Company Code: 600690.SH, 690D.DE Short Name: Haier Smart Home
Haier Smart Home Co., Ltd.
2021 Interim Report
Important NoticeI. The Board of Directors, the Board of Supervisors, directors, supervisors and seniormanagement of Haier Smart Home Co., Ltd. (the “Company”) are individually andcollectively responsible for the content set out therein and hereby assure that the contentset out in the interim report is true, accurate and complete, and free from any false record,misleading representation or material omission.II. All directors attend the Board of Directors.III. The interim report is unaudited.IV. Liang Haishan (legal representative of the Company), Gong Wei (chief financial officer of
the Company) and Ying Ke (the person in charge of accounting department) hereby certifythat the financial report set out in the interim report is true, accurate and complete.
V. Proposal of profit distribution or proposal of converting capital reserves into share capitalfor this reporting period resolved and passed by the Board
Not ApplicableVI. Disclaimer in respect of forward-looking statements
√Applicable ?Not Applicable
Forward-looking statements such as future plans, development strategies as set out in this reportdo not constitute our substantial commitment to investors. Investors are advised to pay attentionto investment risks.
VII. Is there any fund occupation by controlling shareholders and their related parties for non-
operational purposesNoVIII. Is there any provision of external guarantee in violation of prescribed decision-makingprocedures?
NoIX. Are there more than half of the Directors could not warrant the truthfulness, accuracy andcompleteness of the interim report disclosed by the Company
NoX. Important risk warningsFor the possible risks which the Company may encounter, please refer to the relevant informationset out in the section of “DISCUSSION AND ANALYSIS ON OPERATIONS” in this report.XI. Others? Applicable √Not Applicable
Haier Smart Home Co., Ltd.Chairman of the Board: Liang Haishan
30 August 2021
Contents
| SECTION I — DEFINITIONS | 4 |
| SECTION II — GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS | 6 |
| SECTION III — MANAGEMENT DISCUSSION AND ANALYSIS | 11 |
| SECTION IV — CORPORATE GOVERNANCE | 37 |
| SECTION V — ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES | 41 |
| SECTION VI — SIGNIFICANT ISSUES | 48 |
| SECTION VII — CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS | 66 |
| SECTION VIII — RELEVANT INFORMATION OF PREFERRED SHARES | 76 |
| SECTION IX — RELEVANT INFORMATION OF BONDS | 77 |
| SECTION X — RESPONIBILITY STATEMENT | 84 |
| SECTION XI — FINANCIAL REPORT | 85 |
| Documents Available for Inspection | I. 2021 Interim Report of Haier Smart Home Co., Ltd. with signature of the legal representative. |
| II. Financial statements with signatures or seals of the person in charge of the entity, chief accountant and person in charge of accounting department. | |
| III. All documents publicly disclosed on China Securities Journal, Shanghai Securities News, Securities Daily, Securities Times and the website of Shanghai Stock Exchange (www.sse.com.cn) during the reporting period. |
SECTION I DEFINITIONS
Unless otherwise stated in context, the following terms should have the following meaningsin this report:
| Definition of frequently used terms | |
| CSRC | China Securities Regulatory Commission |
| SSE | Shanghai Stock Exchange |
| The Company, Haier Smart Home | Haier Smart Home Co., Ltd, its original name is “Qingdao Haier Co., Ltd.”, and the original short name is “Qingdao Haier” |
| Four Major Securities Newspapers | China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily |
| Haier Electrics, 1169 | Haier Electronics Group Co., Ltd. (a company originally listed in Hong Kong, stock code: 01169.HK), a subsidiary as accounted for in the consolidated statement of the Company. Haier Electrics has been privatized by way of H shares issuance on 23 December 2020 and became a wholly owned subsidiary of the Company since then. |
| GEA | GE Appliances, household appliances assets and business of General Electric Group, have currently been owned by the Company. |
| FPA | Fisher & Paykel Appliances Holdings Limited (Chinese Name: 斐雪派克) was established in 1934 and is known as the national appliance brand of New Zealand, the global top-level kitchen appliance brand and the famous luxury brand of the world. It has products including ventilator, gas stove, oven, dishwasher, microwave oven, built-in freezer, washing machine, clothes dryer and etc. Its business covers over 50 countries/regions across the world. FPA is wholly-owned subsidiary of the Company. |
| Candy | Candy Group (Candy S.p.A) is an international professional appliances manufacturer from Italy. Since its establishment in 1945, it has been committed to enabling the global users to enjoy a higher quality of life through innovative technologies and quality services. Candy Group has been prestigious in the global market with users all over the world via its ten self-owned professional household appliance brands. In January 2019, Candy became a wholly-owned subsidiary of the Company. |
| CMM | China Market Monitor Co., Ltd., as an authoritative market research institute in Chinese home appliances area, was established in 1994 and has been focusing on research of retail sales in China consumption market ever since. |
| Euromonitor | Euromonitor, established in 1972, is the leading strategic market information supplier and has over 40-years of experience in respect of publishing market report, commercial reference data and on-line database. They create data and analysis on thousands of products and services around the world. |
| All View Cloud | All View Cloud (AVC) is a big data integrated solution provider to the smart home field, providing enterprises with big data information services, regular data information services and special data services. |
| IEC | The International Electrotechnical Commission. Founded in 1906, it is the world's first organization for the preparation and publication of international electrotechnical standardization and is responsible for international standardization for electrical engineering and electronic engineering. The goals of the commission include: to effectively meet the needs of the global market; to ensure that the standards and conformity assessment programs are applied globally in a prioritized manner and to the greatest extent; to assess and improve the quality of products and services involved in its standards; to create conditions for the common use of complicated systems; to improve the effectiveness of the industrialization process; to improve human health and safety, and to protect the environment. |
| IEEE | The Institute of Electrical and Electronics Engineers, an international association of electronic technology and information science engineers, is currently the largest non-profit professional technology society in the world. It is committed to the development and research of electrical, electronic, computer engineering and science-related fields, and has now developed into an international academic organization with great influence in terms of the fields of space, computer, telecommunications, |
| biomedicine, power and consumer electronics. | |
| Model of RenDanHeYi | The concept of " Achieving win-win via RenDanHeYi " is the guarantee of Haier's sustainable operation and the driving force of the Company featuring a self-motivated and empowering corporate culture. “Ren” is an employee who has the spirit of entrepreneurship and innovation; “Dan” is to create value for users. The " RenDanHeYi " management model encourages employees to create value for users with an entrepreneurial mindset, and to achieve self-value in line with the those of the Company and its shareholders. |
SECTION II GENERAL INFORMATION OF THE COMPANY
AND KEY FINANCIAL INDICATORS
I. Information of the Company
| Chinese name | 海尔智家股份有限公司 |
| Chinese short name | 海尔智家 |
| English name | Haier Smart Home Co., Ltd. |
| English short name | Haier Smart Home |
| Legal representative | Liang Haishan |
| Secretary to the Board | Representative of securities affairs | Representative of securities affairs (D shares) | Company Secretary (H shares) | Others | |
| Name | Ming Guozhen | Liu Tao | Sun, Yao Sophie | Ng Chi Yin, Trevor | Global Customer Service Hotline |
| Address | Department of Securities of Haier Smart Home Co., Ltd. Haier Information Industrial Park, No. 1 Haier Road, Qingdao City | Department of Securities of Haier Smart Home Co., Ltd. Haier Information Industrial Park, No. 1 Haier Road, Qingdao City | Haier Deutschland GmbH, Konrad-Zuse-Platz 6, 81829 München, Germany | Room 3513, 35/F, The Center, 99 Queen’s Road Central, Central, Hong Kong | / |
| Tel | 0532-88931670 | 0532-88931670 | +49 160 9469 3601 (Germany) | +852 2169 0880 | 4006 999 999 |
| Fax | 0532-88931689 | 0532-88931689 | / | +852 2169 0000 | / |
| finance@haier.com | finance@haier.com | Y.sun@haier.de | ir@haier.hk | / |
| Registered address | Haier Industrial Park, Laoshan District, Qingdao City |
| Historical change of the registered address | Not Applicable |
| Business address | Haier Information Industrial Park, Laoshan District, Qingdao City |
| Postal code of the business address | 266101 |
| Website | https://smart-home.haier.com/cn/ |
| 9999@haier.com | |
| Query index for any changes during the reporting period | Not applicable |
IV. Movement of place for information disclosure
| Designated newspaper for information disclosure | Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily |
| Website for publishing interim report | www.sse.com.cn |
| Website for publishing annual report by other websites | https://smart-home.haier.com/cn/，www.xetra.com，www.dgap.de，https://www.hkexnews.hk |
| Deposit place of interim report | Department of Securities of Haier Smart Home Co., Ltd. Haier Information Industrial Park, No. 1 Haier Road, Qingdao City |
| Query index for any changes during the reporting period | Not applicable |
| Type of Shares | Stock Exchange of Shares Listed | Stock Short Name | Stock Code | Stock Short Name Before Variation |
| A share | Shanghai Stock Exchange | Haier Smart Home | 600690 | Qingdao Haier |
| D share | Frankfurt Stock Exchange | Haier Smart Home | 690D | Qingdao Haier |
| H Share | Hong Kong Stock Exchange | Haier Smart Home | 6690 | / |
| Key accounting data | For the reporting period (January-June) | The corresponding period of last year | Increase/decrease for the reporting period compared with the corresponding period of last year (%) |
| Operating revenue | 111,618,822,064.73 | 95,728,097,106.65 | 16.60 |
| Net profit attributable to shareholders of the listed Company | 6,852,271,812.97 | 2,780,800,712.72 | 146.41 |
| Net profit after deduction of non-recurring profit or loss | 6,269,906,406.72 | 2,569,440,497.59 | 144.02 |
| attributable to shareholders of the listed Company | |||
| Net cash flows from operating activities | 8,423,823,726.89 | -542,919,257.40 | 1,651.58 |
| As at the end of the reporting period | As at the end of reporting period of last year | Increase/decrease as at the end of the reporting period compared with that of last year (%) | |
| Net assets attributable to shareholders of the listed Company | 73,846,216,357.78 | 66,816,422,614.55 | 10.52 |
| Total assets | 206,247,420,630.60 | 203,459,495,879.65 | 1.37 |
| Key financial indicators | For the reporting period (January-June) | The corresponding period of last year | Increase/decrease for the reporting period compared with the corresponding period of last year (%) |
| Basic earnings per share (RMB / share) | 0.741 | 0.423 | 75.18 |
| Diluted earnings per share (RMB / share) | 0.730 | 0.419 | 74.22 |
| Basic earnings per share after deducting non-recurring profit or loss (RMB / share) | 0.678 | 0.391 | 73.40 |
| Weighted average return on net assets (%) | 9.29 | 5.68 | increased by 3.61 percentage points |
| Weighted average return on net assets after deducting non-recurring profit or loss (%) | 8.50 | 5.25 | increased by 3.25 percentage points |
VIII. Differences in accounting data under domestic and overseas accounting standards
√Applicable ? Not Applicable
(I) Difference in net profit and net assets attributable to shareholders of the listedcompany in financial statements as disclosed in accordance with InternationalAccounting Standards and Chinese Accounting Standards
? Applicable √Not Applicable
There is no difference between the net profit and net assets attributable to shareholders of thelisted company presented in the consolidated financial statements as disclosed in accordancewith International Accounting Standards and Chinese Accounting Standards by the Company.
(II) Difference in net profit and net assets attributable to shareholders of the listedcompany in financial statements as disclosed in accordance with overseas accountingstandards and Chinese Accounting Standards
? Applicable √Not Applicable
Apart from the financial statements prepared in accordance with International AccountingStandards, the Company has not prepared financial statements in accordance with otheroverseas accounting standards.
(III) Explanation on difference in domestic and overseas accounting standards? Applicable √Not Applicable
IX. Non-recurring profit or loss items and amount
√Applicable ?Not Applicable
Unit and Currency: RMB
| Non-recurring profit or loss items | Amount |
| Profit or loss from disposal of non-current assets | 135,411,372.65 |
| Government subsidies through the profit and loss, except for government subsidies that are closely related to the Company's normal business operations, comply with national policies and regulations, and continue to be enjoyed in a fixed amount or fixed quantity according to certain standards | 283,535,138.53 |
| Profit and loss of changes in fair value arising from holding of financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities except for valid hedging business relevant to normal business of the company, as well as investment gain realized from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments | 229,227,021.99 |
| Other non-operating income and expenses except the aforementioned items | 35,439,577.28 |
| Effect of minority equity interests | -7,969,113.19 |
| Effect of income tax | -93,278,591.01 |
| Total | 582,365,406.25 |
X. Others? Applicable √Not Applicable
SECTION III MANAGEMENT DISCUSSION AND ANALYSIS’
I. Introduction of the industry where the Company operates and its major businessduring the reporting period
Since its birth in 1984, Haier Smart Home aspires to being an enterprise of the times. Withthirty years of unyielding commitment to provide our users with innovation and iteration, theCompany has established itself as the global leader in home appliance industry and a proudpioneer in smart home solutions:
? Euromonitor ranked the Company as the first by volume in the global major homeappliance market for 12 consecutive years, recognizing our strengths as a global portfolio ofbrands including Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA.Haier brand refrigerators and washing machines also ranked first by volume for 13 and 12consecutive years from 2009 to 2020.
? Euromonitor also recognizes the Company as one of the first in the industry to launchsmart home solutions. Leveraging on our smart home appliance products, Smart Home APP,Smart Home Experiential Cloud Platform, store network and online presence, we are able toprovide scenario-based comprehensive smart home solutions to our users in their pursuit of abetter life.
The Company has built its global presence pillared on smart home business in China, smarthome business overseas and other businesses.
Smart Home Business in China
Leveraging on Haier Smart Home APP and experience stores network, the Companyprovides both comprehensive appliance products and value-added solutions, consists ofHousehold Food Solutions (Internet of Food), Household Clothing Solutions (Internet ofClothing), Household Air Solutions (Internet of Air), and Household Water Solutions(Internet of Water).
? The Company manufactures, distributes and exports refrigerators, freezers andkitchen appliances, leveraging on connectivity amongst our smart products, we are able toprovide smart dietary solutions that combines hardware with software in order to meet users’demand for convenience, wellbeing and taste.
? The Company manufactures, distributes and exports washing machines and tumbledryers, leveraging on connectivity amongst our smart products, we are able to provide smartlaundry solutions that combines hardware with software in order to meet users’ demand forcloth care.
? The Company manufactures, distributes and exports household air conditioners,commercial air conditioners, air purifiers and new wind control systems, leveraging onconnectivity amongst our smart products, we are able to provide smart air solutions thatcombines hardware with software in order to meet users’ demand for temperature, humidity,cleanliness and freshness.
? The Company manufactures, distributes and exports household electric water heaters,
gas water heaters, solar powered water heaters, heat pumps, POE water purifiers, POU waterpurifiers and water softeners, leveraging on connectivity amongst our smart products, we areable to provide smart water solutions that combines hardware with software in order to meetusers’ demand for water purification, softening and heating.
Smart Home Business Overseas
In addition, the Company manufactures and distributes a comprehensive portfolio of homeappliance products and provides value-added services in over 160 countries and regionsincluding North America, Europe, South Asia, Southeast Asia, Australia, New Zealand,Japan, Middle East and Africa.
We have over 20 years of experience in managing proprietary brand portfolio overseas,during which time, several successful acquisitions have been completed, including SanyoElectric Co., Ltd.’s white goods businesses in Japan and Southeast Asia in 2015, GEAppliances in 2016, Fisher&Paykel in 2018, and Candy in 2019.
Solid foundations have been laid for the Company’s overseas business, which now offers acomprehensive product portfolio under seven brands across the globe. In 2020, with a marketshare of 18.6% by volume, Euromonitor ranked the Company the first in major homeappliances in Asia; second in North America with a market share of 22.0%; second inAustralia & New Zealand with a market share of 13.4%; third in Middle East & Africa witha market share of 8.4% and number five in Europe with a market share of 7.2%.
Other Businesses
The Company also expanded its business to cover, among others, parts and components,small home appliances and distribution services. Our parts and components businessprimarily involves procurement, manufacturing and distribution of ancillary parts andcomponents for home appliances. Small home appliances business primarily involves in-house design, outsourced manufacturing and distribution of small home appliances products.The distribution business primarily involves distribution of televisions, consumer electronicproducts and others for Haier Group and third parties through our distribution network.
During the reporting period, for the second time, the Company was included in FortuneGlobal 500, moving up 30 places as compared with 2020. We are also nominated as one ofthe 2021 World’s Most Admired Companies by Fortune, making Haier the only one fromhome appliance and furniture industries in Europe and Asia as well as the only one fromoutside the US. For a second time, the Company made it to BrandZ Top 100 Most ValuableGlobal Brands list as the world’s only Internet-of-Things (IoT) ecosystem brand.
Industry Analysis
1. The China Market
In the first half of 2021, China’s economy continued to recover with improving consumermomentum. According to the data from the National Bureau of Statistics, in the first half ofthe year, sales of urban consumer goods amounted to RMB18,409.8 billion, representing anincrease of 23.3% compared to the corresponding period in 2020, and sales of ruralconsumer goods amounted to RMB2,780.7 billion, representing an increase of 21.4% as
compared to the corresponding period in 2020 The home appliance industry showed similartrend. According to CMM, in the first half of 2021, the aggregated sales of refrigerators,washing machines, air conditioners, water heaters and kitchen appliances (range hoods andstoves) in China amounted to RMB245.7 billion, representing an increase of 14.1%compared to the corresponding period in 2020.
CMM data also indicates that, in the first half of 2021, sales of refrigerator/ freezer amountedto RMB48.9 billion, representing an increase of 20.9% and 7.5% as compared to thecorresponding periods in 2020 and 2019. Sales of washing machine amounted to RMB35.6billion, representing an increase of 24.5% and 6.9% as compared to the correspondingperiods in 2020 and 2019. Growth in both could be attributable to the constant innovation infunctions, designs and application scenarios. Sales of air-conditioners amounted to RMB98.1billion, representing an increase of 5.7% and a decrease of 21.3% as compared to thecorresponding periods in 2020 and 2019. The weakness was mainly attributable to the mildtemperature during the summer which suppressed the demand for air conditioners. Sales ofwater heaters amounted to RMB31.2 billion, representing an increase of 14.6% and adecrease of 4.5% as compared to the corresponding periods in 2020 and 2019. Sales of rangehoods and gas stoves amounted to RMB31.8 billion, representing an increase of 22.0% and
0.6% as compared to the corresponding periods in 2020 and 2019; integrated stovesmaintained rapid growth with sales amounted to RMB9.68 billion, representing an increaseof 66.6% and 64.6% as compared to the corresponding periods in 2020 and 2019. Consumerdemand for laundry care drove rapid growth of dryers, clothes care machines and shoewashers. According to AVC, sales of dryers amounted to RMB2.49 billion, representing anincrease of 116.4% as compared to the corresponding period in 2020. At present, thepenetration of dryers per 100 households in China is 0.2%, whereas the penetration in the USis 76.2%, thus ample growth potential could be unlocked going forward.
The shift of consumer demand from functions to quality has been driving industry growth.When the desire for basic functions is satisfied, consumers start to pay increasing attention towellbeing, design and IoT technologies. For example, large refrigerators with multi-temperature zone are becoming popular, while fresh-keeping, sterilization and built-indesigns have created a brand-new experience; sterilization, partition washing and smartdispensing together make laundry healthier; as consumers are becoming increasinglyconcerned with air quality, functions such as sterilization, dust prevention and purificationfunctions have been popular. On the supply side, industry leaders with world-class R&Dresources and innovative ideas have also accelerated the development of high-end products.More and more consumers wish to integrate home appliances with interior design when theyare redecorating, consequently a brand that offers a “complete package of design, purchaseand installation” does not only save consumers’ time and efforts, and it also makes the wholerenovation process much more efficient.
The transition of consumption online caused by COVID-19 and attractive pricing continue todrive e-commerce growth. For example, in the first half of 2021, the online retail sales of air-conditioners accounted for 55.3%, representing an increase of 3.8 and 12.3 percentagepoints as compared to the corresponding periods in 2020 and 2019. Benefiting from platformdiversification, social networks and live streaming have also become new sales channels. Onthe other hand, offline channels fully tapped scenario offering and services to enhance on-site experience and strengthen product premiumization. In addition, growing number ofconsumers are purchasing home appliances before they start renovation. The size, model anddesign style of appliances have become important elements in making renovation plans, and
home improvement markets as well as designers have become increasingly importantchannels.
The industry continues to consolidate as concentration ratio of leading brands increases. Inthe offline market, combined market share of top three refrigerator brands, washing machinebrands and air-conditioner brands was 63.53%, 66.71% and 84.32% respectively,representing an increase of 1.50, 1.73 and 2.64 percentage points as compared to thecorresponding period of last year.
Profitability of appliances industry remained under significant pressure caused by inflation inthe commodity market where price of steel, copper and aluminium rose sharply; postpandemic supply chain disruption and surge in sea freight.
2. The Overseas Market
(1) The US market:
Second quarter US economic output growth accelerated 0.2 percentage point from theprevious quarter to an annualized rate of 6.5%; making it the first quarter in which domesticoutput exceeded pre-pandemic level, personal consumption increased 11.8% while privatedomestic investment declined 3.5%, indicating labour shortage and supply chain disruptionas having the biggest impact on the economy. According to AHAM, core appliances grew bydouble digit figure in the first half this year.
(2) The European market:
According to GFK, sales volume of refrigerators and washing machines grew by 16% and12% in Europe, driven by growing demand for product upgrade, also reflecting low baseeffect caused by pandemic outbreak in second quarter 2020.
(3) The Australian and New Zealand market:
① Industry growth in Australia has slowed down and competition has intensified. ② Themarket in New Zealand maintained growth in the first half of the year with relatively stabledemand.
(4) The Asian market:
① The Indian market was affected by resurgence of COVID-19 at the end of the firstquarter and the foot traffic in physical stores was only 50% of usual in the second quarter.
② Pakistan has actively promoted vaccination, and its economic environment is improving.Home appliance sales volume increased by 5% in the first half of the year.
③ Sales of refrigerators in Vietnam dropped by 4% and washing machines remained thesame, while air-conditioners dropped by 8%. Resurgence of COVID-19 in Thailand led toeconomic slowdown and extension of emergency decree to 31 July had a negative impact onthe market momentum. In Indonesia, sales of refrigerators and washing machines increasedby 5% and 13.5% respectively, while air-conditioners dropped by 18%.
④Sales of white goods fell by 1% in Japan, but COVID-19 has spawned new demand forlarge-capacity, healthy cleaning and fresh-keeping products.
Business Review
In the first half of 2021, the Company’s revenue amounted to RMB111.619 billion,representing an increase of 16.6% and 11.6% as compared to the corresponding periods in2020 and 2019, excluding the disposal of COSMOPlat (completed in 2020) and RRSLogistics (completed in 2019), revenue growth would have been 27.2% and 22.7% ascompared to the corresponding periods in 2020 and 2019. The rapid growth was mainlyattributable to the Company’s focus on promoting high-end brand, scenario brand &ecosystem brand; global integration and digital transformation
During the reporting period, net profit amounted to RMB6.938 billion, representing anincrease of 92.1% and 12.2% as compared to the corresponding periods in 2020 and 2019,and net profit attributable to owners of the parent company amounted to RMB6.852 billion,representing an increase of 146.4% and 35.5% as compared to the corresponding periods in2020 and 2019. Despite inflation in raw materials and components, the Company’s grossprofit margin grew 2.1 percentage point reaching 30.1%. The growth was mainly attributableto the increasing proportion of high-end products, the continuous optimization of supplychain and disposal of low margin business. The Company’s selling and administrativeexpense ratio was 15.0% and 4.5% respectively. Exclude the disposal of COSMOPlat in thefirst half of 2020, the selling and administrative expense ratio would have decreased by 1.6percentage points and 0.7 percentage points as compared to the corresponding period in 2020respectively (If the revenue from COSMOPlat was included in the first half of 2020, theselling and administrative expense ratio would have been 15.2% and 4.8% respectively.)Cost optimization was mainly attributable to digitalization in China, growing economies ofscale and improvement of operational efficiency overseas.
In the first half of 2021, the Company’s net cash flow from operating activities amountedto RMB8.424 billion, representing an increase of RMB8.968 billion and RMB4.804 billionas compared to the corresponding periods in 2020 and 2019, with net cash flow to net profitratio was 1.23. The improvement was mainly attributable to the rapid growth in net profitand the enhancement of operational efficiency.
(I) Smart Home Business in China
In the first half of 2021, revenue from smart home business in China amounted toRMB57.461 billion, representing an increase of 29.9% as compared to the correspondingperiod in 2020. Operating profit amounted to RMB3.87 billion, representing an increase of
50.1% as compared to the corresponding period in 2020. The growth was attributable toenhanced competitiveness across the board, 74.4% revenue growth of Casarte brand andaccelerated digital transformation.
1. Household Food Solutions (Internet of Food)
(1) Refrigerators/Freezers Business
In the first half of 2021, revenue from the refrigerators/freezers segment amounted toRMB19.189 billion, representing an increase of 30.7%. Among which, the growth of Casarte
was 52.9%, and its revenue contribution reached 16.0%, representing an increase of 2.6percentage points. According to CMM, the Company’s market share online and offlinereached 38.6% and 41.4%, representing an increase of 3.4 and 1.7 percentage points ascompared to the corresponding period last year, Casarte’s market share reached 13.9%,representing an increase of 2.6 percentage points as compared to the corresponding period oflast year.
During the post pandemic period, there was an increasing demand for healthy diet, andenhanced food preservation. By consolidating global resources, optimizing the supply chain,upgrading technology and publishing the cold storage/frozen cell-class fresh-keepingstandard & built-in industry standard 2.0, the Company achieved 46.7% market share offlinein products priced above RMB10,000, representing an increase of 2.8 percentage points ascompared to the corresponding period of last year. During the June 18 Festival, over 30,000units of Casarte Yuanshi ( 原 石 ) series which focus on innovative technology and naturalaesthetics were sold, while Homey 505 & 506 series ranked first in products priced aboveRMB10,000. In addition, benefiting from global integration in R&D, production and supplychain management, export revenue of products with a unit price of over US$1,000 and�1,000 grew by 200% and 128% respectively, demonstrating enhanced competitiveness oflarge-capacity T door and French-style refrigerators. In Europe, Haier’s market shareincreased by 1.3 percentage points as compared to the corresponding period of last year, andwe were also the fastest growing refrigerator manufacturing in the UK, Spain and Italy.
In the first half of the year, the Company led the formulation of IEC63169, the industry’sfirst international standard for food preservation, Haier also applied for 449 invention patents.In April 2021, the Company received seven iF Design
Awards in Germany for Casarte Italian-style refrigerator, Casarte Homey series refrigerator,Haier 505T refrigerator, Leader’s customized refrigerator, Haier’s scenario-adaptedrefrigerator, Leader’s Internet refrigerator and Haier’s smart large-screen refrigerator,making Haier the company with the largest number of awards within refrigerator industry.
(2) Kitchen Appliances Business
During the reporting period, revenue from kitchen appliances segment in China amounted toRMB1.785 billion, representing an increase of 40.8% as compared to the correspondingperiod in 2020. Among which, Casarte’s kitchen appliances revenue increased 164.5% ascompared to the corresponding period of 2020, and its revenue contribution amounted to
21.1%, representing an increase of 10.6 percentage points.
According to CMM, in the first half of the year, the Company’s market share was 6.9%,representing an increase of 0.8 percentage points. Among which, Casarte’s share was 2.6%,representing a 73% increase or 1.1 percentage points expansion. The Company’s marketshare online remained flat at 5.6%.
During the period, the Company focused on the development of high-end, complete sets andsmart kitchen, continued to consolidate kitchen appliance technologies from GE Appliances,Fisher&Paykel in order to build user recognition. The Company launched C6 “Galaxy”series under Casarte brand, with 114 patents and 5 breakthrough technologies, including (1).large range hood that pioneered the smart 12-square “effective air volume” technology. theconstant air volume function enables effective extraction of smoke by sensing the pressure
from ventilation pipe and adjust the speed of extraction by utilizing the infrared smoketracking technology. (2). One-pot same-temperature gas stove that pioneered the“simultaneous five-ring fire” function, with 40% increase in heated area, when cookingdumplings, dough will not break nor stick to the pot. (3).Chef oven pioneered self-cookingtechnology, with ultrahigh temperature at 300 ℃, pizza can be thoroughly baked in 3minutes, and baking can be stopped automatically once the food is ready. (4). Casarte’sdishwasher drawer does not only accommodate tableware up to 265mm in diameter, it alsopioneered the vertical moving spray system, making it easier for consumers without havingto bend over. (5) Casarte pioneered the food-grade disinfection cabinet targeting 10 types ofbacteria and viruses, and took the lead in formulating medical-grade disinfection standards.The product offers the industry’s fastest disinfection of 15 minutes at room temperature, itcan also disinfect fresh & dry food ingredients as well as degrade pesticide residues at roomtemperature.
In Russia, the Philippines, the Middle East and Africa markets, Haier’s export kitchenappliances business maintained a good growth momentum, and the Company ranked amongthe top three in the Philippines.
(3) Ecosystem of the Internet of Food
The Internet of Food focuses on providing consumers with healthy dining experience. Under“smart device + chef + pre-prepared dishes” model, together with China Cuisine Association,the Company created digital recipes with more than 100 chefs from 23 provinces and cities,so gourmet dishes are prepared and home delivered, so users can enjoy healthy quality foodwith their families at home.
2. Household Clothing Solutions (Internet of Clothing)
(1) Washing Machine Business:
During the period, revenue from washing machine business amounted to RMB12.958 billion,representing an increase of 24.4% as compared to the corresponding period of last year. Atthe same time, online and offline retail market share reached 40.6% and 42.2% respectively,representing an increase of 1.3 and 3 percentage points as compared to the correspondingperiod of last year.
The growth was driven by consumption upgrade as the Company captured post pandemicdemand for large-capacity, partition washing, disinfection and sterilization functions as wellas dryers.
In response to users’ concern of removing stubborn stains, reducing discolouration and thedifficulty in working out the right amount of detergent for each wash, the Companycooperated with the detergent industry to launch the detergent cartridge series. Through“professional washing and care + special detergent + smart dispensing”, providing users withbright colour care and opportunity to purchase detergent. Promoted by growing demand fordryers, the Company launched washing & drying integrated machine and Zhongzihemei (中子和美) series of Casarte. The height of the machine is reduced to 1.5m to save space. Uponcompletion of washing in the lower drum, the upper drum will immediately start to pre-heat,thereby shortening drying time. Our leadership was consolidated as market share in front
loading washing machines priced over RMB10,000 grew 2.6 percentage points reaching
78.3%.
In order to address demand in drying large items, delicate items and reducing crease, theCompany developed industry leading technologies including independent fan, hybrid fastdrying and smart wind speed control, which have effectively improved drying experience.Sales of dryers exceeded 120,000 units during the period, representing an increase of 227%as compared to the corresponding period of last year. Market share went up to 27% onlineand 31.9% offline, representing an increase of 11.9 and 18.7 percentage points as comparedto the corresponding period of last year.
Despite significant pressure caused by the resurgence of COVID-19 in South and SoutheastAsia, currency inflation and surging shipping cost, the washing machine segment adhered todifferentiated high-end brand strategy, optimized product mix, developed e-commercechannels and captured the increasing demand for large-capacity washing machines tomaintain a stable growth in export revenue.
(2) Internet of Clothing:
During the reporting period, the Company remained focused on meeting consumers demandwith smart solutions that caters for laundry, care, storage and styling.
With the launch of 1+N+ecosystem model, stores from our distribution network were able toexplore new growth opportunities by providing one stop solution of laundry, care, storageand styling services, together with partners across 9 disciplines including apparel, textileluxury goods, hotels and property developments, the Company continued to lead thetransition from individual industry’s singular service offering towards comprehensiveecosystem-based scenarios.
During the reporting period, the Company signed up 3,000 laundry outlets, launched Mr.Wash Stores, formed partnership with laundry and clothing specialists including JShine(潔神), Saint Angelo (報喜鳥) and Mendale (夢潔 ) and the total number of Internet of Clothingoutlets reached over 4,000.
3. Household Air Solutions
During the period, revenue of air-conditioners segment amounted to RMB17.645 billion,representing an increase of 31.7% as compared to the corresponding period last year.
(1) Household Air-conditioners Business:
The Company adhered to offering healthy and smart products while accelerating networkdigitalization. According to CMM, in the first half of the year, the Company’s market shareoffline and online reached 15.88% and 13.2%, representing an increase of 1.83 and 1.7percentage points as compared to the corresponding period of last year. Through continuousexpansion of Casarte’s product portfolio and network, our share in the high-end market(hanging machines priced above RMB4,000 and standing machines priced aboveRMB10,000) reached 19.2%, representing an increase of 4.3 percentage points as comparedto the corresponding period of last year.
Leveraging multiple brand portfolio, the Company created differentiated experiencefor users, built market reputation and established a solid foundation for development.In the first half of the year, revenue of Casarte’s air-conditioners increased by 124.6% as itadheres to original technology in creating “eco-breathing and exclusive comfort” experience.During the reporting period, Casarte’s product series expanded to 6, fully covering the high-end price range. The Company also launched the Galaxy series air-conditioner, equippedwith smart voice control and two-way constant temperature technology to balance indoortemperature and reduce the temperature difference to within 0.5?C after 3 minutes fromswitching on. 189,000 units have been sold, contributing to the doubling of Casarte’srevenue and 1.6 percentage points increase in its market share. In addition, Haier’s air-conditioner focuses on creating smart and healthy experience with rapid product upgrades. Itlaunched the Thor sleep air- conditioner that connects with the smart pillow when adjustingroom temperature. 36,000 sets were sold within one and a half month,. contributing to 4percentage point increase in market share of products priced above RMB3,500, and drovethe share of products priced above RMB3,500 to over 30% in 13 regions.
The Company improved the user acquisition and conversion with measures including (1)integrate the management of online channels with physical network to improve store layoutand marketing activities, thus increasing same store sales performance; compared to thebeginning of the year. the number of sales outlets increased by 8,000. (2) promote thepresence in home improvement markets. (3) accelerate retail transformation with strategiessuch as reaching out to village and replacing old appliances for new, in order to maintainclose interaction and increase user recognition.
The export revenue of air conditioners maintained rapid growth. Despite the resurgence ofCOVID-19, overseas teams closely captured market demand with upgraded products,including UVC module with TEXCELL certification in France and well received byEuropean market. According to GFK, the Company’s market share in air conditionersbecame no. 1 in Thailand in addition to being number 1 in the US, Pakistan and Russia.
(2) Commercial Air-conditioners Business
In the first half of the year, the Company customized scenario-based commercial airconditioners solutions to accelerate growth. Our market share reached 11.5% in China,representing an increase of 0.7 percentage points as compared to the corresponding period oflast year. The Company also led the market in replacement multi-split system, rail transit andcoal-to-clean energy transition. In the first half of the year, market share of our exportbusiness was 14.6%, representing an increase of 1.7 percentage points as compared to thecorresponding period of last year.
With its innovative products and scenario solutions the Company continued to lead theindustry development in IoT based central air- conditioners. The Company made majorbreakthrough with oil-free, energy-saving technology and IoT based AI technology, bothwere highly recognized by the market. (1) The Company also launched the X+ seriesmagnetic levitation unit, which saves 25% of occupied area as compared to the previousgeneration, and increases energy efficiency by 7%. It can achieve a maximum capacity of3,600RT (refrigeration tons), with coverage from 15,000 square meters to 120,000 squaremeters. Through dual air and refrigerant technologies, the cooling water temperature can bereduced to 10°C. Haier IoT cloud platform facilitate its remote control, fault diagnosis and
real-time interaction. It is especially suitable for manufacturing premises and data centresand the unit has been installed in projects for Guangzhou Metro, Chongqing Metro, BangkokAirport, Goertek and Luxshare, with its market share ranking first in the world. (2) Thebusiness of multi-split air-conditioner system focuses on innovation and energy-savingtechnologies, with remote viewing, control and IoT billing. At present, it has beensuccessfully implemented in projects including Jiaodong International Airport, TibetUniversity and Shanghai Research Institute of Building Sciences. (3) The Company launched“Yujia” (御家), a “forest-breeze” (森林風) new product, equipped with self-balance oftemperature and humidity, nano plasma cluster ion sterilization, 3D sterilization chamber,smart wind sensor and oxygen-enriched fresh air technologies for household central airconditioning system. The “3D sterilization chamber” module enables self-cleaningsterilization, 56°C disinfection and UVC deep sterilization. 5G module enables remotecontrol of the device without Internet connection, a function particular users during homerenovations. (4) The Company also launched the VC-B series of air-conditioner withintegrated floor-heating that operates in –30℃environment.
4. Household Water Solutions
The water heaters and water purifiers business are committed to providing users with safe,smart and comfortable household water solutions. The segment revenue amounted toRMB5.885 billion, representing a high growth of 31.3%.
(1) Water Heaters Business:
During the period, the water heaters business consolidated its leadership as market shareoffline and online reached 27.1% and 30.9% respectively, representing an increase of 3.6 and
5.1 percentage points as compared to the corresponding period of last year. Casarte waterheater grew 87.6% in revenue and 4.2 percentage points in market share through utilizingceramic heating chamber, closed stable combustion chamber and gas-electric hybrids.Through cooperating with B.Duck IP, Leader introduced the concept of happy bath & enjoylife and re-established itself as brand for youngers generations by utilizing seamless innertank (金剛無縫膽) &NFC one touch technology as well as stylish designs with colourfullightings.
According to CMM, the Company’s market share in electric water heaters online and offlinegrew 4.2 and 2.5 percentage points reaching 41.4% and 39.5% respectively, which were also
1.5 and 1.44 times the size of runner up. During the reporting period, three new electricwater heaters were launched featuring crystal inner tank, ceramic heating chamber andmacaron colour themes. Casarte’s Galaxy series was the industry’s first water heater withoutmagnesium rod, as it uses a crystal inner tank to eliminate limescale, rust and corrosion, andit has obtained the NSF certification for bathing and drinking.
In the first half of 2021, revenue of Haier’s gas water heaters grew by 78%, and with Casartebrand doubling in revenue. According to CMM, the Company’s market share online andoffline reached 22% and 19%, respectively, representing an increase of 7.8 and 4.8percentage points as compared to the corresponding period of last year. The Companypioneered the gas-electric hybrid technology and obtained the industry standard certificationfrom China Household Electrical Appliances Association, in addition, the exterior design ofthe gas-electric hybrid CT7 unit won the 2021 Red Dot Design Award in Germany.
In order to meet post pandemic demand, Haier’s air-powered water heaters accelerated thedevelopment of high water temperature and sterilization products. In the first half of the year,Haier led the industry with 60% market share offline and 63% online while nine of ourproducts made it to the top 10 best sellers.
(2) Water Purifiers Business
According to CMM, Haier water purifiers grew by 19.7% online with market share of 10.9%,ranking second in the industry , while the growth offline was 7.8% and market shareincreased by 0.7 percentage point as compared to the corresponding period of last year.
During the period, the water purifiers segment promoted Casarte’s Yunzun ( 雲 鱒 )mineralwater purifiers and offered the solution of strontium-rich mineral water to meet users’demand for healthy water, and developed partnerships with the leading property developersby leveraging on BWT’s brand strengths in whole house water solutions.
Internet of Water Business
During the reporting period, The Company provided one-stop solution for household waterpurification, water softening, heating and hot water. In addition, Casarte’s heating unit isequipped with remote-control enabled pre heating and scheduled heating, making it moreenvironmentally-friendly and energy efficient.
5. Distribution network in China
During the reporting period, the Company achieved solid revenue growth, continuous marketshare expansion and efficiency improvement through digitalization, implementation ofThree-Winged Bird channel brand and expansion of Casarte brand.
In the first half of the year, the Company focused on promoting digitalization of sales,services and supply chain with measures including the establishment of a middle platformthat facilitates social marketing etc., helping sales team mobilizing resources and managingtraffic. At the same time, the Company made use of big data analysis and modelling toencourage repeating purchase. In addition, the Company launched training and resourcemanagement tools online to improve efficiency and reduce operating costs. Digitalized toolshave also been implemented in dispatching and managing service coverage, as a resultservice cost went down by 0.4 percentage point.
The Company actively expanded its distribution network. As of the end of June 2021, 382Three-Winged Bird 001 stores have been established, and formed alliance with 1,600 outletsoffering appliance and decoration services in home improvement markets across China. (2)The Company introduced services such as whole house refurbishment, partial refurbishmentand customized home appliances to offer users with smart home full-scenario solutionsincluding kitchen, balcony, bathroom, living room, bedroom as well as household air, waterand household smart solutions, so as to promote sales of smart product sets, which grew by39% as compared to the corresponding period of last year. Three Winged Bird’s kitchenbusiness has recruited more than 100 designers to develop products and smart scenariopackages, and launched kitchen scenarios based on user groups, functional needs anddecorating styles targeting the elderly, small family and newlyweds with smart elderly
kitchen, smart baby-friendly kitchen and smart trendy kitchen as well as kitchen upgradepackages to help the stores shift from selling single product to promoting scenario solutions.The average ticket price tripled to approximately RMB40,000. (3) The Company developedthe Three-Winged Bird APP, which integrates designers, home improvement, homefurnishing and building companies, so as to provide users with one-stop personalizedsolutions covering design, planning, renovation and delivery.
Casarte continued to expand its leading advantages in the industry. In the first half of theyear, its revenue increased by 74.4%. Casarte developed 2,589 sales outlets in core shoppingarea and home improvement markets. In addition to offering exquisite high-end seven-starservices, it provides scenario solutions ranging from “minor refurbishment to major kitchenbalcony and bathroom renovation, balcony and bathroom”. In the first half of 2021, Casartememberships increased by 180,000 with exclusive rewards and service offerings.
The Company’s e-commerce business maintained rapid growth. According to AVC, theCompany’s online retail sales amounted to RMB32.9 billion, representing an increase of41%, ranking first in the high-end segment. (1) The Company offered exclusive customizedCasarte’s products to meet the demand of high-end user online. The Company improvedusers’ experience and recognition with Casarte’s exclusive customer service and “one-stopdelivery and free installation”, as well as scenario interaction and living stream. Casarte’sretail sales increased by 135%. (2) The Company actively increased presence on Douyin(抖音) and Kuaishou（快手）, and interacted with young users through innovative videos, self-hosted livestreams and celebrity-hosted livestreams, with an increase of 3.5 million fans onDouyin/Kuaishou, Haier ranked first in the number of fans on Douyin platform within homeappliances industry.
The franchise store channel has benefited from the Company’s effort in establishing unifiedwarehouse and distribution system and the implementation of Yilihuo（易理货） digitaltool. It has maintained rapid growth despite unfavourable environment offline. Distributorsare encouraged to expand presence in home improvement markets in order to capturechanging demand.
6. Smart Manufacturing
The Company has built 17 smart factories, two of which were named lighthouse factories.With its user-oriented mass customization model, the Company has implemented aninnovative, fully digitalized and efficient collaborative manufacturing system, enabling theintegration of factories, suppliers and users, thereby quickly satisfying the needs of users forcomplex under multiple scenarios. In the first half of 2021, 4 smart factories includingQingdao Sino- German washing machine, Qingdao Sino-German water heater, Huangdaorefrigerator and Tianjin washing machine factories were selected as China’s top 100benchmark smart factories. Hefei refrigerator factory and Laiyang kitchen appliance smartfactory took the lead in practising the in-depth integration of new generation AI technologyand manufacturing, ranking among top 5 in the list of “2021 Industry 4.0 Innovation Top 50”,making Haier the only company that had two factories in the list.
The Company continued to promote lean production, and improve supply chain efficiency.UPH (units per hour) increased by 24% as compared to the corresponding period of last year,and inventory turnover days of finished products optimized by 20% as compared to the
corresponding period of last year. Product quality also enhanced by 26% as compared to thecorresponding period of last year. The Company further optimized efficiency with measuresby consolidating nationwide inventory management, upgrading APS order managementsystem and increasing the proportion of suppliers capable of centralized delivery by 30%.
(II) Overseas Home Appliances and Smart Home Businesses
During the reporting period, the Company’s overseas sales revenue grew 23.4% toRMB56.916 billion; operating profit grew 113.4% to RMB3.22 billion and operating profitmargin reached 5.7%, representing an increase of 2.4 percentage points as compared to thecorresponding period in 2020. The strong growth was driven by our continued effort inbuilding a seven-brand portfolio with particular focus on premiumization and experienceenhancement, seizing the opportunities online and localizing operations that captures currentmomentum while unlocking future growth potentials.
1. The US Market
In the first half of this year, with the RenDanHeYi transformation, each microenterprise atGE Appliances actively provided the market with innovations, seized opportunities such asstrong demand in the North American market, and responded to challenges such as theshortage of raw materials and the shortage of international logistics. Thanks to theunremitting efforts of the team, GE Appliances achieved record growth of revenue and profitin the North American market, with revenue up 19.8% reaching RMB35.324 billion. Thesuccess of premium brands and high-end products is the key to winning the market.
During the reporting period, GE Appliances continued to accelerate the expansion ofpremium brands and develop the scenario-based home appliance business to meet consumerdemand after the pandemic. Products such as Ultra-Fresh Front Load Laundry, Multi-doorRefrigerator, and Front Control Range were well recognized by users, and premium brandssuch as Café, Profile and Monogram experienced rapid revenue growth. GE Applianceslaunched industry-first Over-The-Air software upgrade by adding air-fry function to existingranges at consumer homes, and kicked off the disruptive experience marketing of“Appliances Are Never Outdated, and We Are Better When Connected”, which wonrecognition and praise from customers and users. It is not only a revolutionary change inhardware upgrades, but also industry leading ecological transformation based on the Internetof Things. During the reporting period, GE Appliances was selected as the Smart ApplianceCompany of the Year by IoT Breakthrough for the third consecutive year.
Global collaboration and integration within Haier family are the keys to coping with materialinflation, shortages of parts and components and logistics cost pressures. The rapid responseof the Global Procurement Platform in terms of resource coordination, supplier and partssharing helped GE Appliances achieve double-digit production output growth despitechallenges such as extreme weather in Texas. In response to raw material inflation, GEAppliances also launched many collaborative procurement projects, with significant costsaving benefits.
During the reporting period, GE Appliances once again achieved a perfect score on theHuman Rights Campaign’s Corporate Equality Index (CEI), earning the designation as a“Best Place to Work for LGBTQ Equality” for the fourth consecutive year.
2. The European Market
During the period, the Company’s sales revenue from the European market amounted toRMB9.094 billion, representing an increase of 34.9% as compared to the correspondingperiod of last year, continued to ranked fifth in overall market share, with leading position inseveral segments, including first for four consecutive years in air-conditioner in Russia, firstin multi-door refrigerator in Germany, France, Spain, Italy and Poland, first in washer-dryercombo in the Czech Republic, first in wine cabinet in the UK and ranked first for twoconsecutive years in washing machine, dryer and washer-dryer combo segments in the UK.
At the same time, the Company has received several awards, including Red Dot DesignAward of Hoover air purifier in Germany; in the UK, Haier Smart Home was nominated asthe fastest growing Chinese company by Grant Thornton, while Hoover & Candy werenamed the six best dryers in 2021 by HomeStyle Magazine; in Italy Haier Smart Home waslisted among the five best online washing machines by ELLE DECOR Magazine. At thesame time, Candy has obtained the highest level A certification under the EU’s new energyefficiency standard.
During the period, the Company further implemented the “high-end branding” strategy inEurope, and steadily promoted the launch of multi-door refrigerators, high-end large-capacity washing machines and UVC healthy air conditioners. The Company fully promotedthe strategic cooperation with local mainstream distributors and e-commerce channels tooutgrow the industry.
At the same time, Haier made full use of the synergy of global procurement and R&D toeffectively alleviate the impact of chip shortage. Equipped with the leading smarttechnologies, the new refrigerator factory in Romania is expected to be recognized as alighthouse factory and it will specialize in the production of energy saving, smart high-endseries.
3. The Australian and New Zealand Markets
In the first half of 2021, sales revenue from the Australian and New Zealand marketsamounted to RMB3.459 billion, representing an increase of 38.6%. Profit margins continuedto increase with product optimization and cost control measures.
In March this year, the new FPA high-end front-loading washing machine achievedremarkable results, and the heat pump dryer became the No. 1 in HVN, the largest channel,upon launching. At the same time, the Company continued to launch built in kitchenappliances and enriched the selection of product sets. The kitchen scenario display anddigital experience have been well recognized by high-end retail customers. The revenue ofthe two brands from the builders channel also grew steadily.
Despite sharp rise in global shipping costs and the resurgence of COVID-19, the Australianand New Zealand team closely coordinated with global supply chain platform and adjustedgo-to market strategies in order to maintain rapid growth.
4. The South Asian Market
During the reporting period, the Company’s sales revenue amounted to RMB3.926 billion,
representing a year-on-year increase of 44.9%. Of which:
(1) Market share in India increased by 2 percentage points to 9.7% as the Companypromoted network expansion, consolidated product leadership and accelerated localization ofthe supply chain management with measures including increasing the distribution networkcoverage in top 50 cities from 45% to 60%, improving retail capabilities through deliveringproduct samples to stores and conducting weekly reviews. The Company also launched 30new products, including side-by-side T door refrigerator and 525 front-loading washingmachine, so as to enhance high-end consumer recognition. ③ The Company overcame thedifficulties brought by the resurgence of COVID-19 and continued the construction ofNorthern Industrial Park targeting to finish building by the end of the year. Once the newfacility ramps up, the Company will be better positioned to meet market demand whileoptimizing procurement cost and logistics efficiency.
In Pakistan, the Company’s overall market share reached 35% with first position inrefrigerators, freezers, air conditioners and washing machines. During the reporting period,the Company further improved the products portfolio, actively expanded online & offlinepresence and promoted smart scenario implementation. 3 smart home appliance experientialstores and 43 smart pop-up stores were opened to provide consumers with one-stop scenariosolutions, accelerating Haier’s transformation from a high-end brand to a scenario andecosystem brand.
5. The Southeast Asian Market
During the reporting period, the Company’s sales revenue amounted to RMB2.611 billion,representing a year-on-year increase of 23.8%. Faced with weak market demand in Thailand,the Company made quick adjustments, as a result, revenue from air-conditioners increasedby 17% and its market share jumped to No. 1 in May and June. In Vietnam, the market shareof Haier’s refrigerators increased by 2.3 percentage points as compared to the correspondingperiod of last year, with 4.7 percentage points increase in high- end T door units. TheCompany also promoted retail transformation and actively expanded the lower-tier network.In the Vietnam, the Company improved user traffic acquisition and conversion through storestandardization and consumer interaction in a distribution network consists of 2,100 stores
6. The Japanese Market
In the first half of the year, the Company’s sales revenue amounted to RMB1.778 billion,representing a year-on-year decrease of 1.1% in Japan or 6.6% growth in local currency.Market share of refrigerators, freezers and washing machines combined reached 13.8%,jumping to the third in the industry, of which, refrigerators and freezers led the industry with
15.3% market share while 400L refrigerator and variable frequency washing machinesignificantly outgrew the industry.
During the reporting period, Haier made efforts to increase brand recognition and met withusers on TV for the first time with videos on popular channels in March. The Company alsocooperated with KOLs on YouTube and Instagram to create scenario- based high endproduct experience.
AQUA brand introduced several new products including ultrathin TZ refrigerators, Delierefrigerators and the industry’s only ultrasound Prette washing machines, while re-
establishing itself with videos to interact with users online and offline throughout Japan.
In addition, community-based washing business has cooperated with partners includingFamilyMart, P&G, ENEOS and MUJI to establish more than 100 multi-scenario experientialstores that offer services in laundry, food and transportation, creating a more convenientexperience for users.
Plans for the second half of the year
In the second half of 2021, the Company will continue to promote high-end brands, scenariobrands and ecosystem brands, grow the value of scenario-based product sets, and offer userswith solutions in apparel, food, lifestyle and entertainment, while accelerating digitalizationand enhancing operational efficiency.
