, immediately threw out a 6 billion repurchase plan. On April 12, Gree Electric announced that the company plans to use its own funds to repurchase the company’s shares in a centralized bidding transaction, with a total capital of not less than 3 billion yuan (inclusive) and not more than 6 billion yuan (inclusive); the price of repurchase shares No more than 70 yuan per share, and the repurchased shares will be used for employee stock ownership plans or equity incentives. It is worth noting that this is the first repurchase in the history of Gree Electric.

Before that, Gree Electric’s old rival Midea Group had launched a repurchase plan. The announcement on the evening of April 1 showed that as of March 31, the company had repurchased 14,265,100 shares in a centralized bidding method through the special securities account for repurchase, accounting for 0.20% of the company’s total share capital as of March 31, and the highest transaction price. It was 54.18 yuan per share, the lowest transaction price was 46.30 yuan per share, and the total amount paid was 701 million yuan (excluding transaction fees). Previously, Midea Group announced that the proposed repurchase price is not more than 65 yuan per share, and the number of repurchases is not more than 80 million shares and not less than 40 million company shares.

According to the 14th week of 2020 (March 30-April 5) of Aowei Cloud Network (AVC), the domestic household appliances all categories and omni-channel market express data, refrigerators, freezers, washing machines, dryers, color TVs and kitchen appliances are in one At the end of the quarter and the beginning of the second quarter, the retail sales of online channels have seen a year-on-year increase, and the market is gradually recovering, but the retail sales of air-conditioning offline and online channels still both fell year-on-year, with a drop of 86.97% and 22.42% respectively. It shows that the air-conditioning industry has not yet eased from the impact of the epidemic. So, what did Dong Mingzhu see and dare to buy back shares at this position? Analysts believe that the answer may lie in real estate or the market.

Dong Mingzhu’s great work

Gree Electric announced on the evening of April 12 that the company had issued a notice on the convening of the tenth meeting of the eleventh board of directors by email on April 7, 2020, and the meeting was voted on by correspondence on April 10, 2020 way to hold. The meeting was presided over by the chairman, Ms. Dong Mingzhu.

Dong Mingzhu took the initiative to throw out a 6 billion repurchase for the first time, what did she smell?

The meeting reviewed and approved the “Proposal on the Repurchase of Partial Public Shares”. The method of this repurchase is to repurchase the company’s shares through centralized bidding transactions through the Shenzhen Stock Exchange trading system, and the repurchased shares will be used for implementation Company equity incentives or employee stock ownership plans. If the company fails to implement the above-mentioned purposes within 36 months after the completion of the share repurchase, the unused part will be cancelled by performing relevant procedures.

The proposed repurchase price does not exceed RMB 70 per share, and does not exceed 150% of the average stock trading price in the 30 trading days before the repurchase resolution of the board of directors. The specific repurchase price will be based on the company’s secondary market stock price, The company’s financial and operating conditions are determined. The total amount of funds used by the company for repurchase shall not be less than RMB 3 billion (inclusive) and shall not exceed RMB 6 billion (inclusive). . The source of funds for the repurchase is the company’s own funds.

Based on the upper limit of the total repurchase funds of RMB 6 billion and the upper limit of the repurchase share price of 70 yuan per share, it is estimated that the number of repurchased shares is about 85,714,285 shares, accounting for about 1.42% of the current total share capital of the company; according to the lower limit of the total repurchase amount of RMB Based on the calculation of 3 billion yuan and the upper limit of the repurchase share price of 70 yuan per share, it is estimated that the number of shares that can be repurchased is about 42,857,143 shares, accounting for about 0.71% of the current total share capital of the company; The number of shares repurchased shall prevail.

Just knocked down Oaks

In June last year, Gree Electric reported Oaks with its real name, pointing out that Oaks air conditioners had problems such as false energy consumption. On April 10, the National Enterprise Credit Information Publicity System showed that on April 10, the Ningbo Municipal Market Supervision and Administration Bureau of Zhejiang Province issued an “order to correct” and “impose a fine of ten 10,000 RMB” administrative penalty decision. It can be said that Sister Dong just knocked down Oaks.

Ningbo Municipal Market Supervision and Administration Bureau stated that after investigation and random sampling of 14 models of air conditioners involving Oaks in the production field and distribution fields such as home appliance stores, specialty stores and e-commerce platforms, and commissioned a legally qualified inspection agency to conduct testing, Among them, the KFR-35GW/ZC+2 model air conditioner with the factory code of 114841001811201629 produced on November 20, 2018 and the indoor unit with the factory code of 017134001904031924 produced on April 3, 2019, the test result is the cooling power consumption 1138.3W, energy efficiency ratio 3.21W/W, energy efficiency grade 3, which does not match the information on its energy efficiency label.

According to the third paragraph of Article 73 of the “Energy Conservation Law of the People’s Republic of China”, “Where the energy efficiency label is used for false propaganda, the market supervision and management department shall order it to make corrections and impose a fine of not less than 50,000 yuan but not more than 100,000 yuan.”

