Many people may still remember that in 2016, after the proposal to acquire Zhuhai Yinlong was rejected, Dong Mingzhu, chairman of Gree Electric Appliances, angrily scolded shareholders for being "short-sighted and only looking at the three cents of land in front of them." After this turmoil, Dong Mingzhu personally invested 1 billion yuan, and also attracted Wang Jianlin and Liu Qiangdong. The three invested 3 billion yuan to invest in Zhuhai Yinlong.

On December 19, Gree Electric disclosed in an announcement that it planned to spend more than 1 billion yuan to increase its holdings in Gree Titanium New Energy Co., Ltd. (hereinafter referred to as "Gree Titanium", formerly known as Zhuhai Yinlong). This news not only announces Gree Electric's deeper binding with Gree Titanium under the implementation of its new energy strategy, but also indicates that Yinlong investors who "supported" Dong Mingzhu with real money 7 years ago may have withdrawn one after another.

Since the "curve investment" in Gree Titanium, the tug-of-war between Dong Mingzhu and Gree shareholders' investment stance is far from over. As soon as the above-mentioned increase in holdings was announced, the company's stock price plummeted. The stock price performance seemed to "force" Gree Electric, causing the company to rarely issue a performance forecast in the early morning of the next day, releasing good news and pushing up the stock price.

Wang Jianlin and others may transfer their shares and exit the market

On the evening of December 19, Gree Electric issued an announcement stating that the company had signed a "Share Transfer Agreement" with 12 counterparties, transferring a total of 271 million shares of Gree Titanium held by them (accounting for 24.54% of Gree Titanium's total share capital). The transaction The consideration is 1.015 billion yuan. After the transfer is completed, Gree Electric will control a total of 72.47% of the voting rights of Gree Titanium, including the 55.01% shares directly held by Gree Electric and the voting rights entrustment of 17.46% of the shares of Gree Titanium held by Dong Mingzhu.

At the same time, the board of directors of Gree Electric Appliances has authorized the management to continue to negotiate with other shareholders of Gree Titanium on the transfer of shares within the next 12 months at a price not exceeding the valuation of this transaction, and plans to transfer no more than 304 million shares in total.

Gree Electric stated in the announcement that Gree Titanium is an important part of the company's new energy sector. As the controlling shareholder of Gree Titanium, the company is confident in the future development of Gree Titanium. This transaction will help strengthen the management and control of Gree Titanium. Give full play to the synergy between the two parties, reduce internal management costs, accelerate the implementation of Gree Electric's green energy strategy, and help achieve the goal of "complete carbon neutrality by 2060".

In December 2016, after Gree Electric's plan to fully acquire Zhuhai Yinlong failed due to shareholder objections, Dong Mingzhu found partners such as Wang Jianlin and Liu Qiangdong and announced an agreement with Dalian Wanda Group, CIMC Group, and Beijing Yanzhao Huijin International Investment Co., Ltd. The responsible company, Suqian Hanbang Investment Management Co., Ltd., a subsidiary of JD.com, jointly invested 3 billion yuan to acquire 22.39% of Zhuhai Yinlong's equity, of which Dong Mingzhu held 7.84%. Later, after two capital increases, Dong Mingzhu's shareholding ratio increased to 17.46%.

It is worth noting that in this shareholding increase announcement, Dong Mingzhu’s “old friend” who invested in Yinlong also appeared among the 12 counterparties. Beijing Honghang Cultural and Creative Co., Ltd. holds 3.73% of the shares, and is 100% owned by Beijing Hongge Technology and Culture Co., Ltd. Hongge Technology is a wholly-owned subsidiary of Wanda Group, and the actual controller behind it is Wang Jianlin; Beijing Automobile Guangxing Information Technology Co., Ltd. The company holds 2.24% of the shares and is 100% owned by JD Century Trading Co., Ltd., and the previous legal representative of JD Century Trade was Liu Qiangdong.

Based on a rough calculation based on today’s valuation, this “capital game” is not a successful investment decision. Back then, Dong Mingzhu invested 3 billion yuan to acquire 22.39% of the equity of Zhuhai Yinlong. Today, Gree Electric Appliances only needs to spend 1.015 billion yuan to acquire 24.54% of the equity of Gree Titanium.

Yinlong’s valuation is only about 4.1 billion yuan

In 2016, when Dong Mingzhu proposed that Gree Electric Appliances acquire Zhuhai Yinlong, the predecessor of Gree Titanium, he raised Yinlong’s valuation to 13 billion yuan. Based on the estimated price of this transaction, Gree Titanium’s valuation is only about 4.1 billion yuan, which is a huge gap in comparison. Is Greti Titanium, which Dong Mingzhu "strongly supports", a "hole" to steal money, or is it "gold buried in the sand"?

Zhuhai Yinlong was established in Zhuhai City, Guangdong Province in 2009. Its main focus in new energy business is lithium titanate battery technology. When Dong Mingzhu advocated Gree Electric's acquisition of Yinlong in 2016, she praised it as "gold buried in the sand" and said that new energy vehicles would be an important puzzle piece for Gree to build the "next 100 billion" goal, but the relevant plan was not approved. . Unexpectedly, in November 2018, Zhuhai Yinlong exposed a "family scandal" and accused founder Wei Yincang and others of embezzling more than 1 billion yuan in company interests. In a public event in December of that year, Dong Mingzhu talked about the Yinlong crisis, To put it bluntly, Yinlong "is really a hole."

Another controversy with Yinlong lies in technology. Industry professionals pointed out that lithium titanate has low energy density and short cruising range, making it unlikely to be used to make cars. However, Dong Mingzhu has another opinion. She believes that lithium titanate batteries have the characteristics of fast charging, long life and superior low-temperature performance. They are more suitable for energy storage scenarios and continue to clear the way for Gree to acquire Yinlong.

In August 2021, Gree Electric purchased 30.47% of Zhuhai Yinlong's equity for 1.828 billion yuan through public bidding in a judicial auction online. At the same time, Dong Mingzhu entrusted the company with the voting rights corresponding to the 17.46% stake in Yinlong that she personally held. Yinlong became a holding subsidiary of Gree Electric and was renamed Gree Titanium. Since then, Gree Titanium's operating conditions have improved. The company's net loss in 2022 was 1.905 billion yuan, and the net loss from January to June this year narrowed to 171 million yuan. According to another announcement, Gree Titanium has launched two series of new energy commercial vehicle products, commercial vehicles and special vehicles. The new energy vehicles produced are operating in more than 230 cities across the country, including Beijing, Shanghai, Guangzhou, and Chengdu.

No matter how reluctant Dong Mingzhu is to "curve investment", Gree Titanium is still not favored by the majority of investors. When the shareholding increase announcement was released (December 20), Gree Electric's stock price fell sharply at the opening. As of the close of trading on December 20, the single-day decline was 7.09%, and the market value had evaporated by more than 13 billion yuan. At 1:30 a.m. on December 21, Gree suddenly released its 2023 performance forecast. The performance forecast shows that Gree Electric expects net profit attributable to the parent company to be 27 billion yuan to 29.3 billion yuan in 2023, a year-on-year increase of 10.2% to 19.6%; total operating income is 205 billion yuan to 210 billion yuan, compared with 190.151 billion yuan in the same period last year.

Choosing to "spoiler" performance at this time juncture somewhat means "turning the tide" for the stock price. On December 21st and 22nd, Gree Electric's stock price rose for two consecutive days, with closing increases of 2.24% and 1.75% respectively. However, Gree's market value is still nearly 6 billion yuan away from fully recovering the "lost ground" on December 20th.