II. Analysis on core competitiveness during the reporting period
√ Applicable □Not Applicable
The Company has established a solid strategic layout and competitive advantages inChina and overseas markets. On this basis, the Company will continue to further solidify ourleading industry position through integration and coordination on a unified global platform,digitalisation-driven efficiency reform, technical strength and innovation ability. As designedto be a basis for sustainable growth, the Company’s RenDanHeYi management modelenables us to guides our management and enables us to replicate our successful experiences.The Company believes that the following advantages will help us strengthen our leadingposition in the future.
(1) Competitive advantages in the Chinese market
The Company has maintained our long-term leadership positions in China’s large-format home appliance market. According to CMM’s report, in the first half of 2021, theCompany has established a leading market position in different large-format home appliancecategories. The Company’s leading position in full-range home appliance products is thebasis for the development of our smart home solutions. The Company’s core technology,advanced manufacturing experience and user base in various categories of products enable usto have sufficient single product scale and industry experience, and to successfully transformour model from delivery of the single product form deliver to users by the Company from asingle product to provision of a full-suite solution.
(2) Dominance in the high-end market
In line with the consumption upgrade in China, the Company started building ourCasarte brand targeting the PRC high-end market more than 10 years ago. In addition tofocus, experience and patience, the creation of high-end brands also requires the technicalability for continuous innovation and differentiated service, so as to meet users’ demand fora high-quality experience. By combining our technical strengths, product developmentability, manufacturing techniques and other advantages in the world as well as specialisedmarketing and differentiated services, our Casarte brand has gradually gained the trust ofusers in China’s high-end market. According to the information from CMM, in the first halfof 2021, Casarte has established absolute leadership in China’s high-end major homeappliance market, and ranked first in terms of the retail volume of refrigeration appliances,
laundry appliances, air-conditioners and other items in the high-end market. Among which,in terms of offline retail volumes, the share of the Casarte washing machines andrefrigerators in China’s market above RMB10,000 reached 78% and 37.9% respectively, andthe share of the air-conditioners in the Chinese market above RMB15,000 reached 37.98%.The offline market average price of refrigerators, air conditioners and washing machines wastwo to three times the average industry price.
(3) Continuous expansion and upgrades of smart home solutions
With the continuous improvement of users’ demand for a better life and thedevelopment of technologies such as IoT, big data, cloud computing, and AI, the homeappliance industry shows the development trend towards smart, full-suite and scenario-basedofferings. With our leading customer insight and rich category coverage, the Company haspioneered in the industry in transforming into offering smart home solutions based onpersonalised life scenarios in living spaces such as living rooms, kitchens, bedrooms,bathrooms and balconies. Users can use the Company’s Haier Smart Home App as thegateway to interact with existing equipment, place orders, and obtain services to meet thecomprehensive needs in specific lifestyle scenarios. In the future, the Company will continueto meet the needs of user experience, further upgrade and enrich the smart home solutionsprovided by the Company.
(4) Competitive advantages in overseas market and comprehensive and deep-rooted global layout with localised operation capabilities
In addition to our success in China, the Company also demonstrates strong performance inoverseas markets. The Company focuses on developing overseas markets with our own self-managed brands. The Company’s business strategy has enabled us to establish a multi-brand,cross-segment and cross-regional three-in-one model for R&D, manufacturing anddistribution to achieve self-developing, interconnectivity and collaborative operations.
The Company’s extensive global layout also relies on our localised business teams andflexible and independent management mechanisms established in overseas regional markets,through which the Company can quickly detect and respond to local consumers’ demands.The Company also actively integrates into local market and culture, and has established acorporate image well received by the local society in overseas regions where the Companyoperates.
In the first half of 2021, the Company had 14 research and development centres, 122production centres, 108 marketing centres around the world, and covered nearly 130,000point-of-sales overseas.
(5) Constantly increasing market share
With the deep-rooted local set-up across the world, the Company has the productcompetitiveness to adapt to the local market, the sales channel to penetrate into the localmarket, the successful experience of other regional markets, as well as the collaborative andoperating capabilities in respect of global R&D, procurement and production scheduling, sothat the Company can continuously improve our market share in each of the major globalmarkets.
(6) Comprehensive self-managed brand portfolio and, generating strong brandimage
Through independent development and M&A, the Company has formed a portfoliocovering seven brands, namely Haier, Casarte, Leader, GE Appliances, Candy,Fisher&Paykel and AQUA. To meet the needs of different groups of users in the globalmarkets, the Company adopts a differentiated multi-brand strategy centering on users toachieve extensive and intensive user coverage.
(7) Cross-border acquisition and integration capabilities
The Company has a successful track record in acquisition and integration. In 2015, theCompany acquired Haier Group’s overseas white goods business, including Sanyo ElectricCo., Ltd.’s white goods business in Japan and Southeast Asia. In 2016, the Companyacquired GE Appliances. In 2018, the Company acquired from Haier Group Fisher&Paykel,a New Zealand-based brand which the Company had been managing since 2015 under a trustarrangement. In 2019, the Company acquired the Italian Company, Candy. Our merger andacquisition integration capabilities are reflected in the following aspects.: Firstly, theCompany promotes the RenDanHeYi management model in the enterprises acquired, i.e. amechanism for the teams to share added value under the same goal in the whole process,which can vitalise the enterprises acquired and encourage the employees, to create morevalue. Secondly, the Company empowers the enterprises that the Company acquired inaspects including strategy, research and development and procurement based on our globalplatforms to enhance their competitiveness. Thirdly, it is easy for the Company to be wellreceived by the enterprises acquired with our open and inclusive corporate culture and thesupport for the enterprises acquired to establish flexible and autonomous managementmechanisms, which facilitates the improvement of integration.
(8) Comprehensive and effective global collaboration ability
The Company is well-positioned to take advantage of our global collaboration platformand integrations such as R&D, product development, procurement, supply chain, marketingand branding. Furthermore, the Company is able to share the successful experience ofexisting markets to all markets around the world. By continuously deepening the synergyamong our global businesses, the Company injects a strong driving force into our futuredevelopment.
? Global collaboration in R&D: With a global collaboration R&D system, theCompany has established a global technology research and development mechanism to shareour common modules and multiplexing technologies, as well as to share patents within thescope of compliance. For example, the Company has successfully applied the direct-drivemotor researched and developed by Fisher&Paykel to our Casarte laundry appliances andachieved a desirable outcome.
? Global collaboration in product development: The Company has established aglobal product development mechanism to coordinate cooperative product developmentefforts around the globe and achieved regional collaboration and complementation amongproduct categories. For example, the Company has successfully supported GE Appliances’resumption of its water heater business.
? Global collaboration in procurement: The Company’s global procurement activitiesare guided and implemented by our global commodity committee. The Company’s operationdepartments in different areas can share procurement resources in the globe with our GlobalSourcing Operation Platform (“GSOP”) and, so as to achieve economies of scale effects.
? Global collaboration in supply chain: With the visualised and digitalised globalsupply chain management system, the Company can flexibly deploy our production capacityacross the globe and share and develop intelligent manufacturing technologies in acoordinated way.
? Global collaboration in marketing and branding: The Company has realised globalcollaboration in branding, with the operation of our multi-level brand portfolios around theglobe. The Company also carries out promotion activities among various regional marketsaround the globe and introduces successful marketing strategies. For example, the Companyhas successfully introduced the sales and marketing models in the third- and fourth-tiermarkets of China into India, Pakistan, Thailand and other markets, which strengthened ourbrand image and market competitiveness.
(9) Industry-leading R&D and technical strengths
Based on the core concept of “the world as my R&D department”, the Company hasestablished a leading global R&D innovation system to ensure that the Company is makingcontinuous innovations centering on user demands. The Company has established 14 R&Dcentres around the world and formed a R&D resource sharing network globally. On thisbasis, the Company independently took the initiative to build the Haier Open PartnershipEcosystem (HOPE platform), which currently has over 120,000 experts and connects to morethan 1 million world-class resources partners to cover over 100 technical fields. The resourcepartners can thereby participate in our user-centered iterative R&D process.
In 2021, Haier Smart Home ranked first on the global smart home patent applicationranking list for five consecutive occasions with 1,868 home appliance patents; Haier SmartHome won 1 more awards at the 22st Chinese Outstanding Patented Invention GoldenAward Presentation. We won a total of 10 national patented invention awards, coming firstin the industry. As a pioneer of standards in the home appliance sector, Haier Smart Homeparticipated and led the establishment/amendment of 74 international standards and 570national/industrial standards. In 2021, experts from Haier were elected as members of theCouncil Board (CB) of the IEC, rendering Haier Smart Home the only enterprise in theworld to have representatives in both the CB of the IEC and the Market Strategy Board(MSB) of the IEC, which are the two most authoritative regulatory bodies. Domestically, asthe sole initiating entity in the home appliance industry, Haier Smart Home andheavyweights in the domestic intelligent interaction industry jointly established the OpenLInk Association (OLA) to co-develop technically advanced IoT connection standards andindustrial ecosystem which cater to the characteristics of China’s industry landscape, therebypromoting healthy industry development.
(10) Honest corporate culture and win-win RenDanHeYi management model
The DNA intrinsic genes of Haier’s integrity culture as supported by survival anddevelopment mentality lay our integrity culture in taking our belief in quality and services isthe foundation, which is imperative for Haier’s continuous success. What makes Haier
evolved from a close to bankruptcy small collective enterprise to the world’s No.1 brand ofwhite household appliances is its honesty culture, namely “Users come first”, “Be sincereforever”, which makes Haier soldier on the Internet innovation wave.
Haier’s win-win view under the “RenDanHeYi” management model ensures itssustainable operation, which is the driving force for our self-motivating and empoweringcorporate culture. As “Ren” refers to employees who have the spirit of entrepreneurship andinnovation, and “Dan” refers to the value created for users, the management model ofRenDanHeYi encourages employees to generate value for users with an entrepreneurmindset, and realise their self-value aligned with the value of our Company and the value forthe shareholders. The RenDanHeYi management model effectively destructs “departmentgateways”, promotes innovation and improves corporate efficiency. To date, this model hasbeen treated as a research object by various companies and research institutions.
III. Discussion and analysis on operations
Please refer to “I. Introduction of the industry where the Company operates and itsmajor business during the reporting period “ of this section.
Significant changes in the Company’s operating conditions during the reportingperiod, and matters occurring during the reporting period that have and expected tohave a significant impact on the Company’s operating conditions
□Applicable √Not Applicable
IV. Major operations during the reporting period(I) Analysis of principal business
1. Table of movement analysis on the related items in financial statements
Unit and Currency: RMB
| Items | Current period | Corresponding period of last year | Change (%) |
| Operating revenue | 111,618,822,064.73 | 95,728,097,106.65 | 16.60 |
| Operating cost | 78,071,651,525.66 | 68,934,592,121.68 | 13.25 |
| Selling expenses | 16,730,914,492.75 | 14,526,912,493.29 | 15.17 |
| Administrative expenses | 5,033,576,083.72 | 4,608,308,707.03 | 9.23 |
| Financial expenses | 295,660,086.07 | 701,520,565.00 | -57.85 |
| R&D expenses | 3,738,734,614.40 | 2,939,733,549.14 | 27.18 |
| Net cash flow generated from operating activities | 8,423,823,726.89 | -542,919,257.40 | 1,651.58 |
| Net cash flow generated from investing activities | -3,234,885,281.31 | -2,061,783,383.42 | -56.90 |
| Net cash flow generated from financing activities | -9,607,019,105.46 | 10,579,538,929.35 | -190.81 |
| Investment income | 1,136,683,667.22 | 756,782,922.79 | 50.20 |
| Income from change in fair value | 64,269,511.32 | -30,987,103.15 | 307.41 |
| Loss on credit impairment | -44,031,423.21 | -108,905,504.07 | 59.57 |
| Gain from disposal of assets | 142,414,954.25 | -14,442,406.46 | 1,086.09 |
| Income tax expense | 1,523,183,264.40 | 661,226,873.34 | 130.36 |
Company’s net profit attributable to shareholders of the parent company. Thus, therestructuring was one of factors in change in indicators, such as net profit attributable toshareholders of the parent company, of the Company for the reporting period.
(II) Explanations on the major changes in profits caused by non-principal businesses
□Applicable √Not Applicable
(III) Analysis of assets and liabilities
√Applicable □Not Applicable
1. Assets and liabilities
Unit: 0’000
| Items | Amount as at the end of the period | Percentage of amount at the end of the period over total assets (%) | Amount as at the end of the corresponding period of last year | Percentage of amount at the end of the corresponding period of last year over total assets (%) | Percentage of change in amount from the end of the corresponding period of last year to current period (%) |
| Monetary fund | 4,184,377.76 | 20.29 | 4,646,132.94 | 22.84 | -9.94 |
| Receivables | 2,020,160.73 | 9.79 | 1,593,002.43 | 7.83 | 26.81 |
| Inventory | 3,350,819.01 | 16.25 | 2,944,697.34 | 14.47 | 13.79 |
| Contract assets | 24,226.59 | 0.12 | 26,341.29 | 0.13 | -8.03 |
| Investment real estates | 2,725.44 | 0.01 | 2,838.70 | 0.01 | -3.99 |
| Long-term equity investment | 2,258,700.71 | 10.95 | 2,156,765.85 | 10.60 | 4.73 |
| Fixed assets | 2,068,082.74 | 10.03 | 2,089,550.47 | 10.27 | -1.03 |
| Works in progress | 502,005.56 | 2.43 | 359,690.24 | 1.77 | 39.57 |
| Right in use assets | 279,345.47 | 1.35 | 283,985.83 | 1.40 | -1.63 |
| Short term borrowings | 1,116,011.00 | 5.41 | 768,790.82 | 3.78 | 45.16 |
| Contract liabilities | 746,655.92 | 3.62 | 704,863.77 | 3.46 | 5.93 |
| Long term borrowings | 959,029.89 | 4.65 | 1,182,141.63 | 5.81 | -18.87 |
| Lease liabilities | 201,185.37 | 0.98 | 207,270.24 | 1.02 | -2.94 |
| Derivative financial assets | 12,197.56 | 0.06 | 7,783.90 | 0.04 | 56.70 |
| Other receivables | 226,582.12 | 1.10 | 171,715.29 | 0.84 | 31.95 |
| Financial liabilities held for trading | 342.38 | 0.00 | 2,695.25 | 0.01 | -87.30 |
| Derivative financial liabilities | 9,208.14 | 0.04 | 23,958.25 | 0.12 | -61.57 |
| Non-current liabilities due within one year | 497,672.06 | 2.41 | 752,272.49 | 3.70 | -33.84 |
| Other current liabilities | 49,745.94 | 0.24 | 611,205.39 | 3.00 | -91.86 |
| Bonds payable | 42,643.68 | 0.21 | 671,350.11 | 3.30 | -93.65 |
| Other equity instruments | 14,848.32 | 0.07 | 236,419.53 | 1.16 | -93.72 |
| Capital reserve | 2,231,035.40 | 10.82 | 1,500,902.74 | 7.38 | 48.65 |
| Treasury stock | 179,615.46 | 0.87 | 2,889.66 | 0.01 | 6115.81 |
6) Derivative financial liabilities decreased by 61.57% as compared to the beginning ofthe period, primarily attributable to fair value changes in lock-exchange instruments andinterest rate swap agreements;
7) Non-current liabilities due within one year decreased by 33.84% as compared to thebeginning of the period, primarily attributable to repayment of long-term borrowings duewithin one year;
8) Other current liabilities decreased by 91.86% as compared to the beginning of theperiod, primarily attributable to repayment of ultra-short-term financing bonds;
9) Bonds payable decreased by 93.65% as compared to the beginning of the period,primarily attributable to conversion of convertible bonds of the Company for the period;10) Other equity instruments decreased by 93.72% as compared to the beginning of theperiod, primarily attributable to conversion of convertible bonds of the Company resulting inreduction in equity component;
11) Capital reserve increased by 48.65% as compared to the beginning of the period,primarily attributable to conversion of convertible bonds of the Company resulting inincrease in share capital premium;
12) Treasury stock increased by 6115.81% as compared to the beginning of the period,primarily attributable to repurchase of shares by the Company.
2. Overseas Assets
√Applicable □Not Applicable
(1) Scope of assets
Among the assets, overseas assets amounted to 9,653,733 (unit and currency: RMB0’000),representing 46.8% of the total assets.
(2) Relevant information on overseas assets
□Applicable √Not Applicable
3. Restrictions on major assets as of the end of reporting period? Applicable √Not Applicable
4. Other explanations
? Applicable √Not Applicable
(IV) Analysis of investment
1. Overall analysis on external equity investment
? Applicable √Not Applicable
(1) Significant equity investment
? Applicable √Not Applicable
(2) Significant non-equity investment
? Applicable √Not Applicable
(3) Financial assets measured at fair value
√ Applicable ?Not Applicable
Unit and currency: RMB
| Items | Initial investment cost | Source of | Current purchase / | Investment income | Changes in fair |
| funds | sale during the reporting period | during the reporting period | value during the reporting period | ||
| Equity instrument investments | 3,061,290,481.15 | Self-owned | 139,879,387.68 | 440,255.20 | 43,521,944.78 |
| Wealth management products | 1,874,000,000.00 | Self-owned | 6,372,119.15 | 28,216,179.52 | 1,881,780.81 |
| Investment funds | 105,408,639.01 | Self-owned | 15,457,768.79 | ||
| Forward foreign exchange contract | Self-owned | 156,251,279.12 | 224,968,094.55 | ||
| Interest rate swap agreement | Self-owned | 13,896,465.10 | |||
| Others | 29,450,000.00 | Self-owned | -821,846.16 | ||
| Total | 5,070,149,120.16 | 146,251,506.83 | 184,907,713.84 | 298,904,207.87 |
raw materials supply continue to rise, it will put pressure on the Company’s productionand operations. In addition, the Company relies on third party suppliers for key rawmaterials, components and manufacturing equipment, as well as OEM suppliers, andany disruption in supply or significant price increases from these suppliers would have anegative impact on the Company’s business. As a leader in the industry, the Companywill take steps to reduce the risk of raw material fluctuations on its operations by usingvaluation adjustment mechanism on volume and price with suppliers and hedging tools.
4. Operational risks in overseas business. The Company has steadily developed itsglobal business and has established production bases, research and development centresand marketing centres in many parts of the world, with the proportion of overseasrevenue increasing year-on-year. The overseas markets are subject to political andeconomic situations, legal systems and regulatory regimes of those countries andregions, and significant changes in these factors may pose certain risks to theCompany’s local operations in these markets. The Company has taken various measuresto mitigate the relevant impact, including actively discussing and working withsuppliers and customers to mitigate the impact of additional tariffs imposed by theUnited States; improving production efficiency to offset the impact on the Company’soverall cost of sales; and potentially expanding the Company’s supply resources toother countries.
5. Risk of exchange rate fluctuations. As the Company’s global footprint progresses, theimport and export of the Company’s products involves the exchange of foreigncurrencies such as the U.S. dollar, the Euro and the Japanese yen. If the exchange ratesof the relevant currencies fluctuate, it will have a certain impact on the Company’sfinancial position and increase its financial costs. In addition, the Company’s combinedfinancial statements are denominated in Renminbi, while the financial statements of itssubsidiaries are measured and reported in the currency of the primary economicenvironment in which the entity operates, and are therefore subject to currencyexchange risk. In this regard, the Company uses hedging instruments to reduce itsexposure to exchange rate fluctuations.
6. Risk of policy changes. The home appliance industry is closely related to the consumer
goods market and the real estate market. Changes in macroeconomic policies, consumerinvestment policies, real estate policies and relevant laws and regulations will affectdemand for the Company’s products, which in turn will affect the sales of theCompany’s products. The Company will closely monitor changes in the relevantpolicies and laws and regulations, and make forecasts of market changes to ensure thefurther development of the Company.
7. Risk of COVID-19 outbreak. The COVID-19 outbreak could lead to a further
weakening of consumer demand for home appliances, which could in turn affect theCompany’s product sales. Firstly, lockdowns, social distancing measures and travelrestrictions will reduce customer mobility and result in the closure of the retail salessites, thereby reducing consumer demand for home appliances. Secondly, the epidemicmay also lead to operational disruptions for customers, such as logistical disruptions inproduct deliveries, resulting in customer dissatisfaction with the Company’s service andconsequently reduced demand for the Company’s products. The Company will leverageon its experience in the China market and make best use of the synergy of globalresources to mitigate the impact of the epidemic on our operations.
8. Credit risk. There is possibility that we will be unable to fully recover our trade
receivables from our customers or that they cannot settle our trade receivables in atimely manner, our business, financial condition and results of operations may beadversely affected. As to this risk, depending on the credit history of our customers andtheir transaction amounts with us, we allow the flexibility by offering a credit period of30 to 90 days to certain customers.
(II) Other disclosures? Applicable √Not Applicable
2021 Interim ReportHaier Smart Home Co., Ltd.
SECTION IV CORPORATE GOVERNANCEI. Introduction to the general meetings of shareholders
| Meeting | Date | Index for details of websites designated for publishing resolutions | Date of disclosure | Resolutions approved |
| 2021 First Extraordinary General Meeting | 5 March 2021 | For details, please refer to the Announcement on Resolutions Passed at the 2021 First Extraordinary General Meeting, 2021 First A Shares Class Meeting, 2021 First D Shares Class Meeting and 2021 First H Shares Class Meeting of Haier Smart Home Co., Ltd. (L2021-009) published by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) and the four major securities newspapers | 6 March 2021 | |
| 2021 First A Shares Class Meeting | Considered and approved a resolution for general mandate to repurchase H share | |||
| 2021 First D Shares Class Meeting | ||||
| 2021 First H Shares Class Meeting | ||||
| 2020 Annual General Meeting | 25 June 2021 | For details, please refer to the Announcement on Resolutions Passed at the 2020 Annual General Meeting, 2021 Second A Shares Class Meeting, 2021 Second D Class Meeting and 2021 Second H Shares Meeting of Haier Smart Home Co., Ltd. (L2020-029) published by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) and the four major securities newspapers | 26 June 2021 | Considered and approved the resolutions related to annual report, profit distribution proposal, expected annual guarantee/foreign exchange operation, general mandate to issue additional/ repurchase H/D shares of the Company, Employee Stock Ownership Plan and the election of sole director/supervisors, etc. |
| 2021 Second A Shares Class Meeting | Considered and approved a resolution for general authorization to repurchase H/D shares of the Company | |||
| 2021 Second D Class Meeting | ||||
| 2021 Second H Shares Meeting |
2021 Interim ReportHaier Smart Home Co., Ltd.
Preferred shareholders whose voting rights have been restored requested an extraordinary generalmeeting
□Applicable √Not Applicable
Explanation of Shareholders' general meeting
√Applicable □Not Applicable
(1) The 2021 First Extraordinary General Meeting and the 2021 First A/D/H Shares ClassMeetings of the Company was held in successive order by way of on-site voting and network votingby poll at Room B101, Haier RenDanHeYi Research Center, Haier Information Park, No.1 HaierRoad, Qingdao, the PRC, in the afternoon on 5 March 2021, considering the amendment of articlesof association of the Company and other relevant resolutions. The total number of the shares of theCompany carrying voting rights amounted to 9,284,895,068 shares (of which 6,308,552,654 shareswere A shares, 271,013,973 shares were D shares and 2,705,328,441 shares were H shares). 463shareholders and proxies, representing 5,402,912,205 shares or 58.19% of the total number of theshares of the Company carrying voting rights, were present at the 2021 First Extraordinary GeneralMeeting; 342 shareholders and proxies, representing 3,389,819,287 shares or 53.73% of the totalnumber of A shares of the Company carrying voting rights, were present at the 2021 First A SharesClass Meeting; 115 shareholders and proxies, representing 136,331,271 shares or 50.30% of thetotal number of D shares of the Company carrying voting rights, were present at the 2021 First DShares Class Meeting; 7 shareholders and proxies, representing 1,827,803,082 shares or 67.56% ofthe total number of H shares of the Company carrying voting rights, were present at the 2021 FirstH Shares Class Meeting. The Directors, supervisors and senior management of the Company aswell as the lawyers engaged by the Company also attended the abovementioned four meetings. The2021 First Extraordinary General Meeting was convened by the Board of the Company and ViceChairman Ms. Tan Lixia, presided over the meeting. The Company had 8 Directors, of whom 2Directors attended the meetings (Directors Liang Haishan, Wu Changqi, Lin Sui, Dai Deming, QianDaqun and Wong Hak Kun were unable to attend the meetings due to personal engagement); theCompany had 3 supervisors, all of whom attended the meeting. The secretary to the Board of theCompany attended the abovementioned meetings and other members of senior management of theCompany were invited to attend the abovementioned meetings.
(2) The 2020 Annual General Meeting and the 2021 Second A/D/H Shares Class Meetings ofthe Company was held in successive order by way of on-site voting and network voting by poll atRoom B101, Haier RenDanHeYi Research Center, Haier Information Park, No.1 Haier Road,Qingdao, the PRC, in the afternoon on 25 June 2021, considering the annual report and otherrelevant resolutions. The total number of the shares of the Company carrying voting right amountedto 9,351,540,298 shares (of which 6,268,408,194 shares were A shares, 271,013,973 shares were Dshares and 2,812,117,411 shares were H shares). 985 shareholders and proxies, representing6,080,584,192 shares or 64.63% of the total number of the shares of the Company carrying votingright, were present at the 2020 Annual General Meeting. 865 shareholders and proxies,representing 4,029,351,155 shares or 63.87% of the total number of A shares of theCompany carrying voting rights, were present at the 2021 Second A Shares Class Meeting;119 shareholders and proxies, representing 140,727,610 shares or 51.93% of the totalnumber of D shares of the Company carrying voting rights, were present at the 2021Second D Shares Class Meeting; 5 shareholders and proxies, representing 1,989,396,251shares or 70.74% of the total number of H shares of the Company carrying voting rights,were present at the 2021 Second H Shares Class Meeting. The Directors, supervisors and
senior management of the Company as well as the lawyers engaged by the Company also attendedthe abovementioned four meetings. The General Meeting was convened by the Board of theCompany and Chairman Mr. Liang Haishan, presided over the meeting. The Company had 11Directors, of whom 4 Directors attended the meetings (Directors Li Huagang, Xie Juzhi, WuChangqi, Lin Sui, Dai Deming, Chien Da-Chun and Li Shipeng were unable to attend the meetings
2021 Interim ReportHaier Smart Home Co., Ltd.
due to personal engagement); the Company had 3 supervisors, of whom 1 supervisor attended themeeting (Supervisors Wang Peihua and Ming Guoqing were unable to attend the meetings due topersonal engagement). The secretary to the Board of the Company attended the abovementionedmeetings and other members of senior management of the Company were invited to attend theabovementioned meetings.
II. Changes in of Directors, supervisors and senior management of the Company
√Applicable □Not Applicable
| Name | Position | Change situation |
| Xie Juzhi | Director | Election |
| Yu Hon To | Director | Election |
| Li Kam Fun | Director | Election |
| Li Shi Peng | Independent director | Election |
| Wu Qi | Independent director | Election |
| Tan Lix | Director | Resignation |
| Dai Deming | Independent director | Resignation |
| Liu Dalin | Supervisor | Election |
| Ma Yingjie | Supervisor | Election |
| Wang Peihua | Supervisor | Resignation |
| Ming Guoqing | Supervisor | Resignation |
| Li Pan | Senior management | Appointment |
| Li Yang | Senior management | Appointment |
| Wu Yong | Senior management | Appointment |
| Wang Li | Senior management | Appointment |
| Guan Jiangyong | Senior management | Appointment |
| Huang Xiaowu | Senior management | Appointment |
| Whether distributed or converted | No |
2021 Interim ReportHaier Smart Home Co., Ltd.
□Applicable √Not Applicable
Employee stock ownership plan
√Applicable □Not Applicable
1. Partial Vesting of Employee Stock Ownership Plan and Termination ofthe First Phase of Employee Stock Ownership Plan：During the Reporting period,pursuant to the "Core Employee Stock Ownership Plan of Qingdao Haier Co., Ltd(Draft)" (the "First phase ESOP"), the "Second Phase Stock Ownership Plan of CoreEmployee Stock Ownership Plan of Qingdao Haier Co., Ltd (Draft)" (the "SecondPhase ESOP"), the "Third Phase Stock Ownership Plan of Core Employee StockOwnership Plan of Qingdao Haier Co., Ltd (Draft)" (the "Third Phase of ESOP"), on 15January 2021, the Management Committee resolved that: (1) the First phase ESOP bevested, 33 persons who pass the appraisal vest 1,783,038 shares; (2) Second PhaseESOP be vested, 116 persons who pass the appraisal vest 1,132,832 shares; (2) ThirdPhase ESOP be vested, 32 persons who pass the appraisal vest 179,351 shares.Directors, supervisors and senior management of the Company are entitled to vest atotal of 1,339,483 shares. Any change in their stock ownership is subject to the relevantprovisions of the Rules Governing the Shares of the Company Held by Directors,Supervisors and Senior Management of Listed Companies and Changes Thereof. TheCompany has, in accordance with the aforesaid resolutions, completed the transfer ofthe relevant shares on 27 January 2021 at the Shanghai Branch of the China SecuritiesDepository and Clearing Corporation, with an aggregate number of 3,095,221 shares.During the reporting period, vesting of shares of the First Phase ESOP were completedand all assets of the stock ownership plan are monetary funds. In accordance with therelevant provisions of the First Phase ESOP, the First Phase ESOP has beenimplemented and terminated. Upon completion of the liquidation and allocation ofassets, the remaining capital was remitted to the Company.
2. Termination of the Second Phase and Third Phase Employee StockOwnership Plan：During the Reporting period, all 721,736 and 5,374,465 shares heldby the Second Phase ESOP and the Third Phase ESOP, respectively, have been sold,and all assets of the stock ownership plan are monetary funds. In accordance with therelevant provisions of the Second Phase ESOP and the Third Phase ESOP, theaforementioned plans have been implemented and terminated. Upon completion of theliquidation and allocation of assets, the remaining capital was remitted to the Company.
3. Introduction of the new phase of A-share and H-share ESOPs: In orderto further improve the corporate governance mechanism, create shareholder value andpromote the full implementation of the Company's IoT smart household ecologicalbrand strategy, the Company introduced the Core Employees A Share Ownership Planof Haier Smart Home Co., Ltd (for Years 2021–2025) (Draft) and its Summary and theCore Employees H Share Ownership Plan of Haier Smart Home Co., Ltd (for Years2021–2025) (Draft) and its Summary upon the approval at the 2020 Annual GeneralMeeting convened by the Company on 25 June 2021. As of the date of disclosure ofthis regular report, the shares pool for the A-share and H-share ESOPs for 2021 havebeen established.
Other Incentives
2021 Interim ReportHaier Smart Home Co., Ltd.
□Applicable √Not applicable
2021 Interim ReportHaier Smart Home Co., Ltd.
Section V ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES
1. Environmental Information
(I) Explanation of the environmental protection status of companies and theirimportant subsidiaries that are key emission units announced by the environmentalprotection department
√Applicable □Not Applicable
1. Information on pollutant discharge
√Applicable □Not Applicable
The Company’s indirect non-wholly owned subsidiaries Zhengzhou Haier Air-conditioning Co., Ltd. (“Zhengzhou Air-conditioning”), Foshan Haier Freezer Co., Ltd.(“Foshan Freezer”), Hefei Haier Refrigerator Co., Ltd. (“Hefei Refrigerator”), WuhanHaier Water Heater Co., Ltd. (“Wuhan Water Heater”), Wuhan Haier Freezer Co., Ltd.(“Wuhan Freezer”) and Chongqing Haier Precision Plastic Co., Ltd., Chongqing Haier Air-conditioning Co., Ltd., Chongqing Haier Drum Washing Machine Co., Ltd., ChongqingHaier Washing Machine Co., Ltd., Chongqing Haier Water Heater Co., Ltd. (theaforementioned 5 companies located in Chongqing are collectively referred to as the"Chongqing Park Companies") are among the key emission units announced by the localenvironmental protection department (according to the latest catalogue of key emissionunits published by Chongqing Ecology and Environment Bureau at the end of April 2021,three companies, namely Chongqing Haier Precision Plastic Co., Ltd, Chongqing HaierDrum Washing Machine Co., Ltd and Chongqing Haier Washing Machine Co., Ltd, wereno longer listed as key emission units).
The main information on pollutant discharge is as follows:
（1）Zhengzhou Air-conditioning
① Main pollutants:
Wastewater. According to the Technical Specification for Application and Issuance ofPollutant Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development ZoneEnergy should apply for a pollutant discharge permit and detect 17 types of pollutants(including specific pollutants) , namely, total cadmium, total chromium, total mercury, totallead, total arsenic, hexavalent chromium, COD, ammonia nitrogen, total phosphorus, totalnitrogen, PH, suspended solids, chroma, petroleum, BOD, rate of flow and temperature.
②Way of discharge: indirect discharge
③Number and distribution of discharge outlets: one, north of the wastewatertreatment plant, pipeline discharge
④Concentration and total amount of discharge and approved total amount ofdischarge:
According to the discharge permit, the concentration and total amount of pollutantdischarge subject to approval for the total amount are as follows:
| No. | Name of pollutant | Concentration of discharge | Total amount of discharge | Approved total amount of discharge | Whether it is excessive discharge |
| 1 | COD | 26.66mg/L | 0.65 tons | 6.25 tons | No |
| 2 | Ammonia nitrogen | 3.00mg/L | 0.073 tons | 0.63 tons | No |
2021 Interim ReportHaier Smart Home Co., Ltd.
⑤Pollutant discharge standards implemented: Wastewater Quality Standards forDischarge to Municipal Sewers (GBT 31962-2015)
（2）Foshan Freezer
①Main pollutants:
Wastewater. According to the Technical Specification for Application and Issuance ofPollutant Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development ZoneEnergy should apply for a pollutant discharge permit and detect 6 types of pollutants(including specific pollutants) , namely, COD, ammonia nitrogen, zinc, PH, SS, suspendedsolids, petroleum
②Way of discharge: indirect discharge
③Number and distribution of discharge outlets: one, south of the wastewatertreatment plant to the southeast of Fushan Sanshui District Haier Park, pipeline discharge;exhaust emission, six dust emitting processes, eight foam generating processes, fourwelding processes, one plastic injection and breaking process, two kitchens, for a total of
④Concentration and total amount of discharge and approved total amount ofdischarge:
According to the discharge permit, the concentration and total amount of pollutantdischarge subject to approval for the total amount are as follows:
| No. | Name of pollutant | Concentration of discharge | Total amount of discharge | Approved total amount of discharge | Whether it is excessive discharge |
| 1 | COD | 31 mg/L | 2.57 tons | 25.92 tons | No |
| 2 | Ammonia nitrogen | 0.028mg/L | 0.023 tons | 2.88 tons | No |
| No. | Name of | Concentration | Total | Approved | Whether it is |
2021 Interim ReportHaier Smart Home Co., Ltd.
| pollutant | of discharge | amount of discharge | total amount of discharge | excessive discharge | |
| 1 | COD | 92.044 mg/L | 40.8 tons | 165 tons | No |
| 2 | Ammonia nitrogen | 10.767mg/L | 4.73 tons | 10 tons | No |
| 3 | total nitrogen | 25.1 mg/L | 11.17 tons | 25 tons | No |
| 4 | total phosphorus | 1.96 mg/L | 0.87 tons | 3 tons | No |
| No. | Name of pollutant | Concentration of discharge | Total amount of discharge | Approved total amount of discharge | Whether it is excessive discharge |
| 1 | COD | 30.96 mg/L | 1.93 ton | 9.075 ton | No |
| 2 | Ammonia nitrogen | 9.6 mg/L | 0.6 ton | 0.9075 ton | No |
2021 Interim ReportHaier Smart Home Co., Ltd.
④Concentration and total amount of discharge and approved total amount ofdischarge:
According to the discharge permit, the concentration and total amount of pollutantdischarge subject to approval for the total amount are as follows:
| No. | Name of pollutant | Concentration of discharge | Total amount of discharge | Approved total amount of discharge | Whether it is excessive discharge |
| 1 | COD | 43 mg/L | 1.97 tons | 4.3628 tons | No |
| 2 | Ammonia nitrogen | 0.082 mg/L | 0.0038 ton | 0.4365 ton | No |
| No. | Name of pollutant | Concentration of discharge | Total amount of discharge | Approved total amount of discharge | Whether it is excessive discharge |
| 1 | COD | 59 mg/L | 33.93 tons | 228.1 tons | No |
| 2 | Suspended solids | 21 mg/L | 12.08 tons | 177.2 tons | No |
| 3 | Animal and vegetable oil | 1.24 mg/L | 0.71 tons | 34 tons | No |
| 4 | Petroleum | 0.14 mg/L | 0.08 ton | 1.32 tons | No |
2021 Interim ReportHaier Smart Home Co., Ltd.
accordance with the requirements of national and local environmental laws and regulations.Information on all wastewater discharge is subject to 24-hour online monitoring and suchmonitored information is transmitted to environmental authorities in a real-time manner.All equipment is operating normally. In addition, the Chongqing Park Companies have allinstalled exhaust treatment facilities and all equipment is operating normally. Exhaustproduced is treated by the prevention and treatment facilities before compliant release andis monitored regularly.
3. Environmental impact assessment of construction projects and otherenvironmental protection administrative permits
√Applicable □Not Applicable
The Company and its subsidiaries execute construction project implementation andproduction in accordance with the requirements of laws and regulations and strictly complywith the “three simultaneous” requirements of environmental protection for constructionprojects in the process of environmental impact assessment, and have passed environmentalassessment acceptance and are not involved in any environmental illegal conducts such asconstruction before approval.
4. Emergency plans for environmental incidents
√Applicable □Not Applicable
The Company and its subsidiaries have formulated Emergency Plans forEnvironmental Incidents in accordance with the requirements of laws and regulations andorganized drills, and continue to improve and upgrade the plans based on drill results.
5. Self-monitoring environmental programs
√Applicable □Not Applicable
The Company complies with national and local environmental standard requirementsin respect of all pollutant discharge. Wastewater collected is subject to standard treatmentand is released in a compliant manner. It is under real-time monitoring through theautomatic online wastewater monitoring system, which shares its information with HaierSmart Energy System. In March 2017, the Company passed the upgraded certification inrelation to ISO14001 environment management system. In March 2021, a professionalcertification firm was appointed to conduct a review and audit on the operation ofISO14001 system in 2021, where satisfactory results were obtained to demonstrate its goodoperating condition.
6. Administrative penalty due to environmental issues during the Reporting Period
√Applicable □Not Applicable
7. Other environmental information that should be disclosed
√Applicable □Not Applicable
(II) Explanation on environmental protection of companies other than majorpollutant-emission units
√Applicable □Not Applicable
1. Administrative penalty due to environmental issues
□Applicable √Not Applicable
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2. Other environmental information disclosure with reference to major pollutant-
emission units
√Applicable □Not Applicable
All division of the Company execute construction project implementation andproduction in accordance with the requirements of laws and regulations and strictly complywith the “three simultaneous” requirements of environmental protection for constructionprojects in the process of environmental impact assessment, and have passed environmentalassessment acceptance and are not involved in any environmental illegal conducts such asconstruction before approval.
Through Haier Smart Energy Center, an industry leading energy big data analysissystem, the Company implements centralized dynamic monitoring and digitalizedmanagement in respect of major energy consumption, such as water, electricity and gas, ofall plants across the country by utilizing automatized and informationalized technology andan integrated management model. It automatically collects precise information on energyresources and completes prediction and analysis of energy consumption information tooptimize energy adjustment, reduce energy consumption per unit production to achievelow-carbon production.
3. Reasons for failure to disclose other environmental information
□Applicable √Not Applicable
(III) Explanation of the subsequent progress or changes in the disclosure ofenvironmental information content during the Reporting Period
√Applicable □Not Applicable
The Company will continue to maintain and improve existing results and strictlycomply with existing environmental protection and emission standards to achievecompliant emission.
(IV) Relevant information favorable to ecological protection, pollution prevention and
control and environmental responsibility fulfillment
√Applicable □Not Applicable
The Company proactively advances product iteration and upgrade and participates inthe development of ecological environment. The Company took part in the formulation ofenergy consumption standard of household appliances organized by Beijing Institute ofStandardization to promote the shift to energy-saving models in the household appliancefield. We cooperated with relevant organizations in relevant refrigerant research anddevelopment projects to strive for the application of refrigerants with lower greenhouse gasemission. Meanwhile, the Company and Haier’s suppliers, among others, cooperated in theresearch and development of low-carbon related technology, such as recyclable packagingmaterials, to facilitate environmental protection.
The Company proactively responds to the household appliance recycling policies ofthe NDRC by launching a household appliance recycling project and investing in theconstruction of Haier’s household appliance recycling plants. With the recycling businessas the starting point, we tapped into the disintegration process and implemented extendedaccountability for household appliance manufacturer to initiate the development ofhousehold appliance recycling plants. The measure will significantly boost the efficiency of
2021 Interim ReportHaier Smart Home Co., Ltd.
resource utilization to achieve sustainable development.
(V) Measures taken during the Reporting Period to reduce its carbon emission and
their effectiveness
√Applicable □Not Applicable
As the leading enterprise in the industry, the Company proactively seeks ways toachieve carbon neutrality and carbon peak and optimize industrial structure and energystructure. Currently, the Company has designed and established Haier Zhong De SmartPark, Haier’s first “beacon base” in the world to achieve carbon neutrality, and intends toexpand its coverage within the Company in the future, with a view to reaching carbonneutrality for Haier Smart Home’s industrial parks in the PRC within a reasonable time,while giving due regards to comprehensive elements, such as costs. Haier Zhong DeIndustrial Park uses a smart general energy control platform to implement centralizeddynamic monitoring and digitalized management in respect of the production, transmission,distribution and utilization of energy and power in the park, such as electricity, water, gas,heat, compressed air, photovoltaic, thereby improving and optimizing energy balance,controlling and adjusting the energy system in the park and enhancing overall efficiency.
2. Particulars on the efforts to consolidate and expand its achievements in poverty
alleviation and rural area invigoration
√Applicable □Not Applicable
In accordance with the national targeted poverty alleviation plan and documentationrequirements, the Company emphasizes poverty alleviation and conducts targeted povertyalleviation within the authority granted on the general meeting in respect of, among others,donations.
For years, the Company has made genuine contributions to education to improve thebasic cultural quality of people in poverty and skills of families in poverty, with anemphasis on shoring up the weak link of the education sector and stopping inter-generational poverty. As of now, the Company, Haier Group Companies (the effectivecontroller of the Company) and its subordinate enterprises (hereafter, the “Haier Group”)have constructed over 300 hope primary schools and hope secondary schools, covering 26provinces, municipalities and autonomous regions in the PRC. It also offers continuousresource assistance to such schools every year to effectively boost the base educationcapacity in poverty regions and improve education quality. At the same time, the Companymaintains its support to rural development in respect of poverty alleviation in agriculturaldevelopment and poverty alleviation in farmers’ health to promote beautiful ruraldevelopment. During the Reporting Period, it offered, among other assistance, funds toXian Feng Village, Tao Lin Town, Xi Shui County, Gui Zhou.
In the first half of 2021, the Company’s capital expenditure in targeted povertyalleviation amounted to approximately RMB4.12 million, primarily attributable toeducation poverty alleviation, poverty alleviation in agricultural development and povertyalleviation in farmers’ health, etc., to proactively respond to the government’s call forsocial responsibility fulfillment.
2021 Interim ReportHaier Smart Home Co., Ltd.
Section VI SIGNIFICANT ISSUESI. Fulfillment status of undertakings(I) The undertakings made by the ultimate controllers, shareholders, related parties, acquirer as well as the Company and other relevant parties
during or up to the reporting period
√Applicable □Not Applicable
| Background of undertakings | Type of undertakings | Covenanter | Contents of undertakings | Date and term of undertakings | Any deadline for performance | Whether performed in a timely and strict way |
| Undertaking related to significant reorganization | Eliminate the right defects in land property etc. | Haier Group Corporation | During the period from September 2006 to May 2007, the Company issued shares to Haier Group Corporation (“Haier Group”) to purchase the controlling equity in its four subsidiaries, namely Qingdao Haier Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电子有限公司), Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司), Wuhan Haier Electronics Co., Ltd. (武汉海尔电器股份有限公司), Guizhou Haier Electronics Co., Ltd. (贵州海尔电器有限公司). With regard to the land and property required in the operation of Qingdao Haier Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电子有限公司), Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司), Wuhan Haier Electronics Co., Ltd. (武汉海尔电器股份有限公司) (the “Covenantees”), Haier Group made an undertaking (the “2006 Undertaking”). According to the content of 2006 Undertaking and current condition of each Covenantee, Haier Group will constantly assure that Covenantees will lease the land and property owned by Haier Group for free. Haier Group will make compensation in the event that the Covenantees suffer loss due to the unavailability of such land and property. | 27 September 2006, long-term | Yes | Yes |
| Address peer | Haier Smart Home Co., | Prior to the Transaction (hereinafter “the Transaction” refers to the transaction in relation to the privatisation of | 31 July 2020 long- | Yes | Yes |
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| competition | Ltd. | Haier Electronics by Haier Smart Home), Haier Electric was a controlling subsidiary of the Company and did not have peer competition with the Company; after the completion of the Transaction, Haier Electric became a wholly-owned or controlling subsidiary of the Company and no new peer competition with the Company existed or will arise. There is no new peer competition or potential competition between the Company and other related parties controlled by the controlling shareholders or the de facto controllers of the Company. | term | ||
| Address connected transactions | Haier Group Corporation | 1. The Transaction constitutes a connected transaction and the connected transaction procedures performed under the Transaction are in compliance with the relevant regulations. The pricing of the connected transaction is fair and there are no circumstances under which the interests of the listed company and the non-connected shareholders are prejudiced. 2. Upon completion of the Transaction, the Company and its affiliates will take lawful and effective measures to minimize and regulate the connected transactions with the listed company, take the initiative to safeguard the interests of the listed company and all shareholders, and refrain from taking advantages of connected transactions for improper benefits. 3. Provided that there is no conflict with laws and regulations, if connected transactions between the Company and its affiliates and the listed company occur or exist which cannot be avoided or for which there are reasonable reasons, the Company and its affiliates will legally enter into a transaction agreement with the listed company to ensure strict compliance with the procedures of connected | 29 July 2020, long- term | Yes | Yes |
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| transactions required by the laws, regulations, regulatory documents and the articles of association of the Company, conduct transactions in accordance with the principles of marketability and fair prices to ensure the fairness and compliance of connected transactions, and refrain from taking advantages of such connected transactions to engage in any acts that are detrimental to the interests of the listed company or its minority shareholders, and at the same time, comply with the information disclosure obligations in accordance with relevant regulations. | ||||||||
| Address peer competition | Haier Group Corporation | 1. The Company and its controlling subsidiary, Haier COSMO Co., Ltd., were principally engaged in investment business during the reporting period, and the Company and its controlling subsidiary, Haier COSMO Co., Ltd. (including its subsidiaries and entities with more than 30% shareholding), have no real or potential pper competition with Haier Smart Home; 2. the domestic and overseas white goods businesses and assets held by the Company (including the Company's subsidiaries and entities with more than 30% shareholding) have been injected into Haier Smart Home through asset consolidation and equity transfer in accordance with the commitments made by the Company in January 2011 and the requirements for adjusting such commitments as considered and approved by Haier Smart Home at its 2014 annual general meeting; 3, Since the acquisition of 100% of Haier New Zealand Investment Holding Company Limited (which holds 100% of the shares in Fisher & Paykel Appliances Holdings Limited) by Haier Smart Home's offshore subsidiary, Haier Singapore Investment Holding Co., Ltd., following the completion in July 2018, the Company (including the | 29 July 2020, long- term | Yes | Yes | |||
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| Company's subsidiaries and entities with more than 30% shareholding) and Haier Smart Home do not have any peer competing relationship in any business areas both within and outside the PRC. During the reporting period, the Company (including the Company's subsidiaries and entities with more than 30% shareholding) did not have any new peer competition with Haier Smart Home; 4. Upon completion of the Transaction, the Company (including the Company's subsidiaries and entities with more than 30% shareholding) and its affiliates do not have any new or potential peer competition with Haier Smart Home; 5. During the period when the Company is the controlling shareholder of Haier Smart Home and the shares of Haier Smart Home are listed on the Hong Kong Stock Exchange, the Company and its other subsidiaries and entities with more than 30% shareholding will not operate any business that competes with the business engaged by Haier Smart Home and will not engage in real or potential peer competition with Haier Smart Home. | ||||||||
| Others | Haier Group Corporation | Upon completion of the Transaction, the Company will strictly comply with the Company Law, the Securities Law, the relevant regulations of the China Securities Regulatory Commission, the Shanghai Stock Exchange and the articles of association of Haier Smart Home, etc., fairly exercise shareholders' rights and fulfill shareholders' obligations, refrain from taking advantage of its shareholding position for improper benefits, ensure the listed company will continue to be completely separate from the Company and other enterprises on which the Company exercises control and exerts significant influence in terms of management, personnel, assets, finance, organization and business | 29 July 2020, long- term | Yes | Yes | |||
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| operations, and maintain the continued independence of the listed company in terms of management, personnel, assets, finance, organization and business operations. Upon completion of the Transaction, the Company will comply with the provisions of the Notice on Several Issues concerning Regulating Fund Transactions between Listed Companies and Their Affiliates and the External Guarantee of Listed Companies and the Circular of China Securities Regulatory Commission and China Banking Regulatory Commission on Regulating the External Guaranties Provided by Listed Companies to regulate the external guarantees by listed companies and their subsidiaries, and will not misappropriate the funds of the listed companyy and their subsidiaries. The Company undertakes to strictly fulfill the above commitments. In the event that the interests of the listed company are damaged as a result of any breach of the above commitments by the Company and other enterprises on which the Company exercises control and exerts significant influence, the Company will legally bear the corresponding liability for damage. | |||||
| Others | HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED | 1. The Company legally holds the Subject Shares, of which the Company has full ownership, and there are no restrictions on the rights of the Subject Shares or any circumstances that may affect the offer or settlement of the Transaction. 2. The Company has full rights to participate in the Transaction and has the right to accept the Offer in connection with the Transaction and to sign and perform all agreements and documents involved in the Transaction. 3. Unless the privatisation of Haier Electronics is completed or Haier Smart Home announces the termination of | 29 July 2020, termination of privatisation / six months after H Share listing | Yes | Yes |
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| rights, benefits or encumbrances in respect of such shares by the Company during the six months following the expiry of the aforesaid six-month period shall not result in Haier Group Companies and parties acting in concert with it losing their status as controlling shareholders of Haier Smart Home. | |||||
| Address connected transactions | HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED | 1. The Transaction constitutes a connected transaction and the connected transaction procedures performed under the Transaction are in compliance with the relevant regulations. The pricing of the connected transaction is fair and there are no circumstances under which the interests of the listed company and the non-connected shareholders are prejudiced. 2. Upon completion of the Transaction, the Company and other enterprises on which the Company exercises control will take lawful and effective measures to minimize and regulate the connected transactions with the listed company, take the initiative to safeguard the interests of the listed company and all shareholders, and refrain from taking advantages of connected transactions for improper benefits. 3. Provided that there is no conflict with laws and regulations, if connected transactions between the Company and other enterprises on which the Company exercise control and the listed company occur or exist which cannot be avoided or for which there are reasonable reasons, the Company and other enterprises on which the Company exercises control will legally enter into a transaction agreement with the listed company to ensure strict compliance with the procedures of connected transactions required by the laws, regulations, regulatory documents and the articles of association of the Company, conduct | 29 July 2020, long- term | Yes | Yes |
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| transactions in accordance with the principles of marketability and fair prices, and refrain from taking advantages of such connected transactions to engage in any acts that are detrimental to the interests of the listed company or its minority shareholders, and at the same time, comply with the information disclosure obligations in accordance with relevant regulations. 4. Any covenants and arrangements between the Company and other enterprises on which the Company exercise control and the listed company in relation to connected transactions shall not prevent the other party from conducting business or dealing with any third party for its own benefit and on equal competitive terms in the market. | ||||||
| Undertaking related to refinancing | Eliminate the right defects in land property and etc. | Haier Group Corporation | Haier Group Corporation undertakes that it will assure Haier Smart Home and its subsidiaries of the constant, stable and unobstructed use of the leased property. In the event that Haier Smart Home or any of its subsidiaries suffers any economic loss due to the fact that leased property has no relevant ownership certificate, Haier Group Corporation will make compensation to impaired party in a timely and sufficient way and take all reasonable and practicable measures to support the impaired party to recover to normal operation before the occurrence of loss. Upon the expiration of relevant leasing period, Haier Group Corporation will grant or take practicable measures to assure Haier Smart Home and its subsidiaries of priority to continue to lease the property at a price not higher than the rent in comparable market at that time. Haier Group Corporation will assure Haier Smart Home and its subsidiaries of the constant, stable, free and unobstructed use of self-built property and land of the Group. In the event that Haier Smart Home or any of its subsidiaries fails to continue to use self-built property according to its own will or in original way due to the fact that self-built | 24 December 2013, long-term | Yes | Yes |
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| property has no relevant ownership certificate, Haier Group Corporation will take all reasonable and practicable measures to eliminate obstruction and impact, or will support Haier Smart Home or its affected subsidiary to obtain alternative property as soon as possible, if Haier Group Corporation anticipates it is unable to cope with or eliminate the external obstruction and impact with its reasonable effort. For details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Formation, Current Situation of the Defective Property, the Influence on Operation of Issuer Caused by Uncertainty of Ownership, Solution for the Defect and Guarantee Measures (L2014-005) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange on 29 March 2014. | |||||
| Eliminate the right defects in land property etc. | Haier Smart Home Co., Ltd. | The Company undertakes that it will eliminate the property defects of the Company and main subsidiaries within five years with reasonable business effort since 24 December 2013, to achieve the legality and compliance of the Company and main subsidiaries in terms of land and property. For details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Formation, Current Situation of the Defective Property, the Influence on Operation of Issuer Caused by Uncertainty of Ownership, Solution for the Defect and Guarantee Measures (L2014-005) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange on 29 March 2014. As at the end of 2018, the Company has resolved the property defects of itself and its eight major subsidiaries. After the approval of the board meeting held by the Company on 5 November 2018 and the general meeting held on 21 December 2018, the term of the above undertakings was extended for three years based on the original deadline. At present, the property defects of the five major subsidiaries have been properly resolved by applying for property ownership | 24 December 2013, eight years | Yes | Yes |
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| certificates, relocating the defective properties and categorizing them as reserve alongside the lands, divesting the defective properties with the equity of the subsidiaries and other means. The Company has fulfilled this undertaking. | ||||||
| Other undertakings | Asset injection | Haier Group Corporation | Inject the assets of Haier Photoelectric to the Company or dispose such assets through other ways according to the requirements of the domestic supervision before June 2025. For more details, please refer to the Announcement of Haier Smart Home Co., Ltd. on the Changes of Some Commitments on Asset Injection (L2020-024) published on the four major securities newspapers and the website of Shanghai Stock Exchange on 30 April 2020. | December 2015 to June 2025 | Yes | Yes |
| Profit forecast and compensation | Haier COSMO Co., Ltd.(formerly known as “Haier Electric Appliances International Co., Ltd.”) | In August 2018, Guanmei (Shanghai) Enterprise Management Company Limited (贯美(上海)企业管理有限公司) (hereinafter referred to as “Guanmei”), an indirect holding subsidiary of the Company replaced the 55% equity interests of Bingji (Shanghai) Enterprise Management Company Limited (冰戟(上海)企业管理有限公司) held by it with the 51% equity interests of Qingdao HSW Water Appliance Co., Ltd. (hereinafter referred to as “Water Appliance”) held by Haier Electric Appliances International Co., Ltd. (hereinafter referred to as “Haier International”). In this regard, Haier International promises that the cumulative actual net profit recorded by the Water Appliance in the three accounting years during the profit compensation period shall not be less than its cumulative forecasted net profit in the corresponding year, otherwise Haier International shall compensate Guanmei’s results according to the Assets Replacement Agreement. Details are set out in the Announcement on the Equity Replacement and Related-Party Transactions to Be Conducted by the Holding Subsidiary of Qingdao Haier Co., Ltd. and Haier Electronics International Co., Ltd. (L2018-047) published by the Company on the four major securities | As of 30 April 2021 | Yes | Yes |
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II. Non-operating utilization of funds by controlling shareholders and other relatedparties during the reporting period.
