Gree Electric (000651.SZ) Hot List Analysis: Long-Term Lock-Up Commitment of Employee Stock Ownership Plan and Valuation Recovery Opportunities

Gree Electric made it to the hot list on January 23, 2026, with a significant rise in market attention. According to analysis [1][2], the

for this phenomenon is the official expiration of the lock-up period of the 3rd Employee Stock Ownership Plan on January 20, 2026, involving 63.195 million shares, accounting for 1.13% of the company’s total share capital, with a holding cost of approximately RMB 1.133 billion (equivalent to about RMB 17.9 per share) [3]. However, different from the usual expectation of share reduction after lock-up expiration, [1][4]. This ultra-long-term lock-up commitment sends a strong positive signal to the market.

From a time perspective, the combination of lock-up expiration and the long-term lock-up commitment has dual significance: on one hand, the expiration of the lock-up period means that the employee stock ownership plan officially enters the tradable stage; on the other hand, the management’s active choice to extend the lock-up period by nearly 8 years demonstrates firm confidence in Gree Electric’s long-term development prospects. This practice is relatively rare in the A-share market, effectively alleviating the market’s concerns about selling pressure after the lock-up period expires.

In terms of secondary market performance, Gree Electric closed at RMB 39.43 on the day, down 3.48% (about RMB 1.42), but the trading volume reached 68.55 million shares, 1.74 times the average daily trading volume (39.42 million shares) [0]. This trend of “sharp drop with heavy volume” usually indicates significant market divergence — some investors chose to cash in profits on the positive news, while others waited on the sidelines or bought on dips.

From a technical analysis perspective, the current stock price is below the 20-day moving average (RMB 40.52), the MACD indicator has formed a death cross, and the KDJ indicator shows a neutral to weak trend, but the RSI indicator is close to the oversold zone, suggesting potential short-term rebound opportunities [0]. Notably, the average target price given by 23 institutions within 90 days is RMB 51.18 [8], representing about 30% upside potential compared to the current stock price, which provides certain value support for medium-term investors.

In terms of fundamentals, Gree Electric achieved operating revenue of RMB 137.654 billion in the first three quarters of 2025, a year-on-year decrease of 6.62%; its net profit attributable to shareholders was RMB 21.461 billion, a year-on-year decrease of 2.27% [9]. Among them, the single-quarter revenue in the third quarter decreased by 15.06% year-on-year, and the decline is expanding, reflecting that the performance pressure faced by the company cannot be ignored. Market analysts pointed out that the price war in the air-conditioning industry continues to intensify [10], and the company’s pricing strategy is being adjusted, which poses certain pressure on short-term profitability.

However, from a valuation perspective, Gree Electric’s current price-to-earnings ratio (TTM) is only 6.87 times [0], significantly lower than the average valuation level of the home appliance industry (about 15-20 times), providing a certain margin of safety. Combined with the 2025 interim dividend plan (RMB 10 cash dividend per 10 shares, dividend yield of about 2.5%) [6], the company has certain allocation attractiveness at the current price.

Data on main capital flows shows that on January 20 (the day the lock-up period expired), the main capital had a net inflow of RMB 426 million [7], indicating the market’s positive interpretation of the long-term lock-up commitment; however, on January 21, the main capital had a net outflow of RMB 147 million [8], indicating that some short-term capital chose to cash in on the positive news. This capital game pattern may intensify stock price fluctuations in the short term, but it does not affect the core judgment of the company’s medium- and long-term investment value.

This long-term lock-up commitment can be understood from three dimensions: first, it deeply binds employees’ interests with the company’s long-term development, which is conducive to stabilizing the core management team; second, it conveys the management’s confidence in the company’s fundamentals to the market, alleviating the valuation discount caused by information asymmetry; third, extending the lock-up period to 2034 helps optimize the company’s shareholder structure and reduce the interference of speculative selling pressure on the stock price.

The current P/E ratio of 6.87 times not only reflects the market’s cautious expectations of the downward cycle of the home appliance industry, but may also be an “overreaction”. As a leader in the air-conditioning industry, Gree Electric still has solid brand recognition and channel advantages. If it can successfully expand new growth drivers such as smart home, industrial robots, and new energy, the current valuation level may provide good medium- and long-term layout opportunities.

Making it to the hot list itself will attract more retail and institutional investors, forming a positive cycle of “attention → trading volume → volatility → attention”. For value investors, this increase in attention may create contrarian investment opportunities; for trend investors, they need to closely monitor changes in trading volume and the gain or loss of support levels.

Risk Type	Risk Description	Impact Assessment
Performance Decline Risk	2025 Q3 single-quarter revenue decreased by 15.06% year-on-year, with the decline expanding	Medium-High Risk, Need Continuous Tracking
Industry Cycle Risk	The home appliance industry is highly correlated with the real estate cycle, and demand continues to be under pressure	Medium-Term Risk
Value Trap Risk	Low P/E may reflect the market’s cautious expectations of growth prospects, with the possibility of a “value trap”	Medium Risk
Capital Volatility Risk	Today’s sharp drop with heavy volume indicates heavy selling pressure, and the stock may continue to be under pressure in the short term	Short-Term Risk

: The long-term lock-up commitment of the employee stock ownership plan provides a stabilizer for the stock price. Combined with the current valuation being in a historically low range, a valuation recovery market may be triggered around the annual report disclosure (expected in March). The institutional target price of RMB 51.18 has about 30% upside potential compared to the current price [8], providing a clear value anchor for medium-term investors.

: If Gree Electric can make breakthroughs in new business areas such as smart home, industrial robots, and new energy, the current low valuation status may be fundamentally revalued. At the same time, the ultra-long-term lock-up commitment demonstrates the management’s confidence in the company’s transformation, providing implicit protection for long-term investors.

From the perspective of investment decision priority, it is recommended that investors prioritize the following time nodes: the 2025 full-year performance forecast in early February, the annual report disclosure in March, and the subsequent possible first-quarter operating data. These nodes will provide key fundamental verification information. In terms of time sensitivity, the current support level of RMB 39.18 is critical [0]. If it is effectively broken, it may trigger technical selling; conversely, if it can stabilize and recover RMB 40.52 (20-day moving average), it may start a phased rebound.

The core driver of Gree Electric’s appearance on the hot list stems from the combined effect of the expiration of the lock-up period of the 3rd Employee Stock Ownership Plan and the ultra-long-term lock-up commitment. This event conveys the management’s confidence in the company’s long-term development to the market, effectively alleviating the potential selling pressure after the lock-up period expires. From a valuation perspective, the current P/E ratio of 6.87 times is at a historical low, and the institutional target price of RMB 51.18 provides about 30% upside potential. However, investors also need to pay attention to risk factors such as the performance decline trend, industry price war pressure, and weak short-term technical indicators. It is recommended that conservative investors wait for the price to stabilize above RMB 40.52 before entering the market, while value investors can build positions in batches in the range of RMB 39.18-39.50, but need to continuously track performance to prevent the risk of a “value trap”.

: Strong support level at RMB 39.18 (if broken, may drop to RMB 39.20), first resistance level at RMB 40.52 (20-day moving average resistance), medium-term target level at RMB 51.18 (average institutional forecast).