China Home Appliance Earnings: Margin Expansion Despite Domestic Challenges; Midea Our Top Pick

We maintain our fair value estimates of CNY 82.0, CNY 33.0, and CNY 48.0 on Midea’s, Haier’s, and Gree’s A-shares, as well as HKD 91.10 and HKD 36.70 on Midea’s and Haier’s H-shares, respectively, following their third-quarter 2024 results. While Midea’s and Haier’s respective 8% and 1% revenue growth year over year align with our forecasts, Gree underperformed with a 15% top-line decrease due to an over 40% revenue slump in new businesses such as energy storage. Positively, these three companies expanded operating profit by 7%-10% compared with the same period last year, which we ascribe to higher revenue mixes of more profitable consumer appliances and better marketing cost control.