CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
CHANGHONG MEILING CO., LTD.
Semi-Annual Report 2018
August 2018
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Changhong Meiling Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are
no any fictitious statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of
the whole contents.
Mr. Li Wei, person in charge of the Company, Mr. Pang Haitao, person in change of
accounting work and Mr. Luo Bo, person in charger of accounting organ (accountant in charge)
hereby confirm that the Financial Report of 2018 Semi-Annual Report is authentic, accurate and
complete.
The Company did not have directors, supervisors and senior executives of the Company could
not guarantee the reality, accuracy and completion of the whole contents or have objections.
All the directors attended the board meeting on deliberating the Report on site and by
communication.
Modified audit opinions notes
□ Applicable √ Not applicable
Risk warning of the forward-looking statements with future planning involved in semi-annual
report
√ Applicable □Not applicable
Concerning the forward-looking statements with future planning involved in the Report, they
do not constitute a substantial commitment for investors, investors and the person concerned should
maintain adequate risk awareness, furthermore, differences between the plans, forecast and
commitments should be comprehended. Investors are advised to exercise caution of investment
risks.
Investors are advised to read the full text of semi-annual report, and pay particular attention to
the following risk factors.
More details about the possible risks and countermeasures in the operation of the Company are
described in the report “X. Risks and countermeasures” of “Section IV Discussion and Analysis of
the Operation”, investors are advised to read the relevant content.
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) are the media for information disclosure for year of 2018 that appointed by
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
the Company. All public information under the name of the Company disclosed on the above said
media and website shall prevail, and investors are advised to exercise caution.
Does the Company need to comply with disclosure requirements of the special industry: No
Profit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the
Board in the semi-annual period
□Applicable √Not applicable
The Company has no plans of cash distribution, bonus shares and capitalizing of common
reserves either.
Directors and senior executives of the Company respectively signed Written Confirmation
Opinions for 2018 Semi-Annual Report.
Supervisory Committee of the Company formed Written Examination Opinions for 2018
Semi-Annual Report.
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Contents
Section I. Important Notice, Contents and Paraphrase .......................................................... 1
Section II Company Profile and Main Finnaical Indexes....................................................... 5
Section III Summary of Company Business ............................................................................ 9
Section IV. Discussion and Analysis of the Operation ........................................................... 16
Section V. Important Events .................................................................................................... 38
Section VI. Changes in shares and particular about shareholders ...................................... 80
Section VII. Preferred Stock .................................................................................................... 87
Section VIII. Particular about Directors, Supervisors and Senior Executives ................... 88
Section IX Corporate Bond ..................................................................................................... 89
Section X. Financial Report ..................................................................................................... 90
Section XI Documents available for Reference.................................................................... 230
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Paraphrase
Items Refers to Contents
Company, the Company, Changhong
Refers to Changhong Meiling Co., Ltd.
Meiling
Sichuan Changhong or controlling
Refers to Sichuan Changhong Electric Co., Ltd.
shareholder
Changhong Group Refers to Sichuan Changhong Electronics Holding Group Co., Ltd.
Hong Kong Changhong Refers to CHANGHONG (HK) TRADING LIMITED
Meiling Group Refers to Hefei Meiling Group Holdings Limited
Industry Investment Group Refers to Hefei Industry Investment Holding (Group) Co., Ltd.
Shine Wing Refers to Shine Wing Certified Public Accountants (LLP)
Changhong Air-conditioner Refers to Sichuan Changhong Air-conditioner Co., Ltd.
Zhongke Meiling Refers to Zhongke Meiling Cryogenic Technology Co., Ltd.
Jiangxi Meiling Refers to Jiangxi Meiling Electric Appliance Co., Ltd.
Changhong Ridian Refers to Guangdong Changhong Ridian Technology Co., Ltd.
Zhongshan Changhong Refers to Zhongshan Changhong Electric Co., LTD
Changmei Technology Refers to Changmei Technology Co., Ltd.
Changhong Huayi Refers to Changhong Huayi Compressor Co., Ltd.
Meiling CANDY Refers to Meiling CANDY Washing Machine Co., Ltd.
Candy Group Refers to Candy Hoover Group S.r.l.
CSRC Refers to China Securities Regulatory Commission
China Securities Regulatory Commission, Anhui Province
Anhui Securities Bureau Refers to
Securities Regulatory Bureau
SSE Refers to Shenzhen Stock Exchange
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section II Company Profile and Main Finnaical Indexes
I. Company profile
MEILINGDIANQI,
Short form of the stock Stock code 000521, 200521
WANMEILING-B
Short form of the Stock after changed (if
Changhong Meiling, Hongmeiling B
applicable)
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in Chinese) 长虹美菱股份有限公司
Short form of the Company (in Chinese) 长虹美菱
Foreign name of the Company (if
CHANGHONG MEILING CO.,LTD.
applicable)
Abbr. of English name of the Company
CHML
(if applicable)
Legal representative Li Wei
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Li Xia Zhu Wenjie
No. 2163, Lianhua Road, Economic and No. 2163, Lianhua Road, Economic and
Contact add.
Technology Development Zone, Hefei Technology Development Zone, Hefei
Tel. 0551-62219021 0551-62219021
Fax. 0551-62219021 0551-62219021
e-mail lixia@meiling.com wenjie.zhu@meiling.com
III. Others
(i) Way of contact
Whether registrations address, offices address and codes as well as website and email of the
Company changed in reporting period or not
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company
has no change in reporting period, found more details in Annual Report 2017
(ii) Information disclosure and preparation place
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish
appointed by CSRC and preparation place for semi-annual report have no change in reporting
period, found more details in Annual Report 2017.
(iii) Other relevant information
Whether other relevant information has changed in reporting period or not
□Applicable √Not applicable
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes √No
Current period Same period last year Changes +/-
Operating income (RMB) 9,271,509,569.67 8,517,794,193.10 8.85%
Net profit attributable to shareholders
50,684,231.73 92,075,039.77 -44.95%
of the listed company(RMB)
Net profit attributable to shareholders
of the listed company after deducting -6,600,101.83 66,905,338.98 -109.86%
non-recurring gains and losses(RMB)
Net cash flow arising from operating
160,489,361.06 484,230,697.91 -66.86%
activities(RMB)
Basic earnings per share (RMB/Share) 0.0485 0.0881 -44.95%
Diluted earnings per share
0.0485 0.0881 -44.95%
(RMB/Share)
0.79 percentage points
Weighted average ROE 1.00% 1.79%
down
End of current period End of last year Changes +/-
Total assets (RMB) 17,485,565,133.30 15,961,511,966.81 9.55%
Net assets attributable to shareholder of
5,031,662,984.03 5,051,066,095.31 -0.38%
listed company (RMB)
V. Accounting data difference under domestic and foreign accounting standards
(i) Difference of the net profit and net assets disclosed in financial report, under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting
Principles)
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
□ Applicable √ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report,
under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted
Accounting Principles) in reporting period.
2. Difference of the net profit and net assets disclosed in financial report, under both
foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □Not applicable
In RMB
Net profit attributable to shareholders of Net assets attributable to shareholders of
listed company listed company
Current period Last period Period-end Period-begin
Chinese GAAP 50,684,231.73 92,075,039.77 5,031,662,984.03 5,051,066,095.31
Items and amount adjusted by foreign accounting rules
Foreign accounting rules 50,684,231.73 92,075,039.77 5,031,662,984.03 5,051,066,095.31
The Company had no difference of the net profit or net assets disclosed in financial report,
under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles)
in the period.
(iii) Reasons for the differences of accounting data under accounting rules in and out of
China
√ Applicable □Not applicable
The “Notice of Relevant Issues of Audit for Company with Domestically Foreign Shares
Offering” was issued from CSRC dated 12 September 2007, since the day issuing, cancel the
previous “dual audit” requirement for companies who offering domestically listed foreign shares
(B-share enterprise) while engaging securities practice qualification CPA for auditing. The
Company did not compile financial report under foreign accounting rules since 2007, the financial
report of the Company is complying on the “Accounting Standard for Business Enterprise” in China,
and therefore, there are no differences of accounting data under accounting rules in and out of
China at period-end.
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset (including Found more in ‘income
3,283,766.57
the write-off that accrued for impairment of assets) from assets disposal”
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Governmental subsidy reckoned into current gains/losses, not
Found more in “other
including the subsidy enjoyed in quota or ration according to
46,107,868.54 income”, “non-operating
national standards, which are closely relevant to enterprise’s
income”
normal business
Held transaction financial asset, gains/losses of changes of fair
values from transaction financial liabilities, and investment
Found more in “Gain/loss
gains from disposal of transaction financial asset, transaction
11,632,885.79 of changes in fair value”,
financial liabilities and financial asset available for sales,
“investment income”
exclude the effective hedging business relevant with normal
operations of the Company
Switch-back of provision of impairment of account receivable Found more in “Account
1,486,361.71
which are treated with separate depreciation test receivable”
Found more in
Other non-operating income and expenditure except for the
3,816,311.33 “non-operating income &
aforementioned items
expenditure”
Less: impact on income tax 8,548,674.56 --
Impact on minority shareholders’ equity (post-tax) 494,185.82 --
Total 57,284,333.56 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on
Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary
Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for
Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□Applicable √Not applicable
The Company has no items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for
Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, in the period
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
Does the Company need to comply with disclosure requirements of the special industry: No
The Company is one of China's major electric appliance manufacturers, possesses four major
domestic manufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas
manufacturing bases in Indonesia and Pakistan, currently, we have completed the industry layout of
white electricity basically, covering the full product line including ice, washing, air, kitchen and
bath, small household appliances and others, at the same time, the company enters into the fresh
e-business, bio-medical and other new industrial fields.
Over the past 30 years, the Company has always been adhering to the "independent innovation,
created in China", and always focus on refrigeration industry without stop, elaborately building the
core competitiveness of enterprises by technological innovation and product innovation. The
company has set up the first RoHS public testing center in Anhui Province, the state-level enterprise
technology center and the top-end R & D team, so that Meiling can continue to achieve
breakthrough results in the variable frequency, intelligence, retain freshness, energy-saving, forced
air cooling, deep cooling and other fields. In recent years, the company has won three national-level
honors such as the Smart Refrigerator Intelligent Manufacturing Pilot Demonstration Project, the
National Green Factory, and the National Industrial Design Center. At the same time, a number of
Meiling products entered the national green product list and won numerous domestic and
international innovation awards, which once again highlighted the capabilities and strengthen of
intelligent innovation technologies of Meiling Intelligent Manufacturing and Meiling brand.
In recent years, driven by the industry transformation and upgrades and consumption upgrades,
the Company has adhered to the strategy of smart and variable frequency products, promoted the
Company’s products to transform and upgrade to become intelligent and high-end and
comprehensively enhanced the competitiveness of products in the industry by grasping the
opportunities of “fresh-keeping” and energy efficiency upgrades and effectively resolving the pain
points of customers. Under the guidance of the “intelligent” strategy, as early as 2014, the Company
has released the industry-leading CHiQ series of smart refrigerators and air-conditioning products;
in 2016, the Company took the lead in launching the industry’s “Smart Home Eco-system Project”
and launched the world’s first free-to-order internet of things refrigerator in the temperature zone
(CHiQ’s second-generation “Space Smart” refrigerator) and the world's first user-customized
intelligent air housekeeper (CHiQ smart air housekeeper), and realized the continuous
implementation of the Company's smart strategy. At the same time, in order to seize the opportunity
of energy efficiency upgrades and consumption upgrades, since the Company launched the “All
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
People Change for Variable Frequency” campaign in 2015, the share of variable frequency products
has continued to increase due to its advantages in the application of variable frequency technology.
In addition, in order to return to the nature of the “fresh-keeping” of refrigerators and effectively
solve the pain points of users, the Company launched its “M Fresh Life” series of refrigerators
equipped with water molecule activation and preservation technology in 2017 for the first time in
the world. “M Fresh Life” has become not only a new starting point for the Company to transform
to the high-end consumer market, but also a concrete measure for the Company’s continuous
improvement of product quality, taste and brand.
Facing the future, the Company will further improve the home internet layout, accelerate the
intelligentization of home appliances, form a dual-growth engine of “hardware + services”, drive
the transformation and upgrading of the Company’s profitability model, investigate the new
value-added service models for home appliance enterprises, meet new competition pattern in the
industry, and achieve its own sustainable and stable development under the guidance of the core
values of “professionalism and shared development”. Meanwhile, based on the “Smart Home
Eco-system Project” and the existing products, the company will enhance the R&D, manufacturing,
sales and cooperative capabilities of integrated white goods so as to provide users with a complete
set of smart white goods system solutions.
In reporting period, main income of the Company coming from refrigerator (freezer), air
conditioner, washing machine, kitchen & toilet and small home appliances products, total
amounting to 8,757.1435 million Yuan, a 94.45% of the operating income.
II. Major changes in main assets
(i) Major changes in main assets
Major assets Note of major changes
Equity assets No major changes
Fixed assets No major changes
Intangible assets No major changes
construction in progress have more investment from parent company and
Construction in progress
subsidiary Changhong Air-conditioner in the period
Investment real estate Investment real estate from subsidiary Zhongke Meiling increased in the period
(ii) Main overseas assets
√ Applicable □Not applicable
Reason for Operati Foreign assets Whether
Content of Control measure to ensure Income
the Asset size Location on accounted for exist
assets the security of assets (RMB)
formation mode net assets of significant
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
the Company impairment
risk(Y/N)
Details of risks control
measures have been
disclosed by the Company by
way of announcement on
60% equity of appointed media (No.
Investment
Changhong US$ 7.803 2011-028, No. 2011-032, No.
establishm Pakistan Sales 1,528,637.10 0.78% N
Ruba Trading million 2014-023, No. 2014-026, No.
ent
Company 2016-027, No. 2016-032, No.
2017-053 and No. 2017-059)
on 28 May 2011, 19 April
2014, 25 March 2016 and 10
August 2017
Details of risks control
measures have been
disclosed by the Company by
40% equity of
way of announcement on
Changhong Investment
US$ 6.976 Manuf appointed media (No.
Ruba Electric establishm Pakistan -6,345,139.13 0.38% N
1 million acture 2011-028, No. 2011-032, No.
Company(Pri ent
2014-023, No. 2014-026, No.
vate)Ltd.
2017-053 and No. 2017-059)
on 28 May 2011, 19 April
2014 and 10 August 2017
100% equity Details of risks control
of measures have been
KELAPA
PT.CHANGH Investment disclosed by the Company by
US$ 6 GADING,
ONG establishm Sales way of announcement on -2,518,894.77 0.54% N
million JKT,
MEILING ent appointed media (No.
Indonesia
ELECTRIC 2016-027 and No. 2016-033)
INDONESIA on 25 March 2016
Other notes N/A
III. Core Competitiveness Analysis
Does the Company need to comply with disclosure requirements of the special industry?
□Yes √ No
(i) Brand capacity
The Company is one of the famous home appliances manufacturers in China, owns several
product lines such as refrigerator, freezing box, air conditioner, washing machine and small
appliances. Meiling trademark is listed as one of the most valuable brands in China. Since 2014, the
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Company released CHiQ intelligent first and second generation refrigerator, AC and intelligent air
steward in succession. And creating a high-end intelligent brand image around the plan of “Wisdom
Home Ecosystem” for opening a white intelligence era. While in order to enhance the brand image
and further expand the market influence of the brand, the company held a conference for "New
LOGO release and offline of the 10th million set of frequency conversion products" in October
2015, comprehensively updated LOGO " ", and launched the new brand proposition
of "Meiling, let the good come". Along with the release of new LOGO, Meiling will also implement
a brand strategy of "Good Trilogy", including the direct sensory experience of “experience the
good", the spirit soul enjoyment of “enjoy the good”, and the lifestyle faith of “believe in the good”.
Moreover, under the boost of consumption upgrades, in November 2017, the Company launches an
“M -Fresh” refrigeration with the “water molecules activating technology”, return to essence of the
refrigerator and set off the revolution of fresh-keeping in industry.
Reshaping brand ability through continuous upgrading of products, Meiling will realize a
young, international and professional brand image. Through gradual construction of the ideas of
Wonderful Start Point, Wonderful Life Circle and Wonderful Ecology Circle, Meiling has become a
people-oriented artist specializing in white appliances, a smarter scientific expert and a more
reliable house keeper.
(ii) Product capacity
In more than 30 years, the Company has been focusing on the refrigeration industry, has
developed a variety of different types of refrigerator products, including three serial produces as
“MELNG 美菱, CHiQ and Athena”. Mainly include the “M Fresh Life” series fresh-keeping
refrigerators equipped with water molecule activation and fresh-keeping technology, Jingdong
smart large-screen 570 series refrigerators, CHiQ series high-end intelligent refrigerators and air
conditioners, 0.1-degree double-precision variable frequency refrigerators, European 540-wide
series air-cooled products, 106DTB series freezer with new appearance and thin door, YC-365L
low-temperature & medical refrigerator and so on; in particular, the “M-Fresh Life” series
fresh-keeping refrigerators that the Company has latest released return to the essence of the
refrigerator, by virtue of the Company’s water molecule activation fresh-keeping technology,
change passive fresh-keeping to active fresh-controlling, change from variable frequency
temperature control and intelligent interaction to intelligent fresh-controlling, activate water
molecules, generate resonance force, fission force, and penetrating power so as to thoroughly solve
the problems of traditional refrigerators such as short preservation time, much thawed water, and
poor preservation in bags.
The Company owned advanced development and quality assurance systems, and received
certification of ISO9001, ISO14001 and OHSAS18001 from domestic and overseas authorities. The
products of the Company have good quality and reliable capacities. As for technology development,
the Company owned national technology centers, and advanced core technologies in energy-saving,
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
intelligence, air cooling, fresh-keeping, frequency conversion and copious cooling. As for product
development, combine the R&D results and consumption upgrading demand, the Company renewal
its outline of product planning and development for the year, products structure is escalating.
Putting more efforts on the middle & high-end products in field of air patenting, large-size,
frequency conversion, intelligence and fresh-keeping, developing core products with competitive,
the product has obvious upgrade in structures.
As for the air conditioning products, the Company adheres to the technical strategy by taking
intelligence and variable frequency as the core, intensively studies the human state perception
technology and intelligent interactive technology, focuses on completing the research and
development of intelligent voice recognition technology and productization, successively releases
the CHiQ serial air conditioner and CHiQ smart air housekeeper based on "human state perception"
technology. The frequency conversion technology focuses on the comfort and energy saving of air
conditioners, puts priority on the fourth generation technology platform development of precision
temperature control which takes PMV comfort control model as the core, and the company has
successively released the frequency conversion and energy-saving leading, comfortable and
energy-saving series products.
In terms of washing machine, the Company has actively developed the core technology of
Meiling washing machines, upgraded its product lineup, continuously laid out the large-scale
washing and drying integration, and innovated the era of drum-type healthy washing. The Company
has developed and launched a series of drum-type washing machines, including Meiling 520
Zhenrui washing and drying series front loading washing machines and Meiling vortex
full-automatic drum-type washing machine series with light luxury gold appearance, large capacity
and high efficient washing and drying technology, a number of patented technologies, and high
efficient and environmental protection and energy saving configuration, especially the
XQB80-19BPLQ1 and MB80-19PZLGX series variable frequency washing machines use DD
(direct drive) variable frequency motor which provides more precise control, less energy loss, less
noise, and longer life. The industry-leading vortex washing technology is applied to reduce the
residue of washing liquid, rinse more cleanly, and protect clothes better.
In terms of kitchen appliance products, the Company has taken the concept of “smart kitchen”
as the mainline, focused on the core business to create competitive industries, and achieved a full
coverage of kitchen and bath and household appliances. Under the guidance of the Company’s
intelligence and variable frequency product strategy, the Company has developed and released
EQ21 series intelligent kitchen ventilator with integration of intelligent control, smoke and stove
linkage, and large air volume, tankless integrated water purifier, cloud intelligent remote control
series intelligent electric water heaters and intelligent gas water heaters, as well as the kitchen
ventilator with DC inverter technology, and the QK intelligent smoke machine as well as the
Internet of Things of the skitchen ventilator supporting Wi-Fi. In addition, with the advent of the
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Company's independently developed plasma-disinfected dishwasher, the dishwasher category has
enjoyed core technologies in the segmented industries.
In terms of cryogenic products, the Company has continued to increase R&D investment and
promote the upgrading of technologies and products. The Company’s existing ultra low freezer,
plasma blaster freezer, blood bank refrigerator, medical refrigerator, combined refrigerator &
freezer and medical freezer and other biomedical products have been widely used in medical and
health, disease control and epidemic prevention, blood systems, research institutes,
bio-pharmaceutical, genetic engineering and life sciences and other fields. Especially in ultra low
products, the Company has the -40 °C ~ -164 °C ultra-low freezer storage tank with the largest
volume, the widest temperature zone, and mute design in the world.
The Company insisting on the two products strategy as intelligence and frequency conversion,
with follow-up R&D of the intelligence and frequency conversion, promoting products of the
Company leading in high-end ; meanwhile, the company improves the manufacturing efficiency
and product quality and enhances product competitiveness by comprehensively implementing
intelligent upgrading and rebuilding to all production lines.
(iii) Operation capacity
The Company conducted benchmark management to improve its basic management level. In
specific, efficiency enhancement has been made in areas of personnel, money and materials, trying
to continuously enhance the internal management. A performance review and sharing system has
been established with clear target and quantity index based on performance and layered incentive
sharing system, thus to inspire the internal production capacity. Under the mainline of value chain
management, the Company continued to carry out value creation and improve its competitiveness.
Its ability to prevent risks has been also strengthened through continuous improvement of internal
control system.
(iv) Marketing ability
The company has established a relatively complete sales network and service system, of which,
the domestic sales channels emphasizing online and offline collaboration and integration, through
the business operation mode system construction (target management, value chain management,
sales promotion, product mix and channel strategy, etc.) and promotion, the pace of business
constantly tends to be benign, has a balanced development in chain, wholesale, e-commerce and
other channels, and the product competitiveness has been improved; At the same time, the company
has actively explored the overseas markets, and the customer structure and product structure have
been optimized and upgraded by increasing the investment in overseas marketing agencies, research
and development bases, production bases, and by cooperating with internationally renowned home
appliance brands and distributors, at present, the company’s products are exported to more than 130
countries and regions.
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
During the reporting period, in order to allow more users to enjoy the quality experience
brought by the company’s “M Fresh Life” series refrigerators, the company launched the activity of
“M Fresh Life is Free of Charge if Belgium Takes the Crown”. When Belgian reached the
quarter-finals, the company quickly organized and carried out the activity of “M Fresh Life is
enjoys20%off as Belgium Reached the Quarter-Finals” to return cash on site to all the consumers
previously participated in the activity at the main venue in Beijing and 33 branch venues throughout
the country, which not only won the high recognition of consumers and greatly enhanced the brand
vitality of the company, but also further deepened the competitiveness of the “M Fresh Life” series
products and expanded the influence of the company’s high-end products.
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section IV. Discussion and Analysis of the Operation
I. Introduction
In the first half of 2018, the global economy encountered more and more risks and difficulties,
the growth of major economies slowed down, the inflation rose, and the cycle of tightening
monetary policy began. At the same time, trade protectionism was on the rise. Overall, the global
economic situation in the first half of 2018 has weakened compared to 2017, and the external
environmental disadvantages faced by China have increased. In this context, the domestic appliance
industry is facing the impact of rising raw material costs, terminal market saturation, real estate
regulation and other factors. In the new normal of home appliances, the competition in the home
appliance industry becomes increasingly fierce, and innovation and breakthroughs become the key
to be bigger and stronger.
In the first half of 2018, under the strategic guidance of “Meiling Dream” and “Double Three
One Core”, the Company insisted on the operating principle of “product leading, marketing
transformation, efficiency promotion and team activation”, We has achieved operating income of
RMB 9.272 billion, an increase of 8.85% on a year-on-year basis; net profit attributable to the
parent company of RMB 50.6842 million, a decrease of 44.95% on a year-on-year basis.
II. Main Business Analysis
(i) Overview
Shows no difference with the summary disclosed in Report of the Board of Director
□Yes √No
1. Introduction
In first half of 2018, refrigerator and freezer business achieved revenue of approximately RMB
3.684 billion, 0.75% decreased on a y-o-y basis; air-conditioning business achieved revenue of
approximately RMB 4.378 billion, 14.29% up y-o-y; washing machine business achieve revenue
around RMB 0.246 billion, with year-on-year growth of 8.19 %; other business of small home
appliance and kitchen & toilet products have revenue approximately as RMB 0.449 billion with
23.61% up y-o-y. At the same time, revenue from exportation gains RMB 2.175 billion, a y-o-y
growth of 2.59%.
2. Progress of the Company's development strategy and business plan during the
reporting period
During the reporting period, in accordance with the development strategy and operating
16
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
principles of 2018, the Company has deployed the annual business plan, arranged the production
and management, and carried out the following activities:
(1) Product leading:
In the first half of 2018, the company completed the listing of a variety of “M fresh Life”
refrigerator (freezer) products which further promoted the upgrades of the company’s refrigerator
(freezer) products, made good market performance, and achieved high recognition from consumers.
At the same time, the sales volume of the company’s CHiQ refrigerator increased by 21.0% on a
year-on-year basis, and the sales volume of CHiQ air-conditioner increased by 27.3% on a
year-on-year basis, and the market influence of intelligent high-end products was promoted
significantly. In addition, the company improved the quality of high-end products through the
establishment of high-end product quality refinement standards and evaluation indicators, and
achieved an overall upgrade of products through the continuous propulsion of “five -ization and two
easy” project and the “quality, taste and brand” promotion project.
(2) Marketing transformation:
Domestic marketing: Further consolidated and promoted the market position of the company’s
products through the e-commerce transformation, value transformation, channel transformation, and
organizational transformation of traditional business.
From the offline market sales, CMM’s data showed that the retail sales of refrigerator industry
declined by 1% on a year-on-year basis, but the retail sales of the company’s refrigerator rose by
4.09% on a year-on-year basis; the retail sales of freezer industry rose by 4.04% on a year-on-year
basis, and the retail sales of the company’s freezer rose by 16.5% on a year-on-year basis; the retail
sales of air-conditioner industry rose by 6.76% on a year-on-year basis, and the retail sales of the
company’s air conditioner rose by 4.04% on a year-on-year basis; the retail sales of washing
machine industry declined by 0.89% on a year-on-year basis, but the retail sales of the company’s
washing machine rose by 1.98% on a year-on-year basis.
From the online sales, the online sales of the company’s refrigerators and air conditioner
further expanded the results. According to AVC’s data, the retail sales of refrigerator industry rose
by 49.24% on a year-on-year basis, and the retail sales of the company’s refrigerator rose by
33.32% on a year-on-year basis; the retail sales of freezer industry rose by 52.49% on a
year-on-year basis, and the retail sales of the company’s freezer rose by 26.15% on a year-on-year
basis; the retail sales of air-conditioner industry rose by 49.41% on a year-on-year basis, and the
retail sales of the company’s air conditioner rose by 31.70% on a year-on-year basis.
Overseas marketing: Through the transformation from pursuing scale to pursuing both scale
and profit, the transformation from traditional business model to emerging business model, and the
transformation from order driving to market driving, the product structure has been gradually
17
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
improved, and the proportion of overseas air-cooled refrigerators has exceeded 15%, the proportion
of medium and high-end air-conditioning products is also increasing, and the profitability of export
products is improving significantly.
