Rising copper prices have dragged down Gree's performance. Is Dong Mingzhu going to make big moves at the end of the year?

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Rising copper prices have dragged down Gree's performance. Is Dong Mingzhu going to make big moves at the end of the year?

Radar Finance

2026.11.12 08:49

· From Jiangsu

Full text 4279 words

Text | Radar Finance, author | Zhou Hui, editor | Meng Shuai

"Gree Electric would rather lose billions of profits this year than reduce the quality of its products." Dong Mingzhu, chairman of Gree Electric, said when he recently visited Tmall's Double 11 "Life Proposal Bureau".

According to the latest financial report disclosed by Gree Electric, in the first three quarters of this year, the company achieved total operating income of 126.544 billion yuan, a year-on-year decrease of 8.07%; it recorded a net profit attributable to the parent company of 17.274 billion yuan, a year-on-year decrease of 19.51%. Among them, the company's single-quarter net profit attributable to parent companies in the third quarter fell by more than 40%.

Regarding Gree Electric's performance under pressure during the year, Dong Mingzhu attributed part of the reason to the rise in copper prices. "The price of copper is 5 to 6 times the price of aluminum. If you want to maintain the brand, you must give up some profits, so Gree Electric insists on using copper to ensure quality."

In fact, as one of the "Three White Appliance Giants", Gree Electric's decline in performance also reflects the severe reality that the home appliance industry as a whole is under pressure. In the face of increasingly fierce stock competition in the home appliance industry, Gree has chosen to increase its presence in the liquid cooling track.

The semi-annual report shows that relying on the technology accumulation in the field of commercial air conditioning, the company has independently achieved full coverage of the three major technical routes of fluorine system, water system, and liquid cooling system, and can match edge computer rooms, traditional IDC, high-density AIDC, and supercomputing scenarios.

At the same time, Gree’s main air-conditioning business is empowered by AI. In the aforementioned program, Dong Mingzhu also revealed that Gree will launch a product that can redefine home appliances at the end of the year. "Perhaps this air conditioner can be sold at the original price after 10 years of use."

Net profit fell by more than 40% in the third quarter, Dong Mingzhu responded to the decline in performance

On October 26, Gree Electric disclosed its third quarter report for 2026. In the first three quarters of this year, Gree Electric achieved total operating income of 126.544 billion yuan, a year-on-year decrease of 8.07%; it recorded a net profit attributable to the parent company of 17.274 billion yuan, a year-on-year decrease of 19.51%.

Among them, in the third quarter, Gree Electric's total operating income in a single quarter was 36.871 billion yuan, a year-on-year decrease of 7.9%; the net profit attributable to the parent company was 3.996 billion yuan, a year-on-year decrease of more than 40%.

In the first three quarters of this year, Gree Electric's gross sales profit margin was 27.03%, down about 1.41 percentage points from 28.44 in the same period last year.

Regarding this unspeakably outstanding financial report, Dong Mingzhu recently visited Tmall Double 11 "Life Proposal Bureau" and said that the company's performance decline this year is due to the increase in copper prices.

According to Caizhong News, since the second half of 2025, affected by multiple factors such as the Federal Reserve's interest rate cut expectations, the suspension of production at Indonesia's Grasberg copper mine, and AI/power grid demand, copper prices have shown an overall upward trend in shock.

Dong Mingzhu said that the price of copper is 5 times or 6 times that of aluminum. If you want to maintain the brand, you must give up some profits, so Gree Electric insists on using copper to ensure quality. "Aluminum can definitely be made, but the stability, reliability, and sustainability are all question marks, and then consumers will become victims."

Regarding the issue of "substituting aluminum for copper", Gree Electric has actually said "no" many times.

In December last year, when many air-conditioning giants such as Xiaomi, Midea, and Haier all joined the "Self-Discipline Convention of the Air-conditioning Aluminum Enhanced Application Research Working Group", Dong Mingzhu stated that she still insisted on not using "aluminum instead of copper" because it did not meet the same technical conditions and guarantees as copper.

In January this year, Gree Electric Appliances issued a "Note on Recent Market Concerns", which promised that Gree's home air conditioners would not increase prices and that there were no plans to "substitute aluminum for copper".

In the "Life Proposal Bureau" program, Dong Mingzhu further emphasized that Gree Electric would rather lose billions in profits this year than reduce the quality of its products. Gree Electric needs to be a long-termist and build a world-class brand.

