Wuxi Little Swan Company Limited
2014 Semi-annual Report
August 2014
Section I. Important Reminders, Contents & Explanation
The Board of Directors, the Supervisory Committee as well as all directors,
supervisors and senior management staff of Wuxi Little Swan Company Limited
(hereinafter referred to as “the Company”) warrant that this report is factual,
accurate and complete without any false record, misleading statement or
material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
The Company plans not to distribute cash dividends or bonus shares or turn
capital reserve into share capital.
Mr. Fang Hongbo, chairman of the Board of Directors, Mr. Zhang Zhaofeng,
CFO, and Mr. Zhong Fangliu, chief of the accounting organ (chief of
accounting), hereby confirm that the Financial Report enclosed in this report is
factual, accurate and complete.
This report involves futures plans and some other forward-looking statements,
which shall not be considered as virtual promises to investors. Investors are
kindly reminded to pay attention to possible risks.
This report is prepared in both Chinese and English. Should there be any
discrepancy between the two versions, the Chinese version shall prevail.
2014 Semi-annual Report of Wuxi Little Swan Company Limited.
Contents
Section I. Important Reminders, Contents & Explanation............................................................ 1
Section II. Company Profile .............................................................................................................. 4
Section III. Highlights of Accounting Data & Financial Indicators .............................................. 6
Section IV. Report of the Board of Directors ................................................................................... 8
Section V. Significant Events ........................................................................................................... 19
Section VI. Change in Shares & Shareholders .............................................................................. 33
Section VII. Preferred Shares ......................................................................................................... 38
Section VIII. Directors, Supervisors & Senior Management Staff .............................................. 39
Section IX. Financial Report ........................................................................................................... 40
Section X. Documents Available for Reference ........................................................................... 140
2014 Semi-annual Report of Wuxi Little Swan Company Limited.
Explanation
Term Refers to Contents
Company, the Company or Little Swan Refers to Wuxi Little Swan Company Limited
Midea Group Refers to Midea Group Co., Ltd.
TITONI Refers to TITONI INVESTMENTS DEVELOPMENT LTD.
Midea Holding Refers to GD Midea Holding Co., Ltd.
Reporting period Refers to 1 Jan. 2014-30 Jun. 2014
2014 Semi-annual Report of Wuxi Little Swan Company Limited.
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation XTEA, XTEB Stock code 000418, 200418
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 无锡小天鹅股份有限公司
Abbr. of the Chinese name of the
小天鹅
Company (if any)
English name of the Company (if any) Wuxi Little Swan Company Limited
Legal representative of the Company Mr. Fang Hongbo
II. For Contact
Company Secretary Securities Affairs Representative
Name Ms. Zhou Sixiu Mr. Zhao Yulin
No. 18, Changjiang Road S., National Hi-tech No. 18, Changjiang Road S., National
Contact address
Development Zone, Wuxi Hi-tech Development Zone, Wuxi
Tel. 0510-81082320 0510-81082377
Fax 0510-83720879 0510-83720879
E-mail IR_littleswan@littleswan.com.cn zhaoyl@littleswan.com.cn
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the reporting period?
□ Applicable √ Inapplicable
The registered address, office address and their postal codes, website address and email address of the Company did not change
during the reporting period. The said information can be found in the 2013 Annual Report.
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the reporting period?
□ Applicable √ Inapplicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this report
and the location where this report is placed did not change during the reporting period. The said information can be found in the 2013
Annual Report.
2014 Semi-annual Report of Wuxi Little Swan Company Limited.
3. Change of the registered information
Did any change occur to the registered information during the reporting period?
□ Applicable √ Inapplicable
The registration date and place of the Company, its business license No., taxation registration No. and organizational code did not
change during the reporting period. The said information can be found in the 2013 Annual Report.
2014 Semi-annual Report of Wuxi Little Swan Company Limited.
Section III. Highlights of Accounting Data & Financial Indicators
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or
correction of any accounting error?
□ Yes √ No
Reporting period Same period of last year YoY +/- (%)
Operating revenues (RMB Yuan) 4,974,057,020.56 3,998,224,336.31 24.41%
Net profit attributable to shareholders of
316,358,532.13 220,961,466.94 43.17%
the Company (RMB Yuan)
Net profit attributable to shareholders of
the Company after extraordinary gains and 272,497,997.10 186,709,366.62 45.95%
losses (RMB Yuan)
Net cash flows from operating activities
825,104,435.83 931,122,295.82 -11.39%
(RMB Yuan)
Basic EPS (RMB Yuan/share) 0.50 0.35 42.86%
Diluted EPS (RMB Yuan/share) 0.50 0.35 42.86%
Weighted average ROE (%) 7.78% 5.82% 1.96%
As at the end of the
As at the end of last year +/- (%)
reporting period
Total assets (RMB Yuan) 9,686,393,875.10 9,222,527,380.74 5.03%
Net assets attributable to shareholders of
4,041,109,118.33 3,908,897,654.74 3.38%
the Company (RMB Yuan)
II. Differences between accounting data under domestic and overseas accounting standards
1. Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards
□ Applicable √ Inapplicable
No difference.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
□ Applicable √ Inapplicable
No difference.
2014 Semi-annual Report of Wuxi Little Swan Company Limited.
III. Items and amounts of extraordinary gains and losses
√Applicable □ Inapplicable
Unit: RMB Yuan
Item Amount Explanation
Gains/losses on the disposal of non-current assets (including the
-1,184,389.51
offset part of asset impairment provisions)
Government grants recognized in the current period, except for
those acquired in the ordinary course of business or granted at
6,454,141.22
certain quotas or amounts according to the country’s unified
standards
Gain/loss on entrusting others with investments or asset
52,412,042.89
management
Gain/loss on debt restructuring 1,688,200.34
Reversal of impairment provisions for the accounts receivable on
5,548,244.81
which impairment tests were carried out separately
Other non-operating income and expenses other than the above 1,652,425.93
Other gain/loss items that meet the definition of an extraordinary
-5,809,948.33
gain/loss
Less: Income tax effects 9,985,599.85
Minority interests effects (after tax) 6,914,582.47
Total 43,860,535.03 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
No such cases.
