标题：Midea GroupRobust earnings growth driven by improving competitiveness
发布日期：2016-03-28 14:17:59
内容： Results in line In 2015, Midea Group reported revenue of Rmb138.4bn (-2.3% YoY) and net profit attributable toshareholders of Rmb12.71bn, implying EPS of Rmb2.99 (+21% YoY); while recurring net profit wasRmb10.9bn (+15% YoY). It proposed offering a dividend of Rmb12 per ten shares – a 40% dividend payout ratio – anddistributing five shares from its capital reserve. Gross margin +0.5ppt to 25.9%; selling expenses and G&A expensesremained flat YoY; and, operating profit rose 10.9% YoY. Its own capital grew 37% to Rmb64.9bn. Robust growth: due to distribution channels’ destocking efforts, revenue from air-conditioners fell 11% toRmb64.5bn; revenue from refrigerators/washing machines +17%/+20% to Rmb11.4bn/Rmb12bn; market share sawvisible increase; small appliances maintained solid leadership with revenue Rmb35.4bn (+8% YoY). Significant improvement in competitiveness: 1) leading strength in e-commerce; retail sales of e-commercesegment +60% to Rmb16bn, No.1 among global home appliance companies, in terms of scale. Annto Logistics hasrealized “last-mile delivery” for e-commerce; flagship stores amid expansion into O2O e-commerce >2,200,covering >90% of tier-3/-4 markets. 2) Continuous improvement in incentive mechanism; the company offeredtwo rounds of equity incentive plan and two rounds of “partner” stock ownership plan for middle/senior managementand core employees. 3) Improved operating efficiency and more efficient asset turnover. 4) Open attitudetowards cooperation; it cooperated with Carrier and Bosch on central air-conditioners, and SIIX on intelligentcontrols. 5) Improved product design and product positioning in market. 6) Centering on its financial serviceecosystem along its value chain, it started to offer diverse financial services such as supply chain finance, consumerfinance, third-party payment, and, asset management. In 2015, financial services saw >Rmb2.2bn earnings. Trends to watch 1) Air-conditioner distribution channels’ destocking efforts will continue in 1H16. As the “stockpiling” modelgradually becomes ineffective, it will adopt a “T+3” client order-based model for production and a “warehousing center”model for distributors. 2) Globalization. Its export business will shift from an “OEM-focused” model towards an“OBM-focused” model. The company will also actively seek M&A, including a plan to acquire Toshiba’s white appliancebusiness. And, 3) Expansion into new businesses: smart home + intelligent manufacturing. It established JVs withYaskawa, increased holdings in KUKA and acquired a 17.8% stake in Efort. Valuation and recommendation We maintain our 2015e, 2016e and 2017e EPS forecasts at Rmb2.98, Rmb3.40 and Rmb3.90. The stock’s currentdividend yield stands at 3.8%; maintain Conviction BUY rating and TP of Rmb40.82 (12x 2016e P/E). Risks Volatile market demand.
发布日期：2016-03-28 14:17:59
内容： Results in line In 2015, Midea Group reported revenue of Rmb138.4bn (-2.3% YoY) and net profit attributable toshareholders of Rmb12.71bn, implying EPS of Rmb2.99 (+21% YoY); while recurring net profit wasRmb10.9bn (+15% YoY). It proposed offering a dividend of Rmb12 per ten shares – a 40% dividend payout ratio – anddistributing five shares from its capital reserve. Gross margin +0.5ppt to 25.9%; selling expenses and G&A expensesremained flat YoY; and, operating profit rose 10.9% YoY. Its own capital grew 37% to Rmb64.9bn. Robust growth: due to distribution channels’ destocking efforts, revenue from air-conditioners fell 11% toRmb64.5bn; revenue from refrigerators/washing machines +17%/+20% to Rmb11.4bn/Rmb12bn; market share sawvisible increase; small appliances maintained solid leadership with revenue Rmb35.4bn (+8% YoY). Significant improvement in competitiveness: 1) leading strength in e-commerce; retail sales of e-commercesegment +60% to Rmb16bn, No.1 among global home appliance companies, in terms of scale. Annto Logistics hasrealized “last-mile delivery” for e-commerce; flagship stores amid expansion into O2O e-commerce >2,200,covering >90% of tier-3/-4 markets. 2) Continuous improvement in incentive mechanism; the company offeredtwo rounds of equity incentive plan and two rounds of “partner” stock ownership plan for middle/senior managementand core employees. 3) Improved operating efficiency and more efficient asset turnover. 4) Open attitudetowards cooperation; it cooperated with Carrier and Bosch on central air-conditioners, and SIIX on intelligentcontrols. 5) Improved product design and product positioning in market. 6) Centering on its financial serviceecosystem along its value chain, it started to offer diverse financial services such as supply chain finance, consumerfinance, third-party payment, and, asset management. In 2015, financial services saw >Rmb2.2bn earnings. Trends to watch 1) Air-conditioner distribution channels’ destocking efforts will continue in 1H16. As the “stockpiling” modelgradually becomes ineffective, it will adopt a “T+3” client order-based model for production and a “warehousing center”model for distributors. 2) Globalization. Its export business will shift from an “OEM-focused” model towards an“OBM-focused” model. The company will also actively seek M&A, including a plan to acquire Toshiba’s white appliancebusiness. And, 3) Expansion into new businesses: smart home + intelligent manufacturing. It established JVs withYaskawa, increased holdings in KUKA and acquired a 17.8% stake in Efort. Valuation and recommendation We maintain our 2015e, 2016e and 2017e EPS forecasts at Rmb2.98, Rmb3.40 and Rmb3.90. The stock’s currentdividend yield stands at 3.8%; maintain Conviction BUY rating and TP of Rmb40.82 (12x 2016e P/E). Risks Volatile market demand.
