By Hou Yu

Edited by Sun Congying

The release of 2025 annual reports marks a pivotal moment for China's home appliance sector, as the competitive landscape that has endured for over two decades undergoes a complete transformation.

Rewind to 2016, when Midea Group concluded a press conference with a bold declaration from its then-PR director, who toasted to the notion that Midea had become an internet company. The statement, met with raised glasses, seemed more like a vision for future transformation at the time.

A decade later, in 2025, Midea is being hailed by the outside world as a '6000 billion AI giant,' a label that has also gained widespread recognition within the company.

Midea has always been quick to embrace cutting-edge technological concepts. However, in typical Midea fashion, this embrace is not blind following but rather a series of targeted goals aligned with the company's unique strengths. Becoming a hardcore tech manufacturer akin to Siemens or GE has long been Midea's aspiration.

While Midea seeks a second growth curve, Haier has embarked on a distinct path centered on globalization.

Haier Smart Home is steered by Li Huagang, a veteran sales executive. For managers with a sales background, expanding into global markets and achieving worldwide product coverage is the ultimate goal. Consequently, Haier's international expansion began early and has progressed steadily, maintaining a leading position in globalization within the industry.

In contrast to the smooth transformation paths of Midea and Haier, Gree's attempts to establish a second growth curve, though not late in starting, have failed to materialize due to various factors. Its transformation narrative has been fraught with setbacks, leaving behind a trail of regrets.

Gree Electric Appliances built its industry reputation on uncompromising quality during the tenure of founder Zhu Jianghong. After Dong Mingzhu took over, she charted a more diversified development path for the company: acquiring Yinlong in an attempt to create a second growth engine, introducing young employees with online influence to inject vitality into the brand, and transitioning the traditional offline franchise system to the online 'Dong Mingzhu Store,' all reflecting a desire to leverage the corporate brand for long-term personal brand development.

These three companies, each with distinct development visions, have embarked on three vastly different strategic paths. The 2025 financial results clearly illustrate the outcomes of these choices in the market.

Divergent Development Philosophies and Paces

Gree Electric Appliances' financial report is scheduled for release on the evening of April 28. Prior to the official disclosure, the market has estimated its full-year performance based on third-quarter results: Gree achieved revenue of RMB 137.654 billion in the first three quarters of 2025, a year-on-year decline of 6.62%; net profit attributable to shareholders was RMB 21.461 billion, down 2.27% year-on-year. Based on industry practices and historical quarterly proportions, its full-year revenue is likely to fall within the RMB 180-190 billion range, with net profit around RMB 30-32 billion, indicating continued low growth or even a slight decline.

These projected figures reveal that the decades-old tripartite balance of power among white goods giants no longer exists in terms of market scale.

Midea Group's 2025 revenue reached RMB 458.5 billion, nearly equaling the combined revenue of Haier Smart Home (RMB 302.3 billion) and Gree Electric Appliances (approximately RMB 180 billion) (Note: This is a common industry expression emphasizing scale comparison; the actual combined figure is slightly higher than Midea's). With a market capitalization exceeding RMB 580 billion (as of April 1, 2026), Midea has firmly established itself as the industry's superpower, creating a new competitive landscape of one superpower, one strong player, and one challenger.

The financial disparities are not mere numerical comparisons but reflect the long-term realization of strategic choices made by these companies years ago.

The root cause of their divergent development trajectories lies in their fundamentally different underlying perceptions of future growth. These long-held philosophical differences have ultimately evolved into starkly different real-world outcomes.

Dong Mingzhu, Chairwoman of Gree Electric Appliances

Midea has placed its greater growth prospects outside the home appliance business, seeking incremental opportunities in broader ToB markets such as industrial manufacturing and new energy.

Haier has pinned its growth hopes on markets beyond China, relying on global premium market expansion and brand value enhancement to build long-term competitiveness.

Gree, on the other hand, may still believe that the foundation for growth lies within its core air conditioning business, believing that achieving excellence in this sector is sufficient to navigate industry cycles.

As China's domestic home appliance market transitions from a mass adoption phase to a replacement-driven phase, the effects of these three strategies have become starkly apparent.