(3) Efficiency promotion:
The company’s comprehensive competitiveness in terms of the market unit price, quality
improvement and efficiency improvement has been promoted by taking benchmarking management
activities as the starting point, and the manufacturing efficiency has been improved by promoting
the “less people project”. In terms of cost reduction, significant achievements have been made
through design cost reduction, process cost reduction, and procurement cost reduction. In the first
half of the year, the company also carried out the special investigation and management activities to
manage the “leakage and venting”, and improved the efficiency through management improvement
and project improvement, and improved the organizational efficiency by promoting the construction
of “responsibility” system.
(4) Team activation
Inspire the business teams’ vitality through the innovative incentive mechanism design
(medium and long-term incentive plan, annual performance share plan, and performance culture);
continue to publicize, train, propagate and guide the corporate culture, precipitate the corporate
culture, and promote the organizational atmosphere.
(II) Year-on-year changes of main financial data
In RMB
Same period of y-o-y
Current period Reasons for changes
last year changes (+,-)
Operation revenue 9,271,509,569.67 8,517,794,193.10 8.85% -
Operation cost 7,758,153,561.09 6,996,226,048.85 10.89% -
Sales expenses 1,189,741,101.32 1,140,172,032.08 4.35% -
Administrative expenses 241,775,084.33 222,533,091.74 8.65% -
Interest expenditure increased from a year
Financial cost -13,460,027.93 -33,454,482.67 59.77% earlier and interest income declined on a
y-o-y basis in the period
Income tax expense 10,150,948.29 9,439,557.86 7.54% -
R&D expenses 213,754,469.95 184,681,025.99 15.74% -
Commodity purchased increased and note
Net cash flow arising
160,489,361.06 484,230,697.91 -66.86% payable on due on a y-o-y growth in the
from operation activities
period
Net cash flow arising Principal for entrust financing received in
-1,346,880,950.63 -564,891,050.65 -138.43%
from investment the period decreased from a year earlier
18
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
activities and the principal paid for entrust
financing increased on a y-o-y basis
Net cash flow arising Loans payment increased from a year
-139,977,892.27 911,251,695.82 -115.36%
from financing activities earlier in the period
Same reason as “Net cash flow arising
Net increase of cash and
-1,323,521,745.98 823,360,098.63 -260.75% from investment activities” and “Net cash
cash equivalent
flow arising from financing activities”
Financial assets
measured by fair value
Change of the fair value in forward
and with its variation 25,071,423.11 15,646,731.48 60.23%
foreign exchange contract in the period
reckoned into current
gain/loss
More sales in the period and outstanding
Note receivable 2,823,082,096.04 2,074,648,484.36 36.08%
note receivables increased in the period
The interest on time deposits accrual
Interest receivable 1,693,400.99 4,692,303.18 -63.91% previously has received by subsidiary
Zhongshan Changhong in the period
The time deposits which re-classified as
Non-current assets due “Non-current assets due within one year”
- 44,497,902.00 -100.00%
within one year has received by subsidiary Zhongshan
Changhong in the period
The parent company’s entrust financing
Other current assets 1,955,160,840.92 801,894,930.97 143.82% amount before maturity at end of the
period
Investment real estate from subsidiary
Investment real estate 31,984,052.33 9,569,711.72 234.22%
Zhongke Meiling increased in the period
Construction in progress from parent
Construction in progress 348,427,423.70 174,857,717.15 99.26% company and subsidiary Changhong
Air-conditioner increased in the period
Amortization of the long-term
Long-term amortization
1,652,664.54 3,635,861.94 -54.55% amortization expenses from subsidiary
expenses
Changhong Air-condition in the period
Financial liability
measured by fair value
Change of the fair value in forward
and with its variation 44,249,602.74 16,034,000.00 175.97%
foreign exchange contract in the period
reckoned into current
gain/loss
Material purchasing increased in the
Account payable 4,135,935,489.96 2,869,886,049.19 44.11%
period
Dividend payable 55,793,659.91 2,890,364.80 1830.33% Dividend payables are not paid yet in the
19
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
period
Non-current liability due 46,454,376.68 The long-term loans are re-classified in
264,293,857.23 468.93%
within one year the period
Same reason as “Non-current liability due
Long-term loans 2,520,000.00 253,160,000.00 -99.00%
within one year”
Deferred income tax liability from
Deferred income tax
709,021.19 - 100.00% subsidiary Changhong Air-conditioner
liability
increased in the period
Other comprehensive Change of the foreign currency rate from
-14,255,671.73 -7,262,322.02 -96.30%
income overseas subsidiary in the period
Accrual of bad debts for receivables
Assets impairment loss 18,938,120.65 45,493,272.74 -58.37%
declined in the period
Changing income of fair Change of the fair value in forward
-18,790,911.11 -10,359,085.30 -81.40%
value foreign exchange contract in the period
Benefits from settlement of forward
foreign exchange contracts and
Investment income 14,749,419.09 23,593,349.66 -37.48% investment income for parts of the
affiliates/ joint ventures declined from a
year earlier
Investment income on Investment income for parts of the
affiliated company and -15,674,377.81 -3,226,328.17 -385.83% affiliates/ joint ventures declined from a
joint venture year earlier
Income from assets Income from assets disposal increased
3,283,766.57 -11,098,098.67 129.59%
disposal from a year earlier
Government subsidiary with routine
Other income 48,561,057.62 23,763,000.16 104.36%
activity concerned increased in the period
Settlement of case are received by parent
Non-operating revenue 4,082,102.58 742,308.82 449.92%
company in the period
Gains from parts of the
Minority’s gain/loss 2,324,332.99 6,019,661.62 -61.39% non-wholly-owned subsidiary declined
from a year earlier
(iii)Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
(iv) Constitution of main business
In RMB
Operating Gross Increase or Increase or Increase or
Operating cost
revenue profit decrease of decrease of decrease of
20
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
ratio operating operating cost gross profit
revenue over over same ratio over same
same period of period of last period of last
last year year year
According to industries
Manufacture of
household 8,757,143,510.24 7,281,761,791.71 16.85% 7.67% 9.57% -1.44%
appliances
According to products
Refrigerators,
3,684,406,463.15 3,058,028,464.57 17.00% -0.75% 1.21% -1. 61%
freezers
Air conditioning 4,377,900,401.60 3,651,494,563.49 16.59% 14.29% 15.66% -0.99%
Washing machine 245,765,756.90 194,685,123.72 20.78% 8.19% 9.77% -1.14%
Small appliances
342,326,803.66 289,208,295.28 15.52% 29.57% 26.16% 2.29%
& kitchen & bath
Others 106,744,084.93 88,345,344.65 17.24% 7.71% 45.22% -21.37%
According to region
Domestic 6,582,227,391.77 5,265,836,158.39 20.00% 9.46% 13.30% -2.71%
Foreign 2,174,916,118.47 2,015,925,633.32 7.31% 2.59% 0.88% 1.57%
III. Analysis of the non-main business
√ Applicable □Not applicable
In RMB
Ratio in total Whether be
Amount Note
profit sustainable (Y/N)
Investment income 14,749,419.09 23.35% Income from financial services N
Loss from fair value changes of the
Changes in fair value -18,790,911.11 -29.75% N
forward foreign exchange contract
Receivable bad debt accruals in the
Asset impairment 18,938,120.65 29.98% N
period
Settlement of case are received by
Non-operating income 4,082,102.58 6.46% N
parent company in the period
Non-operating expense 40,791.25 0.06% The Amercement outlay in the period N
Income from assets Scrapping assets disposed in the
3,283,766.57 5.20% N
disposal period
Government subsidy received in the
Other income 48,561,057.62 76.89% N
period
IV. Assets and liability
21
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
(i) Major changes of assets composition
In RMB
End of current period Same period of last year
Ratio in Ratio in Ratio
Notes of major changes
Amount total Amount total changes
assets assets
Entrust financing from parent
Monetary fund 3,932,190,042.36 22.49% 4,918,185,647.77 29.47% -6.98% company increased in the
period
Account
2,070,276,216.71 11.84% 2,048,332,541.11 12.27% -0.43% No major changes
receivable
Increased with the product
Inventory 3,421,144,669.90 19.57% 2,582,538,614.47 15.47% 4.10%
sales scale growth in the period
Investment real
31,984,052.33 0.18% 12,871,340.33 0.08% 0.10% No major changes
estate
Long-term equity
72,461,723.36 0.41% 90,247,745.70 0.54% -0.13% No major changes
investment
Fix assets 1,490,510,897.78 8.52% 1,214,541,611.12 7.28% 1.24% No major changes
Construction in progress from
Construction in parent company and subsidiary
348,427,423.70 1.99% 148,626,411.17 0.89% 1.10%
progress Changhong Air-conditioner
increased in the period
Short-term loans 1,725,908,730.38 9.87% 1,432,622,701.07 8.58% 1.29% No major changes
Long-term loans are
re-classified as non-current
Long-term loans 2,520,000.00 0.01% 253,460,000.00 1.52% -1.51%
liability due within one year in
the period
(ii) Assets and liability measured by fair value
√ Applicable □ Not applicable
In RMB
Accumulative Devaluatio Amount
Changes of Amount
Amount at the changes of fair n of of
fair value of sale Amount in the
Items beginning value withdrawi purchase
gains/losses in in the end of period
period reckoned into ng in the in the
this period period
equity period period
Financial assets
1. Financial assets measured
by fair value and whose 15,646,731.48 9,424,691.63 25,071,423.11
change is recorded in current
22
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
gains and losses(excluding
derivative financial assets)
Subtotal of financial assets 15,646,731.48 9,424,691.63 25,071,423.11
Total 15,646,731.48 9,424,691.63 25,071,423.11
Financial liabilities 16,034,000.00 28,215,602.74 44,249,602.74
Whether there have major changes on measurement attributes for main assets of the Company
in report period or not
□ Yes √No
(iii) Assets right restricted ended as reporting period
Ended as the reporting period, the Company has no major assets been closed down, detain,
freeze or pledge and guarantee
V. Investment
(i) Overall situation
√ Applicable □ Not applicable
Investment in the same period of last
Investment in the reporting (RMB) Changes
year ( RMB)
46,004,000 199,413,900 -76.93%
2. The major equity investment obtained in the reporting period
√ Applicable □ Not applicable
23
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
In RMB
Wheth
Term Date of
Status as of Current er Index of disclosure
Name of Method of Amount of Sharehol Capital of Type of Expected
Principal business Partners the balance investment litigati disclosure (if
investee investment investment ding sources invest products return (if applicable
sheet date profit and loss on applicable
ment )
(Y/N) )
Invested 15
Meiling R&D, sales and after-sale services million Yuan
www.cninfo.com.cn
CANDY of washing machines; own and Candy Washing in the Period
Capital Owned 20- Not Juchao Website:
Washing operate all types of goods and 90,000,000 60% Hoover machine and -773,106.41 N 2017-3-30
contribution fund year applicable www.cninfo.com.cn
Machine technology import & export Group S.r.l etc. accumulated
(No.: 2017-010 )
Co., Ltd. business contributed 60
million Yuan
Development, production and sales
of computer hardware & software,
technology development,
production and sales of internet of
Things equipment, development and
Invested
maintenance of E-commerce www.cninfo.com.cn
Changm 15.704 million
software, information service, Managemen Fresh Juchao Website:
ei Yuan in the 2016-1-8,
technical transfer and services of the Capital Fund t team of 20- food Not www.cninfo.com.cn
Technol 48,128,000 96.256% period and -6,363,019.14 N 2016-11-26,
internet, domestic AD designing, contribution raising Changmei year e-comm applicable (No.: (2016-002),
ogy Co., completed 2017-11-10
production, agencies and release, Technology erce (2016-068 ) and
Ltd. whole capital
sales of prepackaged food, dairy (2017-088)
contribution
products, general merchandise,
alcohol, beverage and agricultural
products, crop planting, self-support
goods and technology import and
export business.(except items
24
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
prohibited or restricted by laws and
regulations)
Hongyu
The production and sales of Hengyouyua Invested 15.3
an Earth Earth
all-in-one complete machine system n million Yuan www.cninfo.com.cn
Energy energy
and parts of the earth energy heat Capital Owned Technology Long-t in the period Not Juchao Website:
Heat 25,500,000 51% thermal -1,108,406.98 N 2015-4-18
and cold machine, and the sales of contribution fund Developmen erm and completed applicable www.cninfo.com.cn
Pump cooling
household appliances, home t Group Co., whole capital (No.: 2015-016 )
Tech. machine
appliances raw materials and parts Ltd. contribution
Co., Ltd.
Total -- -- 163,628,000 -- -- -- -- -- -- - -8,244,532.53 -- -- --
25
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
3. The major non-equity investment doing in the reporting period
√ Applicable □ Not applicable
In RMB
Industry
Accrued Actual
Invest Fixed involved Investment Accrued Reasons for not
Investment
ment Investm in Amount in Capital Anticipated Realized Income Reaching the Planned Disclosed Disclosed Index
Project Name Amount up to the Project Schedule
Metho ents or Investm this Reporting Source Income up to the End of Schedule and Date (if any) (if any)
End of Reporting
d not ent Period Reporting Period Anticipated Income
Period
Projects
1 million sets of The intelligent
Home
environmental and The project has put production line for
applianc www.cninfo.com.
energy saving into production at end one million sets of
Self-b e Self-owne cn
refrigerator intelligent Yes 30,801,300 115,212,316.48 of 2017, andProject - environmental and Not Applicable 2017-3-14
uilt manufac d Funds ( Announcement
production line acceptance work is energy-saving
turing No. 2017-006)
construction project currently underway. refrigerators have
industry
(Note 1) being completed
The company succes The
sfully bade for the p production
lant, office building capacity of 2
Home and land use rights million sets of
Project is under www.cninfo.com.
2 million sets of applianc under the name of automatic
construction in the cn
automatic washing Self-b e Self-owne Anhui Dongwei Sola washing 2017-3-30,
Yes 11,266,100 150,802,000 period without Not Applicable (Announcement
machines production uilt manufac d Funds r Technology Co., Lt machine shall 2017-4-14
income occurred No. 2017-010, No.
base project (Note 2) turing d. from the judicial be formed
temporary 2017-024)
industry sale with its own f after this
unds of RMB134,58 project being
5,900, and the proje put into
ct was in workshop operation
26
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
reconstruction and eq
uipment purchasing r
ecently
Total -- -- -- 42,067,400 266,014,316.48 -- -- - - -- -- --
Note 1: In order to meet the increasing market demands, make up for the insufficient capacity, enhance the operating efficiency of the
company's production line, and further promote the company's intelligent manufacturing process, the 28th meeting of the company's 8th Board
of Directors approved and agreed the company’s subsidiary Jiangxi Meiling Electric Appliance Co., Ltd. (Hereinafter referred to as “Jiangxi
Meiling”) to invest RMB 209,600,000 to build 1 million sets of environmental and energy saving refrigerator intelligent production line
construction project. See details on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn
that the company disclosed in the form of announcement (Announcement No. 2017-006) on March 14, 2017. Recently, main construction has
completed on 20 December 2017 and will put into production at end of 2017, the project was operated in a good condition.
Note 2: According to the company's strategic development plan, combined with the company's business needs, and in order to make up for
the insufficient research and manufacturing capacity of washing machine industry so as to meet the market demands, the 29th meeting of the
company's 8th Board of Directors approved and agreed the company’s to invest no more than RMB 371,210,000 in the construction of the 2
million sets of automatic washing machines production base project. In addition, the 29th meeting of the company's 8th Board of Directors
approved and agreed the company to successfully bid for the plant and office building (covering an area of 86,087.65 square meters) and land
use rights (covering an area of 116,233.61 square meters) under the name of Anhui Dongwei by public auction organized by the court with its
own funds of RMB134,585,900, and use the plant and land as the washing machine production base for construction. See details on “Securities
Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of
announcement (Announcement No. 2017-010, No. 2017-024) on March 30, 2017 and April 14, 2017. Ownership transfer of relevant land use
right and property licence has completed, and the project is in process recently.
27
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
√ Applicable □ Not applicable
28
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
In 10 thousand Yuan
Ratio of investment
Relate Whether Amount Amount sales Amount of reserve amount at
Investment Investment Actual
d related Initial purchased in in the for devaluation of period-end in net
Operator Type Start date End date amount at amount at gains/losses in
relatio trade or investment the reporting reporting withdrawing (if assets of the
period-begin period-end period
nship not period period applicable) Company at
period-end
Forward foreign
Financial
N/A No exchange 367,218.3239 2017-6-14 2019-5-27 210,705.9149 279,286.9970 212,116.8242 - 278,280.1141 53.93% -404.0264
institution
contract
Total 367,218.3239 -- -- 210,705.9149 279,286.9970 212,116.8242 - 278,280.1141 53.93% -404.0264
Capital resource(if applicable) Owned fund
Lawsuit involved (if applicable) Not applicable
Disclosure date for approval from the Board for
2018-3-30
investment of derivatives (if applicable)
Disclosure date for approval from board of
shareholders for investment of derivatives (if 2018-5-11
applicable)
1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations, forward foreign exchange transactions are under
certain market risk. Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign exchange settlement and sale prices, exchange
rate fluctuations. The Company will follow up the exchange fluctuation, on the basis of target rate determined from the business, relying on the research of the
Risk analysis and controlling measures for foreign currency exchange rates, combined with prediction of consignments, and burdening ability to price variations due to exchange rate fluctuations, then
derivatives holdings in the Period (including but not determine the plan of forward foreign exchange contracts, and make dynamic management to the business, to ensure reasonable profit level.
limited to market risk, liquidity risk, credit risks, 2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business, to meet the requirements of the trade
operation risk and law risks etc.) authenticity. In addition, forward foreign exchange transactions are processed with bank credit, will not affect liquidity of company funds.
3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign exchange contracts with
contract price, which leads the risk of income uncertainty. So the Company chose Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of
China, China Construction Bank and other Chinese Banks and part of the larger foreign Banks (such as Deutsche Bank, UOB, Overseas Chinese Bank, HSBC, etc.)
29
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
to conduct the trading of foreign exchange capital. These banks share a solid strength and management whose failure and the risk of loss may bring to the Company
is very low.
4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The Company has formulated
related management system which defines the operation process and responsibility to prevent and control risks.
5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign exchange transactions are
processing. The Company will strengthen legal review, and choose good bank to carry out this kind of business as to risk control.
Invested derivative products have changes in The Company determines fair value in accordance with the Chapter VII “Determination of Fair Value” carried in the Accounting Standards for Business Enterprises
market price or fair value in the Period, as for No.22 - Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices offered by bank and other pricing services.
analysis of the fair value of derivatives, disclosed While fair-value of derivatives is mainly obtained according to the balance between prices given by outstanding contracts and forward prices given by contracts
specific applied methods and correlation signed during the reporting period with bank. The differences are identified as trading financial assets and liabilities. During the reporting period, forward foreign
assumption and parameter setting exchange contracts and losses of the Company is (4,040,264)Yuan.
Specific principle of the accounting policy and
calculation for derivatives in the Period compared Not applicable
with last period in aspect of major changes
Upon inspection, the independent directors of the Company believes that: during the reporting period, the Company carried out its foreign exchange forward deals
in strict compliance with the standardized operation guidelines for listed issuer on main board (2015 amended) issued by Shenzhen Stock Exchange, the Articles of
Association, Authorization Management of the Company, Management System in relating to Foreign Exchange Forward Deals of Hefei Meiling Co., Ltd., and these
deals were conducted within the authorization scope under general meeting and board meeting. The Company conducts no foreign exchange transactions on the
Special opinion on derivative investment and risk
purpose of getting profit only, all of the forward foreign exchange transactions are operates based on normal operating and production, which is relying on specific
control by independent directors
business operations with purpose of avoiding the preventing the risks in exchange rate. The forward foreign exchange transactions of the Company are beneficial to
prevent the exchange risks exposed by import and export business and thus met its requirement for operation development. There was no speculative operation, no
break of relevant rules and regulations and relevant business was conducted under corresponding decision-making procedures. Interests of the Company and entire
shareholders, especially minority shareholders, were not prejudiced.
30
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
31
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
VII. Analysis of main holding company and stock-jointly companies
√ Applicable □ Not applicable
(i) Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company name Type Main business Register capital Total assets Net Assets Operating revenue Operating profit Net profit
Research and
development,
Zhongke Meiling Cryogenic
Subsidiary manufacturing and sales 68,640,300 267,468,347.80 127,653,086.48 82,033,715.77 6,810,644.30 5,790,135.62
Technology Co., Ltd.
of ultra-low
temperature freezer
Jiangxi Meiling Electric Manufacturing of
Subsidiary 50,000,000 353,558,940.73 89,582,538.11 451,708,800.16 -1,514,719.53 -1,514,719.53
Appliance Co., Ltd. refrigeration and freezer
Mianyang Meiling Manufacturing of
Subsidiary 100,000,000 141,806,740.24 113,095,695.31 129,247,513.42 613,797.02 571,220.47
Refrigeration Co., Ltd. refrigeration and freezer
R&D, manufacturing
Sichuan Changhong
Subsidiary and domestic sales of 850,000,000 4,953,665,239.42 1,411,734,908.82 3,267,953,836.87 80,502,044.40 72,258,372.85
Air-conditioner Co., Ltd.
air-conditioner
R&D, manufacturing
Zhongshan Changhong
Subsidiary and sales of 184,000,000 1,885,294,529.35 159,895,079.07 1,423,686,208.52 8,004,348.02 6,579,959.82
Electric Co., LTD
air-conditioner aboard
Hefei Meiling Electric
Subsidiary Sales of white goods 55,000,000 141,754,436.25 -166,158,103.92 490,551,375.15 47,651,151.59 47,629,545.83
Appliance Marketing Co., Ltd
Hefei Meiling Group Holdings
Subsidiary Sales of white goods 80,000,000 541,165,481.25 -168,274,460.38 1,681,535,220.11 -114,179,643.19 -114,958,432.74
Limited
32
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
E-business of
Changmei Technology Co.,
Subsidiary agricultural products 50,000,000 30,020,719.53 22,427,645.23 12,649,299.45 -6,664,448.69 -6,659,447.77
Ltd.
and fresh
R&D, manufacturing
and sales of kitchen and
Guangdong Changhong Ridian
Subsidiary toilet products, small 83,000,000 315,832,711.13 128,368,697.33 254,072,080.05 8,241,983.35 7,724,351.48
Technology Co., Ltd.
home appliances and
water purifier
Meiling CANDY Washing R&D and sales of
Subsidiary 150,000,000 206,477,420.14 96,624,439.01 220,332,390.00 -1,042,572.80 -1,288,510.69
Machine Co., Ltd. washing machine
33
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
(ii) Notes of holding and shareholding companies
√ Applicable □ Not applicable
The method of obtaining and
The influence to the whole production and
Company Name handling subsidiaries during the
performance
report period
Minor effect on the overall production and
Zhongshan Hongyou Electric Co.,
Clearing off operation and performance of the
Ltd.
Company
Notes of holding and shareholding companies: Nil
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Prediction of business performance from January – September 2018
Estimation on accumulative net profit from the beginning of the year to the end of next report
period to be loss probably or the warning of its material change compared with the corresponding
period of the last year and explanation on reason
□ Applicable √ Not applicable
X. Risks and countermeasures
(i) risks and countermeasures
In the second half of 2018, faced with the more intense competition in home appliance market
and other objective factors, the enterprise will have worse survival environment. In the future, the
company will face risks such as weak macroeconomic growth, severe industry situation,
intensifying competition, rising raw materials and transportation costs, tight domestic currency and
credit environment, Sino-US trade war, exchange rate fluctuations, new business models and the
impact of the Internet era.
In response to the above risks, and combining with the industry situation in the second half of
the year and the insufficient in the first half of the year, in the second half of 2018, the company will
carry out key tasks from the following aspects:
1. Sales
Continue to enhance the market position of products, pay close attention to the changes in the
retail market and e-commerce market shares; continue to launch new products, adjust the structure,
raise the average price, and expand the scale; continue to enhance and increase new channels,
strengthen the cooperation of the Fan-Hong series, and expand the outlets of Changmei Life House;
34
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
solidly control the price, strictly control the terminal price, and reduce the loss in price; tap potential
and reduce fees, strictly control the site cost investment, strengthen the optimization of
low-efficiency stores, intensify the audit of booth making standards; improve the e-commerce
organization, continue to strengthen the e-commerce products, price, product rendering, product
footprint, online retail, spot goods rate, etc.; the overseas markets actively respond to the impact of
RMB exchange rate and bulk raw materials fluctuations, improve the proportion of air-cooled and
frequency conversion products by optimizing the product mix and customer structure, and complete
the maintenance, development and layout of key customers and key markets so as to ensure and
improve the scale of overseas sales.
2. Technology and quality
Continue to carry out research on technologies such as intelligence, frequency conversion, air
cooling, preservation, and so on, actively promote the development of new products, and implement
projects such as “high-end products refinement”, “five -ization and two easy”, and “increasing
revenue and reducing costs” projects to maintain the company’s industry-leading position in
technology and quality.
3. Supply chain and manufacturing
Pay attention to the fluctuation of bulk materials, continue to promote the cost reduction of
purchases and increase the income of materials; concern the efficiency of fund operation, improve
the receivables and inventory turnover rate; continue to implement projects such as “first-class
manufacturing”, “less people engineering”, “smart production” and “intelligent manufacturing” and
so on, comprehensively improve efficiency and quality, reduce product costs, and enhance the
competitiveness of the company’s products.
(ii) Business plan in the next half year
Under the guidance of strategic planning, in the second half of 2018, the company will
continue to carry out operation and management work by centering on “product leading, marketing
transformation, efficiency promotion, and team activation”. For the insufficient and risks in the first
half of the year, the following product line strategies are needed:
1. Refrigerator (freezer)
Heavily invest in basic technology research and product upgrades, continue to carry out
research on technologies such as intelligence, frequency conversion, air cooling, and preservation,
maintain technology leading in the industry, and continue to implement the “five -ization and two
easy” and the “quality, taste and brand promotion and the “smart production” to comprehensively
improve efficiency and quality, reduce product costs and enhance product competitiveness. In terms
of sales strategy, the domestic sales will continue to launch new products, strengthen the promotion
of core products, focus on the high-margin products through product structure adjustment, increase
35
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
the product average price, vigorously expand sales outlets and sales channels, and promote the
structural transformation, sales transformation, and channel transformation. At the same time, we
will vigorously expand the overseas markets, focus on the development and control of large-volume,
air-cooled, multi-door refrigerators, further optimize the product structure, develop a strategic
customer standard evaluation system, build the self-owned brand base markets, increase the
logistics cost control, and guarantee the scale of overseas markets.
2. Air conditioning
Adhere to productism, take the user experience as the core, thoroughly boost the big quality
management system, innovate the industrial design, promote the “quality, taste and brand”; gain
insight into the industry trends, effectively integrate the multi-party resources, accurately grasp the
market opportunities, quickly deliver the goods and reduce the inventory backlog risks; take the
good traditions, take the full value chain management as the starting point, make “responsibility,
rights and interests” as a trinity, systematically improve the efficiency, adapt to the variation
tendency of current channels, adjust the marketing organization structure, strengthen the business
management, standardize the business behavior; persist in the hard work, continue to implement the
full staff value creation, and create and share together.
3. Washing machine
The washing machine business will continue to carry out the business operations by centering
on “focusing on products, expanding channels, promoting synergy, and building capabilities”.
Increase the promotion of “Meiling” and “Candy” new products, strengthen the product sampling,
expand the retail channels, strengthen the collaborative assessment mechanism of internal team, and
attach importance to “product capabilities, market capabilities, team capabilities, operation
capabilities” and other core measures, focus on accelerating the progress of new products, improve
the product quality, focus on improving the product visibility and reputation, and comprehensively
improve the marketing management capabilities.
At the same time, the company will accelerate the construction progress of the washing
machine production base project so as to provide guarantee for enhancing the competitiveness,
profitability and sustainable development of washing machine.
