Midea Group Co., Ltd.Interim Report for the First Quarter 2021
April 2021
Section I Important Reminders
1. The Board of Directors, the Supervisory Committee as well as all thedirectors, supervisors and senior management staff of Midea Group Co.,Ltd. (hereinafter referred to as the “Company”) have warranted that thisReport contains no false record, misleading statement or materialomission. And they shall be jointly and severally liable for the factuality,accuracy and completeness of the information given in this Report.
2. All the directors have attended the Q1 report review board meeting.
3. The financial statements contained in this Report have not beenaudited by a certified public auditors (CPAs) firm.
4. Mr. Fang Hongbo, Chairman of the Board and CEO of the Company,and Ms. Zhong Zheng, Director of Finance of the Company, haverepresented and warranted that the financial statements in this Reportare factual, accurate and complete.
5. This Report has been prepared in both Chinese and English. Shouldthere be any discrepancy between the two versions, the Chinese versionshall prevail.
Section II Company Profile
1. Major Accounting Data and Financial Indicators
Does the Company adjust retrospectively or restate accounting data of previous years?
□Yes √No
| Jan.-Mar. 2021 | Jan.-Mar. 2020 | YoY Change (%) | |
| Operating revenue (RMB'000) | 82,504,017 | 58,013,031 | 42.22% |
| Net profit attributable to shareholders of the Company (RMB'000) | 6,468,588 | 4,810,977 | 34.45% |
| Net profit attributable to shareholders of the Company before non-recurring gains and losses (RMB'000) | 6,649,368 | 4,816,912 | 38.04% |
| Net cash flows from operating activities (RMB'000) | 8,553,861 | 7,668,597 | 11.54% |
| Basic earnings per share (RMB/share) | 0.93 | 0.70 | 32.86% |
| Diluted earnings per share (RMB/share) | 0.92 | 0.69 | 33.33% |
| Weighted average ROE (%) | 5.35% | 4.62% | 0.73% |
| 31 Mar. 2021 | 31 Dec. 2020 | Change (%) | |
| Total assets (RMB'000) | 369,174,526 | 360,382,603 | 2.44% |
| Net assets attributable to shareholders of the Company (RMB'000) | 117,532,628 | 117,516,260 | 0.01% |
Total share capital of the Company on the last trading session before disclosure:
| Total share capital of the Company on the last trading session before disclosure (share) | 7,047,686,070 |
Fully diluted earnings per share based on the latest share capital above:
| Dividend paid to preference shareholders | - |
| Fully diluted earnings per share based on the latest share capital above (RMB/share) | 0.92 |
Non-recurring gains and losses
√ Applicable □ N/A
Unit: RMB’000
| Item | Jan.-Mar. 2021 | Note |
| Gain or loss from disposal of non-current assets | 1,579 | |
| Except for effectively hedging business related to normal business operations of the Company, gain or loss arising from the change in the fair value of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other non-current financial assets, as well as investment gain or loss produced from the disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other non-current financial assets | -566,661 | |
| Other | 366,439 | |
| Less: Corporate income tax | -26,239 | |
| Minority interests (after tax) | 8,376 | |
| Total | -180,780 | -- |
2. Total number of shareholders and shareholdings of the top ten shareholders at theperiod-end
2.1 Total number of common shareholders, preference shareholders with resumed voting rightsand shareholdings of the top ten common shareholders at the period-end
Unit: share
| Total number of common shareholders at the period-end | 404,034 | Total number of preference shareholders with resumed voting rights at the period-end (if any) | 0 | ||||||
| Top ten shareholders | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage (%) | Number of shares held | Number of restricted shares held | Pledged or frozen shares | ||||
| Status of shares | Number of shares | ||||||||
| Midea Holding Co., Ltd. | Domestic non-state-owned corporation | 30.78 | 2,169,178,713 | Pledged | 100,000,000 | ||||
| Hong Kong Securities Clearing Company Limited | Foreign corporation | 14.91 | 1,050,938,349 | ||||||
| China Securities Finance Co., Ltd. | State-owned corporation | 2.81 | 198,145,134 | ||||||
| Fang Hongbo | Domestic individual | 1.66 | 116,990,492 | 87,742,869 | |||||
| The securities account of Midea Group Co., Ltd. for share repurchase | Domestic non-state-owned corporation | 1.64 | 115,686,277 | ||||||
| Canada Pension Plan Investment Board－ own funds (stock exchange) | Foreign corporation | 1.47 | 103,913,897 | ||||||
| Central Huijin Asset Management Ltd. | State-owned corporation | 1.28 | 90,169,354 | ||||||
| Huang Jian | Domestic individual | 1.22 | 86,140,000 | ||||||
| Li Jianwei | Foreign individual | 0.71 | 50,160,000 | ||||||
| Yuan Liqun | Domestic individual | 0.57 | 40,343,895 | ||||||
| Top 10 non-restricted common shareholders | |||||||||
| Name of shareholder | Number of non-restricted common shares held at the period-end | Type of shares | |||||||
| Type | Shares | ||||||||
| Midea Holding Co., Ltd. | 2,212,046,613 | RMB common stock | 2,212,046,613 | ||||||
| Hong Kong Securities Clearing Company Limited | 1,050,938,349 | RMB common stock | 1,050,938,349 | ||||||
| China Securities Finance Co., Ltd. | 198,145,134 | RMB common stock | 198,145,134 | ||||||
| The securities account of Midea Group Co., Ltd. for share repurchase | 115,686,277 | RMB common stock | 115,686,277 | ||||||
| Canada Pension Plan Investment Board－ own funds (stock exchange) | 103,913,897 | RMB common stock | 103,913,897 | ||||||
| Central Huijin Asset Management Ltd. | 90,169,354 | RMB common stock | 90,169,354 | ||||||
| Huang Jian | 86,140,000 | RMB common stock | 86,140,000 | ||||||
| Li Jianwei | 50,160,000 | RMB common stock | 50,160,000 | ||||||
| Yuan Liqun | 40,343,895 | RMB common stock | 40,343,895 | ||||||
| Merrill Lynch International | 39,798,754 | RMB common stock | 39,798,754 | ||||||
| Explanation of related relationship or/and acting-in-concert parties among the above-mentioned shareholders | N/A | ||||||||
| Top ten non-restricted common shareholders taking part in securities margin trading (if any) | 1. The Company’s shareholder Yuan Liqun holds 4,227,400 shares in the Company through her common securities account and 36,116,495 shares in the Company through her account of collateral | ||||||||
Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of theCompany conduct any promissory repurchase during the Reporting Period
□ Yes √ No
No such cases in the Reporting Period.
