\u3000\u3000 Midea Group Co.Ltd(000333) Midea Group Co.Ltd(000333) )
Key investment points
Event: Recently, the company released its 2021 annual report and the first quarterly report of 2022, and issued a multi-phase incentive plan.
Comments:
The company’s revenue growth is good and its operation meets expectations. (1) In 2021, the company achieved a total operating revenue of 343361 billion yuan, a year-on-year increase of 20.18%; The net profit attributable to the parent company was 28.574 billion yuan, a year-on-year increase of 4.96%. In terms of regions, the company’s business at home and abroad developed together. In 2021, China’s revenue was 203.6 billion yuan, a year-on-year increase of 24.8%, and overseas revenue was 137.7 billion yuan, a year-on-year increase of 13.7%. By product, in 2021, the revenue of the company’s main products HVAC and consumer appliances was 141.9 billion yuan and 131.9 billion yuan respectively, with a year-on-year increase of 17.05% and 15.8% respectively. (2) In the first quarter of 2022, the company achieved a total operating revenue of 90.939 billion yuan, a year-on-year increase of 9.54%; The net profit attributable to the parent company was 7.178 billion yuan, a year-on-year increase of 10.97%. In the context of the cold home appliance market, the company’s revenue in the first quarter still increased against the trend, and the revenue in a single quarter exceeded 90 billion yuan for the second time, which fully reflects the company’s business toughness.
The company pays equal attention to the development of Tob and TOC business, and the high-end effect of traditional household appliance business is obvious. Classified by five business segments, in 2021, the company’s smart home, Siasun Robot&Automation Co.Ltd(300024) and automation, industrial technology, building technology and digital innovation businesses achieved revenues of 234.9 billion yuan, 25.3 billion yuan, 20.1 billion yuan, 19.7 billion yuan and 8.3 billion yuan respectively, with year-on-year growth of 12.6%, 22.8%, 43.5%, 54.8% and 51.4% respectively. Among them, the company’s largest business, home appliance business, has developed steadily, maintained double-digit income and maintained a leading position in the industry. According to ovicloud, Midea’s seven categories of household air conditioners, clothes dryers, rice cookers, electric fans, electric pressure cookers, induction cooker and electric heaters rank first in China’s online and offline market share. In terms of high-end, the retail revenue of Colmo, the company’s high-end brand, exceeded 4 billion yuan in 2021, with a year-on-year increase of more than 300%. According to the company’s announcement, the Wuxi Online Offline Communication Information Technology Co.Ltd(300959) proportion of the company’s high-end air conditioner (unit price 15500 yuan), washing machine (unit price 20000 yuan) and refrigerator (unit price 18000 yuan) has increased to varying degrees in 2021, realizing a continuous breakthrough.
The profitability of the company is under pressure in the short term and improved month on month in the first quarter of 2022. In 2021, the company’s gross profit margin on sales was 22.48%, a year-on-year decrease of 2.63 percentage points, and the net profit margin on sales was 8.50%, a year-on-year decrease of 1.18 percentage points. The decline of net profit margin was less than that of gross profit margin. In the first quarter of 2022, the profit level of the company showed marginal improvement, and the gross profit margin and net profit margin of sales were 22.18% and 8.00% respectively, up 4.03 percentage points and 1.34 percentage points month on month respectively. In the face of the pressure on the profit side caused by the sharp fluctuation of upstream raw material costs and the appreciation of RMB, the company hedged the impact of rising costs through various measures, optimized the expense rate during the period and improved operating efficiency.
The company issued the ninth stock option incentive plan and the restricted stock incentive plan in 2022. In order to continuously improve the company’s governance structure, improve the company’s incentive mechanism, and enhance the sense of responsibility and mission of the company’s senior management team and other core personnel to realize the sustainable and healthy development of the company, the company continues to carry out incentive plans. The performance evaluation indicators of this incentive plan are: the weighted average return on net assets in 2022 and 2023 is not less than 20%, the weighted average return on net assets in 2024 is not less than 18%, and the weighted average return on net assets in 2025 is not less than 18%.
Investment suggestion: Midea is a global technology group covering five business segments: smart home business group, electromechanical business group, HVAC and building business department, Siasun Robot&Automation Co.Ltd(300024) and automation business department and digital innovation business. It adheres to product innovation, diversified business layout and strong comprehensive competitiveness. It is estimated that the company’s EPS in 2022 / 2023 will be 4.76 yuan / 5.38 yuan respectively, and the corresponding PE will be 12 times / 11 times respectively, maintaining the “recommended” rating.
Risk warning: epidemic risk; Macroeconomic fluctuation risk; Price fluctuation risk of raw materials; Global asset allocation and overseas market expansion risks; Exchange rate change risk, etc.
