Gree gets boost from insurer’s buy
Gree Electric Appliances Inc of Zhuhai saw its shares surge 7.5 percent on Thursday on the news that Foresea Life Insurance, a unit of Chinese financial conglomerate Baoneng Group, had increased its stake in the company.
Experts said insurers’ active participation in the stock market will continue next year because of their strong financial strength and confidence in high-quality listed companies.
Gree’s shares closed at 30.6 yuan ($4.44) in Shenzhen on Thursday after the company said in a regulatory filing on Wednesday that Foresea Life had become its third-largest shareholder.
Foresea Life largely purchased shares of Gree between Nov 17 and Nov 28, and its holding increased to 4.1 percent from 1 percent, the statement said.
Hao Yansu, director of the School of Insurance at the Central University of Finance and Economics, said insurers such as Foresea Life have adequate capital.
“I think insurers’ active participation in the Chinese stock market at this moment is good for themselves and listed companies, and it is also significant for boosting the stock market,” saidHao.
Hao said insurers’ participation in the stock market will continue next year because of their growing business and encouraging policies.
In the January-September period, premiums of Chinese insurers reached 2.5 trillion yuan, up 32.2 percent year-onyear.
China International Capital Corporation said in a report onMonday that it was a “high probability” that Foresea Life would increase its stake in Gree to more than 5 percent, based on dispersed ownership, a low price-earnings valuation and a steady cash flow.
Gree’s top two shareholders are Zhuhai Gree Group Co Ltd and Hebei Jinghai Guaranteed Investment Co Ltd, according to data from iFinD, a domestic financial information service company.
Dong Mingzhu, one of China’s most prominent businesswomen, was removed from the post of chairwoman of the State-owned conglomerate Gree Group on Nov 11, but stays on as the head of its listed electronics arm.
Workers at an air conditioner assembly plant of Gree Electric Appliances Inc in Hefei, Anhui province.