Due to the new action of the major shareholder Gree Electric Appliance, the trading of Dunan environment shares was officially suspended on May 12. The night before yesterday, Dunan environment announced that the company had received a notice from Gree Electric. In order to consolidate its control position, Gree Electric was planning to transfer 9.71% of the shares held by Dunan holdings.

Dunan environment, with refrigeration devices as its main business, has continuously expanded its business boundaries in recent years and entered the new energy vehicle track through the layout of key parts of the new energy vehicle thermal management system. In the view of insiders, Gree Electric’s move is to further enhance its holding position, enhance its voice in the field of core parts in the middle reaches of the refrigeration and air conditioning industry chain, and improve the layout of its new energy auto parts industry.

“For Gree, this benign expansion is relatively beneficial, especially when the market is at a relatively low level. Mergers and acquisitions and offers can not only get a complementary space between the control of listed companies and the industrial chain, but also increase equity income financially in the future,” said Xuan Jiyou, head of Qianmen assets and manager of private equity funds, in an interview with the Securities Daily

Why Dunan environment?

Dunan environment announced that since Gree has held 29.48% shares of Dunan environment, if Gree agreed to transfer 9.71% shares of Dunan environment, it will trigger the obligation of comprehensive tender offer.

Then, why does Gree Electric not hesitate to pay real gold and silver to continue to hold Dunan environmental shares?

It is understood that in recent years, Dunan environment has concentrated on the equipment manufacturing industry after business downsizing, involving two business segments. Among them, the parts segment covers refrigeration parts, new energy vehicle thermal management parts, etc., while the refrigeration equipment segment mainly includes three parts: commercial central air conditioning, special air conditioning and cold chain system.

The engine thermal management system is like installing a frequency conversion air conditioner for the engine to realize the intelligent control of the engine cooling system, which can reduce energy consumption and improve efficiency. At the same time, it is also a key field in the middle reaches of the new energy vehicle industry chain. This is an important direction for Gree Electric to regard it as a “new air outlet” and continue to increase its layout.

Zhou Haibin, founder of automotive culture, told reporters that Gree Electric’s enhanced control of Dunan environment can ensure the autonomy and controllability of core parts, and continuously expand and improve the layout in the field of new energy vehicle thermal management business.

In recent years, affected by the epidemic situation and the complex environment at home and abroad, the supply of both air conditioners and auto parts is relatively tight. While the supply chain is unstable, the price of raw materials continues to rise, making downstream manufacturers more passive.

In the view of insiders, Gree Electric appliance can kill many birds with one arrow by putting Dunan environment under its command. “Increasing the shareholding ratio of Dunan environment will undoubtedly provide it with a stronger voice in the air conditioning and new energy vehicle industry chain, and change from passive to active. At the same time, Gree Electric can also increase the size and layout of the hot cold chain industry in recent years.” Guo Shiliang, an expert of whale platform think tank and financial commentator, told the reporter of Securities Daily.

It is worth noting that due to the rapid growth of refrigeration accessories business, Dunan environment performed well last year. The annual report shows that in 2021, the company achieved a revenue of 9.837 billion yuan, a year-on-year increase of 33.28%; The net profit attributable to the parent company was 405 million yuan and the non net profit deducted was 379 million yuan. Among them, the net profit attributable to the parent company and the net profit deducted from the non parent company both reached a new high since the listing in 2004.

“If the subsequent Dunan environment maintains high-speed performance growth, it will also drive the performance improvement of Gree Electric Appliance, contribute more income and profits to its diversified sectors, and increase its investment value in the capital market.” Xuan Jiyou said.

“Iron Lady” active attack style reappearance

In fact, Gree Electric Appliance completed its ownership of Dunan environment in April this year. According to the announcement issued by Dunan environment on April 29 this year, Gree Electric transferred the shares of Dunan environment held by Dunan Seiko, accounting for 29.48% of the total share capital, and the transfer price was about 2.190 billion yuan. With the completion of the equity transfer registration procedures, Gree Electric officially became the controlling shareholder of Dunan environment.

However, becoming a major shareholder of Dunan environment is not easy. Recently, Zijin investment, a subsidiary of Zijin mining, signed an agreement with Dunan holdings to invest 7.682 billion yuan to acquire four asset packages of Dunan holdings, the second largest shareholder of Dunan environment.

Now Gree Electric plans to transfer shares, which shows its importance to the control of the company. If the acquisition is completed, combined with the previous 29.48% shares, Gree Electric will hold 39.19% equity of Dunan environment.

“As the major shareholder Gree Electric has no actual controller, Dunan environment also has no actual controller. Gree Electric has firmly grasped the control and discourse power in its hands by obtaining a high shareholding ratio, which is also the embodiment of Dong Mingzhu’s’ Iron Lady ‘style.” Zhang Jianfeng, Executive Deputy Secretary General of China household appliance business association, believes that.

Gree “electric” layout speed up

The acquisition of Dunan environment is only a corner of Gree Electric’s strategy. In 2021, it made two major acquisitions in succession, both around the refrigeration industry chain and the new energy vehicle industry chain, and both of them were completed by holding shares. Last August, Gree Electric invested 1.828 billion yuan to acquire 30.47% equity of Yinlong new energy, and renamed it Gree titanium new energy in November.

“The first step is to acquire Yinlong new energy, the second step is to enter Dunan environment and step by step enhance the controlling stake. Gree Electric appliance is improving its new energy and automobile industry chain from the perspective of batteries and parts, so as to accelerate the transformation of Gree from electric appliance to a more diversified scientific and technological group.” Guo Shiliang thinks.

Gree Electric Appliance moves frequently, or is playing a big game of chess. In February this year, at the shareholders’ meeting of Gree Electric, Dong Mingzhu said that Gree Electric has come to the time of truly diversified Gree “electric”, and is planning to separate and list the businesses of Gree equipment and industrial core components. In addition, Dong Mingzhu previously revealed that Gree’s CNC machine tools have the ability to process key auto parts.

“Gree Electric has frequently initiated mergers and acquisitions, which shows that its plan to build a new Gree has been accelerated and hopes to fight the next blue ocean. Today’s electrical engineering covers almost all engineering activities related to electronics and photons. In Gree’s’ electrical ‘layout, new energy, auto parts, intelligent equipment and so on are all changing the company’s ownership