HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Midea Group Co Ltd A / Equity Capital Markets

<ul>
<li>Although Midea’s performance keeps growing, it is difficult for the home appliance industry to return to rapidly growing incremental market as it was during the robust development of real estate.</li>
<li>As Midea’s To C business encounters growth bottleneck, To B business has become new performance driver and second growth curve, but several new businesses are facing challenges in 24Q1.</li>
<li>For mature leading enterprises in home appliance industry, a valuation of 10-20x PE is reasonable, which means market value of RMB370-740 billion, assuming 2024 net profit would reach RMB37 billion.</li>
</ul>


Although Midea’s performance keeps growing, it is difficult for the home appliance industry to return to rapidly growing incremental market as it was during the robust development of real estate.
As Midea’s To C business encounters growth bottleneck, To B business has become new performance driver and second growth curve, but several new businesses are facing challenges in 24Q1.
For mature leading enterprises in home appliance industry, a valuation of 10-20x PE is reasonable, which means market value of RMB370-740 billion, assuming 2024 net profit would reach RMB37 billion.


Pre-IPO Midea Group H Share - Even in the Face of Challenges, There Is Still Investment Value

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net SELL RMB 6.7bn of A-shares on decent volume. A-shares out-performed H-shares quite dramatically, taking back H-share gains from the week before, which reversed prior weeks.</li>
<li>This week saw net buying of semiconductor/chip names, and net selling of the EV/Solar/Battery space and buying of the Ping Ans, but most notable was liquid A vs H performance.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 6.7bn of A-shares on decent volume. A-shares out-performed H-shares quite dramatically, taking back H-share gains from the week before, which reversed prior weeks.
This week saw net buying of semiconductor/chip names, and net selling of the EV/Solar/Battery space and buying of the Ping Ans, but most notable was liquid A vs H performance.


Mainland Connect NORTHBOUND Flows (To 19 Apr 2024): NB Net Seller; Semi-Tech Buys, Renewables Sold

Analyst

Steve Zhou, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> posted strong 4Q23 results, with net profit up 18% yoy and sales up 10% yoy. </li>
<li>In terms of 2024 outlook, management targets a 5-10% yoy growth in both the top and bottom line. </li>
<li>The stock is has rerated up to 12x 2024E earnings, compared to an average of 13x over the last 10 years. </li>
</ul>



Midea Group Co Ltd A (000333 CH) posted strong 4Q23 results, with net profit up 18% yoy and sales up 10% yoy. 
In terms of 2024 outlook, management targets a 5-10% yoy growth in both the top and bottom line. 
The stock is has rerated up to 12x 2024E earnings, compared to an average of 13x over the last 10 years. 


Midea Group (000333 CH):  Strong 4Q23 Result As Expected

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a>, one of the world’s largest home appliance producers, aims to raise up to  US$5bn in its H-share listing.</li>
<li>Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.</li>
<li>In this note, we look at its past performance and other deal dynamics that might impact the listing.</li>
</ul>



Midea Group Co Ltd A (000333 CH), one of the world’s largest home appliance producers, aims to raise up to  US$5bn in its H-share listing.
Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
In this note, we look at its past performance and other deal dynamics that might impact the listing.


Midea A/H Listing - Early Look - Probably Raising Acquisition Currency

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gree-electric-appliances-inc-of-zhuhai" target="_blank" data-smartkarma-citation="entities:7622:1" rel="noopener">Gree Electric Appliances (000651 CH)</a> announced a profit alert for FY22 yesterday.  Net profit is expected to increase 10.2% - 19.6% yoy for the whole year.</li>
<li>The resilient result of Gree should alleviate concerns of the market that Midea is too correlated with China's new home sales. </li>
<li>The stock is trading at 10x 2024E earnings compared to an average of 13x over the last 10 years, with earnings likely growing at a high-single-digit pace.</li>
</ul>



Gree Electric Appliances (000651 CH) announced a profit alert for FY22 yesterday.  Net profit is expected to increase 10.2% - 19.6% yoy for the whole year.
The resilient result of Gree should alleviate concerns of the market that Midea is too correlated with China's new home sales. 
The stock is trading at 10x 2024E earnings compared to an average of 13x over the last 10 years, with earnings likely growing at a high-single-digit pace.


Midea (000333 CH):  Positive Read-Through From Gree's Profit Alert

China

Midea Group CO., LTD manufactures, markets and installs household electrical appliances, compressors and components. Midea also provides services in information technology, corporate investment consultation, software and hardware development, property management and corporate engineering supports. Midea Group provides its products worldwide.

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Midea Group Co Ltd A (000333 CH)

Mainland Connect NORTHBOUND Flows (To 19 Apr 2024): NB Net Seller; Semi-Tech Buys, Renewables Sold

NORTHBOUND Connect was again a seller this past week, with batteries/EVs/solar seeing net selling, and banks seeing net buying. As significantly...

Travis Lundy

Midea Group (000333 CH): Strong 4Q23 Result As Expected

Midea Group reported strong 4Q23 results with net profit up 18% yoy. The company targets 5-10% growth in 2024, and trades at 12x 2024E earnings.

Steve Zhou, CFA

Midea A/H Listing - Early Look - Probably Raising Acquisition Currency

Midea officially filed for an H-share listing yesterday. As per media reports the company is looking to raise up to US$3bn in Hong Kong.

Sumeet Singh

Midea (000333 CH): Positive Read-Through From Gree's Profit Alert

Gree Electric Appliances expects a 10.2% - 19.6% YoY increase in net profit for FY22, alleviating concerns about Midea's correlation with China's...

Steve Zhou, CFA

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Pre-IPO Midea Group H Share - Even in the Face of Challenges, There Is Still Investment Value

Midea’s To C business encounters growth bottleneck as the industry beta has gone. To B business is new growth driver but it's facing challenges....

Xinyao (Criss) Wang

Mainland Connect NORTHBOUND Flows (To 19 Apr 2024): NB Net Seller; Semi-Tech Buys, Renewables Sold

NORTHBOUND Connect was again a seller this past week, with batteries/EVs/solar seeing net selling, and banks seeing net buying. As significantly...

Travis Lundy

Midea Group (000333 CH): Strong 4Q23 Result As Expected

​Midea Group reported strong 4Q23 results with net profit up 18% yoy. The company targets 5-10% growth in 2024, and trades at 12x 2024E earnings.

Steve Zhou, CFA

Midea A/H Listing - Early Look - Probably Raising Acquisition Currency

Midea officially filed for an H-share listing yesterday. As per media reports the company is looking to raise up to US$3bn in Hong Kong.

Sumeet Singh

Midea (000333 CH): Positive Read-Through From Gree's Profit Alert

​Gree Electric Appliances expects a 10.2% - 19.6% YoY increase in net profit for FY22, alleviating concerns about Midea's correlation with China's...

Steve Zhou, CFA

Midea Group reported strong 4Q23 results with net profit up 18% yoy. The company targets 5-10% growth in 2024, and trades at 12x 2024E earnings.

Gree Electric Appliances expects a 10.2% - 19.6% YoY increase in net profit for FY22, alleviating concerns about Midea's correlation with China's...