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虹美菱B:2022年半年度报告(英文版) 下载公告
公告日期:2022-08-18

CHANGHONG MEILING CO., LTD.

Semi-Annual Report 2022

August 2022

Section I. Important Notice, Contents and Interpretation

Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Changhong MeilingCo., 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, individualand/or joint, for the reality, accuracy and completion of the whole contents.Mr. Wu Dinggang, Chairman of the Company, Mr. Pang Haitao, person in charge of accounting work and Mr. YangJun, person in charge of accounting organ (accountant in charge) hereby confirm that the Financial Report of 2022Semi- Annual Report is authentic, accurate and complete.The Company did not have directors, supervisors and senior executives of the Company could not guarantee thereality, accuracy and completion of the whole contents or have objections.All the directors attended the board meeting to deliberating the Report by a combination of on-site andcommunication.Modified audit opinions notes

□ Applicable √ Not applicable

Risk warning of concerning the forward-looking statements with future planning involved in semi-annual report

√ Applicable □Not applicable

Concerning the forward-looking statements with future planning involved in the Report, they do not constitute asubstantial 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 areadvised to exercise caution of investment risks.

Investors are advised to read the full text of semi-annual report, and pay particular attention to the following riskfactors:

More details about the possible risks and countermeasures in the operation of the Company are described in thereport “X. Risks and countermeasures” of “Section III Management Discussion and Analysis”, investors areadvised 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 2022 that appointed by the Company.All public information under the name of the Company disclosed on the above said media and website shallprevail, and investors are advised to exercise caution.Does the Company need to comply with disclosure requirements of the special industry: NoProfit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the Board in the semi-

annual period

□Applicable √Not applicable

The Company has no plans of cash distribution, bonus shares and capitalizing of common reserves either.Directors, supervisor and senior executives of the Company respectively signed Written Confirmation Opinionsfor 2022 Semi-Annual Report.Supervisory Committee of the Company formed Written Examination Opinions for 2022 Semi-Annual Report.

Contents

Section I. Important Notice, Contents and Interpretation ................................................................................... 1

Section II Company Profile and Main Financial Indexes ...... 6

Section III Management Discussion and Analysis ...... 10

Section IV Corporate Governance ...... 34

Section V Environmental and Social Responsibility ...... 36

Section VI Important Events ...... 40

Section VII Changes in Shares and Particular about Shareholders ...... 87

Section VIII Preferred Stock ...... 95

Section IX Corporate Bonds ...... 96

Section X Financial Report ...... 97

Documents available for Reference

I. Text of the Semi-Annual Report carrying the signature of the Chairman;

II. Financial statement carrying the signatures and seals of the Chairman, principal of the accounting works andperson in charge of accounting organ;

III. Original documents of the Company and manuscripts of public notices that disclosed in the website designatedby CSRC in the report period;

The aforesaid documents are all available at headquarter of the Company. The Company would provide them timelywhen CSRC and Shenzhen Stock Exchange require or the shareholders need consultation according to theregulations and Articles of Association.

Interpretation

ItemsRefers toContents
Company, The Company, Changhong Meiling or Meiling ElectricRefers toCHANGHONG MEILING CO.,LTD.
Sichuan Changhong or controlling shareholderRefers toSichuan Changhong Electric Co., Ltd.
Changhong GroupRefers toSichuan Changhong Electronics Holding Group Co., Ltd.
Hong Kong ChanghongRefers toCHANGHONG (HK) TRADING LIMITED
Meiling GroupRefers toHefei Meiling Group Holdings Limited
Changhong Air-conditionerRefers toSichuan Changhong Air-conditioner Co., Ltd.
Zhongke MeilingRefers toZhongke Meiling Cryogenic Technology Co., Ltd.
Mianyang MeilingRefers toMianyang Meiling Refrigeration Co., Ltd.
Jiangxi MeilingRefers toJiangxi Meiling Electric Appliance Co., Ltd.
Ridian TechnologyRefers toChanghong Meiling Ridian Technology Co., Ltd.
Wulian TechnologyRefers toHefei Meiling Wulian Technology Co., Ltd
Zhongshan ChanghongRefers toZhongshan Changhong Electric Co., Ltd.
Meiling Life AppliancesRefers toHefei Changhong Meiling Life Appliances Co., Ltd.
Changhong HuayiRefers toChanghong Huayi Compressor Co., Ltd.
Shine WingRefers toShine Wing Certified Public Accountants (LLP)
CSRCRefers toChina Securities Regulatory Commission
Anhui Securities BureauRefers toChina Securities Regulatory Commission, Anhui Province Securities Regulatory Bureau
SSERefers toShenzhen Stock Exchange

Section II Company Profile and Main Financial IndexesI. Company profile

Short form of the stockChanghong Meiling, Hongmeiling BStock code000521, 200521
Short form of the Stock after changed (if applicable)N/A
Stock exchange for listingShenzhen Stock Exchange
Name of the Company (in Chinese)长虹美菱股份有限公司
Short form of the Company (in Chinese)(if applicable)长虹美菱
Foreign name of the Company (if applicable)CHANGHONG MEILING CO.,LTD.
Abbr. of English name of the Company (if applicable)CHML
Legal representativeWu Dinggang

II. Person/Way to contact

Secretary of the BoardRep. of security affairs
NameLi XiaPan Haiyun
Contact add.No. 2163, Lianhua Road, Economic and Technology Development Zone, HefeiNo. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Tel.0551-622190210551-62219021
Fax.0551-622190210551-62219021
e-maillixia@meiling.comhaiyun.pan@meiling.com

III. Others(I) Way of contactWhether registrations address, offices address and codes as well as website and email of the Company changed inreporting period or not

□ Applicable √ Not applicable

Registrations address, offices address and codes as well as website and email of the Company has no change inreporting period, found more details in Annual Report 2021.(II) Information disclosure and preparation placeWhether information disclosure and preparation place changed in reporting period or not

□ Applicable √ Not applicable

The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRCand preparation place for semi-annual report have no change in reporting period, found more details in Annual

Report 2021.(III) Other relevant informationWhether other relevant information has changed in reporting period or not

□Applicable √Not applicable

IV. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data or not

□Yes √No

Current periodSame period last yearChanges in the current reporting period compared with the same period of the previous year (+,-)
Operating income (RMB)10,224,503,551.199,602,759,345.296.47%
Net profit attributable to shareholders of the listed company (RMB)60,375,199.2537,157,511.5462.48%
Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB)4,107,468.91-63,552,415.01106.46%
Net cash flow arising from operating activities (RMB)575,053,217.35-588,496,116.82197.72%
Basic earnings per share (RMB/Share)0.05820.035663.48%
Diluted earnings per share (RMB/Share)0.05820.035663.48%
Weighted average ROE1.24%0.76%Increase by 0.48 percentage points
End of current periodEnd of last yearChanges at the end of the reporting period compared with the end of the previous year (+,-)
Total assets (RMB)16,517,739,871.5615,190,469,756.338.74%
Net assets attributable to shareholder of listed company (RMB)4,845,537,338.974,837,334,400.210.17%

V. Accounting data difference under domestic and foreign accounting standards

(I) Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting 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 reportingperiod.

(II) Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)

√ Applicable □ Not applicable

In RMB

Net profit attributable to shareholders of listed companyNet assets attributable to shareholders of listed company
Current periodPrevious periodEnding amountOpening amount
Chinese GAAP60,375,199.2537,157,511.544,845,537,338.974,837,334,400.21
Items and amount adjusted by foreign accounting rules
Foreign accounting rules60,375,199.2537,157,511.544,845,537,338.974,837,334,400.21

The Company had no difference of the net profit or net assets disclosed in financial report, under either foreignaccounting 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 fromCSRC dated 12 September 2007, since the day issuing, cancel the previous “dual audit” requirement for companieswho offering domestically listed foreign shares (B-share enterprise) while engaging securities practice qualificationCPA for auditing. The Company did not compile financial report under foreign accounting rules since 2007, thefinancial report of the Company is complying on the “Accounting Standard for Business Enterprise” in China, andtherefore, there are no differences of accounting data under accounting rules in and out of China at period-end.

VI. Items and amounts of non-recurring profit (gains)/losses

√ Applicable □ Not applicable

In RMB

ItemAmountNote
Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets)8,358,775.10Found more in “Income from assets disposal”
Governmental subsidy calculated into current gains and losses(while closely related with the normal business of the Company, the government subsidy that accord with the provision of national policies and are continuously enjoyed in line with a certain standard quota or quantity are excluded)41,343,694.48Found more in “Other income”
Gains/losses of fair value changes arising from holding of the trading financial asset, trading financial liability and investment earnings obtained from disposing the trading financial asset, trading financial liability, and financial assets available for sale, except for the effective hedging business related to normal operation of the Company13,172,916.65Found more in “Income of fair value changes”, “Investment income”
Switch back of the impairment for receivables that has impairment test independently714,463.58Found more in “Account receivable’’
Other non-operating income and expenses other than the above577,926.96Found more in “Non-operating income’’ and “Non-operating expenses’’
Less: impact on income tax6,327,022.61
Impact on minority shareholders’ equity (post-tax)1,573,023.82
Total56,267,730.34

Details of other gains/losses items that meets the definition of non-recurring gains/losses:

□ Applicable √ Not applicable

There are no other gains/losses items that meet the definition of non-recurring gains/losses in the Company.

Explain the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public ---Extraordinary Profit/loss

□ Applicable √ Not applicable

There are no items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public ---Extraordinary Profit/loss

Section III Management Discussion and Analysis

I. Main businesses of the company engaged in during the PeriodThe Company is one of China's major electric appliance manufacturers, possesses four major domesticmanufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas manufacturing bases inIndonesia and Pakistan. Currently, we have completed the industry layout of white electricity basically, coveringthe full product line including refrigerator, washing machine, air conditioner, kitchen and bath, small householdappliances and others, at the same time, the Company enters the new industrial fields as bio-medical and with certainachievements made.For more than 40 years, the Company has always been adhering to the "independent innovation, created in China",and always focus on the home appliance industry with great persistence, elaborately building the corecompetitiveness of enterprises by technological innovation and product innovation. Relying on the cutting-edgeR&D team and advanced technology, Meiling continue to achieve breakthrough results in the variable frequency,intelligence, refreshment, thin-wall, odourless, energy-saving, forced air cooling, deep cooling and other fields. TheCompany has set up the first RoHS public testing center in Anhui Province, the national enterprise technology center,the national industrial design center, and the 5G industrial internet innovation application laboratory. In recent years,the Company has successively awarded several national honorary titles as the “Smart Refrigerator IntelligentManufacturing Pilot Demonstration Project”, the “National Green Factory”, the “National Industrial Design Center”and “National Leading Enterprises of Qualify in Home Appliance Industry” etc. At the same time, many productsof Meiling have repeatedly won a number of domestic awards, continuously demonstrating the capabilities andstrength of Meiling's intelligent manufacturing and Meiling brand intelligent innovation technology. In the “2022China Refrigerator Industry Summit”, Meiling won the 2022 China Refrigerator Industry Clean and SterilizationPioneer Brand Award, its product Meiling Very Clean Series BCD-550WP9BT won the "2022 China RefrigeratorIndustry Full Space Sterilization Best-Selling Product" Award, and Meiling Spectral Freshness Refrigerator BCD-413WP9BY won the "2022 Outstanding Channel Performance Product" Award; Changhong 3P Guest RestaurantShared Air Conditioner KFR-72LW/Q6C+R1 won the title of "The World's 3P Guest Restaurant Mechanical AirConditioner with the Longest Air Supply Distance"; Meiling kitchen appliances, small household appliances, anddrinking water products won the "National Quality Leading Brand in the Household Appliance Industry"; ZhongkeMeiling Cryogenic Technology Co., Ltd, a subsidiary of biomedical business, was recognized by the Ministry ofIndustry and Information Technology as the third batch of "little giant" enterprises with specialization, refinement,specialty and novelty.In recent years, driven by the industry transformation and upgrades and consumption upgrades, the Company alwaysadheres to the strategy of smart and variable frequency products, promoted the Company’s products to transformand upgrade to become intelligent and high-end and comprehensively enhanced the competitiveness of products inthe industry by grasping the opportunities of refreshment, thin-wall, odourless, air cooling and energy efficiencyupgrades and effectively resolving the pain points of customers. Under the guidance of the “intelligent” strategy, inrecent year, the Company has released and listed a number of CHiQ series of smart refrigerators, air-conditioning

and washing machine, “M-Fresh” refrigerators, “M-Fresh” comprehensive thin series products and “very clean”series of refrigerators, Meiling always leads the trend of the industry by solving the pain points of users effectively.In April 2022, Meiling launched the M Fresh "Mega Capacity" refrigerator, which not only meets the consumerdemand for embedding and small footprint, but also meets the user's demand for storage. In May 2022, the industry'sfirst smart refrigerator tea bar machine using the refrigerator foaming process to make the body and door for the teabar machine was launched, which solved the problem that the tea bar machine could not be refrigerated. In the samemonth, Meiling Biomedical launched a new generation of "Yunzhian·Automated Sample Library", an original -80 ℃separate storage unit, which has the advantages of high compatibility, multi-partition, phased, and multi-systemguarantee, and integrates IoT technology to provide safer and smarter automated sample storage solutions. In June2022, the MG100-14598DHCZ product of the Super Oxygen Clean· Brightening series was released. This productnot only continued the core function of ultra-thin and large drum diameter, but also pioneered the "drying tunnelwashing" function, which has the effects of cleaning, health and deodorization. The ultra-high standard technologyonce again demonstrates the hard core strength in the core technology field of washing machines. In July 2022,Meiling Very Clean 632WUPBT refrigerator, which adopts "MNC + long-term deodorization and sterilization"technology, mainly focuses on the core functions of disinfection, sterilization and deodorization. The inactivationratio for various bacteria and viruses reaches 99.99%, achieving a full range of health care, and creating a realhealthy life for users.Facing the future, the Company will implement the management policy of “one goal and three main lines” andfurther improve the layout of whole scene of smart home, accelerate the intelligentization of home appliances, forma dual-growth engine of “hardware + services”, drive the transformation and upgrading of the Company’sprofitability model, investigate the new value-added service models for home appliance enterprises, meet newcompetition pattern in the industry, and achieve its own sustainable and stable development under the guidance ofthe core values of “professionalism and shared development”. Meanwhile, based on the “Smart Home Eco-systemProject” and the existing products, the company will enhance the R&D, manufacturing, sales and cooperativecapabilities of integrated white goods so as to provide a complete set of smart scene system solutions for users.During the reporting period, main income of the Company coming from refrigerator (freezer), air conditioner,washing machine, kitchen & toilet products, small home appliances and biomedical etc., total amounting to 10.138billion yuan, a 99.16% of the operating income.II. Core Competitiveness Analysis

