Xiangzhou District, Zhuhai

Zhuhai leading enterprise Gree Electric Appliances planed to sign an agreement with Yinlong New Energy on Feb 20, to prioritize the purchase of each other's products and services worth up to 20 billion yuan ($2.9 billion) per year.

According to the plan, subsidiaries and branches of the two enterprises will purchase each other's products such as intelligent equipment, molds, and electrical control systems. 

Insiders have said the deal, if reached, will be an important step for Gree to enter the new energy automobiles and battery manufacturing industries.

Gree was founded and headquartered in Xiangzhou District, Zhuhai of Guangdong Province in 1991. Today, the company is a domestic giant in the air conditioner industry and one of the world's best household appliance suppliers thanks to decades of growth and expansion. Gree has long desired to break into the automotive air conditioning market.

Dong Mingzhu, chairman of the board of Gree Electric Appliances [Photo / News.cn]

Zhuhai Yinlong New Energy, established by Yintong Group, runs businesses ranging from new energy and hybrid power R&D to production and sales of lithium-ion power batteries and storage batteries. The pure electric vehicles it has manufactured have been promoted in more than 10 cities across China. In 2016, Yinlong earned 7.9 billion yuan ($1.1 billion) in revenue including 840 million yuan ($122 million) in net profit. By the end of 2016, its total assets exceeded 19 billion yuan ($2.8 billion). 

Gree's desire to cooperate with Yinlong showed last year when it decided to purchase the company, but failed. It was however closely followed by heavy investment by a consortium of investors headed up by Gree. The company's chairman of the board, Dong Mingzhu, holds a 10 percent sharing of Yinlong's stocks.

"We have good target products, but have struggled to break into the vehicle air conditioner industry, but not after we cooperate with Yinlong," said Dong at a symposium held earlier this year.