--- title: "Midea Group's finances, capital returns and auditors, 2018–2026" language: en canonical: https://dossiertwist.com/dossiers/midea/finance/ as_of: 2026-10-02 keywords: ["Midea Group","美的集团","He Xiangjian","Midea Holding","Fang Hongbo","KUKA","Midea Real Estate","Guangdong Midea Electric","GD Midea Air-Conditioning Equipment","Annto","Hiconics","CLOU Electronics","Wandong Medical","Teka Industrial","Arbonia Climate","Midea America","H-share listing","related-party transactions","Whirlpool ITC investigation","Orient Household Appliances"] --- # Midea Group's finances, capital returns and auditors, 2018–2026 **Question.** What do Midea Group's reports show about its results, debt, capital returns, goodwill and auditors from 2018 to 2026? **Answer.** Under China Accounting Standards (CAS), Midea Group's operating revenue rose from RMB 259,664,820 thousand in 2018 to RMB 456,451,731 thousand in 2025 and net profit attributable to shareholders from RMB 20,230,779 thousand to RMB 43,945,411 thousand; in the first half of 2026, according to the unaudited interim report, operating revenue grew 3.55% while profit after non-recurring items fell 25.31%, which Midea attributes to the rising renminbi. At the end of 2025 its IFRS accounts showed borrowings of RMB 64,184,638 thousand and cash and cash equivalents of RMB 68,508,670 thousand, and its annual report recorded guarantees of about RMB 52.6 billion, none for parties outside the group; in May 2026 a subsidiary issued two HK$8,624,000,000 series of convertible bonds guaranteed by Midea. Midea states that its 2025 dividends and repurchases together exceeded its net profit attributable to the parent. PricewaterhouseCoopers Zhong Tian, its domestic auditor for an 11th consecutive year, gave unqualified opinions for 2025; a 2024 penalty on that firm, reported in the media, concerned its audit work for another client, China Evergrande, not Midea's accounts. ## Revenue and profit, 2018 to 2026 - Analysis: Midea's 2020 annual report, prepared under China Accounting Standards for Business Enterprises (CAS), records operating revenue of RMB 259,664,820 thousand for 2018, RMB 278,216,017 thousand for 2019 and RMB 284,221,249 thousand for 2020, while net profit attributable to shareholders rose from RMB 20,230,779 thousand to RMB 24,211,222 thousand and RMB 27,222,969 thousand over the same three years. At 31 December 2020 the group's total assets were RMB 360,382,603 thousand and net assets attributable to shareholders RMB 117,516,260 thousand. For the following years, a media report of 30 April 2024, describing the H-share prospectus that Midea resubmitted to the Hong Kong Stock Exchange on 29 April 2024, stated revenue of RMB 343.361 billion for 2021, RMB 345.709 billion for 2022 and RMB 373.710 billion for 2023 and annual profit of approximately RMB 29.031 billion, RMB 29.812 billion and RMB 33.747 billion, and put first-quarter 2024 revenue at RMB 106.102 billion, up 10.22% year on year. This is a secondary account: the prospectus itself was not inspected, and the report does not state the accounting basis or whether profit includes non-controlling interests. For 2023, Midea's own 2025 annual report gives CAS operating revenue of RMB 372,037,280 thousand and net profit attributable to shareholders of RMB 33,719,935 thousand. [src-d026] [src-d065] [src-d141] - Analysis: Midea reports its 2025 results under two accounting standards. Its 2025 annual report under CAS shows operating revenue of RMB 456,451,731 thousand (2024: RMB 407,149,600 thousand), net profit attributable to shareholders of RMB 43,945,411 thousand (2024: RMB 38,537,237 thousand), RMB 41,267,233 thousand after non-recurring items, and basic earnings per share of RMB 5.80; net cash flow from operating activities fell 11.84% to RMB 53,345,930 thousand from RMB 60,511,572 thousand. The annual results announcement that Midea published on the Stock Exchange of Hong Kong on 30 March 2026, prepared under IFRS Accounting Standards, reports revenue of RMB 458,502 million (2024: RMB 409,084 million), gross profit of RMB 120,040 million, operating profit of RMB 54,743 million, profit before income tax of RMB 53,085,343 thousand, profit for the year of RMB 44,520 million and profit attributable to owners of the company of RMB 43,945 million (2024: RMB 38,539 million), with basic earnings per share of RMB 5.80 (2024: RMB 5.44). The revenue figures are not interchangeable: CAS operating revenue excludes the interest and fee income that the IFRS revenue line includes, and the two standards are reported separately. [src-d021] [src-d141] [src-d155] [src-d004] - Analysis: Within 2025, the quarterly breakdown in the CAS annual report shows operating revenue falling from quarter to quarter: RMB 127,838,538 thousand in the first quarter, RMB 123,285,176 thousand in the second, RMB 111,933,037 thousand in the third and RMB 93,394,980 thousand in the fourth. Net profit attributable to shareholders was RMB 12,422,233 thousand, RMB 13,591,457 thousand, RMB 11,869,693 thousand and RMB 6,062,028 thousand in the four quarters, and net cash flow from operating activities was negative in the fourth quarter at minus RMB 3,720,155 thousand. The first-quarter 2025 report, published through the Stock Exchange of Hong Kong, prepared under CAS and not audited, compared the first quarter with operating revenue of RMB 106,101,612 thousand and net profit attributable to shareholders of RMB 9,000,007 thousand a year earlier, increases of 20.49% and 38.02%. [src-d021] [src-d141] [src-d008] - Analysis: Growth rates in 2026 were lower. The first-quarter 2026 report, prepared under CAS without audit, shows operating revenue of RMB 131,098,601 thousand, up 2.55%, and net profit attributable to shareholders of RMB 12,674,556 thousand, up 2.03%, while profit after non-recurring items fell 14.02% to RMB 10,961,722 thousand from RMB 12,749,867 thousand. At 31 March 2026 total assets were RMB 613,881,571 thousand and equity attributable to shareholders RMB 232,307,706 thousand. The interim report for the six months to 30 June 2026, prepared