True strength is forged in turbulent times, not tranquil ones. The Kondratiev wave theory suggests that companies daring to invest against the grain and secure prime positions during downturns often possess formidable core competencies and the genuine ability to navigate cycles, positioning them to capture the lion's share of the next industrial boom.
During an online results briefing on September 15, Midea's Chairman and President, Fang Hongbo, revealed plans to firmly advance non-core businesses like robotics and new energy in the latter half of the year. In the first half of 2026, Midea Group recorded revenue of RMB 261.1 billion, a 3.46% year-on-year increase, with net profit attributable to shareholders reaching RMB 26.45 billion, up 1.66%. Against a backdrop of industry-wide decline, these results are commendable, showcasing the resilience of a market leader.
Data from AVC shows China's home appliance retail sales contracted by 9.9% to RMB 425 billion in H1 2026, dragged down primarily by air conditioners and kitchen appliances, whose retail scales fell 15.9% and 10.7% to RMB 122.1 billion and RMB 69.6 billion, respectively. This pressured major players, with Gree and Haier Smart Home both reporting declines in revenue and profit. This raises the question: how does Midea achieve counter-trend growth? What strategic moves underpin this "elephant dancing"? And what are the deeper implications and growth prospects for its secondary business push?
Expanding Black-Light Factories to 14: B2C-B2B Strategic Synergy
It's clear that a solid foundation grants Midea the confidence to weather economic cycles, while continuous innovation and proactive trend adaptation underpin its expansion and creation of new growth curves. A closer look at the latest interim report reveals AI empowerment as a central theme, not just an abstract slogan from a press conference, but deeply integrated across consumer products, manufacturing, internal management, and supply chains, translating into tangible cost savings and efficiency gains.
In manufacturing, Midea's FactoryAgent 2.0 and factory brain continue to evolve, with pilot factory scenarios growing over twofold and intelligent touchpoints increasing 15-fold. The number of "black-light" factories has expanded to 14. The humanoid robot "Mei Luo U" is now deployed in high-end washing machine plants, having locked over 100,000 screws. These figures highlight the pragmatic, results-driven nature of Midea's AI adoption, as manufacturing intelligence must ultimately prove its worth through efficiency.
Extending beyond manufacturing, the supply chain is also undergoing transformation. Midea has launched an AI end-to-end overhaul covering six scenarios, including order management, material control, and marketing logistics. With AI support, order fulfillment cycles for B2B operations have been cut by 30%, finished goods inventory turnover improved by 25%, and over 20,000 sales leads and 30,000 potential customers have been identified.
Industry analyst Li Xiaojing notes that supply chains are often the "hidden skill" of manufacturing, invisible to outsiders yet decisive for cost and responsiveness. Midea's gains here demonstrate AI's value penetrating deeper and more systematically into operations. As management pioneer Henri Fayol once said, management involves forecasting, planning, organizing, commanding, coordinating, and controlling. Midea's AI strategy naturally extends to internal organizational depth as well.
Currently, a company-wide AIGC ecosystem is operational, with employees autonomously building over 20,000 intelligent agents. In H1 2026 alone, this generated efficiency savings exceeding 9 million hours and direct cost reductions of over RMB 450 million. When frontline employees can independently develop AI agents, it ceases to be a tool exclusive to tech departments and becomes woven into the fabric of organizational capability and growth DNA.
On the consumer front, Midea's "Three Ones" whole-home intelligence strategy is accelerating: MevoX, the industry's first home appliance AI agent, now serves over 150 million users; connected devices across homes surpass 140 million; and the home AI ecosystem continues to expand. Industry insiders suggest that while smart home technology is not new, truly turning AI into user-perceivable, reliable services tests execution capabilities. From this perspective, Midea has established a first-mover advantage—a statement that isn't exaggerated.
Midea's underlying data infrastructure is mature, boasting four global data centers with total data volume exceeding 54PB. In H1 2026, data services were called upon over 6 billion times. The DataAgent covers 50+ scenarios across eight business areas, contributing over RMB 60 million in efficiency gains during H1. According to Jiemian News, at the Foshan High-Quality Development Conference in February, Fang Hongbo disclosed the corresponding AI investment structure: an AI talent team of over 400 people and R&D investment exceeding RMB 60 billion in frontier fields over the next three years.
Industry analyst Sun Yewen observes that investment scale influences strategic depth, which often determines a company's position in the next cycle. Data is the soil for AI; the thicker the foundation, the greater the potential for upper-layer applications. C-end provides cash flow, B-end opens up long-term ceilings, and AI acts as the adhesive connecting the two. This synergistic cycle—"C-end nurturing B-end, B-end feeding back to C-end"—is a core differentiator from purely home appliance companies and a fundamental support for Midea's resilience.
