Tag Archives: gree

Home-appliance giants feel inflation pressures

Investors looking for signs of inflationary pressure in the global economy need cast their gaze no further than the world’s biggest makers of home appliances, several of which are based in Guangdong. According to local media, prices of TVs, washing machines, and aircon units has been rising steadily since the second half of last year and now, ahead of the big mid-year online shopping festival known as 6.18 (June 18), they are likely to rise further.

Data from the Aowei Cloud Network shows that in December last year, color TV sets sold online fetched an average of 2,569 yuan, up 27% year-on-year; washing machines were up 10.2%; and air-conditioning units were 2,947 yuan, a year-on-year increase of 19.3%. In the offline market, TVs were 4,717 yuan, up 21.5% year-on-year; washing machines were up 8.2%; and the average price of air-conditioning units was 3,837 yuan, up 9%.

Since then, home appliance manufacturers have issued notices of price increases. On January 12, TCL Home Appliances, part of the group that was founded in Huizhou, said alll refrigerators, washing machines, and freezers would see prices raised by 5%-15%. A month later, Midea, based in Foshan, said refrigerators would rise 10%-15%. Zhuhai-based Gree, has similarly been raising its own prices across the range of its appliances.

Raw material prices appear to be the main reason. According to data from the National Bureau of Statistics, the price of electrolytic copper in non-ferrous metals has risen from 4,4097.2 yuan/ton to 5,8931.3 yuan/ton to over 7,2253.1 yuan/ton.

Read more on SouthCN

GBA Briefs: 11/9/2019

Gree energy: Gree Electric boss Dong Mingzhu is finding time amid the bidding war for her company’s shares held by the city government to chair another joint-venture, this one involved in new-energy industries. Read more on Yicai Global.

Keep calm and Carrie on: Hong Kong CE Carrie Lam welcomed more than 5,000 delegates to the city’s Belt and Road Initiative Forum today, saying the “Hong Kong spirit” will overcome the current turmoil. This followed an evening of protesters singing their own anthem in shopping malls and soccer fans booing the national anthem. Read the SCMP’s wrap.

No more panic: China must stay alert to the possibility of a severe market disruption in case the trade war deteriorates further, as a repeat of the 2015 sell-off will shatter the confidence of international investors, Jessie Pak, managing director for Asia at FTSE Russell, tells the SCMP.

Gree share-sale drama leaves two standing

Caixin has a gripping story about the bidding process for the Zhuhai government’s stake in Gree Electric, the city’s biggest and most famous privately owned company. From a starting field of around 25 bidders, only two remain, as the air conditioner giant inches closer to a deal that has captured the market’s attention for months. 

Continue reading Gree share-sale drama leaves two standing

Gree gets nod to sell Zhuhai govt stake

Gree Electric Appliances, the air conditioner giant chaired by one of China’s best-known female business leaders, has been approved to go completely private. The company said in an announcement this week that the State-owned Assets Supervision and Administration Commission has agreed in principle for the city government to transfer most of its stake in the company through a public tender. 

Continue reading Gree gets nod to sell Zhuhai govt stake

Ping An leads GBA in Fortune China 500

The prestigious Fortune China 500 list has been released for 2019, with GBA companies standing out in measures of both revenues and profits. Shenzhen-based Ping An, which began as an insurer but is now more of a fintech firm, is the GBA’s leading light, ranking No. 4 in revenues and No. 6 in profits nationwide. 

A total of 86 from the GBA made the top 500. Moreover, 12 of the top 40 most profitable were from the GBA.

Continue reading Ping An leads GBA in Fortune China 500

Appliance giant Gree pushes for own chips

Gree Electric boss Dong Mingzhu has clearly never seen a challenge she didn’t relish. Despite doubts about her plans to self-develop microchips for the Zhuhai-based home-appliance giant, she is pushing ahead with a RMB50 billion (US$7.3 billion) investment project over the next three years. 

The company told Caixin Global it has already started using self-developed chips in some of its air conditioners, and it plans to have them installed in all of them by the end of the year. This is less of a gamble and more of a prudent diversification strategy than it might at first appear. Gree is currently spending RMB4 billion a year on microchip purchases. Developing its own chips is clearly a response to the U.S. attack on ZTE and Huawei.

Investors in the Shenzhen-listed company (SHE: 000651) appear to be of two minds about Gree’s plan, bouncing the stock up and down over the past month. However, since the start of the year, it has made a robust 57% return. Read more. 

Guangdong firms boost R&D spending

Guangdong’s listed A-share companies raised their investment in R&D by nearly 20% last year, to more than RMB144.3 billion. In so doing, they increased their share of R&D spending by all listed A-share companies by four percentage points to 19.82%.

Telecom equipment maker ZTE, which was nearly bankrupted a year ago by US sanctions, ranks top among the province’s listed companies and 7th among all A-share companies, investing RMB10.9 billion in R&D last year. (Huawei Technologies is not publicly listed.) Others that invested more than RMB5 billion in R&D include Foshan’s Media Group, Shenzhen’s BYD, Zhuhai’s Gree Electric, and Huizhou’s TCL Corp.  As a percentage of income, IT companies invest the most, at an average of 11.3%.

Guangdong has 615 listed companies with a total market cap of RMB10.62 trillion, accounting for 18.22% of all A-share companies. They generated income of RMB1.61 trillion in Q1, up 12.41% from the previous quarter, with profits up 25.28% to RMB161.73 billion.

Read more in Chinese.

Gree to pump tax savings into R&D

Zhuhai-based Gree Electric Appliances, the world’s biggest maker of home air conditioners, plans to plough into research and development the RMB5.3 billion (US$790 million) it got to keep last year thanks to China’s tax cuts, reports Caixin Global.

The money saved will be spent on core technologies, according to Dong Mingzhu, chairwoman of the company.

China started replacing business tax with VAT in 2016. Last May, it cut the 17 percent and 11 percent VAT rates to 16 percent and 10 percent, respectively, and dropped them further for many sectors, including manufacturing, from 16 percent to 13 percent this April.

The government’s tax policy includes the deduction of R&D expenses and tax incentives for high-tech enterprises to help support innovation. In the past three years that saved Gree CNY5.8 billion, Dong said.