Stock code: 000333 Stock abbreviation: Midea Group Announcement No.: 2021-108
Midea Group Co., Ltd.Interim Report for the Third Quarter 2021Midea Group Co., Ltd. (hereinafter referred to as the “Company”) and all the members of theCompany’s Board of Directors have warranted that the information given in this Report is true, accurateand complete, as well as free of any false record, misleading statement or material omission.
Important Reminders:
1. The Board of Directors, the Supervisory Committee as well as all the directors,supervisors and senior management staff of the Company have warranted that this Reportcontains no false record, misleading statement or material omission. And they shall bejointly and severally liable for the truthfulness, accuracy and completeness of theinformation given in this Report.
2. The legal representative, principal in charge of accounting and head of the accountingdepartment of the Company have represented and warranted that the financial informationin this Report is true, accurate and complete.
3. Is this Report audited by a CPAs firm?
□ Yes √ No
This report has been prepared in both Chinese and English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese version shallprevail.
1. Key financial information
1.1 Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years?
□ Yes √ No
| July-September 2021 | YoY Change (%) | January- September 2021 | YoY Change (%) | |
| Operating revenue (RMB'000) | 87,532,404 | 12.66% | 261,341,969 | 20.57% |
| Net profit attributable to shareholders of the Company (RMB'000) | 8,446,204 | 4.40% | 23,455,250 | 6.53% |
| Net profit attributable to shareholders of the Company before non-recurring gains and losses (RMB'000) | 7,928,026 | 10.75% | 22,564,537 | 9.45% |
| Net cash flows from operating activities (RMB'000) | —— | —— | 27,896,744 | 11.52% | ||
| Basic earnings per share (RMB/share) | 1.24 | 6.90% | 3.41 | 7.23% | ||
| Diluted earnings per share (RMB/share) | 1.23 | 6.03% | 3.39 | 6.94% | ||
| Weighted average ROE (%) | 7.30% | -0.09% | 19.51% | -0.84% | ||
| 30 September 2021 | 31 December 2020 | Change (%) | ||||
| Total assets (RMB'000) | 376,333,770 | 360,382,603 | 4.43% | |||
| Total equity attributable to shareholders of the Company (RMB'000) | 118,530,537 | 117,516,260 | 0.86% | |||
1.2 Non-recurring gains and losses
√ Applicable □ N/A
Unit: RMB’000
| Item | July-September 2021 | January-September 2021 | Note |
| Gains and losses on disposal of non-current assets | 77,247 | 60,162 | |
| Except for effectively hedging business related to normal business operations of the Company, gains and losses 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 gains and losses produced from the disposal of the aforesaid financial assets and liabilities | -21,422 | -123,141 | |
| Other | 693,800 | 1,238,713 | |
| Less: Corporate income tax | 219,783 | 284,055 | |
| Minority interests (after tax) | 11,664 | 966 | |
| Total | 518,178 | 890,713 | -- |
Other items that meet the definition of non-recurring gain/loss:
□ Applicable √ N/A
No such cases for the Reporting Period.Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the<Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities tothe Public—Non-Recurring Gains and Losses> as a recurring gain/loss item
□ Applicable √ N/A
No such cases for the Reporting Period.