□Applicable √Not Applicable
III. Information on non-compliance guarantees
□Applicable √Not Applicable
IV. Information on interim audit
□Applicable √Not Applicable
V. Changes in matters covered by the non-standard audit opinion on the previous year'sannual report and its handling
□Applicable √Not Applicable
VI. Matters relating to bankruptcy and restructuring
□Applicable √Not Applicable
VII. Material litigation and arbitration matters
□Material litigation and arbitration matter during the reporting period √No materiallitigation and arbitration matters during the reporting periodVIII. Punishment and correction on the listed company and its directors, supervisors,senior management, controlling shareholders and ultimate controllers due to suspect oflaw violations and the issue of rectification
□ Applicable √ Not applicable
IX. Explanation of the integrity status of the Company and its controlling shareholdersand ultimate controller during the reporting period
□ Applicable √ Not applicable
X. Significant related-party transactions(I) Related-party transactions from daily operation
1. Matters that have been disclosed in temporary announcements and withno subsequent progress or change
□ Applicable √Not applicable
2. Matters that have been disclosed in temporary announcements and withsubsequent progress or change
√ Applicable □ Not applicable
Pursuant to the " Resolution on Proposal to the General Meeting to Authorize theBoard of Directors and its Authorized Persons to Sign the Framework Agreement onConnected Transactions for 2020-2022" (《關於提請股東大會授權董事會及其授權人士簽署2020-2022年關聯交易框架協定的議案》) considered and approved atthe 10
thmeeting of the 10th session of the Board of Directors and the SecondExtraordinary General Meeting of 2020, the " Resolution on Signing the FrameworkAgreement on Connected Transactions" (《關於簽署關聯交易框架協定的議案》)considered and approved at the 14th meeting of the 10th session of the Board ofDirectors, and the " Resolution of Haier Smart Home Co., Ltd. on Renewing theFramework Agreement on Financial Services with Haier Group Corporation andEstimated Amount of Connected Transactions" (《海爾智家股份有限公司關於與海爾集團公司續簽<金融服務框架協定>暨預計關聯交易額度的議案》) consideredand approved at the 18th meeting of the 10th session of the Board of Directors and the2020 Annual General Meeting, the Company has made estimation on the connectedtransactions for the next three years, as detailed in the aforesaid announcements
2021 Interim ReportHaier Smart Home Co., Ltd.
regarding the resolutions of the meetings.
For the actual performance of the Company's connected transactions in the first halfof 2021, please refer to "XII. Related parties and related-party transactions " undersection X — Financial and Accounting Report set out in this regular report.
3. Matters not disclosed in temporary announcements
□ Applicable √ Not applicable
(II) Related-party transactions regarding acquisition or disposal ofassets/equity
1. Matters disclosed in temporary announcements and with no subsequent
progress or change
□ Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcements and withsubsequent progress or change
□ Applicable √Not applicable
3. Matters not disclosed in temporary announcements
□ Applicable √ Not applicable
4. If performance agreement is involved, the performance achieved during thereporting period shall be disclosed
□ Applicable √ Not applicable
(III) Significant related-party transactions of joint external investment
1. Matters that have been disclosed in temporary announcements and with no
subsequent progress or change
□ Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcements and withsubsequent progress or change
□ Applicable √ Not applicable
3. Matters not disclosed in temporary announcements
□ Applicable √ Not applicable
(IV) Amounts due to or from related parties
1. Matters that have been disclosed in temporary announcements and with nosubsequent progress or change
□ Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcement and with
subsequent progress or change
□ Applicable √ Not applicable
3. Matters not disclosed in temporary announcements
□ Applicable √ Not applicable
(V) Financial business between the Company and the finance company withwhich it has a related relationship, the company's controlling finance companyand related parties
2021 Interim ReportHaier Smart Home Co., Ltd.
√ Applicable □Not applicable
1. Deposit business
√ Applicable □Not applicable
Unit and Currency: RMB
| Related party | Relationship | Maximum daily deposit limit | Range of deposit interest | Balance as at the beginning of the period | Number of occurrence of the period | Balance as at the end of the period |
| Haier Group Finance Co., Ltd. and others | Subsidiary of Haier Group | 29 billion | 0.385%-3.85% | 24,957,736,213.04 | 28,946,190,018.12 | 28,946,190,018.12 |
| Total | / | / | / | 24,957,736,213.04 | 28,946,190,018.12 | 28,946,190,018.12 |
| Related party | Relationship | Loan limit | Range of loan interest | Balance as at the beginning of the period | Number of occurrence of the period | Balance as at the end of the period |
| Haier Group Finance Co., Ltd. | Subsidiary of Haier Group | 5 billion | 1.59%~2.47% | 454,470,450.05 | 556,979,500.00 | 482,161,521.49 |
| Total | / | / | / | 454,470,450.05 | 556,979,500.00 | 482,161,521.49 |
| Related party | Relationship | Type of business | Total amount | Actual number of occurrence |
| Haier Group Finance Co., Ltd. | Subsidiary of Haier Group | Foreign exchange derivative product | 5.5 billion | 2,611,999,252.69 |
| Haier Group Finance Co., Ltd. | Subsidiary of Haier Group | Service fee | 0.08 billion | 11,919,379.11 |
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(VI) Other material related transactions
□ Applicable √ Not applicable
(VII) Others
□ Applicable √ Not applicable
XI. Significant contracts and their execution1 Trusteeship, contracting and leasing
□ Applicable √ Not applicable
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2 Significant guarantees performed and outstanding during the reporting period
√Applicable □Not Applicable
Unit and Currency: RMB
| External guarantees provided by the Company (excluding guarantees for subsidiaries) | ||||||||||||||||||
| Guarantor | Relationship between the guarantor and the listed company | Secured party | Amount of guarantee | Date of occurrence of the guarantee (date of agreement) | Commencement date of guarantee | Expiry date of guarantee | Type of guarantee | Status of principle liabilities | Collateral (if any) | Whether the guarantee has been fulfilled | Whether the guarantee is overdue | Overdue amount of the guarantee | Whether there is a counter-guarantee | Whether Related- party guarantee or not | Relationship | |||
| Total amount of guarantee occurred during the reporting period (excluding guarantees for subsidiaries) | 0 | |||||||||||||||||
| Total balance of guarantee at the end of the reporting period (A) (excluding guarantees for subsidiaries) | 0 | |||||||||||||||||
| Guarantees provided by the Company for subsidiaries | ||||||||||||||||||
| Total amount of guarantees for subsidiaries occurred during the reporting period | 2,967,533.18 | |||||||||||||||||
| Total balance of guarantees for subsidiaries at the end of the reporting period (B) | 2,027,910.98 | |||||||||||||||||
| Total amount of guarantees provided by the Company (including guarantees for subsidiaries) | ||||||||||||||||||
| Total amount of guarantee (A + B) | 2,027,910.98 | |||||||||||||||||
| Ratio of total amount of guarantees to net assets of the Company (%) | 27.46 | |||||||||||||||||
| Including: | ||||||||||||||||||
| Amount of guarantees for shareholders, ultimate controllers and their related parties | 0 | |||||||||||||||||
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| (C) | |||
| Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio exceeding 70% (D) | 590,146.50 | ||
| The amount of total amount of guarantee in excess of 50% of net assets (E) | 0 | ||
| Total amount of the above three guarantees (C + D + E) | 590,146.50 | ||
| Explanation of possibly bearing related discharge duty for premature guarantees | None | ||
| Explanation of guarantee status | The above guarantees include guarantees made in previous years and carried forward to the reporting period, and guarantees newly made for the year, including the following guarantees: To satisfy general corporate requirements, Haier Singapore Investment Holding Pte. Ltd., a wholly owned subsidiary of the Company, applied to DBS Bank Ltd. for a loan of US$280 million, to which the Company provided joint liability guarantee. The Company entered into a guarantee agreement with DBS Bank Ltd. to guarantee the above loan. The guarantee period commences from the due date of each payment obligation in relation to the guaranteed debt (with the meaning ascribed to it by the amended guarantee agreement) and ends on six months from the Initial Termination Date under the loan agreement, i.e. 30 January 2023. |
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2021 Interim ReportHaier Smart Home Co., Ltd.
3 Other major contracts
□Applicable √Not Applicable
XII Statement on Other Significant Events
√Applicable √Not Applicable
(1) Entrusted wealth management: By the end of the reporting period, the balance ofthe Company’s entrusted wealth management amounted to RMB2.273 billion,including two parts: ① temporarily-idle fundraising wealth management: at the end ofDecember 2018, the Company’s proceeds for the issuance of convertible corporatebonds were fully landed. In order to improve the yield of temporarily-idle funds, theCompany intended to carry out cash management with the amounts not exceedingRMB0.7 billion after approved by the Board of Directors. By the end of the reportingperiod, the balance of the entrusted wealth management amounted to RMB0.387billion; ② Temporary-idle funds wealth management by certain subsidiaries of theCompany: Under the premise of ensuring sufficient capital required by the principaloperating activities and daily operations, some subsidiaries of the company purchasedsome short-term principal-guaranteed wealth management products and structureddeposits from major commercial banks to improve the yield of temporarily-idle fundsand the return for shareholders within the authority of the president’s office meetingand under the condition of ensuring fund safety. By the end of the reporting period,the balance of the entrusted wealth management amounted to RMB1.886 billion.
(2) Progress of the A-share repurchase: On 5 March 2021, the Company convened the16th meeting of the 10th session of the Board of Directors, which considered andapproved the Resolution in Relation to the Repurchase Plan of a Portion of PublicShares of Haier Smart Home Co., Ltd. It approved the Company to use its own fundsto repurchase a portion of A shares of the Company by way of centralised bidding.The repurchase price is no more than RMB46 per share and the proposed totalrepurchase amount is no more than RMB4.0 billion and no less than RMB2.0 billion,with no more than 86.96 million shares repurchased. The period of this repurchase iswithin 12 months from the date the Board considered and approved the resolution ofrepurchase of shares. As at the end of the reporting period, the Company hadrepurchased a total of 63,076,566 shares, representing 0.67% of the total share capitalof the Company. The highest price purchased was RMB32.80 per share and thelowest price was RMB25.45 per share, and the total amount paid wasRMB1,767,100,716.86. For details, please refer to the announcement on the progressof the repurchase disclosed by the Company on a monthly basis.
2021 Interim ReportHaier Smart Home Co., Ltd.
SECTION VII CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERSI. Changes in share capital(I) Table of Changes in shares
1. Table of Changes in shares
| Prior to changes | Increase/decrease in changes | After changes | ||||||||||
| Amount | Percentage (%) | Issue of new shares | Bonus shares | Contribution fund convertible shares | Others | Sub-total | Amount | Percentage (%) | ||||
| I. Restricted shares | ||||||||||||
| 1. State-owned shares | ||||||||||||
| 2. Shares held by state-owned legal entities | ||||||||||||
| 3. Other domestic shares | ||||||||||||
| Including: Shares held by domestic non-state-owned legal entities | ||||||||||||
| Shares held by domestic individuals | ||||||||||||
| 4. Foreign Shares | ||||||||||||
| Including: shares held by offshore legal entities | ||||||||||||
| Shares held by | ||||||||||||
2021 Interim ReportHaier Smart Home Co., Ltd.
| offshore individuals | |||||||||
| II. Non-restricted shares | 9,027,846,441 | 100.00 | 397,676,840 | -32,352,800 | 365,324,040 | 9,393,170,481 | 100.00 | ||
| 1. Ordinary shares in RMB | 6,308,552,654 | 69.88 | 6,308,552,654 | 67.16 | |||||
| 2. Domestic listed foreign Shares | |||||||||
| 3. Offshore listed foreign Shares | 2,719,293,787 | 30.12 | 397,676,840 | -32,352,800 | 365,324,040 | 3,084,617,827 | 32.84 | ||
| 4. Others | |||||||||
| III. Total shares | 9,027,846,441 | 100.00 | 397,676,840 | -32,352,800 | 365,324,040 | 9,393,170,481 | 100.00 |
2021 Interim ReportHaier Smart Home Co., Ltd.
2. Statement on the changes in shares
√Applicable □Not Applicable
(1) H-share convertible bonds: On 27 October 2020, the China Securities RegulatoryCommission issued the Reply to the Approval of Issuance of Overseas Listed ForeignShares and Convertible Corporate Bonds by Haier Smart Home Co., Ltd. (《關於核准海爾智家股份有限公司發行境外上市外資股及可轉換公司債券的批復》)(Zheng Jian Xu Ke [2020] No. 2768), which approved that: (1) the Company issuedno more than 2,856,526,138 overseas listed foreign shares (including additionalshares issued by holders of convertible corporate bonds not exceeding HK$8.0 billionor equivalent in foreign currencies upon the exercise of the convertible rights), with apar value of RMB1 each, all of which are ordinary shares. After the completion of thisissuance, the Company can be listed on the main board of the Stock Exchange ofHong Kong Limited (hereinafter referred to as the “Hong Kong Stock Exchange”) ; (2)the issuance of corporate bonds not exceeding HK$8.0 billion or equivalent in foreigncurrencies that can be converted into the Company’s overseas listed foreign shares bythe overseas wholly-owned subsidiaries guaranteed by the Company. On 23December 2020, 2,448,279,814 H shares of the Company, issued for the privatisationof Haier Electric Appliances (a Hong Kong listed company), were listed and traded onthe Main Board of the Hong Kong Stock Exchange and the related convertible bondsunder the H share convertible bonds scheme became valid and in effect immediatelyafter the listing amounting to HK$7,993 million. During the reporting period,HK$7,491,000,000 of the convertible bonds were converted into a total of397,676,840 H shares of the Company and the outstanding amount wasHK$502,000,000.
(2) Cancellation of H share repurchase: On March 5, 2021, the First ExtraordinaryGeneral Meeting of 2021 and the First Class Meeting of 2021 for A shares/D shares/Hshares of the Company considered and approved the "Resolution on the Introductionof General Mandate for Repurchase of H Shares upon Completion of Listing", inwhich the Company intends to repurchase H shares and cancel them within the agreedperiod. During the reporting period, the Company repurchased a total of 32,352,800 Hshares and all such shares have been cancelled.
Based on the above, during the reporting period, the share capital of the Company waschanged from 9,027,846,441 shares at the beginning of the reporting period to9,393,170,481 shares.
3. Effect of changes in shares on the financial indicators such as earnings per
2021 Interim ReportHaier Smart Home Co., Ltd.
share and net assets per share (if any) after the reporting period to the disclosuredate of interim report
√Applicable □Not Applicable
For the interim period in 2021, the Company recorded a net profit attributable toshareholders of the parent company of RMB6,852,271,812.97 and equity attributableto owners of the parent company as at the end of the reporting period ofRMB73,846,216,357.78, representing earnings per Share of RMB0.729 and net assetper Share of RMB7.862, based on the total share capital as at the end of the reportingperiod of 9,393,170,481 Shares; and earnings per Share of RMB0.729 and net assetper Share of RMB7.861, based on the total share capital as at the date of disclosure ofthe interim report of 9,393,860,615 Shares.
4. Other disclosure deemed necessary by the Company or required by securitiesregulatory authorities
□Applicable √Not Applicable
(II) Changes in shares with selling restrictions
□Applicable √Not Applicable
II. Information on shareholders(I) Total number of shareholders:
| Total number of ordinary shareholders by the end of the reporting period | 210,151 |
| Total numbers of preferential shareholders with restoration of voting rights by the end of the reporting period | N/A |
2021 Interim ReportHaier Smart Home Co., Ltd.
(II) Table of shareholdings of top ten shareholders, top ten shareholders of tradable shares (or shares without selling restrictions) by theend of the reporting period
Unit: share
| Shareholdings of top ten shareholders | |||||||
| Name of shareholder (full name) | Increase/decrease during the reporting period | Number of shares held at the end of the period | Percentage (%) | Number of shares held with selling restrictions | Status of shares pledged, marked or frozen | Nature of shareholder | |
| Status | Number | ||||||
| HKSCC NOMINEES LIMITED (Note) | 2,184,772,038 | 23.26 | Unknown | Foreign legal entity | |||
| Haier Electric Appliances International Co., Ltd. | 1,258,684,824 | 13.40 | None | Domestic non-state-owned legal entity | |||
| Haier Group Corporation | 1,072,610,764 | 11.42 | None | Domestic non-state-owned legal entity | |||
| HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED | 538,560,000 | 5.73 | None | Foreign legal entity | |||
| Hong Kong Securities Clearing Co., Ltd. | 512,561,183 | 5.46 | None | Foreign legal entity | |||
| China Securities Finance Corporation Limited | 182,592,654 | 1.94 | None | Unknown | |||
| Qingdao Haier Venture & Investment Information Co., Ltd. | 172,252,560 | 1.83 | None | Domestic non-state-owned legal entity | |||
2021 Interim ReportHaier Smart Home Co., Ltd.
| (青島海爾創業投資諮詢有限公司) | |||||||
| China Merchant Bank Co., Ltd. – Xingquan Herun mixed securities investment fund | 103,290,923 | 1.10 | None | Unknown | |||
| China Merchant Bank Co., Ltd. –Xingquan Heyi flexible deployment mixed securities investment fund (LOF) | 87,672,150 | 0.93 | None | Unknown | |||
| ALIBABA INVESTMENT LIMITED | 83,823,993 | 0.89 | Unknown | Unknown | |||
2021 Interim ReportHaier Smart Home Co., Ltd.
| Shareholdings of top ten shareholders without selling restrictions | |||
| Name of shareholder | Number of tradable shares held without selling restrictions | Class and number of shares | |
| Class | Number | ||
| HKSCC NOMINEES LIMITED (Note) | 2,184,772,038 | Overseas listed foreign shares | 2,184,772,038 |
| Haier Electric Appliances International Co., Ltd. | 1,258,684,824 | RMB ordinary | 1,258,684,824 |
| Haier Group Corporation | 1,072,610,764 | RMB ordinary | 1,072,610,764 |
| HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED | 538,560,000 | Overseas listed foreign shares | 538,560,000 |
| Hong Kong Securities Clearing Co., Ltd. | 512,561,183 | RMB ordinary | 512,561,183 |
| China Securities Finance Corporation Limited | 182,592,654 | RMB ordinary | 182,592,654 |
| Qingdao Haier Venture & Investment Information Co., Ltd. | 172,252,560 | RMB ordinary | 172,252,560 |
| China Merchants Bank Co., Ltd. – Xingquan Herun mixed securities investment fund | 103,290,923 | RMB ordinary | 103,290,923 |
| China Merchants Bank Co., Ltd. – Xingquan Heyi flexible allocation mixed securities investment fund (LOF) | 87,672,150 | RMB ordinary | 87,672,150 |
| ALIBABA INVESTMENT LIMITED | 83,823,993 | Overseas listed foreign shares | 83,823,993 |
2021 Interim ReportHaier Smart Home Co., Ltd.
| Explanation on repurchase account of top ten shareholders | Nil |
| Explanation on delegated voting rights, entrusted voting rights, abstained voting rights of the above shareholders | Nil |
| Related parties or parties acting in concert among the aforesaid shareholders | (1) Haier Electric Appliances International Co., Ltd. (currently named as Haier COSMO Co., Ltd. （海尔卡奥斯股份有限公司）) is a holding subsidiary of Haier Group Corporation. Haier Group Corporation holds 51.20% of its equity. Qingdao Haier Venture & Investment Information Co., Ltd.(青島海爾創業投資諮詢有限公司) and HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED are parties acting in concert with Haier Group Corporation; (2) The Company is not aware of the existence of any connections of other shareholders. |
| Explanation of preferential shareholders with restoration of voting rights and their shareholdings | Not applicable |
2021 Interim ReportHaier Smart Home Co., Ltd.
III. Directors, supervisors, senior management(I) Changes of shareholding of current and retired directors, supervisors andsenior management during the reporting period
√Applicable □Not Applicable
Unit: Share
| Name | Position | Number of shares held at the beginning of the period | Number of shares held at the end of the period | Increase/ decrease during the reporting period | Reason of increase/ decrease |
| Liang Haishan | Director | 14,923,047 | 15,570,174 | 647,127 | Vesting pursuant to employee shareholding scheme |
| Tan Lixia (resigned) | Director | 8,535,920 | 9,053,622 | 517,702 | Vesting pursuant to employee shareholding scheme |
| Wang Peihua (resigned) | Supervisor | 161,067 | 182,401 | 21,334 | Vesting pursuant to employee shareholding scheme |
| Ming Guoqing (resigned) | Supervisor | 105,511 | 119,449 | 13,938 | Vesting pursuant to employee shareholding scheme |
| Gong Wei | Senior management | 1,724,315 | 1,812,495 | 88,180 | Vesting pursuant to employee shareholding scheme |
| Ming Guozhen | Senior management | 1,275,295 | 1,326,497 | 51,202 | Vesting pursuant to employee shareholding scheme |
2021 Interim ReportHaier Smart Home Co., Ltd.
management during the reporting period
□Applicable √Not Applicable
(III) Other explanations
□Applicable √Not Applicable
IV. Changes in controlling shareholder and the ultimate controller
□Applicable √Not Applicable
SECTION VIII RELEVANT INFORMATION OF PREFERRED
SHARES? Applicable √Not Applicable
SECTION IX RELEVANT INFORMATION OF CORPORATE BONDSI. Enterprise bond, corporate bond, and non-financial corporate debt financinginstruments
√Applicable □Not Applicable
(1) Enterprise bond
□Applicable √Not Applicable
(2) Corporate bond
□Applicable √Not Applicable
(3) Non-financial corporate debt financing instruments in interbank bond market
√Applicable □Not Applicable
1. General information on non-financial corporate debt financing instruments
Unit and Currency: RMB’00 million
| Bond Name | Short Name | Code | Date of issue | Value date | Expiry date | Bond balance | Interest Rate (%) | Payment method of principal and interest | Trading venue | Arrangement of investor suitability (if any) | Trading mechanism | Whether risk of delisting exists |
| Haier Smart Home Co., Ltd. 2020 first tranche of ultra-short-term financing bond | 20 Haier Smart Home SCP001 | 012002518 | 17 July 2020 | 17 July 2020 | 13 January 2021 | 30 | 1.45 | One-off principal and interest payment upon maturity | Interbank bond market | None | / | No |
| Haier Smart Home Co., Ltd. 2020 second tranche of ultra-short-term financing bond | 20 Haier Smart Home SCP002 | 012003094 | 28 August 2020 | 28 August 2020 | 24 February 2021 | 25 | 1.71 | None | / | No |
On the 2019 Annual General Meeting, the Company passed the “Resolution of HaierSmart Home Co., Ltd. on the Proposed Registration and Issuance of Debt FinancingInstruments” to approve the Company’s proposed application to the National Associationof Financial Market Institutional Investors for the registration of a debt financinginstrument of not more than RMB15 billion (inclusive) in total. Accordingly, the Companyissued two tranches of ultra-short-term financing bond of RMB3 billion and RMB2.5billion on 17 July 2020 and 28 August 2020, respectively, with a maturity of 180 days.Please refer to the “Announcement of Haier Smart Home Co., Ltd. on the Results of theIssuance of the 2020 First Tranche of Super- short-term Bonds” and “Announcement ofHaier Smart Home Co., Ltd. on the Results of the Issuance of the 2020 Second Tranche ofSuper-short-term Bonds” published by the Company on 21 July 2020 and 1 September2020, respectively, for details.During the reporting period, the principal and interests of the above two tranches ofultra-short-term financing bond were settled in full as agreed.
Response measure in respect of risk of delisting of bonds
□Applicable √Not Applicable
Outstanding bonds past due
□Applicable √Not Applicable
Explanation on debt past due
□Applicable √Not Applicable
2. Trigger and implementation of issuer or investor option terms and investor protection terms
√Applicable □Not Applicable
For the above two tranches of ultra-short-term financing bond, there were triggermechanisms of investor protection emergency response in place in case of extraordinaryevents to protect the interests of the investors and minimise the adverse impact to the bondmarket. For details of the investor protection mechanism, please refer to relevantdocuments, such as the prospectus of ultra-short-term financing bonds, published by theCompany on public document disclosure platforms for debt financing instruments,including Chinamoney.com.cn.
During the valid period of the above financing bonds, the Company did not experienceany relevant event triggering the investor protection mechanism.
3. Adjustment to credibility assessment results
□Applicable √Not Applicable
4. Guarantee, repayment schedule and implementation and change of other repayment guaranteemeasures during the reporting period and their impact
√Applicable □Not Applicable
During the reporting period, the principal and interests of the above two tranches ofultra-short-term financing bond were settled in full as agreed.
The above two tranches of ultra-short-term financing bond were not guaranteed andthe repayment was primarily funded by monetary assets of the Company. The Companydevised prudent and detailed financial arrangements and plans and delegated the task ofrepayment of debt financing instruments to the financial department of the Company toobtain funding for timely repayment, ensure capital to be deployed as planned and confirmthe timely and full settlement of principal and interests of the debt financing instruments,thereby properly safeguarding the interests of bondholders.
5. Explanation on other information on non-financial corporate debt financing instruments
□Applicable √Not Applicable
(4) Losses exceeding 10% of net assets as at the end of previous year in the scope of combinedstatements during the reporting period
□Applicable √Not Applicable
(5) Major accounting data and financial indicators
√Applicable □Not Applicable
Unit and Currency: RMB
| Key indicators | End of the reporting period | End of last year | Yoy change (%) |
| Liquidity ratio | 1.02 | 1.04 | -1.92 |
| Quick ratio | 0.73 | 0.78 | -6.41 |
| Debt to assets ratio (%) | 63.54 | 66.52 | -4.48 |
| Reporting period (January - June) | Corresponding period last year | Yoy change (%) | |
| Net profit after deduction of non- | 6,269,906,406.72 | 2,569,440,497.59 | 144.02 |
| recurring profit or loss | |||
| Total liabilities ratio of EBITDA | 0.19 | 0.11 | 75.30 |
| Interest coverage ratio | 24.29 | 6.94 | 249.97 |
| Cash interest coverage ratio | 23.19 | -0.75 | 3,172.17 |
| EBITDA interest coverage ratio | 31.68 | 10.45 | 203.22 |
| Name of convertible corporate bond | Harvest International Company HK$8,000,000,000 Zero Coupon Guaranteed Convertible Bonds due 2022 (hereafter, “H Share Convertible Bonds”) | ||
| Number of convertible bond holders as at the end of the period | 1 | ||
| Guarantor of the Company’s convertible bonds | Haier Smart Home Co., Ltd. | ||
| Material change of the profitability, asset and credibility of the guarantor | N/A | ||
| Top 10 holders of convertible bonds are as follows: | |||
| Name of holder of corporate convertible bonds | Holdings as at the end of the period ($) | Holding percentage (%) | |
| HSBC Nominees (Hong Kong) Limited | 502,000,000 | 100 | |
Note: (1) the aforementioned bonds as at the end of the period are denominated inHong Kong Dollar; (2) H Share Convertible Bonds of the Company are held on behalf byHSBC Nominees (Hong Kong) Limited as the sole legal holder, who is not the ultimateholder. Information on the ultimate holders of the bonds is only stored in the clearingsystem and, without the authorization from the ultimate holder, the clearing system shallnot directly provide the detailed list of ultimate bond holders to any cooperating party.
(3) Conversion of convertible bonds for the Reporting Period
Unit and Currency: HKD
| Name of convertible corporate bond | Prior to the conversion | Increase/decrease for the conversion | After the conversion | ||
| Conversion | Redemption | Resale | |||
| H Share Convertible Bonds | 7,993,000,000 | 7,491,000,000 | 502,000,000 | ||
| Name of convertible corporate bond | H Share Convertible Bonds |
| Amount of conversion for the Reporting Period ($) | 7,491,000,000 |
| Number of conversion for the Reporting Period (Share) | 397,676,840 |
| Cumulative number of conversion (Share) | 397,676,840 |
| Percentage of cumulative number of conversion to total issued Shares of the Company prior to the conversion (%) | 4.41 |
| Outstanding amount ($) | 502,000,000 |
| Percentage of outstanding amount to total amount of convertible bonds issued (%) | 6.28 |
| Name of convertible corporate bond | H Share Convertible Bonds |
| Latest conversion price as at the end of the Reporting Period | 18.8369 |
(6) Liabilities, change in credit and cash arrangements of repayment in the comingyear of the Company
As at the end of the Reporting Period, liabilities of the Company amounted toRMB131,047,644,200, in which current liabilities amounted to RMB113,392,212,800 andnon-current liabilities amounted to RMB17,655,431,400.
The Company remains stable in every operating condition with reasonable assetstructure and good credibility and is capable of providing stable and sufficient capital forthe interests of convertible corporate bonds and repayment of the principal and interests ofthe bonds in the coming year.
(7) Other information on convertible bonds
Nil
SECTION X RESPONSIBILITY STATEMENT
“As the board of Haier Smart Home Co., Ltd, we hereby confirm to the best of ourknowledge, and in accordance with the applicable reporting principles, that the financialstatements give a true and fair view of the assets, liabilities, financial position and profit orloss of the company; and the management report includes a fair review of the developmentand performance of the business including the results and the position of the company,together with a description of the principal opportunities and risks associated with theexpected development of the company.”
Qingdao, 30 Aug 2021The Board of Haier Smart Home Co., Ltd
Liang Haishan
Li Huagang
Xie Juzhi
Wu Changqi
Martin Lin
David Yu
Eva Li
SECTION XI FINANCIAL REPORT
I. Audit report
□ Applicable √ Not Applicable
II. Financial statements
Consolidated Balance Sheet
30 June 2021Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
| Items | Notes | 30 June 2021 | 31 December 2020 |
| Current assets: | |||
| Monetary funds | VII. 1 | 41,843,777,555.56 | 46,461,329,426.91 |
| Provision of settlement fund | |||
| Funds lent | |||
| Financial assets held for trading | VII. 2 | 2,248,916,788.25 | 2,165,192,497.83 |
| Derivative financial assets | VII. 3 | 121,975,627.78 | 77,839,006.63 |
| Bills receivable | VII. 4 | 11,906,406,723.66 | 14,136,349,754.34 |
| Accounts receivable | VII. 5 | 20,201,607,270.68 | 15,930,024,286.67 |
| Financing receivables | |||
| Prepayments | VII. 6 | 866,997,982.40 | 765,427,571.70 |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Reinsurance contract reserves receivable | |||
| Other receivables | VII. 7 | 2,265,821,208.28 | 1,717,152,945.65 |
| Including: Interest receivable | 284,404,268.03 | 322,473,254.91 | |
| Dividend receivable | 4,915,409.42 | ||
| Financial assets purchased under resale agreements | |||
| Inventories | VII. 8 | 33,508,190,125.05 | 29,446,973,404.75 |
| Contract assets | VII. 9 | 242,265,937.64 | 263,412,927.58 |
| Assets held for sale | |||
| Non-current assets due in one year | |||
| Other current assets | VII. 10 | 2,925,075,253.35 | 3,283,888,900.58 |
| Total current assets | 116,131,034,472.65 | 114,247,590,722.64 | |
| Non-current assets: | |||
| Loans and advances granted | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | 309,892,045.80 | 330,588,978.97 | |
| Long-term equity investments | VII. 11 | 22,587,007,137.19 | 21,567,658,450.89 |
| Investments in other equity instruments | VII. 12 | 2,829,179,420.16 | 2,659,125,265.54 |
| Other non-current financial assets | |||
| Investment properties | VII. 13 | 27,254,438.10 | 28,387,002.81 |
| Fixed assets | VII. 14 | 20,680,827,377.71 | 20,895,504,722.21 |
| Construction in progress | VII. 15 | 5,020,055,626.42 | 3,596,902,447.07 |
| Biological assets for production | |||
| Oil and gas assets | |||
| Right-of-use assets | VII. 16 | 2,793,454,708.24 | 2,839,858,259.27 |
| Intangible assets | VII. 17 | 9,882,925,278.28 | 10,017,867,645.93 |
| Development cost | VII. 18 | 168,477,189.37 | 167,746,724.13 |
| Goodwill | VII. 19 | 22,216,549,512.47 | 22,518,460,337.64 |
| Long-term prepaid expenses | VII. 20 | 470,212,444.74 | 455,742,504.13 |
| Deferred income tax assets | VII. 21 | 1,685,498,098.65 | 2,208,301,258.25 |
| Other non-current assets | VII. 22 | 1,445,052,880.82 | 1,925,761,560.17 |
| Total non-current assets | 90,116,386,157.95 | 89,211,905,157.01 | |
| Total assets | 206,247,420,630.60 | 203,459,495,879.65 | |
| Current liabilities: | |||
| Short-term borrowings | VII. 23 | 11,160,109,997.72 | 7,687,908,165.88 |
| Borrowings from central bank | |||
| Due to banks and other financial institutions | |||
| Financial liabilities held for trading | VII. 24 | 3,423,774.60 | 26,952,508.66 |
| Derivative financial liabilities | VII. 25 | 92,081,440.09 | 239,582,532.90 |
| Bills payable | VII. 26 | 24,290,143,300.41 | 21,236,057,053.67 |
| Accounts payable | VII. 27 | 39,008,002,641.86 | 36,302,971,944.48 |
| Receipts in advance | |||
| Contract liabilities | VII. 28 | 7,466,559,172.71 | 7,048,637,659.48 |
| Disposal of repurchased financial assets | |||
| Absorbing deposit and deposit in inter-bank market | |||
| Customer deposits for trading in securities | |||
| Amounts due to issuer for securities underwriting | |||
| Payables for staff's remuneration | VII. 29 | 3,178,004,997.26 | 3,760,099,978.82 |
| Taxes payable | VII. 30 | 2,669,466,112.57 | 2,399,705,460.12 |
| Other payables | VII. 31 | 20,050,241,387.28 | 17,056,156,167.28 |
| Including: Interest receivable | |||
| Dividend receivable | 3,420,918,669.85 | ||
| Fees and commissions payable | |||
| Reinsurance Accounts payables | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | VII. 32 | 4,976,720,571.63 | 7,522,724,913.40 |
| Other current liabilities | VII. 33 | 497,459,434.14 | 6,112,053,944.63 |
| Total current liabilities | 113,392,212,830.27 | 109,392,850,329.32 | |
| Non-current liabilities: | |||
| Deposits for insurance contracts | |||
| Long-term borrowings | VII. 34 | 9,590,298,914.57 | 11,821,416,259.81 |
| Bonds payable | VII. 35 | 426,436,821.17 | 6,713,501,050.27 |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | VII. 36 | 2,011,853,682.89 | 2,072,702,352.68 |
| Long-term payables | VII. 37 | 94,010,166.66 | 98,203,261.27 |
| Long-term payables for staff’s remuneration | VII. 38 | 1,332,727,402.72 | 1,245,775,024.35 |
| Estimated liabilities | VII. 39 | 1,585,475,425.32 | 1,442,844,036.73 |
| Deferred income | VII. 40 | 617,897,583.09 | 633,761,669.48 |
| Deferred income tax liabilities | VII. 21 | 1,963,219,325.33 | 1,900,401,265.97 |
| Other non-current liabilities | 33,512,053.44 | 27,033,458.13 | |
| Total non-current liabilities | 17,655,431,375.19 | 25,955,638,378.69 | |
| Total liabilities | 131,047,644,205.46 | 135,348,488,708.01 | |
| Owners' equity (or shareholders' equity): | |||
| Paid-in capital (or share capital) | VII. 41 | 9,393,170,481.00 | 9,027,846,441.00 |
| Other equity instruments | VII. 42 | 148,483,179.98 | 2,364,195,333.79 |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Capital reserve | VII. 43 | 22,310,353,950.96 | 15,009,027,407.40 |
| Less: treasury stock | 1,796,154,587.01 | 28,896,550.65 | |
| Other comprehensive income | VII. 44 | -1,302,353,671.61 | -1,046,216,729.06 |
| Special reserve | |||
| Surplus reserve | VII. 45 | 3,045,334,539.60 | 3,045,334,539.60 |
| General risk provisions | |||
| Undistributed profits | VII. 46 | 42,047,382,464.86 | 38,445,132,172.47 |
| Total equity attributable to owners (or shareholders) of the Parent Company | 73,846,216,357.78 | 66,816,422,614.55 | |
| Minority shareholders' interests | 1,353,560,067.36 | 1,294,584,557.09 | |
| Total owners' equity (or shareholders' equity) | 75,199,776,425.14 | 68,111,007,171.64 | |
| Total liabilities and owners' equity (or shareholders' equity) | 206,247,420,630.60 | 203,459,495,879.65 |
| Items | Notes | 30 June 2021 | 31 December 2020 |
| Current Assets: | |||
| Monetary funds | 1,783,378,537.78 | 8,286,549,909.64 | |
| Financial assets held for trading | |||
| Derivative financial assets | |||
| Bills receivable | |||
| Accounts receivable | XVIII. 1 | 1,120,385,861.16 | 5,491,536,070.42 |
| Financing receivables | |||
| Prepayments | 275,054,302.88 | 295,050,991.15 |
| Other receivables | XVIII. 2 | 11,817,209,369.87 | 3,906,373,387.61 |
| Including: Interest receivable | 37,316,878.96 | 38,582,434.11 | |
| Dividend receivable | |||
| Inventories | 1,926,598.24 | 73,974,562.87 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 402,351,438.91 | 459,309,301.58 | |
| Total current assets | 15,400,306,108.84 | 18,512,794,223.27 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | XVIII. 3 | 52,322,505,530.61 | 52,290,227,070.21 |
| Investments in other equity instruments | 804,334,894.58 | 804,334,894.58 | |
| Other non-current financial assets | |||
| Investment properties | |||
| Fixed assets | 180,583,473.83 | 196,529,502.16 | |
| Construction in progress | 24,996,214.91 | 8,319,418.36 | |
| Biological assets for production | |||
| Oil and gas assets | |||
| Right-of-use assets | 1,646,781.72 | 2,076,376.95 | |
| Intangible assets | 58,637,471.48 | 62,103,457.66 | |
| Development cost | |||
| Goodwill | |||
| Long-term prepaid expenses | 3,410,447.98 | 4,208,602.97 | |
| Deferred income tax assets | 154,335,216.49 | 154,335,216.49 | |
| Other non-current assets | 26,894,836.99 | ||
| Total non-current assets | 53,550,450,031.60 | 53,549,029,376.37 | |
| Total assets | 68,950,756,140.44 | 72,061,823,599.64 | |
| Current liabilities: | |||
| Short-term borrowings | |||
| Financial liabilities held for trading | |||
| Derivative financial liabilities | |||
| Bills payable | |||
| Accounts payables | 76,953,150.80 | 248,172,640.78 | |
| Receipts in advance | |||
| Contract liabilities | 8,716,599.17 | 8,716,599.17 | |
| Payables for staff's remuneration | 148,239,132.23 | 86,872,482.44 | |
| Taxes payable | 6,554,122.71 | 55,756,358.98 | |
| Other payables | 31,776,407,254.45 | 29,642,219,320.03 | |
| Including: Interest payable | |||
| Dividends payable | 3,420,918,669.85 | ||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 921,780.31 | 20,840,106.80 |
| Other current liabilities | 5,578,170.10 | 5,538,254,928.01 | |
| Total current liabilities | 32,023,370,209.77 | 35,600,832,436.21 | |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | - | 877,995.63 | |
| Long-term payable | |||
| Long-term payables for staff's remuneration | |||
| Estimated liabilities | |||
| Deferred income | 18,460,000.00 | 24,250,000.00 | |
| Deferred income tax liabilities | 219,544,771.62 | 219,544,771.62 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 238,004,771.62 | 244,672,767.25 | |
| Total liabilities | 32,261,374,981.39 | 35,845,505,203.46 | |
| Owners' equity (or Shareholders' equity): | |||
| Paid-in capital (or share capital) | 9,393,170,481.00 | 9,027,846,441.00 | |
| Other equity instruments | |||
| Including: Preference shares | |||
| Perpetual bonds | |||
| Capital reserve | 25,494,323,977.23 | 20,408,352,380.95 | |
| Less: treasury stock | 1,767,258,036.36 | ||
| Other comprehensive income | 1,633,806.54 | -10,030,704.15 | |
| Special reserve | |||
| Surplus reserve | 2,440,188,314.15 | 2,440,188,314.15 | |
| Undistributed profits | 1,127,322,616.49 | 4,349,961,964.23 | |
| Total owners' equity (or shareholders' equity) | 36,689,381,159.05 | 36,216,318,396.18 | |
| Total liabilities and owners’ equity (or shareholders' equity) | 68,950,756,140.44 | 72,061,823,599.64 |
| Items | Notes | 2021 Interim | 2020 Interim |
| Ⅰ. Total operating revenue | 111,618,822,064.73 | 95,728,097,106.65 | |
| Including: Operating revenue | VII. 47 | 111,618,822,064.73 | 95,728,097,106.65 |
| Interest income | |||
| Insurance premiums earned | |||
| Fee and commission income | |||
| Ⅱ. Total cost of operations | 104,209,419,477.98 | 91,986,258,214.68 | |
| Including: Operating cost | VII. 47 | 78,071,651,525.66 | 68,934,592,121.68 |
| Interest expenses | |||
| Fee and commission expenses |
| Insurance withdrawal payment | |||
| Net payment from indemnity | |||
| Net provisions withdrew for insurance liability | |||
| Insurance policy dividend paid | |||
| Reinsurance cost | |||
| Taxes and surcharges | VII. 48 | 338,882,675.38 | 275,190,778.54 |
| Selling expenses | VII. 49 | 16,730,914,492.75 | 14,526,912,493.29 |
| Administrative expenses | VII. 50 | 5,033,576,083.72 | 4,608,308,707.03 |
| R&D expenses | VII. 51 | 3,738,734,614.40 | 2,939,733,549.14 |
| Financial expenses | VII. 52 | 295,660,086.07 | 701,520,565.00 |
| Including: Interest expenses | 363,256,552.03 | 719,257,090.03 | |
| Interest income | 264,334,107.38 | 219,622,316.65 | |
| Add: other income | VII. 53 | 377,180,441.63 | 525,289,255.43 |
| investment income (losses are represented by “-”) | VII. 54 | 1,136,683,667.22 | 756,782,922.79 |
| Including: Investment income of associates and joint ventures | 943,069,721.83 | 679,043,527.00 | |
| Income generated from the derecognition of financial assets measured at amortized cost (losses are represented by “-”) | |||
| Exchange gain (losses are represented by “-”) | |||
| Gains on net exposure hedges (losses are represented by “-”) | |||
| Income from change in fair value (losses are represented by “-”) | VII. 55 | 64,269,511.32 | -30,987,103.15 |
| Loss on credit impairment (losses are represented by “-”) | VII. 56 | -44,031,423.21 | -108,905,504.07 |
| Loss on assets impairment (losses are represented by “-”) | VII. 57 | -653,387,326.88 | -609,748,132.69 |
| Gain from disposal of assets (losses are represented by “-”) | VII. 58 | 142,414,954.25 | -14,442,406.46 |
| Ⅲ. Operating profit (losses are represented by “-”) | 8,432,532,411.08 | 4,259,827,923.82 | |
| Add: non-operating income | VII. 59 | 79,500,691.72 | 68,886,689.07 |
| Less: non-operating expenses | VII. 60 | 51,064,696.04 | 55,470,756.55 |
| Ⅳ. Total profit (total losses are represented by “-”) | 8,460,968,406.76 | 4,273,243,856.34 | |
| Less: income tax expense | VII. 61 | 1,523,183,264.40 | 661,226,873.34 |
| Ⅴ. Net profit (net losses are represented by “-”) | 6,937,785,142.36 | 3,612,016,983.00 | |
| (I) Classification by continuous operation | |||
| 1.Net profit from continuous operation (net losses are represented by “-”) | 6,937,785,142.36 | 3,612,016,983.00 | |
| 2. Net profit from discontinued operation (net losses are represented by “-”) | |||
| (II) Classification by ownership of the equity | |||
| 1. Net profit attributable to shareholders of the Parent | 6,852,271,812.97 | 2,780,800,712.72 | |
| Company (net losses are represented by “-”) | |||
| 2. Profit or loss attributable to minority shareholders (net losses are represented by “-”) | 85,513,329.39 | 831,216,270.28 | |
| VI. Other comprehensive income, net of tax | VII. 62 | -296,041,116.28 | -261,463,495.41 |
| (I) Other comprehensive income attributable to owners of the Parent Company, net of tax | -293,997,754.26 | -220,001,490.33 | |
| 1. Other comprehensive income that cannot be reclassified into the profit or loss | 38,290,357.71 | -56,383,682.14 | |
| (1) Changes arising from re-measurement of defined benefit plans | -595,263.81 | 12,218.39 | |
| (2) Other comprehensive income that cannot be transferred into profit or loss under equity method | |||
| (3) Changes in fair value of investments in other equity instruments | 38,885,621.52 | -56,395,900.53 | |
| (4) Changes in fair value of credit risks of the enterprise | |||
| 2. Other comprehensive income to be reclassified into the profit or loss | -332,288,111.97 | -163,617,808.19 | |
| (1) Other comprehensive income that can be transferred into profit or loss under equity method | 55,956,231.90 | 29,046,113.28 | |
| (2) Changes in fair value of other debt investments | |||
| (3) Reclassified financial assets that are credited to other comprehensive income | |||
| (4) Credit impairment provision for other debt investments | |||
| (5) Reserve for cash flow hedging | 112,586,182.47 | -85,267,888.94 | |
| (6) Exchange differences on translation of financial statements denominated in foreign currencies | -500,830,526.34 | -107,396,032.53 | |
| (7) Others | |||
| (II) Other comprehensive income attributable to minority shareholders, net of tax | -2,043,362.02 | -41,462,005.08 | |
| Ⅶ. Total comprehensive income | 6,641,744,026.08 | 3,350,553,487.59 | |
| (I) Total comprehensive income attributable to the owners of Parent Company | 6,558,274,058.71 | 2,560,799,222.39 | |
| (II) Total comprehensive income attributable to the minority shareholders | 83,469,967.37 | 789,754,265.20 | |
| Ⅷ. Earnings per share: | |||
| (I) Basic earnings per share (RMB/share) | XIX. 1 | 0.741 | 0.423 |
| (II) Diluted earnings per share | XiX. 1 | 0.730 | 0.419 |
(RMB/share)
Person in charge of the Company: Liang HaishanPerson in charge of accounting function: Gong WeiPerson in charge of accounting department: Ying Ke
Profit Statement of the Parent Company
January-June 2021
Unit and Currency: RMB
| Items | Notes | 2021 Interim | 2020 Interim |
| I. Operating income | XVIII. 4 | 196,151,588.84 | 5,042,717,099.68 |
| Less: operating cost | XVIII. 4 | 170,532,414.76 | 4,398,410,781.55 |
| Taxes and surcharges | 1,174,776.60 | 11,343,686.85 | |
| Selling expenses | 1,542,784.65 | 217,962,272.62 | |
| Administration expenses | 143,500,790.38 | 132,288,406.83 | |
| R&D expenses | 17,296,703.96 | 142,656,643.01 | |
| Financial expenses | -32,789,762.71 | 28,978,469.77 | |
| Including: Interest expenses | 7,372,782.23 | 46,159,222.22 | |
| Interest income | 35,812,614.94 | 16,084,909.36 | |
| Add: other income | 39,709,407.90 | 33,262,133.10 | |
| investment income (losses are represented by “-”) | XVIII. 5 | 113,153,980.76 | 245,974,740.37 |
| Including: Investment income of associates and joint ventures | 89,661,570.77 | 63,292,928.01 | |
| Derecognition income on financial assets measured at amortized cost (losses are represented by “-”) | |||
| Gains on net exposure hedges (losses are represented by “-”) | |||
| Income from change in fair value (losses are represented by “-”) | |||
| Loss on credit impairment (losses are represented by “-”) | -7,122,909.94 | 284,032.12 | |
| Loss on assets impairment (losses are represented by “-”) | -1,306,612.25 | ||
| Gain from disposal of assets (losses are represented by “-”) | 142,444,000.00 | ||
| II. Operating profit (losses are represented by “-”) | 183,078,359.92 | 389,291,132.39 | |
| Add: non-operating income | 60,749.06 | 36,554.33 | |
| Less: non-operating expenses | 50,687.25 | 319,495.89 | |
| III. Total profit (total losses are represented by “-”) | 183,088,421.73 | 389,008,190.83 | |
| Less: income tax expenses | -15,190,900.38 | -1,456,008.32 | |
| IV. Net profit (net losses are represented by “-”) | 198,279,322.11 | 390,464,199.15 | |
| (I) Net profit from continuous operations (net losses are represented by “-”) | 198,279,322.11 | 390,464,199.15 | |
| (II) Net profit from discontinued operations (net losses are represented by “-”) |
| V. Other comprehensive income, net of tax | 11,664,510.69 | -7,116,127.00 | |
| (I) Other comprehensive income that cannot be reclassified into the profit or loss | -178,713.89 | ||
| 1. Changes arising from re-measurement of defined benefit plans | |||
| 2. Other comprehensive income that cannot be transferred into profit or loss under equity method | |||
| 3. Changes in fair value of investments in other equity instruments | -178,713.89 | ||
| 4. Changes in fair value of credit risks of the enterprise | |||
| (II) Other comprehensive income to be reclassified into the profit or loss | 11,664,510.69 | -6,937,413.11 | |
| 1. Other comprehensive income that can be transferred into profit or loss under equity method | 11,664,510.69 | -6,937,413.11 | |
| 2. Changes in fair value of other debt investments | |||
| 3. Reclassified financial assets that are credited to other comprehensive income | |||
| 4. Credit impairment provision for other debt investments | |||
| 5. Reserve for cash flow hedging | |||
| 6. Exchange differences on translation of financial statements denominated in foreign currencies | |||
| 7. Others | |||
| VI. Total comprehensive income | 209,943,832.80 | 383,348,072.15 | |
| VII. Earnings per share: | |||
| (I) Basic earnings per share (RMB/share) | |||
| (II) Diluted earnings per share (RMB/share) |
| Items | Notes | 2021 Interim | 2020 Interim |
| I. Cash flow from operating activities: | |||
| Cash received from the sale of goods and rendering services | 117,815,574,983.23 | 89,745,966,042.83 | |
| Net increase in customer and inter-bank deposits | |||
| Net increase in borrowing from the central bank |
| Net cash increase in borrowing from other financial institutes | |||
| Cash received from premiums under original insurance contract | |||
| Net cash received from reinsurance business | |||
| Net increase in deposits of policy holders and investment | |||
| Cash received from interest, fee and commissions | |||
| Net increase in placement from banks and other financial institutions | |||
| Net increase in cash received from repurchase operation | |||
| Net cash received from customer deposits for trading in securities | |||
| Refunds of taxes | 964,437,549.48 | 469,784,953.90 | |
| Cash received from other related operating activities | VII. 63 | 735,776,487.28 | 727,414,944.47 |
| Sub-total of cash inflows from operating activities | 119,515,789,019.99 | 90,943,165,941.20 | |
| Cash paid on purchase of goods and services | 80,228,131,855.35 | 68,204,573,941.90 | |
| Net increase in loans and advances of customers | |||
| Net increase in deposits in the PBOC and inter-bank | |||
| Cash paid for compensation payments under original insurance contract | |||
| Net increase in cash lent | |||
| Cash paid for interest, bank charges and commissions | |||
| Cash paid for insurance policy dividend | |||
| Cash paid to and on behalf of employees | 12,748,147,254.98 | 11,031,460,042.03 | |
| Cash paid for all types of taxes | 5,071,928,519.13 | 3,466,925,924.16 | |
| Cash paid to other operation related activities | VII. 64 | 13,043,757,663.64 | 8,783,125,290.51 |
| Sub-total of cash outflows from operating activities | 111,091,965,293.10 | 91,486,085,198.60 | |
| Net cash flow from operating activities | VII. 67 | 8,423,823,726.89 | -542,919,257.40 |
| II. Cash flow from investing activities: | |||
| Cash received from recovery of investments | 2,869,349,936.62 | 1,912,295,416.73 | |
| Cash received from return on investments | 313,949,022.75 | 223,367,236.11 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long- | 19,269,652.96 | 49,585,896.20 |
| term assets | |||
| Net cash received from disposal of subsidiaries and other operating entities | |||
| Other cash received from investment activities | |||
| Sub-total of cash inflows from investing activities | 3,202,568,612.33 | 2,185,248,549.04 | |
| Cash paid on purchase of fixed assets, intangible assets and other long-term assets | 3,153,590,910.44 | 3,105,838,460.63 | |
| Cash paid for investments | 3,283,612,983.20 | 799,380,076.93 | |
| Net increase in secured loans | |||
| Net cash paid on acquisition of subsidiaries and other operating entities | 338,445,082.28 | ||
| Other cash paid on investment activities | VII. 65 | 250,000.00 | 3,368,312.62 |
| Sub-total of cash outflows from investing activities | 6,437,453,893.64 | 4,247,031,932.46 | |
| Net cash flow from investing activities | -3,234,885,281.31 | -2,061,783,383.42 | |
| III. Cash flow from financing activities: | |||
| Cash received from capital contributions | 8,600,000.00 | 1,116,431,069.68 | |
| Including: Cash received from capital contributions by minority shareholders of subsidiaries | |||
| Cash received from borrowings | 4,920,230,964.76 | 15,878,143,451.50 | |
| Other cash received from financing activities | |||
| Sub-total of cash inflows from financing activities | 4,928,830,964.76 | 16,994,574,521.18 | |
| Cash paid on repayment of loans | 11,117,743,195.81 | 5,448,817,686.75 | |
| Cash paid on distribution of dividends, profits or repayment of interest expenses | 327,295,977.88 | 568,142,953.79 | |
| Including: Dividend and profit paid to minority shareholders by subsidiaries | |||
| Other cash paid to financing activities | VII. 66 | 3,090,810,896.53 | 398,074,951.29 |
| Sub-total of cash outflows from financing activities | 14,535,850,070.22 | 6,415,035,591.83 | |
| Net cash flow from financing activities | -9,607,019,105.46 | 10,579,538,929.35 | |
| IV. Effect of fluctuations in exchange rates on cash and cash equivalents | -107,597,142.14 | 84,027,232.22 | |
| V. Net increase in cash and cash equivalents | -4,525,677,802.02 | 8,058,863,520.75 | |
| Add: balance of cash and cash | VII. 68 | 45,635,132,638.48 | 34,962,947,399.85 |
| equivalents at the beginning of the period | |||
| VI. Balance of cash and cash equivalents at the end of the period | VII. 68 | 41,109,454,836.46 | 43,021,810,920.60 |
| Items | Notes | 2021 Interim | 2020 Interim |
| I. Cash flow from operating activities: | |||
| Cash received from the sale of goods and rendering of services | 4,574,156,292.06 | 1,201,820,635.00 | |
| Refunds of taxes | 15,641,231.71 | 7,969,641.49 | |
| Other cash received from operating activities | 60,444,554.93 | 44,874,440.51 | |
| Sub-total of cash inflows from operating activities | 4,650,242,078.70 | 1,254,664,717.00 | |
| Cash paid on purchase of goods and services | 81,405,473.91 | 9,839,119,707.06 | |
| Cash paid to and on behalf of employees | 138,942,956.91 | 299,326,532.30 | |
| Cash paid for all types of taxes | 33,242,176.88 | 139,592,241.79 | |
| Other cash paid to operation activities | 9,853,987.61 | 114,847,819.51 | |
| Sub-total of cash outflows from operating activities | 263,444,595.31 | 10,392,886,300.66 | |
| Net cash flow from operating activities | 4,386,797,483.39 | -9,138,221,583.66 | |
| II. Cash flow from investing activities: | |||
| Cash received from recovery of investments | 273,250,000.00 | 312,000,000.00 | |
| Cash received from return on investments | 92,194,698.15 | 3,840,802,526.75 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | |||
| Net cash received from disposal of subsidiaries and other operating entities | |||
| Other cash received from investment activities | |||
| Sub-total of cash inflows from investing activities | 365,444,698.15 | 4,152,802,526.75 | |
| Cash paid on purchase of fixed assets, intangible assets and other long-term assets | 31,022,950.45 | 68,733,039.41 | |
| Cash paid for investments | 231,500,000.00 | 1,159,400,000.00 |
