- KUKA Offer
- Letter to Shareholders
- Financial Information
- Stock Information
- Credit Ratings
- IR Contacts
Letter to Shareholders
In 2015, with China’s economy in a “New Normal” state, the downturn in the household appliance market has not only led to increased competition, but has also acted as a driver to the restructuring of this industry. In the face of tremendous pressure from a volatile market, Midea Group, a team with the courage to transform, together with its shared values, goals and working practices, faithfully followed our strategic focuses of “Leading Products, Operational Efficiency & Global Operations” and therefore has continued to strengthen its reform.
Throughout 2015, our product competitiveness and operating efficiency rapidly increased, our operational quality thoroughly improved, our overseas business network was further optimized, our own brands were effectively developed and new progress was made in our corporate governance. Meanwhile, we established our “Global Innovation Center”, trying to build a globally competitive and multi-layered R&D system, continued with our strategy of “Smart Home & Intelligent Manufacturing”, and actively entered into new businesses areas. In 2015, while maintaining stable revenues, we achieved a year-on-year growth of 17% net profit, a remarkable result amid the downturn in the household appliance industry.
Also during the year, Midea Group was included on Forbes’ List of Top 500 Global Enterprises. In addition, Midea Group ranked 32nd on Fortune Magazine’s List of China’s Top 500 Enterprises 2015, making it the leader in China’s household appliance sector. Also Midea Group was placed 13th in China’s Top 500 Private Enterprises and 38th in China’s Top 500 Manufacturers, continuing its performance as a leading manufacturer of household appliances. In 2015, Midea Group became the first household appliance manufacturer in China to be rated by the three major international rating agencies—Standard & Poor’s, Fitch and Moody’s, with its rating results outstanding among both the global household appliance makers and the domestic private enterprises. On the Ruifu Global List 2015 of China’s Top 100 Brands in Value, our “Midea” brand was ranked 6th with a value of RMB71.611 billion. Up to the end of 2015, we had a total of 21,581 granted patents.
2015 has been a wonderful year for us due to our hard work. In 2016, we will strive forward to realize our dreams without fear!
History tells us that dreams and ideals are indispensable to success. Dreams help to succeed. How successful and big a business becomes is dependant on how many dreams it carries. As such, the future of Midea Group lies within the dreams of all its employees.
With the world now changing much faster than one might have imagined, our different lifestyles have been or are being changed. The traditional business model that relies on large-scale effects and low costs can no longer work in the current household appliance industry, leading to the boundaries of the industry becoming more vague. However, despite all these changes, it is always the right choice to design and offer products and services with value for consumers. In the evolution of commerce, it can be seen that all great enterprises grew and thrived in the bleak periods of an economic cycle. In times of change, the question of whether we will thrive or wane, unite as one man or fight each other’s own battles, be confident and tolerant or unwisely arrogant, is all up to our courage to change and accept change. We change, therefore we survive. The more adverse the circumstances are, the tougher and more composed we are. We will also change at a faster rate, our business strategies, management style and business models, towards achieving our strategic directions, while trying to strengthen our reform and stand out as a great example of success.
Whatever the household appliance industry will become, we have the courage to challenge and the ambition to win. We hope that one day Midea will become a truly multinational company, a global operation and a respectable hi-tech enterprise. And we understand it is definitely not easy to achieve this. In the face of uncertainties, and fiercer competition and obstacles in the future, we must have the big picture in mind, pushing forward with every campaign for reform, arousing the enthusiasm of every employee, encouraging entrepreneurship and creativity in them and bringing their personal objectives in line with that of Midea, for the purpose of maximizing the investment returns (ROI) for you, the shareholders, and sharing with you the fruits of our development.
We will adhere to our guideline of “Leading Products”. Our company will increase our R&D investments with the goal to build up a global R&D system and enrich our R&D talent pool. We will continue to develop differentiated products for our customers, adopting a strict quality policy, launching campaigns for competitive products as well as encouraging product innovation and upgrading our product mix. In this way, we will be able to increase our products competitiveness.
We will follow our path of “Operational Efficiency”. In order to be more competitive in cost, we will try to increase the efficiency of our employees, capital and properties, further improve lean management in our product design, supply chain and production, and push forward with improving our channel efficiency, the development of our e-commerce capabilities and the reform of our marketing system.
We will also adhere to our roadmap of “Global Operations” to grow our overseas revenue. We will further upgrade our product mix for the overseas markets, keep expanding our own brand globally, pursue further business collaborations or M&A opportunities with strong global competitors, and push forward our global operations by breaking into more markets while at the same time launching more products and projects.
With an open mind, we will embrace the government’s guideline of “Internet +” by promoting a win-win partnership with Internet enterprises in creating a better eco-chain in the Internet industry. Our continuous increased investments in IT will support our IT system throughout the whole process of our operations and upgrade the internet usage across the complete value chain covering our organization, marketing, products, and business models.
We will carry on with our strategy of “Smart Home & Intelligent Manufacturing”. We will plan for our future with the entire industry and even the whole world in our mind. Our investments in both fundamental and cutting-edge technologies will be increased, providing a larger growth space for our new businesses. With the courage to change, we will be able to keep up with the times and create new competitive edges for ourselves.
We will continue to give play to our strongpoints in modern corporate governance and mechanisms so as to further reform our organization and corporate culture towards a lively and creativity- nurturing environment. We will continue to improve our Employee Stock Ownership Plan (Partner Program), further reform our incentive schemes, strengthen our power decentralization principles, and focus on our customers and products.
To have a beginner’s mind helps you to succeed in the end.
It means to learn everything with a humble heart. It also means to think, to listen, to challenge, to accept, and more importantly, to change! A true golden age awaits Midea in the near future. In 2016, we will reform Midea in a more determined and effective way, trying to make our dreams come true.
We are grateful for your companionship, support and trust, and we hereby send our best wishes to you!
With dreams, ANYTHING is possible for Midea!
The Board of Directors of Midea Group Co., Ltd.