GREE(SZ:000651) Sou Hu Cai Jing·2025-08-03 23:10Core Viewpoint - The conflict between Gree Electric and the consumer complaint platform "Xiaofei Bao" highlights the company's deep-seated anxiety amid declining market share and performance pressures, reflecting broader challenges in the home appliance industry [4][15]. Financial Performance - Gree's 2024 revenue was approximately 189.16 billion yuan, a decrease of 7.26% year-on-year, marking a drop below the 200 billion yuan threshold for the first time since 2018 [5]. - The net profit attributable to shareholders reached about 32.18 billion yuan, an increase of 10.91%, setting a historical high [5]. - The revenue decline is attributed to a 4.29% drop in the consumer appliance segment, primarily air conditioning, which generated 148.56 billion yuan [5][7]. Market Dynamics - Gree's domestic revenue fell by 5.45% to 141.5 billion yuan, while overseas revenue grew by 13.25% to 28.2 billion yuan, indicating weakening competitiveness in the domestic market [7]. - Despite a 9.7% increase in air conditioning production across the industry, Gree's core air conditioning business experienced a decline, suggesting a significant loss in market share [5][7]. Cost Management - Gree achieved net profit growth primarily through substantial reductions in operating expenses, with sales expenses dropping by 34.11% to 9.75 billion yuan [7][8]. - The company's gross margin was 29.43%, down 1.14 percentage points, while the net margin rose to 16.89%, up approximately 3.3 percentage points, reflecting the impact of cost-cutting measures [8]. Strategic Challenges - Gree faces three main pressures: saturation in the air conditioning market, slow channel transformation, and ineffective diversification efforts [15][20]. - The air conditioning market has shifted to a stock competition phase, with a total transaction volume of 172.52 million units in 2024, showing only a 1.8% growth [15]. - Gree's reliance on air conditioning remains high at 78.13%, significantly above competitors like Midea and Haier [19]. Brand and Public Relations - Gree's aggressive public relations strategy, characterized by confrontational tactics, may undermine its long-term brand credibility [10][12]. - The company's response to consumer complaints has shifted focus from data authenticity to its attitude towards consumer feedback, potentially damaging its reputation [11]. Innovation and R&D - Gree's R&D investment decreased by 12% in 2024, raising concerns about its ability to innovate in key areas like smart technology and IoT [16]. - Despite having the largest R&D center globally, Gree's innovation outcomes have not translated effectively into market success [16]. Conclusion - The ongoing conflict with Xiaofei Bao may serve as a catalyst for Gree to confront internal challenges rather than deflecting criticism, emphasizing the need for a strategic overhaul to regain competitiveness in the evolving market landscape [20].