| Net cash paid on acquisition of subsidiaries and other operating entities | |||
| Other cash paid on investment activities | 75,886,144.59 | 79,000,000.00 | |
| Sub-total of cash outflows from investing activities | 338,409,095.04 | 1,307,133,039.41 | |
| Net cash flow from investing activities | 27,035,603.11 | 2,845,669,487.34 | |
| III. Cash flow from financing activities: | |||
| Cash received from capital contributions | |||
| Cash received from borrowings | 4,500,000,000.00 | ||
| Other cash received from financing activities | 818,187,321.17 | ||
| Sub-total of cash inflows from financing activities | 5,318,187,321.17 | ||
| Cash paid on repayment of borrowings | 5,520,000,000.00 | ||
| Cash paid on distribution of dividends, profits or repayment of interest expenses | 43,159,752.53 | 39,865,388.89 | |
| Other cash paid on financing activities | 5,359,441,498.61 | 978,120.00 | |
| Sub-total of cash outflows from financing activities | 10,922,601,251.14 | 40,843,508.89 | |
| Net cash flow from financing activities | -10,922,601,251.14 | 5,277,343,812.28 | |
| IV. Effect of fluctuations in exchange rates on cash and cash equivalents | 5,596,792.78 | 92,170.17 | |
| V. Net increase in cash and cash equivalents | -6,503,171,371.86 | -1,015,116,113.87 | |
| Add: balance of cash and cash equivalents at the beginning of the period | 8,286,549,909.64 | 5,624,406,816.79 | |
| VI. Balance of cash and cash equivalents at the end of the period | 1,783,378,537.78 | 4,609,290,702.92 |
Consolidated Statement of Changes in Owner's Equity
January-June 2021
Unit and Currency: RMB
| Items | 2021 Interim | ||||||||||||||
| Equity attributable to owners of the Parent Company | Minority equity | Total owners' equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Sub-total | |||||
| preference shares | perpetual bonds | Others | |||||||||||||
| I. Closing balance for the previous year | 9,027,846,441.00 | 2,364,195,333.79 | 15,009,027,407.40 | 28,896,550.65 | -1,046,216,729.06 | 3,045,334,539.60 | 38,445,132,172.47 | 66,816,422,614.55 | 1,294,584,557.09 | 68,111,007,171.64 | |||||
| Add: changes in accounting policies | 183,214,768.11 | 183,214,768.11 | 289,732.70 | 183,504,500.81 | |||||||||||
| Error correction for prior period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance for the current year | 9,027,846,441.00 | 2,364,195,333.79 | 15,009,027,407.40 | 28,896,550.65 | -1,046,216,729.06 | 3,045,334,539.60 | 38,628,346,940.58 | 66,999,637,382.66 | 1,294,874,289.79 | 68,294,511,672.45 | |||||
| III. Increase/decrease for the current period (decrease is represented by “-”) | 365,324,040.00 | -2,215,712,153.81 | 7,301,326,543.56 | 1,767,258,036.36 | -256,136,942.55 | 3,419,035,524.28 | 6,846,578,975.12 | 58,685,777.57 | 6,905,264,752.69 | ||||||
| (I) Total comprehensive income | -293,997,754.26 | 6,852,271,812.97 | 6,558,274,058.71 | 83,469,967.37 | 6,641,744,026.08 | ||||||||||
| (II) Capital injection and reduction by owners | 365,324,040.00 | -2,215,712,153.81 | 7,301,398,691.86 | 1,767,258,036.36 | 3,683,752,541.69 | 16,167,229.15 | 3,699,919,770.84 | ||||||||
| 1. Ordinary shares invested by owners | |||||||||||||||
| 2. Capital contribution by holders of other equity instruments | 397,676,840.00 | -2,215,712,153.81 | 8,095,619,066.22 | 6,277,583,752.41 | 6,277,583,752.41 | ||||||||||
| 3. Share-based payment included in owners' equity | |||||||||||||||
| 4. Others | -32,352,800.00 | -794,220,374.36 | 1,767,258,036.36 | -2,593,831,210.72 | 16,167,229.15 | -2,577,663,981.57 | |||||||||
| (III) Profit distribution | -3,420,918,669.85 | -3,420,918,669.85 | -40,951,418.95 | -3,461,870,088.80 | |||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of provisions for general risks | - | ||||||||||||||
| 3. Distribution to owners (or shareholders) | -3,420,918,669.85 | -3,420,918,669.85 | -40,951,418.95 | -3,461,870,088.80 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal transfer of owner's equity | - | - | - | - | |||||||||||
| 1. Transfer of capital reserves into capital (or share capital) | |||||||||||||||
| 2. Transfer of surplus reserves into capital (or share capital) | |||||||||||||||
| 3. Surplus reserves used for remedying loss | - | ||||||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | - | - | - | - | - | - | - | - | - | ||||||
| 1．Withdrawal for the period | |||||||||||||||
| 2. Utilization for the period |
| (VI) Others | -72,148.30 | 37,860,811.71 | -12,317,618.84 | 25,471,044.57 | 25,471,044.57 | ||||||||||
| Ⅳ. Closing balance for the period | 9,393,170,481.00 | 148,483,179.98 | 22,310,353,950.96 | 1,796,154,587.01 | -1,302,353,671.61 | 3,045,334,539.60 | 42,047,382,464.86 | 73,846,216,357.78 | 1,353,560,067.36 | 75,199,776,425.14 |
| Items | 2020 Interim | ||||||||||||||
| Equity attributable to owners of the Parent Company | Minority equity | Total owners' equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Sub-total | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. Closing balance for the previous year | 6,579,566,627.00 | 431,424,524.07 | 4,435,890,845.47 | 1,317,988,619.66 | 2,655,327,405.46 | 32,468,121,744.26 | 47,888,319,765.92 | 17,101,540,502.01 | 64,989,860,267.93 | ||||||
| Add: changes in accounting policies | |||||||||||||||
| Error correction for prior period | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance for the current year | 6,579,566,627.00 | 431,424,524.07 | 4,435,890,845.47 | 1,317,988,619.66 | 2,655,327,405.46 | 32,468,121,744.26 | 47,888,319,765.92 | 17,101,540,502.01 | 64,989,860,267.93 | ||||||
| III. Increase/decrease for the current period (decrease is represented by “-”) | 351,201,960.67 | -212,009,960.47 | 302,889,913.27 | 442,081,913.47 | 1,075,798,128.43 | 1,517,880,041.90 | |||||||||
| (I) Total comprehensive income | -220,001,490.33 | 2,780,800,712.72 | 2,560,799,222.39 | 789,754,265.20 | 3,350,553,487.59 | ||||||||||
| (II) Capital injection and reduction by owners | 359,193,490.53 | 359,193,490.53 | 965,639,084.88 | 1,324,832,575.41 | |||||||||||
| 1. Ordinary shares invested by owners | 359,193,490.53 | 359,193,490.53 | 965,639,084.88 | 1,324,832,575.41 | |||||||||||
| 2. Capital contribution by holders of other equity instruments | |||||||||||||||
| 3. Share-based payment included in owners' equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -2,467,337,485.13 | -2,467,337,485.13 | -679,595,221.65 | -3,146,932,706.78 | |||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of provisions for general risks | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -2,467,337,485.13 | -2,467,337,485.13 | -679,595,221.65 | -3,146,932,706.78 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal transfer of owner's equity | |||||||||||||||
| 1. Transfer of capital reserves into capital (or share capital) | |||||||||||||||
| 2. Transfer of surplus reserves into capital (or share capital) | |||||||||||||||
| 3. Surplus reserves used for remedying loss | |||||||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1．Withdrawal for the period | |||||||||||||||
| 2. Utilization for the |
| period | |||||||||||||||
| (VI) Others | -7,991,529.86 | 7,991,529.86 | -10,573,314.32 | -10,573,314.32 | -10,573,314.32 | ||||||||||
| Ⅳ. Closing balance for the period | 6,579,566,627.00 | 431,424,524.07 | 4,787,092,806.14 | 1,105,978,659.19 | 2,655,327,405.46 | 32,771,011,657.53 | 48,330,401,679.39 | 18,177,338,630.44 | 66,507,740,309.83 |
| Items | 2021 Interim | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Total owners' equity | |||
| Preference shares | Perpetual bonds | Others | |||||||||
| Ⅰ. Closing balance for the previous year | 9,027,846,441.00 | 20,408,352,380.95 | -10,030,704.15 | 2,440,188,314.15 | 4,349,961,964.23 | 36,216,318,396.18 | |||||
| Add: changes in accounting policies | |||||||||||
| Error correction for prior period | |||||||||||
| Others | |||||||||||
| Ⅱ. Opening balance for the current year | 9,027,846,441.00 | 20,408,352,380.95 | -10,030,704.15 | 2,440,188,314.15 | 4,349,961,964.23 | 36,216,318,396.18 | |||||
| III. Increase/decrease for the current period (decrease is represented by “-”) | 365,324,040.00 | 5,085,971,596.28 | 1,767,258,036.36 | 11,664,510.69 | -3,222,639,347.74 | 473,062,762.87 | |||||
| (I) Total comprehensive income | 11,664,510.69 | 198,279,322.11 | 209,943,832.80 | ||||||||
| (II) Capital injection and reduction by owners | 365,324,040.00 | 5,085,971,596.28 | 1,767,258,036.36 | - | 3,684,037,599.92 | ||||||
| 1. Ordinary shares invested by | -32,352,800.00 | -793,935,316.13 | -826,288,116.13 | ||||||||
| owners | |||||||||||
| 2. Capital contribution by holders of other equity instruments | 397,676,840.00 | 5,879,906,912.41 | 6,277,583,752.41 | ||||||||
| 3. Share-based payment included in owners' equity | |||||||||||
| 4. Others | 1,767,258,036.36 | -1,767,258,036.36 | |||||||||
| (III) Profit distribution | -3,420,918,669.85 | -3,420,918,669.85 | |||||||||
| 1. Withdrawal of surplus reserves | |||||||||||
| 2．Distribution to owners (or shareholders) | -3,420,918,669.85 | -3,420,918,669.85 | |||||||||
| 3．Others | |||||||||||
| (IV) Internal transfer of owner's equity | |||||||||||
| 1. Transfer of capital reserves into capital (or share capital) | |||||||||||
| 2. Transfer of surplus reserves into capital (or share capital) | |||||||||||
| 3. Surplus reserves used for remedying loss | |||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Special |
| reserve | |||||||||||
| 1．Withdrawal for the period | |||||||||||
| 2. Utilization for the period | |||||||||||
| (VI) Others | |||||||||||
| Ⅳ. Closing balance for the period | 9,393,170,481.00 | 25,494,323,977.23 | 1,767,258,036.36 | 1,633,806.54 | 2,440,188,314.15 | 1,127,322,616.49 | 36,689,381,159.05 |
| Items | 2020 Interim | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Total owners' equity | |||
| Preference shares | Perpetual bonds | Others | |||||||||
| Ⅰ. Closing balance for the previous year | 6,579,566,627.00 | 7,036,531,178.83 | 11,077,477.45 | 2,050,181,180.01 | 3,307,235,242.11 | 18,984,591,705.40 | |||||
| Add: changes in accounting policies | - | ||||||||||
| Error correction for prior period | - | ||||||||||
| Others | - | ||||||||||
| Ⅱ. Opening balance for the current year | 6,579,566,627.00 | 7,036,531,178.83 | 11,077,477.45 | 2,050,181,180.01 | 3,307,235,242.11 | 18,984,591,705.40 | |||||
| III. Increase/decrease for the current period (decrease is represented by “-”) | -7,116,127.00 | -2,076,873,285.98 | -2,083,989,412.98 | ||||||||
| (I) Total comprehensive income | -7,116,127.00 | 390,464,199.15 | 383,348,072.15 | ||||||||
| (II) Capital injection and reduction by owners | - | ||||||||||
| 1. Ordinary shares invested by owners | |||||||||||
| 2. Capital contribution by holders of other | |||||||||||
| equity instruments | |||||||||||
| 3. Share-based payment included in owners' equity | |||||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | -2,467,337,485.13 | -2,467,337,485.13 | |||||||||
| 1. Withdrawal of surplus reserves | - | ||||||||||
| 2．Distribution to owners (or shareholders) | - | -2,467,337,485.13 | -2,467,337,485.13 | ||||||||
| 3．Others | |||||||||||
| (IV) Internal transfer of owner's equity | |||||||||||
| 1. Transfer of capital reserves into capital (or share capital) | |||||||||||
| 2. Transfer of surplus reserves into capital (or share capital) | |||||||||||
| 3. Surplus reserves used for remedying loss | |||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1．Withdrawal for the period | |||||||||||
| 2. Utilization for the period | |||||||||||
| (VI) Others |
| Ⅳ. Closing balance for the period | 6,579,566,627.00 | 7,036,531,178.83 | 3,961,350.45 | 2,050,181,180.01 | 1,230,361,956.13 | 16,900,602,292.42 |
III. General Information of the Company
1. Overview of the Company
√Applicable ?Not Applicable
The predecessor of Haier Smart Home Co., Ltd. (herein after referred to as theCompany) was Qingdao Refrigerator Factory, which was established in 1984. As permittedto offering by People's Bank of China, Qingdao Branch on 16 December 1989, andapproved by Qing Ti Gai [1989] No.3 on 24 March 1989, based on the reconstruction ofthe original Qingdao Refrigerator Factory, a limited company was set up by directionalfund raising of RMB150 million. In March and September 1993, as approved by thedocument of Qing Gu Ling Zi [1993] No. 2 and No. 9 issued by the pilot leading team ofQingdao joint stock company, the Company was converted from a directional offeringcompany to a public subscription company and issued additional 50 million shares to thepublic and listed with trading on Shanghai Stock Exchange in November 1993. In October2018, D-shares in issue of the Company were listed on the China Europe InternationalExchange AG. In December 2020, H-shares in issue of the Company were listed on theStock Exchange of Hong Kong Limited by way of introduction.The Company's registered office is located at the Haier Industrial Park of LaoshanDistrict, Qingdao, Shandong Province, and the headquarter is located at the Haier IndustrialPark of Laoshan District, Qingdao, Shandong Province.The Company is mainly engaged in manufacturing and trading as well as R&D ofrefrigerator, air-conditioner, freezer, washing machine, water heater, dishwashers, gas stoveand relevant products and commercial circulation business.
The ultimate holding company of the Company is Haier Group Corporation.
These financial statements have been approved for publication by the Board of theCompany on 30 August 2021.
2. Scope of consolidated financial statements
√Applicable ?Not Applicable
For details of changes in the scope of consolidated financial statements for the currentperiod, please refer to “VIII. Changes in Consolidation Scope” and “IX. Interest in OtherEntities” of this note.IV. Basis of Preparation of the Financial Statements
1. Basis of Preparation
The financial statements of the Company were prepared on the going concern basisaccording to the transactions and matters actually occurred, in accordance with theAccounting Standards for Business Enterprises – Basic Standards published by theMinistry of Finance, specific accounting standards, and guidance on application ofaccounting standards for business enterprises, interpretations to accounting standards forbusiness enterprises and other relevant requirements (herein after collectively referred to as
the “Accounting Standards for Business Enterprises”) which issued subsequently, and incombination with the disclosure provisions of the Rules for the Information Disclosure andCompilation of Companies Publicly Issuing Securities No.15: General Provisions forFinancial Report (Revised in 2014) of CSRC as well as the following significantaccounting policies and accounting estimation.
2. Going Concern
√ Applicable □ Not Applicable
The Company has ability to continue its operation for at least 12 months since the endof the reporting period and there are no significant events affecting its ability to continue asa going concern.V. Significant accounting policies and accounting estimatesSpecific accounting policies and accounting estimates:
√ Applicable □ Not Applicable
According to the characteristics of its production and operation, the Companyformulated a series of specific accounting policies and accounting estimates, including theprovisions for impairment for accounts receivable (Note V.10); the measurement ofinventories (Note V.11); the depreciation and amortization of the investment properties(Note V.13); the depreciation of fixed assets (Note V.14); the amortization of intangibleassets (Note V.18); the criterion for determining of long-term assets impairment (NoteV.19); and the date of revenue recognition (Note V.25), etc.
1. Statement of compliance with Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet the requirements of theAccounting Standards for Business Enterprises, which accurately and completely reflectedinformation relating to the financial condition, the operating results, changes inshareholders’ equity and cash flow of the Company.
2. Accounting period
The accounting year of the Company is from 1 January each year to 31 December ofthe same year in solar calendar.
3. Operating cycle
√ Applicable □ Not Applicable
The Company takes 12 months as an operating cycle, which is also the classificationbasis for the liquidity of its assets and liabilities.
4. Recording currency
Renminbi is the recording currency of the Company.
5. Accounting methods of business combinations under common control and not
under common control
√ Applicable □ Not Applicable
A business combination is a transaction or event that brings together two or moreseparate entities into one reporting entity. Business combinations are classified intobusiness combinations under common control and business combinations not undercommon control.
(1) Business combinations under common control
A business combination under common control is a business combination in which allthe combining entities are ultimately controlled by the same party or parties both beforeand after the combination, and that control is not transitory. For business combinationunder common control, the party that obtains the control over the other parties on thecombination date is the acquirer, and other parties involving in the business combinationare the transferors. The combination date is the date on which the acquiring partyeffectively obtains the control over the party being acquired.
In case the consideration for long-term equity investments formed in businesscombination under common control is paid by ways of cash, transfer of non-cash assets orassumption of debts, the Company will regard the share of carrying amounts of the netassets of the transferor in the ultimate controller's consolidated financial statementsobtained as the initial investment cost of long-term equity investments as at the date ofcombination. For carrying value of net assets of the transferor is negative as at the date ofcombination, investment cost of long-term equity investment is calculated as zero. In casethe transferor is controlled by the ultimate controller by the business combination not undercommon control before combination, the initial investment cost of the long-term equityinvestment of the acquirer includes relevant goodwill. The Company should adjust thecapital reserve (capital premium or share premium) in accordance with the differencesbetween initial investment cost of the long-term equity investment and the cash paid, thenon-cash assets transferred and the carrying value of liability assumed; in case the balanceof the capital reserve (capital premium or share premium) is insufficient for the elimination,the surplus reserves and undistributed profits shall be used to dilute such expenses in order.In case the consideration for the combination is paid by issuance of equity instruments, theaggregate nominal value of shares issued will be deemed as the share capital. Thedifference between the initial investment cost of long-term equity investments andaggregate nominal value of shares issued shall be adjusted to capital reserve (capitalpremium or share premium); in case the capital reserve (capital premium or share premium)is insufficient for the elimination, the surplus reserves and undistributed profits shall beused to dilute such expenses in order.
Intermediary fees (such as audit, legal services and valuation consultancy) and otherrelevant management fees incurred in the business combination by the acquirer are creditedin profit or loss in the period when they occurred. Trading expenses in direct relation to theissuance of equity instrument as the consideration for the combination is written down tothe capital reserve (share premium), where the capital reserve (share premium) isinsufficient, and to surplus reserves and undistributed profits in order. Trading expenses in
direct relation to the issuance of debt instrument as the consideration for the combination isincluded in the initial recognition amount of the debt instrument.For business combination under common control realized through several transactionsstep by step, in case of a package transaction, each transaction is accounted as onetransaction that has acquired the control; in case of not a package transaction, in thefinancial statement of parent company the capital reserve ( share premium) is adjusted bythe difference between the initial investment cost and the sum of the carrying value of theoriginal long-term equity investment and the book value of the new payment considerationfor further acquisition of shares with the share of acquirer's owner's equity on the date ofcombination in case calculated on the proportion of shareholding on the date ofcombination as its initial investment cost; where the capital reserve is insufficient, theretained earnings will be used to offset such expenses.
In the consolidated financial statements, the long-term equity investment held by thecombining party before the date of acquiring control of the combined parties, and relevantprofit and loss, the other comprehensive income and changes in the other owners' equityrecognized during the period between the later of the date of acquisition and the date whenthe combining and the combined parties are under the common control of the same partyand the date of combination, are written down to the retained earnings or profit or loss atthe beginning of the comparative reporting period, respectively.
(2) Business combinations not under common control
A business combination not under common control is a business combination in whichall of the combining entities are not ultimately controlled by the same party or parties bothbefore and after the combination. For business combination not under common control, theparty that obtains the control of the other parties involving in the business combination atthe combination date is the acquirer; other parties involving in the business combination arethe transferors. The combination date is the date on which the acquirer effectively obtainscontrol of the transferors.In business combination not under common control, the cost of combination shall bethe sum of the assets paid, obligations incurred or assumed and the fair value of the equitysecurities issued by the acquirer for obtaining control of the transferor at the date ofacquisition. Intermediary fees (such as audit, legal services and valuation consultancy) andother relevant management fees incurred by the acquirer for the purpose of businesscombination are credited in profit or loss in the period when they occurred. Transactionfees for the equity instruments or debt instruments issued by the acquirer as combinationconsideration is included in the initial recognition amount of such equity instruments ordebt instruments. Contingent consideration involved shall be recorded as the combinationcost based on its fair value on the acquisition date. Should any new or further evidencearise within 12 months after the acquisition date and makes it necessary to adjust thecontingent consideration on the acquisition date, the goodwill arising from the businesscombination shall be amended accordingly.
The cost of combination and identifiable net assets obtained by the acquirer in abusiness combination are measured at fair value on the acquisition date. Where the cost ofthe combination exceeds the acquirer's interest in the fair value of the transferor'sidentifiable net assets obtained on the acquisition date, the difference is recognized as
goodwill; where the cost of combination is lower than the acquirer's interest in the fairvalue of the transferor's identifiable net assets, the difference is initially recognized in profitor loss for the current year after a review of computation for the identifiable assets,liabilities or fair value of contingent liabilities and combination cost, and where thecombination cost is still lower than the acquirer's interest in the fair value of the identifiablenet assets of the transferor obtained during the course of combination, then the difference isrecorded in the profit and loss.In business combination not under common control that is realized in phases throughmultiple exchange transactions, in the Company individual financial statements, the sum ofthe book value of the equity investment of the transferor held before the date of acquisitionand the cost of new investment on the date of acquisition are recognized as the initialinvestment cost of such investment.
In the consolidated financial statement, the equity of the transferor held before the dateof acquisition is re-measured at the fair value on the date of acquisition, and the differencebetween the fair value and book value is included in current investment income; where theequity of the transferor held before the date of acquisition involves the other comprehensiveincome, such equity and relevant other comprehensive income are transferred to currentinvestment income on the date of acquisition, other than the other comprehensive incomethat cannot be reclassified in the profit or loss.The fair value on the acquisition date of equity interest in the transferor prior to theacquisition date and the fair value of the considerations paid for the acquisition of the newequity on the acquisition date are regarded as the combination costs of the Company,comparing with acquirer's share of the fair value on the acquisition date of the transferor'snet identifiable assets on the proportion of the shareholding on the acquisition date toconfirm the goodwill that required to be recognized on the acquisition date or the amountthat shall be included in the profit or loss.
6. Preparation method of consolidated financial statements
√ Applicable □ Not Applicable
(1) Scope of consolidated financial statements
The Company incorporated all of its subsidiaries (including the separate entitiescontrolled by the Company) into the scope of consolidation financial statements, includingthe enterprises under the Company's control, divisible part in the investees and structuredentities.
(2) To unify the accounting policies, balance sheets date and accounting periods of theCompany and subsidiaries
When preparing consolidated financial statements, adjustments are made if subsidiaries'accounting policies or accounting periods are different from that of the Company, inaccordance with the Company's accounting policies and accounting periods.
(3) Offset matters in the consolidated financial statements
The consolidated financial statements shall be prepared on the basis of the balancesheets of the Company and subsidiaries, which offset the internal transactions incurredbetween the Company and subsidiaries and among subsidiaries. The owner's equity of thesubsidiaries not attributable to the Company shall be presented as “minority interests”under the owner's equity item in the consolidated balance sheet.The long-term equity investment of the Company held by the subsidiaries, deemed astreasury stock of the corporate group as well as the reduction of owners' equity, shall bepresented as “Less: Treasury stock” under the owner's equity item in the consolidatedbalance sheet.
(4) Accounting treatment of subsidiaries acquired from combination
For subsidiaries acquired from business combination under common control, the assets,liabilities, operating results and cash flow of the subsidiaries are included in theconsolidated financial statements from the beginning of the period in which thecombination took place, as if the combination has taken since the ultimate controller beganits control. When preparing the consolidated financial statements, for the subsidiariesacquired from business combination not under common control, separate financialstatement will be adjusted on the basis of their fair values of the identifiable net assets onthe date of acquisition.
7. Classification of joint arrangement and accounting methods of joint
operations
√ Applicable □ Not Applicable
A joint arrangement refers to an arrangement jointly controlled by two or more parties.In accordance with the Company's rights and obligations under a joint arrangement, theCompany classifies joint arrangements into joint operations and joint ventures.
Joint operations refer to a joint arrangement in which the Company is a party and isentitled to relevant assets and obligations of this arrangement. The Company recognizes thefollowing items in relation to its interest in a joint operation, and accounts the same inaccordance with relevant accounting standards for business enterprises:
(1) recognize the assets held solely by the Company, and recognize assets held jointlyby the Company in appropriation to the share of the Company; (2) recognize theobligations assumed solely by the Company, and recognize obligations assumed jointly bythe Company in appropriation to the share of the Company; (3) recognize revenue fromdisposal of joint operations in appropriation to the share of the Company; (4) recognizerevenue from disposal of joint operations in appropriation to the share of the Company; (5)recognize fees solely occurred by the Company and recognize fees from joint operations inappropriation to the share of the Company.
When the Company, as a joint venture, invests or sells assets to or purchase assets (theassets do not constitute a business, the same below) from joint operations, the Companyshall only recognize the part of profit or lost from this transaction attributable to otherparties of joint operations before these assets are sold to a third party. In case of animpairment loss incurred on these assets which meets the requirements as set out in“Accounting Standards for Business Enterprises No. 8 – Asset Impairment”, the Company
shall full recognize the amount of this loss in relation to its investment in or sale of assets tojoint operations or recognize the loss according to the Company's share of commitment inrelation to its purchase of assets from joint operations.Joint ventures refer to a joint arrangement during which the Company only is entitledto net assets of this arrangement. Investment in joint venture is accounted for using theequity method according to the accounting policies referred to under “12 Long-term equityinvestment” of Note V.
8. Recognition standard for cash and cash equivalents
Cash recognized in the cash flow statements represents the cash on hand and depositsavailable for payment of the Company at any time.Cash equivalents recognized in the cash flow statements refer to short-term, highlyliquid investments held by the Company that are readily convertible to known amounts ofcash and which are subject to an insignificant risk on change in value.
9. Foreign currency businesses and translation of foreign currency statements
√ Applicable □ Not Applicable
(1) Foreign currency transactions
If foreign currency transactions occur, they are translated into the amount of functionalcurrency by applying the spot exchange rate at the transaction date.
Monetary items denominated in foreign currencies are translated into functionalcurrencies at the rates of exchange ruling at the balance sheet date. All foreign exchangedifference are credited in the profit or loss, except ①those arising from the fundsdenominated in foreign currency specially borrowed for the establishment of the qualifyingassets are treated based on the principal of capitalization of borrowing costs; ②thosearising from the other changes in the balance other than amortized cost of available-for-salemonetary items denominated in foreign currency are recognized in the other comprehensiveincome.
Non-monetary items in foreign currency measured at historical cost are translatedusing the spot exchange rate prevailing on the date when transaction occurred and itsfunctional currency shall remain unchanged. Non-monetary items denominated in foreigncurrencies that are measured at fair value are translated using the foreign exchange rate atthe date the fair value is determined; the exchange differences between the translated andoriginal amounts of functional currencies are recognized in the statement of profit or loss orother comprehensive income as changes in fair value (including changes in exchange rate).
(2) Translation of foreign currency financial statements
If the functional currencies used as the bookkeeping base currency by the subsidiaries,joint ventures and associates under the control of the Company are different from that ofthe Company, their financial statements denominated in foreign currencies shall betranslated to perform accounting and prepare the consolidated financial statements.
The assets and liabilities of the balance sheet are translated using the spot exchangerate at the balance sheet date; all items except for “undistributed profits” of the owner'sequity are translated at the spot exchange rate on the transaction date. The revenue andexpenses in the income statement are translated using the approximate rate of the spotexchange rate on the transaction date. Differences arising from the translation of foreigncurrency financial statements are presented as the “other comprehensive income” in theowner's equity of the balance sheet.
Foreign currency cash flow is translated using the approximate rate of the spotexchange rate on the transaction date. The impact of exchange rate changes on cash amountis reflected separately in the cash flow.When disposing overseas operations, converted difference in foreign currencystatements related to the overseas operation shall be transferred together or as thepercentage of disposing the overseas operation to profit or loss in the current period ofdisposal.
10. Financial instruments
√ Applicable □ Not Applicable
A financial instrument refers to any contract that gives rise to a financial asset of oneentity and a financial liability or equity instrument of another entity. A financial asset orfinancial liability is recognized when the Company becomes a party to the contract of afinancial instrument.
(1) Financial assets
1 Classification and measurement
According to the business model for managing financial assets and the contractual cashflow characteristics of financial assets, the Company classifies financial assets into: (1)Financial assets measured at amortized cost; (2) financial assets measured at fair valuethrough other comprehensive income; (3) financial assets measured at fair value throughprofit or loss of the current period.
Financial assets are measured at fair value upon initial recognition. For financial assetsmeasured at fair value through profit or loss of the current period, related transaction costsare directly included in profit and loss of the current period; for other types of financialassets, related transaction costs are included in their initial recognized amounts. For theaccounts receivable or bills receivable arising from the sale of products or the provision oflabor services that do not contain or consider the significant financing components, theCompany shall take the consideration amount entitled to be received as the initialrecognized amount.
a. Debt instrument
The debt instruments held by the Company refer to the tools that are in conformity withthe definition of financial liability from the perspective of the issuing party, which aremeasured in the following three ways, respectively:
(a) Measured at amortized cost:
The Company's business model for managing such financial assets is: with the aim ofobtaining contractual cash flow, the contractual cash flow characteristics of such financialassets shall be consistent with the basic lending arrangements, that is, the cash flowgenerated on a specific date is only the payment for the principal and the interest based onthe outstanding principal amount. For such financial assets, the Company recognizes theinterest income in accordance with the effective interest method. Such financial assetsmainly include cash and cash equivalents, bills receivable and accounts receivable, otherreceivables, creditor's right investment and long-term receivables. The Company lists thecreditor's rights investments and long-term receivables matured within one year (inclusive)from the balance sheet date as non-current assets matured within one year; the creditor'srights investments matured within one year (inclusive) when being obtained are listed asother current assets.
(b) Measured at fair value through other comprehensive income:
The Company's business mode for managing such financial assets is: with the aim ofobtaining contractual cash flow and selling the financial assets, the contractual cash flowcharacteristics of such financial assets shall be consistent with the basic lendingarrangements. Such financial assets are measured at fair value through other comprehensiveincome, but impairment gains and losses, exchange gains and losses, and interest incomecalculated by the effective interest method are included in profit and loss of the currentperiod. Such financial assets are listed as other creditor's rights investments. Othercreditor's rights investments matured within one year (inclusive) from the balance sheetdate are listed as non-current assets matured within one year; other creditor's rightsinvestments matured within one year (inclusive) when being obtained are listed as othercurrent assets.
(c) Measured at fair value through profit or loss of the current period:
The Company lists its held debt instruments that are neither measured at amortizedcost nor at fair value through other comprehensive income as financial assets held fortrading measured at fair value through profit or loss of the current period. At the time ofinitial recognition, in order to eliminate or significantly reduce accounting mismatch, theCompany designated some financial assets as financial assets measured at fair valuethrough profit or loss of the current period. Investments that are matured more than oneyear and are expected to be held for more than one year from the balance sheet date arelisted as other non-current financial assets.
b. Equity instruments
The Company lists equity instrument investments that have no control, joint controland significant influence on itself as financial assets held for trading measured at fair valuethrough profit or loss of the current period; investments that are expected to be held formore than one year from the balance sheet date are listed as other non-current financialassets.
In addition, the Company designated some non-trading equity instrument investmentsas financial assets measured at fair value through other comprehensive income, which arelisted as other equity instrument investments. The relevant dividends and interest income of
such financial assets are included in profit and loss of the current period.
②Impairment
For financial assets measured at amortized cost and debt instrument investmentsmeasured at fair value through other comprehensive income, contract assets and financialguarantee contracts, the Company recognizes the loss provision based on the expectedcredit losses.
The Company considers reasonable and reliable information about past events, currentconditions and forecasts of future economic conditions, and takes the risk of default as aweight, and calculates the probability-weighted amount of the present value of thedifference between the cash flow receivable and the cash flow expected to be received ofthe contract to confirm the expected credit losses.
On each balance sheet date, the Company measures the expected credit losses offinancial instruments in different phases. If the credit risk has not increased significantlysince the initial recognition, the financial instruments are in the first phase. The Companymeasures the loss provision according to the expected credit losses in the next 12 months; ifcredit risk has increased significantly but credit impairment has not yet occurred since theinitial recognition, the financial instruments are in the second phase. The Companymeasures the loss provision according to the expected credit losses of the instrumentsduring the entire duration; if credit impairment has occurred since the initial recognition,the financial instruments are in the third phase. The Company measures the loss provisionaccording to the expected credit losses of the instruments during the entire duration.
For financial instruments with lower credit risk on the balance sheet date, theCompany measures the loss provision according to the expected credit losses in the next 12months, assuming that its credit risk has not increased significantly since the initialrecognition.
For financial instruments in the first phase and second phase and financial instrumentswith relatively lower credit risk, the Company calculates interest income based on theirbook balance before the deduction of impairment provisions and effective interest rate. Forfinancial instruments in the third phase, the Company calculates interest income based ontheir amortized cost after the impairment provision has been deducted from the bookbalance and effective interest rate.
For bills receivable, accounts receivable and contractual assets, whether there existsignificant financing components, the Company measures loss provision based on expectedcredit loss over the entire duration.
The Company classifies accounts receivable into groups on the basis of shared creditrisk characteristics, and calculates the expected credit losses on groups, the bases of groupdetermination are as follows:
For each group of bills receivable, the Company applies exposure at default andexpected credit losses rate over the entire duration to calculate the expected credit losses onthe historical credit losses experience, the existing conditions and forecast of futureeconomic conditions.
For each group of accounts receivable, the Company makes the comparison ofexpected credit losses rates of accounts receivable in overdue days and over the entireduration to calculate the expected credit losses by taking into account the historical creditlosses experience, the existing conditions and forecast of future economic conditions.For each group of other accounts receivable, the Company applies exposure at defaultand expected credit losses rate within the next 12 months or over the entire duration tocalculate the expected credit losses by taking into account the historical credit lossesexperience, the existing conditions and forecast of future economic conditions.
The Company recognizes the loss impairment provision or reversed in profit or loss ofthe current period. For held debt instruments at fair value through other comprehensiveincome, the Company recognizes loss/gain on impairment in profit or loss of the currentperiod, and adjusts other comprehensive income at the same time.
③ Derecognition
A financial asset is derecognized when any of the below criteria is met: a. thecontractual rights to receive the cash flow from the financial asset have been terminated; b.the financial asset has been transferred and the Company transfers substantially all the risksand rewards of ownership of the financial asset to the transferee; c. the financial asset hasbeen transferred and the Company has not retained control of the financial asset, althoughthe Company neither transfers nor retains substantially all the risks and rewards ofownership of the financial asset.
On de-recognition of other equity instruments investment, the difference between thebook balance and the sum of the consideration received and any cumulative profit or loss offair value that had been recognized in other comprehensive income is recognized in theretained earnings. On de-recognition of other financial assets, the difference between thebook balance and the sum of the consideration received and any cumulative profit or loss offair value that had been recognized in other comprehensive income is recognized in theprofit and loss of the current period.
(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at amortized costand financial liabilities at fair value through profit or loss of the current period at initialrecognition.
The financial liabilities of the Company are financial liabilities measured at amortizedcost, including bills payable, accounts payable, other payables, borrowings, bonds payable,etc. Such financial liabilities are recognized initially at fair value less transaction costs andsubsequently measured using the effective interest method. Financial liabilities with amaturity of less than one year (inclusive) are listed as current liabilities: those with maturityof more than one year but are mature within one year from the balance sheet date (inclusive)are listed as non-current liabilities due within one year; the rest are presented as non-currentliabilities.
When all or partial current obligations of financial liabilities have been discharged,such financial liabilities or the part with obligations discharged are derecognized by theCompany. The difference between the carrying amount of a financial liability de-
recognized and the consideration paid is recognized in the profit and loss of the currentperiod.
(3) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determinedat the quoted price in the active market. The fair value of a financial instrument that is nottraded in an active market is determined by using a valuation technique. During thevaluation, the Company adopts an applicable valuation technique under current conditionsand there are enough available data and other information to support. Those inputs shouldbe consistent with the inputs a market participant would use when trading the asset orliability, and the Company should maximize the use of relevant observable inputs. Whenrelated observable inputs can't be acquired or are not feasible to be acquired, then useunobservable inputs.
(4) Significant accounting estimates and judgments
①Significant accounting estimates and key assumptions
Measurement of expected credit loss
The Company applies exposure at default and expected credit loss rate to calculateexpected credit loss, and determines expected credit loss rate based on probability ofdefault and loss given default. For the determination of expected credit loss rate, theCompany applies data including internal historical credit losses experience, and adjustshistorical data taking account current conditions and forward-looking information.Regarding forward-looking information, indicators used by the Company include economicdownturn risk, growth in expected unemployment rate, changes in external marketenvironment, technology environment and customer status. The Company monitors andreviews assumptions related to the calculation of expected credit loss on a regular basis. Nomajor change occurred in the above-mentioned estimate techniques and key assumptions inthis year.2 Critical judgments on application of accounting policiesa. Classification of financial assets
On classification of financial assets, critical judgments considered by the Companyinclude the business mode, an analysis of contractual cash flow characteristics and others.
From the dimension of financial asset portfolio, the Company determines the businessmode of financial asset management. Considerations cover assessments, reporting methodsof financial asset performance to key management personnel, risks impacting financialasset performance and relevant management methods, as well as methods of relevantbusiness management personnel receiving remuneration.
In assessing the consistency between contractual cash flow of financial assets and thebasic lending arrangements, the Company makes the following major judgments: whetherthe time distribution or amount of the principal changes during the duration of the financialassets due to prepayment, etc.; and whether the interest includes considerations for thecurrency time value, credit risk, as well as other basic borrowing risks, costs and profits.
For example, whether the prepayment amount merely reflects the principal unpaid andinterest incurred by the principal unpaid, as well as reasonable compensation paid due topremature termination of contracts.
b. Judgment that credit risk increases significantlyThe main standards for the Company to judge significant increase in credit risk arethat overdue days are more than 30 days, or that significant changes occur in one or moreof the following indicators: business environment of debtors, internal and external creditrating, the significant change of actual or expected business performance, value ofcollaterals or significant drop in credit rating of guarantors.
The main standards for the Company to judge incurred credit impairment are thatoverdue days are more than 90 days (i.e. default occurred), or that one or more of thefollowing conditions are met: a debtor is under significant financial difficulty; otherongoing debt restructuring or high possibility of bankruptcy.
11. Inventories
√ Applicable □ Not Applicable
(1) Classification of inventories
Inventories refer to the finished goods or commodities held for sale in daily activities,goods in progress in the production process, consumed materials and supplies in theproduction process or providing services of the Company, which mainly include rawmaterials, revolving materials, entrusted processed materials, wrap page, goods in progress,self-made semi-finished goods, finished goods (merchandise inventory) and engineeringconstruction, etc.
(2) Measurement of inventories transferred out
At delivery, inventories are accounted using the weighted average method.
(3) Provision for inventory impairment
At balance sheet date, inventories are measured at the lower of cost or net realizablevalue.
The net realizable value of inventories (including finished products, merchandize andmaterials for sale) that can be sold directly is determined based on the estimated sellingprice of such inventory deducted by the estimated selling expenses and relevant taxes. Thenet realizable value of materials held for production is determined based on the estimatedselling price of the finished product deducted by the estimated cost to be incurred uponcompletion, estimated selling expenses and relevant taxes. The net realizable value ofinventory held for performance of sales contract or labor service contract is determinedbased on the contractual price; in case the amount of inventory held by the enterpriseexceeds the contractual amount, the net realizable value of the excess portion of inventoryis calculated based on the general selling price.
Provision for impairment of inventories is made for individual inventory. For items of
inventories that is produced and marketed in the same geographical area and with thesame or similar end uses or purposes, which cannot be practicable evaluated separatelyfrom other items, cost and net realizable value of inventories may be determined on anaggregate basis. For large quantity and low value items of inventories, cost and netrealizable value of inventories may be determined on types of inventories.Provision for inventory impairment is made and recognized as profit or loss when thecost is higher than the net realizable value on the balance sheet date. If the factors that giverise to the provision in prior years are not in effect in current year, provision would bereversed within the amount of provision for inventory impairment originally recognized,and the reversed amount shall be recognized in the profit or loss.
(4) Inventory system
The Company adopts perpetual inventory system.
(5) Amortization of low-value consumables and packaging
Low-value consumables and packages of the Company are amortized by one-timewrite-off.
12. Long-term equity investments
√ Applicable □ Not Applicable
Long-term equity investments in this section refer to equity investments held by theCompany that give it control, joint control or significant influence over the investee. Long-term equity investments where the Company does not exercise control, joint control orsignificant influence over the investee are accounted for as other equity instrumentinvestments.
(1) Recognition of initial cost of investment
①For long-term equity investment obtained from business consolidation undercommon control, the initial cost is measured at the combining party's share of the carryingamount of the equity of the combined party; for a long-term equity investment obtainedfrom business consolidation not under common control, the initial cost is the consolidationcost at the date of acquisition;
②For the long-term equity investment acquired in a manner other than businesscombination: the initial investment cost of the long-term equity investment acquired bypayment in cash shall be the purchase price actually paid; the initial investment cost of thelong-term equity investment acquired by issuing equity securities shall be the fair value ofthe equity securities issued; for long-term equity investment acquired by debt restructuring,the initial investment cost shall be determined in accordance with the relevant requirementsunder Accounting Standards for Enterprises No. 12 - Debt Restructuring; for long-termequity investment acquired by the exchange of non-monetary assets, the initial investmentcost shall be determined in accordance with relevant requirements under the Rules.
(2) Subsequent measurement and profit or loss recognition
①Cost method
Where the investor has a control over the investee, long-term equity investments aremeasured using cost method. For long-term equity investments using cost method, unlessincreasing or recovering the investment, the carrying value is generally unchanged. Theprofit distributions or cash dividends declared by the investee attributable to the Companyare recognized as investment income.
②Equity method
Investor's long-term equity investments in associates and joint ventures are measuredusing equity method. Where part of the equity investments of an investor in its associatesare held indirectly through venture investment institutions, common fund, trust companiesor other similar entities including investment linked insurance funds, such part of equityinvestments indirectly held by the investor shall be measured at fair value through profit orloss according to relevant requirements of Accounting Standards for Business EnterprisesNo.22—Recognition and measurement of Financial Instruments regardless whether theabove entities have significant influence on such part of equity investments, while theremaining part shall be measured using equity method.
Under the equity method, where the initial investment cost of a long-term equityinvestment exceeds the Company's share of the fair value of the investee's identifiable netassets at the time of acquisition, no adjustment is made to the initial investment cost. Wherethe initial investment cost is less than the Company's share of the fair value of the investee'sidentifiable net assets at the time of acquisition, the difference is recognized in profit or lossfor the period, and the cost of the long-term equity investment is adjusted accordingly.
For long-term equity investments accounted for using the equity method, theCompany recognizes the investment income and other comprehensive income according toits share of net profit or loss and other comprehensive income of the investee, and thecarrying amount of the long-term equity investments shall be adjusted accordingly; thecarrying amount of the investment is reduced by the Company's share of the profitdistribution or cash dividends declared by an investee; for changes in owner's equity of theinvestee other than those arising from its net profit or loss, other comprehensive incomeand profit distribution, the carrying amount of the long-term equity investment shall beadjusted and recognized to capital reserve. When recognizing attributable share of the netprofit and losses of the investee, the net profit of the investee shall be recognized afteradjustment on the ground of the fair value of all identifiable assets of the investee when itobtains the investment. If the accounting policies and accounting periods adopted by theinvestee are different from those adopted by the Company, an adjustment shall be made tothe financial statements of the investee in accordance with the accounting policies andaccounting periods of the Company and recognize the investment incomes and othercomprehensive income.
