Investment Rating - The report maintains a "Recommended" rating for Midea Group, indicating confidence in the company's ability to sustain growth despite industry challenges [4]. Core Views - Midea Group is expected to maintain steady growth and attractive dividend yields, even as the home appliance industry faces a downturn. The company has demonstrated strong competitive advantages and a commitment to shareholder returns [4][6]. - The report highlights that Midea's revenue and profit growth in Q1 2025 exceeded market expectations, with projected revenue growth of 7-9% and net profit growth of 10-15% for Q2 2025 [4]. - The report emphasizes the resilience of Midea's business model, particularly in the context of ongoing market adjustments and external pressures such as U.S. tariff policies [4][6]. Summary by Sections Financial Performance - For Q1 2025, Midea Group reported revenue of 127.8 billion yuan, a year-on-year increase of 20.5%, and a net profit of 12.4 billion yuan, up 38.0% year-on-year [4]. - The forecast for 2024 indicates total revenue of 409.1 billion yuan, with a growth rate of 9.5%, and a net profit of 38.5 billion yuan, reflecting a growth rate of 14.3% [5]. Market Position - Midea Group's A-share price as of July 1, 2025, was 72.11 yuan, with a market capitalization of 497.9 billion yuan [2]. - The company's A-share price-to-earnings (P/E) ratio is projected to be 12.5x for 2025, which is below its historical average, suggesting a potentially undervalued position [6]. Dividend Policy - Midea Group's dividend payout ratio is expected to reach 69% in 2024, with a projected dividend yield of 5.5% for 2025, making it attractive for income-focused investors [4][10]. Industry Outlook - The home appliance industry is anticipated to experience a gradual decline in growth rates, but Midea is expected to leverage its competitive strengths to continue growing [4]. - The report notes that Midea's industrial business, particularly in HVAC and related sectors, is showing strong growth potential, with significant opportunities in international markets [4][6].