China/Hong Kong Consumer: Large Appliances 2Q26 Result Preview: Resilience Despite Challenges

研报英文原文证据摘录

China/Hong Kong Consumer: Large Appliances 2Q26 Result Preview: Resilience Despite Challenges

UpdateMValuation Methodology and Risks

Midea Group Co Ltd. (000333.SZ)

Base case, sum of the parts.

Home appliances - Rmb93/share: Based on a 2026e P/E of 15x, which is 0.5SD above with

the company's average at 14x since 2017, reflecting its high earnings visibility and potential

upside from better To-business segment growth.

Robots and automation (KUKA business) - Rmb6/share: Average derived from EV/sales

and EV/EBITDA. We apply 1.1x 2026e EV/sales and 13x 2026e EV/EBITDA, similar to the global

peer average.

Risks to Upside

n Better-than-expected rebound in Chinese property market

n Less-than-expected competition from key competitors

n Any successful M&A transactions

Risks to Downside

n Fiercer-than-expected market competition

n Unfavorable FX movement and raw material price change

n Unsuccessful M&A transactions

Gree Electric Appliances Inc of Zhuhai (000651.SZ)

We use target P/E-based valuation, consistent with the rest of our consumer discretionary

coverage. Our price target is based on a 2026E P/E of 8.5x, which is below its average P/E since

2017 at 10x, as its growth outlook is still weaker compared to previous domestic property and

economic up-cycles.

n Better-than-expected rebound in Chinese property market, and recovery of appliances

industry

n Hotter-than-average summer season

n Insufficient promotion campaign to clean up channel inventory

n Weaker-than-expected home appliance demands

n Aggressive expansion into low-margin products

n Acquisitions of Yinlong and Dun'an negatively affect earnings

Midea Group Co Ltd. (0300.HK)

We apply SOTP methodology to derive our price target for Midea-A. We then apply a 10% H-A

discount to arrive at our Midea-H price target.