Gree's risk of being targeted by a takeover bid has been temporarily lifted, but the company still has no intention of changing its car dream

The warning from the regulatory level seems to have worked. On the evening of December 9, Qianhai Life Insurance released a statement on its official website regarding its investment in Gree Electric Appliances, saying that it would no longer increase its holdings of Gree Electric Appliances in the future and would gradually exit the company based on market conditions and investment strategies. This also means that the incident in which the air-conditioning giant Gree Electric Appliances was almost targeted by a "barbarian" has been substantially reversed.

At the "2016 (15th) China Business Leaders Annual Conference" held on December 10, Dong Mingzhu stated that capital should not be a destroyer of the manufacturing industry, and made it clear that Gree Electric is determined to cross over into the new energy vehicle field.

Temporary calm

It is reported that the "plague" storm started on the evening of November 30. Gree Electric Appliances issued an announcement on the same day, saying that it was discovered that Qianhai Life Insurance purchased a large number of company stocks from November 17, when the company's stock resumed trading, to November 28, and its shareholding ratio increased from 0.99% at the end of the third quarter to 4.13%. The shareholding ranking rose from the sixth largest shareholder to the third largest shareholder, but it still did not meet the disclosure standard of holding 5%. Gree Electric Appliances has not yet learned of its subsequent investment plans and investment purposes.

With the "Baoneng Group" Qianhai Life Insurance knocking on the door of Vanke A and CSG A, the incident immediately triggered speculation from all walks of life in the market. Based on the current total share capital of Gree Electric Appliances of 6.02 billion shares and the latest share price of Gree Electric Appliances of 26.99 yuan, the "Baoneng Group" Qianhai Life Insurance only needs to acquire another 52.37 million shares to approach the holding line. Roughly estimated, it only costs 1.413 billion yuan. For the "Baoneng Group" that aggressively buys in the capital market and spends tens of billions of yuan, this amount of money is negligible.

The development of the incident also attracted the attention of regulatory authorities such as the China Securities Regulatory Commission and the China Insurance Regulatory Commission. On December 3, at the second first member representative meeting of the China Securities Investment Fund Association, Liu Shiyu, chairman of the China Securities Regulatory Commission, severely reprimanded the "barbarians" for using "unidentified money" to engage in leveraged buyouts and other behaviors. On the evening of the 5th, Qianhai Life Insurance received a regulatory letter from the China Insurance Regulatory Commission, requiring it to prohibit the application of new products within three months from that day, and to suspend the development of new universal insurance business; reduce the proportion of medium and short-term products, etc. On the 7th, the China Insurance Regulatory Commission sent an investigation team led by the Development and Reform Ministry to Qianhai Life Insurance.

It is reported that in 2013, 2014 and 2015, the premium income of universal life insurance accounted for 97.3%, 90.3% and 77.7% respectively, and most of the products were short-term and medium-term products. Zhang Ning, a financial industry analyst at Analysys, and many other industry insiders have previously told reporters from China Business News that Qianhai Life's products are too concentrated in universal life insurance. Under the regulatory order, whether it is for considerations of capital flow and cash flow or due to external policy pressure, Qianhai Life's gradual withdrawal from Gree Electric Appliances seems to be a high probability event. And last night, Qianhai Life's announcement once again confirmed the market's various inferences.

The dream of new energy vehicles remains unchanged

At the "2016 (15th) China Business Leaders Annual Conference" held in Beijing today, Dong Mingzhu made a clear statement on this incident, saying that she hoped that capital would not destroy China's manufacturing and become a sinner of society. Gree Electric will continue to adhere to independent innovation and become a creative enterprise.

It is reported that Gree Electric had previously launched an acquisition of Zhuhai Yinlong, hoping to cross over into the new energy vehicle field. However, because the adjusted transaction plan failed to be approved by the Zhuhai Yinlong shareholders' meeting, Gree Electric issued an announcement on November 16 that it decided to terminate the transaction. The shattered dream of Gree Electric's car manufacturing was also seen by the outside world as a setback in its diversified exploration. Whether at the small and medium shareholders' meeting held on October 28 on the acquisition of Zhuhai Yinlong, or at the media meeting attended by this newspaper reporter on August 23, Dong Mingzhu emphasized that Gree Electric's crossover into the new energy vehicle field is not to sprint for the so-called second 100 billion revenue, but is based on the fast charging, clean, and safe characteristics of Zhuhai Yinlong's lithium titanate batteries.

It is reported that Gree Electric's announcement on November 16 also stated that due to the termination of the plan to issue shares to purchase Yinlong's assets, it will not seek major asset restructuring for at least one month. This means that Gree Electric can initiate new asset restructuring matters from December 17. However, a senior insider of Gree Electric told reporters that "the company currently has no merger and acquisition plans."

However, at the above-mentioned meeting held today, Dong Mingzhu still said, "Yinlong's technology is the most advanced in China and even in the world," and "I must make new energy vehicles."

Zhang Yanbin, assistant president of AVIC Cloud Network, previously told reporters that Gree Electric Appliances issued an announcement stating that it would terminate the acquisition of Yinlong, and the reason was attributed to Yinlong's shareholders being dissatisfied with the acquisition plan. This is more like a delaying tactic by Gree Electric Appliances to buy time for space.

Dong Mingzhu's words and deeds show Gree Electric's firm determination to transform into the new energy vehicle field. Zhang Yanbin told reporters that it is highly likely that Gree Electric will launch another acquisition of Yinlong in the future, and it is only a matter of time.

Because the acquisition of Zhuhai Yinlong was not approved by minority shareholders, mainly because Gree Electric's additional offering price was too low and the valuation of the proposed acquisition asset Zhuhai Yinlong was too high, resulting in a significant dilution of the rights and interests of existing minority shareholders, 15 proposals including the "Proposal on the Company's Raising of Supporting Funds" were rejected. Zhang Yanbin said that if Gree Electric launches another acquisition plan in the future, it may make appropriate compromises and concessions in terms of the rights and interests of minority shareholders.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.