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. Higher tariff risks from the U.S. for export business. Healthy free operating cash flow. Sizable net cash position. We believe about 6% of 2025 demand would be pulled forward to this year with the China government's trade-in subsidy because the bulk of demand for consumer electronics and appliances is driven by replacement. We assume new demand (which is tied to the property market) would remain weak in China. As such, we expect Midea's domestic revenue to grow about 12% in 2024 but slow to low single digit in 2025. Most of Midea?s products sold in the U.S. are produced

...Midea Group Co. Ltd.'s will likely experience softer revenue growth in 2025 after a strong second half in 2024. We believe about 6% of 2025 demand would be pulled forward to this year with the China government's trade-in subsidy because the bulk of demand for consumer electronics and appliances is driven by replacement. We assume new demand (which is tied to the property market) would remain weak in China. As such, we expect Midea's domestic revenue to grow about 12% in 2024 but slow to low single digit in 2025. Midea's expansion of oversea factories over the past eight years should mitigate potential tariff hike risks in U.S. Most of Midea's products sold in the U.S. are produced in Thailand, although some components are imported from China. We estimate over 90% of these products, including components, can be produced in Thailand in 2025, which should help Midea avoid the...

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