under CAS, approved by the board on 28 August 2026 and not audited, reports operating revenue of RMB 260,042,490 thousand (up 3.55%), total revenue including interest income of RMB 261,052,379 thousand, net profit attributable to shareholders of RMB 26,446,037 thousand (up 1.66%) and basic earnings per share of RMB 3.52. Net profit after non-recurring items fell 25.31% to RMB 19,595,179 thousand. Midea attributes that fall to the continued rise of the renminbi: exchange losses on foreign-currency monetary items count as recurring items, while gains on the derivatives held to manage that risk count as non-recurring. Non-recurring items totalled RMB 6,850,858 thousand, including RMB 6,745,721 thousand of fair-value changes and disposal gains on financial assets and derivatives outside effective hedging. [src-d033] [src-d155] - Analysis: The interim report's income-statement notes give the main line items for the half-year. Finance costs turned into a net expense of RMB 3,273,004 thousand in the first half of 2026, against net finance income of RMB 5,987,740 thousand a year earlier, mainly because of higher exchange losses; investment income rose to RMB 3,040,102 thousand from RMB 645,870 thousand, mainly from disposals of derivative financial assets and liabilities; fair-value gains, mainly on equity investments, were RMB 4,997,108 thousand; and asset impairment losses rose to RMB 1,652,869 thousand from RMB 366,345 thousand, mainly because of a higher goodwill impairment loss. The report, which gives its derivative figures in units of ten thousand yuan (written here as ten-thousand), states that derivative investments produced an actual gain of RMB 356,982.8 ten-thousand (about RMB 3.57 billion) in the half-year and that fair-value changes of RMB 136,067.8 ten-thousand (about RMB 1.36 billion) were recognised on derivatives. It describes these as commodity futures and foreign-exchange instruments hedging raw-material price and currency exposures, funded entirely from own funds and approved by the board (announcement of 31 March 2026) and by shareholders (announcement of 6 June 2026), and states that no derivatives were held for speculative purposes. One structured entity, a private fund controlled by the group, was consolidated at 30 June 2026. [src-d155] ## Businesses, segments, scale and stated market positions - Analysis: Midea's 2025 annual report describes a group that mainly designs, manufactures and sells household air conditioners, central air conditioning, heating and ventilation systems, kitchen appliances, refrigerators, washing machines, small household appliances, elevators, high- and low-voltage inverters, medical imaging products and robotics and automation systems, organised into smart home, industrial technology, building technology, robotics and automation, new energy, healthcare and smart logistics businesses. The segment note of the same report (CAS) gives the smart-home business RMB 326,084,667 thousand of external revenue and RMB 37,130,386 thousand of segment profit in 2025, against RMB 36,755,772 thousand and RMB 4,503,740 thousand for building technology, RMB 33,420,450 thousand and RMB 5,088,171 thousand for industrial technology, and RMB 62,241,518 thousand and RMB 2,603,866 thousand for other segments. Total external revenue in the segment note, RMB 458,502,407 thousand, corresponds to the IFRS revenue figure given above rather than to CAS operating revenue. Revenue from mainland China was RMB 262,554,714 thousand and from other countries and regions RMB 195,947,693 thousand (2024: RMB 240,049,883 thousand and RMB 169,034,383 thousand), and no single customer accounted for 10% or more of revenue in 2025 or 2024. [src-d021] [src-d141] - Analysis: By business line, the 2025 annual report gives main-business revenue of RMB 299,927,239 thousand for smart home and RMB 122,752,958 thousand for commercial and industrial solutions, made up of building technology (RMB 35,790,825 thousand), robotics and automation (RMB 31,010,933 thousand), industrial technology (RMB 27,232,432 thousand) and other (RMB 28,718,768 thousand). The IFRS results put Building Technology revenue at RMB 35.8 billion in 2025, up 25.7%, and state that in 2025 Midea acquired Arbonia Climate, designated Europe as its second home market overseas and integrated resources from its acquisitions to establish MBT Climate, with the aim of becoming a mainstream brand in the European heating market; the annual results also state that Midea completed the acquisition of TEKA in Europe in 2025 as part of its strategy of localising research, manufacturing and sales in the region. For the first half of 2026 the interim report gives operating revenue of RMB 174,340,606 thousand for smart home (up 4.27%), RMB 21,625,109 thousand for building technology (up 10.84%), RMB 16,620,817 thousand for robotics and automation (up 10.27%), RMB 15,282,454 thousand for other businesses (up 2.55%) and RMB 13,137,739 thousand for industrial technology, a decrease of 12.72%. [src-d021] [src-d004] [src-d155] - Analysis: Under its CAS accounting policies, Midea recognises revenue when the customer obtains control of the goods: for domestic sales after delivery, the buyer's acceptance and signature of a goods handover note, and for exports mainly after customs declaration and departure from port. Distributors may return products within a period after purchase; the group estimates returns from historical experience and deducts them from revenue, and it records revenue net of expected discounts and rebates. Accrued sales rebates stood at RMB 52,952,866 thousand at 31 December 2025 (2024: RMB 55,539,161 thousand), within other current liabilities of RMB 92,537,419 thousand. Of 2025 revenue, RMB 425,174,695,000 was recognised at a point in time and RMB 31,162,532,000 over time, the latter mainly from logistics integration, robotics and automation system construction, warehousing, delivery, installation and transport services. [src-d021] - Analysis: Midea states that it has over 600 subsidiaries, 41 R&D centres and 65 major manufacturing bases, more