Midea Group Maintains Steady Progress in Overseas Expansion and Domestic Automation Market

UOB Kay Hian Research Report – March 31, 2025

Midea Group (000333 CH), a leading global provider of smart home solutions and commercial & industrial solutions, has reported its 2024 financial results, showcasing steady progress in its overseas expansion and growing presence in the domestic automation market.

Solid 2024 Performance

Midea’s 2024 revenue reached Rmb409,084 million, a 9.5% year-over-year (yoy) increase, in line with market expectations.
Gross profit margin improved to 26.8%, up 0.7 percentage points (ppts) yoy.
EBITDA grew 15.4% yoy to Rmb51,184 million, with EBITDA margin expanding 0.6 ppts to 12.5%.
Net profit attributable to shareholders increased 14.3% yoy to Rmb38,537 million, with net margin up 0.4 ppts to 9.4%.
Core net profit rose 8.4% yoy to Rmb35,741 million, with core net margin at 8.7%.

Steady Progress in Overseas Expansion

For Midea’s smart home solutions business, revenue from original brand manufacturers (OBM) accounted for 43% of the overseas revenue, moving towards the company’s target of 50% OBM sales contribution in overseas markets.
In the domestic market, Midea’s high-end brands COLMO and TOSHIBA achieved retail sales growth of over 45% yoy in 2024.

Expanding Automation Footprint in China

Midea’s to-business (ToB) segment recorded revenue of Rmb104.5 billion, up 7% yoy and accounting for 26% of the total revenue.
For the robotics & automation business, Midea’s KUKA brand increased its domestic market share to 8% by sales volume and 15% by sales value.
KUKA China achieved growth in both sales revenue and order size, with its share of KUKA Group’s revenue increasing from 15% in 2020 to more than 22% in 2024.

Enhanced Shareholder Returns

Midea declared a final dividend of Rmb3.50 per share, raising the full-year dividend payout ratio to 69% (vs 62% in 2023).
Midea also announced a Rmb5 billion to Rmb10 billion share buyback program, with at least 70% of the repurchased shares to be cancelled.

Earnings Outlook and Valuation

The analysts have cut their 2025 and 2026 earnings forecasts by 5% and 4% respectively, reflecting a slight reduction in revenue projections and adjustments to operating expenses.
Maintain BUY rating and target price of Rmb106.50, implying 18.7x 2025F PE and 17.1x 2026F PE.