HSBC Research raises Midea's target price to 112 yuan, maintaining a "Buy" rating

HSBC Global Research report indicates that Midea (00300.HK) saw a 6% year-on-year increase in revenue and an 11% decrease in net profit in the fourth quarter of last year, both in line with expectations. Excluding the impact of acquisitions, both organic revenue and net profit showed positive growth during the quarter. The bank also noted that Midea announced a final dividend of RMB 3.8 per share, along with an interim dividend of RMB 0.5 per share, resulting in a payout ratio of approximately 74%, and launched a share repurchase plan of up to RMB 13 billion, providing shareholders with a maximum return rate of 8%.

The bank stated that despite a high comparison base, benefiting from better-than-expected overseas demand, the company is still expected to achieve year-on-year profit growth in the first quarter of this year, with growth pressure in subsequent quarters expected to ease gradually. The bank is also optimistic about Midea's proven ability to respond to uncertainties and its strengthened commitment to enhancing shareholder returns.

The bank generally maintains its revenue forecasts for Midea for this year and next, and has raised its net profit forecast by 2%, reflecting greater confidence in Midea's operating profit margin, which stems from measures taken by Midea to alleviate cost pressures. The bank has raised its target price for Midea from RMB 110 to RMB 112, maintaining a "Buy" rating