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虹美菱B:2018年年度报告(英文版) 下载公告
公告日期:2019-03-29
                   CHANGHONG MEILING CO.,LTD. Annual Report 2018
长虹美菱股份有限公司
CHANGHONG MEILING CO., LTD.
      二〇一八年年度报告
      Annual Report 2018
                                                              CHANGHONG MEILING CO.,LTD. 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, Chairman of the Company, Mr. Pang Haitao, person in charge of accounting work
and Mr. Luo Bo, person in charge of accounting organ (accountant in charge) hereby confirm that
the Financial Report of 2018 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
    Shine Wing Certified Public Accountants Co., Ltd. (LLP) issued standard unqualified Auditors’
Report for the Company’s Financial Report of 2018.
     Major defects in internal control
     □ Applicable √Not applicable
      The Company had no major defects in internal control in the reporting period.
    Risk warning of concerning the forward-looking statements with future planning involved in
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 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 “IX. Prospects for the future development of the company” of “Section IV.
Analysis and discussion of the operation”, investors are advised to read the relevant content.
     Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) are the media for information disclosure for year of 2019 that appointed by
the Company. All public information under the name of the Company disclosed on the above said
                                                    1
                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
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 reporting period
     √ Applicable   □ Not applicable
     Whether has capitalizing of common reserves carried out
     □Yes √ No
      The profit distribution plan for year of 2018, that deliberated and approved by 20th session of
the 9th BOD was: take total shares of 1,044,597,881 shares as base dated 31 December 2018,
distributed 0.6 Yuan (tax included) bonus in cash for every 10-share hold by all shareholders, no
share bonus issued and no capitalizing of common reserves carried out.
    Directors and senior executives of the Company respectively signed Written Confirmation
Opinions for 2018 Annual Report.
    Supervisory Committee of the Company formed Written Examination Opinions for 2018
Annual Report.
                                                  2
                                                                                  CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                            Contents
Section I. Important Notice, Contents and Paraphrase ................................................................. 1
Section II Company Profile and Main Financial Indexes .............................................................. 5
Section III. Summary of Company Business ................................................................................. 12
Section IV. Discussion and Analysis of the Operation .................................................................. 21
Section V. Important Events............................................................................................................ 59
Section VI. Changes in shares and particular about shareholders............................................ 162
Section VII. Preferred Stock ......................................................................................................... 172
Section VIII. Particular about Directors, Supervisors, Senior Executives and Employees .... 173
Section IX. Corporate Governance .............................................................................................. 189
Section X. Corporate Bond ........................................................................................................... 205
Section XI. Financial Report ......................................................................................................... 206
Section XII. Documents available for Reference ......................................................................... 367
                                                                    3
                                                          CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                       Paraphrase
             Items                 Refers to                          Contents
Company, The Company, Meiling
                                   Refers to   CHANGHONG MEILING CO.,LTD.
 Electric or Changhong Meiling
Sichuan Changhong or controlling
                                   Refers to   Sichuan Changhong Electric Co., Ltd.
          shareholder
                                               Sichuan Changhong Electronics Holding Group Co.,
       Changhong Group             Refers to
                                               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 Compressor        Refers to   Changhong Huayi Compressor Co., Ltd.
       Meiling CANDY               Refers to   Meiling CANDY Washing Machine Co., Ltd.
             CSRC                  Refers to   China Securities Regulatory Commission
                                               China Securities Regulatory Commission,          Anhui
    Anhui Securities Bureau        Refers to
                                               Province Securities Regulatory Bureau
              SSE                  Refers to   Shenzhen Stock Exchange
                                               4
                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
           Section II Company Profile and Main Financial Indexes
I. Company profile
                                      MEILINGDIANQI,
Short form of the stock                                              Stock code               000521, 200521
                                      WANMEILING-B
Short form of the Stock after
                                                      Changhong Meiling, Hongmeiling B
changed (if applicable)
Stock exchange for listing                                   Shenzhen Stock Exchange
Name of the Company (in
                                                             长虹美菱股份有限公司
Chinese)
Short form of the Company (in
                                                                    长虹美菱
Chinese)
Foreign name of the Company
                                                     CHANGHONG MEILING CO.,LTD.
(if applicable)
Abbr. of English name of the
                                                                     CHML
Company (if applicable)
Legal representative                                                 Li Wei
Registrations add.                No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Code for registrations add                                           230601
Offices add.                      No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Codes for office add.                                                230601
Website                                                      http://www.meiling.com
E-mail                                                          info@meiling.com
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. Information disclosure and preparation place
Newspaper appointed for information             Securities Times, China Securities Journal, Hong Kong
                                                        5
                                                                   CHANGHONG MEILING CO.,LTD. Annual Report 2018
disclosure                                      Commercial Daily
Website for annual report publish appointed by
                                               Juchao website: http://www.cninfo.com.cn
CSRC
                                                Room of secretary of the Board, 2/F , administrative center,
Preparation place for annual report
                                                Office building of the Company
IV. Registration changes of the Company
Organization code                     Uniform social credit code: 9134000014918555XK
Changes of main business since
                                      No changes
listing (if applicable)
                                      1. In October 1993, after initial listing, controlling shareholder of the
                                      Company-- Hefei Meiling Industrial Corp. (renamed as Hefei Meiling Group
                                      Co., dated 23 May 1994), executing controlling rights of the Company and
                                      management right of the state-owned assets on behalf of Hefei State-owned
                                      Assets Management Office, named at that time;
                                      2. From November 1997 to May 2003, controlling shareholder of the
                                      Company was Hefei Meiling Group Holding Co., Ltd. (established base on
                                      former Meiling Group Co.,, “Meiling Group” for short), an enterprise solely
                                      owned by the State; mainly operating the state-owned capital in authorized
                                      from State-owned Assets Management Commission of Hefei City, ensuring
                                      the maintenance and appreciation of state-owned assets;
                                      3. On 29 May 2003, Meiling Group entered into “Equity Transfer
                                      Agreement” with Shunde GreenKel Enterprise Development Co., ltd.
                                      (“GreenKel”), the 82,852,683 state-owned shares held by the Company was
                                      transfer to GreenKel. After transferring, GreenKel comes to the first largest
Previous changes for controlling      shareholder of the Company.
shareholders (if applicable)          4. According to the spirit of “Bulletin of Treatment Opinions on GreenKel
                                      Company purchasing State-owned Assets Shares of Listed Company”
                                      (GZFCQ[2006] No.: 44) jointly issued from SASAC and Ministry of Finance
                                      in April 2006, Meiling Group took back the Meiling Electric 82,852,683
                                      shares from GreenKel by procedures, which has been transferred. In
                                      September 2006, relevant equity transfer agreement signed between the
                                      Meiling Group and GreenKel is invalid, which was confirmed by the
                                      “Award” ((2006) HZZ No.: 104) issued from arbitration commission of
                                      Hefei; the state-owned legal person’s 82,852,683 shares, held by GreenKel,
                                      should return to Meiling Electric, and relevant equity consideration will pay
                                      to GreenKel by Meiling Group . On 29 December 2006, the 82,852,683
                                      shares of Meiling Electric were transfer to Meiling Group by GreenKel, and
                                      Meiling Group becomes the controlling shareholder of Meiling Electric
                                      again.
                                      5. On 18 May 2006 and 11 January 2007, Meiling Group entered into
                                      “Equity Transfer Agreement of Meiling Electric” and “Supplementary
                                                        6
                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                Agreement of Equity Transfer of Meiling Electric” respectively with Sichuan
                                Changhong and Changhong Group, among the 123,396,375 shares held by
                                Meiling Group, 82,852,683 shares were transferred respectively to Sichuan
                                Changhong and Changhong Group according to the transfer way regulated in
                                agreement; of this transferring, 45,000,000 shares (10.88% of total share
                                capital of the Company) were transferred to Sichuan Changhong, the first
                                largest shareholder of the Company while 37,852,683 shares (9.15% of total
                                share capital of the Company) were transferred to Changhong Group, the
                                third largest shareholder of the Company.
                                6. On 29 October 2008, Changhong Group and Sichuan Changhong entered
                                into “Equity Transfer Agreement of Hefei Meiling Co., Ltd.”, the 32,078,846
                                restricted circulations A shares of Meiling Electric held by Changhong Group
                                were transferred by agreement to Sichuan Changhong. On 23 December
                                2008, the aforesaid equity transfer was approved by “Reply on Matters of
                                Equity held by State-owned Shareholders of Hefei Meiling Co., Ltd.”
                                (GZCQ(2008) No.: 1413) from SASAC; on 21 January 2009, the aforesaid
                                transfer was registered for ownership transfer in Shenzhen Branch of China
                                Securities Depository and Clearing Corporation Limited. With this, the first
                                majority shareholder of the Company comes to Sichuan Changhong.
                                7. Ended as 31 December 2018, Sichuan Changhong and its concerted action
                                Changhong HK totally holds 279,200,104 shares of the Company, a 26.73%
                                in total share capital of the Company; Sichuan Changhong directly holds
                                246,301,524 A-share of the Company, a 23.58% in total share capital of the
                                Company while Changhong HK holds circulation B-share of the Company
                                amounting as 32,898,580 shares, a 3.15% in total share capital of the
                                Company.
                                8. Ended as 27 March 2019, Sichuan Changhong and its concerted action
                                Changhong HK totally holds 281,832,434 shares of the Company, a 26.98%
                                in total share capital of the Company; Sichuan Changhong directly holds
                                248,457,724 A-share of the Company, a 23.79% in total share capital of the
                                Company while Changhong HK holds circulation B-share of the Company
                                amounting as 33,374,710 shares, a 3.19% in total share capital of the
                                Company.
V. Other relevant information
(I) CPA engaged by the Company
Name of CPA              Shine Wing Certified Public Accountants (LLP)
                         8/F, Block A, Fu Hua Mansion No.8 Chao Yang Men Bei da jie, Dong Cheng
Offices add. for CPA
                         District, Beijing, P.R.C
Signing Accountants      Li Xifu, Xia Cuiqiong
                                                  7
                                                                              CHANGHONG MEILING CO.,LTD. Annual Report 2018
  (II) Sponsor engaged by the Company for performing continuous supervision duties in
  reporting period
          □ Applicable √          Not applicable
  (III) Financial consultant engaged by the Company for performing continuous supervision
  duties in reporting period
          □ Applicable √          Not applicable
  VI. Main accounting data and financial indexes
  Whether it has retroactive adjustment or re-statement on previous accounting data
  □ Yes         √ No
                                                                                     Changes over last
                                                2018                 2017                                     2016
                                                                                          year
Operating income (RMB)                     17,490,174,950.01 16,797,436,757.36                  4.12% 12,526,710,867.49
Net     profit     attributable      to
shareholders       of    the      listed      38,658,256.97       32,473,204.92                19.05%      220,216,680.96
company (RMB)
Net     profit     attributable      to
shareholders       of    the      listed
company          after     deducting           -3,142,791.01      -97,705,959.02               96.78%      158,461,015.10
non-recurring gains and losses
(RMB)
Net cash flow arising from
                                             -220,560,615.36    -551,501,994.74                60.01%      985,390,895.63
operating activities (RMB)
Basic     earnings       per      share
                                                       0.0370               0.0311             18.97%                0.2717
(RMB/Share)
Diluted    earnings      per      share
                                                       0.0370               0.0311             18.97%                0.2717
(RMB/Share)
Weighted average ROE                                                                 0.13 percent point
                                                       0.77%                0.64%                                    5.77%
                                                                                               increase
                                                                                     Changes over end
                                             End of 2018         End of 2017                               End of 2016
                                                                                       of last year
Total assets (RMB)                         15,561,810,184.54 15,961,511,966.81                  -2.50% 12,507,567,310.84
Net     assets     attributable      to
shareholder of listed company               5,015,730,486.57    5,051,066,095.31                -0.70%    5,095,160,291.91
(RMB)
                                                                 8
                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
The cause of the accounting policy change and accounting error correction
□ Applicable √      Not applicable
Whether have corporate bonds or not
□Yes √ No
VII. 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)
□ 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.
(II) 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
                              Amount in this                                      Amount at             Amount at
                                                   Amount in last period
                                period                                            period-end           period-begin
Chinese GAAP                       38,658,256.97              32,473,204.92        5,015,730,486.57     5,051,066,095.31
Items and amount adjusted by foreign accounting rules
Foreign accounting rules           38,658,256.97              32,473,204.92        5,015,730,486.57     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
                                                          9
                                                                               CHANGHONG MEILING CO.,LTD. Annual Report 2018
    of China at period-end.
    VIII. Quarterly main financial index
                                                                                                                     In RMB
                                                1st Q                  2nd Q                3rd Q                 4th Q
   Operating income                      4,245,506,565.60        5,026,003,004.07       3,977,110,177.70     4,241,555,202.64
   Net    profit   attributable to
   shareholders    of the listed              56,261,852.68           -5,577,620.95        14,954,274.39       -26,980,249.15
   company
   Net    profit    attributable   to
   shareholders of the listed
                                              23,011,689.73          -29,611,791.56        -5,122,046.17         8,579,356.99
   company       after      deducting
   non-recurring gains and losses
   Net cash flow arising from
                                             -771,375,311.87         931,864,672.93        80,738,009.49      -461,787,985.91
   operating activities
    Whether there are significant differences between the above-mentioned financial index or its total number and the
    relevant financial index disclosed in the company’s quarterly report and semi-annual report
    □Yes √ No
    IX. Items and amounts of non-recurring profit (gains)/losses
         √ Applicable □ Not applicable
                                                                                                                     In RMB
                   Item                                 2018              2017             2016                   Note
Gains/losses from the disposal of
                                                                                                       See “Income from assets
non-current asset (including the write-off              787,721.32     -8,203,782.90    9,265,320.01
                                                                                                       disposal”
that accrued for impairment of assets)
Governmental subsidy reckoned into                                                                     ”See “Other income” and
current gains/losses (not including the                                                                “Non-operation income”
subsidy enjoyed in quota or ration                90,401,997.63        68,403,702.36 41,152,549.66
according to national standards, which are
closely relevant to enterprise’s business)
Gains and losses arising from contingent                                                               ”See “Non-operation
proceedings irrelevant to normal operation       -13,050,649.33                                        expenditure”
of the Company
Held transaction financial asset,
gains/losses of changes of fair values from
                                                                                                   See “Gains/losses from
transaction financial liabilities, and
                                                 -18,928,688.87        92,846,391.02 11,500,963.72 change of fair value” and
investment gains from disposal of
                                                                                                   “Investment income”
transaction financial asset, transaction
financial liabilities and financial asset
                                                                10
                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
available for sales, exclude the effective
hedging business relevant with normal
operations of the Company
Switch-back of provision of impairment of                                                        See “Account
account receivable which are treated with         2,543,553.45                                   receivable/Other
separate depreciation test                                                                       receivable”
Other non-operating income and
                                                                                                 See “Non-operation
expenditure except for the aforementioned        -2,614,761.68    2,680,908.22    4,948,619.55
                                                                                                 income & expenditure”
ones
Gains/losses items qualified definition of
                                                                                  3,798,660.03 See “Investment income”
the non-recurring gains/losses
Less: impact on income tax                       16,236,806.66   24,087,520.95    8,534,266.32
     Impact on minority shareholders’
                                                  1,101,317.88    1,460,533.81      376,180.79
equity (post-tax)
Total                                            41,801,047.98 130,179,163.94 61,755,665.86                  --
    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.
                                                            11
                                                                     CHANGHONG MEILING CO.,LTD. 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?
□Yes √ No
(I) Main businesses of the Company
The company is one of China's major electric appliance manufacturers, possesses four major domestic
manufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas manufacturing bases in
Indonesia and Pakistan. Currently, we have completed the industry layout of white electricity basically, covering
the full product line including refrigerator, washing machine, air conditioner, kitchen and bath, small household
appliances and others, at the same time, the company enters into the bio-medical and other new industrial fields
with certain achievements made.
Over the past 30 years, the Company has always been adhering to the "independent innovation, created in China",
and always focus on refrigeration industry without stop, elaborately building the core competitiveness of
enterprises by technological innovation and product innovation. The company has set up the first RoHS public
testing center in Anhui Province, the state-level enterprise technology center and the top-end R & D team, so that
Meiling can continue to achieve breakthrough results in the variable frequency, intelligence, refreshment,
thin-wall, energy-saving, forced air cooling, deep cooling and other fields. In recent years, the company has won
three national-level honors such as the Smart Refrigerator Intelligent Manufacturing Pilot Demonstration Project,
the National Green Factory, and the National Industrial Design Center. At the same time, a number of Meiling
products entered the national green product list and won numerous domestic and international innovation awards,
which once again highlighted the capabilities and strengthen of intelligent innovation technologies of Meiling
Intelligent Manufacturing and Meiling brand.
In recent years, driven by the industry transformation and upgrades and consumption upgrades, the Company has
adhered to the strategy of smart and variable frequency products, promoted the Company’s products to transform
and upgrade to become intelligent and high-end and comprehensively enhanced the competitiveness of products in
the industry by grasping the opportunities of “refreshment”, “thin-wall” and energy efficiency upgrades and
effectively resolving the pain points of customers. Under the guidance of the “intelligent” strategy, in 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
second-generation of CHiQ’s - “Space Smart” refrigerator and CHiQ smart air housekeeper system; In 2018, the
                                                        12
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
company released the CHiQ third-generation refrigerator equipped with artificial intelligence and automatic door
technology and CHiQ5 air-conditioning products, which realized the continuous implementation of the company’s
intelligent strategy. At the same time, for the younger consumers, the company released the youth refrigerator. In
addition, in order to return to the essence of “retaining freshness” of refrigerators, the company launched the “M
Fresh Life” series of refrigerators equipped with water molecule activation and preservation technology in 2017,
and developed comprehensive thin GLS integration technology based on the upgrade of water molecule activation
and preservation technology, in February 2019, the company has released the M Fresh Life comprehensive thin
series products with thin body, thin box and thin door, the thin wall technology realized the productization and
marketization.In order to seize the opportunity of energy efficiency upgrades and consumption upgrades, since the
Company launched the “All 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. The above mentioned release and listing products have upgrade the product structure of the Company,
which 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, small home appliances and kitchen & toilet products etc., total amounting to 16,147.8573 million Yuan,
a 92.33% of the operating income.
(II) Conditions of the industry the company involved
The home appliance industry is experiencing its renewal period, industry competition intensified and brand
concentration gets further improve. With the upgrading of consumption structure and ideas, the period of
upgrading tuns to be high-end oriented and intelligent oriented. Meanwhile, with the development of urbanization
and the improvement of living standards, the age of quality consumption has coming, the new consumer groups
pay more attention to high-quality, intelligent and healthy environmental protection products. The appliance
industry facing severe challenges and opportunities for development in 2018, mainly have follow presentations:
     1.refrigerator industry
                                                         13
                                                                      CHANGHONG MEILING CO.,LTD. Annual Report 2018
The popularity degree of refrigerators in domestic households is relatively high, and the national policy has
basically ended the privilege period of the refrigerator industry, meanwhile, affected by the real estate market
regulation policy, the new demand for refrigerators has slowed down. All View Cloud (AVC) omnichannel data
showed that the retail sales of the refrigerator market in 2018 was 96.8 billion yuan, an increase of 3.2% on a
year-on-year basis, and the retail volume was 32.99 million units, a decrease of 2.3% on a year-on-year basis, and
the growth trend showed a growth in the first and second quarters and a decline in the third and fourth quarters.
Despite the sluggish market demand, the product innovation in the refrigerator market has never stopped. The
products in 2018 have been further optimized on the basis of differentiated door, free embedding and
fresh-keeping functions, and the product development trend has moved towards functionalization, detailing and
elaboration. The competition has intensified in the high-end market. In 2018, the domestic refrigerator market has
accelerated its consumption upgrades. Major brands have launched brand-named fresh-keeping products to
develop the high-end markets, the competitive advantage of refrigerator market is rapidly inclining to the
premium brands, and the Matthew Effect is growing. At the same time, the upgrade of refrigerator consumption in
the primary and secondary markets is rapidly transmitting to the third-tier and fourth-tier markets, and the market
potential is shifting to the third- and fourth-tier markets. At the same time, the market is also divided and grading,
and the era of consumer grading is coming.
2. Industry situation of air conditioning products
After more than two consecutive years of high growth, in 2018, affected by the trade friction between China and
the United States, coupled with the slowdown in domestic economic growth, the anxiety has been spreading and
deepening, and the domestic air-conditioning market has entered a downward cycle, the industrial competition has
intensified. At the beginning in the second half of 2018, the average price increase of air conditioners slowed
down noticeably, and the average price of most air conditioners began to decline.
Under the unfavorable macro environment in economy and real estate, household air conditioners still achieved
positive growth throughout the year, and the retail scale exceeded 200 billion yuan. All View Cloud (AVC)
omnichannel data showed that the retail volume of the air-conditioning market in 2018 was about 57.03 million
sets, an increase of 1.6% on a year-on-year basis. Under the background of consumption upgrade and industrial
structure upgrade, the retail sales were 201 billion yuan, an increase of 4.1% on a year-on-year basis. In terms of
market growth trend, the retail sales in the first half of the year increased by 15.5%. In the peak season in July, the
market growth rate was sharply affected by temperature and rainfall, with a decline for four consecutive months.
In November, the decline was stopped by the big sales, the air conditioning market had a tendency of “first high
then low” throughout the year. In the product mix, in addition to frequency conversion and artistic design,
energy-saving products are the focus of structural upgrading of the air-conditioning industry this year. From the
perspective of market research and analysis, the potential demand for energy-saving products by potential users in
the future is obviously improving.
3. Industry situation of washing machine
                                                          14
                                                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
          The competition in the washing machine market in 2018 was still very intense. The industry centralization pattern
          was further stabilized, and the upgrading trend of each subdivision type structure was obvious. The roller washing
          and drying machine increased rapidly, and the products have been developing towards roller, large volume,
          frequency conversion and intelligence. All View Cloud (AVC) omnichannel data showed that the retail sales of the
          washing machine market in 2018 were 74.5 billion yuan, a rise of 3.7% on a year-on-year basis. The washing
          machine market has shifted from the incremental market to the stock market, and the upgrade has become the
          industry-driven engine. The washing and drying integration and the large washing capacity have become the two
          main directions for upgrading in 2018.
          Generally speaking, in the context of the weak recovery of the world economy and the new normal of China’s
          economic development, China’s economic situation in 2018 was generally stable and made steady progress. But
          the home appliance industry was in a state of stagflation, due to factors such as further strengthening of the
          industry’s brand concentration, rising raw material and logistics costs, upgrading of consumer demand structure,
          and cross-border impact of internet enterprises, the industry was facing accelerated reshuffles, and challenges such
          as oligopolistic competition, product and business model transformation and upgrading. Therefore, in the era of
          quality consumption, high end and intelligence have become the inevitable choice for the development of the
          home appliance industry.
          II. Major changes in main assets
          (i) Major changes in main assets
                        Major assets                                                  Note of major changes
          Equity assets                                Losses from joint venture in the period
                                                       Mainly due to the increase in the transfer of the company’s construction in
          Fixed assets
                                                       progress during the period.
          Intangible assets                            No major changes
                                                       Construction in progress have more investment by parent company and
          Construction in progress
                                                       subsidiary Changhong Air-conditioner in the period
          (ii) Main overseas assets
                 √ Applicable □ Not applicable
                     Reaso                                                                                                                      Whether
                                                                                                                              Foreign assets
                      n for                                Operat                                                                                 exist
                                                                     Control measure to ensure the security                   accounted for
 Content of assets    the      Asset size     Location      ion                                               Income (RMB)                     significant
                                                                                   of assets                                  net assets of
                     format                                mode                                                                                impairment
                                                                                                                              the Company
                      ion                                                                                                                      risk (Y/N)
60% equity of        Invest                                         Details of risks control measures have
                              US$ 7.803
Changhong Ruba ment                         Pakistan       Sales    been disclosed by the Company by way      -2,342,851.01         0.64%          N
                       million
Trading        establi                                              of announcement    on appointed media
                                                                              15
                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
Company           shmen                                         (No. 2011-028, No. 2011-032, No.
                  t                                             2014-023, No. 2014-026, No. 2016-027,
                                                                No. 2016-032, No. 2017-053 and No.
                                                                2017-059) on 28 May 2011, 19 April
                                                                2014, 25 March 2016 and 10 August
                                                                2017
                                                                Details of risks control measures have
40% equity of     Invest                                        been disclosed by the Company by way
Changhong Ruba    ment                                          of announcement    on appointed media
                              US$ 6.9761               Manuf
Electric          establi                  Pakistan             (No. 2011-028, No. 2011-032, No.         -15,129,056.84     0.18%       N
                              million                  acture
Company(Private   shmen                                         2014-023, No. 2014-026, No. 2017-053
)Ltd.             t                                             and No. 2017-059) on 28 May 2011, 19
                                                                April 2014 and 10 August 2017
100% equity of    Invest                                        Details of risks control measures have
                                           KELAPA
CHANGHONG         ment                                          been disclosed by the Company by way
                              US$ 6        GADING,
MEILING           establi                              Sales    of announcement    on appointed media     -6,452,403.34     0.48%       N
                              million      JKT,
ELECTRIC          shmen                                         (No. 2016-027 and No. 2016-033) on 25
                                           Indonesia
INDONESIA. PT     t                                             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
          1. Brand capacity
          The Company is one of the famous home appliances manufacturers in the PRC, owns several product lines such
          as refrigerator, freezing box and air conditioner. Meiling trademark is listed as one of the most valuable brands in
          the PRC, well-known trademark in China; the trademark “Athena” in refrigerator, freezer (services) of the
          Company was recognized as the famous mark in Anhui Province. The Company released CHiQ intelligent first
          and second generation refrigerator, AC and intelligent air steward in succession since 2014. And creating a
          high-end intelligent brand image around the plan of “Wisdom Home Ecosystem” for opening a white intelligence
          era. While in order to enhance the brand image and further expand the market influence of the brand, the company
          held a conference for "New LOGO release and offline of the 10th million set of frequency conversion products" in
          October 2015, comprehensively updated LOGO "                                  ", and launched the new brand proposition of
          "Meiling, let the good come". Along with the release of new LOGO, Meiling will also implement a brand strategy
          of "Good Trilogy", including the direct sensory experience of “experience the good", the spirit soul enjoyment of
          “enjoy the good”, and the lifestyle faith of “believe in the good”. Moreover, under the boost of consumption
          upgrades, in November 2017, the Company launches a “M -Fresh” refrigeration with the “water molecules
                                                                          16
                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
activating technology”, return to essence of the refrigerator and set off the revolution of fresh-keeping in industry;
In October 2018, the M Fresh Life voice intelligent refrigerator equipped with full voice interaction technology
was launched. At the same time, CHiQ5 air conditioners integrated with three core functions of listening sound for
person recognition, voice positioning and listening sound for speed adjustment were released. In November 2018,
the company’s world-first youth refrigerator further enhanced the company’s younger brand image; in February
2019, the company released the “M Fresh Life” comprehensive thin series products, continuing to inherit the
brand effect of M Fresh Life.
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.
     2.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; on the basis of
upgrading the water molecule activation and preservation technology, the company developed a comprehensive
thin GLS integration technology to realize the M Fresh Life comprehensive thin series products with thin body,
thin box and thin door.
The Company owned advanced development and quality assurance systems, passed management system
certification of ISO9001 and ISO14001. The products of the Company have good quality and reliable capacities.
As for technology development, the Company has a national-standard technology center, and vigorously invest in
basic technology research; and in the field of intelligence, air cooling, refreshment, frequency conversion,
thin-wall, energy-saving and copious cooling, we has an advance core technology that leading the industry. As for
product development, combine the R&D results and consumption upgrading demand, the Company renewal its
outline of product planning and development for the year, products structure is escalating. Putting more efforts on
the middle & high-end products in field of air patenting, large-size, frequency conversion, intelligence,
refreshment and thin-wall, developing core products with competitive, the product has obvious upgrade in
structures.