2.2 Total number of preference shareholders and shareholdings of the top ten preferenceshareholders at the period-end
□ Applicable √ N/A
Section III Significant Events
1. Major changes of main items in financial statements and financial indicatorswithin the Report Period, as well as the reasons for the changes
√ Applicable □ N/A
Unit: RMB’000
| Financial statement items (consolidated) | 31 March 2021/January-March 2021 | 31 December 2020/January-March 2020 | Change (%) | Reasons for the changes |
| Financial assets held for trading | 17,847,023 | 28,239,601 | -36.80% | Mainly due to the decreased structured deposits |
| Derivative financial liabilities | 212,889 | 161,225 | 32.04% | Mainly due to the changes in the fair value of derivative financial instruments |
| Current portion of non-current liabilities | 3,416,313 | 6,310,181 | -45.86% | Mainly due to the repayment of borrowings |
| Long-term payables | - | 13,260 | -100.00% | Mainly due to the reclassification to contract liabilities |
| Treasury stock | 13,396,198 | 6,094,347 | 119.81% | Mainly due to the increased share repurchase |
| Operating revenue | 82,504,017 | 58,013,031 | 42.22% | Mainly due to the increased sales revenue |
| Interest income | 513,036 | 342,786 | 49.67% | Mainly due to the changes in the finance business |
| Cost of sales | 63,526,113 | 43,428,300 | 46.28% | Mainly due to the increased sales revenue |
| Interest costs | 15,059 | 53,023 | -71.60% | Mainly due to the changes in the finance business |
| Taxes and surcharges | 390,356 | 281,138 | 38.85% | Mainly due to the increased sales revenue |
| Selling and distribution expenses | 7,456,925 | 5,656,993 | 31.82% | Mainly due to the increased sales revenue |
| Financial expense | -960,112 | -267,397 | -259.06% | Mainly due to the increased interest income |
| Other income | 345,651 | 81,818 | 322.46% | Mainly due to the increased subsidies received |
| Gains on changes in fair value | -830,632 | 20,570 | -4,138.07% | Mainly due to the changes in the |
| fair value of financial assets held for trading | ||||
| Credit impairment losses | 180,953 | 131,813 | 37.28% | Mainly due to the changes in the finance business |
| Asset impairment losses | 115,967 | -1,430 | 8,209.58% | Mainly due to the increased inventory valuation allowances |
| Gains/(Losses) on disposal of assets | 1,400 | 3,841 | -63.55% | Mainly due to the increased losses on disposal of non-current assets |
| Non-operating income | 72,204 | 46,134 | 56.51% | Mainly due to the increased subsidies received |
| Non-operating expenses | 25,720 | 16,726 | 53.77% | Mainly due to the increased other expenses |
| Minority interests | 100,849 | -587 | 17,280.41% | Mainly due to the increased profits of joint ventures |
| Net cash flows from investing activities | -932,059 | -5,485,574 | 83.01% | Mainly due to the increased cash received from disposal of investments |
| Net cash flows from financing activities | -3,537,964 | 300,610 | -1,276.93% | Mainly due to the increased cash payments relating to other financing activities |
| Net increase in cash and cash equivalents | 4,033,640 | 2,540,236 | 58.79% | Mainly due to the increased net cash flows from investing activities |
2. Progress, influence and solutions of significant events
□ Applicable √ N/A
Progress of any share repurchase
√ Applicable □ N/A
The Proposal on the Plan for the Repurchase of Some Public Shares was approved at the 29th Meetingof the 3rd Board of Directors on 23 February 2021. As such, the Company was agreed to repurchase,with its own funds, no less than 50,000,000 shares and no more than 100,000,000 shares by way ofcentralized bidding at a price not exceeding RMB140/share. The share repurchase plan would beimplemented within 12 months starting from the date it was approved by the Board of Directors. And therepurchased shares would be used for the Company’s equity incentive schemes and/or employee stock
ownership schemes.The Announcement on the Completion of the Implementation of the Share Repurchase Plan wasdisclosed on 3 April 2021. As of 2 April 2021, the Company has cumulatively repurchased 99,999,931shares (1.4189% of the Company’s total share capital as of 31 March 2021). With the highest tradingprice being RMB95.68/share and the lowest being RMB80.29/share, the total payment amounted toRMB8,664,107,576.69 (exclusive of trading fees). With the repurchased shares close to the upper limitof the share repurchase plan of 100,000,000 shares, the implementation of this share repurchase planhas been completed.Progress of any repurchased share reduction through centralized price bidding
□ Applicable √ N/A
3. Overdue commitments of the Company’s actual controller, shareholders, relatedparties and acquirer, as well as the Company and other commitment makers in theReport Period or ongoing at the period-end
□Applicable √N/A
No such cases in the Reporting Period.
