Coexistence of declining profits and high dividends: Is Gree about to become a "cigarette butt stock"?
Author | Huang Yu
As the home appliance industry undergoes deep adjustments, even Gree Electric, one of the "three giants of white goods," has not escaped the decline in revenue and profit.
On the evening of April 28, Gree Electric disclosed its financial reports for 2025 and the first quarter of 2026. Data shows that Gree achieved an operating revenue of 170.447 billion yuan in 2025, a year-on-year decrease of 9.89%; net profit attributable to the parent company was 29.003 billion yuan, with a similar drop of nearly 10%.
In the first quarter of 2026, Gree Electric's performance rebounded slightly, with revenue rising 3.52% year-over-year to 42.966 billion yuan and net profit attributable to the parent company up 3.01% to 6.082 billion yuan. However, its operating cash flow dropped 29.11% year-over-year to 7.799 billion yuan.
Even with lackluster performance, Gree Electric continues to insist on generous dividends.
The 2025 profit distribution proposal for Gree Electric is: a cash dividend of 20 yuan per 10 shares for all shareholders, plus a mid-term dividend of 10 yuan per 10 shares for 2025, totaling 16.755 billion yuan for the year. The annual dividend per share is 3 yuan; according to the closing price on April 28, Gree Electric's dividend yield is as high as 7.8%.
The “counter-cyclical” dividend reveals Gree’s deep considerations to hedge the anxiety of slowing growth through high returns in the capital market as its main business hits the cyclical ceiling, while maintaining its status as a “blue-chip stock.”
On the same day the financial report was released, Gree Electric also announced a stock repurchase plan, proposing to use 5-10 billion yuan of its own funds to buy back shares at no more than 56.55 yuan/share, with not less than 70% of the shares to be cancelled and reduce registered capital, increasing earnings per share; no more than 30% of the repurchased shares will be used for employee stock ownership plans or equity incentives.
Analysts from Qunyi Securities pointed out that Gree Electric’s high dividend and buyback plans help highlight the company’s value.
The capital market responded enthusiastically, with Gree Electric’s share price surging on April 28, rising 5.28% in a single day to 40.47 yuan/share.
Additionally, in 2025, Gree Electric’s overall gross margin rose slightly against the trend to 32.75%, with consumer appliances gross margin increasing to 35.28%, a year-on-year increase of 0.37 percentage points.
This shows that even in a market environment of weak demand and intensified competition, Gree Electric still maintains strong cost control and product pricing power. What’s more noteworthy is that Gree’s operating cash flow for 2025 surged 57.93% to 46.383 billion yuan.
Robust earning power is the direct confidence behind its ability to issue generous dividends.
In recent years, due to increased market volatility and other factors, high-dividend companies have become favored by the capital market. Of course, investors need to look at Gree Electric’s future sustainability.
As one of the three giants of the white goods industry, every time financial reports are released, Midea, Gree, and Haier are always compared.
From the 2025 results, Gree Electric still lags behind.
Midea Group remains firmly at the top in scale, with annual operating revenue of 458.5 billion yuan and net profit attributable to the parent company at 43.95 billion yuan, both achieving double-digit growth; Haier Smart Home’s global operating revenue reached 302.347 billion yuan, up 5.71% year-over-year, and net profit attributable to the parent company hit 19.553 billion yuan, up 4.39% year-over-year.
With the home appliance industry reaching a growth peak and young brands like Xiaomi rising rapidly, Gree’s biggest issue is still its heavy reliance on air conditioners for revenue. Gree Electric’s financial report shows that in 2023, air conditioner revenue accounted for 74.14%.
In 2024, Gree changed its statistical scope, no longer reporting air conditioner business income separately, instead combining air conditioners and household appliances as “consumer appliances”; this category’s revenue in 2025 was 133.055 billion yuan, a year-on-year decline of 10.44%, accounting for 78% of total revenue.
Dong Mingzhu once stated that she hopes the air conditioner business will maintain a maximum proportion of 50%. Helping Gree find its second growth curve remains an urgent task.
In recent years, Gree has continued to invest in new energy, intelligent manufacturing, and industrial equipment, but the new business transformation is clearly below expectations.
Also, as expanding overseas markets has become industry consensus, Gree’s overseas sales share remains relatively low. In 2025, Gree’s domestic sales accounted for about 74%, with sales down 10.67% year-over-year to 12.64 billion yuan; overseas sales accounted for only 16%, with sales down 2.93% to 27.37 billion yuan year-over-year.
With the technical path of the air conditioner industry gradually converging and product iteration unable to widen generational gaps, the competitive environment Gree faces is shifting from product-driven growth to “maintaining profits with efficiency.”
When additional capital investment fails to bring matching returns, returning cash to shareholders becomes a more certain choice.
This also means the company is moving from a blue-chip stock priced based on growth to one leaning toward asset characteristics anchored by cash returns.
If the second growth curve cannot be materialized in the future, high dividends may merely become a label, and the anchor point for the market’s valuation will also shift accordingly.
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