As for the air conditioning products, the Company adheres to the technical strategy by taking intelligence and
                                                          17
                                                                      CHANGHONG MEILING CO.,LTD. Annual Report 2018
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 Meiling520 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. Benefiting from the advanced
application of swirling waterfall washing technology, washing solution residue are reduced greatly, rinsing are
more and more neat and tidy with clothing wash in protection
In terms of kitchen and small       appliance products, the Company has taken the concept of “smart kitchen” as
the mainline, focus on creation of eco-chain of “water ecological appliances”. Eyes 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 CHiQ intelligent smoke machine as well as the Internet of Things of the kitchen ventilator supporting Wi-Fi.
In addition, with the advent of the Company's independently developed plasma-disinfected dishwasher, the
dishwasher category has enjoyed core technologies in the segmented industries.
In terms of cryogenic products, we strengthened system innovation and rapidly enhanced our core
competitiveness by focusing on life science, wisdom cold chain and family health. The company continued to
increase investment in research and development of cryogenic products and promoted the upgrade of technology
and products.The Company’s existing ultra low freezer, plasma blaster freezer, blood bank refrigerator, medical
                                                         18
                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
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
products; meanwhile, the company improves the manufacturing efficiency and product quality and enhances
product competitiveness by comprehensively implementing intelligent upgrading and rebuilding to all production
lines.
3.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.
     4.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, benefit from the systematic construction
and promotion of business operation mode, the pace of business this year constantly tends to be benign; we has a
balanced development in chain, wholesale, e-commerce and other channels, and the product competitiveness has
been improved; meanwhile, the overseas market has been strengthened by increasing the investments in overseas
marketing    organizations,   research    and   development    bases    and   production   bases,   cooperate    with
internationally-known home appliance brand business and dealer, optimized the client structure and improve
product structure, the company has been actively develop the overseas market, and the products have been
exported to more than 130 countries and regions.
In 2018, as the company’s star flagship machine, “M Fresh Life” series refrigerators established Meiling’s unique
fresh-keeping image and reputation in the industry by “one hundred stores sealed up for safekeeping”, “ten
thousand endorsement”, “new product launch event” and other promotional activities. The company powerfully
made the “M Fresh Life Phenomenon” through the close cooperation of technology, marketing and market and the
diversified channels of communication, and the brand activity was significantly improved. In addition, the free
trial at Jingdong and Tmall, and the “free trial by thousands of people” activities, and the food storage comparison
                                                         19
                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
of “keeping the roses fresh for 33 days” shaped the high-end brand image of Meiling. 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”, which not only won 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.
                                                        20
                                                          CHANGHONG MEILING CO.,LTD. Annual Report 2018
            Section IV. Discussion and Analysis of the Operation
I. Introduction
In 2018, the national economy continued to operate in a reasonable range, achieved an overall
stability and made steady progress. At the same time, the economic operation also made changes in
steady progress, and the external environment was complicated and severe, and the economy was
facing downward pressure. 2018 was the 40th anniversary of the reform and opening up policy. In
the past 40 years, China’s household electrical appliance industry has achieved many achievements
with the vigorous development of China’s industry. However, due to the influence of macro
environment and its own development cycle, coupled with multiple negative factors such as the
tightening of real estate market, the upgrading of consumption structure, and the flat demand, the
performance of the home appliance market in 2018 was not satisfactory, the growth rate of
traditional home appliances such as refrigerators and washing machines obviously slowed down.
2018 , Facing the weak global economic recovery, the great fluctuations in raw materials and parts
prices, the tightening of money market liquidity, and the sluggish demand in the home appliance
market, the company had many difficulties in reform, innovation and transformation. Under the
leadership of the board of directors and the joint efforts of all employees, the company adhered to
the business policy of “product leadership, marketing transformation, efficiency improvement, team
activation”, and promoted all important work of the company with a high degree of professionalism
and sense of responsibility. In 2018, in response to the shortcomings and problems in the
development process, the company targeted at the difficulties and pressures faced by the industry,
and adopted targeted countermeasures under the leadership of the board of directors, promoting
development by solving problems and solving problems by development, and achieved continuous
improvement in product structure and steady progress in operation. At the same time, the company
firmly grasped the mainstream of consumption upgrades and adhered to technological innovation,
which significantly improved the product structure transformation and upgrading of the company.
II. Main Business Analysis
(i) Overview
                                                21
                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
Shows no difference with the summary disclosed in Report of the Board of Director
□Yes √No
1. Introduction
Under the background that the growth of refrigerator market bore great pressure in 2018, the
domestic sales growth rate of the company’s refrigerator industry was ahead of the industry growth
rate; market share continued to rise, and industry status has been significantly improved; product
structure has been improved obviously; new channels have developed rapidly; and freezer product
lines have risen on a year-on-year basis; the quality of operations in overseas markets has increased
significantly. The air-conditioning industry overcame many adverse effects such as the market and
the weather to achieve growth. The washing machine industry has already had product research and
development capabilities, and the products have been serialized. The washing machine factory
completed the phase I project and started working successfully, laying a foundation for the
competitiveness promotion and sustainable development of the later products. Small household
appliances, biomedical and other businesses have risen abruptly based on their accumulated
strength, and the business synchronization achieved rapid growth.
In 2018, refrigerator and freezer business achieved revenue of approximately RMB 8.168 billion,
9.42% increased on a y-o-y basis; air-conditioning business achieved revenue of approximately
RMB 6.777 billion, 3.26% down y-o-y; washing machine business achieve revenue around RMB
0.514 billion, with year-on-year decline of 27.19 %; other business of kitchen & toilet products and
small home and Refrigeration accessories appliance have revenue approximately as RMB 1.000
billion with 19.34% up y-o-y. At the same time, revenue from exportation gains RMB 37.10 billion,
a y-o-y decrease of 3.41%.
2. Progress of the company's development strategy and business plan during the reporting
period
During the reporting period, in accordance with the development strategy and operating principles
of “product leading, marketing transformation, efficiency enhancement and team activation” in
2018, the company has deployed the annual business plan, arranged the production and
management, and carried out the following activities:
(1) Product leading
Along with the overall sluggish home appliance market, the trend of quality consumption upgrading
became obvious, and the high-end transformation has become the key for major enterprises to get
                                                 22
                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
out of the predicament. The company adhered to taking the needs of users as the starting point, and
carefully built the core competitiveness of enterprises with technological innovation and product
innovation to accelerate product upgrades. During the reporting period, the company carried out
product upgrades around the two major product strategies of intelligence and frequency conversion,
took breakthroughs in fresh-keeping, thin wall and energy efficiency upgrades, thereby
comprehensively enhanced the competitiveness of products and further strengthened the advantages
of frequency conversion differentiation. In terms of technical research, the company adhered to the
basic research and upgrade of core technology, maintained the existing technological advantages,
expanded the innovation and upgrade in technological field, achieved differentiated breakthroughs,
and launched high-end products to lead the industry’s wind vane.
In 2018, through the in-depth development of “M Fresh Life Series” and “Ultra-thin Wall
Refrigerator”, the company launched a number of M Fresh Life refrigerators, one M Fresh Life
freezer, and five full thin wall products for trial production during the year, of which the research
and development, manufacturing, supply chain and marketing were all highly efficient. In 2018, the
company carried out the food storage comparison of M Fresh Life “keeping the roses fresh for 33
days”, 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”. In addition, in terms of air conditioning, intelligent and
inverter air conditioner products played a leading role, and the application of the fourth generation
technology of precise temperature control significantly improved the air conditioning comfort and
greatly enhanced the user perception. Q3Ts cabinet that adopted the industry’s first artificial
intelligence image recognition, gesture recognition and other technologies not only won many
awards in the industry, but also had outstanding market performance. Q5K cabinet adopted the new
appearance with original seam-inspired wind design and equipped with the latest super-level fourth
generation precision control technology platform to achieve the micro-seam comfort wind effect
and enhance the user’s comfortable experience.
In February 2019, the company released the “M Fresh Life” comprehensive thin series products.
The company’s “M Fresh Life” comprehensive thin series products continued to inherit the brand
effect of “M Fresh Life”, the comprehensive thin products was positioned as the “M Fresh Life”
high-end series, and through the comprehensive upgrading of product technology, quality and
performance and the upgrading of water molecule activation fresh-keeping technology, the
company has developed a comprehensive thin GLS integration technology to achieve a thin body, a
thin box and a thin door. In order to allow consumers to enjoy the higher quality experience, the
                                                  23
                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
company is accelerating the “three promotions” action of quality, taste and brand so as to inject new
vitality into the high-end consumer market.
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:      market performance of vary products are meets the anticipation basically
through the e-commerce transformation, value transformation, channel transformation, and
organizational transformation of traditional business.
The company’s domestic sales of refrigerators, freezers, and washing machines outperformed the
industry market, the product structure of refrigerators (freezers), air conditioners and washing
machine has been optimized and upgraded, and the market position has been further consolidated
and upgraded. CMM’s data showed that the retail sales of refrigerator industry declined by 5.57%
on a year-on-year basis, but the retail sales of the company’s refrigerator declined by 4.20% on a
year-on-year basis; the retail sales of freezer industry declined by 0.63% on a year-on-year basis,
and the retail sales of the company’s freezer rose by 12.01% on a year-on-year basis; the retail sales
of air-conditioner industry declined by 3.66% on a year-on-year basis, and the retail sales of the
company’s air conditioner declined by 11.56% on a year-on-year basis; the retail sales of washing
machine industry declined by 3.38% on a year-on-year basis, but the retail sales of the company’s
washing machine rose by 4.26% on a year-on-year basis. At the same time, CMM’s data showed
that the market share of the company’s refrigerator retail sales reached 8.99%, an increase of 0.17%
on a year-on-year basis; the market share of freezer retail sales reached 10.53%, an increase of
1.24% on a year-on-year basis; the market share of the air conditioning and washing machine retail
sales was basically the same as that of the same period of last year.
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
improved, and the proportion of overseas air-cooled refrigerators has 56% growth on a y-o-y basis,
management quality promoted greatly, the proportion of medium and high-end air-conditioning
                                                      24
                                                              CHANGHONG MEILING CO.,LTD. Annual Report 2018
products is also increasing, and the profitability of export products is improving significantly.
(3) Efficiency enhancement
The company’s comprehensive competitiveness in terms of the market unit price, quality
improvement and efficiency improvement has been promoted by taking bench-marking
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; continue to
publicize, train, propagate and guide the corporate culture, precipitate the corporate culture, and
promote the organizational atmosphere.
As a whole, in 2018, under the background that quality consumption was brought about by
intensifying competition, consumption upgrades, and renewal demand, the industry has set off a
wave of product upgrades, and the high-end market has gradually become the main battlefield of
competition. In this regard, the company firmly grasped the main line of business development,
focused on the 13th five-year development planning route through the joint efforts of all Meiling
people, and achieved the company’s steady improvement through the core technology and product
traction, by strengthening the mechanism management innovation, and vigorously activating the
internal team. At the same time, the product sales outperformed the market, the product structure
was upgraded obviously, and the proportion of frequency conversion and intelligent products
continued to increase, especially the release of “M Fresh Life” series refrigerators set off a wave of
fresh-keeping technology in the industry and led the industry fresh-keeping revolution. As an
important product for the company’s transformation to the high-end consumer market, “M Fresh
Life” series refrigerators not only enhanced the company’s high-end brand image, but also further
promoted the upgrading of the product structure of the company’s refrigerator (freezer).
                                                   25
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
 (ii) Revenue and cost
1. Constitute of operation revenue
                                                                                                             In RMB
                                      2018                                  2017
                                                                                                      Increase/decr
                                        Ratio in operation                       Ratio in operation
                          Amount                                 Amount                                 ease y-o-y
                                             revenue                                  revenue
Total operation
                    17,490,174,950.01               100% 16,797,436,757.36                    100%           4.12%
revenue
According to industries
Manufacture of
household           16,458,650,756.15             94.10% 16,013,327,582.28                  95.33%           2.78%
appliances
Other business       1,031,524,193.86              5.90%       784,109,175.08                 4.67%        31.55%
According to products
Refrigerator,
                     8,167,773,533.33             46.70%      7,464,503,149.31              44.44%           9.42%
freezer
Air-conditioning     6,777,093,389.43             38.75%      7,005,144,650.67              41.70%          -3.26%
Washing
                       513,917,450.54              2.94%       705,875,802.77                 4.20%        -27.19%
machine
Small appliance
and kitchen &          689,072,966.20              3.94%       536,291,620.64                 3.19%        28.49%
toilet
Other products         310,793,416.65              1.77%       301,512,358.89                 1.80%          3.08%
Other business       1,031,524,193.86              5.90%       784,109,175.08                 4.67%        31.55%
According to region
Domestic            13,768,743,643.18             78.72% 12,941,622,221.55                  77.05%           6.39%
Foreign              3,721,431,306.83             21.28%      3,855,814,535.81              22.95%          -3.49%
2. About the industries, products, or regions accounting for over 10% of the company’s operating income or
operating profit
     √ Applicable □ Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
□ Yes √ No
                                                                                                            In RMB
                                                           Gross Increase/decreas Increase/decrea Increase/decrea
                  Operating revenue     Operating cost
                                                         profit ratio e of operating se of operating se of gross
                                                         26
                                                                          CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                           revenue y-o-y     cost y-o-y     profit ratio
                                                                                                              y-o-y
According to industries
Manufacture of
household           16,458,650,756.15 13,273,395,942.04          19.35%            2.78%           1.38%            1.11%
appliances
According to products
Refrigerator,
                      8,167,773,533.33 6,390,896,089.57          21.75%            9.42%           5.77%            2.70%
freezer
Air-conditioning      6,777,093,389.43 5,636,463,273.39          16.83%           -3.26%          -2.26%            -0.84%
Small appliance
and kitchen &           689,072,966.20     583,308,199.41        15.35%           28.49%          27.73%            0.50%
toilet
According to region
Domestic            12,748,897,296.29 9,988,923,192.37           21.65%            4.74%           5.53%            -0.59%
Foreign               3,709,753,459.86 3,284,472,749.67          11.46%           -3.41%          -9.45%            5.89%
  Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
  business based on latest one year’s scope of period-end
  □ Applicable √ Not applicable
  3. Income from physical sales larger than income from labors
  √ Yes □ No
                                                                                                    Increase/decrease
       Industries              Item              Unit               2018                2017
                                                                                                          y-o-y
                                            10 thousand
                            Sales volume                           1,606.40           1,508.66             6.48%
                                             pieces/set
    Manufacture of
     household                              10 thousand
                             Production                            1,581.94           1,547.89             2.20%
     appliances                              pieces/set
      industry
                                            10 thousand
                             Inventory                             145.39              169.85             -14.40%
                                             pieces/set
  Reasons for y-o-y relevant data with over 30% changes
          □ Applicable √      Not applicable
  4. Fulfillment of the company’s signed significant sales contracts up to this reporting period
          □ Applicable √      Not applicable
  5. Constitute of operation cost
  Industry classification
                                                            27
                                                                          CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                                                                In RMB
                                                2018                                   2017
                                                                                                           Increase/de
                                                          Ratio in                             Ratio in
   Industries         Item                                                                                   crease
                                        Amount           operation            Amount          operation
                                                                                                              y-o-y
                                                           cost                                 cost
Manufacture of
household      Raw material          12,224,876,343.70      92.10%        12,170,622,123.33       92.96%        -0.86%
appliances
      Note: nil
6. Whether the changes in the scope of consolidation in Reporting Period
√ Yes □ No
More details can be seen in the report “VII. Changes in the scope of the merger” and “VIII. Interests in other
entities” of “Section XI Financial Report”
7. Major changes or adjustment in business, product or service of the Company in Reporting Period
      □ Applicable √         Not applicable
8. Major sales and main suppliers
(1) Major sales client of the Company
Total top five clients in sales (RMB)                                                                 4,913,712,759.11
Proportion in total annual sales volume for top five clients                                                    28.09%
Proportion of the related parties’ sales in total annual sales
                                                                                                                15.81%
volume for top five clients
Information of top five clients of the Company
  Serial                     Name                           Sales (RMB)              Proportion in total annual sales
    1                        Client I                           2,547,232,568.77                               14.56%
    2                      Client II                            1,170,731,664.10                                 6.69%
    3                     Client III                               579,359,172.39                                3.31%
    4                     Client IV                                397,714,147.65                                2.28%
    5                      Client V                                218,675,206.20                                1.25%
Total                           --                                4,913,712,759.11                             28.09%
Other situation of main clients
□ Applicable √       Not applicable
(2) Main suppliers of the Company
                                                           28
                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
Total purchase amount from top five suppliers (RMB)                                                  3,076,496,670.06
Proportion in total annual purchase amount for top five
                                                                                                              24.09%
suppliers
Proportion of related party’s purchase in total annual purchase
                                                                                                              14.15%
amount for top five suppliers
Information of top five suppliers of the Company
   Serial                  Name                           Sales (RMB)             Proportion in total annual purchase
     1                   Supplier I                             733,653,149.28                                  5.75%
     2                   Supplier II                            662,814,025.83                                  5.19%
     3                  Supplier III                            606,625,874.31                                  4.75%
     4                  Supplier IV                             537,900,775.75                                  4.21%
     5                   Supplier V                             535,502,844.89                                  4.19%
Total                        --                                3,076,496,670.06                               24.09%
Other notes of main suppliers of the Company
□ Applicable √      Not applicable
(iii) Expenses
                                                                                                               In RMB
                                                                  Increase/decreas
                              2018                 2017                                   Note of major changes
                                                                       e y-o-y
                                                                                     Sales expense increase with the
Sales expense           2,576,277,169.86 2,434,337,059.85                  5.83%
                                                                                     more sales scale in the period
Administrative
                          317,917,548.03      285,953,969.91              11.18% -
expense
                                                                                     Exchange gains increased in the
Financial expense          -39,305,608.74      -33,648,833.18            -16.81%
                                                                                     period
                                                                                     Mote investment in R&D in the
R&D expense               235,299,398.06      210,977,773.13              11.53%
                                                                                     period
                                                                                     Taxable income in the period
Income tax expense            -533,886.62       20,520,373.53           -102.60%
                                                                                     decline
(iv) Investment in R&D
     √ Applicable □ Not applicable
In 2018, the Company continues to insisted on the upgrade of fundamental research on core technology in
technical research, maintained its technological advantages, expanded the innovation and upgrade in the
technological field, made breakthroughs in differentiation, continued to promote product upgrades, and led the
development orientation in the industry.
                                                          29
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
In terms of the refrigerator, the Company focused on its technology planning and core technology for technology
development, and carried out the research on human-computer interaction techniques, food refreshment
technology, energy saving and mute technology, wide rotation speed variable frequency technology, air duct
design technology, and vacuum insulation technology, etc. The “M Fresh Life” series refrigerator with the
Company’s original “water molecules activation and preservation technology” lifted a preservation revolution in
refrigerator industry, greatly promoted the market shares, brand influence and reputation of the high-end products;
in addition, in order to realize the high-end transformation, technological innovation and industry leading by
advancing the follow-up research, popularization, and technology updates of intelligent and variable frequency
products, the Company intensified the advance of research and development of a new generation of CHiQ
products, continued to vigorously promote 0.1 ℃ variable frequency series refrigerator and realize the continuous
increase in proportion of intelligent and variable frequency refrigerators and variable frequency freezer. The
release of new generation of CHiQ with auto-door are cause great concern in industry and market.Accelerate the
popularity of small and medium-sized air-cooled refrigerators, and the proportion of air-cooled refrigerators
continues to rise rapidly. The completion of the research of comprehensive thin technology and series of products
will further enhance the brand image and accelerate the transition to the high end.
In air conditioning, according to the strategic planning of holistic intelligent air ecosystem, the Company core
with the technical strategic as intelligence and frequency conversion, carrying out variable frequency control in
depth, CFD&CAE simulation, intelligent voice, and basic core ability construction as recognition and interaction
etc. Focus on user perception and user experience, and create the super-energy-saving, super-comfortable and
super-quiet health air conditioner based on the application of                                the fourth-generation
intelligent comfort and precision temperature control technology platform controlled by PMV in batch products;
make major breakthroughs in the improvement of the air duct sound quality of air-conditioner indoor unit and the
expansion sound of plastic parts, and enhance the brand competitiveness; the product’s working performance in
the harsh environment is on the advanced level of the industry, and the improvement effect is obvious; take the
lead in carrying out the research and application of the voiceprint recognition function of intelligent voice in the
industry, and greatly improve the product image; the Xiaomi and Smartmi OEM frequency conversion outboard
motor products have begun mass production and come onto the market.
In terms of biomedical, Zhongke Meiling, a new three board listed subsidiary of the company, continuously
increased its R&D investment. During the reporting period, the 5 series freezer platform products equipped with
the brand new control system were launched in batches; the self-developed explosion-proof refrigerators obtained
the explosion-proof medical freezer certification; the new vaccine storage solution was designed to ensure the
temperature uniformity and stability in the freezer and guarantee the supervision of vaccine; the intelligent
wireless monitoring and Android screen control system platform thoroughly got through the technical bottleneck
of product end cloud integration; many life science and laboratory products entered the pre-development stage,
such as clean workbench, biological safety cabinet and so on.
R&D investment of the Company
                                                         30
                                                                   CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                             2018                       2017                    Change ratio
Number of R&D (people)                                  1,649                       1570                    5.03%
                                                                                             1.23 percentage points
Ratio of number of R&D                                 15.52%                   14.29%
                                                                                                                up
R&D investment (Yuan)                         821,742,728.27            761,572,843.03                      7.90%
R&D investment accounted for                                                                 0.17 percentage points
                                                       4.70%                       4.53%
R&D income                                                                                                      up
R&D investment capitalization
                                              152,448,558.04            116,704,686.42                     30.63%
(Yuan)
Capitalization R&D investment                                                                3.23 percentage points
                                                       18.55%                   15.32%
accounted for R&D investment                                                                                    up
The reason of great changes in the proportion of total R&D investment accounted for operation income than last
year
     □ Applicable √      Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
     √Applicable □ Not applicable
      The company carried out product upgrades around product strategies of fresh keeping,
intelligence and variable frequency, and accelerated the layout of new products, which further
consolidated and promoted the market position. During the reporting period, the company increased
investment in the refrigerator (freezer), air-conditioning technology research and the high
value-added new product development, especially the investment in thin-wall technology and its
application, long-term fresh keeping technology (water molecule activation and fresh keeping
technology, etc.), variable frequency technology development and intelligent product technology
development, resulting in a significant increase in the amount of R&D investment capitalization
during the reporting period compared to the previous year.
(v) Cash flow
                                                                                                           In RMB
                Item                            2018                        2017                 Y-o-y changes
Subtotal of cash in-flow from
                                              16,778,361,372.57          14,940,892,460.66                 12.30%
operation activity
Subtotal of cash out-flow from
                                              16,998,921,987.93          15,492,394,455.40                  9.72%
operation activity
Net cash flow from operation
                                                -220,560,615.36            -551,501,994.74                 60.01%
activity
Subtotal of cash in-flow from
                                               3,668,508,401.66           5,451,591,320.85                -32.71%
investment activity
                                                        31
                                                                  CHANGHONG MEILING CO.,LTD. Annual Report 2018
 Subtotal of cash out-flow from
                                               4,623,429,604.21         4,960,940,585.00               -6.80%
 investment activity
 Net cash flow from investment
                                                -954,921,202.55           490,650,735.85            -294.62%
 activity
 Subtotal of cash in-flow from
                                               3,213,434,868.63         2,880,194,862.03              11.57%
 financing activity
 Subtotal of cash out-flow from
                                               2,646,463,305.11         1,673,559,914.76              58.13%
 financing activity
 Net cash flow from financing
                                                 566,971,563.52         1,206,634,947.27             -53.01%
 activity
 Net increased amount of cash and
                                                -605,122,582.46         1,103,667,350.63            -154.83%
 cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
     √ Applicable □ Not applicable
     The net cash flow arising from operation activities in 2018 amounted as -221 million Yuan,
increased 331 million Yuan over that of last year’s -552 million Yuan, a 60.01% goes up, mainly
because on a y-o-y basis, the cash received from goods sales and offering labor service in the period
increased over that of cash paid for purchasing goods and accepting labor service.
     The large change in net cash flow from investing activities was mainly due to the year-on-year
decrease in net cash recovered from the entrusted money management of the company during the
period.
     The large change in net cash flow from financing activities was mainly due to the year-on-year
increase in cash paid by the company for repayment of debts during the period.
Reasons of major difference between the cash flow of operation activity in report period and net profit of
the Company
     √ Applicable □ Not applicable
     Mainly due to the decrease in inventory and operating payables at the end of the reporting
period compared to the beginning of the year.
III. Analysis of the non-main business
□ Applicable □ Not applicable
                                                                                                      In RMB
                                            Ratio in                                                Whether be
                           Amount            total                       Note                       sustainable
                                             profit                                                   (Y/N)
Investment income            3,931,358.68    11.45% -                                                   N
                                                        32
                                                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
Gains/losses from                                          Losses from the fair value of forward foreign
                              -45,949,257.12 -133.80%                                                             N
fair value changes                                         exchange contract changed in the period
                                                           The accrual of inventory falling price reserves
Asset impairment               39,253,891.46 114.30%                                                              N
                                                           increased in the period
Non-operation
                                6,486,445.70      18.89% -                                                        N
income
Non-operation                                              Penalty payable and relocation expenditure in
                               21,268,525.58      61.93%                                                          N
expenditure                                                the period
 IV. Assets and liability
 (i) Major changes of assets composition
                                                                                                                In RMB
                            End of 2018                    End of 2017
                                       Ratio in                                    Ratio
                                                                       Ratio in                Notes of major changes
                        Amount           total        Amount                      changes
                                                                     total assets
                                        assets
                                                                                             Entrusted investment
Monetary fund        4,596,077,557.40 29.53% 5,283,081,788.04            33.10%     -3.57%
                                                                                             increased in the period
Account
                     1,670,988,644.76 10.74% 1,780,416,509.02            11.15%     -0.41% No major changes
receivable
                                                                                             Inventory turnover speed up
Inventory            2,174,436,573.67 13.97% 2,918,100,650.27            18.28%     -4.31%
                                                                                             in the period
                                                                                          Investment real estate from
Investment real
                       46,846,507.41      0.30%       9,569,711.72        0.06%     0.24% subsidiary increased in the
estate
                                                                                          period
Long-term
                                                                                             Losses from joint venture in
equity                 61,869,440.55      0.40%      90,534,671.92        0.57%     -0.17%
                                                                                             the period
investment
                                                                                          Mainly due to the increase
                                                                                          in the transfer of the
Fix assets           1,733,957,012.14 11.14% 1,515,302,743.61             9.49%     1.65%
                                                                                          company’s construction in
                                                                                          progress during the period.
