Japan Essentials - 30 Jun 2026

Research evidence excerpt

Japan Essentials - 30 Jun 2026

3.8 (20.7)10.0 (24.7)7.8

opportunity. Europe remains the largest overseas region for Midea's ROA (%) 7.2 7.5 7.9 8.3

appliances business. We estimate Midea's overall European appliances (to ROE (%) 18.8 18.6 19.1 19.0

consumer, To-C) business made an approximate high-single-digit group PER rep (x) 13.6 13.0 11.9 11.1

revenue contribution in FY25. With the TEKA acquisition completed in PER adj (x) 14.5 14.0 12.7 11.8

P/BV (x) 2.7 2.5 2.3 2.1

2025, the company sees higher branded business contribution going Total div yield (%) 5.4 5.0 5.6 6.0

forward. We believe the low air conditioner penetration rate remains a key

growth opportunity for Midea as the International Energy Agency (IEA)

estimates only 20% of European homes have air conditioner units (higher in

Spain and Italy but lower in Germany and France) vs 90% in the US.

• Localisation for overseas business remains a key strategy for Midea.

PortaSplit was a result of Midea's European Research Center in Stuttgart

partnering with Milan Design Center; this has allowed local expertise to

address local consumer pain points. We believe the company continues

to drive localisation in supply chain and product development to further

increase market share for its overseas business. On the to-business (to-

B) side, Midea previously acquired ARBONIA's climate division in 2025 and 000333 CH rel CSI 300

Clivet S.p.A back in 2016, both of which are involved in HVAC business performance, & rec history

in Europe and should provide a solid foundation for future growth on

production and supply chain capabilities, after merging both businesses into

the Midea Building Technologies' Climate division in 2025.

What now

• We continue to expect overseas to outgrow domestic revenues, and the