Midea Group(SZ:000333)2024-04-04 16:00Investment Rating - The investment rating for Midea Group is OUTPERFORM with a target price of RMB 85.12 [2][4]. Core Insights - Midea Group reported a total revenue of RMB 373.7 billion in 2023, representing an 8.10% year-on-year increase, and a net profit attributable to shareholders of RMB 33.7 billion, up 14.10% year-on-year [3][8]. - The company achieved a significant growth in Q4 2023, with total revenue of RMB 81.33 billion, a 10% increase year-on-year, and a net profit of RMB 6.00 billion, an 18.08% increase [3][9]. - Midea's operating cash flow reached RMB 57.9 billion, marking a 67.07% increase [3][8]. - The company proposed a dividend of RMB 3 per share, resulting in a payout ratio of 62% and a dividend yield of 4.67% based on the share price as of March 29 [3][8]. Revenue Breakdown - The TOC division showed steady growth, while the TOB division experienced double-digit growth. The air conditioning business generated RMB 161.1 billion, up 6.95% year-on-year, and household appliances earned RMB 134.7 billion, a 7.51% increase [3][9]. - The industrial technology, building technology, and robotics divisions saw rapid revenue growth, with respective revenues of RMB 27.9 billion (up 29.17%), RMB 25.9 billion (up 13.60%), and RMB 31.1 billion (up 12.27%) [3][9]. Profitability Metrics - Midea's gross profit margin improved by 2.25 percentage points to 26.49% in 2023, with domestic and overseas margins at 26.03% and 27.16%, respectively [3][9]. - The net profit margin also improved, increasing by 0.47 percentage points to 9.02% [3][9]. Strategic Initiatives - Midea solidified its leadership in the home appliance sector and advanced its high-end brand strategy, with the 'COLMO+Toshiba' brands achieving over 20% growth in retail value [3][10]. - The company deepened its global presence, with OBM business accounting for over 40% of overseas smart home revenue, demonstrating strong competitiveness in various markets [4][10]. Future Outlook - Midea Group is expected to maintain stable operations with a strong certainty of double-digit growth in 2024, forecasting a net profit attributable to shareholders of RMB 37.1 billion [4][10].