Midea Group Co. Ltd.

Overview Key strengths Key risks Largest global home appliance manufacturer by units Highly competitive markets Strong market position in small appliances Growing investment appetite for business expansion Healthy free operating cash flow Net cash position We forecast the company's revenue will expand 13%-16% in 2021, but growth will then slow down to 4%-8% in 2022, mainly due to softened consumer demand. Its gross margin will likely dip in 2021 because of higher raw material prices and transportation costs. Gross margins will show some recovery in 2022 but be below 25.1% in 2020. Midea is raising its prices but is unlikely to be able to fully pass on the cost increases due to competitive intensity. The price increases should enable the

...Midea Group Co. Ltd.'s performance should be solid despite increased raw material costs. We forecast the company's revenue will expand 13%-16% in 2021, but growth will then slow down to 4%-8% in 2022, mainly due to softened consumer demand. Its gross margin will likely dip in 2021 because of higher raw material prices and transportation costs. Gross margins will show some recovery in 2022 but be below 25.1% in 2020. Midea is raising its prices but is unlikely to be able to fully pass on the cost increases due to competitive intensity. The price increases should enable the company to claw back some of its gross margin. Increasing presence in business-oriented products should enhance Midea's revenue diversity over the longer term....

Full Report