Research on the Optimization of Midea Group's Financial Strategy from the Perspective of DuPont Analysis

Abstract

Against the backdrop of intensifying stock competition in the home appliance industry and deepening global layout, optimizing financial strategy has become a key factor for enterprises to enhance their core competitiveness. Taking Midea Group as the research object, this paper uses traditional DuPont analysis and improved DuPont analysis (distinguishing operating/financial assets), combined with benchmarking against industry leader Haier Smart Home (600690), to systematically decompose the core driving factors of Return on Equity (ROE) based on the financial annual report data from 2022 to 2024. The research finds that Midea Group's ROE shows a downward trend year by year, with the core crux lying in the continuous deterioration of total asset turnover, coupled with problems such as high capital structure leverage and inefficient allocation of financial assets; although the net profit margin on sales has steadily increased, it is difficult to offset the impact of the above negative factors. Based on this, optimization paths are proposed from four dimensions: profitability strategy, operation strategy, capital structure strategy, and asset allocation strategy, providing practical references for Midea Group and similar enterprises in the home appliance industry.