Article from: Tencent News periscope , author: Li Si Yi, from the title figure: Oriental IC

Gree Electric Appliance’s mixed reform lasting for 8 months finally came to an end. Tencent News “Perspective” understands that behind this long-planned system reform is the result of a game of interests among all parties. In the end, the management headed by Dong Mingzhu is undoubtedly the biggest beneficiary of this transaction.

“Gree Electric is now undergoing a restructuring. We want to become a truly market-oriented, legalized, and institutionalized company.” Gree Electric Chairman Dong Mingzhu once stated in public that he hopes to find a better company through changes in the nature of the company. Corporate governance model.

On the evening of December 2, Gree Electric Appliances (000651.SZ) announced that the company’s controlling shareholder Gree Group and Zhuhai Mingjun Investment Partners The enterprise (Limited Partnership) (hereinafter referred to as: Zhuhai Mingjun) signed an equity transfer agreement, which stipulated that Zhuhai Mingjun will receive Let Gree Group hold 15% of the total share capital of Gree Electric Appliances, with a total transfer price of 41.662 billion yuan.

The announcement said that This move is a 100% -controlled Gree Group of Zhuhai SASAC “actively implements the reform of mixed ownership of state-owned enterprises to further stimulate the vitality of enterprises, optimize the governance structure, and promote the stable and rapid development of Gree Electric.” strong>.

After the transfer is completed, Zhuhai Mingjun is the first largest shareholder with 15% of the shares, and Gree’s dealer team background, Hejing Haiguai Investment Co., Ltd., holding 8.91% of the shares is the second largest shareholder, Gree Retired as the third largest shareholder with a 3.22% stake.

According to the cooperation agreement, Zhuhai Mingjun has the right to nominate three directors. This number cannot reach substantial control of the board of directors. At the same time, there are no arrangements such as concerted action, voting rights entrustment, and shareholding between Zhuhai Mingjun and other shareholders. This also means that, after this change in the shareholding structure, Gree Electric changed from a state-controlled company to a company without controlling shareholders and actual controllers.

At this point, the mixed reform of Gree Electric Appliances, which lasted 8 months, finally came to an end. Tencent News “Perspective” understands that behind this long-planned system reform is the result of a game of interests among all parties. In the end, the management headed by Dong Mingzhu was undoubtedly the biggest beneficiary of this transaction.

Hope is inevitable, but the winner is Gao Yong

Gree Electric’s mixed reform was officially announced in April this year. At that time, Gree Electric announced an announcement that Gree Group intends to transfer 15% of the total share capital of Gree Electric held by Gree Group through public solicitation of the transferee. At a meeting of prospective investors held a month later, 25 institutions including Baidu, Temasek, Boyu Capital, Gao Capital, and Hopu Investment were eager to try.

However, only two of the transferee’s application materials were submitted and the corresponding contract deposit was paid in full. One is Zhuhai Mingjun led by Gaofeng Capital, and the other is Gewu Houde Equity Investment led by Hopu Investment. (Zhuhai) Partnerships (Limited Partnership) and GENESIS FINANCIALINVESTMENT COMPANY LIMITED Consortium.

A person close to the transaction told Tencent News “Perspective” that the two transferees with different intentions carried outLater, they represent different stakeholders-Houpo Investment is the transferee highly recommended by Dong Mingzhu. For the sake of balance, Zhuhai SASAC mainly promoted Gaofeng Capital, which had previously participated in the investment of Gree Electric.

In fact, after Gree Electric announced the mixed reform plan, Houp Investment announced the intention to participate in the transfer of equity. More than one person close to Gree Group and Gree Electric Appliances expressed to Tencent News “Wangwang” the surprise when it was announced on the evening of October 28 that the final transferee was identified as Gaofeng Capital. “It is almost a matter of coming in for Hopu,” one of them described.