4．Small household appliances
Take the “smart kitchen” concept as the main line, respectively focus on the core business to
create competitive industry, realize the linkage development of multi-product lines, highlight the
leading advantages of intelligent products, and develop the high-end intelligent products with voice
recognition and screen. Develop e-commerce channels to supplement and enrich the existing online
products; carry out in-depth maintenance and expansion to the offline existing and newly opened
channel outlet customers, deepen the third and fourth-level markets, and vigorously expand the
36
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
primary and secondary markets. At the same time, closely follow the guiding direction of national
policies, vigorously carry out the coal-to-gas (electricity) engineering transformation projects and
refined decoration housing market, and introduce new growth points. In addition, promote the
optimization of internal management system through the establishment of a sound internal
organization structure of small household appliances, and foster the industry development
sustainability and quality risk management awareness through the shaping of research and
development and quality control capabilities.
5．Biopharmaceutical
As the platform for the company to comprehensively develop biopharmaceutical industry, in
the second half of 2018, the company’s subsidiary Zhongke Meiling, a three board listed company,
will unswervingly implement the “related diversification based on biopharmaceutical field” strategy,
focus on creating three mainline business of life sciences, smart cold chain and family health,
actively embrace the general trend of the internet, big data and artificial intelligence development,
continuously increase the product innovation and brand promotion, and promote the company’s
core competitiveness. At the same time, the company will increase investment in product
technology and new product development, accelerate a new generation of refrigerator series, blood
storage series and ultra-low temperature series products, especially the iterative upgrade of products
and services in biopharmaceutical integrated solutions, actively expand the online and offline
channels of family health business, and quickly expand the scale of product sales.
6. Emerging service of fresh e-business
Continue to promote the investment project “intelligent life project” and build Meiling
intelligent life O2O community fresh business platform with steady operating strategy. Rely on the
company’s advantages in intelligent and refrigeration fields. Through the independent research and
development of online platforms including mobile terminals App, Web, H5, WeChat Mall, WeChat
applet, cloud management platform, create the offline intelligent devices (fresh self pick-up cabinet,
unmanned sales cabinets, etc.) and the O2O new retail platform for fresh food which integrates
online platform with fresh mall. Focus on Chengdu, Hefei, and Mianyang, take the intelligent
equipment as the entry point, center on the community precision marketing, steadily advance and
drive the transformation and upgrading of the company’s profit model through the innovation of
smart devices, user operations, supply chain building, and internal capability improvement.
The above business plan and business objectives do not represent the listed company’s profit
forecast of 2018, whether it can be achieved depends on the changes in market condition, the efforts
of management team and other factors, there are a lot of uncertainties, investors should pay special
attention to it.
37
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section V. Important Events
I. AGM and extraordinary general meeting
1. AGM held in the period
Participation
Holding Disclosure
Meeting Type ratio for Index
date date
investors
First
Extraordinary Juchao Website (www.cninfo.com.cn),
Extraordinary
General 31.74% 2018-1-9 2018-1-10 Resolution Notice of First Extraordinary General
General Meeting
Meeting Meeting of 2018 (Notice No.: 2018-001)
of 2018
Annual Juchao Website (www.cninfo.com.cn),
2017 AGM general 30.16% 2018-5-10 2018-5-11 Resolution Notice of AGM of 2017 (Notice No.:
meeting 2018-029)
Second
Extraordinary Juchao Website (www.cninfo.com.cn),
Extraordinary
General 31.20% 2018-6-21 2018-6-22 Resolution Notice of Second Extraordinary
General Meeting
Meeting General Meeting of 2018 (Notice No.: 2018-038)
of 2018
2. Request for extraordinary general meeting by preferred stockholders with rights to
vote
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves in the period
□ Applicable √ Not applicable
There are no cash dividend, bonus and capitalizing of common reserves carried out in the
semi-annual.
III. Commitments that the company, shareholders, actual controller, offeror, directors,
supervisors, senior management or other related parties have fulfilled during the reporting
period and have not yet fulfilled by the end of reporting period
□ Applicable √ Not applicable
There are no commitments that the company, shareholders, actual controller, offeror, directors,
supervisors, senior management or other related parties have fulfilled during the reporting period
and have not yet fulfilled by the end of reporting period.
IV. Appointment and non-reappointment (dismissal) of CPA
38
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Whether the semi-annual financial report had been audited
□Yes √ No
The semi-annual report was not audited
V. Explanation on “Qualified Opinion” from CPA by the Board and Supervisory
Committee
□ Applicable √ Not applicable
VI. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
VIII. Lawsuit
(i) Significant lawsuits and arbitrations
□ Applicable √ Not applicable
No significant lawsuits or arbitrations occurred in the reporting period.
(ii) Other lawsuits
√Applicable □ Not applicable
To maintain the independence and integrity of "Meiling" trademark and trade name, the
Company carried out serials of lawsuits, attribution and administration suits with “Meiling”
trademark and corporate name concerned, please found more in 2014 first quarter report, 2014
semi-annual report, the 2014 annual report disclosed respectively on April 19, 2014, August 12,
2014, and March 26, 2014 for the relevant progress. Up to now, the company has stopped the
infringement enterprises using “Meiling” trade name, i.e. the infringement of company name and
unfair competition behavior, through litigation and administrative complaints.
At present, only the kitchen ventilator, cooker, water heater, water purifiers and household
electrical appliances manufactured and sold by the Company and its wholly-owned subsidiary -
Hefei Meiling Group Holding Co., Ltd. and Guangdong Changhong Ridian Technology Co., Ltd.
are the company's regular products, any other small household appliances using same or similar
trademark as our company or using the trade name similar to the Company’s name are the
Company’s products. In view of the infringement to the Company’s trademark and trade name, false
propaganda and unfair competition in the market, the Company has carried out many ways
39
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
including administrative reports, criminal investigation and civil litigation to fight against
infringement and counterfeiting behavior in the whole country.
IX. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
X. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
During the reporting period, the Company and the controlling shareholders and the actual
controllers have had good reputation, and there is no large amount due unliquidated debt sentenced
by the court.
XI. Implementation of the company’s stock incentive plan, employee stock ownership
plan or other employee incentives
√ Applicable □Not applicable
Implementation for annual performance incentive fund
On August 9, 2012 and August 28, 2012, the Company considers the adoption of "Hefei
Meiling annual performance incentive fund implementation plan" (hereinafter referred to as ""
stimulus "") on the 16th meeting of the 7th board of directors and the 2012-second provisional
shareholders meeting. Details were disclosed on information disclosure media appointed by the
Company as "Securities Times", "Chinese Securities Daily", "Hong Kong Commercial Daily" and
the Juchao network (www.cninfo.com.cn) on August 10, 2012 and August 29th in the form of
announcement (No.: 2012-028, No.:2012-035).
1. Implementation about 2012, 2013, 2014 and 2016 performance incentive fund
provision and distribution plan
See details in "Implementation of the company's annual incentive fund" in "XV
Implementation of the company's stock incentive plan, employee stock ownership plan, or other
employee incentive measures" in "Section V Significant Events" of the company's "2017 Annual
Report" disclosed on 30 March 2018
Up to the end of this reporting period, the company's stock purchased by some 2012 annual
performance incentive objects (non-directors, supervisors and senior management) and 2013 annual
performance incentive objects (non-directors, supervisors and senior management) with their
granted 2012 annual performance incentive funds and own funds and 2013 annual performance
incentive funds and own funds have been fully desterilized, the company's stock purchased by some
2014 annual performance incentive objects (non-directors, supervisors and senior management)
40
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
with their granted 2014 annual performance incentive funds and own funds has been desterilized by
50% for term of holding for two years, see below for the overall reducing holding-shares of some
above-mentioned incentive objects; The shareholding period of the company’s stock purchased by
the 2016 annual performance incentive objects with their awarded 2016 annual performance
incentive funds and their own funds is less than two years, the stock purchased by all incentive
objects are locked in accordance with the commitments. Among the incentive objects, the current
directors, supervisors and senior management have not reduced the Company’s shares purchased by
implementing 2012, 2013, 2014 and 2016 annual performance incentive plans.
2. Shareholding and reducing of performance incentive objects of the Company
Ended as 30 June 2018, shares hold by all incentive objects amounting to 12,379,807 shares, a
1.1851 % in total share capital of the Company, including 10,689,914 A-share, a 1.0233% in total
share capital and 1,689,893 B-share, a 0.1618% in total share capital of the Company. Other
grantees of the 2012, 2013 and 2014 incentive plan (not being directors, supervisors and senior
management) have reduced holding of 4,134,008 in aggregate, accounting for about 0.3956% of the
total share capital and no shares are reduced in the reporting period.
XII. Major related transaction
(i) Related transaction with routine operation concerned
√ Applicable □Not applicable
1. Related transaction with routine operation concerned
41
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Whethe
Trading r over
Availab
Related Proport limit the
Related
Type of transaction ion in Clearing le
Seri Content of Pricing transaction approved approve Date of
Related related amount similar form for
Relationship related principl price (in 10 similar Index of disclosure
al party transact (in 10 transact (in 10 d related disclosure
transaction e thousand
ion thousand ions transaction market
Yuan) thousand limited
Yuan) (%)
price
Yuan) or not
(Y/N)
Electric melting, Juchao
Sichuan Commo Spot 30 March
Controlling resistors, steel Website(www.cninfo.c
Changhong dity Marketi exchange, 2018,
1 shareholder and plate, accessory 17,152.85 17,152.85 2.18% 57,000 N - om.cn) No.: 2018-005,
Electric Co., purchas ng price Bank 11 May
ultimate controller and color No. 2018-008 and
Ltd. ed acceptance 2018
masterbatch ect. No.2018-029
Other enterprise
Changhong Commo Spot
control under the 30 March
Huayi dity Marketi exchange,
2 same controlling Compressor etc. 29,967.62 29,967.62 3.81% 60,000 N - 2018, 11 Juchao
Compressor purchas ng price Bank
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ed acceptance
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise Spot
Commo
Changhong control under the exchange, 30 March
dity Plastic products Marketi
3 Mold Plastic same controlling 42,545.85 42,545.85 5.40% 110,000 N bank and - 2018, 11 Juchao
purchas etc. ng price
Tech. Co., shareholder and commercial May 2018 Website(www.cninfo.c
ed
Ltd. ultimate controller acceptance om.cn) No.: 2018-005,
Other enterprise Spot
Sichuan Commo Door shell,
control under the exchange, 30 March
Changhong dity baseboard, Marketi
4 same controlling 20,351.17 20,351.17 2.58% 62,000 N bank and - 2018, 11 Juchao
Jijia Fine purchas holder, Sheet ng price
shareholder and commercial May 2018 Website(www.cninfo.c
Co., Ltd. ed metal parts
ultimate controller acceptance om.cn) No.: 2018-005,
42
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Sichuan Other enterprise Spot
Commo
Changhong control under the Packing case, exchange, 30 March
dity Marketi
5 Package same controlling printed matter 7,295.70 7,295.70 0.93% 22,000 N bank and - 2018, 11 Juchao
purchas ng price
Printing shareholder and etc. commercial May 2018 Website(www.cninfo.c
ed
Co., Ltd. ultimate controller acceptance om.cn) No.: 2018-005,
Sichuan
Other enterprise
Changhong Commo Settlement
control under the 30 March
Precision dity Printed board Marketi of bank and
6 same controlling 5,357.47 5,357.47 0.68% 24,000 N - 2018, 11
Electronics purchas components etc. ng price commercial Juchao
shareholder and May 2018
Tech. Co., ed acceptance Website(www.cninfo.c
ultimate controller
Ltd. om.cn) No.: 2018-005,
Sichuan Other enterprise
Commo
Changhong control under the 30 March
dity Power supply, Marketi Spot
7 New Energy same controlling 3.59 3.59 0.00% 5,200 N - 2018, 11 Juchao
purchas battery ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
ed
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Other enterprise Spot
Commo
081 control under the exchange, 30 March
dity Power Marketi
8 Electronic same controlling 135.62 135.62 0.02% 5,000 N bank and - 2018, 11 Juchao
purchas transformer etc. ng price
Group shareholder and commercial May 2018 Website(www.cninfo.c
ed
ultimate controller acceptance om.cn) No.: 2018-005,
Other enterprise Spot
Guangdong Commo
control under the exchange, 30 March
Changhong dity Foam pieces Marketi
9 same controlling 176.79 176.79 0.02% 5,200 N bank and - 2018, 11 Juchao
Electronics purchas etc. ng price
shareholder and commercial May 2018 Website(www.cninfo.c
Co., Ltd. ed
ultimate controller acceptance om.cn) No.: 2018-005,
Sichuan Other enterprise Commo Spot
Junction plate, 30 March
Changhong control under the dity Marketi exchange, Juchao
10 sprocket shaft 8.98 8.98 0.00% 6,000 N - 2018, 11
Intelligent same controlling purchas ng price Bank Website(www.cninfo.c
etc. May 2018
Manufacturi shareholder and ed acceptance om.cn) No.: 2018-005,
43
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
ng ultimate controller
Technology
Co., Ltd.
Sichuan Other enterprise
Commo
Zhiyijia control under the 30 March
dity Electronic Marketi Spot
11 Network same controlling 13.16 13.16 0.00% 5,200 N - 2018, 11 Juchao
purchas products ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
ed
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise Spot
Commo
Changhong control under the PCB, remote exchange, 30 March
dity Marketi
12 Electronic same controlling control, 1,933.86 1,933.86 0.25% 7,000 N bank and - 2018, 11 Juchao
purchas ng price
Products shareholder and transformer, etc commercial May 2018 Website(www.cninfo.c
ed
Co., Ltd. ultimate controller acceptance om.cn) No.: 2018-005,
Sichuan Other enterprise Spot
Commo
Ailian control under the exchange, 30 March
dity Marketi
13 Science & same controlling Internet module 599.81 599.81 0.08% 5,000 N bank and - 2018, 11 Juchao
purchas ng price
Technology shareholder and commercial May 2018 Website(www.cninfo.c
ed
Co., Ltd. ultimate controller acceptance om.cn) No.: 2018-005,
Hunan
Other enterprise
Grand-Pro Commo Spot
control under the 30 March
Intelligent dity Marketi exchange,
14 same controlling V-BOT 156.25 156.25 0.02% 650 - - 2018, 11
Tech. purchas ng price Bank Juchao
shareholder and May 2018
Company ed acceptance Website(www.cninfo.c
ultimate controller
(note 1) om.cn) No.: 2018-005,
Other enterprise
Sichuan Commo Spot
control under the 30 March
Aichuang dity Marketi exchange,
15 same controlling Control panel 251.51 251.51 0.03% 5,000 - - 2018, 11 Juchao
Technology purchas ng price Bank
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ed acceptance
ultimate controller om.cn) No.: 2018-005,
44
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Sichuan
Changhong
Controlling Accept 30 March
Electronics Marketi Spot
16 shareholder and the Regular bus fee 7.38 7.38 0.01% 5,000 N - 2018, 11
Holding ng price exchange Juchao
ultimate controller services May 2018
Group Co., Website(www.cninfo.c
Ltd. om.cn) No.: 2018-005,
Information
Sichuan Spot
Controlling Accept system services, 30 March
Changhong Marketi exchange,
17 shareholder and the repair fees, 623.03 623.03 0.77% 5,000 N - 2018, 11 Juchao
Electric Co., ng price Bank
ultimate controller services shared service May 2018 Website(www.cninfo.c
Ltd. acceptance
fees om.cn) No.: 2018-005,
Sichuan Other enterprise Spot
Changhong control under the Accept Transportation, exchange, 30 March
Marketi
18 Minsheng same controlling the storage, loading 23,028.07 23,028.07 28.33% 71,000 N bank and - 2018, 11 Juchao
ng price
Logistics shareholder and services and unloading commercial May 2018 Website(www.cninfo.c
Co., LTD ultimate controller acceptance om.cn) No.: 2018-005,
Sichuan
Other enterprise Spot
Service Exp. After-sale and
control under the Accept exchange, 30 March
Appliance installation Marketi
19 same controlling the 8,822.05 8,822.05 10.85% 25,000 N bank and - 2018, 11
Service maintenance, ng price Juchao
shareholder and services commercial May 2018
Chain Co., etc. Website(www.cninfo.c
ultimate controller acceptance
Ltd. om.cn) No.: 2018-005,
Other enterprise
Sichuan
control under the Accept 30 March
Hongxin Software usage Marketi Spot
20 same controlling the 25.36 25.36 0.03% 5,000 N - 2018, 11 Juchao
Software fee ng price exchange
shareholder and services May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller om.cn) No.: 2018-005,
Guangdong Other enterprise Accept 30 March Juchao
Security service Marketi Spot
21 Changhong control under the the 27.73 27.73 0.03% 5,000 N - 2018, 11 Website(www.cninfo.c
charge ng price exchange
Electronics same controlling services May 2018 om.cn) No.: 2018-005,
45
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Co., Ltd. shareholder and
ultimate controller
Other enterprise
Sichuan Maintenance
control under the Accept 30 March
Jiahong costs and Marketi Spot
22 same controlling the 16.26 16.26 0.02% 5,000 N - 2018, 11 Juchao
Industrial business activity ng price exchange
shareholder and services May 2018 Website(www.cninfo.c
Co., Ltd. fee
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the Accept 30 March
Business Marketi Spot
23 International same controlling the 22.16 22.16 0.03% 5,000 N - 2018, 11 Juchao
activity fee ng price exchange
Hotel Co., shareholder and services May 2018 Website(www.cninfo.c
Ltd. ultimate controller om.cn) No.: 2018-005,
Sichuan
Other enterprise
Changhong
control under the Accept 30 March
International Marketi Spot
24 same controlling the Ticket fee 9.03 9.03 0.01% 5,000 N - 2018, 11
Travel ng price exchange Juchao
shareholder and services May 2018
Service Co., Website(www.cninfo.c
ultimate controller
Ltd. om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the Accept Management 30 March
Marketi Spot
25 Property same controlling the fee and 42.12 42.12 0.05% 5,000 N - 2018, 11 Juchao
ng price exchange
Service Co., shareholder and services maintenance fee May 2018 Website(www.cninfo.c
Ltd. ultimate controller om.cn) No.: 2018-005,
Other enterprise
Sichuan
control under the Accept Laboratory 30 March
Hongwei Marketi Spot
26 same controlling the technical 35.90 35.90 0.04% 5,000 N - 2018, 11 Juchao
Technology ng price exchange
shareholder and services service fee May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller om.cn) No.: 2018-005,
46
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Sichuan Other enterprise
Zhiyijia control under the Accept 30 March
Platform Marketi Spot
27 Network same controlling the 417.95 417.95 0.51% 5,000 N - 2018, 11 Juchao
licensing ng price exchange
Technology shareholder and services May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the Accept 30 March
Communication Marketi Spot
28 Network same controlling the 3.50 3.50 0.00% 5,000 N - 2018, 11 Juchao
fee ng price exchange
Technology shareholder and services May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Sichuan
Changhong Other enterprise
Intelligent control under the Accept 30 March
Marketi Spot
29 Manufacturi same controlling the Installation cost 3.07 3.07 0.00% 6,000 N - 2018, 11
ng price exchange
ng shareholder and services May 2018 Juchao
Technology ultimate controller Website(www.cninfo.c
Co., Ltd. om.cn) No.: 2018-005,
Sichuan
Other enterprise
Changhong
control under the Accept 30 March
Jiahua Communication Marketi Spot
30 same controlling the 0.60 0.60 0.00% 5,000 N - 2018, 11
Information fee ng price exchange Juchao
shareholder and services May 2018
products Website(www.cninfo.c
ultimate controller
Co., Ltd. om.cn) No.: 2018-005,
Sichuan Purchas Spot
Controlling Water, 30 March
Changhong e fuel Marketi exchange, Juchao
31 shareholder and electricity and 880.40 880.40 0.11% 57,000 N - 2018, 11
Electric Co., and ng price Bank Website(www.cninfo.c
ultimate controller gas May 2018
Ltd. power acceptance om.cn) No.: 2018-005,
Changhong Other enterprise Purchas Spot 30 March Juchao
Marketi
32 Huayi control under the e fuel Compressed air 29.15 29.15 0.00% 130 N exchange, - 2018, 11 Website(www.cninfo.c
ng price
Compressor same controlling and Bank May 2018 om.cn) No.: 2018-005,
47
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Co., Ltd. shareholder and power acceptance
ultimate controller
Other enterprise
Guangdong Purchas
control under the 30 March
Changhong e fuel Water and Marketi Spot
33 same controlling 67.45 67.45 0.01% 5,200 N - 2018, 11 Juchao
Electronics and electricity fee ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. power
ultimate controller om.cn) No.: 2018-005,
Hefei
Other enterprise
Changhong Purchas
control under the 30 March
New Energy e fuel Marketi Spot
34 same controlling Electricity fee 14.49 14.49 0.00% 5,200 N - 2018, 11
Science & and ng price exchange Juchao
shareholder and May 2018
Technology power Website(www.cninfo.c
ultimate controller
Co., Ltd. om.cn) No.: 2018-005,
Sichuan Other enterprise
Purchas
Changhong control under the 30 March
e fuel Marketi Spot
35 Property same controlling Electricity fee 0.75 0.75 0.00% 5,000 N - 2018, 11 Juchao
and ng price exchange
Service Co., shareholder and May 2018 Website(www.cninfo.c
power
Ltd. ultimate controller om.cn) No.: 2018-005,
Sichuan Spot
Controlling Air-conditioner, 30 March
Changhong Sales of Marketi exchange, Juchao
36 shareholder and small appliances 3,695.69 3,695.69 0.40% 32,000 N - 2018, 11
Electric Co., goods ng price Bank Website(www.cninfo.c
ultimate controller and fresh etc. May 2018
Ltd. acceptance om.cn) No.: 2018-005,
Sichuan
Changhong
Controlling 30 March
Electronics Sales of Fresh and Marketi Spot
37 shareholder and 67.87 67.87 0.01% 9,500 N - 2018, 11
Holding goods air-conditioner ng price exchange Juchao
ultimate controller May 2018
Group Co., Website(www.cninfo.c
Ltd. om.cn) No.: 2018-005,
48
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Other enterprise
Sichuan Spot
control under the Color board and 30 March
Changhong Sales of Marketi exchange,
38 same controlling door shell 3,973.51 3,973.51 0.43% 12,000 N - 2018, 11 Juchao
Jijia Fine goods ng price Bank
shareholder and component May 2018 Website(www.cninfo.c
Co., Ltd. acceptance
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Spot
Changhong control under the Color 30 March
Sales of Marketi exchange,
39 Mold Plastic same controlling Masterbatch, 8,310.71 8,310.71 0.90% 16,000 N - 2018, 11 Juchao
goods ng price Bank
Tech. Co., shareholder and plastic particle May 2018 Website(www.cninfo.c
acceptance
Ltd. ultimate controller om.cn) No.: 2018-005,
Other enterprise
Lejiayi Air-conditioner, Spot
control under the 30 March
Chain Sales of refrigerator and Marketi exchange,
40 same controlling 981.20 981.20 0.11% 15,000 N - 2018, 11 Juchao
Managemen goods washing ng price Bank
shareholder and May 2018 Website(www.cninfo.c
t Co., Ltd. machine etc. acceptance
ultimate controller om.cn) No.: 2018-005,
Other enterprise
PT.CHANG
control under the 30 March
HONGELE Sales of Refrigerator and Marketi Spot
41 same controlling 54.76 54.76 0.01% 15,000 N - 2018, 11 Juchao
CTRICIND goods freezer ng price exchange
shareholder and May 2018 Website(www.cninfo.c
ONESIA
ultimate controller om.cn) No.: 2018-005,
Other enterprise
CHANGHO
control under the 30 March
NG(HK)TR Sales of Marketi Spot
42 same controlling Air-conditioner 18,132.40 18,132.40 1.96% 120,000 N - 2018, 11 Juchao
ADINGLIM goods ng price exchange
shareholder and May 2018 Website(www.cninfo.c
ITED
ultimate controller om.cn) No.: 2018-005,
Other enterprise
CHANGHO
control under the 30 March
NGELECT Sales of Refrigerator and Marketi Spot
43 same controlling 667.34 667.34 0.07% 15,000 N - 2018, 11 Juchao
RIC(AUST goods freezer ng price exchange
shareholder and May 2018 Website(www.cninfo.c
RALIA)
ultimate controller om.cn) No.: 2018-005,
49
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Other enterprise
Sichuan
control under the 30 March
Hongwei Sales of Marketi Spot
44 same controlling Fresh etc. 12.09 12.09 0.00% 15,000 N - 2018, 11 Juchao
Technology goods ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Refrigerator and Spot
Changhong control under the 30 March
Sales of freezer, washing Marketi exchange,
45 Minsheng same controlling 151.60 151.60 0.02% 15,000 N - 2018, 11 Juchao
goods machine, ng price Bank
Logistics shareholder and May 2018 Website(www.cninfo.c
air-conditioner acceptance
Co., LTD ultimate controller om.cn) No.: 2018-005,
Sichuan
Other enterprise
Service Exp. Spot
control under the 30 March
Appliance Sales of Maintenance Marketi exchange,
46 same controlling 771.61 771.61 0.08% 15,000 N - 2018, 11
Service goods parts etc. ng price Bank Juchao
shareholder and May 2018
Chain Co., acceptance Website(www.cninfo.c
ultimate controller
Ltd. om.cn) No.: 2018-005,
Sichuan
Changhong
Other enterprise
Gerun
control under the 30 March
Environmen Sales of Marketi Spot
47 same controlling Waste materials 1,077.63 1,077.63 0.12% 9,500 N - 2018, 11
tal goods ng price exchange
shareholder and May 2018
Protection Juchao
ultimate controller
Tech. Co., Website(www.cninfo.c
Ltd. om.cn) No.: 2018-005,
Other enterprise
. Hefei
control under the Air Bank 30 March
Changhong Sales of Marketi
48 same controlling conditioners, 137.04 137.04 0.01% 15,000 N acceptance - 2018, 11 Juchao
Industrial goods ng price
shareholder and refrigerators, etc settlement May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller om.cn) No.: 2018-005,
50
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Other enterprise
Sichuan control under the 30 March
Sales of Marketi Spot
49 Huafeng same controlling Fresh 18.58 18.58 0.00% 9,500 N - 2018, 11 Juchao
goods ng price exchange
Corp. Group shareholder and May 2018 Website(www.cninfo.c
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise Refrigerator and Spot
Zhiyijia control under the freezer, washing exchange, 30 March
Sales of Marketi
50 Network same controlling machine, 132,164.21 132,164.21 14.25% 420,000 N bank and - 2018, 11 Juchao
goods ng price
Technology shareholder and air-conditioner commercial May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller etc. acceptance om.cn) No.: 2018-005,
Other enterprise
Sichuan
control under the 30 March
Changhong Sales of Marketi Spot
51 same controlling Air-conditioner 86.52 86.52 0.01% 15,000 N - 2018, 11 Juchao
Property goods ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
52 Network same controlling Fresh 21.23 21.23 0.00% 15,000 N - 2018, 11 Juchao
goods ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Sichuan
Other enterprise
Changhong
control under the 30 March
Intelligent Sales of Marketi Spot
53 same controlling Fresh 0.84 0.84 0.00% 15,000 N - 2018, 11
Health goods ng price exchange Juchao
shareholder and May 2018
Technology Website(www.cninfo.c
ultimate controller
Co., Ltd. om.cn) No.: 2018-005,
Sichuan Other enterprise
30 March
Changhong control under the Sales of Marketi Spot Juchao
54 Air-conditioner 1.94 1.94 0.00% 9,500 N - 2018, 11
Property same controlling goods ng price exchange Website(www.cninfo.c
May 2018
Service Co., shareholder and om.cn) No.: 2018-005,
51
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Ltd. ultimate controller
Other enterprise
Sichuan
control under the 30 March
Huanyu Sales of Marketi Spot
55 same controlling Air-conditioner 14.62 14.62 0.00% 9,500 N - 2018, 11 Juchao
Industrial goods ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co. Ltd.