(1) Brand capacity

The Company is one of the famous home appliances manufacturers in China, owns several product lines such asrefrigerator, freezing box, air conditioner, washing machine, small household appliances and biomedical etc.“Meiling” brand is listed as one of the most valuable brands in China, we own the young brand "Athena" andgradually build the "M Fresh" product brand. In recent years, the company has been continuously improving thecore competitiveness of the brand through measures such as reshaping the brand image, continuously innovatingcore technologies and developing high-end intelligent products. In terms of continuous innovation of core

technologies, on the one hand, in order to comply with the development needs of the industry and the market, thecompany continuously promotes innovations in fresh-keeping, intelligence and frequency conversion technologiesto maintain its leading position in the industry. On the other hand, under the boost of consumption upgrade, in orderto meet the individualized, differentiated and diversified demands of consumers, the company continues toaccelerate product innovation and enhance the comprehensive competitiveness of the brand around products. In thedevelopment of high-end intelligent products, product innovation has been continuously promoted throughcontinuous technological innovation, and through the introduction of high-end intelligent products, it can timelymeet the market demand, and enrich and enhance the brand image.In terms of refrigerator products, the company has independently developed core technologies such as "zero shock"and "slight freeze" fresh-keeping technology, water molecule activation preservation technology, full thin GLSintegration technology, MCN + deodorization and fresh-keeping technology, etc., leading the refrigerator industryto return to the main field of fresh-keeping and fully enter the era of "thin" and "long-lasting deodorization". At thesame time, the company has successively released the "M Fresh" series of refrigerators, the "M Fresh" full thinseries of products, the "M Fresh" second-generation series of refrigerators, and the "Very Clean" series ofrefrigerators, which created "Meiling Fresh", "Meiling Clean", "Meiling Embedding" brand name cards, andestablished brand images. In terms of washing machine products, through the development of three blacktechnologies, i.e. inner barrel conical bulging technology, inclined barrel stabilization technology and cloud traycondensed technology, we have created a "thin", "large" and "smart" industry business card for washing machines,providing users with new embedded experience. In terms of air-conditioning products, the company adheres to theproduct concept of "good sleep + good air + comfort", focuses on quality, experience and health for product upgrades,strictly controls quality based on comfort and reliability indicators, and creates the "extremely quiet, extremelypower saving, extremely intelligent" brand experience of air conditioners, and carries out product series layoutaround three core functions of "fresh air ventilation, self-cleaning, and complete dust-free". In terms of kitchen,bathroom and small household appliances, the company focuses on building an influential brand of water ecologicalappliances and operation services, strengthens the lineup of drinking water products, and develops the integrationof drinking water series products with refrigeration and household fields to provide users with better products andservices. In terms of biomedical treatment, the company adheres to the development strategy "based on the relevantdiversification in the biomedical field", focuses on the three major business strategic layouts of life science, smartcold chain and family health, and continues to promote product innovation, research and development and qualityimprovement.Promoting the remodeling of brand ability through the continuous upgrading of products, Meiling will achieve arejuvenated, intelligent, international and professional brand image. Through gradual construction of the ideas ofWonderful Start Point, Wonderful Life Circle and Wonderful Ecology Circle, Meiling has become a people-orientedartist specializing in white appliances, a smarter scientific expert and a more reliable house keeper.

(2) Product capacity

For more than 40 years, the Company has been focusing on the refrigeration industry, and has developed a numberof different models of refrigerators, mainly including the "M fresh" first generation series of fresh-keeping

refrigerators carrying water molecule activation preservation technology, the "M fresh"second generation series offresh-keeping refrigerators with "zero shock" and "slight freeze" fresh-keeping technology, "Star" series mother andinfant refrigerators, "Very Clean" series fresh-keeping and cleaning refrigerators, the ultra-thin side-by-siderefrigerator BCD-529X, large capacity and equipped with ADF + negative ion antibacterial magic stone series (O2O)BCD-616B/532B and other 5 glass door refrigerators, M Fresh "Mega Capacity" BCD-681WQ3S refrigerator, -32degrees cryogenic lock fresh BCD-500L, French BCD-546WP9B, BCD-550WUP9BT series refrigerators, veryclean and sterilized BCD-632WUPBT series refrigerators, export vertical air-cooled freezers, SC-270WE single-door refrigeration vertical display freezer, CX-1000 chromatography freezer, CT-G185R high-speed freezinglaboratory centrifuge, etc. On the "Very Thin" front loading washing machine platform, Meiling has successivelyreleased series of products such as super-oxygen clean and 5G II. The aforementioned washing machines not onlycontinue the core functions of ultra-thin and large inner barrel, but also are smarter and healthier. Its automaticdelivery and voice technology are more intelligent and convenient, the pioneered "drying channel washing" functionhas the functions of cleaning, health, and deodorization. The ultra-high standard technology once againdemonstrates the hard core strength of washing machine products in the core technology field. Deeply dug into theindustry subdivision track, adopted the "far-to-near soft and comfortable wind" technology and released the sharedseries floor-standing air conditioners for living room and dining room, and opened up the industry's living-diningroom air-conditioning market segment; it was the first to release the "completely dust-free" series of wall-mountedair-conditioners, adopting fully enclosed and dust-proof design for the air inlet and outlet, which opened up a newtrack for the health industry. Launched the industry's smallest 5P floor-standing air conditioners, of which thefashionable style, high performance, and high cost performance have opened up a new choice for 5P floor-standingair conditioners. Kitchen, bathroom and small household appliances have carefully cultivated the industry fieldaccording to user needs, strengthened the integration of product functions, and launched the industry's first smartrefrigerator tea bar machine, breaking through the bottleneck of product refrigeration technology and leading thehigh-end and high-quality development of the industry. Biomedical launched a new generation of"Yunzhian·Automated Sample Library", an original -80 ℃ separate storage unit, which has the advantages of highcompatibility, multi-partition, phased, and multi-system guarantee, and integrates IoT technology to provide saferand smarter automated sample storage solutions.The Company owned advanced development and quality assurance systems, passed management systemcertification of ISO9001, ISO14001 and ISO45001. Product quality has been quality assurance and productperformance is reliable. At the same time, the company has authoritative certifications including “national-leveltechnology center”,”national-level industrial design center”, “national-level intellectual property demonstrationenterprise”, “national-level industrial product green design demonstration enterprises”, “ Anhui Green Energy-saving Refrigerator Engineering technology research center”, “Anhui energy-saving and fresh green refrigeratorengineering research center ”as strong guarantees. In terms of technical research, it is committed to applying basictechnology research and industrialization transfer, and has established a technical strategic plan with “intelligence,frequency conversion, simulation, fresh-keeping” as core technologies, and “refrigeration, new material and foam”as key technologies. Adhere to the product strategy of “thin, fresh, clear, embedded and intelligent”, aim at the users’pain point, making the refrigerators return to essence of use. Promoting the transformation and upgrading of

products to high-end by seizing the opportunities of “large volume ratio”, “fresh-keeping”, “odor clear”, “embed inhome”, “intelligent upgrade” and “green appliances”. In terms of product development, based on the technologicalresearch results and consumption upgrade requirements, updated the annual product planning and developmentoutline, increasingly upgraded the product structure, continued to increase the development of mid-to-high-endproducts with characteristic of thin-wall, air-cooling, large-volume, frequency conversion, intelligence, simulation,smart cleaning, odour clean, sterilization, dust removal, silent and developed competitive core products. At thestrategic level of the company, continued to adhere to the core idea of “intelligent strategy, productism”, andpromoted the company's product transformation, technological innovation, and industry leadership by advancingthe subsequent research and development, promotion and technical update of intelligent and frequency conversionproducts. Additionally, the Company will improve their home appliances product lines continuously, layout severalproduct business as AC, washing machines, kitchen and bathroom, small appliances and biomedical products, tobuild a comprehensive home appliance enterprise.

(3) Operation capacity

The Company continues to carrying out bench-marking activities to improve the operation and managementstandards and competitiveness of the Company. At the same time, the internal management capability has beencontinuously improved by continuing to carry out the improvement work in "human efficiency, money efficiencyand material efficiency". The company established a hierarchical sharing system with clear goals, quantitativeindicators, performance-oriented performance appraisal and incentives to activate internal productivity. Takingvalue chain management as the main line, continued to carry out value creation work, and enhanced the company'scompetitiveness. Meanwhile, continuously improved the internal control system and improved the ability to preventrisks.

(4) Marketing ability

The Company has established a relatively complete sales network and service system, which can provide users withhigh-quality services covering all categories of white goods. The domestic market is actively accelerated to realizethe marketing transformation from product line-oriented sales management to channel- and user-oriented businessservices, from single-category marketing to full-category marketing, quickly building an operation managementsystem with reasonable commercial inventory management as the core and a value management system core withterminal retail price; through determined bench marking match, achieved products leading and efficiencyimprovement and builds the capability for marketing system and development potential for long period of time. Inoverseas markets, the company increased the investments in overseas marketing agencies, research and developmentbases, production bases, etc., developed the market actively and cooperated with internationally renownedhousehold appliance brands and distributors, continued to optimize the customer structure and enhance the productstructure, accelerated the overseas branding, improve overseas brand awareness, in counter with the overseas marketsegments, tailored marketing strategy to promoting the expanding driven by marketing.III. Main Business Analysis

(1) Overview

Whether the disclosure is the same as the main businesses of the company engaged in during the Period

□Yes √No

1. Introduction

In the first half of 2022, the external environment of the market continued to deteriorate. The sporadic pandemicseriously affected the release of demand. The interruption of national logistics and transportation by the pandemicalso made the market worse.With the pandemic under control, the logistics industry has also recovered, the supplyside of the household appliance manufacturing industry has recovered, and the demand side has begun to show apositive trend. In the first half of this year, the retail sales of China's household appliance market reached 338.9billion yuan, a decline of 9.3 percent on a year-over-year basis, according to total data released by All View Cloud(AVC).In the first half of the year, revenue scale of the Company has achieved a y-o-y growth with profitability improvedand result in a virtuous development. Operating income as a growth of 6.47%, net profit rose 30.52%.

2. Progress of the company's development strategy and business plan during the reporting periodDuring the reporting period, according to the development strategy, the Company comprehensively implementedthe guidelines of “one goal and three main lines”, actively push forward the operation plans and carried out followingworks including:

1.One goal

(1) Refrigerator (cabinet)

In the domestic market, the company insists on creating the "fresh", "clean" and "embedded" featured productbusiness cards. With reasonable commercial inventory as the core, it promotes the digital transformation of its ownchannels, and strategically expands the pre-installation market and ODM business. The online C-end operationcapability has been steadily improved, profit and loss has been improved, the B-end expansion capabilities has beenimproved, and the online scale in the first half of the year increased by more than 20% on a year-on-year basis.In the overseas markets, faced with soaring shipping costs and severe shipping situation, the company gathers nearshipping routes, uses shipping resources to grab orders, and implements "production based on sales orders" toimprove efficiency, and assists business development by focusing on best-selling products, advantageous markets,and key customers. During the reporting period, the company's refrigerator (freezer) business achieved revenue ofabout 3.344 billion yuan, a year-on-year decrease of 12.53 %.

