Author | Huang Yu Editor | Liu Baodan Last year, thanks to the success of the "Speeding" on iQiyi, the company has had a difficult time recently. On the one hand, the explosively popular TV series is on hiatus, and on the other hand, the derivative concert of the variety show "Plant Some Goodness" has been criticized for "free offline but paid online." According to Wall Street News, the second Wheat Field Music Festival, produced by iQiyi's reality show "Plant Some Goodness," was held on June 6th. Some viewers had previously received free offline tickets through official activities, while online viewers, even iQiyi members, had to pay RMB 12 for viewing, and the viewing period was valid until June 14th. This differentiated pricing model has caused dissatisfaction among many viewers, who question that iQiyi's move is "cutting corners." In response, iQiyi's customer service said, "You can buy tickets to watch the concert live according to your own needs, and the edited content of the concert will be launched on the main platform in the future." In fact, this is not the first time that long video platforms represented by iQiyi have been accused of "cutting corners." In recent years, membership grading systems, early access, and inventory restrictions have often caused user backlash, in addition to paying extra for derivative programs. The differential pricing model reflects the growth anxiety faced by long-form video platforms such as "i优腾."

The weather is good today Today's weather is good.

One and a half months ago, Midea Group, which had the largest IPO in the Hong Kong stock market in nearly three years, turned in its first report card after becoming an "A+H" listed company.

On October 30th, Midea Group released its third quarter report for 2024, showing that it achieved an operating income of approximately 319 billion yuan in the first three quarters, a year-on-year growth of 9.57%; net profit attributable to parent of approximately 31.7 billion yuan, a year-on-year growth of 14.37%. In the third quarter alone, it achieved an operating income of 101.7 billion yuan, a year-on-year growth of 8.05%; with a net profit attributable to parent of 10.9 billion yuan, a year-on-year growth of 14.86%.

Specifically in terms of business, in the first three quarters of this year, smart home remains the cornerstone of Midea Group, with revenue of about 215.4 billion yuan, a year-on-year growth of 10%.

In terms of specific business segments, in the first three quarters of this year, the new energy and industrial technology sectors, considered as the second growth curve, showed the highest growth, with a year-on-year increase of 19% to 25.4 billion yuan, while smart building technology increased by 6% to 22.4 billion yuan. However, revenue from robots and automation decreased by 9% to 20.8 billion yuan.

In the current market environment, this overall can be considered a good report card, showing steady progress compared to last year's performance. Financial report data shows that in 2023, Midea Group's total revenue was 373.7 billion yuan, an 8.18% year-on-year growth, and net profit attributable to the parent increased by 13.95% to 33.7 billion yuan.

At the end of 2021, influenced by multiple cycles in the macro environment and various factors in Midea's own development, Midea Group made the determination that the next three years will be a cold winter. At the shareholders' meeting in May 2022, Midea's management stated that the profit margin will return to a relatively reasonable level compared to the profit level in 2019 after three years.

2019 was the year with the highest net margin since 2017 for Midea Group, reaching 10.62%; the attributable net profit in 2019 increased by 19.68% year-on-year to 24.211 billion yuan, and then the growth rate slowed down over the next three years. In 2022, Midea Group's net profit growth rate was the lowest since 2013, at about 3.43%.

2024 is an important year for Midea Group to improve its profitability. In terms of net margin, in the first three quarters of this year, Midea Group's net margin was around 9.9%, showing a certain improvement compared to 9% in 2023.

Goldman Sachs pointed out in a recent report that Midea Group's income/profit from 2023 to 2026 will compound annual growth at 8%/12%, thanks to its comprehensive growth strategy.

Firstly, Midea Group's domestic appliance business focuses more on profit margins and product structure upgrades; secondly, its export appliance business concentrates on expanding market share; finally, the B-end business launches targeted strategies for different segmented markets.