ultimate controller om.cn) No.: 2018-005,
Mianyang
Other enterprise
Technology
control under the 30 March
Town Big Sales of Marketi Spot
56 same controlling Fresh 0.16 0.16 0.00% 15,000 N - 2018, 11
Data goods ng price exchange Juchao
shareholder and May 2018
Technology Website(www.cninfo.c
ultimate controller
Co., Ltd. om.cn) No.: 2018-005,
Other enterprise
BVCH
control under the 30 March
Optronics Sales of Air-conditioner, Marketi Spot
57 same controlling 7.02 7.02 0.00% 15,000 N - 2018, 11 Juchao
(Sichuan) goods fresh ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
58 Electronic same controlling Fresh 16.53 16.53 0.00% 15,000 N - 2018, 11 Juchao
goods ng price exchange
Products shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
59 Group same controlling Fresh 2.23 2.23 0.00% 9,500 N - 2018, 11 Juchao
goods ng price exchange
Finance Co., shareholder and May 2018 Website(www.cninfo.c
Ltd. ultimate controller om.cn) No.: 2018-005,
52
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
60 Package same controlling Fresh 2.20 2.20 0.00% 15,000 N 2018, 11 Juchao
goods ng price exchange
Printing shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
61 Power same controlling Air-conditioner 9.36 9.36 0.00% 15,000 N 2018, 11 Juchao
goods ng price exchange
Source Co., shareholder and May 2018 Website(www.cninfo.c
Ltd. ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Air-conditioner, Marketi Spot
62 Education same controlling 56.17 56.17 0.01% 9,500 N 2018, 11 Juchao
goods fresh ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller - om.cn) No.: 2018-005,
GuangYuan Other enterprise Air
Changhong control under the conditioners, 30 March
Sales of Marketi Spot
63 Electronic same controlling refrigerators, 77.09 77.09 0.01% 15,000 N 2018, 11 Juchao
goods ng price exchange
Technology shareholder and washing May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller machine etc - om.cn) No.: 2018-005,
Sichuan Other enterprise
Ailian control under the 30 March
Sales of Air-conditioner, Marketi Spot
64 Science & same controlling 12.50 12.50 0.00% 9,500 N 2018, 11 Juchao
goods fresh ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
65 Innovation same controlling Fresh 0.17 0.17 0.00% 15,000 N 2018, 11 Juchao
goods ng price exchange
Investment shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller - om.cn) No.: 2018-005,
53
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Sichuan
Other enterprise
Changhong
control under the 30 March
Energy Sales of Marketi Spot
66 same controlling Fresh 2.02 2.02 0.00% 15,000 N 2018, 11
Sunshine goods ng price exchange Juchao
shareholder and May 2018
Technology Website(www.cninfo.c
ultimate controller
Co., Ltd. - om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
67 Electronic same controlling Fresh 0.80 0.80 0.00% 9,500 N 2018, 11 Juchao
goods ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller - om.cn) No.: 2018-005,
Other enterprise
Sichuan
control under the 30 March
Hongxin Sales of Marketi Spot
68 same controlling Fresh 3.80 3.80 0.00% 15,000 N 2018, 11 Juchao
Software goods ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller - om.cn) No.: 2018-005,
Other enterprise
Sichuan
control under the 30 March
Hongcheng Sales of Marketi Spot
69 same controlling Air-conditioner 9.46 9.46 0.00% 9,500 N 2018, 11 Juchao
Real Estate goods ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
70 New Energy same controlling Fresh 2.61 2.61 0.00% 15,000 N 2018, 11 Juchao
goods ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
30 March
Changhong control under the Sales of Air-conditioner, Marketi Spot Juchao
71 27.84 27.84 0.00% 9,500 N 2018, 11
International same controlling goods fresh ng price exchange Website(www.cninfo.c
May 2018
Hotel Co., shareholder and - om.cn) No.: 2018-005,
54
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Ltd. ultimate controller
Sichuan Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
72 Electronic same controlling Fresh 0.85 0.85 0.00% 15,000 N 2018, 11 Juchao
goods ng price exchange
System Co., shareholder and May 2018 Website(www.cninfo.c
Ltd. ultimate controller - om.cn) No.: 2018-005,
Sichuan
Other enterprise
Changhong
control under the 30 March
Precision Sales of Fresh, Marketi Spot
73 same controlling 6.43 6.43 0.00% 15,000 N 2018, 11
Electronics goods refrigerator ng price exchange Juchao
shareholder and May 2018
Tech. Co., Website(www.cninfo.c
ultimate controller
Ltd. - om.cn) No.: 2018-005,
Other enterprise
control under the 30 March
Orion.PDP. Sales of Refrigerator / Marketi Spot
74 same controlling 1,489.79 1,489.79 0.16% 9,500 N 2018, 11 Juchao
Co.,ltd goods freezer ng price exchange
shareholder and May 2018 Website(www.cninfo.c
ultimate controller - om.cn) No.: 2018-005,
Changhong
Other enterprise
International
control under the 30 March
Holdings Sales of Air-conditioner, Marketi Spot
75 same controlling 58.80 58.80 0.01% 6,000 N 2018, 11
(Hong goods fresh ng price exchange Juchao
shareholder and May 2018
Kong) Co., Website(www.cninfo.c
ultimate controller
Ltd. - om.cn) No.: 2018-005,
Other enterprise
Changhong control under the 30 March
Sales of Marketi Spot
76 EuropeElect same controlling Refrigerator 0.19 0.19 0.00% 15,000 N 2018, 11 Juchao
goods ng price exchange
rics.r.o shareholder and May 2018 Website(www.cninfo.c
ultimate controller - om.cn) No.: 2018-005,
55
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Other enterprise
Yibin
control under the 30 March
Red-Star Sales of Marketi Spot
77 same controlling Air-conditioner 91.74 91.74 0.01% 9,500 N 2018, 11 Juchao
Electronics goods ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller - om.cn) No.: 2018-005,
Other enterprise
CHANGHO
control under the Air-conditioner, 30 March
NGELECT Sales of Marketi Spot
78 same controlling Refrigerator / 122.67 122.67 0.01% 15,000 N 2018, 11 Juchao
RICMIDDL goods ng price exchange
shareholder and freezer May 2018 Website(www.cninfo.c
EEASTFZE
ultimate controller - om.cn) No.: 2018-005,
Other enterprise
Sichuan
control under the 30 March
Aichuang Sales of Juicer, Marketi Spot
79 same controlling 101.37 101.37 0.01% 9,500 N 2018, 11 Juchao
Technology goods air-conditioner ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller - om.cn) No.: 2018-005,
Other enterprise
Changhong
control under the Renderi 30 March
Huayi Marketi Spot
80 same controlling ng of R&D service 12.00 12.00 0.00% 5,000 N - 2018, 11 Juchao
Compressor ng price exchange
shareholder and service May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller om.cn) No.: 2018-005,
Other enterprise
Guangdong
control under the Provide 30 March
Changhong Marketi Spot
81 same controlling fuel and Utility fee 0.91 0.91 0.00% 15,000 N 2018, 11 Juchao
Electronics ng price exchange
shareholder and power May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Spot
Changhong control under the Provide 30 March
Marketi exchange,
82 Minsheng same controlling fuel and Utility fee 0.81 0.81 0.00% 15,000 N 2018, 11 Juchao
ng price Bank
Logistics shareholder and power May 2018 Website(www.cninfo.c
acceptance
Co., LTD ultimate controller - om.cn) No.: 2018-005,
56
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Other enterprise
Sichuan
control under the Provide Bank 30 March
Changhong Marketi
83 same controlling fuel and Utility fee 7.92 7.92 0.00% 12,000 N acceptance 2018, 11 Juchao
Jijia Fine ng price
shareholder and power settlement May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the Provide Bank 30 March
Marketi
84 Mold Plastic same controlling fuel and Utility fee 375.31 375.31 0.04% 16,000 N acceptance 2018, 11 Juchao
ng price
Tech. Co., shareholder and power settlement May 2018 Website(www.cninfo.c
Ltd. ultimate controller - om.cn) No.: 2018-005,
Other enterprise
Sichuan
control under the Provide 30 March
Hongwei Marketi Spot
85 same controlling fuel and Utility fee 0.08 0.08 0.00% 15,000 N 2018, 11 Juchao
Technology ng price exchange
shareholder and power May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Changhong control under the Provide Bank 30 March
Marketi
86 Devices same controlling fuel and Utility fee 45.76 45.76 0.00% 15,000 N acceptance 2018, 11 Juchao
ng price
Technology shareholder and power settlement May 2018 Website(www.cninfo.c
Co., Ltd. ultimate controller - om.cn) No.: 2018-005,
Other enterprise
Shenzhen
control under the Provide 30 March
YijEn Marketi Spot
87 same controlling fuel and Utility fee 0.01 0.01 0.00% 15,000 N 2018, 11 Juchao
Technology ng price exchange
shareholder and power May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller - om.cn) No.: 2018-005,
Changhong Other enterprise
International control under the Provide 30 March
Marketi Spot
88 Holdings same controlling fuel and Utility fee 0.20 0.20 0.00% 6,000 N 2018, 11 Juchao
ng price exchange
(Hong shareholder and power May 2018 Website(www.cninfo.c
Kong) Co., ultimate controller - om.cn) No.: 2018-005,
57
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Ltd.
Other enterprise
Sichuan Rent to
control under the Workshop,Forkl Bank 30 March
Changhong the Marketi
89 same controlling ift, Warehouse, 28.71 28.71 0.37% 5,000 N acceptance 2018, 11 Juchao
Jijia Fine related ng price
shareholder and etc settlement May 2018 Website(www.cninfo.c
Co., Ltd. party
ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Rent to
Changhong control under the Bank 30 March
the Workshop, Marketi
90 Mold Plastic same controlling 123.50 123.50 1.61% 5,000 N acceptance 2018, 11 Juchao
related Warehouse etc. ng price
Tech. Co., shareholder and settlement May 2018 Website(www.cninfo.c
party
Ltd. ultimate controller - om.cn) No.: 2018-005,
Sichuan Other enterprise
Rent to Spot
Changhong control under the 30 March
the Workshop, Marketi exchange,
91 Minsheng same controlling 98.41 98.41 1.28% 9,500 N 2018, 11 Juchao
related apartment etc. ng price Bank
Logistics shareholder and May 2018 Website(www.cninfo.c
party acceptance
Co., LTD ultimate controller - om.cn) No.: 2018-005,
Sichuan
Other enterprise
Service Exp. Rent to
control under the 30 March
Appliance the Apartment, Marketi Spot
92 same controlling 23.72 23.72 0.31% 5,000 N - 2018, 11
Service related office ng price exchange Juchao
shareholder and May 2018
Chain Co., party Website(www.cninfo.c
ultimate controller
Ltd. om.cn) No.: 2018-005,
Other enterprise
. Hefei Rent to
control under the 30 March
Changhong the Marketi Spot
93 same controlling Apartment 6.47 6.47 0.08% 9,500 N - 2018, 11 Juchao
Industrial related ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. party
ultimate controller om.cn) No.: 2018-005,
58
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Sichuan
Other enterprise
Changhong Rent to
control under the Forklift, 30 March
Precision the Marketi Spot
94 same controlling warehouse, 2.55 2.55 0.03% 5,000 N - 2018, 11
Electronics related ng price exchange Juchao
shareholder and apartment May 2018
Tech. Co., party Website(www.cninfo.c
ultimate controller
Ltd. om.cn) No.: 2018-005,
Sichuan Other enterprise
Rent to
Ailian control under the 30 March
the Marketi Spot
95 Science & same controlling Warehouse 0.06 0.06 0.00% 9,500 N - 2018, 11 Juchao
related ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
party
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Other enterprise
BVCH Rent to
control under the 30 March
Optronics the Marketi Spot
96 same controlling Cargo elevator 5.25 5.25 0.07% 5,000 N - 2018, 11 Juchao
(Sichuan) related ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. party
ultimate controller om.cn) No.: 2018-005,
Other enterprise
Guangdong Rent to
control under the 30 March
Changhong the Marketi Spot
97 same controlling Office building 6.36 6.36 0.08% 9,500 N - 2018, 11 Juchao
Electronics related ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. party
ultimate controller om.cn) No.: 2018-005,
Other enterprise
Sichuan Rent to
control under the Workshop, and 30 March
Hongwei the Marketi Spot
98 same controlling Two living 3.98 3.98 0.05% 9,500 N - 2018, 11 Juchao
Technology related ng price exchange
shareholder and area May 2018 Website(www.cninfo.c
Co., Ltd. party
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise Rent to
30 March
Changhong control under the the Marketi Spot Juchao
99 Workshop 50.19 50.19 0.65% 5,000 N - 2018, 11
Devices same controlling related ng price exchange Website(www.cninfo.c
May 2018
Technology shareholder and party om.cn) No.: 2018-005,
59
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Co., Ltd. ultimate controller
Changhong
Other enterprise
International Rent to
control under the 30 March
Holdings the Office, Two Marketi Spot
100 same controlling 8.09 8.09 0.11% 9,500 N - 2018, 11
(Hong related living area ng price exchange Juchao
shareholder and May 2018
Kong) Co., party Website(www.cninfo.c
ultimate controller
Ltd. om.cn) No.: 2018-005,
Sichuan Other enterprise
Rent to
Changhong control under the 30 March
the Marketi Spot
101 Package same controlling Storage charge 0.03 0.03 0.00% 5,000 N - 2018, 11 Juchao
related ng price exchange
Printing shareholder and May 2018 Website(www.cninfo.c
party
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Rent
Changhong control under the 30 March
from the Workshop, Marketi Spot
102 Property same controlling 101.03 101.03 1.31% 5,000 N - 2018, 11 Juchao
related office etc. ng price exchange
Service Co., shareholder and May 2018 Website(www.cninfo.c
party
Ltd. ultimate controller om.cn) No.: 2018-005,
Chengdu Other enterprise
Rent
Changhong control under the 30 March
from the Marketi Spot
103 Electronic same controlling Office 28.61 28.61 0.37% 5,000 N - 2018, 11 Juchao
related ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
party
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Other enterprise
Guangdong Rent
control under the 30 March
Changhong from the Marketi Spot
104 same controlling Employee dorm 16.30 16.30 0.21% 5,000 N - 2018, 11 Juchao
Electronics related ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. party
ultimate controller om.cn) No.: 2018-005,
60
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Sichuan Rent
Controlling 30 March
Changhong from the Workshop and Marketi Spot Juchao
105 shareholder and 49.21 49.21 0.64% 5,000 N - 2018, 11
Electric Co., related office ng price exchange Website(www.cninfo.c
ultimate controller May 2018
Ltd. party om.cn) No.: 2018-005,
Sichuan
Changhong Rent
Controlling 30 March
Electronics from the Marketi Spot
106 shareholder and Employee dorm 1.14 1.14 0.01% 5,000 N - 2018, 11
Holding related ng price exchange Juchao
ultimate controller May 2018
Group Co., party Website(www.cninfo.c
Ltd. om.cn) No.: 2018-005,
Other enterprise
Sichuan Rent
control under the 30 March
Hongwei from the Marketi Spot
107 same controlling Device server 13.67 13.67 0.18% 5,000 N - 2018, 11 Juchao
Technology related ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. party
ultimate controller om.cn) No.: 2018-005,
Sichuan
Changhong Other enterprise
Purchas Spot
Intelligent control under the 30 March
e of Production line Marketi exchange,
108 Manufacturi same controlling 813.58 813.58 2.43% 5,000 N - 2018, 11
fixed transformation ng price Bank
ng shareholder and May 2018 Juchao
assets acceptance
Technology ultimate controller Website(www.cninfo.c
Co., Ltd. om.cn) No.: 2018-005,
Sichuan
Other enterprise
Hongcheng Purchas
control under the 30 March
Constructio e of Building Marketi Spot
109 same controlling 45.05 45.05 0.13% 5,000 N - 2018, 11
n fixed construction ng price exchange Juchao
shareholder and May 2018
Engineering assets Website(www.cninfo.c
ultimate controller
Co., Ltd. om.cn) No.: 2018-005,
61
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Other enterprise Purchas
Sichuan
control under the e& 30 March
Hongcheng Building Marketi Spot
110 same controlling building 39.32 39.32 0.12% 5,000 N - 2018, 11 Juchao
Real Estate construction ng price exchange
shareholder and the fixed May 2018 Website(www.cninfo.c
Co., Ltd.
ultimate controller assets om.cn) No.: 2018-005,
Purchasi
ng and
Sichuan Workshop Spot
Controlling Purchas 30 March
Changhong reconstruction Marketi exchange,
111 shareholder and e& 10.62 10.62 0.03% 5,000 N - 2018, 11
Electric Co., and information ng price Bank
ultimate controller building May 2018 Juchao
Ltd. system acceptance
the fixed Website(www.cninfo.c
assets om.cn) No.: 2018-005,
Other enterprise
Sichuan Purchas
control under the 30 March
Hongxin e of Information Marketi Spot
112 same controlling 160.64 160.64 0.48% 5,000 N - 2018, 11 Juchao
Software fixed system etc. ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. assets
ultimate controller om.cn) No.: 2018-005,
Sichuan Other enterprise
Purchas
Zhiyijia control under the 30 March
e of Marketi Spot
113 Network same controlling Air-conditioner 0.30 0.30 0.00% 5,000 N - 2018, 11 Juchao
fixed ng price exchange
Technology shareholder and May 2018 Website(www.cninfo.c
assets
Co., Ltd. ultimate controller om.cn) No.: 2018-005,
Other enterprise
Sichuan Purchas
control under the 30 March
Huanyu e of Workshop Marketi Spot
114 same controlling 19.37 19.37 0.06% 5,000 N - 2018, 11 Juchao
Industrial fixed reconstruction ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co. Ltd. assets
ultimate controller om.cn) No.: 2018-005,
Sichuan Controlling Purchas 30 March Juchao
Workshop Marketi Spot
115 Changhong shareholder and e& 377.36 377.36 1.13% 5,000 N - 2018, 11 Website(www.cninfo.c
construction ng price exchange
Electronics ultimate controller building May 2018 om.cn) No.: 2018-005,
62
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Holding the fixed
Group Co., assets
Ltd.
Other enterprise
Sichuan Purchas
control under the 30 March
Aichuang e of Juicer, vending Marketi Spot
116 same controlling 134.50 134.50 0.40% 5,000 N - 2018, 11 Juchao
Technology fixed machine ng price exchange
shareholder and May 2018 Website(www.cninfo.c
Co., Ltd. assets
ultimate controller om.cn) No.: 2018-005,
Total -- -- 335,080.89 -- -- -- -- -- -- --
Detail of sales return with major amount involved Not applicable
1. It is estimated that the related transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and accepting
fuel and power from Sichuan Changhong and its subsidiary by the Company for year of 2018 was RMB 2872 million at most (tax-excluded),
actually RMB 957,927,800 occurred in reporting period (tax-excluded).
2. It is estimated that the related transaction amount resulted by purchasing goods (including compressor purchased, cleaning robot etc.) from
Changhong Huayi and its subsidiary by the Company for year of 2018 was RMB 606.5 million at most (tax-excluded), actually RMB
301,238,700 occurred in reporting period (tax-excluded).
3. It is estimated that the related transaction amount resulted by purchasing or selling equipment, software, maintenance and spare parts and
molds etc. from Sichuan Changhong and its subsidiary by the Company for year of 2018 was RMB 50 million at most (tax-excluded), actually
RMB 1,715,600 occurred in reporting period (tax-excluded).
Report the actual implementation of the daily related transactions which
4. It is estimated that the related transaction amount resulted by purchasing goods from and providing fuel and power to Sichuan Changhong and
were projected about their total amount by types during the reporting
its subsidiary by the Company for year of 2018 was RMB 6210 million at most (tax-excluded), actually RMB 1,619,016,500 occurred in
period (if applicable)
reporting period (tax-excluded).
5. It is estimated that the related transaction amount resulted by accepting energy, power and service from Huayi Compressor and its subsidiary
by the Company for year of 2018 was RMB 1.3 million at most (tax-excluded), actually RMB 291,500 occurred in reporting period
(tax-excluded).
6. It is estimated that the related transaction amount resulted by leasing business from Sichuan Changhong and its subsidiary by the Company for
year of 2018 was RMB 50 million at most (tax-excluded), actually RMB 4,128,000 occurred in reporting period (tax-excluded).
7. It is estimated that the related transaction amount from domestic finished goods logistic business outsourcing to Sichuan Changhong Minsheng
Logistic Co., Ltd. by the Company for year of 2018 was RMB 710 million at most (tax-excluded), actually RMB 230,280,700 occurred in
reporting period (tax-excluded).
63
HEFEI MEILING CO., LTD SEMI-ANNUAL REPORT 2018
8. It is estimated that the related transaction amount from after sales service of domestic goods outsourcing to Sichuan Service Exp. Appliance
Service Chain Co., Ltd. by the Company for year of 2018 was RMB 250 million at most (tax-excluded), actually RMB 88,220,500 occurred in
reporting period.
9. It is estimated that the related transaction amount resulted by accepting other service and labor service etc. or providing other service and labor
service etc. to Sichuan Changhong and its subsidiary by the Company for year of 2018 was RMB 50 million at most (tax-excluded), actually
RMB 11,460,700 occurred in reporting period (tax-excluded).
10. It is estimated that the related transaction amount resulted by selling goods from Sichuan Changhong Electronics Group and its subsidiary by
the Company for year of 2018 was RMB 95 million at most (tax-excluded), actually RMB 30,959,100 occurred in reporting period.
11. It is estimated that the related transaction amount resulted by purchasing goods and receiving labor services, fuel power, leasing and
purchasing equipment etc. from Sichuan Changhong Electronics Group and its subsidiary by the Company for year of 2018 was RMB 120
million at most (tax-excluded), actually RMB 25,569,800 occurred in reporting period.
Reasons for major differences between trading price and market
Not applicable
reference price
Note 1: During the reporting period, the daily related transaction amount between the company and Hunan Grand-Pro Intelligent Tech Co.,
Ltd. (hereinafter referred to as “Grand-Pro”) was 1.5625 million Yuan, mainly because the subsidiary Changhong Home Appliances purchased
cleaning robot from the related parties. As the company’s related party Changhong Huayi subscribed for the non-public offering of shares of
Grand-Pro and the holding of Grand-Pro was completed during the reporting period, Grand-Pro was included in the consolidation scope of
Changhong Huayi financial statements. Therefore, in accordance with relevant regulations and in conjunction with the actual business needs of
the company’s subsidiary Changhong Home Appliances, the 14th meeting of the ninth board of directors of the company reviewed and approved
the “Proposal on Adding the Predicted Daily Related Transactions for 2018”, agreed to add the predicted daily related transactions amount no
more than 6.5 million Yuan in total (excluding tax) for the purchase of goods between the company and its holding subsidiary with the subsidiary
of Changhong Huayi - Hunan Grand-Pro in 2018, see details on the Announcement on Adding the Predicted Daily Related Transactions for 2018
of Changhong Meiling Co., Ltd. that the company disclosed on the designated information disclosure media on August 15, 2018. The company
has fulfilled the necessary approval procedures for this new daily related transaction.
64
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
2. Related transactions with Finance Company
The resolution of the 34th meeting of the 8th board of directors on August 9, 2017 and the
second extraordinary general meeting of 2017 on September 12, 2017 approved and agreed the
company to continue carry out the financial service cooperation with Sichuan Changhong Group
Finance Co., Ltd. (hereinafter referred to as “Changhong Finance Company”) and sign a triennial
Financial Service Agreement, It is agreed that the maximum deposit balance (including accrued
interest and handling fees) and the highest principal and interest of outstanding loan the Company
in any finance company within the three-year validity period from the effective date of the new
agreement shall be adjusted to not exceed RMB 3.8 billion per day. In accordance with the
agreement, Changhong Finance Company shall provide a series of financial services such as deposit
and loan in its business scope according to the requirements of the Company and its subsidiaries.
The related transactions between the company and its subsidiaries and Changhong Finance
Company from the beginning of the year to the end of the reporting period are as follows:
Up to 30 June 2018, the Company and its subsidiaries have opened financial business as
savings, loans, note drawing and notes discounted with Changhong Finance Company. The
Company and its subordinate company owns 2,282,305,192.11 Yuan savings in Changhong Finance
Company, takes 27.60% of the deposit taking balance in Changhong Finance Company without
30% occupied, balance of loans at period-end amounted as 77,600,000.00 Yuan, balance of notes
drawing at period-end was 941,548,617.05 Yuan and balance of notes discounted outstanding as
747,241,584.65 Yuan. More details are:
In RMB
Interest and
Balance at Increased in the Decreased in the Balance at commission
Item
year-begin Year Year period-end charge received
or paid
I. Savings in
Changhong Group 2,762,513,703.88 26,079,408,328.36 26,559,616,840.13 2,282,305,192.11 52,350,875.61
Finance Company
II. Borrowings
from Changhong
- 77,600,000.00 - 77,600,000.00 265,500.00
Group Finance
Company
1.Short-term loans - 77,600,000.00 - 77,600,000.00 265,500.00
2.Long-term loans - - - - -
III. Other financial
-
business
1.notes drawing 721,645,627.87 969,728,168.93 749,825,179.75 941,548,617.05 428,544.83
65
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Interest and
Balance at Increased in the Decreased in the Balance at commission
Item
year-begin Year Year period-end charge received
or paid
2.notes discounted 699,356,853.98 652,100,160.10 604,215,429.43 747,241,584.65 4,222,691.63
According to the regulation of Information Disclosure Business Memorandum No. 2 -
Transactions and Related Transactions of the Shenzhen Stock Exchange, the company issued the
Risk Continuous Assessment Report About Sichuan Changhong Group Finance Co., Ltd. for the
deposit, loan and other financial services that the company carried out with Changhong Finance
Company during the reporting period, and disclosed at www.cninfo.com.cn on 15 August 2018.
(ii) Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
There are no related transactions by assets acquisition and sold in the period
(iii) Material related transaction of jointly foreign investment
□ Applicable √ Not applicable
The Company has no material related transaction of jointly foreign investment occurred in
reporting period-end.
(iv) Connect of related liability and debt
√ Applicable □ Not applicable
Whether has non-operational contact of related liability and debts or not
□ Yes √No
No non-operational contact of related liability or debts in Period
(v) Other related transactions
□ Applicable √ Not applicable
Nil
XIII. Non-business capital occupying by controlling shareholders and its related parties
□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period.
XIV. Significant contract and implementations
(i) Entrust, contract and leasing
66
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
1. Entrust
□ Applicable √ Not applicable
No entrust in Period.
2. Contract
□ Applicable √ Not applicable
No contract in Period.
3. Leasing
√ Applicable □ Not applicable
Explanation:
Operational leasing of the Company please found more details in “investment real estate”,
“fixed assets”, “Lease of related party” and “Rent of related party” in Note of Financial Statement.
Gains/losses to the Company from projects that reached over 10% in total profit of the
Company in reporting period
□ Applicable √ Not applicable
No gains or losses to the Company from projects that reached over 10% in total profit of the
Company in reporting period.