The Company's share of net losses of the investee shall be recognized to the extentthat the carrying amount of the long-term equity investment together with any long-terminterests that in substance form part of the investor's net investment in the investee arereduced to zero. If the Company has to assume additional obligations, the estimatedobligation assumed shall be provided for and charged to the profit or loss as investment lossfor the period. Where the investee is making net profits in subsequent periods, the
Company shall resume recognizing its share of profits after setting off against the share ofunrecognized losses.
(3) Change of the accounting methods for long-term equity investments
① Change of measurement at fair value to accounting under equity method: where theequity investment originally held have no control, joint control or significant impact on theinvestee, and that are accounted according to the Standards for Recognition andMeasurement of Financial Instruments and can impose common control or place significantimpact on the investee due to addition of investment which resulted in the increase ofshareholding, the investee shall take the fair value of the equity investment originally helddetermined in accordance with the Standards for Recognition and Measurement ofFinancial Instruments plus the fair value of the consideration payable for new investment asthe initial investment cost accounted after the equity method is adopted.
② Change of measurement at fair value or accounting under equity method to costmethod: the equity investment originally held by the investor with no control, joint controlor significant impact on the investee and accounted according to the Standards forRecognition and Measurement of Financial Instruments, or the long-term equity investmentoriginally held in associates or joint ventures that can impose control over the investee dueto addition of investment, shall be accounted as long-term equity investment formed bycombination of relevant enterprises.
③ Change of accounting under equity method to measurement at fair value: for thelong-term equity investment originally held with common control or significant impact onthe investee that can no longer impose common control or significant impact on theinvestee due to a decrease of shareholding as a result of factors such as partial disposal, theremaining equity investment shall be accounted in accordance with Standards forRecognition and Measurement of Financial Instruments, and the difference between the fairvalue on the date when the common control or significant impact no longer exists and thebook value is included in profit or loss.
④ Change of cost method to equity method or measured at fair value: For loss ofcontrol in the invested company due to reasons such as partial disposal of equity investment,in the preparation of separate financial statements, the residual equity which can applycommon control or impose significant influence to the invested company after disposalshall be accounted for under equity method. Such residual equity shall be treated asaccounting for under equity method since the equity is obtained and adjusted. For residualequity which cannot apply common control or impose significant influence after disposal, itshall be accounted for in accordance with relevant requirements of “Accounting Standardsfor Business Enterprises No. 22 – Recognition and Measurement of Financial Instrument”,and the difference between the fair value and the carrying value of residual equity on thedate loss of control shall be included in the profit or loss for such period. In the preparationof combined financial statements, it shall be accounted for in accordance with relevantrequirements of “Accounting Standards for Business Enterprises No. 33 – CombinedFinancial Statements”.
(4) Basis of conclusion for common control and significant impact over the investee
①Joint control over an investee means that activities which have a significant impact
on the return of a certain arrangement could be decided only by mutual consent of theinvesting parties sharing the right of control, which includes the sales and purchase ofgoods or services, management of financial assets, acquisition and disposal of assets,research and development activities and financing activities, etc.
②Significant impact on the investee exists when the investing parties hold more than20% but less than 50% of the shares with voting rights in the investee or, if the investingparties hold less than 20% shares in the investee, they:
1) have representatives in the board of directors or similar governing body of theinvestee;
2) participate in the investee's policy formulation;
3) assign management personnel to the investee;
4) provide technology or technical information that the investor is dependent on;
5) have major transactions with the investee.
(5) methods of impairment test and provision for impairment
At the balance sheet date, the Company reviews whether there are signs for theimpairment of long-term equity investments. If yes, the recoverable amount is determinedthrough impairment test and provision for impairment is made based on the differencebetween the recoverable amount and the carrying value. Impairment loss will not bereversed in subsequent accounting periods once provision is made for it.
The recoverable amount is the higher of net fair value of long-term equity investmentson disposal and the present value of estimated future cash flow.
(6) Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the considerationsactually received and the carrying value of the disposed investment is recognized in currentprofit or loss. For long-term equity investment accounted for using the equity method, thepart previously recognized in other comprehensive income is accounted on pro rata basisupon disposal in the same way as the relevant assets or liabilities are disposed of directly bythe investee.
13. Investment properties
Investment properties of the Company include leased land use rights and leasedbuildings.
An investment property is initially measured at cost, and cost method is adopted forsubsequent measurement.
The buildings leased out of investment properties of the Company are depreciated overtheir useful lives using the straight-line method. The specific measurement policy is thesame as that of fixed assets. For land use rights leased out of investment properties or held
for resale after appreciation in value, they are amortized using the straight-line method. Thespecific measurement policy is the same as that of intangible assets.
At the balance sheet date, the Company reviews whether there are signs for impairmentof investment properties. If yes, the recoverable amount is recognized through animpairment test and provision for impairment is made based on the difference between thecarrying value and the recoverable amount. Impairment loss will not be reversed insubsequent accounting periods once provision is made for it.
14. Fixed assets
(1). Recognition criteria
√ Applicable □ Not Applicable
Fixed assets are tangible assets that are held for production of goods, provision oflabor services, leasing or operation and management purposes, and have a useful life ofmore than one fiscal year, which are recognized when the following conditions are met:
1 economic benefits in relation to the fixed assets are very likely to flow into theenterprise;2 the cost of the fixed assets can be measured reliably.
(2). Depreciation method
√ Applicable □ Not Applicable
The fixed assets of the Company can be divided into: houses and buildings, productionequipment, transportation equipment, office equipment, etc. The straight-line method overuseful lives is used to measure depreciation. The useful lives and the expected net residualvalue of fixed assets are determined according to the nature and usage of various fixedassets. At the end of each year, the useful lives, expected net residual value anddepreciation method of fixed assets are reviewed, and adjusted if there is variance withoriginal estimates. The Company has made provisions for all the fixed assets except for thefixed assets that have been fully depreciated and still in use.
| Type | Depreciation life (year) | Residual ratio |
| Land ownership | - | - |
| Houses and buildings | 8-40 years | 0%-5% |
| Machinery equipment | 4-20 years | 0%-5% |
| Transportation equipment | 5-10 years | 0%-5% |
| Office equipment and others | 3-10 years | 0%-5% |
At the balance sheet date, the Company reviews whether there are signs for impairmentof the fixed assets. If yes, the recoverable amount is recognized through an impairment testand provision for impairment is made based on the difference between the carrying valueand the recoverable amount. Impairment loss will not be reversed in subsequent accountingperiods once provision is made for it.
(4). Disposal of fixed assets
When fixed assets are disposed of or are expected to fail to generate economic benefitsafter the use or disposal, the fixed assets shall be derecognized. The difference of theincome from sales, transfer, retirement or damage of fixed assets deducting the book valueand related taxes should be included in the current profit and loss.
15. Construction in progress
√ Applicable □ Not Applicable
(1) Measurement of construction in progress
Costs of construction in progress are recognised based on actual construction expense,including various necessary construction expenses incurred during construction, borrowingcosts to be capitalised before reaching estimated usable status and other relevant fees.
(2) Standard and timing of transfer from construction in progress to fixed assets
The construction in progress of the Company is transferred to fixed assets when theproject is completed and ready for its intended use, which shall satisfy one of the followingconditions:
①The construction of the fixed assets (including installation) has been completed orsubstantially completed;
②The fixed asset has been used for trial production or operation and it is evidenced thatthe asset can operate ordinarily or steadily produce qualified products; or the result of trialoperation proves that it can operate normally or be opened for business;
③Further expenditure incurred for construction of the fixed asset is very minimal orremote;
④The constructed fixed asset reaches or almost reaches the design or contractualrequirements, or complies with the design or contractual requirements.
(3) Method of test and provision for impairment of impairment of construction inprogress
At the balance sheet date, the Company reviews the construction in progress to checkwhether there is any sign of impairment. If yes, the recoverable amount is recognizedthrough an impairment test and provision for impairment is made based on the differencebetween the carrying value and the recoverable amount. Impairment loss will not bereversed in subsequent accounting periods once provision is made for it.
The recoverable amount of construction in progress should base on the higher of netfair value of asset less disposal expense and the present value of estimated future cash flowof the asset.
16. Borrowing costs
√ Applicable □ Not Applicable
(1) Recognition principles for capitalization of borrowing costs
The Company's borrowing costs that are directly attributable to the acquisition,construction or production of a qualifying asset are capitalized into the cost of relevantassets. Other borrowing costs are recognized as expenses in current profit or loss based onthe amount incurred. Qualifying assets for capitalization include fixed assets, investmentproperties and inventories that necessarily take a substantial period of time for acquisition,construction or production to get ready for their intended use or for sale.
(2) Computation of capitalized amount
Period of capitalization refers to the period from the commencement to the cessationof capitalization timing of borrowing costs, excluding the periods in which capitalization ofborrowing costs is suspended.
Period of suspended capitalization: Capitalization of borrowing costs is suspendedduring periods in which the acquisition, construction or production of a qualifying asset issuspended abnormally and the suspension lasts for more than 3 months.Computation of capitalized amount: ①Specific borrowings will be determined based onthe actual interest expense incurred in the current period of the special borrowings less theinterest income from unutilized borrowings deposited in banks or investment income fromtemporary investment; ②Normal borrowings utilized are calculated based on the weightedaverage of the asset expenses accumulated exceeding the asset expenses of the portion ofspecial borrowings multiplied by the capitalization ratio of the normal borrowings utilized.Capitalization ratio is calculated based on weighted average interest rate of normalborrowings; ③For borrowings with discount or premium, the discount or premium whichshould be amortized in each accounting period is determined based on the effective interestrate method and an adjustment should be made to the amount of interests in each period.
17. Right-of-use assets
√ Applicable □ Not Applicable
Right-of-use assets are the right of the Company as a lessee to use leased assets duringthe lease term. On the commencement date of the lease term, the Company as lessee shallrecognize the right-of-use assets and lease liabilities for the lease, except for short-termleases and low value assets leases which are treated with practical expedient. Thecommencement date of the lease term refers to the start date when the lessor provides theleased assets to make it available to the lessee.The Company’s right-of-use assets shall be initially measured at the costs. The costsinclude:
(1) initial measurement amount of the lease liability;
(2) a lease payment paid on or before the date of commencement of the lease period,where there was lease incentive, such incentives shall be deducted;
(3) initial direct costs incurred by the Company as lessee;
(4) costs expected to be incurred by the Company for demolition and removal of leasedassets, restoration of the premises where the leased assets are located, or restoration ofthe leased assets to the conditions of the lease terms.The Company refers to the relevant depreciation provisions of Accounting Standardsfor Business Enterprises No. 4-Fixed Assets to accrue depreciation for right-of-use assets. Ifthe Company can reasonably determine that the ownership of the leased asset can beacquired at the expiration of the lease term, the leased asset shall be depreciated within itsremaining useful life. If the Company cannot reasonably determine that the ownership ofthe leased asset can be acquired at the expiration of the lease term, the leased asset shall bedepreciated within the lease term or its remaining useful life (whichever is shorter).The Company determines whether the right-of-use assets are impaired in accordancewith the provisions of Accounting Standards for Business Enterprises No. 8 – AssetImpairment and performs accounting treatment on the identified impairment losses.
When the lease liabilities are remeasured in accordance with the Standards, theCompany adjusts the book value of the right-of-use assets accordingly. If the book value ofthe right-of-use assets is reduced to zero, but needs a further reduction in the measurementof the lease liabilities, the Company recognizes any remaining amount of theremeasurement in current profit or loss.If the lease change results in a narrower lease or a shorter lease term, the Companyreduces the book value of the right-of-use assets accordingly and recognizes the relatedgains or losses of the partially terminated or completely terminated leases into current profitand loss. For other lease changes which result in the remeasurement of lease liabilities, theCompany adjusts the book value of the right-of-use assets accordingly.
18. Intangible assets
Intangible assets are the identifiable non-monetary assets which have no physical formand are possessed or controlled by the Company.
(1). Valuation method, service life and impairment test
√ Applicable □ Not Applicable
Intangible assets of the Company are initially recognized at costs. The actual costs ofpurchased intangible assets include the consideration and relevant expenses actually paid.For intangible assets contributed by investors, relevant actual costs are determined based onthe value agreed in the investment contract or agreement. But if the value agreed in theinvestment contract or agreement is not a fair value, the actual costs should be determinedbased on the fair value. The cost of a self-developed intangible asset is the total expenditureincurred in bringing the asset to its intended use.
Subsequent measurement of intangible assets of the Company: ①Intangible assetswith finite useful lives are amortized on a straight-line basis; their useful lives andamortization methods are reviewed at the end of each year, and adjusted accordingly ifthere is any variance with the previous estimates; ②Intangible assets with indefinite usefullives are not amortized and their useful lives are reviewed at the end of each year. If there isan objective evidence that the useful life of an intangible asset is finite, an estimationshould be made on the useful life and the intangible asset should be amortized using thestraight-line method.
(2). Criterion of determining indefinite useful life
The useful life of an intangible asset is indefinite if the period in which the assetbrings economic benefits for the Company is unforeseeable, or the useful life could not beascertained.
Criterion of determining indefinite useful lives: ① the period is derived fromcontractual rights or other legal rights and there are no explicit years of use stipulated in thecontract or laws and regulations; ② the period in which the intangible assets generatebenefits for the Company still could not be estimated after considering the industrialpractice or relevant expert opinions.
At the end of each year, the useful lives of the intangible assets with indefinite usefullives are reviewed. The assessment is primarily reviewed by relevant departments that usethe intangible assets, using the down-to-top approach, to determine if there are changes tothe determination basis of indefinite useful lives.
(3). Methods of test and provision for impairment of intangible assets
At the balance sheet date, the Company reviews intangible assets to check whetherthere is any sign of impairment. If yes, the recoverable amount is recognized through animpairment test and provision for impairment is made based on the difference between thecarrying value and the recoverable amount. Impairment loss will not be reversed insubsequent accounting periods once provision is made for it.
The recoverable amount of intangible assets should be based on the higher of the netfair value of the assets less the disposal expense and the present value of estimated futurecash flow of the assets.
(4). Basis for research and development phases for internal research anddevelopment project and basis for capitalization of expenditure incurred indevelopment stage
√ Applicable □ Not Applicable
As for an internal research and development project, expenditure incurred in theresearch stage is recognized in the profit or loss as incurred. Expenses incurred in thedevelopment stage are recognized as intangible assets if all of the following conditions aremet: ①the technical feasibility of completing the intangible assets so that they will beavailable for use or for sale; ②the intention to complete the intangible assets for use or for
sale; ③ how the intangible assets will generate economic benefits, including there isevidence that the products produced by the intangible assets has a market or the intangibleassets themselves have a market; if the intangible assets are for internal use, there isevidence that there exists usage for the intangible assets; ④ the availability of adequatetechnical, financial and other resources to complete the development and gain the ability touse or sell the intangible assets; ⑤ the capability to reliably measure the expendituresattributable to the development stage of the intangible assets.Specific standards for distinguishing research stage and development stage of aninternal research and development project: research stage refers to the stage of plannedinvestigation and search for obtaining new technology and knowledge, which featuresplanning and exploration; before commercial production or other uses, the stage ofapplying the research achievements and other knowledge in a plan or design to producenew or substantially improved materials, equipment and products is regarded asdevelopment stage, which features pertinence and is very likely to form results.All the expenditures incurred on research and development which cannot bedistinguished between research stage and development stage are recognized in the profit orloss.
19. Impairment of long-term assets
√ Applicable □ Not Applicable
Long-term equity investment, investment properties measured based on cost model,fixed assets, construction in progress, intangible assets and other long-term assets are testedfor impairment if there is any sign of impairment at the balance sheet date. If the result ofthe impairment test indicates that the recoverable amount of the assets is less than thecarrying amount, a provision for impairment will be made based on the difference and willbe recorded in impairment loss. The recoverable amount is the higher of the net fair valueof the assets less the disposal expense and the present value of estimated future cash flowof the assets. Provision for asset impairment is calculated and recognized on the individualasset basis. If it is not possible to estimate the recoverable amount of an individual asset,the recoverable amount of the asset group to which the asset belongs is determined. Anasset group is the smallest asset portfolio that can generate cash inflows independently.Goodwill is tested for impairment at least at the end of each year.In terms of impairment test of the goodwill of the Company, the carrying amount ofthe goodwill, arising from business combination, shall be allocated to the related assetgroups on reasonable basis since the acquisition date, or to the related asset group portfoliosif it is difficult to be allocated to the related asset groups. When the carrying amount of thegoodwill is allocated to the related asset groups or asset group portfolios, it shall beallocated in the proportion of the fair value of each asset group or asset group portfolioagainst the total fair value of related asset groups or asset group portfolios. If it is difficultto measure the fair value reliably, it shall be allocated in the proportion of the carryingamount of each asset group or asset group portfolio against the total carrying amount ofrelated asset groups or asset group portfolios.When impairment test is made to the related asset groups or asset group portfolios
including goodwill, if there is a sign that the related asset groups or asset group portfoliosare prone to impair, the Company shall first conduct impairment test on the asset groups orasset group portfolios excluding goodwill, calculate the recoverable amount and recognizethe corresponding impairment loss by comparing with its carrying amount. The Companyshall then conduct impairment test on the asset groups or asset group portfolios includinggoodwill and compare the carrying amount (including the carrying amount of allocatedgoodwill) of related asset groups or asset group portfolios with the recoverable amountthereof. Impairment loss on goodwill shall be recognized when the recoverable amount ofthe related asset groups or asset group portfolios is lower than the carrying amount thereof.
Once the above impairment loss on assets is recognized, it shall not be reversed in anysubsequent accounting period.
20. Long-term prepaid expense
√ Applicable □ Not Applicable
Long-term prepaid expenses of the Company are expenditures which have incurred butthe benefit period of which is more than one year (exclusive). They are amortized byinstallments over the benefit period based on each item under the expenses. If items underthe long-term pre-paid expenses are no longer beneficial to the subsequent accountingperiods, the amortized value of such unamortized items is then fully transferred to the profitor loss.
21. Staff's remuneration
(1). Accounting treatment of short-term remuneration
√ Applicable □ Not Applicable
Staff's remunerations are all forms of compensation and other relevant expendituregiven by the Company in exchange for services rendered by employees, including short-term remunerations, post-employment benefits, termination benefits and other long-termbenefits.
Short-term remunerations include short-term salaries, bonus, allowance, subsidies,employee welfare, housing provident fund, labor union fee and education fee, medicalinsurance premiums, work-related injury insurance premiums, maternity insurancepremiums, short-term compensated leave, short-term profit-sharing plans, etc. During theaccounting period when employees render services, short-term remunerations that actuallyincurred shall be recognized as liabilities and credited into the current profit or loss or thecost of relevant assets on an accrual basis by the benefit objects.
(2). Accounting treatment of post-employment benefits
√ Applicable □ Not Applicable
Post-employment benefits mainly include the basic pension insurance, enterpriseannuity, etc., In accordance with the risks and obligations undertaken by the Company, the
post-employment benefits are classified as defined contribution plans and defined benefitplans. Defined contribution plans: the Company shall recognize the sinking funds paid onthe balance sheet date to individual entities in exchange for services from employees in theaccounting period as liabilities, and shall credit such funds into the profit or loss or the costof relevant assets in accordance with the benefit objects. Defined benefit plans: the cost forproviding benefits is determined using the expected cumulative welfare unit method, withactuarial valuations being carried out by independent actuary at the interim and annualbalance sheet date. The costs for staff’s remunerations incurred by the defined benefit plansof the Group are categorized as follows: (1) service cost, including current period servicecost, past service cost and settlement profit or loss. Specifically, current period service costmeans the increase of the present value of defined benefit obligations resulted from thecurrent period services offered by employees. Past service cost means the increase ordecrease of the present value of defined benefit obligations resulted from the revision of thedefined benefit plans related to the prior period services offered by employees; (2) interestexpenses of defined benefit plans; (3) changes caused by the remeasurement of liabilitiesfor defined benefit plans. Unless other accounting standards require or permit the credit ofthe costs for employee welfare into the cost of assets, the Company will credit (1) and (2)above into the profit or loss; and recognize (3) above as other comprehensive income andwill not transfer it back to the profit or loss in subsequent accounting periods.
(3). Accounting treatment of termination benefits
√ Applicable □ Not Applicable
Termination benefits: The indemnity proposal provided by the Company for employeesfor the purpose of terminating labor relations with employees before expiry of the laborcontracts or encouraging employees to accept downsizing voluntarily. When the followingconditions are met, the Company will recognize and credit into the profit or loss theaccrued liabilities arising from the indemnity as a result of terminating labor relations withthe employees: the Company has made a formal plan for termination of labor relations orhas made an offer for voluntary redundancy which will be implemented immediately; andthe Company could not unilaterally withdraw the plan for termination of labor relations orthe redundancy offer. Early retirement plans for employees will be handled in the principlethe same as the termination benefits above. The Company will credit the salaries and socialinsurance premiums to be paid to the early retirees during the period from the date of earlyretirement to the normal retirement date to the profit or loss when recognition conditionsfor estimated liabilities are met.
(4). Accounting treatment of other long-term employee benefits
□ Applicable √ Not Applicable
22. Lease liabilities
√ Applicable □ Not Applicable
On the commencement date of the lease term, the Company as the lessee shallrecognize the right-of-use assets and lease liabilities for the lease. The Company’s leaseliabilities are initially measured at the present value of the lease payment that has not beenpaid on the commencement date of the lease term.
When calculating the present value of the lease payment, the Company adopts interestrate implicit in lease as discount rate; if it is impossible to determine the interest rateimplicit in lease, the incremental borrowing rate of the Company (i.e. lessee) shall beadopted as the discount rate.The interest rate implicit in lease refers to the interest rate that makes the sum of thepresent value of the lessor’s lease receivable amount and the present value of theunguaranteed residual value equal to the sum of the fair value of the leased asset and theinitial direct cost of the lessor. The lessee’s incremental borrowing rate refers to the interestrate that the lessee is required to pay for borrowing funds under similar mortgageconditions in a similar economic environment in order to obtain assets close to the value ofthe right-of-use assets during a similar period.The Company shall calculate the interest expenses of lease liabilities over the lease termat the fixed periodic interest rate, and include it into current profit or loss or assets cost.
After the commencement date of the lease term, where the assessment results of therenewal of the option, the termination of the lease option and the purchase option havechanged, the Company re-determines the lease payment and re-measures the leaseliabilities in accordance with the present value of the lease payment after changes and therevised discount rate.
After the commencement date of the lease term, in the event that the future leasepayment changes due to a change in expected payment under a guaranteed remaining valueor changes in an index or rate used in determining the lease payments, the Company shallre-measure lease liabilities based on present value of the lease payment after changes. Insuch cases, the discount rate adopted by the Company shall remain unchanged; however, ifthe change in lease payment results from a change in floating interest rates, the Companyshall use a revised discount rate.
23. Estimated liability
√ Applicable □ Not Applicable
(1) Criterion for determining of estimated liability
If an obligation in relation to contingencies such as external guarantees, discounting ofcommercial acceptance bills, pending litigation or arbitration and product quality assurance is thepresent obligation of the Company and the performance of such obligation is likely to lead to anoutflow of economic interests and its amount can be reliably measured, such obligation shall berecognized as an estimated liability.
(2) Measurement of estimated liability
The estimated liability shall be initially measured according to the best estimate of thenecessary expenses for the performance of the present obligation. If there is a continuous range forthe necessary expenses and if all the outcomes within this range are equally likely to occur, the bestestimate shall be determined according to the middle estimate within the range.; if there are two ormore items involved, the best estimate should be determined according to all possible outcomes andrelevant probabilities.
At the balance sheet date, the carrying value of estimated liabilities should be reviewed. If
there is objective evidence that the carrying value could not reflect in the current best estimate, thecarrying value shall be adjusted to reflect the current best estimate.
24. Share-based payments
√ Applicable □ Not Applicable
For equity-settled share-based payment transaction in return for services from employees, itshall be measured at the fair value of equity instruments granted to the employees at the grant date.For the payment of such fair value that may only be exercised if services are fulfilled during thevesting period or the specified performance condition is achieved, the amount of such fair valueshall, based on the best estimate of the number of exercisable equity instruments during the vestingperiod, be recognized in relevant costs or expenses in straight-line method with the increase in thecapital reserve accordingly.The cash-settled share-based payment shall be measured at the fair value of liability assumedby the Company, which is determined based on the shares or other equity instruments. For the cash-settled share-based payment that may be exercised immediately after the grant, the fair value of theliability assumed by the Company shall, on the date of the grant, be recognized in relevant costs orexpenses and the liabilities shall be increased accordingly. For cash-settled share-based paymentthat may be exercised if services are fulfilled during the vesting period or the specified performancecondition is achieved, on each balance sheet date within the vesting period, the services acquired inthe current period shall, based on the best estimate of exercise, be recognized in relevant costs orexpenses at the fair value of the liability assumed by the Company, and the liabilities shall beadjusted correspondingly.At each balanced sheet date and the settlement date prior to the settlement of liabilities, the fairvalue of the liability is re-measured with its change consolidated in profit/loss.When there are changes to the Company's share-based payment plans, if the modificationincreases the fair value of the equity instruments granted, corresponding recognition of serviceincrease in accordance with the increase in the fair value of the equity instruments; if themodification increases the number of equity instruments granted, the increase in fair value of theequity instruments is recognized as a corresponding increase in service achieved. Increase in the fairvalue of equity instruments refer to the difference between the fair values of the equity instrumenton the modified date before or after the modification. If the Company modifies the vestingconditions in such manner conductive to the employees, including the shortening of the vestingperiod, change or cancellation of the performance conditions (rather than market conditions), theCompany shall consider the modified vesting conditions upon the disposal of vesting conditions. Ifthe modification reduces the total fair value of shares paid or the Company uses other methods notconductive to employees to modify the terms and conditions of share-based payment plans, it willcontinue to be accounted for the services obtained in the accounting treatment, as if the change hadnot occurred, unless the Company cancelled some or all of the equity instruments granted.During the vesting period, if the Company cancel equity instruments granted which will betreated as accelerating the exercise of rights and any amount to be charged over the remainingvesting period should be recognized immediately in the profit or loss, while at the same timerecognize the capital reserve. Employees or other parties can choose to meet non-vesting conditions,but for those that are not met in the vesting period, the Company will treat it as cancellation ofequity instruments granted.
25. Revenue
√ Applicable □ Not Applicable
Revenue is the total inflow of economic benefits formed by the Company and itssubsidiaries during day-to-day operations which might lead to increase of shareholders'equity and be irrelevant to capital invested by shareholders.The Company and its subsidiaries performed performance obligations stated in thecontract, i.e., recognized revenue when the client obtains the control right of relevant goodsor services.Where the contract includes two or more performance obligations, during the startingdate of the contract, the Company and its subsidiaries allocate transaction price to varioussingle performance obligation in accordance with the relevant proportion of separate sellingprice of goods or services promised by various single performance obligation, and measurerevenue in accordance with transaction price allocated to various single performanceobligation.Transaction price is the amount of consideration that the Company and its subsidiariesare expected to be entitled to collect due to transfer of goods and services transferred to theclient, excluding the amount collected for any third party. The transaction price recognizedby the Company and its subsidiaries does not exceed the amount of recognized revenuewhen relevant uncertainties are eliminated and might not incur material carrying back. Theamount that is expected to be returned to the client is taken as liability of returned goodsand is not recorded in transaction price.When one of the following conditions is met, the Company and its subsidiaries performperformance obligations during a certain time horizon, otherwise, it belongs to fulfillingperformance obligations at a certain time point:
① The client simultaneously obtains and consumes economic benefits as the Companyand its subsidiaries perform the contract;
② The client is able to control goods under construction during the process ofperformance of the Company and its subsidiaries;
③ Goods produced by the Company and its subsidiaries during the process ofperformance have no alternative use, and the Company and its subsidiaries areentitled to collect the amount for the cumulative completed and performed portionto date during the entire contractual period.
For the performance obligations performed during a certain time horizon, the Companyand its subsidiaries recognize revenue in accordance with the schedule of performanceduring such time horizon. When the schedule of performance can't be reasonablyrecognized, where the costs that have been incurred by the Company and its subsidiariesare estimated to be compensated, revenue shall be recognized in accordance with theamount of costs that has been incurred until the schedule of performance can be reasonablyconfirmed.
For performance obligations performed at a certain time point, the Company and itssubsidiaries recognize revenue at the time point when the client obtains the control right ofrelevant goods or services. When judging whether the client has obtained control right overgoods or services, the Company and its subsidiaries will consider the following signs:
① The Company and its subsidiaries enjoy the right of instant collection over such
goods and services;
② The Company and its subsidiaries have transferred the material objects of such
goods to the client;
③ The Company and its subsidiaries have transferred statutory ownership right of thegoods or major risks and rewards of the ownership to the client;
④ The client has accepted such goods or service.
The right that the Company and its subsidiaries are entitled to collect the considerationfor having transferred goods or services to the client (and such right depends on otherfactors other than time lapse) is presented as contractual asset, and contractual asset isprovisioned impairment on the basis of expected credit losses. The right owned by andunconditionally collected from the client by the Company and its subsidiaries (only dependon time lapse) shall be presented as accounts receivable. Obligations that the Company andits subsidiaries have collected or shall collect consideration from the client and shalltransfer goods or services to the client are presented as contractual obligations.Specific accounting policies relating to major activities that the Company and itssubsidiaries obtain revenue are described as follows:
(1) Sale of goods
Generally, contracts for sale of goods between the Company and its clients only includeperformance obligation of transferring the whole machine of home appliance. Generally, onthe basis of taking into account the following factors comprehensively, the Companyrecognizes the revenue at the time point of transfer of control right of goods: the right ofinstant collection for obtaining goods, transfer of major risks and rewards on ownership ofgoods, transfer of statutory ownership of goods, transfer of assets of material objects ofgoods, the client's acceptance of such goods.
(2) Construction contract income
Construction contract between the Company and the client generally includesperformance obligations of construction and installation of commercial air-conditioner andsmart home, because the client is able to control goods under construction during theCompany's performance process, the Company takes them as performance obligationsperformed during a certain time horizon, and recognizes revenue in accordance with theschedule of performance, and it is an exemption when the schedule of performance can't bereasonably confirmed. The Company confirms the schedule of performance of servicesprovided in accordance with the input method. When the schedule of performance can't bereasonably confirmed, where the costs that have been incurred by the Company areestimated to be compensated, the revenue will be recognized in accordance with theamount of costs that has been incurred until the schedule of performance can be reasonablyconfirmed.
(3) Warranty obligations
According to contractual agreement and regulations of laws, the Company providesquality assurance for goods sold and project constructed. For guarantee-type qualityassurance in order to ensure the client that goods sold comply with existing standards, theCompany conducts accounting treatment in accordance with estimated liabilities. Forservice-type quality assurance in order to ensure the client that we also provide a separateservice other than that the goods sold comply with existing standards, the Company takes itas a separate performance obligation, and allocates partial transaction price to service-typequality assurance in accordance with the relevant proportion of separate selling price ofgoods and service-type quality assurance, and recognizes revenue when the client obtainscontrol right over services. When assessing whether quality assurance provides a separateservice other than ensuring the client that the goods sold comply with existing standards,the Company shall consider factors such as whether such quality assurance is understatutory requirements or industrial practices, the term of quality assurance and the natureof the Company's commitment to perform the tasks.
26. Government grants
√ Applicable □ Not Applicable
(1) Types of government grants
Government grants refer to the gratuitous monetary assets or non-monetary assetsobtained by the Company from the government, excluding the capital invested by thegovernment as an owner. The government grants are mainly divided into asset-relatedgovernment grants and revenue-related government grants.
(2) Accounting treatment of government grants
Asset-related government grants shall be recognized as deferred income in currentprofit or loss on an even basis over the useful life of relevant assets; government grantsmeasured at nominal amount shall be recognized directly in current profit or loss. Revenue-related government grants shall be treated as follows: ①those used to compensate relevantexpenses or losses to be incurred by the enterprise in subsequent periods are recognized asdeferred income and recorded in current profit or loss when such expenses are recognized;
②those used to compensate relevant expenses or losses that have been incurred by theenterprise are recorded directly in current profit or loss.
(3) Basis for determination of asset-related government grant and revenue-related
government grant
If the government grant received by the Company is used for purchase, construction orother project that forms a long-term asset, it is recognized as asset-related government grant.
If the government grant received by the Company is not asset-related, it is recognizedas revenue-related government grant.
Government grant received without clear objective shall be classified as asset-relatedgovernment grant or revenue-related government grant by:
①Government grant subject to a certain project shall be separated according to theproportion of expenditure budget and capitalization budget, and the proportion shall bereviewed and modified if necessary on each balance sheet date;
②Government grant shall be categorized as revenue-related if its usage is described ingeneral statement and no specific project is specified in the relevant government document.
(4) Amortization method and determination of amortization period of deferred revenue
related to government grants
Asset-related government grant received by the Company is recognized as deferredrevenue and is evenly amortized to the profit or loss in the current period over the estimateduseful life of the relevant asset starting from the date when the asset is available for use.
(5) Recognition of government grants
Government grant measured at the amounts receivable is recognized at the end of theperiod when there is clear evidence that the relevant conditions set out in the financialsubsidy policies and regulations are fulfilled and the receipt of such financial subsidy isassured.
Other government grants other than those measured at the account receivable isrecognized upon actual receipt of such subsidies.
27. Deferred income tax assets/ deferred income tax liabilities
√ Applicable □ Not Applicable
Deferred income tax assets and deferred income tax liabilities of the Company arerecognized:
(1) Based on the difference between the carrying amount and the tax base amount of anasset or a liability (items not recognized as assets and liabilities but their tax base isascertained by the tax laws and regulations, the tax base is the difference), deferred incometax asset or deferred income tax liability is calculated using the applicable tax rateprevailing at the expected time of recovering the asset or discharging the liability.
(2) Deferred income tax asset is recognized to the extent that there is enough taxableincome for the deduction of the deductible temporary difference. At the balance sheet date,if there is sufficient evidence that there will be enough taxable income in the future for thededuction of the deductible temporary difference, the deferred income tax asset notrecognized in previous accounting period is recognized. If there is no sufficient evidencethat there will be enough taxable income in the future for the deduction of the deferredincome tax asset, the carrying value of the deferred income tax asset is reduced.
(3) Deferred income tax liability is recognized for taxable temporary difference arisingfrom investments in subsidiaries and associated companies, unless the Company couldcontrol the time of reversal of the temporary differences and the temporary differenceswould not be probably reversed in the foreseeable future. For deductible temporarydifferences arising from investments in subsidiaries and associated companies, deferredincome tax asset is recognized if the temporary difference will be very probably reversed in
the foreseeable future and it is highly probable that taxable income will be available in thefuture to deduct the deductible temporary difference.
(4) No deferred income tax liability is recognized for a temporary difference arisingfrom the initial recognition of goodwill. No deferred income tax asset or deferred incometax liability is recognized for the temporary differences resulting from the initialrecognition of assets or liabilities due to a transaction other than a business combination,which affects neither accounting profit nor taxable income (or deductible loss). At thebalance sheet date, deferred income tax assets and deferred income tax liabilities aremeasured at the tax rates that apply to the period when the asset is expected to be recoveredor the liability is expected to be settled.
28. Other significant accounting policies and accounting estimations
√ Applicable □ Not Applicable
(1) Asset securitization business
Some of the Company's receivables are securitized. The Company's underlying assetsare trusted to a special purpose entity which issues securities to investors. The Companyserves as the asset service supplier, providing services including asset maintenance and itsdaily management, formulation of the annual asset disposal plan, formulation andimplementation of the asset disposal plan, signing relevant asset disposal agreements andperiodic preparation of asset service report.
The Company has evaluated the extent to which it transfers the risks and rewards ofassets to other entities and the extent it exercises control over such entities while applyingthe accounting policy in respect of securitization of financial assets:
①The financial asset is derecognized when the Company transfers substantially all therisks and rewards of ownership of the financial asset;
②Recognition of the financial asset is continued when the Company retainssubstantially all the risks and rewards of ownership of the financial asset;
③When the Company neither transfers nor retains substantially all the risks andrewards of ownership of the financial asset, the Company evaluates whether it retainscontrol over the financial asset. If the Company does not retain control, it derecognizes thefinancial asset and recognizes separately as assets or liabilities any rights and obligationscreated or retained in the transfer. If the Company retains control, it continues to recognizethe financial asset to the extent of its continuing involvement in the financial asset.
(2) Hedge accounting
Hedge refers to risk management activities that enterprises designate financialinstruments as hedge instruments in order to manage risk exposure caused by specific riskssuch as foreign exchange risk, interest rate risk, price risk and credit risk, allowing toexpect changes in fair value or cash flow of hedge instruments to offset all or partialchanges in fair value or cash flow of hedged items.
Hedged items refer to items which make enterprises face risks of changes in fair valueor cash flow and are designated as hedged objects and can be reliably measured.A hedging instrument is a financial instrument designated by an enterprise for thepurpose of hedging, whose fair value or cash flow changes are expected to offset thechange in the fair value or cash flow of the hedged items.The Company continuously conducts assessment over whether hedge relationshipcomplies with requirements of hedge effectiveness on the starting date of hedge and duringfollow-on period. Hedge effectiveness refers to the extent that changes in fair value or cashflow of hedge instruments can offset that of hedged items caused by the risks of beinghedged. The portion that the changes in fair value or cash flow of hedge instruments isgreater or less than that of hedged items is the ineffective portion of hedge.
(3) Explanations on significant accounting estimates
Judgments, estimates and assumptions shall be made to book value of the financialstatements items, which could not be measured accurately, due to the inherent uncertaintiesof operating activities, while applying accounting policy. Such judgments, estimates andassumptions were based on the management's historical experience and made after othervarious factors are considered. These judgments, estimates and assumptions will influencethe amount of revenues, expenses, assets and liabilities presented in financial reports andthe disclosure of contingent liabilities on the balance sheet date. However, the actual resultscaused by the uncertainties of these estimations may be different from the current estimatesof the management, and thus cause a material adjustment to the carrying amounts of assetsand liabilities affected in the future. The judgments, estimates and assumptions mentionedabove shall be reviewed on a going concern basis. If the revisions to accounting estimatesonly affect the current period, the amount affected shall be recognized in the current period;if the revisions affect both the current and future periods, the amount affected shall berecognized in both the current and future periods.
On the balance sheet date, the Company needs to have judgments, estimates andassumptions about the following items on the financial statements:
① Estimated liabilities
Provision for product quality guarantee, expected contract losses, and other estimatesshall be made in accordance with the terms of contracts, current knowledge and historicalexperience. If the contingent event has formed a present obligation the performance ofwhich is very probable to result in outflow of economic benefits from the Company, anestimated liability shall be recognized by the Company on the basis of the best estimate ofthe expenditures to settle relevant present obligation. Recognition and measurement of theestimated liability significantly rely to a great extent on the management's judgments. In theprocess of judgment, the Company takes into consideration the assessment of relevant risks,uncertainties, time value of money and other factors related to the contingent events.Among them, the Company will undertake estimated liabilities with respect to the after-sales services provided for the return, maintenance and installation of goods. Whenestimating liabilities, the Company has considered the empirical data on maintenance inrecent years, but the previous maintenance experiences may fail to reflect the future
circumstances. Any increase or decrease in this provision is likely to affect the profits andlosses of the next year.
② Provision of expected credit losses
The Company calculates the expected credit losses in accordance with breach riskexposure and expected credit loss rate, and confirms expected credit loss rate on the basisof breach possibilities and breach loss rate. When confirming expected credit loss rate, theCompany uses data such as internal historical credit loss experiences, and conductsadjustments over historical data in combination with current status and forward-lookinginformation. When considering forward-looking information, indexes used by the Companyinclude risks such as economic downturn, growth of expected unemployment rate, changesin external market environment, technological environment and client conditions. TheCompany regularly monitors and reviews relevant assumptions relating to calculation ofexpected credit losses. The aforesaid estimation techniques and key assumptions have notchanged substantially in this year.
③Impairment provision of inventories
Inventories are measured by lower of cost and net realizable value according to theaccounting policies of inventories; for inventories whose costs are higher than the netrealizable value or those obsolete and unsalable, the impairment provision of inventoriesshall be made. The carrying value of inventory shall be written down to the net realizablevalue on the basis of the evaluation of the salability of inventories and the net realizablevalue thereof. Authenticating inventory impairment requires the management's obtaining ofsolid evidence, and their judgments and estimations made after considering the purpose ofholding inventories and the effect of events after the balanced sheet date and etc. Thedifference between the actual outcome and the previously estimated outcome will influencethe carrying value of inventories and the provision or reversal of impairment provision ofinventories during the period when the estimates are changed.
④Fair value of financial instruments
For financial instruments where there is no active market, the Company will determinetheir fair value through a variety of valuation methods. Such valuation methods includediscounted cash flow analysis. In the valuation, the Company shall estimate the future cashflow, credit risk, market volatility and correlation, and select the appropriate discount rate.Such related assumptions are uncertain, and their changes may affect the fair value offinancial instruments.
⑤Impairment of investment in other equity instruments
The Company largely relies on judgments and assumptions of the management whendetermining whether investments of other equity instruments are impaired to determinewhether it is needed to recognize their impairment. During the process of conductingjudgments or making assumptions, the Company shall assess the extent and duration periodthat the fair value of such investments is below the cost, as well as financial conditions andshort-term business prospects of the invested objects, including industry conditions,technological reform, credit rating, breach rate and risks of counterparties.
⑥Provision of long-term assets impairment
As at the balance sheet date, the Company shall judge whether there is any possibleindication of impairment against non-current assets other than financial assets. Theintangible assets with indefinite useful life must be tested for impairment on an annualbasis as well as when there is any indication of impairment. Other non-current assets otherthan financial assets shall be tested for impairment when there is an indication showing thatthe carrying value is not recoverable. Impairment occurs while the carrying value of anasset or asset group is higher than the recoverable value, which is the higher of the net offair value less disposal expenses and the present value of expected future cash flow. Thenet of fair value less disposal expenses is determined with reference to the price in the saleagreement regarding analogous asset in fair transactions or the observable market price lessthe increase of cost that is directly attributable to the disposal of assets. Significantjudgments regarding the output, sales price, relevant operating costs of the assets (or assetsgroup) and the discount rate used to calculate the present value shall be made whenestimating the present value of future cash flow. Recoverable amount shall be estimated bythe Company using all accessible relevant information, including predictions made on theoutput, sales price, and relevant operating costs based on reasonable and supportiveassumptions. The Company shall test for goodwill impairment at least every year. Thisrequires the Company to estimate the present value of future cash flow for such assetsgroups or asset group portfolios allocated with goodwill. When estimating the present valueof future cash flow, the Company shall not only estimate the future cash flow generated bysuch asset groups or asset group portfolios, but also select the appropriate discount rate todetermine the present value of such future cash flow.
⑦Depreciation and amortization
Investment properties, fixed assets and intangible assets are depreciated and amortizedby the Company with a straight-line approach over their useful life by taking intoconsideration the residual value. Useful life shall be periodically reviewed by the Companyto determine the amount of depreciation and amortization expenses for each reportingperiod and be determined on the basis of historical experience regarding analogous assetsand the expected technological updates. Significant changes to previous accountingestimates will result in adjustments against depreciation and amortization expenses in thefuture periods.
⑧Deferred income tax assets
Deferred income tax asset is recognized by the Company for all the uncompensated taxlosses to the extent that there is sufficient taxable profit for the deduction of loss. In orderto determine the amount of deferred income tax assets, the management of the Companyneeds to predict the timing and the amount of taxable profits in the future by makingabundant judgments, as well as through the strategy of tax planning.
⑨Income tax
In the ordinary course of business of the Company, the ultimate tax treatment andcalculations of some transactions are uncertain. Whether some items could be presentedbefore taxation shall be approved by relevant tax authorities. Where there are differences
between the final tax outcome of these items and the initial estimated amount, suchdifferences will impact the current and deferred tax in the period of final confirmation.⑩Provisions for sales rebatesThe Company and its subsidiaries adopt the policy of sales rebates for consumers.According to the relevant conventions in the sales agreement, the review of specifictransactions, the market situation, the pipeline inventory levels and the historicalexperiences, the Company and its subsidiaries estimate and accrue sales rebate on a regularbasis with reference to the completion of agreed assessment indexes by customers. Accrualof sales rebate involves the judgment and estimates of the management. In case of anysignificant changes in the previous estimates, the difference above will have an impact onthe sales rebate during the period when relevant changes in estimates occur.
29. Changes in the significant accounting policies and accounting estimates
(1). Changes in the significant accounting policies
□ Applicable √ Not Applicable
(2). Changes in the significant accounting estimates
□ Applicable √ Not Applicable
VI. Taxation
1. Main tax categories and rates
Main tax categories and rates
√ Applicable □ Not Applicable
| Tax categories | Basis of taxation | Tax rate |
| Value-added tax | Taxable revenue from sales of goods or rendering services | 6%, 9%, 13% |
| City maintenance and construction tax | Circulation Taxes payable | 7% |
| Enterprise income tax | Taxable income | Statutory tax rate or preferential rates as follows |
| (Local) education surcharge | Circulation Taxes payable | 1%, 2%, 3% |
Companies subjected to preferential tax:
| Name of company | Tax rate | Preferential tax |
| Qingdao Haier Refrigerator Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Special Refrigerator Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Dishwasher Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Special Freezer Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Intelligent Home Appliance Technology Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Wuhan Haier Electronics Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Wuhan Haier Freezer Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Hefei Haier Refrigerator Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Hefei Haier Air-conditioning Co., Limited | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Zhengzhou Haier Air-conditioning Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Shenyang Haier Refrigerator Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Air-Conditioner Electronics Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Meier Plastic Powder Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Hai Gao Design and Manufacture Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Hairi Hi-Tech Model Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Intelligent Technology Development Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Foshan Haier Freezer Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Central Air Conditioning Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Air Conditioner Gen Corp., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Haier U+smart Intelligent Technology (Beijing) Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Beijing Zero Micro Technology Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Hefei Haier Washing Machine Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Washing Machine Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Jiaonan Haier Washing Machine Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Foshan Shunde Haier Electric Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Tianjin Haier Washing Appliance Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Economic and Technological Development Zone Haier Water Heater Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Wuhan Haier Water Heater Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Foshan Drum Washing Machine Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Strauss Water Equipment Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Lejia Electric Appliance Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier New Energy Electric Appliance Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Washing Appliance Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Ririshun Lexin Cloud Technology Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Hefei Haier Drum Washing Machine Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Electronic Plastic Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Wei Xi Intelligent Technology Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Special Refrigerating Appliance Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Smart Kitchen Appliance Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Hefei Haier Air-conditioning Co., Limited | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Beijing Lingli Technology Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Hairuijiejing Electronics Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Shanghai Haier Medical Technology Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Yunshang Yuyi IOT Technology Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Haier (Shanghai) Home Appliance Research and Development Center Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Haier (Shenzhen) R&D Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Ririshun Lejia IOT Technology Co., Ltd. | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Smart Electrical Equipment Limited | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haier Technology Co., Ltd. | 10% | entitled to half deduction the preferential taxation policies as a key software enterprise |
| Wuhan Haier Energy and Power Co., Ltd. | 10% | entitled to the preferential policies as a small/micro enterprise |
| Dalian Free Trade Zone Haier Refrigerator Trading Co., Ltd. | 5% | entitled to the preferential policies as a small/micro enterprise |
| Qingdao Haimeihui Management Consulting Co., Ltd. | 5% | entitled to the preferential policies as a small/micro enterprise |
| GE Appliance (Shanghai) Co., Ltd. | 10% | entitled to the preferential policies as a small/micro enterprise |
| Shanghai Haier Zhongzhi Fang Chuang Ke Management Co., Ltd. | 5% | entitled to the preferential policies as a small/micro enterprise |
| Guangdong Heilong Intelligent Technology Co. Ltd | 15% | entitled to the preferential taxation policies as a hi-tech enterprise |
| Qingdao Haichuangyuan Appliances Sales Co.,Ltd. | 5% | entitled to the preferential policies as a small/micro enterprise |
| Dalian Haier Precision Products Co., Ltd. | 5% | entitled to the preferential policies as a small/micro enterprise |
| Chongqing Haier Electronics Sales Co., Ltd. and some Western branches | 15% | entitled to the preferential taxation policies under the Western Development initiative of the PRC |
| Chongqing Xin Ri Ri Shun Electric Sales Co., Ltd. And some Western branches | 15% | entitled to the preferential taxation policies under the Western Development initiative of the PRC |
| Chongqing Haier Air-conditioning Co., Ltd. | 15% | entitled to the preferential taxation policies under the Western Development initiative of the PRC |
| Chongqing Haier Refrigeration Appliance Co., Ltd. | 15% | entitled to the preferential taxation policies under the Western Development initiative of the PRC |
| Guizhou Haier Electronics Co., Ltd. | 15% | entitled to the preferential taxation policies under the Western Development initiative of the PRC |
| Chongqing Haier Washing Machine Co., Ltd | 15% | entitled to the preferential taxation policies under the Western Development initiative of the PRC |
| Chongqing Haier Water Heater Co., Ltd | 15% | entitled to the preferential taxation policies under the Western Development initiative of |
| the PRC | ||
| Chongqing Haier Drum Washing Machine Co., Ltd | 15% | entitled to the preferential taxation policies under the Western Development initiative of the PRC |
VII. Explanatory Notes for Items in Consolidated Financial Statements
Unless otherwise specified, the following closing balance refers to the amount as of 30June 2021. The opening balance refers to the amount as of 31 December 2020. The amountfor the current period refers to the amount in the period from 1 January to 30 June 2021.The amount of the previous period refers to the amount of the period from 1 January to 30June 2020.
1. Monetary funds
√ Applicable □ Not Applicable
Unit and Currency: RMB
| Items | Closing balance | Opening balance |
| Cash on hand | 6,532,547.04 | 2,257,666.98 |
| Deposit in bank | 40,349,002,059.65 | 45,306,078,417.59 |
| Other monetary funds | 1,488,242,948.87 | 1,152,993,342.34 |
| Total | 41,843,777,555.56 | 46,461,329,426.91 |
| Including: Total amount deposit overseas | 8,084,129,776.52 | 10,409,047,820.91 |
| Items | Closing balance | Opening balance |
| Forward foreign exchange contracts | 128,322,958.47 | 105,446,693.00 |
| Short-term wealth management products | 1,892,664,884.11 | 1,862,036,322.21 |
| Investment fund | 144,100,920.94 | 113,759,845.57 |
| Investment in other equity instruments | 83,828,024.73 | 83,949,637.05 |
| Total | 2,248,916,788.25 | 2,165,192,497.83 |
| Items | Closing balance | Opening balance |
| Forward foreign exchange trading contracts | 97,152,699.86 | 52,194,232.55 |
| Forward commodity contracts | 24,822,927.92 | 25,644,774.08 |
| Total | 121,975,627.78 | 77,839,006.63 |
| Items | Closing balance | Opening balance |
| Bank acceptance notes | 11,337,058,569.30 | 3,091,631,183.91 |
| Commercially acceptance notes | 580,548,154.36 | 11,056,075,267.03 |
| Balance of bills receivable | 11,917,606,723.66 | 14,147,706,450.94 |
| Allowance for bad debts | 11,200,000.00 | 11,356,696.60 |
| Bills receivable, net | 11,906,406,723.66 | 14,136,349,754.34 |
| Items | Opening balance | Increase for the current period | Decrease for the current period | Closing balance | ||
| Provision | Other increases | Reversal | Write-off/ other movement | |||
| Allowance for bad debts | 11,356,696.60 | 156,696.60 | 11,200,000.00 | |||
| Total | 11,356,696.60 | 156,696.60 | 11,200,000.00 | |||
| Aging | Closing balance | Opening balance |
| Within one year | 20,145,187,600.50 | 15,866,291,515.38 |
| 1-2 years | 337,924,237.89 | 229,618,450.58 |
| 2-3 years | 87,350,762.57 | 91,669,887.74 |
| Over 3 years | 87,446,223.64 | 184,125,877.54 |
| Accounts receivable, balance | 20,657,908,824.60 | 16,371,705,731.24 |
| Allowance for bad debts | 456,301,553.92 | 441,681,444.57 |
| Accounts receivable, net | 20,201,607,270.68 | 15,930,024,286.67 |
| Items | Opening balance | Increase for the period | Decrease for the period | Closing balance | ||
| Provision | Other increases | Reversal | Write-off/ other movement | |||
| Allowance for bad debts | 441,681,444.57 | 65,025,925.57 | 31,902,930.37 | 18,502,885.85 | 456,301,553.92 | |
| Aging | Closing balance | Opening balance |
| Within one year | 759,749,397.45 | 697,975,595.05 |
| 1-2 years | 68,479,410.00 | 30,590,250.54 |
| 2-3 years | 5,570,050.82 | 4,580,733.23 |
| Over 3 years | 33,199,124.13 | 32,280,992.88 |
| Total | 866,997,982.40 | 765,427,571.70 |
The amount of the top 5 in the prepayments at the end of the period totalsRMB213,229,609.97, which accounts for 24.59% of the prepayment balance.
