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Investing.com - Goldman Sachs downgraded Gree Electric Appliances Inc of Zhuhai (000651:CH) stock rating to Neutral from Buy on Monday, while reducing its price target to RMB42.00 from RMB53.00.
The downgrade reflects Goldman Sachs’ concerns about revenue growth pressure as trade-in stimulus support in China tapers off, potentially affecting the air conditioner manufacturer’s sales momentum.
Goldman Sachs also cited market share loss risks due to intensifying competition and what it described as the company’s "less proactive strategy to enhance value-for-money product offering" in the Chinese market.
Despite these challenges, Goldman Sachs noted that Gree Electric’s expected dividend yield of 7% in 2025 should provide valuation support for the stock, which currently trades at 8x 12-month forward P/E with a 6% dividend yield.
The investment bank continues to recognize Gree’s strengths in manufacturing through vertical integration and economies of scale, its extensive offline distribution network, and brand equity in the mid to high-end air conditioner segment.
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