Midea Group (000333): Steady Growth and Continuous Transformation

Midea Group (000333): Steady Growth and Continuous Transformation
Revenue growth was stable and performance was in line with market expectations.19H1 Midea ‘s revenue was 1,543% (+ 7%), net profit attributable to mothers was 152% (+ 17%), net profit after deduction was 146% (past + 16%), and diluted EPS was 2.2 yuan (yoy + 12%), benefit cost + exchange rate dividend, profit growth is faster than income growth.Midea’s 19Q2 revenue, net profit, and net profit after deductions were + 7%, + 18%, and + 14%, respectively, and its single-quarter growth remained stable. The strong sales of air conditioners drive revenue, and it is expected that the annual revenue will increase by a large amount.On the whole, the original main business of 19H1 Midea has improved significantly compared to 18H2, and the downturn of the industry has prolonged the integration of KUKA.The foundation for repairing the overall business: (1) Air-conditioning revenue of 71.4 billion yuan, + 12% per year, and the average offline price of yoy-5% boosted the retail share + boosted domestic sales, and the domestic sales growth rate of the United States exceeded + 23%.Speed is only + 1% (Industry Online).(2) Revenue from consumer electronics was 58.4 billion (+ 6% per year), and washing machine revenue was expected to be 13.3 billion, + 6% over the same period, of which double-export growth, clothes dryers and Beverly growth; refrigerator revenue was 11.4 billion, + 10% year-on-yearThe growth rate of domestic and foreign sales is balanced; small household appliances revenue + 4% year-on-year, of which domestic sales are extended + 10%, exports are temporarily under pressure; kitchen appliances destocking notice level one, revenue increased by + 10% in the first half of the year, a low H2 base will help the yearGrowth is picking up.From the perspective of new business, the tightening of global industrial robot demand has lengthened the integration time of KUKA, and KUKA revenue has decreased by -4% in 19H1, of which robot business + 1%, system integration has remained flat, and the number of logistics automation has been discrete. EBIT will be maintained forever after eliminating regular profit and loss3.At 0%, KUKA’s revenue target of up to  3.3 billion has been changed.Looking into the future, flexible air-conditioning prices + channel upgrades will drive the terminal, ice-washed small appliances will grow steadily, and kitchen appliances will continue to improve. Looking at the revenue side as a whole, a large number may be maintained. Weak costs + depreciation of the exchange rate helped to boost gross profit margins, and cash flow improved significantly, maintaining a “Buy” rating.19H1 gross profit margin 29.5% (+ 1% year-on-year.2pcts), where gross domestic sales / export margins are +0.7 / + 4.6pcts, the main raw materials going up and down 5% -10% + RMB value exceeding the value 6% is the influencing factor, but it should also be noted that the expansion of the 18H2 base may cause the narrowing of the gross attenuation of the second half of the year.The first half sales expense ratio was 12.7% (+0 year-on-year.9pcts), the promotion intensity and expenses are fully accrued; management + R & D expense rate +0 each time.6pcts, financial expense ratio yoy-0.3pcts, comprehensive look at the mother and mother clarity coefficient +2.Three.19H1 operating net cash yoy + 186%, of which cash expenditures + 25% in a row, cash round trips + 10% daily, channel digitization + integration to accelerate inventory turnover and terminal retail, receivables and inventory at most only + 2%. At present, Midea owns funds of 67.6 billion, abundant surplus grain in hand, excellent asset quality, and other flow resistance of 41.5 billion (yoy + 29%, + 102 ‰ from the initial period). Performance confirmation is cautious. Midea’s group leader is further stable, efficiency optimization + 成都桑拿网 channel change landing, absorption and merger of Little Swan to play synergistic advantages, and internationalization and diversification strategy guarantee growth space.It is estimated that Midea Group’s net profit for 2019-21 will be US $ 23.8,257.27 billion and US $ 27.9 billion, and the current corresponding PE is 14.5, 13.5, 12.4x, maintain “Buy” rating. Risk warning: Costs and prices rise, RMB appreciates, and new business synergy fails to meet expectations.