(Yicai Global) April 30 -- Shares of Gree Electric Appliances fell 3.8 percent after the world's biggest maker of home air conditioners yesterday reported a sharp slowdown in first-quarter earnings growth.

Zhuhai-based Gree's stock [SHE:000651] ended today at CNY55.58 (USD8.25). The benchmark Shenzhen Component Index lost 2.35 percent.

Gree said in an earnings report yesterday that net profit rose 1.6 percent to CNY5.7 billion (USD846.4 million) in the three months ended March 31 from a year earlier on a 2.5 percent gain in revenue to CNY40.6 billion. The company had net cash flow of CNY7.7 billion in the first quarter, down just over 46 percent. The slump was mainly due to increased cash going to activities related to its operations, Gree said.

The company's 2018 financial report, published two days ago, showed both revenue and profit hitting record highs last year. Profit jumped 17 percent to CNY26.2 billion as revenue surged 33 percent to CNY20 billion.

Gree Electric is planning a change of control, with its major shareholder Gree Group selling its 15 percent stake to promote the firm's mixed ownership reform. The equity transfer will bring about a huge change in its corporate governance structure, transforming it from a local state-owned enterprise into a company with dispersed shareholdings, no actual controller, and complete mixed ownership reform, according to Everbright Securities.

Everbright also said the company is likely to see growth of more than 10 percent this year based on the medium-term industry fundamentals.

But Citigroup yesterday cut its price target for Gree to CNY47 a share from CNY58 and lowered its forecast for the company's earnings in 2019 and 2020 by 9 percent and 7 percent, respectively.