Dec. 17 (NBD) -- Haier Electronics Group Co., Ltd. ("Haier Electronics", 01169.HK), one of China's largest home appliance makers, announced on Monday its controlling shareholder Haier Smart Home Co., Ltd. (600690.SH) is considering privatizing the Hong Kong-listed company in a securities exchange offer.

If the privatization was conducted, Haier Electronics would delist from the Hong Kong Stock Exchange. Instead, Haier Smart Home will go public on the main board of the Hong Kong bourse, the announcement mentioned. The details and terms of the plan remain unsettled at present. 

But there is still much uncertainty over the issue, since Haier Smart Home has made no agreement or other commitment regarding the possible deal as of the date of the filing.

Photo/Guo Rongcun (NBD)

Haier Electronics suspended trading of its stock on December 13-16, and shares closed 9.38 percent higher at 23.9 Hong Kong dollars (3.1 U.S. dollars) after resuming trading on Tuesday.

If the privatization was finally approved, Haier Electronics would become a subsidiary of Haier Smart Home, which would conduce to improving the efficiency of parent company Haier Group's asset management and decision making, home appliance industry analyst Liang Zhenpeng pointed out.

National Business Daily noticed that Haier Electronics and Haier Smart Home have overlapping businesses. For instance, both companies are engaged in manufacturing and sale of washing machines and water heaters.

According to a report from Everbright Securities, the two companies have complicated internal transaction settlement systems and are run by different management teams, so there could be conflicts of interests.

Industry insiders also held that Haier Electronics' new move is part of Haier Group's strategy to get its entire household appliance unit listed.

Haier Group, known as one of the top three electrical appliance manufacturers following Midea Group and Gree Electric Appliances Inc. of Zhuhai (Gree), posted competitive revenue last year. Its global income rose 10 percent year over year to 266.1 billion yuan (38 billion U.S. dollars) in 2018, compared to about 260 billion yuan for Midea Group and over 200 billion yuan for Gree.

In terms of the valuation of listed assets, Haier Group lags behind its rivals as the latters got the whole group listed. Data shows that market valuation of Haier Electronics and Haier Smart Home totaled about 179.9 billion yuan, far less than Gree's 385.7 billion yuan and Midea Group's 406.7 billion yuan.

Email: lansuying@nbd.com.cn