than 190,000 employees and business in over 200 countries and regions, with 29 R&D centres in 11 countries and 43 of the 65 major bases overseas. The 2025 annual report counts 198,570 employees at the end of 2025 (927 at the parent company and 194,813 at major subsidiaries): 152,499 in production, 15,488 in sales, 23,926 in R&D, 2,866 in finance and 3,791 in administration, with 8,700 holding doctoral or master's degrees and 31,651 bachelor's degrees; the Hong Kong results add that over 40,000 employees worked overseas at the end of 2025. The 2026 interim report gives 68 major manufacturing bases, 45 of them overseas, and nearly 50,000 overseas employees at June 2026. By comparison, Midea's 2020 annual report stated that overseas sales made up more than 40% of total sales revenue, that products were exported to over 200 countries and regions, and that the group owned 17 overseas manufacturing bases and 24 overseas operating agencies. The 2025 annual report also lists 24 group enterprises included in the lists of enterprises required by law to disclose environmental information, beginning with Anhui Meizhi Precision Manufacturing Co., Ltd. and Anhui Meizhi Refrigeration Equipment Co., Ltd. [src-d021] [src-d004] [src-d426] [src-d141] [src-d155] [src-d026] - Analysis: Midea's 2025 annual report (CAS) records research and development expenses of RMB 17,787,624 thousand (2024: RMB 16,232,771 thousand), alongside selling expenses of RMB 42,891,490 thousand and administrative expenses of RMB 16,092,311 thousand; the Hong Kong results describe R&D investment of over RMB 17.8 billion in 2025, up 9.6%, and over RMB 48.0 billion across 2023 to 2025. The same results state that Midea added over 13,000 globally authorised patents in 2025, over 2,000 of them overseas, that by the end of 2025 its global patent applications exceeded 165,000 with over 36,000 invention patents authorised and maintained, and that its industrial technology business applied for over 1,000 new patents in 2025 and held over 8,800 authorised invention patents in total. The 2026 interim report gives over 5,000 new authorised patents in the first half of 2026 (over 1,000 overseas), over 170,000 patent applications and over 30,000 maintained invention patents as of June 2026. [src-d021] [src-d004] [src-d155] - Analysis: Midea's statements about its rankings and market positions are its own. Its 2025 annual report states that the group ranked 246th in the 2025 Fortune Global 500, its tenth consecutive year on the list, and that by early 2026 it had 39 national-level green factories and 8 world-class lighthouse factories, including its air-conditioner plant in Thailand, which the World Economic Forum named a supply-chain resilience lighthouse factory in September 2025. The report also states that its household air conditioners ranked first by sales volume in South America and its unitary household air conditioners remained first by sales volume in North America, that its ovens, refrigerators and dishwashers ranked first in Saudi Arabia, and that its overseas own-brand e-commerce grew by more than 35% in 2025, ranking first by market share in 32 product sub-categories on major Amazon marketplaces. It says that Midea sponsors Manchester City football club and the player Erling Haaland and will become a main partner of FC Barcelona from the 2026/2027 season. Midea's 2026 interim report adds that the group ranked 231st in the Fortune Global 500 list published in July 2026, its eleventh consecutive year on the list, and that a five-year strategic partnership with FC Barcelona began with the 2026/2027 season, with the Midea brand appearing for the first time on the sleeves of the team's match and training kits. These are company self-descriptions: the underlying lists, market data and sponsorship contracts were not inspected. [src-d141] [src-d155] [src-d021] ## Balance sheet, cash and liquidity - Analysis: Midea's IFRS statement of financial position shows total assets of RMB 608,791,766 thousand at 31 December 2025 (2024: RMB 604,351,853 thousand), total liabilities of RMB 372,367,543 thousand (RMB 376,684,462 thousand) and equity attributable to owners of the company of RMB 223,221,305 thousand (RMB 216,750,094 thousand), with share capital of RMB 7,597,145 thousand, treasury shares of RMB 8,151,117 thousand and retained earnings of RMB 167,227,785 thousand. Property, plant and equipment was RMB 48,931,256 thousand, right-of-use assets RMB 11,551,982 thousand and investment properties RMB 1,142,213 thousand. Cash and cash equivalents were RMB 68,508,670 thousand, and term deposits and restricted cash RMB 16,738,480 thousand, down from RMB 85,291,580 thousand a year earlier. The CAS annual report shows monetary funds of RMB 85,247,150 thousand (2024: RMB 140,410,308 thousand), an amount equal to those two IFRS lines combined; RMB 22,156,871 thousand of it was held outside mainland China, including in Hong Kong, Singapore, the Netherlands, Egypt and the United States, and bank deposits within it fell to RMB 37,562,392 thousand from RMB 74,000,253 thousand. [src-d004] [src-d021] [src-d155] - Analysis: Beyond monetary funds, the CAS report shows large holdings of fixed-income products. Products with an original term of more than one year (time deposits, monetary investment products and large certificates of deposit held at amortised cost) amounted to RMB 209,650,953 thousand at the end of 2025 (2024: RMB 146,264,889 thousand), of which RMB 155,362,528 thousand fell due within one year, and non-current assets due within one year rose to RMB 155,618,201 thousand from RMB 55,471,712 thousand. In the first half of 2026 the group bought US Treasury medium-term notes for RMB 15,021,592 thousand with its own funds; they are measured at amortised cost within other non-current assets and were carried at RMB 15,034,889 thousand at 30 June 2026. [src-d021] [src-d155] - Analysis: Midea's 2025 annual report gives a current ratio of 121.34% at 31 December 2025 (2024: 110.59%), a quick ratio of 94.60% (85.94%) and a debt-to-asset ratio of 61.17% (62.33%), with EBITDA to