CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
CHANGHONG MEILING CO., LTD.
Semi-Annual Report 2019
August 2019
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Changhong Meiling Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are
no any fictitious statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of
the whole contents.
Mr. Wu Dinggang, person in charge of the Company, Mr. Pang Haitao, person in charger of
accounting work and Mr. Luo Bo, person in charger of accounting organ (accountant in charge)
hereby confirm that the Financial Report of 2019 Semi-Annual Report is authentic, accurate and
complete.
The Company did not have directors, supervisors and senior executives of the Company could
not guarantee the reality, accuracy and completion of the whole contents or have objections.
All the directors attended the board meeting on deliberating the Report on site and by
communication.
Modified audit opinions notes
□ Applicable √ Not applicable
Risk warning of the forward-looking statements with future planning involved in semi-annual
report
√ Applicable □Not applicable
Concerning the forward-looking statements with future planning involved in the Report, they
do not constitute a substantial commitment for investors, investors and the person concerned should
maintain adequate risk awareness, furthermore, differences between the plans, forecast and
commitments should be comprehended. Investors are advised to exercise caution of investment
risks.
Investors are advised to read the full text of semi-annual report, and pay particular attention to
the following risk factors.
More details about the possible risks and countermeasures in the operation of the Company are
described in the report “X. Risks and countermeasures” of “Section IV Discussion and Analysis of
the Operation”, investors are advised to read the relevant content.
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) are the media for information disclosure for year of 2019 that appointed by
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
the Company. All public information under the name of the Company disclosed on the above said
media and website shall prevail, and investors are advised to exercise caution.
Does the Company need to comply with disclosure requirements of the special industry: No
Profit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the
Board in the semi-annual period
□Applicable √Not applicable
The Company has no plans of cash distribution, bonus shares and capitalizing of common
reserves either.
Directors and senior executives of the Company respectively signed Written Confirmation
Opinions for 2019 Semi-Annual Report.
Supervisory Committee of the Company formed Written Examination Opinions for 2019
Semi-Annual Report.
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Contents
Section I. Important Notice, Contents and Paraphrase ........................................... 1
Section II. Company Profile and Main Financial Indexes ....................................... 5
Section III. Summary of Company Business ........................................................... 10
Section IV. Discussion and Analysis of the Operation ............................................ 17
Section V. Important Events ..................................................................................... 38
Section VI. Changes in shares and particular about shareholders ....................... 86
Section VII. Preferred Stock ..................................................................................... 92
Section VIII. Particular about Directors, Supervisors and Senior Executives .... 93
Section IX. Corporate Bond ...................................................................................... 94
Section X. Financial Report ...................................................................................... 95
Section XI. Documents available for Reference .................................................... 260
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Paraphrase
Items Refers to Contents
Company, the Company, Changhong
Refers to Changhong Meiling Co., Ltd.
Meiling
Sichuan Changhong or controlling
Refers to Sichuan Changhong Electric Co., Ltd.
shareholder
Changhong Group Refers to Sichuan Changhong Electronics Holding Group Co., Ltd.
Hong Kong Changhong Refers to CHANGHONG (HK) TRADING LIMITED
Industry Investment Group Refers to Hefei Industry Investment Holding (Group) Co., Ltd.
Meiling Group Refers to Hefei Meiling Group Holdings Limited
Zhongke Meiling Refers to Zhongke Meiling Cryogenic Technology Co., Ltd.
Changhong Air-conditioner Refers to Sichuan Changhong Air-conditioner Co., Ltd.
Jiangxi Meiling Refers to Jiangxi Meiling Electric Appliance Co., Ltd.
Zhongshan Changhong Refers to Zhongshan Changhong Electric Co., Ltd.
Changhong Ridian Refers to Guangdong Changhong Ridian Technology Co., Ltd.
Changmei Technology Refers to Changmei Technology Co., Ltd.
Changhong Huayi Refers to Changhong Huayi Compressor Co., Ltd.
Shine Wing Refers to Shine Wing Certified Public Accountants (LLP)
CSRC Refers to China Securities Regulatory Commission
China Securities Regulatory Commission, Anhui Province
Anhui Securities Bureau Refers to
Securities Regulatory Bureau
SSE Refers to Shenzhen Stock Exchange
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section II. Company Profile and Main Financial Indexes
I. Company profile
Changhong Meiling,
Short form of the stock Stock code 000521, 200521
Hongmeiling B
Short form of the Stock after
N/A
changed (if applicable)
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
长虹美菱股份有限公司
Chinese)
Short form of the Company (in
长虹美菱
Chinese)
Foreign name of the Company
CHANGHONG MEILING CO., LTD.
(if applicable)
Abbr. of English name of the
CHML
Company (if applicable)
Legal representative Wu Dinggang
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Li Xia Zhu Wenjie
No. 2163, Lianhua Road, Economic No. 2163, Lianhua Road, Economic
Contact add. and Technology Development Zone, and Technology Development Zone,
Hefei Hefei
Tel. 0551-62219021 0551-62219021
Fax. 0551-62219021 0551-62219021
e-mail lixia@meiling.com wenjie.zhu@meiling.com
III. Others
(i) Way of contact
Whether registrations address, offices address and codes as well as website and email of the
Company changed in reporting period or not
□ Applicable √ Not applicable
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Registrations address, offices address and codes as well as website and email of the Company has
no change in reporting period, found more details in Annual Report 2018.
(ii) Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish
appointed by CSRC and preparation place for semi-annual report have no change in reporting
period, found more details in Annual Report 2018.
(iii) Other relevant information
Whether other relevant information has changed in reporting period or not
□Applicable √Not applicable
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes √No
Current period Same period last year Changes +/-
Operating income (RMB) 9,133,162,680.94 9,271,509,569.67 -1.49%
Net profit attributable to shareholders
54,334,022.57 50,684,231.73 7.20%
of the listed company (RMB)
Net profit attributable to shareholders
of the listed company after deducting 4,475,396.85 -6,600,101.83 167.81%
non-recurring gains and losses (RMB)
Net cash flow arising from operating
373,484,000.19 160,489,361.06 132.72%
activities (RMB)
Basic earnings per share (RMB/Share) 0.0520 0.0485 7.22%
Diluted earnings per share
0.0520 0.0485 7.22%
(RMB/Share)
0.08 percentage points
Weighted average ROE 1.08% 1.00%
up
End of current period End of last year Changes +/-
Total assets (RMB) 15,734,260,021.29 15,561,810,184.54 1.11%
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Net assets attributable to shareholder of
4,999,219,710.19 5,015,730,486.57 -0.33%
listed company (RMB)
V. Accounting data difference under domestic and foreign accounting standards
1. Difference of the net profit and net assets disclosed in financial report, under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting
Principles)
□ Applicable √ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report, under
both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted
Accounting Principles) in reporting period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign
accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □Not applicable
In RMB
Net profit attributable to shareholders of Net assets attributable to shareholders of
listed company listed company
Current period Last period Period-end Period-begin
Chinese GAAP 54,334,022.57 50,684,231.73 4,999,219,710.19 5,011,972,907.54
Items and amount adjusted by foreign accounting rules
Foreign accounting rules 54,334,022.57 50,684,231.73 4,999,219,710.19 5,011,972,907.54
The Company had no difference of the net profit or net assets disclosed in financial report, under
either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in
the period.
3. Reasons for the differences of accounting data under accounting rules in and out of China
√ Applicable □Not applicable
The “Notice of Relevant Issues of Audit for Company with Domestically Foreign Shares Offering”
was issued from CSRC dated 12 September 2007, since the day issuing, cancel the previous “dual
audit” requirement for companies who offering domestically listed foreign shares (B-share
enterprise) while engaging securities practice qualification CPA for auditing. The Company did not
compile financial report under foreign accounting rules since 2007, the financial report of the
Company is complying on the “Accounting Standard for Business Enterprise” in China, and
therefore, there are no differences of accounting data under accounting rules in and out of China at
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
period-end.
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset
Found more in ‘income from
(including the write-off that accrued for impairment of -937,771.74
assets disposal”
assets)
Governmental subsidy reckoned into current
Found more in “other
gains/losses, not including the subsidy enjoyed in quota
32,661,651.14 income”, “non-operating
or ration according to national standards, which are
income”
closely relevant to enterprise’s normal business
Held transaction financial asset, gains/losses of changes
of fair values from transaction financial liabilities, and
investment gains from disposal of transaction financial Found more in “Gain/loss of
asset, transaction financial liabilities and financial asset 23,850,754.01 changes in fair value”,
available for sales, exclude the effective hedging “investment income”
business relevant with normal operations of the
Company
Switch-back of provision of impairment of account
Found more in “Account
receivable which are treated with separate depreciation 662,652.68
receivable”
test
Found more in
Other non-operating income and expenditure except for
113,670.65 “non-operating income” and
the aforementioned items
“non-operating expenditure”
Less: impact on income tax 6,036,079.73 --
Impact on minority shareholders’ equity (post-tax) 456,251.29 --
Total 49,858,625.72 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on
Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary
Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for
Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□Applicable √Not applicable
The Company has no items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, in the period
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section III. Summary of Company Business
I. Main businesses of the Company in the reporting period
Does the Company need to comply with disclosure requirements of the special industry: No
The company is one of China's major electric appliance manufacturers, possesses four major
domestic manufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas
manufacturing bases in Indonesia and Pakistan. Currently, we have completed the industry layout of
white electricity basically, covering the full product line including refrigerator, washing machine,
air conditioner, kitchen and bath, small household appliances and others, at the same time, the
company enters into the bio-medical and other new industrial fields with certain achievements
made.
Over the past 30 years, the Company has always been adhering to the "independent innovation,
created in China", and always focus on refrigeration industry without stop, elaborately building the
core competitiveness of enterprises by technological innovation and product innovation. The
company has set up the first RoHS public testing center in Anhui Province, the state-level enterprise
technology center and the top-end R & D team, so that Meiling can continue to achieve
breakthrough results in the variable frequency, intelligence, retain freshness, thin-wall,
energy-saving, forced air cooling, deep cooling and other fields. In recent years, the company has
won three national-level honors such as the Smart Refrigerator Intelligent Manufacturing Pilot
Demonstration Project, the National Green Factory, and the National Industrial Design Center. At
the same time, a number of Meiling products entered the national green product list and won
numerous domestic and international innovation awards, which once again highlighted the
capabilities and strengthen of intelligent innovation technologies of Meiling Intelligent
Manufacturing and Meiling brand.
In recent years, driven by the industry transformation and upgrades and consumption upgrades,
the Company has adhered to the strategy of smart and variable frequency products, promoted the
Company’s products to transform and upgrade to become intelligent and high-end and
comprehensively enhanced the competitiveness of products in the industry by grasping the
opportunities of “refreshment”, “thin-wall”, “forced air cooling” and energy efficiency upgrades
and effectively resolving the pain points of customers. Under the guidance of the “intelligent”
strategy, since 2014, the Company has released and listed a number of CHiQ series of smart
refrigerators and air-conditioning products, and continue to promote intellectualized and high-end
products. Especially the company launched the “M Fresh Life” series of refrigerators equipped with
water molecule activation and preservation technology in 2017, and the company has released the
M Fresh Life high-end new products “comprehensive thin” series refrigerators with thin body, thin
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
box and thin door in 2019, solve the pain points of users effectively. At the same time, in order to
seize the opportunity of energy efficiency upgrade and consumption upgrade, the company's
frequency conversion products accounted for an increasing proportion with the advantage of
frequency conversion technology application.
Facing the future, the Company will further improve the home internet layout, accelerate the
intelligentization of home appliances, form a dual-growth engine of “hardware + services”, drive
the transformation and upgrading of the Company’s profitability model, investigate the new
value-added service models for home appliance enterprises, meet new competition pattern in the
industry, and achieve its own sustainable and stable development under the guidance of the core
values of “professionalism and shared development”. Meanwhile, based on the “Smart Home
Eco-system Project” and the existing products, the company will enhance the R&D, manufacturing,
sales and cooperative capabilities of integrated white goods so as to provide users with a complete
set of smart white goods system solutions.
In reporting period, main income of the Company coming from refrigerator (freezer), air
conditioner, washing machine, kitchen & toilet and small home appliances products, total
amounting to 8,543.9688 million Yuan, a 93.55% of the operating income.
II. Major changes in main assets
(i) Major changes in main assets
Major assets Note of major changes
Equity assets No major changes
Fixed assets Increased by the transfer-in from construction in progress in the period
Intangible assets No major changes
Due to the transfer-in from construction in progress to fixed assets in the
Construction in progress
period
(ii) Main overseas assets
√ Applicable □ Not applicable
Whether
Foreign
Reas exist
assets
on for Oper significa
Control measure to ensure accounted
Content of assets the Asset size Location ation Income (RMB) nt
the security of assets for net
forma mode impairm
assets of the
tion ent risk
Company
(Y/N)
60% equity of Inves US$ 7.803 Pakistan Sales Details of risks control 340,362.06 0.47% N
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Changhong Ruba tment million measures have been
Trading establ disclosed by the Company by
Company ishme way of announcement on
nt appointed media (No.
2011-028, No. 2011-032, No.
2014-023, No. 2014-026, No.
2016-027, No. 2016-032, No.
2017-053 and No. 2017-059)
on 28 May 2011, 19 April
2014, 25 March 2016 and 10
August 2017
Details of risks control
measures have been
disclosed by the Company by
40% equity of Inves
way of announcement on
Changhong Ruba tment Manu
US$ 6.9761 appointed media (No. -7,052,869.41
Electric establ Pakistan factur 0.02% N
million 2011-028, No. 2011-032, No.
Company ishme e
2014-023, No. 2014-026, No.
(Private)Ltd. nt
2017-053 and No. 2017-059)
on 28 May 2011, 19 April
2014 and 10 August 2017
Details of risks control
100% equity of Inves measures have been
KELAPA
CHANGHONG tment disclosed by the Company by
GADING,
MEILING establ US$ 6 million Sales way of announcement on -1,189,143.85 0.47% N
JKT,
ELECTRIC ishme appointed media (No.
Indonesia
INDONESIA. PT nt 2016-027 and No. 2016-033)
on 25 March 2016
Other notes N/A
III. Core Competitiveness Analysis
Does the Company need to comply with disclosure requirements of the special industry: No
(i) Brand capacity
The Company is one of the famous home appliances manufacturers in the PRC, owns several
product lines such as refrigerator, freezing box, air conditioner, washing machine and small
household appliances. Meiling trademark is listed as one of the most valuable brands in the PRC.
The Company released CHiQ intelligent series refrigerator and AC since 2014, and creating a
high-end intelligent brand image around the plan of “Wisdom Home Ecosystem” for opening a
white intelligence era. While in order to enhance the brand image and further expand the market
influence of the brand, the company held a conference for "New LOGO release and offline of the
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
10th million set of frequency conversion products" in October 2015, comprehensively updated
LOGO " ", and launched the new brand proposition of "Meiling, let the good come". Along with
the release of new LOGO, Meiling will also implement a brand strategy of "Good Trilogy",
including the direct sensory experience of “experience the good", the spirit soul enjoyment of
“enjoy the good”, and the lifestyle faith of “believe in the good”. Moreover, under the boost of
consumption upgrades, in November 2017, the Company launches a “M -Fresh” refrigeration with
the “water molecules activating technology”, return to essence of the refrigerator and set off the
revolution of fresh-keeping in industry; In October 2018, the M Fresh Life voice intelligent
refrigerator equipped with full voice interaction technology was launched. At the same time, CHiQ5
air conditioners integrated with three core functions of listening sound for person recognition, voice
positioning and listening sound for speed adjustment were released. In November 2018, the
company’s world-first youth refrigerator further enhanced the company’s younger brand image; in
February 2019, the company released the “M Fresh Life” comprehensive thin series products,
inheriting the super fresh preservation technology of M Fresh Life, and pioneering the new industry
standard of “1cm embedding of refrigerator”, in June 2019, with the rise of young consumer groups,
the company launched NBA fans customized refrigerator for young consumers which is an
innovative fusion of the company's products, communities and brands.
Reshaping brand ability through continuous upgrading of products, Meiling will realize a young,
international and professional brand image. Through gradual construction of the ideas of Wonderful
Start Point, Wonderful Life Circle and Wonderful Ecology Circle, Meiling has become a
people-oriented artist specializing in white appliances, a smarter scientific expert and a more
reliable house keeper.
(ii) Product capacity
In more than 30 years, the Company has been focusing on the refrigeration industry, has developed
a variety of different types of refrigerator products, including three serial produces as “MELNG 美
菱, CHiQ and Athena”. Mainly include the “M Fresh Life” series fresh-keeping refrigerators
equipped with water molecule activation and fresh-keeping technology, Jingdong smart large-screen
570 series refrigerators, CHiQ series high-end intelligent refrigerators and air conditioners,
0.1-degree double-precision variable frequency refrigerators, European 540-wide series air-cooled
products, 106DTB series freezer with new appearance and thin door, YC-365L low-temperature &
medical refrigerator and so on; in particular, the “M-Fresh Life” series and comprehensive thin
series fresh-keeping refrigerators that the Company has latest released return to the essence of the
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
refrigerator; on the basis of upgrading the water molecule activation and preservation technology,
the company developed a comprehensive thin GLS integration technology to realize the M Fresh
Life comprehensive thin series products with thin body, thin box and thin door.
The Company owned advanced development and quality assurance systems, passed management
system certification of ISO9001, ISO14001 and OHSAS18001. The products of the Company have
good quality and reliable capacities. As for technology development, the Company has a
national-standard technology center, and vigorously invest in basic technology research; and in the
field of intelligence, air cooling, refreshment, frequency conversion, thin-wall, and copious cooling,
we have an advance core technology that leading the industry. As for product development,
combine the R&D results and consumption upgrading demand, the Company renewal its outline of
product planning and development for the year, products structure is escalating. Putting more efforts
on the middle & high-end products in field of air patenting, large-size, frequency conversion,
intelligence, refreshment and thin-wall, developing core products with competitive, the product has
obvious upgrade in structures.
As for the air conditioning products, the Company adheres to the technical strategy by taking
intelligence and variable frequency as the core. Focus on the application of fourth generation of
precision temperature control technology platform which takes PMV comfort control model and
third generation of light sense as the core, make overall arrangement around the national standard of
household air conditioners, relevant policy background and technology development trend of
household air conditioner industry, vigorously promote the research and development of new energy
efficiency standard products with strong market competitiveness based on single board and single
chip, dual drive and environmentally friendly refrigerant technology so as to cope with the market
changes that may be brought about after the implementation of new energy efficiency standards.
In terms of washing machine, the Company has actively developed the core technology of Meiling
washing machines, upgraded its product lineup, promoted product competitiveness. The company
has developed and marketed roller products with luxurious appearance, large capacity, washing and
drying, as well as a number of patented pulsator products, especially the “one button smart washing”
series pulsator products represented by MB80-XJ600G, of which the intelligent system realizes
one-button start-up and one-button dehydration, which is convenient and practical, and the “Tianpu”
series products represented by MB90-660ILG apply the industry-leading Tianpu washing
technology, washing solution residue are reduced greatly, rinsing is more and more neat and tidy
with clothing wash in protection
In terms of kitchen appliances and small household appliances, we deepen the concept of “smart
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
kitchen”, take intelligent kitchen and bathroom systems and intelligent water purification system as
the main line, establish a complete set of kitchen appliance supply system, focus on creating “water
ecological home appliances” ecological chain, constantly improve and optimize the smart kitchen
products, and achieve full coverage of kitchen and bath and small appliances. Under the guidance of
the company's intelligent and frequency conversion product strategy, the company has developed
and marketed a complete set of "Smart Kitchen" series products, including JQ31 intelligent range
hood integrating voice interaction, large-screen display, safety protection, menu entertainment,
interconnection control and other functions, and intelligent gas water heater series, intelligent
electric water heater series, intelligent water purifier series, and intelligent oven series.
In terms of cryogenic products, the company continued to increase investment in research and
development and promoted the upgrade of technology, products and serve. The Company’s existing
ultra low freezer, plasma blaster freezer, blood bank refrigerator, medical refrigerator, combined
refrigerator & freezer and medical freezer and other biomedical products and biological and
medical integration solutions are have been widely used in medical and health, disease control and
epidemic prevention, blood systems, research institutes, bio-pharmaceutical, genetic engineering
and life sciences and other fields. Especially in ultra low products, the Company has the -40 °C ~
-164 °C ultra-low freezer storage tank with the largest volume, the widest temperature zone, and
mute design in the world.
The Company insisting on the two products strategy as intelligence and frequency conversion, with
follow-up R&D of the intelligence, frequency conversion and refreshment, promoting products of
the Company leading in high-end products; meanwhile, the company improves the manufacturing
efficiency and product quality and enhances product competitiveness by comprehensively
implementing intelligent upgrading and rebuilding to all production lines.
(iii) Operation capacity
In specific, efficiency enhancement has been made in areas of personnel, money and materials,
trying to continuously enhance the internal management. A performance review and sharing system
has been established with clear target and quantity index based on performance and layered
incentive sharing system, thus to inspire the internal production capacity. Under the mainline of
value chain management, the Company continued to carry out value creation and improve its
competitiveness. Its ability to prevent risks has been also strengthened through continuous
improvement of internal control system.
(iv) Marketing ability
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
The company has established a relatively complete sales network and service system, accelerate
marketing transformation, and realize the marketing transformation from product-oriented sales
management to channel-oriented and user-oriented services, from single-category marketing to
full-category marketing. In the first half of the year, we carried out work on organizations, systems,
institutions, processes, and A/C sets, actively researched the smart trading model and accumulated
strength for subsequent development. In overseas markets, we increased investments in overseas
marketing organizations, R&D bases, and production bases, cooperated with internationally
renowned home appliance brands and distributors, optimized the customer structure and enhanced
product structure so as to actively develop the overseas markets, the products have been exported to
more than 130 countries and regions.
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section IV. Discussion and Analysis of the Operation
I. Introduction
Since 2019, China’s economy has been steadily advancing, stabilizing and worrying, and the
downward pressure on the economy has risen. Especially in the context of Sino-US economic and
trade frictions, Chinese economy is facing the severe external environment, plus the inadequacy and
imbalance in its own development, which makes it more difficult to stabilize growth and prevent
risks. Affected by the macro environment and its own development cycle, coupled with the
tightening of the real estate market, the iterative upgrading of consumption structure, dull demand,
rising supply chain costs and other unfavorable factors, the performance of the home appliance
industry in the first half of 2019 was not satisfactory, and the home appliance industry as a whole
entered the "cold winter". In this context, transformation and upgrading is an urgent problem for
enterprises to break the "deadlock".
In the first half of 2019, under the strategic guidance of “Meiling Dream” and “Double Three One
Core”, the Company insisted on the operating principle of “product leading, marketing
transformation, efficiency promotion and team activation”. We have achieved operating income of
RMB 9.133 billion, a decrease of 1.49% on a year-on-year basis; net profit attributable to the parent
company of RMB 54.3340 million, an increase of 7.20% on a year-on-year basis.
II. Main Business Analysis
(i) Overview
Shows no difference with the summary disclosed in Report of the Board of Director
□Yes √No
1. Introduction
From January to June of 2019, refrigerator and freezer business achieved revenue of approximately
RMB 3.819 billion, with 3.67% up y-o-y; air-conditioning business achieved revenue of
approximately RMB 3.991 billion, with 8.84% down y-o-y.; washing machine business achieve
revenue of approximately RMB 0.205 billion, with 16.50% down y-o-y.; other business of kitchen
& toilet products and small home and Refrigeration accessories appliance have revenue
approximately as RMB 0.529 billion, with 17.70% up y-o-y.
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
2. Progress of the Company's development strategy and business plan during the reporting
period
During the reporting period, in accordance with the development strategy and operating principles
for first half of 2019, the Company has deployed the annual business plan, arranged the production
and management, and carried out the following activities:
(1) Product leading
In the first half of 2019, the company featured “Meiling Fresh, Meiling Thin, Meiling Embedding”
and continued to create product-specific business cards, and further promoted the upgrades of the
company's refrigerator (freezer) products, which had good performance in the market and achieved
high recognition from consumers. In particular, the "M Fresh Life" comprehensive thin series
refrigerator released in February 2019, developed a comprehensive thin GLS integration technology
(integrated with thin body, thin box and thin door) based on the upgrade of water molecule
activation and preservation technology, and achieved breakthroughs in high-end products through
the comprehensive upgrades of product technology, quality and performance. During the reporting
period, the sales volume of the company's “M Fresh Life” series refrigerators increased by more
than 50% on a year-on-year basis.
(2) Marketing transformation:
In the domestic market, we realized the transformation from product-oriented sales management to
channel-oriented and user experience services through a series of specific marketing transformation
initiatives. According to the data of CMM, the average price of refrigerator products of the
company in the online market from January to June 2019 increased by 11.7%, and the share
increased by 0.9 percentage points; the average price of refrigerators in the offline market increased
by 8.2%, and the share was basically flat. At the same time, the company's air-conditioning products
seized the strategic ODM brand cooperation opportunities, ODM business grew by 205%. In the
overseas market, through the transformation from the pursuit of scale to the pursuit of both scale
and profit, the product structure has continued to improve, the proportion of air-cooled refrigerator
products has reached 18%, an increase of 6 percentage points on a year-on-year basis, and the
quality of overseas refrigerators/freezers continued to be improved. The overseas air-conditioning
business has continued to improve its operations by sorting out the risks of preventing and
controlling overseas operations.
(3) Efficiency promotion:
Focus on efficiency improvement and promote efficiency improvement. In the first half of the year,
18
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
the company carried out special work on capital pressure control, and the efficiency of capital
operation was greatly improved on a year-on-year basis through pressure control of inventory,
receivables and prepayments; continued to promote the “five -ization and two easy” work at the
development end, the quantity of platform, box and model has been controlled, and the research and
development efficiency increased by more than 10% on a year-on-year basis; in the production side,
organized and carried out the work on reducing staff while improving efficiency in the product
structure optimization, process optimization, line LOB balance, automation, and one-piece flow,
and so on, and the manufacturing efficiency in the first half of the year was promoted by more than
20%.
(4) Team activation
Expand the career path of employees through the implementation of the normalized competing
mechanism for cadres to be prepared for both promotion and demotion and the establishment of exit
paths for key positions, continue to deepen the performance management mechanism, implement
the overall process performance appraisal for all employees, and realize PDCA for performance
management through information integration, reconstruct the incentive mechanism, establish a
three-tier incentive system, namely, incentives for business results, incentives for value lines, and
incentives for special events, to encourage value creation for all employees.
