58.com and MIDEA GROUP Collaborate to Develop China's Smart Commercial Office Market

The analyst rating for MIDEA GROUP was set at "Outperform" due to several factors highlighted in the CLSA research report. The report noted an increase in ex-factory prices, suggesting that the average selling price across the industry is expected to rise. Despite acknowledging weak domestic demand and lowering net profit forecasts for 2025-2027 by 1-3%, the broker raised the target price for MIDEA GROUP's H-shares from $90 to $95, based on a historical average price-to-earnings (PE) ratio of 12.5x. Additionally, there is potential for overseas sales to exceed expectations due to OEM orders, contributing to a more optimistic outlook for the company.

CMBI has issued an Equalweight rating for China's 2026 discretionary consumption sector due to a cautious outlook influenced by several headwinds. These include the retreat of national and delivery subsidies, a slowdown in export momentum, and job reductions linked to the widespread application of AI. While the broker anticipates overall retail sales growth to be around 3.5%, slightly slower than the previous year's 4%, they also recognize some positive factors such as the delayed Spring Festival, extended holidays, potential recovery in the real estate sector, and a thriving stock market. However, they expect stock prices in the discretionary consumption sector to face pressure in the first half of 2026, with a potential rebound in the second half. The report categorizes investment opportunities into different types of consumption, favoring survival, compensatory, and hedging/defensive consumption, while being less optimistic about large-scale consumption.