Economic Observer Network reporter Zhang Bin, intern reporter Hu Rongyu On the evening of April 14, Gree Electric (000651.SZ) disclosed the 2020 annual performance bulletin. The company’s total operating income was 170.497 billion yuan, a year-on-year decrease of 14.97%; the net profit attributable to shareholders of listed companies was 22.175 billion yuan, a year-on-year decrease of 10.21 %; Basic earnings per share were 3.71 yuan, a year-on-year decrease of 9.73%.
Image source: Gree Electric’s performance bulletin
A reporter from Economic Observation Network noted that this is the second time that Gree Electric has seen both revenue and profit declines since its listing. The last time it was in 2015, Gree Electric’s total operating income for the year fell by 28.17% year-on-year, and its parent net profit fell by 11.46% year-on-year.
Data source: Wind
Regarding the decline in overall performance throughout the year, Gree Electric said that in the first half of 2020, the epidemic will have a greater impact on the offline retail market of the domestic air-conditioning industry. In order to adapt to market changes, the company promoted the new retail model nationwide, steadily promoted changes in sales channels and internal management, and implemented active sales promotion policies. With the effective integration of online and offline, the channel efficiency of the company’s products has improved, channel costs have been reduced, and market competitiveness has further improved. The performance in the second half of 2020 will gradually pick up.
In terms of quarters, Gree Electric’s performance in the fourth quarter of 2020 is exceptionally outstanding. Its 2020 third quarter report shows that the net profit attributable to shareholders of listed companies in the first three quarters of 2020 will be 13.699 billion yuan. In other words, Gree Electric’s net profit attributable to shareholders of listed companies in the fourth quarter of 2020 was 8.476 billion yuan, the highest in the four quarters, accounting for about 38.22% of the annual net profit.
Data source: Wind
On the evening of April 14, Gree Electric also disclosed its performance forecast for the first quarter of 2021. It expects to achieve a total operating income of 32 billion-36.5 billion yuan in the first quarter, an increase of 11.1 billion-15.6 billion from the 20.9 billion in the same period in 2020 Yuan; net profit attributable to shareholders of listed companies was 3.21 billion-3.8 billion yuan, a year-on-year increase of 106%-144%.
Gree Electric said that in the first quarter of 2021, the company’s revenue and profit increased significantly compared with the same period last year. The main reasons are as follows: In the first quarter of 2020, due to the impact of the novel coronavirus pneumonia epidemic, and the new energy efficiency standards intensified industry competition, the company’s short-term performance was under pressure. In the first quarter of 2021, the company steadily promoted the reform of sales channels and internal management, implemented active promotion policies, and promoted performance recovery by leveraging on brand, technology and channel advantages.
The Economic Observer Network reporter noted that Gree Electric expects to double its net profit in the first quarter of 2021 due to the impact of the epidemic in the performance of the first quarter of 2020 and a low base. However, compared with the net profit in the fourth quarter of 2020, its net profit in the first quarter of 2021 has dropped significantly from the previous quarter, which is expected to decrease by 4.676 billion yuan to 5.266 billion yuan.
As of the close of April 14, Gree Electric reported closing at 59.92 yuan per share, with a total market value of 360.5 billion yuan.
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