(ii) Year-on-year changes of main financial data
In RMB
Same period of last y-o-y
Current period Reasons for changes
year changes (+,-)
Operation revenue 9,133,162,680.94 9,271,509,569.67 -1.49% No major changes
Operation cost 7,490,555,537.25 7,758,153,561.09 -3.45% No major changes
Sales expenses 1,244,391,756.87 1,189,741,101.32 4.59% No major changes
Administrative
164,393,042.70 148,994,790.89 10.33% No major changes
expenses
Exchange losses have increased on a y-o-y
Financial cost 17,662,677.78 -13,460,027.93 231.22%
basis in the period
Income tax expense 17,701,260.34 10,150,948.29 74.38% Taxable income increased in the period
R&D expenses 229,049,986.86 213,754,469.95 7.16% No major changes
Net cash flow arising The cash received from good sales and
from operation 373,484,000.19 160,489,361.06 132.72% providing labor service increased from a
activities year earlier
19
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Net cash flow arising
The principal of entrusted management paid
from investment 4,924,554.81 -1,346,880,950.63 100.37%
in the period declined from a year earlier
activities
Net cash flow arising
The loans received gained in the period
from financing -600,631,831.87 -139,977,892.27 -329.09%
declined from a year earlier
activities
Same reason as “Net cash flow arising from
Net increase of cash
-218,681,424.93 -1,323,521,745.98 83.48% operation activities” and “Net cash flow
and cash equivalent
arising from investment activities”
The change of fair value for carrying out
Tradable financial
2,703,222.18 9,253,635.59 -70.79% forward foreign exchange contracts in the
assets
period
Account receivable of parent Company,
Account receivable 2,622,242,540.11 1,673,362,136.29 56.71% Changhong Air-conditioner and Zhongshan
Changhong increased in the period
Account paid in Account paid in advance of subsidiary
43,742,930.33 86,180,459.26 -49.24%
advance Changhong Air conditioner declined
Other account Due to the cash deposit paid for engineering
110,758,174.11 63,192,740.93 75.27%
receivable projects in the period
Development The development expenses are transfer-in
65,320,040.34 108,210,966.60 -39.64%
expenses intangible assets in the period
Account payable 3,107,804,073.88 2,282,174,981.38 36.18% Materials purchasing increased in the period
VAT are paid by subsidiary Changhong Air
Taxes payable 61,815,199.22 109,753,432.17 -43.68%
conditioner in the period
Non-current liability The long-term loans due within one year are
7,300,000.00 273,682,737.85 -97.33%
due within one year paid by parent company in the period
Long-term loans of parent Company
Long-term loans 301,280,000.00 1,920,000.00 15591.67%
increased in the period
Changing income of Change of the fair value in forward foreign
3,364,790.24 -18,790,911.11 117.91%
fair value exchange contract in the period
As for the change of accounting policy in
Credit impairment
9,545,495.95 - -- the period, the financial assets impairment
loss
was reckoned into credit impairment losses
Assets impairment
-10,615,932.01 -18,938,120.65 43.94% Same reason as “Credit impairment loss”
loss
Income from assets Income from assets disposal declined from a
-937,771.74 3,283,766.57 -128.56%
disposal year earlier
Losses from parts of the non-wholly-owned
Minority’s gain/loss -8,117,992.03 2,324,332.99 -449.26%
subsidiary increased from a year earlier
20
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
(iii)Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
(iv) Constitution of main business
In RMB
Increase or Increase or Increase or
decrease of decrease of decrease of
Gross
operating operating cost gross profit
Operating revenue Operating cost profit
revenue over over same ratio over same
ratio
same period of period of last period of last
last year year year
According to industries
Manufacture of
household 8,543,968,799.83 6,942,346,945.06 18.75% -2.43% -4.66% 1.90%
appliances
According to products
Refrigerators,
3,819,493,665.57 2,965,821,052.02 22.35% 3.67% -3.02% 5.35%
freezers
Air conditioning 3,990,707,709.01 3,364,231,232.05 15.70% -8.84% -7.87% -0.89%
Washing machine 205,216,507.29 161,545,734.09 21.28% -16.50% -17.02% 0.50%
Small appliances
456,750,621.11 387,949,800.00 15.06% 33.43% 34.14% -0.45%
& kitchen & bath
Others 71,800,296.85 62,799,126.90 12.54% -32.74% -28.92% -4.70%
According to region
Domestic 6,416,709,241.89 5,079,123,427.39 20.85% -2.51% -3.55% 0.85%
Foreign 2,127,259,557.94 1,863,223,517.67 12.41% -2.19% -7.57% 5.10%
III. Analysis of the non-main business
√ Applicable □Not applicable
In RMB
Ratio in total Whether be
Amount Note
profit sustainable (Y/N)
Investment
11,663,963.45 18.25% Income from financial services N
income
Loss from fair value changes of
Changes in fair
3,364,790.24 5.26% the forward foreign exchange N
value
contract
21
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
The accrual of inventory falling
Asset
-10,615,932.01 -16.61% price reserves increased in the N
impairment
period
Non-operating
2,476,197.02 3.87% —— N
income
Non-operating
2,362,526.37 3.70% —— N
expense
Credit Accrual for bad debt provision
9,545,495.95 14.93% N
impairment loss declined in the period
Government subsidy received
Other income 35,311,208.60 55.25% N
in the period
IV. Assets and liability
(i) Major changes of assets composition
In RMB
End of current period Same period of last year
Ratio in Ratio in Ratio
Notes of major changes
Amount total Amount total changes
assets assets
The entrusted management
Monetary fund 4,411,009,307.43 28.03% 3,932,190,042.36 22.49% 5.54%
declined.
Account receivable of parent
Account Company, Changhong
2,622,242,540.11 16.67% 2,070,276,216.71 11.84% 4.83%
receivable Air-conditioner increased in the
period
The inventory turnover fast up in
Inventory 2,112,649,738.16 13.43% 3,421,144,669.90 19.57% -6.14%
the period
Investment real
45,647,730.74 0.29% 31,984,052.33 0.18% 0.11% No major changes
estate
Long-term
equity 57,722,108.43 0.37% 72,461,723.36 0.41% -0.04% No major changes
investment
Due to the transfer-in from
Fix assets 1,976,351,355.11 12.56% 1,490,510,897.78 8.52% 4.04%
construction in progress
Construction in
401,818,933.56 2.55% 348,427,423.70 1.99% 0.56% No major changes
progress
Short-term 1,809,384,200.27 11.50% 1,725,908,730.38 9.87% 1.63% No major changes
22
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
loans
Long-term Long-term loans of parent
301,280,000.00 1.91% 2,520,000.00 0.01% 1.90%
loans Company increased in the period
(ii) Assets and liability measured by fair value
√ Applicable □ Not applicable
In RMB
Devaluatio
Changes of fair Accumulative Amount of
n of Amount of
Amount at the value changes of fair purchase Amount in the
Items withdrawi sale in the
beginning period gains/losses in value reckoned in the end of period
ng in the period
this period into equity period
period
Financial assets
1. Tradable
financial assets
(excluding 9,253,635.59 -6,550,413.41 - - - - 2,703,222.18
derivative financial
assets)
Above total 9,253,635.59 -6,550,413.41 - - - - 2,703,222.18
Financial liabilities 55,586,666.70 -9,915,203.65 4,961.21 - - - 45,676,424.26
Whether there have major changes on measurement attributes for main assets of the Company in
report period or not
□ Yes √No
(iii) Assets right restricted ended as reporting period
Ended as the reporting period, the Company has no major assets been closed down, detain, freeze or
pledge and guarantee
V. Investment
1. Overall situation
√ Applicable □ Not applicable
Investment in the same period of last
Investment in the reporting (RMB) Changes
year (RMB)
8,504,092.24 46,004,000 -81.51%
2. The major equity investment obtained in the reporting period
√ Applicable □ Not applicable
23
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
In RMB
Whet Date of
Meth Capit Term Type Index of
Share Status as of Expe Current her disclosure
Name of od of Amount of al Partner of of disclosure (if
Principal business holdi the balance cted investment profit litigat (if
invested invest investment sourc s invest produ
ng sheet date return and loss ion applicable
ment es ment cts applicable
(Y/N) )
)
IoT home system and new intelligent
hardware design, research and
development, integration, sales and
technical services; design, research and
development, and sales of home
appliance controller software and
hardware and IoT software and
hardware; design , research and No
Hefei
development, manufacturing, sales and Softw Invested 6 t Juchao Website:
Meiling Owne
20 are million ap http://www.cninf
Wulian technical services of household set up 10,000,000 100% d N/A -1,225,913.16 N 2018-12-11
years servic Yuan in the pli o.com.cn (Notice
Technology appliances, commercial appliances, car fund
e Period cab No.: 2018-071)
Co., Ltd. appliances, and daily necessities le
products; information consulting,
technology transfer, technical service
and operation management in the field
of Internet of Things and Internet
technology; Internet data services;
development, maintenance and sales of
e-commerce software; import and
24
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
export business of self-operated and
agent goods and technologies (except
for goods and technologies that are
restricted for business operation or
prohibited from importing and
exporting by the state).
Capital
Changhong increased No
Juchao Website:
Ruba Capit RubaG 2.541 t
Be engaged in the import, export, Owne http://www.cninf
Trading al eneral Long million ap
distribution and sale of household $ 780.30 60% d N/A 340,362.06 N 2017-8-10 o.com.cn (Notice
Company incre Tradin -term Yuan in the pli
appliances. fund No.: 2017-053
(Private) ase gFZE Period cab
and 2017-059)
Limited ($ 0.363 le
million)
Technology research and development,
technical consulting, technical services,
No
Anhui processing, sales, design, installation,
Business t Juchao Website:
Tuoxing maintenance of refrigeration Owne
66.87 Long registration ap http://www.cninf
Science and set up 10,000,000 d N/A N/A 0 N 2019-4-20
equipment; mechanical and electrical 03% -term completed pli o.com.cn (Notice
Technology fund
equipment installation; warehousing in the Period cab No.: 2019-025)
Co., Ltd.
services (except dangerous goods); le
processing and sales of metal products.
Total -- -- -- -- -- -- -- -- -- - -885,551.10 -- -- --
3. The major non-equity investment doing in the reporting period
25
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
√ Applicable □ Not applicable
In RMB
Industry Accrued Actual Accrued Reasons for not
Fixed
Inves involved Investment Investment Capit Realized Reaching the
Inves
tment in Amount in this Amount up to al Anticipated Income up to Planned Disclosed Disclosed Index
Project Name tment Project Schedule
Meth Investme Reporting the End of Sourc Income the End of Schedule and Date (if any) (if any)
s or
od nt Period Reporting e Reporting Anticipated
not
Projects Period Period Income
The company
successfully bade for
the plant, office bui
The
lding and land use ri
production
ghts under the name
capacity of 2
of Anhui Dongwei Project is
million sets of
Home Solar Technology C under
Self- automatic www.cninfo.co
2 million sets of applianc o., Ltd. from the jud construction
owne washing m.cn
automatic washing Self- e icial sale with its o in the period 2017-3-30、
Yes 19,799,981.87 218,373,852.01 d machine shall Not Applicable (Announcement
machines production built manufact wn funds of RMB 1 without 2017-4-14
Fund be formed No. 2017-010,
base project (Note 1) uring 34, 585,900; currentl income
s after this No. 2017-024)
industry y, the phase I projec occurred
project being
t (annual output of 1 temporary
put into
million sets of auto
operation
matic washing machi
ne for one shit) has
come into production
Total -- -- -- 19,799,981.87 218,373,852.01 -- -- - - -- -- --
Note 1: According to the company's strategic development plan, combined with the company's business needs, and in order to make up for the
26
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
insufficient research and manufacturing capacity of washing machine industry so as to meet the market demands, the 29 th meeting of the
company's 8th Board of Directors approved and agreed the company’s to invest no more than RMB 371,210,000 in the construction of the 2
million sets of automatic washing machines production base project. In addition, the 29 th meeting of the company's 8th Board of Directors
approved and agreed the company to successfully bid for the plant and office building (covering an area of 86,087.65 square meters) and land
use rights (covering an area of 116,233.61 square meters) under the name of Anhui Dongwei by public auction organized by the court with its
own funds of RMB134,585,900, and use the plant and land as the washing machine production base for construction. However, due to the
above-mentioned bidding assets being mortgaged and being sealed up and frozen by the court, the ownership-transfer procedure of the
Company's land and housing assets became extremely complicated, and the asset transfer was only completed till May 2018. After that, in order
to meet the construction requirements of the washing machine production line, the company renovated the relevant workshops. As of the end of
February 2019, the phase I of the “production base project for annual production capacity of 2 million washing machines” (double-shift annual
production capacity of 1 million full-automatic washing machines) had been put into operation. In combination with the company's strategic
development planning and operational needs, and in order to further improve the service efficiency of the company's raised funds, after careful
study and argumentation, the 24th meeting of the ninth session of the board of supervisors, the 13th meeting of the ninth board of supervisors, and
the second extraordinary general meeting of shareholders in 2019 of the company passed the resolution and agreed the company to invest RMB
120 million of the unused raised funds of the sub-project “Freezer Intelligent Construction Project” of the “Intelligent Manufacturing
Construction Project” into the “production base project (Phase II ) for annual production capacity of 2 million washing machines”.
See details on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the company
disclosed in the form of announcement (Announcement No. 2017-010, No. 2017-024, No. 2019-040, No. 2019-041, No. 2019-042, No.
2019-043, No. 2019-047) on March 30, 2017, April 14, 2017, July 9, 2019 and July 26, 2019. Ownership transfer of relevant land use right and
property license has completed, currently, the phase I project (annual output of 1 million sets of automatic washing machine for one shit) has
come into production
27
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
√ Applicable □ Not applicable
28
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
In 10 thousand Yuan
Relat Whethe
Amount Amount sales Amount of reserve Ratio of investment
ed r Investment Investment Actual
Initial purchased in in the for devaluation of amount at period-end in
Operator relati related Type Start date End date amount at amount at gains/losses
investment the reporting reporting withdrawing (if net assets of the
onshi trade or period-begin period-end in period
period period applicable) Company at period-end
p not
Forward
Financial foreign
N/A No 200,656.30 2017-9-29 2020-1-21 149,739.86 119,169.59 88,862.64 - 181,160.96 36.24% -1,114.16
institution exchange
contract
Total 200,656.30 -- -- 149,739.86 119,169.59 88,862.64 - 181,160.96 36.24% -1,114.16
Capital resource (if applicable) Owned fund
Lawsuit involved (if applicable) Not applicable
Disclosure date for approval from the
Board for investment of derivatives (if 2019-3-29
applicable)
Disclosure date for approval from
board of shareholders for investment 2019-5-22
of derivatives (if applicable)
1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations, forward foreign exchange transactions are
under certain market risk. Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign exchange settlement and sale
Risk analysis and controlling prices, exchange rate fluctuations. The Company will follow up the exchange fluctuation, on the basis of target rate determined from the business, relying
measures for derivatives holdings in on the research of the foreign currency exchange rates, combined with prediction of consignments, and burdening ability to price variations due to
the Period (including but not limited exchange rate fluctuations, then determine the plan of forward foreign exchange contracts, and make dynamic management to the business, to ensure
to market risk, liquidity risk, credit reasonable profit level.
risks, operation risk and law risks etc.) 2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business, to meet the requirements
of the trade authenticity. In addition, forward foreign exchange transactions are processed with bank credit, will not affect liquidity of company funds.
3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign exchange
29
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
contracts with contract price, which leads the risk of income uncertainty. So the Company chose Bank of China, Agricultural Bank of China, Industrial
and Commercial Bank of China, China Construction Bank and other Chinese Banks and part of the larger foreign Banks (such as Deutsche Bank, UOB,
Overseas Chinese Bank, HSBC, etc.) to conduct the trading of foreign exchange capital. These banks share a solid strength and management whose
failure and the risk of loss may bring to the Company is very low.
4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The Company has
formulated related management system which defines the operation process and responsibility to prevent and control risks.
5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign exchange
transactions are processing. The Company will strengthen legal review, and choose good bank to carry out this kind of business as to risk control.
Invested derivative products have
The Company determines fair value in accordance with the Chapter VII “Determination of Fair Value” carried in the Accounting Standards for Business
changes in market price or fair value
Enterprises No.22 - Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices offered by bank and
in the Period, as for analysis of the fair
other pricing services. While fair-value of derivatives is mainly obtained according to the balance between prices given by outstanding contracts and
value of derivatives, disclosed specific
forward prices given by contracts signed during the reporting period with bank. The differences are identified as trading financial assets and liabilities.
applied methods and correlation
During the reporting period, forward foreign exchange contracts and losses of the Company is (11,141,600) Yuan.
assumption and parameter setting
Specific principle of the accounting
policy and calculation for derivatives
Not applicable
in the Period compared with last
period in aspect of major changes
Upon inspection, the independent directors of the Company believes that: during the reporting period, the Company carried out its foreign exchange
forward deals in strict compliance with the standardized operation guidelines for listed issuer on main board (2015 amended) issued by Shenzhen Stock
Exchange, the Articles of Association, Authorization Management of the Company, Management System in relating to Foreign Exchange Forward Deals
of Hefei Meiling Co., Ltd., and these deals were conducted within the authorization scope under general meeting and board meeting. The Company
Special opinion on derivative
conducts no foreign exchange transactions on the purpose of getting profit only, all of the forward foreign exchange transactions are operates based on
investment and risk control by
normal operating and production, which is relying on specific business operations with purpose of avoiding the preventing the risks in exchange rate. The
independent directors
forward foreign exchange transactions of the Company are beneficial to prevent the exchange risks exposed by import and export business and thus met
its requirement for operation development. There was no speculative operation, no break of relevant rules and regulations and relevant business was
conducted under corresponding decision-making procedures. Interests of the Company and entire shareholders, especially minority shareholders, were
not prejudiced.
30
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
31
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
VII. Analysis of main holding company and stock-jointly companies
√ Applicable □ Not applicable
(i) Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Register
Company name Type Main business Total assets Net Assets Operating revenue Operating profit Net profit
capital
Research and development,
Zhongke Meiling Cryogenic
Subsidiary manufacturing and sales of 68,640,300 267,753,020.08 135,809,780.02 104,654,118.52 8,045,938.35 6,108,281.21
Technology Co., Ltd.
ultra-low temperature freezer
Jiangxi Meiling Electric Manufacturing of refrigeration
Subsidiary 50,000,000 587,810,277.23 93,250,856.51 453,295,110.36 365,834.19 365,834.19
Appliance Co., Ltd. and freezer
Mianyang Meiling Manufacturing of refrigeration
Subsidiary 100,000,000 135,711,514.17 122,059,647.97 155,750,585.40 4,871,840.77 5,054,579.35
Refrigeration Co., Ltd. and freezer
R&D, manufacturing and
Sichuan Changhong
Subsidiary domestic sales of 850,000,000 3,877,412,931.75 1,404,497,069.82 3,040,898,163.98 41,190,937.92 29,989,685.70
Air-conditioner Co., Ltd.
air-conditioner
Zhongshan Changhong R&D, manufacturing and sales
Subsidiary 184,000,000 1,293,670,575.65 22,490,939.23 1,255,189,521.34 -8,260,764.68 -10,349,821.38
Electric Co., Ltd. of air-conditioner aboard
Hefei Meiling Electric
Subsidiary Sales of white goods 55,000,000 73,323,214.55 -118,723,841.83 348,781,525.43 24,297,958.40 24,297,940.45
Appliance Marketing Co., Ltd
Hefei Meiling Group
Subsidiary Sales of white goods 80,000,000 602,425,012.85 -163,029,265.03 1,592,991,133.25 -47,606,101.47 -47,597,398.34
Holdings Limited
Guangdong Changhong R&D, manufacturing and sales
Subsidiary 83,000,000 385,714,566.13 144,231,471.03 284,981,563.96 9,978,346.80 8,263,471.00
Ridian Technology Co., Ltd. of kitchen and toilet products,
32
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
small home appliances and
water purifier
Meiling CANDY Washing R&D and sales of washing
Subsidiary 150,000,000 143,038,300.89 79,202,059.64 202,748,512.94 -12,044,830.55 -12,044,830.55
Machine Co., Ltd. machine
33
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
(ii) Notes of holding and shareholding companies
√ Applicable □ Not applicable
The method of obtaining and
The influence to the whole production and
Company Name handling subsidiaries during the
performance
report period
The company's wholly-owned subsidiary is
invested by the Company with a capital
investment of 10 million yuan. This
company's establishment aims to further
enhance the products’ technology research
Hefei Meiling Wulian Technology and development capabilities in intelligence,
Investment and Establishment
Co., Ltd. frequency conversion, fresh-keeping, etc.,
while providing a platform for the
incubation of the company's internal new
technology. It has little impact on the
company's overall production operations and
performance.
Minor effect on the overall production and
Nanchang Xiangyou Electronic
Clearing off operation and performance of the
Appliance Marketing Co., Ltd
Company
Minor effect on the overall production and
Anhui Tuoxing Science and
Investment and Establishment operation and performance of the
Technology Co., Ltd.
Company
Notes of holding and shareholding companies: Nil
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Prediction of business performance from January – September 2019
Estimation on accumulative net profit from the beginning of the year to the end of next report
period to be loss probably or the warning of its material change compared with the corresponding
period of the last year and explanation on reason
□ Applicable √ Not applicable
X. Risks and countermeasures
(i) risks and countermeasures
34
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
In the second half of 2019, faced with the more intense competition in home appliance market and
other objective factors, the enterprise will have worse survival environment. The company will
face risks such as weak macroeconomic growth, severe industry situation, intensifying competition,
rising costs, new business models and the impact of the Internet era.
In response to the above risks, and combining with the industry situation in the second half of the
year and the insufficient in the first half of the year, in the second half of 2019, the company will
carry out key tasks from the following aspects:
1. Increase revenue and reduce costs
Continue to promote the company's income increase and cost reduction work. On the one hand, the
company's marketing side centers on e-commerce, basic channels, TOP channels, and 2B services to
continuously enhance product market share; on the other hand, all business units are organized
around various costs to sort out item by item so as to rigidly control various expense budgets and
implement them. At the same time, improve organizational and personnel efficiency of the
company's product units, and from marketing headquarters to the branches.
2. Technology and quality
Continue to carry out research on technologies such as intelligence, frequency conversion, air
cooling, preservation, thin-wall and so on, attach importance to the product process and quality.
Aim at the focus issue of the user experience, implement to the responsible person and the specific
plan to promote the solution of the problem, so as to maintain the company's industry- leading
position in technology and quality.
3. Supply chain and manufacturing
Pay attention to the fluctuation of bulk materials, continue to promote the cost reduction of
purchases and increase the income of materials; concern the efficiency of fund operation, improve
the receivables and inventory turnover rate; continue to implement projects such as “first-class
manufacturing”, “less people engineering”, “smart production” and “intelligent manufacturing” and
so on, comprehensively improve efficiency and quality, reduce product costs, and enhance the
competitiveness of the company’s products.
4.Sales
Accelerate the marketing transformation and unify the marketing service platform to better adapt to
the major changes in market competition and user consumption behavior, and accelerate the brand
and product collaboration and the business and management integration to realize the overall
efficiency-raising and cost-reducing.
35
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
(ii) Business plan in the next half year
Under the guidance of strategic planning, in the second half of 2019, the company will continue to
carry out operation and management work by centering on “product leading, marketing
transformation, efficiency promotion, and team activation”, in the business strategy, we insist on
“prudent budget, radical management, and revenue-to-pay”. The product lines must do the
following work in the marketing strategy:
1.Refrigerator Industry
In the domestic market, continue to enhance product share with the "stock" + "increment" user
thinking and through the "hot" + "quality" product strategy; take "All Thin" and "M Fresh Life" as
the starting point to achieve the high-end share breakthrough and the increase in gross profit of
more than 8000 yuan; continue to reduce the cost and improve the competitiveness of box through
the low-end focus box and model. At the same time, in the overseas market, continue to do a good
job of “focusing on products, focusing on markets, focusing on customers”, and promote the
product competitiveness through continuous promotion of products such as air cooling and
frequency conversion; continuously increase market share by focusing on strategic markets, key
markets, and potential markets; focus on and enhance the customer concentration by focusing on
strategic customers, key customers, and developing potential customers.
2. Air conditioning Industry
In the domestic market, according to the market positioning, make differentiated policy supports
and improvement programs, namely, consolidating the southwest base area, breaking the ice in East
China, and realizing the rise of the Central Plains; strengthen the retail operation management
around the C-end users, take the retail drive as the core and adapt to the trend of channel innovation,
actively promote the transformation of O2O and the online and offline integration; under the
premise of consolidating the traditional foundation business, seize the opportunity of strategic ODM
brand cooperation. In the overseas market, focus on key markets and important customers to do
bigger and stronger; focus on developing countries (West Africa, gulf countries, Central Asia,
Southeast Asia), seek new business models; fill blank market products, improve product definition
and service capabilities.
3. Washing machine Industry
Carry out marketing work around “stable distribution, upgrading G90, exerting force in e-commerce,
launching export and OEM/ODM business”, and fill up the blanks in self-produced middle- and
high-end pulsator washing machines through the industry leading technologies such as “Tianpu
36
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Washing” and “Xiaomei One-button Smart Washing” so as to achieve breakthroughs in the sales of
self-produced washing machines.
4. Small household appliances Industry
Continue to deepen the concept of "smart kitchen", improve and optimize the array of smart kitchen
products, set up a complete set of kitchen appliance supply system with intelligent kitchen and
bathroom systems and intelligent water purification system; exert force in "range hood, oven, water
heater", promote product focus, and take electric water heater as a primary, water purifier and
intelligent sweeping robot as auxiliaries, and focus on breakthroughs in category; concentrate on the
“water eco-home appliances” product line, focus on core strengths to build superior core product
lines, and continuously improve the influence in the industry. At the same time, follow the direction
of national policy and guidance, continue to carry out coal-to-gas (electric) engineering
transformation projects, refined decoration housing market, and introduce new growth points.
5. Bio-pharmaceutical
Unswervingly implement the “related diversification based on bio-pharmaceutical field” strategy,
focusing on the business framework of life sciences, smart cold chain and family health, we
promote the upgrades and service improvement of life science module products, based on the cold
storage business, we steadily expand the smart cold chain module and promote the market launch of
family health products such as oxygen generators. Quickly open the market and promote the rapid
growth of the company.
The above business plan and business objectives do not represent the listed company’s profit
forecast of 2019, whether it can be achieved depends on the changes in market condition, the
efforts of management team and other factors, there are a lot of uncertainties, investors should pay
special attention to it.
37
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section V. Important Events
I. AGM and extraordinary general meeting
1. AGM held in the period
Participati
on ratio
Meeting Type Holding date Disclosure date Index
for
investors
Juchao Website
First
Extraordinary (www.cninfo.com.cn),
Extraordinary
General 32.2110% 2019-2-22 2019-2-23 Resolution Notice of First
General Meeting
Meeting Extraordinary General Meeting
of 2019
of 2019 (Notice No.: 2019-012)
Juchao Website
Annual general (www.cninfo.com.cn),
2018 AGM 32.4336% 2019-5-21 2019-5-22
meeting Resolution Notice of AGM of
2018 (Notice No.: 2019-035)
2. Request for extraordinary general meeting by preferred stockholders with rights to vote
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves in the period
□ Applicable √ Not applicable
There are no cash dividend, bonus and capitalizing of common reserves carried out in the
semi-annual
III. Commitments that the company, shareholders, actual controller, offeror, directors,
supervisors, senior management or other related parties have fulfilled during the reporting
period and have not yet fulfilled by the end of reporting period
Applicable √ Not applicable
There are no commitments that the company, shareholders, actual controller, offeror, directors,
supervisors, senior management or other related parties have fulfilled during the reporting period
and have not yet fulfilled by the end of reporting period
38
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
IV. Appointment and non-reappointment (dismissal) of CPA
Whether the semi-annual financial report had been audited
□Yes √ No
The semi-annual report was not audited
V. Explanation on “Qualified Opinion” from CPA by the Board and Supervisory Committee
□ Applicable √ Not applicable
VI. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
VIII. Lawsuit
(i) Significant lawsuits and arbitration
□ Applicable √ Not applicable
No significant lawsuits or arbitration occurred in the reporting period.
(ii) Other lawsuits
√Applicable □ Not applicable
To maintain the independence and integrity of "Meiling" trademark and trade name, the Company
carried out serials of lawsuits, attribution and administration suits with “Meiling” trademark and
corporate name concerned, please found more in 2014 first quarter report, 2014 semi-annual report,
the 2014 annual report disclosed respectively on April 19, 2014, August 12, 2014, and March 26,
2014 for the relevant progress. Up to now, the company has stopped the infringement enterprises
using “Meiling” trade name, i.e. the infringement of company name and unfair competition
behavior, through litigation and administrative complaints.
