On the afternoon of February 28, the first extraordinary general meeting of Gree Electric Appliances (000651, SZ) in 2022 was held at the headquarters of Gree Electric Appliances in Zhuhai as scheduled. The reporter of “Daily Economic News” learned at the scene in Zhuhai that Dong Mingzhu was successfully re-elected as the 12th non-independent director of Gree Electric with a high pass rate. It will also mean that Dong Mingzhu, 68, will start her next three-year term as chairman at Gree Electric Appliances.
In the investor exchange session of the shareholders’ meeting, Dong Mingzhu talked about the challenges faced by the home appliance industry in the past year. She said that the impact of the real estate market is not the most important, and the price increase of raw materials since last year has indeed put pressure on enterprises. Despite the challenges, Dong Mingzhu said that she is still very confident, and this confidence comes from Gree’s team and Gree’s diversified business coverage. “In addition to air conditioners, all categories of Gree ice washing and household appliances have been covered, and it is also at the harvest stage.”
Dong Mingzhu also revealed that Gree Electric’s current major business sectors do have plans to spin off and go public, but “we are not listing for the purpose of misappropriating money. The purpose of (splitting) listing is to shape the brand value of our own category classification.”
Talking about new energy batteries, Dong Mingzhu said: “If we succeeded in acquiring (Gree Titanium) at that time, the industry has already done a lot. We delayed ourselves. But it is not too late.”
On the evening of the 28th, Gree Electric announced that the board of directors elected Dong Mingzhu as the chairman of the twelfth board of directors of the company, and the term of office is the same as that of the twelfth director of the company.
“We are very confident in the first half of the year”
On the afternoon of February 28, 41 shareholders from all over the country came to the headquarters of Gree Electric Appliances in Zhuhai. The extraordinary general meeting of shareholders reviewed eight proposals including the “2021 Interim Profit Distribution Plan” and “Proposal on the Election of the Board of Directors and Nomination of Non-Independent Directors”, which are related to the re-election of the board of directors of Gree Electric Appliances, so it also attracted many investors. Come to the meeting.
The “Daily Economic News” reporter learned at the scene that the eight proposals reviewed this time have all been reviewed and approved. Dong Mingzhu was elected as a non-independent director of Gree Electric with a high pass rate, and the other four non-independent directors were Zhang Wei, Deng Xiaobo, Commander Zhang and Guo Shuzhan.
On the same day, Dong Mingzhu, chairman and president of Gree Electric Appliances, and other directors, supervisors and senior executives also attended the extraordinary general meeting. In the question-and-answer session of investors, investors first paid attention to the performance pressure faced by Gree Electric. In June last year, Gree Electric released the first phase of the company’s employee stock ownership plan, which mentioned that the company’s performance assessment requirements for Gree Electric’s equity incentive plan are that the net profit attributable to the parent in 2021 and 2022 should be higher than the base in 2020. The growth rate is not less than 10% and 20% respectively. Under the pressure of external changes in 2022, whether there is pressure on Gree Electric to achieve the above-mentioned performance has become a concern of investors.
Dong Mingzhu said frankly that the pressure brought about by external changes in the past two years is believed to be felt by everyone from different angles and positions, and home appliance companies bear the brunt of this pressure – first, changes in the real estate market, followed by raw materials price increase. “I don’t think the changes in real estate are important. The more important thing is the price increase of materials. The price of some materials has increased by 50%, and even the price of some materials has increased by 100%, which really puts pressure on us.” Dong Mingzhu said, “Even if we don’t increase the price of our products, we can’t cut corners. This is where our real pressure lies. How to ensure the quality is also the integrity that Gree has insisted on for so many years.”
Despite the challenges, she is confident. “Our team is getting more and more sound, and our senior management team does not have the phenomenon of ‘laying flat’, and the senior executives are not condescending or self-righteous.” In addition, Gree Electric now has not only air conditioners, but also ice washing and household appliances. When all categories are covered, these categories have reached the harvest stage, which is very promising.
Dong Mingzhu also said that in the diversification of Gree, mobile phones must also be made. “I believe that perseverance will definitely pay off. I am still very confident about how to harvest it. (It’s just) to have time to settle. Gree’s mobile phone is not to grab a share of the mobile phone market, but to make a plan based on the layout of the entire home appliance. .”