1.3 Major changes of main items in financial statements and financial indicators, as well as thereasons for the changes
√ Applicable □ N/A
Unit: RMB’000
| Financial statement items (consolidated) | 30 September 2021/January- September 2021 | 31 December 2020/January- September 2020 | Change (%) | Reasons for the changes |
| Cash at bank and on hand | 55,870,709 | 81,210,482 | -31.20% | Mainly due to the decreased term deposits |
| Financial assets held for trading | 11,219,571 | 28,239,601 | -60.27% | Mainly due to the decreased structured deposits |
| Derivative financial assets | 183,340 | 420,494 | -56.40% | Mainly due to the changes in the fair value of derivative financial instruments |
| Advances to suppliers | 3,621,966 | 2,763,710 | 31.05% | Mainly due to the increased advances to material suppliers |
| Other current assets | 65,891,409 | 33,079,918 | 99.19% | Mainly due to the increased monetary investment products |
| Other debt investments | 11,511,716 | 21,456,155 | -46.35% | Mainly due to the transfer to the current portion of non-current assets |
| Other non-current financial assets | 5,325,750 | 3,360,849 | 58.46% | Mainly due to the increased equity investments |
| Investment properties | 887,837 | 405,559 | 118.92% | Mainly due to the increased business combinations |
| Construction in progress | 2,148,934 | 1,477,302 | 45.46% | Mainly due to the increased construction in progress |
| Customer deposits and deposits from banks and other financial institutions | 26,783 | 87,535 | -69.40% | Mainly due to the changes in the business operations of Midea Group Finance |
| Derivative financial liabilities | 82,478 | 161,225 | -48.84% | Mainly due to the changes in the fair value of derivative financial instruments |
| Current portion of non-current liabilities | 2,017,084 | 6,310,181 | -68.03% | Mainly due to the repayment of borrowings |
| Deferred income | 1,103,615 | 779,729 | 41.54% | Mainly due to the increased government subsidies received |
| Treasury stock | 14,188,847 | 6,094,347 | 132.82% | Mainly due to the increased share repurchase |
| Minority interests | 9,774,931 | 6,720,840 | 45.44% | Mainly due to the acquisition of Beijing Wandong Medical Technology Co., Ltd. |
| Interest income | 1,600,306 | 992,158 | 61.30% | Mainly due to the changes in the business operations of Midea Group Finance |
| Research and development expenses | 8,764,926 | 6,715,806 | 30.51% | Mainly due to the increased research and development investments |
| Financial expenses | -3,349,461 | -1,462,390 | -129.04% | Mainly due to the increased interest income |
| Gains/(losses) on changes in fair value | -924,798 | 1,123,644 | -182.30% | Mainly due to the changes in the fair value of financial assets |
| Credit impairment losses | -204,276 | -615,091 | 66.79% | Mainly due to the decreased losses on bad debts of accounts receivable |
| Losses on disposal of assets | 57,969 | -36,917 | 257.03% | Mainly due to the increased gains on disposal of non-current assets |
| Non-operating income | 406,215 | 223,576 | 81.69% | Mainly due to the increased other income |
| Net profit attributable to minority interests | 237,578 | 175,702 | 35.22% | Mainly due to the increased profits of non-wholly-owned subsidiaries |
| Net cash flows from investing activities | 6,680,656 | -32,098,571 | 120.81% | Mainly due to the increased cash received from disposal of investments |
| Net cash flows from financing | -27,666,525 | 8,101,376 | -441.50% | Mainly due to the decreased cash received from issuance of short-term |