                                                                                          Construction in progress
                                                                                          have more investment by
Construction in
                      464,558,352.60      2.99%     174,857,717.15        1.10%     1.89% parent company and
progress
                                                                                          subsidiary Changhong
                                                                                          Air-conditioner in the period
                                                                                          Short-term loans of parent
Short-term
                     2,336,373,929.62 15.01% 1,631,206,000.00            10.22%     4.79% company increased in the
 loans
                                                                                          period
                                                             33
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                                      The long-term loans due
                                                                                      within one year was
 Long-term
                          1,920,000.00    0.01%     253,160,000.00    1.59%    -1.58% re-classified as
 loans
                                                                                      “Non-current liability due
                                                                                      within one year”
  (ii) Assets and liability measured by fair value
        √ Applicable     □ Not applicable
                                                                                                          In RMB
                                                                  Devaluatio Amount
                                  Changes of fair Accumulative                       Amount
                    Amount at the                                    n of      of
                                       value      changes of fair                    of sale in Amount at end
        Items        beginning                                    withdrawi purchase
                                  gains/losses in value reckoned                        the      of the period
                       period                                      ng in the in the
                                    this period     into equity                       period
                                                                    period   period
Financial assets
1. Financial assets
measured by fair
value and whose
change is recorded
in current gains    15,646,731.48        -6,393,095.89                                                 9,253,635.59
and losses
(excluding
derivative
financial assets)
Subtotal of
                     15,646,731.48       -6,393,095.89                                                 9,253,635.59
financial assets
Total                15,646,731.48       -6,393,095.89                                                 9,253,635.59
Financial liabilities 16,034,000.00 39,552,666.70                                                     55,586,666.70
  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
                                                            34
                                                                  CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                     Investment in the same period of last
 Investment in the reporting (RMB)                                                     Changes
                                                 year ( RMB)
                     46,004,000.00                         992,441,301.50                            -95.36%
(ii) The major equity investment obtained in the reporting period
     √ Applicable   □ Not applicable
                                                      35
                                                                                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                                                                                                                                                                      In RMB
                                                      Metho                                Capita                   Term         Type                                                        Wheth         Date of
                                                                                                                                                               Expect                                                    Index of disclosure (if
 Invested                                                 d of   Amount of     Sharehold      l                         of        of      Status as of the              Current investment     er       disclosure (if
                       Principal business                                                               Partners                                                ed
 company                                              invest     investment       ing      source                   invest produc balance sheet date                      profit and loss    litigati                          applicable
                                                                                                                                                               return                                    applicable
                                                          ment                                s                     ment          ts                                                           on                                   )
                                                                                                                                                                                                              )
Meiling                                                                                                                      Washi Invested 15 million
            R&D, sales and after-sale services of     Capita                                                                                                   Not
CANDY                                                                                      Self-o                            ng         Yuan during the                                                                  Juchao Website:
            washing machines; own and operate all l                                                  Candy Hoover 20                                           app
Washing                                                           90,000,000        60% wned                                 machi period and totally 60                     -4,061,254.55     N           2017-3-30 http://www.cninfo.co
            types of goods and technology import      invest                                         Group S.r.l   years                                       lica
Machine                                                                                    capital                           ne,        million Yuan                                                                     m.cn(No.: 2017-010)
            & export business                         ment                                                                                                     ble
Co., Ltd.                                                                                                                    etc.       invested acculturate
            Development, production and sales of
            computer hardware & software,
            technology development, production
            and sales of internet of Things
            equipment, development and
            maintenance of E-commerce software,
            information service, technical transfer                                                                                                                                                                      Juchao Website:
                                                      Capita                                         Management              Fresh Invested                    Not
Changmei    and services of the internet, domestic                                         Self-o                                                                                                           2016-1-8; http://www.cninfo.co
                                                      l                                              team of       20        online Capital of                 app
Technology AD designing, production, agencies                     48,128,000 96.256% wned                                                                                  -17,209,628.36      N         2016-11-26; m.cn(No.: 2016-002,
                                                      invest                                         Changmei      years     retailer 15.704 million Yuan lica
Co., Ltd.   and release, sales of prepackaged food,                                        capital                                                                                                        2017-11-10 No.: 2016-068, No.:
                                                      ment                                           Technology              s            in the period 报     ble
            dairy products, general merchandise,                                                                                                                                                                         2017-088)
            alcohol, beverage and agricultural
            products, crop planting, self-support
            goods and technology import and
            export business(Except for items
            prohibited or restricted by laws and
            regulations)
Hongyuan    Production and sales of the system and Capita         25,500,000        51% Self-o Ever Source         Long-t Groun Invested capital of            Not           -5,795,344.98     N           2015-4-18 Juchao Website:
                                                                                                                   36
                                                                                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
Ground        parts of ground energy heat & cold        l                                   wned Science &             erm       d         15.3 million Yuan     app                                                   http://www.cninfo.co
Energy        integrated machine, sales of home         invest                              capital Technology                   energy during the period        lica                                                  m.cn(No.: 2015-016)
Heat          appliance, raw material of home           ment                                           Development               heat & and completed the        ble
              appliance and parts                                                                      Group Co.,                cold      contribution amount
Pump
                                                                                                       Ltd.                      integra
Tech. Co.
                                                                                                                                 ted
Ltd.
                                                                                                                                 machi
                                                                                                                                 ne
Total                              --                       --    163,628,000      --         --              --            --        --            --                  -- -27,066,227.89       --          --                   --
                (iii) The major non-equity investment doing in the reporting period
                      √ Applicable          □ Not applicable
                                                                                                                                                                                                                      In RMB
                                        Industry                                                                                                                                     Reasons for
                                                                                                                                                                        Accrued
                    Invest    Fixed     involved                         Accrued Actual                                                                                             not Reaching
                                                   Investment Amount                          Capita                                                             Realized Income
                    ment Investm            in                          Investment Amount                                                          Anticipated                       the Planned      Disclosed        Disclosed Index (if
  Project Name                                      in this Reporting                              l                Project Schedule                             up to the End of
                    Metho ents or Investm                                up to the End of                                                            Income                         Schedule and     Date (if any)            any)
                                                         Period                              Source                                                                 Reporting
                      d        not          ent                          Reporting Period                                                                                            Anticipated
                                                                                                                                                                        Period
                                        Projects                                                                                                                                       Income
Intelligent                                                                                                                                                      Completed an
production line                         Home                                                                                                                     intelligent
for one million                         applianc                                                                                                                 production line
                                                                                             Self-o                                                                                                                  Juchao Website:
sets of            Self-b               e                                                               The project completed and come                           for one million
                             Yes                        72,386,347.52       156,797,364.00 wned                                                          -                          Not applicable 2017-3-14         www.cninfo.com.cn(N
eco-friendly and uilt                   manufac                                                         into service                                             sets of
                                                                                             capital                                                                                                                 o.: 2017-006)
energy-saving                           turing                                                                                                                   eco-friendly and
refrigerators                           industry                                                                                                                 energy-saving
(note 1)                                                                                                                                                         refrigerators
Production base Self-b Yes              Home            59,037,970.14       198,573,870.14 Self-o The company                                     The            Project is under Not applicable 2017-3-30;          Juchao Website:
                                                                                                                       37
                                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
for two million     uilt           applianc                                             wned successfully bade for the plant, of production           planning during            2017-4-14       www.cninfo.com.cn(N
sets of automatic                  e                                                    capital fice building and land use rights capacity of 2 the reporting                                    o.: 2017-010, No.:
washing                            manufac                                                      under the name of Anhui Dongw million sets period, no                                            2017-024)
machine (note 2)                   turing                                                       ei Solar Technology Co., Ltd. fro of automatic income yet.
                                   industry                                                     m the judicial sale with its own    washing
                                                                                                funds of RMB134, 585,900; curre machine
                                                                                                ntly, the phase I project (annual   shall       be
                                                                                                output of 0.5 million sets of auto formed after
                                                                                                matic washing machine for one s this project
                                                                                                hit)has came into production        being       put
                                                                                                                                    into
                                                                                                                                    operation
Total                  --   --         --      131,424,317.66        355,371,234.14        --                     --                                                    --              --                    --
             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 session of the 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 intelligent production line for one million sets of eco-friendly and energy-saving refrigerators. 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 has completed and came into service so
             far.
             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 29 th session of the 8th Board of Directors approved and agreed the company’s to invest no more than RMB 371,210,000 in
             the construction of the production base for two million sets of automatic washing machine. In addition, the 29th session of the 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.Currently, the phase I project (annual output
             of 0.5 million sets of automatic washing machine for one shit) has came into production officially
                                                                                                            38
                                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
            (iv) Financial assets investment
            1. Securities investment
                 □ Applicable √           Not applicable
            2. Derivative investment
                 √ Applicable        □ Not applicable
                                                                                                                                                                                     In 10 thousand Yuan
                                                                                                                                                    Amount of                         Ratio of
                                                                                                                                                    reserve for                      investment
                  Relate Whether                                                                                     Amount
                                                                                                    Investment                     Amount sales in devaluation    Investment         amount at          Actual
                    d      related                  Initial                                                        purchased in
    Operator                            Type                         Start date        End date      amount at                      the reporting       of        amount at       period-end in net gains/losses in
                  relatio trade or               investment                                                        the reporting
                                                                                                    period-begin                       period       withdrawing   period-end        assets of the       period
                  nship      not                                                                                      period
                                                                                                                                                        (if                         Company at
                                                                                                                                                    applicable)                      period-end
                                     Forward
Financial                            foreign                                      23     December
                  N/A     No                       367,218.32 14 June 2017                            210,705.91     482,036.08        547,658.54        -           149,739.86            29.85%          -4,656.41
institution                          exchange                                     2019
                                     contract
Total                                              367,218.32           --               --           210,705.91     482,036.08        547,658.54        -           149,739.86            29.85%          -4,656.41
Capital resource(if applicable)                 Self-owned capital
Lawsuit involved (if applicable)                Not applicable
Disclosure date for approval from the Board
                                                30 March 2018
for investment of derivatives (if applicable)
Disclosure date for approval from board of
shareholders for investment of derivatives (if 11 May 2018
applicable)
                                                                                                           39
                                                                                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                   Risk analysis:
                                                   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
                                                   foreign currency exchange rates, combined with prediction of consignments, and burdening ability to price variations due to exchange rate fluctuations, then
                                                   determine the plan of forward foreign exchange contracts, and make dynamic management to the business, to ensure reasonable profit level.
                                                   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
Risk analysis and controlling measures for
                                                   authenticity. In addition, forward foreign exchange transactions are processed with bank credit, will not affect liquidity of company funds.
derivatives holdings in the Period (including
                                                   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
but not limited to market risk, liquidity risk,
                                                   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
credit risks, operation risk and law risks etc.)
                                                   China, China Construction Bank and other chines e-funded banks with a joint-stock system as Everbright and Industrial Bank, as well as the foreign-funded banks as
                                                   UOB, Oversea Chinese Bank and the Bank of East Asia etc. to conduct the trading of foreign exchange capital. These banks share a solid strength and management
                                                   whose failure and the risk of loss may bring to the Company is very low.
                                                   4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The Company has formulated
                                                   related management system which defines the operation process and responsibility to prevent and control risks.
                                                   5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign exchange transactions are
                                                   processing. The Company will strengthen legal review, and choose good bank to carry out this kind of business as to risk control.
Invested derivative products have 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. While
analysis of the fair value of derivatives,         fair-value of derivatives is mainly obtained according to the balance between prices given by outstanding contracts and forward prices given by contracts signed
disclosed specific applied methods and             during the reporting period with bank. The differences are identified as trading financial assets and liabilities. During the reporting period, forward foreign exchange
correlation assumption and parameter setting contracts and losses of the Company is RMB -46,564,100.
Specific principle of the accounting policy
and calculation for derivatives in the Period
                                                   Not applicable
compared with last period in aspect of major
changes
                                                   Upon inspection, the independent directors of the Company believes that: during the reporting period, the Company carried out its foreign exchange forward deals in
Special opinion on derivative investment and
                                                   strict compliance with the standardized operation guidelines for listed issuer on main board (2015 amended) issued by Shenzhen Stock Exchange, the Articles of
risk control by independent directors
                                                   Association, Authorization Management of the Company, Management System in relating to Foreign Exchange Forward Deals of Hefei Meiling Co., Ltd., and these
                                                                                                              40
                                                                                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                               deals were conducted within the authorization scope under general meeting and board meeting. The Company conducts no foreign exchange transactions on the
                                               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
                                               business operations with purpose of avoiding the preventing the risks in exchange rate. The forward foreign exchange fund transaction benefit a lot in avoiding the
                                               exchange rate risks in import and exports 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.
         (v) Application of raised proceeds
                √ Applicable     □ Not applicable
         1. Overall application of raised proceeds
                √ Applicable     □ Not applicable
                                                                                                                                                                                                 In 10 thousand Yuan
                                                                                               Total raised         Cumulative          Ratio of
                                                Total raised capital                            capital has        raised capitals    cumulative        Total accumulative    Usage of the retained raised       Raised capitals idle
                                                                       Total accumulative
  Year        Way      Total raised capitals           used                                   purpose of uses has purpose of raised capitals              raised capitals    capitals and what is expected       for more than two
                                                                       raised capitals used
                                                     in Period                                  changed in         uses changed      has purpose of          unused          to invested with those capitals            years
                                                                                                  Period              in total       uses changed
                                                                                                                                                                             The raised funds that the
                                                                                                                                                                             Company has not run out will
         Non-public                                                                                                                                                          continue to complete the
2016     offering of       154,073.272276            20,349.247113          71,151.385865                     0                  0                 0%       92,025.292981 corresponding investment as                              --
         A-shares                                                                                                                                                            planned. At the same time,
                                                                                                                                                                             according to the planning for
                                                                                                                                                                             equity investment projects, it’s
                                                                                                              41
                                                                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                                                                                                                  agreed the Company to use
                                                                                                                                                                  the idle raised funds of no
                                                                                                                                                                  more than RMB 940 million
                                                                                                                                                                  (The amount can be rolled
                                                                                                                                                                  over) to invest in the
                                                                                                                                                                  principal-protected financial
                                                                                                                                                                  products after being approved
                                                                                                                                                                  by the Company’s board of
                                                                                                                                                                  directors, board of
                                                                                                                                                                  supervisors, and the
                                                                                                                                                                  resolutions of shareholders’
                                                                                                                                                                  meeting, and after the
                                                                                                                                                                  independent directors issuing
                                                                                                                                                                  agreed independent opinions
                                                                                                                                                                  and sponsor agencies issuing
                                                                                                                                                                  unanimous verification
                                                                                                                                                                  opinions. The remaining funds
                                                                                                                                                                  are deposited in the
                                                                                                                                                                  designated raised capital
                                                                                                                                                                  account.
Total            --            154,073.272276         20,349.247113        71,151.385865                 0               0              0%        92,025.292981                  --
                                                                                   Explanation on General usage of raised capital
Being deliberated and approved by 1st extraordinary shareholders meeting of 2016 and 17th session of 8th BOD, and verified by the Reply on Private Placement of Hefei Meiling Co., Ltd. (CSRC XK [2016] No.1396)
issued from CSRC, the Company successfully offering 280,858,676 shares (A-stock) to 7 qualified investors, including Sichuan Changhong Electric Co., Ltd. (hereinafter referred as to Sichuan Changhong), with price
of 5.59 Yuan/Share and face value of 1.00 Yuan. According to the Verification Report XYZH/2016CDA40272 issued by Shine Wing Certified Public Accountants (LLP), total raised fund amounting to
1,569,999,998.84 Yuan, less vary issuance changes (tax included) 29,267,276.08 Yuan, raised fund amounts to 1,540,732,722.76 Yuan.
Ended as 31 December 2018, actually fund of raised used accumulative amounted as 711,513,858.65 Yuan in total, balance of the account for fund raised counted as 920,252,929.81 Yuan (including interest income
accumulative amounted as 10,924,322.94 Yuan and income from financial product at expiration 79,962,401.75 Yuan)
The Company accumulative used the fund raised amounted as 711,513,858.65 Yuan, the use of purpose including: intelligent construction has 123,057,203.64 Yuan in used; R&D ability for intelligence and new
                                                                                                        42
                                                                                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
  products for intelligent household appliance has 272,575,391.24 Yuan in used; smart life project totally used 45,001,200.00 Yuan; used in current fund supplementary counted as 270,880,063.77 Yuan (including saving
  interest of 147,341.01 Yuan)
                      2. Situation of committed project of raised proceed
                      √ Applicable           □ Not applicable
                                                                                                                                                                                                   In 10 thousand Yuan
                               Change the                                                                                             Investment
                                                                                                                    Cumulative                                                                       Achieved
  Committed investment        project (Y/N)                                                                                           progress till        Date of reach a            Benefit                     Major changes of
                                                 Total raised-fund   Investment after    Invested in the       investment amount                                                                     expected
  projects and over-raised       (including                                                                                              end of        predetermined state of        achieved in                  project feasibility
                                                   commitment        adjustment (1)          period                 till end of                                                                       benefits
      fund investment             partially                                                                                          period-end (3)                 use              the Period                          (Y/N)
                                                                                                                 Period-end (2)                                                                        (Y/N)
                                  changed)                                                                                             =(2)/(1)
Committed investment project
                                                                                                                                                      Intelligent
                                                                                                                                                      manufacturing (Hefei)
                                                                                                                                                      project: end of
Construction of intelligent                                                                                                                                                                             Not
                              N                          39,100.00           39,100.00       4036.739920             12,305.720364          31.47% December of 2021,                     --                               N
manufacturing project                                                                                                                                                                                applicable
                                                                                                                                                      construction project of
                                                                                                                                                      freezer intelligent : end
                                                                                                                                                      of December of 2021
Construction of intelligent
R&D capability and new
                                                                                                                                                      End of December of                                Not
products development of       N                          55,900.00           55,900.00     14,962.471193             27,257.539124          48.76%                                       --                               N
                                                                                                                                                      2021                                           applicable
the intelligent appliance
technology
                                                                                                                                                                                                        Not
Intelligent life project      N                          32,000.00           32,000.00       1,350.036000             4,500.120000          14.06% April 2021                            --                               N
                                                                                                                                                                                                     applicable
Supplementary the floating                                                                                                                                                                              Not
                              N                     27,073.272276       27,073.272276                      0         27,088.006377        100.05%                               --       --                               N
capital                                                                                                                                                                                              applicable
                                                                                                               43
                                                                                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
Subtotal of committed
                                     --         154,073.272276        154,073.272276          20,349.247113         71,151.385865           46.18%              --                   --              --                --
investment project
Investment of the over-raised fund
                                                                                               No over-raised fund in the Period
Payment of bank loans (if
                                     --                                                                                                                         --                   --              --                --
 applicable)
Supplementary the floating
                                     --                                                                                                                         --                   --              --                --
capital (if applicable)
Subtotal of over-raised fund
                                     --                                                                                                    --                   --                   --              --                --
investment
Total                                --         154,073.272276        154,073.272276          20,349.247113         71,151.385865           46.18%              --                   --              --                --
                                                                  1. In the "intelligent manufacturing construction project":
                                                                  (1)the planning construction period of "intelligent manufacturing (Hefei) project" is 3 years, during the reporting period, phase I and phase II has
                                                                  completed in construction, phase III till in process, the original estimated completion time has expired.Therefore, in accordance with the actual situation of
                                                                  the company’s fund-raising project, in order to regulate the use of raised funds, the resolution of the 20 th meeting of the ninth session of the board of
                                                                  directors and the 11th meeting of the ninth session of the board of supervisors of the company passed and agreed the company to postpone the date that the
                                                                  project achieves the scheduled serviceable condition to the end of December 2021. At the same time, the company’s independent directors have issued
                                                                  independent opinions of consent, and the company’s sponsor institution Shenwan Hongyuan issued a unanimous verification opinion.
                                                                  (2) The planned construction period of “newly increasing 600,000 sets of medium and large-capacity environmental protection and energy-saving freezer
Conditions and reasons of failure to meet schedule or predicted
                                                                  intelligent production line construction project” is one year. In accordance with the actual situation of the company’s fund raising project, in order to
income (by specific projects)
                                                                  regulate the use of raised funds, the resolution of the 14th meeting of the ninth session of the board of directors and the 16th meeting of the ninth session of
                                                                  the board of supervisors andthe 20th meeting of the ninth session of the board of directors and the 11th meeting of the ninth session of the board of
                                                                  supervisors of the company passed and agreed the company to postpone the date that the project achieves the scheduled serviceable condition to the end of
                                                                  December 2021. Meanwhile, independent directors have issued an agreed independent opinion and sponsor agencies -Shenwan Hongyuan issued a
                                                                  verification opinions without objection.
                                                                  2. “Intelligent R&D ability building projects and new product development projects for intelligent home appliances”: is three years, the construction of
                                                                  Inspection & Testing Center Building and fire control acceptance were completed, and came into service so far; completed the development and marketing
                                                                  of intelligent second-generation products, and the intelligent third-generation products has also completed the trial production in small batches; other
                                                                                                               44
                                                                                                                              CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                   projects are being implemented. The original completion time has expired. Therefore, combine with actual condition, and with purpose of standardize the
                                                                   fund-raised, after approved by the resolution of 20th session of 9th BOD and 11th session of 9th Supervisory Committee, the Company agreed to postponed
                                                                   the time for using in normal status to end of December of 2021. Meanwhile, independent directors have issued an agreed independent opinion and sponsor
                                                                   agencies -Shenwan Hongyuan issued a verification opinions without objection.
                                                                   3. As the implementation subject of the Company’s “Intelligent Life Project”, Changmei Technology was established in April 2016. At present, Changmei
                                                                   Technology owns the online platform of the fresh e-commerce brand “ifoodtube”, the main business model is organic integration of fresh e-commerce and
                                                                   intelligent retail equipment, providing users with online and offline integrated fresh products and services. Currently, the project is in normal operation.
                                                                   4. Up to end of the period, investment in “Supplementary the floating capital” has over 100%, mainly due to the saving interest in fund raised used in the
                                                                   project
Presentation on the major changes in project feasibility           Not applicable
Use progress of the raised-fund and purpose                        Not applicable
Changes of the site for raised-fund investment projects            Not applicable
Adjustment of the raised-fund investment projects                  Not applicable
                                                                   Applicable
                                                                   Ended as 31 October 2016, the Company contributed self-raised fund 63,984,738.91 Yuan for the raised-fund investment project, the money has replaced
                                                                   as 63,984,738.91Yuan. Shine Wing CPA (LLP) made a special audit for pre-investment and carried out an Assurance Report on Invested Self-raised fund to
                                                                   the Raised-fund Investment Before Hand (XYZH/2016CD40285) (hereinafter referred as to Assurance Report). Replacement are as:
                                                                                                                                                                                                              In 10 thousand Yuan
Up-front cost and replace of the raised-fund investment projects                                                                        Commitment
                                                                                                                                                              Investment of self-raised
                                                                                            Raised-fund                 Total            capital for                                              Amount
                                                                                                                                                             fund invested till end of 31
                                                                                         investment project          investment         raised-fund                                               replaced
                                                                                                                                                                   October 2016
                                                                                                                                          project
                                                                                       Construction          of
                                                                                       intelligent                      39,870.65             39,100.00                           2,545.41            2,545.41
                                                                                       manufacturing project
                                                                                       Construction      of
                                                                                       intelligent     R&D              55,900.00             55,900.00                           2,053.06            2,053.06
                                                                                       capability and new
                                                                                       products development
                                                                                                                45
                                                                                                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                                 of    the     intelligent
                                                                                 appliance technology
                                                                                 Intelligent life project            32,076.00         32,000.00                         1,800.00            1,800.00
                                                                                           Total                    127,846.65       127,000.00                          6,398.47            6,398.47
                                                             The replacement has been deliberated and approved by the 27th session of 8th BOD and 14th session of 8th supervisory committee, independent directors are
                                                             proposed an agreeable independent opinion, and sponsor institution carried out a verification opinion without objection.
Supplement working capital temporary with idle raised-fund   Not applicable
Balance and reasons of the implementation of raised-fund     Not applicable
                                                             The raised-fund have not been used will continues to invested on the raised-fund projects in above mentioned table. Meanwhile, according to the
                                                             raised-fund investment plan, and been approved by the Board, the Board of supervisors and shareholder general meeting, agreeable independent opinion
                                                             from independent directors and with the verification opinion without objection issued by sponsor institution, it’s agreed the Company to use the idle raised
Use of funds and fund allocation for un-used raised-fund
                                                             fund of no more than 940 million Yuan (the amount can be rolled over) to invest in principal-protected financial products, the remaining funds are deposit
                                                             in the designated raised capital account.
                                                             Use of the raised-fund has no changes till recently.
Use of raised-fund and problems or other condition in        As for the relevant information of raised-fund disclosed, there is no any disclosure information that released without timely, true-ness, accurate and
disclosure                                                   complete. The savings, usage, management and disclosure of the raised-fund have no violation conditions been found.
             3. The changed project of raised proceeds
                    □ Applicable √         Not applicable
             No changes of raised proceeds in the Period.
             VI. Sales of major assets and equity
             (i) Sales of major assets
                    □ Applicable √         Not applicable
                   No major assets are sold in the period
                                                                                                            46
                                                                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
         (ii) Sales of major equity
              □ Applicable √           Not applicable
         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
                                          manufacturing and sales of
Cryogenic Technology Subsidiary                                              68,640,300    276,297,653.60       137,326,070.00     185,678,757.29      16,618,467.30    15,463,119.14
                                            ultra-low temperature
Co., Ltd.
                                                   freezer
Jiangxi Meiling Electric                      Manufacturing of
                            Subsidiary                                       50,000,000    593,270,713.67        92,855,531.17     990,771,504.41        1,756,673.53    1,758,273.53
Appliance Co., Ltd.                        refrigeration and freezer
Mianyang          Meiling                     Manufacturing of
                            Subsidiary                                     100,000,000     136,991,742.10       116,984,982.19     264,249,893.04        4,829,802.29    4,460,507.35
Refrigeration Co., Ltd.                    refrigeration and freezer
Sichuan      Changhong                     R&D, manufacturing and
Air-conditioner       Co., Subsidiary         domestic sales of            850,000,000    3,469,780,862.70    1,372,026,736.77   5,310,863,142.78      38,046,716.29    32,830,567.02
Ltd.                                           air-conditioner
                                           R&D, manufacturing and
Zhongshan Changhong
                            Subsidiary        domestic sales of            184,000,000     907,674,237.23        50,064,623.27   1,985,947,420.54      -99,211,221.55   -96,864,675.58
Electric Co., LTD
                                               air-conditioner
Hefei             Meiling
Electronic     Appliance Subsidiary          Sales of white goods            55,000,000     69,442,167.29      -143,584,392.78     899,743,787.81      70,225,896.29    70,203,256.97
Marketing Co., Ltd.
Hefei Meiling Group
                            Subsidiary       Sales of white goods            80,000,000    450,701,273.04      -125,294,119.02   3,500,114,587.76      -71,498,105.87   -71,978,091.38
Holdings Limited
                                                                                                   47
                                                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
Changmei    Technology                 E-business of agricultural
                         Subsidiary                                   50,000,000    20,530,817.84       11,139,793.68      26,839,141.37      -18,069,100.45   -17,947,299.32
Co., Ltd.                                 products and fresh
                                       R&D, manufacturing and
Guangdong Changhong                    sales of kitchen and toilet
Ridian Technology Co., Subsidiary        products, small home         83,000,000   367,232,026.98      136,012,120.14     525,992,095.11      16,307,329.39    15,367,774.29
Ltd.                                     appliances and water
                                                purifier
Meiling CANDY
                                      R&D and sales of washing
Washing Machine Co.,     Subsidiary                                  150,000,000   209,111,952.29       91,144,192.11     468,389,142.46       -5,134,249.55    -6,768,757.59
                                      machine
Ltd.
