(Yicai Global) May 27 -- Shares in Gree Electric Appliances surged over 5 percent today after the Chinese air conditioner manufacturer announced a further share repurchase scheme which if executed to its maximum amount of CNY15 billion (USD2.3 billion) will be the biggest stock buyback on the mainland to date.

Gree’s stock price [SHE:000651] closed up 3.29 percent at CNY58.04 (USD9). Earlier in the day it had reached CNY59.27.

Gree will buy back between CNY7.5 billion (USD1.2 billion) and CNY15 billion of its own stock over the next 12 months, accounting for between 1.78 percent and 3.56 percent of equity, at a price of no more than CNY70 (USD11) per share, the Zhuhai, southern Guangdong province-based company said yesterday.

If executed to the maximum value, the repurchase will eclipse rival Midea’s CNY14 billion share buyback plan announced in February.

Should the repurchase be made at CNY70 per share, this would be a 20 percent premium on its current price, and just a tad above the company’s record stock price of CNY69.79 (USD10.92) reached on Dec. 2 last year, indicating that the firm’s major shareholders believe that the company’s stock is undervalued.

It is the third stock buyback plan announced by Gree in the last 13 months. The company has already repurchased CNY12 billion worth of equity, equivalent to 3.48 percent of its overall share capital, in two repurchase schemes announced in April and October last year.

Gree’s stock price has struggled in the face of intense competition from Foshan, Guangdong province-based Midea. Midea overtook Gree for the first time last year to become the country’s top aircon supplier, raking in CNY121.2 billion (USD19 billion) compared to Gree’s CNY117.9 billion. Midea’s output grew 1.34 percent year on year in 2020 while Gree’s slumped 15 percent.

Editor: Kim Taylor