[SMM report] Gree's share price continues to decline, "50% discount" employee stock ownership plan causes controversy, "Gree gives away a house" and goes on a hot search again.

"long-awaited final appearance", 000651.SZ (Gree) the largest employee stock ownership plan finally landed.

On June 20, Gree Electric Appliances issued an announcement that the total number of employees who intend to participate in the employee stock ownership plan does not exceed 12000, and the capital scale does not exceed 3 billion yuan. According to the announcement, the purchase price of the employee stock ownership plan is 27.68 yuan per share, which is only half of the closing price on June 18, and Dong Mingzhu subscribed for 30 million shares, accounting for 27.68 percent of the entire plan, which means that if the relevant conditions are met, Dong Mingzhu, who is not far from retirement, can pocket 780 million yuan of "pension".

As soon as the announcement came out, the market talked one after another, such as "disregarding shareholders' profits", "benefit transfer", "Dong Mingzhu earned sky-high pensions for himself" and so on, and the stock bar seemed to explode. After the opening of trading on June 21, Gree Electric Appliance shares continued to fall, falling nearly 5%, reaching 51 yuan per share, the lowest in a year. On June 22, the share price fell again, finally falling below 50 yuan support to close at 49.82 yuan per share.

In addition, Dong Mingzhu also responded in a recent interview that the ownership of house property rights was being reconsidered on the topic of "Gree sending a room". Gree sent a room in order to respect talents. It is reported that prior to the "Dong Mingzhu Zi Media" official account released a message, located in Xiangzhou District of Zhuhai City Gree Pearl Plaza talent room, the first batch of more than 3000 sets of staff housing, is about to be delivered.

Since the beginning of the year, under the influence of the sharp rise in raw materials, the home appliance industry has been under pressure. Gree's share price has continued to decline since the beginning of the year, falling by more than 25% from its peak at the beginning of the year. Gree Electric Appliances had planned to buy back shares at a price of 7.5 billion to 15 billion yuan in May. The price of the repurchased shares does not exceed 70 yuan per share. The repurchased shares will be used to implement the company's employee stock ownership plan or equity incentive, plus the previous two buybacks. The total repurchase amount reached 20 billion yuan. However, large buybacks have failed to save Gree's share price, which has risen in only two days since the first phase of Gree's buyback on May 31.

Anxin Securities believes that domestic shipments of Gree air conditioners in the first five months of 2021 increased by + 36.6% and-13.4% respectively compared with the same period in 2020 and 2019, both better than the industry level. The share of domestic shipments in the first five months of 2021 was + 3.7% to 34.6% compared with the same period last year. And May Gree domestic shipments YoY+13.8%, is the only one of the three leading household appliances to achieve positive growth, reflecting the company's sales channels and internal management reform has achieved preliminary results. In the follow-up, we believe that the trend of real estate sales completion is good, the superimposed channel inventory is at a low level, and there is a large demand for replenishment. Gree is expected to continue to release the results of channel reform.

Western Securities pointed out that the shareholding plan sets assessment targets based on comprehensive factors such as the company's historical performance and the stage of industry development, and based on the details of the planning plan based on a number of indicators such as employees' income level, which is expected to enhance the stability of the company's core personnel and help to further deepen channel reform.