We are a leading technology-driven global provider of Smart Home Solutions and Commercial & Industrial Solutions. Under Smart Home Solutions, we offer a wide range of home appliances for consumers; under Commercial & Industrial Solutions, our offerings cover various solutions for enterprise customers, such as home appliance compressors and motors, commercial air conditioners, industrial robots and supply chain services. As a Fortune Global 500 company for nine consecutive years, we operate a global business that reaches over 200 countries and regions, with 33 R&D centers, 43 major manufacturing bases and over 190,000 employees across different continents. During the Track Record Period, we generated the majority of our revenue from sales of home appliances under Smart Home Solutions.
Our products offered under Smart Home Solutions include residential air conditioners, refrigerators, washing machines, kitchen appliances, and various other appliances. Our offerings under Commercial & Industrial Solutions include (i) industrial components such as compressors and motors and green energy solutions under Energy Solutions & Industrial Technology; (ii) integrated solutions for buildings, supported by our offerings of commercial air conditioners, elevators, building energy management and building control software, under Intelligent Building Technology; (iii) automation solutions including industrial robotics, production cells, automated systems and automated logistics systems, under Robotics & Automation; and (iv) Other Businesses, including the digital supply chain services offered by Annto Smart Logistics, the industrial software and digitalization consulting services offered by Midea Cloud, and others.
Our business is technology-driven. With 33 R&D centers and more than 23,000 R&D employees, we invest heavily in R&D, incurring more than RMB39 billion in R&D expenses from 2021 to 2023. Our R&D efforts enhance the technological sophistication of our offerings to customers. Under Smart Home Solutions, many of our home appliance products incorporate AI and other technologies that enable intelligent features, such as “smart control” enabled by IoT and AI technologies. Through Energy Solutions & Industrial Technology, we provide technologically advanced industrial components and integrated green energy solutions that enable the storage and use of renewable energy. Under Intelligent Building Technology, we offer integrated solutions for intelligent building ecosystems, with the digital platform iBUILDING at the core of such solutions. This platform digitalizes and connects various equipment and provides comprehensive data analyses and recommendations to facilitate the monitoring, control and management of buildings. In addition, KUKA Group provides sophisticated robotics and automation solutions leveraging its advanced algorithm, ranking among the world’s “big four” industrial robotics makers. Our Other Businesses are also largely technology-driven. For example, Annto Smart Logistics delivers end-to-end supply chain services that leverage data insights to optimize and manage its comprehensive logistics network, with line scheduling and fulfillment systems based on optimization algorithms.
OUR JOURNEY
Our journey commenced in 1968 in Shunde, China and we have consistently adapted to the rapidly changing global landscape. Driven by relentless innovation, organic growth, strategic acquisitions and joint ventures, we have evolved from a business with a singular focus in one market into a global technology powerhouse with a wide array of product and service offerings, catering to diverse end-markets around the world. For details of this journey, see “Business — Our Key Milestones.”
Our journey brought us to where we stand today, with numerous extraordinary achievements associated with the Midea name. To give a few examples (each according to the Frost & Sullivan Report):
‧ We are the world’s largest home appliance company in terms of both sales volume and revenue in 2023, capturing a market share of 7.9% in terms of sales volume. In 2023, in terms of sales volume, we ranked among the top three home appliance companies in the world in each of residential air conditioners, laundry appliances, refrigerators, as well as kitchen and other appliances, with a market share of 23.7%, 14.2%, 10.5% and 6.0%, respectively. During the same period, we also ranked among the top three home appliance companies in these markets in terms of retail sales value, with a market share of 21.1%, 12.5%, 7.7% and 4.6%, respectively.
Among these markets, we ranked first in residential air conditioners as well as kitchen and other appliances.
‧ Our home appliance compressor business ranked No. 1 in the global market in terms of manufacturing volume in 2023, capturing a market share of 30.3%. Our residential air conditioner compressor business also ranked No. 1 in the global market in the same period in terms of manufacturing volume, commanding a global market share of 45.1%.
‧ We are the largest commercial air conditioner provider in mainland China, capturing a market share of 14.3%, and one of the top five globally, capturing a market share of 6.6%, both in terms of revenue in 2023.
‧ Our subsidiary KUKA Group is one of the world’s “big four” industrial robotics companies, and it ranked second in terms of sales volume and revenue of heavy-payload robots in 2023, capturing a market share of 18.6% and 17.9%, respectively.
Looking ahead, our fundamental strategies of “technology leadership, direct to users, digitalization & intelligence driven, and global impact” (科技領先、用戶直達、數智驅動、全 球突破) will continue to guide us on our path forward. We aim to bolster our Commercial & Industrial Solutions as a powerful growth engine while remaining committed to the continual expansion of our Smart Home Solutions.
OUR BUSINESS
Our business is divided primarily into Smart Home Solutions and Commercial & Industrial Solutions.
Smart Home Solutions
We offer a wide range of home appliances, including air conditioners, refrigerators, washing machines, kitchen appliances, and various other appliances. Applying technologies such as IoT and AI, we provide interconnected and comprehensive Smart Home Solutions ensuring a smooth and differentiated consumer experience. Our IoT-enabled appliances are equipped with wireless communication modules such as Wi-Fi and Bluetooth that allow them to connect to the internet, communicate with other devices, and be centrally managed through the digital platform we provide for consumers. AI technologies in areas such as voice, language, computer vision and embodied AI infuse intelligence into many of our appliances, enabling real-time data collection and analysis and automatic adjustment of operational parameters such as temperature and humidity, as well as other functions such as voice recognition, resulting in seamless control and personalized experiences.
