Ask AI · How does Fang Hongbo’s high-profile turnaround reshape Midea’s valuation logic?

One of the strongest annual reports in history—Midea Group’s stock price keeps rising for three straight days: In 2025, Midea Group’s revenue was 458.5 billion yuan, net profit was 43.95 billion yuan, and it announced a dividend of 32.4 billion yuan, nearly a “sell-the-whole-portfolio” style payout. Behind it all is the strategy shift of Midea’s chairman, Fang Hongbo, who boldly stepped to the front—internally “cutting to cure” the ailments of large companies, and externally telling technology-focused stories to the market. Yet before the celebration toast had even cooled, the drums for the next campaign were already sounding.

From “a relentless slide” to “a chorus of gains,” Midea Group is using a set of financial statements.

From March 31 to April 2, Midea Group’s stock price rose continuously. This turned investors’ sentiment from gloomy to upbeat. You have to know that before this period, Midea Group’s stock had been showing an “oscillating downward” trend. The core of the reversal is the strongest annual report ever: revenue of 458.5 billion yuan, attributable net profit of 43.95 billion yuan, net profit of 120 million yuan per day—all hitting historical highs.

▲Midea Group’s stock chart over the past half year

What truly ignited the capital market was Midea Group’s “sell-the-whole-portfolio” dividend: a planned cash payout of 43 yuan per 10 shares, about 32.4 billion yuan, with a payout intensity rare among A-share blue chips.

Why does Midea Group’s chairman Fang Hongbo dare to distribute so much money? You have to start with his “high-profile” 2025.

01, Chairman Fang Hongbo breaks the stalemate with high-profile moves

In 2025, Fang Hongbo changed. This chairman, who rarely faces the camera directly, suddenly stepped into the spotlight. He not only accepted an in-depth interview, but also appeared one after another on CCTV’s Dialogues《对话》 and under the stage lights at the Boao Forum’s Aubiili forum. Internally, he made frequent statements and personally pushed Midea’s management transformation. Why did Fang Hongbo act out of character? The reason lies in the environment Midea Group is operating in.

Over the years, although Midea Group has maintained a leading position in the home appliance industry, competitors such as Xiaomi have grown rapidly in areas like air conditioners, putting pressure on it. More importantly, in the capital market and public perception, Midea Group is still seen as a “traditional home appliance giant,” which means its price-to-earnings ratio has long hovered in the 13–15x range—lower than many technology companies. The company’s board secretary, Jiang Peng, once admitted that the company’s market value is undervalued.

At the same time, the continuous expansion in scale also brings certain “large-company diseases.” As of 2024, Midea Group employed more than 190k people, leading to issues such as redundant layers and slow response. Fang Hongbo is tasked with a dual mission: externally, he needs to tear off the old label of “traditional manufacturing” and tell the market a new technology story; internally, he must fight against the organization’s own size and inertia, and in an environment where industry growth is slowing, find new growth engines for Midea Group.

To this end, over the past year, Fang Hongbo carried out a series of actions. To cure the organizational bloat caused by “large-company disease,” he personally issued the “Requirements for Simplifying Work Processes,” banning things like widespread PPT use and formalism overtime work.

Wang Lin, a veteran home appliance industry observer, told Caijing Tianxia that this can directly reduce a large amount of management friction that does not create value, freeing resources for the front line of business.

In external communication, Fang Hongbo publicly discussed competition with Xiaomi, explained the company’s transformation strategy, and boldly announced that over the next three years it would invest more than 60 billion yuan to build AI and other cutting-edge areas. While stabilizing the core home appliance business base, he strongly guided resources toward B-end business. In 2025, Midea’s B-end business revenue reached 122.8 billion yuan, up 17.5%, with overseas revenue share rising to 42.7%, becoming a core engine of growth. Fang Hongbo’s clear positioning gives strong confidence to these two growth paths.

Through a series of high-profile statements, Fang Hongbo has continuously sent the market a message about his determination to transform into a technology company. Wang Lin believes that this, to a certain extent, has changed the market’s valuation logic for Midea Group, attracting some capital focused on long-term technology growth and creating a more favorable environment for the company’s strategic investment.

Against the backdrop of Fang Hongbo’s steadfast push for technology transformation, the fully implemented AI has become the core engine driving efficiency improvements. According to the financial reports, in 2025, Midea operated more than 13k “intelligent agents” across scenarios such as manufacturing and home living. It increased efficiency by more than 15 million hours over the year, directly saving 700 million yuan in costs.

Over the past year, the home appliance industry has been deeply trapped in a price war and inventory competition. At the start of 2025, at Midea’s annual meeting on operating and management, Fang Hongbo set the tone: “Promote growth by simplifying; face challenges with self-disruption.” Toward year-end, he emphasized again that the core business must be among the “top ranks” globally. “Such clear strategic messages point employees in the right direction amid an uncertain environment and stabilize morale,” Wang Lin analyzed.

