Gree's $200 Million Debt-to-Equity Swap for Kanhoo: 103% Debt Ratio Sparks Delisting Risk as Gree Stumbles in New Energy Sector

Deep News11-10

Jiangmen Kanhoo Industry Co., Ltd. (Kanhoo) recently announced that its affiliate, Gree Supply Chain Management Co., Ltd. (Gree Supply Chain), plans to convert its RMB 200 million debt into equity to increase capital in Kanhoo’s wholly-owned subsidiary, Shenzhen Haoneng Technology Co., Ltd. (Haoneng Tech). Post-investment, Gree Supply Chain will hold a 33.21% stake in Haoneng Tech.

Haoneng Tech specializes in lithium battery equipment, with Gree Titanium New Energy Co., Ltd. (formerly Zhuhai Yinlong New Energy) as a key client. In 2016, Kanhoo—already loss-making for two consecutive years—acquired Haoneng Tech at a high premium via a private placement, temporarily avoiding delisting risks. However, after Yinlong’s financial crisis, Haoneng Tech plunged into losses, dragging down Kanhoo’s performance again.

In 2021, Gree Electric Appliances invested RMB 1.828 billion to acquire a 30.47% stake in Yinlong, later renamed Gree Titanium. Despite Gree’s control, Haoneng Tech’s losses persisted, lagging far behind peers like Lead Intelligent Equipment and Hangke Technology.

Following Gree’s acquisition of Yinlong, Gree Financial Investment (Gree FinInvest) took control of Kanhoo through another private placement in 2022. Yet, similar to Yinlong, Kanhoo’s operations continued deteriorating, with a net loss of RMB 192 million in 2024 and RMB 138 million in the first three quarters of 2025.

Kanhoo’s financial health worsened, with a debt-to-asset ratio hitting 103% by Q3 2025, signaling insolvency. Under Shenzhen Stock Exchange rules, negative net assets could trigger a delisting risk warning if unresolved in the 2025 annual report.

Early this year, Kanhoo proposed another RMB 500 million private placement to Gree FinInvest for working capital. The latest RMB 200 million debt-to-equity swap aims to alleviate financial pressure, but Gree’s deepening struggles in the new energy sector cast doubt on its turnaround prospects.

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