7. Other receivables
√ Applicable □ Not Applicable
Unit and Currency: RMB
| Items | Closing balance | Opening balance |
| Interest receivable | 284,404,268.03 | 322,473,254.91 |
| Dividend receivable | 4,915,409.42 | |
| Other receivables | 1,981,416,940.25 | 1,389,764,281.32 |
| Total | 2,265,821,208.28 | 1,717,152,945.65 |
| Aging | Closing balance | Opening balance |
| Within one year | 117,728,640.37 | 230,234,039.92 |
| 1-2 years | 155,916,288.92 | 82,575,210.18 |
| 2-3 years | 10,759,338.74 | 8,925,141.80 |
| Over 3 years | 738,863.01 | |
| Total | 284,404,268.03 | 322,473,254.91 |
| Aging | Closing balance | Opening balance |
| Within one year | 4,915,409.42 | |
| 1-2 years | ||
| 2-3 years | ||
| Over 3 years | ||
| Total | 4,915,409.42 |
Other receivables1 Other receivables are disclosed by aging as follows:
| Aging | Closing balance | Opening balance |
| Within one year | 1,527,145,718.43 | 931,454,573.77 |
| 1-2 years | 395,365,575.42 | 417,514,929.49 |
| 2-3 years | 51,140,489.59 | 61,251,809.96 |
| Over 3 years | 110,567,512.77 | 75,201,513.32 |
| Other receivables balance | 2,084,219,296.21 | 1,485,422,826.54 |
| Allowance for bad debts | 102,802,355.96 | 95,658,545.22 |
| Other receivables, net | 1,981,416,940.25 | 1,389,764,281.32 |
| Items | Opening balance | Increase for the period | Decrease for the period | Closing balance | ||
| Provision | Other Increases | Reversal | Write-off/ other movement | |||
| Allowance for bad debts | 95,658,545.22 | 18,177,127.87 | 372,297.18 | 7,112,003.26 | 4,293,611.05 | 102,802,355.96 |
| Items | Closing balance | Opening balance | ||
| Book value balance | Impairment provision | Book value balance | Impairment provision | |
| Raw material | 3,576,352,139.27 | 132,707,777.25 | 2,785,611,125.08 | 115,958,355.70 |
| Work in progress | 506,624,364.38 | 336,866,878.61 | ||
| Finished goods | 30,418,238,442.94 | 860,317,044.29 | 27,613,569,305.90 | 1,173,115,549.14 |
| Total | 34,501,214,946.59 | 993,024,821.54 | 30,736,047,309.59 | 1,289,073,904.84 |
| Items | Opening balance | Increase for the period | Decrease for the period | Closing balance | ||
| Provision | Other Increases | Reversal | Write-off/ other movement | |||
| Raw material | 115,958,355.70 | 27,865,439.05 | 101,787.20 | 11,014,230.30 | 132,707,777.25 | |
| Work in progress | ||||||
| Finished goods | 1,173,115,549.14 | 443,011,285.81 | 68,008,501.34 | 687,801,289.32 | 860,317,044.29 | |
| Total | 1,289,073,904.84 | 470,876,724.86 | 68,110,288.54 | 698,815,519.62 | 993,024,821.54 | |
| Items | Closing balance | Opening balance | ||
| Book value balance | Impairment Provision | Book value balance | Impairment Provision | |
| Relating to construction service contract | 242,265,937.64 | 263,412,927.58 | ||
| Total | 242,265,937.64 | 263,412,927.58 | ||
| Items | Closing balance | Opening balance | ||
| Book value balance | Impairment provision | Book value balance | Impairment provision | |
| Bank deposit for financial products | 408,970,053.06 | 554,131,037.76 | ||
| Taxes to be deducted | 2,096,871,492.75 | 2,826,836.58 | 2,438,982,829.14 | 2,907,303.98 |
| Return cost receivable | 431,529,485.61 | 228,948,507.82 | 418,107,603.27 | 242,502,616.01 |
| Others | 219,479,566.33 | 118,077,350.40 | ||
| Total | 3,156,850,597.75 | 231,775,344.40 | 3,529,298,820.57 | 245,409,919.99 |
| Items | Opening balance | Increase for the period | Decrease for the period | Closing balance | ||
| Provision | Other Increases | Reversal | Write-off / other movement | |||
| Deductible input tax | 2,907,303.98 | 78,683.50 | 1,783.90 | 2,826,836.58 | ||
| Return cost receivables | 242,502,616.01 | 228,948,507.82 | 242,502,616.01 | 228,948,507.82 | ||
| Total | 245,409,919.99 | 228,948,507.82 | 78,683.50 | 242,504,399.91 | 231,775,344.40 | |
11. Long-term equity investments
√ Applicable □ Not Applicable
| Investees | Opening balance | Increase/decrease for the period | ||||
| Investment increase | Investment profit recognized under equity method | Adjustment in other comprehensive income | Other changes in equity | Declaration of cash dividends or profits | ||
| Associate: | ||||||
| Haier Group Finance Co., Ltd. | 6,526,237,270.67 | 332,052,043.26 | 31,058,064.07 | -126,000,000.00 | ||
| Bank of Qingdao Co., Ltd. | 2,463,096,567.92 | 146,198,194.52 | 29,444,672.12 | -66,019,246.02 | ||
| Wolong Electric (Jinan) Motor Co., Ltd. | 143,847,870.70 | 13,441,218.96 | ||||
| Qingdao Hegang New Material Technology Co., Ltd. | 297,154,935.85 | 10,980,513.03 | ||||
| Qingdao Haier SAIF Smart Home Industry Investment Center (Limited Partnership) | 385,797,036.73 | 11,710,187.89 | -17,819,777.76 | |||
| Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Co., Ltd. | 654,581,961.84 | 39,355,157.03 | ||||
| Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. | 415,298,165.93 | 6,163,986.57 | -25,074,310.40 | |||
| Qingdao Haier multimedia Co., Ltd. | 328,987,205.07 | -50,160,853.64 | ||||
| Qingdao Haier Moulds Co., Ltd. | 259,696,084.44 | 7,878,022.92 | ||||
| Hefei Feier Smart Technology Co., Ltd. | 1,491,024.72 | 1,659,252.99 | ||||
| Anhui Kunhe Intelligent Technology Co., Ltd.* | 3,000,000.00 | |||||
| Zhejiang Futeng Fluid Technology Co., Ltd.* | 70,000,000.00 | |||||
| Beijing Mr. Hi Network Technology Company Limited | 7,507,759.75 | |||||
| Beijing Xiaobei Technology Co., Ltd. | 2,687,341.82 | |||||
| Beijing ASU Tech Co., Ltd. | 32,365,969.45 | -10,478,677.95 | ||||
| Shenzhen Genyuan Environment al Protection Technology Co., Ltd. | 6,914,487.73 | |||||
| Qingdao Haimu Investment Management Co., Ltd. | 2,349,240.51 | |||||
| Qingdao Haimu Smart Home Investment Partnership (Limited Partnership) | 47,870,696.66 | -239,104.82 | ||||
| Guangzhou Heying Investment Partnership (Limited Partnership) | 288,209,197.58 | |||||
| Qingdao Home Wow Cloud Network Technology Co., Ltd. | 2,629,009.63 | 87,644.95 | ||||
| Qingdao Ririshun Service Co., Ltd. | 33,010,000.00 | 403,328.00 | ||||
| Bingji (Shanghai) Corporate Management Co., Ltd. | 928,444,178.47 | 20,033,292.85 | ||||
| Youjin (Shanghai) Corporate Management Co., Ltd | 1,687,262,142.67 | 36,424,168.82 | ||||
| RRS (Shanghai) Investment Co., Ltd. | 3,066,931,168.49 | 66,225,761.48 | ||||
| Haier Best Water Technology Co., Ltd. | 33,455,159.59 | -2,535,284.12 | ||||
| uizhixiangshun Equity Investment Fund (Qingdao) Partnership (Limited Partnership) | 120,000,000.00 | |||||
| Qingdao Ririshun Huizhi Investment Co., Ltd. | 2,100,000.00 | |||||
| Meiling Candy Washing Machine Co., Ltd. | 22,558,307.10 | 279,586.44 | ||||
| Konan Electronic Co., Ltd. | 77,561,552.87 | 1,310,907.78 | -5,918,521.84 | -270,900.00 | ||
| HNR Company (Private) Limited | 92,141,887.27 | 41,118,626.54 | -370,616.01 | |||
| HPZ LIMITED | 66,827,745.66 | 5,581,022.71 | -4,161,242.29 | |||
| HaierRayaElectricS.A.E | 10,741,234.10 | 1,257,900.00 | -575,240.89 | |||
| CONTROLADORAMABES.A.deC.V. | 3,667,310,241.31 | 266,155,966.51 | 6,027,923.74 | -40,168,145.36 | ||
| MiddleEastAirconditioningCompany,Limited | 19,002,595.66 | |||||
| Total | 21,694,068,040.19 | 74,257,900.00 | 943,069,721.83 | 56,080,279.79 | -275,352,379.54 |
| Investees | Increase/decrease for the period | Closing balance | Impairment provision Closing balance | |
| Other movement | Disposal of the investment | |||
| Associate: | ||||
| Haier Finance Co., Ltd. | 221,293,164.22 | 6,984,640,542.22 | ||
| Bank of Qingdao Co., Ltd. | 2,572,720,188.54 | |||
| Wolong Electric (Jinan) Motor Co., Ltd. | 157,289,089.66 | |||
| Qingdao Hegang New Material Technology Co., Ltd. | 308,135,448.88 | |||
| Qingdao Haier SAIF Smart Home Industry Investment Center (Limited Partnership) | 379,687,446.86 | |||
| Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Co., Ltd. | 693,937,118.87 | |||
| Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. | 396,387,842.10 | 21,000,000.00 | ||
| Qingdao Haier Multimedia Co., Ltd | 278,826,351.43 | 88,300,000.00 | ||
| Qingdao Haier Moulds Co., Ltd | 267,574,107.36 | |||
| Hefei Feier Smart Technology Co., Ltd. | 3,150,277.71 | |||
| Anhui Kunhe Intelligent Technology Co., Ltd.* | 3,000,000.00 | |||
| Zhejiang Futeng Fluid Technology Co., Ltd.* | 70,000,000 | |||
| Beijing Mr. Hi Network Technology Company Limited | 7,507,759.75 | 7,507,759.75 | ||
| Beijing Xiaobei Technology Co., Ltd. | 2,687,341.82 | 2,687,341.82 | ||
| Beijing ASU Tech Co., Ltd. | 21,887,291.50 | |||
| Shenzhen Genyuan Environmental Protection Technology Co., Ltd. | 6,914,487.73 | 6,914,487.73 | ||
| Qingdao Haimu Investment Management Co., Ltd. | 2,349,240.51 | |||
| Qingdao Haimu Zhijia Investment Partnership (Limited Partnership) | 47,631,591.84 | |||
| Guangzhou Heying Investment Partnership (Limited Partnership) | 288,209,197.58 | |||
| Qingdao Home Wow Cloud Network Technology Co., Ltd. | 2,716,654.58 | |||
| Qingdao Ririshun Service Co., Ltd. | 33,413,328.00 | |||
| Bingji (Shanghai) Corporate Management Co., Ltd. | 948,477,471.32 | |||
| Youjin (Shanghai) Corporate Management Co., Ltd | 1,723,686,311.49 | |||
| RRS (Shanghai) Investment Co., Ltd. | 3,133,156,929.97 | |||
| Haier Best Water Technology Co., Ltd. | 30,919,875.47 | |||
| Huizhixiangshun Equity Investment Fund (Qingdao) Partnership (Limited Partnership) | 120,000,000.00 | |||
| Qingdao Ririshun Huizhi Investment Co., Ltd. | 2,100,000.00 | |||
| Meiling Candy Washing Machine Co., Ltd. | 22,837,893.54 | |||
| Konan Electronic Co., Ltd. | 72,683,038.81 | |||
| HNR Company (Private) Limited | 132,889,897.80 | |||
| HPZ LIMITED | 68,247,526.08 | |||
| HaierRayaElectricS.A.E | 11,423,893.21 | |||
| CONTROLADORAMABES.A.deC.V. | 3,899,325,986.20 | |||
| MiddleEastAirconditioningCompany,Limited | 19,002,595.66 | |||
| Total | 221,293,164.22 | 22,713,416,726.49 | 126,409,589.30 |
| Items | Closing balance | Opening balance |
| SINOPEC Fuel Oil Sales Corporation Limited | 1,141,941,000.00 | 1,117,637,000.00 |
| Haier COSMO IOT Ecosystem Technology Co., Ltd. | 1,396,555,521.94 | 1,396,555,521.94 |
| Others | 290,682,898.22 | 144,932,743.60 |
| Total | 2,829,179,420.16 | 2,659,125,265.54 |
| Items | Amount for the current period |
| Others | 440,255.20 |
| Total | 440,255.20 |
| Items | Houses and buildings | Land use rights | Total |
| I. Original book value | |||
| 1.Opening balance | 46,978,578.83 | 2,128,550.51 | 49,107,129.34 |
| 2.Increase for the period | |||
| (1) Outsourced | |||
| (2) Inventories\fixed assets\construction in progress transferred in | |||
| (3) Increase in business combinations | |||
| 3. Decrease for the period | |||
| (1) Disposal | |||
| (2) Disposal of subsidiary | |||
| (3) Other transferring out | |||
| 4. Converted difference in foreign currency statements | -272,200.40 | -272,200.40 | |
| 5. Closing balance | 46,706,378.43 | 2,128,550.51 | 48,834,928.94 |
| II. Accumulated depreciation and accumulated amortization | |||
| 1.Opening balance | 20,129,742.37 | 590,384.16 | 20,720,126.53 |
| 2.Increase for the period | |||
| (1) Provision or amortization | 900,247.38 | 20,118.11 | 920,365.49 |
| 3. Decrease for the period | |||
| (1) Disposal | |||
| (2) Disposal of subsidiary | |||
| (3) Other transferring out | |||
| 4. Converted difference in foreign currency statements | -60,001.18 | -60,001.18 | |
| 5. Closing balance | 20,969,988.57 | 610,502.27 | 21,580,490.84 |
| III. Impairment provision | |||
| 1.Opening balance | |||
| 2.Increase for the period | |||
| (1) Provision | |||
| 3. Decrease for the period | |||
| (1) Disposal | |||
| (2) Disposal of subsidiary | |||
| (3) Other transferring out | |||
| 4. Converted difference in foreign currency statements | |||
| 5. Closing balance | |||
| IV. Book value | |||
| 1. Closing book value | 25,736,389.86 | 1,518,048.24 | 27,254,438.10 |
| 2. Opening book value | 26,848,836.46 | 1,538,166.35 | 28,387,002.81 |
| Items | Closing balance | Opening balance |
| Fixed assets | 20,667,862,688.61 | 20,878,516,949.39 |
| Disposals of fixed assets | 12,964,689.10 | 16,987,772.82 |
| Total | 20,680,827,377.71 | 20,895,504,722.21 |
| Items | Houses and buildings | Production equipment | Transportation equipment |
| I. Original book value | |||
| 1.Opening balance | 10,162,375,605.27 | 24,419,389,978.14 | 169,128,209.23 |
| 2.Increase for the period | |||
| (1) Acquisition | 37,295,772.82 | 434,896,087.17 | 4,852,083.89 |
| (2) Construction in progress transferred in | 227,282,171.84 | 1,043,182,153.23 | 6,389,524.30 |
| (3) Increase in business combinations | |||
| 3.Decrease for the period | |||
| (1) Disposal or Write-off | 36,274,739.05 | 467,867,291.79 | 9,635,049.05 |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -158,927,087.11 | -296,599,393.65 | -3,678,180.94 |
| 5.Closing balance | 10,231,751,723.77 | 25,133,001,533.10 | 167,056,587.43 |
| II. Accumulated depreciation | |||
| 1.Opening balance | 3,513,815,327.47 | 11,613,034,474.07 | 99,044,833.13 |
| 2.Increase for the period | |||
| (1) Provision | 257,257,030.77 | 1,319,687,083.26 | 9,630,994.50 |
| (2) Increase in business combinations |
| 3.Decrease for the period | |||
| (1) Disposal or write-off | 14,194,613.99 | 333,305,672.97 | 7,454,504.51 |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -51,985,785.86 | -171,680,414.83 | -1,414,647.71 |
| 5.Closing balance | 3,704,891,958.39 | 12,427,735,469.53 | 99,806,675.41 |
| III. Impairment provision | |||
| 1.Opening balance | 33,638,997.63 | 39,684,984.39 | 185,490.35 |
| 2.Increase for the period | |||
| (1) Provision | 21,593,523.50 | ||
| (2) Increase in business combinations | |||
| 3.Decrease for the period | |||
| (1) Disposal or Write-off | 1,761,365.78 | ||
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -2,538,419.21 | 347,003.53 | -7,992.37 |
| 5.Closing balance | 31,100,578.42 | 59,864,145.64 | 177,497.98 |
| IV. Book value | |||
| 1.Closing book value | 6,495,759,186.96 | 12,645,401,917.93 | 67,072,414.04 |
| 2.Opening book value | 6,614,921,280.17 | 12,766,670,519.68 | 69,897,885.75 |
| Items | Office furniture | Others | Total |
| I. Original book value | |||
| 1.Opening balance | 951,374,986.48 | 2,268,702,315.82 | 37,970,971,094.94 |
| 2.Increase for the period | |||
| (1) Acquisition | 21,816,710.13 | 21,204,038.41 | 520,064,692.42 |
| (2) Construction in progress transferred in | 108,042,400.74 | 99,892,334.04 | 1,484,788,584.15 |
| (3) Increase in business combinations | |||
| 3.Decrease for the period | |||
| (1) Disposal or Write-off | 31,595,474.77 | 52,729,382.19 | 598,101,936.85 |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -79,529,057.44 | 13,477,874.80 | -525,255,844.34 |
| 5.Closing balance | 970,109,565.14 | 2,350,547,180.88 | 38,852,466,590.32 |
| II. Accumulated depreciation | |||
| 1.Opening balance | 482,846,976.88 | 1,304,418,481.44 | 17,013,160,092.99 |
| 2.Increase for the period | |||
| (1) Provision | 72,467,718.81 | 111,988,219.42 | 1,771,031,046.76 |
| (2) Increase in business combinations | |||
| 3.Decrease for the period | |||
| (1) Disposal or Write-off | 28,878,212.22 | 50,501,712.28 | 434,334,715.97 |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -6,777,472.47 | -30,227,871.88 | -262,086,192.75 |
| 5.Closing balance | 519,659,011.00 | 1,335,677,116.70 | 18,087,770,231.03 |
| III. Impairment provision | |||
| 1.Opening balance | 367,009.63 | 5,417,570.56 | 79,294,052.56 |
| 2.Increase for the period | |||
| (1) Provision | 157,542.74 | 21,751,066.24 | |
| (2) Increase in business combinations | |||
| 3.Decrease for the period | |||
| (1) Disposal or Write-off | 42,689.77 | 1,804,055.55 | |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -9,546.53 | -198,437.99 | -2,407,392.57 |
| 5.Closing balance | 314,773.33 | 5,376,675.31 | 96,833,670.68 |
| IV. Book Value | |||
| 1.Closing book value | 450,135,780.81 | 1,009,493,388.87 | 20,667,862,688.61 |
| 2.Opening book value | 468,160,999.97 | 958,866,263.82 | 20,878,516,949.39 |
| Items | Closing balance | Opening balance | Reason for transferring to disposal |
| Relocation of Qingdao Industrial Park | 12,964,689.10 | 12,964,689.10 | Demolition |
| Other | 4,023,083.72 | Scrap cleanup | |
| Total | 12,964,689.10 | 16,987,772.82 |
| Items | Closing balance | Opening balance |
| Construction in progress | 5,020,055,626.42 | 3,596,902,447.07 |
| Construction materials | ||
| Total | 5,020,055,626.42 | 3,596,902,447.07 |
| Items | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Haier India Project | 756,300,118.70 | 756,300,118.70 | 400,955,285.59 | 400,955,285.59 | ||
| Europe CANDY Project | 585,831,480.18 | 585,831,480.18 | 611,529,115.13 | 611,529,115.13 | ||
| America GEA Project | 569,477,992.54 | 569,477,992.54 | 518,260,493.01 | 518,260,493.01 | ||
| Smart home appliance technology project | 438,904,361.14 | 438,904,361.14 | 291,584,097.58 | 291,584,097.58 | ||
| Foshan freezer Project | 303,342,506.46 | 303,342,506.46 | 89,437,456.94 | 89,437,456.94 | ||
| Hefei Refrigerator Project | 279,298,017.69 | 279,298,017.69 | 87,566,220.44 | 87,566,220.44 | ||
| Haier Russian Project | 202,161,316.32 | 202,161,316.32 | 76,966,572.40 | 76,966,572.40 | ||
| Qingdao Haier Washing Machine Project | 156,757,876.08 | 156,757,876.08 | 107,072,469.09 | 107,072,469.09 | ||
| Haier Strauss Project | 152,700,514.93 | 152,700,514.93 | 105,851,790.40 | 105,851,790.40 | ||
| Haier Special Refrigerator Project | 129,054,284.32 | 129,054,284.32 | 26,181,149.22 | 26,181,149.22 | ||
| New Zealand FPA Project | 125,335,851.64 | 125,335,851.64 | 96,050,392.73 | 96,050,392.73 | ||
| Haier Air Conditioning | 97,574,762.03 | 97,574,762.03 | 56,560,330.52 | 56,560,330.52 | ||
| Electronics Project | ||||||
| Zhengzhou New Energy Project | 92,592,962.03 | 92,592,962.03 | 134,884,592.49 | 134,884,592.49 | ||
| Haier (Jiaozhou) Air-conditioning Project | 78,456,538.07 | 78,456,538.07 | 16,503,076.95 | 16,503,076.95 | ||
| Hefei Haier Air Conditioning Project | 71,185,462.69 | 71,185,462.69 | 12,948,252.61 | 12,948,252.61 | ||
| Haier Special Refrigerator Project | 63,899,120.09 | 63,899,120.09 | 28,379,142.82 | 28,379,142.82 | ||
| Wuhan Haier Freezer Project | 61,541,218.34 | 61,541,218.34 | 29,444,043.15 | 29,444,043.15 | ||
| Jiaonan Washing Machine Project | 52,487,557.82 | 52,487,557.82 | 48,681,689.86 | 48,681,689.86 | ||
| Qingdao Haier Dishwasher Project | 51,335,506.63 | 51,335,506.63 | 25,231,410.35 | 25,231,410.35 | ||
| Others | 752,655,914.57 | 837,735.85 | 751,818,178.72 | 833,652,601.64 | 837,735.85 | 832,814,865.79 |
| Total | 5,020,893,362.27 | 837,735.85 | 5,020,055,626.42 | 3,597,740,182.92 | 837,735.85 | 3,596,902,447.07 |
| Project name | Opening balance | Increase for the current period | Transfer to fixed assets | Other decrease | Converted difference in foreign currency statements | Closing balance | Source of fund |
| Haier India Project | 400,955,285.59 | 391,430,778.47 | 20,794,018.86 | -15,291,926.50 | 756,300,118.70 | Self-funding/fund raising | |
| Europe CANDY Project | 611,529,115.13 | 298,634,127.92 | 273,476,893.14 | 1,410,722.01 | -49,444,147.72 | 585,831,480.18 | Self-funding |
| America GEA Project | 518,260,493.01 | 324,339,049.28 | 267,833,262.87 | -5,288,286.88 | 569,477,992.54 | Self-funding | |
| Smart home appliance technology project | 291,584,097.58 | 147,320,263.56 | 438,904,361.14 | Self-funding | |||
| Foshan freezer Project | 89,437,456.94 | 221,713,588.50 | 7,808,538.98 | 303,342,506.46 | Self-funding | ||
| Hefei Refrigerator Project | 87,566,220.44 | 209,132,986.99 | 17,401,189.74 | 279,298,017.69 | Self-funding | ||
| Haier Russian Project | 76,966,572.40 | 126,454,395.15 | 1,259,651.23 | 202,161,316.32 | Self-funding | ||
| Qingdao Haier Washing Machine Project | 107,072,469.09 | 51,315,774.62 | 1,630,367.63 | 156,757,876.08 | Self-funding | ||
| Haier Strauss Project | 105,851,790.40 | 46,848,724.53 | 152,700,514.93 | Self-funding | |||
| Haier Special Refrigerator Project | 26,181,149.22 | 115,425,370.68 | 12,552,235.58 | 129,054,284.32 | Self-funding | ||
| New Zealand FPA Project | 96,050,392.73 | 82,110,980.12 | 47,998,229.79 | -4,827,291.42 | 125,335,851.64 | Self-funding | |
| Haier Air Conditioning Electronics Project | 56,560,330.52 | 57,245,084.17 | 14,614,409.48 | 1,616,243.18 | 97,574,762.03 | Self-funding | |
| Zhengzhou New Energy Project | 134,884,592.49 | 27,893,541.47 | 70,185,171.93 | 92,592,962.03 | Self-funding | ||
| Haier (Jiaozhou) Air-conditioning Project | 16,503,076.95 | 67,387,876.07 | 5,434,414.95 | 78,456,538.07 | Self-funding/ fund raising | ||
| Hefei Haier Air Conditioning Project | 12,948,252.61 | 70,286,969.34 | 12,049,759.26 | 71,185,462.69 | Self-funding/ fund raising | ||
| Haier Special Refrigerator Project | 28,379,142.82 | 50,149,268.69 | 14,629,291.42 | 63,899,120.09 | Self-funding | ||
| Wuhan Haier Freezer Project | 29,444,043.15 | 34,242,750.38 | 2,145,575.19 | 61,541,218.34 | Self-funding |
| Jiaonan Washing Machine Project | 48,681,689.86 | 27,766,593.93 | 23,960,725.97 | 52,487,557.82 | Self-funding | ||
| Qingdao Haier Dishwasher Project | 25,231,410.35 | 44,948,309.41 | 18,844,213.13 | 51,335,506.63 | Self-funding | ||
| Others | 833,652,601.64 | 611,259,685.76 | 672,170,635.00 | 9,891,898.84 | -10,193,838.99 | 752,655,914.57 | Self-funding/ fund raising |
| Total | 3,597,740,182.92 | 3,005,906,119.04 | 1,484,788,584.15 | 12,918,864.03 | -85,045,491.51 | 5,020,893,362.27 |
| Project name | Opening balance | Increase for the period | Transfer to fixed assets | Other decrease | Exchange differences | Closing balance |
| Lejia IOT Project | 837,735.85 | 837,735.85 | ||||
| Total | 837,735.85 | 837,735.85 |
| Items | Houses and buildings | Production equipment | Transportation equipment |
| I. Original book value: | |||
| 1.Opening balance | 3,363,666,439.28 | 39,645,820.91 | 194,507,833.03 |
| 2. Increase for the current period | |||
| (1) Increase | 333,998,904.49 | 3,638,881.01 | 24,650,760.62 |
| 3. Decrease for the current period | |||
| (1) Disposal | 157,794,759.00 | 226,268.14 | 14,249,314.53 |
| (2) Disposal of subsidiary | |||
| 4. Converted difference in foreign currency statements | -71,173,390.01 | 44,789.54 | -9,566,424.20 |
| 5. Closing balance | 3,468,697,194.76 | 43,103,223.32 | 195,342,854.92 |
| II. Accumulated amortization | |||
| 1. Opening balance | 885,680,688.93 | 12,842,957.01 | 89,243,999.98 |
| 2. Increase for the current period | |||
| (1) Provision | 259,451,681.67 | 4,703,927.50 | 30,984,183.89 |
| 3. Decrease for the current period | |||
| (1) Disposal | 98,572,893.69 | 216,262.02 | 13,963,041.76 |
| (2) Disposal of subsidiary | |||
| 4. Converted difference in foreign currency statements | -27,990,907.59 | -2,716,151.10 | -6,333,363.23 |
| 5. Closing balance | 1,018,568,569.32 | 14,614,471.39 | 99,931,778.88 |
| III. Impairment provision | |||
| 1.Opening balance | |||
| 2.Increase for the current period | |||
| (1) Provision | |||
| 3.Decrease for the current period |
| (1) Disposal | |||
| (2) Disposal of subsidiary | |||
| 4. Converted difference in foreign currency statements | |||
| 5.Closing balance | |||
| IV. Book Value | |||
| 1.Closing book value | 2,450,128,625.44 | 28,488,751.93 | 95,411,076.04 |
| 2.Opening book value | 2,477,985,750.35 | 26,802,863.90 | 105,263,833.05 |
| Items | Office furniture | Other | Total |
| I. Original book value: | |||
| 1.Opening balance | 48,709,675.83 | 355,706,633.95 | 4,002,236,403.00 |
| 2.Increase for the current period | |||
| (1) Increase | 3,326,409.23 | 35,476,806.56 | 401,091,761.91 |
| 3. Decrease for the current period | |||
| (1) Disposal | 2,352,555.28 | 174,622,896.95 | |
| (2) Disposal of subsidiary | |||
| 4. Converted difference in foreign currency statements | -3,866,874.07 | -35,589,345.08 | -120,151,243.82 |
| 5. Closing balance | 45,816,655.71 | 355,594,095.43 | 4,108,554,024.14 |
| II. Accumulated amortization | |||
| 1.Opening balance | 14,096,013.92 | 160,514,483.89 | 1,162,378,143.73 |
| 2.Increase for the current period | |||
| (1) Provision | 4,770,709.67 | 37,408,576.80 | 337,319,079.53 |
| 3.Decrease for the current period | |||
| (1) Disposal | 2,352,555.28 | 115,104,752.75 | |
| (2) Disposal of subsidiary | |||
| 4. Converted difference in foreign currency statements | 1,048,058.99 | -33,500,791.68 | -69,493,154.61 |
| 5.Closing balance | 17,562,227.30 | 164,422,269.01 | 1,315,099,315.90 |
| III. Impairment provision | |||
| 1.Opening balance | |||
| 2.Increase for the current period | |||
| Provision | |||
| 3.Decrease for the current period | |||
| Disposal | |||
| Disposal of subsidiary | |||
| 4. Converted difference in foreign currency statements |
| 5.Closing balance | |||
| IV. Book Value | |||
| 1.Closing book value | 28,254,428.41 | 191,171,826.42 | 2,793,454,708.24 |
| 2.Opening book value | 34,613,661.91 | 195,192,150.06 | 2,839,858,259.27 |
17. Intangible assets
(1). Details of intangible assets
√ Applicable □ Not Applicable
| Items | Proprietary technology | Licenses and franchises | Land use rights |
| I. Original book value | |||
| 1.Opening balance | 1,842,005,662.53 | 4,010,777,802.58 | 1,200,138,465.93 |
| 2.Increase for the current period | |||
| (1) Purchase | 1,631,271.28 | 152,603,821.97 | 49,248,805.00 |
| (2) Internal research and development | 66,178,730.58 | - | - |
| (3) Increase in business combination | |||
| 3.Decrease for the current period | |||
| (1) Disposal | |||
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -51,816,827.32 | -43,190,410.67 | -6,014,986.90 |
| 5.Closing balance | 1,857,998,837.07 | 4,120,191,213.88 | 1,243,372,284.03 |
| II. Accumulated amortization | |||
| 1.Opening balance | 871,204,292.17 | 564,045,820.06 | 139,165,642.83 |
| 2.Increase for the current period | |||
| (1) Provision | 84,147,005.39 | 63,863,023.74 | 15,615,290.78 |
| (2) Increase in business combination | |||
| 3.Decrease for the current period | |||
| (1) Disposal | |||
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -25,059,769.85 | -7,762,750.39 | -847,270.19 |
| 5.Closing balance | 930,291,527.71 | 620,146,093.41 | 153,933,663.42 |
| III. Impairment provision | |||
| 1.Opening balance | |||
| 2.Increase for the current period | |||
| (1) Provision | |||
| (2) Increase in business combination | |||
| 3.Decrease for the current period | |||
| (1) Disposal |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | |||
| 5.Closing balance | |||
| IV. Book Value | |||
| 1.Closing book value | 927,707,309.36 | 3,500,045,120.47 | 1,089,438,620.61 |
| 2.Opening book value | 970,801,370.36 | 3,446,731,982.52 | 1,060,972,823.10 |
| Items | Trademark rights | Application management software and others | Total |
| I. Original book value | |||
| 1.Opening balance | 2,713,444,699.59 | 3,828,069,125.45 | 13,594,435,756.08 |
| 2.Increase in the current period | |||
| (1) Purchase | 117,722,303.65 | 321,206,201.90 | |
| (2) Internal research and development | 132,595,018.45 | 198,773,749.03 | |
| (3) Increase in business combination | |||
| 3.Decrease for the current period | |||
| (1) Disposal | 3,735,225.66 | 3,735,225.66 | |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -91,039,231.65 | -65,906,930.06 | -257,968,386.60 |
| 5.Closing balance | 2,622,405,467.94 | 4,008,744,291.83 | 13,852,712,094.75 |
| II. Accumulated amortization | |||
| 1.Opening balance | 1,946,112,106.66 | 3,520,527,861.72 | |
| 2.Increase in the current period | |||
| (1) Provision | 301,756,688.95 | 465,382,008.86 | |
| (2) Increase in business combination | |||
| 3.Decrease for the current period | |||
| (1) Disposal | 2,913,333.26 | 2,913,333.26 | |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -35,470,463.65 | -69,140,254.08 | |
| 5.Closing balance | 2,209,484,998.70 | 3,913,856,283.24 | |
| III. Impairment provision | |||
| 1.Opening balance | 56,040,248.43 | 56,040,248.43 |
| 2.Increase in the current period | |||
| (1) Provision | |||
| (2) Increase in business combination | |||
| 3.Decrease for the current period | |||
| (1) Disposal | 104,507.20 | 104,507.20 | |
| (2) Disposal of subsidiary | |||
| (3) Transfer to hold for sale | |||
| 4. Converted difference in foreign currency statements | -5,208.00 | -5,208.00 | |
| 5.Closing balance | 55,930,533.23 | 55,930,533.23 | |
| IV. Book value | |||
| 1.Closing book value | 2,622,405,467.94 | 1,743,328,759.90 | 9,882,925,278.28 |
| 2.Opening book value | 2,713,444,699.59 | 1,825,916,770.36 | 10,017,867,645.93 |
| Items | Opening balance | Increase for the period | Decrease for the period | Converted difference in foreign currency statements | Closing balance | ||
| Confirmed as an intangible asset | Included in Current profit and loss | Disposal of subsidiaries | |||||
| 91ABD.ERP IT Program | 97,893,800.99 | 33,095,733.87 | 107,941,368.58 | -785,314.94 | 22,262,851.34 | ||
| Others | 69,852,923.14 | 253,749,069.91 | 90,832,380.45 | 81,509,730.11 | -5,045,544.46 | 146,214,338.03 | |
| Total | 167,746,724.13 | 286,844,803.78 | 198,773,749.03 | 81,509,730.11 | -5,830,859.40 | 168,477,189.37 | |
| Items | Opening balance | Increase for the period | Decrease for the period | Impact of fluctuation in exchange rate for the period | Closing balance |
| GEA | 19,382,602,366.26 | -193,295,603.31 | 19,189,306,762.95 | ||
| Candy | 2,086,499,983.95 | -88,087,999.32 | 1,998,411,984.63 | ||
| Others | 1,049,357,987.43 | -20,527,222.54 | 1,028,830,764.89 | ||
| Total | 22,518,460,337.64 | -301,910,825.17 | 22,216,549,512.47 |
| Items | Opening balance | Increase for the current period | Amortization for the current period | Other decrease | Converted difference in foreign currency statements | Closing balance |
| Renovation | 169,271,684.57 | 116,612,921.15 | 84,322,153.77 | -16,669.62 | 201,545,782.33 |
| Improvement on leased property | 170,582,753.74 | 3,024,499.46 | 12,054,593.70 | -833,359.30 | 160,719,300.20 | |
| Others | 115,888,065.82 | 7,063,267.43 | 14,128,738.52 | -875,232.52 | 107,947,362.21 | |
| Total | 455,742,504.13 | 126,700,688.04 | 110,505,485.99 | -1,725,261.44 | 470,212,444.74 |
| Items | Closing balance | Opening balance |
| Provision for assets impairment | 341,873,801.45 | 374,373,978.37 |
| Liabilities | 1,424,735,374.39 | 1,745,260,196.51 |
| Internal unrealized earnings eliminated due to combination | 440,515,864.30 | 668,981,845.53 |
| Government grants | 128,600,941.36 | 124,822,115.15 |
| Uncovered losses | 848,685,152.59 | 806,710,012.75 |
| Others | 217,030,300.04 | 237,331,301.90 |
| Total | 3,401,441,434.13 | 3,957,479,450.21 |
| Item | Closing balance | Opening balance |
| Asset amortisation | 2,430,285,259.05 | 2,371,032,689.77 |
| Remeasurement of fair value of the remaining equity interest on the date of loss of control | 878,623,804.46 | 878,623,804.46 |
| Withholding income tax of overseas enterprises | 93,629,113.00 | 93,629,113.00 |
| Others | 276,624,484.30 | 306,293,850.70 |
| Total | 3,679,162,660.81 | 3,649,579,457.93 |
| Items | Closing balance | Opening balance |
| Prepayments for equipment and land | 1,075,431,381.98 | 1,403,997,069.15 |
| Others | 369,621,498.84 | 521,764,491.02 |
| Total | 1,445,052,880.82 | 1,925,761,560.17 |
√Applicable □Not Applicable
Unit and Currency: RMB
| Items | Closing balance | Opening balance |
| Borrowings - secured by pledge | 493,649,581.08 | 472,098,030.36 |
| Borrowings – unsecured | 10,659,639,064.09 | 7,200,328,217.00 |
| Interest payable for short-term borrowings | 6,821,352.55 | 15,481,918.52 |
| Total | 11,160,109,997.72 | 7,687,908,165.88 |
| Items | Closing balance | Opening balance |
| Forward foreign exchange trading contracts | 3,423,774.60 | 26,952,508.66 |
| Total | 3,423,774.60 | 26,952,508.66 |
| Items | Closing balance | Opening balance |
| Forward foreign exchange trading contracts | 55,091,160.59 | 188,695,788.30 |
| Interest rate swap agreement | 36,990,279.50 | 50,886,744.60 |
| Total | 92,081,440.09 | 239,582,532.90 |
| Items | Closing balance | Opening balance |
| Commercially acceptance notes | 3,034,346,907.38 | 2,710,903,499.32 |
| Bank acceptance notes | 21,255,796,393.03 | 18,525,153,554.35 |
| Total | 24,290,143,300.41 | 21,236,057,053.67 |
| Items | Closing balance | Opening balance |
| Accounts payable | 39,008,002,641.86 | 36,302,971,944.48 |
| Total | 39,008,002,641.86 | 36,302,971,944.48 |
| Items | Closing balance | Opening balance |
| Contract liabilities | 7,466,559,172.71 | 7,048,637,659.48 |
| Total | 7,466,559,172.71 | 7,048,637,659.48 |
| Items | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| I. Short-term remuneration | 3,623,128,868.83 | 11,323,047,227.52 | 11,914,000,313.19 | 3,032,175,783.16 |
| II. Post-employment benefits-defined contribution plan | 21,035,358.61 | 602,859,838.49 | 580,581,433.10 | 43,313,764.00 |
| III. Termination benefits | 9,818,188.41 | 680,845.07 | 680,845.07 | 9,818,188.41 |
| IV. Other benefits due within one year | 106,117,562.97 | 35,720,781.58 | 49,141,082.86 | 92,697,261.69 |
| Total | 3,760,099,978.82 | 11,962,308,692.66 | 12,544,403,674.22 | 3,178,004,997.26 |
| Items | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| I. Salaries, bonus, allowance and benefit | 2,523,158,164.63 | 8,510,633,954.92 | 8,899,437,989.65 | 2,134,354,129.90 |
| II. Employee welfare | 320,271,605.18 | 415,341,467.29 | 437,547,682.94 | 298,065,389.53 |
| III. Social benefit | 183,892,203.86 | 834,299,655.80 | 844,257,779.02 | 173,934,080.64 |
| IV. Housing fund | 5,028,762.45 | 162,498,666.38 | 161,542,446.04 | 5,984,982.79 |
| V. Labor union fee and education fee | 1,323,116.90 | 58,272,982.44 | 58,345,188.59 | 1,250,910.75 |
| VI. Short-term compensated absences | 276,729,127.32 | 166,957,660.71 | 165,359,691.66 | 278,327,096.37 |
| VII. Others | 312,725,888.49 | 1,175,042,839.98 | 1,347,509,535.29 | 140,259,193.18 |
| Total | 3,623,128,868.83 | 11,323,047,227.52 | 11,914,000,313.19 | 3,032,175,783.16 |
| Items | Opening balance | Increase for the current period | Decrease for current the period | Closing balance |
| I. Basic pension insurance | 20,356,245.73 | 567,773,896.99 | 545,481,730.97 | 42,648,411.75 |
| II. Unemployment insurance | 170,304.70 | 12,452,157.91 | 12,437,305.38 | 185,157.23 |
| III. Enterprise annuity payment | 508,808.18 | 22,633,783.59 | 22,662,396.75 | 480,195.02 |
| Total | 21,035,358.61 | 602,859,838.49 | 580,581,433.10 | 43,313,764.00 |
| Items | Closing balance | Opening balance |
| Termination compensation | 9,818,188.41 | 9,818,188.41 |
| Total | 9,818,188.41 | 9,818,188.41 |
| Items | Closing balance | Opening balance |
| Value-added tax | 978,360,164.88 | 645,144,199.35 |
| Enterprise income tax | 1,293,070,998.27 | 1,371,458,516.07 |
| City maintenance and construction tax | 25,179,827.41 | 13,992,816.15 |
| Individual income tax | 82,921,478.32 | 144,333,033.24 |
| Education surcharge | 11,182,584.38 | 5,960,935.92 |
| The electrical and electronic products waste treatment fund | 84,791,906.00 | 88,989,555.00 |
| Other taxes | 193,959,153.31 | 129,826,404.39 |
| Total | 2,669,466,112.57 | 2,399,705,460.12 |
| Items | Closing balance | Opening balance |
| Dividends payable | 3,420,918,669.85 | |
| Other payables | 16,629,322,717.43 | 17,056,156,167.28 |
| Total | 20,050,241,387.28 | 17,056,156,167.28 |
| Name of company | Closing balance | Opening balance |
| Haier COSMO Co., Ltd. | 460,678,645.58 | |
| Haier Group Corporation | 392,575,539.62 | |
| Others | 2,567,664,484.65 | |
| Total | 3,420,918,669.85 |
| Items | Closing balance | Opening balance |
| Other payables | 16,629,322,717.43 | 17,056,156,167.28 |
| Total | 16,629,322,717.43 | 17,056,156,167.28 |
| Items | Closing balance | Opening balance |
| Long-term borrowings due within one year | 2,412,067,581.09 | 4,950,555,670.08 |
| Long-term payables due within one year | 20,000,000.00 | |
| Lease liabilities due within one year | 677,452,058.59 | 670,863,763.75 |
| Estimated liabilities due within one year | 1,887,200,931.95 | 1,881,305,479.57 |
| Total | 4,976,720,571.63 | 7,522,724,913.40 |
| Items | Closing balance | Opening balance |
| Payable refund | 472,368,601.91 | 540,552,003.81 |
| Super-short-term bonds | 5,535,262,500.00 | |
| Tax amount to be written off | 14,630,402.75 | 20,186,405.07 |
| Others | 10,460,429.48 | 16,053,035.75 |
| Total | 497,459,434.14 | 6,112,053,944.63 |
| Items | Closing balance | Opening balance |
| Borrowings - unsecured | 9,590,298,914.57 | 11,821,416,259.81 |
| Total | 9,590,298,914.57 | 11,821,416,259.81 |
2020, H Shares of Haier Smart Home was listed, and the EB-to-CB Proposal becameeffective. The outstanding principal of the original exchangeable bonds amounted toHK$7.993 billion and the maturity, coupon rate and rate on investment remainedunchanged. The convertible bonds were divided into liabilities and equities on initialrecognition:
| Items | Exchangeable corporate bonds issued on 23 December 2020 |
| Initial recognition: | 9,105,660,619.93 |
| Including: | |
| Equity portion of the exchangeable bond | 2,364,195,333.79 |
| Liability portion of the exchangeable bond | 6,741,465,286.14 |
| Items | Opening balance | Increase for the current period | Accrued bond interest for the current period | Less: Bond interest paid for the current period | Exchange rate impact | Shares converted in the current period | Shares redeemed in the current period | Closing balance |
| Convertible corporate bonds (“CB”) | 6,713,501,050.27 | 44,340,674.19 | 6,277,583,752.41 | -53,821,150.88 | 426,436,821.17 | |||
| Total | 6,713,501,050.27 | 44,340,674.19 | 6,277,583,752.41 | -53,821,150.88 | 426,436,821.17 |
| Items | Closing balance | Opening balance |
| Lease liabilities | 2,689,305,741.48 | 2,743,566,116.43 |
| Less: lease liabilities due within one year | 677,452,058.59 | 670,863,763.75 |
| Total | 2,011,853,682.89 | 2,072,702,352.68 |
| Items | Closing balance | Opening balance |
| Investment from CDB development fund | 36,500,000.00 | 56,500,000.00 |
| Others | 57,510,166.66 | 61,703,261.27 |
| Less: long-term payables due within one year | 20,000,000.00 | |
| Total | 94,010,166.66 | 98,203,261.27 |
38. Long-term payables for staff's remuneration
√ Applicable □ Not Applicable
(1) The presentation of long-term payables for staff's remuneration
| Items | Closing balance | Opening balance |
| Post-employment benefits- net liability of defined benefit plan | 559,042,580.03 | 602,802,957.77 |
| Termination benefits | 571,873,456.36 | 429,651,733.32 |
| Provision for work-related injury compensation | 201,811,366.33 | 213,320,333.26 |
| Other long-term benefits | ||
| Total | 1,332,727,402.72 | 1,245,775,024.35 |
| Items | Rate |
| Discount rate | 0.50% |
| Expected rate of return | 2.00% |
| Items | Amount |
| I. Opening balance | 324,375,540.91 |
| II. Defined benefit cost recognized in current profit or loss | 1,285,743.31 |
| 1. Current service cost | 1,285,743.31 |
| 2. Past service cost | |
| 3. Settlement gains (loss indicated in “－”) | |
| 4. Interest expenses | |
| III. Defined benefit cost recognized in other comprehensive income |
| 1. Actuarial loss (gain indicated in “－”) | |
| IV. Other changes | -24,700,954.02 |
| 1. The consideration paid at the time of settlement | |
| 2. Benefits paid | |
| 3. Exchange differences | -24,700,954.02 |
| V. Closing balance | 300,960,330.20 |
| Items | Amount |
| Ⅰ. Opening balance | 371,501,327.98 |
| II. Defined benefit cost recognized in current profit or loss | |
| 1. Interest income | |
| III. Defined benefit cost recognized in other comprehensive income | |
| 1. Return on plan assets (except those included in net interests) | |
| 2. Changes in impact of asset cap (except those included in net interests) | |
| IV. Other changes | -31,466,887.09 |
| 1. Employer contributions | 776,933.35 |
| 2. Benefits paid | 2,541,347.98 |
| 3. Exchange differences | -34,785,168.42 |
| V. Closing balance | 340,034,440.89 |
| Items | Amount |
| Ⅰ. Opening balance | -47,125,787.07 |
| II. Defined benefit cost recognized in current profit or loss | 1,285,743.31 |
| III. Defined benefit cost recognized in other comprehensive income | |
| IV. Other changes | 6,765,933.07 |
| V. Closing balance | -39,074,110.69 |
defined benefit plan for post-retirement health care benefits.
