Gree Electric (000651): Interpretation and Discussion on Three Major Events of Gree Tonight
The main points of the report describe the announcement of Gree Electric Appliance’s expansion of the scope of supplements tonight, and the announcement of the subscription of Sanan Optoelectronics’ equity with its own funds of 2 billion and the announcement of the Zhuhai Mingjun and the controlling shareholder’s proposed extension of the share transfer agreement.
The incident commented on how to interpret Gree’s expansion of the scope of compensation: the time range of supplementary supplementation exceeds expectations, and the ultimate target audience is consumers. We believe that the company can establish a reliable brand image that protects the interests of consumers through this substitution.The “Pearl ‘s Shop” declaration can also achieve “secondary” promotion of the company’s e-commerce channel; the compensation amount is expected to be generally limited, and the replacement amount is estimated to be about 3.5 million units, and the corresponding total compensation amount is 3.5 billionOnly slightly exceeded the amount of 3 billion disclosed yesterday, and it is estimated that the sales of activities are expected to be about 1 million units from January to October 2019, corresponding to a difference of only about 1.1 billion.
How to interpret Gree’s subscription of Sanan Optoelectronics: After Gree participates in the non-public offering, it will hold Sanan Optoelectronics 4.
76% equity, the nature of Gree’s participation and the stake in Wingtech last year, are mainly based on the consideration of business collaboration and layout chips; we expect synergy to be mainly reflected in two directions: First, Sanan Optoelectronics will continue to develop SiC power devicesGree also has layout and research and development in this field, and power devices are necessary parts for air conditioning. Second, Gree may provide Sanan with air conditioning, intelligent equipment, molds and other products, and cut into the semiconductor industry at the same time.
Finally, considering that the financial investment amount is only USD 2 billion, the estimated impact on 南京夜网论坛 Gree’s overall operation is limited.
How to interpret the displacement of Gree Hybrid: The transfer involves the equity of a company with a class size of 40 billion. It is expected that the details of the relevant cooperation terms will be decomposed. In this context, it is reasonable to consider that it is reasonable not to do too much at the same time.Explanation; In view of the demonstration significance of Gree’s mixed reform, we judge that the probability of variable occurrence of this issue overlaps, and the prospect of subsequent successful landing is expected.
Taking a step back, even without mixed reforms, Gree’s overall operating rhythm is very efficient, and considering that the company’s operating pressure stage in 2015-2016 also implemented a dividend of more than 70%, so President Dong successfully completed re-election at the beginning of this year.We judge that the company is likely to resume a stable dividend in the future.
Maintain the company’s “Buy” rating: First, supplementing consumers is conducive to enhancing brand trust and the amount is limited; second, equity participation in Sanan is mainly based on business collaboration and coordination, and the overall risk is controllable; third, mixed reforms are relatively smallLarge, the process twists and turns is very normal, the probability of the event will be smoothly implemented, even in extreme cases, there will be variables, there is no impact on the company’s operating scale.
In general, the actual average impact of each event is limited. Considering the company’s stable top and deep moat, we insist on the company’s future development.
The company’s EPS is expected to be 4 in 2019 and 2020, respectively.
26 yuan, currently corresponding to 12 respectively.
63 times PE, maintain “Buy” rating.
Risk warning: 1. Terminal demand is less than expected; 2. The company’s mixed reforms are less than expected.