total debt of 68.32% (50.76%), interest cover of 25.01 times (20.03) and cash interest cover of 30.67 times (42.47); loan repayment and interest payment rates were 100.00%. It states that at year-end no interest-bearing debt other than bonds was overdue, that no consolidated loss exceeded 10% of the prior year-end net assets and that there was no breach of rules and regulations in 2025. The IFRS results give an asset-liability ratio of 61.2% (2024: 62.3%), attributing the decrease mainly to the repayment of part of the borrowings, and an operating cash conversion ratio of 1.2 times. [src-d021] [src-d141] [src-d004] - Analysis: Reported under IFRS, cash flows from financing turned from a net inflow of RMB 22,698 million in 2024 to a net outflow of RMB 64,958 million in 2025. That outflow included RMB 30.5 billion of dividends, RMB 11.7 billion for share repurchases and refunds of the exercise price of lapsed restricted shares and RMB 112.1 billion of borrowing repayments, partly offset by RMB 88.9 billion of new borrowings. Net cash from operating activities was RMB 53,346 million (2024: RMB 60,512 million), and investing activities brought in a net RMB 25,340 million (2024: an outflow of RMB 87,902 million), including net proceeds of RMB 32.6 billion from financial assets, RMB 11.1 billion of capital expenditure payments and a net outflow of RMB 6.1 billion for acquisitions of subsidiaries; cash and cash equivalents were RMB 68,509 million at year-end. Capital expenditure excluding business combinations rose to RMB 13.0 billion from RMB 9.9 billion, which the company attributes mainly to building global production bases and R&D centres, while capital commitments fell to RMB 3,915 million (2024: RMB 11,346 million), RMB 3,913 million of them for property, plant and equipment. [src-d004] - Analysis: Part of the asset base is pledged or otherwise restricted. Midea's CAS annual report lists assets with restricted use of RMB 46,584,515 thousand at 31 December 2025 (2024: RMB 114,082,443 thousand): RMB 23,690,000 thousand of other non-current assets, mainly fixed-income products with original terms over one year pledged to issue bank acceptance bills; RMB 16,658,157 thousand of monetary funds, mainly time deposits of three months to one year, deposits with banks, other monetary funds and statutory reserves at the central bank; and RMB 6,236,358 thousand of other assets, including receivables, notes, fixed assets, investment properties and intangible assets, mortgaged or pledged for bank borrowings and acceptance bills. That CAS total includes restricted cash and deposits and is a different measure from the one in the IFRS results, which put the net carrying amount of assets pledged or mortgaged to draw bank acceptance bills and secure bank borrowings at RMB 29.9 billion, mainly constant-return financial products, trade and note receivables and certain property, plant and equipment, leased land and land use rights. The IFRS results also state that the company had no material off-balance sheet arrangements. [src-d021] [src-d004] - Analysis: Midea also settles purchases with bank acceptance bills, drafts whose payment a bank has accepted. In 2025, according to the CAS annual report, the group derecognised endorsed and discounted bank acceptance bills with a carrying amount of RMB 37,379,046,000 (2024: RMB 37,364,922,000), with discount losses of RMB 48,323,000; endorsed or discounted bills not yet due but already derecognised totalled RMB 11,701,385,000 at year-end (2024: RMB 9,872,891,000), and a small number of receivables were factored without recourse. Purchases of inventories and long-term assets paid with bank acceptance bills, a non-cash item, came to RMB 63,790,479 thousand (2024: RMB 65,855,585 thousand). On the receivables side, the five largest balances of accounts receivable and contract assets totalled RMB 3,873,122 thousand, 8.33% of the total, without the debtors being named. Receivables assessed individually for impairment were RMB 835,783 thousand, with an allowance of RMB 807,281 thousand: RMB 750,161 thousand from domestic customers (98.34% provided) and RMB 85,622 thousand from overseas customers (81.25% provided), the stated reason being the debtors' financial difficulties. [src-d021] - Analysis: The CAS annual report shows gross loans and advances of RMB 12,668,990 thousand at the end of 2025 (2024: RMB 11,652,674 thousand): personal loans of RMB 708,140 thousand and corporate loans and advances of RMB 11,960,850 thousand, including bill discounting of RMB 711,747 thousand. By security, RMB 705,269 thousand were credit loans, RMB 685,761 thousand guaranteed loans and RMB 11,277,960 thousand pledged loans, with a loss allowance of RMB 267,525 thousand. Its market-risk note estimates that a 5% appreciation or depreciation of the functional currencies against the US dollar would change profit before tax by about RMB 2,375,871,000 (2024: RMB 1,182,818,000) and a 10% change in equity-investment prices by about RMB 422,708,000, and states that after interest rate swaps the group had no floating-rate interest-bearing debt. Leaving aside liabilities due within one year whose undiscounted cash flows equal their carrying amounts, the maturity analysis puts undiscounted contractual cash flows of financial liabilities at RMB 69,425,547 thousand, of which RMB 50,587,756 thousand was due on demand or within one year. The report states that the group had provided no financial guarantees to third parties and no loan commitments to related parties, and that title certificates for fixed assets with a carrying amount of RMB 524,923,000 (2024: RMB 396,250,000) were still being processed. [src-d021] - Analysis: In the first half of 2026 total assets grew while equity attributable to shareholders fell, according to the first-quarter and interim reports, both unaudited as noted above. The first-quarter report shows goodwill of RMB 33,215,220 thousand and total liabilities of RMB 368,440,440 thousand, down from RMB 372,367,543 thousand at the end of 2025. At 30 June 2026 the interim report shows total assets of