Gree Electric's block trade shows institutional involvement; Hillhouse Capital's divestment plan may have already been executed.

Recently, Gree Electric’s block trades have drawn market attention.

According to data, in late March, Gree Electric carried out a block trade of 600k shares, with a transaction value of RMB 22.7640 million. The transaction price was the same as the stock’s closing price on that day. Both parties to the trade were institutional desks reserved for institutions, and there was no premium or discount.

Combined with Gree Electric’s prior announcements, the seller in the recent block trades may be Zhuhai Mingjun Investment Partnership Enterprise (Limited Partnership), a subsidiary under Hillhouse Capital.

**　　Institutional entities frequently appear in Gree Electric’s block trades**

On March 26, Gree Electric executed a block trade of 600k shares, with a transaction value of RMB 22.7640 million. On March 17, Gree Electric also saw a block trade of 390k shares, with a transaction amount of RMB 15.1866 million. In both block trades, the buy and sell sides were institutional entities.

On the evening of February 25, Gree Electric released an announcement stating that the company’s largest shareholder, Zhuhai Mingjun Investment Partnership Enterprise (Limited Partnership) (abbreviated as “Zhuhai Mingjun”), plans to reduce its holdings of the company’s shares. The reduction will be no more than 112 million shares (no more than 2% of the company’s total share capital after excluding shares in the treasury share repurchase account), and all the funds from the reduction will be used to repay bank loans.

The announcement specifies the details of the reduction. Within three months after 15 trading days from the date of disclosure of the announcement, Zhuhai Mingjun will complete the reduction through block trades. On this basis, the seller in the block trades Gree Electric has seen recently may be Zhuhai Mingjun, a subsidiary under Hillhouse Capital.

The information shows that Zhuhai Mingjun currently holds 902 million shares of Gree Electric, accounting for 16.11% of the company’s total share capital. If this reduction is completed, its shareholding ratio would drop to around 14.11%, but it would still remain Gree Electric’s largest shareholder. Meanwhile, the announcement also specifically states that the shares held by Zhuhai Mingjun were acquired from Gree Group via agreement in January 2020, and the locked-in period commitment of 36 months has already been fulfilled. This reduction is fully compliant, with no situation involving any breach of commitments.

In addition, Gree Electric also explicitly mentioned in the announcement that Zhuhai Mingjun’s purpose in reducing its holdings is to repay bank loans. Tracing back to history, in 2019 Hillhouse acquired a 15% stake in Gree Electric at RMB 46.17 per share, for a total consideration of RMB 600k, of which about RMB 20 billion came from bank loans. The loan term for such loans is typically 5 to 7 years, meaning that repayment of principal and interest may be due in 2026. Therefore, Hillhouse’s reduction this time may be part of a defensive financial arrangement of “passive debt repayment.”

**　　What is behind the reduction?**

In terms of performance, in the first three quarters of 2025, Gree Electric’s revenue was RMB 600k, down 6.62% year over year; its net profit attributable to the parent was RMB 390k, down 2.27% year over year. Notably, the declines in the second and third quarters of 2025 were significant: net profit attributable to the parent decreased by 10.07% and 9.92% year over year, respectively.

A research report from China Galaxy Securities noted that in 2019, the company faced a major pressure, which drove reforms toward channel flattening. The company is facing considerable pressure again this time, originating from the market’s clearly enhanced demand for price-performance, while the company needs to maintain high profit margins to compete against rivals. In addition, competitors have implemented digital transformation, which is a systemic reform no less than channel flattening. Gree still has brand premiums; its net profit margin is the highest among HVAC companies, but its market share is gradually declining. The company launched Jinghong air conditioners as a price-performance brand to counterattack, but given that other air-conditioning companies generally operate multiple brands, the room for impact may be limited.

In recent years, prices of non-ferrous metals have been rising strongly, and copper prices have also kept climbing. Using “aluminum in place of copper” to ease cost pressure has once again been brought onto the agenda by the industry. However, Gree Electric—the global leader in air conditioners—says no to “aluminum in place of copper.” On an investor interaction platform, Gree Electric stated that the company has carried out research related to aluminum-in-place-of-copper technology many years ago, and has continued to monitor industry developments and technological progress. Under circumstances where the performance, quality, and reliability of aluminum materials cannot be fully guaranteed, the company does not currently have plans to apply aluminum-in-place-of-copper technology.

（Source: Securities Times）