4. Financial investments
4.1 Securities investments
√ Applicable □ N/A
Unit: RMB’000
| Type of securities | Code of securities | Abbreviation of securities | Initial investment cost | Measurement method | Opening carrying amount | Profit or loss from change in fair value during the period | Cumulative fair value change charged to equity | Purchased in the period | Sold in the period | Profit or loss in the period | Closing carrying amount | Accounting title | Funding source |
| Overseas listed stock | 1810 | XIAOMI-W | 769,972 | Fair value metho | 1,676,547 | -374,629 | 3,885 | - | - | -374,629 | 1,305,803 | Financial asset held for | Own funds |
| d | trading | ||||||||||||
| Overseas listed stock | DNK | Danke | 172,190 | Fair value method | 35,126 | -6,534 | 183 | - | - | -6,534 | 28,775 | Financial asset held for trading | Own funds |
| Domestically listed stock | 688018 | Espressif Systems | 13,998 | Fair value method | 128,032 | -40,625 | - | - | - | -40,625 | 87,407 | Financial asset held for trading | Own funds |
| Domestically listed stock | 688165 | EFORT | 178,534 | Fair value method | 475,260 | -119,260 | - | - | - | -119,260 | 356,000 | Financial asset held for trading | Own funds |
| Total | 1,134,694 | -- | 2,314,965 | -541,048 | 4,068 | - | - | -541,048 | 1,777,985 | - | -- | ||
4.2 Derivatives investments
√ Applicable □ N/A
Unit: RMB’000
| Operating party | Relationship with the Company | Related transaction | Type of derivative | Initial investment amount | Starting date | Ending date | Opening investment amount | Purchased in Reporting Period | Sold in Reporting Period | Amount provided for impairment (if any) | Closing investment amount | Closing investment amount as a percentage of the Company’s closing net assets | Actual gain/loss in Reporting Period |
| Futures company | No | No | Futures contracts | 105 | 01/01/2021 | 31/12/2021 | 105 | - | - | - | 18,905 | 0.0161% | 39,921 |
| Bank | No | No | FX derivatives | 1,007,587 | 01/01/2021 | 31/12/2021 | 1,007,587 | 6,674.9 | 4,468.1 | - | 564,255 | 0.4801% | 264,788 |
| Total | 1,007,692 | -- | -- | 1,007,692 | 6,674.9 | 4,468.1 | - | 583,160 | 0.4962% | 304,709 | |||
| Source of derivatives investment funds | All from the Company’s own funds | ||||||||||||
| Litigation involved (if | N/A | ||||||||||||
| applicable) | |
| Disclosure date of the announcement about the board’s consent for the derivative investment (if any) | 30/04/2021 |
| Disclosure date of the announcement about the general meeting’s consent for the derivative investment (if any) | - |
| Risk analysis of positions held in derivatives during the Reporting Period and explanation of control measures (Including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | For the sake of eliminating the cost risk of the Company's bulk purchases of raw materials as a result of significant fluctuations in raw material prices, the Company not only carried out futures business for some of the materials, but also made use of bank financial instruments and promoted forex funds business, with the purpose of avoiding the risks of exchange and interest rate fluctuation, realizing the preservation and appreciation of forex assets, reducing forex liabilities, as well as achieving locked-in costs. The Company has performed sufficient evaluation and control against derivatives investment and position risks, details of which are described as follows: 1. Legal risk: The Company's futures business and forex funds businesses shall be conducted in compliance with laws and regulations, with clearly covenanted responsibility and obligation relationship between the Company and the agencies. Control measures: The Company has designated relevant responsible departments to enhance learning of laws and regulations and market rules, conducted strict examination and verification of contracts, defined responsibility and obligation well, and strengthened compliance check, so as to ensure that the Company's derivatives investment and position operations meet the requirements of the laws and regulations and internal management system of the Company. 2. Operational risk: Imperfect internal process, staff, systems and external issues may cause the Company to suffer from loss during the course of its futures business and forex funds business. Control measures: The Company has not only developed relevant management systems that clearly defined the assignment of responsibility and approval process for the futures business and forex funds business, but also established a comparatively well-developed monitoring mechanism, aiming to effectively reduce operational risk by strengthening risk control over the business, decision-making and trading processes. 3. Market risk: Uncertainties caused by changes in the prices of bulk commodity and exchange rate fluctuations in foreign exchange market could lead to greater market risk in the futures business and forex funds business. Meanwhile, inability to timely raise sufficient funds to establish and maintain hedging positions in futures operations, or the forex funds required for performance in forex funds operations being unable to be credited into account could also result |
| in loss and default risks. Control measures: The futures business and forex funds business of the Company shall always be conducted by adhering to prudent operation principles. For futures business, the futures transaction volume and application have been determined strictly according to the requirements of production & operations, and the stop-loss mechanism has been implemented. Besides, to determine the prepared margin amount which may be required to be supplemented, the futures risk measuring system has been established to measure and calculate the margin amount occupied, floating gains and losses, margin amount available and margin amount required for intended positions. As for forex funds business, a hierarchical management mechanism has been implemented, whereby the operating unit which has submitted application for funds business should conduct risk analysis on the conditions and environment affecting operating profit and loss, evaluate the possible greatest revenue and loss, and report the greatest acceptable margin ratio or total margin amount, so that the Company can update operating status of the funds business on a timely basis to ensure proper funds arrangement before the expiry dates. | |
| Changes in market prices or fair value of derivative products during the Reporting Period, specific methods used and relevant assumption and parameter settings shall be disclosed for analysis of fair value of derivatives | 1. Gain from futures contracts during the Reporting Period was RMB39.921 million. 2. Gain from FX derivatives during the Reporting Period was RMB264.788 million. 3. Public quotations in futures market or forward forex quotations announced by the Bank of China are used in the analysis of derivatives fair value. |
| Explanation of significant changes in accounting policies and specific financial accounting principles in respect of the Company's derivatives for the Reporting Period as compared to the previous Reporting Period | No change |
| Special opinions expressed by independent directors concerning the Company's derivatives investment and risk | The Company's independent directors are of the view that the futures hedging business is an effective instrument for the Company to eliminate price volatility and implement risk prevention measures through enhanced internal control, thereby improving the operation and management of the Company; the Company's foreign exchange risk management capability can be further improved through the forex funds business, so as to maintain and increase the value of foreign exchange assets and the abovementioned investment in derivatives can help the Company to |
| control | fully bring out its competitive advantages. Therefore, it is practicable for the Company to carry out derivatives investment business, and the risks are controllable. |
5. Progress on projects financed with raised funds
□ Applicable √ N/A
6. Operating result forecast for January-June 2021
Warning of possible loss or considerable YoY change of the accumulated net profit made during theperiod-start until the end of the next Reporting Period according to predictions as well as anyexplanations for these reasons:
□ Applicable √ N/A
7. Significant contracts arising from the Company’s ordinary course of business
□ Applicable √ N/A
8. Wealth management entrustment
□ Applicable √ N/A
No such cases in the Reporting Period.