Tencent News “Perspective” understands that, as an investment in Gree Electric, it has a good foundation, which is not only more beneficial to the future development of the company, but also provides high-quality capital for the management to win. Is the final result of the game of interests of all parties.

According to Gree Electric’s third quarter financial report, Gaofeng Capital Management Co., Ltd.-HCM China Fund currently holds 43.964 million shares of Gree Electric, holding a 0.72% share, which is the top ten shareholders of Gree Electric.

Not only that, but also the founder and CEO of Gao Ye Capital as early as 2008, Yale University invested in Gree Electric Appliances. The latest shareholder information shows that Yale University recently increased its holdings of Gree Electric again to its top ten shareholders.

Zhuhai Mingjun made a commitment and guarantee, after the completion of the equity transfer: Maintain the stability of Gree’s operation and management team, the company’s governance structure will not change significantly; do not actively propose and ensure that Gree’s headquarters and registered place Relocate from Zhuhai City; make every effort and ability to carry out effective industrial investment and strategic resource introduction for Zhuhai’s economic development, and promote Gree Electric Appliances to make new contributions to the sustainable and healthy development of Zhuhai’s economy.

“Compared to Houpo Investment, the industrial chain companies invested by Gao Ye Capital also have an advantage in the third point, and it is easier to empower the industry.” A person in charge of Gree Electric said.

Management’s shareholding increased, and the right to speak further strengthened

In this transaction, Gree Investment, a management company of Gree Electric Appliances, was established in September 2019. Among the limited partnerships of Gree’s 18 executives, Dong Mingzhu ranked first with 95.48% of the shares.

According to the information disclosed by Zhuhai Mingjun, the management entity Gezhen Investment holds Zhuhai Ming through the transfer of Zhuhai Yuxiu’s equity, the transfer of Zhuhai Xianying’s limited partnership share, and the subscription of Zhuhai Mingjun’s limited partnership share. Jun and his superstructure hold equity.

According to the announcement, this part of the equity is the result of “Zhuhai Mingjun was confirmed as the final assignee and negotiated with the management of the listed company and reached an agreement”, the purpose is to comply with the transaction to maintain the stability of the management of the listed company Relevant measures and specific plans for management cooperation of listed companies.

In Zhuhai Mingjun’s upper-level institutions, at the Zhuhai Yuxiu level, Gezhen Investment holds 41% of the equity; at Zhuhai Xianying level, Gezhen Investment holds 41% of the equity and enjoys the entire GP income. The 8% portion should be allocated in an appropriate manner to members and employees of management of listed companies that have made significant contributions to listed companies.

Gezhen Investment directly contributed 6.38% of the five partners of Zhuhai Mingjun, ranking third largest partner. At the same time, Zhuhai Botao transferred the 4.72% of its capital contribution to Gezhen Investment in accordance with the agreement. The cooperation agreement also stipulates that it will not charge management fees and executive partner affairs for the capital contribution of Gezhen Investment, and it will not withdraw excess income from the distributable income of Gezhen Investment under the Zhuhai Mingjun Partnership Agreement.

Not only that, after the completion of the transaction, the transferee will also advance the equity incentive plan for the management and key employees recognized by Gree Electric at the management entity level, with a total amount not exceeding 4%. At that time, the 8.91% stake in Gree Electric held by Hebei Haihai Guarantee Investment Co., Ltd., established by Gree Electric, a distributor close to the management, plus Dong Mingzhu’s current holding of 0.74% and management’s 4% Equity incentives, and management entitiesThe indirect shareholding in Zhuhai Mingjun, this part of the equity is about 14%, which is almost the same as the shareholding of Zhuhai Gree held by the largest shareholder Zhuhai Mingjun after the management indirectly holds the shares of the listed company.