                                                                                         48
                                                                                  CHANGHONG MEILING CO.,LTD. Annual Report 2018
(ii) Notes of holding and shareholding companies
      √ Applicable       □ Not applicable
                                         The method of obtaining and handling           The influence to the whole production and
           Company Name
                                          subsidiaries during the report period                       performance
                                                                                    Minor effect on the overall production and
Zhongshan Hongyou Electric Co.,Ltd.     Clearing off
                                                                                    operation and performance of the company
Wuhu Meiling Electronic Appliance                                                   Minor effect on the overall production and
                                        Clearing off
Marketing Co., Ltd.                                                                 operation and performance of the company
Shijiazhuang Meiling Electronic                                                     Minor effect on the overall production and
                                        Clearing off
Appliance Marketing Co., Ltd                                                        operation and performance of the company
Kunming Meiling Electronic Appliance                                                Minor effect on the overall production and
                                        Clearing off
Marketing Co., Ltd                                                                  operation and performance of the company
Jingzhou Meiling Electronic Appliance                                               Minor effect on the overall production and
                                        Clearing off
Marketing Co., Ltd                                                                  operation and performance of the company
Harbin Meiling Electronic Appliance                                                 Minor effect on the overall production and
                                        Clearing off
Marketing Co., Ltd                                                                  operation and performance of the company
Guiyang Meiling Electronic Appliance                                                Minor effect on the overall production and
                                        Clearing off
Marketing Co., Ltd                                                                  operation and performance of the company
Chongqing Meiling Electronic                                                        Minor effect on the overall production and
                                        Clearing off
Appliance Marketing Co., Ltd                                                        operation and performance of the company
Nantong Meiling Electronic Appliance                                                Minor effect on the overall production and
                                        Clearing off
Marketing Co., Ltd                                                                  operation and performance of the company
Shenyang Meiling Electronic                                                         Minor effect on the overall production and
                                        Clearing off
Appliance Marketing Co., Ltd                                                        operation and performance of the company
Changchun Meiling Electronic                                                        Minor effect on the overall production and
                                        Clearing off
Appliance Marketing Co., Ltd                                                        operation and performance of the company
(iii) Notes of holding and shareholding companies
The Company has no major holding and stock-jointly enterprise should be disclosed in the period
VIII. Structured vehicle controlled by the Company
      □ Applicable √            Not applicable
IX. Future Development Prospects
(i) Competition pattern and development trend
Affected by the macro environment and its own development cycle, China’s home appliance market is facing
weak growth and is in a critical period of transformation and upgrading. In addition, Sino-US trade friction brings
many uncertainties. Simultaneously, there are opportunities in danger, it’s necessary to seize the opportunities
still existing in the transformation and upgrading stage of home appliance industry. The innovative technology
                                                                49
                                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
that is constantly iterating in the home appliance industry will provide driving forces for the benign development
of the entire industry. The era of barbaric expansion in China’s home appliance market has passed, it is necessary
to shift from extensive management to refined operation and focus on quality and efficiency so that the company
can stand erect in tomorrow’s market competition.
1. Macro environment analysis
(1) Social environment and demand trend
Social environment: The population growth in developed countries is sluggish, the retail volume will remain
stable, the retail sales will increase with product upgrades, and the product structure will be further upgraded. The
global economy has entered a recovery cycle, and the consumption upgrade brought about by economic
development has further accelerated. As the aging of population intensifies, people will pay more and more
attention to health.
Demand trend: The product structure continues to be optimized, and the quality upgrade continues to drive the
market’s high-end development. With the rapid development of smart technology and the continuous upgrading of
consumption, home appliance technology presents diversification new trends such as “large”, “beauty”, “health”,
“comfort”, “energy saving”, “intelligence”, “integration” and “full house”, and so on.
(2) Market potential
The economy of developing countries is gradually growing, home appliances are entering the stage of
popularization, and emerging countries will grow at a high speed, it is expected that the demand for imports will
increase in the short term. E-commerce continues to develop at a high speed, and the impacts on the traditional
retail industry are gradually spreading, and the purchasing behavior of consumers will have further changes. With
the rise of self-owned brands, the living space of agents and traders has been further compressed. The acceleration
of urbanization has provided sustained demand for the growth of the home appliance industry. The two-child
policy and real estate regulation brought about market opportunities. The new retail market moves forward and
leads to the transformation of home appliance channels, channel sinking, new department store formats, digital
stores, and brand experience pavilions, which have become the new direction for the current home appliance
channel transformation.
2. Refrigerator (freezer) industry
The home appliance industry will bid farewell to low-price competition and gradually return to rational value
competition, and the industry market competition pattern will further intensify. With the withdrawal of the
national inclusive policy, and the formulation and introduction of new policies still take time, the industry growth
is weak. All View Cloud (AVC) predicts that the refrigerator market will have a retail volume of 31.64 million
units in 2019, a decline of 3.3% on a year-on-year basis, and the retail sales will reach 95.4 billion yuan, a decline
of 0.4% a year-on-year basis. The possibility that the joining of internet brands may trigger the price war and the
slowdown in price structure upgrade brought about by the release of cost pressure are the important potential
factors for a small negative growth in retail sales.
                                                               50
                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
Despite the lack of industry demand, in the context of the industry structural transformation and upgrading and the
product upgrading, with the rise of medium- and high-end consumer groups, especially the full release of quality,
high-end and fashion technology demands, the home appliance industry is welcoming a new round of
consumption upgrade, the coming of quality consumption era will promote the transformation and upgrade of the
industry to high end and intelligence, and the competition in the home appliance market dominated by “quality
and new products”, will become clear and definite. The refrigerator industry is rapidly developing towards fresh
keeping, air cooling, frequency conversion, intelligence, and large volume. In a market where both structure and
quality are upgrading, it is crucial to grasp the direction of industry development needs. The demand trend of
refrigerators in the future will be based on the product upgrades in the third- and fourth-tier markets and on the
high-end consumption in the first- and second-tier markets.
3. Air conditioning industry
The dominant pattern of the three major brands in the air-conditioning industry has not changed, the duopoly
situation has become more apparent, and the brand concentration has increased again. The second- and third-tier
brands face greater pressure. Driven by the e-commerce platform channel sinking and network wholesale model,
the omni-channel business model has become a new outlet for brand manufacturers to open up the integrative
development of online and offline channels. Under the trend of consumption grading, high-end brands and
high-end products have found a breakthrough in differentiated development, and have also become an important
driving force for the development of high-end products and high-end brands of air-conditioning manufacturers.
In 2019, the air-conditioning market will continue to bear pressure. In the first half of the year, the market will
continue the declining trend in the second half of 2018, and the market will return to a stable development stage.
Under the background of consumption upgrading, the upgrading of industrial structure will continue to drive the
industry price to rise, All View Cloud (AVC) predicts that the retail volume of the air-conditioning market in 2019
will be 55.9 million sets, a decline of 2.0% on a year-on-year basis, and the retail sales will reach 201.4 billion
yuan, a rise of 0.2% on a year-on-year basis.
4. Washing machine industry
The washing machine market has entered the period of stock upgrade, the market demand power is mainly
upgrading and updating, and the demand in washing machine market is slowing down and also facing the pressure
of slowing down. From the perspective of growth momentum, the washing and drying and the large capacity are
leading the update and upgrade, at the same time, healthy washing and differentiated products will also become an
upgrade trend.
 (ii) Development strategy
1. Vision
Be a leading brand in China, World Class and respectable household appliance enterprise.
2. Strategic thought
                                                        51
                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
In 2011, the board of directors of the company proposed the strategic guiding thoughts of "Meiling Dream" and
"Double Three Strategy", and upgraded the original "Double Three Strategy" to "Double Three One Core
Strategy", Double Three refers to three core strategies which are product strategy, talent strategy, and cost
leadership strategy and three significant strategies which are market strategy, brand strategy, and
internationalization strategy, One Core refers to intelligentization.
In the next few years, the company will stand correctly, accurately and firmly in the industry, market and
reformation, continue to promote the six innovations so that the company shall step forward to the direction of
"Meiling Dream", and strive to create another Meiling by 2020.
3. Strategic thinking and targets
By "two insists", "two adheres" and "two transformations" (i.e. insist on product doctrine and technology driven,
insist on cultural development and institutional innovation; adhere to domestic and overseas markets, adhere to
talent and brand strategy; transform from single to diversification, transform from B2C to 020 and C2B), the
company has strive to achieved the annual revenue of 20 billion Yuan by 2020. Details include: the first is to
create another Meiling in scale, i.e. to achieve the annual sales revenue of 20 billion Yuan, at the same time, the
company’s refrigerator and freezer have become the industry leader in intelligence, frequency conversion, fresh
keeping and thin wall; the air-conditioner has become the industry leader in intelligence and frequency conversion;
the washing machines have become the leading brand in the industry with excellent quality, exquisite
workmanship and healthy care; the small household appliances have become the leader of smart kitchens and a
leading brand of “Water Eco-Home Appliances”. The market share of the main products of refrigerator and freezer
and air conditioners has increased significantly. Washing machine products, kitchen and bathroom products and
small household electrical appliances have become the new main products of Meiling, and drive the
transformation and upgrading of the company’s profit model through the layout of emerging businesses such as
fresh e-commerce and biomedical services.
(iii) Business plan
1. Business objective
In the face of downward pressure on the macro economy, fierce competition among brands in the home appliance
industry and rising raw material prices, in 2019, under the leadership of the board of directors, the company will
strive to achieve double growth in operating income and net profit, with a focus on improving profitability.
2. Operating principles
The Company’s operating principles in 2018 are ”product leading, marketing transformation, efficiency
enhancement and team activation"
Product leading: Adhere to “productism” and continue to focus on product development. Continuously improve
the market performance and competitiveness of products. The Company has satisfied the needs of product
                                                           52
                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
upgrades, consumption upgrades, and high-end breakthroughs through the promotion of quality, taste, and brand.
Meanwhile, the company has achieved the products’ easy manufacturing and easy maintenance through the
platformization and serialization of products and the standardization, generalization, and modularization of parts,
that is “five -ization and two easy”, as well as the digital transformation of digital factories, digital processes and
digital supply chain, and escorted the “product leadership” by creating the “first-class manufacturing”. In 2019,
the company will continue to adhere to intelligent and variable frequency strategies, and firmly grasp the depth
development and iterative products of “M Fresh Life Series” and “Ultra Thin Wall Refrigerator”, continue to
promote the development of smart products and variable frequency, M Fresh Life refrigerator and freezer, and
large-capacity refrigerators, focus on high-end products and super-hot products, mainly promote “M Fresh Life”
refrigerators, all thin-walled new products, and develop e-commerce channels for “M Fresh Life” products, full
thin-walled CHiQ high-end series products, create differentiated flagship products, and achieve product
serialization, make breakthroughs in the market and business models, and continue to increase the proportion of
variable frequency, intelligence, and fresh keeping, and the differentiated competition level.
Marketing transformation:
Digitalization is the core of the traditional marketing business transformation, reconstruct the three major systems
by digitalization, namely, establishing a marketing management system with terminal retail as the core,
establishing a value management system with retail price as the core, and establishing an operation management
system with customer’s business inventory as the core. At the same time, in the domestic market, on the one hand,
the value transformation is realized by adjusting the structure, raising the average price and increasing the share.
On the other hand, the same regional price and the online and offline integrated price system is implemented by
strengthening the overall channel linkage, promoting the online and offline integration, improving the profitability
of the e-commerce channel. Focus on the users, fully optimize the product array, focus on creating high-quality
products and super-hot products; promote the traditional channel e-commerce transformation work nationwide.
In addition, in the overseas market, further increase the product development and planning of mid- and high-end
refrigerators, promote the sales structure, improve the average sales price, put through the value chain as oversea
factories, R&D and sales, and increase the profitability; transform from the single pursuit of scale to the pursuit of
both scale and profit, from the order driving to market driving and from foreign trade thinking to marketing
thinking; gradually increase the team and product investments in brand, and promote the construction of overseas
own brands.
Efficiency enhancement: Establish a chain-wide operational excellence concept, and promote projects such as
“intelligent manufacturing”, “B2C business marketing transformation”, and “supply chain procurement
management reform” to form a systematic synergy. On the one hand, the organization efficiency can be improved
by promoting the manufacturing delivery, shortening the quality response cycle, and improving the process
efficiency. On the other hand, continue to carry out the objectives of “triple effect” promotion, cost control,
                                                           53
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
increasing revenue and reducing costs and formulate and implement measures to optimize resource allocation and
fully activate resource potential by exploring the cost potential, strengthening the process control, reducing the
internal consumption, and generating revenue. Finally, further strengthen the implementation of terminal services,
continuously reduce its own inventory and commercial inventory scale, promote the rapid turnover of real estate
business, and continue to implement the operational net cash flow improvement measures; establish a reversal
mechanism to enhance the initiative of industry units to improve efficiency; continue to improve decision-making
efficiency.
Team activation: The company will continue to vigorously strengthen the construction of professional and
technical personnel, promote the "Yangquan Plan", select and train key post successors, build a team of
company-level experts, and improve the construction of talent pool. We will implement the “creating and sharing
together” incentive mechanism, optimize the existing compensation system, and explore and establish more
flexible and open incentive and restraint policies in the medium and long-term incentives and profit sharing to
further activate the team’s vitality.
3. Market strategy
(1) Refrigerator (freezer)
Tightly around the management policy, continue to adhere to the intelligence and frequency two core product
strategy; speed up the development and upgrading of a new generation of intelligent product, implement the
company's intelligent strategy, and enhance the proportion of high-end products.Vigorously invest in basic
technology research and product upgrading, continue to carry out intelligence, frequency, forced air cooling,
refreshment, thin-wall and other technical researches, maintain technology-leading in the industry, promote the
company's product structure to upgrade to high end and intelligence, and drive the company's industrial
transformation and upgrading; at the same time, giving great impetus to enhancing the three-qualities, five -ization
and two easy and first-class manufacturing, comprehensively improve the efficiency and quality, reduce the
product costs and enhance the product competitiveness. In domestic and overseas market, realize the
transformation of marketing around value, strengthen the domestic sales channel capacity building, strengthen the
online and offline synergy, and increase the competitiveness. Domestically accelerate O2O integration, implement
channel transformation; focus on core customers overseas, expand self-owned brand business; comprehensively
put talent strategy on team building, and provide sufficient talent for development.
The domestic market takes frequency leading, intelligent pilot, multi-door becoming stronger, back to back getting
bigger, air-cooling jump start as the thinking, makes reasonable planning, promote the products’ combination
ability, and enhance the domestic sales capacity by adjusting the product structure. Regarding the channel,
enhance the offline terminal sales ability through the price management, promotion management, user experience
management and other means, at the same time, enhance the online sales ability by creating e-commerce hot
                                                         54
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
products, enhancing after-sales service experience, and collaborative operations among all product lines and other
means.
In overseas markets, on the one hand, strengthen the market research, market planning and market promotion
capabilities; continuously adjust the product mix, transform from low end, low cost, low value to middle end,
middle price, and middle value; while also pull through the overseas factories, R&D, sales and the
full-value-chain, reduce the manufacturing costs, reduce the logistics costs, improve the human performance and
material efficiency and enhance the overall competitiveness of overseas products; export the semi-knocked down
business through technology and process, and achieve the local production in overseas. On the other hand,
gradually increase the team and product investments in brand, and promote the construction of overseas own
brands, realize the local marketing of self-owned brands in overseas, and increase the brand added value.
(2) Air conditioning
At home, center on the user experience, accelerate the promotion of “quality, brand and taste”, strengthen the
transformation of basic research applications, develop key core technologies and capabilities, grasp industry
trends, create quality products, improve product competitiveness, and form industrial overall competitiveness by
rapidly building the central air-conditioning capabilities. Take the fighter oriented to create elite teams; promote
the “intelligent R&D” and “intelligent manufacturing” by taking the entire industry chain as the starting point.
Follow the trend of channel innovation, adjust the model, and strengthen the retail; follow the dualization trend of
consumption, adjust the structure, and improve the efficiency; follow the trend of industrial adjustment, seek
transformation and development. Furthermore, the air conditioning industry will seize the opportunities of coal to
electricity and home appliances energy-saving leader policy, improve product layout, and promote enterprise
transformation.
(3) Washing machine
Implement the quality priority and differentiated product strategies. Adhere to the quality leadership strategy,
become the medium- and high-end washing machine brand with first-class quality, create autonomous appearance
and functional selling points; lay out the medium- and high-end products, form a series of products; take product
differentiation as a breakthrough, quickly deploy automatic washing machine product line, and rapidly form the
self-production ability at the same time.
(4) Kitchen and bath, small household appliances
Based on kitchen and bath, develop purified water business and build core business. Take the concept of “smart
kitchen” as the main line, and created the smart kitchen; meanwhile, focus on creating an ecological chain of
“water ecological home appliances”. Respectively focus on core business to create advantageous industries, and
achieve multi-product line linkage development, highlight the leading advantage of intelligent products. Adhere to
                                                        55
                                                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
the brand road, adhere to productism, adhere to the terminal image, create smart kitchen, and take intelligent and
wall-mounted stoves as the entry point to achieve the business growth of kitchen and bathroom, and small
appliances.
(5) Bio-medical care
Under the guidance of the development strategy of “relevant diversification based on biomedical field”, the
Company continues to focus on life sciences, smart cold chain, and family health businesses. Life science:
increase technical research and reserves, and upgrade the products from the second generation to the fourth
generation; make multi-channel and all-round marketing promotion, and expand the company’s industry
popularity. Family health: center on the crossing field of “medical health” and “personal care health” to enrich
products. Smart cold chain: based on cold storage engineering and leasing business, gradually cut into the cold
chain transportation market.
The above business plan and business objectives do not represent the listed company’s profit forecast of 2019,
whether it can be achieved depends on the changes in market condition, the efforts of management team and other
factors, there are a lot of uncertainties, investors should pay special attention to it.
(iv) Possible risks and countermeasures
In 2019, the competition in the home appliance market will become more intense, and the survival environment
for enterprises will be even worse. In the future, the Company will face serious risks such as the severe industrial
situation, the intensified competition, the labor shortage, and the rise of raw material prices, transportation costs
and human resource costs, the new business models and the impact of internet age.
1. Impact of intensifying industry competition and declining broader market
China's home appliance industry is a complete competing industry, there are many domestic and foreign-funded
household appliances manufacturers providing products with a higher degree of homogenization and fierce
competition. With the withdrawal of national preferential policy, the industry broader market continues to decline,
the industry enters into aggressive growth from large-scale growth, the industry brand concentration further
strengthens, and the competition among the brands shows a new situation of oligarchy and giant competition. In
recent years, the transformation and upgrading of the industry have been speeding up, and the competition for new
energy efficiency in the industry has been normalized. Whoever can faster and more accurately grasp the
opportunity of new energy efficiency switching will be able to enhance the competitiveness of products to a
greater extent. If you can't accurately judge and follow the market dynamics of the industry, you may be
eliminated.
2. Impact of cross-border Internet industry and challenges of new business model
With the arrival of Internet era and artificial intelligence era, the Internet enterprises continue to cross boarder and
swarm into intelligent home fields, which intensifies competition in the industry, subversive changes may occur at
any time, and traditional household appliance enterprises are facing serious challenges. At the same time, under
the impact of Internet economy and new business model, the home appliance manufacturers are actively
                                                            56
                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
promoting the transformation, new business model and new products emerge one after another in the home
appliance industry, the development of intelligent home appliances changes quickly, if unable to make rapid
response or catch up with the development trend, it may be easily replaced or even completely subverted. New
rules of the game bring strong sense of crisis and sense of urgency to the enterprises.
3. Pressure of raw material price rising and transportation costs rising
Influence by the supply-side reform and product structure adjustment, price of raw materials goes up dramatically;
at the same time, the transportation costs greatly rise due to logistics industry’s governance to “three excesses”. It
is expected that the raw material price and logistics transportation costs will continue to run at high prices in 2019,
but the end product selling price will be unchanged or will be difficult to digest the impact of rising raw materials
prices, logistics costs and other key resource costs, which will bring greater operating pressure to the company
and further affect the company's profitability.
4. Human resources risk
Household appliance industry is an industry with relatively intensive capital, technology, and labor. With the
gradual expansion of the company's business scope and scale, and the arrival of intelligent home appliances and
the impact of Internet, the company will greatly increase the demands for high-level management personnel,
technical personnel, and innovative talents, talent introduction becomes one of the key points for human resources
management, if it cannot effectively enhance the company's attraction to high-quality talents from various aspects,
the company's future development will be subject to constraints. At the same time, in its intelligent manufacturing
transformation period, the company needs higher requirements to the technical capacity and professional quality
of workers at the production line, the improvement for the company's product quality will be influenced if the
comprehensive quality of workers at the production line can not be enhanced. In addition, with the increase in
orders, the demand for workers at the production line is increasing, but affected by the supply and demand in labor
market and the continuous rising labor costs, the company's cost pressure will be further enlarged.
In view of the above risks, and combined with industry trend of 2019 and the insufficient in 2018, the Company
will carry out follow works in 2019:
1. Sales
Continue to enhance the product market position, pay close attention to the changes in retail market share and
e-commerce market share; continue to launch new products, adjust structure, raise average price, and enlarge the
scale; continue to enhance new channels, strengthen the synergy with the home appliances related to controlling
shareholders, expand the branches of Changmei Life House; rigidly control the price, strictly control the terminal
price, and reduce price loss; dig potential and reduce fees, strictly control the site cost investment, strengthen the
optimization for low-efficiency stores, and strengthen the audit of booth production standards; improve
e-commerce organization, and continue to strengthen e-commerce products, prices, product rendering, product
footprint, online retail, spot goods rate, etc.; in overseas markets, actively respond to the impact of RMB exchange
rate and bulk raw materials fluctuations, improve the proportion of air-cooling and variable frequency products by
                                                           57
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
optimizing product structure and customer structure, complete the maintenance, development and layout of key
customers and key markets, and guarantee and improve the scale of overseas sales.
2. Technology and quality
Continue to carry out technical research on intelligence, frequency conversion, air cooling, fresh keeping, thin
wall, etc., actively promote the development of new products, and implement projects such as “high-end product
refinement”, “five -ization and two easy” and “increasing revenue and reducing costs” 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 procurement, reduce costs and increase
revenue; pay attention to fund operation efficiency, improve the turnover rate of receivables and inventory;
continue to implement “first-class manufacturing”, “less people engineering” and “smart production” to
comprehensively improve efficiency and quality, reduce product costs and enhance the company’s product
competitiveness.
X. Reception of research, communication and interview
(i) In the report period, reception of research, communication and interview
     √ Applicable      □ Not applicable
          Time                   Way                   Type            Basic situation index of investigation
                                                                 http://irm.cninfo.com.cn/ircs/ssgs/companyIrmF
12 July 2018                Field research        Institute
                                                                 orSzse.do?stockcode=000521
                                                                 http://irm.cninfo.com.cn/ircs/ssgs/companyIrmF
24 Aug. 2018                Field research        Institute
                                                                 orSzse.do?stockcode=000521
                                                                 http://irm.cninfo.com.cn/ircs/ssgs/companyIrmF
28 Dec. 2018                Field research        Institute
                                                                 orSzse.do?stockcode=000521
Reception (times)                                                                                                 3
Number of hospitality                                                                                             5
Number of individual reception                                                                                    0
Number of other reception                                                                                       N/A
Disclosed, released or let out major
                                                                                                                No
undisclosed information
                                                          58
                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                  Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
(i) Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially
Cash Dividend policy during the Reporting Period
     √ Applicable     □ Not applicable
During the reporting period, the company has strictly executed the profit distribution policy in accordance with
the " Articles of Association", the formulation and implementation of the company's cash dividend policy are in
line with the provisions of "Articles of Association" and the requirements of the resolutions of shareholders'
meeting, the dividends standards and proportion have been definite and clear, relevant decision-making
procedures and mechanisms have been complete, the responsibilities of independent directors have been clear and
have played its due role, minority shareholders have had the opportunities to fully express their views and
aspirations, and the legitimate interests of minority shareholders have been maintained.
In the reporting period, the Company implemented Profit distribution plan for year of 2017, that is, distribute 0.6
Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on total share
capital 1,044,597,881 shares dated 31 December 2017 (including 881,733,881 shares of A-share and 162,864,000
shares of B-share), cash dividend of 62,675,872.86 Yuan was distributed in total.
                                   Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement
                                                                                     Y
of Article of Association (Y/N):
Well-defined and clearly dividend standards and
                                                                                     Y
proportion (Y/N):
Completed relevant decision-making process and
                                                                                     Y
mechanism (Y/N):
Independent directors perform duties completely and
                                                                                     Y
play a proper role (Y/N):
Minority shareholders have opportunity to express
opinions and demands totally and their legal rights are                              Y
fully protected (Y/N):
Condition and procedures are compliance and
transparent while the cash bonus policy adjusted or                                  Y
changed (Y/N):
                                                        59
                                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
       (ii) Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves
       plan (pre-plan) in latest three years (including the reporting period)
       1. Profit distribution plan for year of 2016
       Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
       total share capital 1,044,597,881 shares dated 31 December 2016, cash dividend of 62,675,872.86 Yuan was
       distributed in total.
       2. Profit distribution plan for year of 2017
       Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
       total share capital 1,044,597,881 shares dated 31 December 2017, cash dividend of 62,675,872.86 Yuan was
       distributed in total.
       3. Profit distribution plan for year of 2018
       Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
       total share capital 1,044,597,881 shares dated 31 December 2018, cash dividend of 62,675,872.86 Yuan was
       distributed in total.
       The pre-plan had been deliberated and approved by the board of directors, and it need to be submitted the annual
       shareholders’ general meeting of 2018 for its consideration.
       (iii) Cash dividend of common stock in latest three years (including the reporting period)
                                                                                                                                   In RMB
                                                                                     Ratio of the cash
                                                Ratio of the cash                                                             Ratio of the total cash
                            Net profit                              Proportion bonus by other ways
                                          bonus in net profit                                                                  bonus (other ways
                          attributable to                            for cash          in net profit
                                             attributable to                                                                  included) in net profit
 Year                    common stock                               bonus by          attributable to
         Amount for                         common stock                                                   Total cash bonus       attributable to
  for                    shareholders of                                 other        common stock
       cash bonus (tax                      shareholders of                                                (including other      common stock
bonus                  listed company in                            ways(i.e.        shareholders of
          included)                         listed company                                                      ways)         shareholders of listed
shares                    consolidation                                  share       listed company
                                              contained in                                                                    company contained in
                          statement for                             buy-backs          contained in
                                             consolidation                                                                        consolidation
                            bonus year                                     )          consolidation
                                                      statement                                                                     statement
                                                                                        statement
2018       62,675,872.86        38,658,256.97             162.13%                -                       - 62,675,872.86                  162.13%
2017       62,675,872.86        32,473,204.92             193.01%                -                       - 62,675,872.86                  193.01%
2016       62,675,872.86       220,216,680.96              28.46%                -                       - 62,675,872.86                    28.46%
       (iv) The Company gains profits in reporting period and the retained profit of common stock shareholders
       provided by parent company is positive but no plan of cash dividend proposed of common stock
             □ Applicable √       Not applicable
       II. Profit distribution plan and capitalizing of common reserves plan for the Period
             √ Applicable      □ Not applicable
                                                                    60
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
Bonus shares for every 10-share (Share)                                                                           0
Dividends for every 10-share (RMB) (Tax
                                                                                                                0.6
included)
Shares added for every 10-share base
                                                                                                                  0
(Share)
Equity base of distribution plan (Share)                                                           1,044,597,881
Total cash dividend (RMB) (Tax included)                                                           62,675,872.86
Proportion for cash bonus by other ways(i.e.
                                                                                                                  0
share buy-backs)
Total cash bonus (including other ways)                                                            62,675,872.86
Distributable profits (RMB)                                                                       904,232,582.87
Ratio of cash dividend(including other
                                                                                                              100%
ways) in total profit distribution
                                                  Cash dividend
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 1,044,597,881 shares dated 31 December 2018, cash dividend of 62,675,872.86 Yuan was
distributed in total.
              Detail explanation on profit distribution or capitalization from capital public reserve
For year of 2018, the individual statement of the parent company show net profit of 96,445,731.69 Yuan,
according to the auditing from ShinWing CPA (LLP). In accordance with relevant regulations, the retained profit
at beginning of the year amounted as 893,442,648.28 Yuan, deducted the 2017 profit distributed
62,675,872.86 Yuan and after extract for statutory surplus reserve 9,644,573.17 Yuan, the retained profit in
individual statement of the parent company cumulative counted as 917,567,933.94 Yuan at end of 2018. In
addition, for year of 2018, the net profit attributable to owners of parent company amounted as 38,658,256.97
Yuan, the retained profit for end of the 2018 counted as 904,232,582.87 Yuan.
Pursuit to relevant rules and regulation of Article of Association, and considering the interest of shareholders and
long-term development needs of the Company, Board of Directors agrees that, based on total share capital
1,044,597,881 of the Company dated 31 December 2018, distributed 0.6 Yuan (tax included) in cash for every 10
shares held by shareholders, totally 62,675,872.86 Yuan distributed in total(tax included). Total share capital of
the Company has no changes after distribution, the retained profit of the parent company amounted as
854,892,061.08Yuan, rests of the retained profit will carry-over for distribute in later years.
This plan has been considered and passed by the board of directors, and needs to be submitted to 2018 annual
general meeting of the company for deliberation.