9. Irregular provision of guarantees
□ Applicable √ N/A
No such cases in the Reporting Period.
10. Occupation of the Company’s funds by the controlling shareholder or its relatedparties for non-operating purposes
□ Applicable √ N/A
No such cases in the Reporting Period.
11. Visits received during the Reporting Period
√ Applicable □ N/A
| Date | Place | Type of | Type of | Visitor | Discussions | Index to main |
| visit | visitor | inquiry information | ||||
| 18 March 2021 | Midea Group HQ | By phone | Institution | BOCIM, New China Fund, Taiping Asset Management, Ping An Annuity Insurance, SWS MU Fund Management, Kaiyuan Securities, Fullgoal Fund, CICC Securities, Industrial Securities, Essence Fund, Huamei Investment, Fullgoal Fund, UBS SDIC, Huitong Fund, Focusbridge Fund, BOC Wealth Management, Minsheng Royal, Maxwealth Fund, Huashang Fund, Guotai Junan Securities Asset Management, Ping An Fund Management, Xueshi Investment, Western Leadbank FMC, AXA SPDB Investment Managers, PICC Pension, Xinyuan Asset Management, and BOCIM | 1. Midea’s new business structure and strategic focus? 2. Midea’s planning and strategy for overseas sales in the near future? 3. KUKA’s latest condition and future development? 4. What are the positions for WINONE Elevator and WDM, which were acquired in the past year, in Midea’s business landscape in the future? | Log Sheet of Investor Relations Activities for 18 March 2021 disclosed on www.cninfo.com.cn |
Section IV Financial Statements
1. Financial statements
| Balance Sheet | ||||||||
| Prepared by Midea Group Co., Ltd. 31 March 2021 Unit: RMB’000 | ||||||||
| ASSETS | 31 March 2021 | 31 December 2020 | 31 March 2021 | 31 December 2020 | ||||
| Consolidated | Consolidated | Company | Company | |||||
| Current assets: | ||||||||
| Cash at bank and on hand | 86,223,870 | 81,210,482 | 62,926,571 | 49,240,180 | ||||
| Financial assets held for trading | 17,847,023 | 28,239,601 | 8,875,145 | 16,614,658 | ||||
| Derivative financial assets | 329,867 | 420,494 | - | - | ||||
| Notes receivable | 4,609,220 | 5,304,510 | - | - | ||||
| Accounts receivable | 26,388,315 | 22,978,363 | - | - | ||||
| Receivables financing | 12,868,889 | 13,901,856 | - | - | ||||
| Advances to suppliers | 3,208,993 | 2,763,710 | 77,952 | 45,306 | ||||
| Contract assets | 3,875,902 | 3,236,848 | - | - | ||||
| Loans and advances | 19,728,893 | 16,469,069 | - | - | ||||
| Other receivables | 2,757,223 | 2,973,945 | 33,832,202 | 28,318,670 | ||||
| Inventories | 31,496,638 | 31,076,529 | - | - | ||||
| Other current assets | 38,238,606 | 33,079,918 | 24,805,849 | 20,533,745 | ||||
| Total current assets | 247,573,439 | 241,655,325 | 130,517,719 | 114,752,559 | ||||
| Non-current assets: | ||||||||
| Other debt investments | 23,256,572 | 21,456,155 | 21,864,572 | 20,064,155 | ||||
| Long-term receivables | 937,727 | 981,623 | - | - | ||||
| Loans and advances | 952,561 | 1,113,501 | - | - | ||||
| Long-term equity investments | 2,951,553 | 2,901,337 | 56,142,828 | 54,991,161 | ||||
| Other investments in equity instruments | 38,975 | 46,651 | - | - | ||||
| Other non-current financial assets | 3,302,444 | 3,360,849 | 79,139 | 80,937 | ||||
| Investment properties | 366,254 | 405,559 | 466,099 | 476,839 | ||||
| Fixed assets | 21,955,436 | 22,239,214 | 708,433 | 749,835 | |
| Construction in progress | 1,508,141 | 1,477,302 | 260,637 | 204,304 | |
| Right-of-use assets | 2,050,852 | 8,402 | |||
| Intangible assets | 16,588,979 | 15,422,393 | 681,037 | 684,997 | |
| Goodwill | 28,365,224 | 29,557,218 | - | - | |
| Long-term prepaid expenses | 1,321,140 | 1,300,962 | 94,750 | 97,078 | |
| Deferred tax assets | 7,435,518 | 7,208,635 | 286,871 | 287,360 | |
| Other non-current assets | 10,569,711 | 11,255,879 | 10,040,163 | 10,141,031 | |
| Total non-current assets | 121,601,087 | 118,727,278 | 90,632,931 | 87,777,697 | |
| TOTAL ASSETS | 369,174,526 | 360,382,603 | 221,150,650 | 202,530,256 | |
| Legal representative: Principal in charge of accounting: Head of accounting department: Fang Hongbo Zhong Zheng Chen Lihong | |||||
| Balance Sheet (Continued) | ||||||
| Prepared by Midea Group Co., Ltd. 31 March 2021 Unit: RMB’000 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | 31 March 2021 | 31 December 2020 | 31 March 2021 | 31 December 2020 | ||
| Consolidated | Consolidated | Company | Company | |||
| Current liabilities: | ||||||
| Short-term borrowings | 11,589,187 | 9,943,929 | 490,570 | 799,314 | ||
| Customer deposits and deposits from banks and other financial institutions | 98,785 | 87,535 | - | - | ||
| Derivative financial liabilities | 212,889 | 161,225 | - | - | ||
| Notes payable | 29,015,231 | 28,249,939 | - | - | ||
| Accounts payable | 58,403,164 | 53,930,261 | - | - | ||
| Contract liabilities | 20,148,760 | 18,400,922 | - | - | ||
| Employee benefits payable | 4,956,559 | 6,954,822 | 558,134 | 562,954 | ||
