Company Coverage
Midea Group (000333 CH): 3Q26: EBIT Declines 3%; Targets Positive Sales Growth For 4Q26
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb87.48
Rmb116.80
+33.5%
Rmb112.60
Analyst
Analyst
Highlights
- Midea’s 3Q26 EBIT declined 3% yoy. Reported net profit rose 26% yoy on investment gains. Excluding the gains, we estimate the recurring net profit would have declined 11%.
- In 3Q26, ToC revenue declined by high single-digits yoy, with domestic sales down by more than 15%, partially offset by mid-single-digit growth in overseas sales, with OBM growing by more than 20% yoy. ToB revenue grew by high single-digits, with steady growth of building technology and robotics yet industrial technology facing pressure.
- Looking ahead to 4Q26, management targets positive sales growth, with overseas to remain stable, while the domestic outlook remains uncertain. Maintain BUY and raise target price by 4% to Rmb116.80.
Analysis
- 3Q26 EBIT declined 3%; net profit rose 26% yoy on investment gains; estimated recurring net profit would have declined 11%. Midea Group (Midea) reported 9M26 revenue of Rmb369,087m (+1% yoy). Gross profit was Rmb95,270m (flat yoy), with gross margin at 25.8% (-0.4ppt yoy). EBIT was Rmb39,361m (+6% yoy), with an EBIT margin of 10.7% (+0.5ppt yoy). Net profit was Rmb41,393m (+9% yoy), with a net margin of 11.2% (+0.8ppt yoy).
Highlights
- Midea’s 3Q26 EBIT declined 3% yoy. Reported net profit rose 26% yoy on investment gains. Excluding the gains, we estimate the recurring net profit would have declined 11%.
- In 3Q26, ToC revenue declined by high single-digits yoy, with domestic sales down by more than 15%, partially offset by mid-single-digit growth in overseas sales, with OBM growing by more than 20% yoy. ToB revenue grew by high single-digits, with steady growth of building technology and robotics yet industrial technology facing pressure.
- Looking ahead to 4Q26, management targets positive sales growth, with overseas to remain stable, while the domestic outlook remains uncertain. Maintain BUY and raise target price by 4% to Rmb116.80.
Analysis
- 3Q26 EBIT declined 3%; net profit rose 26% yoy on investment gains; estimated recurring net profit would have declined 11%. Midea Group (Midea) reported 9M26 revenue of Rmb369,087m (+1% yoy). Gross profit was Rmb95,270m (flat yoy), with gross margin at 25.8% (-0.4ppt yoy). EBIT was Rmb39,361m (+6% yoy), with an EBIT margin of 10.7% (+0.5ppt yoy). Net profit was Rmb41,393m (+9% yoy), with a net margin of 11.2% (+0.8ppt yoy).
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb87.48
Rmb116.80
+33.5%
Rmb112.60
Analyst
Analyst
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This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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