Gree Electric announced its determination to acquire Zhuhai Yinlong (full name "Zhuhai Yinlong New Energy Co., Ltd.") with 35 announcements in one breath. However, with the joint opposition of small and medium shareholders and institutions, the acquisition was temporarily suspended due to the failure of 15 proposals.
On November 4, Chairman of the Gree Electric Appliances, Dong Mingzhu, said that when some of the motions were not passed, some people said that they had spent money on the shareholders’ meeting. However, behind the “coordinationâ€, capital interests have always been an important factor for small and medium-sized shareholders to oppose Gree’s acquisition of Yinlong.
The power of small and medium-sized shareholders has made Gree Electric once again face the question of whether it will encounter the Vanke crisis. However, Gree, whose main business has already encountered “ceilingâ€, has to open its arms and absorb more capital to speed up its diversification process.
"Someone stirred up"
A week later, Dong Mingzhu’s summary of the Gree shareholders’ meeting that attracted the attention of the whole people was that “someone spent money to the scene to stir up.â€
On October 31, Gree Electric announced that it held an extraordinary general meeting on October 28 to vote on the acquisition of 26 acquisitions of Zhuhai Yinlong. Among them, 15 proposals related to the issuance of additional funds, including fund raising of 9.694 billion yuan. Was denied. The "Proposal on the company's plan to issue shares to a specific object to purchase assets" was barely passed at a rate of 66.96% (just arrived at 2/3). Gree Electric immediately began to suspend trading from October 31.
It is worth noting that this vote not only made the outside world unable to understand the acquisition, but also issued a letter of concern on October 31 to ask whether Gree’s acquisition was passed.
Gree Electric announced on November 3 that it intends to adjust the plan of this transaction, but since the stakeholders include 21 shareholders of Zhuhai Yinlong and 8 subscription targets, there are also many transaction details, so the application is postponed. A reply was given on November 7.
The outside world believes that it is the small and medium-sized shareholders who have jointly opposed Dong Mingzhu, whom they once supported. According to the announcement, there were 5,141 shareholders who passed the online and on-site voting, accounting for 54% of the total shares of Gree. Among them, there were 5,139 small and medium shareholders, accounting for 27% of the total shares of listed companies.
Liu Buchen, a senior appliance observer, said that Dong Mingzhu actually expected the voting results. According to him, one and a half months ago, Gree’s small and medium-sized shareholders joined in series to vote for the veto of Zhuhai Yinlong.
Dong Mingzhu’s speech to the shareholders on the spot was considered by the outside world to be a “fighting†for small and medium shareholders. At the shareholder meeting, she said with excitement: "Two years have given you 18 billion, you go to see which company gives you so much?" She also asked, Gree from the loss to achieve today, to achieve 13% of the profits, is Are you coming by you?
In fact, in the strong opposition, there are not only small and medium-sized shareholders but also securities institutions.
According to the announcement issued by Gree, only two organizations were excluded from the minority shareholders, but the shares they held accounted for more than 20% of the total shares of the listed company. It is reported that the securities company is one of the forces of this opposition. But no further confirmation was found.
Small and medium shareholders do not buyBefore the vote, Dong Mingzhu had made a lot of preparations for the successful acquisition of Zhuhai Yinlong. For example, Wei Yincang, the chairman of Zhuhai Yinlong, spent nearly half a year explaining the advantages of lithium titanate battery to the outside world. A high return promise.
On March 7, Gree Electric announced that it intends to issue shares to acquire Zhuhai Yinlong. Judging from her speech at the Gree Electric Appliances Shareholders' Meeting 2015, the real intention of acquiring Yinlong is to acquire Yinlong's battery technology. Zhuhai Yinlong also promised that its net profit for the three years of 2016, 2017 and 2018 will not be less than 720 million yuan, 1 billion yuan and 1.4 billion yuan.
Then, why do small and medium shareholders do not buy Dong Mingzhu’s account? One of the reasons is that its own interests are being diluted.
On the evening of August 18, Gree announced that it planned to purchase a 100% stake in Zhuhai Yinlong for a price of 13 billion yuan. Gree also announced that it will adopt a non-public offering of stocks for eight specific targets, including Gree Group, Gree employees' shareholding plan and Yintong Investment, and the amount raised will not exceed RMB 9.694 billion.
It is understood that Gree Electric has previously carried out subscription activities among employees. Gree Electric announced that the employee shareholding plan subscription amount is 2.374 billion yuan, with a share of 153 million shares.
Among them, Dong Mingzhu personally contributed 937 million yuan, and the amount of funds accounted for 39.52% of the employee stock ownership plan. After the completion of the additional issuance, it is expected to hold about 1.3% of Gree shares. After the completion of the issuance, the shareholding ratio of the small and medium shareholders will be reduced to 58.65% from 72.87% and the diluted ratio will be around 20%.
Another point of view is that Gree has a strong cash in hand and can use its own funds without having to issue additional funds.
Gree's 2016 third quarterly report released on October 30 showed that the net cash flow from its current business activities decreased by 61.7% compared with the same period of last year, but it also reached 14.162 billion yuan. The monetary funds of current current assets reached 97.234 billion yuan.
However, Zhang Yanbin, dean of the Aowei Research Institute, said that the large capital operation mode of the air-conditioning industry determines that Gree needs to complete the acquisition through fundraising.