III. Implementation of commitment
(i) Commitments that the actual controller, shareholders, related party, the buyer and  the
company have fulfilled during the reporting period and have not yet fulfilled by the end of
reporting period
                                                         61
                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
√ Applicable   □ Not applicable
                                    62
                                                                                                 CHANGHONG MEILING CO.,LTD. Annual Report 2018
                Commitment                                                                                                                                    Implemen
Commitment                                                              Content                                               Date               Term
                   party                                                                                                                                        tation
                                                        1. The acquirer shall not engage in refrigerator business or
                                                        activity which competes or will compete with business of                                               Strictly
                                                                                                                                             Valid for long
                                                        Hefei Meiling Co., Ltd. (hereinafter referred to as the                                               implemen
                                                                                                                                                  term
                                                        “Meiling Electric ”),or that which has interest conflict with                                          ted
                                                        Meiling Electrical Appliances.
                                 About committed and
              Sichuan                                   2. The acquirer promises to apply shareholders’ right on a                                            Strictly
Commitments                      promised in order to                                                                                        Valid for long
              Changhong                                 legal and reasonable manner and shall not take any action to                                          implemen
made in                          prevent     horizontal                                                                                           term
              Electric Co.,                             limit or affect the normal operation of Meiling Electric.                                                ted
acquisition                      competition in the
              Ltd.(hereinafter                                                                                        12 June 2007
report or                        Acquisition Report of 3. For any opportunity to engage in competing business, the
              referred to as
equity change                    Hefei Meiling Co., acquirer will advise Meiling Electric in written for engaging
              “Sichuan                                 such business or not. If Meiling Electrical Appliances gives
report                           Ltd.
              Changhong ”)                            no clear written reply as to whether engaging the competing                                            Strictly
                                                                                                                                             Valid for long
                                                        business or not within 20 days after receipt of the aforesaid                                         implemen
                                                                                                                                                  term
                                                        letter, it shall be deemed that it will not engage in such                                               ted
                                                        business. The acquirer will only engage in non-competing
                                                        business provided that Meiling Electric confirms not to or is
                                                        deemed to not engage in such non-competing business.
                                                       1. It will not engage in such business or activity that
                                                       competes with or has interest conflict with that of Meiling
Commitment                       Commitment            Electric except for the action taken for sake of Meiling
made during                      regarding to reducing Electric as required by Meiling Electrical Appliances.                                                  Strictly
              Sichuan                                                                                                                        Valid for long
the                              and preventing        2. The Company promises to apply shareholders’ right on a 24 June 2010                                implemen
              Changhong                                                                                                                           term
non-public                       competition with      legal and reasonable manner and shall not take any action to                                              ted
offer of 2010                    Meiling Electric      limit or affect the normal operation of Meiling Electric
                                                        3. In case that Meiling Electric expects, on the basis of its
                                                        existing business, to expand its operation scope into the
                                                                                     63
                                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                     business which the Company has already operated, the
                                     Company agrees to grant priority acquisition right to Meiling
                                     Electric regarding such business if the same conditions are
                                     met, provided that the Company is still the controlling
                                     shareholder or actual controller of Meiling Electric
                                    1. Measures will be adopted to prevent continued related
                                    transaction with Meiling Electric: as to the related transaction
                                    that can not be prevented, it will sign related transaction
                                    agreement with Meiling Electric under the market principles
                                    of “equally paid and mutual benefit”, and fairly determined
              Commitment            the transaction price according to the market prevailing
              regarding to reducing standards.                                                                                             Strictly
                                                                                                                         Valid for long
              and standardizing                                                                      24 June 2010                         implemen
                                    2. Perform the necessary obligations to make related                                      term
              related transaction                                                                                                            ted
                                    directors and related shareholder abstain from voting
              with Meiling Electric
                                    according to relevant regulation, and observe legal procedure
                                    for approving related transaction and information disclosure
                                    obligations.
                                     3. Promise not to hurt legal interests of Meiling Electric and
                                     other shareholders through related transaction.
              Commit to authorized Changhong Air-conditioner and Zhongshan Air-conditioner                                                 Strictly
                                                                                                                         Valid for long
              Electric Co., Ltd. (hereinafter referred to as the “Zhongshan Changhong ”) to use      6 Nov. 2010                        implemen
                                                                                                                              term
              “Changhong” trademark and relevant patents for free.                                                                         ted
              1. Commit to disclose periodic reports on a truthful, accurate, complete, fair and
              prompt manner, to disclose all the information that have important influences over                                           Strictly
                                                                                                                         Valid for long
The Company   investors, to accept supervision under the CSRC and Shenzhen Stock Exchange.       7 Jan. 2011                              implemen
                                                                                                                              term
              2. Commit to make public clarification in respect of such information that is released                                         ted
              from any public media and may result in misleading influences on stock price once
                                                                 64
                                                                                              CHANGHONG MEILING CO.,LTD. Annual Report 2018
                              the Company is aware of such information.
                              3. The directors, supervisors, senior management and core technicians of the
                              Company will accept opinions and criticism from the social public, and they will not
                              trade the Company’s securities, directly or indirectly, with any inside information
                              and other illegal methods. The Company promises that the documents submitted to
                              Shenzhen Stock Exchange exist no false statement or material omission, and no
                              relevant information will be disclosed during the application for listing without prior
                              content from Shenzhen Stock Exchange.
                              1. Since the property transfer didn’t involve the buildings and land currently used by
                                                                                                                                                            Strictly
                              Changhong Air-conditioner, Sichuan Changhong commits, upon the completion of                                Valid for long
                                                                                                                                                           implemen
                              equity transfer, to continue to lease such assets to Changhong Air-conditioner at                                term
                                                                                                                                                              ted
Commitment                    market price.
made in                       2. After completion of this property transfer, Sichuan Changhong commits to manage
transfer of air Sichuan       to prevent new related transaction with Meiling Electric. For those which can not be
                                                                                                                   10 Dec. 2009
conditioning Changhong        prevented, Sichuan Changhong commits to determine the transaction price based on
                                                                                                                                                            Strictly
assets                        market accepted methods, so as to ensure fairness of related transaction and                                Valid for long
                                                                                                                                                           implemen
property                      protection of the interest of Meiling Electric                                                                   term
                                                                                                                                                              ted
                              3. Sichuan Changhong commits that it will not engage in air conditioning and
                              refrigerator business or activity which competes or will compete with business of
                              Meiling Electric, or that which has interest conflict with Meiling Electric
Commitments Some of the 1. Make promise not to reduce the shares of Meiling bought in every year during                 15 Aug.2013
                                                                                                                                                          Complete
by     Annual Directors,    implementation of the performance incentive fund via any market ways in the later           3 July 2014     Three years after
                                                                                                                                                              d
performance supervisors and first year, which was allowed to be reduced by 50% according to the laws and                21 July 2015    current shares
incentive     senior        regulations in the second year, and the remaining 50% was allowed to be reduced in                          purchased         Implemen
fund,         executives of the third year in accordance with the laws and regulations.                                 20 June 2017
                                                                                                                                                            ting
                                                                                  65
                                                                                                CHANGHONG MEILING CO.,LTD. Annual Report 2018
incentive     the Company as                                                                                                              From the date
                             2. The directors, supervisors and senior management promised to manage in
objects while well as other                                                                                                               when annual
                             accordance with the relevant management approaches in accordance with the
purchasing    incentive                                                                                                                   incentive fund
                             "Company Law", "Securities Law" and "The Company’s shares held by the
stock of the objects                                                                                                                      plan deliberated
                             directors, supervisors and senior management of the listed company and its change         15 Aug. 2013
Company                                                                                                                                   and approved by Strictly
                             management rules", as objects of annual performance incentive fund of Meiling,            3 July 2014
with                                                                                                                                      general meeting implemen
                             including but not limited to: during his tenure, the shares transferred each year shall   21 July 2015
performance                                                                                                                               to 6 moths after   ted
                             not exceed 25% of the total number of shares held of the Company; shall not sell the      20 June 2017
incentive                                                                                                                                 director,
                             shares of the Company within six months after bought it or purchase again six
funds     and                                                                                                                             supervisor and
                             months after sold it; shall not transfer the shares held within six months after
owned fund                                                                                                                                senior executives
                             Dismission.
                                                                                                                                          resigned
             Sichuan            1. Based on market conditions and as allowed by laws and rules, multiple measures
             Changhong          were adopted adequately to increase shareholding of Meiling Electric, so as to
             Electric Co.,      demonstrate its firm confidence on the PRC economy and Meiling Electric with its
Commitments Ltd.and persons     actual actions, maintain sound development of capital market and promote recovery
                                                                                                                                                              Strictly
of not to    acting in          of healthy market                                                                                           Valid for long
                                                                                                                       9 July 2015                           implemen
reducing the concert                                                                                                                             term
                                                                                                                                                                ted
shares       CHANGHONG          2. Continued to support operation and development of listed company as always and
             (HK)               promoted the achievement of Meiling Electric. It is committed to bringing steady
             TRADING            and real return to investors.
             LIMITED
                                                                                                                                          14 October 2016
Commitment      Sichuan         Shares are not transfer within thirty-six (36) months since end of the private                                            Implemen
                                                                                                                       6 March 2016       to 14 October
made during     Changhong       placement                                                                                                                   ting
                                                                                                                                          2019
the
non-public      Directors and   Commitment on         1. I hereby undertake not to deliver interests to other entities                    Till the
                                                                                                                                                            Implemen
offer in 2016   senior          compensation of       or individuals without consideration or at unfair conditions, 23 Feb. 2016          completion of
                                                                                                                                                              ting
                executives of   immediate dilution of nor to prejudice the Company’s interests by other means.                           projects invested
                                                                                    66
                                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
the Company   return arising from    2. I hereby undertake to restrain my role related consumption                    with the proceeds
              non-public issuance of behaviors.                                                                       from this
              shares                                                                                                  non-public
                                     3. I hereby undertake not to conduct any investment and
                                                                                                                      issuance of
                                     consumption which is not related to performance of duties
                                                                                                                      shares
                                     with utilization of any company assets.
                                     4. I hereby undertake that the remuneration system
                                     determined by the board of directors or the remuneration and
                                     examination committee be linked to implementation of the
                                     compensation of return measures.
                                     5. In case that the Company adopts share based incentive
                                     plan in future, I hereby undertake that the exercise conditions
                                     of the incentive plan to be announced by the Company be
                                     linked to implementation of the compensation of return
                                     measures.
                                     6. For the period from the date of this commitment to the
                                     date of completion of this non-public issuance of shares, if
                                     the CSRC makes other new regulatory requirements on
                                     compensation of return measures and the commitment
                                     thereof, and in case that the above commitments cannot
                                     satisfy these new requirements from the CSRC, I hereby
                                     undertake to issue supplementary commitment in compliance
                                     with the latest CSRC requirements.
                                     As one of the principals responsible for compensation of
                                     return measures, I, in case of break of the above
                                     commitments or refuse to perform the above commitments,
                                     agree to receive relevant punishment or to adopt relevant
                                     administration measures according to the systems, rules and
                                     regulations of the CSRC and Shenzhen Stock Exchange.
                                                                 67
                                                                                               CHANGHONG MEILING CO.,LTD. Annual Report 2018
                               1. Promise to truly, accurately, completely, fairly and timely publish periodic reports,
                               disclose all information that has significant impacts on the investors, and accept the
                               supervision and management of China Securities Regulatory Commission and the
                               Shenzhen Stock Exchange.
                               2. Make commitments that the Company will publicly clarify in time after knowing
                                                                                                                                                             Strictly
                               any information on any public communications media that may cause misleading                                Valid for long
               The Company                                                                                      12 Oct. 2016                                implemen
                               influence on the stock price                                                                                     term
                                                                                                                                                               ted
                               3. The Company’s directors, supervisors and senior executives will listen carefully to
                               the opinions and criticisms of the public and never use any acquired inside
                               information and other improper means to directly or indirectly engage in the trading
                               activities of the Company's stock.
Perform the commitment promptly or
                                   √ Yes □ No
not
If the commitments is not fulfilled on
time, shall explain the specify reason Not applicable
and the next work plan
 Note: for the commitments completed and exemption for implementing in above mentioned table, the Company will not disclose in next ordinary report
                                                                                   68
                                                                 CHANGHONG MEILING CO.,LTD. Annual Report 2018
(ii) Concerning assets or project of the Company, which has profit forecast, and reporting
period still in forecasting period, explain reasons of reaching the original profit forecast
     □ Applicable √     Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
     □ Applicable √     Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
Disclosure date for specific approval opinion on fund occupation from CPA: 29 March 2019
Disclosure index for specific approval opinion on fund occupation from CPA: Juchao website:
www.cninfo.com.cn-- Specific Explanation on Non-operating capital occupation and Other related funds for year
of 2018 of Changhong Meiling Co., Ltd.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
     □ Applicable √     Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation
method compared with the financial report of last year
     √ Applicable    □ Not applicable
Found more details in 35. Change of major accounting policy and estimation under IV. Major
accounting policy and estimation carried in the Section XI. Financial Report
VII. Major accounting errors within reporting period that needs retrospective restatement
   □ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the
Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
     √ Applicable    □ Not applicable
    The Company’s consolidated financial statement included 47 subsidiaries including Sichuan
Changhong Air-conditioner Co., Ltd., Zhongshan Changhong Electric Co., LTD and Zhongke
Meiling Cryogenic Technology Co., Ltd. Etc.As compared to previous year, subsidiary Zhongshan
Hongyou Electric Co.,Ltd, Shijiazhuang Meiling Electronic Appliance Marketing Co., Ltd, Guiyang
Meiling Electronic Appliance Marketing Co., Ltd, Kunming Meiling Electronic Appliance
                                                     69
                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
Marketing Co., Ltd, Chongqing Meiling Electronic Appliance Marketing Co., Ltd, Wuhu Meiling
Electronic Appliance Marketing Co., Ltd., Changchun Meiling Electronic Appliance Marketing Co.,
Ltd, Jingzhou Meiling Electronic Appliance Marketing Co., Ltd, Nantong Meiling Electronic
Appliance Marketing Co., Ltd, Harbin Meiling Electronic Appliance Marketing Co., Ltd and
Shenyang Meiling Electronic Appliance Marketing Co., Ltd were excluded due to liquidation.
     More details can be seen in the report “VIII. Changes in the scope of the merger” and “XIII.
Interests in other entities” of “Section XI Financial Report”
IX. Appointment and non-reappointment (dismissal) of CPA
(i) Accounting firm appointed
                                                                   Shine Wing Certified Public Accountants
Name of domestic accounting firm
                                                                   (LLP)
Remuneration for domestic accounting firm (in 10 thousand
                                                                                                             125
Yuan)
Continuous life of auditing service for domestic accounting firm                                       10- Year
Name of domestic CPA                                                                      Li Xifu, Xia Cuiqiong
Continuous life of auditing service for domestic CPA                    Li Xifu (2 years), Xia Cuiqiong (4 years)
Name of foreign accounting firm (if applicable)                                                             N/A
Remuneration for foreign accounting firm (10 thousand Yuan)
                                                                                                            N/A
(if applicable)
Continuous life of auditing service for foreign accounting firm
                                                                                                            N/A
(if applicable)
Name of foreign CPA (if applicable)                                                                         N/A
Continuous life of auditing service for foreign CPA (if
                                                                                                                  -
applicable)
(ii) Re-appointed accounting firms in this period
□Yes √ No
(iii) Appointment of internal control auditing accounting firm, financial consultant or sponsor
     √ Applicable     □ Not applicable
In reporting period, Shine wing Certified Public Accountants (LLP) was appointed as audit institute of internal
control for the Company, auditing charge for internal control amounting as RMB 250,000 yuan.
X. Particular about suspended and delisting after annual report disclosed
     □ Applicable √      Not applicable
XI. Bankruptcy reorganization
                                                          70
                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
     □ Applicable √       Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitration of the Company
     □ Applicable √       Not applicable
(i) No significant lawsuits or arbitration occurred in the reporting period.
(ii) Some other significant lawsuits and arbitration in the reporting period.
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 Holdings Limited
and Guangdong Changhong Ridian Technology Co., Ltd. are the company's regular products, any other small
household appliances using same or similar trademark as our company or using the trade name similar to the
Company’s name are the Company’s products. In view of the infringement to the Company’s trademark and trade
name, false propaganda and unfair competition in the market, the Company has carried out many ways including
administrative reports, criminal investigation and civil litigation to fight against infringement and counterfeiting
behavior in the whole country.
XIII. Penalty and rectification
□ Applicable      √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. 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.
XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
                                                        71
                                                                      CHANGHONG MEILING CO.,LTD. Annual Report 2018
       √ 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
29 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 "XI Implementation of the company's
stock incentive plan, employee stock ownership plan, or other employee incentive measures" in "Section V
Important Events" of the company's "2018 Semi-Annual Report" disclosed on 15 August 2018
According to the provisions of the Incentive Plan and the commitment of all incentive targets, the purchase of the
Company’s stock will not be reduced by any market means in the first year from the date of purchase, of which
50% can be reduced according to laws and regulations after the second year, and of which the remaining 50% can
be reduced according to laws and regulations after the third year. In addition, the incentive targets who are also the
company’s directors, supervisors and senior executives should at the same time promise to follow the Company
Law, Securities Law, and the Company’s Shares Held by the Directors, Supervisors and Senior Executives of
Listed Companies and Its Changes Management Rules and other related management methods to regulate the
operation.
Up to the end of this reporting period, the company's stock purchased by some 2012 annual performance incentive
objects (non-directors, supervisors and senior management), 2013 annual performance incentive objects
(non-directors, supervisors and senior management), the 2014 annual performance incentive objects
(non-directors, supervisors and senior management) with their granted 2012 annual performance incentive funds
and own funds and 2013 & 2014 annual performance incentive funds and own funds have been fully released for
trading; details of the share reduction for the above mentioned objects see below; if the holding period of the
company’s shares which are purchased by the 2016 annual performance incentive targets with their awarded 2016
annual performance incentive funds and their own funds is less than two years, all shares purchased by the
incentive targets will be locked in accordance with their commitments. The Company’s shares purchased by the
current directors, supervisors and senior executives among the performance incentive targets due to the
implementation of the 2012, 2013, 2014 and 2016 annual performance incentive plans have not reduced the
shareholdings.
                                                         72
                                                                   CHANGHONG MEILING CO.,LTD. Annual Report 2018
2. Shareholding and reducing of performance incentive objects of the Company
Ended as 31 December 2018, shares hold by all incentive objects amounting to 11,797,430 shares, a 1.1294 % in
total share capital of the Company, including 10,107,537 A-share, a 0.9676% in total share capital and 1,689,893
B-share, a 0.1618% in total share capital of the Company. Other grantees of the 2012, 2013, 2014 and 2016
incentive plan (not being directors, supervisors and senior management) have reduced holding of 4,716,385 in
aggregate, accounting for about 0.4515% of the total share capital and 582,377 shares are reduced in the reporting
period.
XVI. Major related transaction
(i) Related transaction with routine operation concerned
     √ Applicable     □ Not applicable
1. Related transaction with routine operation concerned
                                                       73
                                                                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                                                                                 Whethe
                                                                                                                     Trading     r over
                                                                                           Related                     limit       the                   Available
                                                                            Related                    Proportio
                                     Type of                                             transaction                                         Clearing
Ser                                             Content of                transaction                      n in     approved     approve                  similar       Date of
       Related      Relations        related                   Pricing                     amount                                            form for
                                                  related                 price (in 10                   similar                                                                      Index of disclosure
ial     party          hip          transacti                 principle                     (in 10                    (in 10       d          related    market       disclosure
                                                transaction                thousand                    transactio
                                       on                                                 thousand                                         transaction
                                                                             Yuan)                       ns (%)      thousand    limited                   price
                                                                                            Yuan)
                                                                                                                      Yuan)      or not
                                                                                                                                  (Y/N)
                                                Plastic
                    Controllin                                                                                                                                                      Juchao
                                                particles,
      Sichuan       g               Commodi                                                                                                Spot                      30 March       Website(www.cninfo.co
                                                IC,
      Changhong     shareholde         ty                     Marketing                                                                    exchange,                 2018; 11       m.cn)No.: 2018-005、
1                                               discharge                   33,040.87      33,040.87        2.59%       57,000     No                        -
      Electric      r         and   purchase                    price                                                                      Bank                      May; 15 May;   2018-008、2018-029、
                                                tube, plate
      Co., Ltd.     ultimate           d                                                                                                   acceptance                11 Dec.        2018-047、2018-052、
                                                and plastic
                    controller                                                                                                                                                      2018-071、2018-073
                                                pieces etc.
                    Other
                    enterprise
                    control                                                                                                                                          30 March       Juchao
      Changhong     under the       Commodi                                                                                                Spot                      2018, 11 May   Website(www.cninfo.co
      Huayi         same               ty       Compressor    Marketing                                                                    exchange,                 2018, 15       m.cn)No.: 2018-005、
2                                                                           53,248.03      53,248.03        4.17%       60,000     No                        -
      Compresso     controlling     purchase    etc.            price                                                                      Bank                      May , 11       2018-008、2018-029、
      r Co., Ltd.   shareholde         d                                                                                                   acceptance                December       2018-047、2018-052、
                    r         and                                                                                                                                    2018           2018-071、2018-073
                    ultimate
                    controller
      Sichuan       Other           Commodi     Plastic                                                                                    Spot                      30 March       Juchao
                                                              Marketing
3     Changhong     enterprise         ty       products                    73,348.73      73,348.73        5.75%     110,000      No      exchange,         -       2018, 11 May   Website(www.cninfo.co
                                                                price
      Mold          control         purchase    etc.                                                                                       bank and                  2018, 15       m.cn)No.: 2018-005、
                                                                                                       74
                                                                                                                 CHANGHONG MEILING CO.,LTD. Annual Report 2018
    Plastic          under the          d                                                                                             commercial                 May , 11       2018-008、2018-029、
    Tech. Co.,       same                                                                                                             acceptance                 December       2018-047、2018-052、
    Ltd.             controlling                                                                                                                                 2018           2018-071、2018-073
                     shareholde
                     r         and
                     ultimate
                     controller
                     Other
                     enterprise
                     control                                                                                                                                     30 March       Juchao
                                                Door shell,                                                                           Spot
    Sichuan          under the       Commodi                                                                                                                     2018, 11 May   Website(www.cninfo.co
                                                baseboard,                                                                            exchange,
    Changhong        same               ty                      Marketing                                                                                        2018, 15       m.cn)No.: 2018-005、
4                                               holder,                     30,669.97   30,669.97        2.40%      62,000     No     bank and         -
    Jijia     Fine   controlling     purchase                     price                                                                                          May , 11       2018-008、2018-029、
                                                Sheet metal                                                                           commercial
    Co., Ltd.        shareholde         d                                                                                                                        December       2018-047、2018-052、
                                                parts                                                                                 acceptance
                     r         and                                                                                                                               2018           2018-071、2018-073
                     ultimate
                     controller
                     Other
                     enterprise
                     control                                                                                                                                     30 March       Juchao
    Sichuan                                                                                                                           Spot
                     under the       Commodi                                                                                                                     2018, 11 May   Website(www.cninfo.co
    Changhong                                   Packing                                                                               exchange,
                     same               ty                      Marketing                                                                                        2018, 15       m.cn)No.: 2018-005、
5   Package                                     case, printed               10,413.66   10,413.66        0.82%      22,000     No     bank and         -
                     controlling     purchase                     price                                                                                          May , 11       2018-008、2018-029、
    Printing                                    matter etc.                                                                           commercial
                     shareholde         d                                                                                                                        December       2018-047、2018-052、
    Co., Ltd.                                                                                                                         acceptance
                     r         and                                                                                                                               2018           2018-071、2018-073
                     ultimate
                     controller
    Sichuan          Other           Commodi      Printed                                                                             Spot                       30 March       Juchao
                                                                Marketing
6   Changhong        enterprise         ty      boards and                   6,325.00    6,325.00        0.50%      24,000     No     exchange,        -         2018, 11 May   Website(www.cninfo.co
                                                                  price
    Precision        control         purchase   assemblies                                                                            bank and                   2018, 15       m.cn)No.: 2018-005、
                                                                                                    75
                                                                                                      CHANGHONG MEILING CO.,LTD. Annual Report 2018
    Electronics   under the          d       etc.                                                                          commercial                 May , 11       2018-008、2018-029、
    Tech. Co.,    same                                                                                                     acceptance                 December       2018-047、2018-052、
    Ltd.          controlling                                                                                                                         2018           2018-071、2018-073
                  shareholde
                  r         and
                  ultimate
                  controller
                  Other
                  enterprise
    Sichuan       control                                                                                                                             30 March       Juchao
    Changhong     under the       Commodi                                                                                                             2018, 11 May   Website(www.cninfo.co
    New           same               ty                    Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
7                                            Battery                     4.18     4.18        0.00%       5,200     No                      -
    Energy        controlling     purchase                   price                                                         exchange                   May , 11       2018-008、2018-029、
    Technolog     shareholde         d                                                                                                                December       2018-047、2018-052、
    y Co., Ltd.   r         and                                                                                                                       2018           2018-071、2018-073
                  ultimate
                  controller
                  Other
                  enterprise
                  control                                                                                                                             30 March       Juchao
                  under the       Commodi                                                                                  Spot                       2018, 11 May   Website(www.cninfo.co
    081                                      Power
                  same               ty                    Marketing                                                       exchange,                  2018, 15       m.cn)No.: 2018-005、
8   Electronic                               transformer               184.39   184.39        0.01%       5,200     No                      -
                  controlling     purchase                   price                                                         Bank                       May , 11       2018-008、2018-029、
    Group                                    etc.
