On November 15, S&P Global Ratings (S&P) upgraded the credit rating of Midea Group Co., Ltd. (Midea Group) from "A-" to "A". Midea Group now owns the highest credit rating among private manufacturing companies in China, being one of the few internaionally with A or above rating, and is expected to grow faster than the industry in its existing segments and expand into business-oriented products while maintain its strong credit mesasures. Based on its diversified development and enhanced brand competitiveness, Midea Group is expected to see steady growth in operations and a steady increase in market share in the next two years, according to the latest report of S&P.
Midea Group's development in recent years has been characterized by diversification. At present, Midea Group comprises five business segments - Smart Home Business, Industrial Technologies, Midea Building Technologies, Robotics & Automation, and Digital Innovation Business. The report stresses that MIDEA GROUP is shifting some of its focus to products such as overall building solutions and smarter healthcare to enhance the diversity and resilience of its operations for diversified revenue in the long run.
As a manufacturer and brand owner, Midea Group equips solid manufacturing experiences and first-mover advantages in fields such as ToB building technologies and digital innovations. At the recent 72nd International Trade Fair for Ideas, Inventions and New Products (iENA) in Nuremberg, Germany, the project of "heat recovery VRF and intelligent control system" independently developed by Midea Building Technologies won the Silver Award. On November 12, the "2021 Midea Cloud City Tour" was held in Shanghai. The industrial Internet solutions of Midea Cloud -- Midea Group's proprietary industrial cloud ecology and M.IoT company -- have been widely applied in more than 40 sub-sectors and over 400 companies. These solutions continue to empower the industry, arm the manufacturing industry with digitalization, and boost the transformation and upgrading of China's manufacturing industry.
The report also points out that the outstanding performance of Midea brand products, small home appliances, and online channel sales contributed significantly to Midea Group's revenue. Data show that for 2018-2020, the market share of Midea brands grew from 5.7% to 6.1%, to which OBM has made a big contribution. Meanwhile, since Midea Group acquired Toshiba Lifestyle Products & Services Corporation in 2016, the Toshiba brand has expanded rapidly and performed well in Southeast Asia and the Middle East. The rollout of "COLMO" brand in 2018 has demonstrated its determination to enter the domain of high-end smart home appliances. Midea is the leading manufacturer of small home appliances in China, with a market share close to 17%, which is expected to increase further spurred by online sales.
Overall, Midea Group's forward-looking strategy of "diversification" has been recognized by the global market and institutions, and its online and multi-category product strategy has enabled the group's development to be more robust and risk more diversified. The market believes that in the next two years, Midea Group's position as the leader of China's home appliance industry will be further consolidated as its market share is expected to further expand.
Mr. Jeremy Choy, CFO of Midea Group, expressed his gratitude to S&P for the recognition. He stated that the strong and steady growth of Midea Group can be attributed to its strong commitment to technology investment and intense focus in providing excellent products and services to its retail and corporate customers. Midea Group will continue to invest in area such as artificial intelligence, cloud computing, big data, IoT, industrial Internet to strengthen its leadership in home appliance and industrial robotics, while maintaining a prudent and disciplined approach in financial management.