Gree Electric Appliances Inc of Zhuhai: A Mid‑Quarter Snapshot
The consumer‑discretionary stock Gree Electric Appliances Inc of Zhuhai, listed on the Shenzhen Stock Exchange, closed at 39.99 CNY on 5 November 2025. Its 52‑week trading range spanned from a low of 39.20 CNY to a high of 48.47 CNY, underscoring a relatively narrow channel for the past year. With a market capitalisation of approximately 221.5 billion CNY and a price‑earnings ratio of 7.01, the share sits on the lower end of valuation multiples for the household‑durables sector.
1. Industry Context
Gree’s core business revolves around the design, manufacture and sale of a wide array of air‑conditioning units—including window, split, floor, mobile and ceiling models—as well as air purifiers. The company’s product portfolio is marketed through its website (www.gree.com.cn ) and through a network of distributors across China. The air‑conditioner segment has long been a bellwether for Chinese domestic demand, as it is tightly linked to weather patterns and government policies on energy efficiency.
In recent quarters, the domestic market has faced two major headwinds:
| Headwind | Impact on Gree |
|---|---|
| Stagnating domestic consumption | Lower volume growth in the core split‑type segment, traditionally the most profitable line. |
| Intensified price competition | Pressure on margins from rivals such as Midea Group, Haier Smart Home and the rapidly expanding Xiaomi air‑conditioner line. |
2. Recent Financial Performance
The company released its third‑quarter 2025 earnings on 6 November 2025. Key highlights include:
- Revenue: 137.2 billion CNY, a 6.5 % decline YoY.
- Net profit: 21.46 billion CNY, down 2.27 % YoY.
- Operating cash flow: 45.7 billion CNY.
- Return on equity (ROE): 15.16 %, a 2.64 % drop from the previous quarter.
- Operating margin: 28.35 %, largely unchanged from the prior quarter.
In the third quarter alone, revenue fell 15 % to 39.8 billion CNY, while profit dipped 9.92 % to 7.05 billion CNY. The company attributed the revenue slump to a “high baseline” created by a strong fiscal‑year‑end push and to fierce competition in the domestic market, especially from Xiaomi. Nonetheless, Gree managed to preserve its operating margin by cutting discretionary spend by 600 million CNY in the quarter.
3. Dividend Outlook
While Gree has not yet announced a mid‑year dividend, it is worth noting the broader trend of Chinese industry leaders boosting shareholder returns. Several peers—such as Industrial Bank, Luxshare Precision and China National Immunisation Administration—have announced mid‑term dividend schemes in the same reporting window. Analysts view these moves as signals of improving operating quality and a shift toward value‑focused capital allocation. Gree’s strong cash reserves (reported at 144.4 billion CNY) and healthy ROE position it well to consider similar payouts in the near future.
4. Market Sentiment and ETF Exposure
In the broader equity market, the Select Consumer ETF (562580) opened 0.48 % lower on 7 November. Within the ETF’s core holdings, Midea Group rose 0.31 %, whereas Gree fell 0.10 %. This modest decline aligns with the broader industry sentiment that domestic cooling‑device makers are under pressure from cost‑driven competition and slowing demand.
Institutional coverage remains positive. A recent analysis highlighted that 53 value‑style A‑share stocks—many of which are in the consumer‑discretionary sector—have price‑earnings ratios below the industry average, suggesting that market participants are seeking undervalued opportunities. Gree’s PE of 7.01 places it well below the sector median, reinforcing its appeal to value‑oriented investors.
5. Strategic Outlook
Looking ahead, Gree faces a dual challenge: maintaining profitability amid a tightening pricing environment and expanding its product mix to capture new market segments. The company’s research and development pipeline, particularly in smart‑home integration and energy‑efficient technologies, could offer a competitive edge if executed effectively.
Key questions for the coming quarters include:
- Can Gree sustain its operating margin while scaling its sales volume?
- Will the company successfully launch higher‑margin smart‑home appliances to diversify revenue streams?
- Will it announce a dividend that reflects its cash‑rich balance sheet and solid ROE?
6. Bottom Line
Gree Electric Appliances Inc of Zhuhai remains a staple in the Chinese household‑durables landscape. While recent earnings have shown a modest decline in top‑line growth and profit, the company’s robust cash position, resilient operating margin and attractive valuation suggest that it is well‑placed to navigate the current headwinds. Investors should monitor the company’s mid‑year dividend decision and any strategic moves toward smart‑home integration, as these developments could materially influence shareholder value in the near term.
