Midea Group Co. Ltd.

This report does not constitute a rating action. Overview Key strengths Key risks World's largest home appliance manufacturer. Highly competitive markets. Good product portfolio, with strong positions in air conditioners and small appliances. Higher risk of U.S. tariffs on export business than a year ago. Strengthening capital goods segments. Sizable net cash position. We expect the company to keep increasing global air conditioner sales, particularly in key markets such as Italy, Germany, and Latin America. Midea has been able to offer products at lower price points thanks to its efficient cost structure. The company has also incorporated attractive new features, such as easier installation of window air conditioner units. The company earns 8%-10% of its revenue from the U.S. It

...Overseas expansion will support Midea's growth in the next two years. We expect the company to keep increasing global air conditioner sales, particularly in key markets such as Italy, Germany, and Latin America. Midea has been able to offer products at lower price points thanks to its efficient cost structure. The company has also incorporated attractive new features, such as easier installation of window air conditioner units. Higher U.S. tariffs are unlikely to significantly affect Midea. The company earns 8%-10% of its revenue from the U.S. It makes most of these products outside China, so they should face lower tariffs than products made in China. Although Midea may need to raise product prices to cover...

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