(2) Air-conditioning

In the domestic market, we have made popular floor-standing air conditioner and wall-mounted air conditioneronline, and expanded our unique value products offline. In terms of channel improvement, we implemented specialaction plans and achieved initial results. In addition, in the first half of the year, two waves of high temperature

weather in March and June in Sichuan and Chongqing significantly boosted retail sales, and the O2O channelboosted beyond expectations, with a significant year-on-year increase. The company strengthened cooperation withcore strategic customers, and realized a large increase in ODM business.In the overseas markets, we continues to carry out special actions to actively snatch orders, and gets repeat ordersby improving customer service, improving customer satisfaction and promoting fast delivery. Relying on theimprovement of product strength, we vigorously promotes variable frequency products, launches new products (Dplatform), promotes high-end products (EVA series, voice air conditioners, etc.), and promotes differentiatedproducts (such as generator air conditioners, current controllable energy-saving variable frequency air conditioners),constantly adjusts product structure, and competes for new customers. During the reporting period, the company'sair-conditioning business achieved revenue of about 5.351 billion yuan, a year-on-year increase of 35.16 %.

(3) Washing machine

The company's washing machine industry insists on differentiated and dislocated competition, and optimizes andadjusts the product structure. In the domestic market, the company gives full play to its "very thin" differentiatedcompetitive advantage, and closely focuses on the needs of users, and has launched the super-oxygen cleaning seriesof front-loading washing machines to further enhance the competitiveness of Meiling’s mid-to-high-end washingmachine products. In the overseas markets, the company expands washing machine business with industrial thinking,creates washing machine products in line with overseas markets, and promotes washing machine products with thehelp of refrigerator and freezer customers, and has achieved certain results in various markets. During the reportingperiod, the company's washing machine business achieved revenue of about 393 million yuan, a year-on-yearincrease of 21.89%.

(4) Kitchen & bathroom, small appliances

The company adheres to drinking water, gas hot water products as the core products. Based on traditional marketing,it actively embraces new retail, vigorously explores new channels, comprehensively sorts out the organizationalstructure of offline channels from the inside, and promotes the flat transformation of offline channels. It establishesonline shop groups on JD, Tmall, Pinduoduo and other platforms and quickly builds self-operated shop matrix toimprove the sales conversion rate and associated purchase rate. During the reporting period, the company's kitchenand bathroom, small household appliances business achieved revenue of about 727 million yuan, a year-on-yeargrowth 27.20%.

(5)Biomedical

Focusing on the three major business strategic layouts of life science, smart cold chain and family health, strengtheninnovative research and development of new technologies and new products, optimize research and developmentprocesses, stimulate innovation and research and development vitality, and form sustainable technologicalinnovation capabilities. Based on market demand, deepen the market segmentation and channel layout, and

constantly improve the level of market services; promote the standardization of production processes, enhance thelevel of value chain management, and improve production capacity efficiency and product quality; absorboutstanding talents, improve the construction of talent training system, and stimulate the vitality and creativity ofthe company. The Company's biomedical industry is mainly developed on the platform of its subsidiary ZhongkeMeiling. According to strategic planning and business development needs, Zhongke Meiling is promoting the publicoffering of shares to unspecified qualified investors and the listing on the Beijing Stock Exchange. Up to now, theBeijing Stock Exchange has officially accepted the application of Zhongke Meiling Cryogenic Technology Co., Ltdto issue shares to unspecified qualified investors and be listed on the Beijing Stock Exchange. During the reportingperiod, the biomedical business achieved revenue of approximately 213 million yuan, a year-on-year decrease of

18.21%.

2.Three main lines

(1)Efficiency priority

With reasonable commercial inventory as the core, the whole chain of "retail end - production end - logistics end"is driven to operate efficiently and collaboratively to maximize efficiency. It mainly improves delivery efficiencythrough model innovation, bottleneck breakthrough, and production and sales collaboration, and continues to reducethe number of models, optimizes the supply chain, replenishes in time, maintains reasonable inventory, digitallytransforms basic channels, and strengthens the assessment of the accuracy of sales forecasts. In the first half of theyear, commercial inventory turnover days of refrigerators decreased by over 20%, and air conditioners increased byover 40%.In terms of organizational efficiency, the company focuses on strengthening operation, and adjusts the R&D andproduction organization and functions of the refrigerator and freezer business headquarters in accordance with themanagement principle of "small platform, big business", thus, the organization has become more flat, and thedecision-making efficiency has been further improved.The company is accelerating its digital transformation. On the manufacturing end, continue to improve the MeilingIndustrial Internet platform, consolidate high-end manufacturing capabilities, and enhance large-scale flexiblecustomized production capabilities. On the market side, promote the "C+3 customer order system" model, based ononline collaboration and data parallel decision-making of four plans of sales, procurement, manufacturing, andlogistics, and quickly respond to market demand with punctual and efficient production and delivery capabilities.On the product side, use advanced R&D tools such as PLM and digital simulation to dig into the data value ofmarket, R&D, process, manufacturing, service and others to achieve deep understanding of user pain points andaccurate access to consumption trends. At the same time, improve operational efficiency through digital operationof the whole value chain.

(2)Product leadership

Through the close combination of technology empowerment and product application, the company promotes the in-

depth research and capability improvement of core technologies, key technologies and hard-core technologies, andthe competitiveness of products is continuously strengthened. In the first half of the year, we continued to promotethe “fresh, clean, and embedded” refrigerators and the “thin, large, and intelligent” washing machines, and releaseda variety of products, such as the “Very Clean” series refrigerators, super-oxygen clean, Tianpu II washing machines,etc., and made every effort to create differentiated and high-profit "high-quality products" with Meilingcharacteristics. Focus on unique value products to carry out annual promotion of air conditioners, and create threebusiness cards of "good comfort, good air, and good sleep" around "wind - wind feeling, air inlet and outlet, and airconditioning". Good Comfort mainly promotes the "living room and dining room shared floor-standing airconditioner" series, Good Air mainly promotes the "all dust-free" series, as well as the industry's smallest 5P floor-standing air conditioner, and Good Sleep mainly promotes the static oxygen wall-mounted air conditioner. Kitchen,bathroom and small home appliances refine their product layout around the core strategy of "water ecology", andlaunch the industry's first refrigerator tea bar machine and the condensing gas heating water heater with energyefficiency grade 1. Biomedical launches a new generation of "Yunzhian ·Automated Sample Library", an original -80 ℃ independent storage unit, to provide users with a safer and more intelligent automated sample storage solution.At the same time, in terms of improving product competitiveness, the company has launched a productcompetitiveness model, which evaluates product arrays and individual products in terms of appearance, costperformance, quality, experience and other dimensions, and continuously improves product competitiveness. Duringthe reporting period, the success rate of new refrigerator and freezer products in the market has increased, and theresearch on wide-speed full-frequency conversion technology and the application of air-cooled refrigerators havewon the Science and Technology Improvement Award of China National Light Industry Council, which not onlymarks that Meiling's technological innovation strength has been widely recognized by the industry and society, andalso highlights Meiling's continuous satisfaction and innovation strength for user needs.

(3) Benchmarking

Comprehensive benchmarking strengthens internal efficiency improvement. The company has been focusing onpromoting product cost benchmarking, share increase, average price increase and other work, and has achievedcertain results, i.e. reduced cost through bidding and negotiation, introduction of new suppliers, updated applicationof price models, new foaming process, new materials, design optimization and other measures. Benefiting from thesuccessful creation of "Jingxiaozhai" air conditioners and relying on C-end refined operational breakthrough, air-conditioning share at JD.com reached 1.5%, an increase of 0.8 percent on a year-on-year basis. Relying on productadvantages, it strengthened terminal retail-driven delivery of of cargo from warehouses. According to the monitoringdata of AVC, the offline share of refrigerators increased by 0.22%, and the offline share of freezers increased by

2.28%, and the offline share of washing machines increased by 0.44%.

(2)Y-o-y changes in the key financial data

In RMB

Current PeriodSame period lastY-o-yCauses
yearchanges (+,-)
Operation income10,224,503,551.199,602,759,345.296.47%No major changes
Operation cost9,061,080,531.068,177,231,196.1710.81%No major changes
Sales expense666,066,309.98984,805,928.94-32.37%According to the implementation of guidelines Q&A in the Period, relevant expenses as transportation costs adjusted to item of “Operation cost”
Administrative expense164,132,141.97152,957,426.987.31%No major changes
Financial expense-62,786,327.96-5,695,990.10-1002.29%Mainly due to the exchange gains in the Period and there is an exchange loss in the same period of the previous year
Income tax expenses-10,115,573.4637,086,971.38-127.28%Mainly due to the decline of taxable income in the Period
R&D investment272,521,887.72217,199,272.5225.47%Mainly due to the increase of investment in R&D in the Period
Net cash flow from operation activity575,053,217.35-588,496,116.82197.72%Mainly due to the increase of cash from commodity sales, and providing labor service increase from a year earlier
Net cash flow from investment activity-844,422,733.68-699,480,638.02-20.72%Mainly due to the restricted time deposits in the Period
Net cash flow from financing activity-352,220,645.93-356,001,274.241.06%No major changes
Net increased amount of cash and cash equivalent-602,548,686.03-1,657,978,314.3563.66%Mainly because the net cash flow from operation activity increased from a year earlier
Investment income13,816,261.7552,533,705.90-73.70%Mainly because forward foreign exchange contract delivery gains decreased from a year earlier
Credit impairment loss-50,466,619.13-15,121,003.89233.75%Mainly because impairment loss on account receivable increased from a year earlier
Assets impairment loss-29,791,822.84-43,310,366.42-31.21%Mainly because the provision for decline in value of inventories declined from a year earlier

(3)Major changes on profit composition or profit resources in reporting period

□ Applicable √ Not applicable

No major changes on profit composition or profit resources occurred in reporting period

(4) Constitute of operation revenue/income

In RMB

Current PeriodSame period last yearY-o-y changes (+,-)
AmountRatio in operation revenueAmountRatio in operation revenue
Total operation revenue10,224,503,551.19100%9,602,759,345.29100%6.47%
According to industries
Manufacture of household appliances10,138,489,064.2899.16%9,076,019,575.5694.51%11.71%
Other business86,014,486.910.84%526,739,769.735.49%-83.67%
According to products
Refrigerator, freezer3,557,279,193.8034.79%4,083,961,202.3342.53%-12.90%
Air-conditioning5,350,650,174.7652.33%3,958,753,350.5041.23%35.16%
Washing machine393,315,713.023.85%322,671,076.353.36%21.89%
Small appliance and kitchen & toilet727,498,495.757.12%571,948,185.395.96%27.20%
Other products109,745,486.951.07%138,685,760.991.44%-20.87%
Other business86,014,486.910.84%526,739,769.735.48%-83.67%
According to region
Domestic7,556,599,775.0673.91%6,912,387,260.0771.98%9.32%
Foreign2,667,903,776.1326.09%2,690,372,085.2228.02%-0.84%

(5)The industries, products or regions that accounting for over 10% of the Company’s operating revenue oroperating profit

√Applicable □ Not applicable

In RMB

Operating revenueOperating costGross profit ratioIncrease/decrease of operating revenue y-o-yIncrease/decrease of operating cost y-o-yIncrease/decrease of gross profit ratio y-o-y
According to industries
Manufacture of household appliances10,138,489,064.289,027,583,283.9610.96%11.71%17.09%-4.09%
According to products
Refrigerator, freezer3,557,279,193.803,052,742,990.2114.18%-12.90%-8.43%-4.19%
Air-conditioning5,350,650,174.764,907,155,572.468.29%35.16%38.60%-2.28%
Small appliance and kitchen & toilet727,498,495.75642,738,038.6711.65%27.20%35.55%-5.44%
According to region
Domestic7,475,522,523.096,574,576,772.5212.05%16.94%26.12%-6.40%
Foreign2,662,966,541.192,453,006,511.447.88%-0.77%-1.76%0.92%

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted mainbusiness based on latest one year’s scope of period-end

□ Applicable √ Not applicable

(6) Reasons for y-o-y relevant data with over 30% changes

□ Applicable √ Not applicable

Products of air-conditioning has a y-o-y growth in operation revenue and operation costs, mainly resulted by thefull implementation of the business policy as “one goal and three main lines” and positive demand in China andinternational market.IV. Analysis of the non-main business

√ Applicable □Not applicable

In RMB

AmountRatio in total profitNoteWhether be sustainable (Y/N)
Investment income13,816,261.7522.08%Mainly due to the income of long-term equity investment and forward foreign exchange contract delivery proceeds in the PeriodN
Gains/losses from change of fair value3,562,737.045.69%Mainly due to the income on change in fair value of the forward foreign exchange contract in the PeriodN
Asset impairment-29,791,822.84-47.61%Mainly due to the provision for losses on decline in value of inventory in the PeriodN
Non-operating income2,910,887.794.65%Mainly due to the income from fines receivedN
Non-operating expense2,332,960.833.73%Mainly due to the loss on retirement of non-current assets in the PeriodN
Other income48,325,391.8177.22%Mainly due to the government subsidies received in the PeriodN
Credit impairment loss-50,466,619.13-80.64%Mainly due to the provision for credit impairment loss on account receivable in the PeriodN