| Taxes payable | 4,667,549 | 5,758,058 | 984,212 | 1,326,219 | ||
| Other payables | 4,278,661 | 4,501,391 | 145,857,360 | 123,120,354 | ||
| Current portion of non-current liabilities | 3,416,313 | 6,310,181 | 7,786 | 4,000,000 | ||
| Other current liabilities | 51,057,776 | 49,852,239 | 3,004,427 | 3,048,794 | ||
| Total current liabilities | 187,844,874 | 184,150,502 | 150,902,489 | 132,857,635 | ||
| Non-current liabilities: | ||||||
| Long-term borrowings | 46,909,801 | 42,827,287 | 12,000,000 | 5,800,000 | ||
| Lease liabilities | 1,422,561 | 684 | ||||
| Long-term payables | - | 13,260 | - | - | ||
| Provisions | 299,147 | 298,110 | - | - | ||
| Deferred income | 823,607 | 779,729 | - | - | ||
| Long-term employee benefits payable | 1,838,312 | 2,159,675 | - | - | ||
| Deferred tax liabilities | 4,975,914 | 5,223,954 | 46,647 | 67,792 | ||
| Other non-current liabilities | 691,182 | 692,986 | - | - | ||
| Total non-current liabilities | 56,960,524 | 51,995,001 | 12,047,331 | 5,867,792 | ||
| Total liabilities | 244,805,398 | 236,145,503 | 162,949,820 | 138,725,427 | ||
| Shareholders' equity: | ||||||
| Share capital | 7,047,686 | 7,029,976 | 7,047,686 | 7,029,976 | ||
| Capital surplus | 23,340,345 | 22,488,105 | 29,956,567 | 29,123,547 |
| Less: Treasury stock | (13,396,198) | (6,094,347) | (13,396,198) | (6,094,347) |
| Other comprehensive income | (1,574,746) | (1,549,003) | (4,529) | (16,009) |
| General risk reserve | 587,984 | 587,984 | - | - |
| Specific reserve | 13,441 | 12,730 | ||
| Surplus reserve | 7,966,362 | 7,966,362 | 7,966,362 | 7,966,362 |
| Undistributed profits | 93,547,753 | 87,074,453 | 26,630,942 | 25,795,300 |
| Total equity attributable to shareholders of the Company | 117,532,627 | 117,516,260 | 58,200,830 | 63,804,829 |
| Minority interests | 6,836,501 | 6,720,840 | - | - |
| Total shareholders' equity | 124,369,128 | 124,237,100 | 58,200,830 | 63,804,829 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 369,174,526 | 360,382,603 | 221,150,650 | 202,530,256 |
| Legal representative: Principal in charge of accounting: Head of accounting department: Fang Hongbo Zhong Zheng Chen Lihong | ||||
| Income Statement | ||||||||
| Prepared by Midea Group Co., Ltd. January-March 2021 Unit: RMB’000 | ||||||||
| Item | January-March 2021 | January-March 2020 | January-March 2021 | January-March 2020 | ||||
| Consolidated | Consolidated | Company | Company | |||||
| 1. Total revenue | 83,017,120 | 58,355,915 | 442,664 | 382,710 | ||||
| Including: Operating revenue | 82,504,017 | 58,013,031 | 442,664 | 382,710 | ||||
| Interest income | 513,036 | 342,786 | - | - | ||||
| Fee and commission income | 67 | 98 | - | - | ||||
| 2. Total operating cost | (75,354,650) | (53,240,225) | 257,173 | 166,944 | ||||
| Including: Cost of sales | (63,526,113) | (43,428,300) | (11,610) | (10,696) | ||||
| Interest expenses | (15,059) | (53,023) | - | - | ||||
| Fee and commission expenses | (1,776) | (1,976) | - | - | ||||
| Taxes and surcharges | (390,356) | (281,138) | (18,648) | (14,860) | ||||
| Selling and distribution expenses | (7,456,925) | (5,656,993) | - | - | ||||
| General and administrative expenses | (2,404,839) | (2,008,521) | (233,265) | (129,126) | ||||
| Research and development expenses | (2,519,694) | (2,077,671) | - | - | ||||
| Financial income | 960,112 | 267,397 | 520,696 | 321,626 | ||||
| Including: Interest expenses | (317,428) | (272,142) | (504,197) | (397,286) | ||||
| Interest income | 1,158,995 | 778,923 | 1,024,813 | 718,942 | ||||
| Add: Other income | 345,651 | 81,818 | 152,367 | 1,687 | ||||
| Investment income | 531,167 | 409,709 | 254,440 | 222,065 | ||||
| Including: Investment income from associates and joint ventures | 136,353 | 137,588 | 70,473 | 74,300 | ||||
| Gains/(Losses) on changes in fair value | (830,632) | 20,570 | (249,001) | 86,529 | ||||
| Credit impairment losses | (180,953) | (131,813) | (664) | (6,179) | ||||
| Asset impairment losses | (115,967) | 1,430 | - | - | ||||
| Gains/(Losses) on disposal of assets | 1,400 | 3,841 | (964) | - | ||||
| 3. Operating profit | 7,413,136 | 5,501,245 | 856,015 | 853,756 | ||||
| Add: Non-operating income | 72,204 | 46,134 | 448 | 842 | ||||
| Less: Non-operating expenses | (25,720) | (16,726) | - | (12,629) | ||||
| 4. Total profit | 7,459,620 | 5,530,653 | 856,463 | 841,969 | ||||
| Less: Income tax expenses | (890,183) | (720,263) | (25,533) | (52,467) |
| 5. Net profit | 6,569,437 | 4,810,390 | 830,930 | 789,502 |
| (1) Classified by continuity of operations | ||||
| Net profit from continuing operations | 6,569,437 | 4,810,390 | 830,930 | 789,502 |
| Net profit from discontinued operations | - | - | - | - |
| (2) Classified by ownership of the equity | ||||
| Attributable to shareholders of the Company | 6,468,588 | 4,810,977 | 830,930 | 789,502 |
| Minority interests | 100,849 | (587) | - | - |
