AxJ Consumer Sector: A Different Approach to Investment Research and Model Portfolio

Asia ex-Japan consumer sector long-only analyst.

Chan Wai Leong

Equity Bottom-Up

<p>This paper lays down briefly the investment thesis for the inclusion of Midea in the model portfolio. Midea is the world's largest home appliance manufacturer by revenue. Its EPS grew by a CAGR of 19% last 5 years. The Chinese market is not yet saturated. There is room to grow geographically, horizontally and vertically; Midea could continue its double-digit growth next 5 years. This is a high-quality company that trades at a very reasonable 13x PE (FY18 est). I have an 18-month price target of CNY50.80 (+22% total returns).</p>

This paper lays down briefly the investment thesis for the inclusion of Midea in the model portfolio. Midea is the world's largest home appliance manufacturer by revenue. Its EPS grew by a CAGR of 19% last 5 years. The Chinese market is not yet saturated. There is room to grow geographically, horizontally and vertically; Midea could continue its double-digit growth next 5 years. This is a high-quality company that trades at a very reasonable 13x PE (FY18 est). I have an 18-month price target of CNY50.80 (+22% total returns).

Midea Group (000333 CH): Compelling Growth Prospects. Initiate Coverage with a Positive Rating.

Midea Group Co Ltd A

Midea Group (000333 CH): Compelling Growth Prospects. Initiate Coverage with a Positive Rating.