SZSE:000333

Stock Analysis Report

Executive Summary

Midea Group Co., Ltd., together with its subsidiaries, manufactures and sells home appliances, and robotic and automatic systems in China and internationally.

Rewards

Trading at 30.8% below its fair value

Earnings are forecast to grow 10.84% per year

Earnings grew by 17% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Outstanding track record, good value and pays a dividend.


Similar Companies

Share Price & News

How has Midea Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 000333 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.5%

333

-0.1%

CN Consumer Durables

0.5%

CN Market


1 Year Return

43.3%

333

44.2%

CN Consumer Durables

29.4%

CN Market

Return vs Industry: 000333 matched the CN Consumer Durables industry which returned 44.2% over the past year.

Return vs Market: 000333 exceeded the CN Market which returned 30.6% over the past year.


Shareholder returns

333IndustryMarket
7 Day0.5%-0.1%0.5%
30 Day3.8%5.1%4.6%
90 Day14.5%17.4%9.1%
1 Year47.1%43.3%47.6%44.2%31.7%29.4%
3 Year123.1%106.4%55.6%47.3%1.3%-2.8%
5 Year237.6%196.6%118.9%98.7%18.4%10.8%

Price Volatility Vs. Market

How volatile is Midea Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Midea Group undervalued compared to its fair value and its price relative to the market?

30.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 000333 (CN¥60.31) is trading below our estimate of fair value (CN¥87.1)

Significantly Below Fair Value: 000333 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 000333 is good value based on its PE Ratio (16.7x) compared to the Consumer Durables industry average (27x).

PE vs Market: 000333 is good value based on its PE Ratio (16.7x) compared to the CN market (34x).


Price to Earnings Growth Ratio

PEG Ratio: 000333 is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: 000333 is overvalued based on its PB Ratio (4.2x) compared to the CN Consumer Durables industry average (2.8x).


Next Steps

Future Growth

How is Midea Group forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 000333's forecast earnings growth (10.8% per year) is above the savings rate (3.2%).

Earnings vs Market: 000333's earnings (10.8% per year) are forecast to grow slower than the CN market (21.2% per year).

High Growth Earnings: 000333's earnings are forecast to grow, but not significantly.

Revenue vs Market: 000333's revenue (8.6% per year) is forecast to grow slower than the CN market (15.5% per year).

High Growth Revenue: 000333's revenue (8.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 000333's Return on Equity is forecast to be high in 3 years time (20.1%)


Next Steps

Past Performance

How has Midea Group performed over the past 5 years?

15.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 000333 has high quality earnings.

Growing Profit Margin: 000333's current net profit margins (8.6%) are higher than last year (7.8%).


Past Earnings Growth Analysis

Earnings Trend: 000333's earnings have grown by 15.9% per year over the past 5 years.

Accelerating Growth: 000333's earnings growth over the past year (17%) exceeds its 5-year average (15.9% per year).

Earnings vs Industry: 000333 earnings growth over the past year (17%) exceeded the Consumer Durables industry 11.4%.


Return on Equity

High ROE: 000333's Return on Equity (23.9%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Midea Group's financial position?


Financial Position Analysis

Short Term Liabilities: 000333's short term assets (CN¥200.1B) exceed its short term liabilities (CN¥129.4B).

Long Term Liabilities: 000333's short term assets (CN¥200.1B) exceed its long term liabilities (CN¥51.5B).


Debt to Equity History and Analysis

Debt Level: 000333's debt to equity ratio (41.3%) is considered high.

Reducing Debt: 000333's debt to equity ratio has increased from 26.7% to 41.3% over the past 5 years.

Debt Coverage: 000333's debt is well covered by operating cash flow (88.4%).

Interest Coverage: 000333 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 000333 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 000333's debt is covered by short term assets (assets are 4.6x debt).


Next Steps

Dividend

What is Midea Group's current dividend yield, its reliability and sustainability?

2.16%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%0.4%markettop25%1.8%industryaverage2.2%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: 000333's dividend (2.19%) is higher than the bottom 25% of dividend payers in the CN market (0.42%).

High Dividend: 000333's dividend (2.19%) is in the top 25% of dividend payers in the CN market (1.77%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 000333 has been paying a dividend for less than 10 years.

Growing Dividend: 000333's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (36.5%), 000333's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 000333's dividends in 3 years are forecast to be well covered by earnings (47.7% payout ratio).


Next Steps

Management

What is the CEO of Midea Group's salary, the management and board of directors tenure and is there insider trading?

3.1yrs

Average management tenure


CEO

Hongbo Fang (52yo)

7.4yrs

Tenure

0

Mr. Hongbo Fang has been the Chief Executive Officer at Midea Group Co., Ltd. and served its President since August 25, 2012. Mr. Fang serves as the Principal of Wuxi Little Swan Company Limited. He has be ...


