Morgan Stanley issued a Research Report stating that the National Development and Reform Commission has announced the details of the 2025 consumer goods replacement plan, which will have a broader coverage and an increase in the number of air conditioning subsidies. Among these, the policy details are slightly better than expected, particularly concerning air conditioning.

Morgan Stanley expects that leading home appliance companies like Midea (000333.SZ) will benefit more and see a positive stock price reaction in the short term. The forecast for Midea's A and H shares' PE for 2025 is approximately 13 times, slightly lower than the average level for Midea's A shares since 2017, but slightly higher than the average level for Midea's H shares since its listing last September.

Morgan Stanley also anticipates that Midea's earnings per share for the fiscal years 2024 to 2026 will have a compound annual growth rate in the low double digits, believing that the stock is attractive. At the same time, it is believed that the price of its A shares has over an 80% chance of outperforming the market within 45 days.

The firm set the Target Price for Midea's A shares at 94 RMB, assigning a Shareholding rating.

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