Investment Rating - Industry rating: Recommended [8] Core Insights - The report highlights that the export production of major home appliances (air conditioners, refrigerators, and washing machines) in November 2025 outperformed domestic sales, with total production of 28.47 million units, a year-on-year decrease of 17.7% [17] - Air conditioner exports showed resilience with a production of 7.46 million units, down 13.8% year-on-year, while domestic production fell by 21.2% to 5.3 million units [17] - Refrigerator production for domestic sales was 3.76 million units, down 10.9% year-on-year, while exports were 4.02 million units, down 1.5% [2][18] - Washing machine exports increased by 5.0% year-on-year to 3.75 million units, while domestic production decreased by 2.6% to 4.18 million units [3][18] - The overall air conditioner export volume for the cold year 2025 reached 88.02 million units, an increase of 12.3% year-on-year, with export value at $16.97 billion, up 13.7% [19] Summary by Sections 1. Weekly Topic: November Production Performance - Air conditioners, refrigerators, and washing machines showed stronger export performance compared to domestic sales, with significant production declines in domestic markets due to high inventory and cost pressures [17] - The report attributes the decline in domestic production to factors such as inventory management, high raw material costs, and the impact of previous government subsidy policies [17] 2. Company Announcements - Hisense Home Appliances reported a revenue of 71.533 billion yuan for Q1-Q3 2025, a year-on-year increase of 1.35%, with a net profit of 2.812 billion yuan, up 0.67% [21] - Midea Group's revenue for Q1-Q3 2025 was 364.7 billion yuan, a 14% increase year-on-year, with a net profit of 37.9 billion yuan, up 20% [24] - Haier Smart Home reported a revenue of 234.1 billion yuan for Q1-Q3 2025, a 10% increase year-on-year, with a net profit of 17.4 billion yuan, up 15% [25] 3. Data Tracking - Raw material prices showed slight increases, with copper and aluminum prices rising by 0.9% and 1.1% respectively as of October 31, 2025 [28] - Shipping rates increased, with the CCFI composite index rising by 2.89% [30] - Real estate data indicated a decline in sales area and construction activity, with year-on-year decreases of 5.5% and 15.3% respectively for the first nine months of 2025 [33]

Investment Rating - The report maintains an "Outperform" rating for Midea Group with a target price of RMB 92.32, based on a current price of RMB 76.40 [2][7]. Core Insights - Midea Group reported stable growth in total revenue and profit, with a notable performance in its ToB (business-to-business) segment [1][5]. - The company achieved a revenue of RMB 364.72 billion for Q3 2025, representing a year-on-year increase of 13.85%, and a net profit of RMB 37.88 billion, up 19.51% year-on-year [5][12]. - The gross profit margin for Q3 2025 was 26.7%, an increase of 0.3 percentage points, while the net profit margin was 10.6%, a slight decrease of 0.1 percentage points [6][13]. - Midea's diversified business model and efficient operations have allowed it to respond effectively to market changes, achieving solid growth in both ToC (business-to-consumer) and ToB segments [14]. Financial Performance Summary - For the fiscal year 2025, Midea's projected revenues are as follows: - 2025E: RMB 457.51 billion (up 12% from 2024) - 2026E: RMB 489.10 billion (up 7% from 2025) - 2027E: RMB 524.87 billion (up 7% from 2026) [4][11]. - Net profit projections are: - 2025E: RMB 44.36 billion (up 15% from 2024) - 2026E: RMB 48.28 billion (up 9% from 2025) - 2027E: RMB 53.47 billion (up 11% from 2026) [4][11]. - The diluted EPS (earnings per share) is expected to grow from RMB 5.02 in 2024 to RMB 6.96 in 2027 [4][11]. Valuation - Midea is focusing on direct-to-consumer (DTC) innovations to drive growth in its C-end business while maintaining strong performance in its B-end business through a customer value and efficiency strategy [15]. - The company is assigned a PE (price-to-earnings) ratio of 16x for 2025, supporting the target price of RMB 92.32 [7][15].

