Summary of Key Points
In 2025, Gree Electric's revenue and profit both declined by approximately 9.8%. At the annual shareholders' meeting, Dong Mingzhu addressed the concerns of the shareholders directly. On one hand, she turned the meeting into a live product promotion event, featuring her company's newly developed rice dehusker, which encouraged shareholders to place orders with immediate delivery the next day. On the other hand, she announced strategic measures to address these challenges: promoting the sale of diversified products (by enhancing training for non-air conditioning categories), undergoing significant reforms in overseas markets, and investing in green energy systems that integrate solar, storage, and air conditioning technologies, as well as AI technology. She also aimed to stabilize the company's market value through share repurchases and an employee stock ownership plan, emphasizing that shareholder dividends depend on product sales and that consumers should choose Gree products.
1. The Shareholders' Meeting Turns into a Product Promotion Event: The Rice Dehusker Takes Center Stage
Dong Mingzhu transformed this year's shareholders' meeting into a new product launch event, focusing on Gree's self-developed rice dehusker. She explained that the rice sold in the market loses its moisture within two to three months after being husked, leading to consumers consuming stale grains. Her dehusker allows for immediate dehusking and cooking, making it healthier. She directly appealed to the shareholders, saying, "For your health, you must buy this; place an order today, and it will be delivered to your home by tomorrow morning!" Some shareholders responded immediately, even asking for autographs, creating a lively atmosphere reminiscent of a live shopping show. This approach not only showcased Gree's range of diversified products but also reflected Dong Mingzhu's urgency in driving product sales through shareholder engagement.
2. Gree's Growth Challenges: Declining Performance and Hurdles in Diversification and Overseas Markets
For 2025, Gree expects revenue of 170.4 billion yuan and a net profit of 29 billion yuan, both showing a year-on-year decrease of 9.8% (due to the overall pressure on the air conditioning market). Although performance improved in the first quarter (with 3% growth in both revenue and profit), shareholders raised two main concerns:
- Insufficient Diversification: The promotion of products other than air conditioners (such as rice dehuskers and small appliances) in the "Dong Mingzhu Health Home" stores was insufficient, and sales staff training needed improvement.
- Weak Overseas Market Performance: Dong Mingzhu acknowledged that exports had not been successful, and there was a need for major reforms in overseas market strategies. These issues represent significant obstacles for Gree's growth; it cannot rely solely on air conditioners to sustain its development and must find new opportunities in non-air conditioning categories and overseas markets.
3. Path to Success: Channel Reforms, New Energy, and AI Technology
In response to the shareholders' concerns, Dong Mingzhu proposed specific solutions:
- Channel Reforms: Domestic sales efforts will focus on promoting non-air conditioning products, with plans to invite Suzhou shareholders to open "Dong Mingzhu Health Home" stores. Overseas markets require significant changes, as Gree's product range has expanded beyond air conditioners, offering ample potential for growth.
- New Energy Strategy: Gree's titanium-based energy storage business holds promise in the next three to five years. Next year, the Zhuhai Gree Electronic Components Building will use a "solar-storage-air conditioning" system to generate its own green energy, reducing reliance on the grid.
- AI and Chips: Gree has an "AI-powered smart manufacturing factory," and AI can transform appliances from being individually intelligent to interconnected and intelligent. The company has mass-produced silicon carbide chips, enabling more energy-efficient and reliable air conditioners, which will be supported by a global "ten-year free repair" warranty.
4. Dong Mingzhu's Straightforward Philosophy: Interaction with Shareholders and Long-Term Vision
Dong Mingzhu's straightforward approach was evident throughout the meeting:
- Shareholder Dividends: She emphasized that shareholders should support Gree products to receive dividends, noting that both the 80,000 employees and distributors need to work together for this goal.
- Valuation and Market Share: When questioned about Gree's lower valuation compared to Japanese competitors like Daikin, she stated that as a manufacturing company focused on quality, Gree's value will rise once the world recognizes its products. She also mentioned that prioritizing profit over market share is necessary to give others room to thrive.
- Long-Term Motivation: She discussed measures to stabilize the market value through share repurchases and a fourth employee stock ownership plan, balancing short-term and long-term goals.
Her straightforwardness reflects her strong leadership style and Gree's commitment to a product-centric, quality-driven long-term strategy.
5. The New Competition in the AI Era: Gree's Next Round of Competition
Dong Mingzhu noted that although the competition with Xiaomi has passed, the AI era presents new challenges. While Xiaomi has entered the air conditioning and electric vehicle markets, Gree is shifting its focus to titanium-based energy storage for commercial vehicles, AI-powered smart manufacturing, and intelligent appliances. Gree's AI strategy involves integrating these technologies into its production processes (smart factories), products (intelligent connectivity), and industry applications (central air conditioning, refrigeration). With its advantages in silicon carbide chips, Gree aims to gain a competitive edge in the AI and manufacturing sectors.
In summary, this shareholders' meeting highlights that Gree is going through a period of transformation. Dong Mingzhu is using her straightforwardness and action to drive change through diversification, overseas market reforms, and technological innovation. The participation and support of the shareholders are crucial for Gree's successful transition.