Midea's diversified layout (layout) has not only opened up tangible growth space but also left ample room for capital market imagination.

Haier's deep globalization efforts have effectively sidestepped the intense domestic market competition.

In contrast, Gree's over-reliance on air conditioning has left it bearing significant operational pressures during this industry transition period.

Midea Group: Second Growth Curve Takes Shape, Profitability Quality Awaits Validation

Midea's transformation cannot be discussed without mentioning its 2017 acquisition of German industrial robot company Kuka for nearly RMB 30 billion. This move raised industry questions at the time about why a home appliance company would invest heavily in the robotics sector.

Subsequent business layout (deployments) provided the answer: the Kuka acquisition was just the beginning of Midea's second growth curve exploration. In management's vision, Midea's growth potential extended far beyond the home appliance sector.

Since then, Midea has continuously expanded into industrial robotics, building technologies, new energy, medical equipment, and other fields, constructing a comprehensive ToB business ecosystem. By 2025, Midea's ToB business revenue exceeded RMB 120 billion, becoming the second pillar supporting the company's development.

What was once a vision of 'Midea becoming an internet company' a decade ago has now become an undeniable reality, with Midea establishing itself in the market as a technology conglomerate. Simultaneously, Midea's overseas revenue approached RMB 200 billion, accounting for over 40% of total revenue, completing its globalization layout (layout) while building its second growth engine.

Fang Hongbo, Chairman of Midea Group

The ToB business, growing at 17.5%, has become the group's new growth engine, but its profitability and growth quality still require time to validate.

Internal growth within the business remains uneven: building technologies grew by 25.72%, while robotics and automation lagged at 8.05%, the slowest among core segments, indicating that Kuka has not yet delivered the expected growth momentum.

Meanwhile, the overall gross margin of the ToB business remains lower than that of the mature home appliance business. Currently still in the market expansion phase focused on scale, its contribution to group profits has not yet matched its revenue proportion.

Haier Smart Home: Notable Globalization Success but Persistently Low Valuation

2025 financial results show that overseas revenue now accounts for over 50% of Haier Smart Home's total, making it unquestionably the most globalized Chinese home appliance company.

In fact, Haier anticipated the slowdown in domestic home appliance market growth early on and shifted its development focus to global markets. Its globalization strategy goes beyond simple product exports, achieving localization through acquisitions of overseas brands like GE Appliances and Fisher & Paykel.

Simultaneously, Haier has vigorously promoted product premiumization, with its Casarte brand serving as a highly successful case of brand upgrading. Haier aims to open up pathways for premium products in global markets through this dual-wheel drive of globalization and premiumization.

However, this premiumization and globalization layout (layout) requires sustained capital investment. In 2025, Haier's profit growth slowed to 4.39%, with revenue even declining in the fourth quarter. Financially, Midea's revenue is 1.5 times that of Haier, while its net profit is 2.25 times higher (full-year 2025 figures), with an even more pronounced profit margin gap. Enhancing profitability quality while expanding scale has become an urgent issue for Haier.

From a capital market perspective, Haier Smart Home's market valuation remains significantly lower than Midea Group's. As of April 1, 2026, Haier Smart Home's market cap was even surpassed by Gree Electric Appliances. This indicates that the market has not assigned a valuation premium for Haier's globalization layout (layout).

This is not a market misjudgment but rather a reflection of Haier's strategic path, business structure, and growth narrative.

Li Huagang, Chairman of Haier Smart Home

Haier Smart Home is essentially an integration platform for Haier Group's home appliance businesses, a positioning that ties its valuation to the home appliance sector. Even with strong operational performance, it can only command the valuation multiple of a mature manufacturing company.

Over 80% of Haier's revenue comes from traditional home appliance businesses, with limited ToB business scale failing to form a second growth curve. The high integration and operational costs from globalization have kept the company's expense ratios elevated, resulting in revenue growth without corresponding profit increases.

Meanwhile, Haier Group's layout (deployments) in high-valuation sectors like biomedical and industrial internet cannot be reflected in Haier Smart Home's financial statements, leaving its ecological value severely underestimated.