| activities | financing bonds | |||
| Net increase in cash and cash equivalents | 6,662,307 | 870,074 | 665.72% | Mainly due to the increased net cash flows from investing activities |
2. Shareholder information
2.1 Total number of ordinary shareholders and preference shareholders with resumed votingrights, as well as shareholdings of the top ten shareholders at the period-end
Unit: share
| Total number of ordinary shareholders at the period-end | 455,639 | 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 | 31.06 | 2,169,178,713 | Pledged | 100,000,000 | ||||||
| Hong Kong Securities Clearing Company Limited | Foreign corporation | 18.61 | 1,299,563,430 | - | - | ||||||
| China Securities Finance Co., Ltd. | Domestic non-state-owned corporation | 2.84 | 198,145,134 | - | - | ||||||
| Fang Hongbo | Domestic individual | 1.68 | 116,990,492 | 87,742,869 | - | - | |||||
| Canada Pension Plan Investment Board－ own funds (stock exchange) | Foreign corporation | 1.49 | 103,913,897 | - | - | ||||||
| Central Huijin Asset Management Ltd. | State-owned corporation | 1.29 | 90,169,354 | - | - | ||||||
| Huang Jian | Domestic individual | 1.23 | 86,140,000 | - | - | ||||||
| Li Jianwei | Foreign individual | 0.72 | 50,100,000 | - | - | ||||||
| Huang Xiaoxiang | Domestic individual | 0.56 | 39,257,832 | Pledged | 14,779,556 | ||||||
| Yuan Liqun | Domestic individual | 0.54 | 37,888,882 | - | - | ||||||
| Top ten non-restricted ordinary shareholders | |||||||||||
| Name of shareholder | Number of non-restricted ordinary shares held at the period-end | Type of shares | |||||||||
| Type | Number | ||||||||||
| Midea Holding Co., Ltd. | 2,169,178,713 | RMB-denominated ordinary share | 2,169,178,713 | ||||||||
| Hong Kong Securities Clearing Company Limited | 1,299,563,430 | RMB-denominated ordinary share | 1,299,563,430 | ||||||||
| China Securities Finance Co., Ltd. | 198,145,134 | RMB-denominated ordinary share | 198,145,134 | ||||||||
| Canada Pension Plan Investment Board－ own funds (stock exchange) | 103,913,897 | RMB-denominated ordinary share | 103,913,897 | ||||||||
| Central Huijin Asset Management Ltd. | 90,169,354 | RMB-denominated ordinary share | 90,169,354 | ||||||||
| Huang Jian | 86,140,000 | RMB-denominated ordinary share | 86,140,000 |
| Li Jianwei | 50,100,000 | RMB-denominated ordinary share | 50,100,000 |
| Huang Xiaoxiang | 39,257,832 | RMB-denominated ordinary share | 39,257,832 |
| Yuan Liqun | 37,888,882 | RMB-denominated ordinary share | 37,888,882 |
| Merrill Lynch International | 37,191,573 | RMB-denominated ordinary share | 37,191,573 |
| Explanation of related relationship or/and acting-in-concert parties among the above-mentioned shareholders | N/A | ||
| Top ten non-restricted ordinary shareholders taking part in securities margin trading | The Company’s shareholder Huang Xiaoxiang holds 28,679,832 shares in the Company through his common securities account and 10,578,000 shares in the Company through his account of collateral securities for margin trading, representing a total holding of 39,257,832 shares in the Company. The Company’s shareholder Yuan Liqun holds 705,000 shares in the Company through her common securities account and 37,183,882 shares in the Company through her account of collateral securities for margin trading, representing a total holding of 37,888,882 shares in the Company. | ||
Note: 116,828,832 ordinary shares (or 1.67% of the Company’s total share capital) were held in the special account forrepurchased shares of Midea Group Co., Ltd. at the end of the Reporting Period.
