Gree Electric Announces Second Round of Wingtech Stake Reduction as Strategic Focus Shifts

Gree Electric’s Latest Wingtech Divestment Plan

Gree Electric Appliances Inc. of Zhuhai, under the leadership of Chairperson Dong Mingzhu (董明珠), has announced plans to sell up to 2% of its holdings in semiconductor manufacturer Wingtech Technology. This move marks Gree’s second divestment from Wingtech within eight months as China’s appliance giant reevaluates its six-year semiconductor investment. The timing coincides with Wingtech’s ongoing strategic shift from consumer electronics toward pure-play semiconductor operations—a transition that saw the company record a $28.33 billion net loss in 2024 before showing recent signs of recovery. The planned reduction could net Gree Electric approximately $9 billion based on current valuations, raising questions about Gree’s long-term commitment to China’s semiconductor ambitions at a pivotal moment for the industry.

Key Strategic Developments

• – Gree Electric and affiliate Zhuhai Ronglin each plan 1% stake reduction (≈12.4M shares)
• – Potential $9B combined proceeds based on current $36.48/share valuation
• – Reduction window opens mid-August 2025 through November 2025
• – Follows partial 0.5% divestment completed January 2025
• – Comes amid Wingtech’s strategic pivot toward dedicated semiconductor operations

The Evolution of Gree-Wingtech Alliance

Gree Electric’s $30 billion investment in 2018 positioned Dong Mingzhu (董明珠) at the forefront of China’s semiconductor push. The strategic acquisition facilitated Wingtech’s purchase of Nexperia semiconductor assets at $24.68/share—a milestone transaction hailed as advancing China’s chip independence. Initial success saw shares surge 590% by February 2020, creating over $10 billion in paper gains for Gree’s investment arm Zhuhai Ronglin. However, geopolitical turbulence including 2023 entity list designations triggered an 85% valuation collapse by August 2024. Wingtech’s subsequent restructuring underscores semiconductor’s volatility. Despite partial recovery to $36.48/share, current pricing remains below strategic projections of sustained semiconductor leadership.

Investment Timeline Analysis

Wingtech’s Strategic Transformation

Wingtech’s 2024 decision to sell its product integration division to Luxshare Precision marks its full commitment to semiconductor specialization. This follows consecutive quarterly improvements culminating in projected 178-317% H1 2025 profit growth. The transformation required abandoning smartphone ODM operations that delivered 73% of 2022 revenue. Semiconductor now represents over 80% of Wingtech’s asset structure—including flagship Nexperia power components controlling 14% of global automotive chip supply according to Counterpoint Research. Supply chain diversification away from U.S. export restrictions forces consolidation of competencies.

Financial Recovery Trajectory

• – Q1 2025: $130.99B revenue (-19.38% YoY)
• – Q1 2025: $2.61B profit (+82.29% YoY)
• – H1 2025 guidance: $3.9B-$5.85B projected profit
• – Strategic disposals: Product integration division sold for estimated $2.4B

Gree’s Strategic Calculus

Gree Electric Chairman Dong Mingzhu (董明珠) consistently framed semiconductor investments as essential diversification beyond core appliance markets. The Wingtech partnership initially promised synergistic advancement in IoT controllers and power management chips. However, semiconductor requires specialized R&D investment cycles averaging seven years before profitability—a reality conflicting with Gree’s quarterly-focused shareholder expectations. China’s home appliance sector forecasts show cooling demand signals. The timing suggests Gree may redirect freed capital toward higher-return core initiatives including renewable HVAC tech.

Divestment Motivations

Industry analysts highlight three driving considerations:

• Capital redeployment: Gree requires liquidity for domestic EV compressor research
• Risk management: Semiconductor volatility exceeds Gree’s traditional risk tolerance
• Strategic alignment: Gree increasingly prioritizes vertical integration over diversification

Market Implications

The announcement arrives during Wingtech’s fragile recovery phase. Previous January divestment saw the stock gain 12% despite execution—indicating ample market absorption capacity. Regulatory filings confirm several cornerstone investors increased positions when Gree last reduced holdings. Yet this second divestment tests investor confidence as Wingtech completes business repositioning into pure-play semiconductors with substantial debt obligations. Industry analysts recommend monitoring whether Tencent Holdings or state-backed semiconductor funds emerge as counterweight buyers.

Strategic Outlook

Gree Electric’s phased Wingtech divestment signifies pragmatic portfolio management amid shifting technological priorities. The calculated reduction avoids precipitous selling while acknowledging semiconductor specialization requires deeper operational commitment. Dong Mingzhu’s leadership demonstrates adaptability aligning investments with core industrial competencies. Market observers view this as setting sustainable precedent for Chinese enterprises balancing strategic overseas expansion and domestic priorities. Investors should monitor Gree’s capital reallocation toward sustainability tech development—expected focal point for redirected funds.

Strategic Recommendations

• For investors: Evaluate Wingtech’s H2 earnings sustainability before position adjustments
• For Gree: Increase transparency regarding semiconductor exit strategy timeline
• For Wingtech: Accelerate debt reduction using transaction proceeds
• Industry-wide: Treat as case study in specialized enterprise diversification portfolios

Monitor regulatory disclosures through Shanghai Clearing House for forthcoming transaction volumes while assessing semiconductor indices for sector sentiment signals. Gree’s ultimate strategic pivot merits examination beyond stakeholder communication—requiring ongoing reevaluation as industrial priorities accelerate into green technological transformation.