Core Insights - The company reported a total revenue of 2.651 billion yuan in 2024, reflecting a year-on-year increase of 11.91%, while the net profit attributable to shareholders decreased by 22.52% to 233 million yuan [1] - The company experienced a robust growth in its compound seasoning and light cooking solutions, with significant contributions from both direct and online sales channels [2] Financial Performance - In 2024, the total revenue was 2.651 billion yuan, with a net profit of 233 million yuan and a non-recurring net profit of 215 million yuan [1] - The fourth quarter of 2024 saw a revenue of 721 million yuan, with a slight decline in net profit to 59.75 million yuan [1] - For Q1 2025, the revenue was 669 million yuan, with a net profit of 58.25 million yuan, indicating a year-on-year decrease [1] Product and Sales Analysis - The revenue breakdown for 2024 shows that compound seasonings generated 1.296 billion yuan (+13.21%), light cooking solutions 1.130 billion yuan (+10.41%), and beverage and dessert ingredients 147 million yuan (+3.00%) [2] - Direct sales accounted for 2.138 billion yuan (+12.35%), while non-direct sales reached 435 million yuan (+6.63%) [2] - Online sales were 808 million yuan (+2.19%), and offline sales were 1.765 billion yuan (+16.10%) [2] Competitive Positioning - The company maintained a strong competitive advantage in the B2B sector, with revenue from the top five clients reaching 791 million yuan (+7.45%) [3] - The first major client, Yum China, reported a revenue of 376 million yuan (-4.57%), while the second to fourth clients collectively generated 415 million yuan (+21.28%) [3] - In the C2C sector, the company’s online platform achieved a revenue of 918 million yuan (+5.99%) in 2024, recovering from a decline in 2023 [3] Profitability Metrics - The net profit margin for 2024 decreased by 3.91 percentage points to 8.8%, while the gross margin slightly declined by 0.33 percentage points to 32.81% [4] - The gross margin for compound seasonings increased by 2.85 percentage points, while light cooking solutions saw a decrease of 4.23 percentage points [4] - In Q1 2025, the net profit margin further declined to 8.71%, despite a slight increase in gross margin to 32.61% [4] Future Outlook - The company forecasts net profits for 2025-2027 to be 274 million, 315 million, and 358 million yuan respectively, with corresponding EPS of 0.69, 0.79, and 0.90 yuan [4] - The current price-to-earnings ratio is projected to be 20, 17, and 15 times for the respective years [4]

Core Viewpoint - Midea Group reported a strong performance for the fiscal year 2024, with significant revenue growth and a robust shareholder return plan, highlighting its operational resilience and global expansion success [1][2]. Financial Performance - Midea Group achieved a total revenue of 409.1 billion RMB, representing a year-on-year increase of 9.5% [1]. - The net profit attributable to the parent company rose by 14.3% to 38.5 billion RMB, with operating cash flow reaching a historical high of 60.5 billion RMB [1]. Shareholder Returns - The company announced a dividend of 3.5 RMB per share, totaling 26.7 billion RMB, which is a 28.5% increase year-on-year, with a payout ratio nearing 70% [2]. - Midea plans to repurchase shares worth 5 to 10 billion RMB, with 70% of the repurchased shares to be canceled, indicating a commitment to returning profits to shareholders [2]. Research and Development - In 2024, Midea's R&D expenditure exceeded 16 billion RMB, with a total investment surpassing 100 billion RMB over the past decade [3]. - The company added 11,000 global authorized patents in the year, including 5,000 invention patents, and led or revised 230 industry technical standards [3]. International Strategy - Midea became the top global brand in smart home appliance sales in 2024, with its smart home business revenue reaching 269.5 billion RMB [4]. - The overseas business contributed over 40% to the total revenue, with self-owned brand (OBM) revenue accounting for more than 43% of the smart home overseas business [4]. B2B Business Growth - Midea's enterprise segment (ToB) revenue surpassed 100 billion RMB for the first time, making up 25.5% of total revenue [5]. - The company maintained the leading global market share in household air conditioning compressors and achieved significant sales in domestic central air conditioning [5].

Investment Rating - The report maintains a "Buy" rating for Midea Group [3][5] Core Views - The C-end business shows strong resilience, with significant improvements in the robotics segment. The domestic appliance replacement policy is effective, leading to a projected increase in sales [1][2] - The B-end business demonstrates steady growth, particularly in the new energy and industrial technology sectors, with a notable recovery in the robotics and automation segment [2] - Long-term, Midea Group's leading position is solid, supported by efficiency optimization and channel transformation, with a target price of 86.00 CNY based on a 15x PE for 2025 [3] Summary by Sections C-end Business - The domestic appliance replacement policy is expected to drive continued growth in the C-end business, with a projected 24% year-on-year increase in air conditioning sales in Q4 2024 [1] - Overseas sales of air conditioning units are projected to grow by 38% year-on-year in Q4 2024, with a cumulative growth of 31% for the first three quarters of 2024 [1] B-end Business - The B-end business revenue grew by 5% year-on-year in Q1-Q3 2024, with the robotics and automation segment showing a significant improvement in H2 2024 [2] - The robotics and automation segment is estimated to generate 30 billion CNY in revenue for 2024, with a 12% year-on-year increase in Q4 2024 [2] Financial Forecasts and Valuation - The report forecasts net profits of 38.88 billion CNY, 43.64 billion CNY, and 49.15 billion CNY for 2024, 2025, and 2026 respectively, with corresponding PE ratios of 14, 12, and 11 [3][4] - Midea's current PE is 14.4, which is below the 5-year average PE of 15.8 for Midea and 18.7 for Haier, indicating a favorable valuation [3]