We have curated a broad brand portfolio covering premium, mass and youth markets.
We have a global sales and distribution network, covering both online and offline channels. Our Midea Cloud Sales platform digitalizes our offline distribution operations. We actively utilize online sales channels, including influential e-commerce and livestreaming and short video platforms such as JD.com, Tmall, Pinduoduo and Douyin. In the four months ended 30 April 2024, online sales accounted for over 50% of our total sales in mainland China under Smart Home Solutions. Guided by our “direct to users” strategy, we spare no effort to increase direct connections and interactions with consumers to better understand and respond to their needs.
Looking into the future, there is a noticeable trend in mainland China towards higher-end products in major home appliance categories, driven by rising income and consumption levels.
We are ready to capitalize on this trend by upgrading our product portfolio and increasing our sales of high-end and technologically sophisticated products that command higher prices. In addition, we are striving to further increase our proportion of overseas revenue, particularly by promoting our OBM business.
Commercial & Industrial Solutions
Through Commercial & Industrial Solutions, we provide a full range of products and services across four business units: Energy Solutions & Industrial Technology, Intelligent Building Technology, Robotics & Automation and Other Businesses. Our revenue from Commercial & Industrial Solutions exhibited a remarkable CAGR of 15.4% between 2021 and 2023, with its share in our total revenue rising from 21.4% in 2021 to 26.2% in 2023. Going forward, we believe that Commercial & Industrial Solutions will be an important driver for our growth.
Energy Solutions & Industrial Technology Harnessing our expertise from decades of experience in home appliances and commercial air conditioners, we provide technologically advanced, reliable and eco-friendly core industrial components including compressors, motors and industrial control systems. Our residential air conditioner compressor business ranked No. 1 in 2023 in terms of manufacturing volume, commanding a global market share of 45.1%.
We also offer green energy solutions across the energy value chain, including large-scale energy storage, industrial and commercial energy storage, household energy storage, intelligent power grids, distributed photovoltaic solutions and new energy vehicle components (such as thermal management systems) to enable our various global customers to store and use renewable energy.
Intelligent Building Technology
We provide intelligent and integrated solutions for infrastructure, public premises, industrial parks, agricultural facilities and more, supported by our offerings of commercial air conditioners, elevators, building energy management and building control software. We empower our customers to transform buildings into highly efficient and green spaces, optimizing energy consumption and enhancing comfort.
We are a market leader in commercial air conditioners. According to the Frost & Sullivan Report, our commercial air conditioners ranked first in mainland China in terms of revenue in 2023, capturing a market share of 14.3%, and we were among the top five commercial air conditioner providers globally in terms of revenue in 2023, capturing a market share of 6.6%.
Building on our market leadership in commercial air conditioners, we are well-positioned to acquire customers with our increasingly comprehensive and competitive product lineups. We have acquired Winone, a major domestic manufacturer of freight elevators in mainland China.
We also offer building control software that automates building control and building energy management solutions that help buildings enhance energy efficiency.
Robotics & Automation
Our Robotics & Automation business is operated under KUKA Group, Germanyheadquartered and one of the world’s “big four” industrial robotics makers, with over 120 years of history. KUKA Group offers one-stop automation solutions including industrial robotics, production cells, fully automated systems, and automated logistics systems through its subsidiary Swisslog for end-markets such as automotive, electronics, metal and plastic, consumer goods, retail, e-commerce and healthcare.
Since we acquired KUKA Group in 2017, its business in China has grown rapidly, making KUKA China an important contributor to KUKA Group’s overall growth. The revenue contribution from KUKA China to KUKA Group’s overall business increased from 17.3% in 2021 to 19.6% in 2023, representing impressive growth in the world’s largest industrial robotics market, where we have established a comprehensive sales and service network and state-of-the-art manufacturing facilities for robotics.
Other Businesses
Our Other Businesses primarily comprise Annto Smart Logistics, Midea Cloud, Midea Lighting and Wandong Medical.
Over the years, we have developed infrastructure and technological capabilities in areas such as supply chain and digitalized operations, which have been instrumental to the success of our Smart Home Solutions and Commercial & Industrial Solutions. We have externalized a number of such capabilities to serve other customers, including through Annto Smart Logistics.
Annto Smart Logistics is a logistics technology company dedicated to providing customers with end-to-end digital intelligent supply chain services, assisting enterprises in promoting channel optimization and improving supply chain efficiency. Annto Smart Logistics provides services to over 3,000 enterprise customers in home appliances, fast-moving consumer goods, furniture and other sectors. In the field of digitalized operations, our subsidiary Midea Cloud provides industrial software and digitalization consulting services for intelligent manufacturing and industrial interconnection to facilitate the digital transformation of its customers. In addition, our subsidiary Midea Lighting is principally engaged in the research and development, manufacturing and sales of lighting and home design appliances, striving to provide intelligent integrated solutions for our customers.
Besides in-house incubation, we have expanded into new businesses by making strategic acquisitions in certain high-growth markets. For example, in 2021, we acquired Wandong Medical, a provider of medical imaging products and services in mainland China to enter the medical imaging market.
Source: Midea Group (00300) Prospectus (IPO Date : 2024/09/09) |