Gree Electric’s Share Buyback Plan Accelerates Value Enhancement Strategy

Technology, Industrials, Financials Author: Yuehan Li Editor: 陈迪 Nov 01, 2023 08:30 AM (GMT+8)

Gree Electric Appliances Reports 8.5% Growth in Q3 Net Profit, Dong Mingzhu Proposes Up to CNY 3 Billion Share Buyback.


Chinese electric appliance leader, Gree Electric Appliances (000651:SZ) unveiled its Q3 2023 financial figures on October 30, indicating a resilient performance. During the quarter, the company achieved an operating income of CNY 55.771 billion, marking a substantial 6.7% upswing from the previous year. Notably, the net profit attributable to the company's listed shareholders soared to CNY 7.419 billion, showcasing an impressive 8.5% surge. With earnings per share reaching CNY 1.32, the company continues to deliver robust financial results.

Across the first three quarters of this year, Gree Electric Appliances demonstrated steady growth, racking up CNY 155 billion in operating revenue, which is a solid 5.1% rise when compared to the same period last year. Furthermore, the net profit attributable to shareholders of the listed company reached CNY 20 billion, reflecting a substantial growth rate of 9.77%.

In a strategic move, Gree Electric Appliances initiated a share buyback program aimed at bolstering equity incentives and employee stock ownership plans. The program entails a total repurchase amount ranging between CNY 1.5 billion and CNY 3 billion, with a maximum buyback price set at CNY 50 per share. This initiative is expected to extend over a period of up to 12 months, subject to approval by the board of directors.

Chairman and President of Gree Electric Appliances, Dong Mingzhu, has put forth a proposal to implement the fourth phase of the share repurchase program. This innovative step seeks to reduce the company's registered capital while boosting equity incentives and employee stock ownership plans. The ultimate goal is to enhance long-term shareholder returns and establish a sustainable incentive mechanism for the management team. Such a move will bring about the alignment of interests between employees and shareholders, thus augmenting the overall value of the company.

Importantly, Gree Electric Appliances remains dedicated to providing value to its shareholders. Over the years, the company has consistently distributed profits through cash dividends and share repurchases. Since its listing in 1996, Gree Electric Appliances has successfully raised CNY 5.269 billion in equity financing. Remarkably, dividends totaling over CNY 139 billion have been disbursed, with cash dividends surpassing CNY 110 billion, and share repurchases totaling approximately CNY 27 billion. Impressively, the company's historical dividend rate has exceeded 62% of the net profits ascribed to shareholders.

Since 2020, Gree Electric Appliances has actively repurchased approximately 525 million of its own shares and invalidated around 384 million shares. As of October 30, the stock was trading at $0.75, experiencing only a marginal decline of 0.5%. Gree Electric Appliances continues to assert its position as a leading force in the Chinese home appliance industry through consistent expansion and a proactive stock buyback strategy.