Management Age and Tenure

3.1yrs

Average Tenure

50yo

Average Age

Experienced Management: 000333's management team is considered experienced (3.1 years average tenure).


Board Age and Tenure

5.8yrs

Average Tenure

51.5yo

Average Age

Experienced Board: 000333's board of directors are considered experienced (5.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Hongbo Fang (52yo)

    Chairman & CEO

    • Tenure: 7.4yrs
  • Jianguo Wang (42yo)

    Vice President

    • Tenure: 2.1yrs
  • Peng Jiang (46yo)

    Company Secretary & Investor Relations Director

    • Mingguang Xiao (49yo)

      Vice President

      • Bitong Yin (51yo)

        VP, GM of Residential AC Division & Executive Non-Independent Director

        • Tenure: 2.8yrs
      • Ziqiang Hu (62yo)

        VP & CTO

        • Yanmin Gu (56yo)

          VP & Non-Independent Director

          • Jinliang Wang (52yo)

            VP & Director of the Department of Legal Affairs

            • Xiaoyi Zhang (46yo)

              VP, Chief Information Officer & IT Director

              • Zheng Zhong (37yo)

                Director of Finance


                Board Members

                • Hongbo Fang (52yo)

                  Chairman & CEO

                  • Tenure: 7.4yrs
                • Jun Zhao (44yo)

                  Non-Employee Supervisor

                  • Tenure: 5.8yrs
                • Bitong Yin (51yo)

                  VP, GM of Residential AC Division & Executive Non-Independent Director

                  • Tenure: 2.8yrs
                • Jianfeng He (52yo)

                  Non-Independent Director

                  • Tenure: 7.4yrs
                • Yanmin Gu (56yo)

                  VP & Non-Independent Director

                  • Min Liu (42yo)

                    Chairman of the Supervisory Committee and CEO Assistant & HR Director

                    • Tenure: 3.9yrs
                  • Gang Yu (60yo)

                    Non-Independent Director

                    • Yunkui Xue (55yo)

                      Independent Director

                      • Qingyou Guan (42yo)

                        Independent Director

                        • Jian Han (47yo)

                          Independent Director

                          Company Information

                          Midea Group Co., Ltd.'s company bio, employee growth, exchange listings and data sources


                          Key Information

                          • Name: Midea Group Co., Ltd.
                          • Ticker: 333
                          • Exchange: SZSE
                          • Founded: 1968
                          • Industry: Household Appliances
                          • Sector: Consumer Durables
                          • Market Cap: CN¥418.485b
                          • Shares outstanding: 6.94b
                          • Website: https://www.midea-group.com

                          Number of Employees


                          Location

                          • Midea Group Co., Ltd.
                          • No. 6 Midea Avenue
                          • Beijiao Town
                          • Foshan
                          • Guangdong Province
                          • 528311
                          • China

                          Listings

                          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                          333SZSE (Shenzhen Stock Exchange)YesDomestic SharesCNCNYSep 2013
                          333XSEC (Shenzhen Stock Exchange - Shenzhen-Hong Kong Stock Connect)YesDomestic SharesCNCNYSep 2013

                          Biography

                          Midea Group Co., Ltd., together with its subsidiaries, manufactures and sells home appliances, and robotic and automatic systems in China and internationally. The company operates through four segments: Heating & Ventilation, as well as Air-Conditioner; Consumer Appliances; Robotics and Automatic Systems; and Others. The company offers split, portable, and dehumidifier residential air conditioners (ACs); light commercial ACs, including cassette, duct, ceiling and floor, console, floor standing, and AHU; and commercial ACs, such as VRF and chiller, large split, rooftop packaged, FCU, AHU, and heat pump solutions. It also provides 3+ door, side by side, top mount, and single door refrigerators, as well as bottom freezers, freezers, wine coolers, and others; laundry products comprising washing machines and dryers; commercial ovens; and kitchen appliance products, such as rice cookers, microwaves, ovens and mini ovens, hoods, hobs, slow cookers, bread makers, electric steamers, dishwashers, and food waste disposers. In addition, the company offers home solutions, such as water heaters, fans, heaters, and vacuum and steam cleaners; compact fluorescent lights, LED lamp sources, LED luminaries, and electrical series products; and rotary and rceip compressors. Further, the company provides robots and automation systems. It markets its products under the Midea, Little Swan, MDV, Hualing, Welling, and GMCC brand names. Midea Group Co., Ltd. was founded in 1968 and is headquartered in Foshan, China. 


                          Company Analysis and Financial Data Status

                          All financial data provided by Standard & Poor's Capital IQ.
                          DataLast Updated (UTC time)
                          Company Analysis2020/01/18 15:26
                          End of Day Share Price2020/01/17 00:00
                          Earnings2019/09/30
                          Annual Earnings2018/12/31


                          Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.