(Yicai Global) Sept. 18 -- Gree Electric Appliances Inc of Zhuhai [SHE:00065], led by China's well-known female entrepreneur Dong Mingzhu, has suspended the trading of its shares on the Shenzhen Stock Exchange today upon rumors that it will buy a stake in Tianjin Faw Xiali Automobile Co. [SHE:000927], a subsidiary of FAW Group Corporation. Tianjin Faw is expected to shift its production to new energy vehicles, which further fueled rumors since Gree has invested in a new energy battery developer earlier in search for diversified business.
Securities Daily quoted an insider of Tianjin Faw Xiali as saying that Dong and her Gree team concluded final negotiations with Tianjin Faw Xiali's shareholders about a possible stake acquisition. Tianjin Faw Xiali would announce the progress made on the equity purchase as early as next week, the insider claimed.
After Gree's stake acquisition, Tianjin Benefo Tejing Electric Co. [SHA;600468], currently Faw Xiali's second largest shareholder, is expected to withdraw as a shareholder and Faw Xiali will halt making traditional fuel vehicles.
In recent years, Gree, which developed and thrived with air-conditioner business, sought to diversify business as air-conditioner market has shrunk. Gree first bought shares in new energy battery developer Zhuhai Yinlong Energy Co., in which Dong Mingzhu invested nearly CNY1 billion (USD152.3 million) to obtain a 7.46 percent stake. Gree's plans to buy a stake in a carmaker is a logical progress after investment in the new energy battery developer.