Ecosystem Goes Global: AI Redefines the Overseas Expansion Playbook
This foundational support profoundly influences Midea's global footprint. As of June 2026, the company operates over 600 subsidiaries, 41 R&D centers, and 68 major manufacturing bases worldwide, employing over 190,000 people and serving over 200 countries and regions. Overseas, it has 29 R&D centers and 45 major manufacturing bases across more than 20 countries. Overseas sales account for over 40% of total revenue, products are exported to over 200 countries, and the company boasts around 5,500 after-sales service points, over 25,000 overseas retailers on its sales platform, and nearly 50,000 overseas employees.
For instance, the Midea Club system is live in 22 countries across the Americas, Europe, Asia, and Africa, with global order volume exceeding 1.3 million units. It covers over 90,000 overseas installers and workers, with AI-driven installation review efficiency improving by 83%, and some countries achieving instant settlement and real-time payment. The global customs compliance platform uses AI document recognition, intelligent classification algorithms, and automated customs declaration, achieving full digitalization and intelligence of customs processes.
Similarly, the self-developed AI Load Planner Agent supports full-chain load planning and fulfillment from quotation to shipment, improving overall efficiency by more than 60% and covering 95% of export sales personnel at pilot sites. In Vietnam and Germany, overseas smart warehousing and distribution systems using TMS, WMS, and BMS have improved warehousing efficiency by 35%, reduced overall logistics costs by 8% year-on-year, and achieved 98% transparent data visibility across the supply chain. The global logistics control tower has a 92% accuracy rate for anomaly alerts, reduces risk response times to under 30 minutes, and improves in-transit exception handling efficiency by 60%. The customer service agent robot supports multilingual voice and text interaction, providing round-the-clock service capability.
In June 2026, Midea integrated 72 digital and AI solutions, 13 intelligent agents, and 25 application scenarios to launch the "Midea Going Global Partner Program" in Thailand, offering one-stop digitalization, automation, logistics, and energy services for Chinese manufacturers building factories overseas, spanning new energy, photovoltaics, and automotive electronics. In August, Midea became the organizer for the Thailand station of comprehensive overseas services. The program supports Foshan enterprises expanding to Thailand by integrating resources like Midea Cloud, KUKA, and Building Technology, adapting to 25 types of factory scenarios.
The Thailand overseas intelligent factory pilot provides compelling validation data: order lead times reduced by 43%, customer complaint rates down 32%, and employee training periods shortened by 62%. Through the "Digitalization 3.0" project and AI empowering the entire value chain, Midea's PortaSplit portable split air conditioner, developed over three years, has become a phenomenal hit. In H1 2026, Midea-branded refrigerators achieved market-leading retail sales in Vietnam and Thailand; Toshiba white goods maintained a 16%+ share across six core categories in Japan; Americas OBM revenue grew 25% year-on-year; and Midea-branded residential air conditioner integrated unit sales share reached 42% in the US. By the end of June, overseas cumulative registered users for Midea's smart home app exceeded 15 million, with monthly active users up over 80% year-on-year.
Industry analyst Wang Tingyuan believes that while a hit product can rely on luck, consistently producing hits requires a robust system. Chinese manufacturing's global expansion has reached a crossroads. From "selling products" as trade going out, to "moving factories" as capacity going out, and now to "exporting capabilities" as ecosystem going out, Midea is using decades of globalization experience to redefine its playbook. When a company starts exporting factory standards and organizational capabilities, it is no longer selling just products, but an entire replicable industrial system.
Over RMB 90 Billion in Cumulative R&D: The Scarcity of Core Control
Of course, there's no such thing as effortless success; this transformation results from strategic accumulation. As early as 2012, Midea internally launched the "632" digitalization project to unify disparate systems and data resources, aiming to improve management efficiency. Looking back, the seeds planted 14 years ago were about laying groundwork early: once data flows smoothly, business units can collaborate and reuse resources, allowing models to be built on stable inputs. This doesn't show immediate returns, but when technology undergoes systemic innovation, its value is released exponentially.
In 2017, Midea acquired KUKA, entering the core industrial robotics segment; in 2022, the Blue Orange Laboratory was approved, pushing R&D further into critical components. As equipment capabilities evolve from "usage" to "definition," the control chain tightens, improving controllability of key processes. Regarding core support chips, Midea's groundwork dates back to 2010 with IPM development, followed by Meiren Semiconductor's establishment in 2018 and MCU mass production in 2021. By 2024, cumulative sales of related products exceeded 100 million units with failure rates controlled within 5ppm, and began supplying external manufacturers.
