Gree, who had been distributing dividends for 10 consecutive years, suddenly announced no dividends.
On the evening of April 25th, Gree Electric released its 2017 annual report. The company's 2017 operating income reached 148.29 billion yuan, an increase of 36.92% year-on-year; net profit was 22.4 billion yuan, an increase of 44.87% year-on-year. Gree's 2017 profit distribution plan 》shows that no cash dividends will be proposed for 2017, no bonus shares will be offered, no capital reserve will be converted into share capital, and the balance will be transferred to the next year's allocation.
Prior to this, Gree Electric Appliances' cash dividends have continued for 10 years. The 2016 annual report also announced a dividend of over 10 billion yuan.
In response, on April 26, the Shenzhen Stock Exchange issued a “concern letter” asking the Gree Electric Board to make explanations on relevant issues, requesting Gree Electric Appliances to combine characteristics of the industry, its own business model, and multi-year financial indicators. At the development stage, industry characteristics, fund demand status, etc., combined with the company's current funding status, etc., the specific reasons and rationality of the non-cash dividends for 2017 are indicated, and it is in line with the profit distribution policy stipulated in the company's articles of association.
Gree Electric Appliance Co., Ltd. returned to the Shenzhen Stock Exchange on the evening of the 26th, paying attention to the letter of concern. It will make clear as soon as possible the capital demand and cash flow calculations, fully consider the investor’s demands, and conduct the mid 2018 dividend. The dividend amount will be determined according to the company’s funds at that time.
Once had a dividend of 10 billion, the stock price was once lowered after the announcement of no dividends
In the 2016 annual bonus plan, Gree Electric Appliances distributed a total of 10.8 billion yuan in discoveries. In 2015, it distributed a cash dividend of 15 yuan (including tax) to every 10 shareholders for a total of 9 billion yuan in cash. In 2014, it also distributed a dividend of 9 billion yuan. .
Choice's data shows that since its listing, Gree Electric's total dividends over the years have reached 41.792 billion yuan. This total amount of dividends ranks the 22nd among all listed companies in Shanghai and Shenzhen.
Under continuous dividends, its share price rose significantly higher than the market average. Its share price has risen from about 4.9 yuan on April 25, 2008 to about 50 yuan on April 25, 2018. After the dividend was announced , Yesterday, Gree's stock price fell to a stop, eventually fell 8.97%. Market value evaporated 20 billion.
In contrast, Midea Group's operating revenue in 2017 was 240.7 billion yuan; net profit attributable to parent company was 15.6 billion yuan; cash dividend of 12 yuan (tax included) was distributed to every 10 shareholders. Haier realized revenue of 1592.54 in 2017. Billion yuan, an increase of 33.68%. The net profit attributable to the mother was 6.962 billion yuan, an increase of 37.37%. The cash dividend of RMB 3.42 (taxes included) was distributed to all shareholders for every 10 shares.
Is it illegal? Experts say they need to explain the specific reason
There are numerous A-share iron cocks, and Gree is a model of cash dividends. Now Gree declares whether the non-profit dividends violate the relevant regulations?
The CSRC has specific regulations on the cash dividends of listed companies. The company should clearly define the cash dividend policy in its articles of incorporation. The profit distribution policy should maintain continuity and stability. That is, Gree must stipulate the annual cash dividend ratio in the Articles of Association. The profit distribution policy of the company in the company’s charter of Gree Company is 'under the premise that the company’s cash flow meets the company’s normal operations and long-term development, the company’s profits accumulated in cash over the last three years are not less than the profits achieved in the last three years. Thirty percent of annual profit can be distributed. '
According to Chang Sha, a lawyer from Beijing Kyoto Law Firm, Gree’s announcement of dividends this year is indeed contrary to common sense, but it does not involve illegal activities.
Gree Electric Appliances has always had a strong expectation for its dividends. According to Gree Electric's disclosure in January 2018, December 2017 respectively received investor record sheets, all investors asked, what are the company’s dividend payments? According to the plan, Gree twice responded that 'the dividend plan is related to the company's performance for the year and must be reviewed and determined by the board of directors and the shareholders' meeting, but the company has been paying attention to investors' returns over the years.'
Renmin University of China Professor of Law, Liu Junhai, director of the Institute of Commercial Law at Renmin University of China, believes that unlike shareholders and creditors, creditors can repay the principal and interest regardless of the debtors’ operating conditions. However, shareholders need to bear investment risks. Investors are rushing towards dividends. Since the listed companies are profitable, they need to repay the investors. They should respect the investor's right to share dividends. If there is no need to explain the specific reasons for dividends, respect the investors’ right to know.
