Gree’s Third-Quarter Net Profit and Operating Income Falls More Than 15%

Chinese electric appliance giant Gree announced its results in the first three quarters of 2021 on Tuesday. The report shows that the company achieved operating income of 47.08 billion yuan ($7.4 billion) in the third quarter, down 16.5% year-on-year, while its net profit was 6.18 billion yuan, down 15.66% year-on-year.

In 2020, Gree’s revenue in the third quarter was 56.387 billion yuan, a significant increase of 14.82% from the previous quarter. The reason for the increase may be that the epidemic in China was better controlled and pent-up consumption demand in the first two quarters broke out. But this year, the performance of Gree has regressed in the peak sales season.

In the first three quarters of this year, Gree achieved operating income of 138.13 billion yuan, a year-on-year increase of 9.73%. Net profit was 15.64 billion yuan, a year-on-year increase of 14.2%.

Gree added more than 170,000 retail shareholders in the third quarter, making the total number of shareholders amount to 887,991.

In terms of changes in shareholding, Gree’s second largest shareholder Hong Kong Securities Clearing Company Ltd., holds 821 million shares, 200 million shares less than that in the mid-year financial report. The shareholding of Central Huijin Investment Ltd. decreased to 40.048 million shares. In addition, the Abu Dhabi Investment Authority, which manages the state-owned assets of UAE, recently bought 25.42 million shares, becoming the tenth largest shareholder of Gree.

One of the company’s assessment indicators for its first employee stock ownership plan released in June is that the net profit in 2021 will increase by not less than 10% compared with 2020, and the cash dividend per share for the year will be not less than 2 yuan or the total cash dividend will not be less than the net profit for the year. Previously, many investors had commented that this goal “looks conservative” and should be easy to achieve.

If Gree wants to achieve the target, the company needs to achieve revenue of about 47 billion yuan in the fourth quarter of this year. However, its revenue in the fourth quarter of last year only reached 42.3 billion yuan. Gree is under great pressure to implement the employee stock ownership plan.

SEE ALSO: China’s Electric Appliance Giant Gree to Introduce Huawei’s HarmonyOS

Everbright Securities recently released a research report, pointing out that the home appliance industry is facing great difficulty this year. Reasons behind the sector’s poor performance include the increase in price of raw materials, poor income growth amongresidents and the lack of demand for household appliances due to the epidemic.