(ii) Material guarantee
√ Applicable □ Not applicable
1.Guarantee
During the reporting period, we did not offering guarantee to any legal person or natural
person except the wholly-owned and controlling subsidiary, the guarantees that the company
provides for its wholly-owned and holding subsidiaries are for the loans generated by supporting
their production and operation, the guaranty type is assurance; up to 30 June 2018, the Company
has granted credit to the guarantees of some wholly-owned and holding subsidiaries, in addition to
the wholly-owned subsidiary Changhong Air-conditioner, other subsidiaries have no actual
guarantee. The external guarantees of the Company and subsidiaries are as follows:
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Complete
Name of the Actual date of Actual Guarantee
Related Announcement Guarantee Guarantee implement
Company happening (Date of guarantee Guarantee type for related
disclosure date limit term ation or
guaranteed signing agreement) limit party
not
67
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Notice No. 2015-038, No.
2015-040, No. 2015-064
released on 29 August
2015 and 23 December
Dealer of Hefei
2015; Joint liability
Meiling Co., 20,000 2016-9-29 15.00 One year Y N
guaranty
Ltd.
Notice No. 2016-068, No.
2016-072, No. 2016-077
released on 26 Nov. 2016
and 14 Dec.
Notice No. 2015-038, No.
2015-040, No. 2015-064
released on 29 August
Dealer of
2015 and 23 December
Sichuan
2015; Joint liability
Changhong 20,000 2016-10-14 111.00 One year Y N
guaranty
Air-conditioner
Notice No. 2016-068, No.
Co., Ltd.
2016-072, No. 2016-077
released on 26 Nov. 2016
and 14 Dec.
Total approving external guarantee in report Total actual occurred external
0 126.00
period (A1) guarantee in report period (A2)
Total actual balance of external
Total approved external guarantee at the
0 guarantee at the end of report 0
end of report period ( A3)
period (A4)
Guarantee between the Company and the subsidiaries
Complete
Name of the Actual date of Actual Guarantee
Related Announcement Guarantee Guarantee implement
Company happening (Date of guarantee Guarantee type for related
disclosure date limit term ation or
guaranteed signing agreement) limit party
not
Joint liability
2017-2-24 6,000 One year Y N
guaranty
Joint liability
2017-1-22 5,500 One year Y N
guaranty
Notice No. 2017-010,
Joint liability
Zhongshan No. 2017-014, No. 2017-3-1 20,000 One year Y N
guaranty
Changhong 2017-031 released on 70,000
Joint liability
Electric Co., LTD 30 Mar. 2017 and 5 2017-6-23 10,000 One year N N
guaranty
May
Joint liability
2017-7-24 5,000 One year N N
guaranty
Joint liability
2017-11-6 10,000 One year N N
guaranty
68
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Joint liability
2018-3-30 10,000 One year N N
guaranty
Notice No. 2018-005,
Joint liability
No. 2018-009, No. 2018-4-11 6,000 One year N N
guaranty
2018-029 released on 70,000
Joint liability
30 Mar. 2018 and 11 2018-4-12 5,000 One year N N
guaranty
May
Joint liability
2018-4-18 5,500 One year N N
guaranty
Joint liability
2017-8-13 4,500 One year N N
Notice No. 2017-010, guaranty
No. 2017-014, No.
Joint liability
2017-031 released on 10,500 2017-11-14 4,000 One year N N
guaranty
Guangdong 30 Mar. 2017 and 5
Joint liability
Changhong Ridian May 2017-12-15 2,000 One year N N
guaranty
Technology Co.,
Ltd. Notice No. 2018-005,
No. 2018-009, No.
2018-029 released on 25,500 - -- - - -
30 Mar. 2018 and 11
May
Notice No. 2017-010, Joint liability
2017-2-16 2,000 One year Y N
No. 2017-014, No. guaranty
2017-031 released on 6,000
Joint liability
Zhongke Meiling 30 Mar. 2017 and 5 2017-6-23 1,000 One year Y N
guaranty
Cryogenic May
Technology Co., Notice No. 2018-005, Joint liability
2018-1-30 2,000 One year N N
Ltd. No. 2018-009, No. guaranty
2018-029 released on 7,000
Joint liability
30 Mar. 2018 and 11 2018-6-29 1,000 One year N N
guaranty
May
Notice No. 2018-005,
Sichuan
No. 2018-009, No.
Changhong
2018-029 released on 70,000 - - - - - -
Air-conditioner
30 Mar. 2018 and 11
Co., Ltd.
May
Total amount of actual occurred
Total amount of approving guarantee for
172,500 guarantee for subsidiaries in 99,500
subsidiaries in report period (B1)
report period (B2)
Total amount of approved guarantee for Total balance of actual
subsidiaries at the end of reporting period 253,000 guarantee for subsidiaries at the 65,000
(B3) end of reporting period (B4)
69
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Guarantee of the subsidiaries for the subsidiaries
Related
Actual date of Complete
Announce Guarantee
Name of the Company Guarantee happening (Date Actual guarantee Guarantee implement
ment Guarantee type for related
guaranteed limit of signing limit term ation or
disclosure party
agreement) not
date
-- --- -- -- -- -- -- -- --
Total amount of actual occurred
Total amount of approving guarantee for
-- guarantee for subsidiaries in report --
subsidiaries in report period (C1)
period (C2)
Total amount of approved guarantee for Total balance of actual guarantee for
subsidiaries at the end of reporting period -- subsidiaries at the end of reporting --
(C3) period (C4)
Total amount of guarantee of the Company( total of three abovementioned guarantee)
Total amount of approving guarantee in Total amount of actual occurred
172,500 99,626
report period (A1+B1+C1) guarantee in report period (A2+B2+C2)
Total amount of approved guarantee at the Total balance of actual guarantee at the
253,000 65,000
end of report period (A3+B3+C3) end of report period (A4+B4+C4)
Ratio of actual guarantee (A4+B4+C4) in net assets of the Company 12.92%
Including:
Amount of guarantee for shareholders, actual controller and its related
0
parties(D)
The debts guarantee amount provided for the guaranteed parties whose
51,500
assets-liability ratio exceed 70% directly or indirectly(E)
Proportion of total amount of guarantee in net assets of the Company
0
exceed 50%(F)
Total amount of the aforesaid three guarantees(D+E+F) 51,500
Explanations on possibly bearing joint and several liquidating
N/A
responsibilities for undue guarantees (if applicable)
Explanations on external guarantee against regulated procedures (if
N/A
applicable)
The above-mentioned guarantee objects are the wholly-owned and holding subsidiaries of the
Company, and these wholly-owned and holding subsidiaries are in normal production and operation,
there are no overdue loans, and the guarantee risks are controllable. During the reporting period, the
highest level of security the Company provided amounted to 1725 million Yuan by the approval, the
actual amount of guarantee is 995 million Yuan. At the end of the reporting period, the practical
guarantee balance amounted to 650 million Yuan, accounting for the Company’s latest net assets
ratio of 12.92%.
Explanation on guarantee with composite way: Nil
2. Guarantee outside against the regulation
□Applicable √Not applicable
70
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
No guarantee outside against the regulation in Period.
(iii) Other material contracts
□Applicable √Not applicable
XV. Social responsibility
(i) Material environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from
environmental protection department:
√ Yes □ No
71
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
number
Distributio Total
Name of Major pollutants and of Discharge
Way of n of Pollutants discharge standards Total discharge discharge
company or name of typical dischar concentration of discharge beyond the
discharge discharge enacted volume volume
subsidiary pollutants ge standards
outlets certified
outlets
Concentration of particulates
Total discharge volume
discharge:3.6mg/m The Emission Standards for Air
of particulates for the
Pollutants (GB 16297-1996) applies to
first half of 2018:0.08
Exhaust constitutes the exhaust emission.Concentration of
Discharge to Concentration of NMHC ton;Total discharge Satisfy the
Sichuan major pollutants, and the particulates discharge:120mg/m with
air after Distributed emission: volume of NMHC for standards Not beyond
Changhong typical pollutants discharge speed of
satisfying the 12 in related 63.7mg/m； the first half of for total the
Air-conditioner comprise of NMHC, 5.9kg/h;Concentration of NMHC
discharge workshops 2018:1.158 ton;Total volume standards
Co., Ltd. smoke particulates, tin emission:120mg/mwith discharge
standards Concentration of tin and its discharge volume of tin control
and its compound. speed of 17kg/h；Concentration of tin
compound and its compound for
and its compound discharge:8.5mg/m
discharge:0.0494mg/m the first half of 2018:
with discharge speed of 0.52kg/h。
0.0012 ton.
The Emission Limits for Air Pollutants
Concentration of particulates
(DB44/27—2001) applies to exhaust
discharge＜20mg/m
Exhaust constitutes the Discharge to emission. Satisfy the
Zhongshan Total discharge volume
major pollutants, and the air after Concentration of particulates standards Not beyond
Changhong Roof of the Concentration of NMHC for the first half of
typical pollutants satisfying the 2 discharge:120mg/ m for total the
Electric Co., No.1 and 2 emission:2.3mg/ m 2018: 30,000,000
comprise of particulates, discharge Concentration of NMHC volume standards
LTD plants m(N).
NMHC and odor standards emission:120mg/ m control
Concentration of stink: 1318
concentration. Concentration of stink: 2000
non-dimensional.
non-dimensional.
72
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
1.Construction and operation of pollution prevention facilities
The Company and its subsidiaries actively respond to the national ecological civilization
construction plan, and actively participate in national environmental protection works in line with
the purpose of actively fulfilling its corporate social responsibility. In recent years, The Company
and its subsidiaries have actively explored the introduction of advanced management concepts and
methods, and invested a large amount of money in the purchase of pollution control equipment and
facilities notwithstanding they have already fully met the emission standards, just to further bring
down and reduce discharge of corporate pollutants and realize emission reduction by scientific
technical methods. At the same time, in order to ensure the effective operation of the management
equipment and facilities, the Company and its subsidiaries have adopted such management
measures as setting up special personnel to manage and maintain the operation of the equipment
and facilities, formulating proper rules for operation and maintenance of the equipment and
facilities, emergency disposal regulations, supervision and assessment mechanism, allocating
special maintenance funds and so on, so as to ensure the effective operation of the governing
facilities in a full round, delivering its best to protect and improve the ecological environment
around the enterprise.
2. Environment impact assessment and other required environment protection
administrative license for construction projects
The Company and its subsidiaries earnestly implement the Environmental Protection Law, the
Environmental Impact Assessment Law and the Regulations on Environmental Protection
Management of Construction Projects, consciously abide by environmental protection laws and
regulations, industry requirements and government regulations. For new, renovated and expanded
projects, the Company and its subsidiaries adhere to the project environmental impact assessment
and "three simultaneous" system, fully implement environmental protection measures, act well in
environment protection management in respect of project planning, design, construction and
operation, make full use of advanced crafts and technological means to reduce environmental
pollution. Environmental impact assessment is carried out synchronously while making the
feasibility study for a construction project. Third-party professional parties are engaged to analyze
the industrial policy, land use planning, environmental impact and the feasibility of environmental
protection measures of the project. Construction will be started only after approved by the
competent environmental protection authorities. During the construction, environmental protection
requirements are earnestly implemented, environmental protection facilities are built synchronously,
environmental protection acceptance of the project is arranged in time upon completion of the
project to ensure that the project meets the acceptance criteria and could be put into official
operation with all the environmental impact assessment requirements met. During the operation
period, the Company conducts pollution prevention to ensure the normal operation of
environmental protection facilities in strict compliance with the relevant environmental impact
73
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
assessment documents and the reply requirements of the competent environmental protection
authorities.
3. Emergency plan for environmental emergencies
The Company and its subsidiaries have set up related emergency plans for environmental
emergencies. The Company and its subsidiaries have determined classified warning based on the
different extent and severity of environmental impacts that may be caused by the material
environmental factors, defined the responsibilities for emergency response, regulated emergency
handling procedures, established special team to handle emergencies and organized regular
rehearsal and appraisal of relevant emergency plans, so as to ensure the effectiveness of these plans,
improve their capability of emergency handling and take precautions against contingent
emergencies.
4. Independent plan to monitor environment
The Company and its subsidiaries have established regular monitoring plan for environmental
pollutants, set up special funds for pollutants monitoring, and engaged third-party authoritative to
regularly monitor the operation of major pollution-production links and environmental protection
treatment facilities in connection with the major pollutants produced by the Company and its
subsidiaries, to make sure that the Company and its subsidiaries could achieve emission standards
in a full round.
5. Other environment information that should be disclosed
According to the Environmental Information Disclosure Measures of Enterprises and
Institutions, the Company and its subsidiaries have realized the disclosure of information relating to
environmental impact assessment, project acceptance, pollutants production and discharge, solid
waste management, important environmental factors, environmental objectives and performance of
construction projects.
6. Other environment related information
In order to further realize the scientific and systematic environmental protection work of the
Company and its subsidiaries, the Company and its subsidiaries have established an environmental
management system in accordance with ISO14001 standards, set up an environmental protection
organization, acquired environmental protection resources, regularly identified, updated and
appraised environmental factors, compliance obligations, environmental risks and opportunities,
and regularly determined environmental objectives and management programs. Through the
implementation of management programs and continuous normal improvement, the environmental
performance of the Company and its subsidiaries has been continuously improved. Through regular
internal audit and management review, as well as the verification and examination of the third
parties, the environmental management system of the Company and its subsidiaries has been
74
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
effectively controlled and fully meets the system management standards and relevant regulations.
Meanwhile, the Company and its subsidiaries have been rated as environmental integrity
enterprises for consecutive years in the environment credit evaluation organized by environment
protection authorities.
(ii) Fulfill the precise social responsibility for poverty alleviation
The Company has no precise social responsibility for poverty alleviation in the period and has
no follow-up plan either
XVI. Explanation on other significant events
√ Applicable □ Not applicable
(i) As discussed at the 6th meeting of the 9th session of the board, the 3rd meeting of the 9th
session of the supervisory committee and the 1st extraordinary general meeting for 2018, The
Company was approved to invest in such break-even financing products that are highly safe, in
good liquidity and with a term of not more than one year for a single product with the available
raised proceeds under the maximum limit of RMB1,060,000,000 which could be used on a rolling
basis. This authorization shall be effective for a year since being approved at the general meeting of
The Company. Found more on appointed media “Securities Times”, “China Securities Journal”,
“Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company disclosed in the form
of announcement (Announcement No. 2017-096, No. 2017-097, No. 2017-099, No. 2017-101 and
No.2018-001) on 23 December 2017 and 10 January 2018.
(ii) On 15 January 2018, The Company received from Caitong Fund Management Co., Ltd
(“Caitong Fund”, a shareholder of The Company holding shares of over 5%) the Letter Relating to
Progress of the Plan of Reducing Shareholding in Hefei Meiling Co., Ltd. Caitong Fund reduced
holding of 11,913,134 shares in The Company via collective bidding trading and bulk trading
during the period from 6 November 2017 to 15 January 2018, accounting for 1.1405% of the total
share capital of The Company.
On 13 April 2018, The Company received from Caitong Fund the Letter Relating to Progress
of the Plan of Reducing Shareholding in Hefei Meiling Co., Ltd. and the Notice Relating to
Shareholding Reduction Plan of Hefei Meiling Co., Ltd. Caitong Fund reduced holding of
7,098,450 shares in The Company via collective bidding trading during the period from 16 January
2018 to 13 April 2018, accounting for 0.6795% of the total share capital of The Company. Besides,
it planned to reduce holding of not more than 62,675,866 shares of The Company (not more than
6% of the total share capital of The Company) via collective bidding trading, bulk trading or other
legal means within six months since this shareholding reduction announcement.
On 13 July 2018, The Company received from Caitong Fund the Letter Relating to Progress of
75
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
the Plan of Reducing Shareholding in Changhong Meiling Co., Ltd. Caitong Fund reduced holding
of 5,601,671 shares in The Company via collective bidding trading during the period from 11 May
2018 to 13 July 2018, accounting for 0.5363% of the total share capital of The Company. Found
more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong Commercial
Daily” and www.cninfo.com.cn that the Company disclosed in the form of announcement
(Announcement No. 2018-003, No. 2018-017, No. 2018-018 and No.2018-044) on 16 January 2018,
14 April and 14 July.
(iii) As discussed at the 7th meeting of the 9th session of the board, the 4th meeting of the 9th
session of the supervisory committee and the annual general meeting for 2017, The Company was
approved to make certain accounting policy changes, implement the new business accounting
standards and new requirements under the relevant requirements of the Ministry of Finance. Found
more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong Commercial
Daily” and www.cninfo.com.cn that the Company disclosed in the form of announcement
(Announcement No. 2018-005, No. 2018-006, No. 2018-010 and No.2018-029) on 16 January
2018.
(iv) As discussed at the 7th meeting of the 9th session of the board and the annual general
meeting for 2017, The Company and its subsidiaries were approved to conduct forward exchange
capital transactions during the period from 1 July 2018 to 30 June 2019, provided that the
transaction balance shall not be more than USD700 million and the completion term for a single
transaction shall be not more than one year. Found more on appointed media “Securities Times”,
“China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the
Company disclosed in the form of announcement (Announcement No. 2018-005, No. 2018-012 and
No.2018-029) on 30 March 2018 and 11 May.
(v) As discussed at the 7th meeting of the 9th session of the board and the annual general
meeting for 2017, the Shareholder Return Plan for the Future Three Years (2018-2020) of The
Company prepared by The Company was passed. Found more on appointed media “Securities
Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that
the Company disclosed in the form of announcement (Announcement No. 2018-005, and
No.2018-029) on 30 March 2018 and 11 May.
(vi) As authorized by the 7th meeting of the 9th session of the board and the annual general
meeting for 2017, it was agreed that The Company and its subsidiaries apply to the Hefei Branch of
Bank of Hangzhou for the bill pool special credit facility under the maximum amount of RMB600
million, apply to the Hefei Branch of Huaxia Bank for the bill pool special credit facility under the
maximum amount of RMB500 million, apply to the Anhui Branch of Bank of Communication for
the bill pool special credit facility under the maximum amount of RMB1.0 billion and to the Hefei
Branch of China Zheshang Bank for the bill pool special credit facility under the maximum amount
of RMB500 million. Found more on appointed media “Securities Times”, “China Securities
76
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company disclosed in
the form of announcement (Announcement No. 2018-005, No. 2018-013 and No.2018-029) on 30
March 2018 and 11 May.
(vii) The 2017 Annual Profit Distribution Plan of The Company was considered and approved
at the 7th meeting of the 9th session of the board, the 4th meeting of the 8th session of the
supervisory committee and the annual general meeting for 2017, for which, the independent
directors of The Company issued independent opinion. Taking into account the shareholders’
interest and long-term development need of The Company, it was resolved that a cash dividend of
RMB0.6 (tax included) would be paid for every 10 shares held by all the shareholders based on the
total share capital of 1,044,597,881 shares as of 31 December 2017. thus, total cash dividend of
RMB62,675,872.86 (tax included) was paid. After this distribution, the total share capital of The
Company maintained unchanged and the remaining accumulative undistributed profit of the parent
company was RMB830,766,775.42 which would be carried forward to the later years for
distribution.
On 27 June 2018, the Company released the profit distribution plan for year of 2017 and
implemented the plan. Found more on appointed media “Securities Times”, “China Securities
Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company disclosed in
the form of announcement (Announcement No. 2018-005 , No. 2018-006, No. 2018-029 and
No.2018-040) on 30 March 2018, 11 May and 27 June.
(viii) As resolved by the 7th meeting of the 9th session of the board, The Company was agreed
to subscribe the “Soochow-China Merchants Bank-Donghui No.135 Targeted Assets Management
Plan” issued by Soochow Securities with its own spare funds of RMB200 million, and to sign the
“Soochow-China Merchants Bank-Donghui No.135 Targeted Assets Management Plan-Targeted
Assets Management Contract” with Soochow Securities. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2018-014 and No.2018-016) on 13 April 2018.
(ix) As approved at the 10th meeting of the 9th session of the board and the annual general
meeting for 2017, it was agreed to amend certain provisions of the Articles of Association of The
Company, such as addition of relevant provision on Party construction and separate count of votes
for minority shareholders. Found more on appointed media “Securities Times”, “China Securities
Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the Company disclosed in
the form of announcement (Announcement No. 2018-022, No. 2018-023, No. 2018-024 and
No.2018-029) on 20 April 2018 and 11 May.
(x) Shares of The Company suspended trading from 9 May 2018 since its participation in an
equity acquisition of Gorenje gospodinjski aparati, d.d. (“Gorenje Company”, “Gorenje” or “Target
77
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Company”, the headquarter of which is in Slovenia ) may constitute material assets reorganization.
At the 11th meeting of the 9th session of the Board held by The Company on 7 May 2018, it was
resolved by unanimous approving votes that The Company was authorized to submit the binding
quotation in relation to this acquisition of equity interest of Gorenje Company under relevant
requirements. On the evening of 9 May 2018 (Beijing time), after prudent negotiation with relevant
parties, The Company determined to cease this bidding acquisition since The Company and Gorenje
Company and its certain shareholders held material different opinions on transaction procedure and
price. Found more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the Company disclosed in the form of
announcement (Announcement No. 2018-027 and No.2018-028) on 9 May 2018 and 11 May.
(xi) On 27 June 2018, The Company received an amount of RMB15,410,000 as enterprise
policy fund appropriated from the Financial Treasury Payment Center of Hefei Economic and
Technology Development Zone, accounting for 47.45% of the audited net profit attributable to
shareholders of the listed company as set out in the latest financial statement of The Company.
During the period from 1 January to 28 June 2018, the total government grant received by The
Company and its subsidiaries was RMB27,479,458.67 which included the aforesaid enterprise
policy fund, among which, the government grant related to income was RMB25,687,858.67 and
government grant related to assets was RMB1,791,600.00. Found more on appointed media
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.
2018-041) on 29 June 2018.
(xii) In order to consolidate the coordination effect between The Company and Sichuan
Changhong (the controlling shareholder of The Company) and to achieve combined brand influence,
further expand market and improve its capability of bargaining, The Company convened the 12th
meeting of the 9th session of the board and the 2nd extraordinary general meeting for 2018 on 4
June and 21 June 2018 respectively to consider and approve the Proposal on Planned Change of the
Full Name of The Company and the Abbreviated Name of Securities, pursuant to which, it was
agreed that the full name of The Company changed from “合肥美菱股份有限公司” to “长虹美菱
股份有限公司” (for Chinese name) and from “HEFEI MEILINGCO.,LTD.” to “CHANGHONG
MEILING CO.,LTD.” (for English name). meanwhile, the abbreviated name of the A shares
changed from “Meiling Appliances” to “Changhong Meiling” , and for B shares, from “Wanmeiling
B” to “Hongmeiling B”. The Company obtained the updated business license from Anhui Business
and Commercial Administrative Bureau on 2 July 2018, since then, The Company name was
officially changed from “合肥美菱股份有限公司” to “长虹美菱股份有限公司” while other items
in the business license kept unchanged.
Upon application of The Company and authorization by the Shenzhen Stock Exchange, the
abbreviated name of A shares changed from “Meiling Appliances” to “Changhong Meiling”, and for
78
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
B shares, changed from “Wanmeiling B” to “Hongmeiling B” since 3 July 2018, while the stock
codes of the A shares (000521) and B shares (200521) and business scope maintained unchanged.
Found more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the Company disclosed in the form of
announcement (Announcement No. 2018-032, No. 2018-033, No. 2018-034, No. 2018-036, No.
2018-038 and No.2018-043) on 5 June 2018, 22 June and 3 July.
XVII. Major event of the subsidiary
□Applicable √ Not applicable
79
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section VI. Changes in shares and particular about shareholders
I. Changes in shares
(i) Changes in shares
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
New Capitalization
Proporti Bonus Proporti
Amount shares of public Others Subtotal Amount
on shares on
issued reserve
I. Restricted shares 80,858,588 7.74% 0 0 0 -397,780 -397,780 80,460,808 7.70%
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
2. State-owned legal person’s 70,793,625 6.78% 0 0 0 0 0 70,793,625 6.78%
shares
3. Other domestic shares 8,797,543 0.84% 0 0 0 -397,780 -397,780 8,399,763 0.80%
Including: Domestic legal 4,716,077 0.45% 0 0 0 0 0 4,716,077 0.45%
person’s shares
Domestic natural person’s 4,081,466 0.39% 0 0 0 -397,780 -397,780 3,683,686 0.35%
shares
4. Foreign shares 1,267,420 0.12% 0 0 0 0 0 1,267,420 0.12%
Including: Foreign legal 0 0.00% 0 0 0 0 0 0 0.00%
person’s shares
Foreign natural person’s 1,267,420 0.12% 0 0 0 0 0 1,267,420 0.12%
shares
II. Unrestricted shares 963,739,293 92.26% 0 0 0 397,780 397,780 964,137,073 92.30%
1. RMB ordinary shares 802,142,713 76.79% 0 0 0 397,780 397,780 802,540,493 76.83%
2. Domestically listed foreign 161,596,580 15.47% 0 0 0 0 0 161,596,580 15.47%
shares
3. Overseas listed foreign 0.00% 0 0 0 0 0 0 0.00%
shares
4. Others 0.00% 0 0 0 0 0.00%
III. Total shares 1,044,597,881 100% 0 0 0 0 0 1,044,597,881 100%
1. Reasons for share changed
√ Applicable □ Not applicable
(1) In reporting period, the new director of the 9th BOD Mr. Hu Zhaogui holds 178,050 shares
of the Company, and the 75% shares held by Hu (that is 133,537 shares) are locked up for relevant
regulations since he serves director and deputy president of the Company in reporting period.
80
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
(2) In reporting period, former director Mr. Teng Guangsheng leave the office not for 6 months,
and according to relevant regulations, since Mr. Teng leave the office, the 25% un-lock shares of the
117,600 shares held by Teng are lock for trading.
(3) On 21 November 2017, the original vice president Mr. Liao Tao resigned from the position
of vice president due to work remove, and the original term of Mr. Liao Tao would have expired on
12 September 2020. according to the relevant requirements of the Implementation Rules on
Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Management of Listed
Companies Issued by Shenzhen Stock Exchange, lockup on 176,242 shares held by Mr. Liao Tao in
The Company (accounting for 25% of the total shares held by him) were released during the
Reporting Period, and the remaining shares held by him would be continually locked up.
(4)On 24 October 2017, the original vice president and financial principal Mr. Zhang Xiaolong
resigned from the position of vice president and financial principal due to work remove, and the
original term of Mr. Zhang Xiaolong would have expired on 12 September 2020. according to the
relevant requirements of the Implementation Rules on Shareholding Reduction by Shareholders,
Directors, Supervisors and Senior Management of Listed Companies Issued by Shenzhen Stock
Exchange, lockup on 121,175 shares held by Mr. Zhang Xiaolong in The Company (accounting for
25% of the total shares held by him) were released during the Reporting Period, and the remaining
shares held by him would be continually locked up.
2. Approval of share changed
□ Applicable √ Not applicable
3. Ownership transfer of share changed
□Applicable √Not applicable
4. Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets
per share attributable to common shareholders of Company in latest year and period
□ Applicable √ Not applicable
5. Other information necessary to disclose for the Company or need to disclosed under
requirement from security regulators
□ Applicable √ Not applicable
(ii) Changes of restricted shares
√ Applicable □ Not applicable
In Share
Sharehol Opening Shares Restricted Ending
Restricted reasons Date for released
ders shares released in Shares shares
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
restricted Period Increased In restricted
the Period
25% of the Company’s stock held by Hu can be lifted the
restrictions each year, at the same time, see details on “III
Hu Share lockup in
0 - 133,537 133,537 The commitments” of “Section V Important Matters”in
Zhaogui senior executives
Annual Report 2017 if the stock held by Hu has other
restrictions.
