CSCI-Stock Connect-Midea Group (000333 CH)：Pulling the trigger on globalization - 20171016
Pulling the trigger on globalization
Global M&A push. Midea is at a critical juncture of upgrading itself from the world’s second largest home appliance maker to a global technology powerhouse capable of intelligent manufacturing by acquiring KUKA (one of the “Big Four” robot manufacturers) and automation solution provider Servotronix. Meanwhile, an M&A spree around the world has significantly boosted the company’s global competitiveness, helping it go upscale.
Growth outlook. We estimate Midea to notch a full-year revenue of over RMB230bn in 2017, continuing to dominate segments such as the “big three” white goods, kitchen appliances and small appliances. From purchasing products and technologies to the swallowing of market shares and sales channels, Midea is evolving on its global M&A journey.
Earnings forecast. We estimate Midea’s 2017-2019 EPS to be RMB 2.62/3.30/4.11, corresponding to 16x/13x/10x PER. Recommend a Buy Rating.
Risk alert: stiff competition in the home appliance sector; fluctuations in overseas demands and raw material prices.
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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