Although 2020 is the second time that Gree Electric has experienced a decline in both revenue and net profit since its listing, in the eyes of many people, Gree Electric’s performance in 2020 is already higher than expected.
As early as April 15, when Gree Electric released its 2020 performance report, some analysts in the home appliance industry said that in view of Gree Electric’s performance in the first three quarters of 2020 - revenue fell by 18.8%, and it was attributed to a listed company. Net profit fell by 38.06%. Investors were psychologically prepared for a sharp decline in Gree Electric's 2020 annual performance. As a result, the decline in its annual revenue and net profit remained within 16%, which can be regarded as exceeding expectations.
Essence Securities analyst Zhang Licong believes that Gree Electric’s fourth-quarter 2020 performance exceeded expectations as a reflection of the initial results of channel reform.
Judging from the performance data of the four quarters, Gree Electric’s performance in the fourth quarter of 2020 turned the tide. In the fourth quarter of 2020, the net profit attributable to listed companies reached 8.476 billion yuan, accounting for more than 38% of the net profit attributable to listed companies for the whole year.
Looking back at Gree Electric’s 2020 annual report, three key points stand out. One is the expansion of production capacity and products; the other is channel reform; and the third is large cash dividends.
Gree Electric’s 2019 annual report disclosed that Gree Electric has 14 major appliance production bases, and the 2020 annual report disclosed that the number of production bases has increased to 17, adding production bases in Ganzhou and other places. Affected by the COVID-19 epidemic, the sales of major appliances such as air conditioners, refrigerators, washing machines, and kitchen appliances have been hindered, and retail sales have declined to varying degrees. However, the sales of household appliances have been booming, and the importance of healthy appliances has been highlighted. In 2020, Gree Electric has enriched its home appliance categories, launching new disinfectant making machines, sterilizing small square tubes, handheld vacuum cleaners, heat pump washing and drying machines, electric lunch boxes, juice cups, handheld tooth rinsers, handheld Vacuum cleaners, dishwashers and other categories.
Under the new crown epidemic, Gree Electric has also entered the medical and health field, and newly established Zhuhai Gejian Medical Technology Co., Ltd. (hereinafter referred to as "Zhuhai Gejian") and Chengdu Gree Xinhui Medical Equipment Co., Ltd. ( (hereinafter referred to as "Gree Xinhui"). Among them, Zhuhai Gejian produces anti-epidemic materials and mainly produces and sells first and second class medical devices such as medical goggles, medical masks, and medical forehead thermometers. Gree Xinhui produces medical equipment. According to Gree Electric Appliances, the mobile protective equipment developed by Gree Xinhui has filled the company's product gap in the temperature control system of medical equipment. It has been launched on the market and delivered for use in 2020, assisting in mobile nucleic acid detection and reducing the cost of hospitals. Check the load.
Although Zhuhai Gejian and Gree Xinhui have not been established for a long time, they will benefit Gree Electric’s revenue in 2020. Gree Electric's 2020 annual report disclosed that Zhuhai Gejian's impact on the company's revenue in 2020 reached 24.21 million yuan, and Gree Xinhui's impact on the company's 2020 revenue reached 1.199 million yuan.
Channel reform is a highlight of Gree Electric in 2020. In 2020, Gree Electric held an eight-stop national live broadcast tour, driving 30,000 offline stores to open online Gree Dong Mingzhu stores and strengthening online channels.