2015 Semi-annual Report of Wuxi Little Swan Company Limited
Wuxi Little Swan Company Limited
2015 Semi-annual Report
August 2015
2015 Semi-annual Report of Wuxi Little Swan Company Limited
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, Mr. Sun Yunan, 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.
2015 Semi-annual Report of Wuxi Little Swan Company Limited
Contents
Section I. Important Reminders, Contents & Explanation ............................................................ 2
Section II. Company Profile .............................................................................................................. 5
Section III. Highlights of Accounting Data & Financial Indicators .............................................. 7
Section IV. Report of the Board of Directors ................................................................................... 9
Section V. Significant Events ........................................................................................................... 21
Section VI. Change in Shares & Shareholders .............................................................................. 33
Section VII. Preference Shares........................................................................................................ 37
Section VIII. Directors, Supervisors & Senior Management Staff .............................................. 37
Section IX. Financial Report ........................................................................................................... 38
Section X. Documents Available for Reference ........................................................................... 137
2015 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 Group Finance Refers to Midea Group Finance Co., Ltd.
Midea Holding Refers to GD Midea Holding Co., Ltd.
Hefei Midea Washing Machine Refers to Hefei Midea Washing Machine Co., Ltd.
Wuxi Little Swan General Appliance Refers to Wuxi Little Swan General Appliance Co., Ltd.
Wuxi FILIN Electronics Refers to Wuxi FILIN Electronics Co., Ltd.
CSRC Refers to China Securities Regulatory Commission
Reporting period Refers to 1 Jan. 2015-30 Jun. 2015
2015 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 abbreviation after change (if any) N/A
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 Company (if any) 小天鹅
English name of the Company (if any) Wuxi Little Swan Company Limited
Abbr. of the English name of the Company (if any) None
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 Hi-tech
Contact address
Development Zone, Wuxi, Jiangsu Province, P.R. China Development Zone, Wuxi, Jiangsu Province, P.R. China
Tel. 0510-81082320 0510-81082377
Fax 0510-83720879 0510-83720879
E-mail IR_littleswan@littleswan.com.cn IR_littleswan@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 2014 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
2015 Semi-annual Report of Wuxi Little Swan Company Limited
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 2014Annual Report.
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 2014
Annual Report.
2015 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) 6,101,903,864.60 4,974,057,020.56 22.67%
Net profit attributable to shareholders of the
430,694,268.55 316,358,532.13 36.14%
Company (RMB Yuan)
Net profit attributable to shareholders of the
Company after extraordinary gains and losses 369,115,221.99 272,497,997.10 35.46%
(RMB Yuan)
Net cash flows from operating activities (RMB
1,365,269,483.46 825,104,435.83 65.47%
Yuan)
Basic EPS (RMB Yuan/share) 0.68 0.50 36.00%
Diluted EPS (RMB Yuan/share) 0.68 0.50 36.00%
Weighted average ROE (%) 9.28% 7.78% 1.50%
As at the end of the reporting period As at the end of last year +/- (%)
Total assets (RMB Yuan) 11,230,158,118.77 11,376,793,928.71 -1.29%
Net assets attributable to shareholders of the
4,580,881,426.28 4,427,982,112.33 3.45%
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.
2015 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 offset part of asset
-1,543,093.94
impairment provisions)
Government grants recognized in the current period, except for those acquired in
the ordinary course of business or granted at certain quotas or amounts according to 11,077,408.20
the country’s unified standards
Gain/loss on entrusting others with investments or asset management 71,346,929.06
Reversal of impairment provisions for the accounts receivable on which
341,340.00
impairment tests were carried out separately
Non-operating income and expenses other than the above 2,966,563.60
Less: Income tax effects 12,627,967.94
Minority interests effects (after tax) 9,982,132.42
Total 61,579,046.56 --
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.
2015 Semi-annual Report of Wuxi Little Swan Company Limited
Section IV. Report of the Board of Directors
I. Overview
(I) Business review
1. Macro-environment
In the reporting period, macro economic growth slowed down with some real estate recovery and low prices of
raw materials. As the Internet is rapidly hitting and transforming traditional industries, cross-field operation,
cooperation and innovation have become an inevitable choice in this new time. The information technology and
the manufacturing industry are closely integrated, triggering profound industrial reform. More opportunities and
challenges are to come in the innovation and transformation of the manufacturing industry.