He said that the demand for liquidity in the air-conditioning industry is concentrated, the demand for funds is large, and the requirements for liquidity are relatively high. Gree’s money is mostly because there are both the downstream dealer’s payment and the upstream supplier’s payment. The use of the book cash purchase will affect Gree’s operations.
Zhang Yanbin believes that the reason for the resistance to the acquisition of Gree is that the communication work between Gree and the small and medium shareholders is not done well. Dong Mingzhu also said on November 4th: "If there is not enough communication, the understanding is not enough, and the explanation will not be clear, there may be some misunderstandings. I think it is normal; but it does not mean that failure to pass is a denial to us."
In addition, in addition to the purchase price of 13 billion yuan means a premium of 234.37%, Zhuhai Yinlong itself is also being questioned.
Before Gree held its first shareholders meeting, Zhuhai Yinlong announced that it had signed a total price of 1 billion yuan with Guangdong CITIC Sunshine, including orders for 1,000 new energy vehicles. This figure is more than half of the 1,884 passenger cars that Zhuhai Yinlong has sold in the first eight months of this year.
However, Guangdong CITIC Sunshine was only exposed in less than two months, and the registered capital was only 100 million yuan. The public welfare activities of its declared “Great Love Without Borders and Healthy China Miles†were denied by the “China Ageing Career Development Foundation†and said it would be held accountable.
On November 3, the Shenzhen Stock Exchange even asked four questions about this suspected thousand orders, and asked Gree to further explain the conditions for the entry into force of the contract and the liability for breach of contract before November 7, and the impact of the contract on Yinlong's performance.
Barbarian invasion?The opposition of small and medium-sized shareholders has once again caused doubts about whether Gree is facing the danger of Vanke’s invasion of “barbariansâ€.
The capital war between Vanke and Baoneng has made it the hot topic for who is the next Vanke. In the eyes of “barbariansâ€, Gree, like Vanke, is a “fat and fresh meat†with low market value, scattered equity, and huge cash reserves. According to the third quarterly report, the current shareholder of Gree Electric Group, Gree Group, holds only 18.22%, while the second share of Tokyo Haidun holds 8.91%, while the three shareholder securities company, which is also a state-owned legal person, holds 2.85%. Qianhai Life, owned by Yao Zhenhua, holds a 0.99% stake in Gree and ranks sixth in the shareholder.
In fact, in the Gree 2015 financial report, Ningbo Proofi Investment Management Co., Ltd., a company owned by the founder and actual controller of the US group, He Xiangjian and his son, entered the list of the top ten shareholders of Gree Electric Appliances. Speculation. However, Dong Mingzhu became the tenth largest shareholder with 0.74% of the shares, eliminating doubts from outside.
Regarding the "invasion of barbarians", Dong Mingzhu stated at the general meeting of shareholders on May 19 that Gree is a manufacturing company and is essentially different from Vanke. At the same time, she said that if she did not devote herself to the enterprise, the manufacturing industry would not do well. "Please rest assured that we will always adhere to the principle of being responsible for the market."
It is pointed out that the biggest difference between Gree and Vanke is that the Gree Group's state-owned status and its "father-son relationship" with Gree Electric will not allow it to easily give up its position as the largest shareholder. In this additional proposal, Gree Group invested 4 billion yuan to ensure that Gree Electric maintains its original share after the issuance.
Hong Shibin, an observer of the senior appliance industry, said that Gree should face the "invasion" and the idea of ​​refusing "invasion" is the landlord complex; not all capital is barbarians, and good capital enters legal compliance.
In fact, in the current business of the ceiling, Gree needs to absorb more capital to speed up its own diversification process.
The newly released home appliance company's third quarterly report shows that Gree's revenue in the first three quarters was 82.429 billion yuan, a slight increase of 1.11% over the same period of last year; Gree's net profit attributable to listed companies in the first three quarters was 11.229 billion yuan, an increase of 12.82% over the same period of last year. .
Dong Mingzhu also said at the shareholders' meeting on October 28 that Gree has exceeded 40% of the air-conditioning field, and there is not much room for growth. She also said that Gree's profit from 6% in 2011 to the current 13% is also trying.
The Gree, which has been diversified in water testing for a long time, is also diversified in this year's formal foreign appearance.
At the shareholders meeting on May 19, Dong Mingzhu emphasized that “Gree will continue to use the air-conditioning industry as a pillar to vigorously develop new industries such as new energy, living appliances, industrial products, molds and mobile phones, and automation equipment. Home appliance manufacturing enterprises have transformed into equipment manufacturing enterprises and new energy enterprises to achieve diversified and stable development."
However, Gree’s previous diversification in the fields of mobile phones and home appliances was not satisfactory.
Hong Shibin told this reporter that Gree has missed the best entry time in the home appliance industry. He believes that Gree will not be able to challenge Haier and the United States in depth. The future home appliance industry is still the competition between the first and second place. The biggest problem for Gree is that the runway is occupied by others.
Hong Shibin believes that Gree's entry into new energy vehicles is another way to change into a new runway.
"There is no right or wrong to enter new energy vehicles. The risk in this area is very large, but the products are constantly adjusted according to the market. Whether to do an industry well is related to time nodes, environment and other factors. Do not do well." Hong Shibin said.
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