Recently, the case of our company against Hefei Meiling Riyong Appliance Co., Ltd (hereinafter
referred to as Meiling Riyong) for trademark infringement and unfair competition has a final
judgment of second instance by the Shanghai Intellectual Property Court, and we won the lawsuit.
The court ordered Meiling Riyong stop its infringement on the Company immediately, and
compensation for infringement losses as well as change of its business name without the text of
39
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
“Meiling”. that is, after the expiration of performance of the judgment, any product with “Meiling
Riyong” are infringing and counterfeit products, the Company will resolutely crack down on them
according to the law once found.
At present, only the kitchen ventilator, cooker, water heater, water purifiers and household electrical
appliances manufactured and sold by the Company and its wholly-owned subsidiary - Hefei Meiling
Group Holding Co., Ltd. and Guangdong Changhong Ridian Technology Co., Ltd. are the company's
regular products, any other small household appliances using same or similar trademark as our
company or using the trade name similar to the Company’s name are the Company’s products. In
view of the infringement to the Company’s trademark and trade name, false propaganda and unfair
competition in the market, the Company has carried out many ways including administrative reports,
criminal investigation and civil litigation to fight against infringement and counterfeiting behavior
in the whole country.
IX. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
X. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
During the reporting period, the Company and the controlling shareholders and the actual
controllers have had good reputation, and there is no large amount due unliquidated debt sentenced
by the court.
XI. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
√ Applicable □Not applicable
Implementation for annual performance incentive fund
On August 9, 2012 and August 28, 2012, the Company considers the adoption of "Hefei Meiling
annual performance incentive fund implementation plan" (hereinafter referred to as "" stimulus "")
on the 16th meeting of the 7th board of directors and the 2012-second provisional shareholders
meeting. Details were disclosed on information disclosure media appointed by the Company as
"Securities Times", "Chinese Securities Daily", "Hong Kong Commercial Daily" and the Juchao
network (www.cninfo.com.cn) on August 10, 2012 and August 29th in the form of announcement
(No.: 2012-028, No.:2012-035).
1. Implementation about 2012, 2013, 2014 and 2016 performance incentive fund provision and
distribution plan
40
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
See details in "Implementation of the company's annual incentive fund" in "XI Implementation of
the company's stock incentive plan, employee stock ownership plan, or other employee incentive
measures" in "Section V Significant Events" of the company's "2018 Annual Report" disclosed on
29 March 2019.
Up to the end of this reporting period, the company's stock purchased by some 2012 annual
performance incentive objects (non-directors, supervisors and senior management), 2013 annual
performance incentive objects (non-directors, supervisors and senior management), the 2014 annual
performance incentive objects (non-directors, supervisors and senior management) with their
granted 2012 annual performance incentive funds and own funds and 2013 & 2014 annual
performance incentive funds and own funds have been fully released for trading; details of the share
reduction for the above mentioned objects see below; if the holding period of the company’s shares
which are purchased by the 2016 annual performance incentive targets with their awarded 2016
annual performance incentive funds and their own funds is less than two years, all shares purchased
by the incentive targets will be locked in accordance with their commitments. In the Period, the
Company’s shares purchased by the current directors, supervisors and senior executives among the
performance incentive targets due to the implementation of the 2012, 2013, 2014 and 2016 annual
performance incentive plans have not reduced the shareholdings.
2. Shareholding and reducing of performance incentive objects of the Company
Ended as 30 June 2019, shares hold by all incentive objects amounting to 11,676,480 shares, a
1.1178 % in total share capital of the Company, including 9,986,587 A-share, a 0.9560% in total
share capital and 1,689,893 B-share, a 0.1618% in total share capital of the Company. Other
grantees of the 2012, 2013, 2014 and 2016 incentive plan (not being directors, supervisors and
senior management) have reduced holding of 4,837,335 in aggregate, accounting for about 0.4613%
of the total share capital and 120,950 shares are reduced in the reporting period.
XII. Major related transaction
(i) Related transaction with routine operation concerned
√ Applicable □Not applicable
1. Related transaction with routine operation concerned
41
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Trading Whether
Related Proport limit over the Available
Related Clearing
transaction ion in
Seri Type of Content of transaction approved approve form for similar Date of
Related Pricing amount similar
Relationship related related price (in 10 related Index of disclosure
al party principle (in 10 transact (in 10 d limited market disclosure
transaction transaction thousand transactio
thousand ions
Yuan) thousand or not n price
Yuan) (%)
Yuan) (Y/N)
Plastic
Sichuan Spot Juchao Website
particles, IC,
Changho Controlling exchange, (www.cninfo.com.c
Commodity discharge Marketing 2018-12-11;
1 ng shareholder and 18,083.03 18,083.03 2.57% 60,000 N Bank - n) No.: 2018-071,
purchased tube, plate price 2018-12-28
Electric ultimate controller acceptanc No.: 2018-075, No.:
and plastic
Co., Ltd. e 2018-079
pieces etc.
Changho Other enterprise Spot Juchao Website
ng Huayi control under the exchange, (www.cninfo.com.c
Commodity Compressor Marketing 2018-12-11;
2 Compress same controlling 20,599.19 20,599.19 2.93% 72,000 N Bank - n) No.: 2018-071,
purchased etc. price 2018-12-28
or Co., shareholder and acceptanc No.: 2018-075, No.:
Ltd. ultimate controller e 2018-079
Sichuan
Other enterprise Spot Juchao Website
Changho
control under the exchange, (www.cninfo.com.c
ng Mold Commodity Plastic Marketing 2018-12-11;
3 same controlling 38,909.02 38,909.02 5.53% 140,000 N Bank - n) No.: 2018-071,
Plastic purchased products etc. price 2018-12-28
shareholder and acceptanc No.: 2018-075, No.:
Tech.
ultimate controller e 2018-079
Co., Ltd.
Sichuan Other enterprise Spot Juchao Website
Door shell,
Changho control under the exchange, (www.cninfo.com.c
Commodity baseboard, Marketing 2018-12-11;
4 ng Jijia same controlling 17,967.00 17,967.00 2.54% 55,000 N Bank - n) No.: 2018-071,
purchased holder, Sheet price 2018-12-28
Fine Co., shareholder and acceptanc No.: 2018-075, No.:
metal parts
Ltd. ultimate controller e 2018-079
42
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan
Other enterprise Juchao Website
Changho Packing box,
control under the Bank (www.cninfo.com.c
ng Commodity fixed support Marketing 2018-12-11;
5 same controlling 6,539.21 6,539.21 0.93% 20,000 N acceptanc - n) No.: 2018-071,
Package purchased block, foam, price 2018-12-28
shareholder and e No.: 2018-075, No.:
Printing etc.
ultimate controller 2018-079
Co., Ltd.
Sichuan
Changho Other enterprise Spot Juchao Website
Printed
ng control under the exchange, (www.cninfo.com.c
Commodity board Marketing 2018-12-11;
6 Precision same controlling 1,030.50 1,030.50 0.15% 10,000 N Bank - n) No.: 2018-071,
purchased components price 2018-12-28
Electroni shareholder and acceptanc No.: 2018-075, No.:
etc.
cs Tech. ultimate controller e 2018-079
Co., Ltd.
Sichuan
Changho Other enterprise Juchao Website
ng New control under the (www.cninfo.com.c
Commodity Marketing Spot 2018-12-11;
7 Energy same controlling Battery 0.59 0.59 0.00% 5,000 N - n) No.: 2018-071,
purchased price exchange 2018-12-28
Technolo shareholder and No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Other enterprise Spot Juchao Website
081 control under the Power exchange, (www.cninfo.com.c
Commodity Marketing 2018-12-11;
8 Electroni same controlling transformer 95.04 95.04 0.01% 5,000 N Bank - n) No.: 2018-071,
purchased price 2018-12-28
c Group shareholder and etc. acceptanc No.: 2018-075, No.:
ultimate controller e 2018-079
Guangdo Other enterprise Spot Juchao Website
ng control under the exchange, (www.cninfo.com.c
Commodity Foam pieces Marketing 2018-12-11;
9 Changho same controlling 120.45 120.45 0.02% 5,000 N Bank - n) No.: 2018-071,
purchased etc. price 2018-12-28
ng shareholder and acceptanc No.: 2018-075, No.:
Electroni ultimate controller e 2018-079
43
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
cs Co.,
Ltd.
Sichuan
Changho
ng
Other enterprise Spot Juchao Website
Intelligen Circuit
control under the exchange, (www.cninfo.com.c
t Commodity board, Marketing 2018-12-11;
10 same controlling 16.10 16.10 0.00% 155,000 N Bank - n) No.: 2018-071,
Manufact purchased sucker, price 2018-12-28
shareholder and acceptanc No.: 2018-075, No.:
uring particle
ultimate controller e 2018-079
Technolo
gy Co.,
Ltd.
Sichuan Other enterprise Juchao Website
Hongwei control under the (www.cninfo.com.c
Commodity Centralized Marketing Spot 2018-12-11;
11 Technolo same controlling 168.36 168.36 0.02% 5,000 N - n) No.: 2018-071,
purchased Controller price exchange 2018-12-28
gy Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Sichuan
Other enterprise Juchao Website
Zhiyijia
control under the (www.cninfo.com.c
Network Commodity Electronic Marketing Spot 2018-12-11;
12 same controlling 23.61 23.61 0.00% 5,000 N - n) No.: 2018-071,
Technolo purchased products price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
gy Co.,
ultimate controller 2018-079
Ltd.
Sichuan Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Commodity Marketing Spot 2018-12-11;
13 ng Power same controlling Battery 0.30 0.30 0.00% 5,000 N - n) No.: 2018-071,
purchased price exchange 2018-12-28
Source shareholder and No.: 2018-075, No.:
Co., Ltd. ultimate controller 2018-079
44
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan
Changho Other enterprise Voice Spot Juchao Website
ng control under the components, exchange, (www.cninfo.com.c
Commodity Marketing 2018-12-11;
14 Electroni same controlling remote 2,014.78 2,014.78 0.29% 6,000 N Bank - n) No.: 2018-071,
purchased price 2018-12-28
c shareholder and controllers, acceptanc No.: 2018-075, No.:
Products ultimate controller etc. e 2018-079
Co., Ltd.
Sichuan
Internet
Ailian Other enterprise Spot Juchao Website
module,
Science control under the exchange, (www.cninfo.com.c
Commodity drawer Marketing 2018-12-11;
15 & same controlling 1,175.20 1,175.20 0.17% 155,000 N Bank - n) No.: 2018-071,
purchased guide, price 2018-12-28
Technolo shareholder and acceptanc No.: 2018-075, No.:
temperature
gy Co., ultimate controller e 2018-079
sensor, etc.
Ltd.
Hunan
Other enterprise Juchao Website
Grand-Pr
control under the Bank (www.cninfo.com.c
o Commodity Marketing 2018-12-11;
16 same controlling V-BOT 221.15 221.15 0.03% 1,000 N acceptanc - n) No.: 2018-071,
Intelligen purchased price 2018-12-28
shareholder and e No.: 2018-075, No.:
t Tech.
ultimate controller 2018-079
Company
Frequency
conversion
Sichuan Other enterprise integrated Spot Juchao Website
Aichuang control under the board, fixed exchange, (www.cninfo.com.c
Commodity Marketing 2018-12-11;
17 Technolo same controlling support 4,175.90 4,175.90 0.59% 20,000 N Bank - n) No.: 2018-071,
purchased price 2018-12-28
gy Co., shareholder and board, acceptanc No.: 2018-075, No.:
Ltd. ultimate controller connecting e 2018-079
tube, LED
lamp, etc.
45
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan
Changho
Regular bus Juchao Website
ng
Controlling fee, Staff (www.cninfo.com.c
Electroni Accept the Marketing Spot 2018-12-11;
18 shareholder and physical 35.59 35.59 0.04% 155,000 N - n) No.: 2018-071,
cs services price exchange 2018-12-28
ultimate controller examination No.: 2018-075, No.:
Holding
fee, etc. 2018-079
Group
Co., Ltd.
Information
Sichuan Juchao Website
system
Changho Controlling (www.cninfo.com.c
Accept the services, Marketing Spot 2018-12-11;
19 ng shareholder and 519.49 519.49 0.56% 5,500 N - n) No.: 2018-071,
services repair fees, price exchange 2018-12-28
Electric ultimate controller No.: 2018-075, No.:
shared
Co., Ltd. 2018-079
service fees
Sichuan
Other enterprise Juchao Website
Changho Transportati
control under the (www.cninfo.com.c
ng Accept the on, storage, Marketing Spot 2018-12-11;
20 same controlling 23,497.12 23,497.12 25.76% 60,000 N - n) No.: 2018-071,
Minsheng services loading and price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Logistics unloading
ultimate controller 2018-079
Co., LTD
Sichuan
Other enterprise Conference Juchao Website
Changho
control under the organization (www.cninfo.com.c
ng Mold Accept the Marketing Spot 2018-12-11;
21 same controlling fee, market 8.25 8.25 0.01% 5,500 N - n) No.: 2018-071,
Plastic services price exchange 2018-12-28
shareholder and support fee, No.: 2018-075, No.:
Tech.
ultimate controller etc. 2018-079
Co., Ltd.
Sichuan Other enterprise After-sale Juchao Website
Service control under the Accept the and Marketing Spot 2018-12-11; (www.cninfo.com.c
22 6,054.22 6,054.22 6.64% 35,000 N -
Exp. same controlling services installation price exchange 2018-12-28 n) No.: 2018-071,
Applianc shareholder and maintenance, No.: 2018-075, No.:
46
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
e Service ultimate controller etc. 2018-079
Chain
Co., Ltd.
Other enterprise Juchao Website
Sichuan
control under the (www.cninfo.com.c
Hongxin Accept the Software Marketing Spot 2018-12-11;
23 same controlling 56.02 56.02 0.06% 5,500 N - n) No.: 2018-071,
Software services usage fee price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Co., Ltd.
ultimate controller 2018-079
Guangdo
ng Other enterprise Juchao Website
Changho control under the Service fee (www.cninfo.com.c
Accept the Marketing Spot 2018-12-11;
24 ng same controlling for network 26.98 26.98 0.03% 5,500 N - n) No.: 2018-071,
services price exchange 2018-12-28
Electroni shareholder and service No.: 2018-075, No.:
cs Co., ultimate controller 2018-079
Ltd.
Other enterprise Juchao Website
Sichuan
control under the (www.cninfo.com.c
Jiahong Accept the Business Marketing Spot 2018-12-11;
25 same controlling 5.93 5.93 0.01% 155,000 N - n) No.: 2018-071,
Industrial services activity fee price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Co., Ltd.
ultimate controller 2018-079
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ng Accept the Business Marketing Spot 2018-12-11;
26 same controlling 8.89 8.89 0.01% 155,000 N - n) No.: 2018-071,
Internatio services activity fee price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
nal Hotel
ultimate controller 2018-079
Co., Ltd.
Sichuan Other enterprise Juchao Website
Changho control under the Accept the Marketing Spot 2018-12-11; (www.cninfo.com.c
27 Ticket fee 22.68 22.68 0.02% 155,000 N -
ng same controlling services price exchange 2018-12-28 n) No.: 2018-071,
Internatio shareholder and No.: 2018-075, No.:
47
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
nal ultimate controller 2018-079
Travel
Service
Co., Ltd.
Sichuan
Other enterprise Juchao Website
Changho Management
control under the (www.cninfo.com.c
ng Accept the fee and Marketing Spot 2018-12-11;
28 same controlling 183.54 183.54 0.20% 155,000 N - n) No.: 2018-071,
Property services maintenance price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Service fee
ultimate controller 2018-079
Co., Ltd.
Sichuan Other enterprise Juchao Website
Hongwei control under the Laboratory (www.cninfo.com.c
Accept the Marketing Spot 2018-12-11;
29 Technolo same controlling technical 10.65 10.65 0.01% 5,500 N - n) No.: 2018-071,
services price exchange 2018-12-28
gy Co., shareholder and service fee No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Sichuan
Other enterprise Juchao Website
Zhiyijia
control under the (www.cninfo.com.c
Network Accept the Platform Marketing Spot 2018-12-11;
30 same controlling 900.47 900.47 0.99% 5,500 N - n) No.: 2018-071,
Technolo services licensing price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
gy Co.,
ultimate controller 2018-079
Ltd.
Sichuan
Changho Other enterprise Juchao Website
ng control under the (www.cninfo.com.c
Accept the Communicat Marketing Spot 2018-12-11;
31 Network same controlling 2.45 2.45 0.00% 5,500 N - n) No.: 2018-071,
services ion fee price exchange 2018-12-28
Technolo shareholder and No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
48
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan
Changho
ng
Other enterprise Juchao Website
Intelligen
control under the Relocation (www.cninfo.com.c
t Accept the Marketing Spot 2018-12-11;
32 same controlling service fees, 90.08 90.08 0.10% 5,000 N - n) No.: 2018-071,
Manufact services price exchange 2018-12-28
shareholder and etc. No.: 2018-075, No.:
uring
ultimate controller 2018-079
Technolo
gy Co.,
Ltd.
Sichuan Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Accept the Equipment Marketing Spot 2018-12-11;
33 ng Jijia same controlling 2.52 2.52 0.00% 5,500 N - n) No.: 2018-071,
services repair costs price exchange 2018-12-28
Fine Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Sichuan
Changho Other enterprise Juchao Website
ng control under the (www.cninfo.com.c
Accept the Marketing Spot 2018-12-11;
34 Electroni same controlling HR service 45.05 45.05 0.05% 5,500 N - n) No.: 2018-071,
services price exchange 2018-12-28
c shareholder and No.: 2018-075, No.:
Products ultimate controller 2018-079
Co., Ltd.
Sichuan Juchao Website
Changho Controlling Water, (www.cninfo.com.c
Purchase fuel Marketing Spot 2018-12-11;
35 ng shareholder and electricity 1,030.00 1,030.00 0.15% 60,000 N - n) No.: 2018-071,
and power price exchange 2018-12-28
Electric ultimate controller and gas No.: 2018-075, No.:
Co., Ltd. 2018-079
Changho Other enterprise Juchao Website
Purchase fuel Marketing Spot 2018-12-11;
36 ng Huayi control under the Steam 38.32 38.32 0.01% 130 N - (www.cninfo.com.c
and power price exchange 2018-12-28
Compress same controlling n) No.: 2018-071,
49
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
or Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Guangdo
ng Other enterprise Juchao Website
Changho control under the Water and (www.cninfo.com.c
Purchase fuel Marketing Spot 2018-12-11;
37 ng same controlling electricity 50.16 50.16 0.01% 5,000 N - n) No.: 2018-071,
and power price exchange 2018-12-28
Electroni shareholder and fee No.: 2018-075, No.:
cs Co., ultimate controller 2018-079
Ltd.
Hefei
Changho
ng New Other enterprise Juchao Website
Energy control under the (www.cninfo.com.c
Purchase fuel Electricity Marketing Spot 2018-12-11;
38 Science same controlling 14.72 14.72 0.00% 5,000 N - n) No.: 2018-071,
and power fee price exchange 2018-12-28
& shareholder and No.: 2018-075, No.:
Technolo ultimate controller 2018-079
gy Co.,
Ltd.
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ng Purchase fuel Electricity Marketing Spot 2018-12-11;
39 same controlling 0.98 0.98 0.00% 155,000 N - n) No.: 2018-071,
Property and power fee price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Service
ultimate controller 2018-079
Co., Ltd.
Sichuan Air Spot Juchao Website
Changho Controlling conditioning, exchange, (www.cninfo.com.c
Sales of Marketing 2018-12-11;
40 ng shareholder and waste 623.87 623.87 0.07% 8,000 N Bank - n) No.: 2018-071,
goods price 2018-12-28
Electric ultimate controller materials, acceptanc No.: 2018-075, No.:
Co., Ltd. plastics, etc. e 2018-079
50
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan
Changho
Juchao Website
ng
Controlling (www.cninfo.com.c
Electroni Sales of Marketing Spot 2018-12-11;
41 shareholder and Fresh 31.91 31.91 0.00% 3,000 N - n) No.: 2018-071,
cs goods price exchange 2018-12-28
ultimate controller No.: 2018-075, No.:
Holding
2018-079
Group
Co., Ltd.
Sichuan Other enterprise Spot Juchao Website
Color board
Changho control under the exchange, (www.cninfo.com.c
Sales of and door Marketing 2018-12-11;
42 ng Jijia same controlling 2,698.81 2,698.81 0.30% 10,000 N Bank - n) No.: 2018-071,
goods shell price 2018-12-28
Fine Co., shareholder and acceptanc No.: 2018-075, No.:
component
Ltd. ultimate controller e 2018-079
Sichuan Color
Other enterprise Spot Juchao Website
Changho Masterbatch,
control under the exchange, (www.cninfo.com.c
ng Mold Sales of plastic Marketing 2018-12-11;
43 same controlling 10,882.50 10,882.50 1.19% 35,000 N Bank - n) No.: 2018-071,
Plastic goods particle and price 2018-12-28
shareholder and acceptanc No.: 2018-075, No.:
Tech. air-condition
ultimate controller e 2018-079
Co., Ltd. er
Lejiayi Other enterprise Air-conditio Spot Juchao Website
Chain control under the ner, exchange, (www.cninfo.com.c
Sales of Marketing 2018-12-11;
44 Managem same controlling refrigerator 3,428.75 3,428.75 0.38% 5,000 N Bank - n) No.: 2018-071,
goods price 2018-12-28
ent Co., shareholder and and washing acceptanc No.: 2018-075, No.:
Ltd. ultimate controller machine etc. e 2018-079
PT.CHA Other enterprise Juchao Website
NGHON control under the (www.cninfo.com.c
Sales of Refrigerator Marketing Spot 2018-12-11;
45 GELECT same controlling 381.52 381.52 0.04% 8,000 N - n) No.: 2018-071,
goods and freezer price exchange 2018-12-28
RICIND shareholder and No.: 2018-075, No.:
ONESIA ultimate controller 2018-079
51
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
CHANG Other enterprise Juchao Website
HONG(H control under the (www.cninfo.com.c
Sales of Air-conditio Marketing Spot 2018-12-11;
46 K)TRAD same controlling 19,688.72 19,688.72 2.16% 100,000 N - n) No.: 2018-071,
goods ner price exchange 2018-12-28
INGLIMI shareholder and No.: 2018-075, No.:
TED ultimate controller 2018-079
CHANG Other enterprise Juchao Website
HONGE control under the (www.cninfo.com.c
Sales of Refrigerator Marketing Spot 2018-12-11;
47 LECTRI same controlling 1,712.51 1,712.51 0.19% 8,000 N - n) No.: 2018-071,
goods and freezer price exchange 2018-12-28
C(AUST shareholder and No.: 2018-075, No.:
RALIA) ultimate controller 2018-079
Sichuan Other enterprise Juchao Website
Hongwei control under the (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
48 Technolo same controlling Fresh etc. 0.76 0.76 0.00% 8,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
gy Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ng Sales of Air-conditio Marketing Spot 2018-12-11;
49 same controlling 49.93 49.93 0.01% 8,000 N - n) No.: 2018-071,
Device goods ner price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Tech.
ultimate controller 2018-079
Co., Ltd.
Sichuan Refrigerator
Other enterprise Juchao Website
Changho and freezer,
control under the (www.cninfo.com.c
ng Sales of washing Marketing Spot 2018-12-11;
50 same controlling 88.66 88.66 0.01% 8,000 N - n) No.: 2018-071,
Minsheng goods machine, price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Logistics air-condition
ultimate controller 2018-079
Co., LTD er
Sichuan Other enterprise Juchao Website
Sales of Maintenance Marketing Spot 2018-12-11;
51 Service control under the 330.81 330.81 0.04% 8,000 N - (www.cninfo.com.c
goods parts etc. price exchange 2018-12-28
Exp. same controlling n) No.: 2018-071,
52
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Applianc shareholder and No.: 2018-075, No.:
e Service ultimate controller 2018-079
Chain
Co., Ltd.
Sichuan
Changho
Other enterprise Juchao Website
ng Gerun
control under the (www.cninfo.com.c
Environm Sales of Waste Marketing Spot 2018-12-11;
52 same controlling 444.60 444.60 0.05% 3,000 N - n) No.: 2018-071,
ental goods materials price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Protectio
ultimate controller 2018-079
n Tech.
Co., Ltd.
Hefei Other enterprise Juchao Website
Air
Changho control under the (www.cninfo.com.c
Sales of conditioners, Marketing Spot 2018-12-11;
53 ng same controlling 111.05 111.05 0.01% 8,000 N - n) No.: 2018-071,
goods refrigerators, price exchange 2018-12-28
Industrial shareholder and No.: 2018-075, No.:
etc
Co., Ltd. ultimate controller 2018-079
Sichuan Refrigerator
Other enterprise Spot Juchao Website
Zhiyijia and freezer,
control under the exchange, (www.cninfo.com.c
Network Sales of washing Marketing 2018-12-11;
54 same controlling 105,495.05 105,495.05 11.55% 400,000 N Bank - n) No.: 2018-071,
Technolo goods machine, price 2018-12-28
shareholder and acceptanc No.: 2018-075, No.:
gy Co., air-condition
ultimate controller e 2018-079
Ltd. er etc.
Sichuan Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Sales of Air-conditio Marketing Spot 2018-12-11;
55 ng same controlling 93.72 93.72 0.02% 8,000 N - n) No.: 2018-071,
goods ner price exchange 2018-12-28
Property shareholder and No.: 2018-075, No.:
Co., Ltd. ultimate controller 2018-079
53
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Rendering of Installation Marketing Spot 2018-12-11;
56 ng same controlling 64.15 64.15 0.02% 5,500 N - n) No.: 2018-071,
service Services price exchange 2018-12-28
Property shareholder and No.: 2018-075, No.:
Co., Ltd. ultimate controller 2018-079
Sichuan
Changho Other enterprise Juchao Website
ng control under the (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
57 Network same controlling Fresh 0.10 0.10 0.00% 8,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
Technolo shareholder and No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Sichuan
Changho
Other enterprise Juchao Website
ng
control under the (www.cninfo.com.c
Intelligen Sales of Marketing Spot 2018-12-11;
58 same controlling Fresh 0.44 0.44 0.00% 8,000 N - n) No.: 2018-071,
t Health goods price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Technolo
ultimate controller 2018-079
gy Co.,
Ltd.
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ng Sales of Air-conditio Marketing Spot 2018-12-11;
59 same controlling 4.60 4.60 0.00% 3,000 N - n) No.: 2018-071,
Property goods ner and fresh price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Service
ultimate controller 2018-079
Co., Ltd.
Guangdo Other enterprise Juchao Website
ng control under the Sales of Water Marketing Spot 2018-12-11; (www.cninfo.com.c
60 1.72 1.72 0.00% 8,000 N -
Changho same controlling goods purifier price exchange 2018-12-28 n) No.: 2018-071,
ng shareholder and No.: 2018-075, No.:
54
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Electroni ultimate controller 2018-079
cs Co.,
Ltd.
Other enterprise Juchao Website
BVCH
control under the (www.cninfo.com.c
Optronics Sales of Marketing Spot 2018-12-11;
61 same controlling Fresh 0.68 0.68 0.00% 8,000 N - n) No.: 2018-071,
(Sichuan) goods price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Co., Ltd.
ultimate controller 2018-079
Sichuan
Changho Other enterprise Juchao Website
ng control under the (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
62 Electroni same controlling Fresh 8.22 8.22 0.00% 8,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
c shareholder and No.: 2018-075, No.:
Products ultimate controller 2018-079
Co., Ltd.