Core Viewpoint - Midea Group is advancing its embodied intelligence strategy, focusing on the development of household robots capable of performing tasks such as folding laundry and enhancing smart home interactions [3][5]. Group 1: Household Intelligence - Midea's research emphasizes the development of household robots that can handle tasks like laundry and food storage, with a current focus on achieving high completion rates for single tasks before expanding capabilities [5][6]. - The new smart appliance interaction system will clarify user intentions, enhancing the collaboration between multiple intelligent agents [3][5]. Group 2: Factory Intelligence - Midea is building a "factory brain" to control various embodied intelligent terminals, including humanoid robots and AI glasses, aiming to create economic value beyond emotional support [5][6]. - The establishment of a humanoid robot innovation center indicates Midea's commitment to developing advanced humanoid robots for practical applications in factories [5][6]. Group 3: Industry Intelligence - Midea's AI Research Institute supports a wide range of industries, including building technology, KUKA robotics, and healthcare, with plans to develop large models for various applications [6]. - The timeline for household robots, such as those capable of folding clothes, is projected to mature in laboratories over the next two to three years, with commercial viability requiring further integration with different business units [6][7].

Core Viewpoint - The latest holdings of the "national team" in A-share listed companies have been revealed, with significant investments in major financial institutions and other sectors, indicating a strategic focus on stability and growth in the market [1][2]. Group 1: National Team Holdings - A total of 233 A-share listed companies have the "national team" (China Securities Finance Corporation and Central Huijin) among their top ten shareholders [1]. - There are 30 stocks with a holding value exceeding 10 billion yuan, including major banks like China Construction Bank, Agricultural Bank of China, and Bank of China, with holdings valued at 1.3288 trillion yuan, 1.1429 trillion yuan, and 1.1138 trillion yuan respectively [1][2]. - The top holdings also include companies from various sectors such as insurance, food and beverage, and energy, showcasing a diversified investment strategy [1][2]. Group 2: New Additions and Performance - Farah Electronics has been newly added to the "national team" holdings, with a market value of 158 million yuan [3]. - For the third quarter, Farah Electronics reported a revenue of 3.944 billion yuan, a year-on-year increase of 14.69%, and a net profit of 888 million yuan, also up by 14.58% [3]. - The company’s capacitor products are utilized in ultra-high voltage transmission applications, indicating a focus on high-demand technology sectors [3].

Core Insights - The latest holdings of the "national team" in A-share listed companies have been revealed, with 233 companies having the "national team" as one of their top ten shareholders [1][2] - In the third quarter, the "national team" held over 10 billion yuan in market value in 30 stocks, including major banks and insurance companies [1] Group 1: Major Holdings - The top three holdings by market value are: - China Construction Bank: 13,288.15 billion yuan - Agricultural Bank of China: 11,429.52 billion yuan - Bank of China: 11,138.27 billion yuan [1] - Other significant holdings include: - Industrial and Commercial Bank of China: 9,914.42 billion yuan - New China Life Insurance: 751.22 billion yuan - Ping An Insurance: 734.02 billion yuan [1][2] Group 2: New Additions - Farah Electronics is a new addition to the "national team" holdings, with a market value of 1.58 billion yuan [2] - The company reported a revenue of 3.944 billion yuan for the first three quarters, a year-on-year increase of 14.69%, and a net profit of 888 million yuan, also up 14.58% [2] - In the third quarter alone, Farah Electronics achieved a revenue of 1.445 billion yuan, reflecting a year-on-year growth of 9.31% [2]