RMB 643,101,789 thousand (up 5.64% from 31 December 2025), total liabilities of RMB 417,308,848 thousand and equity attributable to shareholders of RMB 212,861,055 thousand (down 4.64%), with treasury shares up to RMB 15,117,924 thousand from RMB 8,151,117 thousand and monetary funds of RMB 90,642,783 thousand. The current ratio fell to 114.52% from 121.34% and the debt-to-asset ratio rose to 64.89% from 61.17%; the quick ratio was 93.52%, interest cover 37.91 times and loan and interest repayment rates 100.00%. Net cash flow from operating activities for the half-year was RMB 37,552,090 thousand. [src-d033] [src-d155] ## Borrowings, notes, guarantees and credit rating - Analysis: Midea's 2025 annual report states that on 11 September 2025 S&P upgraded the company's long-term issuer credit rating from A to A+, and that Midea holds international credit ratings from S&P, Fitch and Moody's. Its IFRS results give total borrowings of RMB 64,184,638 thousand at 31 December 2025, down from RMB 83,307,706 thousand a year earlier: secured bank loans of RMB 19,649,173 thousand, unsecured bank loans of RMB 41,340,691 thousand and debentures of RMB 3,194,774 thousand. Of the total, RMB 48,331,021 thousand was repayable within one year, RMB 6,306,803 thousand in one to two years, RMB 9,422,026 thousand in two to five years and RMB 124,788 thousand after five years. In the CAS annual report, short-term borrowings rose to RMB 43,904,550 thousand (2024: RMB 31,008,549 thousand), made up of RMB 19,672,362 thousand of unsecured credit borrowings, RMB 4,735,689 thousand of guaranteed borrowings and RMB 19,496,499 thousand of pledged or mortgaged borrowings, none overdue, at annual rates of 0.70% to 5.04%; no long-term borrowings were overdue either, and their rates ranged from 1.80% to 3.65%. [src-d021] [src-d141] [src-d004] - Analysis: At the end of 2024 the group's guaranteed borrowings had included about RMB 24,555,336,000 (net of fees) at a floating rate due in August 2025. For that borrowing, a USD 3,419,058,000 principal amount, the group used a cross-currency interest rate swap from August 2022 to August 2025 that converted the floating USD SOFR plus 0.55% rate into a fixed euro rate; the swap expired in August 2025. At the end of 2025 the main guaranteed bank borrowing was about RMB 2,749,400,000, guaranteed by the company, at a fixed rate and due in April 2027. In 2026 the quarterly balance sheets show short-term borrowings of RMB 37,419,496 thousand and long-term borrowings of RMB 13,576,764 thousand at 31 March 2026 (31 December 2025: RMB 43,904,550 thousand and RMB 12,658,843 thousand), with debenture payables of RMB 3,121,853 thousand, and RMB 47,305,038 thousand and RMB 15,417,300 thousand at 30 June 2026. [src-d021] [src-d033] [src-d155] - Analysis: Midea's US dollar notes were issued by its subsidiary Midea Investment Development Company Limited: USD 450 million of 2.88% guaranteed notes due 2027 (ISIN XS2432130453), issued on 16 February 2022 with interest from 24 February 2022, maturing on 24 February 2027, paying interest semi-annually and traded on the Stock Exchange of Hong Kong. Midea Group guarantees the notes. The 2026 interim report records them at USD 450,000,000 (RMB 2,848,500,000 at issue) with a carrying amount of RMB 3,095,389 thousand at 30 June 2026. The 2025 annual report states that the full USD 450 million raised was used, through a dedicated proceeds account and consistent with the offering document, to support the company's green strategy in the design and development of green products and project construction, and that interest was paid on schedule. It lists as intermediaries the banks BofA Securities, Standard Chartered Bank, Credit Agricole, Bank of China (Singapore), China Construction Bank (Asia), DBS Bank and Industrial and Commercial Bank of China (Asia); the law firms Linklaters, Fangda Partners, Clifford Chance, Jingtian & Gongcheng and Ogier; and the rating agencies Fitch and S&P Global Ratings Hong Kong Limited, none of which changed during 2025. [src-d021] [src-d141] [src-d155] - Analysis: Midea's guarantees are given for companies within the group. Its 2025 annual report, whose guarantee table counts in units of RMB 10,000 (written here as ten-thousand), records no guarantees for parties outside the group and none for shareholders, the actual controller or their related parties, and states that there were no irregular external guarantees. The total guarantee balance at 31 December 2025, essentially for subsidiaries, was RMB 5,255,895 ten-thousand (about RMB 52.6 billion), 23.55% of the company's net assets, against approved limits of RMB 17,899,623 ten-thousand (about RMB 179.0 billion); the balance of guarantees given by the company for subsidiaries was RMB 4,576,294 ten-thousand, and guarantees for parties with a debt-to-asset ratio above 70% totalled RMB 4,022,875 ten-thousand (about RMB 40.2 billion). At 30 June 2026 the interim report shows a total balance across all guarantee categories of RMB 6,709,160 ten-thousand (about RMB 67.1 billion), 31.52% of net assets, against approved limits of RMB 17,558,465 ten-thousand, of which RMB 6,088,716 ten-thousand was for parties with a debt-to-asset ratio above 70%; the company's guarantees for subsidiaries stood at RMB 5,516,488 ten-thousand (about RMB 55.2 billion) against limits of RMB 13,219,360 ten-thousand, and again none were for outside parties, shareholders or the actual controller. [src-d021] [src-d155] - Analysis: Among the individual company guarantees in the 2026 interim report, Midea guarantees Midea Investment Development Company Limited, the issuer of its US dollar notes and, as described below, of the 2026 convertible bonds, with joint and several liability, a limit of RMB 2,378,500 ten-thousand and RMB 1,805,345 ten-thousand outstanding, for one year from 1 January 2026. It also guarantees GD Midea Air-Conditioning Equipment Co., Ltd. with a limit of RMB 1,600,000 ten-thousand and RMB 1,304,800 ten-thousand outstanding, for one year from 7 January 2026. [src-d155] [src-d021] [src-d141] ## The 2026 convertible