However, this does not mean that Gree Electric is ignoring the "aluminum-replacing copper" technology. Dong Mingzhu has previously emphasized, "We have not said we will not study it. We will study it until aluminum can completely replace copper. I will definitely use aluminum."

In the "Note on Recent Market Concerns" released in January, Gree Electric also stated that if relevant research can fully meet Gree's quality and technical standards requirements and be formally applied in the future, it will be clearly marked to fully protect consumers' rights to know and choose.

In addition to rising copper prices, weakening consumer demand has also had a certain impact on Gree Electric's performance. Gree Electric pointed out in its third quarter report that the year-on-year decline in the company's consumer appliance business affected the company's performance.

According to Industry Online data, in the first three quarters of 2026, the total sales volume of China's household air conditioning industry was 150 million units, a year-on-year decrease of 8.4%. Looking at the quarters, the decline expanded quarter by quarter, with a year-on-year decrease of 2.8% in the first quarter, a year-on-year decrease of 9.3% in the second quarter, and a decrease of 15.1% in the third quarter.

Gree Electric admitted in its third quarterly report that the home appliance industry as a whole is under pressure, with downward pressure continuing to increase and industry competition further intensifying.

Industry online data shows that in the third quarter of 2026, Gree Electric's domestic sales and export shipments of home air conditioners fell by 13.8% and 34.0% respectively year-on-year.

In the face of challenges, the company adopted a differentiated competition strategy and focused on the mid-to-high-end market with its technological and quality advantages, resulting in a decline in revenue. At the same time, faced with the impact of high raw material prices, the company adhered to the business philosophy of "quality, not price", and product sales prices were relatively stable, which had a certain impact on the company's profits.

The home appliance industry is generally under pressure, and Gree is increasing its presence on the liquid cooling track.

In fact, Gree Electric's performance decline is also a microcosm of the current downward trend in the home appliance industry.

Total data from AVC shows that from January to September this year, the retail sales of China's home appliance market (excluding 3C) was 604.1 billion yuan, a year-on-year decrease of 10%. Looking at quarters, the first, second and third quarters decreased by 6.0%, 12.4% and 10.1% respectively.

In terms of categories, from January to September this year, the retail sales of air conditioners fell by 15.9% year-on-year, ranking first in terms of decline.

During the same period, the categories of large kitchen and bathroom appliances, color TVs, laundry care, refrigeration, small kitchen appliances, and cleaning appliances also fell by 10.3%, 9.0%, 7.1%, 5.8%, 5.2%, and 2.3% respectively year-on-year.

Affected by this, the performance of home appliance companies is generally under pressure. Not long ago, Haier Smart Home, one of the "Big Three" white goods giants, also submitted a third quarter report with both revenue and net profit falling.

In the first three quarters of this year, Haier Smart Home achieved total operating income of 221.819 billion yuan, a year-on-year decrease of 5.23%; it recorded a net profit attributable to the parent company of 14.999 billion yuan, a year-on-year decrease of 13.67%.

During the same period, Midea Group's total operating income was 369.087 billion yuan, a slight increase of 1.2% year-on-year; net profit attributable to the parent company was 41.393 billion yuan, a year-on-year increase of 9.27%. It is the only company among the "Big Three" to maintain both revenue and net profit growth. However, compared with the same period last year, its revenue and net profit growth slowed down significantly.

According to a research report by Nomura Oriental International Securities, in the first three quarters of this year, the revenue of Midea Group's C-end smart home business group was under pressure due to weak domestic sales and the company's cancellation of the new cold year opening. However, the revenue growth of its export OBM business is still impressive.

As the home appliance industry enters a stage of increasingly fierce stock competition, the liquid cooling track continues to heat up with the support of AI.

Data from CCID Consulting shows that the overall market size of China's liquid-cooled data centers will reach 15.98 billion yuan in 2025, a year-on-year increase of 45.2%. It is expected to reach 23.25 billion yuan in 2026 and exceed 47 billion yuan in 2028.

CICC predicts that the global intelligent computing center liquid cooling market is expected to exceed 114.7 billion yuan in 2026, a year-on-year increase of 273%.

Relying on the cold source technology and manufacturing capabilities accumulated in the HVAC business for decades, home appliance giants including Gree, Midea, Haier, etc. have entered this track.

Gree Electric mentioned in its semi-annual report that in the first half of the year, the company's data center business continued to make breakthroughs, and successively won the bids for leading communications operators' national annual centralized procurement of computer room air conditioners, and Internet liquid-cooled computing power centers and other benchmark projects.

