Business Description

Gree Electric Appliances Inc. of Zhuhai (Gree Electric), is a manufacturer and distributor of consumer electronics products. The company’s main focus is on the development, manufacture, marketing, and research of a wide variety of home appliances, including ceiling fans, table fans, kettles, rice cookers, water dispensers, and air conditioning products. Gree Electric has a network of distribution bases, R&D labs, distributors, alliances, and after-sales service units. The company’s products can be divided into more than 20 categories, 400 series, and 12700 models. Gree sells its products in over 160 countries and regions, to more than 300 million customers around the globe.

Gree operates from a network with 11 production bases. Nine of these are in China and two are in Brazil and Pakistan. The company operates through three product categories: Air conditioners, home appliances, and others. The company’s Air Conditioners category manufactures, markets, and services commercial and residential air conditioners worldwide (CAC). Gree Electric is China’s largest manufacturer of air conditioners. With more than 200 million customers worldwide, Gree Electric is the largest manufacturer of air conditioners in the world.

There are many types of RAC manufactured by the company, including wall-mounted, floor-standing, and window models, as well as portable, dehumidifiers and special AC. Its CAC products include light commercial AC (Multi-VRF), chiller, terminal, and special AC. The company sells, markets, and distributes a broad range of products in China through the Home appliances section. The company’s product range includes an electric heater, air purifier, and water purifier, as well as a kettle, rice cooker, electric table fan and ceiling fan, pressure cooker and refrigerator, smartphones, induction cook, and humidifier.

Gree Electric also offers industrial products, including compressors, motors, capacitors, and enameled wires. Gree Electric focuses on R&D to create innovative products in its field and improve the performance of existing products. It holds 36,949 patents in technology, which includes 15,253 invention patents. It manages 12 research institutes, 72 research institutions, and 727 advanced laboratories.

Key Financials

Revenue (US$ Mn)

• At a 17.91% increase from , Gree Electric Appliances Inc.’s annual revenue of US$ 29,360 Mn was indexed in 2021
• Gree Electric Appliances Inc. generated total revenue of US$ 24,900 Mn in 2020

Operating Income (US$ Mn)

• At a 96.74% increase from , Gree Electric Appliances Inc.’s operating income of US$ 3,298 Mn was indexed in 2021
• Gree Electric Appliances Inc. generated an operating income of US$ 1,676 Mn in 2020

Net Income (US$ Mn)

• At a 4.01% increase from , Gree Electric Appliances Inc.’s net income of US$ 3,430 Mn was indexed in 2021
• Gree Electric Appliances Inc. generated a net income of US$ 3,298 Mn in 2020

Operating Margin %

• At a -19.32% decrease from , Gree Electric Appliances Inc.’s operating margin of 14% was indexed in 2021
• Gree Electric Appliances Inc. generated an operating margin of 18% in 2020

Gross Margin %

• At a 1.14% increase from , Gree Electric Appliances Inc.’s gross margin of 27% was indexed in 2021
• Gree Electric Appliances Inc. generated a gross margin of 26% in 2020

SWOT Analysis

Strengths

Operating Margin

Strong financial margins support the company’s overall growth. The company’s revenues for FY2018 were CNY200.024 million. This 33.3% increase over FY2017. In FY2018, its operating margin was 15.5%, compared with 17.4% in FY2017. It still beat the Consumer Products industry average operating margin of 6.24% in the same year. It can be attributed to a strong operating margin and a good pricing strategy. This demonstrates the company’s ability to create value for shareholders by creating positive operating cash, and fulfilling obligations toward creditors.

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