Midea Group Faces the "Spin-off Listing Curse" Head-on
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After going public on the Hong Kong Stock Exchange in September last year, Midea Group (000333.SZ) is now promoting its subsidiary, Annto Logistics Supply Chain Technology Co., Ltd. (“Annto Logistics”), for an IPO in Hong Kong.
Annto Logistics originated from Midea Group’s logistics department and gradually grew into a company providing integrated supply chain solutions, with revenues and net profits of 18.663 billion yuan and 380 million yuan respectively in 2024.
Currently, Midea Group holds 52.94% of Annto Logistics’ shares.
Behind the revenue scale exceeding ten billion yuan, the Midea Group and its affiliates remain important customers for Annto Logistics, contributing nearly 40% of its income in 2024 alone.
The high level of related-party transactions between the subsidiary and its parent company may be the main reason why Annto Logistics’ A-share IPO stalled previously.
If Annto Logistics successfully lists on the Hong Kong Stock Exchange, it is expected to become the first subsidiary of Midea Group to go public via a spin-off.
Previously, Midea Group had twice attempted to take its subsidiary, Meizhi Optoelectronics Technology Co., Ltd. (“Meizhi Optoelectronics”), public on the ChiNext board, but both attempts failed.
Whether Annto Logistics can ride the wave of the Hong Kong stock boom and successfully list is attracting attention.
Midea contributes over ten billion in revenue
Currently, Annto Logistics’ business covers the entire process from pre-production logistics optimization, integrated inventory and warehouse distribution, to last-mile delivery and installation, solving the full-process logistics and transportation issues for companies in the home appliance and manufacturing industries.
The advantage of Annto Logistics lies in its strong backing by Midea Group, with access to rich supply chain data and the ability to intelligently manage all aspects of distribution via a digital platform, helping companies reduce costs and improve operational efficiency.
It is not uncommon for leading home appliance companies to build their own supply chains.
Haier Group’s RRS Supply Chain Technology Co., Ltd. (“RRS”) also provides end-to-end services from production to last-mile delivery, with annual revenues exceeding ten billion yuan.
The business structures of the two companies are quite similar.
Annto Logistics’ main revenue comes from integrated inventory and warehouse management services, mainly involving products from factory outflow to distributors, serving companies with multi-tiered manufacturing and distribution channels.
Annto Logistics manages the omni-channel inventories of such companies through a centralized sharing model to provide unified warehousing and distribution services, not only saving warehouse space but also improving delivery efficiency.
In 2022, 2023, and 2024, integrated inventory and distribution services generated 9.589 billion yuan, 10.654 billion yuan, and 12.053 billion yuan respectively for Annto Logistics, consistently accounting for more than 60% of its revenue.
RRS's main revenue also comes from this segment, generating 11.644 billion yuan in 2022, accounting for nearly 70% of its revenue.
The downside of being under a big tree is that Annto Logistics has a strong dependence on its parent company.
From 2022 to 2024, Annto Logistics' revenue from providing supply chain services to the Midea ecosystem was 5.342 billion yuan, 5.938 billion yuan, and 7.675 billion yuan respectively, accounting for nearly 40% of total revenue.
Moreover, the transaction volume between Annto Logistics and Midea Group is still expected to grow in the future.
According to a framework agreement between the two parties, the transaction cap for Annto Logistics’ services to Midea Group is set at 9.35 billion yuan, 11 billion yuan, and 12.5 billion yuan respectively for 2025, 2026, and 2027.
Continuously expanding related-party transactions may have been the main reason for Annto Logistics ultimately ending its A-share IPO counseling.
As early as December 2023, Annto Logistics submitted IPO counseling materials to the securities regulatory authority, but the process ceased without result.
Xinfeng noticed that CICC, Annto Logistics’ IPO counseling advisor, had pointed out in three phases of counseling materials that the revenue Annto Logistics derives from the Midea Group is overly high both in proportion and in absolute terms.
At that time, RRS faced similar issues when trying to go public in A-shares.
In 2021, RRS applied to the Shenzhen Stock Exchange for a ChiNext IPO but withdrew after two years.
From 2020 to 2022, RRS’s revenue from the “Haier Group” was 4.65 billion yuan, 5.252 billion yuan, and 5.316 billion yuan respectively, accounting for about 30% of its revenue.
