AI is starting to print money for Midea! By 2025, it will “save” 700 million yuan, and is also set to pour 60 billion yuan into research—| See the financial report

Source: Titanium Media

While global manufacturing is still anxiously circling the idea of artificial intelligence’s “high investment and slow returns,” Midea Group has already set more than 13,000 digital employees called “agents” running tirelessly across its global factories, products, and even R&D systems. This quiet “digital expedition” bore its first substantial fruit in 2025: direct cost savings of as much as 700 million yuan.

Meanwhile, in 2025, Midea—whose scale is approaching 460 billion yuan—delivered a solid set of results under a complex macro environment: revenue of 458.5 billion yuan, net profit of 43.95 billion yuan, with double-digit growth in both figures.

More eye-catching than the performance itself is its seemingly “contradictory” strategic layout: on one side, the company plans to distribute 32.4 billion yuan in cash dividends and repurchase 11.6 billion yuan in shares, using hard cash to reinforce shareholder value with “certainty”; on the other side, it announced that it will invest more than 60 billion yuan in R&D over the next three years, betting on cutting-edge technologies such as AI and embodied intelligence, and pushing full steam toward the “possibility” of becoming a “technology group.”

The “profit stabilizer” of traditional manufacturing and the “innovation driver” of future technology are playing out a precise “balancing act” within Midea. In an era where uncertainty has become the norm, Midea is trying to answer a question that all companies are asking: how to win the present and seize the future at the same time? The answer is hidden in the details of its newly released 2025 annual report.

“Profit stabilizer” for performance, and a “dividend reassurance”

In the mercurial and ever-changing global economic landscape of 2025, Midea Group’s “giant vessel” has shown unusual stability. Full-year operating total revenue was 458.5 billion yuan, up 12.1% year over year; net profit attributable to shareholders was 43.95 billion yuan, up 14% year over year. Both revenue and net profit reached record highs, and the quality of growth is particularly noteworthy.

First, there is the solid “profit stabilizer” and the strong “new engine.” The ToC segment centered on smart home business, as the foundation, has revenue close to 300 billion yuan, maintaining healthy growth of 11.28%. While stabilizing the overall picture, it continues to upgrade product structure.

What truly drives the growth curve is the Commercial and Industrial Solutions (ToB) business. This segment’s revenue reached 122.8 billion yuan, soaring 17.5% year over year—significantly faster than the ToC business. Among them, building technology recorded standout growth, reaching 25.72%. Other segments such as robots and automation and industrial technology also grew in sync. This indicates that Midea has long stepped out of the role of a pure home-appliance manufacturer; its industrial genes and B-end solutions capabilities are evolving into the core “second curve” to fight cyclical fluctuations and open the ceiling of growth.

A deeper globalization layout provides another dimension of safety margin. In 2025, Midea’s overseas revenue reached 195.9 billion yuan, up 15.9%; its localized self-operated business has already covered 50 countries worldwide. This not only gives it a market position as “No. 1 brand in global smart home appliance sales” (certified by Euromonitor International), but also secures an unshakable leading share in the global industrial chain for key components such as household air conditioner compressors and motors. The combination of “brand overseas expansion” and “supply chain overseas expansion” builds a deep moat.

Second, the “certainty” of high dividends gives the market long-term confidence. Solid performance is the basis for returning value to shareholders. Midea Group announced that for fiscal year 2025, it plans to distribute cash dividends of 43 yuan per 10 shares (including tax). The total cash dividend amount for the year is expected to reach 32.4 billion yuan. If this is added to the roughly 11.6 billion yuan share repurchase already implemented in 2025, the total used to return to shareholders will reach as much as 44 billion yuan—roughly comparable to the scale of annual net profit. Looking across a longer time horizon, over the past decade, Midea’s cumulative dividends have exceeded 150 billion yuan.

In today’s environment where risk appetite in capital markets is shrinking and valuation frameworks are being reshaped, such continuous and sizable cash returns go beyond a simple financial act and become a strong strategic signal. It sends a clear message to the market: the company has strong and healthy free cash flow, management is confident in the company’s operating prospects, and it is willing to share the fruits of long-term development with shareholders.

This “reassurance” is especially precious in an age of uncertainty. As Midea Group’s Chairman Fang Hongbo said: “The wilds of the ToC business allow us to roam across the four seas, and the layout of the ToB business allows us to look up at boundless skies.” Meanwhile, generous shareholder returns ensure that this giant ship exploring the starry sea has the most steadfast and most patient “fellow voyager.”

Midea’s AI transformation has entered the “harvest period”

If you view Midea only as a “traditional top student” that is good at manufacturing, has rich profits, and is willing to distribute dividends, it would undoubtedly severely underestimate its strategic ambition.

A key shift in data reveals the change at its core: in Midea’s 2025 annual report, the word “AI” is mentioned 116 times. In 2023 and 2024, the number was only 19 and 50 times, respectively. Behind the soaring frequency of words is a soul-touching “gene reshaping.” Midea is clearly transforming from a home appliance manufacturer into an “AI+ global technology group.”

