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Shares of the Chinese home appliance giant declined after it announced that Hillhouse Capital, a major private equity firm, plans to reduce its stake for the first time since investing six years ago.
The company’s stock closed 2.3% lower at CNY37.59 (approximately USD5.50), marking nearly a 19% decrease from the purchase price paid by Zhuhai Mingjun Investment Partnership, an investment fund controlled by Hillhouse.
According to the announcement, Zhuhai Mingjun intends to sell up to 112 million shares—about 2% of the total—over the next three months starting in 15 trading days. The sale aims to raise funds to pay down bank loans. Based on the current stock price, the transaction’s estimated value is around CNY4.2 billion (USD614.3 million).
Zhuhai Mingjun, which also includes an investment company owned by the company’s Chairwoman Dong Mingzhu, acquired a 15% stake from the state-owned Zhuhai Gree Group for CNY41.7 billion (USD6.1 billion) in January 2020. This made it the largest shareholder in the Zhuhai-based firm.
Recent share buyback programs have increased Zhuhai Mingjun’s ownership to 16.1%, while Dong Mingzhu owns approximately 1.8%.
As the Chinese air conditioning market continues to suffer an overall downturn, the company experienced financial pressures last year. Its net profit dropped 2.3% to CNY21.5 billion in the first nine months of the year, and revenue declined 6.6% to CNY137.7 billion (about USD20.1 billion), according to the latest financial report.
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