Last year, the cash outflow from investment activities increased 192.04% year-on-year
According to statistics, in 2017, Gree’s operating income was 148.3 billion yuan and net profit was 22.5 billion yuan. In 2017, it was not because there was no money. As of the end of 2017, the assets of Gree Electric Appliances totaled RMB 214.963 billion, and shareholders’ equity RMB 65.595 billion, undistributed profits of 55.74 billion yuan, and undistributed profits of more than 9 yuan per share.
According to Gree Electric's financial report, by the end of 2017, the most liquid currency totaled RMB 99.610 billion, accounting for 46.34% of the total assets, of which bank deposits amounted to RMB 59.171 billion. It can be seen that Gree can use the funds not lower.
It is worth mentioning that in recent years, its operating cash flow has fluctuated. In 2016, the net cash flow from its operating activities dropped sharply by 66.52% from RMB 44.378 billion in 2015 to RMB 14.846 billion. In 2017, the situation With a turn for the better, the net cash flow from the company's 2017 operating activities was 16.4 billion yuan.
In contrast, the cash outflow from its investment activities increased 192.04% year-on-year in 2016 to RMB 66.2 billion.
In recent years, Gree’s external expansion continues to increase. According to Gree Electric’s announcement, the company’s newly established subsidiary in 2017 has seven, including Zhuhai Gree Robot Co., Ltd., Zhuhai Gree Information Technology Co., Ltd., Gree (Wu An). The net assets of the three companies of Precision Equipment Manufacturing Co., Ltd. at the end of 2017 were 49.25 million yuan, 52 million yuan and 300 million yuan, respectively.
In addition, Gree HVAC Refrigeration Equipment (Chengdu) Co., Ltd., Zhuhai Gree CNC Machine Tool Research Institute Co., Ltd., Gree Robots (Luoyang) Co., Ltd. and Zhuhai Gree Transportation Co., Ltd. 4 newly established subsidiaries have not yet injected capital.
■ Inventory
Eight components of listed companies in home appliances, the most profitable companies do not pay dividends
The Choice data shows that at present, there are a total of 67 listed companies in the household appliance industry in Shanghai and Shenzhen. Among them, 59 companies have released the 2017 annual report. From a revenue point of view, Midea Group is ranked at home appliances with an operating income of 240.7 billion yuan. Ranked first in the industry, Qingdao Haier ranked second in operating income of 159.3 billion yuan, Gree Electric Appliances ranked third in approximately 148.3 billion yuan.
However, among the above companies, the most profitable company is Gree Electric. The data shows that Gree Electric Appliances' net profit for 2017 was 22.5 billion yuan, ranking first; Midea Group's net profit reached 15.6 billion yuan; Qingdao Haier's net profit 6.93 billion yuan ranked third.
In terms of dividends, of the 59 companies that have published annual reports in the appliance industry above, 46 companies plan to distribute dividends in 2017, accounting for 78% of the companies that have published annual reports. Of the top 15 household appliances companies with net profit, only Gree Electric is in 2017. There is no dividend in the year.
■ Focus
Gree to do money? Diversification has caused controversy
As for the reasons for no dividends, Gree Electric replied that the air-conditioning industry in which the company's main business is located has the characteristics of large investment in assets, significant seasonal and regional differences in consumption, and increasing logistics costs. In order to meet market demand, it further reduces operating costs and strengthens In terms of competitive advantages, the company plans to gradually expand its air-conditioning capacity. At the same time, the company has maintained a leading position in the air-conditioning industry through its high-speed and high-quality development in recent years. In order to seek the long-term development of the company and the long-term interests of shareholders, the company plans to focus on smart equipment, smart appliances, Integrated circuits and other industries, to achieve sustainable, stable and healthy development of the company.
In a recent statement of Dong Mingzhu, she set a new 'small goal': 'We will have to make efforts in smart devices in the next five years. Smart equipment must adhere to independent innovation and become the second major business of Gree's future. '
People in the home appliance industry believe that smart equipment is a very important development area in the future and it is also relevant to Gree’s existing business.
However, Gree's diversification has caused a lot of controversy. After Gree announced that it was making mobile phones, there was a voice in the industry that Gree's incoming mobile phones lacked logic and detailed the irrationality of its incoming mobile phone industry in terms of sales, channels, and brands.
A Gree investor who did not wish to be named told the Beijing News reporter that from the perspective of shareholders, Gree still has a lot of investment space because of its good performance. For Gree’s planning, the shareholders said, 'The same is a civilian product. The chip must keep up with the world's level of competition, the difficulty is more than a hundred times that of a large aircraft. Countless money and talents are needed to become cannon fodder, and the efforts of several generations of people are the same. It is money to send, and I am willing to make such cannon ash.