V. Analysis of assets and liability

(1) Major changes of assets composition

In RMB

End of current periodYear-end of last yearRatio changesNotes of major changes
AmountRatio in total assetsAmountRatio in total assets
Monetary fund6,183,005,095.1137.43%5,938,823,396.2139.10%-1.67%The percentage of total assets declined due to the increase in total assets
Account receivable2,270,853,232.1213.75%1,440,874,691.289.49%4.26%Mainly due to the increase in operation revenue
Contractual assets2,313,522.400.01%0.01%No major changes
Inventory1,607,718,382.719.73%1,356,357,419.808.93%0.80%Mainly due to the increase
in production in the Period
Investment real estate52,191,185.680.32%53,149,934.450.35%-0.03%No major changes
Long-term equity investment88,915,648.080.54%86,631,660.530.57%-0.03%No major changes
Fix assets2,266,504,611.7413.72%2,303,122,699.9215.16%-1.44%Mainly due to the decrease in assets investment in the Period
Construction in progress103,923,104.080.63%98,469,862.450.65%-0.02%No major changes
Right-of-use assets40,286,720.530.24%45,367,918.310.30%-0.06%No major changes
Short-term loans1,087,291,446.156.58%622,874,652.774.10%2.48%Mainly due to the new short-term borrowings in the Period
Contractual liability351,317,980.382.13%515,004,115.233.39%-1.26%Mainly due to the decrease in accounts received in advance during the Period
Long-term loans158,000,000.000.96%168,000,000.001.11%-0.15%No major changes
Lease liability30,061,422.300.18%33,225,912.150.22%-0.04%No major changes

(2) Main overseas assets

√ Applicable □ Not applicable

Content of assetsReason for the formationAsset sizeLocationOperation modeControl measure to ensure the security of assetsIncome (RMB)Foreign assets accounted for net assets of the CompanyWhether exist significant impairment risk (Y/N)
60% equity of Changhong Ruba Trading CompanyInvestment establishmentUS$ 7.803 millionPakistanSalesDetails of risks control measures have been disclosed by the Company by way of announcement on appointed media (No. 2011-028, No. 2011-032, No. 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 2017-741,419.00-0.04%N
40% equity of Changhong Ruba Electric Company(Private)Lt d.Investment establishmentUS$ 6.9761 millionPakistanManufactureDetails of risks control measures have been disclosed by the Company by way of announcement on appointed media (No. 2011-028, No. 2011-032, No. 2014-023, No. 2014-026, No. 2017-053 and No. 2017-059) on 28 May 2011, 19 April 2014 and 10 August 20170.00-0.22%N
100% equity of CHANGHONG MEILING ELECTRIC INDONESIA. PTInvestment establishmentUS$ 6 millionKELAPA GADING, JKT, IndonesiaSalesDetails of risks control measures have been disclosed by the Company by way of announcement on appointed media (No. 2016-027 and No. 2016-033) on 25 March 2016-966,902.470.35%N
100% equity of CH-Meiling International (Philippines) Inc.Investment establishmentUS$ 1 millionPhilippinesSalesDetails of risks control measures have been disclosed by the Company by way of announcement on appointed media (No. 2019-083) on 7 December 2019.-844,501.460.04%N
Other notesN/A

(3) Assets and liability measured by fair value

√Applicable □ Not applicable

In RMB

ItemsAmount at the beginning periodChanges of fair value gains/losses in this periodAccumulative changes of fair value reckoned into equityDevaluation of withdrawing in the periodAmount of purchase in the periodSales in the periodOther changesAmount at end of the period
Financial assets
1.Trading financial assets (derivative financial assets excluded)17,997,086.1929,478,307.89380,000,000.00220,000,000.00709,401.15208,184,795.23
2.Receivable financing1,808,109,301.56-428,009,007.471,380,100,294.09
3.Other non-581,980,440.705,779,799.20576,200,641.50
current financial assets
Subtotal of financial assets2,408,086,828.4529,478,307.89380,000,000.00225,779,799.20-427,299,606.322,164,485,730.82
Above total2,408,086,828.4529,478,307.89380,000,000.00225,779,799.20-427,299,606.322,164,485,730.82
Financial liabilities12,304,272.4126,624,972.0038,929,244.41

Other changes:

Other change of trading financial assets mainly due to the provision of income from financial products; other change of receivablefinancing due to the decrease in note receivable with the objective of both collecting contractual cash flow (collections) and selling(endorsement or discounting)

Whether there have major changes on measurement attributes for main assets of the Company in report period ornot

□Yes √ No

(4) 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 andguarantee. As for other assets have restriction on rights found more in relevant content of “63. Assets with restrictedownership or use rights” in “VI. Note of consolidate financial statement” carried under Section X. Financial ReportVI. Investment analysis

(1) Overall situation

□Applicable √ Not applicable

(2) The major equity investment obtained during the reporting period

□Applicable √ Not applicable

(3)The material non-equity investment during the reporting period

□Applicable √ Not applicable

(4)Financial assets investment

1. Securities investment

□ Applicable √ Not applicable

The Company had no securities investment in the reporting period.

2. Derivative investment

√ Applicable □ Not applicable

In 10 thousand yuan

OperatorRelated relationshipWhether related trade or not(Y/N)TypeInitial investmentStart dateEnd dateInvestment amount at period-beginAmount purchased in the reporting periodAmount sales in the reporting periodAmount of reserve for devaluation of withdrawing (if applicable)Investment amount at period-endRatio of investment amount at period-end in net assets of the Company at period-endActual gains/losses in period
Financial institutionN/ANForward foreign exchange contract299,655.672021-5-262023-3-30156,034.41282,480.19239,774.22-200,001.5741.28%-1,261.19
Total299,655.67----156,034.41282,480.19239,774.22-200,001.5741.28%-1,261.19
Capital resourceOwn fund
Lawsuit involved (if applicable)Not applicable
Disclosure date for approval from the Board for investment of derivatives (if applicable)2022-3-31
Disclosure date for approval from board of shareholders for investment of derivatives (if applicable)2022-4-29
Risk analysis and controlling measures for derivatives holdings in the Period (includingRisk analysis:
but not limited to market risk, liquidity risk, credit risks, operation risk and law risks etc.)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 authenticity. In addition, forward foreign exchange transactions are processed with bank credit, will not affect liquidity of company funds. 3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign exchange contracts with contract price, which leads the risk of income uncertainty. So the Company chose five state-owned banks, the Chinese-funded banks in shareholding enterprise as Everbright Bank, Industrial Bank and the foreign-funded banks as UOB, OCBC, BEA etc. to conduct the trading of foreign exchange capital. These banks share a solid strength and management whose failure and possible losses 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 market price or fair value in the Period, as for analysis of the fair value of derivatives, disclosed specific applied methods and correlation assumption and parameter settingThe Company determines fair value in accordance with the Chapter VII “Determination of Fair Value” carried in the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices offered by bank and other pricing services. While fair-value of derivatives is mainly obtained according to the balance between prices given by outstanding contracts and forward prices given by contracts signed during the reporting period with bank. The differences are identified as trading financial assets and liabilities. During the reporting period, forward foreign exchange contracts and losses of the Company is -12.6119 million yuan.
Specific principle of the accounting policy and calculation for derivatives in the Period compared with last period in aspect of major changesNot applicable
Special opinion on derivative investment and risk control by independent directorsUpon inspection, the Company believes that: during the reporting period, the Company carried out its foreign exchange forward deals in strict compliance with the Shenzhen Stock Exchange Self-Regulatory Guidelines No.1- Standardized Operation of the Listed Companies on main Board , the Articles of Association, Management Measures on Company Authorization, Management System in relating to Foreign Exchange Forward Deals, and these 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 closely related to the routine operation requirement of the Company and 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 transactions of the Company are beneficial to prevent the

exchange risks exposed by import and export business and thus met its requirement for operation development. There was no speculative operation, no break of relevantrules and regulations and relevant business was conducted under corresponding decision-making procedures. Interests of the Company and entire shareholders, especiallyminority shareholders, were not prejudiced.

3.Application of raised proceeds

√ Applicable □ Not applicable

(1) Overall application of raised proceeds

√ Applicable □ Not applicable

In 10 thousand yuan

Raising yearWayTotal raised capitalsTotal raised capital used in PeriodTotal accumulative raised capitals usedTotal raised capital has purpose of uses changed in PeriodCumulative raised capitals has purpose of uses changed in totalRatio of cumulative raised capitals has purpose of uses changedTotal accumulative raised capitals unusedUsage of the retained raised capitals and what is expected to invested with those capitalsRaised capitals idle for more than two years
2016Non-public offering of A-share154,073.272276970.54351117,946.07042,584.30512727.64%935.01821After approval of the “ proposal on closing of the remaining fund raising investment and replenishment of the working capital with surplus fund raised permanently” at the 16th session of 10th BOD, the 13th session of 10th BOS and AGM of 2021 held dated March 29, 2022 and April 28, 2022, its was agreed that the Company will close the project of “intelligent R&D management platform construction” under the “intelligent manufacturing construction project” and “intelligent R&D project” . after the project closed, the investment projects with the funds raise by 2016 non-public offering of shares will all be completed.The above-mentioned fund raising project still have some--
remaining contractual payments and financial management income of 9,350,182.1 yuan. The Company will pay the remaining contract payments as planned and use the surplus proceeds to replenish the working capital permanently for its daily operations and business development.
Total--154,073.272276970.54351117,946.07042,584.30512727.64%935.01821----
Explanation on General usage of raised capital
In 2016, 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. The total proceeds raised from the issue amounted to 1,569,999,998.84 yuan, net amount raised amounted to 1,540,732,722.76 yuan after deducted the offering expenses (tax included) 29,267,276.08 yuan. As of June 30, 2022, the Company accumulative used the fund raised amounted as 1179460700 yuan, total balance of special account for fund raised was 9350182.1 yuan (including 369,142.04 yuan accumulated interest income and maturity earnings of 1,735,039.45 yuan from bank financial products)

(2) Situation of committed project of raised proceed

□Applicable √ Not applicable

(3) Change of the raised funds

□Applicable √ Not applicable

There is no change of raised funds during the reporting period.

VII. Sales of major assets and equity

(1) Sales of major assets

□Applicable √ Not applicable

No major assets are sold in the period(ii) Sales of major equity

□Applicable √ Not applicable

VIII. Analysis of main holding company and stock-jointly companies

√ Applicable □Not applicable

(1) Particular about main subsidiaries and stock-jointly companies net profit over 10%

In RMB

Company nameTypeMain businessRegister capitalTotal assetsNet assetsOperating revenueOperating profitNet profit
Zhongke Meiling Cryogenic Technology Co., Ltd.SubsidiaryResearch and development, manufacturing and sales of ultra-low temperature freezer72,548,200460,367,118.01225,013,744.69235,704,905.7537,635,712.2034,977,067.97
Jiangxi Meiling Electric Appliance Co., Ltd.SubsidiaryManufacturing of refrigeration and freezer50,000,000329,823,180.80139,812,393.11316,893,749.467,371,271.747,375,671.74
Mianyang Meiling Refrigeration Co., Ltd.SubsidiaryManufacturing of refrigeration and freezer100,000,000173,913,164.56120,480,549.80174,755,637.60799,630.5791,970.82
Zhongshan Changhong Electric Co., Ltd.SubsidiaryR&D, manufacturing and foreign sales of air-conditioning334,000,0001,794,997,540.68126,106,127.731,778,468,757.6644,914,005.2844,602,177.68
Hefei Meiling Group Holdings LimitedSubsidiarySales of white goods80,000,0001,719,256,879.22-356,638,304.232,680,436,900.73-124,970,892.33-127,111,190.44
Changhong Meiling Ridian Technology Co., Ltd.SubsidiaryR&D, manufacturing and sales of kitchen and toilet products, small home appliances and water purifier83,000,000286,455,739.24138,687,564.56121,903,975.392,398,112.051,833,690.30
Hefei Changhong Meiling Life Appliances Co., Ltd.SubsidiaryR&D and sales of household appliances, kitchen appliances and small home appliances50,000,000484,728,701.8589,120,532.45618,374,856.0513,640,426.728,755,357.31

(2) Subsidiary obtained and disposed in the period

√ Applicable □ Not applicable

Company nameThe method of obtaining and disposing subsidiaries during the report periodThe influence to the whole production and performance
Jinan Xiangyou Electric Appliances Marketing Co., LtdCancellationMinor effect on the overall production and operation and performance of the company
Zhengzhou Meiling Electric Appliances Marketing Co., LtdMergers & acquisitionMinor effect on the overall production and operation and performance of the company

(3) Description of the holding company and stock-jointly companies

During the reporting period, subsidiary Sichuan Changhong Air-conditioner Co., Ltd. and Zhongshan ChanghongElectric Co., Ltd has larger increase in net profit from a year earlier, mainly due to the big increase in operationrevenue.