bonds - Analysis: On 6 May 2026 Midea Group, its wholly owned subsidiary Midea Investment Development Company Limited (incorporated in the British Virgin Islands) as issuer, and the managers signed a subscription agreement for HK$8,624,000,000 of zero-coupon guaranteed convertible bonds due 2027 and HK$8,624,000,000 of zero-coupon guaranteed convertible bonds due 2033, both issued at 100% of principal and unconditionally and irrevocably guaranteed by Midea Group. The bonds are convertible into Midea's H shares, its Hong Kong-listed shares, at initial prices of HK$96.82 for the 2027 bonds and HK$115.76 for the 2033 bonds, premiums of about 10.4% and 32.0% over the closing price of HK$87.70 on 6 May 2026; full conversion would give about 89,072,505 and 74,498,963 H shares, about 1.2% and 1.0% of the issued shares. The 2027 bonds mature on 11 May 2027. The 2033 bonds mature on 13 May 2033, when they are redeemed at 114.95 per cent of principal, and holders have put options at 106.15 per cent and 110.46 per cent of principal. Net proceeds were estimated at about HK$17,174 million. [src-d142] - Analysis: Midea stated that about 60% of the net proceeds would be used for international expansion and enhancing offshore liquidity and about 40% for general corporate purposes, and its board cited enlarging and diversifying the shareholder base, improving liquidity, reducing financing costs and raising working capital. The bonds and the conversion shares were issued under the general mandate granted by shareholders on 30 May 2025 and 24 September 2025, without further shareholder approval, and Midea's guarantees under the shareholders' resolution of 30 May 2025 on guarantees for controlled subsidiaries. A separate debt-financing mandate from the second extraordinary general meeting of 2025 allows the company or its wholly owned subsidiaries to issue onshore and offshore debt instruments with a total outstanding balance of up to 50% of the latest audited equity attributable to shareholders. [src-d142] - Analysis: Under the bond terms, holders of the 2027 bonds may require redemption at principal after a relevant event: a change of control, a delisting, a suspension of trading in the H shares for 30 consecutive H-share business days, or a no-registration event. Both series carry a negative pledge: while the bonds are outstanding, neither the issuer nor Midea Group, nor their subsidiaries other than listed subsidiaries, may secure other relevant indebtedness or guarantees of it unless the bonds are secured equally or bondholders approve otherwise by extraordinary resolution, subject to stated exceptions. [src-d142] - Analysis: The managers were Morgan Stanley Asia Limited, Goldman Sachs (Asia) L.L.C., Citigroup Global Markets Limited, Merrill Lynch (Asia Pacific) Limited and China International Capital Corporation Hong Kong Securities Limited, and the trustee was Citicorp International Limited. The National Development and Reform Commission had issued the foreign-debt registration certificate for the 2033 bonds on 8 March 2026; no certificate was required for the 2027 bonds. The bond announcement stated that an application would be made to list the bonds on the Vienna MTF operated by the Vienna Stock Exchange (Wiener Börse), and Midea's 2026 interim report states that the group issued both series on the Vienna Stock Exchange on 13 May 2026. At 30 June 2026 the 2027 series was carried at RMB 7,269,104 thousand, presented within other current liabilities, and the 2033 series at RMB 6,665,757 thousand, each against an issue amount of RMB 7,490,375 thousand. [src-d142] [src-d155] ## Dividends, share repurchases and share plans - Analysis: In its 2025 annual results Midea states that its 2025 cash dividends and share repurchases together exceeded its net profit attributable to the parent. It states that since its 2013 listing it has distributed over RMB 166.0 billion in cash dividends (including the 2025 proposal), and that its 2025 repurchases under two A-share plans and of H shares exceeded RMB 11.6 billion, bringing cumulative repurchases to over RMB 38.8 billion. By the end of 2025 it had launched nine stock option plans, seven restricted stock plans, sixteen employee stock ownership plans and one H-share award plan. The 2026 interim report gives cumulative cash dividends since 2013 of over RMB 160 billion, repurchases of over RMB 6.9 billion in the first half of 2026 under a new A-share plan and cumulative repurchases of over RMB 45 billion. All of these are company-stated totals given as lower bounds, and the two reports are not reconciled with each other. [src-d004] [src-d155] - Analysis: Midea's 2025 annual report states that the company paid about RMB 30,476,852,000 in cash dividends in 2025: RMB 3.5 per share under the shareholders' meeting resolution of 30 May 2025 (about RMB 24,443,729,000 on 6,983,922,480 A shares net of repurchased shares and about RMB 2,277,969,000 on 650,848,500 H shares) and RMB 0.5 per share under the resolution of the second extraordinary general meeting of 24 September 2025 (about RMB 3,448,324,000 on 6,896,648,327 A shares and about RMB 325,424,000 on H shares), less about RMB 18,594,000 cancelled on repurchased restricted shares. For the 2025 financial year the profit distribution plan totals RMB 43 (tax inclusive) per 10 shares: an interim dividend of RMB 5 per 10 shares already paid and a final dividend of RMB 38 per 10 shares proposed by the board on 30 March 2026, subject to the 2025 annual general meeting, with H-share dividends payable in Hong Kong dollars. On a base of 7,522,863,645 shares (7,603,276,186 shares less 80,412,541 repurchased A shares) the final dividend amounts to RMB 28,586,881,851, and no capital reserve is converted into share capital. The 2026 interim report records distributions to shareholders of RMB 28,389,299 thousand in the first half of 2026. [src-d021] [src-d004] [src-d155] [src-d141] - Analysis: Midea's 2020 annual report proposed a cash dividend of RMB 16 (tax inclusive) per 10 shares for 2020 on 6,916,495,109 shares, being the total share capital