Gree Electric Appliance plans to hold Dun'an Environment for 3 billion yuan.

On the evening of November 16th, Gree Electric Appliances announced that the company intends to transfer 270 million shares of Zhejiang Dun'an artificial Environment Co., Ltd., held by Zhejiang Dun'an Seiko Group Co., Ltd., with a transfer price of about 2.19 billion yuan; at the same time, the company intends to subscribe for 139 million shares of Shield'an Environment non-publicly issued to specific objects in cash, with a subscription price of about 810 million yuan. This means that Gree Electric Appliances intends to achieve a controlling stake in Dun'an Environment at a total cost of 3 billion yuan. After the completion of this transaction, Gree Electric Appliances will hold 410 million shares of Dun'an Environment, accounting for 38.78% of the total share capital of Dun'an Environment after the issue.

In order to ensure the independent control of core parts, improve the layout of the industrial chain, further consolidate the business competitive advantage, and build a diversified, technology-based global industrial group, Gree Electric Appliances contributed to the transaction. Gree Electric Appliance said in the announcement that the air conditioning and refrigeration components business of Dun'an Environment has deep technical accumulation and good manufacturing capacity, and the product matrix related to the new energy thermal manager is perfect. It has carried out business cooperation with many well-known domestic enterprises. Gree Electric Appliance is optimistic about the industrial value of Dun'an Environment as a leading enterprise in the global refrigeration components industry, and intends to further improve the competitiveness of the company's upstream core components of air conditioners and the stability of the supply chain through this transaction, give full play to the synergy between the two sides, and improve the industrial layout of the company's new energy automobile core components.

In addition, Zhejiang Duan'an Mechanical and Electrical Technology Co., Ltd. (that is, Dun'an Central Air conditioning) under Dun'an Environment is also an effective supplement to Gree Electric Central Air conditioning business. Dun'an central air conditioner has the first market share in the air conditioning field of nuclear power plant, is the maker of air conditioning standard of nuclear power plant, and is the market share leader of dry surface cooler in the field of industrial purification, and is the promoter of energy saving technology of elliptical tube heat exchanger. it is the main supplier of heat pipe backplane energy-saving air-conditioning system in the data communication industry, serving the three major operators. It is an excellent air-conditioning equipment supplier in the rail transit industry, providing the integration of rail platform environmental control system equipment and the supply of rail vehicle air-conditioning equipment, and has set up many model projects in key cities across the country.

Prior to this, Gree's related acquisitions included listing Haili, a supplier of air-conditioning compressors, with a total of 90.22 million shares in July 2018, and completing the acquisition of 100% stake in Hefei Jinghong Electric Appliance Co., Ltd. in October 2018, the acquisition of 100% stake in Zhuhai Yinlong New Energy Co., Ltd. for 13 billion in August 2021.

According to the latest third-quarter report released by Gree Electric Appliances, Gree's total operating income in the first three quarters of 2021 was 139.549 billion yuan, an increase of 9.48 percent over the same period last year; the total profit was 18.487 billion yuan, an increase of 12.43 percent over the same period last year; and the net profit attributed to shareholders of listed companies was 15.645 billion yuan, an increase of 14.21 percent over the same period last year. In 2019 and 2020, Gree's total operating income was 200.5 billion yuan and 170.5 billion yuan respectively, and the net profits attributed to shareholders of listed companies were 24.7 billion yuan and 22.18 billion yuan respectively.

For Dun'an Environment, the transaction is an integral part of the overall work arrangement to resolve the liquidity matters of its parent company, Shield'an Holdings Group Co., Ltd. Dun an Seiko, a holding subsidiary of Duan'an Holdings, sold its 29.48% stake in Dun'an Environment, and the proceeds will be used to repay loans to financial institutions in accordance with the arrangements related to the debt disposal work of the debt committee.

According to the latest third-quarter report released by Dun'an Environment, the total operating income of Dun'an Environment in the first three quarters of 2021 was 7.374 billion yuan, an increase of 41.6 percent over the same period last year, and the net profit belonging to shareholders of listed companies was 342 million yuan, an increase of 281 percent over the same period last year. Prior to this, in 2019 and 2020, the total operating income of Dun'an Environment was 9.104 billion yuan and 7.381 billion yuan respectively, and the net profits attributed to shareholders of listed companies were 131 million yuan and-1 billion yuan respectively.

Author: Yang Fan