Midea Group injects an additional 1.652 billion yuan! Kanghong New Energy's performance improves, accelerating its strategic moves in the new energy sector

Midea Group, a giant in white household appliances, is accelerating its layout in the new energy sector through capital operations and organizational restructuring, strengthening its strategic position in photovoltaic, energy storage, and other fields. Recently, Hekang New Energy disclosed a private placement plan, aiming to issue 288 million shares to Midea Group, raising approximately 1.652 billion yuan for R&D and industrialization of projects such as high-voltage inverters, photovoltaic inverters, and residential energy storage systems. After this private placement, Midea Group’s stake in Hekang New Energy will increase from 18.50% to 35.08%, further consolidating control.

As an important piece of Midea Group’s new energy landscape, Hekang New Energy has shifted its focus from traditional industrial inverters to the new energy field since being incorporated in 2020. According to the announcement, the raised funds will be invested in four main areas: high-voltage inverter R&D and industrialization, photovoltaic grid-connected inverter R&D and industrialization, residential energy storage system R&D and industrialization, and the construction of benchmark distributed photovoltaic power stations. The company has stated that it will leverage Midea Group’s global distribution network to expand overseas markets and promote a business model transformation from “photovoltaic power station builder” to “smart energy operator.”

Financial data shows that Hekang New Energy’s transition to new energy has begun to bear fruit. In the first three quarters of 2025, the company’s operating revenue increased by 98.61% year-on-year to 6.182 billion yuan, and net profit attributable to the parent increased by 584.40% to 71 million yuan. The performance growth is mainly driven by explosive growth in photovoltaic EPC (engineering, procurement, and construction) business, which contributed over 90% of revenue. However, the company also admits that the gross profit margin of the photovoltaic EPC business is only 6.84%, down 2.85 percentage points from the same period last year. To address the challenge of low gross margins, Hekang New Energy has strictly controlled expenses in sales, management, and R&D, reducing the expense ratios from 2023’s 9.99%, 8.29%, and 9.89% to the first three quarters of 2025’s 2.02%, 1.24%, and 4.03%.

Midea Group’s layout in the new energy sector goes far beyond this. In 2022, the company entered the industrial and commercial energy storage track through the acquisition of Kelu Electronics; in June 2025, it announced an energy strategy driven by “Energy Storage + Heat Pumps + AI,” aiming to make the energy industry a second growth engine; in December of the same year, it established a new energy business division, integrating resources from the former industrial technology division’s new energy product companies and energy technology companies, with CEO Wang Jianguo also serving as the division’s president. These actions indicate that Midea is trying to create synergy among its dispersed new energy businesses.

From a financial perspective, Midea Group’s new energy layout has entered a harvest period. In the first three quarters of 2025, Kelu Electronics achieved revenue of 3.586 billion yuan, up 23.42% year-on-year; net profit attributable to the parent was 232 million yuan, turning profitable from a loss. During the same period, Midea Group’s new energy and industrial technology business segment revenue reached 30.6 billion yuan, an increase of about 21%. At a recent investor conference, Midea Group reaffirmed that by 2026, it will adhere to the strategy of “leading global white household appliances and HVAC, maintaining strategic focus on robotics and energy medical,” with new energy business viewed as a key support to navigate industry cycles.

Industry analysts point out that the domestic white household appliance market has entered a stock competition stage, with domestic sales in 2025 declining by 0.1% year-on-year to 846.1 billion yuan. Against this backdrop, Midea Group is building a complete industrial chain covering photovoltaic, energy storage, and smart grids through mergers, acquisitions, and organic growth. With the completion of Hekang New Energy’s private placement and organizational restructuring, Midea Group’s new energy landscape is expected to expand further, though the sustainability of profits from its low-margin businesses remains to be continuously monitored.