IX. Structured entity controlled by the Company

□Applicable √ Not applicable

X. Risks and countermeasures

(1) risks and countermeasures

In the second half of 2022, the domestic home appliance market demand will be under pressure, and exports will beaffected by factors such as transportation costs and the market. The company will face business risks such as severeindustry situation, intensified competition, and repeated COVID-19 pandemic at home and abroad.

1.Grim industry situation

Affected by the pandemic and pandemic prevention policies, consumption, especially offline contact serviceconsumption, has been recovering slowly, and the consumption intention is still lower than the level before thepandemic. The repeated pandemic has a negative impact on the overall consumption environment and consumerconfidence, and consumption, real estate, and employment have weakened. Reflected in the home appliance market,the market uncertainty has intensified, and some enterprises in the same industry have begun to contract strategically.

2. Impact of cross-border Internet industry and challenges of new business modelWith the advent of the Internet era and the era of artificial intelligence, Internet enterprises are constantly pouringinto the smart home field. Diversified and digital scene marketing will accelerate the transformation of onlinechannels. which not only intensifies the competition in the industry, but also aggravates the sinking of chains andthe difficulties of KA channels. Traditional home appliance enterprises are facing severe challenges.

3. Risk of price fluctuations in international transportation

Affected by the international shipping situation, ocean freight rates are still at a high level, and there is nofundamental improvement, which will have an impact on export business

4. The impact of trade frictions and geopolitics

The company pays close attention to the impact of uncertain factors such as international trade frictions andgeopolitics on the company's global business.In response to the above risks, combined with the industry situation in the second half of the year and the shortagein the first half of the year, the company will seize the opportunities and turn the crisis into an opportunity in thesecond half of 2022,, and implement the business plan from the following part (II).

(2)Operation plan for second half of the year

Under strategic planning, the company will continue to take “one goal and three main lines” as the guiding ideology,main works during the second half of the year as follow:

1. Refrigerator and freezer industry

In the domestic market, we will promote customer focus, provide consumers with unique value products, promotehigh-quality products and create popular products, and improve channel efficiency by reducing inventory, speedingup turnover, and exiting from inefficient stores, carry out transformation of basic channels through unifiedwarehousing and distribution, digital platform, C+3, and operator models, develop trend channels through dedicatedand customized product resources, and expand incremental channels through the establishment of professionalteams and planning dedicated products. At the same time, a special promotion group for efficiency improvementwill be established to continuously improve the capital efficiency, channel efficiency, product efficiency andmanagement efficiency to strengthen its own capabilities.In overseas markets, we will continue to focus on best-selling products, advantageous markets, and key customers.Focus on products with large loading quantity and high value per container; focus on the markets with shippingresources and low freight near the ocean routes; focus on key customers and explore market opportunities. Improveefficiency internally while looking for optimized logistics solutions. Increase investment in brand business teamsand products, and continue to promote the construction of overseas independent brands.

2.Air-conditioning industry

In the domestic market, we will focus on the offline core areas, and the controllable online value chain. We willconsolidate and enhance existing core customers and incrementally expand TOP and ODM customers mainlythrough the special plans of "granary area construction, innovation area model, Qiao Tou Bao plan, and Jing Gengaction"; improve retail promotion capabilities, and expand unique value products.In overseas markets, we will continue to practice the concept of "profitable scale growth and profit growth withcash flow", adhere to brand priority, improve product strength, expand customer channels, and at the same timefocus on efficiency improvement, reduce costs, improve quality, and improve service capabilities.

3.Washing machine industry

In the second half of the year, washing machine industry will adhere to the "good quality" + "hot sale" product

strategy, and build the "thin", "large", "smart" industry business card. For “good quality” products, enrich theproduct lines mainly through the layout in color screen tumble washing machine and high-box wave washingmachine, and improve product competitiveness from the appearance, cost performance, experience, and quality. For“hot sale” products, deploying the downstream channels and product integration channel in way of high priceperformance, and expand the scale of washing machines. At the same time, relying on the self-produced washingmachine to develop overseas business and ODM/OEM customers, and achieve rapid breakthroughs in Meilingwashing machine scale after complete the layout of washing and care products and accessories.

4. Kitchen, bathroom and small household appliances industry

In the second half of the year, the kitchen, bathroom and small household appliances industry shall adhere to thepolicy of "seeking quality in progress, transformation and upgrading". In terms of products, we will focus ondrinking water and gas heating products, promote the core products, core technologies and popular products,improve product competitiveness and operation quality, and quickly fill the space left by the peer when exiting themarket. In terms of marketing channels, we will continue to develop new business situations such as online and livebroadcast, at the same time, continue to expand self-operated business, explore and integrate high-quality marketresources, and strengthen self-operated capabilities.

5. Bio-pharmaceutical

We will implement the development strategy of "related diversification based on bio-medical field" determinedly,and keep up steady to push the innovation and research in aspect of new technology and new products, enrich theproduct lines and higher the quality by focusing on the strategy deployment for three business, including life science,smart cold-chain and family heath care. The life science businesses continue to strengthen the channel systemconstruction of the domestic market, actively deploy overseas markets, and strengthen online and offline markettraining and promotion. Relying on the life science channel system, the smart cold chain businesses steadily extendto professional logistics, pharmaceuticals, chemicals and other fields. Family health businesses actively promotethe launch of new products, build channel system construction, and promote the growth of the company's scale.

Section IV Corporate GovernanceI. AGM(Annual General Meeting) and extraordinary general meeting

(1)AGM held in the period

MeetingTypeParticipation ratio for investorsMeeting dateDisclosure dateResolution
First Extraordinary General Meeting of 2022Extraordinary General Meeting6.0286%2022-1-52022-1-6The General Meeting has approved one proposals-”Agreement of the External Guarantee Provided by Sichuan Zhiyijia Network Technology Co., Ltd ”, found more in the “Resolution of First Extraordinary General Meeting of 2022 ” released on Juchao Website www.cninfo.com.cn
2021 AGMAnnual General Meeting31.9056%2022-4-282022-4-29The General Meeting have approved 18 proposals in total, including “Report on Works of BOD for year of 2021”, “Report on Works of BOS for year of 2021”, “Annual Report of 2021 and Its Summary”, “Financial Statement Report for year of 2021”, “ Plans of Profit Distribution for year of 2021”, “Renewal of the Audit Institution on Financial Report and Internal Control for year of 2022 and Payment of Remuneration” , “Change of the Accounting Policy” and the rest, found more in the “Resolution of 2021 Annual General Meeting” (No.: 2022-033) released on Juchao Website www.cninfo.com.cn
Second Extraordinary General Meeting of 2022Extraordinary General Meeting31.9478%2022-6-292022-6-30The General Meeting have approved 5 proposals in total, including “Provide Internal Guarantee and External Loans to Overseas Controlling Subsidiary”, “Amendment of Some Clauses in Articles of Association”, “Amendment of Some Clauses in ‘Rules of Procedure for the GM’”, “Amendment of Some Clauses in ‘Rules of Procedure of the BOD” and “ Amendment of Some Clauses in ‘Rules of Procedure of the BOS”, found more in the “Resolution of Second Extraordinary General Meeting of 2022” (No.: 2022-049) released on Juchao Website www.cninfo.com.cn

(2) Request for extraordinary general meeting by preferred stockholders with rights to vote

□Applicable √ Not applicable

II. Changes of directors, supervisors and senior executives

□Applicable √ Not applicable

There was no change of directors, supervisors and senior executives during the reporting period, refer to theAnnual Report of 2021 for details.

III. Profit distribution plan and capitalizing of common reserves in the period

□Applicable √ Not applicable

There are no cash dividend, bonus and capitalizing of common reserves carried out in the semi-annual

IV. Implementation of the company’s stock incentive plan, employee stock ownership plan or otheremployee incentives

□Applicable √ Not applicable

The Company has no implementation of the company’s stock incentive plan, employee stock ownership plan orother employee incentives in the period.

Section V Environmental and Social ResponsibilityI. Major environmentalThe listed Company and its subsidiary whether belongs to the key sewage units released from environmentalprotection department

□Yes √ No

Administrative penalties imposed for environmental issues during the reporting period

NameCause of penaltyViolationsPenalty resultsImpact on production & operation of the listed companyRectification measures
Not applicableNot applicableNot applicableNot applicableNot applicableNot applicable

Other environmental information disclosed with reference to the key emission unitsNot applicableMeasures taken to reduce the carbon emission during the reporting period and their effectiveness

√Applicable □Not applicable

Integrate features of the carbon emissions and special requirements, the Company, perfecting energy efficiencyindex assessment for internal energy management and energy consumption assessment system through tighten upthe energy management works in each production units. Continuously develop energy measurement assessment,follows the principle of system management and establish a complete and effective management system.During thereporting period, the Company vigorously promotes and applies the advanced energy-saving equipment andtechnology within the industry, carried out energy-saving technology improvement works; carried out energy-saving renovation measures to upgrading the automation and intelligence including high-consumption & low-efficiency renovation for air compressor, air compressor upgrading for the join control system, compressed airpressure reduction modification, steam piping energy saving retrofit, research and application on the infrared heatingtechnology, application research of air energy units, application research on electric heating to replace the steamheating and the replacement of energy-efficient heating tiles, etc., combining energy management with theinformation technology construction, at the same time of realizing the leaner production management and enhanceproductivity to reduce the energy waster and emission of CO

.

Reasons for not to disclosing other information with environment concernedThe Company and subordinate subsidiaries are not belongs to the key emission units announced by the authority ofenvironmental protection.

II. Social responsibilityThe company adheres to the core values of "dedication, responsibility, co-creation and sharing", and achieves thepurpose of "staff satisfaction, customer satisfaction, and shareholder satisfaction" through standardized operationand scientific management. While achieving benign development, the company has also actively fulfilled its socialresponsibilities through various forms and channels.

1. Protection of the rights and interests of shareholders and creditors

The company strictly follows the provisions and requirements formulated by the Articles of Association and theRules of Procedure for the General Meeting of Shareholders, regulates the convening, holding and voting proceduresof the general meeting of shareholders, equally treats all shareholders, especially small and medium shareholdersequally, and ensures that all shareholders enjoy equal status and fully exercise their own rights. Under the premiseof strictly implementing the Administrative Measures for Information Disclosure of Listed Companies, the companyactively communicates and exchanges information with investors on the company's operations and management,financial status, etc. through annual performance briefings, Anhui service week for investors by SZSE, investortelephone hotline, e-mails, and the investor relations interactive platform of the Shenzhen Stock Exchange, anddiscloses information to all investors in a truthful, accurate, complete, concise and clear, and easy-to-understandmanner; further, the company attaches great importance to the shareholder return mechanism,in line with the"Shareholder Return Plan for the Next Three Years (2021-2023) of Changhong Meiling Co., Ltd.", combined withthe self-management status and other factors, during the reporting period, the Company implemented the profitdistribution plan for the year of 2021 and giving shareholders a reasonable return on their investment.

2. Protection of the rights and interests of employees

In accordance with relevant laws, regulations and policies, and in light of its own actual situation, the company hasestablished a relatively complete employment management system, including labor contract system, salary andperformance appraisal system, welfare management system, training management system, employee vacationmanagement system, etc. The company pays attention to the vital interests of employees, maximizes the protectionof the legitimate rights and interests of employees and retirees, and strives to form a benefit sharing mechanism forboth company and employees, and establishes a harmonious labor relationship. At the same time, the companyshapes corporate culture and improves employee satisfaction by providing various vacations, allowances,condolences, and organizing colorful leisure activities, sports and cultural festivals, carnivals, etc.

3. Protection of the rights and interests of suppliers, customers and consumers

The company has established a relatively complete procurement management system, optimized and revised systemdocuments in a timely manner, unified information system tools, strictly controlled every link of the procurementbusiness, cultivated core and strategic suppliers, and established a high-end supply chain cultivation plan forcomponent suppliers of high-end products, so as to form a synergy, cooperation and win-win situation between thecompany and its suppliers.The company attaches great importance to product quality and customer needs, and has a relatively advanced and

complete R&D and quality assurance system which has passed ISO9001, ISO14001, ISO45001 management systemcertifications. Laboratory of the Company owns a CNAS qualifications and built its own RoHS laboratory toconduct the strict testing for products, so its products are guaranteed by high quality and reliable performance. Atthe same time, for different types of customers, the company implements classification evaluation and systemmanagement, timely answers or feedbacks and deals with the questions raised by customers, continuously improvesquality services, and enhances brand image. Fully survey, understand customer needs, and do real-time follow-upand result feedback, focus on terminal construction, terminal experience and product training to increase attentionand support, and improve the sales of high-end structural products. For export products sold to various countries,the company conducts product certification in accordance with local laws and regulations, and also internally teststhe reliability of the product and its adaptability to different environments to ensure the reliability of the product inthe target market, and tracks usage feedback by means of customer satisfaction surveys and SCR value monitoring.For the protection of consumers' rights and interests, the company has a relatively advanced closed-loopmanagement system for user services. In order to meet the service needs of users, it has gradually improved thefunction construction of user interaction platforms such as 400 service hotline, brand official website, WeChatpublic account, Douyin, and APP, understands and deals with user needs and problems in a timely manner, andpromotes the process visualization management and user evaluation system management of the work orderprocessing timeline according to user needs. We pay attention to the improvement of consumer product protectionservices, and have upgraded and launched the 180-day unconditional return of Meiling M Fresh refrigerator if notsatisfied with the fresh keeping and the 180-day unconditional return of Meiling Very Clean refrigerator if notsatisfied with the sterilization, so as to effectively meet the needs of users and improve consumer satisfaction.