At the listing committee meeting, regulators required RRS to explain “whether there is significant dependence on related-party customers and whether the company has the ability to operate independently and sustainably in the market.”
Although RRS passed the review, it eventually voluntarily withdrew its application.
Afterwards, Haier Group delegated the voting rights of RRS to Haier Smart Home (600690.SH), thus consolidating control over RRS and including it in its consolidated statements.
Whether RRS will join Annto Logistics and relocate its IPO to Hong Kong remains to be seen.
Expanding the customer base
The Midea ecosystem is not only a direct contributor to revenue but also an important assistant in developing external clients.
In May of this year, Midea Group signed a strategic cooperation agreement with Hisense Group, agreeing to work together in areas including AI applications and smart logistics.
In the following month, Hisense Electronics Technology, a subsidiary of Hisense Group, subscribed to 164 million shares of Annto Logistics for 1.52 billion yuan.
With this equity partnership, the transaction volume between the two sides is expected to increase significantly.
From 2025 to 2027, Hisense Group plans to purchase logistics services from Annto Logistics with caps of 200 million yuan, 1.2 billion yuan, and 1.8 billion yuan respectively, totaling 3.2 billion yuan—over 30 times the amount for the past three years.
Annto Logistics also acknowledges its strategic synergy with the Midea ecosystem. If the latter fails to grow as expected, it could adversely affect its business, financial status, operating results, and prospects.
As Annto Logistics goes it alone, whether its supply chain and logistics capabilities can be validated among more external companies and various industries may be key to unlocking future performance growth.
In fact, as early as 2022, three years ago, Annto Logistics Chairman Liang Pengfei set a target: by 2025, external business should account for up to 80% of overall business, with total business size reaching 30 billion yuan.
It is now halfway through 2025, but Annto Logistics’ first-half revenue was 10.885 billion yuan, with less than 60% from external business—clearly still some distance from Liang Pengfei’s goal.
In expanding its external client base, on the one hand, Annto Logistics aims to focus on general consumer goods, new energy, and automotive and auto parts clients to increase industry coverage.
On the other hand, Annto Logistics plans to leverage Midea Group’s global presence to expand in overseas markets, focusing on Southeast Asia and exploring mergers and acquisitions to enhance international supply chain capabilities.
Whether this will bring more room for performance growth to Annto Logistics remains to be seen.
First spin-off breakthrough?
As the parent company of Annto Logistics, Midea Group has maintained stable growth in its performance.
In the first half of 2025, Midea Group’s revenue and net profit attributable to shareholders were 252.331 billion yuan and 26.014 billion yuan, up 15.68% and 25.04% respectively year-on-year.
Benefiting from government subsidies, Midea Group’s main intelligent home business grew significantly, generating 167.2 billion yuan in revenue in the first half of 2025, an increase of 13.31% year-on-year, accelerating by 2.31 percentage points compared to the same period of 2024.
This may all create a stable incremental space for Annto Logistics.
If Annto Logistics successfully lists on the Hong Kong Stock Exchange, it is expected to become the first subsidiary of Midea Group to be successfully spun off for listing.
Currently, Midea Group’s listed subsidiaries—Hekang New Energy (300048.SZ), Wandong Medical (600055.SH), and Kelun Electronics (002121.SZ)—were all obtained through acquisitions.
Compared to “buying,” Midea Group’s spin-off operations have not been smooth.
Five years ago, Midea Group sought to spin off Meizhi Optoelectronics for a ChiNext listing—between 2021 and 2023, Meizhi Optoelectronics applied twice, but both applications failed.
This attempt to list Annto Logistics in Hong Kong marks Midea Group’s fourth spin-off effort.
If Annto Logistics is successfully listed, Midea Group may finally shake off the shadow of failure from previous spin-off attempts.
It is worth noting that He Xiangjian's family, as the controller behind Midea Group, also owns Midea Real Estate (3990.HK), Yingfeng Environment (000967.SZ), Baina Qiancheng (300291.SZ), and Kuka Home (603816.SH).
If this IPO succeeds, Annto Logistics may become the ninth listed company under the He Xiangjian family.
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