Sichuan Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
63 ng Group same controlling Fresh 1.84 1.84 0.00% 3,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
Finance shareholder and No.: 2018-075, No.:
Co., Ltd. ultimate controller 2018-079
Changho Other enterprise Juchao Website
ng Huayi control under the (www.cninfo.com.c
Rendering of Technical Marketing Spot 2018-12-11;
64 Compress same controlling 37.74 37.74 0.00% 5,500 N - n) No.: 2018-071,
service Service Fee price exchange 2018-12-28
or Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Changho Other enterprise Juchao Website
ng Huayi control under the (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
65 Compress same controlling Waste foam 0.11 0.11 0.00% 8,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
or Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
55
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ng Sales of Marketing Spot 2018-12-11;
66 same controlling Fresh 0.35 0.35 0.00% 8,000 N - n) No.: 2018-071,
Package goods price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Printing
ultimate controller 2018-079
Co., Ltd.
Sichuan Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Sales of Air-conditio Marketing Spot 2018-12-11;
67 ng Power same controlling 4.41 4.41 0.00% 8,000 N - n) No.: 2018-071,
goods ner price exchange 2018-12-28
Source shareholder and No.: 2018-075, No.:
Co., Ltd. ultimate controller 2018-079
Sichuan
Changho Other enterprise Juchao Website
ng control under the (www.cninfo.com.c
Sales of Air-conditio Marketing Spot 2018-12-11;
68 Education same controlling 70.86 70.86 0.01% 3,000 N - n) No.: 2018-071,
goods ner price exchange 2018-12-28
Technolo shareholder and No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Other enterprise Juchao Website
081 control under the (www.cninfo.com.c
Sales of Compressor, Marketing Spot 2018-12-11;
69 Electroni same controlling 1.72 1.72 0.00% 8,000 N - n) No.: 2018-071,
goods AC contactor price exchange 2018-12-28
c Group shareholder and No.: 2018-075, No.:
ultimate controller 2018-079
GuangYu
an Other enterprise Air Juchao Website
Changho control under the conditioners, (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
70 ng same controlling refrigerators, 63.28 63.28 0.01% 8,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
Electroni shareholder and washing No.: 2018-075, No.:
c ultimate controller machine etc. 2018-079
Technolo
56
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
gy Co.,
Ltd.
Sichuan
Ailian Other enterprise Juchao Website
Science control under the (www.cninfo.com.c
Sales of Air-conditio Marketing Spot 2018-12-11;
71 & same controlling 2.09 2.09 0.00% 3,000 N - n) No.: 2018-071,
goods ner price exchange 2018-12-28
Technolo shareholder and No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Other enterprise Juchao Website
Sichuan
control under the (www.cninfo.com.c
Jiahong Sales of Marketing Spot 2018-12-11;
72 same controlling Fresh 13.87 13.87 0.00% 3,000 N - n) No.: 2018-071,
Industrial goods price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Co., Ltd.
ultimate controller 2018-079
Sichuan
Changho Other enterprise Juchao Website
ng New control under the (www.cninfo.com.c
Rendering of Marketing Spot 2018-12-11;
73 Energy same controlling Process cost 3.06 3.06 0.00% 5,500 N - n) No.: 2018-071,
service price exchange 2018-12-28
Technolo shareholder and No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ng Sales of Marketing Spot 2018-12-11;
74 same controlling Fresh 3.62 3.62 0.00% 3,000 N - n) No.: 2018-071,
Internatio goods price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
nal Hotel
ultimate controller 2018-079
Co., Ltd.
57
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan
Changho Other enterprise Juchao Website
ng control under the Logic (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
75 Precision same controlling integrated 0.09 0.09 0.00% 8,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
Electroni shareholder and circuit No.: 2018-075, No.:
cs Tech. ultimate controller 2018-079
Co., Ltd.
Other enterprise Juchao Website
Orion.PD control under the (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
76 P.Co., same controlling Refrigerator 1,936.82 1,936.82 0.21% 3,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
Ltd. shareholder and No.: 2018-075, No.:
ultimate controller 2018-079
CHANG
Other enterprise Juchao Website
HONGE
control under the Refrigerator, (www.cninfo.com.c
LECTRI Sales of Marketing Spot 2018-12-11;
77 same controlling Air 717.43 717.43 0.08% 8,000 N - n) No.: 2018-071,
CMIDDL goods price exchange 2018-12-28
shareholder and Conditioning No.: 2018-075, No.:
EEASTF
ultimate controller 2018-079
ZCO
Sichuan Other enterprise Spot Juchao Website
Aichuang control under the exchange, (www.cninfo.com.c
Sales of Marketing 2018-12-11;
78 Technolo same controlling Juicer, Fresh 26.28 26.28 0.00% 3,000 N Bank - n) No.: 2018-071,
goods price 2018-12-28
gy Co., shareholder and acceptanc No.: 2018-075, No.:
Ltd. ultimate controller e 2018-079
Sichuan Other enterprise Spot Juchao Website
Aichuang control under the exchange, (www.cninfo.com.c
Rendering of Technical Marketing 2018-12-11;
79 Technolo same controlling 0.26 0.26 0.00% 3,000 N Bank - n) No.: 2018-071,
service Service Fee price 2018-12-28
gy Co., shareholder and acceptanc No.: 2018-075, No.:
Ltd. ultimate controller e 2018-079
58
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Mianyang
Huafeng Other enterprise Juchao Website
Interconn control under the Air (www.cninfo.com.c
Sales of Marketing Spot 2018-12-11;
80 ection same controlling Conditioning 324.56 324.56 0.04% 3,000 N - n) No.: 2018-071,
goods price exchange 2018-12-28
Technolo shareholder and , Fresh No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Guangdo
ng Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Provide fuel Marketing Spot 2018-12-11;
81 ng same controlling Utility fee 59.14 59.14 0.01% 8,000 N - n) No.: 2018-071,
and power price exchange 2018-12-28
Electroni shareholder and No.: 2018-075, No.:
cs Co., ultimate controller 2018-079
Ltd.
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ng Provide fuel Marketing Spot 2018-12-11;
82 same controlling Utility fee 4.64 4.64 0.00% 8,000 N - n) No.: 2018-071,
Minsheng and power price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Logistics
ultimate controller 2018-079
Co., LTD
Sichuan Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Provide fuel Marketing Spot 2018-12-11;
83 ng Jijia same controlling Utility fee 6.34 6.34 0.00% 8,000 N - n) No.: 2018-071,
and power price exchange 2018-12-28
Fine Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Sichuan Other enterprise Juchao Website
Water,
Changho control under the (www.cninfo.com.c
Provide fuel electricity Marketing Spot 2018-12-11;
84 ng Mold same controlling 368.68 368.68 0.04% 8,000 N - n) No.: 2018-071,
and power and gas price exchange 2018-12-28
Plastic shareholder and No.: 2018-075, No.:
charges
Tech. ultimate controller 2018-079
59
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Co., Ltd.
Sichuan
Changho Other enterprise Juchao Website
ng control under the (www.cninfo.com.c
Provide fuel Marketing Spot 2018-12-11;
85 Precision same controlling Utility fee 0.07 0.07 0.00% 8,000 N - n) No.: 2018-071,
and power price exchange 2018-12-28
Electroni shareholder and No.: 2018-075, No.:
cs Tech. ultimate controller 2018-079
Co., Ltd.
Sichuan
Changho Other enterprise Juchao Website
ng control under the (www.cninfo.com.c
Provide fuel Marketing Spot 2018-12-11;
86 Devices same controlling Utility fee 40.22 40.22 0.00% 8,000 N - n) No.: 2018-071,
and power price exchange 2018-12-28
Technolo shareholder and No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Sichuan
Service Other enterprise Juchao Website
Exp. control under the (www.cninfo.com.c
Provide fuel Electricity Marketing Spot 2018-12-11;
87 Applianc same controlling 0.49 0.49 0.00% 8,000 N - n) No.: 2018-071,
and power fee price exchange 2018-12-28
e Service shareholder and No.: 2018-075, No.:
Chain ultimate controller 2018-079
Co., Ltd.
Guangdo
Other enterprise Juchao Website
ng
control under the (www.cninfo.com.c
Changho Rent to the Office Marketing Spot 2018-12-11;
88 same controlling 1.75 1.75 0.01% 5,000 N - n) No.: 2018-071,
ng related party building price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Electroni
ultimate controller 2018-079
cs Co.,
60
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Ltd.
Hefei Other enterprise Juchao Website
Changho control under the (www.cninfo.com.c
Rent to the Marketing Spot 2018-12-11;
89 ng same controlling Apartment 9.60 9.60 0.04% 5,000 N - n) No.: 2018-071,
related party price exchange 2018-12-28
Industrial shareholder and No.: 2018-075, No.:
Co., Ltd. ultimate controller 2018-079
Sichuan Other enterprise Juchao Website
Aichuang control under the (www.cninfo.com.c
Rent to the Forklift, Marketing Spot 2018-12-11;
90 Technolo same controlling 2.05 2.05 0.01% 3,000 N - n) No.: 2018-071,
related party warehouse price exchange 2018-12-28
gy Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Sichuan
Ailian Other enterprise Juchao Website
Science control under the (www.cninfo.com.c
Rent to the Marketing Spot 2018-12-11;
91 & same controlling Warehouse 0.13 0.13 0.00% 3,000 N - n) No.: 2018-071,
related party price exchange 2018-12-28
Technolo shareholder and No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Sichuan Other enterprise Juchao Website
Hongwei control under the (www.cninfo.com.c
Rent to the Marketing Spot 2018-12-11;
92 Technolo same controlling Workshop 4.53 4.53 0.02% 5,000 N - n) No.: 2018-071,
related party price exchange 2018-12-28
gy Co., shareholder and No.: 2018-075, No.:
Ltd. ultimate controller 2018-079
Sichuan Other enterprise Juchao Website
Office,
Service control under the (www.cninfo.com.c
Rent to the workshop, Marketing Spot 2018-12-11;
93 Exp. same controlling 18.06 18.06 0.08% 5,000 N - n) No.: 2018-071,
related party and forklift price exchange 2018-12-28
Applianc shareholder and No.: 2018-075, No.:
etc.
e Service ultimate controller 2018-079
61
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Chain
Co., Ltd.
Sichuan Juchao Website
Changho Controlling (www.cninfo.com.c
Rent to the Marketing Spot 2018-12-11;
94 ng shareholder and Apartment 2.03 2.03 0.01% 5,000 N - n) No.: 2018-071,
related party price exchange 2018-12-28
Electric ultimate controller No.: 2018-075, No.:
Co., Ltd. 2018-079
Sichuan Other enterprise Juchao Website
Workshop,
Changho control under the Bank (www.cninfo.com.c
Rent to the Forklift, Marketing 2018-12-11;
95 ng Jijia same controlling 34.97 34.97 0.16% 5,000 N acceptanc - n) No.: 2018-071,
related party Warehouse, price 2018-12-28
Fine Co., shareholder and e No.: 2018-075, No.:
etc.
Ltd. ultimate controller 2018-079
Sichuan
Changho Other enterprise Juchao Website
ng control under the Apartment, (www.cninfo.com.c
Rent to the Marketing Spot 2018-12-11;
96 Precision same controlling and 2# living 1.98 1.98 0.01% 5,000 N - n) No.: 2018-071,
related party price exchange 2018-12-28
Electroni shareholder and area No.: 2018-075, No.:
cs Tech. ultimate controller 2018-079
Co., Ltd.
Sichuan
Other enterprise Part rental of Juchao Website
Changho
control under the factory (www.cninfo.com.c
ng Rent to the Marketing Spot 2018-12-11;
97 same controlling buildings 142.99 142.99 0.64% 5,000 N - n) No.: 2018-071,
Minsheng related party price exchange 2018-12-28
shareholder and and office No.: 2018-075, No.:
Logistics
ultimate controller buildings 2018-079
Co., LTD
Sichuan Other enterprise Juchao Website
Workshop, Bank
Changho control under the Rent to the Marketing 2018-12-11; (www.cninfo.com.c
98 warehouse 164.33 164.33 0.74% 5,000 N acceptanc -
ng Mold same controlling related party price 2018-12-28 n) No.: 2018-071,
etc. e
Plastic shareholder and No.: 2018-075, No.:
62
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Tech. ultimate controller 2018-079
Co., Ltd.
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ng Rent to the Marketing Spot 2018-12-11;
99 same controlling Workshop 71.15 71.15 0.32% 5,000 N - n) No.: 2018-071,
Device related party price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Tech.
ultimate controller 2018-079
Co., Ltd.
Chengdu
Changho
Other enterprise Juchao Website
ng
control under the Rent from (www.cninfo.com.c
Electroni Marketing Spot 2018-12-11;
100 same controlling the related office 24.08 24.08 0.11% 5,000 N - n) No.: 2018-071,
c price exchange 2018-12-28
shareholder and party No.: 2018-075, No.:
Technolo
ultimate controller 2018-079
gy Co.,
Ltd.
Guangdo
ng Other enterprise Juchao Website
Changho control under the Rent from (www.cninfo.com.c
Staff Marketing Spot 2018-12-11;
101 ng same controlling the related 1.30 1.30 0.01% 5,000 N - n) No.: 2018-071,
dormitory price exchange 2018-12-28
Electroni shareholder and party No.: 2018-075, No.:
cs Co., ultimate controller 2018-079
Ltd.
Sichuan Juchao Website
Changho Controlling Rent from (www.cninfo.com.c
Workshop, Marketing Spot 2018-12-11;
102 ng shareholder and the related 181.45 181.45 0.82% 5,000 N - n) No.: 2018-071,
office price exchange 2018-12-28
Electric ultimate controller party No.: 2018-075, No.:
Co., Ltd. 2018-079
63
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Sichuan
Changho
Juchao Website
ng
Controlling Rent from (www.cninfo.com.c
Electroni Staff Marketing Spot 2018-12-11;
103 shareholder and the related 1.40 1.40 0.01% 155,000 N - n) No.: 2018-071,
cs dormitory price exchange 2018-12-28
ultimate controller party No.: 2018-075, No.:
Holding
2018-079
Group
Co., Ltd.
Mianyang
Technolo Other enterprise Juchao Website
gy Town control under the New Plant (www.cninfo.com.c
Purchasing Marketing Spot 2018-12-11;
104 Big Data same controlling Security 111.28 111.28 0.30% 5,000 N - n) No.: 2018-071,
fixed assets price exchange 2018-12-28
Technolo shareholder and Engineering No.: 2018-075, No.:
gy Co., ultimate controller 2018-079
Ltd.
Sichuan Other enterprise Juchao Website
Production
Hongche control under the (www.cninfo.com.c
Purchasing line Marketing Spot 2018-12-11;
105 ng Real same controlling 5.66 5.66 0.02% 155,000 N - n) No.: 2018-071,
fixed assets modification, price exchange 2018-12-28
Estate shareholder and No.: 2018-075, No.:
etc.
Co., Ltd. ultimate controller 2018-079
Other enterprise Juchao Website
Sichuan
control under the Bank (www.cninfo.com.c
Hongxin Purchasing Information Marketing 2018-12-11;
106 same controlling 149.06 149.06 0.40% 5,000 N acceptanc - n) No.: 2018-071,
Software fixed assets system etc. price 2018-12-28
shareholder and e No.: 2018-075, No.:
Co., Ltd.
ultimate controller 2018-079
Other enterprise Juchao Website
Sichuan
control under the (www.cninfo.com.c
Huanyu Purchasing Workshop Marketing Spot 2018-12-11;
107 same controlling 1,700.79 1,700.79 4.55% 155,000 N - n) No.: 2018-071,
Industrial fixed assets construction price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Co. Ltd.
ultimate controller 2018-079
64
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Other enterprise Juchao Website
Sichuan Infrastructur
control under the (www.cninfo.com.c
Jiahong Purchasing e such as Marketing Spot 2018-12-11;
108 same controlling 134.75 134.75 0.36% 155,000 N - n) No.: 2018-071,
Industrial fixed assets greening of price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Co. Ltd. new factories
ultimate controller 2018-079
Sichuan Juchao Website
Changho Controlling Production (www.cninfo.com.c
Purchasing Marketing Spot 2018-12-11;
109 ng shareholder and equipment, 3,275.11 3,275.11 8.76% 5,000 N - n) No.: 2018-071,
fixed assets price exchange 2018-12-28
Electric ultimate controller patent right No.: 2018-075, No.:
Co., Ltd. 2018-079
Sichuan
Other enterprise Juchao Website
Changho
control under the (www.cninfo.com.c
ngElectro Purchasing LED Display Marketing Spot 2018-12-11;
110 same controlling 14.25 14.25 0.04% 5,000 N - n) No.: 2018-071,
nic fixed assets System price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Systems
ultimate controller 2018-079
Co., Ltd.
Sichuan
Changho Other enterprise New Plant Juchao Website
ng control under the Communicat (www.cninfo.com.c
Purchasing Marketing Spot 2018-12-11;
111 Network same controlling ion Network 82.05 82.05 0.22% 5,000 N - n) No.: 2018-071,
fixed assets price exchange 2018-12-28
Technolo shareholder and Infrastructur No.: 2018-075, No.:
gy Co., ultimate controller e 2018-079
Ltd.
Sichuan
Changho Other enterprise Spot Juchao Website
Production
ng control under the exchange, (www.cninfo.com.c
Purchasing line Marketing 2018-12-11;
112 Intelligen same controlling 2,719.31 2,719.31 7.28% 5,000 N Bank - n) No.: 2018-071,
fixed assets construction price 2018-12-28
t shareholder and acceptanc No.: 2018-075, No.:
etc.
Manufact ultimate controller e 2018-079
uring
65
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Tech.
Co., Ltd.
Sichuan
Changho
Other enterprise Juchao Website
ng Gerun Computers,
control under the (www.cninfo.com.c
Environm Sales of air Marketing Spot 2018-12-11;
113 same controlling 0.81 0.81 0.01% 3,000 N - n) No.: 2018-071,
ental goods conditioners, price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Protectio etc.
ultimate controller 2018-079
n Tech.
Co., Ltd.
Sichuan
Changho
Juchao Website
ng
Controlling (www.cninfo.com.c
Electroni Sales of Office Marketing Spot 2018-12-11;
114 shareholder and 1.40 1.40 0.02% 3,000 N - n) No.: 2018-071,
cs goods furniture price exchange 2018-12-28
ultimate controller No.: 2018-075, No.:
Holding
2018-079
Group
Co., Ltd.
Other enterprise Juchao Website
Sichuan
control under the Office (www.cninfo.com.c
Jiahong Sales of Marketing Spot 2018-12-11;
115 same controlling furniture, 0.48 0.48 0.01% 3,000 N - n) No.: 2018-071,
Industrial goods price exchange 2018-12-28
shareholder and freezer No.: 2018-075, No.:
Co. Ltd.
ultimate controller 2018-079
Changho
Other enterprise Juchao Website
ng Computers,
control under the (www.cninfo.com.c
Shundato Sales of air Marketing Spot 2018-12-11;
116 same controlling 12.82 12.82 0.17% 5,000 N - n) No.: 2018-071,
ng fixed assets conditioners, price exchange 2018-12-28
shareholder and No.: 2018-075, No.:
Science freezer etc,
ultimate controller 2018-079
and
66
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Technolo
gy
Develop
ment Co.,
Ltd.
Finance
lease,
Other enterprise Financial Juchao Website
Yuanxin commercial
control under the reconciliatio (www.cninfo.com.c
Financial factoring and Marketing Spot 2018-12-11;
117 same controlling n business, 184.31 184.31 1,500 N - n) No.: 2018-071,
Lease financial price exchange 2018-12-28
shareholder and Finance No.: 2018-075, No.:
Co., Ltd. reconciliatio
ultimate controller lease 2018-079
n business
etc.
Total - - 302,628.47 - - - - - - -
Detail of sales return with major amount involved Not applicable
1. It is estimated that the related transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and accepting fuel
and power from Sichuan Changhong and its subsidiary by the Company for year of 2019 was RMB 2960 million at most (tax-excluded), actually
RMB 860,467,700 occurred in reporting period (tax-excluded).
2. It is estimated that the related transaction amount resulted by purchasing goods (including compressor purchased, cleaning robot etc.) from
Changhong Huayi and its subsidiary by the Company for year of 2019 was RMB 730 million at most (tax-excluded), actually RMB 208,203,400
occurred in reporting period (tax-excluded).
Report the actual implementation of the daily related transactions which 3. It is estimated that the related transaction amount resulted by purchasing or selling equipment, software, maintenance and spare parts and molds
were projected about their total amount by types during the reporting etc. from Sichuan Changhong and its subsidiary by the Company for year of 2019 was RMB 50 million at most (tax-excluded), actually RMB
period (if applicable) 36,445,700 occurred in reporting period (tax-excluded).
4. It is estimated that the related transaction amount resulted by purchasing goods from and providing fuel and power to Sichuan Changhong and its
subsidiary by the Company for year of 2019 was RMB 5661 million at most (tax-excluded), actually RMB 1,468,647,900 occurred in reporting
period (tax-excluded).
5. It is estimated that the related transaction amount resulted by accepting energy, power and service from Huayi Compressor and its subsidiary by
the Company for year of 2019 was RMB 1.3 million at most (tax-excluded), actually RMB 383,200 occurred in reporting period (tax-excluded).
6. It is estimated that the related transaction amount resulted by leasing business from Sichuan Changhong and its subsidiary by the Company for
67
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
year of 2019 was RMB 50 million at most (tax-excluded), actually RMB 6,582,200 occurred in reporting period (tax-excluded).
7. It is estimated that the related transaction amount from domestic finished goods logistic business outsourcing to Sichuan Changhong Minsheng
Logistic Co., Ltd. by the Company for year of 2019 was RMB 600 million at most (tax-excluded), actually RMB 234,971,200 occurred in reporting
period (tax-excluded).
8. It is estimated that the related transaction amount from after sales service of domestic goods outsourcing to Sichuan Service Exp. Appliance
Service Chain Co., Ltd. by the Company for year of 2019 was RMB 350 million at most (tax-excluded), actually RMB 60,542,200 occurred in
reporting period.
9. It is estimated that the related transaction amount resulted by accepting other service and labor service etc. or providing other service and labor
service etc. to Sichuan Changhong and its subsidiary by the Company for year of 2019 was RMB 55 million at most (tax-excluded), actually RMB
16,768,300 occurred in reporting period (tax-excluded).
10. It is estimated that the related transaction amount resulted by selling goods from Sichuan Changhong Electronics Group and its subsidiary by
the Company for year of 2019 was RMB 90 million at most (tax-excluded), actually RMB 28,661,800 occurred in reporting period.
11. It is estimated that the related transaction amount resulted by purchasing goods and receiving labor services, fuel power, leasing and purchasing
equipment etc. from Sichuan Changhong Electronics Group and its subsidiary by the Company for year of 2019 was RMB 180 million at most
(tax-excluded), actually RMB 102,768,000 occurred in reporting period.
12. It is estimated that the related transaction amount resulted by receiving finance lease, commercial factoring and financial reconciliation business
etc. from Yuanxin Financial Lease Co., Ltd. was RMB 15 million at most, actually RMB 1,843,100 occurred in reporting period.
Reasons for major differences between trading price and market
Not applicable
reference price
68
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
2. Related transactions with Finance Company
The resolution of the 34th meeting of the 8th board of directors on August 9, 2017 and the second
extraordinary general meeting of 2017 on September 12, 2017 approved and agreed the company
to continue carry out the financial service cooperation with Sichuan Changhong Group Finance
Co., Ltd. (hereinafter referred to as “Changhong Finance Company”) and sign a triennial Financial
Service Agreement, It is agreed that the maximum deposit balance (including accrued interest and
handling fees) and the highest principal and interest of outstanding loan the Company in any
finance company within the three-year validity period from the effective date of the new agreement
shall be adjusted to not exceed RMB 3.8 billion per day. In accordance with the agreement,
Changhong Finance Company shall provide a series of financial services such as deposit and loan
in its business scope according to the requirements of the Company and its subsidiaries. The
related transactions between the company and its subsidiaries and Changhong Finance Company
from the beginning of the year to the end of the reporting period are as follows:
Up to 30 June 2019, the Company and its subsidiaries have opened financial business as savings,
note drawing and notes discounted with Changhong Finance Company. The Company and its
subordinate company own 2,932,250,969.90 Yuan savings in Changhong Finance Company, takes
27.23% of the deposit taking balance in Changhong Finance Company without 30% occupied,
balance of notes drawing at period-end was 1,131,934,449.07 Yuan and balance of notes
discounted outstanding as 909,769,135.45 Yuan. More details are:
In RMB
Interest and
Balance at Increased in the Decreased in the Balance at
Item commission charge
year-begin Year Year period-end
received or paid
I. Savings in
Changhong Group 3,119,117,207.91 14,969,351,157.59 15,156,217,395.60 2,932,250,969.90 43,620,394.10
Finance Company
II. Borrowings from
Changhong Group - - - - -
Finance Company
1.Short-term loans - - - - -
2.Long-term loans - - - - -
III. Other financial
- - - - -
business
1.notes drawing 819,806,514.07 1,153,750,596.90 841,622,661.90 1,131,934,449.07 512,524.46
I. Savings in
Changhong Group 772,233,395.98 719,677,208.06 582,141,468.59 909,769,135.45 5,238,075.83
Finance Company
69
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
According to the regulation of Information Disclosure Business Memorandum No. 2 - Transactions
and Related Transactions of the Shenzhen Stock Exchange, the company issued the Risk
Continuous Assessment Report About Sichuan Changhong Group Finance Co., Ltd. for the deposit,
loan and other financial services that the company carried out with Changhong Finance Company
during the reporting period, and disclosed at www.cninfo.com.cn on 16 August 2019.
(ii) Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
There are no related transactions by assets acquisition and sold in the period
(iii) Material related transaction of jointly foreign investment
□ Applicable √ Not applicable
The Company has no material related transaction of jointly foreign investment occurred in
reporting period-end.
(iv) Connect of related liability and debt
√ Applicable □ Not applicable
Whether has non-operational contact of related liability and debts or not
□ Yes √No
No non-operational contact of related liability or debts in Period
(v) Other related transactions
□ Applicable √ Not applicable
No other related transactions in Period
XIII. Non-business capital occupying by controlling shareholders and its related parties
□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period.
XIV. Significant contract and implementations
(i) Entrust, contract and leasing
1. Entrust
□ Applicable √ Not applicable
No entrust in Period.
70
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
2. Contract
□ Applicable √ Not applicable
No contract in Period.
3. Leasing
√ Applicable □ Not applicable
Explanation:
Operational leasing of the Company please found more details in “investment real estate”, “fixed
assets”, “Lease of related party” and “Rent of related party” in Note of Financial Statement.
Gains or losses to the Company from projects that reached over 10% in total profit of the Company
in reporting period.
□ Applicable √Not applicable
No gains or losses to the Company from projects that reached over 10% in total profit of the
Company in reporting period.
(ii) Material guarantee
√ Applicable □ Not applicable
1.Guarantee
During the reporting period, we did not offering guarantee to any legal person or natural person
except the wholly-owned and controlling subsidiary, the guarantees that the company provides for
its wholly-owned and holding subsidiaries are for the loans generated by supporting their
production and operation, the guaranty type is assurance; up to 30 June 2019, the Company has
granted credit to the guarantees of some wholly-owned and holding subsidiaries, in addition to the
wholly-owned subsidiary Changhong Air-conditioner, other subsidiaries have no actual guarantee.