In addition, Gree Electric’s nucleic acid vehicles have been launched in many provinces across the country, and the energy storage market in which Gree Titanium is located is also very large.
“Gree’s production line has been fully covered, not just a single air conditioner. If Gree still only has a single air conditioner, it may be a dead end now, and there is no chance. But now on the contrary, Gree’s production line is full of people from all over the world. The demand in the field is particularly large.” Dong Mingzhu said.
“It is true that the price increase of raw materials has exceeded our expectations since last year. I think the most critical issue now is not the issue of raw material price increases, but the issue of technological upgrading of products.” Dong Mingzhu told the investors present, “In the first half of the year, we have Confidence, we will observe according to the situation in the second half of the year.” She also emphasized that as long as there is continuous innovation, there is always hope. There are difficulties every day, the key is how to face them.
Image source: Visual China
Its business sector does have plans to spin off and go public
On the afternoon of February 28, Dong Mingzhu made it clear at the extraordinary general meeting that several major sectors of the company do have plans to spin off and list, such as motors, equipment and other sectors. She also emphasized that the spin-off and listing is not for the purpose of making money, but to shape the brand value of her own category.
Dong Mingzhu said that after the spin-off and listing, Gree will not pursue a high market value too much, “because our purpose is not to make money, but to build our own brand.”
The reporter learned that Gree Electric has sorted out the company’s business sectors in its 2020 annual report. The company’s subsidiaries include household appliances and industrial equipment. Among them, the field of household appliances includes 5 sectors of household air conditioners, HVAC equipment, household appliances, refrigerators and washing machines, and industrial products; in the field of industrial equipment, Gree Electric has intelligent equipment, precision molds, renewable resources, semiconductors, new energy, medical and health 6 a plate.
“As for the equipment, we have gradually entered a stage of development. Forging, we have also quietly done it.” Dong Mingzhu said.
It should be noted that among the new independent directors of Gree Electric, Zhang Qiusheng is an expert in the field of mergers and acquisitions. This time, his joining Gree Electric has also sparked investor speculation about whether Gree Electric will have more mergers and acquisitions in the future.
In this regard, Dong Mingzhu said that the responsibility of independent directors is more to supervise listed companies, help enterprises, promote the development of enterprises, and supervise and regulate operations. She hopes that the four independent directors can help Gree Electric make better strategic planning and decision-making from different perspectives. In terms of restructuring, I also hope that Zhang Qiusheng will provide more and better help for Gree Electric.
“I have always advocated that our shareholders really use an investment mentality to recognize Gree. I absolutely do not agree with using a speculative mentality to make stocks. This is why we have made a three-year profit distribution plan this time. We still hope to use the market in exchange for benefits , using the market to exchange returns for investors.” Dong Mingzhu said.
Talking about Gree Titanium, Dong Mingzhu told investors that Gree Electric has been sticking to it for a long time and has seen the expected situation – the market’s brand recognition of Gree Titanium. She believes that energy storage is a huge market, not only for engineering and power systems, but also for every household in the future. For example, in a flood, when the household is cut off from water and electricity, the refrigerator cannot work, and energy storage equipment is needed. In her opinion, the advantage of Gree-Ti’s new energy battery is that it has a service life of 30 years and will not explode at high temperatures.
Regarding investors’ doubts about Gree Electric’s investment in Gree Titanium, she said that after Gree Electric’s shareholders meeting rejected the acquisition of Gree Titanium, Gree Electric still wanted to buy shares because it encountered a very good acquisition opportunity. The debt problem of the original shareholders of Greeti led to the judicial auction of Greeti’s equity. “1.8 billion, it may not even be able to build a factory building. I think it is very valuable. It is the best time (to acquire).”
“At the next shareholders meeting, we should be able to speak with (Greti’s) performance. It’s not yet that time.” Dong Mingzhu said. She told investors that, in her opinion, the most important and essential thing about batteries is safety. “Technology is about continuous innovation, and our bottom line is to ensure safety. Gree Electric focuses on technological innovation, and I think (lithium titanate battery) is very promising.”