| 6. Other comprehensive income, net of tax | (42,607) | (834,341) | 11,480 | - |
| Other comprehensive income attributable to shareholders of the Company, net of tax | (25,743) | (583,429) | 11,480 | - |
| (1) Other comprehensive income items which will not be reclassified subsequently to profit or loss | 94,651 | (34,092) | - | - |
| 1) Changes arising from remeasurement of defined benefit plan | 94,607 | (34,092) | - | - |
| 2) Changes in fair value of other investments in equity instruments | 44 | - | - | - |
| (2) Other comprehensive income items which will be reclassified subsequently to profit or loss | (120,394) | (549,337) | 11,480 | - |
| 1) Other comprehensive income that will be transferred subsequently to profit or loss under the equity method | 12,308 | 1,606 | 11,480 | - |
| 2) Cash flow hedging reserve | (197,769) | (326,367) | - | - |
| 3) Exchange differences on translation of foreign currency financial statements | 65,067 | (224,576) | - | - |
| Other comprehensive income attributable to minority shareholders, net of tax | (16,864) | (250,912) | - | - |
| 7. Total comprehensive income | 6,526,830 | 3,976,049 | 842,410 | 789,502 |
| Attributable to shareholders of the Company | 6,442,845 | 4,227,548 | 842,410 | 789,502 |
| Minority interests | 83,985 | (251,499) | - | - |
| 8. Earnings per share | ||||
| (1) Basic earnings per share (RMB Yuan) | 0.93 | 0.70 | N/A | N/A |
| (2) Diluted earnings per share (RMB Yuan) | 0.92 | 0.69 | N/A | N/A |
| Legal representative: Principal in charge of accounting: Head of accounting department: Fang Hongbo Zhong Zheng Chen Lihong | ||||
| Cash Flow Statement | ||||||||
| Prepared by Midea Group Co., Ltd. January-March 2021 Unit: RMB’000 | ||||||||
| Item | January-March 2021 | January-March 2020 | January-March 2021 | January-March 2020 | ||||
| Consolidated | Consolidated | Company | Company | |||||
| 1. Cash flows from operating activities: | ||||||||
| Cash received from sales of goods or rendering of services | 70,624,192 | 54,493,549 | - | - | ||||
| Net increase in customer deposits and deposits from banks and other financial institutions | 11,250 | 9,220 | - | - | ||||
| Net decrease in deposits with the Central Bank | 823,134 | 26,198 | - | - | ||||
| Cash received from interest, fee and commission | 449,113 | 356,968 | - | - | ||||
| Refund of taxes and surcharges | 2,185,291 | 1,481,374 | - | - | ||||
| Cash received relating to other operating activities | 1,612,552 | 771,562 | 23,394,410 | 13,336,223 | ||||
| Sub-total of cash inflows | 75,705,532 | 57,138,871 | 23,394,410 | 13,336,223 | ||||
| Cash paid for goods and services | (43,141,773) | (29,986,705) | - | - | ||||
| Net increase in loans and advances | (3,182,455) | (420,707) | - | - | ||||
| Cash paid for interest, fee and commission | (17,033) | (55,731) | - | - | ||||
| Cash paid to and on behalf of employees | (10,119,594) | (8,895,742) | (5,245) | (9,783) | ||||
| Payments of taxes and surcharges | (3,252,112) | (2,621,587) | (14,624) | (2,964) | ||||
| Cash paid relating to other operating activities | (7,438,704) | (7,489,802) | (7,745,089) | (2,828,386) | ||||
| Sub-total of cash outflows | (67,151,671) | (49,470,274) | (7,764,958) | (2,841,133) | ||||
| Net cash flows from operating activities | 8,553,861 | 7,668,597 | 15,629,452 | 10,495,090 | ||||
| 2. Cash flows from investing activities: | ||||||||
| Cash received from disposal of investments | 27,124,590 | 22,580,275 | 17,800,000 | 20,960,000 | ||||
| Cash received from returns on investments | 942,913 | 1,005,097 | 987,658 | 980,079 | ||||
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 16,233 | 8,683 | 255 | - | ||||
| Net cash received from disposal of subsidiaries and other business units | 2,479 | - | - | - | ||||
| Sub-total of cash inflows | 28,086,215 | 23,594,055 | 18,787,913 | 21,940,079 | ||||
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | (2,145,202) | (884,830) | (78,204) | (47,168) | ||||
| Cash paid to acquire investments | (26,718,699) | (28,183,538) | (25,870,441) | (27,760,000) | ||||
| Net cash paid to acquire subsidiaries and other business units | (146,982) | (11,261) | - | - | ||||||||
| Cash paid relating to other investing activities | (7,391) | - | - | - | ||||||||
| Sub-total of cash outflows | (29,018,274) | (29,079,629) | (25,948,645) | (27,807,168) | ||||||||
| Net cash flows from investing activities | (932,059) | (5,485,574) | (7,160,732) | (5,867,089) | ||||||||
| 3. Cash flows from financing activities: | ||||||||||||
| Cash received from capital contributions | 358,749 | 361,920 | 358,749 | 361,920 | ||||||||
| Including: Cash received from capital contributions by minority shareholders of subsidiaries | - | - | - | - | ||||||||
| Cash received from borrowings | 9,152,583 | 1,403,478 | 6,200,000 | 308,744 | ||||||||
| Cash received from issuance of short-term financing bonds | 2,999,629 | - | 2,999,629 | - | ||||||||