4. Social welfare

Over the years, the company has been actively participating in social welfare undertakings and various socialwelfare activities. The company strictly implements the internal environmental operation control procedures and aseries management systems related to environment, safety and product quality, such as Energy ManagementRegulations, Safety Production Responsibility System, Safety Training Management System, and "Process QualityControl Points" Management Measures for Refrigerator and Freezer Products, ensures that the company'sproduction and service activities comply with relevant national legal requirements; and actively carries out actionssuch as helping employees with serious illnesses and advocating voluntary donations by employees. During thereporting period, in order to actively fulfill corporate social responsibilities, Zhongke Meiling, a subsidiary of thecompany, shall donate scholarships totaling no more than 5.65 million yuan to 11 well-known domestic universitieswithin 10 years, which will be used to support the development of college education and enhance the brandreputation, social image and influence of the company and its subsidiaries.

5. Consolidate and expand the achievements of poverty alleviation and rural revitalizationThe company actively undertakes corporate social responsibility, and strives to contribute to local povertyalleviation and rural revitalization while achieving its own sound operation and development. At the beginning of2022, the company has successively carried out the "Rural revitalization with Meiling- Base Agricultural Products

Fair", and the love assistance activities for Tongxin Primary School in Tiantangzhai Town, Jinzhai County,positively responding to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and assumingthe social responsibility of enterprises.

Section VI Important EventsI. Commitments that the actual controller, shareholders, related party, the buyer and thecompany have fulfilled during the reporting period and have not yet fulfilled by the end ofreporting period

□ Applicable √ Not applicable

The Company has no commitments that the actual controller, shareholders, related party, the buyer and thecompany have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period

II. 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.III. External guarantee out of the regulations

□ Applicable √ Not applicable

No external guarantee out of the regulations occurred in the period.IV. Appointment and non-reappointment (dismissal) of CPA

Whether the semi-annual financial report had been audited

□Yes √ No

The semi-annual report was not auditedV. Explanation on “Qualified Opinion” from CPA by the Board and Supervisory Committee

□ Applicable √ Not applicable

VI. Explanation from the Board for “Qualified Opinion” of last year’s

□ Applicable √ Not applicable

VII. Bankruptcy reorganization

□ Applicable √ Not applicable

No bankruptcy reorganization for the Company in reporting periodVIII. Lawsuit(i) Major Litigation and Arbitration Matters

□ Applicable √ Not applicable

During the reporting period, the Company had no major litigation and arbitration matters.(ii) Other litigation matters

□ Applicable √ Not applicable

To maintain the independence and integrity of "Meiling" trademark and trade name, the Company carried out serialsof lawsuits, attribution and administration suits with “Meiling” trademark and corporate name concerned, Up tonow, in view of the infringement to the Company’s "Meiling" trademark and trade name, false propaganda andunfair competition in the market, the Company has carried out many ways including administrative reports, criminalinvestigation and civil litigation to fight against infringement and counterfeiting behavior in the whole country tostop the trademark infringement and unfair competition.

IX. Penalty and rectification

□ Applicable √ Not applicable

X. Integrity of the company and its controlling shareholders and actual controllers

√ Applicable □ Not applicable

During the reporting period, the Company and the controlling shareholders and the actual controllers have had goodreputation, and there is no large amount due unliquidated debt sentenced by the court.XI. Major related party transaction