Actuarial assumptions used in defined benefit plans
| Item | Rate |
| Discount rate | 2.47% |
| Item | Amount |
| I. Opening balance | 151,567,760.38 |
| II. Business combination not under common control | |
| III. Defined benefit cost recognized in current profit or loss | 16,380,076.18 |
| 1. Current period service cost | 12,973,557.63 |
| 2. Past service cost | |
| 3. Settlement gains ((loss indicated in “－”) | |
| 4. Interest expenses | 3,406,518.55 |
| IV. Defined benefit cost recognized in other comprehensive income | |
| 1. Actuarial loss (gain indicated in “－”) | |
| V. Other changes | -18,361,895.29 |
| 1. The consideration paid at the time of settlement | |
| 2. Benefits paid | -8,671,118.10 |
| 3. Exchange differences | -9,690,777.19 |
| VI. Closing balance | 149,585,941.27 |
| Items | Amount |
| I. Opening balance | 151,567,760.38 |
| II. Business combination not under common control | |
| III. Defined benefit cost recognized in current profit or loss | 16,380,076.18 |
| IV. Defined benefit cost recognized in other comprehensive income | |
| V. Other changes | -18,361,895.29 |
| VI. Closing balance | 149,585,941.27 |
Actuarial assumptions used in defined benefit plans
| Item | Rate |
| Discount rate | 2.09% |
| Items | Amount |
| I. Opening balance | 293,063,281.71 |
| II. Business combination not under common control | |
| III. Defined benefit cost recognized in current profit or loss | 8,539,507.32 |
| 1. Current period service cost | 3,077,601.69 |
| 2. Past service cost | |
| 3. Settlement gains (loss indicated in “－”) | |
| 4. Interest expenses | 5,461,905.63 |
| IV. Defined benefit cost recognized in other comprehensive income | |
| 1. Actuarial loss (gain indicated in “－”) | |
| V. Other changes | -46,224,577.13 |
| 1. The consideration paid at the time of settlement | |
| 2. Benefits paid | -27,571,752.34 |
| 3. Exchange differences | -18,652,824.79 |
| VI. Closing balance | 255,378,211.90 |
| Items | Amount |
| I. Opening balance | 293,063,281.71 |
| II. Business combination not under common control | |
| III. Defined benefit cost recognized in current profit or loss | 8,539,507.32 |
| IV. Defined benefit cost recognized in other comprehensive income | |
| V. Other changes | -46,224,577.13 |
| VI. Closing balance | 255,378,211.90 |
| Item | Rate |
| Discount rate | 2.08% |
Present value of defined benefit obligations
| Items | Amount |
| I. Opening balance | 224,286,521.09 |
| II. Business combination not under common control | |
| III. Defined benefit cost recognized in current profit or loss | 13,744,667.66 |
| 1. Current service cost | 9,768,677.65 |
| 2. Past service cost | |
| 3. Settlement gains (loss indicated in “－”) | |
| 4. Interest expenses | 3,975,990.01 |
| IV. Defined benefit cost recognized in other comprehensive income | |
| 1. Actuarial loss (gain indicated in “－”) | |
| V. Other changes | -53,143,430.37 |
| 1. The consideration paid at the time of settlement | |
| 2. Benefits paid | -38,894,521.32 |
| 3. Exchange differences | -14,248,909.05 |
| VI. Closing balance | 184,887,758.38 |
| Items | Amount |
| I. Opening balance | 160,409,027.51 |
| II. Defined benefit cost recognized in current profit or loss | 5,985,091.18 |
| 1. Interest income | 5,985,091.18 |
| III. Defined benefit cost recognized in other comprehensive income | |
| 1. Return on plan assets (except those included in net interests) | |
| 2. Changes in impact of asset cap (except those included in net interests) | |
| IV. Other changes | -34,428,739.85 |
| 1. Employer contributions | 14,655,891.94 |
| 2. Benefits paid | -38,894,521.32 |
| 3. Exchange differences | -10,190,110.47 |
| V. Closing balance | 131,965,378.84 |
| Items | Amount |
| I. Opening balance | 63,877,493.58 |
| II. Business combination not under common control | |
| III. Defined benefit cost recognized in current profit or loss | 7,759,576.48 |
| IV. Defined benefit cost recognized in other comprehensive income |
| V. Other changes | -18,714,690.52 |
| VI. Closing balance | 52,922,379.54 |
| Items | Amount |
| I. Opening balance | 213,320,333.26 |
| II. Business combination not under common control | |
| III. Compensation recognized in current profit and loss | 41,190,223.38 |
| IV. Actual compensation paid in the current period | -35,354,986.64 |
| V. Other changes | -17,344,203.67 |
| VI. Closing balance | 201,811,366.33 |
| Items | Closing balance | Opening balance |
| Short-term salary | 22,013,055.61 | 38,202,187.93 |
| Long-term salary | 559,042,580.03 | 602,802,957.77 |
| Total | 581,042,547.19 | 641,005,145.70 |
| Items | Opening balance | Closing balance |
| Pending litigation | 21,550,139.03 | 19,124,300.01 |
| Others | 238,570,708.44 | 224,305,566.95 |
| Projection of three guarantees and installation fees | 1,182,723,189.26 | 1,342,045,558.36 |
| Total | 1,442,844,036.73 | 1,585,475,425.32 |
√ Applicable □ Not Applicable
Unit and Currency: RMB
| Items | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| Government grants | 633,761,669.48 | 52,012,510.90 | 67,876,597.29 | 617,897,583.09 |
| Total | 633,761,669.48 | 52,012,510.90 | 67,876,597.29 | 617,897,583.09 |
| Categories of shares | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| I. Restricted shares | ||||
| 1. State-owned shares | ||||
| 2. Shares held by domestic non-state-owned legal entities | ||||
| 3. Shares held by domestic individuals | ||||
| 4. Shares held by offshore non-state-owned legal entities | ||||
| II. Non-restricted shares | 9,027,846,441 | 397,676,840 | 32,352,800 | 9,393,170,481 |
| 1. Ordinary shares in RMB | 6,308,552,654 | 6,308,552,654 | ||
| 2. Domestic listed foreign Shares | ||||
| 3. Offshore listed foreign Shares | 2,719,293,787 | 397,676,840 | 32,352,800 | 3,084,617,827 |
| 4. Others | ||||
| III. Total shares | 9,027,846,441 | 397,676,840 | 32,352,800 | 9,393,170,481 |
| Items | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| Equity portion of convertible bonds | 2,364,195,333.79 | 2,215,712,153.81 | 148,483,179.98 | |
| Total | 2,364,195,333.79 | 2,215,712,153.81 | 148,483,179.98 |
| Items | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| Capital premium | 14,195,347,140.17 | 8,095,619,066.22 | 794,292,522.66 | 21,496,673,683.73 |
| (share capital premium) | ||||
| Other capital reserve | 813,680,267.23 | 813,680,267.23 | ||
| Total | 15,009,027,407.40 | 8,095,619,066.22 | 794,292,522.66 | 22,310,353,950.96 |
| Items | Opening balance | Amount for the current period | Closing balance | ||||
| Amount before income tax in the current period | Less: income tax expense | Amount attributable to the parent company after tax | Amount attributable to minority shareholders after tax | Others | |||
| a | -292,647,416.24 | 56,080,279.79 | 55,956,231.90 | 124,047.89 | 37,860,811.71 | -198,830,372.63 | |
| b | -101,239,895.27 | 170,835,525.87 | -58,249,343.40 | 112,586,182.47 | 11,346,287.20 | ||
| c | -530,525,234.75 | -502,890,286.66 | -500,830,526.34 | -2,059,760.32 | -1,031,355,761.09 | ||
| d | -159,428,469.24 | 42,582,461.40 | -3,807,134.54 | 38,885,621.52 | -110,294.66 | -120,542,847.72 | |
| e | 37,624,286.44 | -759,575.21 | 166,956.47 | -595,263.81 | 2,645.07 | 37,029,022.63 | |
| Total | -1,046,216,729.06 | -234,151,594.81 | -61,889,521.47 | -293,997,754.26 | -2,043,362.02 | 37,860,811.71 | -1,302,353,671.61 |
| Items | Opening balance | Increase for the current period | Decrease for the current period | Closing balance |
| Statutory surplus reserve | 2,997,677,738.01 | 2,997,677,738.01 | ||
| Discretionary surplus reserve | 26,042,290.48 | 26,042,290.48 | ||
| Reserve fund | 11,322,880.64 | 11,322,880.64 | ||
| Enterprise development fund | 10,291,630.47 | 10,291,630.47 | ||
| Total | 3,045,334,539.60 | 3,045,334,539.60 |
| Items | Amounts |
| Undistributed profits at the end of previous year | 38,445,132,172.47 |
| Changes in accounting policies① | 183,214,768.11 |
| Undistributed profits at the beginning of the year | 38,628,346,940.58 |
| Add: net profit attributable to owners of the parent company | 6,852,271,812.97 |
| Other transfer in | -12,317,618.84 |
| Adjustment due to implementation of enterprise accounting standard | |
| Profit available for appropriation for the year | 45,468,301,134.71 |
| Less: appropriation of statutory surplus reserve | |
| Appropriation of staff incentive and welfare fund | |
| Dividend payable for ordinary shares | 3,420,918,669.85 |
| Undistributed profits at the end of period | 42,047,382,464.86 |
| Items | Amount for the current period | Amount for the previous period |
| Primary business | 110,963,580,135.76 | 95,222,506,535.21 |
| Other business | 655,241,928.97 | 505,590,571.44 |
| Total | 111,618,822,064.73 | 95,728,097,106.65 |
| Categories | Amount for the current period | Amount for the previous period | ||
| Primary business income | Primary business cost | Primary business income | Primary business cost | |
| Air conditioner | 21,626,942,343.55 | 15,570,568,221.85 | 16,994,714,538.19 | 12,325,759,112.18 |
| Refrigerator | 33,637,015,872.13 | 23,400,300,288.46 | 26,737,917,721.21 | 18,296,498,256.27 |
| Kitchen appliance | 16,918,040,488.85 | 11,715,172,134.94 | 14,065,148,916.99 | 9,863,397,560.12 |
| Water appliance | 5,778,983,645.59 | 3,336,143,841.42 | 4,455,955,349.13 | 2,567,869,114.74 |
| Washing machine | 24,988,233,426.16 | 16,920,815,831.58 | 19,706,304,066.77 | 13,498,929,586.30 |
| Equipment product and integrated channel services | 8,014,364,359.48 | 6,984,822,958.10 | 13,262,465,942.92 | 12,143,658,318.29 |
| Total | 110,963,580,135.76 | 77,927,823,276.35 | 95,222,506,535.21 | 68,696,111,947.90 |
| Items | Amount for the current period | Amount for the previous period |
| City maintenance and construction tax | 116,957,051.34 | 88,690,704.32 |
| Education surcharge | 84,945,850.69 | 63,314,967.69 |
| Property tax | 25,464,790.86 | 22,487,302.01 |
| Land use tax | 7,635,139.14 | 5,207,509.93 |
| Stamp duty | 84,852,090.78 | 72,199,239.68 |
| Others | 19,027,752.57 | 23,291,054.91 |
| Total | 338,882,675.38 | 275,190,778.54 |
| Items | Amount for the current period | Amount for the previous period |
| Selling expenses | 16,730,914,492.75 | 14,526,912,493.29 |
| Total | 16,730,914,492.75 | 14,526,912,493.29 |
Unit and Currency: RMB
| Items | Amount for the current period | Amount for the previous period |
| Administrative expenses | 5,033,576,083.72 | 4,608,308,707.03 |
| Total | 5,033,576,083.72 | 4,608,308,707.03 |
| Item | Amount for the current period | Amount for the previous period |
| R&D expenses | 3,738,734,614.40 | 2,939,733,549.14 |
| Total | 3,738,734,614.40 | 2,939,733,549.14 |
| Items | Amount for the current period | Amount for the previous period |
| Interest expenses | 363,256,552.03 | 719,257,090.03 |
| Less: Interest income | 264,334,107.38 | 219,622,316.65 |
| Less: Cash discount | 82,709,178.40 | 65,843,464.11 |
| Exchange gains and losses | 211,612,640.23 | 216,765,382.01 |
| Others | 67,834,179.59 | 50,963,873.72 |
| Total | 295,660,086.07 | 701,520,565.00 |
| Items | Amount for the current period | Amount for the previous period |
| Government grants related to revenue | 337,502,418.14 | 497,272,167.38 |
| Government grants related to assets | 39,678,023.49 | 28,017,088.05 |
| Total | 377,180,441.63 | 525,289,255.43 |
54. Investment income
√ Applicable □ Not Applicable
Unit and Currency: RMB
| Items | Amount for the current period | Amount for the previous period |
| Income from long-term equity investment calculated by equity method | 943,069,721.83 | 679,043,527.00 |
| Investment income from disposal of long-term equity investment | -199,825.65 | |
| Investment income from disposal of other equity instrument investments | 440,255.20 | 14,526,208.93 |
| Income from wealth management products | 28,216,179.52 | 48,451,938.85 |
| Investment income from disposal of financial assets at fair value through profit or loss | 164,957,510.67 | 14,961,073.66 |
| Total | 1,136,683,667.22 | 756,782,922.79 |
| Sources of gains from changes in fair value | Amount for the current period | Amount for the previous period |
| Changes in fair value of forward foreign exchange trading contracts | 46,929,961.72 | -35,571,335.94 |
| Changes in fair value of wealth management products | 1,881,780.81 | 2,809,431.16 |
| Changes in fair value of investment funds | 15,457,768.79 | |
| Others | 1,774,801.63 | |
| Total | 64,269,511.32 | -30,987,103.15 |
| Items | Amount for the current period | Amount for the previous period |
| Bad debts losses on bills receivable | 156,696.60 | 1,000,000.00 |
| Bad debts losses on accounts receivable | -44,188,119.81 | -109,905,504.07 |
| Total | -44,031,423.21 | -108,905,504.07 |
57. Impairment loss on assets
| Items | Amount for the current period | Amount for the previous period |
| Impairment losses on inventory | -402,766,436.32 | -412,325,166.32 |
| Impairment losses on other current assets | -228,869,824.32 | -197,422,966.37 |
| Impairment losses on fixed assets | -21,751,066.24 | |
| Impairment losses on intangible assets | ||
| Impairment losses on construction in progress | ||
| Impairment losses on long-term equity investment | ||
| Total | -653,387,326.88 | -609,748,132.69 |
| Items | Amount for the current period | Amount for the previous period |
| Gains on disposal of non-current assets | 157,808,087.44 | 14,120,787.44 |
| Less: losses on disposal of non-current assets | -15,393,133.19 | -28,563,193.90 |
| Total | 142,414,954.25 | -14,442,406.46 |
| Items | Amount for the current period | Amount for the previous period |
| Gains on disposal of non-current assets | 924,615.55 | 12,240,620.38 |
| Quality claims and fines | 19,066,129.21 | 17,811,610.75 |
| Others | 59,509,946.96 | 38,834,457.94 |
| Total | 79,500,691.72 | 68,886,689.07 |
| Items | Amount for the current period | Amount for the previous period |
| Losses on disposal of non-current assets | 7,928,197.15 | 9,175,290.01 |
| Others | 43,136,498.89 | 46,295,466.54 |
| Total | 51,064,696.04 | 55,470,756.55 |
| Items | Amount for the current period | Amount for the previous period |
| Current income tax expenses | 982,716,122.78 | 432,844,606.93 |
| Deferred income tax expenses | 540,467,141.62 | 228,382,266.41 |
| Total | 1,523,183,264.40 | 661,226,873.34 |
| Items | Amount for the current period |
| Total profit | 8,460,968,406.76 |
| Income tax expenses calculated pursuant to statutory/applicable tax rate(s) | 2,115,242,101.76 |
| Impact from different tax rates applicable to subsidiaries | -387,639,911.45 |
| Impact from adjustment to income tax in prior periods | -152,101,320.21 |
| Impact from non-taxable income | -251,234,711.04 |
| Impact from non-deductible cost, expense and loss | 48,767,934.40 |
| Impact from deductible provisional differences or deductible losses of unrecognized deferred income tax assets for the current period | 150,149,170.94 |
| Income tax expense | 1,523,183,264.40 |
| Items | Amount |
| Deposits and securities | 86,924,607.81 |
| Government grants | 282,417,200.52 |
| Non-operating income excluding government grants | 23,698,258.91 |
| Interest income | 272,381,326.84 |
| Others | 70,355,093.20 |
| Total | 735,776,487.28 |
| Items | Amount |
| Cash paid on selling expenses | 9,715,516,651.76 |
| Cash paid on administrative and R&D expenses | 3,145,406,556.73 |
| Cash paid on financial expenses | 57,104,763.74 |
| Non-operating expenses | 991,470.21 |
| Others | 124,738,221.20 |
| Total | 13,043,757,663.64 |
| Items | Amount |
| Others | 250,000.00 |
| Total | 250,000.00 |
| Items | Amount |
| Cash paid to lease | 313,614,596.21 |
| Repurchase of shares | 2,593,546,152.49 |
| Expenses from issuance of H-shares | 183,263,247.83 |
| Others | 386,900.00 |
| Total | 3,090,810,896.53 |
| Supplementary information | Amount for the current period | Amount for the previous period |
| 1. Net profit adjusted to cash flow of operating activities: | ||
| Net profit | 6,937,785,142.36 | 3,612,016,983.00 |
| Add: impairment provision for assets | 697,418,750.09 | 718,653,636.76 |
| Losses on credit impairment | ||
| Depreciation of fixed assets | 2,109,270,491.78 | 1,963,015,056.31 |
| Depreciation of fixed assets, oil and gas assets and production materials | ||
| Amortization of ROU assets | 465,382,008.86 | 478,210,242.71 |
| Amortization of long-term prepaid expenses | 110,505,485.99 | 81,963,800.63 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (gains are represented by “-”) | -135,411,372.65 | 11,377,076.09 |
| Losses on retirement of fixed assets (gains are represented by “-”) | ||
| Losses on change of fair value (gains are represented by “-”) | -64,269,511.32 | 30,987,103.15 |
| Financial expenses (gains are represented by “-”) | 574,869,192.26 | 936,022,472.04 |
| Loss on investments (gains are represented by “-”) | -1,136,683,667.22 | -756,782,922.79 |
| Decrease in deferred tax assets (increase is represented by “-”) | 549,883,365.96 | 143,796,985.57 |
| Increase of deferred tax liabilities (decrease is represented by “-”) | -9,416,224.31 | 84,585,280.84 |
| Decrease in inventories (increase is represented by “-”) | -3,765,167,637.00 | 2,543,296,922.45 |
| Decrease of operational account receivables (increase is represented by “-”) | -2,215,770,602.60 | -5,862,948,537.55 |
| Increase of operational account payables (decrease is represented by “-”) | 4,321,292,391.08 | -4,757,655,587.32 |
| Others | -15,864,086.39 | 230,542,230.71 |
| Net cash flow generated from operational activities | 8,423,823,726.89 | -542,919,257.40 |
| 2. Significant investment and financing activities not involving cash inflows and outflows: | ||
| Capital transferred from debts | 6,277,583,752.41 | |
| Convertible corporate bonds due within one year | ||
| Fixed assets under finance lease | ||
| 3. Net changes of cash and cash equivalents: | ||
| Cash balance at the end of the period | 41,109,454,836.46 | 43,021,810,920.60 |
| Less: cash balance at the beginning of the period | 45,635,132,638.48 | 34,962,947,399.85 |
| Add: cash equivalents balance at the end of the period | ||
| Less: cash equivalents balance at the beginning of the period | ||
| Net increase of cash and cash equivalents | -4,525,677,802.02 | 8,058,863,520.75 |
| Items | Closing balance | Opening balance |
| I. Cash | 41,109,454,836.46 | 45,635,132,638.48 |
| Including: cash on hand | 6,532,547.04 | 2,257,666.98 |
| Bank deposits always available for payment | 40,349,002,059.65 | 45,306,078,417.59 |
| Other monetary funds always available for payment | 753,920,229.77 | 326,796,553.91 |
| II. Cash equivalents | ||
| Including: Bond investments due within three months | ||
| III. Closing balance of cash and cash equivalents | 41,109,454,836.46 | 45,635,132,638.48 |
| Items | Closing Balance | Exchange rate | Closing converted RMB balance |
| Monetary funds | - | - | 9,286,167,138.39 |
| Including: USD | 723,005,674.30 | 6.4601 | 4,670,688,956.52 |
| EUR | 102,772,303.43 | 7.6862 | 789,928,478.64 |
| JPY | 12,371,839,384.77 | 0.058428 | 722,861,831.57 |
| HKD | 411,408,354.34 | 0.8321 | 342,332,891.65 |
| 2,760,354,980.01 | |||
| Accounts receivable | - | - | 15,391,577,197.35 |
| Including: USD | 1,079,521,428.82 | 6.4601 | 6,973,816,382.31 |
| EUR | 445,419,850.63 | 7.6862 | 3,423,586,055.91 |
| JPY | 4,144,687,700.19 | 0.058428 | 242,165,812.95 |
| 4,752,008,946.18 | |||
| Long-term borrowings | - | - | 9,590,298,914.57 |
| Including: USD | 1,052,645,878.53 | 6.4601 | 6,800,197,639.89 |
| EUR | 122,247,325.97 | 7.6862 | 939,617,396.90 |
| 329,906,360.02 | 0.088800 | 29,295,684.77 | |
| 319,963,612.98 | 4.5153 | 1,444,731,701.69 | |
| JPY | 6,280,974,522.34 | 0.058428 | 366,984,779.39 |
| 9,471,711.93 | |||
| Short-term borrowings | - | - | 10,906,147,093.94 |
| Including: USD | 657,928,527.55 | 6.4601 | 4,250,284,080.84 |
| EUR | 532,452,854.50 | 7.6862 | 4,092,539,130.29 |
| JPY | 1,296,927,986.56 | 0.058428 | 75,776,908.40 |
| HKD | 2,600,173,375.64 | 0.8321 | 2,163,604,265.87 |
| 323,942,708.54 | |||
| Accounts payable | - | - | 21,514,977,908.02 |
| Including: USD | 2,059,968,218.84 | 6.4601 | 13,307,600,690.50 |
| EUR | 504,937,074.31 | 7.6862 | 3,881,047,340.58 |
| JPY | 6,132,558,699.30 | 0.058428 | 358,313,139.68 |
| 213,699,394.60 | 4.5153 | 964,916,876.44 | |
| 3,003,099,860.82 | |||
| on-current liabilities due within one year | - | - | 3,788,780,803.40 |
| Including: USD | 95,843,007.76 | 6.4601 | 619,155,414.43 |
| EUR | 361,382,453.68 | 7.6862 | 2,777,657,815.47 |
| JPY | 402,268,650.00 | 0.058428 | 23,503,752.68 |
| 232,975,804.26 | 0.088800 | 20,688,251.42 | |
| 347,775,569.40 |
(4) Qingdao Haier Air-Conditioner Electronics Co., Ltd., a subsidiary of the Company,established a wholly-owned subsidiary Qingdao Haishengze Technology Co., Ltd. for thecurrent period.
(5) Qingdao Haizhi Investment Management Co., Ltd., a subsidiary of the Company,established a wholly-owned subsidiary Qingdao Hailvyuan Recycling Technology Co., Ltd.for the current period.
IX. Interests in other entities
1. Interests in subsidiaries
(1). Composition of the Group
| Name of subsidiary | Principal place of business | Place of registration | Nature of business | Shareholding | Proportion of the voting rights | Acquiring method | |
| Direct | Indirect | ||||||
| Flourishing Reach Limited | Mainland of China and Hong Kong | Bermuda | Group company, which mainly engages in investment holding, and production, sale and distribution of washing machines and water heaters | 100.00% | 100.00% | Establishment | |
| Haier U.S. Appliance Solutions, Inc. | The US | The US | Group company, which mainly engages in household appliances production and distribution business | 100.00% | 100.00% | Establishment | |
| Haier Singapore Investment Holding Co., Ltd. | Singapore and other overseas areas | Singapore | Group company, which mainly engages in the production and distribution of home appliances | 100.00% | 100.00% | Business combination under common control | |
| Haier New Zealand Investment Holding Company Limited | New Zealand | New Zealand | Group company, which mainly engages in the production and distribution of household appliances | 100.00% | 100.00% | Business combination under common control | |
| Candy S.p.A | Europe | Italy | Group company, which mainly engages in the production and distribution of household appliances | 100.00% | 100.00% | Business combination not under common control | |
| Qingdao Haier Air Conditioner Gen Corp., Ltd. | Qingdao High-tech Zone | Qingdao High-tech Zone | Manufacture and operation of household air-conditioners | 100.00% | 100.00% | Business combination under common control | |
| Guizhou Haier Electronics Co., Ltd. | Huichuan District, Zunyi City, Guizhou Province | Huichuan District, Zunyi City, Guizhou Province | Manufacture and sale of refrigerator | 59.00% | 59.00% | Business combination under common control | |
| Hefei Haier Air-conditioning Co., Limited | Hefei Haier Industrial Park | Hefei Haier Industrial Park | Manufacture and sale of air-conditioners | 99.22% | 99.22% | Business combination under common control | |
| Wuhan Haier Electronics Co., Ltd. | Wuhan Haier Industrial Park | Wuhan Haier Industrial Park | Manufacture and sale of air-conditioners | 60.00% | 60.00% | Business combination under common control | |
| Qingdao Haier Air-Conditioner Electronics Co., Ltd. | Qingdao Development Zone | Qingdao Development Zone | Manufacture and sale of air-conditioners | 99.54% | 99.54% | Business combination under common control | |
| Qingdao Haier Information Plastic Development Co., Ltd. | Qingdao High-tech Zone | Qingdao High-tech Zone | Manufacturing of plastic products | 100.00% | 100.00% | Business combination under common control | |
| Dalian Haier Precision Products Co., Ltd. | Dalian Export Expressing Zone | Dalian Export Expressing Zone | Manufacture and sale of precise plastics | 90.00% | 90.00% | Business combination under common control | |
| Hefei Haier Plastic Co., Ltd. | Hefei Economic & Technological Development Area | Hefei Economic & Technological Development Area | Manufacture and sale of plastic parts | 77.36% | 4.83% | 82.19% | Business combination under common control |
| Qingdao Meier Plastic Powder Co., Ltd. | Qingdao Development Zone | Qingdao Development Zone | Manufacture of plastic powder, plastic sheet and high-performance coatings | 40.00% | 60.00% | 100.00% | Business combination under common control |
| Chongqing Haier Precision Plastic Co., Ltd. | Jiangbei District, Chongqing City | Jiangbei District, Chongqing City | Plastic products, sheet metal work, electronics and hardware | 90.00% | 10.00% | 100.00% | Business combination under common control |
| Qingdao Haier Refrigerator Co., Ltd. | Qingdao High-tech Zone | Qingdao High-tech Zone | Manufacture of fluorine-free refrigerators | 100.00% | 100.00% | Establishment | |
| Qingdao Haier Refrigerator (International) Co., Ltd. | Pingdu Development Zone, Qingdao | Pingdu Development Zone, Qingdao | Manufacture of refrigerators | 100.00% | 100.00% | Establishment |
| Qingdao Household Appliance Technology and Equipment Research Institute | Qingdao High-tech Zone | Qingdao High-tech Zone | R&D of home appliances mold and technological equipment | 100.00% | 100.00% | Establishment | |
| Qingdao Haier Whole Set Home Appliance Service Co., Ltd. | Qingdao High-tech Zone | Qingdao High-tech Zone | R&D and sales of health-related small home appliance | 98.33% | 98.33% | Establishment | |
| Qingdao Haier Special Refrigerator Co., Ltd. | Qingdao Development Zone | Qingdao Development Zone | Manufacture and sales of fluorine-free refrigerators | 100.00% | 100.00% | Establishment | |
| Qingdao Haier Dishwasher Co., Ltd. | Qingdao Development Zone | Qingdao Development Zone | Manufacture of dish washing machine and gas stove | 100.00% | 100.00% | Establishment | |
| Qingdao Haier Special Freezer Co., Ltd. | Qingdao Development Zone | Qingdao Development Zone | Development, manufacture and sales of freezer and other refrigeration products | 96.06% | 96.06% | Establishment | |
| Dalian Haier Air-conditioning Co., Ltd. | Dalian Export Expressing Zone | Dalian Export Expressing Zone | Manufacture of air conditioners | 90.00% | 90.00% | Establishment | |
| Dalian Haier Refrigerator Co., Ltd. | Dalian Export Expressing Zone | Dalian Export Expressing Zone | Manufacture of refrigerators | 90.00% | 90.00% | Establishment | |
| Qingdao Haier Electronic Plastic Co., Ltd. | Qingdao Development Zone | Qingdao Development Zone | Development, assembling and sales of plastics, electronics and products | 80.00% | 80.00% | Establishment | |
| Wuhan Haier Freezer Co., Ltd. | Wuhan Economic & Technological Development Zone High-tech Industrial Park | Wuhan Economic & Technological Development Zone High-tech Industrial Park | R&D, manufacture and sales of freezer and other refrigeration products | 95.00% | 5.00% | 100.00% | Establishment |
| Qingdao Haidarui Procurement Service | Qingdao High-tech Zone | Qingdao High-tech | Development, purchase and sale of electrical products and components | 98.00% | 2.00% | 100.00% | Establishment |
| Co., Ltd. | Zone | ||||||
| Qingdao Haier Intelligent Home Appliance Technology Co., Ltd. | Qingdao High-tech Zone | Qingdao High-tech Zone | Development and application of household appliances, communication, electronics and network engineering technology | 98.91% | 1.09% | 100.00% | Establishment |
| Chongqing Haier Air-conditioning Co., Ltd. | Jiangbei District, Chongqing City | Jiangbei District, Chongqing City | Manufacture and sales of air conditioners | 76.92% | 23.08% | 100.00% | Establishment |
| Qingdao Haier Precision Products Co., Ltd. | Qianwangang Road, Jiaonan City | Qianwangang Road, Jiaonan City | Development and manufacture of precise plastic, metal plate, mold and electronic products for household appliances | 70.00% | 70.00% | Establishment | |
| Qingdao Haier Air Conditioning Equipment Co., Ltd. | Jiaonan City, Qingdao | Jiaonan City, Qingdao | Manufacture of home appliances and electronics | 100.00% | 100.00% | Establishment | |
| Dalian Free Trade Zone Haier Air-conditioning Trading Co., Ltd. | Dalian Export Expressing Zone | Dalian Export Expressing Zone | Domestic trade | 100.00% | 100.00% | Establishment | |
| Dalian Free Trade Zone Haier Refrigerator Trading Co., Ltd. | Dalian Export Expressing Zone | Dalian Export Expressing Zone | Domestic trade | 100.00% | 100.00% | Establishment | |
| Chongqing Haier Electronics Sales Co., Ltd. | Jiangbei District, Chongqing City | Jiangbei District, Chongqing City | Sales of household appliances | 95.00% | 5.00% | 100.00% | Establishment |
| Chongqing Haier Refrigeration Appliance Co., Ltd. | Jiangbei District, Chongqing City | Jiangbei District, Chongqing City | Manufacture of refrigerator | 84.95% | 15.05% | 100.00% | Establishment |
| Hefei Haier Refrigerator Co., Ltd. | Hefei Haier Industrial Park | Hefei Haier Industrial Park | Manufacture of refrigerator | 100.00% | 100.00% | Establishment | |
| Wuhan Haier Energy and Power Co., Ltd. | Wuhan Haier Industrial | Wuhan Haier | Energy service | 75.00% | 75.00% | Establishment |
| Park | Industrial Park | ||||||
| Qingdao Haier HVAC Engineering Co., Ltd. | Qingdao Development Zone | Qingdao Development Zone | Air-conditioning engineer | 100.00% | 100.00% | Establishment | |
| Chongqing Goodaymart Electric Appliance Sale Co., Ltd. | Jiangbei District, Chongqing City | Jiangbei District, Chongqing City | Sales of household appliances and electronics | 51.00% | 51.00% | Establishment | |
| Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited | Jiaozhou City, Qingdao | Jiaozhou City, Qingdao | Manufacture and sale of air-conditioners | 100.00% | 100.00% | Establishment | |
| Qingdao Haier Component Co., Ltd. | Jiaozhou City, Qingdao | Jiaozhou City, Qingdao | Manufacture and sales of plastic and precise sheet metal products | 100.00% | 100.00% | Establishment | |
| Haier Shareholdings (Hong Kong) Limited | Hong Kong | Hong Kong | Investment | 100.00% | 100.00% | Establishment | |
| Harvest International Company | Cayman Islands | Cayman Islands | Investment | 100.00% | 100.00% | Establishment | |
| Shenyang Haier Refrigerator Co., Ltd. | Shenbei New Area, Shenyang City | Shenbei New Area, Shenyang City | Manufacture and sales of refrigerator | 100.00% | 100.00% | Establishment | |
| Foshan Haier Freezer Co., Ltd. | Sanshui District, Foshan City | Sanshui District, Foshan City | Manufacture and sales of freezer | 100.00% | 100.00% | Establishment | |
| Zhengzhou Haier Air-conditioning Co., Ltd. | Zhengzhou Economic and Technological Development Zone | Zhengzhou Economic and Technological Development Zone | Manufacture and sales of air conditioner | 100.00% | 100.00% | Establishment | |
| Qingdao Haidayuan Procurement Service Co., Ltd. | Qingdao Development Zone | Qingdao Development Zone | Development, purchase and sale of electrical products and components | 100.00% | 100.00% | Establishment | |
| Qingdao Haier Intelligent Technology | Qingdao High-tech Zone | Qingdao High-tech | R&D of household appliance products | 100.00% | 100.00% | Establishment |
| Development Co., Ltd. | Zone | ||||||
| Qingdao Hairi Hi-Tech Model Co., Ltd. | Qingdao High-tech Zone | Qingdao High-tech Zone | Design, manufacture and sales of product model and mould | 100.00% | 100.00% | Business combination under common control | |
| Qingdao Hai Gao Design and Manufacture Co., Ltd. | Qingdao High-tech Zone | Qingdao High-tech Zone | Industrial design and prototype production | 75.00% | 75.00% | Business combination under common control | |
| Beijing Haier Guangke Digital Technology Co., Ltd. | Beijing | Beijing | Technological development, promotion and transfer | 55.00% | 55.00% | Business combination under common control | |
| Shanghai Haier Medical Technology Co., Ltd. | Shanghai | Shanghai | Wholesale and retail of medical facility | 80.93% | 80.93% | Establishment | |
| Qingdao Haier Technology Co., Ltd. | Qingdao | Qingdao | Development and sales of software and information product | 100.00% | 100.00% | Business combination under common control | |
| Qingdao Haier Technology Investment Co., Ltd. | Qingdao | Qingdao | Entrepreneurship investment and consulting | 100.00% | 100.00% | Establishment | |
| Qingdao Casarte Smart Living Appliances Co., Ltd. | Qingdao | Qingdao | Development, production and sales of appliances | 100.00% | 100.00% | Establishment | |
| Qingdao Haichuangyuan Appliances Sales Co., Ltd. | Qingdao | Qingdao | Sales of household appliances and digital products | 100.00% | 100.00% | Establishment | |
| Haier Overseas Electric Appliance Co., Ltd. | Qingdao | Qingdao | Sales of household appliances, international freight forwarding | 100.00% | 100.00% | Establishment | |
| Haier Group (Dalian) Electrical Appliances Industry Co., Ltd. | Dalian | Dalian | Sales of household appliances, international freight forwarding | 100.00% | 100.00% | Business combination under common control |
| Qingdao Haier Central Air Conditioning Co., Ltd. | Qingdao | Qingdao | Production and sales of air conditioners and refrigeration equipment | 100.00% | 100.00% | Establishment | |
| Beijing Haier Yun Kitchen Technology Co., Ltd. | Beijing | Beijing | Technological development promotion and transfer | 95.77% | 95.77% | Establishment | |
| Chongqing Haier Home Appliance Sale Hefei Co., Ltd. | Hefei | Hefei | Sales of household appliances | 100.00% | 100.00% | Establishment | |
| Qingdao Weixi Smart Technology Co., Ltd. | Qingdao | Qingdao | Intelligent sanitary ware | 71.43% | 71.43% | Establishment | |
| Haier U+smart Intelligent Technology (Beijing) Co., Ltd. | Beijing | Beijing | Software development | 100.00% | 100.00% | Establishment | |
| Haier (Shanghai) Electronics Co., Ltd. | Shanghai | Shanghai | Sales and R&D of home appliances | 100.00% | 100.00% | Establishment | |
| Haier Shanghai Zhongzhi Fang Chuang Ke Management Co., Ltd. | Shanghai | Shanghai | Business management consulting, chuangke management | 100.00% | 100.00% | Establishment | |
| Qingdao Haier Smart Kitchen Appliance Co., Ltd. | Qingdao | Qingdao | Production and sales of kitchen smart household appliances | 100.00% | 100.00% | Establishment | |
| JIYI Appliance (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of household appliances | 100.00% | 100.00% | Establishment | |
| Qingdao Hao Pin Hai Rui Information Technology Co., Ltd. | Qingdao | Qingdao | Development, purchase and sales of electrical products and components | 100.00% | 100.00% | Establishment | |
| Qingdao Haier Special Refrigerating Appliance Co., Ltd. | Qingdao | Qingdao | Production and sales of household appliances | 100.00% | 100.00% | Establishment | |
| Beijing Zero Micro Technology Co., Ltd. | Beijing | Beijing | Technological development and promotion | 55.00% | 55.00% | Establishment | |
| Laiyang Haier Smart | Laiyang | Laiyang | Production and sales of household | 100.00% | 100.00% | Establishment |
| Kitchen Appliance Co., Ltd. | appliances | ||||||
| Hefei Haier Air Conditioning Electronics Co., Ltd. | Hefei | Hefei | Production and sales of household appliances | 100.00% | 100.00% | Establishment | |
| Haier (Shanghai) Home Appliance Research and Development Center Co., Ltd. | Shanghai | Shanghai | R&D of household appliances | 100.00% | 100.00% | Establishment | |
| Haier (Shenzhen) R&D Co., Ltd. | Shenzhen | Shenzhen | Development, research and technical services of home and commercial appliances | 100.00% | 100.00% | Establishment | |
| Guangzhou Haier Air Conditioner Co., Ltd. | Guangdong | Guangdong | Manufacturing of refrigeration and air conditioning equipment | 100.00% | 100.00% | Establishment | |
| Qingdao Yunshang Yuyi IOT Technology Co., Ltd. | Qingdao | Qingdao | IoT technology R&D | 70.00% | 70.00% | Establishment | |
| Haiyu (Shanghai) Intelligent Technology Co., Ltd. | Shanghai | Shanghai | Rental of apartments, intelligent equipment, etc. | 70.00% | 70.00% | Establishment | |
| Qingdao Haizhi Investment Management Co., Ltd. | Qingdao | Qingdao | Asset management, equity investment | 100.00% | 100.00% | Establishment | |
| Qingdao Jijia Cloud Intelligent Technology Co., Ltd. | Qingdao | Qingdao | R&D and sales of lighting appliances | 80.00% | 80.00% | Establishment | |
| Qingdao Haimeihui Management Consulting Co., Ltd. | Qingdao | Qingdao | Leasing and business services | 100.00% | 100.00% | Establishment | |
| Wuxi Yunshang Internet of Clothing Technology Co., Ltd. | Wuxi | Wuxi | Internet of Things technology R&D | 100.00% | 100.00% | Establishment | |
| Qingdao Guochuang Intelligent Household | Qingdao | Qingdao | Scientific research and technical service | 37.75% | 37.75% | Establishment |
| Appliance Research Institute Co., Ltd. | |||||||
| Hangzhou Gandao Intelligent Technology Co., Ltd. | Hangzhou | Hangzhou | Technology development, service | 52.58% | 52.58% | Establishment | |
| Qingdao Haidacheng Procurement Services CO., LTD. | Qingdao | Qingdao | Development, purchase and sales of electrical products and components | 100.00% | 100.00% | Establishment | |
| Guangdong Heilong Intelligent Technology CO., LTD. | Guangzhou | Guangzhou | Scientific research and technical service | 76.72% | 76.72% | Business combination not under common control | |
| Beijing Haixianghui Technology CO., LTD. | Beijing | Beijing | Scientific research and technical service | 100.00% | 100.00% | Establishment | |
| Qingdao Hairuijiejing Electronics Co., Ltd. | Beijing | Beijing | Electronic equipment technology research, development, transfer, consulting and services | 51.00% | 51.00% | Business combination not under common control | |
| Haier Smart Home Experience Cloud Ecological Technology Co., Ltd. | Qingdao | Qingdao | Technology development of smart home products, whole furniture customization, etc. | 100.00% | 100.00% | Establishment | |
| Haier Smart Home (Qingdao) Network | Qingdao | Qingdao | Technical services, development, consulting, transfer, etc. | 100.00% | 100.00% | Establishment |
| Co., Ltd. | |||||||
| Haier Smart Home (Qingdao) Network Operation Co., Ltd. | Qingdao | Qingdao | Residential interior decoration, professional construction operation, special equipment installation, upgrading and repair, etc. | 100.00% | 100.00% | Establishment | |
| Qingdao Internet of Wine Technology Co., Ltd. | Qingdao | Qingdao | Urban distribution and transportation services, import and export of goods, technology import and export and food business, etc. | 100.00% | 100.00% | Establishment | |
| Qingdao Linghai Air Conditioning Equipment Co., Ltd. | Qingdao | Qingdao | Manufacture and production of air conditioner and refrigeration equipment | 100.00% | 100.00% | Establishment | |
| Chongqing Yunshang Yilian Technology Co., Ltd. | Qingdao | Qingdao | Food business, commodity import and export, technology import and export, Internet information services, etc. | 100.00% | 100.00% | Establishment | |
| Shenzhen Yunshang Yilian Technology Co., Ltd. | Chongqing | Chongqing | Import and export business, Internet, Internet of things, big data, AI, AR and technical services | 100.00% | 100.00% | Establishment | |
| Qingdao Haixiangxue Human Resources Co., Ltd. | Shenzhen | Shenzhen | Employment agency activities | 100.00% | 100.00% | Establishment | |
| Jiangxi Haier Medical Technology Co., Ltd. | Qingdao | Qingdao | Wholesale and retail of medical equipment | 100.00% | 100.00% | Establishment |
| Qingdao Haizhi Shenlan Technology Co., Ltd. | Jiangxi | Jiangxi | Technical service development | 100.00% | 100.00% | Establishment | |
| Qingdao Haishengze Technology Co., Ltd. | Qingdao | Qingdao | Air conditioning equipment technical services | 100.00% | 100.00% | Establishment | |
| Qingdao Hailvyuan Recycling Technology Co., Ltd. | Qingdao | Qingdao | Electrical and electronic products waste treatment | 100.00% | 100.00% | Establishment | |
| Tianjin Internet of clothes Ecological Technology Co., Ltd. | Tianjin | Tianjin | IoT technology development | 100.00% | 100.00% | Establishment | |
| Microenterprises such as Qingdao Hai Heng Feng Electrical Appliances Sale & Service Co., Ltd. | All over the country | All over the country | Sales of household appliances | Establishment |
(2). Material non-wholly owned subsidiaries
√ Applicable □ Not Applicable
Unit and Currency: RMB
| Name of subsidiary | Shareholding of minority shareholders (%) | Profit or loss attributable to minority shareholders in the current period | Dividends announced to be distributed to minority shareholders in the current period | Balance of minority interests at the end of the period |
| Guizhou Haier Electronics Co., Ltd. | 41.00 | 6,485,719.90 | 12,300,000.00 | 100,825,739.81 |
| Wuhan Haier Electronics Co., Ltd. | 40.00 | 3,870,409.79 | 254,793,415.63 |
| Name of subsidiary | Closing balance | |||||
| Current assets | Non-current Assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Guizhou Haier Electronics Co., Ltd. | 401,766,784.21 | 97,384,786.88 | 499,151,571.09 | 245,840,432.97 | 7,394,699.61 | 253,235,132.58 |
| Wuhan Haier Electronics Co., Ltd. | 911,350,916.05 | 163,569,066.14 | 1,074,919,982.19 | 437,936,443.12 | 437,936,443.12 | |
| Name of Subsidiary | Opening balance | |||||
| Current assets | Non-current Assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Guizhou Haier Electronics Co., Ltd. | 598,503,571.44 | 99,869,513.40 | 698,373,084.84 | 432,050,892.47 | 6,224,582.87 | 438,275,475.34 |
| Wuhan Haier Electronics Co., Ltd. | 857,372,778.47 | 162,182,594.22 | 1,019,555,372.69 | 392,247,858.10 | 392,247,858.10 | |
| Name of subsidiary | Amount for the current period | |||
| Operating revenue | Net profit | Total comprehensive | Cash flow from operating activities | |
| income | ||||
| Guizhou Haier Electronics Co., Ltd. | 662,890,916.60 | 15,818,829.01 | 15,818,829.01 | -96,960,642.56 |
| Wuhan Haier Electronics Co., Ltd. | 1,116,565,155.40 | 9,676,024.48 | 9,676,024.48 | 146,467,762.05 |
| Name of subsidiary | Amount for the previous period | |||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Guizhou Haier Electronics Co., Ltd. | 489,594,043.14 | 12,420,159.51 | 12,420,159.51 | -244,989,823.11 |
| Wuhan Haier Electronics Co., Ltd. | 555,927,511.14 | -20,154,743.87 | -20,154,743.87 | 28,624,806.30 |
| Items | Others |
| Total consideration for acquisition/disposal | 2,550,000.00 |
| Less: share of net assets of subsidiaries in respect to the shareholding proportion acquired/disposed | 2,264,941.77 |
| Difference | |
| Including: capital reserve adjustment | -285,058.23 |
| Name of joint ventures or associates | Principal place of business | Place of registration | Nature of business | Shareholding | Accounting treatment of investment |
| Haier Finance Co., Ltd. | Qingdao | Qingdao | Financial services | 42.00% | Equity method |
| Bank of Qingdao Co., Ltd. | Qingdao | Qingdao | Commercial Bank | 8.13% | Equity method |
| Wolong Electric (Jinan) Motor Co., Ltd. | Jinan | Jinan | Motor Manufacturing | 30.00% | Equity method |
| Qingdao Hegang New Material Technology Co., Ltd. | Qingdao | Qingdao | Steel plate Manufacturing | 23.94% | Equity method |
| Qingdao Haier SAIF Smart Home Industry Investment Center (Limited Partnership) | Qingdao | Qingdao | Venture Capital | 63.13% | Equity method |
| Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Co., Ltd. | Qingdao | Qingdao | Manufacturing of household appliances | 45.00% | Equity method |
| Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. | Qingdao | Qingdao | Manufacturing of household appliances | 49.00% | Equity method |
| Qingdao Haier Multimedia Co., Ltd. | Qingdao | Qingdao | R&D and sales of televisions | 20.20% | Equity method |
| Qingdao Haier Moulds Co., Ltd. | Qingdao | Qingdao | Mold processing and manufacturing | 25.00% | Equity method |
| Hefei Feier Smart Technology Co., Ltd. | Hefei | Hefei | Technology development | 40.00% | Equity method |
| Anhui Kunhe Intelligent Technology Co., Ltd. | Hefei | Hefei | Electrical equipment R&D | 30.00% | Equity method |
| Zhejiang Futeng Fluid Technology Co., Ltd. | Huzhou | Huzhou | Gas compression machinery development and manufacturing | 48.00% | Equity method |
| Beijing Mr. Hi Network Technology Company Limited | Beijing | Beijing | Technology development | 36.29% | Equity method |
| Beijing Xiaobei Technology Co., Ltd. | Beijing | Beijing | Sales of household appliances | 42.75% | Equity method |
| Beijing ASU Tech Co. Ltd | Beijing | Beijing | Technical service import and export business | 36.45% | Equity method |
| Shenzhen Genyuan Environmental Protection Technology Co., Ltd. | Shenzhen | Shenzhen | Technical advisory services | 16.89% | Equity method |
| Qingdao Haimu Investment Management Co., Ltd. | Qingdao | Qingdao | Investment Management | 49.00% | Equity method |
| Qingdao Haimu Smart Home Investment Partnership (Limited Partnership) | Qingdao | Qingdao | Investment Management | 24.00% | Equity method |
| Guangzhou Heying Investment Partnership (Limited Partnership) | Guangzhou | Guangzhou | Investment | 49.00% | Equity method |
| Qingdao Java Cloud Network Technology Co., Ltd. | Qingdao | Qingdao | Home online service | 24.93% | Equity method |
| Qingdao RRS Service Co., Ltd. | Qingdao | Qingdao | Water equipment technical service | 40.00% | Equity method |
| Bingji (Shanghai) Corporate Management Co., Ltd. | Shanghai | Shanghai | Investment management | 45.00% | Equity method |
| Youjin (Shanghai) Corporate Management Co., Ltd. | Shanghai | Shanghai | Investment management | 45.00% | Equity method |
| RRS (Shanghai) Investment Co., Ltd. | Shanghai | Shanghai | Investment management | 45.00% | Equity method |
| Haier Best Water Technology Co., Ltd. | Qingdao | Qingdao | Water equipment technology development service | 49.00% | Equity method |
| Huizhi Xiangshun Equity Investment Fund (Qingdao) Partnership (Limited Partnership) | Qingdao | Qingdao | Investment management | 30.00% | Equity method |
| Qingdao RRS Huizhi Investment Co., Ltd. | Qingdao | Qingdao | Investment management | 50.00% | Equity method |
| Meiling Candy Washing Machine Co., Ltd. | Hefei | Hefei | Manufacturing of home appliances | 40.00% | Equity method |
| Konan Electronic Co., Ltd. | Japan | Japan | Motor Manufacturing | 50.00% | Equity method |
| HPZ LIMITED | Nigeria | Nigeria | Manufacturing of household appliances | 25.01% | Equity method |
| HNR Company (Private) Limited | Pakistan | Pakistan | Manufacturing of household appliances | 31.72% | Equity method |
| Haier Raya Electric S.A.E | Egypt | Egypt | Manufacturing of home appliances | 15.00% | Equity method |
| Controladora Mabe S.A.deC.V. | Mexico | Mexico | Manufacturing of household | 48.41% | Equity method |
| appliances | |||||
| Middle East Air conditioning Company, Limited | Saudi Arabia | Saudi Arabia | Sales of household appliances | 49.00% | Equity method |
| Items | Finance company | |
| Closing balance/ Amount for the current period | Opening balance/ Amount for the previous period | |
| Current assets | 59,018,215,668.78 | 62,750,087,810.02 |
| Non-current assets | 9,759,970,621.31 | 12,907,238,025.07 |
| Total assets | 68,778,186,290.09 | 75,657,325,835.09 |
| Current liabilities | 51,712,613,664.94 | 59,895,340,204.39 |
| Non-current liabilities | 435,476,096.24 | 223,325,462.63 |
| Total liabilities | 52,148,089,761.18 | 60,118,665,667.02 |
| Minority equity interests | ||
| Equity interest attributable to shareholders of the Parent Company | 16,630,096,528.91 | 15,538,660,168.07 |
| Including: share of net assets calculated based on shareholding percentage | 6,984,640,542.15 | 6,526,237,270.60 |
| Operating income | 1,071,931,150.97 | 1,116,349,935.66 |
| Net profit | 790,600,102.99 | 839,643,218.29 |
| Other comprehensive income | 73,947,771.60 | 3,721,035.88 |
| Total comprehensive income | 864,547,874.59 | 843,364,254.17 |
| Dividend received from associates for the year | 126,000,000.00 | 126,000,000.00 |
| Investment in Associates | Closing balance/Amount for the current period | Opening balance/Amount for the previous period |
| Bank of Qingdao Co., Ltd. | 2,572,720,188.54 | 2,463,096,567.92 |
| Wolong Electric (Jinan) Motor Co., Ltd. | 157,289,089.66 | 143,847,870.70 |
| Qingdao Hegang New Material Technology Co., Ltd. | 308,135,448.88 | 297,154,935.85 |
| Qingdao Haier SAIF Smart Home Industry Investment Center (Limited Partnership) | 379,687,446.86 | 385,797,036.73 |
| Mitsubishi Heavy Industries Haier (Qingdao) Air Conditioner Co., Ltd. | 693,937,118.87 | 654,581,961.84 |
| Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. | 396,387,842.10 | 415,298,165.93 |
| Qingdao Haier Multimedia Co., Ltd. | 278,826,351.43 | 328,987,205.07 |
| Qingdao Haier Moulds Co., Ltd. | 267,574,107.36 | 259,696,084.44 |
| Hefei Feier Smart Technology Co., Ltd. | 3,150,277.71 | 1,491,024.72 |
| Anhui Kunhe Intelligent Technology Co., Ltd. | 3,000,000.00 | |
| Zhejiang Futeng Fluid Technology Co., Ltd. | 70,000,000.00 | |
| Beijing Mr. Hi Network Technology Company Limited | 7,507,759.75 | 7,507,759.75 |
| Beijing Xiaobei Technology Co., Ltd. | 2,687,341.82 | 2,687,341.82 |
| Beijing ASU Tech Co., Ltd. | 21,887,291.50 | 32,365,969.45 |
| Shenzhen Genyuan Environmental Protection Technology Co., Ltd. | 6,914,487.73 | 6,914,487.73 |
| Qingdao Haimu Investment Management Co., Ltd. | 2,349,240.51 | 2,349,240.51 |
| Qingdao Haimu Smart Home Investment Partnership (Limited Partnership) | 47,631,591.84 | 47,870,696.66 |
| Guangzhou Heying Investment Partnership (Limited Partnership) | 288,209,197.58 | 288,209,197.58 |
| Qingdao Java Cloud Network Technology Co., Ltd. | 2,716,654.58 | 2,629,009.63 |
| Qingdao RRS Service Co., Ltd. | 33,413,328.00 | 33,010,000.00 |
| Bingji (Shanghai) Corporate Management Co., Ltd. | 948,477,471.32 | 928,444,178.47 |
| Youjin (Shanghai) Corporate Management Co., Ltd. | 1,723,686,311.49 | 1,687,262,142.67 |
| RRS (Shanghai) Investment Co., Ltd. | 3,133,156,929.97 | 3,066,931,168.49 |
| Haier Best Water Technology Co., Ltd. | 30,919,875.47 | 33,455,159.59 |
| Huizhi Xiangshun Equity Investment Fund (Qingdao) Partnership (Limited Partnership) | 120,000,000.00 | 120,000,000.00 |
| Qingdao RRS Huizhi Investment Co., Ltd. | 2,100,000.00 | 2,100,000.00 |
| Meiling Candy Washing Machine Co., Ltd. | 22,837,893.54 | 22,558,307.10 |
| Konan Electronic Co., Ltd. | 72,683,038.81 | 77,561,552.87 |
| HNR Company (Private) Limited | 132,889,897.80 | 92,141,887.27 |
| HPZ LIMITED | 68,247,526.08 | 66,827,745.66 |
| Haier Raya Electric S.A.E | 11,423,893.21 | 10,741,234.10 |
| Controladora Mabe S.A.deC.V. | 3,899,325,986.21 | 3,667,310,241.31 |
| MiddleEastAirconditioningCompany,Limited | 19,002,595.66 | 19,002,595.66 |
| Total book value of investment | 15,728,776,184.28 | 15,167,830,769.52 |
| Total amount of the following financial data of associates calculated based on shareholding percentage | ||
| --Net profit | 611,017,678.57 | 326,393,375.32 |
| --Other comprehensive income | 25,022,215.72 | 19,872,824.20 |
| --Total comprehensive income | 636,039,894.29 | 346,266,199.52 |
appliance business and others.Due to centralized management under the headquarters or exclusion from theassessment scope of segment management, the total assets of segments exclude monetaryfunds, financial assets held for trading, derivative financial assets, dividends receivable,held-for-sale financial assets, other current assets, other equity instruments investment,long-term accounts receivable, long-term equity investment, goodwill and deferred incometax assets; the total liabilities of segments exclude long-term and short-term borrowings,financial liabilities held for trading, derivative financial liabilities, dividends payable, taxespayable, held-for-sale liabilities, bonds payable, deferred income tax liabilities and othernon-current liabilities; profits of segments exclude financial expenses, profit or loss in fairvalue changes, income from investment, and income on disposal of assets, Non-value-added tax refundable upon imposition component of other income, non-operating incomesand expenses and income tax.