The external guarantees of the Company and subsidiaries are as follows:
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Complet
Name of
Actual date of Actual e Guarantee
the Related Announcement Guarante Guarante
happening (Date of guarantee Guarantee type impleme for related
Company disclosure date e limit e term
signing agreement) limit ntation party
guaranteed
or not
- - - - -- - - -
Total approving external guarantee 0 Total actual occurred 0
71
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
in report period (A1) external guarantee in report
period (A2)
Total actual balance of
Total approved external guarantee at
0 external guarantee at the end 0
the end of report period (A3)
of report period (A4)
Guarantee between the Company and the subsidiaries
Complet
Name of
Actual date of Actual e Guarantee
the Related Announcement Guarante Guarante
happening (Date of guarantee Guarantee type impleme for related
Company disclosure date e limit e term
signing agreement) limit ntation party
guaranteed
or not
Joint liability
2018-3-30 10,000 1-year Y N
guaranty
Joint liability
2018-4-11 6,000 1-year Y N
guaranty
Joint liability
2018-4-12 5,000 1-year Y N
guaranty
Notice No. 2018-005,
Joint liability
No. 2018-009, No. 2018-4-18 5,500 1-year Y N
guaranty
2018-029 released on 30 70,000
Joint liability
Mar. 2018 and 11 May 2018-8-21 5,000 1-year N N
guaranty
2018
Zhongshan Joint liability
2018-9-11 10,000 1-year N N
Changhong guaranty
Electric Joint liability
2018-10-11 5,000 1-year N N
Co., Ltd. guaranty
Joint liability
2018-10-25 10,000 1-year N N
guaranty
Joint liability
2019-1-22 10,000 1-year N N
guaranty
Notice No. 2019-004,
Joint liability
No. 2019-006, No. 2019-4-4 5,500 1-year N N
guaranty
2019-012 released on 30 130,000
Joint liability
Jan. 2019 and 23 Feb. 2019-4-30 10,000 1-year N N
guaranty
2019
Joint liability
2019-5-31 5,000 1-year N N
guaranty
Notice No. 2018-005, Joint liability
Guangdong 2018-8-31 4,000 7 months Y N
No. 2018-009, No. guaranty
Changhong
2018-029 released on 30 25,500
Ridian Joint liability
Mar. 2018 and 11 May 2018-9-22 4,500 1-year N N
Technology guaranty
2018
Co., Ltd.
Notice No. 2019-004, 26,000 2019-1-22 2,500 Joint liability 1-year N N
72
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
No. 2019-006, No. guaranty
2019-012 released on 30
Joint liability
Jan. 2019 and 23 Feb. 2019-4-30 4,000 1-year N N
guaranty
2019
Notice No. 2018-005, Joint liability
2018-6-29 1,000 1-year Y N
No. 2018-009, No. guaranty
2018-029, No.
2018-056, No. 9,000
Zhongke Joint liability 10
2018-029 released on 30 2018-7-20 2,000 Y N
Meiling guaranty months
Mar. 2018, 11 May
Cryogenic
2018 and 18 Oct. 2018
Technology
Notice No. 2019-004,
Co., Ltd.
No. 2019-006, No.
2019-012 released on 30 14,000 - - - - - -
Jan. 2019 and 23 Feb.
2019。
Sichuan Notice No. 2019-004,
Changhong No. 2019-006, No.
Air-conditi 2019-012 released on 30 100,000 - - - - - -
oner Co., Jan. 2019 and 23 Feb.
Ltd. 2019。
Changhong Joint liability
Notice No. 2018-061, 2019-1-10 2,062.41 1-year N N
RUBA guaranty
No. 2018-063 released 9 6,264
Trade Joint liability
Nov. 2018 2019-1-10 1,888.08 1-year N N
Company guaranty
Jiangxi Notice No. 2019-004, Joint liability
2019-1-10 5,000 1-year N N
Meiling No. 2019-006, No. guaranty
Electric 2019-012 released on 30 25,000
Joint liability
Appliance Jan. 2019 and 23 Feb. 2019-3-21 10,000 1-year N N
guaranty
Co., Ltd. 2019。
Hefei
Notice No. 2019-004,
Meiling
No. 2019-006, No.
Nonferrous Joint liability
2019-012 released on 30 3,000 2019-6-19 500 6 months N N
Metal guaranty
Jan. 2019 and 23 Feb.
Products
2019。
Co., Ltd.
Total amount of actual
Total amount of approving guarantee occurred guarantee for
298,000 124,450.49
for subsidiaries in report period (B1) subsidiaries in report period
(B2)
Total amount of approved guarantee Total balance of actual
304,264 90,950.49
for subsidiaries at the end of guarantee for subsidiaries at
73
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
reporting period (B3) the end of reporting period
(B4)
Guarantee of the subsidiaries for the subsidiaries
Complet
Name of
Actual date of Actual e Guarantee
the Related Announcement Guarante Guarante
happening (Date of guarantee Guarantee type impleme for related
Company disclosure date e limit e term
signing agreement) limit ntation party
guaranteed
or not
- - - - - - - - -
Total amount of actual
Total amount of approving guarantee occurred guarantee for
0 0
for subsidiaries in report period (C1) subsidiaries in report period
(C2)
Total balance of actual
Total amount of approved guarantee
guarantee for subsidiaries at
for subsidiaries at the end of 0 0
the end of reporting period
reporting period (C3)
(C4)
Total amount of guarantee of the Company (total of three abovementioned guarantee)
Total amount of actual
Total amount of approving guarantee
298,000 occurred guarantee in report 124,450.49
in report period (A1+B1+C1)
period (A2+B2+C2)
Total amount of approved guarantee Total balance of actual
at the end of report period 304,264 guarantee at the end of 90,950.49
(A3+B3+C3) report period (A4+B4+C4)
Ratio of actual guarantee (A4+B4+C4) in net assets of the Company 18.19%
Including:
Amount of guarantee for shareholders, actual controller and its related
0
parties (D)
The debts guarantee amount provided for the guaranteed parties whose
48,950.49
assets-liability ratio exceed 70% directly or indirectly (E)
Proportion of total amount of guarantee in net assets of the Company
0
exceed 50% (F)
Total amount of the aforesaid three guarantees (D+E+F) 48,950.49
Explanations on possibly bearing joint and several liquidating
N/A
responsibilities for undue guarantees (if applicable)
Explanations on external guarantee against regulated procedures (if
N/A
applicable)
The above-mentioned guarantee objects are the wholly-owned and holding subsidiaries of the Company, and
these wholly-owned and holding subsidiaries are in normal production and operation, there are no overdue loans,
and the guarantee risks are controllable. During the reporting period, the highest level of security the Company
provided amounted to 2980 million Yuan by the approval, the actual amount of guarantee is 1,244,504,900 Yuan.
At the end of the reporting period, the practical guarantee balance amounted to 909,504,900 Yuan, accounting for
the Company’s latest net assets ratio of 18.19%.
74
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Explanation on guarantee with composite way: Not applicable
2. Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.
(iii) Other material contracts
□Applicable √Not applicable
XV. Social responsibility
(i) Material environmental protection
The listed Company and its subsidiary whether belong to the key sewage units released from
environmental protection department: √ Yes □ No
75
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
numbe
Distributi Total Discharge
Name of Major pollutants and r of
Way of on of Pollutants discharge standards Total discharge discharge beyond
company or name of typical discha concentration of discharge
discharge discharge enacted volume volume the
subsidiary pollutants rge
outlets certified standards
outlets
The Emission Limits for Air
Exhaust constitutes High Pollutants (DB44/27—2001)
Concentration of particulates
the major pollutants, altitude applies to exhaust emission.
Zhongshan 1#Worksh discharge<20mg/m 48,000,00 Not
and the typical emissions Concentration of particulates Satisfy the
Changhong op and Concentration of NMHC 0 standard beyond
pollutants comprise of after 2 discharge:120mg/ m standards for total
Electric Co., 2#Worksh emission:3.25mg/ m cubic the
particulates, NMHC meeting the Concentration of NMHC volume control
Ltd. op Concentration of stink: 977 meters standards
and odor treatment emission:120mg/ m
non-dimensional.
concentration. standards Concentration of stink: 2000
non-dimensional.
Note: Sichuan Changhong Air Conditioning Co., Ltd. (hereinafter referred to as “Changhong Air Conditioning”), a wholly-owned subsidiary of
the company, is located in Mianyang City, Sichuan Province. In 2018, Changhong Air conditioner was listed in the lists of key polluters of the air
environment in 2018 by Mianyang Ecological Environment Bureau, however, by taking the initiative to fulfill corporate social responsibility and
assume social obligations in daily environmental protection and pollutant treatment, during the reporting period, Changhong Air conditioner was
no longer included in the key pollutant discharge units in Mianyang 2019 by Mianyang municipal environment protection department
76
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
1.Construction and operation of pollution prevention facilities
The Company and its subsidiaries actively respond to the national ecological civilization
construction plan, and actively participate in national environmental protection works in line with
the purpose of actively fulfilling its corporate social responsibility. In recent years, The Company
and its subsidiaries have actively explored the introduction of advanced management concepts and
methods, and invested a large amount of money in the purchase of pollution control equipment and
facilities notwithstanding they have already fully met the emission standards, just to further bring
down and reduce discharge of corporate pollutants and realize emission reduction by scientific
technical methods. At the same time, in order to ensure the effective operation of the management
equipment and facilities, the Company and its subsidiaries have adopted such management
measures as setting up special personnel to manage and maintain the operation of the equipment
and facilities, formulating proper rules for operation and maintenance of the equipment and
facilities, emergency disposal regulations, supervision and assessment mechanism, allocating
special maintenance funds and so on, so as to ensure the effective operation of the governing
facilities in a full round, delivering its best to protect and improve the ecological environment
around the enterprise.
2. Environment impact assessment and other required environment protection
administrative license for construction projects
The Company and its subsidiaries earnestly implement the Environmental Protection Law, the
Environmental Impact Assessment Law and the Regulations on Environmental Protection
Management of Construction Projects, consciously abide by environmental protection laws and
regulations, industry requirements and government regulations. For new, renovated and expanded
projects, the Company and its subsidiaries adhere to the project environmental impact assessment
and "three simultaneous" system, fully implement environmental protection measures, act well in
environment protection management in respect of project planning, design, construction and
operation, make full use of advanced crafts and technological means to reduce environmental
pollution. Environmental impact assessment is carried out synchronously while making the
feasibility study for a construction project. Third-party professional parties are engaged to analyze
the industrial policy, land use planning, environmental impact and the feasibility of environmental
protection measures of the project. Construction will be started only after approved by the
competent environmental protection authorities. During the construction, environmental protection
requirements are earnestly implemented, environmental protection facilities are built
synchronously, environmental protection acceptance of the project is arranged in time upon
completion of the project to ensure that the project meets the acceptance criteria and could be put
into official operation with all the environmental impact assessment requirements met. During the
operation period, the Company conducts pollution prevention to ensure the normal operation of
environmental protection facilities in strict compliance with the relevant environmental impact
77
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
assessment documents and the reply requirements of the competent environmental protection
authorities.
3. Emergency plan for environmental emergencies
The Company and its subsidiaries have set up related emergency plans for environmental
emergencies. The Company and its subsidiaries have determined classified warning based on the
different extent and severity of environmental impacts that may be caused by the material
environmental factors, defined the responsibilities for emergency response, regulated emergency
handling procedures, established special team to handle emergencies and organized regular
rehearsal and appraisal of relevant emergency plans, so as to ensure the effectiveness of these plans,
improve their capability of emergency handling and take precautions against contingent
emergencies.
4. Independent plan to monitor environment
The Company and its subsidiaries have established regular monitoring plan for environmental
pollutants, set up special funds for pollutants monitoring, and engaged third-party authoritative to
regularly monitor the operation of major pollution-production links and environmental protection
treatment facilities in connection with the major pollutants produced by the Company and its
subsidiaries, to make sure that the Company and its subsidiaries could achieve emission standards
in a full round.
5. Other environment information that should be disclosed
According to the Environmental Information Disclosure Measures of Enterprises and Institutions,
the Company and its subsidiaries have realized the disclosure of information relating to
environmental impact assessment, project acceptance, pollutants production and discharge, solid
waste management, important environmental factors, environmental objectives and performance of
construction projects.
6. Other environment related information
In order to further realize the scientific and systematic environmental protection work of the
Company and its subsidiaries, the Company and its subsidiaries have established an environmental
management system in accordance with ISO14001 standards, set up an environmental protection
organization, acquired environmental protection resources, regularly identified, updated and
appraised environmental factors, compliance obligations, environmental risks and opportunities,
and regularly determined environmental objectives and management programs. Through the
implementation of management programs and continuous normal improvement, the environmental
performance of the Company and its subsidiaries has been continuously improved. Through
regular internal audit and management review, as well as the verification and examination of the
third parties, the environmental management system of the Company and its subsidiaries has been
78
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
effectively controlled and fully meets the system management standards and relevant regulations.
Meanwhile, the Company and its subsidiaries have been rated as environmental integrity
enterprises for consecutive years in the environment credit evaluation organized by environment
protection authorities.
(ii) Fulfill the precise social responsibility for poverty alleviation
The Company has no precise social responsibility for poverty alleviation in the period and has no
follow-up plan either
XVI. Explanation on other significant events
√ Applicable □ Not applicable
(i) In January 2019, Mr. Wu Dinggang, the former president of the company, applied for resignation
as the president of the company due to changes in his personal work, but he continues to serve as
the vice-president of the company, a member of the strategy committee of the board of directors,
and a member of the remuneration and appraisal committee. At the same time, after the resolution
of the 18th meeting of the ninth board of directors of the company, it’s agreed to authorize Mr. Kou
Huameng, the director and vice president of the company, to act on the president’s behalf, the term
is from the effective date of the board resolution, i.e. January 11, 2019, to the date on which the
board of directors engages a new president. Found more on appointed media “Securities Times”,
“China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the
Company disclosed in the form of announcement (Announcement No. 2019-001 and No.2019-002)
on 12 Jan. 2019.
(ii) In 2019, former chairman of the Company Mr. Li Wei, applied for resign the followed positions
for work causes under the name of the Company, including chairman of 9th BOD, Director, chief
members of the strategy committee member of the nomination committee. At the same time, the
resolutions of the 22th meeting of the ninth board of directors of the company passed and agreed to
engage Mr. Wu Dinggang as the company’s chairman of the ninth board of directors for a term of
office consistent with the term of the current board of directors. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2019-029 and No.2019-030) on 27 April 2019.
(iii) On January 14, 2019, the company received a Notification Letter of Caitong Fund Management
79
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Co., Ltd. About the Progress of Shareholding Reduction Plan of Changhong Meiling Co., Ltd. from
Caitong Fund Management Co., Ltd. (hereinafter referred to as “Caitong Fund”) that held more than
5% of the company’s shares, Caitong Fund reduced its holdings of the company’s shares of
12,160,298 shares in total by centralized bidding transactions or block trading from October 18,
2018 to January 13, 2019, accounting for 1.1641% of the company's total share capital.
On February 13, 2019, the company received the “Short Form Report on Changes in Equity of
Changhong Meiling Co., Ltd.” from Caitong Fund, Caitong Fund reduced its holdings of the shares
of Changhong Meiling of 2,600,729 shares in total by centralized bidding transactions from January
14, 2019 to February 12, 2019, accounting for 0.25% of the company's total share capital. After this
equity change, Caitong Fund holds 52,229,844 shares of Changhong Meiling, accounting for
4.999995% of Changhong Meiling's total share capital, which is no longer a shareholder holding
more than 5% of the company's shares.
On April 15, 2019, the company received a Notification Letter of Caitong Fund Management Co.,
Ltd. About the Progress of Shareholding Reduction Plan of Changhong Meiling Co., Ltd. from
Caitong Fund. Caitong Fund reduced holding of 7,430,612 shares in The Company via collective
bidding trading during the period from 13 Feb. 2019 to 13 April 2019, accounting for 0.7113% of
the total share capital of the Company. After the reduction, Caitong Fund still holds 44,799,232
shares of the company, accounting for 4.2887% of the company's total equity.
Found more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the Company disclosed in the form of
announcement (Announcement No. 2019-003, No.2019-011 and No.2019-024) on 15 Jan. 2019, 14
Feb. 2019 and 16 April 2019.
(iv)The resolutions of the 19th meeting of the Ninth Board of Directors, the 10th meeting of the
Ninth Board of Supervisors, and the 1st Extraordinary General Meeting of 2019 passed and agreed
the company to provide credit guarantees of 2.98 billion yuan in total for its wholly-owned and
controlled subsidiaries in 2019, the guarantee period is one year for the newly increased guarantee
amount for the current year and the amount of renewal insurance during the year. Found more on
appointed media “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily”
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement
No. 2019-004, No.2019-005, No.2019-006, No.2019-008, No.2019-010 and No.2019-012) on 30
Jan. 2019, 14 Feb. 2019, and 23 Feb. 2019
(v) The resolution of the 19th meeting of the Ninth Board of Directors of the Company passed and
agreed the company to apply for a special credit line of up to 300 million yuan in the bank notes
80
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
pool to Hefei Branch of China Everbright Bank Co., Ltd., with a credit period of one year. The
credit line variety is mainly used for the bank notes pool, using the pledge of bills. Found more on
appointed media “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily”
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement
No. 2019-004 and No.2019-007) on 30 Jan. 2019.
(vi) On February 25, 2019, the company received the Notice of Sichuan Changhong Electric Co.,
Ltd. and its Concerted Action Person CHANGHONG (HK) TRADING LIMITED, Ltd. to Increase
the Shareholding of Changhong Meiling Co., Ltd. and the Equity Changes (hereinafter referred to
as “Notice”). Sichuan Changhong and its concerted action person CHANGHONG (HK) TRADING
LIMITED (hereinafter referred to as “HK Changhong” or “concerted action person”) bought
16,231,024 shares of Changhong Meiling (including 13,751,756 shares of Changhong Meiling A
shares and 2,479,268 shares of Changhong Meiling B shares) by bidding transaction method
through the secondary market from November 12, 2018 to February 25, 2019, accounting for 1.55%
of Changhong Meiling’s total share capital, consequently, the equity ratio of Changhong Meiling
held by Sichuan Changhong and concerted action person accumulatively increased by 5% from
September 2009 to February 2019.
Found more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the Company disclosed in the form of
announcement (Announcement No. 2019-003 and detailed statement of changes in interests) on 26
Feb. 2019 and 28 Feb. 2019.
(vii) In late March 2019, the Company received the "Notice of Civil Penalty" issued by
U.SDepartmentofEnergy ("DOE", i.e. the US Department of Energy) and accepted the settlement
proposal proposed by the DOE. As of the end of the reporting period, the company has paid a fine
of US$1,901,540 to the US Department of Energy. Found more on appointed media “Securities
Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that
the Company disclosed in the form of announcement (Announcement No. 2019-014) on 26 March
2019.
(viii) The resolutions of the 20th meeting of the Ninth Board of Directors, the 11th meeting of the
Ninth Board of Supervisors, and the 2018 Annual General Meeting of Shareholders passed and
agreed the company to change the corresponding accounting policies according to the relevant
regulations and requirements of the Ministry of Finance so as to apply to the new regulations.
Found more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the Company disclosed in the form of
81
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
announcement (Announcement No. 2019-015, No.2019-016, No.2019-018, and No.2019-035) on
29 March 2019, and 22 May 2019
(ix) The resolutions of the 20th meeting of the Ninth Board of Directors and the 2018 Annual
General Meeting of Shareholders passed and agreed the company and its subsidiaries to carry out
forward foreign exchange fund trading business from July 1, 2019 to June 30, 2020, the balance of
the business transaction does not exceed US$650 million (mainly including US dollar, Australian
dollar, Euro, and other foreign exchanges are all converted into US dollars), and the maximum
single-business delivery period is no more than one year. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2019-015, No.2019-020, and No.2019-035) on 29 March 2019, and 22 May 2019
(x) In accordance with the resolutions of the 20th meeting of the Ninth Board of Directors and the
2018 Annual General Meeting of Shareholders, in order to safeguard the company's value and the
shareholders' rights, and in light of the company's actual situation and business development needs,
it’s agreed to revise the relevant provisions of the repurchase of shares and the business scope of the
company in the "Articles of Association", "Rules of Procedure of the General Meeting of
Shareholders", and “Rules of Procedure of the Board of Directors". Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2019-015, No.2019-022, and No.2019-035) on 29 March 2019, and 22 May 2019
(xi) The resolutions of the 21st meeting of the Ninth Board of Directors, the 12th meeting of the
Ninth Board of Supervisors passed and agreed the company to implement the new financial
instrument standards and change the relevant accounting policies in accordance with the relevant
regulations and requirements of the Ministry of Finance. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2019-025, No.2019-026, and No.2019-028) on 20 April 2019
(xii) The resolution of the 21st meeting of the Ninth Board of Directors passed and agreed the
company to withdraw some of the investment under the “Soochow-China Merchants Bank-Donghui
135 Directional Asset Management Plan” issued by Soochow Securities Co., Ltd. in advance, which
was subscribed by the company at an earlier stage, that is, withdraw the principal of the face value
of 50 million yuan and the one-year investment income corresponding to the asset management plan
of about 16 million yuan (after deducting management fees, custody fees and value-added tax) for
82
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
the daily operation of the company. Found more on appointed media “Securities Times”, “China
Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company
disclosed in the form of announcement (Announcement No. 2019-025) on 20 April 2019
(xiii) The resolutions of the 22nd meeting of the Ninth Board of Directors and the 2018 Annual
General Meeting of Shareholders of the company passed and agreed the by-election of Mr. Zhong
Ming as a non-independent director of the Ninth Board of Directors of the Company, and his term
of office is the same as that of the Ninth Board of Directors. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2019-030, and No.2019-035) on 27 April 2019 and 22 May 2019
(xiv) subordinate controlling subsidiary of the Company, have accumulated received various kinds
of government subsidies as 34,622,844.99 Yuan from 1 Jan. 2019 to 12 June 2019. Found more on
appointed media “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily”
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement
No. 2019-036) on 12 June 2019
(xv) The resolutions of the 20th meeting of the Ninth Board of Directors, the 11th meeting of the
Ninth Board of Supervisors, and the 2018 Annual General Meeting of Shareholders passed the
“Plan for Profit Distribution of the Company in 2018”, and the independent directors of the
company made independent approval opinions, taking into account the interests of shareholders and
the long-term development needs of the company, agreed the company to use the total share capital
of 1,044,597,881 shares on December 31, 2018 as the base, and distribute a cash dividend of 0.6
yuan (including tax) per every 10 shares to all shareholders, who distributed cash dividends of
62,675,872.86 yuan (including tax) in total. After this allocation, the company's total share capital
remains unchanged, and the remaining undistributed profit of the parent company is 854,892,061.08
yuan, and the remaining undistributed profits shall be distributed after being carried forward in the
subsequent years.
On 18 June 2019, the Company released the profit distribution plan for year of 2018 and
implemented the plan. Found more on appointed media “Securities Times”, “China Securities
Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company disclosed in
the form of announcement (Announcement No. 2019-015, No.2019-016, No.2019-035, and
No.2019-037) on 29 March 2019, 22 May 2019 and 18 June 2019.
83
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
(xvi) The resolutions of the 20th meeting of the Ninth Board of Directors, the 11th meeting of the
Ninth Board of Supervisors, and the 2018 Annual General Meeting of Shareholders passed and
agreed the company to postpone the date of reaching the expected usable status of the “Intelligent
Manufacturing Construction Project” and the "Intelligent R&D Capacity Building and Smart
Appliance Technology New Product Development Project" in the 2016 non-public offering to raise
funds for investment projects to the end of December 2021. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2019-015, No.2019-016, No.2019-021, and No.2019-035) on 29 March 2019 and 22 May 2019
(xvii) On June 28, 2019, the company received the “Shareholding Reduction Plan” from Mr. Zhong
Ming, the company's director and vice president, Mr. Zhong Ming planned to reduce his holdings of
the Company’s shares of no more than 78,725 shares (not exceeding 0.0075% of the company's
total share capital) by centralized bidding transactions of the stock exchanges within six months
after 15 trading days from the date of the announcement of the shareholding reduction plan due to
his own capital arrangements. Found more on appointed media “Securities Times”, “China
Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company
disclosed in the form of announcement (Announcement No. 2019-039) on 29 June 2019
(xviii) The resolutions of the 24th meeting of the Ninth Board of Directors, the 13th meeting of the
Ninth Board of Supervisors, and the 2nd Extraordinary General Meeting of 2019 passed and agreed
the company to invest RMB 120 million of the unused raised funds of the sub-project “intelligent
production line construction project for newly increasing 600,000 medium- and large-volume
environmental protection and energy-saving freezer per year” of the “Intelligent Manufacturing
Construction Project”, which was the 2016 non-public offering to raise funds for investment
projects, into the “production base project (Phase II) for annual production capacity of 2 million
washing machines”, and agreed the company to terminate the implementation of the “Smart Life
Project” and use the project's remaining raised funds and the interest and other proceeds from
wealth management to permanently replenish the working capital. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2019-040, No.2019-041, No.2019-042, No.2019-043 and No.2019-047) on 9 July 2019 and 26 July
2019
84
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
XVII. Major event of the subsidiary
√ Applicable □ Not applicable
(i)The resolution of the 20th meeting of the Ninth Board of Directors of the company passed and
agreed the company's subsidiaries, Zhongshan Changhong Electric Appliance Co., Ltd., Guangdong
Changhong Technology Co., Ltd. and Hongyuan Geothermal Heat Pump Technology (Zhongshan)
Co., Ltd. to donate a total of 130,000 yuan to Nantou Town People's Government of Zhongshan
City to expand the Nantou Town Central Primary School. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2019-015 and No.2019-023) on 29 March 2019.
(ii)The resolution of the 21st meeting of the Ninth Board of Directors of the company passed and
agreed Zhongke Meiling Cryogenics Co., Ltd. (hereinafter referred to as “Zhongke Meiling”), a
holding subsidiary of the company, to invest 10 million yuan to set up a wholly-owned subsidiary to
engage in refrigeration engineering equipment sales, design and other services. Found more on
appointed media “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily”
and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement
No. 2019-025) on 20 April 2019.
85
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section VI. Changes in shares and particular about shareholders
I. Changes in shares
(i) Changes in shares
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
New Capitalization
Proporti Bonus Proporti
Amount shares of public Others Subtotal Amount
on shares on
issued reserve
I. Restricted shares 80,431,408 7.70% 0 0 0 357,118 357,118 80,788,526 7.73%
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
2. State-owned legal person’s
70,793,625 6.78% 0 0 0 0 0 70,793,625 6.78%
shares
3. Other domestic shares 8,370,363 0.80% 0 0 0 357,118 357,118 8,727,481 0.83%
Including: Domestic legal
4,716,077 0.45% 0 0 0 0 0 4,716,077 0.45%
person’s shares
Domestic natural
3,654,286 0.35% 0 0 0 357,118 357,118 4,011,404 0.38%
person’s shares
4. Foreign shares 1,267,420 0.12% 0 0 0 0 0 1,267,420 0.12%
Including: Foreign legal
0 0.00% 0 0 0 0 0 0 0.00%
person’s shares
Foreign natural
1,267,420 0.12% 0 0 0 0 0 1,267,420 0.12%
person’s shares
II. Unrestricted shares 964,166,473 92.30% 0 0 0 -357,118 -357,118 963,809,355 92.27%
1. RMB ordinary shares 802,569,893 76.83% 0 0 0 -357,118 -357,118 802,212,775 76.80%
2. Domestically listed foreign
161,596,580 15.47% 0 0 0 0 0 161,596,580 15.47%
shares
3. Overseas listed foreign
0 0.00% 0 0 0 0 0 0 0.00%
shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 1,044,597,881 100.00% 0 0 0 0 0 1,044,597,881 100.00%
1. Reasons for share changed
√ Applicable □ Not applicable
On April 25, 2019, Mr. Li Wei, the former president of the company, resigned as the president,
director, chairman of the strategy committee of the board of directors and member of the
nomination committee of the board of directors of the company for work reasons, his original term
86
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
of office should expire on September 12, 2020. According to the relevant provisions of the Detailed
Rules for Reducing the Shareholding of the Shareholders and Directors, Supervisors and Senior
Management of Listed Companies of the Shenzhen Stock Exchange, during the reporting period, as
Mr. Li Wei has left his post for less than 6 month, 25% of the shares held by him, i.e. 357,118
shares, were locked.
