Gree Electric Appliances Inc of Zhuhai: Q3 2025 Performance Amid Industry Divergence
Gree Electric Appliances Inc of Zhuhai (GREE) reported its third‑quarter 2025 results on October 31, 2025, in the context of a diverging performance landscape among China’s leading white‑goods manufacturers. The company, which specializes in a wide range of air‑conditioning units and air‑purifiers, saw its revenue and profitability slip in line with broader challenges faced by the household durables sector.
Financial Highlights
- Total Revenue: ¥51.3 billion, a decline of 4.2 % year‑on‑year.
- Net Profit: ¥3.8 billion, down 12.5 % compared with the same period in 2024.
- Operating Margin: 4.8 %, lower than the sector average of 6.3 %.
- EBITDA: ¥5.1 billion, reflecting tighter cost pressures.
These figures underscore the impact of a slowdown in the air‑conditioner market, exacerbated by the gradual withdrawal of government subsidies for new energy appliances. Gree’s exposure to the commercial refrigeration and HVAC segments—where demand growth has stalled—has translated into a modest contraction in earnings.
Dividend Commitment
Despite the revenue dip, Gree maintained its shareholder‑friendly stance. The company announced a dividend of ¥2.35 billion for the year, bringing its cumulative dividend payout since listing to ¥1.776 trillion (including share repurchases and the mid‑year distribution of ¥55.85 billion). This figure surpasses the ¥1.722 trillion threshold reached in 2012, reaffirming Gree’s long‑term commitment to returning value to investors.
The dividend policy remains unchanged at a payout ratio of 65 % of net profit, a level that balances reinvestment needs with shareholder expectations. The company’s board cited stable cash flows from its core product lines and a solid balance sheet as the primary drivers behind the generous dividend.
Strategic Response to Market Pressures
Gree’s management has outlined a multi‑pronged strategy to counteract the current headwinds:
Product Portfolio Diversification
- Accelerating development of smart HVAC systems that integrate with emerging home‑automation standards.
- Expanding the air‑purifier segment, which has shown resilience amid rising consumer awareness of indoor air quality.
Cost Discipline
- Implementing lean manufacturing initiatives across the Shenzhen and Zhuhai plants to reduce unit costs by 2 % over the next two years.
- Negotiating long‑term contracts with key raw‑material suppliers to hedge against commodity price volatility.
Geographic Expansion
- Targeting high‑growth markets in Southeast Asia, where urbanization and rising disposable incomes are driving demand for household appliances.
- Leveraging existing distribution networks in Indonesia and Vietnam to achieve a 5 % market share within five years.
Digital Transformation
- Enhancing after‑sales services through an integrated digital platform that provides predictive maintenance and remote troubleshooting.
- Exploring partnerships with technology firms to incorporate Internet‑of‑Things (IoT) capabilities into its product line.
These initiatives are intended to offset the decline in traditional air‑conditioner sales while positioning Gree as a leader in the next‑generation smart appliance market.
Market Context
Gree’s performance contrasts sharply with that of its peers, Meidi‑Group and Haier Smart Home, which reported robust growth in the same quarter. Meidi‑Group’s B‑to‑C strategy and Haier’s focus on premium and global markets have yielded revenue gains of 10.6 % and 7.3 %, respectively. Gree’s slower pace reflects its heavier reliance on the domestic air‑conditioner market, which remains under pressure from policy shifts and a saturated consumer base.
Nevertheless, the company’s strong cash position (cash and cash equivalents of ¥28 billion) and low debt‑to‑equity ratio (0.32) provide a solid buffer to navigate the current cyclical downturn. Investors should monitor Gree’s execution of its diversification and cost‑reduction plans, as these will be decisive in restoring profitability margins.
Outlook
Analysts project a gradual rebound in Gree’s operating income as smart‑home initiatives gain traction and cost controls take effect. A moderate revenue recovery of 3–4 % is expected in FY 2026, with net profit projected to return to pre‑downturn levels by mid‑2027, contingent on favorable macroeconomic conditions and sustained demand for air‑conditioning and air‑purification solutions.
In summary, Gree Electric Appliances Inc of Zhuhai remains a significant player in China’s household durables sector, albeit facing headwinds that require strategic realignment. Its continued dividend policy and robust balance sheet will likely sustain investor confidence as the company navigates this transitional phase.