GREE(SZ:000651) EBSCN·2024-08-05 06:31Investment Rating - The report maintains a "Buy" rating for Gree Electric Appliances with a target price of 46.62 CNY [3]. Core Views - The introduction of the third employee stock ownership plan and the cancellation of repurchased shares enhance corporate governance [1][2]. - The employee stock ownership plan involves 79.46 million shares, accounting for 1.41% of the total share capital, with a maximum participation of 12,000 employees [1][2]. - The performance assessment criteria for the plan are set to achieve a weighted average ROE of no less than 20% for 2024 and 2025, reflecting a focus on high-quality development [2]. Summary by Sections Employee Stock Ownership Plan - The plan allows a significant number of core employees to benefit from the company's growth, with a lock-up period of 12 months and a purchase price of 20.31 CNY per share [2]. - The plan's assessment criteria are designed to ensure effective use of net assets while pursuing performance growth [2]. Financial Performance and Forecast - Gree Electric's revenue is projected to grow from 205.02 billion CNY in 2023 to 254.04 billion CNY in 2026, with a compound annual growth rate (CAGR) of approximately 9.4% [3][7]. - The net profit attributable to the parent company is expected to increase from 29.02 billion CNY in 2023 to 36.42 billion CNY in 2026, reflecting a stable growth trajectory [3][7]. - The report forecasts an EPS growth from 5.15 CNY in 2023 to 6.47 CNY in 2026, indicating a positive outlook for earnings per share [3][8]. Valuation Metrics - The current price-to-earnings (P/E) ratio is projected to decrease from 8 in 2023 to 6 in 2026, suggesting an attractive valuation as earnings grow [3][8]. - The report highlights a strong dividend history, with cumulative cash dividends exceeding 125.2 billion CNY since the company's listing [3]. Market Position and Strategy - Gree Electric is positioned as a leader in the air conditioning industry, benefiting from brand strength, product quality, and channel barriers [3]. - The company is expected to leverage new retail models to enhance online and offline platform integration, further solidifying its market position [3].