In 2025, Midea Group’s core C-end smart home business achieved revenue of 8B yuan, up 11.28%, accounting for 65.71% of total revenue, serving as the company’s steady “anchor stone.” Data from industry platforms such as Chanye ishi (Industrial Online) shows that Midea’s global market share for home air conditioner compressors, home air conditioner motors, and washing machine motors is consistently number one.

Fang Hongbo’s “high-profile” approach is also closely tied to the trend of “everyone building personal IP.”

In 2025, it has become a new lever for driving brand growth for entrepreneurs to interact directly with users through personal IP. Due to a widely circulated meme featuring Lei Jun (Ray) and his “serious face” expression, Haier’s chairman Zhou Yunjie quickly joined major social platforms and successfully turned attention into brand goodwill and co-creation of products—such as the rapid launch of the “lazy-person washing machine.” Against this backdrop, Fang Hongbo’s “high-profile” behavior can be seen as Midea Group riding the wave of a “society-wide IP” trend.

So why must the person driving this change be Fang Hongbo? As the final decision-maker and the soul of the company, Fang Hongbo personally stepped in to criticize “performance-style work” and push for “cutting one’s own arm to save the body,” conveying an unmistakable resolve for transformation. Wang Lin believes that Midea Group’s transformation involves a full range and deep level of change, requiring the highest commander to coordinate the overall strategy. If others push it, the力度 and coverage might be limited and would be hard to shift the company’s accumulated issues. From the outcome, Fang Hongbo’s high-profile tone and hands-on management in 2025 were the key strategic driving force and catalyst behind steering Midea Group’s huge ship toward a new direction.

02, The celebration dinner just ended, and the gunfire starts again

On March 30 this year, Midea Group and Xiaomi—both releasing their financial reports around the same time—submitted scorecards showing revenue and profit growth rates at record highs. However, the capital market’s reaction could not be more contrasting. The next day, Midea Group’s stock price jumped more than 7%; Xiaomi’s stock price, meanwhile, continued to face pressure. Wang Lin analyzed that this starkly different treatment reflects the market paying for “certainty in growth quality.”

At first glance, Xiaomi’s home appliance paths and Midea Group’s are quite different, but both share a strategic core: they are evolving from a single-product company into a global technology enterprise centered on users and data, achieving closed-loop growth through diversified ecosystem chains.

However, the meaning of the companies’ “double growth” is entirely different. Midea Group’s growth is “dual-wheel-driven with solid profits.” Its double-wheel drivers are the C-end smart home segment and B-end businesses such as building technology and industrial technology, with the structure continuing to optimize. More importantly, it has strong profitability quality: in the fourth quarter of 2025, gross margin rose to 28.4% against the trend, demonstrating strong cost transmission capability and premium-setting power. This is also the basis and confidence for Fang Hongbo and Midea Group to carry out high proportion dividend payouts.

But for Midea Group, the glasses at the celebration dinner are not yet fully cool—new battle drums have already begun. It will face “gunfire” from three dimensions.

The first volley comes from the front line of the industry’s price war. At the start of 2026, driven by a surge in copper prices, brands including AUX (Aokes) and Hisense initiated a “collective price-increase wave.” Even though Midea Group adopted a “stair-step” pricing strategy to offset costs, analysts generally believe that end-customer price increases may not fully cover the rise in costs. For every 10% increase in the copper price, it could erode air conditioner gross margin by 1.5 to 2 percentage points. In the first three quarters of 2025, Midea’s gross margin had already fallen by 0.89 percentage points year over year, and 2026 profit headroom may still face pressure.

The second volley comes from a “three-dimensional siege” by new and old competitors. While Midea’s leading position remains solid, every submarket is locked into close-quarters competition. Xiaomi’s intelligent large home appliance revenue grew at a high rate of 66.2% in 2025. Air conditioner shipments exceeded 8.5 million units. Its online share even surpassed Gree to become second at one point, closing in on Midea Group. Traditional giant Gree builds service barriers with a “10-year free repair” offering. Haier, meanwhile, continues to lead in high-end scenarios through its “San-Wing Bird” (three-wing bird) and Casarte (卡萨帝) brands.

The third volley comes from internal “undercurrents.” To improve efficiency, in 2025 Midea Group made at least 6 organizational structure adjustments, involving layoffs and channel reforms. However, Caijing Tianxia learned that reforms also triggered complaints from dealers about policy tilt, as well as unease among internal employees due to frequent changes. This may plant potential challenges for stable operations at Midea Group.

Fang Hongbo used a year of “high-profile” moves to win Midea Group a phase of brilliant success. But the exam questions for the next battle have already appeared: for this giant that keeps setting new records in profitability, how will it prove its long-term survival capability through complex cycles? The answer will determine whether Midea can move from a phase of victory to victory in an era.

(The character Wang Lin in the article is a pseudonym)

(Author | Yi Xi, Editor | Wu Yue, Photo source | Visual China; this content is from Caijing Tianxia WEEKLY)