Midea ventures into humanoid robots, UBS: Not surprising, Midea can leverage supply chain resources

Midea Group's significant layout in the robotics field has attracted widespread attention in the market. UBS stated that entering the humanoid robot sector will allow the company to fully utilize its existing supply chain resources. Although the short-term contribution to profits is limited, due to the rising market interest in the white goods industry and the artificial intelligence/robotics theme, the company's stock price may continue to rise in the short term. On March 18, Midea Group showcased its self-developed humanoid robot prototype for the first time, which demonstrated impressive diverse functions, capable of performing actions such as shaking hands, handing water, making heart signs, dancing, opening bottle caps, and screwing. Following the announcement, Midea Group's A-share price surged over 4% on the same day, while the Hong Kong stock price increase expanded to 10%, reflecting the market's high recognition of Midea's strategic layout in the robotics sector. In a report released on March 19, UBS gave a positive evaluation of Midea Group's robotics business. UBS analysts believe that Midea's involvement in the humanoid robot field is not surprising, as it is a market with enormous potential, and Midea can leverage its existing supply chain resources. Analysts stated that by 2035, the market size of humanoid robots in China is expected to reach 200-300 billion RMB. Domestic companies focus more on hardware and system integration capabilities, and the industry has attracted numerous cross-industry participants, including Xiaomi and ZhiMi (a manufacturer of robotic vacuum cleaners). UBS indicated that according to Midea Group's CTO, the company's robotics team is currently focused on the following areas: Core components of humanoid robots: including reducers, motors, sensors, and controllers, which are being tested on internal robot prototypes. The humanoid robot system itself: preliminary applications may be in the B2B sector. Robotization of home appliances: integrating artificial intelligence and robotics technology (such as vision systems, robotic arms, and human-machine interaction) into household products. However, UBS also acknowledged that Midea's robotics are still in the prototype stage and will not make a significant contribution to profits in the short term. But due to the rising market interest in the white goods industry (which has received positive feedback recently) and the artificial intelligence/robotics theme, the stock price increase may continue for some time, similar to Ecovacs (whose stock price has risen 39% year-to-date), which has made a series of investments in the robotics supply chain. In Midea's traditional white goods sector, UBS maintains a relatively optimistic outlook. Analysts expect that benefiting from the continuous improvement in retail sales during the air conditioning peak season and potentially higher dividend payments, investors will refocus on the white goods sector before the earnings report season to achieve steady profit growth