The capital market values corporate growth potential and certainty. Midea has achieved a valuation shift toward a technology company through its dual-wheel drive of home appliances + ToB businesses, while Haier remains defined as a traditional home appliance leader with perceived limited growth potential, keeping its valuation depressed.

The key to Haier's breakthrough lies not in simply merging group businesses into the listed platform but in demonstrating the ecological entry value behind its home appliance business through improved information disclosure and quantified business synergy values. Simultaneously, it must optimize operational efficiency and boost profit margins to drive valuation restoration with real performance.

Gree Electric Appliances: Over-reliance on Core Business, Transformation Efforts Repeatedly Frustrated

Gree's development has consistently revolved around its core air conditioning business, which still contributed nearly 80% of revenue in 2025. Real estate market adjustments and intensified industry price wars have placed Gree under far greater operational pressure than its peers.

Gree has not stood still in diversification attempts, with layout (deployments) in new energy, intelligent equipment, and other fields. However, these businesses remain small in scale and fail to provide meaningful support. With overseas revenue accounting for just 15%, its globalization progress has been slow. The former 'King of Air Conditioners' now faces severe transformation challenges.

Building on the manufacturing and brand foundations established during Zhu Jianghong's tenure, Gree's air conditioning products have become market benchmarks, with net profit margins consistently ranking among the industry's highest. Yet despite these strong fundamentals, Gree has repeatedly encountered difficulties in its transformation journey.

Most of Gree's diversification efforts have ended in failure. The ongoing losses from the Yinlong New Energy acquisition have become a financial burden, while products like smartphones and 'Rose Air Conditioners' have deviated from market demands, serving only as marketing topics without generating real growth momentum. Significant resources invested in these diversification attempts have failed to cultivate a second growth curve.

Meanwhile, the deep integration of Dong Mingzhu's personal IP with the Gree brand, while generating short-term buzz, has long-term implications for the corporate image due to personal controversies. Frequent adjustments to the channel system have also undermined operational stability.

Gree's high net profit margins have been achieved through cost control rather than business growth. The capital market assigns Gree a price-to-earnings ratio of 7-8 times, significantly lower than Midea's and gradually approaching Haier's, reflecting pessimistic views on its future growth potential.

Despite possessing industry-leading manufacturing capabilities and brand equity, Gree has missed development opportunities during this critical industry transition period, failing to translate its core air conditioning business advantages into momentum for diversified development.

Unless Gree can swiftly streamline its decision-making mechanisms, reduce excessive personal influence on the company, and quickly identify a suitable transformation path, this former industry benchmark will struggle to escape its current development quagmire and may continue its downward trajectory.

[Editor's Postscript]

The long-standing notion of the 'Big Three' in white goods no longer applies to today's industry reality. With Midea, Haier, and Gree pursuing radically divergent strategic directions, the former tripartite balance has officially dissolved, giving way to a new competitive landscape of one superpower, one strong player, and one challenger. These three companies, each with distinct development aspirations, have embarked on three vastly different paths amid stock competition (stock competition) and industrial upgrading.

Midea has unlocked a second growth curve through its ToB business, while Haier remains committed to globalization and premium market positioning, both demonstrating foresight in navigating industry cycles. In contrast, Gree, during this critical phase of industry transition to stock competition and ecological competition, remains overly reliant on its core air conditioning business, with its transformation efforts repeatedly failing to gain traction. Strategic lag and governance constraints are progressively pushing the company into a passive position.

From an industry perspective, Haier, as a gold-standard brand in Chinese home appliances, can still unlock greater valuation potential in the capital market through group business synergies. Gree's current predicament underscores that for true turnaround, adjustments in management and operational thinking may be the core solutions.

The divergent paths of these three companies serve as a microcosm of China's home appliance sector and even broader Chinese manufacturing. They remind the industry that a company's development philosophy and leadership vision directly determine how far and how steadily it can progress. Companies ultimately reap what they sow, with their current scale and position essentially reflecting the inevitable outcomes of their past strategic choices and original aspirations.