Hisense Home Appliances Group Co., Ltd. Announces Major Wealth Management Investments

Key Points

• Significant Wealth Management Subscription:
  Hisense Home Appliances Group Co., Ltd. (“Hisense” or “the Company”) has announced that from 9 April 2025 to 17 March 2026, its subsidiaries subscribed to Bairui Trust Wealth Management Products with an aggregate subscription amount of RMB 1,762,000,000.
• Use of Idle Funds:
  The investments were made using the Group’s idle self-owned funds, aiming to enhance capital efficiency and increase returns on cash assets.
• Nature and Risk Profile:
  The products are fixed income with a medium-low risk rating. The performance is linked to market conditions and is subject to uncertainty. The investment scope includes deposits, bonds, and other debt assets.
• Approval and Compliance:
  The transactions were approved at the Company’s board meeting on 28 March 2025 and the annual general meeting on 25 June 2025, ensuring compliance with both internal controls and regulatory requirements.
• Listing Rules Implication:
  While each individual agreement does not constitute a discloseable transaction, the aggregated amount exceeds 5% but is less than 25% of the applicable percentage ratios, making it a discloseable transaction under Hong Kong Listing Rules. This triggers mandatory reporting and announcement requirements.
• Independence from Connected Parties:
  Bairui Trust and its ultimate beneficial owners are confirmed as independent third parties, not connected with Hisense or its affiliates.

Details of the Wealth Management Subscriptions

The investments were made in tranches through multiple agreements, with each product having similar terms:

• Product Name: Bairui Anxin Zengli Collective Fund Trust Plan (Ju Ying No.4 and No.3)
• Type: Fixed income
• Risk Rating: Medium-low
• Principal Amount per Agreement: Ranges from RMB 10,000,000 to RMB 200,000,000 per subscription
• Term: Subject to the redemption time of the subscriber
• Expected Rate of Return: Fluctuates with the market and is subject to uncertainty
• Investment Scope: Deposits, bonds, and other debt assets

The agreements were entered into by various subsidiaries, including Air-conditioner Marketing Company, Refrigerator Marketing Company, Gorenje Company, and Kitchen & Bathroom Company, each subscribing to different tranches of the products.

Strategic and Financial Implications for Shareholders

• Efficient Use of Idle Funds:
  The Company is proactively deploying its idle cash, which could otherwise remain unproductive, into relatively low-risk financial products. This could potentially improve the Company’s overall return on cash assets.
• Risk Considerations:
  While the products are classified as medium-low risk, their performance is not guaranteed and will depend on market conditions. There is a degree of exposure to market volatility, though mitigated by the conservative nature of the investment instruments (deposits and bonds).
• Impact on Core Operations:
  The Board has explicitly stated that these subscriptions will not adversely affect the daily operations or the principal business of the Group, nor the interests of minority shareholders.
• Signaling Effect:
  The substantial aggregate amount (RMB 1.76 billion) may signal to the market that the Company has significant surplus liquidity and is confident in its financial stability, which could be viewed positively by investors.
• Regulatory Transparency:
  The disclosure under Hong Kong Listing Rules ensures transparency and compliance, providing investors with timely information on significant capital allocation decisions.

Background on the Parties

• Hisense Home Appliances Group:
  A leading manufacturer and marketer of electrical products, including refrigerators, air-conditioners, washing machines, kitchen appliances, and automotive air-conditioner systems.
• Bairui Trust:
  A non-bank financial institution regulated by the National Financial Regulatory Administration, owned ultimately by the State-owned Assets Supervision and Administration Commission of the State Council.
• Subsidiaries Involved:
  – Qingdao Hisense Air-conditioner Marketing Co., Ltd.
  – Qingdao Gorenje Electrical Co., Ltd.
  – Hisense (Guangdong) Kitchen & Bathroomroom System
  – Guangdong Hisense Refrigerator Marketing Co., Ltd.

Potential Impact on Share Price

The deployment of a large sum of idle funds into medium-low risk financial products, if managed prudently, could enhance the Company’s financial returns and signal disciplined capital management. However, investors should closely monitor future disclosures regarding the actual returns achieved and any changes in market conditions that could affect the performance of these products. Any adverse developments or lower-than-expected returns could affect investor sentiment and, consequently, the share price.

Overall, this move reflects positively on the Company’s liquidity position and capital management strategy, both of which are important considerations for shareholders and potential investors.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their own research or consult with a qualified financial adviser before making any investment decisions. While every effort has been made to ensure the accuracy of the information provided, no responsibility can be accepted for any errors or omissions.

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