Midea Group (00300) is conducting its initial public offering (IPO) from September 9 to September 12, 2024, a development that has garnered significant attention. This initiative not only represents a major milestone for the Chinese home appliance giant in the capital markets but also positions Midea as a leading contender in stock fundraising for the year. Moreover, uSMART now facilitates the subscription process for Midea Group’s new shares, thereby enabling investors to purchase these shares via the uSMART app.

Background of Midea Group’s IPO

As a prominent home appliance manufacturer in China, Midea Group’s product range includes air conditioners, refrigerators, washing machines, and kitchen appliances. Beyond its leadership in the smart home sector, Midea has experienced substantial growth in its commercial and industrial solutions, which have become key drivers of the company’s expansion. Notably, Midea has demonstrated robust development in areas such as new energy and industrial technology, smart building technology, and robotics and automation.

In preparation for its Hong Kong listing, Midea Group plans to allocate the proceeds towards global technological research and development, the continuous advancement of intelligent manufacturing systems, improvements in supply chain management, expansion of global sales channels and networks, and increased overseas sales of its proprietary brands. Consequently, the company is actively broadening its international market presence and enhancing its competitive edge through strengthened R&D and supply chain management.

Financial Stability and Performance

Midea Group has exhibited consistent financial stability, achieving notable performance in the first half of 2024 despite market challenges. In 2023, the company’s total revenue reached RMB 373.7 billion, marking an 8% year-on-year increase, while net profit attributable to shareholders was RMB 33.7 billion, up 14% from the previous year. Furthermore, Midea has significantly invested in R&D, with expenditures exceeding RMB 14.5 billion in 2023 and a global R&D workforce of over 23,000 employees, thereby laying a solid foundation for ongoing innovation and product enhancement.

In the crucial period leading up to its Hong Kong IPO, Midea Group achieved counter-cyclical growth and reported strong interim results. According to the performance report released on August 19, 2024, the company’s revenue for the first half of the year amounted to RMB 217.3 billion, reflecting a 10.3% year-on-year increase, and net profit attributable to the listed company’s shareholders was RMB 20.8 billion, up 14.1% from the previous year. Notably, overseas revenue has surpassed domestic revenue, emerging as a stronger growth driver for Midea. Specifically, in the first half of the year, overseas revenue grew by 13.1% to RMB 91.08 billion, while domestic revenue increased by 8.37% to RMB 126.2 billion, indicating a positive trend for Midea’s international expansion efforts.

IPO Size and Market Expectations

From September 9 to September 12, 2024, Midea Group(00300) plans to issue approximately 492 million shares in its IPO, with 5.0% allocated for the Hong Kong public offering and 95.0% for international placement, along with an additional 15% overallotment option. The shares are priced between HKD 52.00 and HKD 54.80 each, with a minimum lot size of 100 shares. The H-shares are expected to commence trading on September 17, 2024.

Sources suggest that Midea’s IPO could raise approximately USD 4 billion. In contrast, Tea Baidao, which went public earlier this year, raised only HKD 2.586 billion. If these estimates prove accurate, Midea is poised to become the largest IPO in Hong Kong for the year, potentially leading the market for new share fundraising.

For investors, Midea Group’s IPO represents an opportunity to participate in the growth of a leading Chinese home appliance enterprise. Given the company’s strong financial health, robust R&D capabilities, and clear growth strategy, Midea Group’s IPO is a significant investment opportunity. Nevertheless, investors should remain vigilant regarding market trends and the company’s subsequent developments to make informed investment decisions.

How to Subscribe to Midea Group (00300) via uSMART HK

The uSMART HK App features a dedicated IPO Center, which allows clients to subscribe to public offerings of new shares in real-time through the app. The following provides a visual guide to the subscription process:

Exclusive Offer: To enhance accessibility for retail investors, uSMART is offering an exclusive HK$50 cash voucher to clients who subscribe to Midea Group's IPO via margin financing. This voucher can be used for online securities trading within its validity period, enabling investors to maximize their investments with minimal capital.

• The app supports "Smart Account Opening," which facilitates rapid account creation without the need to complete personal information forms.
• For subscription amounts up to HK$500,000, no interest is charged; for amounts exceeding HK$500,000, a uniform interest rate of 5.88% applies.
• ^This offer is available to PRO account holders.