2.2 Total number of preference shareholders and shareholdings of the top ten preferenceshareholders at the period-end
□ Applicable √ N/A
3. Other significant events
□ Applicable √ N/A
4. Financial statements
4.1 Financial statements
4.1.1 Consolidated and Company balance sheets
| Consolidated and Company Balance Sheets | |||||||||
| Prepared by Midea Group Co., Ltd. As at 30 September 2021 Unit: RMB’000 | |||||||||
| ASSETS | 30 September 2021 | 31 December 2020 | 30 September 2021 | 31 December 2020 | |||||
| Consolidated | Consolidated | Company | Company | ||||||
| Current assets | |||||||||
| Cash at bank and on hand | 55,870,709 | 81,210,482 | 42,060,082 | 49,240,180 | |||||
| Financial assets held for trading | 11,219,571 | 28,239,601 | 6,405,484 | 16,614,658 | |||||
| Derivative financial assets | 183,340 | 420,494 | - | - | |||||
| Notes receivable | 6,044,674 | 5,304,510 | - | - | |||||
| Accounts receivable | 25,984,593 | 22,978,363 | - | - | |||||
| Receivables financing | 15,622,773 | 13,901,856 | - | - | |||||
| Advances to suppliers | 3,621,966 | 2,763,710 | 76,720 | 45,306 | |||
| Contract assets | 4,098,681 | 3,236,848 | - | - | |||
| Loans and advances | 20,228,082 | 16,469,069 | - | - | |||
| Other receivables | 2,968,794 | 2,973,945 | 32,579,418 | 28,318,670 | |||
| Inventories | 33,198,146 | 31,076,529 | - | - | |||
| Current portion of non-current assets | 14,204,709 | - | 13,524,924 | - | |||
| Other current assets | 65,891,409 | 33,079,918 | 57,116,390 | 20,533,745 | |||
| Total current assets | 259,137,447 | 241,655,325 | 151,763,018 | 114,752,559 | |||
| Non-current assets | |||||||
| Other debt investments | 11,511,716 | 21,456,155 | 9,769,859 | 20,064,155 | |||
| Long-term receivables | 1,102,818 | 981,623 | - | - | |||
| Loans and advances | 942,420 | 1,113,501 | - | - | |||
| Long-term equity investments | 3,762,188 | 2,901,337 | 63,318,896 | 54,991,161 | |||
| Investments in other equity instruments | 43,866 | 46,651 | - | - | |||
| Other non-current financial assets | 5,325,750 | 3,360,849 | 695,688 | 80,937 | |||
| Investment properties | 887,837 | 405,559 | 450,200 | 476,839 | |||
| Fixed assets | 22,415,206 | 22,239,214 | 659,683 | 749,835 | |||
| Construction in progress | 2,148,934 | 1,477,302 | 679,537 | 204,304 | |||
| Right-of-use assets | 2,129,219 | 12,964 | |||||
| Intangible assets | 17,651,834 | 15,422,393 | 672,592 | 684,997 | |||
| Goodwill | 28,857,740 | 29,557,218 | - | - | |||
| Long-term prepaid expenses | 1,288,533 | 1,300,962 | 77,418 | 97,078 | |||
| Deferred tax assets | 7,680,751 | 7,208,635 | 286,823 | 287,360 | |||
| Other non-current assets | 11,447,511 | 11,255,879 | 10,535,554 | 10,141,031 | |||
| Total non-current assets | 117,196,323 | 118,727,278 | 87,159,214 | 87,777,697 | |||
| TOTAL ASSETS | 376,333,770 | 360,382,603 | 238,922,232 | 202,530,256 | |||
| Legal representative: | Principal in charge of accounting: | Head of accounting department: | |||||
| Fang Hongbo | Zhong Zheng | Chen Lihong | |||||
| Consolidated and Company Balance Sheets (Cont’d) | |||||||||
| Prepared by Midea Group Co., Ltd. As at 30 September 2021 Unit: RMB’000 | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | 30 September 2021 | 31 December 2020 | 30 September 2021 | 31 December 2020 | |||||
| Consolidated | Consolidated | Company | Company | ||||||
| Current liabilities | |||||||||
| Short-term borrowings | 8,179,959 | 9,943,929 | - | 799,314 | |||||
| Borrowings from the Central Bank | 19,841 | - | - | - | |||||