of 7,047,686,070 shares less 131,190,961 repurchased shares held in the repurchase account at the disclosure date. On 28 August 2026 the board approved an interim dividend for 2026 of RMB 5 (tax inclusive) per 10 shares. The interim report computes it on 7,448,597,984 shares (7,628,798,092 shares less 180,200,108 repurchased shares at the report date) for a total of RMB 3,724,298,992, while the circular of 27 September 2026 for the extraordinary general meeting of 13 October 2026 uses 7,458,039,464 shares at the latest practicable date (7,629,418,902 shares less 171,279,438 A shares in the repurchase account and 100,000 H shares held in treasury), for a total of RMB 3,729,019,732, or 14.10% of net profit attributable to shareholders. The two totals rest on share counts at different dates: the per-share amount is fixed and the total is adjusted to the shares entitled at the record date. The result of the 13 October 2026 meeting is not in the inspected record. [src-d026] [src-d097] [src-d155] ## Goodwill from KUKA and TLSC, and the 2026 impairment - Analysis: Midea's goodwill derives mainly from its acquisitions of the KUKA group and of Toshiba Lifestyle Products & Services Corporation (TLSC). The auditor's report in Midea's 2020 annual report records goodwill of RMB 29,557,218,000 at 31 December 2020, including RMB 22,836,294,000 arising from the acquisition of KUKA Aktiengesellschaft and its subsidiaries and RMB 2,944,486,000 from TLSC, and states that management considered no impairment provision necessary on the basis of its impairment testing. At 31 December 2025 the CAS annual report shows goodwill of RMB 34,256,859 thousand (2024: RMB 29,581,014 thousand) after an accumulated impairment provision of RMB 556,411 thousand (2024: RMB 569,005 thousand). The gross amount is allocated to the KUKA group (RMB 23,435,302 thousand), the TLSC group (RMB 2,085,854 thousand), Little Swan (RMB 1,361,306 thousand) and other units (RMB 7,930,808 thousand, increased in 2025 by business combinations). [src-d026] [src-d021] - Analysis: For 2025 the impairment tests for KUKA and TLSC found recoverable amounts above carrying amounts, and no provision was made. The key assumptions for KUKA were gross margins of 19.61% to 22.93% (2024: 22.68% to 23.65%) and a pre-tax discount rate of 10.08% (10.88%); for TLSC they were gross margins of 23.00% to 24.50% (26.22% to 28.80%) and a pre-tax discount rate of 16.25% (14.85%). [src-d021] - Analysis: The 2026 interim report records a goodwill impairment loss of RMB 1,096,473 thousand for the first half of 2026 (first half of 2025: none), within total asset impairment losses of RMB 1,652,869 thousand. Goodwill fell to RMB 31,576,620 thousand at 30 June 2026 from RMB 34,256,859 thousand. The closing gross allocation was KUKA group RMB 22,102,403 thousand, TLSC group RMB 1,957,715 thousand, Little Swan RMB 1,361,306 thousand and other units RMB 7,251,669 thousand, less the impairment provision of RMB 1,096,473 thousand; during the period the opening provision of RMB 556,411 thousand was written off (RMB 547,751 thousand) or translated (RMB 8,660 thousand). The inspected parts of the interim report do not name the asset group to which the new impairment relates. The loss is new for the period but not the first goodwill impairment in the group accounts: provisions of RMB 569,005 thousand and RMB 556,411 thousand stood at the end of 2024 and 2025. [src-d155] [src-d021] ## Tax and government grants - Analysis: Midea's 2025 annual report (CAS) records income tax expense of RMB 8,565,147 thousand on profit before tax of RMB 53,085,343 thousand, against RMB 13,271,336 thousand at the 25% statutory rate; differing tax rates at subsidiaries reduced the charge by RMB 4,790,616 thousand. Several subsidiaries are high and new technology enterprises taxed at 15% under three-year certificates, and would be taxed at 25% if the certificates were not renewed. The group states that it falls within the OECD Pillar Two global anti-base-erosion (GloBE) rules, a minimum-tax regime that took effect in jurisdictions including the European Union, Japan and Vietnam from 2024 and Singapore, Hong Kong and Thailand from 2025, and that it recognised Pillar Two income tax expense in 2025; the inspected passage does not state the amount. Deductible temporary differences and tax losses for which no deferred tax asset was recognised totalled about RMB 19,781,403,000 (2024: RMB 16,964,629,000). [src-d021] - Analysis: The tax note lists subsidiaries holding high and new technology enterprise certificates issued in October to December 2023 for three years, including Shenzhen CLOU Electronics Co., Ltd. (GR202344204605), Beijing Wandong Medical Technology Co., Ltd. (GR202311003930), Wuxi Little Swan Electric Co., Ltd. (GR202332003281), Beijing Hiconics Inverter Technology Co., Ltd. (GR202311003112), KUKA Flexible Systems (Shanghai) Co., Ltd. and Shanghai Swisslog Healthcare Technology Co., Ltd. The report also states that its subsidiaries established in the British Virgin Islands and the Cayman Islands are exempt from enterprise income tax, naming Mecca International (BVI) Limited, Titoni Investments Development Ltd and Midea Investment Development Company Limited, together with four subsidiaries whose Chinese names translate as Midea Holding (BVI) Limited, Midea Electric (BVI) Limited, Welling Holding (BVI) Limited and Midea Holding (Cayman Islands) Limited. [src-d021] - Analysis: For foreign subsidiaries, the tax notes of the 2025 annual report and the 2026 interim report give statutory income tax rates of 34% for Springer Carrier Ltda. in Brazil, 34.01% for certain TLSC subsidiaries in Japan, 24% for Clivet S.p.A. in Italy, 32% for KUKA and 28.1% for Kermi GmbH in Germany, 22.5% for Misr Refrigeration and Air Conditioning Manufacturing Company, S.A.E. in Egypt, a 21% federal rate for Midea America Corp. in the United States and 25% for TEKA INDUSTRIAL, S.A. in Spain; the 2025 report also lists 23% for Servotronix Motion Control Ltd. in Israel, and both reports describe tax holidays for subsidiaries in Vietnam and