2014 Semi-annual Report of Wuxi Little Swan Company Limited.
Section IV. Report of the Board of Directors
I. Overview
In the first half of 2014, affected by the downward macro-economy, the withdrawal of the consumption stimulus package and the real
estate policies, the washing machine industry as a whole slowed down in growth, with the market being stable. Consumption was
upgrading in an obvious manner and the business restructuring accelerated, with an increased weight of middle and high-end
products, as well as roller washing machines. There was a significant growth in the sale of high-capacity, inverter and intelligent
washing machines. The industry became more centralized.
During the reporting period, closely adhering to the strategic axis of “leading products, efficiency-driven and global operation”, we
continued to focus on changes in the industry, improved products and kept pushing forward and deepening operation transformation.
As a result, great progress was achieved in almost all kinds of work. For the reporting period, the Company achieved operating
revenues of RMB 4.97 billion, up 24.4% year on year, and a net profit attributable to the shareholders of the Company of RMB 320
million, up 43.2% from a year earlier.
During the reporting period, we mainly carried out the following work:
In terms of domestic sale, we implemented the “Spring Ploughing Plan” to speed up expansion of the distribution network, which
increased the network coverage and effectiveness; vigorously expanded the e-commerce channel and pushed forward the online and
off-line channel layout, which enlarged the market share of our retail; and promoted terminal standardization and improved user
experience. In the reporting period, domestic sale grew steadily, with an obvious increase in profitability. And the e-business was in
fast development. For the domestic sale in the reporting period, the income stood at RMB 3.57 billion, up 24.2% year on year, and
the gross profit rate at 33.2%, up by 2.3 percentage points from a year earlier.
In terms of export, we continued to optimize the product and customer structures, enhanced our efforts in strategy and market access,
and withdrew some overseas operations with no market. We allowed branches in some regions to launch their own brands to increase
business incomes and profits. The reporting period saw a strong growth in Europe, the largest market share in Latin America as
before and a major breakthrough in the drying machine business. For the reporting period, the export generated an income of RMB
990 million, up 21.3% when compared with the same period of last year; and the gross profit rate of export stood at 9.2%, up 0.3%
year on year.
In regard to product strength, we developed over 200 new products, launching the third generation automatic throw-in washing
machines—the I-intelligent product series. And we continued to improve our strength in R&D and innovation, especially that of
intelligent and networked products. During the reporting period, the Company was awarded the “Appliance” Low-carbon
Environmental Protection Award by China Household Electrical Appliances Association, and Little Swan Beverly Roller Washing
Machine won the Germany IF Product Design Award, and so on.
Concerning quality improvement, with “Prevent Massive Quality Problems and Reduce Repair Needs” as the main line and “Focus
2014 Semi-annual Report of Wuxi Little Swan Company Limited.
on the Beginning of the Production Process and Control the Process” as the means, we focused on massive quality problem
prevention, solidified what was fundamental and became more systematic in quality management. With market as the guidance and
products as the core, we particularly improved the key indicators about products that decided customers’ satisfaction and our market
reputation, enhancing management of “two sources and one process”. As a result, our product quality improved significantly, along
with our reputation on the market.
As for operating efficiency, we further regulated and optimized our authorization mechanism, decision-making procedure and
management mechanism. Meanwhile, we continued to push forward the project of “produce according to sale”, organized lean
logistics improvement projects, and input more resources in replacing workers with machines, so as to increase our overall operating
efficiency.
In the coming six months, we will continue to push forward all the work and deepen operation transformation; continue to explore
traditional channels and vigorously expand online channels; promote delicacy channel management, continuously optimize the
product sale structure and increase the weight of middle and high-end products; deepen the strategic cooperation with overseas
customers, solidify competitive areas, explore new markets, update business modes and move manufacture overseas; continue to
focus on products, enhance research in consumer demand, promote planning management and standardization, and build an efficient
R&D supporting system; firmly stick to the quality principle and improve the quality of new products and suppliers; carry out quality
engineering, particularly improve reliability and realize the transition from “qualified and satisfactory quality” to “charming and
habit-forming quality”; and continue to optimize the organization flow and managerial mechanism, implement the order commitment
mechanism, constantly optimize the logistics layout, increase the operating and turnover efficiency, accelerate the automation
strategy and build a lean manufacture system characteristic of stability, automation and flexibility.
II. Main business analysis
YoY change of major financial data:
Unit: RMB Yuan
Reporting period Same period of last year YoY +/-% Main reasons for change
Operating revenues 4,974,057,020.56 3,998,224,336.31 24.41%
Operating costs 3,655,315,076.59 3,005,810,911.14 21.61%
Increased along with the sales
Selling expenses 708,872,153.90 539,966,097.76 31.28%
income
Administrative expenses 210,082,884.69 173,092,190.68 21.37% Increase in the R&D input
Exchange loss decreased on
Financial expenses -9,899,828.86 20,143,097.74 -149.15%
exchange rate fluctuations.
Increased along with total
Income tax expenses 66,436,602.59 42,992,351.93 54.53%
profits
R&D input 188,396,276.35 149,156,933.04 26.31%
Net cash flows from operating
825,104,435.83 931,122,295.82 -11.39%
activities
