Midea Group (000333): Glittering over time

Midea Group (000333): Glittering over time
Key point 1: We started from the starting point of Midea Group’s strategy, clarified the synergy between various industries, deeply analyzed the concrete manifestation of Midea’s organizational capabilities, and showed you a real beautiful group; Key point 2: Different from the mainstream market view, we believe that “Although 北京夜网 the T + 3 “model has promoted the overall improvement of Midea’s operating efficiency, its role in the air-conditioning industry is still relatively limited and its efficiency is somewhat lacking. Key point 3: We have adjusted the relationship between KUKA and” T + 3 “in detail.Synergy, deeply analyzed the reasons for the replacement of KUKA in 2018, reasonably expected the future improvement direction of KUKA, and predicted the future growth trend.  Covered Midea Group for the first time (000333.SZ) with 北京夜网 a “Buy” rating with a target price of 67.91 yuan, corresponding to 20.0 times, 17.5 times, 15.6 times 2019, 2020, 2021 PE ratio.The reason for recommendation is as follows: investing in Midea is investing in its outstanding organizational capabilities, which is the genes of Midea Group and the foundation of its long-lasting foundation: Midea is based on clear strategic planning, uses strong execution capabilities to promote strategic development, and then continuesThe incentive system in place binds the interests of the company and the alliance and core backbones. Finally, through the superior organizational capabilities, it continuously integrates advantageous resources and cooperates with various industries to promote the company’s comprehensive development.The entire chain of “, warehouse, and distribution” builds structured barriers and forms a covered moat.  ”T + 3″ helps the overall improvement of the US’s operating efficiency from the production and sales end, which is the most direct embodiment of Midea’s “efficiency driven” strategy: 1) “T + 3” is the first to advance in Little Swan, bringing volume and price to Midea washing machines.The overall increase in share, revenue, and efficiency has helped Midea’s washing machines break into the ranks of oligarchs.2) The “T + 3” model was subsequently extended to the entire group, and Midea’s overall operating efficiency improved significantly.3) The nature of air-conditioning products (with obvious characteristics of expected demand) and the nature of the industry (balance of production and sales) determine that the role of the “T + 3” model in the air-conditioning industry is relatively limited and its efficiency has improved.However, Midea is the leader in all categories of home appliances. The industry is not just a temporary air conditioner. “T + 3” is still the most suitable production and marketing model for Midea.  Ander Intelligent Link completed the warehouse ligand, helping the “T + 3” model landing: 1) The “T + 3” model enhances the company’s efficiency at the production and sales end, while Ander Intelligent Link has established a full channel chain through the construction of software and hardware systemsThe integration of warehouse and distribution, combined with the landing of the “T + 3” model at the warehouse distribution side, further incorporates the “product leadership, efficiency driven” strategy.2) The integration of warehouse allocation is achieved by integrating warehouse allocation (de-intermediate, shortening the supply chain) and online and offline “one stock” (inventory sharing of different channels, dynamic understanding of inventory distribution and age status),Helping the “T + 3” model not only landed, but also brought significant improvements to Midea’s logistics efficiency.3) Benefiting from the rapid expansion of the intelligent logistics market, Ande is expected to maintain a rapid growth trend in the future.  Centennial KUKA empowers the “dual-intelligence strategy”, and the synergy effect with “T + 3″ and Andre Connect is prominent: 1) On the production side, KUKA provides Midea with an automated production line, reduces labor costs, improves product quality stability, and further improves”T + 3” efficiency.2) At the warehouse allocation side, KUKA provides software and hardware support, and cooperates with Ander Smartlink to realize the integration of Ander Smartlink.3) On the income side, KUKA contributes an increase, although it currently only accounts for the proportion of the total revenue of the United States?10%, and Midea and KUKA are still in the running-in phase, but there is huge space for imagination in the future.We believe that in the future, with the combination of the active guidance of the United States and the huge development space of Chinese industrial robots, KUKA will try to reverse the decline in 2018 and achieve rapid development.  Earnings forecast and estimation: It is estimated that the profit in 2019/20/21 will be 3 respectively.4/3.9/4.4 yuan, an increase of 16 each year.7% / 14.0% / 12.2%.It currently corresponds to 16.6/14.6/13.0 times 2019/20/21 P / E ratio.Target price of 67.91 yuan, corresponding to 20 respectively.0/17.5/15.6 times the 2019/20/21 price-earnings ratio, still overall compared to the past?20% upside.  Risk disclosure: the risk of rising raw material prices; the risk of fluctuations in demand for home appliances; the risk of mergers and acquisitions integration; the risk of exchange rate changes.