Easing concerns are a near-term catalyst

■ Concerns about rising raw materials prices and a broad-based market correction are
the reasons for Midea’s share price correction since Feb 2021.
■ We believe that Midea’s overseas business, medical equipment and EV components
will drive the medium- and long-term growth of the Company.
■ We cut our net profit forecasts for 2021 and 2022 after factoring in lower gross profit
margin assumptions.
■ Maintain ADD with a higher target price of Rmb95.0, based on 25x 2021 P/E (up from
23x previously). Our target P/E multiple is at the high end of the historical PE band.