Midea Group (000333.SZ) achieved a record high in 2024 with revenue surpassing 400 billion yuan for the first time, announcing a dividend plan of 3.5 yuan (tax included) per 10 shares, totaling up to 26.7 billion yuan. Recently, Midea Group's Vice President and President of the Home Air Conditioning Division, Zhao Lei, who has recently emerged on social media, had a salary last year that was again higher than that of Midea Group's Chairman and President, Fang Hongbo.

Chairman and President of Midea Group Fang Hongbo

According to its annual report released on the evening of March 28, Midea Group achieved a revenue of 407.1 billion yuan in 2024, a year-on-year increase of 9.43%; net profit attributable to the parent company was 38.5 billion yuan, up 14.28%; cash flow from operating activities was 60.5 billion yuan, an increase of 4.51%; the weighted average return on equity was 21.29%, a decrease of 0.94 percentage points.

According to data from customs and AVC, China's home appliance exports reached 712.2 billion yuan last year, a 15.4% increase, while domestic home appliance sales (excluding 3C products) benefited from the trade-in policy in the second half of the year, reaching 907.1 billion yuan, a 6.4% growth. Additionally, GGII data shows that domestic industrial robot sales in 2024 were 302,000 units, a 4.5% decline. Under these circumstances, Midea focused on its core business, increased R&D investment, improved operational efficiency, and achieved success in overseas development.

From a business perspective, Midea Group's revenue from new energy and industrial technology, as well as smart home, grew rapidly last year. Smart home revenue reached 269.5 billion yuan, increasing by 9.41%; commercial and industrial solutions (ToB business) revenue was 104.5 billion yuan, up by 6.87%. Within the ToB business, revenue from new energy and industrial technology was 33.61 billion yuan, growing by 20.58%; smart building technology revenue was 28.47 billion yuan, increasing by 9.86%; robotics and automation revenue was 28.7 billion yuan, decreasing by 7.58%.

Photo provided by the interviewee.

Although Midea Group did not disclose the revenue of its segmented businesses such as air conditioners, refrigerators, washing machines, and small appliances in its smart home revenue as it did in previous years, a home appliance distributor in South China told First Finance that Midea currently leads among all brands in terms of home appliance sales revenue, with air conditioners accounting for half of it. Zhao Lei recently revealed that Midea's total domestic and overseas sales of home air conditioners will exceed 70 million units for the first time in 2024. It is evident that home air conditioners remain the leading business of Midea Group.

In terms of region and sales model, last year, Midea Group's overseas revenue growth rate was higher than its domestic revenue growth rate, and online growth rate was higher than offline growth rate. Domestic revenue was 238.12 billion yuan, up 7.68%, accounting for 58%; overseas revenue was 169 billion yuan, up 12%, accounting for 42%. Online revenue was 85.6 billion yuan, up 11%; offline revenue was 321.5 billion yuan, up 9%.

Midea Group's 2024 dividend payout has reached a new high, increasing from 30 yuan per 10 shares (tax included) last year to 35 yuan per 10 shares (tax included). The total annual dividend will also rise from 20.78 billion yuan last year to 26.7 billion yuan. Additionally, Midea Group plans to implement two cash dividends annually from 2025 to 2027. Furthermore, Midea Group intends to spend no less than 5 billion yuan and no more than 10 billion yuan within one year to repurchase A-shares, with a repurchase price not exceeding 100 yuan per share, of which 70% will be used for cancellation.

To stimulate internal entrepreneurship, some of the shares repurchased by Midea Group will be used for an equity incentive plan or employee stock ownership plan. Yicai Financial News has noted that in 2024, six senior executives at Midea Group continue to earn over 10 million yuan, with Fang Hongbo, Chairman and President of Midea Group, earning 13.78 million yuan. Zhao Lei, Vice President and President of the Home Air Conditioning Business Division, earns 15 million yuan, which is again higher than Fang Hongbo, but the salary gap between them has narrowed from 1.94 million yuan to 1.22 million yuan. Additionally, Fang Hongbo currently holds 1.53% of Midea Group's shares and is the fifth largest shareholder of the company.

Midea's senior management has recently undergone some adjustments. Fu Yongjun, director and vice president of Midea Group, whose annual salary was 11.85 million yuan last year, resigned from his director position on March 28 but retained his vice president position; on the same day, Gao Shu replaced Jiang Peng as the new secretary of the board of directors of Midea Group.

According to AVC's forecast, due to partial demand being exhausted, China's domestic home appliance retail sales this year are expected to only see a slight year-on-year increase. At the same time, China's exports this year also face more uncertainties. In response, Midea will achieve incremental growth this year through domestic DTC (direct-to-consumer) transformation, overseas OBM (own brand manufacturing) prioritization, and breakthroughs in ToB business. Additionally, the company plans to use no more than 16 billion yuan for hedging against bulk raw materials such as copper and will conduct foreign exchange derivative business within a balance limit of 37 billion USD.