Midea Group — Midea: earnings, borrowing, guarantees and tax exposure

analysisMidea’s 2025 IFRS results report RMB458.502 billion revenue, RMB43.945 billion profit attributable to owners and RMB608.792 billion total assets. Total liabilities were RMB372.368 billion, giving the company’s stated liabilities-to-assets ratio of 61.2%. Its China-standard operating-revenue figure uses a different presentation and should not be silently substituted for the IFRS revenue figure. Amounts here are consolidated and rounded from source figures in thousands or millions of renminbi. A liability total is not the same as interest-bearing borrowing. ^{1 2}

analysisAt the end of 2025 the IFRS accounts show RMB64.185 billion of borrowings, down from RMB83.308 billion, with RMB48.331 billion due within a year. Operating cash inflow was RMB53.346 billion, while cash and cash equivalents ended at RMB68.509 billion. The accounts separately identify term deposits and other financial assets. Changes between cash, term deposits and fixed-income products are not automatically losses of cash. Financing outflows include dividends, repurchases and debt repayment, so no single outflow represents acquisition expenditure. ²

analysisFor the first half of 2026, the China-standard report records RMB260.042 billion operating revenue, RMB26.446 billion attributable profit and RMB37.552 billion operating cash flow. Attributable profit excluding non-recurring items was RMB19.595 billion, down 25.31%. The report explains that exchange losses on foreign-currency monetary items and gains on related derivatives fall into different recurring/non-recurring categories. The half-year statements were not audited. These accounting categories explain part of the divergence between profit measures; they do not establish that every operating change was caused by currency movements. ³

analysisThe June 2026 notes record RMB1.096 billion of goodwill impairment charged during the half-year. The guarantee schedule shows an actual outstanding total of RMB67.092 billion, or 31.52% of the stated net-asset base, including RMB60.887 billion relating to borrowers with liabilities above 70% of assets. The guarantee schedule is expressed in RMB10,000 units, unlike the financial-note tables in RMB1,000. Parent, subsidiary and asset-pool subtotals must not be counted again on top of the combined total. The schedule records no guarantee balance for shareholders, the controller or their related parties. ³

analysisThe June 2026 notes describe unresolved tax disputes at an unnamed Brazilian subsidiary in which the group owns 51%. The maximum potential loss was about BRL559 million, including principal, penalties and interest. Original shareholders’ remaining compensation commitment was about BRL131 million. This is a maximum-exposure disclosure, not an adjudicated amount payable. The unnamed subsidiary and all its tax cases should not be equated automatically with a single separately reported Springer Carrier proceeding. Management, after consulting independent lawyers, considered an adverse outcome unlikely and said provisions reflected its best estimate. The cases remained under consideration at the financial statements’ approval date. ^{3 2}

analysisA June 2026 report describes Brazil’s Superior Court of Justice leaving in place a tax assessment against Springer Carrier concerning the 2004–2008 classification of split-air-conditioner components. The upper court did not re-examine the merits because doing so would require reviewing evidence. The report gives no assessment amount. It is not a finding that every Midea company owes the consolidated contingency figure. The company’s lawyer argued for separate component classification. Midea Carrier said it would wait for publication of the reasons before considering available procedural measures. The lower court’s assessment remained in place at this reported stage; no later final payment or appeal outcome is established here. ⁴