On 2 June 2018, Teng resigned from director of the
Company for personal reasons, the original expired office
term would have expired on 12 September 2020.
According to the relevant requirements of the
Implementation Rules on Shareholding Reduction by
Shareholders, Directors, Supervisors and Senior
Teng Management of Listed Companies Issued by Shenzhen
Share lockup in
Guangsh 88,200 - 29,400 117,600
senior executives Stock Exchange, where a director, supervisor or senior
eng
management resigns prior to expiration of his term,
shares transferred each year during the term as
determined when he takes the position and the six months
upon expiration of his term shall not exceed 25% of the
total shares held by him in The Company, and he is not
allowed to transfer the shares held by him in The
Company within six months after his resignation.
On 12 September 2017, Yu did not served as chairman of
Yu the supervisory of the Company for change the term of
Share lockup in
Wanchu 263,300 263,300 0 0 Supervisory. During the period, Yu has leaved the office
senior executives
n for 6 months, shares held by Yu are released for trading in
total.
On 21 Nov. 2017, Liao resigned from deputy president of
the Company for work remove, the original office term
would have expired on 12 September 2020. According to
the relevant requirements of the Implementation Rules on
Share lockup in Shareholding Reduction by Shareholders, Directors,
Liao Tao 704,966 176,242 0 528,724
senior executives Supervisors and Senior Management of Listed
Companies Issued by Shenzhen Stock Exchange, where a
director, supervisor or senior management resigns prior to
expiration of his term, shares transferred each year during
the term as determined when he takes the position and the
six months upon expiration of his term shall not exceed
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
25% of the total shares held by him in The Company, and
he is not allowed to transfer the shares held by him in
The Company within six months after his resignation.
On 24 Oct. 2017, Zhang resigned from deputy president
and CFO of the Company for work remove, the original
office term would expire on 12 September 2020.
According to the relevant requirements of the
Implementation Rules on Shareholding Reduction by
Shareholders, Directors, Supervisors and Senior
Zhang Share lockup in Management of Listed Companies Issued by Shenzhen
484,700 121,175 0 363,525
Xiaolong senior executives Stock Exchange, where a director, supervisor or senior
management resigns prior to expiration of his term,
shares transferred each year during the term as
determined when he takes the position and the six months
upon expiration of his term shall not exceed 25% of the
total shares held by him in The Company, and he is not
allowed to transfer the shares held by him in The
Company within six months after his resignation.
Total 1,541,166 560,717 162,937 1,143,386 -- --
II. Security offering and listing
□ Applicable √ Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In share
Total common shareholders in reporting Total preference shareholders with voting rights recovered at
60,629 -
period-end end of reporting period (if applicable) (note 8)
Particulars about shares held above 5% by common shareholders or top 10 common shares holding
Number of share
Total common Amount of Amount of
Proporti pledged/frozen
Nature of on of shareholders at Changes in restricted un-restricted
Full name of Shareholders State
shareholder shares the end of report report period common common shares
held of Amount
period shares held held
share
State-owned
Sichuan Changhong Electric Co., Ltd. 22.47% 234,705,968 0 69,877,638 164,828,330 -- --
legal person
Hefei Industry Investment Holding State-owned
4.58% 47,823,401 0 0 47,823,401 -- --
(Group) Co., Ltd. legal person
CHANGHONG (HK) TRADING Foreign legal 2.96% 30,895,442 0 0 30,895,442 -- --
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
LIMITED (note 1) person
Ping An Annuity Insurance Company
Domestic non
of China, Ltd. – Ping An Pension
state-owned 2.26% 23,613,595 0 0 23,613,595 -- --
Ruifu private placement No.1 Assets
corporate
Management Products
Foreign
CAO SHENGCHUN 1.32% 13,829,383 0 0 13,829,383 -- --
natural person
Domestic non
Ping An UOB-Ping An Bank-Guohai
state-owned 1.20% 12,522,361 0 0 12,522,361 -- --
Securities Co., Ltd.
corporate
Caitong Fund- Ningbo Bank-Haitong
Domestic non
Xingtai (Anhui) Emerging Industry
state-owned 1.03% 10,733,452 0 0 10,733,452 -- --
Investment Fund (Limited
corporate
Partnership)
Domestic non
National Social Security Funds-504 state-owned 0.94% 9,838,998 0 0 9,838,998 -- --
corporate
Domestic non
Caitong Fund- CEB – Soochow
state-owned 0.80% 8,370,031 -574,513 0 8,370,031 -- --
Securities Co., Ltd.
corporate
Shenzhen Dewei Capital Investment
Domestic non
Management Co., Ltd. – Dewei
state-owned 0.78% 8,167,695 8,167,695 0 8,167,695 -- --
Capital Commodity No.1 Private
corporate
Equity
Strategy investors or general legal person becomes
Not applicable
top 10 shareholders due to rights issued (if applicable)
Among the above shareholders, CHANGHONG (HK) TRADING LIMITED is the
wholly-owned subsidiary of Sichuan Changhong Electronic Co., Ltd.; there existed no
associated relationship or belong to the concerted actors as specified in the Measures for the
Administration of Information Disclosure of Shareholder Equity Changes of Listed Companies
among Sichuan Changhong Electronic Co., Ltd., CHANGHONG (HK) TRADING LIMITED.
and other top 8 shareholders;
Ping An Annuity Insurance Company of China, Ltd. – Ping An Pension Ruifu private
Explanation on associated relationship among the
placement No.1 Assets Management Products has subscribed the products managed by Ping An
aforesaid shareholders
Annuity Insurance Company of China, Ltd. in the Company's non-public offering of shares in
2016; Ping An UOB-Ping An Bank-Guohai Securities Co., Ltd. have subscribed the products
managed by Ping An Dahua Fund Management Co., Ltd. in the Company's non-public offering
of shares in 2016; Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry
Investment Fund (Limited Partnership) and Caitong Fund- CEB – Soochow Securities Co.,
Ltd. have subscribed the products managed by Caitong Fund Management Co., Ltd. in the
Company's non-public offering of shares in 2016; “National Social Security Funds-504” has
84
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
subscribed the products managed by Harvest Fund Management Co., Ltd. in the Company's
non-public offering of shares in 2016. The Company neither knows whether there is any
association among other shareholders, nor knows whether other shareholders belong to the
persons acting in concert that is stipulated in the “Administrative Measures on Information
Disclosure of Changes in Shareholding of Listed Companies”.
Particular about top ten common shareholders with un-restrict shares held
Amount of unrestricted common shares held at end of Type of shares
Shareholders’ name
Period Type Amount
Sichuan Changhong Electric Co., Ltd. 164,828,330 RMB ordinary shares 164,828,330
Hefei Industry Investment Holding (Group)
47,823,401 RMB ordinary shares 47,823,401
Co., Ltd.
Domestically listed
CHANGHONG (HK) TRADING LIMITED 30,895,442 30,895,442
foreign shares
Ping An Annuity Insurance Company of China,
Ltd. – Ping An Pension Ruifu private placement 23,613,595 RMB ordinary shares 23,613,595
No.1 Assets Management Products
Domestically listed
CAO SHENGCHUN 13,829,383 13,829,383
foreign shares
Ping An UOB-Ping An Bank-Guohai Securities
12,522,361 RMB ordinary shares 12,522,361
Co., Ltd.
Caitong Fund- Ningbo Bank-Haitong Xingtai
(Anhui) Emerging Industry Investment Fund 10,733,452 RMB ordinary shares 10,733,452
(Limited Partnership)
National Social Security Funds-504 9,838,998 RMB ordinary shares 9,838,998
Caitong Fund- CEB – Soochow Securities Co.,
8,370,031 RMB ordinary shares 8,370,031
Ltd.
Shenzhen Dewei Capital Investment
Management Co., Ltd. – Dewei Capital 8,167,695 RMB ordinary shares 8,167,695
Commodity No.1 Private Equity
Expiation on associated relationship or
consistent actors within the top 10 un-restrict Found more in relevant notes in “Particulars about shares held above 5% by common shareholders or
shareholders and between top 10 un-restrict top 10 common shares holding”
shareholders and top 10 shareholders
Explanation on top ten common shareholders
Not applicable
involving margin business (if applicable)
Note 1: At end of the reporting period, the person acting in concert with controlling
shareholder Sichuan Changhong-- CHANGHONG (HK) TRADING LIMITED, holds B-stock of
the Company as 30,895,442 shares, among which, 3,817,645 shares are held through Philip
Securities (H.K.) Co., Ltd.
85
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Note 2: In the above table, "the shareholding situation of the shareholders hold more than 5%
of shares or the top ten shareholders" is subject to the data on stock transfer books provided by
China Securities Depository and Clearing Corporation Limited Shenzhen Branch. In 2016, 7 issuing
objects including Sichuan Changhong Electric Co., Ltd. , Ping An Dahua Fund Management Co.,
Ltd., Golden Eagle Fund Management Co., Ltd., Harvest Fund Management Co., Ltd., Ping An
Endowment Insurance Co., Ltd., Rongtong Fund Management Co., Ltd., and Caitong Fund
Management Co., Ltd. have subscribed the Company’s non-public offering of shares in 2016. Up to
the reporting date, other six issuing objects, except Sichuan Changhong, holds 210,981,038 shares
in total with 12 months restriction term expired, the shares are listed for trading on 16 October 2017.
More details can be found on relevant announcement respectively released on 13 October 2016 and
13 October 2017 (Announcement No.: 2016-057 and No.: 2017-079)
Whether the top ten ordinary shareholders of the company and the top 10 ordinary
shareholders of unrestricted conditions have made the repurchase transactions as agreed during the
reporting period.
□Yes √No
The top ten ordinary shareholders of the company and the top 10 ordinary shareholders of
unrestricted conditions have not made the repurchase transactions as agreed during the reporting
period.
IV. Changes of controlling shareholder or actual controller
Changes of controlling shareholder in reporting period
□ Applicable √ Not applicable
No change of controlling shareholder in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controller in reporting period.
86
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting period.
87
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section VIII. Particular about Directors, Supervisors and Senior
Executives
I. Changes of shares held by directors, supervisors and senior executive
□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executive of the Company had no changes,
more details can be seen in Annual Report 2017.
II. Changes of directors, supervisors and senior executive
√ Applicable □ Not applicable
Name Position Type Date Reasons
Teng Resigned as director of the Company for personal
Director Office leaving 2018-6-2
Guangsheng reasons
Mr. Hu Zhaogui was elected as non-independent
director of 9th BOD in the resolution of 2nd
Director Election 2018-6-21
extraordinary general meeting of 2018, office term
Hu Zhaogui same as the Board
Mr. Hu Zhaogui was appointed as deputy president of
Deputy president Appointment 2018-6-21 the Company in the resolution of 13th session of 9th
BOD, office term same as the Board
88
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section IX Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock
exchange and without due on the date when semi-annual report approved for released or fail to cash
in full on due: No
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Section X. Financial Report
I. Audit reports
Whether the semi-annual report was audited or not
□ Yes √ No
The semi-annual report was not audited.
II. Financial statements
Units in Notes of Financial Statements is RMB
1. Consolidated Balance Sheet
Prepared by ChangHong Meiling Co., Ltd.
2018-6-30
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 3,932,190,042.36 5,283,081,788.04
Settlement provisions
Capital lent
Financial assets measured by
fair value and with variation reckoned 25,071,423.11 15,646,731.48
into current gains/losses
Derivative financial liability
Notes receivable 2,823,082,096.04 2,074,648,484.36
Accounts receivable 2,070,276,216.71 1,780,416,509.02
Accounts paid in advance 156,735,516.96 200,106,216.59
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Interest receivable 1,693,400.99 4,692,303.18
Dividend receivable
Other receivables 63,768,875.04 64,358,959.73
Purchase restituted finance asset
Inventories 3,421,144,669.90 2,918,100,650.27
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Assets held for sale
Non-current asset due within
44,497,902.00
one year
Other current assets 1,955,160,840.92 801,894,930.97
Total current assets 14,449,123,082.03 13,187,444,475.64
Non-current assets:
Loans and payments on behalf
Finance asset available for sales 31,000,000.00 31,000,000.00
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 72,461,723.36 90,534,671.92
Investment real estate 31,984,052.33 9,569,711.72
Fixed assets 1,490,510,897.78 1,439,427,226.50
Construction in progress 348,427,423.70 174,857,717.15
Engineering material
Disposal of fixed asset 75,875,517.11 75,875,517.11
Productive biological asset
Oil and gas asset
Intangible assets 777,802,216.45 772,853,622.41
Expense on Research and
106,692,527.35 85,624,078.79
Development
Goodwill
Long-term expenses to be
1,652,664.54 3,635,861.94
apportioned
Deferred income tax asset 100,035,028.65 90,689,083.63
Other non-current asset
Total non-current asset 3,036,442,051.27 2,774,067,491.17
Total assets 17,485,565,133.30 15,961,511,966.81
Current liabilities:
Short-term loans 1,725,908,730.38 1,631,206,000.00
Loan from central bank
Absorbing deposit and interbank
deposit
Capital borrowed
Financial liability measured by
fair value and with variation reckoned 44,249,602.74 16,034,000.00
into current gains/losses
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Derivative financial liability
Notes payable 4,115,118,363.45 4,006,765,857.99
Accounts payable 4,135,935,489.96 2,869,886,049.19
Accounts received in advance 477,631,553.78 438,386,810.72
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 170,819,594.58 184,819,166.86
Taxes payable 47,888,175.17 61,292,671.72
Interest payable 7,063,981.64 6,441,508.68
Dividend payable 55,793,659.91 2,890,364.80
Other accounts payable 823,635,592.47 834,285,636.00
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Liability held for sale
Non-current liabilities due
264,293,857.23 46,454,376.68
within 1 year
Other current liabilities
Total current liabilities 11,868,338,601.31 10,098,462,442.64
Non-current liabilities:
Long-term loans 2,520,000.00 253,160,000.00
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable 10,630,173.13 10,953,687.53
Long-term wages payable 21,227,330.88 24,645,421.94
Special accounts payable 1,530,000.00 1,530,000.00
Projected liabilities 310,881,492.14 313,013,878.20
Deferred income 109,659,868.71 102,569,955.39
Deferred income tax liabilities 709,021.19
Other non-current liabilities
Total non-current liabilities 457,157,886.05 705,872,943.06
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Total liabilities 12,325,496,487.36 10,804,335,385.70
Owner’s equity:
Share capital 1,044,597,881.00 1,044,597,881.00
Other equity instrument
Including: preferred stock
Perpetual capital
securities
Capital public reserve 2,684,388,223.63 2,684,806,344.07
Less: Inventory shares
Other comprehensive income -14,255,671.73 -7,262,322.02
Reasonable reserve
Surplus public reserve 391,029,420.33 391,029,420.33
Provision of general risk
Retained profit 925,903,130.80 937,894,771.93
Total owner’s equity attributable to
5,031,662,984.03 5,051,066,095.31
parent company
Minority interests 128,405,661.91 106,110,485.80
Total owner’s equity 5,160,068,645.94 5,157,176,581.11
Total liabilities and owner’s equity 17,485,565,133.30 15,961,511,966.81
Legal Representative: Li Wei
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
2. Balance Sheet of Parent Company
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 2,130,159,682.88 3,411,454,144.54
Financial assets measured by
fair value and with variation 25,071,423.11 14,077,531.48
reckoned into current gains/losses
Derivative financial liability
Notes receivable 1,940,771,413.60 1,748,615,925.92
Accounts receivable 1,023,952,726.61 1,372,870,968.26
93
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Account paid in advance 97,965,374.77 162,232,742.46
Interest receivable
Dividends receivable
Other receivables 43,921,115.46 39,849,732.36
Inventories 1,257,464,879.26 1,028,423,929.21
Assets held for sale
Non-current assets maturing
within one year
Other current assets 1,841,691,489.11 615,877,268.44
Total current assets 8,360,998,104.80 8,393,402,242.67
Non-current assets:
Available-for-sale financial
31,000,000.00 31,000,000.00
assets
Held-to-maturity investments
Long-term receivables
Long-term equity
1,737,801,038.34 1,705,007,815.84
investments
Investment real estate 7,789,669.61 7,960,789.08
Fixed assets 953,615,542.13 933,149,895.50
Construction in progress 116,231,600.77 67,205,463.02
Project materials
Disposal of fixed assets 43,582,333.35 43,582,333.35
Productive biological assets
Oil and natural gas assets
Intangible assets 466,332,549.61 457,534,626.06
Research and development
19,913,699.11 23,782,085.92
costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 78,613,204.03 76,015,591.58
Other non-current assets
Total non-current assets 3,454,879,636.95 3,345,238,600.35
Total assets 11,815,877,741.75 11,738,640,843.02
Current liabilities:
Short-term borrowings 1,212,605,090.00 1,186,026,000.00
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Financial liability measured
by fair value and with variation 30,428,250.00 16,034,000.00
reckoned into current gains/losses
Derivative financial liability
Notes payable 1,842,986,040.68 2,001,732,195.76
Accounts payable 2,098,915,225.20 1,674,129,819.20
Accounts received in
86,763,150.83 53,558,493.11
advance
Wage payable 14,123,646.07 33,060,896.41
Taxes payable 16,618,559.68 16,641,410.98
Interest payable 1,168,235.19 3,999,358.60
Dividend payable 55,793,659.91 2,890,364.80
Other accounts payable 741,600,562.10 1,013,257,972.75
Liability held for sale
Non-current liabilities due
257,715,255.68 7,715,255.20
within 1 year
Other current liabilities
Total current liabilities 6,358,717,675.34 6,009,045,766.81
Non-current liabilities:
Long-term loans 2,520,000.00 253,160,000.00
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable
Long-term wages payable 21,227,330.88 24,645,421.94
Special accounts payable
Projected liabilities 310,881,492.14 313,013,878.20
Deferred income 53,049,356.73 56,906,985.04
Deferred income tax
liabilities
Other non-current liabilities
Total non-current liabilities 387,678,179.75 647,726,285.18
Total liabilities 6,746,395,855.09 6,656,772,051.99
Owners’ equity:
Share capita 1,044,597,881.00 1,044,597,881.00
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Other equity instrument
Including: preferred stock
Perpetual capital
securities
Capital public reserve 2,753,017,007.10 2,753,017,007.10
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus reserve 390,811,254.65 390,811,254.65
Retained profit 881,055,743.91 893,442,648.28
Total owner’s equity 5,069,481,886.66 5,081,868,791.03
Total liabilities and owner’s
11,815,877,741.75 11,738,640,843.02
equity
Legal Representative: Li Wei
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
3. Consolidated Profit Statement
In RMB
Item Current Period Last Period
I. Total operating income 9,271,509,569.67 8,517,794,193.10
Including: Operating income 9,271,509,569.67 8,517,794,193.10
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 9,260,194,700.16 8,436,805,983.05
Including: Operating cost 7,758,153,561.09 6,996,226,048.85
Interest expense
Commission charge and commission
expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance
contract reserve
96
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Bonus expense of guarantee slip
Reinsurance expense
Operating tax and extras 65,046,860.70 65,836,020.31
Sales expenses 1,189,741,101.32 1,140,172,032.08
Administration expenses 241,775,084.33 222,533,091.74
Financial expenses -13,460,027.93 -33,454,482.67
Losses of devaluation of asset 18,938,120.65 45,493,272.74
Add: Changing income of fair value(Loss is
-18,790,911.11 -10,359,085.30
listed with “-”)
Investment income (Loss is listed with “-”) 14,749,419.09 23,593,349.66
Including: Investment income on affiliated
-15,674,377.81 -3,226,328.17
company and joint venture
Exchange income (Loss is listed with “-”)
Income from assets disposal (Loss is listed
3,283,766.57 -11,098,098.67
with “-”)
Other income 48,561,057.62 23,763,000.16
III. Operating profit (Loss is listed with “-”) 59,118,201.68 106,887,375.90
Add: Non-operating income 4,082,102.58 742,308.82
Less: Non-operating expense 40,791.25 95,425.47
IV. Total Profit (Loss is listed with “-”) 63,159,513.01 107,534,259.25
Less: Income tax expense 10,150,948.29 9,439,557.86
V. Net profit (Net loss is listed with “-”) 53,008,564.72 98,094,701.39
(i) net profit from continuous operation
53,008,564.72 98,094,701.39
(Net loss is listed with “-”)
(ii) net profit from discontinued operation
(Net loss is listed with “-”)
Net profit attributable to owner’s of parent
50,684,231.73 92,075,039.77
company
Minority shareholders’ gains and losses 2,324,332.99 6,019,661.62
VI. Net after-tax of other comprehensive income -8,939,360.51 -3,352,515.41
Net after-tax of other comprehensive income
-6,993,349.71 -2,536,079.62
attributable to owners of parent company
(i) Other comprehensive income items
which will not be reclassified subsequently to
profit of loss
1. Changes as a result of
re-measurement of net defined benefit plan
97
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
liability or asset
2. Share of the other comprehensive
income of the investee accounted for using equity
method which will not be reclassified
subsequently to profit and loss
(ii) Other comprehensive income items
which will be reclassified subsequently to profit -6,993,349.71 -2,536,079.62
or loss
1. Share of the other comprehensive
income of the investee accounted for using equity
method which will be reclassified subsequently
to profit or loss
2. Gains or losses arising from
changes in fair value of available-for-sale
financial assets
3. Gains or losses arising from
reclassification of held-to-maturity investment as
available-for-sale financial assets
4. The effect hedging portion of
gains or losses arising from cash flow hedging
instruments
5. Translation differences arising on
translation of foreign currency financial -6,993,349.71 -2,536,079.62
statements
6. Other
Net after-tax of other comprehensive income
-1,946,010.80 -816,435.79
attributable to minority shareholders
VII. Total comprehensive income 44,069,204.21 94,742,185.98
Total comprehensive income attributable to
43,690,882.02 89,538,960.15
owners of parent Company
Total comprehensive income attributable to
378,322.19 5,203,225.83
minority shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0485 0.0881
(ii) Diluted earnings per share 0.0485 0.0881
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before
combination while 0 Yuan achieved last period
Legal Representative: Li Wei
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
4. Profit Statement of Parent Company
In RMB
Item Current period Last period
I. Operation income 4,393,245,102.05 4,129,608,352.50
Less: Operating cost 3,953,902,686.95 3,775,369,456.26
Tax and extras 29,723,713.26 27,722,529.70
Sales expenses 300,004,706.73 231,438,219.07
Administration expenses 103,842,950.79 109,065,216.23
Financial expenses 13,171,889.86 -37,206,339.33
Losses of devaluation of asset 4,217,403.31 4,856,561.37
Add: Changing income of fair value(Loss
-3,400,358.37 -10,927,134.88
is listed with “-”)
Investment income (Loss is listed with
23,950,589.55 29,730,083.95
“-”)
Including: Investment income on
2,089,222.50 3,105,463.66
affiliated company and joint venture
Income from assets disposal (Loss
-877,303.84 -1,443,561.25
is listed with “-”)
Other income 36,053,817.83 7,156,694.17
II. Operating profit (Loss is listed with “-”) 44,108,496.32 42,878,791.19
Add: Non-operating income 3,746,592.46 262,024.81
Less: Non-operating expense 4,340.60
III. Total Profit (Loss is listed with “-”) 47,855,088.78 43,136,475.40
Less: Income tax expense -2,433,879.71 3,997,506.37
IV. Net profit (Net loss is listed with “-”) 50,288,968.49 39,138,969.03
(i) net profit from continuous operation
50,288,968.49 39,138,969.03
(Net loss is listed with “-”)
(ii) net profit from discontinued operation
(Net loss is listed with “-”)
V. Net after-tax of other comprehensive income
(i) Other comprehensive income items
which will not be reclassified subsequently to
profit of loss
99
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
1. Changes as a result of
re-measurement of net defined benefit plan
liability or asset
2. Share of the other
comprehensive income of the investee
accounted for using equity method which will
not be reclassified subsequently to profit and
loss
(ii) Other comprehensive income items
which will be reclassified subsequently to profit
or loss
1. Share of the other
comprehensive income of the investee
accounted for using equity method which will
be reclassified subsequently to profit or loss
2. Gains or losses arising from
changes in fair value of available-for-sale
financial assets
3. Gains or losses arising from
reclassification of held-to-maturity investment
as available-for-sale financial assets
4. The effect hedging portion of
gains or losses arising from cash flow hedging
instruments
5. Translation differences arising
on translation of foreign currency financial
statements
6. Other
VI. Total comprehensive income 50,288,968.49 39,138,969.03
VII. Earnings per share:
(i) Basic earnings per share 0.0481 0.0375
(ii) Diluted earnings per share 0.0481 0.0375
Legal Representative: Li Wei
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
5. Consolidated Cash Flow Statement
In RMB
100
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Item Current period Last period
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
7,815,961,903.35 6,755,539,540.78
labor services
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial
institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Net increase of amount from disposal financial assets
that measured by fair value and with variation reckoned
into current gains/losses
Cash received from interest, commission charge and
commission
Net increase of capital borrowed
Net increase of returned business capital
Write-back of tax received 287,003,816.39 205,339,020.51
Other cash received concerning operating activities 125,462,336.78 16,569,072.09
Subtotal of cash inflow arising from operating activities 8,228,428,056.52 6,977,447,633.38
Cash paid for purchasing commodities and receiving
6,674,753,714.94 5,258,471,672.84
labor service
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract
compensation
Cash paid for interest, commission charge and
commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 812,465,740.75 704,133,083.60
Taxes paid 176,250,920.48 210,338,863.27
Other cash paid concerning operating activities 404,468,319.29 320,273,315.76
Subtotal of cash outflow arising from operating activities 8,067,938,695.46 6,493,216,935.47
Net cash flows arising from operating activities 160,489,361.06 484,230,697.91
II. Cash flows arising from investing activities:
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Cash received from recovering investment 1,100,000,000.00 1,457,000,000.00
Cash received from investment income 19,903,288.36 27,800,453.69
Net cash received from disposal of fixed, intangible
335,030.00 2,614,755.73
and other long-term assets
Net cash received from disposal of subsidiaries and
other units
Other cash received concerning investing activities 84,470,020.72 41,477,206.87
Subtotal of cash inflow from investing activities 1,204,708,339.08 1,528,892,416.29
Cash paid for purchasing fixed, intangible and other
271,319,288.71 239,785,175.33
long-term assets
Cash paid for investment 2,280,000,001.00 1,853,000,021.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units
obtained
Other cash paid concerning investing activities 270,000.00 998,270.61
Subtotal of cash outflow from investing activities 2,551,589,289.71 2,093,783,466.94
Net cash flows arising from investing activities -1,346,880,950.63 -564,891,050.65
III. Cash flows arising from financing activities
Cash received from absorbing investment 24,865,000.00 20,000,000.00
Including: Cash received from absorbing minority
24,865,000.00
shareholders’ investment by subsidiaries
Cash received from loans 1,505,066,261.86 1,685,653,798.22
Cash received from issuing bonds
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 1,529,931,261.86 1,705,653,798.22
Cash paid for settling debts 1,614,170,535.14 737,057,083.32
Cash paid for dividend and profit distributing or
53,723,439.04 57,193,407.84
interest paying
Including: Dividend and profit of minority shareholder
paid by subsidiaries
Other cash paid concerning financing activities 2,015,179.95 151,611.24
Subtotal of cash outflow from financing activities 1,669,909,154.13 794,402,102.40
Net cash flows arising from financing activities -139,977,892.27 911,251,695.82
IV. Influence on cash and cash equivalents due to
2,847,735.86 -7,231,244.45
fluctuation in exchange rate
V. Net increase of cash and cash equivalents -1,323,521,745.98 823,360,098.63
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Add: Balance of cash and cash equivalents at the
5,089,765,770.39 3,986,098,419.76
period -begin
VI. Balance of cash and cash equivalents at the period -end 3,766,244,024.41 4,809,458,518.39
Legal Representative: Li Wei
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
6. Cash Flow Statement of Parent Company
In RMB
Item Current period Last period
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
3,719,566,923.02 2,847,697,427.41
labor services
Write-back of tax received 119,492,496.21 97,733,874.40
Other cash received concerning operating activities 42,262,676.35 13,343,872.91
Subtotal of cash inflow arising from operating activities 3,881,322,095.58 2,958,775,174.72
Cash paid for purchasing commodities and receiving
3,286,810,130.57 3,270,599,036.24
labor service
Cash paid to/for staff and workers 263,976,937.91 292,673,473.80
Taxes paid 41,814,106.04 39,983,393.59
Other cash paid concerning operating activities 165,818,202.68 111,308,401.29
Subtotal of cash outflow arising from operating activities 3,758,419,377.20 3,714,564,304.92
Net cash flows arising from operating activities 122,902,718.38 -755,789,130.20
II. Cash flows arising from investing activities:
Cash received from recovering investment 1,060,000,000.00 1,430,000,000.00
Cash received from investment income 22,524,918.51 27,605,396.15
Net cash received from disposal of fixed, intangible
220,000.00 566,647.40
and other long-term assets
Net cash received from disposal of subsidiaries and
other units
Other cash received concerning investing activities 72,631,956.88 41,875,620.90
Subtotal of cash inflow from investing activities 1,155,376,875.39 1,500,047,664.45
Cash paid for purchasing fixed, intangible and other
84,879,645.66 190,548,277.28
long-term assets
103
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Cash paid for investment 2,290,704,000.00 1,494,528,000.00
