CSCI-Stock Connect-Midea Group (000333 CH)：Midea doubles down on robotics as cooperation with KUKA strengthens - 20180326
Midea doubles down on robotics as cooperation with KUKA strengthens
Midea speeds up consolidation of KUKA. The KUKA Executive Board has decided to merge the China divisions of both its General Industry Business and its subsidiary Swisslog Holding AG–which specializes in integrated automation solutions for hospitals, warehouses and distribution centers–with Midea. KUKA and Midea will each hold a 50% stake in the JV. Meanwhile, a robot park will be built in Midea’s headquarters Shunde in the manufacturing heartland of Guangdong Province, eying a capacity of 75,000 robots (with a total capacity of 100,000 robot units including existing capacities) by 2024.
Midea better poised to ride the automation wave. As part of the Industry Internet drive, Midea’s deepened cooperation with KUKA will accelerate the world’s largest home appliance maker’s transformation into an industrial automation powerhouse. This follows a tie-up with YASKAWA in 2015 to gatecrash into the robotics field, its acquisition of KUKA in 2016 to extend to robotics hardware manufacturing and the purchase of Servotronix in 2017 to complement KUKA’s weakness in the robot control systems area.
The latest move puts Midea in a better position to reap the benefits of the wave of automation sweeping across China, the world’s biggest market for industrial robots.
Earnings forecast. We predict Midea to have EPS of RMB2.65/3.23/3.87 for 2017-2019, corresponding to 21x/17x/14x PER. Maintain Buy.
Risk factors: stiffening competition in the home appliance market; volatility in raw material prices and labor supply.
Midea Group Co., Ltd. is a China-based company principally engaged in the manufacture and distribution of household electronics. The Company's products are categorized into three types, including consumer appliances, heating ventilating and air conditioning (HAVC) and robot and automation systems. The Company's products mainly consist of central air conditioning systems, heating and ventilation systems, kitchen appliances, refrigerators, washing machines and other small home appliances, such as water dispensers, water purifying devices, air purifiers, electric kettles, dust collectors and humidifiers. The Company is also involved in the production of motors, as well as logistics business. The Company distributes its products within domestic market and to overseas markets.
中信建投国际研究部是中信建投证券香港子公司中信建投国际下属研究部门，负责香港上市公司、行业和宏观研究。我们的研究产品和服务包括行业报告、公司、宏观、常规日报、新闻摘要、分析员路演、上市公司非交易路演和反向路演 以及策略会。
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