Rising middle class and upgrading of lifestyle

We have been long-term shareholders of Midea Group in our Greater China portfolios . Midea Group is China’s largest home appliances company, with a comprehensive product portfolio that includes air conditioners, refrigerators, washing machines and small home appliances.

Midea is a dominant consumer franchise and we believe Midea is well-positioned to benefit from rising income levels and the premiumisation trend in China (as incomes rise, consumers demand better quality and more expensive products).

Midea’s strong emphasis on research and development have improved its product quality over the years; and its market share in most home appliance categories in China ranks it among the top three. Meanwhile, its acquisitions of Kuka (top 4 industrial robotics company) and Toshiba (Japanese premium brand home appliances) add new areas of growth, especially in areas such as logistics and industrials.

Market leader, gaining share

Source: FactSet, company annual report, FSSA Investment Managers, as at 30 June 2021.

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All securities mentioned herein may or may not form part of the holdings of FSSA Investment Managers’ portfolios at a certain point in time, and the holdings may change over time.