                  shareholde         d                                                                                     acceptance                 December       2018-047、2018-052、
                  r         and                                                                                                                       2018           2018-071、2018-073
                  ultimate
                  controller
    Guangdon      Other           Commodi                                                                                  Spot                       30 March       Juchao
                                             Foam pieces   Marketing
9   g             enterprise         ty                                423.80   423.80        0.03%       5,200     No     exchange,        -         2018, 11 May   Website(www.cninfo.co
                                             etc.            price
    Changhong     control         purchase                                                                                 bank and                   2018, 15       m.cn)No.: 2018-005、
                                                                                         76
                                                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Electronics   under the          d                                                                                  commercial                 May , 11       2018-008、2018-029、
     Co., Ltd.     same                                                                                                  acceptance                 December       2018-047、2018-052、
                   controlling                                                                                                                      2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
     Sichuan       control                                                                                                                          30 March       Juchao
     Changhong     under the       Commodi    Junction                                                                   Spot                       2018, 11 May   Website(www.cninfo.co
     Intelligent   same               ty      plate,       Marketing                                                     exchange,                  2018, 15       m.cn)No.: 2018-005、
10                                                                     47.03   47.03        0.00%       5,200     No                      -
     Manufactu     controlling     purchase   sprocket       price                                                       Bank                       May , 11       2018-008、2018-029、
     ring Tech.    shareholde         d       shaft etc.                                                                 acceptance                 December       2018-047、2018-052、
     Co., Ltd.     r         and                                                                                                                    2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                          30 March       Juchao
     Sichuan       under the       Commodi                                                                                                          2018, 11 May   Website(www.cninfo.co
     Jiahong       same               ty                   Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
11                                            Food                     17.65   17.65        0.00%       5,200     No                      -
     Industrial    controlling     purchase                  price                                                       exchange                   May , 11       2018-008、2018-029、
     Co., Ltd.     shareholde         d                                                                                                             December       2018-047、2018-052、
                   r         and                                                                                                                    2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other           Commodi                                                                                                          30 March       Juchao
                                              Electronic   Marketing                                                     Spot
12   Zhiyijia      enterprise         ty                               20.78   20.78        0.00%       5,200     No                      -         2018, 11 May   Website(www.cninfo.co
                                              products       price                                                       exchange
     Network       control         purchase                                                                                                         2018, 15       m.cn)No.: 2018-005、
                                                                                       77
                                                                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Technolog     under the          d                                                                                                                     May , 11       2018-008、2018-029、
     y Co., Ltd.   same                                                                                                                                     December       2018-047、2018-052、
                   controlling                                                                                                                              2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                  30 March       Juchao
     Sichuan                                  PCB,                                                                               Spot
                   under the       Commodi                                                                                                                  2018, 11 May   Website(www.cninfo.co
     Changhong                                remote                                                                             exchange,
                   same               ty                     Marketing                                                                                      2018, 15       m.cn)No.: 2018-005、
13   Electronic                               control,                   2,885.43   2,885.43        0.23%       7,000     No     bank and         -
                   controlling     purchase                    price                                                                                        May , 11       2018-008、2018-029、
     Products                                 transformer,                                                                       commercial
                   shareholde         d                                                                                                                     December       2018-047、2018-052、
     Co., Ltd.                                etc                                                                                acceptance
                   r         and                                                                                                                            2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                  30 March       Juchao
     Sichuan
                   under the       Commodi                                                                                                                  2018, 11 May   Website(www.cninfo.co
     Changhong
                   same               ty                     Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
14   Property                                 Exit slip                      0.04       0.04        0.00%       5,200     No                      -
                   controlling     purchase                    price                                                             exchange                   May , 11       2018-008、2018-029、
     Service
                   shareholde         d                                                                                                                     December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                            2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other           Commodi    Internet                                                                           Spot                       30 March       Juchao
                                                             Marketing
15   Ailian        enterprise         ty      module,                    1,167.16   1,167.16        0.09%       5,200     No     exchange,        -         2018, 11 May   Website(www.cninfo.co
                                                               price
     Science &     control         purchase   control                                                                            bank and                   2018, 15       m.cn)No.: 2018-005、
                                                                                               78
                                                                                                           CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Technolog     under the          d       panel etc.                                                                        commercial                 May , 11       2018-008、2018-029、
     y Co., Ltd.   same                                                                                                         acceptance                 December       2018-047、2018-052、
                   controlling                                                                                                                             2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                 30 March       Juchao
     Hunan
                   under the       Commodi                                                                                      Spot                       2018, 11 May   Website(www.cninfo.co
     Grand-Pro
                   same               ty                    Marketing                                                           exchange,                  2018, 15       m.cn)No.: 2018-005、
16   Intelligent                              V-BOT                      230.21     230.21         0.02%         650     No                      -
                   controlling     purchase                   price                                                             Bank                       May , 11       2018-008、2018-029、
     Tech.
                   shareholde         d                                                                                         acceptance                 December       2018-047、2018-052、
     Company
                   r         and                                                                                                                           2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                 30 March       Juchao
     Sichuan       under the       Commodi                                                                                      Spot                       2018, 11 May   Website(www.cninfo.co
                                              Power line,
     Aichuang      same               ty                    Marketing                                                           exchange,                  2018, 15       m.cn)No.: 2018-005、
17                                            control                   5,211.18   5,211.18        0.41%       5,200     No                      -
     Technolog     controlling     purchase                   price                                                             Bank                       May , 11       2018-008、2018-029、
                                              panel etc.
     y Co., Ltd.   shareholde         d                                                                                         acceptance                 December       2018-047、2018-052、
                   r         and                                                                                                                           2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other           Commodi                                                                                                                 30 March       Juchao
                                                            Marketing                                                           Spot
18   Changhong     enterprise         ty      Robot                         2.58       2.58        0.00%       5,200     No                      -         2018, 11 May   Website(www.cninfo.co
                                                              price                                                             exchange
     Communic      control         purchase                                                                                                                2018, 15       m.cn)No.: 2018-005、
                                                                                              79
                                                                                                           CHANGHONG MEILING CO.,LTD. Annual Report 2018
     ation Tech.   under the          d                                                                                                                    May , 11       2018-008、2018-029、
     Co., Ltd.     same                                                                                                                                    December       2018-047、2018-052、
                   controlling                                                                                                                             2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                 30 March       Juchao
     Sichuan                                  Display
                   under the       Commodi                                                                                                                 2018, 11 May   Website(www.cninfo.co
     Changhong                                panel
                   same               ty                    Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
19   Electronic                               splicing                      4.74       4.74        0.00%       5,200     No                      -
                   controlling     purchase                   price                                                             exchange                   May , 11       2018-008、2018-029、
     System                                   screen
                   shareholde         d                                                                                                                    December       2018-047、2018-052、
     Co., Ltd.                                system
                   r         and                                                                                                                           2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
     Sichuan       control                                                                                                                                 30 March       Juchao
     Changhong     under the                                                                                                                               2018, 11 May   Website(www.cninfo.co
                                    Accept
     Electronics   same                       Regular bus   Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
20                                   the                                  92.16      92.16         0.05%       9,000     No                      -
     Holding       controlling                fee             price                                                             exchange                   May , 11       2018-008、2018-029、
                                   services
     Group Co.,    shareholde                                                                                                                              December       2018-047、2018-052、
     Ltd.          r         and                                                                                                                           2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Controllin       Accept    Information                                                                       Spot                       30 March       Juchao
                                                            Marketing
21   Changhong     g                 the      system                    2,325.74   2,325.74        1.23%       5,000     No     exchange,        -         2018, 11 May   Website(www.cninfo.co
                                                              price
     Electric      shareholde      services   services,                                                                         Bank                       2018, 15       m.cn)No.: 2018-005、
                                                                                              80
                                                                                                              CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Co., Ltd.    r         and              repair fees,                                                                          acceptance                 May , 11       2018-008、2018-029、
                  ultimate                   shared                                                                                                           December       2018-047、2018-052、
                  controller                 service fees                                                                                                     2018           2018-071、2018-073
                  Other
                  enterprise
                  control                                                                                                                                     30 March       Juchao
     Sichuan                                                                                                                       Spot
                  under the                  Transportati                                                                                                     2018, 11 May   Website(www.cninfo.co
     Changhong                    Accept                                                                                           exchange,
                  same                       on, storage,   Marketing                                                                                         2018, 15       m.cn)No.: 2018-005、
22   Minsheng                       the                                 53,790.08   53,790.08        28.35%      71,000     No     bank and         -
                  controlling                loading and      price                                                                                           May , 11       2018-008、2018-029、
     Logistics                    services                                                                                         commercial
                  shareholde                 unloading                                                                                                        December       2018-047、2018-052、
     Co., LTD                                                                                                                      acceptance
                  r         and                                                                                                                               2018           2018-071、2018-073
                  ultimate
                  controller
                  Other
                  enterprise
     Sichuan      control                                                                                                                                     30 March       Juchao
     Changhong    under the                                                                                                                                   2018, 11 May   Website(www.cninfo.co
                                  Accept
     Mold         same                       Processing     Marketing                                                              Spot                       2018, 15       m.cn)No.: 2018-005、
23                                  the                                    16.59       16.59         0.01%        5,000     No                      -
     Plastic      controlling                charges etc.     price                                                                exchange                   May , 11       2018-008、2018-029、
                                  services
     Tech. Co.,   shareholde                                                                                                                                  December       2018-047、2018-052、
     Ltd.         r         and                                                                                                                               2018           2018-071、2018-073
                  ultimate
                  controller
     Sichuan      Other
                                                                                                                                                              30 March       Juchao
     Service      enterprise                 After-sale                                                                            Spot
                                                                                                                                                              2018, 11 May   Website(www.cninfo.co
     Exp.         control         Accept     and                                                                                   exchange,
                                                            Marketing                                                                                         2018, 15       m.cn)No.: 2018-005、
24   Appliance    under the         the      installation               19,496.07   19,496.07        10.27%      25,000     No     bank and         -
                                                              price                                                                                           May , 11       2018-008、2018-029、
     Service      same            services   maintenance                                                                           commercial
                                                                                                                                                              December       2018-047、2018-052、
     Chain Co.,   controlling                , etc.                                                                                acceptance
                                                                                                                                                              2018           2018-071、2018-073
     Ltd.         shareholde
                                                                                                81
                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                              30 March       Juchao
     Sichuan       under the                                                                                                                            2018, 11 May   Website(www.cninfo.co
                                   Accept
     Hongxin       same                       Software       Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
25                                   the                                 113.02   113.02        0.06%       5,000     No                      -
     Software      controlling                usage fee        price                                                         exchange                   May , 11       2018-008、2018-029、
                                   services
     Co., Ltd.     shareholde                                                                                                                           December       2018-047、2018-052、
                   r         and                                                                                                                        2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                              30 March       Juchao
     Guangdon
                   under the                  Service fee                                                                                               2018, 11 May   Website(www.cninfo.co
     g                             Accept
                   same                        for           Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
26   Changhong                       the                                 103.24   103.24        0.05%       5,000     No                      -
                   controlling                 network         price                                                         exchange                   May , 11       2018-008、2018-029、
     Electronics                   services
                   shareholde                  service                                                                                                  December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                        2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                                                                                                                                                        30 March       Juchao
                   enterprise
     Sichuan                                  Maintenanc                                                                                                2018, 11 May   Website(www.cninfo.co
                   control         Accept
     Jiahong                                  e costs and    Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
27                 under the         the                                  21.97    21.97        0.01%       9,000     No                      -
     Industrial                               business         price                                                         exchange                   May , 11       2018-008、2018-029、
                   same            services
     Co., Ltd.                                activity fee                                                                                              December       2018-047、2018-052、
                   controlling
                                                                                                                                                        2018           2018-071、2018-073
                   shareholde
                                                                                           82
                                                                                                      CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                            30 March       Juchao
     Sichuan
                   under the                                                                                                                          2018, 11 May   Website(www.cninfo.co
     Changhong                     Accept
                   same                       Business       Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
28   Internation                     the                                 38.86   38.86        0.02%       9,000     No                      -
                   controlling                activity fee     price                                                       exchange                   May , 11       2018-008、2018-029、
     al    Hotel                   services
                   shareholde                                                                                                                         December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                      2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
     Sichuan       control                                                                                                                            30 March       Juchao
     Changhong     under the                                                                                                                          2018, 11 May   Website(www.cninfo.co
                                   Accept
     Internation   same                                      Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
29                                   the      Ticket fee                 87.00   87.00        0.05%       9,000     No                      -
     al   Travel   controlling                                 price                                                       exchange                   May , 11       2018-008、2018-029、
                                   services
     Service       shareholde                                                                                                                         December       2018-047、2018-052、
     Co., Ltd.     r         and                                                                                                                      2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                                                                                                                                                      30 March       Juchao
     Sichuan       enterprise                 Property
                                                                                                                                                      2018, 11 May   Website(www.cninfo.co
     Changhong     control         Accept     managemen
                                                             Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
30   Property      under the         the      t fee and                  83.66   83.66        0.04%       9,000     No                      -
                                                               price                                                       exchange                   May , 11       2018-008、2018-029、
     Service       same            services   maintenance
                                                                                                                                                      December       2018-047、2018-052、
     Co., Ltd.     controlling                fee
                                                                                                                                                      2018           2018-071、2018-073
                   shareholde
                                                                                         83
                                                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                             30 March       Juchao
     Sichuan       under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
                                   Accept     Laboratory
     Hongwei       same                                     Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
31                                   the      technical                  51.87    51.87        0.03%       5,000     No                      -
     Technolog     controlling                                price                                                         exchange                   May , 11       2018-008、2018-029、
                                   services   service fee
     y Co., Ltd.   shareholde                                                                                                                          December       2018-047、2018-052、
                   r         and                                                                                                                       2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                             30 March       Juchao
     Sichuan
                   under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
     Zhiyijia                      Accept
                   same                       Platform      Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
32   Network                         the                                740.93   740.93        0.39%       5,000     No                      -
                   controlling                licensing       price                                                         exchange                   May , 11       2018-008、2018-029、
     Technolog                     services
                   shareholde                                                                                                                          December       2018-047、2018-052、
     y Co., Ltd.
                   r         and                                                                                                                       2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                                                                                                                                                       30 March       Juchao
     Sichuan       enterprise
                                                                                                                                                       2018, 11 May   Website(www.cninfo.co
     Changhong     control         Accept
                                              Communica     Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
33   Network       under the         the                                  7.87     7.87        0.00%       5,000     No                      -
                                              tion fee        price                                                         exchange                   May , 11       2018-008、2018-029、
     Technolog     same            services
                                                                                                                                                       December       2018-047、2018-052、
     y Co., Ltd.   controlling
                                                                                                                                                       2018           2018-071、2018-073
                   shareholde
                                                                                          84
                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
     Sichuan       control                                                                                                                              30 March       Juchao
     Changhong     under the                                                                                                                            2018, 11 May   Website(www.cninfo.co
                                   Accept
     Intelligent   same                       Installation   Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
34                                   the                                 590.08   590.08        0.31%       9,000     No                      -
     Manufactu     controlling                cost             price                                                         exchange                   May , 11       2018-008、2018-029、
                                   services
     ring Tech.    shareholde                                                                                                                           December       2018-047、2018-052、
     Co., Ltd.     r         and                                                                                                                        2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
     Sichuan       enterprise
     Changhong     control                                                                                                                              30 March       Juchao
     Gerun         under the                                                                                                                            2018, 11 May   Website(www.cninfo.co
                                   Accept
     Environme     same                                      Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
35                                   the      Eco fees                    11.56    11.56        0.01%       5,000     No                      -
     ntal          controlling                                 price                                                         exchange                   May , 11       2018-008、2018-029、
                                   services
     Protection    shareholde                                                                                                                           December       2018-047、2018-052、
     Tech. Co.,    r         and                                                                                                                        2018           2018-071、2018-073
     Ltd.          ultimate
                   controller
                   Other
     Sichuan                                                                                                                                            30 March       Juchao
                   enterprise
     Changhong                                                                                                                                          2018, 11 May   Website(www.cninfo.co
                   control         Accept
     Jiahua                                                  Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
36                 under the         the      Network fee                  0.60     0.60        0.00%       5,000     No                      -
     Informatio                                                price                                                         exchange                   May , 11       2018-008、2018-029、
                   same            services
     n Products                                                                                                                                         December       2018-047、2018-052、
                   controlling
     Co., Ltd.                                                                                                                                          2018           2018-071、2018-073
                   shareholde
                                                                                           85
                                                                                                          CHANGHONG MEILING CO.,LTD. Annual Report 2018
                  r         and
                  ultimate
                  controller
                  Other
                  enterprise
                  control                                                                                                                                 30 March       Juchao
     BVCH         under the                                                                                                                               2018, 11 May   Website(www.cninfo.co
                                  Accept
     Optronics    same                                     Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
37                                  the      HR service                    6.79       6.79        0.00%       5,000     No                      -
     (Sichuan)    controlling                                price                                                             exchange                   May , 11       2018-008、2018-029、
                                  services
     Co., Ltd.    shareholde                                                                                                                              December       2018-047、2018-052、
                  r         and                                                                                                                           2018           2018-071、2018-073
                  ultimate
                  controller
                  Other
                  enterprise
                  control                                                                                                                                 30 March       Juchao
     Sichuan
                  under the                                                                                                                               2018, 11 May   Website(www.cninfo.co
     Changhong                    Accept
                  same                                     Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
38   Electronic                     the      HR service                  38.86      38.86         0.02%       5,000     No                      -
                  controlling                                price                                                             exchange                   May , 11       2018-008、2018-029、
     Products                     services
                  shareholde                                                                                                                              December       2018-047、2018-052、
     Co., Ltd.
                  r         and                                                                                                                           2018           2018-071、2018-073
                  ultimate
                  controller
                  Controllin                                                                                                                              30 March       Juchao
     Sichuan      g                                                                                                                                       2018, 11 May   Website(www.cninfo.co
                                  Purchase   Water,
     Changhong    shareholde                               Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
39                                fuel and   electricity               2,026.44   2,026.44        0.16%      57,000     No                      -
     Electric     r         and                              price                                                             exchange                   May , 11       2018-008、2018-029、
                                   power     and gas
     Co., Ltd.    ultimate                                                                                                                                December       2018-047、2018-052、
                  controller                                                                                                                              2018           2018-071、2018-073
                                                                                             86
                                                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   Other
                   enterprise
                   control                                                                                                                             30 March       Juchao
     Changhong     under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
                                   Purchase
     Huayi         same                                     Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
40                                 fuel and   Steam                      72.04    72.04        0.01%         130     No                      -
     Compresso     controlling                                price                                                         exchange                   May , 11       2018-008、2018-029、
                                    power
     r Co., Ltd.   shareholde                                                                                                                          December       2018-047、2018-052、
                   r         and                                                                                                                       2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                             30 March       Juchao
     Guangdon
                   under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
     g                             Purchase   Water,
                   same                                     Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
41   Changhong                     fuel and   electricity               168.04   168.04        0.01%       5,200     No                      -
                   controlling                                price                                                         exchange                   May , 11       2018-008、2018-029、
     Electronics                    power     etc.
                   shareholde                                                                                                                          December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                       2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
     Hefei
                   control                                                                                                                             30 March       Juchao
     Changhong
                   under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
     New                           Purchase
                   same                       Electricity   Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
42   Energy                        fuel and                              37.75    37.75        0.00%       5,200     No                      -
                   controlling                fee             price                                                         exchange                   May , 11       2018-008、2018-029、
     Science &                      power
                   shareholde                                                                                                                          December       2018-047、2018-052、
     Technolog
                   r         and                                                                                                                       2018           2018-071、2018-073
     y Co., Ltd.
                   ultimate
                   controller
                                                                                          87
                                                                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    Other
                    enterprise
                    control                                                                                                                                  30 March       Juchao
     Sichuan
                    under the                                                                                                                                2018, 11 May   Website(www.cninfo.co
     Changhong                      Purchase
                    same                       Electricity    Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
43   Property                       fuel and                                  5.07       5.07        0.00%       5,200     No                      -
                    controlling                fee              price                                                             exchange                   May , 11       2018-008、2018-029、
     Service                         power
                    shareholde                                                                                                                               December       2018-047、2018-052、
     Co., Ltd.
                    r         and                                                                                                                            2018           2018-071、2018-073
                    ultimate
                    controller
                    Controllin                                                                                                                               30 March       Juchao
                                               Air-conditio
     Sichuan        g                                                                                                             Spot                       2018, 11 May   Website(www.cninfo.co
                                               ner, small
     Changhong      shareholde      Sales of                  Marketing                                                           exchange,                  2018, 15       m.cn)No.: 2018-005、
44                                             appliances                 5,163.23   5,163.23        0.30%      32,000     No                      -
     Electric       r         and    goods                      price                                                             Bank                       May , 11       2018-008、2018-029、
                                               and fresh
     Co., Ltd.      ultimate                                                                                                      acceptance                 December       2018-047、2018-052、
                                               etc.
                    controller                                                                                                                               2018           2018-071、2018-073
                    Other
                    enterprise
     Sichuan        control                                                                                                                                  30 March       Juchao
     Changhong      under the                  Fresh,                                                                                                        2018, 11 May   Website(www.cninfo.co
     Electronics    same            Sales of   air-conditio   Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
45                                                                         148.96     148.96         0.01%       9,500     No                      -
     Holding        controlling      goods     ner and          price                                                             exchange                   May , 11       2018-008、2018-029、
     Group Co.,     shareholde                 refrigerator                                                                                                  December       2018-047、2018-052、
     Ltd.           r         and                                                                                                                            2018           2018-071、2018-073
                    ultimate
                    controller
     Sichuan        Other                      Color board                                                                        Spot                       30 March       Juchao
     Changhong      enterprise      Sales of   and door       Marketing                                                           exchange,                  2018, 11 May   Website(www.cninfo.co
46                                                                        5,847.80   5,847.80        0.33%      12,000     No                      -
     Jijia   Fine   control          goods     shell            price                                                             Bank                       2018, 15       m.cn)No.: 2018-005、
     Co., Ltd.      under the                  component                                                                          acceptance                 May , 11       2018-008、2018-029、
                                                                                                88
                                                                                                               CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    same                                                                                                                                       December       2018-047、2018-052、
                    controlling                                                                                                                                2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
     Sichuan        control                                                                                                                                    30 March       Juchao
                                               Color
     Changhong      under the                                                                                                       Spot                       2018, 11 May   Website(www.cninfo.co
                                               Masterbatch
     Mold           same            Sales of                  Marketing                                                             exchange,                  2018, 15       m.cn)No.: 2018-005、
47                                             , plastic                  19,906.13   19,906.13        1.14%      23,000     No                      -
     Plastic        controlling      goods                      price                                                               Bank                       May , 11       2018-008、2018-029、
                                               particle and
     Tech. Co.,     shareholde                                                                                                      acceptance                 December       2018-047、2018-052、
                                               AC etc.
     Ltd.           r         and                                                                                                                              2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                                    30 March       Juchao
                                               Air-conditio
     Lejiayi        under the                                                                                                       Spot                       2018, 11 May   Website(www.cninfo.co
                                               ner,
     Chain          same            Sales of                  Marketing                                                             exchange,                  2018, 15       m.cn)No.: 2018-005、
48                                             refrigerator                2,324.80    2,324.80        0.13%      15,000     No                      -
     Manageme       controlling      goods                      price                                                               Bank                       May , 11       2018-008、2018-029、
                                               and washing
     nt Co., Ltd.   shareholde                                                                                                      acceptance                 December       2018-047、2018-052、
                                               machine etc.
                    r         and                                                                                                                              2018           2018-071、2018-073
                    ultimate
                    controller
     PT.CHAN        Other                                                                                                                                      30 March       Juchao
     GHONGE         enterprise      Sales of   Refrigerator   Marketing                                                             Spot                       2018, 11 May   Website(www.cninfo.co
49                                                                          711.24      711.24         0.04%      15,000     No                      -
     LECTRICI       control          goods     and freezer      price                                                               exchange                   2018, 15       m.cn)No.: 2018-005、
     NDONESI        under the                                                                                                                                  May , 11       2018-008、2018-029、
                                                                                                  89
                                                                                                              CHANGHONG MEILING CO.,LTD. Annual Report 2018
     A             same                                                                                                                                       December       2018-047、2018-052、
                   controlling                                                                                                                                2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                    30 March       Juchao
     CHANGH        under the                                                                                                                                  2018, 11 May   Website(www.cninfo.co
     ONG(HK)       same            Sales of   Air-conditio   Marketing                                                             Spot                       2018, 15       m.cn)No.: 2018-005、
50                                                                       21,867.52   21,867.52        1.25%     120,000     No                      -
     TRADING       controlling      goods     ner              price                                                               exchange                   May , 11       2018-008、2018-029、
     LIMITED       shareholde                                                                                                                                 December       2018-047、2018-052、
                   r         and                                                                                                                              2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                    30 March       Juchao
     CHANGH
                   under the                                                                                                                                  2018, 11 May   Website(www.cninfo.co
     ONGELE
                   same            Sales of   Refrigerator   Marketing                                                             Spot                       2018, 15       m.cn)No.: 2018-005、
51   CTRIC(A                                                              2,557.96    2,557.96        0.15%      15,000     No                      -
                   controlling      goods     , freezer        price                                                               exchange                   May , 11       2018-008、2018-029、
     USTRALI
                   shareholde                                                                                                                                 December       2018-047、2018-052、
     A)
                   r         and                                                                                                                              2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other                                                                                                                                      30 March       Juchao
     Hongwei       enterprise      Sales of                  Marketing                                                             Spot                       2018, 11 May   Website(www.cninfo.co
52                                            Fresh etc.                    17.24       17.24         0.00%      15,000     No                      -
     Technolog     control          goods                      price                                                               exchange                   2018, 15       m.cn)No.: 2018-005、
     y Co., Ltd.   under the                                                                                                                                  May , 11       2018-008、2018-029、
                                                                                                 90
                                                                                                           CHANGHONG MEILING CO.,LTD. Annual Report 2018
                  same                                                                                                                                     December       2018-047、2018-052、
                  controlling                                                                                                                              2018           2018-071、2018-073
                  shareholde
                  r         and
                  ultimate
                  controller
                  Other
                  enterprise
                  control                                                                                                                                  30 March       Juchao
     Sichuan
                  under the                                                                                                                                2018, 11 May   Website(www.cninfo.co
     Changhong
                  same            Sales of   Air-conditio   Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
53   Device                                                               19.10      19.10         0.00%      15,000     No                      -
                  controlling      goods     ner, fresh       price                                                             exchange                   May , 11       2018-008、2018-029、
     Tech. Co.,
                  shareholde                                                                                                                               December       2018-047、2018-052、
     Ltd.
                  r         and                                                                                                                            2018           2018-071、2018-073
                  ultimate
                  controller
                  Other
                  enterprise
                  control                                                                                                                                  30 March       Juchao
     Sichuan                                 Refrigerator
                  under the                                                                                                     Spot                       2018, 11 May   Website(www.cninfo.co
     Changhong                               , washing
                  same            Sales of                  Marketing                                                           exchange,                  2018, 15       m.cn)No.:2018-005、
54   Minsheng                                machine,                    252.69     252.69         0.01%      15,000     No                      -
                  controlling      goods                      price                                                             Bank                       May , 11       2018-008、2018-029、
     Logistics                               Air-conditio
                  shareholde                                                                                                    acceptance                 December       2018-047、2018-052、
     Co., LTD                                ner
                  r         and                                                                                                                            2018           2018-071、2018-073
                  ultimate
                  controller
     Sichuan      Other                                                                                                         Spot                       30 March       Juchao
     Service      enterprise      Sales of   Maintenanc     Marketing                                                           exchange,                  2018, 11 May   Website(www.cninfo.co
55                                                                      1,443.58   1,443.58        0.08%      15,000     No                      -
     Exp.         control          goods     e parts etc.     price                                                             Bank                       2018, 15       m.cn)No.: 2018-005、
     Appliance    under the                                                                                                     acceptance                 May , 11       2018-008、2018-029、
                                                                                              91
                                                                                                           CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Service      same                                                                                                                                     December       2018-047、2018-052、
     Chain Co.,   controlling                                                                                                                              2018           2018-071、2018-073
     Ltd.         shareholde
                  r         and
                  ultimate
                  controller
                  Other
     Sichuan      enterprise
     Changhong    control                                                                                                                                  30 March       Juchao
     Gerun        under the                                                                                                                                2018, 11 May   Website(www.cninfo.co
     Environme    same            Sales of   Waste          Marketing                                                           Spot                       2018, 15       m.cn)No.: 2018-005、
56                                                                      1,585.49   1,585.49        0.09%       9,500     No                      -
     ntal         controlling      goods     materials        price                                                             exchange                   May , 11       2018-008、2018-029、
     Protection   shareholde                                                                                                                               December       2018-047、2018-052、
     Tech. Co.,   r         and                                                                                                                            2018           2018-071、2018-073
     Ltd.         ultimate
                  controller
                  Other
                  enterprise
                  control                                                                                                                                  30 March       Juchao
     Hefei        under the                  Air-conditio                                                                       Spot                       2018, 11 May   Website(www.cninfo.co
     Changhong    same            Sales of   ner,           Marketing                                                           exchange,                  2018, 15       m.cn)No.: 2018-005、
57                                                                       205.04     205.04         0.01%      15,000     No                      -
     Industrial   controlling      goods     refrigerator     price                                                             Bank                       May , 11       2018-008、2018-029、
     Co., Ltd.    shareholde                 etc.                                                                               acceptance                 December       2018-047、2018-052、
                  r         and                                                                                                                            2018           2018-071、2018-073
                  ultimate
                  controller
     Sichuan      Other                                                                                                                                    30 March       Juchao
     Huafeng      enterprise      Sales of                  Marketing                                                           Spot                       2018, 11 May   Website(www.cninfo.co
58                                           Fresh                        29.84      29.84         0.00%       9,500     No                      -
     Corp.        control          goods                      price                                                             exchange                   2018, 15       m.cn)No.: 2018-005、
     Group        under the                                                                                                                                May , 11       2018-008、2018-029、
                                                                                              92
                                                                                                                 CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   same                                                                                                                                          December       2018-047、2018-052、
                   controlling                                                                                                                                   2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                    Refrigerator                                                                                                       30 March       Juchao
     Sichuan                                                                                                                          Spot
                   under the                  and freezer,                                                                                                       2018, 11 May   Website(www.cninfo.co
     Zhiyijia                                                                                                                         exchange,
                   same            Sales of   washing        Marketing                                                                                           2018, 15       m.cn)No.: 2018-005、
59   Network                                                             254,723.26   254,723.26        14.56%     420,000     No     bank and         -
                   controlling      goods     machine,         price                                                                                             May , 11       2018-008、2018-029、
     Technolog                                                                                                                        commercial
                   shareholde                 air-conditio                                                                                                       December       2018-047、2018-052、
     y Co., Ltd.                                                                                                                      acceptance
                   r         and              ner etc.                                                                                                           2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                       30 March       Juchao
     Sichuan       under the                                                                                                                                     2018, 11 May   Website(www.cninfo.co
     Changhong     same            Sales of   Air-conditio   Marketing                                                                Spot                       2018, 15       m.cn)No.: 2018-005、
60                                                                          112.08       112.08         0.01%       15,000     No                      -
     Property      controlling      goods     ner              price                                                                  exchange                   May , 11       2018-008、2018-029、
     Co., Ltd.     shareholde                                                                                                                                    December       2018-047、2018-052、
                   r         and                                                                                                                                 2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other                                                                                                                                         30 March       Juchao
     Changhong     enterprise      Sales of                  Marketing                                                                Spot                       2018, 11 May   Website(www.cninfo.co
61                                            Fresh                          29.41        29.41         0.00%       15,000     No                      -
     Network       control          goods                      price                                                                  exchange                   2018, 15       m.cn)No.: 2018-005、
     Technolog     under the                                                                                                                                     May , 11       2018-008、2018-029、
                                                                                                   93
                                                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
     y Co., Ltd.   same                                                                                                                             December       2018-047、2018-052、
                   controlling                                                                                                                      2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                          30 March       Juchao
     Chengdu
                   under the                                                                                                                        2018, 11 May   Website(www.cninfo.co
     Changhong
                   same            Sales of                  Marketing                                                   Spot                       2018, 15       m.cn)No.: 2018-005、
62   Electronic                               Fresh                      0.12   0.12        0.00%      15,000     No                      -
                   controlling      goods                      price                                                     exchange                   May , 11       2018-008、2018-029、
     Technolog
                   shareholde                                                                                                                       December       2018-047、2018-052、
     y Co., Ltd.