2. Development trends in the industry
In the reporting period, obvious upgrading in consumption speeded up restructuring in the washing machine
industry, with the proportion of middle and high-end products getting bigger and inverter, large-capacity, roller
and intelligent products growing fast. The industry was stable; however, competition was increasingly fierce
among brands and the industry became more centralized as a result. According to ChinaIOL statistics, the first
half of 2015 saw a total domestic output of 26,485,500 washing machines, down 1.79% year on year, of which
18,207,500 were sold domestically, up 1.91% year on year, while 8,277,900 were exported, down 9.07% year on
year.
(II) Work done in the first half of 2015
In face of rapid changes in the internal and external environment in the reporting period, we closely adhered to our
main strategy of ―advanced products, efficiency-driven development and global operations‖, focused on our main
business, customers and products and kept pushing forward and deepening operational transformation. For the
reporting period, the Company achieved operating revenues of RMB 6.102 billion, up 22.67% year on year, a net
profit attributable to the shareholders of the Company of RMB 431 million, up 36.14% from a year earlier, and a
gross profit rate of 26.95%, a year-on-year increase of 0.44 percentage points.
In the reporting period, we persisted in improving our strength in ―marketing, products, manufacturing, quality
and supply‖ as our core mission by working on the following main projects:
1. Product innovation and upgrading
We proactively promoted product innovation and upgrading. With the needs of markets and customers as the
direction, we developed such products as to solve customers’ problems and keep up with this time of Internet
through more efforts towards user experience and studies. We launched the Little Swan Intelligent Roller Water
2015 Semi-annual Report of Wuxi Little Swan Company Limited
Cube series, the Midea Fast and Clean series, the C2B
tailor-made ―Hornet‖ product, etc., all good in sales and
reputation. In the reporting period, we won quite a few
important awards in the industry, with our strength in products
improved significantly when compared with the same period of
last year.
2. Reform of the marketing model
We proactively promoted reform of our marketing model amid
huge changes in marketing channels in this new era.
Domestically, we reconstructed our market appraisal mechanism
and enhanced distribution and sales to accelerate turnover;
strengthened brand recognition, pushed forward more noticeable
retail settings and built up the ―triple screen interactive‖ training
platform; improved the proportion of middle and high-end products in sales by increasing the portion of high
gross profit rate products such as roller and inverter products; vigorously developed e-commerce through closer
cooperation with all famous online shopping platforms. Overseas, we continued to optimize the sales layout by
solidifying the regions contributing strong sales and exploring new markets and customers and at the same time
enhance the promotion of our own brands. In the reporting period, our domestic and overseas sales both grew
steadily, with the online retail sales surging over 150% year on year.
3. T+3 order mechanism
We continued to improve our lean manufacturing and management capability by vigorously pushing forward the
T+3 order mechanism in production, building a highly responsive supply chain system and materializing flexible
production and supporting step by step to satisfy orders. Meanwhile, we improved our off-line logistics model and
pushed forward the off-line direct distribution of our finished products to realize fast delivery and turnover, which
greatly reduced the warehousing area when compared with the same period of last year. As such, the T+3 order
mechanism produced an excellent result in the reporting period.
4. Quality campaign
We vigorously promoted the quality campaign, tried to implant quality awareness in all employees, built up a
quality standard system and beefed up old product improvement and new product input to thoroughly increase our
product quality and fine product coverage. Meanwhile, we continued to improve the quality control system, firmly
upheld the rigid principle of quality and adopted the ―One-vote Veto System‖ for quality. In the reporting period,
our maintenance rate of sold products further decreased from the same period of last year while our product
quality and reputation further improved.
5. Automation campaign
2015 Semi-annual Report of Wuxi Little Swan Company Limited
We input more for the automation campaign, materializing automation regarding clutch and metal plate
production, injection molding, testing, etc. and pushing forward the example automotive production line project
step by step. In the reporting period, our product quality and per-capita output both improved significantly with
higher manufacturing efficiency than the same period of last year.
(III) Work plan for the second half of 2015
In the second half of 2015, in order to keep up with the development of the mobile Internet era, we will
proactively reform our organization with the Internet thinking, building four platforms (products, markets,
manufacturing and services) centering on ―customers and products‖. Through the platformization thinking and
operation, we will reshape our organization, technological processes, talent team, operating results and corporate
culture to materialize reform of our operational model.
In terms of the product platform, we will center on ―customers, innovation and intelligence‖ and introduce
intelligent technology, maker and geek micro-teams to further stimulate vitality for innovation through
organizational pattern and incentive mechanism reform; and in the meantime increase input for intelligent
technology development to plan for our development in the smart home market. Concerning the market platform,
we will reconstruct the domes