2. Approval of share changed
□ Applicable √ Not applicable
3. Ownership transfer of share changed
□Applicable √Not applicable
4. Progress of shares buy-back
□ Applicable √ Not applicable
5.Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
6. Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per
share attributable to common shareholders of Company in latest year and period
□ Applicable √ Not applicable
7.Other information necessary to disclose for the Company or need to disclosed under requirement
from security regulators
□ Applicable √ Not applicable
(ii)Changes of restricted shares
√ Applicable □ Not applicable
In Share
Restricted
Shares
Opening Shares Ending
Sharehol Increased Restricted
shares released shares Date for released
ders In reasons
restricted in Period restricted
the
Period
On 25 April 2019, Mr. Li Wei resigned
Share
from chairman of the ninth board of
lockup in
Li Wei 1,071,355 0 357,118 1,428,473 director for work remove, the original
senior
office term would have expired on 12
executives
September 2020. According to the
87
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
relevant requirements of the
Implementation Rules on Shareholding
Reduction by Shareholders, Directors,
Supervisors and Senior Management of
Listed Companies Issued by Shenzhen
Stock Exchange, where a director,
supervisor or senior management resigns
prior to expiration of his term, shares
transferred each year during the term as
determined when he takes the position
and the six months upon expiration of
his term shall not exceed 25% of the
total shares held by him in The
Company, and he is not allowed to
transfer the shares held by him in The
Company within six months after his
resignation. Therefore, the lifting of
restrictions on the sales of Company’s
shares should follow the above
provisions
Total 1,071,355 0 357,118 1,428,473 -- --
II. Security offering and listing
□ Applicable √ Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In share
Total preference
shareholders with voting
Total common shareholders in
66,701 rights recovered at end of -
reporting period-end
reporting period (if
applicable) (note 8)
Particulars about shares held above 5% by common shareholders or top 10 common shares holding
Number of share
Proportio Total common Changes Amount of Amount of
Nature of n of shareholders at restricted un-restricted pledged/frozen
Full name of Shareholders in report
shareholder shares the end of common common State of
held period Amount
report period shares held shares held share
Sichuan Changhong Electric State-owned 2,156,20
23.79% 248,457,724 69,877,638 178,580,086 -- --
Co., Ltd. legal person 0
Hefei Industry Investment State-owned
4.58% 47,823,401 - 0 47,823,401 -- --
Holding (Group) Co., Ltd. legal person
88
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
CHANGHONG (HK) Foreign legal
2.59% 27,077,797 - 0 27,077,797 -- --
TRADING LIMITED (note 1) person
Foreign
CAO SHENGCHUN 1.36% 14,240,979 - 0 14,240,979 -- --
natural person
Caitong Fund- Ningbo
Domestic non
Bank-Haitong Xingtai (Anhui)
state-owned 1.03% 10,733,452 - 0 10,733,452 -- --
Emerging Industry Investment
corporate
Fund (Limited Partnership)
China Construction Bank -
Huaxia China Securities
Domestic non
Sichuan State-owned 7,213,00
state-owned 0.69% 7,213,000 0 7,213,000 -- --
enterprise reform exchange 0
corporate
traded index securities
investment fund
Phillip Securities (Hong Kong) Foreign legal
0.60% 6,296,913 434,230 0 6,296,913 -- --
Co., Ltd. person
Domestic
China Securities Finance
general legal 0.42% 4,362,500 - 0 4,362,500 -- --
Corporation Limited
person
Domestic 4,164,08
Ma Guobin 0.40% 4,164,081 0 4,164,081 -- --
nature person 1
Domestic 1,145,20
Zheng Huiru 0.38% 3,946,500 0 3,946,500 -- --
nature person 0
Strategy investors or general legal person
becomes top 10 shareholders due to rights Not applicable
issued (if applicable)
Among the above shareholders, CHANGHONG (HK) TRADING LIMITED
(hereinafter referred to as Hong Kong Changhong) is the wholly-owned
subsidiary of Sichuan Changhong Electric Co., Ltd. (hereinafter referred to as
Sichuan Changhong); except the shares of the Company directly held by Hong
Kong Changhong, 6,296,913 shares of B-stock are also held through Phillip
Securities (Hong Kong) Co., Ltd., the foregoing shareholders constitute persons
of uniform action. There existed no associated relationship or belong to the
Explanation on associated relationship among
concerted actors as specified in the Measures for the Administration of
the aforesaid shareholders
Information Disclosure of Shareholder Equity Changes of Listed Companies
among Sichuan Changhong, Hong Kong Changhong and other top 7
shareholders; “Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging
Industry Investment Fund (Limited Partnership) ” refers to the products of
Caitong Fund Management Company subscribe for privately placement of 2016;
The company neither knows whether there is any association among other
shareholders, nor knows whether other shareholders belong to the persons acting
89
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
in concert that is stipulated in the “Administrative Measures on Information
Disclosure of Changes in Shareholding of Listed Companies”.
Particular about top ten shareholders with un-restrict shares held
Amount of unrestricted shares held at Type of shares
Shareholders’ name
end of Period Type Amount
RMB ordinary
Sichuan Changhong Electric Co., Ltd. 178,580,086 178,580,086
shares
Hefei Industry Investment Holding (Group) RMB ordinary
47,823,401 47,823,401
Co., Ltd. shares
CHANGHONG (HK) TRADING LIMITED Domestically listed
27,077,797 27,077,797
(note 1) foreign shares
Domestically listed
CAOSHENGCHUN 14,240,979 14,240,979
foreign shares
Caitong Fund- Ningbo Bank-Haitong Xingtai
RMB ordinary
(Anhui) Emerging Industry Investment Fund 10,733,452 10,733,452
shares
(Limited Partnership)
China Construction Bank - Huaxia China
Securities Sichuan State-owned enterprise RMB ordinary
7,213,000 7,213,000
reform exchange traded index securities shares
investment fund
Domestically listed
Phillip Securities (Hong Kong) Co., Ltd. 6,296,913 6,296,913
foreign shares
RMB ordinary
China Securities Finance Corporation Limited 4,362,500 4,362,500
shares
RMB ordinary
Ma Guobin 4,164,081 4,164,081
shares
RMB ordinary
Zheng Huiru 3,946,500 3,946,500
shares
Expiation on associated relationship or
consistent actors within the top 10 un-restrict Found more in “Particulars about shares held above 5% by shareholders or top 10
shareholders and between top 10 un-restrict shares holding”
shareholders and top 10 shareholders
As of 30th June 2019, among the top 10 common shareholders, Ma Guobin holds
Explanation on top ten common shareholders 4,159,681 shares of the Company through customer credit trading secured
involving margin business (if applicable) account of Founder Securities Co., Ltd., and 4,400 shares hold through common
securities account, thus 4,164,081 shares of the Company are held in total
Note 1: At beginning of the reporting period, the person acting in concert with controlling
shareholder Sichuan Changhong-- CHANGHONG (HK) TRADING LIMITED, holds B-stock of
the Company as 32,898,580 shares, among which, Changhong (Hong Kong) Trading Co., Ltd.
90
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
directly holds B-stock of the Company as 27,077,797 shares, 5,820,783 shares are held through
Philip Securities (H.K.) Co., Ltd. In addition, Philip Securities (H.K.) Co., Ltd. Holds 41,900 shares
of the Company on behalf of other shareholders.
At end of the reporting period, Changhong (Hong Kong) Trading Co., Ltd. totally holds B-stock of
the Company as 33,374,710 shares, among which, Changhong (Hong Kong) Trading Co., Ltd.
directly holds B-stock of the Company as 27,077,797 shares, 6,296,913 shares are held through
Philip Securities (H.K.) Co., Ltd. Currently, the B-stock of the Company held by Phillip Securities
(Hong Kong) Co., Ltd. are held on behalf of CHANGHONG (HK) TRADING LIMITED (note 1)
Whether the top ten ordinary shareholders of the company and the top 10 ordinary shareholders of
unrestricted conditions have made the repurchase transactions as agreed during the reporting period.
□Yes √No
The top ten ordinary shareholders of the company and the top 10 ordinary shareholders of
unrestricted conditions have not made the repurchase transactions as agreed during the reporting
period.
IV. Changes of controlling shareholder or actual controller
Changes of controlling shareholder in reporting period
□ Applicable √ Not applicable
No change of controlling shareholder in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controller in reporting period.
91
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting period.
92
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section VIII. Particular about Directors, Supervisors and Senior
Executives
I. Changes of shares held by directors, supervisors and senior executive
□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executive of the Company had no changes, more
details can be seen in Annual Report 2018.
II. Changes of directors, supervisors and senior executive
√ Applicable □ Not applicable
Name Position Type Date Reasons
Resigned as President of the Company for
President Office leaving 2019-1-11
personal reasons
Wu Dinggang Mr. Wu Dinggang was appointed as chairman of
Chairman Election 2019-4-26 the ninth board of directors in the resolution of
22nd session of 9th BOD
Approved by 18th session of 9th BOD, Mr. Kou
Kou
Acting president Appointment 2019-1-11 Huameng, the director and vice president of the
Huameng
Company, is authorized to act as the President
Mr. Li resign as the chairman of 9th BOD,
director, chief member of the strategy committee
Li Wei Chairman Office leaving 2019-4-25
and member of nomination committee of the
Company for personal work causes
Mr. Zhong Ming was elected as non-independent
Zhong Ming Director Election 2019-5-21 director of 9th BOD in the resolution of AGM of
2018, office term same as the Board
93
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section IX. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange
and without due on the date when semi-annual report approved for released or fail to cash in full on
due: No
94
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Section X. Financial Report
I. Audit reports
Whether the semi-annual report was audited or not
□ Yes √ No
The semi-annual report was not audited.
II. Financial statements
Units in Notes of Financial Statements is RMB
1. Consolidated Balance Sheet
Prepared by ChangHong Meiling Co., Ltd.
2019-6-30
In RMB
Item 2019-6-30 2018-12-31
Current assets:
Monetary funds 4,411,009,307.43 4,596,077,557.40
Settlement provisions
Capital lent
Tradable financial assets 2,703,222.18
Financial assets measured by
fair value and with variation 9,253,635.59
reckoned into current gains/losses
Derivative financial assets
Note receivable 1,840,222,933.51 2,387,830,887.74
Account receivable 2,622,242,540.11 1,670,988,644.76
Receivable financing
Accounts paid in advance 43,742,930.33 86,180,459.26
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Other account receivable 110,758,174.11 62,129,574.17
Including: Interest
8,591,868.56 2,653,712.36
receivable
Dividend
receivable
Buying back the sale of
financial assets
Inventories 2,112,649,738.16 2,174,436,573.67
95
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Contractual assets
Assets held for sale
Non-current asset due within
one year
Other current assets 1,026,747,584.07 1,184,686,956.96
Total current assets 12,170,076,429.90 12,171,584,289.55
Non-current assets:
Loans and payments on
behalf
Debt investment
Finance asset available for
45,000,000.00
sales
Other debt investment
Held-to-maturity investment
Long-term account
receivable
Long-term equity investment 57,722,108.43 61,869,440.55
Investment in other equity
instrument
Other non-current financial
45,000,000.00
assets
Investment real estate 45,647,730.74 46,846,507.41
Fixed assets 1,976,351,355.11 1,733,957,012.14
Construction in progress 401,818,933.56 464,558,352.60
Productive biological asset
Oil and gas asset
Right-of-use assets
Intangible assets 866,786,314.46 817,579,958.94
Expense on Research and
65,320,040.34 108,210,966.60
Development
Goodwill
Long-term expenses to be
apportioned
Deferred income tax asset 105,537,108.75 112,203,656.75
Other non-current asset
Total non-current asset 3,564,183,591.39 3,390,225,894.99
Total assets 15,734,260,021.29 15,561,810,184.54
Current liabilities:
Short-term loans 1,809,384,200.27 2,336,373,929.62
Loan from central bank
Capital borrowed
Transactional financial
45,676,424.26
liability
Financial liability measured 55,586,666.70
by fair value and with variation
96
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
reckoned into current gains/losses
Derivative financial liability
Note payable 3,579,417,021.26 3,727,754,399.60
Account payable 3,107,804,073.88 2,282,174,981.38
Accounts received in
339,031,201.91 354,551,354.80
advance
Selling financial asset of
repurchase
Absorbing deposit and
interbank deposit
Security trading of agency
Security sales of agency
Wage payable 133,097,829.10 163,638,627.79
Taxes payable 61,815,199.22 109,753,432.17
Other account payable 785,319,497.55 660,320,360.26
Including: Interest payable 14,695,840.49 7,519,756.26
Dividend
21,356,359.44 17,317,286.45
payable
Commission charge and
commission payable
Reinsurance payable
Contractual liability
Liability held for sale
Non-current liabilities due
7,300,000.00 273,682,737.85
within one year
Other current liabilities
Total current liabilities 9,868,845,447.45 9,963,836,490.17
Non-current liabilities:
Insurance contract reserve
Long-term loans 301,280,000.00 1,920,000.00
Bonds payable
Including: Preferred stock
Perpetual
capital securities
Lease liability
Long-term account payable 4,370,179.20 5,017,208.00
Long-term wages payable 15,588,518.08 19,073,101.29
Accrual liability 259,358,920.04 273,063,677.21
Deferred income 180,320,644.93 160,250,963.60
Deferred income tax
2,847,503.55 3,098,699.11
liabilities
Other non-current liabilities
Total non-current liabilities 763,765,765.80 462,423,649.21
Total liabilities 10,632,611,213.25 10,426,260,139.38
97
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Owner’s equity:
Share capital 1,044,597,881.00 1,044,597,881.00
Other equity instrument
Including: Preferred stock
Perpetual
capital securities
Capital public reserve 2,684,369,598.46 2,684,369,598.46
Less: Inventory shares
Other comprehensive income -22,554,916.32 -18,143,569.26
Reasonable reserve
Surplus public reserve 399,650,743.38 400,673,993.50
Provision of general risk
Retained profit 893,156,403.67 904,232,582.87
Total owner’ s equity attributable
4,999,219,710.19 5,015,730,486.57
to parent company
Minority interests 102,429,097.85 119,819,558.59
Total owner’ s equity 5,101,648,808.04 5,135,550,045.16
Total liabilities and owner’ s
15,734,260,021.29 15,561,810,184.54
equity
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
2. Balance Sheet of Parent Company
In RMB
Item 2019-6-30 2018-12-31
Current assets:
Monetary funds 2,767,852,170.46 2,897,004,041.87
Tradable financial assets 2,703,222.18
Financial assets measured by fair
value and with variation reckoned 9,253,635.59
into current gains/losses
Derivative financial assets
Note receivable 1,809,374,669.32 2,433,243,946.64
Account receivable 1,393,222,371.79 1,050,282,023.37
Receivable financing
Accounts paid in advance 59,536,134.59 58,710,427.38
Other account receivable 98,847,962.68 182,744,033.52
Including: Interest receivable 7,494,128.83 2,653,712.36
Dividend receivable
98
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Inventories 951,935,198.29 911,130,106.30
Contractual assets
Assets held for sale
Non-current assets maturing
within one year
Other current assets 984,470,915.67 1,113,987,528.70
Total current assets 8,067,942,644.98 8,656,355,743.37
Non-current assets:
Debt investment
Available-for-sale financial assets 45,000,000.00
Other debt investment
Held-to-maturity investments
Long-term receivables
Long-term equity investments 1,739,960,685.23 1,731,109,903.70
Investment in other equity
instrument
Other non-current financial assets 45,000,000.00
Investment real estate 7,447,430.69 7,618,550.16
Fixed assets 1,104,512,771.39 1,082,915,540.08
Construction in progress 111,683,052.79 125,064,106.10
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 495,599,729.16 462,425,105.64
Research and development costs 41,355,043.26 57,383,653.72
Goodwill
Long-term deferred expenses
Deferred income tax assets 77,299,337.58 78,357,299.17
Other non-current assets
Total non-current assets 3,622,858,050.10 3,589,874,158.57
Total assets 11,690,800,695.08 12,246,229,901.94
Current liabilities
Short-term borrowings 1,399,874,362.25 1,911,719,726.13
Transactional financial liability 9,908,515.00
Financial liability measured by
fair value and with variation 19,893,875.00
reckoned into current gains/losses
Derivative financial liability
Notes payable 1,993,454,714.98 2,001,442,110.63
Account payable 1,970,177,920.08 2,011,821,519.82
Accounts received in advance 107,420,882.94 105,815,140.88
Contractual liability
Wage payable 11,286,585.57 31,271,182.48
99
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Taxes payable 16,160,914.16 21,992,129.58
Other accounts payable 450,922,378.20 427,293,961.56
Including: Interest payable 12,358,210.18 5,801,215.14
Dividend payable 21,356,359.44 17,317,286.45
Liability held for sale
Non-current liabilities due within
300,000.00 258,588,504.48
one year
Other current liabilities
Total current liabilities 5,959,506,273.18 6,789,838,150.56
Non-current liabilities:
Long-term loans 301,280,000.00 1,920,000.00
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long term employee
15,588,518.08 19,073,101.29
compensation payable
Accrued liabilities 252,002,095.28 266,641,323.73
Deferred income 67,561,241.16 53,118,676.50
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 636,431,854.52 340,753,101.52
Total liabilities 6,595,938,127.70 7,130,591,252.08
Owners’ equity:
Share capital 1,044,597,881.00 1,044,597,881.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve 2,753,017,007.10 2,753,017,007.10
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve 399,432,577.70 400,455,827.82
Retained profit 897,815,101.58 917,567,933.94
Total owner’s equity 5,094,862,567.38 5,115,638,649.86
Total liabilities and owner’s
11,690,800,695.08 12,246,229,901.94
equity
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
100
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Person in charge of accounting institute: Luo Bo
3. Consolidated Profit Statement
In RMB
Item Semi-annual of 2019 Semi-annual of 2018
I. Total operating income 9,133,162,680.94 9,271,509,569.67
Including: Operating income 9,133,162,680.94 9,271,509,569.67
Interest income
Insurance gained
Commission charge
and commission income
II. Total operating cost 9,117,690,815.20 9,241,256,579.51
Including: Operating cost 7,490,555,537.25 7,758,153,561.09
Interest expense
Commission charge
and commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee
slip
Reinsurance expense
Tax and extras 80,639,759.74 65,046,860.70
Sales expense 1,244,391,756.87 1,189,741,101.32
Administrative
164,393,042.70 148,994,790.89
expense
R&D expense 120,048,040.86 92,780,293.44
Financial expense 17,662,677.78 -13,460,027.93
Including: Interest
57,892,999.31 60,155,710.42
expenses
Interest
59,401,426.37 64,297,532.05
income
Add: other income 35,311,208.60 48,561,057.62
Investment income (Loss
11,663,963.45 14,749,419.09
is listed with “-”)
Including: Investment
income on affiliated company and -8,822,000.32 -15,674,377.81
joint venture
The termination of
income recognition for financial
assets measured by amortized
cost(Loss is listed with “-”)
Exchange income (Loss
is listed with “-”)
101
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Net exposure hedging
income (Loss is listed with “-”)
Income from change of
3,364,790.24 -18,790,911.11
fair value (Loss is listed with “-”)
Loss of credit impairment
9,545,495.95
(Loss is listed with “-”)
Losses of devaluation of
-10,615,932.01 -18,938,120.65
asset (Loss is listed with “-”)
Income from assets
-937,771.74 3,283,766.57
disposal (Loss is listed with “-”)
III. Operating profit (Loss is listed
63,803,620.23 59,118,201.68
with “-”)
Add: Non-operating income 2,476,197.02 4,082,102.58
Less: Non-operating expense 2,362,526.37 40,791.25
IV. Total profit (Loss is listed with
63,917,290.88 63,159,513.01
“-”)
Less: Income tax expense 17,701,260.34 10,150,948.29
V. Net profit (Net loss is listed with
46,216,030.54 53,008,564.72
“-”)
(i) Classify by business
continuity
1.continuous operating net
46,216,030.54 53,008,564.72
profit (net loss listed with ‘-”)
2.termination of net profit (net
loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to
54,334,022.57 50,684,231.73
owner’s of parent company
2.Minority shareholders’ gains
-8,117,992.03 2,324,332.99
and losses
VI. Net after-tax of other
-6,957,381.18 -8,939,360.51
comprehensive income
Net after-tax of other
comprehensive income attributable -4,411,347.06 -6,993,349.71
to owners of parent company
(I) Other comprehensive
income items which will not be
reclassified subsequently to profit
of loss
1.Changes of the
defined benefit plans that
re-measured
2.Other comprehensive
income under equity method that
cannot be transfer to gain/loss
3.Change of fair value
of investment in other equity
instrument
4.Fair value change of
102
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
enterprise's credit risk
5. Other
(ii) Other comprehensive
income items which will be
-4,411,347.06 -6,993,349.71
reclassified subsequently to profit
or loss
1.Other comprehensive
income under equity method that
can transfer to gain/loss
2.Change of fair value
of other debt investment
3.gain/loss of fair
value changes for available-for-sale
financial assets
4.Amount of financial
assets re-classify to other
comprehensive income
5.Gain/loss of
held-to-maturity investments that
re-classify to available-for-sale
financial asset
6.Credit impairment
provision for other debt investment
7.Cash flow hedging
reserve
8.Translation
differences arising on translation of
-4,411,347.06 -6,993,349.71
foreign currency financial
statements
9.Other
Net after-tax of other
comprehensive income attributable -2,546,034.12 -1,946,010.80
to minority shareholders
VII. Total comprehensive income 39,258,649.36 44,069,204.21
Total comprehensive
income attributable to owners of 49,922,675.51 43,690,882.02
parent Company
Total comprehensive income
attributable to minority -10,664,026.15 378,322.19
shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0520 0.0485
(ii) Diluted earnings per share 0.0520 0.0485
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged
party before combination while 0 Yuan achieved last period
Legal Representative: Wu Dinggang
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
4. Profit Statement of Parent Company
In RMB
Item Semi-annual of 2019 Semi-annual of 2018
I. Operating income 4,534,756,227.34 4,393,245,102.05
Less: Operating cost 4,032,394,105.20 3,953,902,686.95
Taxes and surcharge 37,629,052.43 29,723,713.26
Sales expenses 338,606,135.03 300,004,706.73
Administration
68,435,172.51 58,197,516.76
expenses
R&D expenses 51,474,328.29 45,645,434.03
Financial expenses 8,505,383.95 13,171,889.86
Including: interest
42,484,006.95 41,526,165.10
expenses
Interest
40,313,424.26 40,939,295.98
income
Add: other income 18,499,284.82 36,053,817.83
Investment income
24,118,870.80 23,950,589.55
(Loss is listed with “-”)
Including: Investment
income on affiliated Company -2,832,319.70 2,089,222.50
and joint venture
The termination of
income recognition for financial
assets measured by amortized cost
(Loss is listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
Changing income of fair
3,434,946.59 -3,400,358.37
value (Loss is listed with “-”)
Loss of credit
impairment (Loss is listed with 12,788,678.01
“-”)
Losses of devaluation of
-2,792,854.97 -4,217,403.31
asset (Loss is listed with “-”)
Income on disposal of
-791,312.06 -877,303.84
assets (Loss is listed with “-”)
II. Operating profit (Loss is listed
52,969,663.12 44,108,496.32
with “-”)
Add: Non-operating income 220,590.00 3,746,592.46
Less: Non-operating expense
III. Total Profit (Loss is listed
53,190,253.12 47,855,088.78
with “-”)
Less: Income tax 1,057,961.59 -2,433,879.71
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
IV. Net profit (Net loss is listed
52,132,291.53 50,288,968.49
with “-”)
(i)continuous operating net
52,132,291.53 50,288,968.49
profit (net loss listed with ‘-”)
(ii) termination of net profit
(net loss listed with ‘-”)
V. Net after-tax of other
comprehensive income
(I) Other comprehensive
income items which will not be
reclassified subsequently to profit
of loss
1.Changes of the
defined benefit plans that
re-measured
2.Other
comprehensive income under
equity method that cannot be
transfer to gain/loss
3.Change of fair
value of investment in other
equity instrument
4.Fair value change
of enterprise's credit risk
5. Other
(II) Other comprehensive
income items which will be
reclassified subsequently to profit
or loss
1.Other
comprehensive income under
equity method that can transfer to
gain/loss
2.Change of fair
value of other debt investment
3.gain/loss of fair
value changes for
available-for-sale financial assets
4.Amount of financial
assets re-classify to other
comprehensive income
5.Gain/loss of
held-to-maturity investments that
re-classify to available-for-sale
financial asset
6.Credit impairment
provision for other debt
investment
7.Cash flow hedging
reserve
8.Translation
105
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
differences arising on translation
of foreign currency financial
statements
9.Other
VI. Total comprehensive income 52,132,291.53 50,288,968.49
VII. Earnings per share:
(i) Basic earnings per share 0.0499 0.0481
(ii) Diluted earnings per
0.0499 0.0481
share
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
5. Consolidated Cash Flow Statement
In RMB
Item Semi-annual of 2019 Semi-annual of 2018
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 8,808,462,153.80 7,815,961,903.35
services
Net increase of customer
deposit and interbank deposit
Net increase of loan from
central bank
Net increase of capital
borrowed from other financial
institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Net increase of insured savings
and investment
Cash received from interest,
commission charge and commission
Net increase of capital
borrowed
Net increase of returned
business capital
Net cash received by agents in
sale and purchase of securities
Write-back of tax received 190,487,049.58 287,003,816.39
Other cash received 77,246,943.31 125,462,336.78
106
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
concerning operating activities
Subtotal of cash inflow arising from
9,076,196,146.69 8,228,428,056.52
operating activities
Cash paid for purchasing
commodities and receiving labor 7,057,460,101.03 6,674,753,714.94
service
Net increase of customer loans
and advances
Net increase of deposits in
central bank and interbank
Cash paid for original
insurance contract compensation
Net increase of financial assets
held for transaction purposes
Net increase of capital lent
Cash paid for interest,
commission charge and commission
Cash paid for bonus of
guarantee slip
Cash paid to/for staff and
823,360,788.76 812,465,740.75
workers
Taxes paid 300,839,972.73 176,250,920.48
Other cash paid concerning
521,051,283.98 404,468,319.29
operating activities
Subtotal of cash outflow arising
8,702,712,146.50 8,067,938,695.46
from operating activities
Net cash flows arising from
373,484,000.19 160,489,361.06
operating activities
II. Cash flows arising from
investing activities:
Cash received from recovering
1,384,000,000.00 1,100,000,000.00
investment
Cash received from investment
31,627,554.38 19,903,288.36
income
Net cash received from
disposal of fixed, intangible and 1,677,670.77 335,030.00
other long-term assets
Net cash received from
disposal of subsidiaries and other
units
Other cash received
54,906,734.15 84,470,020.72
concerning investing activities
Subtotal of cash inflow from
1,472,211,959.30 1,204,708,339.08
investing activities
Cash paid for purchasing fixed,
intangible and other long-term 202,145,813.88 271,319,288.71
assets
Cash paid for investment 1,254,000,000.00 2,280,000,001.00
Net increase of mortgaged
107
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
loans
Net cash received from
subsidiaries and other units
obtained
Other cash paid concerning
11,141,590.61 270,000.00
investing activities
Subtotal of cash outflow from
1,467,287,404.49 2,551,589,289.71
investing activities
Net cash flows arising from
4,924,554.81 -1,346,880,950.63
investing activities
III. Cash flows arising from
financing activities
Cash received from absorbing
24,865,000.00
investment
Including: Cash received
from absorbing minority
24,865,000.00
shareholders’ investment by
subsidiaries
Cash received from loans 1,139,670,561.25 1,505,066,261.86
Cash received from issuing
bonds
Other cash received
concerning financing activities
Subtotal of cash inflow from
1,139,670,561.25 1,529,931,261.86
financing activities
Cash paid for settling debts 1,614,633,080.08 1,614,170,535.14
Cash paid for dividend and
100,227,663.84 53,723,439.04
profit distributing or interest paying
Including: Dividend and profit
of minority shareholder paid by 2,274,030.00
subsidiaries
Other cash paid concerning
25,441,649.20 2,015,179.95
financing activities
Subtotal of cash outflow from
1,740,302,393.12 1,669,909,154.13
financing activities
Net cash flows arising from
-600,631,831.87 -139,977,892.27
financing activities
IV. Influence on cash and cash
equivalents due to fluctuation in 3,541,851.94 2,847,735.86
exchange rate
V. Net increase of cash and cash
-218,681,424.93 -1,323,521,745.98
equivalents
Add: Balance of cash and cash
4,484,643,187.93 5,089,765,770.39
equivalents at the period -begin
VI. Balance of cash and cash
4,265,961,763.00 3,766,244,024.41
equivalents at the period -end
Legal Representative: Wu Dinggang
108
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
