Dong Mingzhu: Even if we have to invest 50 billion, Gree will succeed in chip research

Source: Content from CCTV Finance, thank you.

Recently, a CCTV financial reporter conducted an exclusive interview with Ms. Dong Mingzhu, Chairman of Gree Electric Appliances. Dong Mingzhu said that even if there is no dividend this year, Gree Electric Appliances' average dividend rate has reached 44%. Gree must master core technologies in order to achieve long-term sustainable development. Recently, Gree Electric Appliances' Chairman Dong Mingzhu announced that Gree Electric Appliances will not pay dividends this year. This is the first time in 11 years that Gree Electric Appliances has announced no dividends. Later, Gree announced in a high-profile manner that it would make chips.

Recently, CCTV Finance reporter conducted an exclusive interview with Ms. Dong Mingzhu, Chairman of Gree Electric Appliances.

Dong Mingzhu said that even if there is no dividend this year, Gree Electric's average dividend rate has reached 44%. Gree must master core technologies for long-term sustainable development. The core technology Dong Mingzhu mentioned is chips. Gree has been questioned by some for investing money in chip research and development. Dong Mingzhu responded: "Even if it costs 50 billion, Gree will succeed in chip research. When we can master chips and we can get high-end chips, we can serve the world."

On April 25, Gree disclosed a record high net profit in 2017, but did not distribute dividends for this period, retaining funds for new industries such as integrated circuits. Analysts pointed out that this was the third time since Gree went public in 1996, and the first time in 11 years. The previous two times occurred in 1998 and 2007. The day after the annual report was released, Gree's stock price opened 9% lower, once close to the limit.

According to Gree's annual report, the reason for not distributing dividends is to retain funds for "production base construction, smart factory upgrades, and technology research and development and market promotion of new industries such as smart equipment, smart home appliances, and integrated circuits." Gree's Secretary Wang Jingdong said:

The ZTE incident has had a huge impact on us, and has made us reflect on how strong our self-control is. At the same time, it is also a reminder for us that we must increase our investment in integrated circuits this year.

With hundreds of billions of cash in hand but no dividends, Gree made a statement to the Shenzhen Stock Exchange the day after its 2017 annual report that the new industries such as intelligent equipment and integrated circuits mentioned in the annual report "are still in the planning stage. The company will clarify the capital demand and cash flow calculation as soon as possible, fully consider the demands of investors, and make interim dividends in 2018." In addition to being accused of being "stingy", China Securities Journal believes that the non-dividend may be related to Dong Mingzhu's strategy of seeking re-election as chairman.

According to Sina Finance, this year is the 27th anniversary of Gree Electric Appliances. Various information shows that Dong Mingzhu will be re-elected as the company's chairman in the upcoming board election this month. She revealed at the "Gree 2018 Relaunch" party on Wednesday that the company will strive to achieve a revenue target of 200 billion yuan in 2018. She also told the tens of thousands of employees on the scene that she would guarantee a house for each employee of Gree Electric Appliances, and the Zhuhai Municipal Government has agreed to provide Gree Electric with land for the construction of 10,000 houses.

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