(1) Information of reportable segments
Segment information for the current period
| Segment information | China smart home business | ||||
| Internet of Food solutions | Air energy solutions | Internet of clothing solutions | Whole house water solutions | ||
| Refrigerator/freezers | Kitchen appliances | Air conditioners | Washing machine | Water home appliances | |
| Segment revenue | 19,188,607,407.17 | 1,784,628,763.28 | 17,645,069,189.02 | 12,958,083,453.07 | 5,884,989,693.13 |
| Including: external revenue | 16,898,259,985.27 | 1,495,140,647.14 | 15,095,177,397.57 | 10,900,998,372.57 | 5,806,336,225.56 |
| Inter-segment revenue | 2,290,347,421.90 | 289,488,116.14 | 2,549,891,791.45 | 2,057,085,080.50 | 78,653,467.57 |
| Total segment operating cost | 17,158,967,925.84 | 1,746,319,577.28 | 17,416,889,248.90 | 12,111,188,820.80 | 5,157,901,538.45 |
| Segment operating profit | 2,029,639,481.33 | 38,309,186.00 | 228,179,940.12 | 846,894,632.27 | 727,088,154.68 |
| Total segment assets | 14,263,264,997.70 | 2,213,752,410.82 | 17,291,242,044.73 | 10,803,883,492.16 | 3,686,416,228.16 |
| Total segment liabilities | 33,912,192,044.73 | 1,731,117,566.27 | 11,269,291,519.54 | 5,305,936,025.88 | 2,626,857,575.69 |
| Segment information | Overseas home appliance and smart home business | Other businesses | Inter-segment offsetting | Total |
| Segment revenue | 56,916,219,464.44 | 43,176,981,421.17 | -45,935,757,326.55 | 111,618,822,064.73 |
| Including: external revenue | 56,669,104,381.43 | 4,753,805,055.19 | - | 111,618,822,064.73 |
| Inter-segment revenue | 247,115,083.01 | 38,423,176,365.98 | -45,935,757,326.55 | - |
| Total segment operating cost | 53,698,944,763.59 | 43,260,088,724.43 | -46,032,767,760.39 | 104,517,532,838.90 |
| Segment operating profit | 3,217,274,700.85 | -83,107,303.26 | 97,010,433.84 | 7,101,289,225.83 |
| Total segment assets | 58,821,449,057.39 | 48,650,650,065.17 | -46,251,109,104.74 | 109,479,549,191.39 |
| Total segment liabilities | 35,163,611,251.89 | 55,278,993,290.89 | -46,105,899,926.52 | 99,182,099,348.37 |
| Segment information | China smart home business | ||||
| Internet of Food solutions | Air energy solutions | Internet of Clothing solutions | Whole house water solutions | ||
| Refrigerator/freezers | Kitchen appliances | Air conditioners | Washing machine | Water home appliances | |
| Segment revenue | 14,683,603,976.09 | 1,267,093,978.37 | 13,393,533,030.85 | 10,412,711,732.81 | 4,480,940,852.13 |
| Including: external revenue | 13,241,028,063.00 | 1,136,861,395.44 | 10,819,622,386.98 | 8,957,518,846.77 | 4,405,383,279.52 |
| Inter-segment revenue | 1,442,575,913.09 | 130,232,582.93 | 2,573,910,643.87 | 1,455,192,886.04 | 75,557,572.61 |
| Total segment operating cost | 13,228,134,258.51 | 1,257,529,605.79 | 13,392,894,090.92 | 9,830,205,497.05 | 3,950,589,964.96 |
| Segment operating profit | 1,455,469,717.58 | 9,564,372.58 | 638,939.93 | 582,506,235.76 | 530,350,887.17 |
| Total segment assets | 11,689,348,816.41 | 2,532,594,848.74 | 20,925,304,799.58 | 10,136,244,423.99 | 4,136,849,021.24 |
| Total segment liabilities | 29,205,929,335.98 | 1,538,646,245.07 | 13,440,305,435.84 | 8,218,924,225.44 | 5,108,347,965.67 |
| Segment information | Overseas home appliance and smart home business | Other business | Inter-segment offsetting | Total |
| Segment revenue | 46,113,430,665.25 | 41,772,176,557.36 | -36,395,393,686.21 | 95,728,097,106.65 |
| Including: external revenue | 45,890,025,774.06 | 11,277,657,360.88 | - | 95,728,097,106.65 |
| Inter-segment revenue | 223,404,891.19 | 30,494,519,196.48 | -36,395,393,686.21 | - |
| Total segment operating cost | 44,606,124,147.48 | 42,001,089,962.02 | -36,397,663,815.46 | 91,868,903,711.27 |
| Segment operating profit | 1,507,306,517.77 | -228,913,404.66 | 2,270,129.25 | 3,859,193,395.38 |
| Total segment assets | 50,763,259,766.21 | 56,983,696,562.09 | -54,985,101,891.27 | 102,182,196,346.99 |
| Total segment liabilities | 31,137,719,930.78 | 60,169,129,987.26 | -54,845,121,209.94 | 93,973,881,916.10 |
| Items | Amount for the current period | Amount for the previous period |
| Mainland China | 53,591,106,982.67 | 48,729,778,108.08 |
| Other countries/regions | 58,027,715,082.06 | 46,998,318,998.57 |
| Including: | ||
| America | 35,324,883,693.09 | 29,493,797,283.55 |
| Australia | 3,458,819,500.44 | 2,495,026,782.34 |
| South Asia | 3,925,925,777.81 | 2,710,264,399.09 |
| Europe | 9,093,752,866.83 | 6,742,180,009.93 |
| Southeast Asia | 2,610,757,476.24 | 2,108,114,856.79 |
| Central East and Africa | 909,684,097.45 | 725,859,940.76 |
| Japan | 1,778,184,357.59 | 1,797,904,898.35 |
| Others | 925,707,312.61 | 925,170,827.76 |
| Total | 111,618,822,064.73 | 95,728,097,106.65 |
| Items | Closing balance | Opening balance |
| Mainland China | 15,381,426,171.41 | 14,715,132,308.86 |
| Other countries/regions | 25,106,833,772.27 | 25,212,638,556.86 |
| Total | 40,488,259,943.68 | 39,927,770,865.72 |
| Items | Inputs used for fair value measurement | |||
| Quotes in an active market (Level 1) | Important observable input (Level 2) | Important unobservable input (Level 3) | Total | |
| Continuously measured at fair value | ||||
| Financial assets held for trading | 144,100,920.94 | 2,020,987,842.58 | 83,828,024.73 | 2,248,916,788.25 |
| Including: Bank wealth management products | 1,892,664,884.11 | 1,892,664,884.11 | ||
| Forward foreign exchange contract | 128,322,958.47 | 128,322,958.47 | ||
| Investment funds | 144,100,920.94 | 144,100,920.94 | ||
| Equity instruments investment | 83,828,024.73 | 83,828,024.73 | ||
| Derivative financial assets | 121,975,627.78 | 121,975,627.78 | ||
| Including: Forward foreign exchange contract | 97,152,699.86 | 97,152,699.86 | ||
| Forward commodity contract | 24,822,927.92 | 24,822,927.92 | ||
| Other equity instruments | 19,802,461.70 | 2,809,376,958.46 | 2,829,179,420.16 | |
| Including: Equity instruments measured at fair value through other comprehensive income | 19,802,461.70 | 2,809,376,958.46 | 2,829,179,420.16 | |
| Other non-current assets | 46,832,494.61 | 46,832,494.61 | ||
| Including: Other non-current financial assets | 46,832,494.61 | 46,832,494.61 | ||
| Financial liabilities held for trading | 3,423,774.60 | 3,423,774.60 | ||
| Including: Forward foreign exchange contract | 3,423,774.60 | 3,423,774.60 | ||
| Derivative financial liabilities | 92,081,440.09 | 92,081,440.09 | ||
| Including: Forward foreign exchange contract | 55,091,160.59 | 55,091,160.59 | ||
| Interest rate swap agreement | 36,990,279.50 | 36,990,279.50 |
| Items | Input used for fair value measurement | |||
| Quotes in an active market (Level 1) | Important observable input (Level 2) | Important unobservable input (Level 3) | Total | |
| Continuously measured at fair value | ||||
| Financial assets held for trading | 113,759,845.57 | 1,967,483,015.21 | 83,949,637.05 | 2,165,192,497.83 |
| Including: Bank wealth management products | 1,862,036,322.21 | 1,862,036,322.21 | ||
| Forward foreign exchange contract | 105,446,693.00 | 105,446,693.00 | ||
| Investment funds | 113,759,845.57 | 113,759,845.57 | ||
| Investment in equity instruments | 83,949,637.05 | 83,949,637.05 | ||
| Derivative financial assets | 77,839,006.63 | 77,839,006.63 | ||
| Including: Forward foreign exchange contract | 52,194,232.55 | 52,194,232.55 | ||
| Forward commodity contract | 25,644,774.08 | 25,644,774.08 | ||
| Other equity instruments | 19,802,461.70 | 2,639,322,803.84 | 2,659,125,265.54 | |
| Including: Equity instruments measured at fair value and changes of which included in other comprehensive income | 19,802,461.70 | 2,639,322,803.84 | 2,659,125,265.54 | |
| Other non-current assets | 46,832,494.61 | 46,832,494.61 | ||
| Including: Other non-current financial assets | 46,832,494.61 | 46,832,494.61 | ||
| Financial liabilities held for trading | 26,952,508.66 | 26,952,508.66 | ||
| Including: Forward foreign exchange contract | 26,952,508.66 | 26,952,508.66 | ||
| Derivative financial liabilities | 239,582,532.90 | 239,582,532.90 | ||
| Including: Forward foreign exchange contract | 188,695,788.30 | 188,695,788.30 | ||
| Interest rate swap agreement | 50,886,744.60 | 50,886,744.60 | ||
For financial instruments traded in an active market, the Company determines its fair valuebased on its quotes in an active market; for financial instruments not traded in an activemarket, the Company uses valuation techniques to determine its fair value.
2．Basis for determining the fair value of the continual Level 2 fair valuemeasurement items
| Items | Closing fair value | Valuation techniques |
| Financial assets held for trading | ||
| Including: Bank wealth management products | 1,892,664,884.11 | Discounted cash flow |
| Forward exchange contract | 128,322,958.47 | Bank quote for similar products |
| Derivative financial assets | ||
| Including: Forward exchange contract | 97,152,699.86 | Bank quote for similar products |
| Forward commodity contract | 24,822,927.92 | Futures exchange quote for similar products |
| Other non-current assets | ||
| Including: Other non-current financial assets | 46,832,494.61 | Recent transaction method |
| Financial liabilities held for trading | ||
| Including: Forward exchange contract | 3,423,774.60 | Bank quote for similar products |
| Derivative financial liabilities | ||
| Including: Forward exchange contract | 55,091,160.59 | Bank quote for similar products |
| Interest rate swap agreement | 36,990,279.50 | Bank quote for similar products |
| Items | Fair value at the end of the period | Valuation technique | Significant unobservable input | Range | Sensitivity of the input to fair value |
| Other equity Instruments | |||||
| Including: 1. SINOPEC Fuel Oil Sales Corporation Limited | 1,141,941,000.00 | Market approach | 1. Average P/E multiple of peers 2. Discount for lack of | 1. 22.8 - 23.26 2. 24% - 26% | 1. 1% increase (decrease) in average P/E multiple of the Comparable Companies would result in increase (decrease) in fair |
| marketability | value by RMB11,420,000.00. 2. 1% increase (decrease) in the lack of marketability would result in decrease (increase) in fair value by RMB15,226,000.00. | ||||
| 2. Haier COSMO IOT Ecological Technology Co., Ltd. | 1,396,555,521.94 | Market approach | 1. Average P/B multiple of peers 2. Discount for lack of marketability | 1. 2.93 - 2.99 2. 36% - 38% | 1. 1% increase (decrease) in average P/B multiple of the Comparable Companies would result in increase (decrease) in fair value by RMB13,313,000.00. 2. 1% increase (decrease) in the lack of marketability would result in decrease (increase) in fair value by RMB21,188,000.00. |
| Items | Closing book value | Closing fair value |
| Bonds payable (convertible corporate bonds) | 426,436,821.17 | 422,826,629.00 |
According to Accounting Standards for Business Enterprises No. 36 — Related PartyDisclosures, parties are considered to be related if one party has the ability to control orjointly control the other party or exercise significant influence over the other party. Parties(two or more than two) are also considered to be related if they are subject to commoncontrol, joint control or significant influence from another party.According to Management Practices for Information Disclosure of Listed Company(China Securities Regulatory Commission Order No. 40), related legal entity or individualwill be identified as related parties in certain occasions.(II) Relationships between related parties
1. Information about the parent company and other companies holding shares of theCompany
| Name of enterprise | Type of enterprise | Registered place | Registered capital | Legal representative | Relations hips with the Company | Interest in the Company | Voting rights to the Company |
| Haier Group Corporation | Collective ownership company | Qingdao High-tech Zone Haier Park | 311,180,000 | Zhang Ruimin | Parent Company | 11.42% | 11.42% |
| Haier COSMO Co., Ltd. | Joint-stock company | Qingdao High-tech Zone Haier Park | 631,930,635 | Zhang Ruimin | Subsidiary of Parent Company | 13.40% | 13.40% |
| HCH (HK) Investment Management Co.,Limited | Private company with limited liability | Hong Kong | 10,000 (Hong Kong Dollars) | / | Parties acting in concert of Parent Company | 5.73% | 5.73% |
| Qingdao Haier Venture & Investment Information Co., Ltd. | Company with limited liability | Qingdao Free Trade Zone | 923,000,000 | Zhou Yunjie | Parties acting in concert of Parent Company | 1.83% | 1.83% |
| Qingdao Haichuangzhi Managem | Limited partnership | Qingdao High-tech Zone Haier | 1,053,306,000 | Zhang Ruimin | Parties acting in concert | 0.85% | 0.85% |
| ent Consulting Enterprise (Limited Partnership) | Park | of Parent Company | |||||
| Haier International Co., Limited | Company with limited liability | Hong Kong | 10,000 (Hong Kong Dollars) | / | Parties acting in concert of Parent Company | 0.62% | 0.62% |
| Name of company | Relationship with the Company |
| Chongqing Zhonglian Energy Technology Co., Ltd. | Holding subsidiary of the parent group |
| Chongqing Haier Intelligent Electronics Co., Ltd. | Holding subsidiary of the parent group |
| Chongqing Haier Property Management Co., Ltd. | Holding subsidiary of the parent group |
| Chongqing Haier Electrical Appliances Sales Co., Ltd. | Holding subsidiary of the parent group |
| Hong Kong Goodaymart Supply Chains Co., Ltd. | Holding subsidiary of the parent group |
| Shanghai Zhiyu Technology Co., Ltd. | Holding subsidiary of the parent group |
| Shanghai Cotai Supply Chain Management Co., Ltd. | Holding subsidiary of the parent group |
| Gooday Supply Chain Technologies Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Goodaymart Supply Chains Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Oasis Technology Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Blue Whale Technology Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haina Cloud Intelligent System Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Hailizhuju Technology Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier Special Plastic Development Co.,Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier Moulds Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier Parts Procurement Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier Robot Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier International Trading Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier International Travel Agency Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier Industry Intelligence Research Institute Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier Industry and City Innovation Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Ding Xin Electronics Technology Co., Ltd. | Holding subsidiary of the parent group |
| Laiyang Haier Electrical Co. Ltd. | Holding subsidiary of the parent group |
| Cosmoplat Chuangzhi IOT Technology Co., Ltd. | Holding subsidiary of the parent group |
| Hefei Haier Logistics Co., Limited | Holding subsidiary of the parent group |
| Haier Consumer Finance Co., Ltd. | Holding subsidiary of the parent group |
| Haier Digital Technology (Qingdao) Co., Ltd. | Holding subsidiary of the parent group |
| Haier Digital Technology (Nanjing) Co., Ltd. | Holding subsidiary of the parent group |
| Haier Group Finance Co., Ltd. | Holding subsidiary of the parent group |
| Foshan Shunde Haier Intelligent Electronic Co.,Ltd. | Holding subsidiary of the parent group |
| Dalian Haier International Trade Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier International Motors | Holding subsidiary of the parent group |
| Haier International Co., Ltd. | Holding subsidiary of the parent group |
| Qingdao Haier New Materials R & D Co., Ltd. | Associate of subsidiary of Haier Group |
| Controladora Mabe S.A.deC.V. | Associate |
| Wolong Electric (Jinan) Motor Co., Ltd. | Associate |
| Qingdao Hegang New Material Technology Co., Ltd. | Associate |
| HPZ Limited | Associate |
| HNR COMPANY (PRIVATE) LIMITED | Associate |
| Qingdao Haier Multimedia Co., Ltd. | Associate |
| Qingdao HBIS Composite New Material Technology Co., Ltd. | Subsidiary of associate |
| Hefei Hegang New Material Technology Co., Ltd. | Subsidiary of associate |
| Related parties | Amount for the current period | Amount for the previous period |
| Controladora Mabe S.A.deC.V. | 5,919,857,050.59 | 4,864,433,223.10 |
| Gooday Supply Chain Technologies Co., Ltd. | 1,795,280,208.51 | 949,267,175.72 |
| HNR COMPANY (PRIVATE) LIMITED | 1,753,260,194.66 | 1,142,507,687.58 |
| Chongqing Haier Electrical Appliances Sales Co., Ltd. | 1,735,448,645.80 | 1,361,963,444.17 |
| Cosmoplat Chuangzhi IOT Technology Co., Ltd. | 1,007,738,751.14 | |
| Shanghai Cotai Supply Chain Management Co., Ltd. | 837,090,677.39 | 535,089,057.35 |
| Wolong Electric (Jinan) Motor Co., Ltd. | 494,269,324.67 | 345,676,591.78 |
| Chongqing Haier Intelligent Electronics Co., Ltd. | 493,639,084.84 |
| Hefei Hegang New Material Technology Co., Ltd. | 474,928,583.73 | 413,914,100.88 |
| Qingdao Ding Xin Electronics Technology Co., Ltd. | 429,570,435.77 | |
| Qingdao Goodaymart Supply Chains Co., Ltd. | 394,485,275.37 | 173,942,768.33 |
| Qingdao HBIS Composite New Material Technology Co., Ltd. | 392,032,148.49 | 355,481,832.09 |
| Other related parties | 2,934,307,252.33 | 5,956,838,057.87 |
| Total | 18,661,907,633.29 | 16,099,113,938.87 |
| Related parties | Amount for the current period | Amount for the previous period |
| Qingdao Haier Special Plastic Development Co., Ltd. | 324,988,575.86 | 277,812,831.60 |
| Qingdao Haier International Trading Co., Ltd. | 312,030,850.93 | 284,072,456.94 |
| Controladora Mabe S.A.deC.V. | 254,597,948.57 | 144,426,966.26 |
| Qingdao Haier International Travel Agency Co., Ltd. | 105,505,398.38 | 55,926,947.01 |
| Chongqing Haier Electrical Appliances Sales Co., Ltd. | 91,292,269.02 | 53,083,645.42 |
| Shanghai Zhiyu Technology Co., Ltd. | 30,636,966.12 | 15,635,577.11 |
| Qingdao Haier International Motors | 28,717,751.77 | |
| Qingdao Haina Cloud Intelligent System Co., Ltd. | 26,354,742.25 | |
| Qingdao Haier Multimedia Co., Ltd. | 25,743,020.75 | 12,082,014.01 |
| Chongqing Zhonglian Energy Technology Co., Ltd. | 24,614,336.31 | |
| Chongqing Haier Property Management Co., Ltd. | 21,684,041.90 | 18,268,883.79 |
| Qingdao HBIS Composite New Material Technology Co., Ltd. | 81,567,030.58 | |
| Wolong Electric (Jinan) Motor Co., Ltd. | 145,337,819.93 | |
| Qingdao Haier New Materials R & D Co., Ltd. | 148,412,255.35 | |
| Other related parties | 179,839,945.56 | 192,681,286.16 |
| Total | 1,426,005,847.42 | 1,429,307,714.16 |
Explanations of related transactions for the purchase and sale of goods, provision andreceipt of services
□ Applicable √ Not Applicable
3. Amount for outstanding items of related parties
| Items and name of vendors | Closing Balance | Opening Balance |
| Bills receivable: | ||
| Cosmoplat Chuangzhi IOT Technology Co., Ltd. | 116,678,930.60 | |
| Chongqing Haier Intelligent Electronics Co., Ltd. | 88,727,462.00 | |
| Foshan Shunde Haier Intelligent Electronic Co.,Ltd. | 46,795,014.00 | |
| Qingdao Ding Xin Electronics Technology Co., Ltd. | 25,111,549.00 | |
| Qingdao Hegang New Material Technology Co., Ltd. | 21,200,000.00 | |
| Other related parties | 6,706,487.72 | 1,106,165.28 |
| Accounts receivable: | ||
| HNR Company (Private) Limited | 322,006,754.02 | 388,679,073.55 |
| Controladora Mabe S.A.deC.V. | 134,167,050.85 | 81,498,939.68 |
| Qingdao Haier International Travel Agency Co., Ltd. | 110,915,196.14 | 113,933,378.64 |
| HPZ Limited | 73,772,087.58 | 47,762,837.62 |
| Qingdao Haier International Trading Co., Ltd. | 44,607,925.95 | 72,248,862.19 |
| Chongqing Zhonglian Energy Technology Co., Ltd. | 35,050,619.22 | 24,860,829.14 |
| Haier International Co., Ltd. | 33,845,223.64 | 3,815,282.89 |
| Haier Digital Technology (Qingdao) Co., Ltd. | 31,696,490.12 | 80,254,328.37 |
| Qingdao Blue Whale Technology Co., Ltd. | 30,585,617.46 | 29,531,545.86 |
| Qingdao Hailizhuju Technology Co., Ltd. | 29,719,317.78 | 9,549,687.48 |
| Qingdao Haier Special Plastic Development Co., Ltd. | 27,228,142.89 | 187,101,398.95 |
| Chongqing Haier Electrical Appliances Sales Co., Ltd. | 4,647,727.71 | 144,072,335.03 |
| Other related parties | 201,475,388.23 | 378,179,556.68 |
| Prepayments: | ||
| Qingdao Haier International Trading Co., Ltd. | 101,813,048.93 | 80,759,659.73 |
| Qingdao Haier Moulds Co., Ltd. | 33,967,929.22 | 32,695,754.10 |
| Qingdao Oasis Technology Co., Ltd. | 28,986,324.64 | |
| Qingdao Haier International Travel Agency Co., Ltd. | 26,673,633.47 | 26,860,737.70 |
| HNR COMPANY (PRIVATE) LIMITED | 21,788,673.71 | 78,420,575.44 |
| Other related parties | 35,973,956.32 | 61,908,776.76 |
| Interest receivable: | ||
| Haier Group Finance Co., Ltd. | 164,958,085.19 | 120,777,203.01 |
| Haier Consumer Finance Co., Ltd. | 2,317,700.00 | |
| Other receivables: | ||
| Hong Kong Goodaymart Supply Chains Co., Ltd. | 53,200,000.00 | 53,200,000.00 |
| Qingdao Haier Moulds Co., Ltd. | 27,964,393.18 | 14,500,982.35 |
| Qingdao Blue Whale Technology Co., Ltd. | 12,392,334.21 | 12,392,334.21 |
| Dalian Haier International Trade Co., Ltd. | 11,945,428.01 | 7,708,641.11 |
| Haier Digital Technology (Nanjing) Co., Ltd. | 11,848,500.00 | |
| Controladora Mabe S.A.deC.V. | 11,839,807.90 | 15,777,379.54 |
| Qingdao Haier Industry and City Innovation Co., Ltd. | 88,640,000.00 | |
| Other related parties | 36,525,614.70 | 82,727,655.55 |
| Items and name of vendors | Closing Balance | Opening Balance |
| Bills payable: | ||
| Laiyang Haier Electrical Co. Ltd. | 48,906,578.86 | 49,720,701.09 |
| Other related parties | 102,756,773.42 | 56,956,689.86 |
| Accounts payable: | ||
| Qingdao Haier Parts Procurement Co., Ltd. | 2,169,295,503.15 | 1,647,724,215.65 |
| Controladora Mabe S.A.deC.V. | 369,232,073.76 | 316,079,431.43 |
| Cosmoplat Chuangzhi IOT Technology Co., Ltd. | 298,172,923.36 | 671,426,347.70 |
| Qingdao Ding Xin Electronics Technology Co., Ltd. | 253,327,910.73 | 249,323,037.13 |
| Hefei Haier Logistics Co., Limited | 239,522,578.56 | 242,590,693.06 |
| Chongqing Haier Intelligent Electronics Co., Ltd. | 151,594,384.27 | 93,236,600.86 |
| Qingdao Haier Special Plastic | 124,643,179.86 | 295,609,746.74 |
| Development Co., Ltd. | ||
| Qingdao Haier International Trading Co., Ltd. | 120,954,475.24 | 117,064,526.97 |
| Dalian Haier International Trade Co., Ltd. | 107,142,641.28 | 197,461,939.55 |
| Qingdao HBIS Composite New Material Technology Co., Ltd. | 88,864,687.31 | 104,132,210.10 |
| Other related parties | 776,890,437.25 | 1,523,116,608.02 |
| Contract liabilities: | ||
| Chongqing Zhonglian Energy Technology Co., Ltd. | 17,511,894.92 | 17,210,554.92 |
| Wolong Electric (Jinan) Motor Co., Ltd. | 15,324,496.66 | 520,294.42 |
| Qingdao Haier New Materials R & D Co., Ltd. | 5,801,081.14 | 2,823,650.93 |
| HPZ Limited | 3,071,563.35 | 3,071,563.35 |
| Qingdao HBIS Composite New Material Technology Co., Ltd. | 550,303.52 | 2,705,659.12 |
| Other related parties | 7,340,215.00 | 11,059,096.13 |
| Other payables: | ||
| Gooday Supply Chain Technologies Co., Ltd. | 661,795,689.81 | 790,674,332.08 |
| Controladora Mabe S.A.deC.V. | 143,948,806.20 | 43,590,845.08 |
| Shanghai Cotai Supply Chain Management Co., Ltd. | 181,198,883.06 | 183,123,979.68 |
| Qingdao Haier Robot Co., Ltd. | 51,535,075.50 | 49,076,364.39 |
| Qingdao Goodaymart Supply Chains Co., Ltd. | 51,109,774.76 | 77,995,078.37 |
| Qingdao Haier Moulds Co., Ltd. | 33,845,804.94 | 73,679,757.76 |
| Chongqing Zhonglian Energy Technology Co., Ltd. | 32,835,814.56 | 59,926,366.50 |
| Dalian Haier International Trade Co., Ltd. | 21,800,000.00 | 21,800,000.00 |
| Qingdao Haier International Travel Agency Co., Ltd. | 16,256,802.64 | 15,508,707.39 |
| Qingdao Haier Industry Intelligence Research Institute Co., Ltd. | 15,283,578.94 | 25,622,538.88 |
| Other related parties | 57,354,356.14 | 203,481,753.03 |
| Interest payable: | ||
| Haier Finance Co., Ltd. | 4,849,297.70 | 2,808,989.55 |
| Dividends payable: | ||
| Haier COSMO Co., Ltd. | 460,678,645.58 | |
| Haier Group Corporation | 392,575,539.62 | |
| HCH (HK) Investment Management Co., Limited | 197,112,960.00 | |
| Other related parties | 113,233,045.95 |
2. Related partiesProcurement
In addition to independent procurement platform, the Company entrusted Haier GroupCorporation and its subsidiaries for procurements of part of raw materials. Moreover, theCompany entrusted Haier Group Corporation and its subsidiaries to provide the Companywith logistics and distribution, energy and power, basic research and testing, equipmentleasing, house leasing and maintenance, greening and cleaning, gift procurement, design,consulting, various ticket booking and other services. In November 2020, according to theimplementation of connected transactions in the early stage and the relevant listingrequirements in Hong Kong, the Company and Haier Group Corporation revised and signedthe Product and Materials Sales Framework Agreement, the Service Provision FrameworkAgreement and the Property Leasing Framework Agreement on the basis of the originalexecution contract, which agreed on the financial connected transactions. The pricingprinciple included that both parties should agree on the price which is not less favourablethan those provided by the Company to the Independent Third Parties on arm’s length toensure the fairness and reasonableness of connected transactions. The valid term of theagreement ends on 31 December 2022, which can be renewed for another three years uponexpire.
3. Financial aspect
Some of the financial services such as deposit and loan service, discounting service andforeign exchange derivatives needed by the Company are provided by Haier GroupCorporation, its subsidiaries and other companies. According to the Financial ServiceAgreement entered among the Company, Haier Group Corporation and other parties, theprice of financial services is determined by the principle of not less favourable than marketvalue fair. The Company is entitled to decide whether to keep cooperation relationship withthem with the knowledge of the price prevailing in the market and in combination with itsown interests. While performing the agreement, the Company could also require otherfinancial service institutions to provide related financial services basing on actual situation.In order to meet the Company’s demands such as the avoidance of foreign exchangefluctuation risk, the Company may choose Haier Group Finance Co., Ltd. to provide someforeign exchange derivative business after comparing with comparable companies. TheCompany will uphold the safe and sound, appropriate and reasonable principle, underwhich all foreign exchange capital business shall have a normal and reasonable businessbackground to eliminate speculative operation. At the same time, the Company hasspecified the examination and permission rights, management positions and responsibilitiesat all levels for its foreign exchange capital business to eradicate the risks of operation bypersons and improved its response speed to risks on the premise that the risks areeffectively controlled. In June 2021, the Company and Haier Group Corporation signed theFinancial Services Framework Agreement on the basis of the original execution contract,which agreed on the financial connected transactions. The pricing principle included thedeposit interest rate not lower than the maximum interest rate of major banks listed and theloan interest rate not less favourable than the market price to ensure the fairness andreasonableness of connected transactions. The valid term of the agreement expires at 31December 2023, which can be renewed for another three years upon expire.
4. Others
The Company signed the Intellectual Property Licensing Framework Agreement with HaierGroup Corporation in November 2020. According to the agreement, Haier Group hasagreed to grant or procure its subsidiaries and contact persons to grant the license to theCompany at nil consideration to use all its intellectual property rights, including but notlimited to trademarks, patents, copyrights and logos for the products, packaging, servicesand business introduction documents of the Company. The date of the Intellectual PropertyLicensing Framework Agreement shall be permanently effective from the H Share listingdate. When such specific intellectual property rights expire and are not renewed by HaierGroup, our right to use certain intellectual property rights under the Intellectual PropertyLicensing Framework Agreement will terminate.
XIII. Share-based payments
□ Applicable √ Not Applicable
XIV. Commitments and contingencies
1. Significant commitments
□ Applicable √ Not Applicable
2. Contingencies
√ Applicable □ Not Applicable
As of 30 June 2021, the Company has no significant contingencies that need to be disclosed.XV. Events subsequent to the balance sheet date
√ Applicable □ Not Applicable
1. On the 16
th meeting of the 10
thboard of directors of the Company, the “Resolution ofHaier Smart Home Co., Ltd. on the Plan of Partial Repurchase of Public Shares” wasconsidered and approved for the Company to repurchase 8,762,400 A Shares through callauction transaction, with a paid amount of RMB227 million.
2. The Company held the 2020 Annual General Meeting on 25 June 2021 where it adoptedA Share Employee Stock Ownership Scheme (2021-2025), H Share Employee StockOwnership Scheme (2021-2025) and H Share Restricted Share Unit Scheme (2021-2025).
Pursuant to the arrangement under the A Share Employee Stock Ownership Scheme (2021-2025), The 25,440,807 shares (amounting to approximately RMB707 million (excludingrelated fees and taxes)) in the “Haier Smart Home Co., Ltd. Designated Securities Accountfor Repurchase” were transferred to the “Haier Smart Home Co., Ltd. - A Share EmployeeStock Ownership Scheme (2021-2025)” on 22 July 2021 on a non-transactional basis.
Pursuant to the arrangement under the H Share Employee Stock Ownership Scheme (2021-2025), the Company has entrusted an asset management company to purchase a total of3,757,000 H Shares of the Company in the secondary market through Hong Kong StockConnect after the Reporting Period, with a transaction amount of approximately HK$106million.
Pursuant to the arrangement under the H Share Restricted Share Unit Scheme (2021-2025),the Company has entrusted an independent trust to buy a total of 4,538,400 H Shares of theCompany in the secondary market after the Reporting Period, with a transaction amount ofapproximately HK$124 million.
XVI. Risks Related to Financial Instruments
√ Applicable □ Not Applicable
The book value of various financial instruments on the balance sheet date is as follows:
Financial assets
| Items | Closing balance | |||
| Financial assets measured at fair value and changes of which included in current profit and loss | Measured at amortized cost | Financial assets measured at fair value and changes of which included in other comprehensive income | Total | |
| Monetary funds | 41,843,777,555.56 | 41,843,777,555.56 | ||
| Financial assets held for trading | 2,248,916,788.25 | 2,248,916,788.25 | ||
| Derivative financial assets | 121,975,627.78 | 121,975,627.78 | ||
| Bills receivable | 11,906,406,723.66 | 11,906,406,723.66 | ||
| Accounts receivable | 20,201,607,270.68 | 20,201,607,270.68 | ||
| Other receivables | 2,265,821,208.28 | 2,265,821,208.28 | ||
| Other current assets | 408,970,053.06 | 408,970,053.06 | ||
| Long-term receivables | 309,892,045.80 | 309,892,045.80 | ||
| Other equity instruments | 2,829,179,420.16 | 2,829,179,420.16 | ||
| Other non-current assets | 46,832,494.61 | 46,832,494.61 |
| Items | Opening balance | |||
| Financial assets measured at fair value and changes of which included in current profit and loss | Measured at amortized cost | Financial assets measured at fair value and changes of which included in other comprehensive income | Total | |
| Monetary funds | 46,461,329,426.91 | 46,461,329,426.91 | ||
| Financial assets held for trading | 2,165,192,497.83 | 2,165,192,497.83 | ||
| Derivative financial assets | 77,839,006.63 | 77,839,006.63 | ||
| Bills receivable | 14,136,349,754.34 | 14,136,349,754.34 | ||
| Accounts receivable | 15,930,024,286.67 | 15,930,024,286.67 | ||
| Other receivables | 1,717,152,945.65 | 1,717,152,945.65 | ||
| Other current assets | 554,131,037.76 | 554,131,037.76 | ||
| Long-term receivables | 330,588,978.97 | 330,588,978.97 | ||
| Other equity instruments | 2,659,125,265.54 | 2,659,125,265.54 | ||
| Other non-current assets | 46,832,494.61 | 46,832,494.61 | ||
| Items | Closing balance | |||
| Financial liabilities measured at fair value | Financial liabilities measured at amortized cost | Total | ||
| Short-term borrowings | 11,160,109,997.72 | 11,160,109,997.72 | ||
| Financial liabilities held for trading | 3,423,774.60 | 3,423,774.60 | |
| Derivative financial liabilities | 92,081,440.09 | 92,081,440.09 | |
| Bills payable | 24,290,143,300.41 | 24,290,143,300.41 | |
| Accounts payable | 39,008,002,641.86 | 39,008,002,641.86 | |
| Other payables | 20,050,241,387.28 | 20,050,241,387.28 | |
| Non-current liabilities due within one year | 2,412,067,581.09 | 2,412,067,581.09 | |
| Long-term borrowings | 9,590,298,914.57 | 9,590,298,914.57 | |
| Bonds payable | 426,436,821.17 | 426,436,821.17 | |
| Long-term payables | 94,010,166.66 | 94,010,166.66 |
| Items | Opening balance | ||
| Financial liabilities measured at fair value | Financial liabilities measured at amortized cost | Total | |
| Short-term borrowings | 7,687,908,165.88 | 7,687,908,165.88 | |
| Financial liabilities held for trading | 26,952,508.66 | 26,952,508.66 | |
| Derivative financial liabilities | 239,582,532.90 | 239,582,532.90 | |
| Bills payable | 21,236,057,053.67 | 21,236,057,053.67 | |
| Accounts payable | 36,302,971,944.48 | 36,302,971,944.48 | |
| Other payables | 17,056,156,167.28 | 17,056,156,167.28 | |
| Non-current liabilities due within one year | 4,950,555,670.08 | 4,950,555,670.08 | |
| Other current liabilities | 5,535,262,500.00 | 5,535,262,500.00 | |
| Long-term borrowings | 11,821,416,259.81 | 11,821,416,259.81 | |
| Bonds payable | 6,713,501,050.27 | 6,713,501,050.27 | |
| Long-term | 98,203,261.27 | 98,203,261.27 | |
payables
Please refer to related items in Note VII for details on each of the financial instrumentsof the Company. Risks related to these financial instruments and the risk managementpolicies taken by the Company to mitigate these risks are summarized below. Themanagement of the Company manages and monitors these risk exposures to ensure theabove risks are well under control.
1. Credit risk
The credit risk of the Company mainly arises from bank deposits, bills receivable,accounts receivable, interest receivable, other receivables and wealth management products.
(1) The Company's bank deposits and wealth management products are mainlydeposited in Haier Finance Co., Ltd., state-owned banks and other large and medium-sizedlisted banks. The interest receivables are mainly the accrued interests from fixed depositswhich are deposited in the above banks. The Group does not believe there is any significantcredit risk due to defaults of its counterparties which would cause any significant loss. (2)Accounts receivable and bills receivable: The Company only trades with approved andreputable third parties. All customers who are traded by credit are subject to creditassessment according to the policies of the Company, and the payment terms shall bedetermined on a reasonable basis. The Company monitors the balances of accountsreceivable on an ongoing basis and purchases credit insurance for receivables of large-amount credit customers in order to ensure the Company is free from material bad debtsrisks. (3) Other receivables of the Company mainly include export tax refund, borrowingsand contingency provision. The Company strengthened its management and continuousmonitoring in respect of these receivables and relevant economic business based onhistorical data, so as to ensure that the Company's significant risk of bad debts iscontrollable and will be further reduced.
2. Liquidity risk
Liquidity risk is the risk that an enterprise may encounter deficiency of funds infulfilling obligations associated with financial liabilities. To control such risk, the Companyutilizes various financing methods such as notes settlement and bank loans to strive for abalance between sustainable and flexible financing. It also has obtained bank creditfacilities from several commercial banks to satisfy its needs for working capital and capitalexpenditures.
3. Exchange rate risk
The Company's businesses are based in mainland China, USA, Japan, Southeast Asia,South Asia, central and east Africa, Europe, and Australia, etc. and are settled in RMB,USD, and other currencies.
The Company's overseas assets and liabilities denominated in foreign currencies aswell as transactions to be settled in foreign currencies expose the Company to fluctuationsin exchange rates. The Company's finance department is responsible for monitoring the sizeof transactions in foreign currencies and assets and liabilities denominated in foreigncurrencies to minimize the risk of exposure to fluctuation in exchange rate; the Company
resorts the way of signing forward foreign exchange contracts to avoid the risk of exchangefluctuation.
4. Interest rate risk
The Company's interest rate risk arises primarily from its long- and short- term bankloans and bonds payables which are interest-bearing debts. Financial liabilities withfloating interest rates expose the Company to cash flow interest rate risk, while financialliabilities with fixed interest rates expose the Company to fair value interest rate risk. TheGroup determines the relative proportion of fixed-interest rate and floating interest ratecontracts in light of the prevailing market conditions.XVII. Other Significant EventsThe Company has no other significant events that need to be disclosed.XVIII. Notes to Main Items of Financial Statements of the Parent Company
1. Accounts receivable
| Aging | Closing balance | Opening balance |
| Within 1 year | 1,120,694,194.49 | 5,491,427,973.11 |
| 1-2 years | 416,430.64 | |
| 2-3 years | ||
| Over 3 years | ||
| Accounts receivable, balance | 1,120,694,194.49 | 5,491,844,403.75 |
| Allowance for bad debts | 308,333.33 | 308,333.33 |
| Accounts receivable, net | 1,120,385,861.16 | 5,491,536,070.42 |
| Categories | Opening balance | Changes for the current period | Closing balance | |||
| Provision | Recovery or reversal | Transfer or write-off | Other movement | |||
| Bad debts | 308,333.33 | 308,333.33 | ||||
| Total | 308,333.33 | 308,333.33 |
| Items | Closing balance | Opening balance |
| Interest receivable | 37,316,878.96 | 38,582,434.11 |
| Dividend receivable | ||
| Other receivables | 11,779,892,490.91 | 3,867,790,953.50 |
| Total | 11,817,209,369.87 | 3,906,373,387.61 |
| Items | Closing balance | Opening balance |
| Within 1 year | 37,316,878.96 | 38,582,434.11 |
| Over 1 year | ||
| Total | 37,316,878.96 | 38,582,434.11 |
Other receivable
1 Other receivables are disclosed by aging as follows:
| Aging | Closing balance | Opening balance |
| Within one year | 11,244,115,045.37 | 3,501,616,045.85 |
| Over 1 year | 542,904,131.40 | 366,178,683.57 |
| Other receivables, balance | 11,787,019,176.77 | 3,867,794,729.42 |
| Allowance for bad debts | 7,126,685.86 | 3,775.92 |
| Other receivables, net | 11,779,892,490.91 | 3,867,790,953.50 |
| Items | Opening balance | Increase for the current period | Decrease for the current period | Closing balance | ||
| Provision for the current period | Other increase | Reversal | Write-off and other movement | |||
| Allowance for bad debts | 3,775.92 | 7,122,909.94 | 7,126,685.86 | |||
| Items | Closing balance | Opening balance | ||
| Book balance | Provision for impairment | Book balance | Provision for impairment | |
| Long-term equity investments | ||||
| Including: long-term equity investments in subsidiaries | 49,231,447,092.82 | 7,100,000.00 | 49,231,447,092.82 | 7,100,000.00 |
| Long-term equity investments in associates | 3,207,458,437.79 | 109,300,000.00 | 3,175,179,977.39 | 109,300,000.00 |
| Total | 52,438,905,530.61 | 116,400,000.00 | 52,406,627,070.21 | 116,400,000.00 |
| Name of investee | Opening balance | Increase /Decrease for the current period | Closing balance | Impairment provisions at the end of the period provisions |
| I. Subsidiaries: | ||||
| Chongqing Haier Electronics Sales Co., Ltd. | 9,500,000.00 | 9,500,000.00 |
| Haier Group (Dalian) Electrical Appliances Industry Co., Ltd | 34,735,489.79 | 34,735,489.79 | ||
| Qingdao Haier Refrigerator Co., Ltd. | 402,667,504.64 | 402,667,504.64 | ||
| Qingdao Haier Special Refrigerator Co., Ltd. | 329,832,047.28 | 329,832,047.28 | ||
| Qingdao Haier Information Plastic Development Co., Ltd | 102,888,407.30 | 102,888,407.30 | ||
| Dalian Haier Precision Products Co., Ltd. | 41,836,159.33 | 41,836,159.33 | ||
| Hefei Haier Plastic Co., Ltd. | 42,660,583.21 | 42,660,583.21 | ||
| Qingdao Haier Technology Co., Ltd. | 16,817,162.03 | 16,817,162.03 | ||
| Qingdao Household Appliance Technology and Equipment Research Institute | 66,778,810.80 | 66,778,810.80 | ||
| Qingdao Meier Plastic Powder Co., Ltd. | 24,327,257.77 | 24,327,257.77 | ||
| Chongqing Haier Precision Plastic Co., Ltd. | 47,811,283.24 | 47,811,283.24 | ||
| Qingdao Haier Electronic Plastic Co., Ltd. | 48,000,000.00 | 48,000,000.00 | ||
| Dalian Haier Refrigerator Co., Ltd. | 99,000,000.00 | 99,000,000.00 | ||
| Dalian Haier Air Conditioner Co., Ltd. | 99,000,000.00 | 99,000,000.00 | ||
| Guizhou Haier Electronics Co., Ltd. | 96,904,371.71 | 96,904,371.71 | ||
| Hefei Haier Air-conditioning Co., Limited | 67,110,323.85 | 67,110,323.85 | ||
| Qingdao Haier Refrigerator (International) Co., Ltd. | 238,758,240.85 | 238,758,240.85 | ||
| Qingdao Haier Air-Condition Electronic Co., Ltd. | 1,113,433,044.51 | 1,113,433,044.51 | ||
| Qingdao Haier Air Conditioner General Corp., Ltd. | 220,636,306.02 | 220,636,306.02 | ||
| Qingdao Haier Special Freezer Co., Ltd. | 442,684,262.76 | 442,684,262.76 | ||
| Qingdao Haier Dishwasher Co., Ltd. | 206,594,292.82 | 206,594,292.82 | ||
| Wuhan Haier Freezer Co., Ltd. | 47,310,000.00 | 47,310,000.00 | ||
| Wuhan Haier Electronics Co., Ltd. | 100,715,445.04 | 100,715,445.04 | ||
| Chongqing Haier Air Conditioner Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||
| Hefei Haier Refrigerator Co., Ltd. | 49,000,000.00 | 49,000,000.00 | ||
| Qingdao Haier Whole Set Home Appliances Services Co., Ltd. | 118,000,000.00 | 118,000,000.00 | ||
| Chongqing Haier Refrigeration Appliance Co., Ltd. | 91,750,000.00 | 91,750,000.00 | ||
| Shanghai Haier Zhongzhi Fang Chuang Ke Space Management Co., Ltd. | 2,000,000.00 | 2,000,000.00 | ||
| Qingdao Haier Special Refrigerating Appliance Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||
| Haier Shareholdings (Hong Kong) Limited | 26,022,782,526.24 | 26,022,782,526.24 | ||
| Shenyang Haier Refrigerator Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||
| Foshan Haier Freezer Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||
| Zhengzhou Haier Air Conditioner Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||
| Qingdao Haidayuan Procurement Service Co., Ltd. | 20,000,000.00 | 20,000,000.00 | ||
| Qingdao Haier Intelligent Technology Development Co., Ltd. | 130,000,000.00 | 130,000,000.00 | ||
| Qingdao Haier Technology Investment Co., Ltd. | 367,505,635.00 | 367,505,635.00 | ||
| Qingdao Casarte Smart Living Appliances Co., Ltd. | 10,000,000.00 | 10,000,000.00 |
| Haier Overseas Electric Appliance Co., Ltd. | 500,000,000.00 | 500,000,000.00 | ||
| Haier (Shanghai) Electronics Co., Ltd. | 12,500,000.00 | 12,500,000.00 | ||
| Haier U+smart Intelligent Technology (Beijing) Co., Ltd. | 143,000,000.00 | 143,000,000.00 | ||
| Haier Electronics Group Co., Ltd. | 16,730,707,938.63 | 16,730,707,938.63 | 7,100,000.00 | |
| Qingdao Haidarui Procurement Service Co., Ltd. | 107,800,000.00 | 107,800,000.00 | ||
| Qingdao Haier Intelligent Household Appliances Co., Ltd. | 326,400,000.00 | 326,400,000.00 | ||
| Qingdao Haidacheng Procurement Service Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||
| Haier Smart Home Experience Cloud Ecological Technology Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||
| Total | 49,231,447,092.82 | 49,231,447,092.82 | 7,100,000.00 |
| Name of investee | Opening balance | Increase/decrease for the current period | Closing balance | Impairment provisions at the end of the period | ||
| Increase/decrease for the current period | Recognized investment income under equity method | Others | ||||
| Wolong Electric (Jinan) Motor Co., Ltd. | 136,709,910.73 | 13,696,146.11 | 150,406,056.84 | |||
| Qingdao Haier SAIF Smart Home Industry Investment Center (Limited Partnership) | 385,797,036.73 | 11,710,187.89 | -17,819,777.76 | 379,687,446.86 | ||
| Bank of Qingdao Co., Ltd. | 975,756,025.82 | 57,916,433.78 | -14,489,022.21 | 1,019,183,437.39 | ||
| Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Co., Ltd. | 654,581,961.84 | 39,355,157.03 | 693,937,118.87 | |||
| Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. | 415,298,165.93 | 6,163,986.57 | -25,074,310.40 | 396,387,842.10 | 21,000,000.00 | |
| Qingdao Haier Multimedia Co., Ltd. | 328,987,205.06 | -50,160,853.64 | 278,826,351.42 | 88,300,000.00 | ||
| Qingdao HBIS New Material Technology Co., Ltd. | 278,049,671.28 | 10,980,513.03 | 289,030,184.31 | |||
| Total | 3,175,179,977.39 | - | 89,661,570.77 | -57,383,110.37 | 3,207,458,437.79 | 109,300,000.00 |
| Items | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Primary business | 100,011,103.11 | 93,685,159.99 | 4,971,571,357.13 | 4,334,933,560.26 |
| Other business | 96,140,485.73 | 76,847,254.77 | 71,145,742.55 | 63,477,221.29 |
| Total | 196,151,588.84 | 170,532,414.76 | 5,042,717,099.68 | 4,398,410,781.55 |
| Items | Amount for the current period | Amount for the previous period |
| Investment income from long-term equity investments accounted for using cost method | 17,700,000.00 | 173,411,284.52 |
| Investment income from long-term equity investment accounted for using equity method | 89,661,570.77 | 63,292,928.01 |
| Income from wealth management products | 5,792,409.99 | 9,270,527.84 |
| Investment income from investment in other equity instrument during the holding period | ||
| Total | 113,153,980.76 | 245,974,740.37 |
| Items | Amount for the current period | Amount for the previous period | ||||
| Weighted average return rate on net assets | Earnings per share (RMB) | Weighted average return rate on net assets | Earnings per share (RMB) | |||
| Basic earnings per share | Diluted earnings per share | Basic earnings per share | Diluted earnings per share | |||
| Net profit attributable to ordinary shareholders of the Parent Company | 9.29% | 0.741 | 0.730 | 5.68% | 0.423 | 0.419 |
| Net profit attributable to ordinary shareholders of the Parent Company after deduction of | 8.50% | 0.678 | 0.669 | 5.25% | 0.391 | 0.386 |
non-recurring profitor loss
2. Non-recurring profit or loss
| Items | Amount for the current period | Amount for the previous period |
| Net profit attributable to ordinary shareholders of the Parent Company | 6,852,271,812.97 | 2,780,800,712.72 |
| Less: non-recurring profit or loss | 582,365,406.25 | 211,360,215.13 |
| Net profit attributable to ordinary shareholders of the Parent Company after deduction of non-recurring profit or loss | 6,269,906,406.72 | 2,569,440,497.59 |
| Items | Amount |
| Profit or loss from disposal of non-current assets | 135,411,372.65 |
| Government grants included in current profit or loss, except that closely related to the company business, in accordance with the national standard policies to be granted with the amount and quantity determined under certain standards | 283,535,138.53 |
| Profit or loss from fair value changes of financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, as well as investment gains arising from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, except the effective hedging related to the normal operations of the Company | 229,227,021.99 |
| Other non-operating income and expenses except the aforementioned items | 35,439,577.28 |
| Impact on income tax | -93,278,591.01 |
| Impact on minority interest | -7,969,113.19 |
| Total | 582,365,406.25 |
Companies Offering Their Securities to the Public No.1 - Extraordinary Gains or Lossesas recurring gain or loss items, reasons shall be specified.
□ Applicable √ Not Applicable
3. Difference on figures by domestic and foreign accounting standards
√Applicable □Not Applicable
(1). Details on difference of net profit and net assets in the financial report disclosed inaccordance with both international accounting standards and PRC accountingstandards
□ Applicable √ Not Applicable
There is no difference between the net profit and net assets attributable to shareholders ofthe listed company as presented in the consolidated financial statements disclosed inaccordance with International Accounting Standards and in accordance with PRCaccounting standards.
(2). Details on difference of net profit and net assets in the financial report disclosed inaccordance with both foreign accounting standards and PRC accounting standards
□ Applicable √ Not Applicable
The Company has no financial reports prepared in accordance with foreignaccounting standards other than those prepared in accordance with InternationalAccounting Standards.
4. Others
□ Applicable √ Not Applicable
Chairman of the Board: Liang HaishanDate of approval for publication by the Board: 30 August 2021Information of amendment
□ Applicable √ Not Applicable