Midea Group has entered the top 500 public companies in the world, according to The Forbes Global 2000. Sales, profit, assets and market value were taken into account to help Midea to 436th place on the magazine’s annual list, higher than appliances giants Whirlpool, LG and Electrolux. Impressively, the company also ranked 24 places higher than Starbuck’s.
Midea ranked 408th in sales, 418th in profit, 1117th in assets and 534th in market value, helping it on to the world’s most respected list of its kind. Though the United States still leads the way, China overtook Japan for the first time with 232 companies in the top 2,000. Industrial and Commercial Bank of China (ICBC), China Construction Bank, Agricultural Bank of China and Bank of China were the top 4.
The world has not yet fully recovered from the Global Financial Crisis of 2008. China’s domestic economy is experiencing a slowdown. However, the Chinese companies on the list together made US$4.6 trillion in revenue and US$473 billion in profits. They also boast US$25 trillion in assets and combined market value of US$6 trillion.
“Midea appears to be reaping seeds that were sewn a long time ago,” said Liu Buchen, one of China’s leading experts on the appliances industry.
Since growth slowed down in 2011 due to corporate consolidation costs and changes in domestic government policy, Midea has prioritized products, efficiency and global expansion. Changes within the company include an emphasis on online sales rather than traditional channels and manufacturing of interoperable “smart” technology.
These policies have so far paid dividends. In 2014, global revenue was at an all-time high of US$23 billion, a year-on-year growth of 17 percent. Net profit was at the all-time high figure of US$1.69 billion.
This growth looks set to continue. Midea achieved revenue of US$6.87 billion in the first quarter of 2015, a year-on-year increase of 10.5 percent. The holding company saw net profit of US$538 million, a year-on-year increase of 32 percent.
Earnings per share were at US$0.13, a year-on-year increase of 32 percent. The gross margin was at 26.8 percent, a year-on-year increase of 1.5 percentage points.
Group President Paul Fang recently told Caixin finance magazine that he hopes Midea will operate more like an energetic start-up than an old-fashioned appliance maker. This news is a vindication of his approach.