This transformation is not a figment of imagination, but a system-level project deeply integrated with core businesses, built around “two brains” as physical entities.

For example, in terms of the “home brain,” Midea’s goal is to make “home” a living entity that can sense, think, and evolve. Currently, more than 500 million units of home appliances across all categories equipped with connectivity are in Midea’s ecosystem; globally, more than 140 million smart home appliances are online in real time, serving over 150 million users.

On that basis, Midea has launched a self-evolving home smart agent, MevoX. Its breakthrough lies in enabling a leap from a passive mode of “people give commands, and devices execute” to an active mode of “the system understands user intent and proactively provides coherent services.” For instance, based on a fuzzy context like “a bit stuffy,” the system can automatically coordinate by opening fresh-air vents and adjusting the air conditioner to a comfortable temperature.

In terms of the “factory brain,” the “factory brain” provides unified orchestration for 14 agents, covering 38 core production scenarios ranging from assembly and quality inspection to production scheduling. Agents complete tasks that traditionally required hours of human effort in seconds-level responses, achieving average efficiency improvement of more than 80%; among them, production-scheduling response speed improves by 90%. This means that production decisions are no longer the execution of fixed procedures, but dynamic, autonomous optimization based on real-time data (orders, materials, equipment status). It marks that intelligent manufacturing has moved from the “1.0 stage of mechanical arms replacing human labor” to the “2.0 stage of system-brain wise decision-making.”

The power of AI must ultimately be reflected in the financial statements. Midea has deeply applied AI across four major scenarios: smart home, intelligent manufacturing, smart office, and industry enablement—and it has now entered the “harvest period.”

At present, Midea has an AI R&D team of over 400 people, with more than 13,000 agents running every day across the full business chain. In 2025, these “digital employees” helped Midea improve efficiency by more than 15 million hours throughout the year, directly saving as much as 700 million yuan in costs. AI has truly shifted from a “cost center” that requires continuous investment into a “profit center” that creates real money.

Even more worth attention is the “spillover effect” of its capabilities. In the medical field, an “AI-assisted diagnostic system” trained on more than 4 million cases of imaging data can free up doctors’ repeated case-review time by more than 70%. In smart building environments, the iBUILDING platform at Midea’s Shanghai global innovation park connects 39,000 hardware touchpoints and achieves comprehensive energy-efficiency optimization through AI algorithms. Midea’s AI capabilities are moving from enabling itself to enabling thousands of industries.

The ultimate leap from “Midea home appliances” to “Midea technology”

At the historical highs of revenue and profit, Midea has not chosen to “lie flat” and enjoy the dividends. Instead, it has thrown out a more bold plan: over the next three years, it will invest more than 60 billion yuan in frontier research. This is a massive amount equivalent to nearly 1.5 times its annual net profit. It clearly sets the course for Midea’s future, striving for commanding heights in the global technology industry.

Where will the 60 billion be invested? The focus will be frontier areas such as AI, embodied intelligence robotics, new energy, and healthcare. This shows that Midea’s competitive dimension is upgrading comprehensively—from products, channels, and efficiency—to competing at the foundational technologies and core algorithms level. Chairman Fang Hongbo stated clearly that it aims “to seize strategic initiative in future industrial development through technology leadership.” While consolidating Midea’s global leading position in white goods and HVAC, Midea is also accelerating the cultivation of robotics and energy storage businesses. It has successfully acquired the international business of Radcore Medical (a global imaging leader) and broadened its presence in the healthcare track.

Midea’s AI deployment goes beyond software and algorithms, emphasizing deep integration with the physical world—namely “physical AI.” From smart home appliances to industrial robots to medical imaging equipment, the underlying foundation is the fusion of electromechanical control and AI algorithms. Midea plans to systemically encapsulate its technical capabilities accumulated in industrial manufacturing into an “Midea AI” solution, enabling thousands of industries.

When a company’s R&D investment plan is measured in “hundreds of millions of billions” and is focused on the most cutting-edge technology fields, its identity recognition has already changed. Midea’s roster of competitors will no longer be limited to traditional home-appliance manufacturers; it may expand to global technology giants. From “Made in China” to “Intelligently Made in China,” and to “Creatively Made in China,” Midea’s transformation path provides a highly valuable reference model for the upgrading of China’s manufacturing industry.

“Either lead on cost, or be different from everyone else.” This business philosophy of founder Mr. He Xiangjian remains etched into Midea’s gene to this day. Today, Midea is trying to use AI—its sharpest technological tool—to achieve both cost leadership (through intelligent manufacturing and intelligent operations) and being different in products and services (through intelligent experiences and innovative business formats).

For investors, what Midea Group’s 2025 annual report offers is not only the “reassurance” of 32.4 billion yuan in dividends, but also a precious ticket to that “AI+” era defined by “physical AI,” where intelligence is everywhere. (By Company Observer, author: Zhou Jian, editor: Cao Shengyuan)

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