Midea Group(SZ:000333) Guotou Securities·2024-03-28 16:00Investment Rating - The report maintains a "Buy-A" investment rating for Midea Group, with a target price of 75.60 CNY over the next six months, corresponding to a dynamic P/E ratio of 14 times for 2024 [2][4]. Core Insights - Midea Group reported a revenue of 373.71 billion CNY for 2023, representing a year-on-year increase of 8.1%, and a net profit of 33.72 billion CNY, up 14.1% year-on-year. In Q4 alone, the company achieved a revenue of 81.33 billion CNY, with a growth rate of 10.0% year-on-year, and a net profit of 6.00 billion CNY, reflecting an 18.1% increase year-on-year [1][2]. - The company’s cash flow from operating activities showed significant improvement, with a net cash flow of 13.12 billion CNY in Q4, an increase of 79.3 billion CNY year-on-year. This indicates strong operational momentum moving forward [2]. - Midea's dividend payout increased to 61.6% in 2023, up from 58.2% in 2022, with total cash dividends amounting to 20.76 billion CNY [2]. Financial Performance Summary - For 2023, Midea's main revenue was 373.71 billion CNY, with projections for 2024, 2025, and 2026 at 407.10 billion CNY, 439.81 billion CNY, and 471.09 billion CNY respectively [3][10]. - The net profit for 2023 was 33.72 billion CNY, with forecasts of 37.63 billion CNY, 41.02 billion CNY, and 44.34 billion CNY for the following three years [3][10]. - The report indicates a steady increase in earnings per share (EPS), projected at 5.40 CNY for 2024, 5.89 CNY for 2025, and 6.36 CNY for 2026 [2][10]. Operational Metrics - The report highlights that Midea's gross profit margin and sales expense ratio improved, with a gross margin increase of 0.7 percentage points year-on-year in Q4, attributed to a higher proportion of overseas brand revenue [1][2]. - The company’s net profit margin for Q4 was reported at 6.7%, a decrease of 0.2 percentage points year-on-year when excluding minority interests [1][2]. - Midea's return on equity (ROE) is projected to remain stable around 20.7% for 2023, with slight declines expected in the following years [7][10].