At this point, some people in the market joked that Dong Mingzhu had run over and nothing would grow.

What opportunity did Dong Mingzhu smell?

According to data from Aowei Cloud, in the first quarter, offline sales of the entire air-conditioning industry fell by 62%, and online sales fell by 43%. Dong Mingzhu said in public that Gree Electric’s output value will grow negatively in 2020, and there will be basically no sales revenue in February. In the first quarter, Gree showed a downward trend in both sales volume and price. During the epidemic, the advantages of Gree’s large offline store system were not brought into play. Under such circumstances, Dong Mingzhu made a bold move. What opportunities did Dong Mingzhu smell?

Analysts believe that the opportunity may come from two aspects. First, the fall in stock price has given an opportunity to find bargains, and collecting chips at this time can also increase the right to speak at the shareholder level, and play a role in checking and balancing major shareholders to a certain extent; second, the first quarter may really be the darkest in the industry. time, the follow-up opportunities may be relatively large.

Data shows that this is the first time Gree Electric has repurchased. If the final repurchase ratio is calculated at 1.42% of the company’s total share capital, Dong Mingzhu may be able to check and balance the major shareholder Hillhouse Capital to a certain extent. On February 3, Gree Electric stated that the Gree Group agreed to transfer the shares and completed the transfer registration. Zhuhai Mingjun, a related party of Hillhouse, held 15% of the shares of Gree Electric, and was the company’s single largest shareholder. Gree changed hands for nearly a year. settled. Gree Electric’s 2019 third quarterly report shows that Hillhouse Capital Management Co., Ltd.-HCM China Fund is the eighth largest shareholder of Gree Electric, with a shareholding ratio of 0.72%. Adding up the two, Hillhouse controls 15.72% of Gree Electric.

Before that, Dong Mingzhu held a 0.73% stake in Gree Electric Appliances, plus an 8.91% stake in Hebei Beijing Hai Guarantee Investment Co., Ltd., which represented the interests of dealers to a certain extent, and the two controlled 9.64% of Gree’s stake. If the repurchase part is added, calculated according to the maximum proportion, the three will be added together, and the shareholding ratio will reach 11.06%.

In fact, if the repurchase is implemented at the current price, the repurchased shares may account for a larger proportion of the total share capital. The latest closing price of Gree Electric is 53.74 yuan. If calculated based on the 6 billion repurchase funds, the repurchase shares will reach more than 110 million shares, accounting for more than 1.8% of the total share capital. In this way, the combined shareholding ratio of the above three will be larger.

From an industry perspective, Guosheng Securities said that with the gradual reduction of the impact of the epidemic in various places, the decoration has gradually begun, and installers can also come to install. The second quarter will be a process of reducing the decline month by month. In the air-conditioning industry, including Greme and Haier, the price of special models has been raised since the beginning of April. Although Gree will have some promotional activities in April, it is expected that the overall price competition will be better than previously expected. In fact, Midea is also implementing a repurchase program.

What is more worthy of attention is that the real estate industry closely related to home appliances has also seen some increase in holdings. On March 31, Vanke announced that its partner Shenzhen Ying’an Financial Consultant (Limited Partner) purchased 65 million shares through the Shenzhen Stock Exchange’s block trading system, at a cost of 1.626 billion yuan, the transaction price was 25 yuan per share, and the shareholding ratio 0.58%. The Guosen Securities – Industrial and Commercial Bank of China – Guosen Jinpeng Graded No. 1 Collective Asset Management Plan and Guosen Jinpeng Graded No. 2 Collective Asset Management Plan subscribed by Ying An Partnership held a total of 495,934,792 A shares of the company, accounting for 4.39% of the company’s total share capital. So far, through direct and indirect means, Ying’an Partnership holds a total of 4.97% of Vanke’s equity, approaching the line of holding the card.

The data shows that the monthly sales of the top 100 real estate companies improved significantly in March, and Vanke, Shimao and Jinke performed relatively well. In addition to Vanke, Shimao shares and Jinke shares have also increased their holdings. What is more noteworthy is that there have been some signs of optimization of real estate policies in many places recently. For example, Shanghai supports the reasonable financing needs of real estate companies, Qingdao’s five-year sales restriction has changed to two years, and Shenzhen has even seen real estate in seconds. It is a rule that the real estate market is improving, and the home appliance market is following the trend.

In fact, for the market, Gree and Vanke are buying stocks at the same time, which needs special attention. Both companies faced the “barbarians” together in those years, and both won. The game strength displayed by the two companies should not be underestimated. In addition, when the market was sluggish a few years ago, Vanke Yuliang used his annual income to increase his holdings of Vanke. At that time, Vanke was only six or seven yuan. Taken together, in the current situation, the phenomenon of two companies buying stocks at the same time becomes more meaningful.

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