Net cash received from subsidiaries and other units
Other cash paid concerning investing activities 30,000,000.00 998,270.61
Subtotal of cash outflow from investing activities 2,405,583,645.66 1,686,074,547.89
Net cash flows arising from investing activities -1,250,206,770.27 -186,026,883.44
III. Cash flows arising from financing activities
Cash received from absorbing investment
Cash received from loans 1,144,720,995.00 1,633,110,198.22
Cash received from issuing bonds
Other cash received concerning financing activities 6,540,910.71 142,854,592.22
Subtotal of cash inflow from financing activities 1,151,261,905.71 1,775,964,790.44
Cash paid for settling debts 1,133,072,000.00 737,057,083.32
Cash paid for dividend and profit distributing or
48,536,956.18 56,234,951.49
interest paying
Other cash paid concerning financing activities 119,502,958.37 35,096,664.55
Subtotal of cash outflow from financing activities 1,301,111,914.55 828,388,699.36
Net cash flows arising from financing activities -149,850,008.84 947,576,091.08
IV. Influence on cash and cash equivalents due to
-2,715,680.93 -4,752,741.88
fluctuation in exchange rate
V. Net increase of cash and cash equivalents -1,279,869,741.66 1,007,335.56
Add: Balance of cash and cash equivalents at the
3,410,029,424.54 3,067,671,385.08
period -begin
VI. Balance of cash and cash equivalents at the period -end 2,130,159,682.88 3,068,678,720.64
Legal Representative: Li Wei
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
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CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
Current period
Owners’ equity attributable to parent company
Other
equity instrument Reas
Item Less: Provisio Minority Total owners’
Perpetu Other onabl
Invento Surplus n of Retained interests equity
Share capital al Capital reserve comprehensiv e
Preferred ry reserve general profit
capital Other e income reser
stock shares risk
securiti ve
es
I. Balance at the end of
1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 106,110,485.80 5,157,176,581.11
the last year
Add: Changes of
accounting policy
Error correction
of the last period
Enterprise
combined under the same
control
Other
II. Balance at the
1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 106,110,485.80 5,157,176,581.11
beginning of this year
III. Increase/ Decrease in
this year (Decrease is -418,120.44 -6,993,349.71 -11,991,641.13 22,295,176.11 2,892,064.83
listed with “-”)
(i) Total comprehensive
-6,993,349.71 50,684,231.73 378,322.19 44,069,204.21
income
(ii) Owners’ devoted
-418,120.44 22,865,000.00 22,446,879.56
and decreased capital
105
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
1.Common shares
22,865,000.00 22,865,000.00
invested by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other -418,120.44 -418,120.44
(III) Profit distribution -62,675,872.86 -948,146.08 -63,624,018.94
1. Withdrawal of surplus
reserves
2. Withdrawal of general
risk provisions
3. Distribution for owners
-62,675,872.86 -1,366,265.52 -64,042,138.38
(or shareholders)
4. Other 418,119.44 418,119.44
(IV) Carrying forward
internal owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
conversed to capital
(share capital)
3. Remedying loss with
surplus reserve
4. Other
(V) Reasonable reserve
1. Withdrawal in the
report period
2. Usage in the report
period
106
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
(VI)Others
IV. Balance at the end of
1,044,597,881.00 2,684,388,223.63 -14,255,671.73 391,029,420.33 925,903,130.80 128,405,661.91 5,160,068,645.94
the report period
Last period
In RMB
Last period
Owners’ equity attributable to parent company
Other
equity instrument Reas
Item Less: Provisio Minority Total owners’
Perpetu Other onabl
Invento Surplus n of Retained interests equity
Share capital al Capital reserve comprehensiv e
Preferred ry reserve general profit
capital Other e income reser
stock shares risk
securiti ve
es
I. Balance at the end of
1,044,597,881.00 2,687,961,060.65 3,474,546.95 391,029,420.33 968,097,382.98 70,921,198.01 5,166,081,489.92
the last year
Add: Changes of
accounting policy
Error correction
of the last period
Enterprise
combined under the same
control
Other
II. Balance at the
1,044,597,881.00 2,687,961,060.65 3,474,546.95 391,029,420.33 968,097,382.98 70,921,198.01 5,166,081,489.92
beginning of this year
III. Increase/ Decrease in
this year (Decrease is -3,154,716.58 -10,736,868.97 -30,202,611.05 35,189,287.79 -8,904,908.81
listed with “-”)
(i) Total comprehensive
-10,736,868.97 32,473,204.92 3,621,327.79 25,357,663.74
income
107
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
(ii) Owners’ devoted and
-3,154,716.58 31,567,960.00 28,413,243.42
decreased capital
1.Common shares
32,255,000.00 32,255,000.00
invested by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4 Other -3,154,716.58 -687,040.00 -3,841,756.58
(III) Profit distribution -62,675,815.97 -62,675,815.97
1. Withdrawal of surplus
reserves
2. Withdrawal of general
risk provisions
3. Distribution for owners
-62,675,815.97 -62,675,815.97
(or shareholders)
4. Other
(IV) Carrying forward
internal owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
conversed to capital
(share capital)
3. Remedying loss with
surplus reserve
4. Other
(V) Reasonable reserve
1. Withdrawal in the
report period
108
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
2. Usage in the report
period
(VI)Others
IV. Balance at the end of
1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 106,110,485.80 5,157,176,581.11
the report period
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Luo Bo
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
Current period
Other
Other
Item equity instrument Less:
compreh Reasonabl Total owners’
Share capital Perpetual Capital reserve Inventor Surplus reserve Retained profit
Preferred ensive e reserve equity
capital Other y shares
stock income
securities
I. Balance at the end of the last year 1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
Add: Changes of accounting
policy
Error correction of the last
period
Other
II. Balance at the beginning of this
1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
year
III. Increase/ Decrease in this year
-12,386,904.37 -12,386,904.37
(Decrease is listed with “-”)
(i) Total comprehensive income 50,288,968.49 50,288,968.49
(ii) Owners’ devoted and decreased
capital
1.Common shares invested by
109
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
shareholders
2. Capital invested by holders of
other equity instruments
3. Amount reckoned into owners
equity with share-based payment
4. Other
(III) Profit distribution -62,675,872.86 -62,675,872.86
1. Withdrawal of surplus reserves
2. Distribution for owners (or
-62,675,872.86 -62,675,872.86
shareholders)
3. Other
(IV) Carrying forward internal
owners’ equity
1. Capital reserves conversed to
capital (share capital)
2. Surplus reserves conversed to
capital (share capital)
3. Remedying loss with surplus
reserve
4. Other
(V) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(VI)Others
IV. Balance at the end of the report
1,044,597,881.00 2,753,017,007.10 390,811,254.65 881,055,743.91 5,069,481,886.66
period
Last period
In RMB
Last period
Item Other Less: Other Reasonabl Total owners’
Share capital Capital reserve Surplus reserve Retained profit
equity instrument Inventor compreh e reserve equity
110
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
Perpetual y shares ensive
Preferred
capital Other income
stock
securities
I. Balance at the end of the last year 1,044,597,881.00 2,753,017,007.10 390,811,254.65 956,339,194.01 5,144,765,336.76
Add: Changes of accounting
policy
Error correction of the last
period
Other
II. Balance at the beginning of this
1,044,597,881.00 2,753,017,007.10 390,811,254.65 956,339,194.01 5,144,765,336.76
year
III. Increase/ Decrease in this year
-62,896,545.73 -62,896,545.73
(Decrease is listed with “-”)
(i) Total comprehensive income -220,729.76 -220,729.76
(ii) Owners’ devoted and decreased
capital
1.Common shares invested by
shareholders
2. Capital invested by holders of other
equity instruments
3. Amount reckoned into owners
equity with share-based payment
4. Other
(III) Profit distribution -62,675,815.97 -62,675,815.97
1. Withdrawal of surplus reserves
2. Distribution for owners (or
-62,675,815.97 -62,675,815.97
shareholders)
3. Other
(IV) Carrying forward internal
owners’ equity
1. Capital reserves conversed to
capital (share capital)
2. Surplus reserves conversed to
111
CHANGHONG MEILING CO., LTD SEMI-ANNUAL REPORT 2018
capital (share capital)
3. Remedying loss with surplus
reserve
4. Other
(V) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(VI)Others
IV. Balance at the end of the report
1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
period
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Luo Bo
112
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
I. Company profile
Changhong Meiling Co., Ltd (hereinafter referred to as “the Company”) is an incorporated Company
established and reorganized by Hefei Meiling Refrigerator General Factory and approved on June 12 th
1992 through [WanTiGaiHanZi (1992) No.039] issued by original Mechanism Reform Committee of
Anhui Province. On August 30th 1993, through Anhui Provincial Government [Wanzhenmin (1993)
No.166] and re-examination of China Securities Regulatory Commission, the Company made first
public issue for 30 million A shares and the Company was listed on Oct. 18th, 1993 in Shenzhen Stock
Exchange. On August 13th, 1996, the Company was approved to issue 100 million B shares to investors
abroad through [ZhengWeiFa (1996) No.26] issued by China Securities Regulatory Commission. The
Company went public in Shenzhen Stock Exchange on August 28th, 1996.
State-owned Assets Supervision & Administration Commission of the State Council approved such
transfers with Document Guozi Chanquan No.253 in 2007 Reply on Matters of Hefei Meiling Group
Holdings Company Limited Transferring Partial State-owned Ownership, Hefei Meiling Group
Holdings Company Limited (hereinafter abbreviated as Meiling Group) transferred its holding
37,852,683 shares in 82,852,683 state-owned shares of the Company to Sichuan Changhong Electronic
Group Co., Ltd (hereinafter abbreviated as Changhong Group), other 45,000,000 shares to Sichuan
Changhong Electric Co. Ltd (hereinafter abbreviated as Sichuan Changhong). On Aug 15, 2007, the
above ownerships were transferred and Cleaning Corporation Limited.
On 27 August 2007, State-owned Assets Supervision & Administration Commission of Anhui Provincial
Government replied with Document [WGZCQH (2007) No.309] Reply on “Related Matters of Share
Merger Reform of Meiling Co., Ltd.”, agreed the Company’s ownership split reform plan. The
Company made consideration that non-tradable share holders deliver 1.5 shares to A share holders per
10 shares, and original Meiling Group made prepayment 3,360,329 shares for some non-tradable share
holders as consideration for split reform plan.
On 29 May 2008, concerning 34,359,384 state-owned shares (including 3,360,329 shares paid for other
non-tradable shareholders by original Meiling Group in share reform) held by original Meiling Group,
the “Notice of Freely Transfer of Meiling Electrics Equity held by Meiling Group”[HGZCQ(2008) No.
59] issued from State-owned Assets Supervision & Administration Commission of Hefei Municipal,
agrees to transfer the above said shares to Hefei Xingtai Holding Group Co., Ltd.(“Xingtai Holding
Co.,”) for free. On 7 August 2008, the “Reply of Transfer Freely of Part of the Shares of Hefei Meiling
Co., Ltd. held by State-owned shareholders” [GZCQ (2007) No. 750] issued by SASAC, agrees the
above said transferring.
On October 29, 2008, Changhong Group Company signed Agreement on Equity Transfer of Hefei
113
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
Meiling Co., Ltd with Sichuan Changhong, in which 32,078,846 tradable A-shares with conditional
subscription of the Company (accounting for 7.76% in total shares) held by Changhong Group
Company. On 23 December 2008, “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co.,
Ltd. held by State-owned shareholders” [GZCQ (2008) No. 1412] issued by SASAC agrees the above
said share transferring.
On 24 December 2010, being deliberated and approved in 32nd Meeting of 6th Session of the Board and
2nd Extraordinary Shareholders’ General Meeting of 2010 as well as approval of document [ZJXP(2010)
No. 1715] from CSRC, totally 116,731,500 RMB ordinary shares (A stock) were offering privately to
target investors with issue price of RMB 10.28/share. Capital collecting amounting to RMB
1,199,999,820 after issuing expenses RMB 22,045,500 deducted, net capital collected amounting to
RMB 1,177,954,320, and paid-in capital(share capital) increased RMB 116,731,500 with capital
reserve(share premium) RMB 1,061,106,088.5 increased. The increasing capital has been verified by
Capital Verification Report No.: ［XYZH2010CDA6021］issued from Shinwing CPA Co., Ltd.
On 20 June 2011, the general meeting of the Company considered and approved the 2010 profit
distribution plan, namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for
every ten shares held by shareholders to all shareholders, based on the total share capital of 530,374,449
shares as of 31 December 2010. The total share capital of the Company upon profit distribution
increased to 636,449,338 shares. The capital increase was verified by Anhui Huashen Zhengda
Accounting Firm with the verification report WHSZDKYZ (2011) No.141.
On 26 June 2012, the general meeting of the Company considered and approved the 2011 profit
distribution and capitalization of capital reserve plan, namely to distribute cash dividends of RMB0.5
(tax included) plus two shares for every ten shares to all shareholders capitalized from capital reserve,
based on the total share capital of 636,449,338 shares as of 31 December 2011. The total share capital of
the Company upon implementation of capitalization of capital reserve increased to 763,739,205 shares
from 636,449,338 shares, and was verified by Anhui Anlian Xinda Accounting Firm with the
verification report WALXDYZ (2012) No.093.
On November 18, 2015, considered and approved by the 12th meeting of the 8th Board of Directors of
the company and the first extraordinary general meeting in 2016, and approved by the document of
China Securities Regulatory Commission [CSRC License No. (2016) 1396] “Reply to the approval of
non-public offering of shares of Hefei Meiling Co., Ltd.”, the company has actually raised funds of
1,569,999,998.84 Yuan by non-public offering of no more than 334,042,553 new shares at face value
of RMB 1 Yuan per share and with issue price no less than RMB 4.70 per share, after deducting the
issue costs of 29,267,276.08 Yuan , the net amount of raised funds is 1,540,732,722.76 Yuan , the
114
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
increased paid-in capital (share capital) of RMB 280,858,676.00 Yuan , increased capital reserve (share
premium) of 1,259,874,046.76 Yuan . This capital increase has been verified by No.
［XYZH2016CDA40272］capital verification report of ShineWing Certified Public Accountants special
general partnership.
Ended as 30 June 2018, total share capital of the Company amounting to 1,044,597,881shares with
ordinary shares in full. Among which, 881,733,881 shares of A-share accounting 84.41% in total shares
while B-share with 162,864,000 shares accounting 15.59% in total shares. Detail share capital as:
Type of stock Quantity Proportion
(I)Restricted shares 80,460,808 7.70%
1. State-owned shares
2. State-owned legal person’s shares 70,793,625 6.78%
3. Other domestic shares 8,399,763 0.80%
Including: Domestic legal person’s shares 4,716,077 0.45%
Domestic natural person’s shares 3,683,686 0.35%
4. Foreign shares 1,267,420 0.12%
Including: Overseas natural person’s shares 1,267,420 0.12%
(II)Unrestricted shares 964,137,073 92.30%
1. RMB Ordinary shares 802,540,493 76.83%
2. Domestically listed foreign shares 161,596,580 15.47%
3. Overseas listed foreign shares
4. Others
Total shares 1,044,597,881 100.00%
The Company belongs to the manufacture of light industry, and engaged in the production and sale of
refrigerator, freezer and air-conditioner. Unified social credit code of the Company:
9134000014918555XK; Address: No.2163, Lianhua Road, Economy and Technology Development
Zone, Hefei City; Legal Representative: Li Wei; register capital (paid-in capital): RMB 1,044,597,881;
type of company: limited liability company(joint venture and listed of Taiwan, Hong Kong and Macau)
Business Scope: R&D, manufacture and sales of cooling apparatus, air-conditioner, washing machine,
water heater, kitchenware, home decoration, bathroom, lamps & lanterns, household & similar appliance,
injection plastic machine of computer controlling, plastic products, metalwork, packaging products and
decorations as well as the installation and technical consultant services. Business of self-produced
products, technology export and import-export of the raw&auxilary materials, machinery equipment,
instrument and technology; department sales and transportation
II. Scope of consolidated financial statement
The Company’s consolidated financial statement included 47 subsidiaries including Sichuan Changhong
Air Conditioner Co., Ltd, Zhongshan Changhong Home Appliances Company Limited and Zhongke
115
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
Meiling Cryogenic Technology Co., Ltd, etc. As compared to previous year, subsidiary Zhongshan
Hongyou Appliances Co., Ltd. was excluded due to liquidation. More detail can be seen in “VII.
Changes of consolidated scope” and “VIII. Rights and interest in other subjects” in the Note.
III. Basis for preparation of financial statement
1. Basis for preparation
The financial statements of the Company were prepared in accordance with the actual transactions and
proceedings, and relevant regulation of Accounting Standards for Enterprise released by the Ministry of
Finance, and was on the basis of sustainable operation, and the accounting policy and estimation stated
in the “IV. Significant Accounting Policy and Accounting Estimation”
2. Continuous operation
The Company recently has a history of profitability operation and has financial resources supporting,
and prepared the financial statement on basis of going concern is reasonable.
IV. Significant Accounting Policy, Accounting Estimation
1. Statement on observation of accounting standards for enterprise
The financial statement prepared by the Company applies with the requirements of Accounting Standard
for Enterprise, and reflects the financial condition, operational achievements and cash flow of the
Company effectively and completely.
2. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December.
3. Operation cycle
Operation cycle of the Company was 12 months, and it is the standard of flow classification for assets
and liabilities.
4. Standard currency for accounting
The Company takes RMB as the standard currency for accounting.
5. Accountant arrangement method of business combination under common control and not under
common control
As acquirer, the Company measures the assets and liabilities acquired through business combination
under common control at their carrying values as reflected in the consolidated financial statement of the
ultimate controller as of the combination date. Capital reserve shall be adjusted in respect of any
difference between carrying value of the net assets acquired and carrying value of the combination
consideration paid. In case that capital reserve is insufficient to offset, the Company would adjust
retained earnings.
116
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
The acquiree’s net identifiable assets, liabilities or contingent liabilities acquired through business
combination not under common control shall be measured at fair value as of the acquisition date. The
cost of combination represents the fair value of the cash or non-cash assets paid, liabilities issued or
committed and equity securities issued by the Company as at the date of combination in consideration
for acquiring the controlling power in the acquiree, together with the sum of any directly related
expenses occurred during business combination(in case of such business combination as gradually
realized through various transactions, the combination cost refers to the sum of each cost of respective
separate transaction). Where the cost of the combination exceeds the acquirer’s interest in the fair value
of the acquirer’s identifiable net assets acquired, the difference is recognized as goodwill; where the cost
of combination is lower than the acquirer’s interest in the fair value of the acquiree’s identifiable net
assets, the Company shall firstly make further review on the fair values of the net identifiable assets,
liabilities or contingent liabilities acquired as well as the fair value of the non-cash assets portion of
combination consideration or the equity securities issued by the Company. In case that the Company
finds the cost of combination is still lower than the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets after such further review, the difference is recognized in non-operating income for
the current period when combination occurs.
6. Measures on Preparation of Consolidated Financial Statements
The Company shall put all the subsidiaries controlled and main body structured into consolidated
financial statements.
Any difference arising from the inconformity of accounting year or accounting policies between the
subsidiaries and the Company shall be adjusted in the consolidated financial statements.
All the material inter-company transactions, non-extraordinary items and unrealized profit within the
combination scope are written-off when preparing consolidated financial statement. Owners’ equity of
subsidiary not attributable to parent company and current net gains and losses, other comprehensive
income and total comprehensive income attributable to minority shareholders are recognized as
non-controlling interests, minority interests, other comprehensive income attributable to minority
shareholders and total comprehensive income attributable to minority shareholders in consolidated
financial statement respectively.
As for subsidiary acquired through business combination under common control, its operating results
and cash flow will be included in consolidated financial statement since the beginning of the period
when combination occurs. When preparing comparative consolidated financial statement, the relevant
items in previous years financial statement shall be adjusted as if the reporting entity formed upon
combination has been existing since the ultimate controller commenced relevant control.
As for equity interests of the investee under common control acquired through various transactions
which eventually formed business combination, the Company shall supplement disclosure of the
accounting treatment in consolidated financial statement in the reporting period when controlling power
is obtained. For example, as for equity interests of the investee under common control acquired through
117
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
various transactions which eventually formed business combination, adjustments shall be made as if the
current status had been existing when the ultimate controller commenced control in connection of
preparing consolidated financial statement; in connection with preparing comparative statement, the
Company shall consolidate the relevant assets and liabilities of the acquiree into the Company’s
comparative consolidated financial statement to the extent not earlier than the timing when the
Company and the acquiree are all under control of the ultimate controller, and the net assets increased
due to combination shall be used to adjust relevant items under owners’ equity in comparative statement.
In order to prevent double computation of the value of the acquiree’s net assets, the relevant profits and
losses, other comprehensive income and change of other net assets recognized during the period from
the date when the Company acquires original equity interests and the date when the Company and the
acquiree are all under ultimate control of the same party (whichever is later) to the date of combination
in respect of the long-term equity investment held by the Company before satisfaction of combination
shall be utilized to offset the beginning retained earnings and current gains and losses in the period as
the comparative financial statement involves, respectively.
As for subsidiary acquired through business combination not under common control, its operating
results and cash flow will be included in consolidated financial statement since the Company obtains
controlling power. When preparing consolidated financial statement, the Company shall adjust the
subsidiary’s financial statement based on the fair value of the various identifiable assets, liabilities or
contingent liabilities recognized as of the acquisition date.
As for equity interests of the investee not under common control acquired through various transactions
which eventually formed business combination, the Company shall supplement disclosure of the
accounting treatment in consolidated financial statement in the reporting period when controlling power
is obtained. For example, as for equity interests of the investee not under common control acquired
through various transactions which eventually formed business combination, when preparing
consolidated financial statement, the Company would re-measure the equity interests held in the
acquiree before acquisition date at their fair value as of the acquisition date, and any difference between
the fair value and carrying value is included in current investment income. in case that the equity
interests in acquiree held by the Company before the relevant acquisition date involves other
comprehensive income at equity method and change of other owners’ equity (other than net gains and
losses, other comprehensive income and profit distribution), then the equity interests would transfer to
investment gains and losses for the period which the acquisition date falls upon. The other
comprehensive income arising from change of the net liabilities or net assets under established benefit
scheme as acquiree’s re-measured such scheme is excluded.
The transaction with non-controlling interest to dispose long-term equity investment in a subsidiary
without losing control rights over the subsidiary, the difference between the proceeds from disposal of
interests and the decrease of the shared net assets of the subsidiary is adjusted to capital premium (share
premium). In case capital reserve is not sufficient to offset the difference, retained earnings will be
118
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
adjusted.
As for disposal of part equity investment which leads to losing control over the investee, the Company
would re-measure the remaining equity interests at their fair value as of the date when the Company
loses control over the investee when preparing consolidated financial statement. The sum of
consideration received from disposal of equity interest and fair value of the remaining equity interest,
less the net assets of the original subsidiary attributable to the Company calculated based on the original
shareholding proportion since the acquisition date or the date then consolidation commences, is
included in investment gains and losses for the period when control is lost, meanwhile to offset goodwill.
Other comprehensive income related to equity interest investment in original subsidiaries is transferred
into current investment gains and losses upon lost of control.
If the disposal of the equity investment of a subsidiary is realized through multiple transactions until
loss of control and is a package deal, the accounting treatment of these transactions should be dealt with
as one transaction of disposal of the subsidiary until loss of control. However, before the Company
loses total control of the subsidiary, the differences between the actual disposal price and the share of
the net assets of the subsidiary disposed of in every transaction should be recognized as other
comprehensive income in the consolidated financial statements, and transferred to profit or loss when
losing control.
7. Accounting treatment for joint venture arrangement and joint controlled entity
The joint venture arrangement of the Company consists of joint controlled entity and joint venture. As
for jointly controlled entity, the Company determines the assets held and liabilities assumed separately
as a party to the jointly controlled entity, recognizes such assets and liabilities according to its
proportion, and recognizes relevant income and expense separately under relevant agreement or
according to its proportion. As for asset transaction relating to purchase and sales with the jointly
controlled entity which does not constitute business activity, part of the gains and losses arising from
such transaction attributable to other participators of the jointly controlled entity is only recognized.
8. Cash and cash equivalents
Cash in the cash flow statement comprises the Group’s cash on hand and deposits that can be readily
withdrawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group,
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value, including but not limited to the followings which meet the aforesaid conditions: debt
investment matured within three months upon the acquisition date, bank time deposit which can be early
withdrew by serving a notice and transferrable deposit receipt, etc. for time deposit which can not be
used for payment at any time, it would be note recognized as cash; while if can be used for such purpose,
it would be recognized as cash. Guarantee deposit over three months in other monetary capital shall not
be recognized as cash equivalents, and those less than three months are recognized as cash equivalents.
9. Foreign currency business and foreign currency financial statement conversion
119
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
(1) Foreign currency business
As for the foreign currency business, the Company converts the foreign currency amount into RMB
amount pursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary
items expressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of
the balance sheet date. The conversion difference occurred is recorded into prevailing gains and losses,
other than the disclosure which is made according to capitalization rules for the exchange difference
occurred from the special foreign currency borrowings borrowed for constructing and producing the
assets satisfying condition of capitalization. As for the foreign currency non-monetary items measured
by fair value, the amount is then converted into RMB according to the spot exchange rate as of the
confirmation day for fair value. And the conversion difference occurred during the procedure is
recorded into prevailing gains and losses directly as change of fair value. As for the foreign currency
non-monetary items measured by historical cost, conversion is made with the spot exchange rate as of
the business day, with no change in RMB amount.
(2) Conversion of foreign currency financial statement
Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in
foreign currency balance sheet; as for the items in statement of owners’ equity except for “Undistributed
profit”, conversion is made pursuant to the spot exchange rate of business day; income and expense
items in income statement then are also converted pursuant to the spot exchange rate of transaction day.
