The 'Home Appliance Giant' is Making a Strategic Shift.

Recently, Midea Group unveiled its semi-annual report for the first half of 2026. While the figures may not dazzle at first glance, the insights they provide are pivotal: revenue for the period reached RMB 261.05 billion, marking a 3.5% year-on-year increase; net profit attributable to shareholders stood at RMB 26.45 billion, up 1.7% year-on-year.

In terms of growth rate, the 'home appliance leader' seems to be experiencing a slowdown. However, the market's focus extends beyond mere revenue and profit figures, zeroing in on Midea Group's AI and globalization strategies—key drivers shaping its future narrative.

Backed by robust performance and generous shareholder returns, Midea Group has emerged as a rare long-term growth stock in the A-share market. This year in July, its stock price soared to an all-time high.

As of the latest closing, the year-to-date cumulative increase has surpassed 16%, marking the fourth consecutive year of gains. This strong stock performance has propelled the net worth of Midea Group's founder, He Xiangjian. In the 2026 Hurun Global Rich List, the He Xiangjian family once again claimed the top spot in Foshan's wealth rankings, with a fortune of RMB 287 billion, ranking 47th globally.

The C-Side Foundation

Smart home remains the bedrock of Midea Group's business.

The semi-annual report reveals that the smart home segment generated RMB 174.3 billion in revenue during the first half, accounting for 67.04% of total revenue, with a 4.27% year-on-year increase. Amidst a weakening stimulus from 'trade-in' policies in the domestic home appliance industry and demand-side pressures, this growth rate, though not spectacular, is steady and reassuring.

Currently, Midea Group's C-side business is not focused on sprinting ahead but on safeguarding its profit pool and cash flow.

In terms of cash flow, the net cash generated from operating activities in the first half reached RMB 37.552 billion, showing a slight 0.73% year-on-year increase.

From a profitability standpoint, the gross profit margin of the smart home segment in the first half was 27.95%, down slightly by 0.57 percentage points year-on-year, indicating that Midea Group made some price concessions to gain market share during the period.

While the C-side foundation remains solid, Midea Group's second growth curve is accelerating.

A review of the financial report reveals that Midea Group has now established a comprehensive business matrix encompassing smart home, industrial technology, robotics, new energy, and building technologies.

According to the previously released annual report, in 2025, Midea Group's B-side business contributed RMB 122.8 billion in revenue, with the framework for the second growth curve taking shape.

Judging from the business performance disclosed in the financial report, it is clear that Midea Group's strategy is to rely on its mature home appliance business to maintain its foundation while leveraging the cash flow from its consumer business to continuously support industrial technology R&D.

Continued generous dividends and share buybacks also underscore the strength of Midea Group's operating cash flow. According to the semi-annual report, Midea Group plans to distribute RMB 5 per 10 shares, totaling RMB 3.724 billion in dividends, with cumulative cash dividends exceeding RMB 170 billion since its listing.

Midea Group's AI Narrative

The 'AI content' integrated across Midea Group's various business segments is the standout feature of this semi-annual report.

AI is no longer confined to PPT presentations at product launches; it has permeated C-side products, factory manufacturing, internal management, and the entire supply chain, translating into tangible cost reductions and efficiency gains:

On the supply chain front, Midea Group has officially embarked on an AI end-to-end transformation, covering six major scenarios, including order management, material control, and marketing logistics. Empowered by AI, the order fulfillment cycle for ToB business has been reduced by 30%, the finished goods inventory turnover rate has improved by 25%, and over 20,000 business leads and 30,000 potential customers have been identified.

At the internal organizational level, a company-wide AIGC ecosystem has been established, with employees independently developing over 20,000 intelligent agents, achieving over 9 million hours of efficiency gains and direct cost savings exceeding RMB 450 million in the first half alone.

For consumers, the 'Three Ones' strategy for whole-house smart solutions has been implemented. The home appliance industry's first AI agent, MevoX, has served over 150 million users, with over 140 million whole-house connected devices, continuously expanding the AI ecosystem at the household level.

