Gree Electric Falls After Earnings Miss, Dividend Cut

By Bingyan Wang

Gree Electric's shares are lower on their first day of trading after the five-day Labor Day holiday, as earnings missed analysts' expectations and the company trimmed its dividend payout ratio.

Shares of the Chinese home-appliances maker were down 10% in early trading Thursday in Shenzhen, hitting their daily limit.

Gree Electric during the holiday period reported flat on-year revenue growth for both full-year 2022 and the first quarter of 2023, weaker than the performance of rivals Haier Smart Home and Midea Group.

The company also trimmed its 2022 dividend payout ratio to 46% from 72% in 2021 and 106% in 2020, which Citi analysts called a "downward surprise."

"In addition to weak earnings, we expect its dividend cut in 2022 to further pressure its share price in the short term," Citi analysts said in a research report. They have a sell rating on the stock, although they note that the company's balance of prepayment from distributors in the first quarter rose 60% on quarter, implying "potential sales acceleration" in the second quarter.

Gree Electric has been facing a slowdown in China's demand for air conditioners in recent years. Sales of air conditioners accounted for over 80% of the company's revenue in 2022.

Write to Bingyan Wang at bingyan.wang@wsj.com

(END) Dow Jones Newswires

May 03, 2023 23:47 ET (03:47 GMT)

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