Data shows that from 2020 to H1 2026, Midea's R&D expenses were RMB 10.12 billion, 12.01 billion, 12.62 billion, 14.58 billion, 16.23 billion, 17.79 billion, and 8.467 billion respectively, totaling RMB 91.817 billion, with the same intensity maintained for the next three years. This long, significant investment cycle underscores both the difficulty of cultivating core control capabilities and the scarcity of the resulting barriers. These capabilities materialize on the factory floor: in 2025, Midea's self-developed humanoid robot entered the Jingzhou washing machine factory for quality inspection and patrol duties, directly integrated into the scheduling system. Midea's robotics R&D currently spans humanoid, full-humanoid, and super-humanoid directions, prioritizing capability validation in industrial scenarios before expanding outward.
Looking at these changes collectively clarifies the value chain: data gets connected first, hardware capabilities develop internally, execution end strengthens, and organizational structure adjusts accordingly. With these layers in place, Midea's AI capabilities rapidly matured and continue to overflow, supporting the impressive resilience and counter-trend earnings growth observed.
B2B Enters Harvest Phase: Mastering the "Dual-Lens" Mindset
Effort yields results in due season. In early 2026, Fang Hongbo outlined the group's annual operating strategy focused on core growth—concentrating on core businesses, core markets, and core capabilities. White goods and HVAC must grow, aiming for top-tier status and striving for global number one. Half a year on, this focused strategy is yielding results. In H1 2026, Midea's smart home business generated RMB 174.341 billion in revenue, up 4.27% year-on-year. Midea products continue to lead in home appliance sales across major domestic online platforms like JD.com, Tmall, and Douyin, and also top rankings in major offline channels. The B2C segment remains the "ballast stone," while also telling new stories—this steadiness is precisely what emboldens Midea to make bold bets and cultivate new curves elsewhere.
This summer, Europe faced unprecedented extreme heatwaves, with temperatures exceeding 40°C in Spain, France, and Germany. Against explosive demand, Midea leveraged its solid fundamentals to capture this wave, with the PortaSplit portable split air conditioner becoming a hot commodity in European markets, witnessing over 200% year-on-year growth in both unit sales and revenue in H1.
Meanwhile, the B2B segment is emerging as a new variable for valuation re-rating. In H1 2026, Midea's Commercial & Industrial Solutions revenue reached RMB 66.7 billion, up 3.3% year-on-year. More importantly, B2B is transitioning from "scale expansion" to a "capability realization phase." During H1, the Building Technology segment achieved a gross margin of 29.61%, surpassing the smart home business. Industry data shows Midea holding leading positions in central air conditioning, commercial VRF, and centrifugal chillers; globally leading shares in home appliance compressors, motors, and washing machine motors; WELLING auto parts revenue up over 40% year-on-year, achieving first-time half-year profitability; KUKA revenue up over 10% with China contributing over 30%; and over 50% domestic sales share for heavy-payload robots above 300kg.
Among B2B ventures, humanoid robots hold particular imagination. "Mei Luo" has achieved intelligent autonomous closed-loop operations from material identification to precise picking in scenarios like the Jingzhou washing machine factory, becoming a key component of "fully unmanned" black-light factories. The upgraded "Mei Luo U" is now on duty, having completed over 100,000 screw lockings. The home-oriented "Mei La X2" demonstrates over 95% success rates in open-ended tasks like towel folding and table tidying. From industrial to home applications, Midea's robotics narrative has moved beyond concepts, rapidly approaching diverse real-world scenarios. Although commercial scaling still requires time, the autonomous development of core components like reducers and heavy-duty servo motors has exceeded external expectations.
The profit space unlocked by AI-driven cost reduction and efficiency gains also supports dividends, buybacks, and investments in innovative businesses. The "dual-lens effect" teaches that running a company requires holding a microscope in one hand and a telescope in the other. The former focuses on current market changes and adapts flexibly based on specific circumstances; the latter looks far into the industry's future, understanding where the road leads and how to get there. Clearly, Midea is simultaneously consolidating its traditional core business while planting seeds for the future. Mastering this dual-lens mindset has unleashed powerful growth resilience.
The latest interim report isn't merely about a set of counter-trend numbers; it serves as a case study demonstrating how a leading manufacturer, during an industry downturn, uses craftsmanship to refine products, AI to reinvent efficiency, B-end to open new spaces, overseas markets to diversify risk, strategic innovation to expand business boundaries, and long-cycle foundational investment to build a sustainable growth base. "Flowing water doesn't compete for precedence; it competes in its ceaseless flow!" Companies that truly weather economic cycles are often not those that sprint fastest during good times, but those that step firmly and accurately through adversity while maintaining high-quality momentum. Midea has not only passed this concentrated test but has also secured a strong hand for the next cyclical upswing.