On November 7, Gree Electric announced that the company had recently successfully won the bid for the centralized procurement project of temperature control equipment from China Mobile and China Tower, with the order size exceeding 300 million yuan.

According to Gree Electric, the winning products include air-cooled fluorine pump machine room air conditioners, chilled water column air conditioners, wet and dry compound machine room air conditioners, and base station air conditioners, providing safe, reliable, energy-saving and efficient integrated temperature control solutions for data machine rooms and communication base stations nationwide.

According to Securities Daily, the relevant person in charge of Gree Electric said that the compressor, heat exchange and system control technology accumulated by Gree Electric in the field of commercial air conditioning provides a foundation for expanding the data center liquid cooling business. At present, Gree Electric has formed a product layout covering fluorine systems, water systems and liquid cooling systems.

The person in charge also revealed that Gree will continue to conduct research on key technologies such as the utilization of natural cold sources, magnetic levitation compressors and intelligent control, strengthen collaboration with its holding subsidiary Zhejiang Dunan Artificial Environment Co., Ltd., improve the supporting facilities from core components to system integration, and deepen cooperation with communication operators, cloud vendors and computing power hubs.

It is worth mentioning that in February this year, Gree Electric also jointly invested with the domestic leading IDC service provider Sinnet to establish Ge’an Data Information Technology (Kunshan) Co., Ltd. (referred to as “G’an Data”).

Tianyancha information shows that Gree Electric holds 40% of the shares of Ge'an Data through Shanghai Gree Technology Management Co., Ltd., which holds 60% of the shares, and is its actual controller.

According to Kunshan Media Center, Ge'an Data will focus on cutting-edge areas such as the latest liquid cooling technology, data processing, cloud computing equipment, computer room refrigeration equipment, and Internet of Things equipment sales.

AI empowers the main home appliance business, Dong Mingzhu previews "king-fried" new products at the end of the year

While the new track provides the company with increased performance, Gree Electric's main home appliance business is empowered by AI.

In the "Life Proposal Bureau" program, Dong Mingzhu talked about AI home appliances and said that for companies without strength, AI is just a conceptual game; for companies with strength, it is a real technological upgrade.

Dong Mingzhu believes that real AI intelligence does not lie in surface voice interaction, but in realizing the connection between things and the high-level control of people and things.

Dong Mingzhu also took Gree's AI air conditioner as an example, saying that it can identify the number of people in the room, sense changes in ambient temperature and humidity, and automatically adjust energy output. When there are many people, the power is increased to ensure comfort. When there is no one in the room, it will automatically reduce the frequency to save energy, without the need for manual operation by the user.

Radar Finance found that Gree Electric has launched a number of AI products in recent years. In the mid-to-high-end market, Gree Electric has launched products such as "AI Cool King", "AI Moon Goddess", and "AI Cool King".

Among them, the "AI Cooling King" is equipped with AI dynamic energy saving 2.0 technology, which can increase the power saving rate from 13.6% to 23%; the "AI Moon Goddess" is equipped with single cross-flow reversible up and down air outlet technology to create a zero temperature difference sleeping space.

As a veteran IP born in 1995, "Calm King" has also been given new vitality by AI. It is reported that the "AI Calm King", which won the AWE2026 Appleland Gold Award, is not only an air conditioner, but also the intelligent "central brain" of the whole house.

By integrating multi-modal perception and AI decision-making technology, this product has local computing and storage capabilities, can deeply collaboratively manage home appliances throughout the house, can still operate stably when the network is disconnected, and supports intelligent linkage of up to 50 terminals.

According to Gree Electric's semi-annual report, in the first half of this year, the national sales of the "Calm King" series exceeded 5 billion yuan.

Gree Electric said that it will focus on the product characteristics of "cooler, quieter and more power-saving", equipped with "wind does not blow people" technology, continue to enhance the market reputation of "Calm King" IP, and create tens of billions of single products.

In addition, in March this year, Gree Electric and JD.com jointly held a strategic cooperation conference on "Building a New Home with True Love". At the meeting, the two parties formally signed an agreement, clarifying the core goal of selling 10 million units of AI series air conditioners in three years.

It is worth mentioning that in the "Life Proposal Bureau" program, Dong Mingzhu also gave a preview, saying that Gree Electric will launch a product at the end of the year that can redefine what home appliances should be, positioning it at the luxury level. "Perhaps this air conditioner can be sold at the original price after 10 years of use."

Radar Finance will continue to pay attention to the subsequent development of Gree Electric.

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