Midea Group(SZ:000333) EBSCN·2025-05-01 09:16Investment Rating - The report maintains a "Buy" rating for Midea Group (000333.SZ) with a current price of 73.62 CNY and a target price of 86.00 CNY [1]. Core Insights - Midea Group's Q1 2025 performance shows strong revenue growth of 21% year-on-year, reaching 128.4 billion CNY, with net profit increasing by 38% to 12.4 billion CNY [6][9]. - The company benefits from robust growth in both consumer (C-end) exports and improvements in business (B-end) operations, particularly in air conditioning and industrial technology sectors [7][9]. - The net profit margin has increased to 9.7%, reflecting stable profitability despite a slight decline in gross margin [8]. Summary by Sections Financial Performance - Q1 2025 total revenue was 128.4 billion CNY, up 21% year-on-year, with net profit at 12.4 billion CNY, also up 38% [6]. - The gross margin for Q1 2025 was 25.4%, down 1.1 percentage points year-on-year, while the net profit margin improved by 1.2 percentage points [8]. Business Segments - In the air conditioning segment, domestic sales grew by 3% while exports surged by 20%, driven by economic recovery in overseas markets and inventory replenishment in Europe and the US [7]. - B-end business revenues from new energy and industrial technology, smart building technology, and robotics increased by 45%, 20%, and 9% respectively [7]. Profitability and Cash Flow - The company reported a net cash flow from operating activities of 14.3 billion CNY, an increase of 4 billion CNY compared to the previous year [8]. - Midea Group's financial position remains strong with ample liquidity, including 161.3 billion CNY in cash and cash equivalents [8]. Earnings Forecast and Valuation - The report projects net profits for 2025-2027 to be 44.2 billion CNY, 48.4 billion CNY, and 52.7 billion CNY respectively, with corresponding P/E ratios of 13, 12, and 11 [9][12]. - The long-term competitive advantages of Midea Group are highlighted, with expectations of continued growth driven by efficiency optimization and strategic initiatives [9].