(i) Related party transaction with routine operation concerned

√ Applicable □ Not applicable

SerialRelated partyRelationshipType of related transactionContent of related transactionPricing principleRelated transaction price (in 10 thousand Yuan)Related transaction amount (in 10 thousand Yuan)Proportion in similar transactions (%)Trading limit approved (in 10 thousand Yuan)Whether over the approved limited or not (Y/N)Clearing form for related transactionAvailable similar market priceDate of disclosureIndex of disclosure
1Sichuan Changhong Electric Co., Ltd.Controlling shareholderCommodity purchasedR-three-terminal voltage regulator, integrated circuits, R-insulated gate bipolar transistors, steel plates, plastic parts etc.Marketing price20,658.4020,658.402.45%65,000.00NSpot exchange, Bank acceptance-7 Dec. 2021; 24 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
2Changhong Huayi Compressor Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedCompressorMarketing price19,297.5819,297.582.29%48,000.00NBank acceptance-7 Dec. 2021; 24 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
3Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedComponents, plastic parts and lining accessories etc.Marketing price42,116.8542,116.855.00%100,000.00NSpot exchange, Bank acceptance-7 Dec. 2021; 25 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
4Sichuan ChanghongOther enterprise control under the same controllingCommodityBase plate assembly, blackMarketing price24,772.9024,772.902.94%52,000.00NSpot exchange,-7 Dec. 2021; 26 Dec. 2021Juchao Website (www.cninfo.
Jijia Fine Co., Ltd.shareholder and ultimate controllerpurchasedplate, bracket etc.Bank acceptancecom.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
5Sichuan Changhong Package Printing Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedPacking boxes, foam, fixed support block etc.Marketing price7,365.417,365.410.87%18,000.00NBank acceptance-7 Dec. 2021; 27 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
6Sichuan Changhong Precision Electronics Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedPrinted board machine insertion machine paste assemblyMarketing price1,157.301,157.300.14%3,000.00NBank acceptance-7 Dec. 2021; 28 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
7Sichuan Changhong International Hotel Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedFoodMarketing price1.171.170.00%5,000.00NCash settlement-7 Dec. 2021; 29 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
8Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedFoam and cartonMarketing price230.87230.870.03%10,000.00NSpot exchange, Bank acceptance-7 Dec. 2021; 30 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
9Hefei ChanghongOther enterprise control under theCommoditInverter integrated boardMarketing price279.42279.420.03%10,000.00NBank accept-7 Dec. 2021; 31 Dec. 2021Juchao Website
Industrial Co., Ltd.same controlling shareholder and ultimate controllery purchasedance(www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
10Sichuan Changhong New Energy Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedBatteriesMarketing price1.911.910.00%5,000.00NCash settlement-7 Dec. 2021; 32 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
11Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedAir conditioner, LCD TVMarketing price178.81178.810.02%10,000.00NCash settlement-7 Dec. 2021; 33 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
12Changhong International Holdings (Hong Kong) Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedTelevisionMarketing price202.84202.840.02%8,000.00NCash settlement-7 Dec. 2021; 34 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
13Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedprinted boardMarketing price506.18506.180.06%10,000.00NBank acceptance-7 Dec. 2021; 35 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
14Sichuan Changhong Electronic Products Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedRemote controls, switching transformers, printed boards, electronic components, etc.Marketing price1,608.431,608.430.19%3,000.00NSpot exchange, Bank acceptance-7 Dec. 2021; 36 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
15Sichuan Ailian Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedWifi moduleMarketing price460.43460.430.05%5,000.00NSpot exchange, Bank acceptance-7 Dec. 2021; 37 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
16Sichuan Aichuang Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedInverter integrated boardMarketing price5,142.935,142.930.61%13,000.00NBank acceptance-7 Dec. 2021; 38 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
17Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedPower boardMarketing price1.821.820.00%5,000.00NCash settlement-7 Dec. 2021; 39 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
18Sichuan Changhong Electronics Holding Group Co., Ltd.Controlling shareholder and ultimate controllerAccept labor serviceShuttle transportation fee, training feeMarketing price38.5938.590.05%5,000.00NCash settlement-7 Dec. 2021; 40 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094,
2021-222
19Sichuan Changhong Electric Co., Ltd.Controlling shareholderAccept labor serviceSoftware usage fee, information consultation fee, inspection and certification feeMarketing price163.87163.870.20%5,000.00NCash settlement-7 Dec. 2021; 41 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
20Sichuan Changhong Minsheng Logistics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceTransportation costs, storage and handling charges, freight and miscellaneous charges etc.Marketing price30,520.1130,520.1137.07%75,000.00NCash settlement-7 Dec. 2021; 42 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
21Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor servicecommission processing feeMarketing price1,131.771,131.771.37%5,000.00NSpot exchange, Bank acceptance-7 Dec. 2021; 43 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
22Sichuan Service Exp. Appliance Service Chain Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceThree packages, equipment repair,miscellaneous fees, installation fee etc.Marketing price10,913.6310,913.6313.26%32,000.00NCash settlement-7 Dec. 2021; 44 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
23Sichuan Hongxin Software Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceSoftware usage fee, service supporting fee and informationMarketing price296.28296.280.36%5,000.00NCash settlement-7 Dec. 2021; 45 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091,
service fee2021-092, 2021-094, 2021-222
24Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceService support fee, network service fee etc.Marketing price18.8418.840.02%5,000.00NCash settlement-7 Dec. 2021; 46 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
25Sichuan Jiahong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceMeals, property management fees etc.Marketing price342.76342.760.42%5,000.00NCash settlement-7 Dec. 2021; 47 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
26Sichuan Changhong International Hotel Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceMeetings fee, accommodationMarketing price3.663.660.00%5,000.00NCash settlement-7 Dec. 2021; 48 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
27Sichuan Changhong Property Services Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceDormitory facility and equipment service fees, property management feesMarketing price5.415.410.01%5,000.00NCash settlement-7 Dec. 2021; 49 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
28Sichuan Zhiyijia NetworkOther enterprise control under the same controlling shareholder andAccept labor serviceDesign service fee and platform usage feeMarketing price10.3710.370.01%5,000.00NCash settlement-7 Dec. 2021; 50 Dec. 2021Juchao Website (www.cninfo.com.cn) No.:
Technology Co., Ltd.ultimate controller2021-091, 2021-092, 2021-094, 2021-222
29Sichuan Changhong Intelligent Manufacturing Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor servicetest modification feeMarketing price7.317.310.01%5,000.00NBank acceptance-7 Dec. 2021; 51 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
30Sichuan Changhong Jijia Fine Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor servicecommission processing feeMarketing price665.53665.530.81%5,000.00NBank acceptance-7 Dec. 2021; 52 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
31Sichuan Qiruike Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceTechnology development service fee, instrument repair fee, inspection and certification fee, etc.Marketing price533.02533.020.65%5,000.00NCash settlement-7 Dec. 2021; 53 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
32Sichuan Changhong Electric Co., Ltd.Controlling shareholderPurchase of fuel powerElectricity, steam, water, compressed airMarketing price1,332.181,332.180.16%65,000.00NCash settlement-7 Dec. 2021; 54 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
33Changhong HuayiOther enterprise control under thePurchase ofCompressed airMarketing price10.7010.700.00%48,000.00NCash settle-7 Dec. 2021; 55 Dec. 2021Juchao Website
Compressor Co., Ltd.same controlling shareholder and ultimate controllerfuel powerment(www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
34Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fuel powerElectricity, water, compressed airMarketing price28.5928.590.00%10,000.00NCash settlement-7 Dec. 2021; 56 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
35Hefei Changhong New Energy Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fuel powerElectricity feesMarketing price16.3516.350.00%10,000.00NCash settlement-7 Dec. 2021; 57 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
36Sichuan Changhong Property Services Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fuel powerElectricity feesMarketing price1.351.350.00%5,000.00NCash settlement-7 Dec. 2021; 58 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
37Hefei Changhong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fuel powerElectricity, water feeMarketing price58.0358.030.01%10,000.00NCash settlement-7 Dec. 2021; 59 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
38SichuanControllingSalesKitchen andMarketi23.9223.920.00%1,500.00NSpot-7 Dec. 2021; 60Juchao
Changhong Electric Co., Ltd.shareholderof goodsbathroom and small appliancesng priceexchange, Bank acceptanceDec. 2021Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
39Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsPlastic partsMarketing price43.1943.190.00%31,000.00NCash settlement-7 Dec. 2021; 61 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
40Lejiayi Chain Management Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditioner, water heater and small appliancesMarketing price104.10104.100.01%5,000.00NCash settlement-7 Dec. 2021; 62 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
41Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodswashing machine,Refrigerator,freezer,Air conditioner,small appliancesMarketing price343,787.59343,787.5933.91%720,000.00NSpot exchange, Bank acceptance-7 Dec. 2021; 63 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
42Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodssmall appliancesMarketing price0.110.110.00%5,000.00NCash settlement-7 Dec. 2021; 64 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
43Sichuan Changhong Minsheng Logistics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditioner,RefrigeratorMarketing price13.9713.970.00%5,000.00NCash settlement-7 Dec. 2021; 65 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
44Sichuan Service Exp. Appliance Service Chain Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditioners,inverter integrated boards, components etc.Marketing price302.53302.530.03%5,000.00NCash settlement-7 Dec. 2021; 66 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
45Sichuan Huafeng Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditionerMarketing price35.3135.310.00%2,500.00NCash settlement-7 Dec. 2021; 67 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
46Sichuan Changhong Real Estate Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditionerMarketing price9.729.720.00%5,000.00NCash settlement-7 Dec. 2021; 68 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
47Hunan Grand-Pro Intelligent Tech. CompanyOther enterprise control under the same controlling shareholder and ultimate controllerSales of goodsLabelingMarketing price0.050.050.00%48,000.00NCash settlement-7 Dec. 2021; 69 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092,
2021-094, 2021-222
48Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodssmall appliancesMarketing price1.991.990.00%5,000.00NCash settlement-7 Dec. 2021; 70 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
49Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditionerMarketing price23.0123.010.00%2,500.00NCash settlement-7 Dec. 2021; 71 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
50Changhong Huayi Compressor Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditionerMarketing price7.267.260.00%48,000.00NCash settlement-7 Dec. 2021; 72 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
51Guangyuan Changhong Electronic Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditioner,Kitchen and bathroom,small appliancesMarketing price13.7913.790.00%5,000.00NCash settlement-7 Dec. 2021; 73 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
52CHANGHONG(HK)TRADINGLIMITEDOther enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditionerMarketing price17,413.9117,413.911.72%130,000.00NCash settlement-7 Dec. 2021; 74 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091,
2021-092, 2021-094, 2021-222
53CHANGHONGELECTRIC(AUSTRALIA)PTY.LTD.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigerator,freezers,washing machine and accessoriesMarketing price7,001.057,001.050.69%130,000.00NCash settlement-7 Dec. 2021; 75 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
54Orion.PDP.Co.,ltdOther enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigeratorMarketing price2,814.002,814.000.28%5,000.00NCash settlement-7 Dec. 2021; 76 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
55ChanghongEuropeElectrics.r.oOther enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigeratorMarketing price305.51305.510.03%10,000.00NCash settlement-7 Dec. 2021; 77 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
56CHANGHONGELECTRICMIDDLEEASTFZCOOther enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigerator,freezers and accessoriesMarketing price446.27446.270.04%5,000.00NCash settlement-7 Dec. 2021; 78 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
57Changhong International Holdings (HongOther enterprise control under the same controlling shareholder andSales of goodsRefrigerator,freezers,Air conditioner, kitchen utensilsMarketing price8,390.668,390.660.83%35,000.00NCash settlement-7 Dec. 2021; 79 Dec. 2021Juchao Website (www.cninfo.com.cn) No.:
Kong) Co., Ltd.ultimate controller2021-091, 2021-092, 2021-094, 2021-222
58Sichuan Aichuang Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsKitchen and bathroom and small appliancesMarketing price2.192.190.00%2,500.00NCash settlement-7 Dec. 2021; 80 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
59Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price13.3213.320.77%5,000.00NCash settlement-7 Dec. 2021; 81 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
60Sichuan Changhong Jijia Fine Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price3.763.760.22%5,000.00NCash settlement-7 Dec. 2021; 82 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
61Sichuan Aichuang Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service fee,Labor costMarketing price-78.97-78.97-4.56%2,500.00NCash settlement-7 Dec. 2021; 83 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
62Sichuan Huafeng TechnologyOther enterprise control under the same controllingProviding servicLabor costMarketing price36.6136.612.11%2,500.00NCash settlement-7 Dec. 2021; 84 Dec. 2021Juchao Website (www.cninfo.
Co., Ltd.shareholder and ultimate controllerescom.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
63Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesService feeMarketing price0.840.840.05%5,000.00NCash settlement-7 Dec. 2021; 85 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
64Sichuan Changhong Electric Co., Ltd.Controlling shareholderProviding servicesLabor costMarketing price-32.65-32.65-1.88%5,000.00NCash settlement-7 Dec. 2021; 86 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
65Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service feeMarketing price8.018.010.46%5,000.00NCash settlement-7 Dec. 2021; 87 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
66Changhong Huayi Compressor Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service feeMarketing price35.5435.542.05%500.00NCash settlement-7 Dec. 2021; 88 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
67Sichuan ChanghongOther enterprise control under theProvidingLabor costMarketing price17.4117.411.00%5,000.00NCash settle-7 Dec. 2021; 89 Dec. 2021Juchao Website
Minsheng Logistics Co., Ltd.same controlling shareholder and ultimate controllerservicesment(www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
68Hefei Changhong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price0.020.020.00%5,000.00NCash settlement-7 Dec. 2021; 90 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
69Sichuan Service Exp. Appliance Service Chain Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price117.25117.256.77%5,000.00NCash settlement-7 Dec. 2021; 91 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
70Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price15.6215.620.90%2,500.00NCash settlement-7 Dec. 2021; 92 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
71Sichuan Changhong International Hotel Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesMaintenance feesMarketing price1.651.650.10%2,500.00NCash settlement-7 Dec. 2021; 93 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
72SichuanOther enterpriseProviLabor costMarketi0.130.130.01%2,500.00NCash-7 Dec. 2021; 94Juchao
Qiruike Technology Co., Ltd.control under the same controlling shareholder and ultimate controllerding servicesng pricesettlementDec. 2021Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
73Guangyuan Hongcheng Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price4.594.590.26%2,500.00NCash settlement-7 Dec. 2021; 95 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
74Yuanxin Financial Lease Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesService fee of Financial statementMarketing price9.579.570.55%5,000.00NCash settlement-7 Dec. 2021; 96 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
75Sichuan Changhong Property Service Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service feeMarketing price8.588.580.50%2,500.00NCash settlement-7 Dec. 2021; 97 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
76Sichuan Changhong Jiechuang Lithium Battery Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price2.562.560.15%2,500.00NCash settlement-7 Dec. 2021; 98 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
77Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProvide fuel powerWater fee, electricity feesMarketing price0.280.280.00%5,000.00NCash settlement-7 Dec. 2021; 99 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
78Sichuan Changhong Minsheng Logistics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProvide fuel powerWater fee, electricity feesMarketing price2.192.190.00%5,000.00NCash settlement-7 Dec. 2021; 100 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
79Sichuan Changhong Jijia Fine Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProvide fuel powerWater fee, electricity feesMarketing price7.897.890.00%5,000.00NCash settlement-7 Dec. 2021; 101 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
80Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProvide fuel powerWater fee, electricity fees,steam feeMarketing price322.08322.080.03%5,000.00NCash settlement-7 Dec. 2021; 102 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
81Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProvide fuel powerWater fee, electricity feesMarketing price3.523.520.00%5,000.00NCash settlement-7 Dec. 2021; 103 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094,
2021-222
82Sichuan Changhong Precision Electronics Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProvide fuel powerWater fee, electricity feesMarketing price0.720.720.00%5,000.00NCash settlement-7 Dec. 2021; 104 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
83Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProvide fuel powerWater fee, electricity fees,compressed airMarketing price15.2715.270.00%5,000.00NCash settlement-7 Dec. 2021; 105 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
84Changhong International Holdings (Hong Kong) Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProvide fuel powerWater fee, electricity feesMarketing price2.952.950.00%5,000.00NCash settlement-7 Dec. 2021; 106 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
85Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyLodging houseMarketing price1.421.420.02%4,000.00NCash settlement-7 Dec. 2021; 107 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
86Hefei Changhong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartment,warehousesMarketing price30.3230.320.51%4,000.00NCash settlement-7 Dec. 2021; 108 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092,
2021-094, 2021-222
87Sichuan Aichuang Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyWarehouse for rentMarketing price1.881.880.03%2,500.00NCash settlement-7 Dec. 2021; 109 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
88Sichuan Ailian Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyWarehouse for rentMarketing price0.090.090.00%2,500.00NCash settlement-7 Dec. 2021; 110 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
89Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyWarehouse for rentMarketing price0.160.160.00%2,500.00NCash settlement-7 Dec. 2021; 111 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
90Sichuan Service Exp. Appliance Service Chain Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartment,officeMarketing price11.7711.770.20%4,000.00NCash settlement-7 Dec. 2021; 112 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
91Sichuan Qiruike Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyLease of factoryMarketing price4.734.730.08%2,500.00NCash settlement-7 Dec. 2021; 113 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091,
2021-092, 2021-094, 2021-222
92Sichuan Changhong Electric Co., Ltd.Controlling shareholderRent to the related partyLease of factory,equipmentMarketing price151.16151.162.54%4,000.00NCash settlement-7 Dec. 2021; 114 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
93Sichuan Changhong Jijia Fine Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartment,warehouses,plants,equipmentMarketing price222.83222.833.74%4,000.00NCash settlement-7 Dec. 2021; 115 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
94Sichuan Changhong Precision Electronics Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyServiced apartment, living quartersMarketing price8.978.970.15%4,000.00NCash settlement-7 Dec. 2021; 116 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
95Sichuan Changhong Minsheng Logistics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyServiced apartment, office, etc.Marketing price14.2214.220.24%4,000.00NCash settlement-7 Dec. 2021; 117 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
96Sichuan Changhong Mold Plastic Tech. Co.,Other enterprise control under the same controlling shareholder andRent to the relatedServiced apartment, warehouse, workshop,Marketing price433.61433.617.28%4,000.00NCash settlement-7 Dec. 2021; 118 Dec. 2021Juchao Website (www.cninfo.com.cn) No.:
Ltd.ultimate controllerpartyequipment and living quarters2021-091, 2021-092, 2021-094, 2021-222
97Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyLease of factoryMarketing price108.73108.731.83%4,000.00NCash settlement-7 Dec. 2021; 119 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
98Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartmentMarketing price9.419.410.16%4,000.00NCash settlement-7 Dec. 2021; 120 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
99Chengdu Changhong Electronic Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerLeasing from related partyLeasing officeMarketing price36.3036.300.61%4,000.00NCash settlement-7 Dec. 2021; 121 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
100Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerLeasing from related partyLease of staff dormitory, plantMarketing price78.1578.151.31%4,000.00NCash settlement-7 Dec. 2021; 122 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
101Hefei Changhong IndustrialOther enterprise control under the same controllingLeasing fromlease of plantMarketing price89.3789.371.50%4,000.00NCash settlement-7 Dec. 2021; 123 Dec. 2021Juchao Website (www.cninfo.
Co., Ltd.shareholder and ultimate controllerrelated partycom.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
102Sichuan Jiahong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerLeasing from related partyLease of staff dormitoryMarketing price19.3919.390.33%5,000.00NCash settlement-7 Dec. 2021; 124 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
103Sichuan Changhong Electric Co., Ltd.Controlling shareholderLeasing from related partyLease of laboratory and workshopMarketing price181.22181.223.04%4,000.00NCash settlement-7 Dec. 2021; 125 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
104Sichuan Changhong Electronics Holding Group Co., Ltd.Controlling shareholder and ultimate controllerLeasing from related partyLease shopMarketing price6.286.280.11%5,000.00NCash settlement-7 Dec. 2021; 126 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
105Changhong Huayi Compressor Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerLeasing from related partyLease of staff dormitoryMarketing price4.434.430.07%500.00NCash settlement-7 Dec. 2021; 127 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
106Sichuan ChanghongOther enterprise control under thePurchaseassembly line bodyMarketing price48.4348.430.39%3,000.00NBank accept-7 Dec. 2021; 128 Dec. 2021Juchao Website
Intelligent Manufacturing Technology Co., Ltd.same controlling shareholder and ultimate controllerand construction of fixed assetsance(www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
107Sichuan Changhong Electric Co., Ltd.Controlling shareholderPurchase and construction of fixed assetsRelocation and renovation equipmentMarketing price140.00140.001.14%1,500.00NCash settlement-7 Dec. 2021; 129 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
108Sichuan Hongxin Software Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase and construction of fixed assetsKnowledge management, integration and functional improvement projectsMarketing price157.03157.031.27%1,500.00NCash settlement-7 Dec. 2021; 130 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
109Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fixed assetsTVMarketing price0.840.840.01%1,500.00NCash settlement-7 Dec. 2021; 131 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
110Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fixed assetsTVMarketing price0.060.060.00%1,500.00NCash settlement-7 Dec. 2021; 132 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
111MianyangOther enterprisePurchPlant constructionMarketi45.2645.260.37%1,500.00NCash-7 Dec. 2021; 133Juchao
Science & Technology City Big Data Technology Co., Ltd.control under the same controlling shareholder and ultimate controllerase and construction of fixed assetsng pricesettlementDec. 2021Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
112Sichuan Changhong Electronics Holding Group Co., Ltd.Controlling shareholder and ultimate controllerPurchase and construction of fixed assetsFire upgradesMarketing price9.439.430.08%5,000.00NCash settlement-7 Dec. 2021; 134 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
113Sichuan Qiruike Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fixed assetslaboratory equipmentMarketing price6.566.560.05%5,000.00NCash settlement-7 Dec. 2021; 135 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
114Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSale of fixed assetsComputers, monitors, current probes, etc.Marketing price12.1012.101.59%2,500.00NCash settlement-7 Dec. 2021; 136 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
115Yuanxin Financial Lease Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerFinancing businessFinancing businessMarketing price21,168.6821,168.68--82,000.00NCash settlement-7 Dec. 2021; 137 Dec. 2021Juchao Website (www.cninfo.com.cn) No.: 2021-091, 2021-092, 2021-094, 2021-222
Total----574,343.30--------------
Detail of sales return with major amount involvedNot applicable
Report the actual implementation of the daily related transactions which were projected about their total amount by types during the reporting period (if 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 2022 was 2590 million yuan at most (tax-excluded), actually 1,005,125,600 yuan occurred in reporting period. 2. It is estimated that the related transaction amount resulted by purchasing goods (Including compressors, smart vacuum cleaners, etc.) with Changhong Huayi and its subsidiary by the Company for year of 2022 was 485 million yuan at most (tax-excluded), actually 193,555,600 yuan 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 2022 was 15 million yuan at most (tax-excluded), actually 3,431,900 yuan occurred in reporting period. 4. It is estimated that the related transaction amount resulted by selling goods and providing fuel and power to Sichuan Changhong and its subsidiary by the Company for year of 2022 was 9425 million yuan at most (tax-excluded), actually 3,782,132,100 yuan occurred in reporting period. 5. It is estimated that the related transaction amount resulted by leasing business to Sichuan Changhong and its subsidiary by the Company for year of 2022 was 40 million yuan at most (tax-excluded), actually 13,774,800 yuan occurred in reporting period. 6. It is estimated that the related transaction amount from domestic finished goods logistic business outsourcing to Sichuan Changhong Minsheng Logistics Co., Ltd. by the Company for year of 2022 was 750 million yuan at most (tax-excluded), actually 305,201,100 yuan occurred in reporting period. 7. 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 2022 was 320 million yuan at most actually 109,136,300 yuan occurred in reporting period. 8. 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 2022 was 50 million yuan at most (tax-excluded), actually 24,241,900 yuan occurred in reporting period. 9. It is estimated that the related transaction amount resulted by selling goods and leasing business from Sichuan Changhong Electronics Holding Group Co., Ltd and its subsidiary by the Company for year of 2022 was 75 million yuan at most (tax-excluded), actually 28,842,400 yuan occurred in reporting period. 10. 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 2022 was 260 million yuan at most (tax-excluded), actually 66,304,500 yuan occurred in reporting period. 11. It is estimated that the related transaction amount resulted by received the financing lease, commercial factoring and bill financing from Yuanxin Financial Lease Co., Ltd was 820 million yuan at most, actually 211,686,800 yuan occurred in reporting period.
Reasons for major differences between trading price and market reference price (if applicable)Not applicable