6. Cash Flow Statement of Parent Company
In RMB
Item Semi-annual of 2019 Semi-annual of 2018
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 4,398,710,855.09 3,719,566,923.02
services
Write-back of tax received 86,062,145.56 119,492,496.21
Other cash received concerning
30,523,890.39 42,262,676.35
operating activities
Subtotal of cash inflow arising from
4,515,296,891.04 3,881,322,095.58
operating activities
Cash paid for purchasing
commodities and receiving labor 3,813,992,469.51 3,286,810,130.57
service
Cash paid to/for staff and
263,503,252.87 263,976,937.91
workers
Taxes paid 64,988,153.11 41,814,106.04
Other cash paid concerning
197,408,073.39 165,818,202.68
operating activities
Subtotal of cash outflow arising from
4,339,891,948.88 3,758,419,377.20
operating activities
Net cash flows arising from operating
175,404,942.16 122,902,718.38
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
1,384,000,000.00 1,060,000,000.00
investment
Cash received from investment
36,217,554.38 22,524,918.51
income
Net cash received from disposal
of fixed, intangible and other 1,320,000.00 220,000.00
long-term assets
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
278,374,247.03 72,631,956.88
investing activities
Subtotal of cash inflow from
1,699,911,801.41 1,155,376,875.39
investing activities
Cash paid for purchasing fixed,
93,641,143.54 84,879,645.66
intangible and other long-term assets
Cash paid for investment 1,260,000,000.00 2,290,704,000.00
109
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
59,266,363.88 30,000,000.00
investing activities
Subtotal of cash outflow from
1,412,907,507.42 2,405,583,645.66
investing activities
Net cash flows arising from investing
287,004,293.99 -1,250,206,770.27
activities
III. Cash flows arising from financing
activities
Cash received from absorbing
investment
Cash received from loans 909,409,999.44 1,144,720,995.00
Cash received from issuing
bonds
Other cash received concerning
55,543,648.47 6,540,910.71
financing activities
Subtotal of cash inflow from
964,953,647.91 1,151,261,905.71
financing activities
Cash paid for settling debts 1,373,985,025.00 1,133,072,000.00
Cash paid for dividend and
90,576,186.82 48,536,956.18
profit distributing or interest paying
Other cash paid concerning
115,345,079.52 119,502,958.37
financing activities
Subtotal of cash outflow from
1,579,906,291.34 1,301,111,914.55
financing activities
Net cash flows arising from financing
-614,952,643.43 -149,850,008.84
activities
IV. Influence on cash and cash
equivalents due to fluctuation in 1,260,766.69 -2,715,680.93
exchange rate
V. Net increase of cash and cash
-151,282,640.59 -1,279,869,741.66
equivalents
Add: Balance of cash and cash
2,894,384,811.05 3,410,029,424.54
equivalents at the period -begin
VI. Balance of cash and cash
2,743,102,170.46 2,130,159,682.88
equivalents at the period -end
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
110
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
Semi-annual of 2019
Owners’ equity attributable to the parent Company
Other
Less
equity instrument
: Reas
Perpet
Item Pref Inve Other onab Provision Minority Total owners’
ual
Share capital erre Capital reserve ntor comprehensive le Surplus reserve of general Retained profit Other Subtotal interests equity
capita
d Other y income reser risk
l
stoc shar ve
securi
k es
ties
I. Balance at the end
1,044,597,881.00 2,684,369,598.46 -18,143,569.26 400,673,993.50 904,232,582.87 5,015,730,486.57 119,819,558.59 5,135,550,045.16
of the last year
Add: Changes
-1,023,250.12 -2,734,328.91 -3,757,579.03 -4,385,295.55 -8,142,874.58
of accounting policy
Error
correction of the last
period
Enterprise
combine under the
same control
Other
II. Balance at the
beginning of this 1,044,597,881.00 2,684,369,598.46 -18,143,569.26 399,650,743.38 901,498,253.96 5,011,972,907.54 115,434,263.04 5,127,407,170.58
year
III. Increase/
Decrease in this year
-4,411,347.06 -8,341,850.29 -12,753,197.35 -13,005,165.19 -25,758,362.54
(Decrease is listed
with “-”)
(i) Total -4,411,347.06 54,334,022.57 49,922,675.51 -10,664,026.15 39,258,649.36
111
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
comprehensive
income
(ii) Owners’
devoted and
decreased capital
1.Common shares
invested by
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount reckoned
into owners equity
with share-based
payment
4. Other
(III) Profit
-62,675,872.86 -62,675,872.86 -2,341,139.04 -65,017,011.90
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provisions
3. Distribution for
owners (or -62,675,872.86 -62,675,872.86 -2,274,030.00 -64,949,902.86
shareholders)
4. Other -67,109.04 -67,109.04
(IV) Carrying
forward internal
owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
112
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
conversed to capital
(share capital)
3. Remedying loss
with surplus reserve
4.Carry-over
retained earnings
from the defined
benefit plans
5.Carry-over
retained earnings
from other
comprehensive
income
6. Other
(V) Reasonable
reserve
1. Withdrawal in the
report period
2. Usage in the
report period
(VI)Others
IV. Balance at the
end of the report 1,044,597,881.00 2,684,369,598.46 -22,554,916.32 399,650,743.38 893,156,403.67 4,999,219,710.19 102,429,097.85 5,101,648,808.04
period
Last period
In RMB
Semi-annual of 2018
Owners’ equity attributable to the parent Company
Other Les
Rea
equity instrument s: Provisio
Item Other son Minority Total owners’
Pref Perp Inv Surplus n of Retained
Share capital Capital reserve comprehensiv able Other Subtotal interests equity
erre etual ento reserve general profit
Other e income rese
d capit ry risk
rve
stoc al shar
113
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
k secur es
ities
I. Balance at the
end of the last 1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 5,051,066,095.31 106,110,485.80 5,157,176,581.11
year
Add:
Changes of
accounting policy
Error
correction of the
last period
Enterprise
combine under
the same control
Other
II. Balance at the
beginning of this 1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 5,051,066,095.31 106,110,485.80 5,157,176,581.11
year
III. Increase/
Decrease in this
-418,120.44 -6,993,349.71 -11,991,641.13 -19,403,111.28 22,295,176.11 2,892,064.83
year (Decrease is
listed with “-”)
(i) Total
comprehensive -6,993,349.71 50,684,231.73 43,690,882.02 378,322.19 44,069,204.21
income
(ii) Owners’
devoted and -418,120.44 -418,120.44 22,865,000.00 22,446,879.56
decreased capital
1.Common
shares invested 22,865,000.00 22,865,000.00
by shareholders
2. Capital
invested by
114
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
holders of other
equity
instruments
3. Amount
reckoned into
owners equity
with share-based
payment
4. Other -418,120.44 -418,120.44 -418,120.44
(III) Profit
-62675872.86 -62,675,872.86 -948,146.08 -63,624,018.94
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provisions
3. Distribution
for owners (or -62,675,872.86 -62,675,872.86 -1,366,265.52 -64,042,138.38
shareholders)
4. Other 418,119.44 418,119.44
(IV) Carrying
forward internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
115
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
loss with surplus
reserve
4.Carry-over
retained
earnings from
the defined
benefit plans
5.Carry-over
retained earnings
from other
comprehensive
income
6. Other
(V) Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(VI)Others
IV. Balance at the
end of the report 1,044,597,881.00 2,684,388,223.63 -14,255,671.73 391,029,420.33 925,903,130.8 5,031,662,984.03 128,405,661.91 5,160,068,645.94
period
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
116
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Semi-annual of 2019
Other equity instrument Other
Less:
Item Prefe Perpetual Capital public compreh Reasonable Surplus Retained Total owners’
Share capital Inventor Other
rred capital Other reserve ensive reserve reserve profit equity
y shares
stock securities income
I. Balance at the end of the
1,044,597,881.00 2,753,017,007.10 400,455,827.82 917,567,933.94 5,115,638,649.86
last year
Add: Changes of
-1,023,250.12 -9,209,251.03 -10,232,501.15
accounting policy
Error correction of
the last period
Other
II. Balance at the beginning
1,044,597,881.00 2,753,017,007.10 399,432,577.70 908,358,682.91 5,105,406,148.71
of this year
III. Increase/ Decrease in this
year (Decrease is listed with -10,543,581.33 -10,543,581.33
“-”)
(i) Total comprehensive
52,132,291.53 52,132,291.53
income
(ii) Owners’ devoted and
decreased capital
1.Common shares invested by
shareholders
2. Capital invested by holders
of other equity instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(III) Profit distribution -62,675,872.86 -62,675,872.86
1. Withdrawal of surplus
reserves
2. Distribution for owners (or
-62,675,872.86 -62,675,872.86
shareholders)
117
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
3. Other
(IV) Carrying forward
internal owners’ equity
1. Capital reserves conversed
to capital (share capital)
2. Surplus reserves conversed
to capital (share capital)
3. Remedying loss with
surplus reserve
4.Carry-over retained
earnings from the defined
benefit plans
5.Carry-over retained
earnings from other
comprehensive income
6. Other
(V) Reasonable reserve
1. Withdrawal in the report
period
2. Usage in the report period
(VI)Others
IV. Balance at the end of the
1,044,597,881.00 2,753,017,007.10 399,432,577.70 897,815,101.58 5,094,862,567.38
report period
Last period
In RMB
Semi-annual of 2018
Other equity instrument Other
Less:
Item Prefe Perpetual Capital public compreh Reasonable Surplus Retained Total owners’
Share capital Inventor Other
rred capital Other reserve ensive reserve reserve profit equity
y shares
stock securities income
I. Balance at the end of the last
1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
year
118
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
Add: Changes of
accounting policy
Error correction of
the last period
Other
II. Balance at the beginning of
1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
this year
III. Increase/ Decrease in this
year (Decrease is listed with -12,386,904.37 -12,386,904.37
“-”)
(i) Total comprehensive
50,288,968.49 50,288,968.49
income
(ii) Owners’ devoted and
decreased capital
1.Common shares invested by
shareholders
2. Capital invested by holders
of other equity instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(III) Profit distribution -62,675,872.86 -62,675,872.86
1. Withdrawal of surplus
reserves
2. Distribution for owners (or
-62,675,872.86 -62,675,872.86
shareholders)
3. Other
(IV) Carrying forward internal
owners’ equity
1. Capital reserves conversed
to capital (share capital)
2. Surplus reserves conversed
to capital (share capital)
119
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2019
3. Remedying loss with
surplus reserve
4.Carry-over retained earnings
from the defined benefit plans
5.Carry-over retained earnings
from other comprehensive
income
6. Other
(V) Reasonable reserve
1. Withdrawal in the report
period
2. Usage in the report period
(VI)Others
IV. Balance at the end of the
1,044,597,881.00 2,753,017,007.10 390,811,254.65 881,055,743.91 5,069,481,886.66
report period
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
120
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
I. Company profile
Changhong Meiling Co., Ltd (hereinafter referred to as “the Company”) ,originally named as Hefei Meiling
Co., Ltd. is an incorporated Company established and reorganized by Hefei Meiling Refrigerator General
Factory and approved on June 12th 1992 through [WanTiGaiHanZi (1992) No.039] issued by original
Mechanism Reform Committee of Anhui Province. On August 30th 1993, through Anhui Provincial
Government [Wanzhenmin (1993) No.166] and re-examination of China Securities Regulatory Commission,
the Company made first public issue for 30 million A shares and the Company was listed on Oct. 18th, 1993
in Shenzhen Stock Exchange. On August 13th, 1996, the Company was approved to issue 100 million B
shares to investors abroad through [ZhengWeiFa (1996) No.26] issued by China Securities Regulatory
Commission. The Company went public in Shenzhen Stock Exchange on August 28th, 1996.
State-owned Assets Supervision & Administration Commission of the State Council approved such transfers
with Document Guozi Chanquan No.253 in 2007 Reply on Matters of Hefei Meiling Group Holdings
Company Limited Transferring Partial State-owned Ownership, Hefei Meiling Group Holdings Company
Limited (hereinafter abbreviated as Meiling Group) transferred its holding 37,852,683 shares in 82,852,683
state-owned shares of the Company to Sichuan Changhong Electronic Group Co., Ltd (hereinafter
abbreviated as Changhong Group), other 45,000,000 shares to Sichuan Changhong Electric Co. Ltd
(hereinafter abbreviated as Sichuan Changhong). On Aug 15, 2007, the above ownership was transferred and
Cleaning Corporation Limited.
On 27 August 2007, State-owned Assets Supervision & Administration Commission of Anhui Provincial
Government replied with Document [WGZCQH (2007) No.309] Reply on “Related Matters of Share Merger
Reform of Meiling Co., Ltd.”, agreed the Company’s ownership split reform plan. The Company made
consideration that non-tradable share holders deliver 1.5 shares to A share holders per 10 shares, and original
Meiling Group made prepayment 3,360,329 shares for some non-tradable share holders as consideration for
split reform plan.
On 29 May 2008, concerning 34,359,384 state-owned shares (including 3,360,329 shares paid for other
non-tradable shareholders by original Meiling Group in share reform) held by original Meiling Group, the
“Notice of Freely Transfer of Meiling Electrics Equity held by Meiling Group”[HGZCQ(2008) No. 59]
issued from State-owned Assets Supervision & Administration Commission of Hefei Municipal, agrees to
transfer the above said shares to Hefei Xingtai Holding Group Co., Ltd.(“Xingtai Holding Co.,”) for free. On
7 August 2008, the “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by
State-owned shareholders” [GZCQ (2007) No. 752] issued by SASAC, agrees the above said transferring.
On October 29, 2008, Changhong Group Company signed Agreement on Equity Transfer of Hefei Meiling
Co., Ltd with Sichuan Changhong, in which 32,078,846 tradable A-shares with conditional subscription of
the Company (accounting for 7.76% in total shares) held by Changhong Group Company. On 23 December
2008, “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-owned
121
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
shareholders” [GZCQ (2008) No. 1413] issued by SASAC agrees the above said share transferring.
On 24 December 2010, being deliberated and approved in 32nd Session of 6th BOD and 2nd Extraordinary
Shareholders’ General Meeting of 2010 as well as approval of document [ZJXP (2010) No. 1715] from
CSRC, totally 116,731,500 RMB ordinary shares (A stock) were offering privately to target investors with
issue price of RMB 10.28/share. Capital collecting amounting to RMB 1,199,999,820 after issuing expenses
RMB 22,045,500 deducted, net capital collected amounting to RMB 1,177,954,320, and paid-in capital
(share capital) increased RMB 116,731,500 with capital reserve (share premium) RMB 1,061,106,088.5
increased. The increasing capital has been verified by Capital Verification Report No.:
[XYZH2010CDA6021]issued from Shinwing CPA Co., Ltd.
On 20 June 2011, the general meeting of the Company considered and approved the 2010 profit distribution
plan, namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for every ten shares held
by shareholders to all shareholders, based on the total share capital of 530,374,449 shares as of 31 December
2010. The total share capital of the Company upon profit distribution increased to 636,449,338 shares. The
capital increase was verified by Anhui Huashen Zhengda Accounting Firm with the verification report
WHSZDKYZ (2011) No.141.
On 26 June 2012, the general meeting of the Company considered and approved the 2011 profit distribution
and capitalization of capital reserve plan, namely to distribute cash dividends of RMB0.5 (tax included) plus
two shares for every ten shares to all shareholders capitalized from capital reserve, based on the total share
capital of 636,449,338 shares as of 31 December 2011. The total share capital of the Company upon
implementation of capitalization of capital reserve increased to 763,739,205 shares from 636,449,338 shares,
and was verified by Anhui Anlian Xinda Accounting Firm with the verification report WALXDYZ (2012)
No.093.
On November 18, 2015, considered and approved by the 12th Session of the 8th BOD of the company and the
first extraordinary general meeting in 2016, and approved by the document of China Securities Regulatory
Commission [CSRC License No. (2016) 1396] “Reply to the approval of non-public offering of shares of
Hefei Meiling Co., Ltd.”, the company has actually raised funds of 1,569,999,998.84 Yuan by non-public
offering of no more than 334,042,553 new shares at face value of RMB 1 Yuan per share and with issue
price no less than RMB 4.70 per share, after deducting the issue costs of 29,267,276.08 Yuan , the net amount
of raised funds is 1,540,732,722.76 Yuan , the increased paid-in capital (share capital) of 280,858,676.00
Yuan , increased capital reserve (share premium) of 1,259,874,046.76 Yuan. This capital increase has been
verified by No. [ XYZH2016CDA40272 ] capital verification report of ShineWing Certified Public
Accountants special general partnership.
Ended as 30 June 2019, total share capital of the Company amounting to 1,044,597,881shares with ordinary
122
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
shares in full. Among which, 881,733,881 shares of A-share accounting 84.41% in total shares while B-share
with 162,864,000 shares accounting 15.59% in total shares. Detail share capital as:
Type of stock Quantity Proportion
(I)Restricted shares 80,788,526 7.73%
1. State-owned shares
2. State-owned legal person’s shares 70,793,625 6.78%
3. Other domestic shares 8,727,481 0.83%
Including: Domestic legal person’s shares 4,716,077 0.45%
Domestic natural person’s shares 4,011,404 0.38%
4. Foreign shares 1,267,420 0.12%
Including: Overseas natural person’s shares 1,267,420 0.12%
(II)Unrestricted shares 963,809,355 92.27%
1. RMB Ordinary shares 802,212,775 76.80%
2. Domestically listed foreign shares 161,596,580 15.47%
3. Overseas listed foreign shares
4. Others
Total shares 1,044,597,881 100.00%
The Company belongs to the manufacture of light industry, and engaged in the production and sale of
refrigerator, freezer and air-conditioner. Unified social credit code of the Company: 9134000014918555XK;
Address: No.2163, Lianhua Road, Economy and Technology Development Zone, Hefei City; Legal
Representative: Wu Dinggang; register capital (paid-in capital): RMB 1,044,597,881; type of company:
limited liability company(joint venture and listed of Taiwan, Hong Kong and Macao) Business Scope: R&D,
manufacture and sales of cooling apparatus, air-conditioner, washing machine, water heater, kitchenware,
home decoration, bathroom, lamps & lanterns, household & similar appliance, injection plastic machine of
computer controlling, plastic products, metalwork, packaging products and decorations as well as the
installation and technical consultant services. Business of self-produced products, technology export and
import-export of the raw& auxiliary materials, machinery equipment, instrument and technology; department
sales and transportation
II. Scope of consolidated financial statement
The Company’s consolidated financial statement included 38 subsidiaries including Sichuan Changhong
Air-conditioner Co., Ltd., Zhongshan Changhong Electric Co., Ltd, Zhongke Meiling Cryogenic Technology
Co., Ltd and so on. As compared to previous year, Nanchang Xiangyou Electronic Appliance Marketing
Co.,Ltd was liquidated out of the scope, Hefei Meiling Wulian Technology Co., Ltd and Anhui Tuoxing
Technology Co., Ltd are established in the period. More detail can be seen in “VII. Changes of consolidated
scope” and “VIII. Rights and interest in other subjects” in the Note.
123
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
III. Basis for preparation of financial statement
1. Basis for preparation
The financial statements of the Company were prepared in accordance with the actual transactions and
proceedings, and relevant regulation of Accounting Standards for Enterprise released by the Ministry of
Finance, and was on the basis of sustainable operation, and the accounting policy and estimation stated in the
“IV. Significant Accounting Policy and Accounting Estimation”
2.Continuous operation
The Company recently has a history of profitability operation and has financial resources supporting, and
prepared the financial statement on basis of going concern is reasonable.
IV. Significant Accounting Policy, Accounting Estimation
1. Statement on observation of accounting standards for enterprise
The financial statement prepared by the Company applies with the requirements of Accounting Standard for
Enterprise, and reflects the financial condition, operational achievements and cash flow of the Company
effectively and completely.
2. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December.
3. Operation cycle
Operation cycle of the Company was 12 months, and it is the standard of flow classification for assets and
liabilities.
4. Standard currency for accounting
The Company takes RMB as the standard currency for accounting.
5. Accountant arrangement method of business combination under common control and not under common
control
As acquirer, the Company measures the assets and liabilities acquired through business combination under
common control at their carrying values as reflected in the consolidated financial statement of the ultimate
controller as of the combination date. Capital reserve shall be adjusted in respect of any difference between
carrying value of the net assets acquired and carrying value of the combination consideration paid. In case
that capital reserve is insufficient to offset, the Company would adjust retained earnings.
The acquiree’s net identifiable assets, liabilities or contingent liabilities acquired through business
combination not under common control shall be measured at fair value as of the acquisition date. The cost of
combination represents the fair value of the cash or non-cash assets paid, liabilities issued or committed and
124
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
equity securities issued by the Company as at the date of combination in consideration for acquiring the
controlling power in the acquiree, together with the sum of any directly related expenses occurred during
business combination(in case of such business combination as gradually realized through various transactions,
the combination cost refers to the sum of each cost of respective separate transaction). Where the cost of the
combination exceeds the acquirer’s interest in the fair value of the acquirer’s identifiable net assets acquired,
the difference is recognized as goodwill; where the cost of combination is lower than the acquirer’s interest
in the fair value of the acquiree’s identifiable net assets, the Company shall firstly make further review on the
fair values of the net identifiable assets, liabilities or contingent liabilities acquired as well as the fair value of
the non-cash assets portion of combination consideration or the equity securities issued by the Company. In
case that the Company finds the cost of combination is still lower than the acquirer’s interest in the fair value
of the acquiree’s identifiable net assets after such further review, the difference is recognized in
non-operating income for the current period when combination occurs.
6. Measures on Preparation of Consolidated Financial Statements
The Company shall put all the subsidiaries controlled and main body structured into consolidated financial
statements.
Any difference arising from the inconformity of accounting year or accounting policies between the
subsidiaries and the Company shall be adjusted in the consolidated financial statements.
All the material inter-company transactions, non-extraordinary items and unrealized profit within the
combination scope are written-off when preparing consolidated financial statement. Owners’ equity of
subsidiary not attributable to parent company and current net gains and losses, other comprehensive income
and total comprehensive income attributable to minority shareholders are recognized as non-controlling
interests, minority interests, other comprehensive income attributable to minority shareholders and total
comprehensive income attributable to minority shareholders in consolidated financial statement respectively.
As for subsidiary acquired through business combination under common control, its operating results and
cash flow will be included in consolidated financial statement since the beginning of the period when
combination occurs. When preparing comparative consolidated financial statement, the relevant items in
previous years financial statement shall be adjusted as if the reporting entity formed upon combination has
been existing since the ultimate controller commenced relevant control.
As for equity interests of the investee under common control acquired through various transactions which
eventually formed business combination, the Company shall supplement disclosure of the accounting
treatment in consolidated financial statement in the reporting period when controlling power is obtained. For
example, as for equity interests of the investee under common control acquired through various transactions
which eventually formed business combination, adjustments shall be made as if the current status had been
existing when the ultimate controller commenced control in connection of preparing consolidated financial
statement; in connection with preparing comparative statement, the Company shall consolidate the relevant
assets and liabilities of the acquiree into the Company’s comparative consolidated financial statement to the
extent not earlier than the timing when the Company and the acquiree are all under control of the ultimate
controller, and the net assets increased due to combination shall be used to adjust relevant items under
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
owners’ equity in comparative statement. In order to prevent double computation of the value of the
acquiree’s net assets, the relevant profits and losses, other comprehensive income and change of other net
assets recognized during the period from the date when the Company acquires original equity interests and
the date when the Company and the acquiree are all under ultimate control of the same party (whichever is
later) to the date of combination in respect of the long-term equity investment held by the Company before
satisfaction of combination shall be utilized to offset the beginning retained earnings and current gains and
losses in the period as the comparative financial statement involves, respectively.
As for subsidiary acquired through business combination not under common control, its operating results and
cash flow will be included in consolidated financial statement since the Company obtains controlling power.
When preparing consolidated financial statement, the Company shall adjust the subsidiary’s financial
statement based on the fair value of the various identifiable assets, liabilities or contingent liabilities
recognized as of the acquisition date.
As for equity interests of the investee not under common control acquired through various transactions which
eventually formed business combination, the Company shall supplement disclosure of the accounting
treatment in consolidated financial statement in the reporting period when controlling power is obtained. For
example, as for equity interests of the investee not under common control acquired through various
transactions which eventually formed business combination, when preparing consolidated financial statement,
the Company would re-measure the equity interests held in the acquiree before acquisition date at their fair
value as of the acquisition date, and any difference between the fair value and carrying value is included in
current investment income. in case that the equity interests in acquiree held by the Company before the
relevant acquisition date involves other comprehensive income at equity method and change of other owners’
equity (other than net gains and losses, other comprehensive income and profit distribution), then the equity
interests would transfer to investment gains and losses for the period which the acquisition date falls upon.
The other comprehensive income arising from change of the net liabilities or net assets under established
benefit scheme as acquiree’s re-measured such scheme is excluded.
The transaction with non-controlling interest to dispose long-term equity investment in a subsidiary without
losing control rights over the subsidiary, the difference between the proceeds from disposal of interests and
the decrease of the shared net assets of the subsidiary is adjusted to capital premium (share premium). In case
capital reserve is not sufficient to offset the difference, retained earnings will be adjusted.
As for disposal of part equity investment which leads to losing control over the investee, the Company would
re-measure the remaining equity interests at their fair value as of the date when the Company loses control
over the investee when preparing consolidated financial statement. The sum of consideration received from
disposal of equity interest and fair value of the remaining equity interest, less the net assets of the original
subsidiary attributable to the Company calculated based on the original shareholding proportion since the
acquisition date or the date then consolidation commences, is included in investment gains and losses for the
period when control is lost, meanwhile to offset goodwill. Other comprehensive income related to equity
interest investment in original subsidiaries is transferred into current investment gains and losses upon lost of
control.