Based on this, Goldman Sachs gives a buy rating to Midea Group's A+H shares, with a 12-month target price of 90 Hong Kong dollars for H shares (corresponding to a 15% upside potential), and raises the A share's December target price from 80 yuan to 89 yuan (corresponding to a 17% upside potential).

On September 17th, Midea Group was listed on the Hong Kong Stock Exchange at an IPO price of 54.8 Hong Kong dollars per share, and on the first day of listing, the H-share price surged by 7.85%. In this round of significant gains in Chinese concept stocks, Midea's H-share price reached over 100 Hong Kong dollars per share at its peak. As of the market close on October 31st, the stock price, although falling to 74.5 Hong Kong dollars per share, still saw a substantial increase from the IPO price.

In recent years, driven by increased market volatility and other factors, high dividend-paying companies have become favored in the capital markets. With its consistent high dividends, Midea's position as a 'Hakuba stock' is further solidified, allowing investors to continue holding with peace of mind.

Of course, investors also need to see the sustainability of midea's future. As the three giants in the white appliances industry, every financial report release, midea, gree, and haier are often compared.

Looking at the performance of midea group co., ltd in the first three quarters of this year, its position as the largest player in the industry remains stable, with both revenue and profit growth rates quite impressive. Data shows that in the first three quarters of this year, haier smarthome's revenue was 202.971 billion yuan, a year-on-year increase of 2.2%; net income attributable to shareholders was 15.154 billion yuan, a year-on-year increase of 15.3%.

In recent years, gree electric appliances, inc. of zhuhai has always been at the bottom among the three giants, achieving a revenue of 146.722 billion yuan in the first three quarters of this year, a year-on-year decrease of 5.34%, making it the only one with declining revenue. However, gree electric appliances, inc. of zhuhai's profit remains strong, achieving a net income attributable to shareholders of 21.96 billion yuan, a year-on-year increase of 9.3%.

The domestic home appliance industry has entered a stock competition phase, and globalization is the consensus among these home appliance companies. 'Global breakthrough' has also become one of the core strategies of midea group co., ltd.

Regarding this year's listing in Hong Kong, midea group co., ltd's explanation is also: based on the need to deepen its global strategic layout.

According to guolian analyst, for midea, the significance of the Hong Kong listing is not only in fundraising but also an extension of the 'global breakthrough' strategy since 2020, providing an operational platform for overseas stock-based incentives and mergers and acquisitions, while improving overseas investment channels and capital structure.

According to the latest prospectus, the funds raised by midea's IPO in Hong Kong this time are intended to be used for continuous development of global technology research and development, upgrading of intelligent manufacturing system and supply chain management, improvement of global sales channels and networks, as well as increasing overseas sales of its own brands.

The financial report shows that as of the end of September this year, midea group co., ltd's cash and cash equivalents held increased significantly by 97% to approximately 160.88 billion yuan, mainly due to the increase in net cash flow generated from the issuance of stocks and operating activities.

Midea has set a target to reach between 35 billion US dollars and 40 billion US dollars in overseas sales revenue by 2027. From this year's trend, Midea is gradually approaching its target step by step.

In terms of revenue contribution, overseas revenue has replaced domestic revenue, becoming a stronger growth driver for Midea. In the first half of this year, Midea's revenue from overseas increased by 13.1% year-on-year to 91.08 billion yuan, while domestic revenue increased by 8.37% year-on-year to 126.2 billion yuan.

While further increasing overseas revenue, Midea is also striving to enhance its global brand value, which will determine whether it can obtain more OBM revenue.

According to findings from Wall Street News, more of Midea's overseas revenue comes from OEM (original equipment manufacturing), and it aims to increase the proportion of income from higher-margin OBM (original brand manufacturing). From January to September this year, Midea Group's overseas OBM revenue increased by over 25% year-on-year.

Having gone through the cold winter, Midea Group now welcomes another spring, but to further achieve global breakthroughs, there are still many challenges ahead.