| Cash received relating to other financing activities | 16,742 | - | - | - | ||||||||
| Sub-total of cash inflows | 12,527,703 | 1,765,398 | 9,558,378 | 670,664 | ||||||||
| Cash repayments of borrowings | (5,081,076) | (260,351) | (4,308,744) | - | ||||||||
| Cash repayments of short-term financing bonds | (3,000,000) | - | (3,000,000) | - | ||||||||
| Cash payments for interest expenses and distribution of dividends or profits | (426,488) | (383,344) | (461,849) | (400,222) | ||||||||
| Including: Cash payments for dividends or profit to minority shareholders of subsidiaries | (81,772) | (62,631) | - | - | ||||||||
| Cash payments relating to other financing activities | (7,558,103) | (821,093) | (7,394,100) | (802,059) | ||||||||
| Sub-total of cash outflows | (16,065,667) | (1,464,788) | (15,164,693) | (1,202,281) | ||||||||
| Net cash flows from financing activities | (3,537,964) | 300,610 | (5,606,315) | (531,617) | ||||||||
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | (50,198) | 56,603 | - | - | ||||||||
| 5. Net increase in cash and cash equivalents | 4,033,640 | 2,540,236 | 2,862,405 | 4,096,384 | ||||||||
| Add: Cash and cash equivalents at beginning of period | 23,548,509 | 30,441,760 | 16,595,063 | 12,408,650 | ||||||||
| 6. Cash and cash equivalents at end of period | 27,582,149 | 32,981,996 | 19,457,468 | 16,505,034 | ||||||||
| Legal representative: Principal in charge of accounting: Head of accounting department: Fang Hongbo Zhong Zheng Chen Lihong | ||||||||||||
2. Adjustments to the Financial Statements
2.1 Adjustments to financial statement items at the beginning of the year of the firstimplementation of the new accounting standards governing leases which have beenimplemented since 2021
√ Applicable □ N/A
Whether any balance sheet items at the beginning of the year requires adjustment
√ Yes □ No
| Balance Sheet | ||||||||||||
| Prepared by Midea Group Co., Ltd. 31 March 2021 Unit: RMB’000 | ||||||||||||
| ASSETS | Consolidated | Company | ||||||||||
| 31 December 2020 | 1 January 2021 | Adjustment | 31 December 2020 | 1 January 2021 | Adjustment | |||||||
| Current assets: | ||||||||||||
| Cash at bank and on hand | 81,210,482 | 81,210,482 | - | 49,240,180 | 49,240,180 | - | ||||||
| Financial assets held for trading | 28,239,601 | 28,239,601 | - | 16,614,658 | 16,614,658 | - | ||||||
| Derivative financial assets | 420,494 | 420,494 | - | - | - | - | ||||||
| Notes receivable | 5,304,510 | 5,304,510 | - | - | - | - | ||||||
| Accounts receivable | 22,978,363 | 22,978,363 | - | - | - | - | ||||||
| Receivables financing | 13,901,856 | 13,901,856 | - | - | - | - | ||||||
| Advances to suppliers | 2,763,710 | 2,763,710 | - | 45,306 | 45,306 | - | ||||||
| Contract assets | 3,236,848 | 3,236,848 | - | - | - | - | ||||||
| Loans and advances | 16,469,069 | 16,469,069 | - | - | - | - | ||||||
| Other receivables | 2,973,945 | 2,973,945 | - | 28,318,670 | 28,318,670 | - | ||||||
| Inventories | 31,076,529 | 31,076,529 | - | - | - | - | ||||||
| Other current assets | 33,079,918 | 33,079,918 | - | 20,533,745 | 20,533,745 | - | ||||||
| Total current assets | 241,655,325 | 241,655,325 | - | 114,752,559 | 114,752,559 | - | ||||||
| Non-current assets: | ||||||||||||
| Other debt investments | 21,456,155 | 21,456,155 | - | 20,064,155 | 20,064,155 | - | ||||||
| Long-term receivables | 981,623 | 981,623 | - | - | - | - | ||||||
| Loans and advances | 1,113,501 | 1,113,501 | - | - | - | - | ||||||
| Long-term equity investments | 2,901,337 | 2,901,337 | - | 54,991,161 | 54,991,161 | - |
| Other investments in equity instruments | 46,651 | 46,651 | - | - | - | - |
| Other non-current financial assets | 3,360,849 | 3,360,849 | - | 80,937 | 80,937 | - |
| Investment properties | 405,559 | 405,559 | - | 476,839 | 476,839 | - |
| Fixed assets | 22,239,214 | 22,212,866 | (26,348) | 749,835 | 749,835 | - |
| Construction in progress | 1,477,302 | 1,477,302 | - | 204,304 | 204,304 | - |
| Right-of-use assets | - | 2,155,516 | 2,155,516 | - | 10,340 | 10,340 |
| Intangible assets | 15,422,393 | 15,422,393 | - | 684,997 | 684,997 | - |
| Goodwill | 29,557,218 | 29,557,218 | - | - | - | - |
| Long-term prepaid expenses | 1,300,962 | 1,300,962 | - | 97,078 | 97,078 | - |
| Deferred tax assets | 7,208,635 | 7,208,635 | - | 287,360 | 287,360 | - |
| Other non-current assets | 11,255,879 | 11,255,879 | - | 10,141,031 | 10,141,031 | - |
| Total non-current assets | 118,727,278 | 120,856,446 | 2,129,168 | 87,777,697 | 87,788,037 | 10,340 |
| TOTAL ASSETS | 360,382,603 | 362,511,771 | 2,129,168 | 202,530,256 | 202,540,596 | 10,340 |
| Balance Sheet (Continued) | ||||||||||||
| Prepared by Midea Group Co., Ltd. 31 March 2021 Unit: RMB’000 | ||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | Consolidated | Company | ||||||||||
| 31 December 2020 | 1 January 2021 | Adjustment | 31 December 2020 | 1 January 2021 | Adjustment | |||||||
