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Why Midea Is Cuckoo for Kuka’s Robots

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Howard Marsh

Unlike the Greek sorceress it resembles in name, Midea Group 000333 -2.06 % doesn t have to be a prophet to realize it can no longer rest on cheap Chinese labor and low-end technology.

That s why this top Chinese appliance manufacturer is willing to splash out for a German robotics giant.

The offer looks unsolicited, suggesting Midea wants Kuka more than the other way around.

Part of this is the natural result of China s rising wages in the past five years, especially in well-off Guangdong province, where Midea is based.

That s richer than the 28 times a basket of 13 global peers trade at, and far richer than Midea s own 10 times.

For investors who can access Midea s mainland Chinese shares, the stock could rally as Midea signals its intent to improve its technology.

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Howard Marsh
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