Difference arising from the aforementioned conversions shall be listed separately in items of owners’
equity. Spot exchange rate as of the occurrence date of cash flow is adopted for conversion of foreign
currency cash flow. The amount of cash affected by exchange rate movement shall be listed separately
in cash flow statement.
10. Financial assets and financial liabilities
(1) Financial assets
1) Classification of financial assets
In consideration of investment targets and economic essence, the Company groups the financial assets
owned by it as four categories, namely financial assets measured by fair value and whose movement is
recorded into prevailing gains and losses, held-to-maturity investment, accounts receivables and
financial assets available-for-sale.
Financial assets at fair value through profit or loss include trading financial assets and financial assets
designated at air value through profit or loss at initial recognition. Financial asset is classified as held
for trading if one of the following conditions is satisfied: It has been acquired principally for the purpose
of selling in the near term; or on initial recognition it is a part of a portfolio of identifiable financial
instruments that the group manages together and there is objective evidence that the group recently
manages the portfolio through the approach of short-term profit-taking; or it is a derivative that is not
designated and effective as a hedging instrument, or a financial guarantee contract, or a derivative that is
linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price in an
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
active market) whose fair value cannot be reliably measured. A financial asset may be designated as at
FVTPL upon initial recognition only when one of the following conditions is satisfied: such designation
eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise
result from measuring assets or recognizing the gains or losses on them on different bases; or the
financial asset forms part of a group of financial assets or a group of financial assets and financial
liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with
the Group’s documented risk management or investment strategy, and information about the grouping is
reported to key management personnel on that basis; hybrid instruments which contain one or more
embedded derivatives, unless the embedded derivatives does not have a substantial effect on the cash
flows of the hybrid instruments, or the embedded derivatives obviously should not be separated from
the relevant hybrid instruments; hybrid instruments that have to be separated but cannot be individually
measured after it has been obtained or the balance sheet date afterwards. Such kind of financial assets
designated by the Company mainly includes forward exchange settlement business. The Group applies
subsequent measurement based on fair value in respect of such kind of financial assets. Changes in fair
values is included in gains or loss from change of fair value; interests or cash dividends obtained during
the period of holding assets, shall be recognized as investment income; difference between the fair value
and the amount initially recorded of the assets shall be recognized as investment gains or losses on
disposal of the assets, and the profit or loss from changes of fair value will be adjusted at the same time.
Held-to-maturity investment represents the non-derivative financial assets which has fixed maturity day,
fixed or available-for-confirmation recovered amount and for which the management has definite
intention and ability to hold till maturity. Held-to-maturity investment adopts effective interest rate
method for follow-up measurement according to the amortized cost, the gains or losses from
amortization or depreciation and de-recognization will reckon into current gains/losses.
Accounts receivables represent the non-derivative financial assets which have no quotation in an active
market and fixed or available-for-confirmation recovered amount.
Available-for-sale financial assets refer to the non-derivative financial assets that are designated as
available for sale at initial recognition, and the financial assets that are not classified as other types.
Among this type of assets, the equity instrument investments that are not quoted in an active market and
whose fair value cannot be reliably measured, and the derivative financial assets that are linked to the
equity instruments and must be settled through the delivery of the equity instruments are subsequently
measured at cost; others that have the active market quotes or don’t have the active market quotes but of
which the fair value can be reliably measured should be measured at fair value, and the changes in fair
value are included in other comprehensive income. With regard to such financial assets using fair value
for follow-up measurement, except for the impairment losses and the exchange gains and losses arising
from foreign currency monetary financial assets, the changes in fair value of available-for-sale financial
assets are directly reckoned in the shareholders’ equity, the accumulative amount of changes in fair
value that originally included directly in equity is transferred to the current profits and losses until the
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
derecognition of the financial assets. The interests of available-for-sale debt instrument investments
calculated by effective interest method during the holding period and the cash dividends relevant to
available-for-sale equity instrument investments issued by Invested unit are included in the current
profits and losses as investment income. The equity instrument investments that have no quotes in an
active market and whose fair value cannot be reliably measured are measured at cost.
2) Reorganization basis and measure method for transfer of financial assets
The financial assets meet one of following requirements will be terminated recognition: ① The contract
rights of collecting cash flow of the financial assets is terminated; ②The financial assets has already
been transferred, and the Company has transferred almost all risks and remunerations of financial assets
ownership to the transferee; ③The financial assets has been transferred, even though the Company has
neither transferred nor kept almost all risks and remunerations of financial assets ownership, the
Company has given up controlling the financial assets.
If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets
ownership, nor given up controlling the financial assets, then confirm the relevant financial assets
according to how it continues to involve into the transferred financial assets and confirm the relevant
liabilities accordingly.
If the entire transfer of financial assets satisfies the demand for derecognition, reckon the balance
between the book value of the transferred financial assets and the sum of consideration received from
transfer and fluctuation accumulated amount of fair value formerly reckoned in other consolidated
income in the current profits and losses.
If part transfer of financial assets satisfies the demand for derecognition, apportion the integral book
value of the transferred financial assets between the derecognized parts and the parts not yet
derecognized according to each relative fair value, and reckon the balance between the sum of
consideration received from transfer and fluctuation accumulated amount of fair value formerly
reckoned in other consolidated income that should be apportioned to the derecognized parts and the
apportioned aforementioned carrying amounts in the current profits and losses.
3) Method of impairment testing and accounting treatment for financial assets
Except for the financial assets which are measured by fair value and whose fair value change is recorded
into prevailing gains and losses, the Company will make check in the carrying value of other financial
assets as at the balance sheet date. If there is objective evidence proving impairment of certain financial
assets, the Company then makes provision for impairment.
When the financial assets calculated by amortized cost decrease in value, count and draw the provision
for impairment according to the balance between present value and book value of predicted future cash
flows (Excluding future credit losses that haven’t occurred yet.). If there is any objective evidence to
indicate that the financial assets has recovered and is objectively connected with matters occurred after
confirming the losses, the formerly confirmed impairment losses will be reversed and reckoned in
current profits and losses.
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
When the fair value of financial assets available for sale goes down substantially or non- transiently, the
accumulating losses previously and directly reckoned in shareholder's equity and formed due to
shrinkage of fair value will be transferred and reckoned in impairment losses. As for the debt instrument
investment available for sale with confirmed impairment losses, if its fair value rises after and it is
objectively connected with matters occurred after confirming the primary impairment losses, the
formerly confirmed impairment losses will be reversed and reckoned in current profits and losses. And
the debt instrument investment available for sale with confirmed impairment losses shall be directly
reckoned in stockholder's equity if its fair value rises after.
(2)Financial liability
1) Classification, reorganization basis and measurement
When making the initial recognition for financial liabilities, the Company classifies the financial
liabilities into ones which are measured by fair value and whose change is recorded into prevailing gains
and losses, and other financial liabilities.
Financial liabilities which are measured by fair value and whose change is recorded into prevailing
gains and losses include tradable financial liabilities and financial liabilities which are measured by fair
value and whose change is recorded into prevailing gains and losses at the initial recognition day.
Follow-up measurements are made by fair value. Recorded into prevailing gains and losses are the gains
or losses formed through fair value change and dividend and interest expenditure regarding to the
financial liabilities.
As for other financial liabilities, effective interest rate method is adopted and follow-up measurement is
made according to amortized cost.
2) Condition of the de-recognization of financial liability
A financial liability or a part of financial liability is derecognized when and only when the obligation
specified in the contract is discharged or canceled. An agreement between the Company and a lender to
replace the original financial liability with a new financial liability with substantially different terms is
accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability. As for substantive changes made to the contract terms (whole or in part) of the
existing financial liabilities, the existing financial liabilities (or part of it) will be derecognized. And
financial liabilities after term revision will be recognized as a new financial liability. The difference
between the carrying amount of the financial liability derecognized and the consideration paid is
recognized in profit or loss for the period.
(3)Method for recognition of fair value of financial assets and liabilities
Fair values of financial assets and financial liabilities of the Company are measured at the prices in
principal market. In case there is no principal market, fair values of financial assets and financial
liabilities are calculated using the price which is the most beneficial to the market, and using valuation
technology which is the most appropriate at that time and with sufficient available data and other
information. The inputs which are used to measure the fair value have been divided into 3 levels by the
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
Company: Level 1-inputs consist of unadjusted quoted prices in active markets for identical assets or
liabilities. Level 2-inputs are quoted prices for the asset or liability (other than those included in Level 1)
that are either directly or indirectly observable. Level 3-inputs are unobservable inputs to the related
assets or liabilities. The Level 1 inputs are the first priority to use by the Group, and level 3 inputs will
be the last one to use. The level to which the results of measurement of fair value belong is subject to
the lowest level to which the inputs having great significance to the measurement of fair value as whole
belong.
11. Bad debt provision for accounts receivable
Allowance method is adopted for the bad debt losses which are likely to happen. And conducting
impairment test independently or by combination at period-end, withdrawn bad debt provision and then
recorded into current gains and losses. As for the accounts receivable which are not able to call back
through definite evidence, they shall be treated as bad debt losses after approval of the Group according
to regulated procedures to offset withdrawn bad debt provision.
The following situation as standards for confirmation of bad debt losses of accounts receivable: revoke,
bankruptcy, insolvency, serious insufficiency of cash flow of its debit units, or the debit units have to
stop production due to serious natural disaster and are not able to settle the debts or in predicted time, or
other definite evidence showing that the debt is not available to call back or the possibility of calling
back is tiny.
Account receivables were divided as follow categories at period-end, which was performed impairment
test in way of individual or group, and withdrawal bad debt provision:
(1) Account receivable with single significant amount:
If totally amount takes over 80% of the total for over 5% occupied, than 5% of single amount
Determine basis or amount
in total amounts recognized as single significant amount; if totally amount takes less than
standards for single
80% of the total for over 5% occupied, than lower recognition standards till qualified 80% in
significant amount
total
Method of bad debt
provision accrual for account Withdrawal bad debt provision according to difference between the current value of future
receivable with single major cash flow and book values; if there has no impairment been found in individual test,
amount withdrawal bad debt provision while testing by group
(2) Account receivable withdrawal bad debt provision based on combination:
Basis for combination recognized
Combination 1 Account receivable except combination 2
Employee reserve fund, foreign investment amount, contact with related party in consolidated statement
Combination 2 of Changhong Group, export tax refund receivable, account receivable with L/C or insurance,
government subsidy etc.
Methods on withdrawal of bad debt provision based on combination
Combination 1 Withdrawal bad debt provision by proportion in different age group
Combination 2 Risks are under control without bad debt provision accrual
In combination 1, withdrawal proportion of bad debt provision for account receivable based on age
analysis:
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
Withdrawal proportion of account receivable Withdrawal proportion of other
Age
(%) account receivable (%)
Within 1 year (1 year
5 5
included )
1－2 years 15 15
2－3 years 35 35
3－4 years 55 55
4－5 years 85 85
Over 5 years 100 100
(3) Account receivable with single minor amount but withdrawal single item bad debt provision:
Reasons for withdrawal single
Account with minor amount but have significant inflow risk on predicted future cash flow
item bad debt provision
Withdrawal method for bad Impairment test on the current value of predicted future cash flow, bad debt provision
debt provision withdrawal.
12. Inventories
Inventories of the Company principally include raw materials, stock goods; work in process, self-made
semi-finished product, materials consigned to precede, low-value consumption goods, goods in transit,
goods in process, mould and engineering construction etc.
Perpetual inventory system is applicable to inventories. For daily calculation, standard price is adopted
for raw materials, low-value consumption goods and stock goods. Switch-back cost of the current
month is adjusted by distribution price difference at the end of the month, the dispatched goods will
share the cost differences of inventory while in settlement the business income; and low-value
consumption goods is carried forward at once when being applied for use; the mould expenses will
evenly deferred share based on balance at period-begin plus increase amount in this period divided by
12 months.
Inventory at period-end is valued by the Lower-of-value between the cost and net realizable value. For
those individual stock, suffering damage, totally or partly out of fashion or has lower sales price than
cost, predicted recoverable parts in cost, and withdrawal provision of inventory depreciation single. For
those raw materials, stock commodities and goods in transit, withdrawal provision of inventory
depreciation by follow methods:
(1) Determined the net realizable value of raw materials on the higher amount between the final prices
of estimated sale-price deducted cost (about to happen till products finished), estimated sales expense
and relevant taxes, and the fair value of external disposal.
(2) Withdrawal obsolete provision for commodity stocks and goods in transit by the follow proportion:
1) Refrigerator, freezer and washing machine
Withdrawal proportion for obsolete
Grade Stock duration
provision
125
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
Within 3 months 0%
4-6 months 5%
7-12 months 15%
Grade-A
1-2 years 25%
2-3 years 40%
Over 3 years 100%
Qualified 40%
Grade-B 50%
Grade-C 60%
Unqualified 60%
Disposal 65%
Sample machine 30%
Special user type that exceed the order quantity 50%
2) Air-conditioner
Withdrawal proportion for obsolete
Location level
provision
Repair 50%
Awaiting repair 70%
Store return 70%
De-stocking 70%
Overstock 100%
With respect to the inventories and delivered goods which are not vested to the above classification,
their realizable net value will be calculated by the Company based on the estimated selling price of the
inventories less estimated selling expense and related taxes. The Company re-checks the above
mentioned proportion at every end of the year. Calculated the net realizable value by difference between
the estimated sale price less the estimated sales expense and relevant taxation; after comparison with the
book value of commodity stocks and goods in transit, determined whether adjusted the proportion or not.
Mould expense will amortize in installment in usual times. Once the use-life of mould is terminated, and
than transfer its remaining cost into gains/losses, no withdrawal of obsolete provision at period-end.
13. Long-term equity investment
Long-term equity investment of the Company is mainly about investment in subsidiary, investment in
associates and investment in joint-ventures.
For long-term equity investments acquired through business combination under common control, the
initial investment cost shall be the acquirer’s share of the carrying amount of net assets of the acquiree
126
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
as of the combination date as reflected in the consolidated financial statement of the ultimate controller.
If the carrying amount of net assets of the acquiree as of the combination date is negative, the
investment cost of long-term equity investment shall be zero. For long-term equity investment acquired
through business combination not under common control, the initial investment cost shall be the
combination cost.
Excluding the long-term equity investment acquired through business combination, there is also a king
of long-term equity investment acquired through cash payment, for which the actual payment for the
purchase shall be investment cost; If Long-term equity investments are acquired by issuing equity
securities, fair value of issuing equity investment shall be investment cost; for Long-term equity
investments which are invested by investors, the agreed price in investment contract or agreement shall
be investment cost; and for long-term equity investment which is acquired through debt reorganization
and non-monetary assets exchange, regulations of relevant accounting standards shall be referred to for
confirming investment cost.
The Company adopts cost method for investment in subsidiaries, makes calculation for investments in
joint-ventures and associates by equity method.
When calculated by cost method, long-term equity investment is priced according to its investment cost,
and cost of the investment is adjusted when making additional investment or writing off investment;
When calculated by equity method, current investment gains and losses represent the proportion of the
net gains and losses realized by the invested unit in current year attributable to or undertaken by the
investor. When the Company is believed to enjoy proportion of net gains and losses of invested unit,
gains and losses attributable to the Company according to its shareholding ratio is to computer out
according to the accounting policy and accounting period of the Company, on the basis of the fair value
of various recognizable assets of the invested unit as at the date of obtaining of the investment, after
offset of gains and losses arising from internal transactions with associates and joint-ventures, and
finally to make confirmation after adjustment of net profit of the invested unit. Confirmation on gains
and losses from the long-term equity investment in associates and joint-ventures held by the Company
prior to the first execution day, could only stand up with the precedent condition that debit balance of
equity investment straightly amortized according to its original remaining term has already been
deducted, if the aforementioned balance relating to the investment do exist.
In case that investor loses joint control or significant influence over investee due to disposal of part
equity interest investment, the remaining equity interest shall be calculated according to Enterprise
Accounting Principles No.22-Recognition and Measurement of Financial Instrument. Difference
between the fair value of the remaining equity interest as of the date when lose of joint control or
significant influence and the carrying value is included in current gains and losses. Other comprehensive
income recognized in respect of the original equity interest investment under equity method should be
treated according to the same basis which the investee adopts to directly dispose the relevant assets or
liabilities when ceasing adoption of equity method calculation; and also switches to cost method for
127
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
calculating the long-term equity investments which entitles the Company to have conduct control over
the invested units due to its additional investments; and switches to equity method for calculating the
long-term equity investments which entitles the Company to conduct common control or significant
influence, while no control over the invested units due to its additional investments, or the long-term
equity investments which entitles the Company with no control over the invested units any longer while
with common control or significant influence.
When disposing long-term equity investment, the balance between its carrying value and effective price
for obtaining shall be recorded into current investment income. When disposing long-term equity
investment which is calculated by equity method, the proportion originally recorded in owners’ equity
shall be transferred to current investment income according to relevant ratio, except for that other
movements of owners’ equity excluding net gains and losses of the invested units shall be recorded into
owners’ equity.
14. Investment real estate
The investment real estate of the Company includes leased houses and buildings, and is accounted value
by its cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes
and other expenditure which is attributable to the assets directly; while cost of self-built investment real
estate is formed with all necessary expenditures occurred before construction completion of the assets
arriving at the estimated utilization state.
Consequent measurement of investment estate shall be measured by cost method. Depreciation is
provided with average service life method pursuant to the predicted service life and net rate of salvage
value. The predicted service life and net rate of salvage value and annual depreciation are listed as
follows:
Predicted rate of salvage Depreciation rate per
Type Depreciation term
value annum
House and buildings 30-40 years 4%-5% 2.375%-3.20%
When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible
assets commencing from the date of such turning. And when self-used real estate turns to be leased out
for rental or additional capital, the fixed assets or intangible assets shall switch to investment real estate
commencing from the date of such turning. In situation of switch, the carrying value before the switch
shall be deemed as the credit value after the switch.
When investment is disposed, or out of utilization forever and no economic benefit would be predicted
to obtain through the disposal, the Company shall terminate recognition of such investment real estate.
The amount of income from disposal, transfer, discarding as scrap or damage of investment real estate
after deducting the asset’ s carrying value and relevant taxation shall be written into current gains and
losses.
128
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
15. Fixed assets
Fixed assets of the Company represent the tangible assets and assets package: held by the Company for
purpose of producing commodities, providing labor service, leasing or operational management, service
life exceeds one year, and unit price exceeds RMB 2,000. Including four categories of houses and
buildings, machinery equipments, transportation equipments and other equipments
Their credit value is determined on the basis of the cost taken for obtaining them. Of which, cost of
purchased-in fixed assets include bidding price and import duty and relevant taxes, and other
expenditure which occurs before the fixed assets arrive at the state of predicted utilization and which
could be directly attributable to the assets; while cost of self-built fixed asset is formed with all
necessary expenditures occurred before construction completion of the assets arriving at the estimated
utilization state; credit value of the fixed assets injected by investors is determined based on the agreed
value of investment contracts or agreements, while as for the agreed value of investment contracts or
agreements which is not fair, it shall take its fair value as credit value; and for fixed assets which are
leased in through finance leasing, credit value is the lower of fair value of leased assets and present
value of minimized leasing payment as at the commencing date of leasing.
Consequent expenditure related to fixed assets consists of expenditures for repair and update reform.
For those meeting requirements for recognization of fixed assets, they would be accounted as fixed asset
cost; and for the part which is replaced, recognization of its carrying value shall cease; for those not
meeting requirements for recognization of fixed assets, they shall be accounted in current gains and
losses as long as they occur. When fixed asset is disposed, or no economic benefit would be predicted to
obtain through utilization or disposal of the asset, the Company shall terminate recognization of such
fixed asset. The amount of income from disposal, transfer, discarding as scrap or damage of fixed asset
after deducting the asset’ s carrying value and relevant taxation shall be written into current gains and
losses.
The Company withdraws depreciation for all fixed assets except for those which have been fully
depreciated while continuing to use. It adopts average service life method for withdrawing depreciation
which is treated respectively as cost or current expense of relevant assets according to purpose of use.
The depreciation term, predicted rate of salvage value and depreciation rate applied to fixed assets of the
Company are as follows:
Predicted rate of salvage Depreciation rate per
No. Type Depreciation term
value annum
1 House and buildings 30-40 years 4%-5% 2.375%-3.20%
2 Machinery equipment 10-14 years 4%-5% 6.786%-9.60%
3 Transport equipment 5-12 years 4%-5% 7.92%-19.20%
4 Other equipments 8-12 years 4%-5% 7.92%-12.00%
The Company makes re-examination on predicted service life, predicted rate of salvage value and
depreciation method at each year-end. Any change will be treated as accounting estimation change.
129
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
16. Construction in process
Construction in process is measured with effective cost. Self-operated constructions projects are
measured with direct materials, direct salaries and direct construction expense; construction projects
undertaken by external are measured with the engineering payment payable; and engineering cost
(income abatement) of equipment-installation projects is confirmed with consideration of value of the
equipments, installation fee, and expenditure arising from trial operation of the projects. Borrowing
expense and exchange gains and losses which should be capitalized are also included in cost of
construction in process.
17. Borrowing expense
Borrowing expenses include interest expense, amortization of discount or premium, auxiliary expenses
and exchange difference due to borrowing in foreign currency. The borrowing expense which could be
directly attributable to purchase or production of assets satisfying capitalization condition, starts
capitalization when capital expenditure and borrowing expense occur and when necessary purchase or
production conducted for promoting assets to reach the predicted available-for-use or available-for-sale
state; and capitalization shall cease when purchased or produced assets satisfying capitalization
condition have reached the predicted available-for-use or available-for-sale state. Other borrowing
expense is recognized as expense during the occurrence period.
Capitalization shall be exercised for interest expense actually occurred from special borrowings in
current period after deduction of the interest income arising from unutilized borrowing capital which is
saved in banks or deduction of investment income obtained from temporary investment; For
recognization of capitalized amount of common borrowing, it equals to the weighted average of the
assets whose accumulated expense or capital disburse is more than common borrowing times
capitalization rate of occupied common borrowing. Capitalization rate is determined according to
weighted average interest rate of common borrowing.
Assets satisfying capitalization principle generally refer to fixed assets, investment real estate and
inventories which can only arrive at predicted available-for-use and available-for-sale state after quite a
long time (generally over one year) in purchase or production activities.
If abnormal interruption happens during purchase or production of assets satisfying capitalization
principle and the interruption lasts over 3 months, the capitalization for the borrowing expense shall
pause until the purchase or production restarts.
18. Intangible assets
The Company holds intangible assets including land use right, trademark, patent technology and
non-patent technology. Intangible assets are measured according to the effective costs paid for obtaining
the assets. For those intangible assets purchased in by the Company, their effective cost consist of actual
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
payment and relevant other expenditure; for the intangible assets input by investors, effective cost is
determined according to the value agreed in investment contracts and agreements, while if the agreed
value is not fair, then effective value is confirmed according to fair value.
Land use right is averagely amortized according to its transfer term commencing from the sate of
transfer; trademark use-rights averagely amortized by 10 years; patent technology, non-patent
technology and other intangible assets is averagely amortized according to the shortest of their predicted
service life, beneficial term concluded by contract and effective term regulated by laws. Amortization
amount is recorded in assets cost and current gains and losses relevant to beneficial objectives.
Re-examination on predicted service life and amortization method of the intangible assets which have
limited service life shall be conducted at the end of each year. If changed, it would be treated as change
of accounting estimation. Re-examination on predicted service life of intangible assets which have
uncertain service life shall be conducted. For any evidence proving that service life of intangible assets
is limited, then the service life shall be estimated and the Company shall make amortization within the
predicted service life period.
19. Research and development
As for expenditure for research and development, the Company classifies it into expenditure on research
phase and development phase, based on nature of the expenditure and that whether the final intangible
assets formed by research & development is of great uncertainty. Expenditure arising during research
should be recorded in current gains and losses upon occurrence; expenditure arising during development
is confirmed as intangible assets when satisfying the following conditions:
(1) Completions of the intangible assets make it available for application or sell in technology;
(2) Equipped with plan to complete the intangible asset and apply or sell it;
(3) There is market for products produced with this intangible assets or the intangible asset itself;
(4) Have sufficient technology, financial resource and other resources to support development of the
intangible assets, and have ability to apply or sell the assets;
(5) Expenditure attributable to development of the intangible assets could be reliable measured.
Expenditure arising during development not satisfying the above conditions shall be recorded in current
gains and losses upon occurrence. Development expenditure which had been recorded in gains and
losses in previous period would not be recognized as assets in later period. Expenditure arising during
development phase which has been starting capitalization is listed in balance sheet as development
expenditure, and transferred to intangible assets since the project reaches at predicted utilization state.
20. Impairment of non-financial long-term assets
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
As at each balance sheet date, the Company has inspection on long-term equity investment, fixed assets,
construction in process and intangible assets with limited service life. When the following indications
appear, assets may be impaired, and the Company would have impairment test. As for goodwill and
intangible assets which have uncertain service life, no matter there is impairment or not, impairment test
shall be conducted at the end of every year. If it is hard to make test on recoverable amount of single
asset, test is expected to make on the basis of the assets group or assets group portfolio where such asset
belongs to.
After impairment test, if the carrying value exceeds the recoverable amount of the asset, the balance is
recognized as impairment loss. As long as impairment loss of the aforementioned assets is recognized, it
couldn’t be switched back in later accounting periods. Recoverable amount of assets refers to the higher
of fair value of assets net disposal expense and present value of predicted cash flow of the asset.
Indications for impairment are as follows:
(1) Market value of asset drops a lot in current period, the drop scope is obviously greater than the
predicted drop due to move-on of times or normal utilization;
(2) Economy, technology or law environment where enterprise operates or market where asset is located
will have significant change in current or recent periods, which brings negative influence to enterprise;
(3) Market interest rate or returning rate of other market investments have risen in current period, which
brings influence in calculating discount rate of present value of predicted future cash flow of assets,
which leads to a great drop in recoverable amount of such assets;
(4) Evidence proving that asset is obsolete and out of time or its entity has been damaged;
(5) Asset has been or will be keep aside, terminating utilization or disposed advance;
(6) Internal report of enterprise shows that economic performance of asset has been or will be lower
than prediction, such as that net cash flow created by asset or operation profit (or loss) realized by asset
is greatly lower (or higher) than the predicted amount;
(7) Other indications showing possible impairment of assets
21. Goodwill
Goodwill represents balance between equity investment cost or business combination cost under no
common control exceeding the attributable part or fair value of recognizable net assets of party invested
or purchased (obtained through business combination) as of acquisition day or purchase day.
Goodwill relating to subsidiaries is separately listed in consolidated financial statement. And goodwill
relating to associates and joint-ventures is included in carrying value of long-term equity investment.
22. Long-term deferred expenses
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2018 to 30 June 2018
(Unless other wise specified, RMB for record in the Statement)
Long-term deferred expenses of the Company refer to the expense which has been paid out while should
be amortized from the current period and periods thereafter, with amortization term over 1 year
(excluding 1 year). Such expense is averagely amortized during the beneficial period. If such long-term
deferred expense could not bring benefit to following accounting periods, the unamortized value of the
item shall be fully transferred to current gains and losses.
23. Staff remuneration
Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered
by employees or compensation to the termination of employment relationship such as short-term wages,
post-employment benefits, compensation for the termination of employment relationship and other
long-term employee welfare.
Short-term remuneration includes: staff salary, bonus, allowances and subsidies, staff benefits, social
insurances like medical insurance, work-related injury insurance and maternity insurance, housing fund,
labor union funds and staff education funds, short-term paid absence of duty, short-term profit sharing
scheme, and non-monetary benefits as well as other short-term remuneration. During the accounting
period when staff provides services, the short-term remuneration actually occurred is recognized as
liabilities and shall be included in current gains and losses or related as