                   r         and                                                                                                                    2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
     Sichuan       control                                                                                                                          30 March       Juchao
     Changhong     under the                                                                                                                        2018, 11 May   Website(www.cninfo.co
     Wisdom        same            Sales of                  Marketing                                                   Spot                       2018, 15       m.cn)No.: 2018-005、
63                                            Fresh                      1.02   1.02        0.00%      15,000     No                      -
     Health        controlling      goods                      price                                                     exchange                   May , 11       2018-008、2018-029、
     Tech. Co.,    shareholde                                                                                                                       December       2018-047、2018-052、
     Ltd.          r         and                                                                                                                    2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other                                                                                                                            30 March       Juchao
     Changhong     enterprise      Sales of   Air-conditio   Marketing                                                   Spot                       2018, 11 May   Website(www.cninfo.co
64                                                                       2.71   2.71        0.00%       9,500     No                      -
     Property      control          goods     ner, fresh       price                                                     exchange                   2018, 15       m.cn)No.: 2018-005、
     Service       under the                                                                                                                        May , 11       2018-008、2018-029、
                                                                                       94
                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Co., Ltd.     same                                                                                                                                 December       2018-047、2018-052、
                   controlling                                                                                                                          2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                              30 March       Juchao
     Guangdon
                   under the                                                                                                                            2018, 11 May   Website(www.cninfo.co
     g
                   same            Sales of   Air-conditio   Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
65   Changhong                                                           298.73   298.73        0.02%      15,000     No                      -
                   controlling      goods     ner etc.         price                                                         exchange                   May , 11       2018-008、2018-029、
     Electronics
                   shareholde                                                                                                                           December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                        2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                              30 March       Juchao
     Sichuan       under the                                                                                                                            2018, 11 May   Website(www.cninfo.co
     Huanyu        same            Sales of   Air-conditio   Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
66                                                                        16.84    16.84        0.00%       9,500     No                      -
     Industrial    controlling      goods     ner, fresh       price                                                         exchange                   May , 11       2018-008、2018-029、
     Co. Ltd.      shareholde                                                                                                                           December       2018-047、2018-052、
                   r         and                                                                                                                        2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other                                                                                                                                30 March       Juchao
     Changhong     enterprise      Sales of                  Marketing                                                       Spot                       2018, 11 May   Website(www.cninfo.co
67                                            Fresh                        0.14     0.14        0.00%       9,500     No                      -
     Xinrui        control          goods                      price                                                         exchange                   2018, 15       m.cn)No.: 2018-005、
     Tech. Co.     under the                                                                                                                            May , 11       2018-008、2018-029、
                                                                                           95
                                                                                                      CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Ltd.          same                                                                                                                               December       2018-047、2018-052、
                   controlling                                                                                                                        2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
     Sichuan       control                                                                                                                            30 March       Juchao
     Changhong     under the                                                                                                                          2018, 11 May   Website(www.cninfo.co
     Intelligent   same            Sales of   Air-conditio   Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
68                                                                       52.65   52.65        0.00%       9,500     No                      -
     Manufactu     controlling      goods     ner, fresh       price                                                       exchange                   May , 11       2018-008、2018-029、
     ring Tech.    shareholde                                                                                                                         December       2018-047、2018-052、
     Co., Ltd.     r         and                                                                                                                      2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
     Mianyang      control                                                                                                                            30 March       Juchao
     Technolog     under the                                                                                                                          2018, 11 May   Website(www.cninfo.co
     y      Town   same            Sales of                  Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
69                                            Fresh                       0.26    0.26        0.00%      15,000     No                      -
     Big    Data   controlling      goods                      price                                                       exchange                   May , 11       2018-008、2018-029、
     Technolog     shareholde                                                                                                                         December       2018-047、2018-052、
     y Co., Ltd.   r         and                                                                                                                      2018           2018-071、2018-073
                   ultimate
                   controller
     BVCH          Other                                                                                                                              30 March       Juchao
     Optronics     enterprise      Sales of                  Marketing                                                     Spot                       2018, 11 May   Website(www.cninfo.co
70                                            Fresh                       3.35    3.35        0.00%      15,000     No                      -
     (Sichuan)     control          goods                      price                                                       exchange                   2018, 15       m.cn)No.: 2018-005、
     Co., Ltd.     under the                                                                                                                          May , 11       2018-008、2018-029、
                                                                                         96
                                                                                                      CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   same                                                                                                                               December       2018-047、2018-052、
                   controlling                                                                                                                        2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                            30 March       Juchao
     Sichuan
                   under the                                                                                                                          2018, 11 May   Website(www.cninfo.co
     Changhong
                   same            Sales of                  Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
71   Electronic                               Fresh                      27.04   27.04        0.00%      15,000     No                      -
                   controlling      goods                      price                                                       exchange                   May , 11       2018-008、2018-029、
     Products
                   shareholde                                                                                                                         December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                      2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                            30 March       Juchao
     Sichuan
                   under the                                                                                                                          2018, 11 May   Website(www.cninfo.co
     Changhong
                   same            Sales of                  Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
72   Group                                    Fresh                       5.72    5.72        0.00%       9,500     No                      -
                   controlling      goods                      price                                                       exchange                   May , 11       2018-008、2018-029、
     Finance
                   shareholde                                                                                                                         December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                      2018           2018-071、2018-073
                   ultimate
                   controller
     Changhong     Other                                                                                                                              30 March       Juchao
                                              Air-conditio
     Huayi         enterprise      Sales of                  Marketing                                                     Spot                       2018, 11 May   Website(www.cninfo.co
73                                            ner, R&D                   62.05   62.05        0.00%      15,000     No                      -
     Compresso     control          goods                      price                                                       exchange                   2018, 15       m.cn)No.: 2018-005、
                                              service
     r Co., Ltd.   under the                                                                                                                          May , 11       2018-008、2018-029、
                                                                                         97
                                                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
                 same                                                                                                                               December       2018-047、2018-052、
                 controlling                                                                                                                        2018           2018-071、2018-073
                 shareholde
                 r         and
                 ultimate
                 controller
                 Other
                 enterprise
                 control                                                                                                                            30 March       Juchao
     Sichuan
                 under the                                                                                                                          2018, 11 May   Website(www.cninfo.co
     Changhong
                 same            Sales of                  Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
74   Package                                Fresh                       7.93    7.93        0.00%      15,000     No                      -
                 controlling      goods                      price                                                       exchange                   May , 11       2018-008、2018-029、
     Printing
                 shareholde                                                                                                                         December       2018-047、2018-052、
     Co., Ltd.
                 r         and                                                                                                                      2018           2018-071、2018-073
                 ultimate
                 controller
                 Other
                 enterprise
                 control                                                                                                                            30 March       Juchao
     Sichuan
                 under the                                                                                                                          2018, 11 May   Website(www.cninfo.co
     Changhong
                 same            Sales of   Air-conditio   Marketing                                                     Spot                       2018, 15       m.cn)No.: 2018-005、
75   Power                                                             10.64   10.64        0.00%      15,000     No                      -
                 controlling      goods     ner              price                                                       exchange                   May , 11       2018-008、2018-029、
     Source
                 shareholde                                                                                                                         December       2018-047、2018-052、
     Co., Ltd.
                 r         and                                                                                                                      2018           2018-071、2018-073
                 ultimate
                 controller
     Sichuan     Other                                                                                                                              30 March       Juchao
     Changhong   enterprise      Sales of   Air-conditio   Marketing                                                     Spot                       2018, 11 May   Website(www.cninfo.co
76                                                                     59.29   59.29        0.00%       9,500     No                      -
     Education   control          goods     ner, fresh       price                                                       exchange                   2018, 15       m.cn)No.: 2018-005、
     Technolog   under the                                                                                                                          May , 11       2018-008、2018-029、
                                                                                       98
                                                                                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
     y Co., Ltd.   same                                                                                                                                  December       2018-047、2018-052、
                   controlling                                                                                                                           2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                               30 March       Juchao
                   under the                                                                                                                             2018, 11 May   Website(www.cninfo.co
     081
                   same            Sales of   Air-conditio    Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
77   Electronic                                                           434.53   434.53        0.02%      15,000     No                      -
                   controlling      goods     ner               price                                                         exchange                   May , 11       2018-008、2018-029、
     Group
                   shareholde                                                                                                                            December       2018-047、2018-052、
                   r         and                                                                                                                         2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
     GuangYua      control                    Air-conditio                                                                                               30 March       Juchao
     n             under the                  ner,                                                                                                       2018, 11 May   Website(www.cninfo.co
     Changhong     same            Sales of   refrigerator,   Marketing                                                       Spot                       2018, 15       m.cn)No.: 2018-005、
78                                                                        160.00   160.00        0.01%      15,000     No                      -
     Electronic    controlling      goods     freezer,          price                                                         exchange                   May , 11       2018-008、2018-029、
     Technolog     shareholde                 washing                                                                                                    December       2018-047、2018-052、
     y Co., Ltd.   r         and              machine etc.                                                                                               2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other                                                                                                                                 30 March       Juchao
     Ailian        enterprise      Sales of   Air-conditio    Marketing                                                       Spot                       2018, 11 May   Website(www.cninfo.co
79                                                                         27.80    27.80        0.00%       9,500     No                      -
     Science &     control          goods     ner, fresh        price                                                         exchange                   2018, 15       m.cn)No.: 2018-005、
     Technolog     under the                                                                                                                             May , 11       2018-008、2018-029、
                                                                                            99
                                                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
     y Co., Ltd.   same                                                                                                                                December       2018-047、2018-052、
                   controlling                                                                                                                         2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                             30 March       Juchao
     Sichuan
                   under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
     Changhong
                   same            Sales of                  Marketing                                                      Spot                       2018, 15       m.cn)No.: 2018-005、
80   Venture                                  Fresh                       0.20    0.20         0.00%      15,000     No                      -
                   controlling      goods                      price                                                        exchange                   May , 11       2018-008、2018-029、
     Investment
                   shareholde                                                                                                                          December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                       2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                             30 March       Juchao
     Guangyuan     under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
     Hongcheng     same            Sales of   Air-conditio   Marketing                                                      Spot                       2018, 15       m.cn)No.: 2018-005、
81                                                                       14.68   14.68         0.00%       9,500     No                      -
     Industrial    controlling      goods     ner              price                                                        exchange                   May , 11       2018-008、2018-029、
     Co., Ltd.     shareholde                                                                                                                          December       2018-047、2018-052、
                   r         and                                                                                                                       2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other                                                                                                                               30 March       Juchao
     Changhong     enterprise      Sales of                  Marketing                                                      Spot                       2018, 11 May   Website(www.cninfo.co
82                                            Fresh                       2.45    2.45         0.00%      15,000     No                      -
     Energy        control          goods                      price                                                        exchange                   2018, 15       m.cnNo.: )2018-005、
     Sunshine      under the                                                                                                                           May , 11       2018-008、2018-029、
                                                                                         100
                                                                                                     CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Technolog     same                                                                                                                              December       2018-047、2018-052、
     y Co., Ltd.   controlling                                                                                                                       2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                           30 March       Juchao
     Sichuan
                   under the                                                                                                                         2018, 11 May   Website(www.cninfo.co
     Changhong
                   same            Sales of                  Marketing                                                    Spot                       2018, 15       m.cn)No.: 2018-005、
83   Electronics                              Fresh                      1.54   1.54         0.00%       9,500     No                      -
                   controlling      goods                      price                                                      exchange                   May , 11       2018-008、2018-029、
     Tech. Co.,
                   shareholde                                                                                                                        December       2018-047、2018-052、
     Ltd.
                   r         and                                                                                                                     2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                           30 March       Juchao
     Sichuan       under the                                                                                                                         2018, 11 May   Website(www.cninfo.co
     Hongxin       same            Sales of                  Marketing                                                    Spot                       2018, 15       m.cnNo.: )2018-005、
84                                            Fresh                      3.80   3.80         0.00%      15,000     No                      -
     Software      controlling      goods                      price                                                      exchange                   May , 11       2018-008、2018-029、
     Co., Ltd.     shareholde                                                                                                                        December       2018-047、2018-052、
                   r         and                                                                                                                     2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other                                                                                                                             30 March       Juchao
     Hongcheng     enterprise      Sales of   Air-conditio   Marketing                                                    Spot                       2018, 11 May   Website(www.cninfo.co
85                                                                       9.46   9.46         0.00%       9,500     No                      -
     Real Estate   control          goods     ner              price                                                      exchange                   2018, 15       m.cn)No.: 2018-005、
     Co., Ltd.     under the                                                                                                                         May , 11       2018-008、2018-029、
                                                                                       101
                                                                                                       CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   same                                                                                                                                December       2018-047、2018-052、
                   controlling                                                                                                                         2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
     Sichuan       control                                                                                                                             30 March       Juchao
     Changhong     under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
     New           same            Sales of   Air-conditio   Marketing                                                      Spot                       2018, 15       m.cn)No.: 2018-005、
86                                                                       35.22   35.22         0.00%      15,000     No                      -
     Energy        controlling      goods     ner, fresh       price                                                        exchange                   May , 11       2018-008、2018-029、
     Technolog     shareholde                                                                                                                          December       2018-047、2018-052、
     y Co., Ltd.   r         and                                                                                                                       2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                             30 March       Juchao
     Sichuan
                   under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
     Changhong
                   same            Sales of   Air-conditio   Marketing                                                      Spot                       2018, 15       m.cnNo.: )2018-005、
87   Internation                                                         36.19   36.19         0.00%       9,500     No                      -
                   controlling      goods     ner, fresh       price                                                        exchange                   May , 11       2018-008、2018-029、
     al    Hotel
                   shareholde                                                                                                                          December       2018-047、2018-052、
     Co., Ltd.
                   r         and                                                                                                                       2018           2018-071、2018-073
                   ultimate
                   controller
     Sichuan       Other                                                                                                                               30 March       Juchao
     Changhong     enterprise      Sales of   Bluetooth,     Marketing                                                      Spot                       2018, 11 May   Website(www.cninfo.co
88                                                                        2.60    2.60         0.00%      15,000     No                      -
     Electronic    control          goods     fresh            price                                                        exchange                   2018, 15       m.cn)No.: 2018-005、
     System        under the                                                                                                                           May , 11       2018-008、2018-029、
                                                                                         102
                                                                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
     Co., Ltd.     same                                                                                                                                      December       2018-047、2018-052、
                   controlling                                                                                                                               2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
     Sichuan       control                                                                                                                                   30 March       Juchao
     Changhong     under the                                                                                                                                 2018, 11 May   Website(www.cninfo.co
                                              Fresh,
     Precision     same            Sales of                  Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
89                                            refrigerator                 18.06      18.06          0.00%      15,000     No                      -
     Electronics   controlling      goods                      price                                                              exchange                   May , 11       2018-008、2018-029、
                                              etc.
     Tech. Co.,    shareholde                                                                                                                                December       2018-047、2018-052、
     Ltd.          r         and                                                                                                                             2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                   30 March       Juchao
                   under the                                                                                                                                 2018, 11 May   Website(www.cninfo.co
     Orion.PDP     same            Sales of   Refrigerator   Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
90                                                                       2,626.30   2,626.30         0.15%       9,500     No                      -
     .Co.,ltd      controlling      goods     , freezer        price                                                              exchange                   May , 11       2018-008、2018-029、
                   shareholde                                                                                                                                December       2018-047、2018-052、
                   r         and                                                                                                                             2018           2018-071、2018-073
                   ultimate
                   controller
     Changhong     Other                                                                                                                                     30 March       Juchao
     Internation   enterprise      Sales of   Air-conditio   Marketing                                                            Spot                       2018, 11 May   Website(www.cninfo.co
91                                                                         58.92      58.92          0.00%       6,000     No                      -
     al            control          goods     ner, fresh       price                                                              exchange                   2018, 15       m.cn)No.: 2018-005、
     Holdings      under the                                                                                                                                 May , 11       2018-008、2018-029、
                                                                                               103
                                                                                                              CHANGHONG MEILING CO.,LTD. Annual Report 2018
     (Hong         same                                                                                                                                       December       2018-047、2018-052、
     Kong) Co.,    controlling                                                                                                                                2018           2018-071、2018-073
     Ltd.          shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                    30 March       Juchao
                   under the                                                                                                                                  2018, 11 May   Website(www.cninfo.co
     Changhong
                   same            Sales of                   Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
92   EuropeEle                                Refrigerator                  14.14      14.14          0.00%      15,000     No                      -
                   controlling      goods                       price                                                              exchange                   May , 11       2018-008、2018-029、
     ctrics.r.o
                   shareholde                                                                                                                                 December       2018-047、2018-052、
                   r         and                                                                                                                              2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                    30 March       Juchao
     Yibin         under the                                                                                                                                  2018, 11 May   Website(www.cninfo.co
     Red-Star      same            Sales of   Air-conditio    Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
93                                                                          91.74      91.74          0.01%       9,500     No                      -
     Electronics   controlling      goods     ner               price                                                              exchange                   May , 11       2018-008、2018-029、
     Co., Ltd.     shareholde                                                                                                                                 December       2018-047、2018-052、
                   r         and                                                                                                                              2018           2018-071、2018-073
                   ultimate
                   controller
     CHANGH        Other                      Air-conditio                                                                                                    30 March       Juchao
     ONGELE        enterprise      Sales of   ner,            Marketing                                                            Spot                       2018, 11 May   Website(www.cninfo.co
94                                                                        1,125.27   1,125.27         0.06%      15,000     No                      -
     CTRICMI       control          goods     refrigerator,     price                                                              exchange                   2018, 15       m.cn)No.: 2018-005、
     DDLEEAS       under the                  freezer                                                                                                         May , 11       2018-008、2018-029、
                                                                                                104
                                                                                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
     TFZE          same                                                                                                                                  December       2018-047、2018-052、
                   controlling                                                                                                                           2018           2018-071、2018-073
                   shareholde
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                               30 March       Juchao
     Sichuan       under the                                                                                                                             2018, 11 May   Website(www.cninfo.co
                                              Juicer,
     Aichuang      same            Sales of                  Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
95                                            air-conditio               247.39   247.39         0.01%       9,500     No                      -
     Technolog     controlling      goods                      price                                                          exchange                   May , 11       2018-008、2018-029、
                                              ner
     y Co., Ltd.   shareholde                                                                                                                            December       2018-047、2018-052、
                   r         and                                                                                                                         2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                               30 March       Juchao
     Yuanxin       under the                                                                                                                             2018, 11 May   Website(www.cninfo.co
     Financial     same            Sales of                  Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
96                                            Fresh                        0.08     0.08         0.00%      15,000     No                      -
     Lease Co.,    controlling      goods                      price                                                          exchange                   May , 11       2018-008、2018-029、
     Ltd.          shareholde                                                                                                                            December       2018-047、2018-052、
                   r         and                                                                                                                         2018           2018-071、2018-073
                   ultimate
                   controller
     Hunan         Other                                                                                                                                 30 March       Juchao
     Grand-Pro     enterprise      Sales of   Anti-counte    Marketing                                                        Spot                       2018, 11 May   Website(www.cninfo.co
97                                                                         0.72     0.72         0.00%      15,000     No                      -
     Intelligent   control          goods     rfeit label      price                                                          exchange                   2018, 15       m.cn)No.: 2018-005、
     Tech.         under the                                                                                                                             May , 11       2018-008、2018-029、
                                                                                           105
                                                                                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
      Company        same                                                                                                                                December       2018-047、2018-052、
                     controlling                                                                                                                         2018           2018-071、2018-073
                     shareholde
                     r         and
                     ultimate
                     controller
                     Other
                     enterprise
                     control                                                                                                                             30 March       Juchao
      Guangdon
                     under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
      g                                        Water and
                     same            Provide                   Marketing                                                      Spot                       2018, 15       m.cn)No.: 2018-005、
98    Changhong                                electricity                 30.72   30.72         0.00%      15,000     No                      -
                     controlling      fuels                      price                                                        exchange                   May , 11       2018-008、2018-029、
      Electronics                              fee
                     shareholde                                                                                                                          December       2018-047、2018-052、
      Co., Ltd.
                     r         and                                                                                                                       2018           2018-071、2018-073
                     ultimate
                     controller
                     Other
                     enterprise
                     control                                                                                                                             30 March       Juchao
      Sichuan
                     under the                                                                                                Spot                       2018, 11 May   Website(www.cninfo.co
      Changhong                                Water and
                     same            Provide                   Marketing                                                      exchange,                  2018, 15       m.cnNo.: )2018-005、
99    Minsheng                                   electricity                2.92    2.92         0.00%      15,000     No                      -
                     controlling      fuels                      price                                                        Bank                       May , 11       2018-008、2018-029、
      Logistics                                  fee
                     shareholde                                                                                               acceptance                 December       2018-047、2018-052、
      Co., LTD
                     r         and                                                                                                                       2018           2018-071、2018-073
                     ultimate
                     controller
      Sichuan        Other                                                                                                                               30 March       Juchao
                                               Water and                                                                      Bank
      Changhong      enterprise      Provide                   Marketing                                                                                 2018, 11 May   Website(www.cninfo.co
100                                            electricity                 14.39   14.39         0.00%      12,000     No     acceptance       -
      Jijia   Fine   control          fuels                      price                                                                                   2018, 15       m.cn)No.: 2018-005、
                                               fee                                                                            settlement
      Co., Ltd.      under the                                                                                                                           May , 11       2018-008、2018-029、
                                                                                           106
                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    same                                                                                                                                December       2018-047、2018-052、
                    controlling                                                                                                                         2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
      Sichuan       control                                                                                                                             30 March       Juchao
      Changhong     under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
                                              Water and                                                                      Bank
      Mold          same            Provide                 Marketing                                                                                   2018, 15       m.cnNo.: )2018-005、
101                                           electricity               785.39   785.39         0.04%      23,000     No     acceptance       -
      Plastic       controlling      fuels                    price                                                                                     May , 11       2018-008、2018-029、
                                              fee                                                                            settlement
      Tech. Co.,    shareholde                                                                                                                          December       2018-047、2018-052、
      Ltd.          r         and                                                                                                                       2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                             30 March       Juchao
      Sichuan       under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
                                              Water and
      Hongwei       same            Provide                 Marketing                                                        Spot                       2018, 15       m.cnNo.: )2018-005、
102                                           electricity                 0.78     0.78         0.00%      15,000     No                      -
      Technolog     controlling      fuels                    price                                                          exchange                   May , 11       2018-008、2018-029、
                                              fee
      y Co., Ltd.   shareholde                                                                                                                          December       2018-047、2018-052、
                    r         and                                                                                                                       2018           2018-071、2018-073
                    ultimate
                    controller
      Sichuan       Other                                                                                                                               30 March       Juchao
                                              Water and
      Changhong     enterprise      Provide                 Marketing                                                        Spot                       2018, 11 May   Website(www.cninfo.co
103                                           electricity                 0.92     0.92         0.00%      15,000     No                      -
      Precision     control          fuels                    price                                                          exchange                   2018, 15       m.cnNo.: )2018-005、
                                              fee
      Electronics   under the                                                                                                                           May , 11       2018-008、2018-029、
                                                                                          107
                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
      Tech. Co.,    same                                                                                                                                December       2018-047、2018-052、
      Ltd.          controlling                                                                                                                         2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                             30 March       Juchao
      Sichuan
                    under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
      Changhong                               Water and                                                                      Bank
                    same            Provide                 Marketing                                                                                   2018, 15       m.cn)No.: 2018-005、
104   Device                                  electricity               101.53   101.53         0.01%      15,000     No     acceptance       -
                    controlling      fuels                    price                                                                                     May , 11       2018-008、2018-029、
      Tech. Co.,                              fee                                                                            settlement
                    shareholde                                                                                                                          December       2018-047、2018-052、
      Ltd.
                    r         and                                                                                                                       2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
      Sichuan
                    control                                                                                                                             30 March       Juchao
      Service
                    under the                                                                                                                           2018, 11 May   Website(www.cninfo.co
      Exp.                                    Water and
                    same            Provide                 Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
105   Appliance                               electricity                 0.32     0.32         0.00%      15,000     No                      -
                    controlling      fuels                    price                                                          exchange                   May , 11       2018-008、2018-029、
      Service                                 fee
                    shareholde                                                                                                                          December       2018-047、2018-052、
      Chain Co.,
                    r         and                                                                                                                       2018           2018-071、2018-073
      Ltd.
                    ultimate
                    controller
      Shenzhen      Other                                                                                                                               30 March       Juchao
                                              Water and
      YijEn         enterprise      Provide                 Marketing                                                        Spot                       2018, 11 May   Website(www.cninfo.co
106                                           electricity                 0.58     0.58         0.00%      15,000     No                      -
      Technolog     control          fuels                    price                                                          exchange                   2018, 15       m.cn)No.: 2018-005、
                                              fee
      y Co., Ltd.   under the                                                                                                                           May , 11       2018-008、2018-029、
                                                                                          108
                                                                                                      CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    same                                                                                                                              December       2018-047、2018-052、
                    controlling                                                                                                                       2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
      Changhong
                    control                                                                                                                           30 March       Juchao
      Internation
                    under the                                                                                                                         2018, 11 May   Website(www.cninfo.co
      al                                      Water and
                    same            Provide                 Marketing                                                      Spot                       2018, 15       m.cn)No.: 2018-005、
107   Holdings                                electricity                0.44    0.44         0.00%       6,000     No                      -
                    controlling      fuels                    price                                                        exchange                   May , 11       2018-008、2018-029、
      (Hong                                   fee
                    shareholde                                                                                                                        December       2018-047、2018-052、
      Kong) Co.,
                    r         and                                                                                                                     2018           2018-071、2018-073
      Ltd.