Also, Management seats on the board have been strengthened. Among the three board seats owned by Zhuhai Mingjun, the management entity of Gree Electric has 1 nomination right. Of the 9 members of the 11th Board of Directors, 6 are non-independent directors. Among them, Gree Group occupies 4 seats, and the second largest shareholder He Beijing Hai Guaranty Investment Co., Ltd. occupies 2 seats. After the equity transfer, the largest possible nomination rights for the six non-independent directors of Gree Electric Appliances are: 3 Mingjun Zhuhai, 2 from Beijing Sea, and 1 from Gree Group.

The relationship between “strong father and weak son strong” is completely over. Where does Gree Group go?

During the promotion of the reform of state-owned enterprises and the development of mixed ownership economy, Gree Group’s shares in Gree Electric have been continuously diluted-from 60% at the time of Gree Electric’s IPO to 18.22% before the equity transfer. This time, With the Gree Group giving up its largest shareholder status, the many years of “father-son battle” between Gree Group and Gree Electric Appliances will be completely ended.

Early from the era of Zhu Jianghong, the former chairman of Gree Electric Appliances, Gree Group and Gree Electric Appliances have been showing a situation of “strong fathers and weak children.” As early as 2004, when there was crossover in business between the two parties, Gree’s performance was significantly better than that of Gree Group; but Gree Group was the absolute controlling shareholder of Gree. Until September 2004, after the equity transfer between the two parties, Gree Electric Appliances ended the dominant situation of Gree Group and became a state of diversified and dispersed shareholding.

For a long time since then, the chairman of Gree has also served as the chairman of Gree Group, including Zhu Jianghong and his successor Dong Mingzhu. Some Gree executives told Tencent News “Perspective” that during his tenure as chairman of Gree Group, Dong Mingzhu did not pay much attention to Gree Group. A typical example is that the Gree Group headquarters was relocated to an inconspicuous building where the Gree Electric Transport Fleet is located, without even a company sign.

Until October 18, 2016, the Zhuhai State-owned Assets Supervision and Administration Commission issued a notice to the board of directors of Gree Group, removing Dong Mingzhu, the Gree Group chairman, director and legal representative. Although it is officially said that Dong Mingzhu’s resignation from the chairman of Gree Group was “based on the relevant national regulations and my own wishes,” to a certain extent, it was the result of the promotion of Zhuhai SASAC.

After the new management of Gree Group arrived, he also took a series of actions through its investment platform, including a 2018 stake in Changyuan Group. (600525.SH ) , 2019 shares in Orbit (300053.SZ) two listed companies. According to the latest data released by Gree Group, Gree Group holds 11.61% and 15.08% shares in Changyuan Group and Orbit, respectively.

The performance of electric vehicle intelligent equipment maker Changyuan Group does not seem to be satisfactory. On May 31, Changyuan Group received an investigation by the CSRC about the suspected fraudulent performance of its subsidiaries, Changyuan and Eagle, and its stock price went down. According to the third quarter report, due to the sale of equity in some subsidiaries, the revenue in the first three quarters was 4.215 billion yuan, a year-on-year decrease of 21.98%; the loss was 513 million yuan, a 140% year-on-year decrease.

Obit involved in aerospace electronics, satellite and artificial intelligence businesses is no exception. The operating income of Obbit in the first three quarters of 2019 was 556 million yuan, a decrease of 3.76% compared with the same period last year; the net profit attributable to shareholders of listed companies was 75.766 million yuan, a decrease of 17.18% over the same period.

After the pillar enterprise Gree Electric Appliances, how is the performance of the Gree Group? According to official data, the company’s operating income in 2018 was around 2002.94 billion yuan, a year-on-year increase of 33.37%; net profit was 26.02 billion yuan, a year-on-year increase of 15.86%. Gree Electric Appliances achieved a total operating income of 200.024 billion yuan in 2018, a year-on-year increase of 33.33%; a net profit attributable to the parent company of 26.203 billion yuan, a year-on-year increase of 16.97%. By contrast, stand up against each other.

Article from: Tencent News periscope , author: Li Si Yi < / span>