Midea to buy 'undervalued' shares worth US$606m

Electronics giant Midea Group plans to buy back shares of up to 4 billion yuan (US$606 million) as the Shenzhen-listed firm said its shares are “undervalued.”

It’s the biggest share buyback in the Chinese stock markets so far this year. 

Midea shares are “undervalued” and the share buyback can improve investors’ confidence, said Midea in a statement to the Shenzhen Stock Exchange.

Midea will use 4 billion yuan to buy back 80 million shares at not more than 50 yuan each.

The 50-yuan base is 10 percent higher than its closing price on Wednesday of 45.1 yuan, or 25 percent of its 52-week-high. The news of the share buyback plan propelled Midea 2.1 percent to close at 46.1 yuan today, compared with a 1.9-percent drop for the Shenzhen index. 

Midea also said previously that it would boost development of artificial intelligence and industrial Internet as it transforms its business.

Midea invests about 100 million yuan annually into a special AI team to incorporate intelligence features in air conditioners, washing machines, electric rice cookers and water heaters.

Midea also plans to expand production capacity of its Kuka’s robot plant in Shanghai.