| Customer deposits and deposits from banks and other financial institutions | 26,783 | 87,535 | - | - | |||||
| Derivative financial liabilities | 82,478 | 161,225 | - | - | |||||
| Notes payable | 32,082,602 | 28,249,939 | - | - | |||||
| Accounts payable | 61,601,702 | 53,930,261 | - | - | |||||
| Contract liabilities | 20,326,814 | 18,400,922 | - | - | |||||
| Employee benefits payable | 6,323,912 | 6,954,822 | 557,932 | 562,954 | |||||
| Taxes payable | 4,333,343 | 5,758,058 | 874,220 | 1,326,219 | |||||
| Other payables | 4,553,324 | 4,501,391 | 172,317,366 | 123,120,354 | |||||
| Current portion of non-current liabilities | 2,017,084 | 6,310,181 | 8,127 | 4,000,000 | |||||
| Other current liabilities | 49,188,675 | 49,852,239 | 2,172 | 3,048,794 | |||||
| Total current liabilities | 188,736,517 | 184,150,502 | 173,759,817 | 132,857,635 | |||
| Non-current liabilities | |||||||
| Long-term borrowings | 48,636,926 | 42,827,287 | 12,600,000 | 5,800,000 | |||
| Lease liabilities | 1,417,967 | 4,912 | |||||
| Long-term payables | 1,115 | 13,260 | - | - | |||
| Provisions | 353,284 | 298,110 | - | - | |||
| Deferred income | 1,103,615 | 779,729 | - | - | |||
| Long-term employee benefits payable | 1,716,207 | 2,159,675 | - | - | |||
| Deferred tax liabilities | 5,373,260 | 5,223,954 | 70,527 | 67,792 | |||
| Other non-current liabilities | 689,411 | 692,986 | - | - | |||
| Total non-current liabilities | 59,291,785 | 51,995,001 | 12,675,439 | 5,867,792 | |||
| Total liabilities | 248,028,302 | 236,145,503 | 186,435,256 | 138,725,427 | |||
| Shareholders’ equity | |||||||
| Share capital | 6,984,237 | 7,029,976 | 6,984,237 | 7,029,976 | |||
| Capital surplus | 19,386,312 | 22,488,105 | 26,220,162 | 29,123,547 | |||
| Less: Treasury stock | (14,188,847) | (6,094,347) | (14,188,847) | (6,094,347) | |||
| Other comprehensive income | (1,691,296) | (1,549,003) | 2,917 | (16,009) | |||
| General risk reserve | 587,984 | 587,984 | - | - | |||
| Special reserve | 14,842 | 12,730 | - | - | |||
| Surplus reserve | 7,966,362 | 7,966,362 | 7,966,362 | 7,966,362 | |||
| Undistributed profits | 99,470,943 | 87,074,453 | 25,502,145 | 25,795,300 | |||
| Total equity attributable to shareholders of the Company | 118,530,537 | 117,516,260 | 52,486,976 | 63,804,829 | |||
| Minority interests | 9,774,931 | 6,720,840 | - | - | |||
| Total shareholders’ equity | 128,305,468 | 124,237,100 | 52,486,976 | 63,804,829 | |||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 376,333,770 | 360,382,603 | 238,922,232 | 202,530,256 | |||
| Legal representative: | Principal in charge of accounting: | Head of accounting department: | |||||
| Fang Hongbo | Zhong Zheng | Chen Lihong | |||||
4.1.2 Consolidated and Company income statements for the nine months ended 30 September2021
| Consolidated and Company Income Statements | ||||||||
| Prepared by Midea Group Co., Ltd. For the nine months ended 30 September 2021 Unit: RMB’000 | ||||||||
| Item | For the nine months ended 30 September 2021 | For the nine months ended 30 September 2020 | For the nine months ended 30 September 2021 | For the nine months ended 30 September 2020 | ||||
| Consolidated | Consolidated | Company | Company | |||||
| Total revenue | 262,942,589 | 217,753,150 | 1,381,918 | 1,336,559 | ||||
| Including: Operating revenue | 261,341,969 | 216,760,786 | 1,381,918 | 1,336,559 | ||||
| Interest income | 1,600,306 | 992,158 | - | - | ||||
| Fee and commission income | 314 | 206 | - | - | ||||
| Total operating cost | (237,666,842) | (194,931,822) | 865,983 | 620,765 | ||||
