Midea Group Co.Ltd(000333) (000333)
Core view
Leading the global leader in Chinese household appliances. Midea Group Co.Ltd(000333) after 52 years of development, it has become a global technology group integrating five sectors: smart home business group, Midea industrial technology, building technology business division, Siasun Robot&Automation Co.Ltd(300024) automation business division and digital innovation business. Its products and services benefit about 400 million users in more than 200 countries and regions around the world. In 2020, the company achieved a revenue of 285.7 billion yuan and a net profit attributable to the parent company of 27.2 billion yuan, ranking first in the global household appliance industry.
Core competitiveness: excellent organizational gene and culture. The founding team headed by he Xiangjian has forcefully implemented correct strategic decisions at key time points and in the face of key changes. In continuous enterprise practice, it has poured excellent working principles into the gene of beauty, shaped excellent enterprise culture and values, bred an efficient enterprise governance structure, and guided Midea to continue to do the right things in the process of change, Continuously create value for customers through multiple economic cycles and industrial cycles.
Core focus 1: R & D overweight + channel reform, drive the reconstruction of the value chain, and constantly dig deep moat. The company understands the essence of home appliance retail, drives the reconstruction of the value chain by increasing R & D investment and promoting channel reform, and constantly creates better products and faster services for users. R & D overweight: the company upgraded its strategic axis and further established its leading position in science and technology. From 2013 to 2020, the company invested more than 57 billion yuan in R & D, gradually building up the advantage of R & D scale and ensuring product quality and innovation; Channel Transformation: fully implement the “t + 3” model, promote the comprehensive digital transformation, accelerate the flow of information, products and funds, build the flexible manufacturing capacity of “production by sales” and ensure faster and more accurate demand response based on Meiyun sales, Meiyun Zhishu and ande Zhilian.
Core focus 2: industrial expansion + global breakthrough, promote the outward movement of capacity circle and constantly broaden the moat. Through industrial expansion and global breakthroughs, the company continues to explore incremental industries and incremental markets, promote the outward movement of capacity circle and open up new growth space. Industrial expansion: through the upstream and downstream extension of the industrial chain, layout the core components of new energy vehicles, industrial Siasun Robot&Automation Co.Ltd(300024) and other tob businesses, and make use of advanced corporate governance experience, solid intelligent manufacturing capacity, abundant capital strength and broad sales channels to enable the development of emerging industries; Global breakthrough: make a multi-directional breakthrough by using products + brands + channels + supply services to increase the number of private brands going to sea. It is planned that the overseas revenue will exceed US $35 billion by 2025, and the overseas market has great prospects.
Investment suggestion: it is estimated that the net profit attributable to the parent company will be 29.64/34.89/39.32 billion yuan in 21-23 years, and the corresponding PE will be 17.5/14.8/13.2x respectively. For the first time, give a “overweight” rating.
Risk tips: 1. Risk of rising raw material and shipping prices; 2. Affected by repeated overseas epidemics and international relations, globalization is less than expected; 3. Competition increases risk.