Thailand. Government grants carried in deferred income, mostly for industrial upgrading, were RMB 2,638,278 thousand at 31 December 2025 (2024: RMB 2,196,222 thousand; RMB 570,626 thousand received and RMB 128,570 thousand released in 2025) and RMB 2,883,271 thousand at 30 June 2026, mainly asset-related grants for industrial upgrading. [src-d021] [src-d155] ## Auditors, audit opinions and the reported penalty on PwC Zhong Tian - Analysis: Midea's 2020 annual report names PricewaterhouseCoopers Zhong Tian LLP (PwC Zhong Tian) as the company's accounting firm, and CITIC Securities Co., Ltd. as the financial adviser engaged for continuous supervision from 21 June 2019 to 31 December 2020. For 2025 Midea engaged PwC Zhong Tian as its domestic auditor for an 11th consecutive year, at a fee of RMB 940.5 ten-thousand (about RMB 9.4 million), and also to audit internal control for RMB 2.7 million; PricewaterhouseCoopers in Hong Kong was its overseas auditor for a third consecutive year, at a fee of RMB 430 ten-thousand (RMB 4.3 million). The annual report names the signing accountants, one of whom signed for both firms, and states that the auditor was not changed during the period; the Hong Kong results name PricewaterhouseCoopers as the group's auditor. The IFRS results separately disclose auditors' remuneration of RMB 50,681 thousand for audit services and RMB 4,252 thousand for non-audit services in 2025 (2024: RMB 47,624 thousand and RMB 6,062 thousand). That line is a group expense item that does not name the firms paid, and it differs in scope from the fees the CAS annual report gives for the company's engagement of the two PwC firms. [src-d026] [src-d021] [src-d004] - Analysis: PwC Zhong Tian issued a standard unqualified opinion, dated 30 March 2026 (report PwC ZT Shen Zi (2026) No. 10014), on Midea's 2025 CAS financial statements, finding that they present fairly in all material respects the consolidated and company financial position at 31 December 2025 and the 2025 results and cash flows. The key audit matters were revenue recognition in the smart-home business, about RMB 326,084,667 thousand of consolidated operating revenue of about RMB 456,451,731 thousand, and goodwill impairment testing for the KUKA and TLSC groups. As internal-control auditor the firm issued a standard unqualified internal-control audit report, disclosed on 30 March 2026, stating that Midea maintained effective internal control over financial reporting in all material respects at 31 December 2025; the annual report states that this conclusion agrees with the board's self-assessment, which covered units representing 70% of consolidated total assets and 70% of consolidated operating revenue and found no material or significant deficiencies, and that no non-standard internal-control opinion was issued for 2025 or 2024. The annual report also states that there was no non-operating use of company funds by the controlling shareholder or other related parties, no irregular external guarantee and no change in accounting policies or estimates or material correction of errors. [src-d021] [src-d141] - Analysis: A separate matter concerns PwC Zhong Tian's work for another client and does not concern Midea's financial statements. A media report published in May 2026, republishing a business-press investigation from April 2026, stated that in September 2024 mainland Chinese authorities fined PwC Zhong Tian, which audited the core real-estate business of China Evergrande Group, a record RMB 441 million, suspended the firm's operations for six months and revoked the licences of several accountants for helping conceal Evergrande's fraud; the penalty decision itself is not among the inspected records, and the report quoted an unnamed audit executive as saying that the firm's business suspension period on the Chinese mainland had passed. The same report stated that on 23 April 2026 Hong Kong's Securities and Futures Commission announced a settlement requiring PwC Hong Kong, Midea's overseas auditor, to set aside HK$1 billion to compensate eligible independent minority shareholders harmed by Evergrande's fraud in fiscal 2019 and 2020, without an admission of legal liability, and that Hong Kong's Accounting and Financial Reporting Council fined the firm HK$300 million for serious audit deficiencies, barred it from taking on new clients for six months and penalised two executives; the regulators' own announcements are not among the inspected records, and these actions also concern the audits of another client. The same report stated that PwC Zhong Tian's A-share client roster, once 107 companies, had fallen to fewer than 30, and that its remaining A-share clients, mostly private or foreign-backed companies, include top fee payers such as Foxconn Industrial Internet, SF Holding and Midea Group. Midea's 2025 annual report confirms PwC Zhong Tian as domestic auditor for an 11th consecutive year, but neither the annual report nor the media report states Midea's reasons for retaining the firm. [src-d086] ## Sources - [src-d026] Company statement source · src-d026 - [src-d065] Media source · src-d065 - [src-d141] Midea Group 2025 annual report summary (announcement 2026-019), Midea Group Co., Ltd. (filed on CNINFO), 2026-03-31 - [src-d021] Company statement source · src-d021 - [src-d155] Midea Group 2026 interim report, Midea Group Co., Ltd. (filed on CNINFO), 2026-08-29 - [src-d004] Midea Group annual results announcement for the year ended 31 December 2025, Midea Group Co., Ltd. (filed on HKEXnews), 2026-03-30 - [src-d008] Midea Group first quarterly report 2025, Midea Group Co., Ltd. (filed on HKEXnews), 2025-04-29 - [src-d033] Company statement source · src-d033 - [src-d426] Company statement source · src-d426 - [src-d142] Midea Group announcement on the proposed issue of guaranteed convertible bonds due 2027 and 2033, Midea Group Co., Ltd. (filed on HKEXnews), 2026-05-07 - [src-d097] Midea Group circular of 27 September 2026 for the extraordinary general meeting, Midea Group Co., Ltd. (filed on HKEXnews), 2026-09-27 - [src-d086] Media source · src-d086