| Including: Cost of sales | (199,138,296) | (161,943,461) | (26,639) | (39,989) | ||||
| Interest costs | (76,088) | (95,096) | - | - | ||||
| Fee and commission expenses | (5,209) | (9,243) | - | - | ||||
| Taxes and surcharges | (1,172,144) | (1,152,606) | (31,835) | (27,730) | ||||
| Selling and distribution expenses | (24,405,142) | (20,179,953) | - | - | ||||
| General and administrative expenses | (7,454,498) | (6,298,047) | (701,472) | (384,608) | ||||
| Research and development expenses | (8,764,926) | (6,715,806) | - | - | ||||
| Financial income | 3,349,461 | 1,462,390 | 1,625,929 | 1,073,092 | ||||
| Including: Interest expenses | (989,334) | (954,362) | (1,671,992) | (1,378,594) | ||||
| Interest income | 3,842,498 | 2,664,883 | 3,318,208 | 2,467,387 | ||||
| Add: | 1,043,294 | 1,098,444 | 102,686 | 124,619 | ||||
| Investment income | 1,999,228 | 1,646,879 | 8,764,498 | 10,941,133 | ||||
| Including: Investment income from associates and joint ventures | 410,522 | 390,672 | 195,952 | 185,464 | ||||
| Gains/(Losses) on changes in fair value | (924,798) | 1,123,644 | (239,518) | 424,720 | ||||
| Asset impairment losses | (171,668) | (162,323) | - | - | ||||
| Credit impairment losses | (204,276) | (615,091) | (492) | (5,790) | ||||
| Losses on disposal of assets | 57,969 | (36,917) | (891) | 43 | ||||
| Operating profit | 27,075,496 | 25,875,964 | 10,874,184 | 13,442,049 | ||||
| Add: | 406,215 | 223,576 | 31,299 | 10,196 | ||||
| Less: Non-operating expenses | (139,501) | (151,595) | (48,782) | (91,306) | ||||
| Total profit | 27,342,210 | 25,947,945 | 10,856,701 | 13,360,939 | ||||
| Less: Income tax expenses | (3,649,382) | (3,753,942) | (88,176) | (57,984) | ||||
| Net profit | 23,692,828 | 22,194,003 | 10,768,525 | 13,302,955 | ||||
| (1) Classified by continuity of operations | ||||||||
| Net profit from continuing operations | 23,692,828 | 22,194,003 | 10,768,525 | 13,302,955 | ||||
| Net profit from discontinued operations | - | - | - | - | ||||
| (2) Classified by ownership of the equity | ||||||||
| Attributable to shareholders of the Company | 23,455,250 | 22,018,301 | 10,768,525 | 13,302,955 | ||||
| Minority interests | 237,578 | 175,702 | - | - | ||||
| Other comprehensive income, net of tax | (180,401) | (802,684) | 18,926 | (7,965) | ||||
| Other comprehensive income attributable to equity owners of the Company, net of tax | (139,373) | (492,675) | 18,926 | (7,965) | ||||
| (1) Other comprehensive income items which will not be reclassified subsequently to profit or loss | 131,437 | (90,143) | - | - | ||||
| 1) Changes arising from remeasurement of defined benefit plan | 129,967 | (90,143) | - | - | ||||
| 2) Changes in fair value of investments in other equity instruments | 1,470 | - | - | - | ||||
| (2) Other comprehensive income items which will be reclassified subsequently to profit or loss | (270,810) | (402,532) | 18,926 | (7,965) | ||||
| 1) Other comprehensive income that will be transferred subsequently to profit or loss under the equity method | 15,944 | (12,495) | 18,926 | (7,965) | ||||
| 2) Cash flow hedging reserve | (199,762) | 411,163 | - | - | ||||
| 3) Differences on translation of foreign currency financial statements | (86,992) | (801,200) | - | - | ||||
| Other comprehensive income attributable to minority shareholders, net of tax | (41,028) | (310,009) | - | - | ||||
| Total comprehensive income | 23,512,427 | 21,391,319 | 10,787,451 | 13,294,990 | ||||
| Attributable to equity owners of the Company | 23,315,877 | 21,525,626 | 10,787,451 | 13,294,990 | ||||
