Core Insights - Midea Group reported a total revenue of 364.72 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 13.8%, and a net profit attributable to shareholders of 37.88 billion yuan, up 19.5% year-on-year [1] - In Q3 alone, the company achieved a revenue of 112.38 billion yuan, with a year-on-year growth of 9.9%, and a net profit of 11.87 billion yuan, reflecting an 8.9% increase year-on-year [1] - The company's smart home business is expected to benefit from the old-for-new policy, while its OBM business is anticipated to accelerate expansion in emerging markets, indicating a positive outlook for continued growth [1] Revenue Performance - In the C-end business, domestic sales of air conditioners, refrigerators, and washing machines saw year-on-year changes of -9.3%, +5.1%, and +2.3% respectively in Q3 2025, influenced by national subsidy limits in certain regions [1] - The B-end business showed strong performance with revenue growth rates of 21%, 25%, and 9% for new energy and industrial technology, smart building technology, and robotics and automation respectively from Q1 to Q3 2025 [1] Profitability and Margins - Q3 gross margin improved by 1.1 percentage points year-on-year, attributed to reduced online price competition for air conditioners and an increase in the proportion of overseas sales [2] - The net profit margin for Q3 was 10.6%, a slight decrease of 0.1 percentage points year-on-year, primarily due to changes in foreign exchange gains and losses and an increase in the proportion of income tax expenses [2] - The company’s total expense ratio decreased by 0.2 percentage points year-on-year, indicating improved efficiency in expense management [2] Cash Flow and Financial Health - Operating cash flow for Q3 decreased by 6.99 billion yuan year-on-year, mainly due to a drop in cash received from sales of goods and services [2] - As of the end of Q3 2025, other current liabilities increased by 12.87 billion yuan year-on-year, providing a buffer for future operations [2] Investment Outlook - Midea Group has established a balanced business matrix focusing on both consumer and business sectors, which enhances its resilience and positions it for sustained market outperformance [3] - The projected EPS for Midea Group for 2025, 2026, and 2027 are 5.78 yuan, 6.31 yuan, and 6.92 yuan respectively, maintaining a buy rating with a 12-month target price of 94.68 yuan, corresponding to a 15 times dynamic P/E ratio for 2026 [3]

Investment Rating - The investment rating for Midea Group is maintained at "Buy-A" with a 12-month target price of 94.68 CNY, corresponding to a 15x dynamic P/E ratio for 2026 [4][5]. Core Insights - Midea Group reported a total revenue of 364.72 billion CNY for the first three quarters of 2025, representing a year-over-year increase of 13.8%. The net profit attributable to shareholders reached 37.88 billion CNY, up 19.5% year-over-year. In Q3 alone, the revenue was 112.38 billion CNY, with a year-over-year growth of 9.9%, and the net profit was 11.87 billion CNY, reflecting an 8.9% increase year-over-year [1][2]. Summary by Sections Revenue Performance - In Q3, Midea's revenue growth was steady, with the C-end business showing mixed results due to regional subsidy limits. Air conditioner shipments decreased by 9.3% year-over-year, while refrigerator and washing machine sales increased by 5.1% and 2.3%, respectively. The B-end business, particularly in new energy and industrial technology, saw revenue growth of 21% to 25% year-over-year [2][3]. Profitability - The gross margin for Q3 improved by 1.1 percentage points year-over-year, attributed to reduced online price competition for air conditioners and an increase in the proportion of overseas sales. The net profit margin for Q3 was 10.6%, slightly down by 0.1 percentage points year-over-year [2][3]. Cash Flow - Operating cash flow for Q3 saw a significant decline, with a net outflow of 6.99 billion CNY year-over-year, primarily due to a decrease in cash received from sales. However, other current liabilities increased by 12.87 billion CNY year-over-year, providing a buffer for future operations [3]. Financial Forecast - Midea Group's projected EPS for 2025, 2026, and 2027 are 5.78 CNY, 6.31 CNY, and 6.92 CNY, respectively. The company is expected to maintain a robust growth trajectory, supported by its diversified business model and market responsiveness [4][9].