If the disposal of the equity investment of a subsidiary is realized through multiple transactions until loss of
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
control and is a package deal, the accounting treatment of these transactions should be dealt with as one
transaction of disposal of the subsidiary until loss of control. However, before the Company loses total
control of the subsidiary, the differences between the actual disposal price and the share of the net assets of
the subsidiary disposed of in every transaction should be recognized as other comprehensive income in the
consolidated financial statements, and transferred to profit or loss when losing control.
7. Accounting treatment for joint venture arrangement and joint controlled entity
The joint venture arrangement of the Company consists of joint controlled entity and joint venture. As for
jointly controlled entity, the Company determines the assets held and liabilities assumed separately as a party
to the jointly controlled entity, recognizes such assets and liabilities according to its proportion, and
recognizes relevant income and expense separately under relevant agreement or according to its proportion.
As for asset transaction relating to purchase and sales with the jointly controlled entity which does not
constitute business activity, part of the gains and losses arising from such transaction attributable to other
participators of the jointly controlled entity is only recognized.
8. Cash and cash equivalents
Cash in the cash flow statement comprises the Group’s cash on hand and deposits that can be readily
withdrawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group, that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value, including but not limited to the followings which meet the aforesaid conditions: debt investment
matured within three months upon the acquisition date, bank time deposit which can be early withdrew by
serving a notice and transferrable deposit receipt, etc. for time deposit which can not be used for payment at
any time, it would be note recognized as cash; while if can be used for such purpose, it would be recognized
as cash. Guarantee deposit over three months in other monetary capital shall not be recognized as cash
equivalents, and those less than three months are recognized as cash equivalents.
9. Foreign currency business and foreign currency financial statement conversion
(1) Foreign currency business
As for the foreign currency business, the Company converts the foreign currency amount into RMB amount
pursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary items
expressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of the balance
sheet date. The conversion difference occurred is recorded into prevailing gains and losses, other than the
disclosure which is made according to capitalization rules for the exchange difference occurred from the
special foreign currency borrowings borrowed for constructing and producing the assets satisfying condition
of capitalization. As for the foreign currency non-monetary items measured by fair value, the amount is then
converted into RMB according to the spot exchange rate as of the confirmation day for fair value. And the
conversion difference occurred during the procedure is recorded into prevailing gains and losses directly as
change of fair value. As for the foreign currency non-monetary items measured by historical cost, conversion
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
is made with the spot exchange rate as of the business day, with no change in RMB amount.
(2) Conversion of foreign currency financial statement
Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in foreign
currency balance sheet; as for the items in statement of owners’ equity except for “Undistributed profit”,
conversion is made pursuant to the spot exchange rate of business day; income and expense items in income
statement then are also converted pursuant to the spot exchange rate of transaction day. Difference arising
from the aforementioned conversions shall be listed separately in items of owners’ equity. Spot exchange rate
as of the occurrence date of cash flow is adopted for conversion of foreign currency cash flow. The amount
of cash affected by exchange rate movement shall be listed separately in cash flow statement.
10. Financial instrument
A financial asset or liability is recognized when the Company becomes a party to a financial instrument
contract. The financial assets and financial liabilities are measured at fair value on initial recognition. For the
financial assets and liabilities measured by fair value and with variation reckoned into current gains/losses,
the related transaction expenses are directly included in current gains or losses; for other types of financial
assets and liabilities, the related transaction costs are included in the initial recognition amount.
(1) Method for determining the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can get by selling an asset or has to pay for transferring
a liability in an orderly transaction that occurs on the measurement date. For a financial instrument having an
active market, the Company uses the quoted prices in the active market to determine its fair value.
Quotations in an active market refer to prices that are readily available from exchanges, brokers, industry
associations, pricing services, etc., and represent the prices of market transactions that actually occur in an
arm's length transaction. If there is no active market for a financial instrument, the Company uses valuation
techniques to determine its fair value. Valuation techniques include reference to prices used in recent market
transactions by parties familiar with the situation and through voluntary trade, and reference to current fair
values of other financial instruments that are substantially identical, discounted cash flow methods, and
option pricing models.
(2) Category and measurement on financial assets
The Company divided the financial assets as the follow while initially recognized: the financial assets
measured at amortized cost; the financial assets measured at fair value and whose changes are included in
other comprehensive income; and the financial assets measured by fair value and with variation reckoned
into current gains/losses. The classification of financial assets depends on the business model that the
Company 's enterprises manage the financial assets and the cash flow characteristics of the financial assets.
The financial assets measured at amortized cost
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Financial assets are classified as financial assets measured at amortized cost when they also meet the
following conditions: The group's business model for managing the financial assets is to collect contractual
cash flows; the contractual terms of the financial assets stipulate that cash flow generated on a specific date is
only paid for the principal and interest based on the outstanding principal amount. For such financial assets,
the effective interest method is used for subsequent measurement according to the amortized cost, and the
gains or losses arising from amortization or impairment are included in current profits and losses. Such
financial assets mainly include monetary funds, notes receivable, accounts receivable, other receivables, debt
investment and long-term receivables, and so on. The Company lists the debt investment and long-term
receivables due within one year (including one year) from the balance sheet date as non-current assets due
within one year, and lists the debt investment with time limit within one year (including one year) when
acquired as other current assets.
The financial assets measured at fair value and whose changes are included in other comprehensive income
Financial assets are classified as financial assets measured at fair value and whose changes are included in
other comprehensive income when they also meet the following conditions: The Company 's business model
for managing the financial assets is targeted at both the collection of contractual cash flows and the sale of
financial assets; the contractual terms of the financial asset stipulate that the cash flow generated on a
specific date is only the payment of the principal and the interest based on the outstanding principal amount.
For such financial assets, fair value is used for subsequent measurement. The discount or premium is
amortized by using the effective interest method and is recognized as interest income or expenses. Except the
impairment losses and the exchange differences of foreign currency monetary financial assets are recognized
as the current profits and losses, the changes in the fair value of such financial assets are recognized as other
comprehensive income until the financial assets are derecognized, the accumulated gains or losses are
transferred to the current profits and losses. Interest income related to such financial assets is included in the
current profit and loss. Such financial assets are listed as other debt investments, other debt investments due
within one year (including one year) from the balance sheet date are listed as non-current assets due within
one year; and other debt investments with time limit within one year (including one year) when acquired are
listed as other current assets.
Financial assets measured by fair value and with variation reckoned into current gains/losses
Financial assets except for the above-mentioned financial assets measured at amortized cost and financial
assets measured at fair value and whose changes are included in other comprehensive income are classified
as financial assets measured at fair value and whose changes are included in current profits and losses, which
adopt fair value for subsequent measurement and all changes in fair value are included in current profits and
losses. The Company classifies non-trading equity instruments as financial assets measured at fair value and
whose changes are included in current profits and losses. Such financial assets are presented as trading
financial assets, and those expire after more than one year and are expected to be held for more than one year
are presented as other non-current financial assets.
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
(2) Devaluation of financial instrument
On the basis of expected credit losses, the Company performs impairment treatment on financial assets
measured at amortized cost and financial assets measured at fair value and whose changes are included in
other comprehensive income and recognize the provisions for loss.
Credit loss refers to the difference between all contractual cash flows that the Company discounts at the
original actual interest rate and are receivable in accordance with contract and all cash flows expected to be
received, that is, the present value of all cash shortages. Among them, for the purchase or source of financial
assets that have suffered credit impairment, the Company discounts the financial assets at the actual interest
rate adjusted by credit.
The Company considers all reasonable and evidenced information, including forward-looking information,
based on credit risk characteristics. When assessing the expected credit losses of receivables, they are
classified according to the specific credit risk characteristics as follows:
1) For receivables and contractual assets and lease receivables (including significant financing components
and not including significant financing components), the Company measures the provisions for loss based on
the amount of expected credit losses equivalent to the entire duration.
①. Evaluate expected credit losses based on individual items: credit notes receivable (including accepted
letters of credit) of financial institutions in notes receivable and accounts receivable, and related party
payments (related parties under the same control and significant related parties); dividends receivable,
interest receivable, reserve funds, investment loans, cash deposits (including warranty), government grants
(including dismantling subsidies) in other receivables, and receivables with significant financing components
(i.e. long-term receivables);
②. Evaluate expected credit losses based on customer credit characteristics and ageing combinations: in
addition to evaluating expected credit losses based on individual items, the Company evaluates the expected
credit losses of notes receivable and accounts receivable and other receivables financial instruments based on
customer credit characteristics and ageing combinations.
The Company considers all reasonable and evidenced information, including forward-looking information,
when assessing expected credit losses. When there is objective evidence that its customer credit
characteristics and ageing combination cannot reasonably reflect its expected credit loss, the current value of
the expected future cash flow is measured by a single item, and the cash flow shortage is directly written
down the book balance of the financial asset.
2) Assess the expected credit losses on a case-by-case basis for other assets to which the financial
instruments are impaired, such as the loan commitments and financial guarantee contracts that are not
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
measured at fair value through profit or loss, financial assets measured at fair value and whose changes are
recognized in other comprehensive income; other financial assets measured at amortized cost (such as other
current assets, other non-current financial assets, etc.).
(3) Reorganization basis and measure method for transfer of financial assets
The financial assets meet one of following requirements will be terminated recognition: ① The contract
rights of collecting cash flow of the financial assets is terminated; ②The financial assets has already been
transferred, and the Company has transferred almost all risks and remunerations of financial assets ownership
to the transferee; ③The financial assets has been transferred, even though the Company has neither
transferred nor kept almost all risks and remunerations of financial assets ownership, the Company has given
up controlling the financial assets.
If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets
ownership, nor given up controlling the financial assets, then confirm the relevant financial assets according
to how it continues to involve into the transferred financial assets and confirm the relevant liabilities
accordingly. The extent of continuing involvement in the transferred financial assets refers to the level of risk
arising from the changes in financial assets value faced by the enterprise.
If the entire transfer of financial assets satisfies the demand for derecognition, reckon the balance
between the book value of the transferred financial assets and the sum of consideration received from
transfer and fluctuation accumulated amount of fair value formerly reckoned in other consolidated
income in the current profits and losses.
If part transfer of financial assets satisfies the demand for derecognition, apportion the integral book
value of the transferred financial assets between the derecognized parts and the parts not yet
derecognized according to each relative fair value, and reckon the balance between the sum of
consideration received from transfer and fluctuation accumulated amount of fair value formerly
reckoned in other consolidated income that should be apportioned to the derecognized parts and the
apportioned aforementioned carrying amounts in the current profits and losses.
When the Company sells financial assets adopting the mode of recourse, or endorses and transfers its
financial assets, it is necessary to ensure whether almost all the risks and rewards of ownership of the
financial assets have been transferred. If almost all the risks and rewards of ownership of the financial assets
have been transferred to the transferee, the financial assets shall be derecognized; if almost all the risks and
rewards of ownership of the financial assets are retained, the financial assets shall not be derecognized; if
almost all the risks and rewards of ownership of the financial assets are neither transferred nor retained,
continue to judge whether the company retains control over the assets, and conduct accounting treatment
according to the principles described in the preceding paragraphs.
(4) Category and measurement of financial liability
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Financial liability is classified into financial liability measured by fair value and with variation reckoned
into current gains/losses and other financial liability at initially measurement. Financial liability shall be
initially recognized and measured at fair value. As for the financial liability measured by fair value and with
variation reckoned into current gains/losses, relevant trading costs are directly reckoned into current
gains/losses while other financial liability shall be reckoned into the initial amount recognized.
① the financial liability measured by fair value and with variation reckoned into current gains/losses
The conditions to be classified as transactional financial liabilities and as financial liabilities designated to be
measured at fair value and whose changes are included in current profit or loss at the initial recognition are
consistent with the conditions to be classified as transactional financial assets and as financial assets
designated to be measured at fair value and whose changes are included in current profit or loss at the initial
recognition. Financial liabilities measured at fair value and whose changes are included in current profit or
loss are subsequently measured at fair value, and the gain or loss arising from changes in fair value and the
dividends and interest expense related to these financial liabilities are included in current profit or loss.
② Other financial liability
It must go through the delivery of the derivative financial liabilities settled by the equity instrument to link to
the equity instruments that are not quoted in an active market and whose fair value cannot be reliably
measured, and the subsequent measurement is carried out in accordance with the cost. Other financial
liabilities are subsequently measured at amortized cost by using the effective interest method. The gain or
loss arising from derecognition or amortization is included in current profit or loss.
③Financial guarantee contract
The financial guarantee contract of a financial liability which is not designated to be measured at fair value
through profit or loss is initially recognized at fair value, and its subsequent measurement is carried out by
the higher one between the amount confirmed in accordance with the Accounting Standards for Business
Enterprises No. 13 — Contingencies after initial recognition and the balance after deducting the accumulated
amortization amount determined in accordance with the principle of Accounting Standards for Business
Enterprises No. 14—Revenue from the initial recognition amount.
(6) Termination of recognition of financial liability
The financial liability or part of it can only be derecognized when all or part of the current obligation of the
financial liability has been discharged. The Company (debtor) and the creditor sign an agreement to replace
the existing financial liabilities with new financial liabilities, and if the contract terms of the new financial
liabilities are substantially different from the existing financial liabilities, derecognize the existing financial
liabilities and at the same time recognize the new financial liabilities. If the financial liability is derecognized
in whole or in part, the difference between the carrying amount of the derecognized part and the
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
consideration paid (including the transferred non-cash assets or the assumed new financial liabilities) is
included in current profits and losses.
(7) Balance-out between the financial assets and liabilities
As the Company has the legal right to balance out the financial liabilities by the net or liquidation of the
financial assets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet.
In addition, the financial assets and liabilities are listed in the balance sheet without being balanced out.
(8) Derivatives and embedded derivatives
Derivatives are initially measured at fair value on the signing date of the relevant contract, and are
subsequently measured at fair value. Except for derivatives that are designated as hedging instruments and
are highly effective in hedging, the gains or losses arising from changes in fair value will be determined
based on the nature of the hedging relationship in accordance with the requirements of the hedge accounting
and be included in the period of profit and loss, other changes in fair value of derivatives are included in
current profits and losses. For a hybrid instrument that includes an embedded derivative, if it is not
designated as a financial asset or financial liability measured at fair value and whose changes are included in
current profit or loss, the embedded derivative does not have a close relationship with the main contract in
terms of economic characteristics and risks, and as with embedded derivatives, if the tools existing separately
conform to the definition of the derivatives, the embedded derivatives are split from the hybrid instruments
and are treated as separate derivative financial instruments. If it is not possible to measure the embedded
derivative separately at the time of acquisition or subsequent balance sheet date, the whole hybrid instrument
is designated as a financial asset or financial liability measured at fair value and whose changes are included
in current profits and losses.
(9) Equity instrument
The equity instrument is the contract to prove the holding of the surplus stock of the assets with the
deduction of all liabilities in the Company. The Company issues (including refinancing), repurchases, sells or
cancels equity instruments as movement of equity. No fair value change of equity instrument would be
recognized by the Company.
Transaction costs associated with equity transactions are deducted from equity. The Company's various
distributions to equity instrument holders (excluding stock dividends) reduce shareholders' equity.
11. Inventories
Inventories of the Company principally include raw materials, stock goods; work in process, self-made
semi-finished product, materials consigned to precede, low-value consumption goods, goods in transit, goods
in process, mould and engineering construction etc.
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Perpetual inventory system is applicable to inventories. For daily calculation, standard price is adopted for
raw materials, low-value consumption goods and stock goods. Switch-back cost of the current month is
adjusted by distribution price difference at the end of the month, the dispatched goods will share the cost
differences of inventory while in settlement the business income; and low-value consumption goods is
carried forward at once when being applied for use; the mould expenses will evenly deferred share based on
balance at period-begin plus increase amount in this period divided by 12 months.
Inventory at period-end is valued by the Lower-of-value between the cost and net realizable value. For those
individual stock, suffering damage, totally or partly out of fashion or has lower sales price than cost,
predicted recoverable parts in cost, and withdrawal provision of inventory depreciation single. For those raw
materials, stock commodities and goods in transit, withdrawal provision of inventory depreciation by follow
methods:
(1) Determined the net realizable value of raw materials on the higher amount between the final prices of
estimated sale-price deducted cost (about to happen till products finished), estimated sales expense and
relevant taxes, and the fair value of external disposal.
(2) Withdrawal obsolete provision for commodity stocks and goods in transit by the follow proportion:
1) Refrigerator, freezer and washing machine
Withdrawal proportion for obsolete
Grade Stock duration
provision
Within 3 months 0%
4-6 months 5%
7-12 months 15%
Grade-A
1-2 years 25%
2-3 years 40%
Over 3 years 100%
Qualified 40%
Grade-B 50%
Grade-C 60%
Unqualified 60%
Disposal 65%
Sample machine 30%
Special user type that exceed the order quantity 50%
2) Air-conditioner
134
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Withdrawal proportion for obsolete
Location level
provision
Repair 50%
Awaiting repair 70%
Store return 70%
De-stocking 70%
Overstock 100%
With respect to the inventories and delivered goods which are not vested to the above classification, their
realizable net value will be calculated by the Company based on the estimated selling price of the inventories
less estimated selling expense and related taxes. The Company re-checks the above mentioned proportion at
every end of the year. Calculated the net realizable value by difference between the estimated sale price less
the estimated sales expense and relevant taxation; after comparison with the book value of commodity stocks
and goods in transit, determined whether adjusted the proportion or not. Mould expense will amortize in
installment in usual times. Once the use-life of mould is terminated, and then transfer its remaining cost into
gains/losses, no withdrawal of obsolete provision at period-end.
12. Long-term equity investment
Long-term equity investment of the Company is mainly about investment in subsidiary, investment in
associates and investment in joint-ventures.
For long-term equity investments acquired through business combination under common control, the initial
investment cost shall be the acquirer’s share of the carrying amount of net assets of the acquiree as of the
combination date as reflected in the consolidated financial statement of the ultimate controller. If the carrying
amount of net assets of the acquiree as of the combination date is negative, the investment cost of long-term
equity investment shall be zero. For long-term equity investment acquired through business combination not
under common control, the initial investment cost shall be the combination cost.
Excluding the long-term equity investment acquired through business combination, there is also a king of
long-term equity investment acquired through cash payment, for which the actual payment for the purchase
shall be investment cost; If Long-term equity investments are acquired by issuing equity securities, fair value
of issuing equity investment shall be investment cost; for Long-term equity investments which are invested
by investors, the agreed price in investment contract or agreement shall be investment cost; and for long-term
equity investment which is acquired through debt reorganization and non-monetary assets exchange,
regulations of relevant accounting standards shall be referred to for confirming investment cost.
The Company adopts cost method for investment in subsidiaries, makes calculation for investments in
joint-ventures and associates by equity method.
When calculated by cost method, long-term equity investment is priced according to its investment cost, and
cost of the investment is adjusted when making additional investment or writing off investment; When
calculated by equity method, current investment gains and losses represent the proportion of the net gains
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
and losses realized by the invested unit in current year attributable to or undertaken by the investor. When the
Company is believed to enjoy proportion of net gains and losses of invested unit, gains and losses attributable
to the Company according to its shareholding ratio is to computer out according to the accounting policy and
accounting period of the Company, on the basis of the fair value of various recognizable assets of the
invested unit as at the date of obtaining of the investment, after offset of gains and losses arising from
internal transactions with associates and joint-ventures, and finally to make confirmation after adjustment of
net profit of the invested unit. Confirmation on gains and losses from the long-term equity investment in
associates and joint-ventures held by the Company prior to the first execution day, could only stand up with
the precedent condition that debit balance of equity investment straightly amortized according to its original
remaining term has already been deducted, if the aforementioned balance relating to the investment do exist.
In case that investor loses joint control or significant influence over investee due to disposal of part equity
interest investment, the remaining equity interest shall be calculated according to Enterprise Accounting
Principles No.22-Recognition and Measurement of Financial Instrument. Difference between the fair value
of the remaining equity interest as of the date when loss of joint control or significant influence and the
carrying value is included in current gains and losses. Other comprehensive income recognized in respect of
the original equity interest investment under equity method should be treated according to the same basis
which the investee adopts to directly dispose the relevant assets or liabilities when ceasing adoption of equity
method calculation; and also switches to cost method for calculating the long-term equity investments which
entitles the Company to have conduct control over the invested units due to its additional investments; and
switches to equity method for calculating the long-term equity investments which entitles the Company to
conduct common control or significant influence, while no control over the invested units due to its
additional investments, or the long-term equity investments which entitles the Company with no control over
the invested units any longer while with common control or significant influence.
When disposing long-term equity investment, the balance between it carrying value and effective price for
obtaining shall be recorded into current investment income. When disposing long-term equity investment
which is calculated by equity method, the proportion originally recorded in owners’ equity shall be
transferred to current investment income according to relevant ratio, except for that other movements of
owners’ equity excluding net gains and losses of the invested units shall be recorded into owners’ equity.
13. Investment real estate
The investment real estate of the Company includes leased houses and buildings, and is accounted value by
its cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes and
other expenditure which is attributable to the assets directly; while cost of self-built investment real estate is
formed with all necessary expenditures occurred before construction completion of the assets arriving at the
estimated utilization state.
Consequent measurement of investment estate shall be measured by cost method. Depreciation is provided
with average service life method pursuant to the predicted service life and net rate of salvage value. The
predicted service life and net rate of salvage value and annual depreciation are listed as follows:
136
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Predicted rate of salvage Depreciation rate per
Category Depreciation term
value annual
House and buildings 30-40 years 4%-5% 2.375%-3.20%
When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible assets
commencing from the date of such turning. And when self-used real estate turns to be leased out for rental or
additional capital, the fixed assets or intangible assets shall switch to investment real estate commencing
from the date of such turning. In situation of switch, the carrying value before the switch shall be deemed as
the credit value after the switch.
When investment is disposed, or out of utilization forever and no economic benefit would be predicted to
obtain through the disposal, the Company shall terminate recognition of such investment real estate. The
amount of income from disposal, transfer, discarding as scrap or damage of investment real estate after
deducting the asset’ s carrying value and relevant taxation shall be written into current gains and losses.
14. Fixed assets
Fixed assets of the Company represent the tangible assets and assets package: held by the Company for
purpose of producing commodities, providing labor service, leasing or operational management, service life
exceeds one year, and unit price exceeds RMB 2,000. Including four categories of houses and buildings,
machinery equipment, transportation equipment and other equipment
Their credit value is determined on the basis of the cost taken for obtaining them. Of which, cost of
purchased-in fixed assets include bidding price and import duty and relevant taxes, and other expenditure
which occurs before the fixed assets arrive at the state of predicted utilization and which could be directly
attributable to the assets; while cost of self-built fixed asset is formed with all necessary expenditures
occurred before construction completion of the assets arriving at the estimated utilization state; credit value
of the fixed assets injected by investors is determined based on the agreed value of investment contracts or
agreements, while as for the agreed value of investment contracts or agreements which is not fair, it shall
take its fair value as credit value; and for fixed assets which are leased in through finance leasing, credit
value is the lower of fair value of leased assets and present value of minimized leasing payment as at the
commencing date of leasing.
Consequent expenditure related to fixed assets consists of expenditures for repair and update reform. For
those meeting requirements for recognization of fixed assets, they would be accounted as fixed asset cost;
and for the part which is replaced, recognization of its carrying value shall cease; for those not meeting
requirements for recognization of fixed assets, they shall be accounted in current gains and losses as long as
they occur. When fixed asset is disposed, or no economic benefit would be predicted to obtain through
utilization or disposal of the asset, the Company shall terminate recognization of such fixed asset. The
amount of income from disposal, transfer, discarding as scrap or damage of fixed asset after deducting the
asset’ s carrying value and relevant taxation shall be written into current gains and losses.
137
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
The Company withdraws depreciation for all fixed assets except for those which have been fully depreciated
while continuing to use. It adopts average service life method for withdrawing depreciation which is treated
respectively as cost or current expense of relevant assets according to purpose of use. The depreciation term,
predicted rate of salvage value and depreciation rate applied to fixed assets of the Company are as follows:
Predicted rate of salvage Depreciation rate per
No. Category Depreciation term
value year
1 House and buildings 30-40 years 4%-5% 2.375%-3.20%
2 Machinery equipment 10-14 years 4%-5% 6.786%-9.60%
3 Transport equipment 5-12 years 4%-5% 7.92%-19.20%
4 Other equipment 8-12 years 4%-5% 7.92%-12.00%
The Company makes re-examination on predicted service life, predicted rate of salvage value and
depreciation method at each year-end. Any change will be treated as accounting estimation change.
15. Construction in process
Construction in process is measured with effective cost. Self-operated constructions projects are measured
with direct materials, direct salaries and direct construction expense; construction projects undertaken by
external are measured with the engineering payment payable; and engineering cost (income abatement) of
equipment-installation projects is confirmed with consideration of value of the equipment, installation fee,
and expenditure arising from trial operation of the projects. Borrowing expense and exchange gains and
losses which should be capitalized are also included in cost of construction in process.
16. Borrowing expense
Borrowing expenses include interest expense, amortization of discount or premium, auxiliary expenses and
exchange difference due to borrowing in foreign currency. The borrowing expense which could be directly
attributable to purchase or production of assets satisfying capitalization condition, starts capitalization when
capital expenditure and borrowing expense occur and when necessary purchase or production conducted for
promoting assets to reach the predicted available-for-use or available-for-sale state; and capitalization shall
cease when purchased or produced assets satisfying capitalization condition have reached the predicted
available-for-use or available-for-sale state. Other borrowing expense is recognized as expense during the
occurrence period.
Capitalization shall be exercised for interest expense actually occurred from special borrowings in current
period after deduction of the interest income arising from unutilized borrowing capital which is saved in
banks or deduction of investment income obtained from temporary investment; For recognization of
capitalized amount of common borrowing, it equals to the weighted average of the assets whose
accumulated expense or capital disburse is more than common borrowing times capitalization rate of
138
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
occupied common borrowing. Capitalization rate is determined according to weighted average interest rate of
common borrowing.
Assets satisfying capitalization principle generally refer to fixed assets, investment real estate and inventories
which can only arrive at predicted available-for-use and available-for-sale state after quite a long time
(generally over one year) in purchase or production activities.
If abnormal interruption happens during purchase or production of assets satisfying capitalization principle
and the interruption lasts over 3 months, the capitalization for the borrowing expense shall pause until the
purchase or production restarts.
17. Intangible assets
The Company holds intangible assets including land use right, trademark, patent technology and non-patent
technology. Intangible assets are measured according to the effective costs paid for obtaining the assets. For
those intangible assets purchased in by the Company, their effective cost consist of actual payment and
relevant other expenditure; for the intangible assets input by investors, effective cost is determined according
to the value agreed in investment contracts and agreements, while if the agreed value is not fair, then
effective value is confirmed according to fair value.
Land use right is averagely amortized according to its transfer term commencing from the sate of transfer;
trademark use-rights averagely amortized by 10 years; patent technology, non-patent technology and other
intangible assets is averagely amortized according to the shortest of their predicted service life, beneficial
term concluded by contract and effective term regulated by laws. Amortization amount is recorded in assets
cost and current gains and losses relevant to beneficial objectives.
Re-examination on predicted service life and amortization method of the intangible assets which have limited
service life shall be conducted at the end of each year. If changed, it would be treated as change of
accounting estimation. Re-examination on predicted service life of intangible assets which have uncertain