There is no doubt that in the field of domestic home appliances, especially in the direction of white goods, the United States Group is called to sit firmly in the “hegemon” position.

In terms of market value, as of the eve of press on May 7, the A-stock market value of Midea Group reached 501.7 billion yuan, ranking first in the A-share home appliances sector.

In terms of performance, according to the public information on the official website, in 2023, the United States Group ranked first in the industry with a total revenue of 373.7 billion yuan and a net profit of 33.72 billion yuan. Compared with the same period, Haier Zhijia’s revenue of 261.428 billion yuan and net profit of 16.597 billion yuan; Or Gree Electric Appliances annual revenue of 205 billion yuan, net profit of 29 billion yuan, the United States Group is obviously still ahead, especially its revenue and net profit growth rate also remain at the forefront.

F650-B-F-G-F-1-G-1-HI-E The prospectus shows that according to Frost & Sullivan’s report, in terms of 2023 sales and revenue, “we are the world’s largest home appliance company with a market share of 7.9% by volume.”

However, in this case, according to the Hong Kong Stock Exchange disclosed on April 29, the United States Group submitted a listing application to the main board of the Hong Kong Stock Exchange, which is its second submission, the last time was October 24, 2023, the interval is less than one year. It shows its determination to go public in Hong Kong. So, what kind of consideration is the United States group?

First of all, from the perspective of business fundamentals, Midea Group has a strong operating momentum in the past three years, with annual revenue of 343.36 billion yuan, 345.709 billion yuan and 373.71 billion yuan from 2021 to 2023, respectively, and profit attributable to shareholders of 28.587 billion yuan, 29.553 billion yuan and 33.722 billion yuan during the same period. Net profit margins were 8.5%, 8.6% and 9.0%, respectively.

Among them, revenue in 2023 increased by 8% year-on-year, and net profit increased by 14.1%. In terms of subdivision, its HVAC business revenue increased by 6.95% year-on-year, which is its largest business segment, accounting for 43.31% of revenue; This was followed by a year-on-year growth of 7.51% in the consumer electronics sector.

According to the United States Group in the annual report cited OVi cloud network data, in the home air conditioning, desktop pan microwave, desktop electric oven, electric heater, electric fan, induction cooker, electric kettle, air fryer and other eight categories, the United States products in the domestic online and offline market share are ranked first in the industry.

F650-B-F-G-F-1-G-1-HI-E

At the same time, revenue from robots, automation systems and other manufacturing industries was 37.257 billion yuan, an increase of 24.49%, and the proportion of revenue increased to 10%. In particular, Kuka, as a world-renowned robot manufacturer, will benefit from the digital transformation of the global manufacturing industry, and its business has long-term growth.

In addition, on the evening of April 29, the United States Group released 24Q1 quarterly reports, which still continues this growth trend. In the first quarter of this year, its operating income reached 106.102 billion yuan, an increase of 10.22%. Net profit of 9 billion yuan, an increase of 11.91%.

F650-B-F-G-F-1-G-1-HI-E So it can be seen that the current “behemoth” of the United States Group is in continuous “full bloom” and continues to accelerate growth.

From the perspective of cash flow, during 2021-2023, the balance of cash and cash equivalents at the end of the period was 40.55 billion, 51.132 billion and 59.887 billion, respectively. The balance of cash and cash equivalents at the end of 2024Q1 was 62.656 billion yuan, and the cash flow per share of 1.99 yuan ranked first in the industry, which was sufficient to prove the adequacy of its cash flow.

Based on the above operating fundamentals, it can be seen that it is not short of money. At the 2023 Midea Group shareholders’ meeting, Midea Group executives said that the Hong Kong stock market was not listed to raise funds, “the most fundamental reason is that Hong Kong shares have breakthrough, convenience and speed.” Making it easy to forge new incremental directions.

According to the prospectus, the Hong Kong IPO of Midea Group intends to raise funds for global science and technology research and development, the continuous construction of intelligent manufacturing system and the upgrading of supply chain management, the improvement of global sales channels and networks and the improvement of overseas sales of its own brands, the supplement of working capital and general corporate purposes.

In fact, at the performance presentation in May 2023, Fang Hongbo, president of the United States Group, bluntly said that the home appliance industry will usher in an unprecedented winter in the next three years. On the one hand, the environment has entered a stage of slow growth, on the other hand, the home appliance industry has long been the Red Sea market, in addition to the traditional home appliance three giants, the current Internet and other new forces are also continuing to pour into. And stressed that the home appliance business into the stock competition stage, the growth space is limited, the United States group must find a second engine.

At the same time, from the perspective of industry gross profit margin, the sales gross profit margin of the United States Group, which ranks first in revenue scale, is lagging behind Haier Zhijia and Gree Electric Appliances.