Core Insights - Midea Group is advancing its AI research and development, focusing on household robots that can perform tasks such as retrieving and folding laundry, with a roadmap for future capabilities [3][4] - The company is enhancing its smart home appliance interaction systems to improve user engagement and facilitate multi-agent collaboration [3] - Midea has established a humanoid robot innovation center, aiming to develop super humanoid robots that can deliver economic value in factories [4] Group 1: Household Robotics - Midea's future household robots are expected to mature in laboratories over the next two to three years, but commercialization will take longer [1][4] - Current exploration in household robotics focuses on high completion rates for single tasks, such as retrieving clothes from washing machines and organizing food in refrigerators [3][4] - The interaction system will clarify user intentions, enhancing the overall user experience with smart appliances [3] Group 2: Industrial and AI Applications - Midea is building a "factory brain" decision-making system alongside embodied intelligent terminals like humanoid robots and AI glasses [4] - The AI research institute supports various sectors, including building technology, KUKA robotics, and medical applications, with plans to create large models for daily detection tasks [4] - The company is working on code models to upgrade industrial robots and developing multimodal models for medical diagnostics [4]

Core Viewpoint - Midea is focusing on user value rather than the concept of "ecosystem," emphasizing the integration of smart home, smart cars, and smartphones to meet user needs across different spaces and scenarios [1][2]. Group 1: Midea's Strategy - Midea is implementing a dual-brand strategy with COLMO and Midea to create deep smart home integration, aiming to connect users across various environments [1]. - The concept of "human-vehicle-home integration" is not unique to Xiaomi but is seen as a direction for the development of the Internet of Things (IoT) [4]. - Midea has conducted extensive research on user needs for connectivity between smartphones, cars, and traditional homes, indicating a demand for seamless integration [2]. Group 2: Industry Context - The "human-vehicle-home" concept has been referenced by other companies, including Huawei, which emphasizes its HarmonyOS in its smart living solutions [4]. - Midea is a member of the Matter protocol, which aims to standardize connectivity across various smart devices, and has already launched products supporting this protocol [4]. - According to Omdia, the number of devices supporting the Matter protocol is expected to increase by 300% in 2024, with the average number of connected devices in homes rising from 6 to 9-10 [4]. Group 3: Midea's IoT Development - Midea established its IoT research lab in 2013 and has progressed through three phases of smart home development, from single-device control to a unified IoT platform [5]. - The current phase focuses on an integrated solution centered around AI, with the Midea app connecting over 1.259 billion devices and having more than 1.159 billion registered users [5]. - Midea plans to expand its connectivity efforts with smartphone and automotive companies to enhance integration beyond the home environment [5].

Group 1 - Midea Group held its 30th Technology Month conference, showcasing technological innovations and talent cultivation, with the theme "AInnovation" emphasizing AI [1] - The company plans to invest at least 50 billion yuan in R&D over the next three years, focusing on AI large models and embodied intelligence [1] - Midea's AI Research Institute highlighted the significant changes in home information intelligence brought by generative AI, particularly in interaction depth and breadth [1][2] Group 2 - The smart home market in China is rapidly evolving from single product intelligence to a full-home smart ecosystem, driven by policy, technology, and consumer upgrades [2] - Midea's AI Research Institute aims to build a "home brain" and will soon launch a new interactive system based on a novel interaction architecture [3] - The company emphasizes that AI should provide real value to users, enabling proactive services and a comfortable, customized interaction experience [3] Group 3 - Current issues in smart home systems include limited connectivity between appliances, insufficient collaborative sensing capabilities, and a lack of reasoning abilities [5] - To enhance interaction quality, Midea's AI Research Institute identified six key areas for improvement: connection, perception, reasoning, execution, memory, and optimization [5] - Midea is advancing the "robotization of home appliances" and has established a humanoid robot innovation center, with plans for further investment in humanoid robot products [5]

