By Song Jianan, Business Reporter
At Midea Group’s 2025 annual shareholder meeting on June 5, investors were pressing hard on dividend policies and capital planning. When it was his turn to speak, Chairman and President Fang Hongbo drew a clear line in the sand: no more blockbuster deals for at least the next three years. His message was straightforward—we’re keeping our heads cool, skipping massive capital expenditures, and sticking to a core principle: most of this year’s net profits will flow straight back to shareholders. And let’s get one thing straight, the drive to boost return on investment isn’t going anywhere.
Bottom line? This marks a clear pivot for a manufacturing behemoth that just crossed the 450-billion-RMB revenue mark. For the foreseeable future, throwing billions at external acquisitions won’t be the playbook driving their scale.
Fang also opened up about what he calls the “second curve”—the new growth pillars Midea needs to build to stay dominant for decades. But here’s the reality check: you can’t just buy innovation. It requires slow, hands-on experimentation, which inevitably means paying your dues through costly lessons. Even internally, Mida admits they haven’t quite pinpointed which new venture will truly catch fire yet.
When pressed on the healthcare division, Fang’s stance was refreshingly pragmatic: if it’s competitive enough, keep pushing; if not, cut losses and walk away.
If you trace the timeline, Midea’s healthcare footprint actually started quietly back in 2007. They spun up an internal medical device unit focused on home therapy gadgets, temperature-control accessories, and compact refrigeration units borrowed from their appliance tech. It was largely treated as a supportive incubator for their main business, meaning no standalone money pits or aggressive external M&A back then.
The real acceleration kicked in during 2017. After locking in a €3.7 billion all-stock deal to fully acquire KUKA, Midea didn’t just park the asset—they actively restructured KUKA’s Swisslog Healthcare division and surgical rehab robotics into standalone operations, officially diving into medical automation. That same May, they partnered with Yaskawa Electric to launch domestic nursing and rehab robots. By September, a strategic alliance with Guangzhou Pharmaceutical Group cemented three focus areas: medical robots, smart hospital logistics, and healthcare data analytics. The strategy was clear: leverage partnerships over heavy acquisition checks.
A year later, in 2018, Midea and Swisslog co-founded a 50-50 joint venture in Shanghai. This wasn’t just a legal formality; they absorbed the entire Chinese mainland operation for hospital pharmacy automation and internal logistics. Smart dispensing cabinets and medical supply conveyance lines rolled out across top-tier hospitals, and those assets were eventually folded directly into Midea’s healthcare portfolio.
Midea’s push into medical imaging landed around 2021. They dropped roughly 2.3 billion RMB to acquire a 29.09% stake in Wandong Medical from Yuwell Technology and other holders, instantly securing controlling interest in the listed company. Over the following years, they kept buying. By the end of 2025, their stake climbed to 45.46%, and they’d collectively pumped over 4 billion RMB into Wandong’s capacity upgrades and R&D.
Fast forward to 2026, and Midea is still actively reshaping its healthcare holdings. Through Wandong, they’re moving forward with acquiring the remaining 77.5% stake in Italy’s Esaote, finally converting a joint-management arrangement running since 2017 into full ownership. Esaote is a heavyweight in Europe, known for premium ultrasound scanners and specialized MRI machines. Once this wraps up, Midea effectively stacks three imaging powerhouses under one roof: Wandong (domestic radiology), Carestream (global X-ray), and Esaote (worldwide ultrasound), finally closing the loop on a full-spectrum medical imaging ecosystem.
But let’s keep it real—integration hasn’t been flawless across the board. Nearly four years after acquiring Wandong Medical, its financials have been rollercoaster-style, spending more quarters declining than rising. Same goes for Hekang New Energy, snapped up earlier in Midea’s expansion phase: it hemorrhaged cash for years before finally clawing back to profitability after a grueling four-year turnaround.
Zooming out at the macro level, Midea has successfully built a dual-engine model: consumer appliances anchored alongside industrial B2B solutions. In 2025, total revenue hit 458.5 billion RMB (up 12.1% year-over-year), while net profit attributable to shareholders reached 43.95 billion RMB (up 14%), setting fresh records on both fronts. Simultaneously, they’re accelerating their “AI-plus” transformation, earmarking over 60 billion RMB for frontier research and development over the next three years.
From a cash flow standpoint, they’re sitting on serious dry powder. Last year, operating cash flow netted 53.35 billion RMB, with idle cash and liquid assets comfortably above 300 billion RMB, while interest-bearing debt remains structurally low. Shareholders have also felt the love: 32.4 billion RMB in direct dividends, plus share buybacks totaling 44 billion RMB returned to the market annually. Over the past decade, cumulative payouts have surpassed 150 billion RMB.
Traditional white goods remain the bedrock, generating nearly 300 billion RMB annually and holding a commanding market share domestically. Meanwhile, their B2B segment—spanning building technology, industrial automation, energy storage, and medical equipment—generated 122.8 billion RMB, growing 17.5% faster than their core appliance business. Building tech, KUKA robotics, and new energy transmission components have posted consecutive years of strong sub-segment growth. Overseas markets pulled in 195.9 billion RMB, accounting for well over 40% of total revenue.
The positive momentum carried into Q1 2026 as well. Revenue ticked up 2.55% to 131.1 billion RMB, while net profit attributable to parent shareholders rose 2.03% to 12.68 billion RMB. Operating cash flow held steady at 14.53 billion RMB, climbing 1.45% YoY, underscoring consistently healthy liquidity.
That said, top-line growth doesn’t erase structural headwinds. China’s appliance market has firmly entered a zero-sum inventory cycle, and volatile copper and aluminum prices continue to eat into product margins. Meanwhile, greenfield factory investments abroad and channel expansion keep getting heavier on the wallet. Layer in the ongoing management and capital drain from multiple cross-industry acquisitions, and it’s completely understandable why executives are hitting the pause button on another round of mega-deals.
On the trading floor, sentiment reflects that caution. As of today’s A-share close, Midea’s stock traded at 81.69 RMB, slipping 0.89%. That places it roughly 23.73% below its historic peak set back in 2021. Currently valued at 621.9 billion RMB, the company’s market cap has contracted by more than 130 billion RMB from its all-time high of 754 billion RMB.