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                           30 March       Juchao
      Guangdon
                    under the       Rent to                                                                                                           2018, 11 May   Website(www.cninfo.co
      g
                    same              the     Office        Marketing                                                      Spot                       2018, 15       m.cn)No.: 2018-005、
108   Changhong                                                         99.66   99.66         0.32%       5,000     No                      -
                    controlling     related   building        price                                                        exchange                   May , 11       2018-008、2018-029、
      Electronics
                    shareholde       party                                                                                                            December       2018-047、2018-052、
      Co., Ltd.
                    r         and                                                                                                                     2018           2018-071、2018-073
                    ultimate
                    controller
      Hefei         Other           Rent to                                                                                                           30 March       Juchao
      Changhong     enterprise        the                   Marketing                                                      Spot                       2018, 11 May   Website(www.cninfo.co
109                                           Apartment                 31.37   31.37         0.10%       5,000     No                      -
      Industrial    control         related                   price                                                        exchange                   2018, 15       m.cn)No.: 2018-005、
      Co., Ltd.     under the        party                                                                                                            May , 11       2018-008、2018-029、
                                                                                        109
                                                                                                    CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    same                                                                                                                            December       2018-047、2018-052、
                    controlling                                                                                                                     2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                         30 March       Juchao
      Sichuan       under the       Rent to                                                                                                         2018, 11 May   Website(www.cninfo.co
      Aichuang      same              the     Forklift,     Marketing                                                    Spot                       2018, 15       m.cn)No.: 2018-005、
110                                                                      0.8   0.80         0.00%       9,500     No                      -
      Technolog     controlling     related   warehouse       price                                                      exchange                   May , 11       2018-008、2018-029、
      y Co., Ltd.   shareholde       party                                                                                                          December       2018-047、2018-052、
                    r         and                                                                                                                   2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                         30 March       Juchao
      Sichuan
                    under the       Rent to                                                                                                         2018, 11 May   Website(www.cninfo.co
      Ailian
                    same              the                   Marketing                                                    Spot                       2018, 15       m.cn)No.: 2018-005、
111   Science &                               Warehouse                 0.22   0.22         0.00%       9,500     No                      -
                    controlling     related                   price                                                      exchange                   May , 11       2018-008、2018-029、
      Technolog
                    shareholde       party                                                                                                          December       2018-047、2018-052、
      y Co., Ltd.
                    r         and                                                                                                                   2018           2018-071、2018-073
                    ultimate
                    controller
      Sichuan       Other           Rent to                                                                                                         30 March       Juchao
                                              Workshop,
      Hongwei       enterprise        the                   Marketing                                                    Spot                       2018, 11 May   Website(www.cninfo.co
112                                           and 2#                    5.03   5.03         0.02%       5,000     No                      -
      Technolog     control         related                   price                                                      exchange                   2018, 15       m.cn)No.: 2018-005、
                                              living area
      y Co., Ltd.   under the        party                                                                                                          May , 11       2018-008、2018-029、
                                                                                      110
                                                                                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
                     same                                                                                                                                December       2018-047、2018-052、
                     controlling                                                                                                                         2018           2018-071、2018-073
                     shareholde
                     r         and
                     ultimate
                     controller
                     Other
                     enterprise
      Sichuan
                     control                                                                                                                             30 March       Juchao
      Service
                     under the       Rent to                                                                                                             2018, 11 May   Website(www.cninfo.co
      Exp.
                     same              the     Apartment,      Marketing                                                      Spot                       2018, 15       m.cn)No.: 2018-005、
113   Appliance                                                            39.65   39.65         0.13%       5,000     No                      -
                     controlling     related   office etc.       price                                                        exchange                   May , 11       2018-008、2018-029、
      Service
                     shareholde       party                                                                                                              December       2018-047、2018-052、
      Chain Co.,
                     r         and                                                                                                                       2018           2018-071、2018-073
      Ltd.
                     ultimate
                     controller
                     Other
                     enterprise
                     control                                                                                                                             30 March       Juchao
      Sichuan
                     under the       Rent to                                                                                                             2018, 11 May   Website(www.cninfo.co
      Changhong
                     same              the                     Marketing                                                      Spot                       2018, 15       m.cn)No.:2018-005、
114   Package                                  Warehouse                    0.05    0.05         0.00%       5,000     No                      -
                     controlling     related                     price                                                        exchange                   May , 11       2018-008、2018-029、
      Printing
                     shareholde       party                                                                                                              December       2018-047、2018-052、
      Co., Ltd.
                     r         and                                                                                                                       2018           2018-071、2018-073
                     ultimate
                     controller
      Sichuan        Other           Rent to   Workshop,                                                                                                 30 March       Juchao
                                                                                                                              Bank
      Changhong      enterprise        the      warehouse      Marketing                                                                                 2018, 11 May   Website(www.cninfo.co
115                                                                        71.74   71.74         0.23%       5,000     No     acceptance       -
      Jijia   Fine   control         related    and forklift     price                                                                                   2018, 15       m.cn)No.: 2018-005、
                                                                                                                              settlement
      Co., Ltd.      under the        party     etc.                                                                                                     May , 11       2018-008、2018-029、
                                                                                           111
                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    same                                                                                                                                December       2018-047、2018-052、
                    controlling                                                                                                                         2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
      Sichuan       control                                                                                                                             30 March       Juchao
      Changhong     under the       Rent to                                                                                                             2018, 11 May   Website(www.cninfo.co
                                              Apartment,
      Precision     same              the                   Marketing                                                        Spot                       2018, 15       m.cn) No.:2018-005、
116                                            warehouse,                11.66    11.66         0.04%       5,000     No                      -
      Electronics   controlling     related                   price                                                          exchange                   May , 11       2018-008、2018-029、
                                               forklift
      Tech. Co.,    shareholde       party                                                                                                              December       2018-047、2018-052、
      Ltd.          r         and                                                                                                                       2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                             30 March       Juchao
      Sichuan
                    under the       Rent to                                                                                  Spot                       2018, 11 May   Website(www.cninfo.co
      Changhong                               Workshop,
                    same              the                   Marketing                                                        exchange,                  2018, 15       m.cn)No.: 2018-005、
117   Minsheng                                apartment                 282.72   282.72         0.92%       5,000     No                      -
                    controlling     related                   price                                                          Bank                       May , 11       2018-008、2018-029、
      Logistics                               etc.
                    shareholde       party                                                                                   acceptance                 December       2018-047、2018-052、
      Co., LTD
                    r         and                                                                                                                       2018           2018-071、2018-073
                    ultimate
                    controller
      Sichuan       Other           Rent to                                                                                                             30 March       Juchao
                                              Workshop,                                                                      Bank
      Changhong     enterprise        the                   Marketing                                                                                   2018, 11 May   Website(www.cninfo.co
118                                            warehouse                292.59   292.59         0.95%       5,000     No     acceptance       -
      Mold          control         related                   price                                                                                     2018, 15       m.cn)No.: 2018-005、
                                               etc.                                                                          settlement
      Plastic       under the        party                                                                                                              May , 11       2018-008、2018-029、
                                                                                          112
                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
      Tech. Co.,    same                                                                                                                                December       2018-047、2018-052、
      Ltd.          controlling                                                                                                                         2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                             30 March       Juchao
      Sichuan
                    under the       Rent to                                                                                                             2018, 11 May   Website(www.cninfo.co
      Changhong                               Workshop,
                    same              the                   Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
119   Device                                  and 2#                    106.21   106.21         0.35%       5,000     No                      -
                    controlling     related                   price                                                          exchange                   May , 11       2018-008、2018-029、
      Tech. Co.,                              living area
                    shareholde       party                                                                                                              December       2018-047、2018-052、
      Ltd.
                    r         and                                                                                                                       2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
      Changhong
                    control                                                                                                                             30 March       Juchao
      Internation
                    under the       Rent to                                                                                                             2018, 11 May   Website(www.cninfo.co
      al                                      Office and
                    same              the                   Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
120   Holdings                                2# living                  16.36    16.36         0.05%       5,000     No                      -
                    controlling     related                   price                                                          exchange                   May , 11       2018-008、2018-029、
      (Hong                                   area
                    shareholde       party                                                                                                              December       2018-047、2018-052、
      Kong) Co.,
                    r         and                                                                                                                       2018           2018-071、2018-073
      Ltd.
                    ultimate
                    controller
      BVCH          Other           Rent to                                                                                                             30 March       Juchao
      Optronics     enterprise        the     Freight       Marketing                                                        Spot                       2018, 11 May   Website(www.cninfo.co
121                                                                       5.25     5.25         0.02%       5,000     No                      -
      (Sichuan)     control         related   elevator        price                                                          exchange                   2018, 15       m.cn)No.: 2018-005、
      Co., Ltd.     under the        party                                                                                                              May , 11       2018-008、2018-029、
                                                                                          113
                                                                                                        CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    same                                                                                                                                December       2018-047、2018-052、
                    controlling                                                                                                                         2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                             30 March       Juchao
      Beijing       under the        Rent                                                                                                               2018, 11 May   Website(www.cninfo.co
      Changhong     same            from the                Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
122                                            office                    36.47    36.47         0.12%       5,000     No                      -
      Tech. Co.     controlling     related                   price                                                          exchange                   May , 11       2018-008、2018-029、
      Ltd,          shareholde       party                                                                                                              December       2018-047、2018-052、
                    r         and                                                                                                                       2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                             30 March       Juchao
      Chengdu
                    under the        Rent                                                                                                               2018, 11 May   Website(www.cninfo.co
      Changhong
                    same            from the                Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
123   Electronic                               office                    47.96    47.96         0.16%       5,000     No                      -
                    controlling     related                   price                                                          exchange                   May , 11       2018-008、2018-029、
      Technolog
                    shareholde       party                                                                                                              December       2018-047、2018-052、
      y Co., Ltd.
                    r         and                                                                                                                       2018           2018-071、2018-073
                    ultimate
                    controller
      Guangdon      Other            Rent                                                                                                               30 March       Juchao
                                               Staff
      g             enterprise      from the                Marketing                                                        Spot                       2018, 11 May   Website(www.cninfo.co
124                                            dormitory,               105.38   105.38         0.34%       5,000     No                      -
      Changhong     control         related                   price                                                          exchange                   2018, 15       m.cn)No.: 2018-005、
                                               workshop
      Electronics   under the        party                                                                                                              May , 11       2018-008、2018-029、
                                                                                          114
                                                                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
      Co., Ltd.     same                                                                                                                                    December       2018-047、2018-052、
                    controlling                                                                                                                             2018           2018-071、2018-073
                    shareholde
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                                 30 March       Juchao
      Sichuan       under the        Rent                                                                                                                   2018, 11 May   Website(www.cninfo.co
      Hongwei       same            from the   Device       Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
125                                                                       13.67      13.67          0.04%       5,000     No                      -
      Technolog     controlling     related    server         price                                                              exchange                   May , 11       2018-008、2018-029、
      y Co., Ltd.   shareholde       party                                                                                                                  December       2018-047、2018-052、
                    r         and                                                                                                                           2018           2018-071、2018-073
                    ultimate
                    controller
                    Controllin                                                                                                                              30 March       Juchao
      Sichuan       g                Rent                                                                                                                   2018, 11 May   Website(www.cninfo.co
      Changhong     shareholde      from the   Workshop,    Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
126                                                                     1,337.21   1,337.21         4.35%       5,000     No                      -
      Electric      r         and   related    office etc     price                                                              exchange                   May , 11       2018-008、2018-029、
      Co., Ltd.     ultimate         party                                                                                                                  December       2018-047、2018-052、
                    controller                                                                                                                              2018           2018-071、2018-073
                    Other
      Sichuan       enterprise                                                                                                                              30 March       Juchao
      Changhong     control          Rent                                                                                                                   2018, 11 May   Website(www.cninfo.co
                                               Staff
      Electronics   under the       from the                Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
127                                            dormitory,                 15.42      15.42          0.05%       9,000     No                      -
      Holding       same            related                   price                                                              exchange                   May , 11       2018-008、2018-029、
                                               workshop
      Group Co.,    controlling      party                                                                                                                  December       2018-047、2018-052、
      Ltd.          shareholde                                                                                                                              2018           2018-071、2018-073
                    r         and
                                                                                              115
                                                                                                            CHANGHONG MEILING CO.,LTD. Annual Report 2018
                     ultimate
                     controller
                     Other
                     enterprise
                     control                                                                                                                                30 March       Juchao
      Sichuan
                     under the         Rent                                                                                                                 2018, 11 May   Website(www.cninfo.co
      Changhong
                     same            from the    Workshop,      Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
128   Property                                                              208.85   208.85         0.68%       9,000     No                      -
                     controlling      related    office etc       price                                                          exchange                   May , 11       2018-008、2018-029、
      Service
                     shareholde        party                                                                                                                December       2018-047、2018-052、
      Co., Ltd.
                     r         and                                                                                                                          2018           2018-071、2018-073
                     ultimate
                     controller
                     Other
                     enterprise
                     control                                                                                                                                30 March       Juchao
      Changhong      under the         Rent                                                                                                                 2018, 11 May   Website(www.cninfo.co
      Huayi          same            from the    Staff          Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
129                                                                           3.38     3.38         0.01%       5,000     No                      -
      Compresso      controlling      related    dormitory        price                                                          exchange                   May , 11       2018-008、2018-029、
      r Co., Ltd.    shareholde        party                                                                                                                December       2018-047、2018-052、
                     r         and                                                                                                                          2018           2018-071、2018-073
                     ultimate
                     controller
                     Other
      Mianyang                                                                                                                                              30 March       Juchao
                     enterprise
      Technolog                                                                                                                                             2018, 11 May   Website(www.cninfo.co
                     control         Purchasin
      y     Town                                 Workshop       Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
130                  under the        g fixed                                26.01    26.01         0.03%       5,000     No                      -
      Big     Data                               construction     price                                                          exchange                   May , 11       2018-008、2018-029、
                     same             assets
      Technolog                                                                                                                                             December       2018-047、2018-052、
                     controlling
      y Co., Ltd.                                                                                                                                           2018           2018-071、2018-073
                     shareholde
                                                                                              116
                                                                                                           CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    r         and
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                                30 March       Juchao
      Sichuan       under the                                                                                                                              2018, 11 May   Website(www.cninfo.co
                                    Purchasin   Juicer,
      Aichuang      same                                       Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
131                                  g fixed    vending                    194.36   194.36         0.23%       9,000     No                      -
      Technolog     controlling                                  price                                                          exchange                   May , 11       2018-008、2018-029、
                                     assets     machine
      y Co., Ltd.   shareholde                                                                                                                             December       2018-047、2018-052、
                    r         and                                                                                                                          2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                                30 March       Juchao
      Sichuan       under the                                                                                                                              2018, 11 May   Website(www.cninfo.co
                                    Purchasin
      Hongcheng     same                        Workshop       Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
132                                  g fixed                                39.32    39.32         0.05%       9,000     No                      -
      Real Estate   controlling                 construction     price                                                          exchange                   May , 11       2018-008、2018-029、
                                     assets
      Co., Ltd.     shareholde                                                                                                                             December       2018-047、2018-052、
                    r         and                                                                                                                          2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                                                                                                                                                           30 March       Juchao
                    enterprise
                                                                                                                                                           2018, 11 May   Website(www.cninfo.co
      四川虹城      control         Purchasin
                                                Workshop       Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
133   建筑工程      under the        g fixed                                45.05    45.05         0.05%       9,000     No                      -
                                                construction     price                                                          exchange                   May , 11       2018-008、2018-029、
      有限公司      same             assets
                                                                                                                                                           December       2018-047、2018-052、
                    controlling
                                                                                                                                                           2018           2018-071、2018-073
                    shareholde
                                                                                             117
                                                                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
                   r         and
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                   30 March       Juchao
      Sichuan      under the                                                                                                                                 2018, 11 May   Website(www.cninfo.co
                                   Purchasin
      Hongxin      same                        Information       Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
134                                 g fixed                                  520.38   520.38         0.62%       5,000     No                      -
      Software     controlling                     system etc.     price                                                          exchange                   May , 11       2018-008、2018-029、
                                    assets
      Co., Ltd.    shareholde                                                                                                                                December       2018-047、2018-052、
                   r         and                                                                                                                             2018           2018-071、2018-073
                   ultimate
                   controller
                   Other
                   enterprise
                   control                                                                                                                                   30 March       Juchao
      Sichuan      under the                                                                                                                                 2018, 11 May   Website(www.cninfo.co
                                   Purchasin
      Huanyu       same                        Workshop          Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
135                                 g fixed                                  564.83   564.83         0.67%       9,000     No                      -
      Industrial   controlling                 construction        price                                                          exchange                   May , 11       2018-008、2018-029、
                                    assets
      Co. Ltd.     shareholde                                                                                                                                December       2018-047、2018-052、
                   r         and                                                                                                                             2018           2018-071、2018-073
                   ultimate
                   controller
                   Controllin                                                                                                                                30 March       Juchao
                                               Workshop
      Sichuan      g                                                                                                              Spot                       2018, 11 May   Website(www.cninfo.co
                                   Purchasin   construction
      Changhong    shareholde                                    Marketing                                                        exchange,                  2018, 15       m.cn)No.: 2018-005、
136                                 g fixed    ,                             774.36   774.36         0.92%       5,000     No                      -
      Electric     r         and                                   price                                                          Bank                       May , 11       2018-008、2018-029、
                                    assets     information
      Co., Ltd.    ultimate                                                                                                       acceptance                 December       2018-047、2018-052、
                                               system
                   controller                                                                                                                                2018           2018-071、2018-073
                                                                                               118
                                                                                                           CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    Other
                    enterprise
      Sichuan       control                                                                                                                                30 March       Juchao
      Changhong     under the                                                                                                                              2018, 11 May   Website(www.cninfo.co
                                    Purchasin
      Electronics   same                        Workshop       Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
137                                  g fixed                               387.68   387.68         0.46%       9,000     No                      -
      Holding       controlling                 construction     price                                                          exchange                   May , 11       2018-008、2018-029、
                                     assets
      Group Co.,    shareholde                                                                                                                             December       2018-047、2018-052、
      Ltd.          r         and                                                                                                                          2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
      Sichuan       control                                                                                                                                30 March       Juchao
      Changhong     under the                                                                                                                              2018, 11 May   Website(www.cninfo.co
                                    Purchasin
      Energy        same                        Workshop       Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
138                                  g fixed                                 91.3    91.30         0.11%       5,000     No                      -
      Sunshine      controlling                 construction     price                                                          exchange                   May , 11       2018-008、2018-029、
                                     assets
      Technolog     shareholde                                                                                                                             December       2018-047、2018-052、
      y Co., Ltd.   r         and                                                                                                                          2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
                    control                                                                                                                                30 March       Juchao
      Sichuan
                    under the                                                                                                                              2018, 11 May   Website(www.cninfo.co
      Changhong                     Purchasin
                    same                        Workshop       Marketing                                                        Spot                       2018, 15       m.cn)No.: 2018-005、
139   Network                        g fixed                                31.07    31.07         0.04%       5,000     No                      -
                    controlling                 construction     price                                                          exchange                   May , 11       2018-008、2018-029、
      Technolog                      assets
                    shareholde                                                                                                                             December       2018-047、2018-052、
      y Co., Ltd.
                    r         and                                                                                                                          2018           2018-071、2018-073
                    ultimate
                    controller
                                                                                             119
                                                                                                               CHANGHONG MEILING CO.,LTD. Annual Report 2018
                    Other
                    enterprise
                    control                                                                                                                                    30 March       Juchao
      Sichuan
                    under the                                                                                                                                  2018, 11 May   Website(www.cninfo.co
      Zhiyijia                      Purchasin
                    same                        Air-conditio   Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
140   Network                        g fixed                                    0.3       0.30         0.00%       5,000     No                      -
                    controlling                 ner              price                                                              exchange                   May , 11       2018-008、2018-029、
      Technolog                      assets
                    shareholde                                                                                                                                 December       2018-047、2018-052、
      y Co., Ltd.
                    r         and                                                                                                                              2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
                    enterprise
      Sichuan       control                                                                                                                                    30 March       Juchao
      Changhong     under the                   Production                                                                          Spot                       2018, 11 May   Website(www.cninfo.co
                                    Purchasin
      Intelligent   same                         line          Marketing                                                            exchange,                  2018, 15       m.cn)No.: 2018-005、
141                                  g fixed                               3,290.92   3,290.92         3.92%       6,000     No                      -
      Manufactu     controlling                  constructio     price                                                              Bank                       May , 11       2018-008、2018-029、
                                     assets
      ring Tech.    shareholde                   n      etc                                                                         acceptance                 December       2018-047、2018-052、
      Co., Ltd.     r         and                                                                                                                              2018           2018-071、2018-073
                    ultimate
                    controller
                    Other
      Sichuan       enterprise
      Changhong     control                                                                                                                                    30 March       Juchao
      Gerun         under the                                                                                                                                  2018, 11 May   Website(www.cninfo.co
                                    Sales of    Mould,
      Environme     same                                       Marketing                                                            Spot                       2018, 15       m.cn)No.: 2018-005、
142                                   fixed     air-conditio                    2.9       2.90         0.14%       9,500     No                      -
      ntal          controlling                                  price                                                              exchange                   May , 11       2018-008、2018-029、
                                     assets     ner
      Protection    shareholde                                                                                                                                 December       2018-047、2018-052、
      Tech. Co.,    r         and                                                                                                                              2018           2018-071、2018-073
      Ltd.          ultimate
                    controller
                                                                                                 120
                                                                                                                               CHANGHONG MEILING CO.,LTD. Annual Report 2018
                       Other
                                       commerci
                       enterprise
                                       al           commercial
                       control
                                       factoring    factoring
        Yuanxin        under the
                                       and          and
        Financial      same                                         Marketing                                                                             Spot
143                                    financial    financial                           168.68          168.68                           300     No                            -               -                      -
        Lease Co.,     controlling                                    price                                                                               exchange
                                       reconcilia   reconciliatio
        Ltd.           shareholde
                                       tion         n business
                       r         and
                                       business     etc.
                       ultimate
                                       etc.
                       controller
                               Total                                    --             --         629,383.47           --           --           --              --            --              --                     --
       Detail of sales return with major amount involved            Not applicable
                                                                    1. It is estimated that the related transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and accepting fuel and
                                                                    power from Sichuan Changhong and its subsidiary by the Company for year of 2018 was RMB 2872 million at most (tax-excluded), actually RMB
                                                                    1,595,563,600 occurred in reporting period
                                                                    2. It is estimated that the related transaction amount resulted by purchasing goods (including compressor purchased) from Changhong Huayi and its
                                                                    subsidiary by the Company for year of 2018 was RMB 606.5 million at most (tax-excluded), actually RMB 534,782,400 occurred in reporting period
                                                                    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 14,434,200 occurred in
                                                                    reporting period
      Report the actual implementation of the daily related
                                                                    4. It is estimated that the related transaction amount resulted by purchasing goods from and providing fuel and power to Sichuan Changhong and its
 transactions which were projected about their total amount
                                                                    subsidiary by the Company for year of 2018 was RMB 6280 million at most (tax-included), actually RMB 3,183,862,000 occurred in reporting period
       by types during the reporting period (if applicable)
                                                                    5. It is estimated that the related transaction amount resulted by accepting energy, power and service from Changhong Huayi and its subsidiary by the
                                                                    Company for year of 2018 was RMB 1.3 million at most (tax-included), actually RMB 720,400 occurred in reporting period
                                                                    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 25,063,600 occurred in reporting period
                                                                    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 537,900,800 occurred in reporting period
                                                                    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, actually RMB 194,960,700 occurred in reporting period.
                                                                                                                 121
                                                                                                                         CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                             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 34,170,700
                                                             occurred in reporting period
                                                             10. It is estimated that the related transaction amount resulted by selling goods from Sichuan Changhong Electronics Holding Group Co., Ltd and its
                                                             subsidiary by the Company for year of 2018 was RMB 95 million at most (tax-excluded), actually RMB 49,577,600 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 Holding Group Co., Ltd and its subsidiary by the Company for year of 2018 was RMB 160 million at
                                                             most (tax-excluded), actually RMB 121,111,900 occurred in reporting period.
Reasons of major difference between the trading price and
                                                             Not applicable
                      market price
           Note: According to relevant provisions of the Stock Listing Rules of the Shenzhen Stock Exchange and the Authorization Management System of the company, the related transactions between
           the company and related parties amounting to less than 3 million yuan (including 3 million yuan) can only be implemented after being approved by the company’s president. Therefore, during
           the reporting period, the related transactions carried out by the company and the related party, Yuanxin Financial Lease Co., Ltd., amounting to less than 3 million yuan has been approved by the
           company’s president.
                                                                                                          122
                                                                             CHANGHONG MEILING CO.,LTD. Annual Report 2018
        2. Related transactions with Changhong 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 31 December 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 3,119,117,207.91 Yuan savings in Changhong Finance Company, takes 28.41% of the deposit taking balance
        in Changhong Finance Company without 30% occupied, balance of notes drawing at period-end was
        819,806,514.07 Yuan and balance of notes discounted outstanding as 772,233,395.98 Yuan. More details are:
                                                                                                           In RMB/CNY
                                                                                                                Interest and
                                                                                                                commission
                          Balance at          Increased in the         Decreased in the         Balance at
        Item                                                                                                       charge
                          year-begin                Year                    Year                 year-end        received or
                                                                                                                    paid
I. Savings in
Changhong
                        2,762,513,703.88      45,997,197,744.62        45,640,594,240.59      3,119,117,207.91    103,532,219.23
Group Finance
Company
II. Borrowings
from
Changhong                               -        113,400,000.00           113,400,000.00                      -      2,981,085.00
Group Finance
Company
1.Short-term
                                        -        113,400,000.00           113,400,000.00                      -      2,981,085.00
loans
2.Long-term
                                        -                        -                        -                   -                 -
loans
III.      Other
financial
                                                                 123
                                                                                   CHANGHONG MEILING CO.,LTD. Annual Report 2018
                                                                                                                              Interest and
                                                                                                                              commission
                         Balance at             Increased in the           Decreased in the             Balance at
     Item                                                                                                                        charge
                         year-begin                    Year                       Year                   year-end              received or
                                                                                                                                  paid
business
1.notes drawing          721,645,627.87           1,790,388,282.05           1,692,227,395.85           819,806,514.07            771,936.36
2.notes
                         699,356,853.98           1,312,666,811.99           1,239,790,269.99           772,233,395.98         13,533,515.67
discounted
     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 29 March 2019
       (ii) Related transactions by assets acquisition and sold
             □ Applicable √       Not applicable
     There are no related transactions by assets acquisition and sold in the period
       (iii) Material related transaction of jointly foreign investment
             □ Applicable √       Not applicable
     The Company has no material related transaction of jointly foreign investment occurred in reporting
     period-end.
       (iv) Connect of related liability and debt
             √Applicable □ Not applicable
     Whether has non-operational contact of related liability and debts or not
             □Yes √ No
     No non-operational contact of related liability or debts in Period
                                                                    124
                                                                                               CHANGHONG MEILING CO.,LTD. Annual Report 2018
             1.Claim receivable from related party
                                                                          Whether has     Balance at       Current                                  Current    Balance at
                                                                                                                           Current
                                                                          non-business    period-begi       newly                                   interest   period-end
Seria                                                                                                                    collected(10   Interes
           Related party            Relationship            Causes           capital         n (10        added(10                                    (10          (10
  l                                                                                                                       thousand       t rate
                                                                          occupying or     thousand       thousand                                 thousand     thousand
                                                                                                                            Yuan)
                                                                               not           Yuan)          Yuan)                                    Yuan)        Yuan)
                                                         Operational
        Sichuan Changhong     Controlling shareholder
 1                                                       contact of           No              181.46         5,163.23        3,917.93          -           -      1,426.76
        Electric Co., Ltd.    and ultimate controller
                                                         related credit
        Sichuan Changhong                                Operational
                              Controlling shareholder
 2      Electronics Holding                              contact of           No                10.06          148.96          154.05          -           -          4.96
                              and ultimate controller
        Group Co., Ltd.                                  related credit
                              Other enterprise control
        Sichuan Changhong                                Operational
                              under the same
 3      International Hotel                              contact of           No                    -

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