Meanwhile, Midea Group's underlying data infrastructure has taken shape, with four global data centers established and a total data volume exceeding 54PB. Data services were called over 6 billion times in the first half. DataAgent covers over 50 scenarios across eight major businesses, contributing over RMB 60 million in efficiency gains in the first half.

The C-side provides cash flow, the B-side opens up long-term growth potential, and AI serves as the adhesive between the two.

Among the B-side businesses, Midea Group's building technologies segment stands out, contributing RMB 21.625 billion in revenue in the first half, up 10.84% year-on-year, with a gross profit margin of 29.61%, already surpassing that of smart home.

The driver of this growth is not traditional air conditioning but AIDC temperature control.

According to the semi-annual report, benefiting from the AI computing power boom, Midea Group's data center liquid cooling business has surged, securing over RMB 200 million in centralized procurement orders for China Unicom's machine room air conditioners and capturing 70% of China Mobile's low-voltage chiller market share. Meanwhile, Midea Group has also formed a strategic AIDC liquid cooling partnership with Alibaba.

Analysts told Kanjian Caijing that Midea Group's building technologies segment is transitioning from 'selling air conditioners' to 'selling computing power temperature control solutions.'

Midea Group's future business growth pattern is becoming clearer: C-side home appliances stabilize cash flow and continuously support the B-side; B-side AI technologies, in turn, empower smart home products, shortening the growth cycle of new businesses.

Globalization: Reinventing Midea

Global expansion is a resolute development direction for Midea Group. Chairman Fang Hongbo stated that the company adheres to an overseas OBM (Original Brand Manufacturer) priority strategy and aims for overseas revenue to account for 50% of total revenue.

Currently, Chinese manufacturing's global expansion has reached a new crossroads, and the era of simply selling hardware products may be over.

Midea Group's solution is to shift from 'product exports' to 'systematic capability exports.'

In June this year, Midea Group integrated 72 digital and AI solutions, 13 intelligent agents, and 25 application scenarios, launching the 'Global Partner Program.'

In August, Midea Group became the organizer of the Thailand station for overseas comprehensive services, using the 'Global Partner Program' as a core initiative to provide one-stop comprehensive services for Foshan enterprises expanding into Thailand.

Midea Group has integrated resources across its entire chain, including Meiyun Zhishu, KUKA, and building technologies, accumulating 72 AI applications, 13 major intelligent agents, and adapting them to 25 types of factory scenarios. This solution has been validated at a smart factory in Thailand: order lead times decreased by 43%, customer complaint rates dropped by 32%, and employee training cycles shortened by 62%.

High trial-and-error costs and operational shortcomings have long been pain points for Chinese manufacturing's globalization, but Midea Group's intelligent agent factory export solution provides a replicable approach.

Financial reports show that in the first half of 2026, Midea Group's overseas revenue reached RMB 113.127 billion, accounting for 43.5% of total revenue, up 5.54% year-on-year. It has established 29 R&D centers in 11 countries and operates 65 major production bases, with 43 located overseas.

While Midea Group once exported home appliance products globally, it now exports a complete intelligent manufacturing system.

Conclusion

From allocating one-third of its profits in 2012 to initiate digital transformation to the widespread adoption of intelligent agents across the company today, Midea Group has undergone a lengthy and transformative journey over more than a decade.

Fang Hongbo proposed investing over RMB 60 billion in cutting-edge technologies over the next three years, focusing on 'home brains' and 'factory brains.'

Of course, we must also view the reality objectively: the growth rate of Midea Group's core home appliance business is flattening, its B-side industrial technology business is still in the expansion and cultivation phase, and the commercial value of AI has yet to be fully realized.

However, it cannot be denied that Midea Group has stepped out of its comfort zone, transitioning from a traditional home appliance giant to an AI-driven global technology group. The biggest future highlight is undoubtedly how AI is reconstructing the underlying logic of this home appliance behemoth.