| Attributable to minority interests | 196,550 | (134,307) | - | - | ||||
| Earnings per share: | ||||||||
| (1) Basic earnings per share | 3.41 | 3.18 | Not applicable | Not applicable | ||||
| (2) Diluted earnings per share | 3.39 | 3.17 | Not applicable | Not applicable | ||||
| Legal representative: | Principal in charge of accounting: | Head of accounting department: | ||||||
| Fang Hongbo | Zhong Zheng | Chen Lihong | ||||||
4.1.3 Consolidated and Company cash flow statements for the nine months ended 30 September2021
| Consolidated and Company Cash Flow Statements | |||||||||
| Prepared by Midea Group Co., Ltd. For the nine months ended 30 September 2021 Unit: RMB’000 | |||||||||
| Item | For the nine months ended 30 September 2021 | For the nine months ended 30 September 2020 | For the nine months ended 30 September 2021 | For the nine months ended 30 September 2020 | |||||
| Consolidated | Consolidated | Company | Company | ||||||
| 1. Cash flows from operating activities | |||||||||
| Cash received from sales of goods or rendering of services | 227,937,641 | 182,997,506 | - | - | |||||
| Net decrease in deposits with the Central Bank, banks and other financial institutions | 1,347,924 | 61,267 | - | - | |||||
| Net increase in borrowings from the Central Bank | 19,841 | - | - | - | |||||
| Cash received from interest, fee and commission | 1,536,829 | 1,011,706 | - | - | |||||
| Refund of taxes and surcharges | 6,789,422 | 4,574,603 | - | - | |||||
| Cash received relating to other operating activities | 4,897,712 | 4,047,145 | 51,113,226 | 28,363,419 | |||||
| Sub-total of cash inflows | 242,529,369 | 192,692,227 | 51,113,226 | 28,363,419 | |||||
| Cash paid for goods and services | (149,209,825) | (105,250,492) | - | - | |||||
| Net increase in loans and advances | (3,676,530) | (5,257,382) | - | - | |||||
| Net decrease in customer deposits and deposits from banks and other financial institutions | (60,752) | (6,424) | - | - | |||||
| Cash paid for interest, fee and commission | (82,085) | (105,503) | - | - | |||||
| Cash paid to and on behalf of employees | (24,558,796) | (21,507,371) | (12,798) | (19,492) | |||||
| Payments of taxes and surcharges | (11,392,788) | (10,611,998) | (437,678) | (322,104) | |||||
| Cash paid relating to other operating activities | (25,651,849) | (24,938,422) | (6,070,874) | (5,651,559) | |||||
| Sub-total of cash outflows | (214,632,625) | (167,677,592) | (6,521,350) | (5,993,155) | |||||
| Net cash flows from operating activities | 27,896,744 | 25,014,635 | 44,591,876 | 22,370,264 | |||||
| 2. Cash flows from investing activities | |||||||||
| Cash received from disposal of investments | 104,890,385 | 82,922,131 | 43,296,962 | 66,110,300 | |||||
| Cash received from returns on investments | 4,360,871 | 3,554,642 | 11,345,718 | 12,156,396 | |||||
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 236,010 | 47,157 | 86 | 255 | |||||
| Net cash received from disposal of subsidiaries and other business units | 182,133 | 43,344 | - | - | |||||
| Cash received relating to other investing activities | 10,251 | - | - | - | |||||
| Sub-total of cash inflows | 109,679,650 | 86,567,274 | 54,642,766 | 78,266,951 | |||||
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | (5,875,219) | (3,206,463) | (573,214) | (166,141) | |||||
| Cash paid to acquire investments | (95,094,863) | (114,914,846) | (60,960,461) | (89,827,000) | |||||
| Net cash paid to acquire subsidiaries and other business units | (2,028,912) | (544,536) | - | - | |||||
