...May 20, 2026 This report does not constitute a rating action. Modest revenue growth. We expect high single digit percent in Midea's overseas consumer appliances and global commercial business to more than offset a low single digit percent decline in the domestic appliances segment. Revenue from the domestic appliances business will likely continue to decline in the second and third quarters of this year as the subsidy effects from 2025 fade. Declining margins. Midea's efforts to cut costs are unlikely to fully offset a surge in prices of key inputs such as copper and plastics. We therefore expect margins to decline in 2026 and 2027 as benefits of earlier locked-in costs fade, before rebounding slightly in 2028. Expansion blueprint. Midea's joint venture with AB Electrolux, as well as proceeds from two HK$17.2 billion convertible bonds raised in 2026 will support the company's expansion overseas and in areas of identified growth (namely new energy vehicle components, medical, and high-end...
