Mighty shares worth 44 billion! Midea Group, where does its confidence come from?

Ask AI · How does Midea Group’s 44 billion yuan dividend ensure future cash flow for investments?

The 580 billion yuan leading white goods manufacturer Midea Group has delivered a satisfactory annual “report card.”

On the evening of March 30, Midea Group released its 2025 annual financial report. Data shows that during the reporting period, the company achieved total revenue of 458.5B yuan, up 12.08% year-on-year; net profit of 43.95B yuan, up 14.03% year-on-year; and non-recurring net profit of 41.27B yuan, an increase of 15.46% year-on-year.

It is worth noting that both revenue and net profit in Midea Group’s latest financial report hit record highs.

Faced with this impressive performance, Midea Group also demonstrated generosity in dividends. The announcement states that the profit distribution plan for 2025 is to pay a cash dividend of 4.3 yuan per 10 shares (tax included). The interim dividend plan for 2025, which pays 0.5 yuan per 10 shares (tax included), has already been implemented. The current year-end dividend plan is to pay 3.8 yuan per 10 shares (tax included).

According to calculations, Midea Group’s total cash dividends for the year amount to 32.4 billion yuan. Plus, the company’s accumulated share repurchase amount in 2025 is 11.6 billion yuan, bringing the total to 44 billion yuan.

This also means that Midea Group will allocate its entire net profit for the year to cash dividends. Using equity penetration calculations, the actual controlling shareholder He Xiangjian holds a total of 27.41% of shares. Based on this shareholding ratio, He Xiangjian’s family can receive approximately 8.88 billion yuan in cash dividends in 2025 (tax included).

According to relevant statistics, Midea Group’s cumulative dividends over the past ten years have exceeded 150 billion yuan.

In addition, Midea Group also announced that it plans to repurchase A-shares through centralized bidding, with a repurchase amount of no less than 6.5 billion yuan and no more than 13 billion yuan, at a price not exceeding 100 yuan per share.

So, does this large-scale combination of dividends and buybacks impact the company’s daily operations?

From the perspective of business segments, Midea Group’s main businesses cover six major areas: smart home, building technology, robotics and automation, industrial technology, and other businesses. Among them, the smart home segment is the core revenue pillar, with revenue reaching 6.5B yuan in 2025, accounting for 65.41%. The other major segments have relatively balanced revenue distributions.

According to Euromonitor International’s data, in 2025, Midea Group ranked first globally in smart home appliance sales. The annual report discloses that Midea’s localized self-operated business now covers 50 major countries worldwide, with 29 R&D centers and 43 major manufacturing bases overseas. Its own brands hold the top market share in 32 product categories on Amazon in North America, Europe, Japan, and other key markets.

Regarding revenue distribution by region, in 2025, Midea’s domestic revenue was 299.93B yuan, accounting for 56.82% of total revenue; overseas revenue was 260.5B yuan, accounting for 42.74%.

On the cash flow front, in 2025, Midea’s operating cash flow reached 53.3 billion yuan; as of the end of 2025, the company’s cash and cash equivalents stood at 195.95B yuan. This is the core confidence behind Midea’s willingness to allocate its entire net profit for the year to dividends.

In terms of R&D investment, Midea’s total R&D spending in 2025 was 17.8 billion yuan, a 9.6% increase year-on-year. Over the next three years, the company plans to invest over 60 billion yuan, focusing on cutting-edge scientific research fields.

Data shows that by the end of 2025, Midea had assembled an AI professional R&D team of over 400 members, built 13.5k intelligent agents independently, and achieved efficiency improvements of over 15 million hours through intelligent upgrades, reducing costs by 700 million yuan.

Midea states that it is accelerating its transformation into a “AI+” global technology group. Currently, all categories of Midea appliances have 500 million connected units, with over 140 million smart appliances connected worldwide and over 150 million smart users accessing the system. The company has completed AI deployment across more than 150 appliance categories.

After the financial report was released, China Galaxy Securities issued a research report noting that under severe external market pressures, Midea Group achieved double-digit growth in both revenue and profit. Meanwhile, various operational indicators performed steadily, fully demonstrating the company’s core competitiveness and the strong driving role of its ToB (business-to-business) segment as a second growth curve. Therefore, they maintain a “Recommended” rating for Midea Group.

Huachuang Securities also released a research report stating that, driven by steady growth in C-end (consumer) business, accelerated growth in B-end (business) operations, and ongoing brand and channel upgrades, Midea’s revenue and profit growth are highly certain. First, the OBM (Original Brand Manufacturing) business continues to grow rapidly, laying a solid foundation for future ToC (consumer) growth; second, the building technology, new energy, and industrial energy storage sectors, combined with the growth of robotics and automation, are expected to become core incremental drivers for ToB; third, the company continues to promote cost reduction and efficiency improvements across the entire value chain, likely leading to sustained profitability enhancement. Additionally, the company emphasizes shareholder returns and market value management, with a dividend payout ratio exceeding 73% in 2025. When combined with buyback amounts, these total more than the entire net profit for the year. The company also plans to implement buybacks of 6.5 to 13 billion yuan in 2026, making its shareholder return advantage very prominent, maintaining a “Strong Buy” rating.

Kanjian Finance believes that as a global leader in home appliances, Midea’s ability to maintain double-digit performance growth proves the health of its business system. Despite the current overall growth pressure in the home appliance industry, the rapid growth of other business segments is enough to offset the slowdown in traditional home appliance sectors. In the long term, as Midea deepens its AI layout for home appliances, valuing it based on traditional manufacturing standards no longer aligns with the company’s actual development. Currently, the company’s valuation may be undervalued.

Author’s statement: Personal opinions only, for reference.