| Sub-total of cash outflows | (102,998,997) | (118,665,845) | (61,533,675) | (89,993,141) | |||||
| Net cash flows from investing activities | 6,680,656 | (32,098,571) | (6,890,909) | (11,726,190) | |||||
| 3. Cash flows from financing activities | |||||||||
| Cash received from capital contributions | 1,474,377 | 2,351,094 | 1,431,805 | 2,351,094 | |||||
| Including: Cash received from capital contributions by minority shareholders of subsidiaries | 42,572 | - | - | - | |||||
| Cash received from borrowings | 13,864,476 | 12,222,629 | 6,800,000 | 799,314 | |||||
| Cash received from issuance of short-term financing bonds | 2,999,629 | 21,998,500 | 2,999,629 | 21,998,500 | |||||
| Cash received relating to other financing activities | 51,159 | 13,276 | - | - | ||||
| Sub-total of cash inflows | 18,389,641 | 36,585,499 | 11,231,434 | 25,148,908 | ||||
| Cash repayments of borrowings | (12,723,723) | (5,068,760) | (4,799,314) | (350,064) | ||||
| Cash paid for repayment of short-term financing bonds | (6,000,000) | (9,000,000) | (6,000,000) | (9,000,000) | ||||
| Cash payments for interest expenses and distribution of dividends or profits | (12,415,831) | (12,277,952) | (12,871,936) | (12,348,759) | ||||
| Including: Cash payments for dividends or profit to minority shareholders of subsidiaries | (289,414) | (173,752) | - | - | ||||
| Cash payments relating to other financing activities | (14,916,612) | (2,137,411) | (13,807,786) | (2,024,942) | ||||
| Sub-total of cash outflows | (46,056,166) | (28,484,123) | (37,479,036) | (23,723,765) | ||||
| Net cash flows from financing activities | (27,666,525) | 8,101,376 | (26,247,602) | 1,425,143 | ||||
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | (248,568) | (147,366) | - | - | ||||
| 5. Net increase in cash and cash equivalents | 6,662,307 | 870,074 | 11,453,365 | 12,069,217 | ||||
| Add: Cash and cash equivalents at the beginning of the period | 23,548,508 | 30,441,760 | 16,595,063 | 12,408,650 | ||||
| 6. Cash and cash equivalents at the end of the period | 30,210,815 | 31,311,834 | 28,048,428 | 24,477,867 | ||||
| Legal representative: | Principal in charge of accounting: | Head of accounting department: | ||||||
| Fang Hongbo | Zhong Zheng | Chen Lihong | ||||||
4.2 Adjustments to the financial statements
4.2.1 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
| Consolidated and Company Balance Sheets | |||||||||||
| Prepared by Midea Group Co., Ltd. Unit: RMB’000 | |||||||||||
| ASSETS | Consolidated | Company | |||||||||
| 2020-12-31 | 2021-01-01 | Adjustment | 2020-12-31 | 2021-01-01 | 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 | - |
| Investments in other 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 |
| Consolidated and Company Balance Sheets (Cont’d) | ||||||||||||
| Prepared by Midea Group Co., Ltd. Unit: RMB’000 | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | Consolidated | Company | ||||||||||
| 2020-12-31 | 2021-01-01 | Adjustment | 2020-12-31 | 2021-01-01 | 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 | - | - | - | - |
| Special 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 adjustments
Pursuant 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.
4.2.2 Retrospective adjustments to comparative data of the previous period due to the firstimplementation of the new accounting standards leases since 2021
□ Applicable √ N/A
4.3 Auditor’s report
Is this Report audited by a CPAs firm?
□ Yes √ No
This Report is not audited by a CPAs firm.
The Board of Directors of Midea Group Co., Ltd.
30 October 2021