Hillhouse to Cut Gree Stake in First Move Since Landmark Buyout
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Zhuhai Mingjun acquired a 15% stake from Gree's state-owned shareholder in late 2019 for 41.7 billion yuan. Photo: VCG
Private equity firm Hillhouse plans to trim its stake in Gree Electric Appliances Inc. of Zhuhai for the first time since becoming the home-appliance maker’s largest shareholder six years ago, in a move that could generate more than 4 billion yuan ($579 million).
The planned divestment by Hillhouse’s investment vehicle, Zhuhai Mingjun, underscores the lingering financial strain from the leveraged buyout that transformed the former state-owned enterprise, even as Gree continues to deliver hefty dividend payouts.
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- Hillhouse plans to sell about 112 million Gree Electric shares (2% stake), aiming to raise over 4 billion yuan ($579 million) to repay bank loans from its 2019 leveraged buyout.
- Gree shares are down nearly 20% from the 2019 buyout price, giving Hillhouse a paper loss of 7.7 billion yuan, partly offset by nearly 15 billion yuan in dividends received.
- Gree’s 2025 revenue and net profit declined, lagging competitors Midea and Haier, despite stable management under Chairwoman Dong Mingzhu.
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Who’s Who
- Gree Electric Appliances Inc. of Zhuhai
- Gree Electric Appliances Inc. of Zhuhai is a home appliance manufacturer. Hillhouse, through Zhuhai Mingjun, became its largest shareholder in 2019 but is now trimming its stake to repay debt. Despite underperforming stock, Gree has been a "cash cow" for shareholders, distributing significant dividends. The company's revenue and net profit declined in the first three quarters of 2025.
- Hillhouse
- Hillhouse, through its investment vehicle Zhuhai Mingjun, plans to reduce its stake in Gree Electric Appliances Inc. of Zhuhai. This move, aiming to generate over 4 billion yuan, is intended to repay bank loans incurred during its 2019 leveraged buyout. Despite substantial dividend payouts, Hillhouse faces a paper loss on its investment due to Gree's underperforming stock.
- Zhuhai Mingjun
- Zhuhai Mingjun, an investment vehicle of private equity firm Hillhouse, intends to trim its stake in Gree Electric Appliances for the first time since becoming its largest shareholder in 2019. The proceeds will repay bank loans from the leveraged buyout, where nearly half of the 41.7 billion yuan deal was financed with loans totaling over 20.8 billion yuan.
- Midea Group Co. Ltd.
- Midea Group Co. Ltd. is a competitor to Gree Electric Appliances Inc. of Zhuhai. In the first three quarters of 2025, Midea Group reported double-digit increases in net profit, outperforming Gree, which saw declines in both revenue and net profit during the same period.
- Haier Smart Home Co. Ltd.
- Haier Smart Home Co. Ltd. is a competitor of Gree Electric Appliances Inc. of Zhuhai. In the first three quarters of 2025, while Gree's revenue and net profit declined, Haier Smart Home Co. Ltd. reported double-digit increases in net profit.
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What Happened When
- Late 2019：
- Zhuhai Mingjun acquired a 15% stake from Gree's state-owned shareholder for 41.7 billion yuan.
- 2019 - First half of 2025：
- Gree distributed cumulative cash dividends of 16.58 yuan per share.
- 2022：
- Hillhouse did not seek a seat on Gree’s board during director elections.
- 2025：
- Hillhouse did not seek a seat on Gree’s board during director elections.
- First three quarters of 2025：
- Gree’s revenue fell 6.5% year on year to 137.2 billion yuan; net profit declined 2.27% to 21.5 billion yuan.
- 2026-02-25：
- Gree announced that Zhuhai Mingjun plans to sell up to about 112 million shares.
- 2026-02-26：
- Shares of Gree fell 2.34% to close at 37.59 yuan.
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