\u3000\u3000 Midea Group Co.Ltd(000333) Midea Group Co.Ltd(000333) )
Report guide
Midea Group Co.Ltd(000333) is transforming from a home appliance enterprise into a comprehensive technology group. As a global white power giant, the company’s C-end smart home appliance business has developed steadily, and the emerging b-end business has contributed to a new growth curve for Midea Group Co.Ltd(000333) and we are optimistic that Midea Group Co.Ltd(000333) will become a technology giant like Siemens for a long time.
Key investment points
Midea Group Co.Ltd(000333) : towards a bigger, more beautiful and stronger scientific and technological Empire
1) the company divides its business segments into five strategic business groups, namely smart home, industrial technology, building technology, Siasun Robot&Automation Co.Ltd(300024) and automation and digital platforms. 2) The company is a global white power giant with comprehensive coverage of household appliances and multi brand matrix. In the first three quarters of 21 years, the business income of C-end (household appliances) of the company was 183.2 billion yuan, accounting for 70.10% of the operating income. 3) The revenue of b-end business in the first three quarters of 21 years was 78.1 billion yuan, accounting for 29.90% of the operating revenue. The rapid development of b-end business is expected to contribute a new growth curve to the company. 4) The company’s corporate culture “the only constant is change”, laying a solid ideological foundation for business expansion.
End C: the world’s leading white power giant with complete categories
1) products: the sales volume in the white electricity market is stabilizing, and the replacement demand leads to the increase of the average price in the white electricity market. The company is deeply engaged in white electricity, and its products have good technical and brand advantages. In 2021, the sales market shares of the company’s air conditioners, refrigerators and washing machines were 33%, 17% and 30% respectively. At the same time, the company actively expands new categories of kitchen appliances such as integrated stoves and dishwashers. 2) Channel: Midea determines production by sales through t + 3 mode, changes the original inventory pressing mode, gets through the information of brand side and terminal retail, and can formulate production plan and flexible production according to downstream demand, which significantly improves the channel efficiency. 3) Brand: the company embraces new retail and Colmo brand focuses on AI technology to create a young and high-end brand image. The company strengthens the construction of independent brands overseas and strengthens the construction of independent brands overseas by means of M & A of overseas targets.
End B: Industrial spillover creates a new growth curve
1) Industrial Technology: Meizhi is the world’s leading air-conditioning rotor compressor, accounting for 45% of the global air-conditioning rotor compressor market in 2021. At the same time, the company actively arranges new energy vehicle accessories, provides a full set of new energy vehicle solutions, and seizes the opportunity of rapid global penetration of new energy vehicles. 2) Building technology: Midea exports a complete set of building solutions based on commercial HVAC, combined with Lingwang elevator and building control system. At present, the HVAC and elevator of Chinese buildings are dominated by foreign capital, and Midea is expected to lead the domestic substitution by exporting a full set of solutions. 3) Siasun Robot&Automation Co.Ltd(300024) and automation: China Siasun Robot&Automation Co.Ltd(300024) has broad market prospects. Compared with developed countries, China’s industrial Siasun Robot&Automation Co.Ltd(300024) density has greater room for improvement. KUKA will turn losses into profits in 2021. We believe that KUKA’s profitability is expected to be further realized. 4) Digital platform: relying on smart manufacturing, Internet of things, big data, cloud computing, mobile Internet and other technologies, Midea cloud intelligence provides a whole process digital solution of “consulting + product + implementation”, and Midea exports digital management experience through Midea cloud intelligence.
Compared with Siemens, Midea has the conditions to become a comprehensive technology giant
From a long-term perspective, we believe Midea can become a comprehensive technology giant like Siemens. 1) In terms of corporate culture, Midea and Siemens have the cultural gene of keeping pace with the times and seeking change in stability. 2) Based on the digitalization of the Internet of things, Siemens has built and managed the Internet of things on the basis of digitalization. 3) Midea and Siemens have the same methodology in business development – M & A. both have sufficient resources and capabilities to integrate the acquired enterprises and finally release profits.
Profit forecast and valuation
We expect the company’s revenue to be 330.3/363.2/396.6 billion yuan in 21-23 years, with a corresponding growth rate of 16.20% / 9.96% / 9.22% respectively; The net profit attributable to the parent company was 28.7/316/35.6 billion yuan respectively, the corresponding growth rate was 5.48% / 9.90% / 12.95% respectively, and the corresponding EPS was 4.11/4.51/5.10 yuan respectively. We give the company a “buy” rating of 15xpe for 22 years, with a corresponding target share price of 67.65 yuan.
Risk tips
The price of raw materials rises; Intensified market competition; Downstream demand was lower than expected.