Core Viewpoint - The home appliance industry is experiencing a divergence in performance among major players, with Midea Group and Haier Smart Home showing stable growth, while Gree Electric is facing pressure and a decline in performance in the third quarter of 2025 [1][4]. Group 1: Company Performance - Midea Group reported a revenue of 363.06 billion yuan, a year-on-year increase of 13.82%, and a net profit of 37.88 billion yuan, up 19.51% [5]. - Haier Smart Home achieved a revenue of 234.05 billion yuan, with a growth of 9.98%, and a net profit of 17.37 billion yuan, increasing by 14.68% [5]. - Gree Electric's revenue was 137.18 billion yuan, down 6.50%, and its net profit was 21.46 billion yuan, a decrease of 2.27% [5]. Group 2: Market Trends - The home appliance industry (excluding 3C) saw a retail sales figure of 198.8 billion yuan in Q3 2025, a year-on-year decline of 3.2%, while the total retail sales for the first three quarters reached 670.1 billion yuan, up 5.2% [4]. - The air conditioning market is experiencing intense competition, leading to price wars among brands, with Midea leveraging its Hualing brand and Haier promoting its Tongshuai brand [3][11]. Group 3: Business Strategies - Midea Group's B-end business is outperforming its C-end business, with a 18% growth in ToB revenue compared to 13% in ToC [7]. - Haier Smart Home is deepening its multi-brand strategy, with high-end brand Casarte growing by 18% and Leader brand revenue increasing by 25% [8]. - Gree Electric is expanding its non-air conditioning product lines and has launched new brands targeting the price-sensitive market segment [15]. Group 4: Future Outlook - Analysts expect Midea's humanoid robots to enter offline commercial settings in the second half of the year, focusing on enhancing operational capabilities [10]. - Xiaomi is planning to become a leading brand in the home appliance sector within five years, aiming for a significant market share in air conditioning [14].

Core Viewpoint - Midea Group reported a robust revenue growth in Q3, driven by external sales recovery, significant contributions from emerging regions and OBM, and strong performance in ToB business. The company is improving profitability through digital transformation and is expected to further enhance growth potential by deepening global manufacturing layout and channel transformation, solidifying its long-term competitive advantage [1] Event Summary - For Q1-Q3 2025, Midea Group achieved total revenue of 363.06 billion yuan, a year-on-year increase of 13.82%. The net profit attributable to shareholders was 37.88 billion yuan, up 19.51%, and the net profit after deducting non-recurring items was 37.14 billion yuan, an increase of 22.26%. In Q3 alone, the company reported revenue of 111.93 billion yuan, a 10.06% year-on-year growth, with a net profit of 11.87 billion yuan, up 8.95%, and a net profit of 10.91 billion yuan after deductions, increasing by 6.95% [1] Revenue Review - The company's external sales showed strong growth momentum, with ToB business performing exceptionally well. In the first three quarters, total revenue reached 363.06 billion yuan, reflecting a 13.82% year-on-year increase, while Q3 revenue was 111.93 billion yuan, marking a 10.06% growth [2] Profitability Analysis - In Q3, the net profit attributable to shareholders was 11.9 billion yuan, a 9% year-on-year increase, while the net profit after deductions was 10.9 billion yuan, up 7%. The gross margin was 26.74%, an increase of 0.32 percentage points, and the net profit margin was 10.56%, a decrease of 0.10 percentage points. The improvement in profitability is attributed to effective cost reduction and efficiency enhancement measures [3] Future Outlook - The ToB business is expected to be the core growth driver, contributing significantly to revenue and structural optimization. The company is entering a phase of scaled growth in ToB, with strong resilience across various segments. Future investments in new energy storage, smart buildings, and industrial robotics are anticipated to further increase the revenue share of ToB business, serving as a buffer against cyclical fluctuations in the ToC industry [3] Global Manufacturing and Channel Transformation - Midea Group is enhancing its global manufacturing and localized operations to build an efficient risk-resistant supply chain. The company is implementing a "regional supply for regional demand" model and leveraging local consumer insights to strengthen product innovation and channel development. The ongoing improvements in global capacity networks and localized operational capabilities are expected to increase the overseas revenue share [4] - The company is also advancing channel transformation to upgrade operational efficiency and user experience. By focusing on a "direct-to-user" strategy, Midea is reshaping the entire value chain process from orders to logistics and service feedback, enhancing operational efficiency and flexibility in pricing strategies [5]