| Current liabilities: | ||||||||||||
| Short-term borrowings | 9,943,929 | 9,943,929 | - | 799,314 | 799,314 | - | ||||||
| Customer deposits and deposits from banks and other financial institutions | 87,535 | 87,535 | - | - | - | - | ||||||
| Derivative financial liabilities | 161,225 | 161,225 | - | - | - | - | ||||||
| Notes payable | 28,249,939 | 28,249,939 | - | - | - | - | ||||||
| Accounts payable | 53,930,261 | 53,930,261 | - | - | - | - | ||||||
| Contract liabilities | 18,400,922 | 18,400,922 | - | - | - | - | ||||||
| Employee benefits payable | 6,954,822 | 6,954,822 | - | 562,954 | 562,954 | - | ||||||
| Taxes payable | 5,758,058 | 5,758,058 | - | 1,326,219 | 1,326,219 | - | ||||||
| Other payables | 4,501,391 | 4,501,391 | - | 123,120,354 | 123,120,354 | - | ||||||
| Current portion of non-current liabilities | 6,310,181 | 6,939,183 | 629,002 | 4,000,000 | 4,007,693 | 7,693 | ||||||
| Other current liabilities | 49,852,239 | 49,852,239 | - | 3,048,794 | 3,048,794 | - | ||||||
| Total current liabilities | 184,150,502 | 184,779,504 | 629,002 | 132,857,635 | 132,865,328 | 7,693 | ||||||
| Non-current liabilities: | ||||||||||||
| Long-term borrowings | 42,827,287 | 42,827,287 | - | 5,800,000 | 5,800,000 | - | ||||||
| Lease liabilities | 1,513,426 | 1,513,426 | - | 2,647 | 2,647 | |||||||
| Long-term payables | 13,260 | - | (13,260) | - | - | - | ||||||
| Provisions | 298,110 | 298,110 | - | - | - | - | ||||||
| Deferred income | 779,729 | 779,729 | - | - | - | - | ||||||
| Long-term employee benefits payable | 2,159,675 | 2,159,675 | - | - | - | - | ||||||
| Deferred tax liabilities | 5,223,954 | 5,223,954 | - | 67,792 | 67,792 | - | ||||||
| Other non-current liabilities | 692,986 | 692,986 | - | - | - | - | ||||||
| Total non-current liabilities | 51,995,001 | 53,495,167 | 1,500,166 | 5,867,792 | 5,870,439 | 2,647 | ||||||
| Total liabilities | 236,145,503 | 238,274,671 | 2,129,168 | 138,725,427 | 138,735,767 | 10,340 | ||||||
| Shareholders' equity: | ||||||||||||
| Share capital | 7,029,976 | 7,029,976 | - | 7,029,976 | 7,029,976 | - | ||||||
| Capital surplus | 22,488,105 | 22,488,105 | - | 29,123,547 | 29,123,547 | - |
| Less: Treasury stock | (6,094,347) | (6,094,347) | - | (6,094,347) | (6,094,347) | - |
| Other comprehensive income | (1,549,003) | (1,549,003) | - | (16,009) | (16,009) | - |
| General risk reserve | 587,984 | 587,984 | - | - | - | - |
| Specific reserve | 12,730 | 12,730 | - | - | - | - |
| Surplus reserve | 7,966,362 | 7,966,362 | - | 7,966,362 | 7,966,362 | - |
| Undistributed profits | 87,074,453 | 87,074,453 | - | 25,795,300 | 25,795,300 | - |
| Total equity attributable to shareholders of the Company | 117,516,260 | 117,516,260 | - | 63,804,829 | 63,804,829 | - |
| Minority interests | 6,720,840 | 6,720,840 | - | - | - | - |
| Total shareholders' equity | 124,237,100 | 124,237,100 | - | 63,804,829 | 63,804,829 | - |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 360,382,603 | 362,511,771 | 2,129,168 | 202,530,256 | 202,540,596 | 10,340 |
Notes to the adjustmentsPursuant to the Notice of Revising and Issuing the Accounting Standard No. 21 for BusinessEnterprises—Leases (CK [2018] No. 35) issued by the Ministry of Finance on 7 December 2018, theCompany has adopted, starting from 1 January 2021, the revised Accounting Standard No. 21 forBusiness Enterprises—Leases (hereinafter referred to as the “New Lease Standard”). According to theNew Lease Standard, the Company chooses to adjust the amounts of retained earnings and otherrelevant financial statement items at the beginning of the year of the first implementation of the NewLease Standard based on the cumulative effects arising from the first implementation of the New LeaseStandard, with no adjustments to comparable data. For finance leases before the first implementationdate, the Company recognizes right-of-use assets and lease liabilities based on the original carryingamounts of the assets held under the finance leases and the finance lease payables respectively on thefirst implementation date. For operating leases other than short-term leases and leases of low-valueassets before the first implementation date, the Company recognizes lease liabilities on the firstimplementation date based on the present value of the balances of lease payables discounted using theinterest rate of the Company’s incremental borrowings on the first implementation date, and recognizesright-of-use assets by making necessary adjustments to prepaid rents based on amounts equivalent tolease liabilities.
2.2 Retrospective adjustments to comparative data of the previous period due to the firstimplementation of the new accounting standards leases since 2021
□ Applicable √ N/A
3. Auditor’s report
Is this Report audited by a CPAs firm?
□Yes √No
Midea Group Co., Ltd.Legal Representative: Fang Hongbo
30 April 2021