Caixin News, June 29th (Reporter Ren Chaoyu): The shareholders' meeting of Gree Electric Appliances, Inc. of Zhuhai (000651.SZ) held on the afternoon of June 28th continued the tradition of previous years, not encouraging recording, video, live broadcast, and screening of network signals. At the meeting, Dong Mingzhu directly declared war on Xiaomi's air conditioner when talking about industry competition, questioning Xiaomi's lack of core technology. In addition, Caixin News reporters learned on the scene that Gree Electric's channel reform will continue, and refrigeration business may become the company's future new growth point.

(Source: Caixin News journalist photo)

"Xiaomi claims to be number one on the internet, but all of its products are made by other manufacturers. What is your technology?" Faced with the strong momentum of Xiaomi's air conditioner in recent days, Dong Mingzhu chose to directly confront it.

According to AVC Cloud Net, from January to May 2024, the online sales of Xiaomi air conditioners accounted for 9.09% of the market share, with a year-on-year increase of 84.46%; offline sales increased by 8344.41% year-on-year. In terms of sales growth rate, it far exceeds Gree and Midea, but there is still a big gap in sales market share.

Notably, on the eve of the shareholders meeting, the official account of "Gree Wen Chuan" paid attention to an article titled "China's air conditioning market "reshuffles", Gree falls out of the top three, and the new dark horse is "outsider"", which claimed that Xiaomi air conditioners have surpassed Gree, Midea, and Haier.

Gree said that fake articles and transcribed videos have been reprinted by hundreds of self-media accounts in a short period of time. The article/video misleads the public's understanding of Gree's products and sales by fabricating false data. Therefore, the company has reported it to the relevant national authorities and will take legal measures to firmly defend its legitimate rights and interests.

Investors who have invested heavily in Gree for many years said they are not worried about Xiaomi's strong momentum. He believes that Xiaomi's air conditioner is seizing more of the second- and third-line brand markets.

In addition to air conditioning, Gree Electric Appliances introduced refrigeration business as a new growth point to shareholders. Lu Luqun, head of the business, stated that starting this year, the company will gradually establish sales companies in various provinces and regions to undertake local construction and market maintenance. The headquarters will also invest heavily in product iteration and update based on the base, and use technology to drive and develop its technical capabilities.

Dong Mingzhu also stated that the refrigeration channel is separated from the air conditioning channel because it has different service content from air conditioning. With the improvement of technology and quality standards, consumers can soon enjoy free service for refrigeration products according to national service life commitments.

When talking about channel reform, Dong Mingzhu also introduced Lu Luqun to shareholders. She stated that Lu Luqun is not fighting alone, but as a team. Gree's channel reform has taken shape, but it still needs to change further.

Caixin News reporters found that Wang Ziru, the person in charge of Gree's "channel reform", did not appear at the shareholders' meeting.

In addition, the development of Gree Titanium is still one of the focus points for investors' inquiries. Some research analysts from investment institutions expressed that even though public information showed that Gree Titanium's losses had been reduced greatly, the competition in the new energy industry is still fierce. Will Gree Titanium's losses increase in the future? If so, under what conditions will it consider shrinking?

Deng Xiaobo, chairman of Gree Titanium, stated that first of all, Gree Titanium has a very small impact on Gree's main business, with revenues accounting for about 2%. Secondly, Gree Titanium's performance in 2023 increased significantly, with a growth rate exceeding 50%, gross margin rate at a normal level, and the loss is mainly due to historical reasons resulting in impairment. The application scenarios of lithium carbonate batteries are becoming more and more extensive. The demand, production, and supply of products are becoming more and more stable. In short, we have made progress in the lithium carbonate battery field.

However, Deng Xiaobo also stated that since the competition in the large-scale energy storage market is very fierce, whether Gree Titanium's traditional energy storage business of LiFePO4 will develop in the future, it is indeed necessary to weigh the pros and cons. Overall, he expects the performance of Gree Titanium to continue to maintain high-speed growth.