(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) Related party transaction of joint foreign investment

□ Applicable √ Not applicable

No main related transactions of mutual investment outside for the Company in reporting period.(iv) Connect of related liability and debt

√ Applicable □ Not applicable

Whether has non-operational contact of related liability and debts or not

□Yes √ No

No non-operational contact of related liability or debts in Period(v) Contact with the related finance companies

√ Applicable □ Not applicable

Deposit business

Related partyRelationshipMaximum daily deposit limit (In 10 thousand yuan)Deposit interest rate rangeOpening balance (In 10 thousand yuan)Amount for the PeriodEnding Balance (10 thousand yuan)
Total deposit amount for the Period (10 thousand yuan)The total amount withdrawn in the Period (10 thousand yuan)
Sichuan Changhong Group Finance Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controller450,000.000.42%-4.805%338,508.691,634,044.031,642,963.96329,588.76

Credit extension or other financial business

Related partyRelationshipType of businessTotal amount ( 10 thousand yuan)Actual amount ( 10 thousand yuan)
Sichuan Changhong Group Finance Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerOther financial services - note issuance300,000.00150,991.30
Sichuan Changhong Group Finance Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerOther financial services - note discounting300,000.0084,173.89

Note 1: After deliberated and approved by the 27

th

session of 9

th BOD and 3

rdextraordinary shareholders general meeting of 2019 heldon 10 September 2019 and 27 September, it is agreed that the company and its related party, Changhong Huayi Compressor Co., Ltd.(hereinafter referred to as "Changhong Huayi"), respectively, will increase the capital to Changhong Finance Company by 500 millionyuan with its own funds, the total capital increase will not exceed one billion yuan. After capital increased, registered capital ofChanghong Finance Company changed to 2,693,938,365.84 yuan. The Company and Changhong Huayi holds 14.96% equity ofChonghong Finance Company respectively, and controlling shareholder of the Company -Sichuan Changhong Electric Co., Ltd and itscontrolling shareholder Sichuan Changhong Electronics Holding Group Co., Ltd holds 35.04% equity of Changhong Finance Companyrespectively.Note 2: After deliberated and approved by the 41

st session of 9

th BOD and 4

thextraordinary shareholders general meeting of 2020 heldon 14 August 2020 and 12 October, it is agreed to continue the financial services cooperation between the Company and ChanghongFinance Company and renew the “Financial Service Agreement” for a period of three years. Changhong Finance Company will providea series of financial services such as deposit and loans within scope of operation according to the requirements of Company and itssubsidiaries.(vi) Transactions between the finance company controlled by the Company and related parties

□ Applicable √ Not applicable

(vii) Other related party transactions

□ Applicable √ Not applicable

During the reporting period, the company had no other significant related transactions.XII. Significant contract and implementations(i) Entrust, contract and leasing

1. Entrust

□Applicable √ Not applicable

No entrust in Period.

2. Contract

□Applicable √ Not applicable

No contract in Period.

3. Leasing

√ Applicable □ Not applicable

Explanation of leasingOperational leasing of the Company please found more details in “investment real estate”, “fixed assets”, “Right-of-use assets”, “Lease of related party” and “Rent of related party” in Note of Financial Statement.

Gains or losses to the Company from projects that reached over 10% in total profit of the Company in reportingperiod.

□ Applicable √Not applicable

No gains or losses to the Company from projects that reached over 10% in total profit of the Company in reportingperiod.(ii) Major guarantee

√ Applicable □ Not applicable

The guarantees provided by the company to the wholly-owned and holding subsidiaries are guarantees forsupporting bank credits generated by its production and operation. The guaranty style is the guarantee. The companyand its subsidiaries did not provide guarantees to subjects outside the scope of consolidated statements. Thecompany and its holding subsidiaries had no overdue external guarantees, no external guarantees involving litigation,and no losses due to the award of the guarantee. Up to 30 June 2022, the external guarantees of the Company andsubsidiaries are as follows:

In 10 thousand yuan

Particulars about the external guarantee of the Company and subsidiaries (Barring the guarantee for subsidiaries)
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if applicable)Counter guarantee (if applicable)Guarantee termComplete implementation or notGuarantee for related party
-----------
Total approving external guarantee in report period (A1)0Total actual occurred external guarantee in report period (A2)0
Total approved external guarantee at the end of report period ( A3)0Total actual balance of external guarantee at the end of report period (A4)0
Guarantee between the Company and the subsidiaries
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if applicable)Counter guarantee (if applicable)Guarantee termComplete implementation or notGuarantee for related party
Jiangxi Meiling Electric Appliance Co., Ltd.Notice No.: 2020-097, 2020-098, 2020-101 and 2020-107 released on 12 December 2020 and 30 December 2020 respectively10,000.002021-7-810,000.00Joint liability guarantyN/AY1-yearNN
Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 2415,000.00-------
December 2021 respectively
Sichuan Changhong Air-conditioner Co., Ltd.Notice No.: 2020-097, 2020-098, 2020-101 and 2020-107 released on 12 December 2020 and 30 December 2020 respectively100,000.002021-9-245,000.00Joint liability guarantyY1-yearNN
2021-12-715,000.00Joint liability guarantyY1-yearNN
Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively100,000.002022-3-188,000.00Joint liability guarantyY1-yearNN
2022-4-1830,000.00Joint liability guarantyY1-yearNN
Changhong MeilingRidian Technology Co., Ltd.Notice No.: 2020-097, 2020-098, 2020-101 and 2020-107 released on 12 December 2020 and 30 December 2020 respectively30,000.002021-3-314,000.00Joint liability guarantyY1-yearYN
2021-9-223,000.00Joint liability guarantyY1-yearNN
2021-10-194,000.00Joint liability guarantyY1-yearNN
Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively16,000.002022-6-63,000.00Joint liability guarantyY1-yearNN
ZhongkeMeiling CryogenicNotice No.: 2020-097, 2020-098, 2020-101 and26,000.002021-5-245,000.00Joint liability guarantyY1-yearNN
Technology Co., Ltd.2020-107 released on 12 December 2020 and 30 December 2020 respectively2021-9-266,000.00Joint liability guarantyY1-yearNN
Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively26,000.00-------
Zhongshan Changhong Electric Co., Ltd.Notice No.: 2020-097, 2020-098, 2020-101 and 2020-107 released on 12 December 2020 and 30 December 2020 respectively140,000.002021-3-2613,000.00Joint liability guarantyY1-yearYN
2021-3-2918,000.00Joint liability guarantyY1-yearYN
2021-3-3020,000.00Joint liability guarantyY1-yearYN
2021-4-120,000.00Joint liability guarantyY11.5 monthsYN
2021-4-69,000.00Joint liability guarantyY1-yearYN
2021-5-2510,000.00Joint liability guarantyY1-yearYN
2021-7-205,000.00Joint liability guarantyY1-yearNN
2021-8-195,000.00Joint liability guarantyY1-yearNN
2021-8-2715,000.00Joint liability guarantyY1-yearNN
Notice No.: 2021-091, 2021-092, 2021-096 and140,000.002022-3-102,000.00Joint liability guarantyY1-yearNN
2021-109 released on 7 December 2021 and 24 December 2021 respectively2022-3-287,000.00Joint liability guarantyY1-yearNN
2022-4-2218,000.00Joint liability guarantyY1-yearNN
2022-5-66,000.00Joint liability guarantyY1-yearNN
2022-6-1010,000.00Joint liability guarantyY1-yearNN
2022-6-2513,000.00Joint liability guarantyY1-yearNN
Hefei Meiling Group Holdings LimitedNotice No.: 2020-097, 2020-098, 2020-101 and 2020-107 released on 12 December 2020 and 30 December 2020 respectively50,000.002021-3-55,000.00Joint liability guarantyY1-yearYN
Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively40,000.002022-4-185,000.00Joint liability guarantyY1-yearNN
Hefei Changhong Meiling Life Appliances Co., Ltd.Notice No.: 2021-008, 2021-009, 2021-011 and 2021-034 released on 3 March 2021 and 29 April 2021respectively35,000.002021-7-282,000.00Joint liability guarantyY1-yearYN
2021-7-295,000.00Joint liability guarantyY1-yearNN
2021-8-305,000.00Joint liability guarantyY1-yearNN
2021-10-132,000.00Joint liability guarantyY11 monthsNN
2021-12-94,000.00Joint liability guarantyY1-yearNN
Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively35,000.002022-1-263,000.00Joint liability guarantyY1-yearNN
2022-3-175,000.00Joint liability guarantyY1-yearNN
2022-3-215,000.00Joint liability guarantyY5 monthsNN
Hefei Meiling Nonferrous Metal Products Co., Ltd.Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively3,000.00-------
Changhong RUBA Trade CompanyNotice No.: 2022-036, 2022-036, 2022-037 and 2022-049 released on 18 May2022 and 30 June 2022 respectively5,955.93note 1-------
Total amount of approving guarantee for subsidiaries in report period (B1)5,955.93Total amount of actual occurred guarantee for subsidiaries in report period (B2)305,000.00
Total amount of approved guarantee for subsidiaries at the end of reporting period (B3)721,955.93Total balance of actual guarantee for subsidiaries at the end of reporting period (B4)204,000.00
Guarantee of the subsidiaries for the subsidiaries
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if applicable)Counter guarantee (ifGuarantee termComplete implementation or notGuarantee for related party
applicable)
Anhui Tuoxing Technology Co., Ltd.Notice No.: 2021-013, 2021-014, 2021-021 and 2021-034 released on 31 March 2021 and 29 April 2021respectively6,000.002021-4-30500Joint liability guaranty-11 monthsYN
Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively5,000.002022-6-27500Joint liability guaranty-1-yearNN
Anhui Ling'an Medical Equipment Co., Ltd.Notice No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively5,000.00--------
Total amount of approving guarantee for subsidiaries in report period (C1)0Total amount of actual occurred guarantee for subsidiaries in report period (C2)1,000.00
Total amount of approved guarantee for subsidiaries at the end of reporting period (C3)10,000.00Total balance of actual guarantee for subsidiaries at the end of reporting period (C4)500.00
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of approving guarantee in report period (A1+B1+C1)5,955.93Total amount of actual occurred guarantee in report period (A2+B2+C2)306,000.00
Total amount of approved guarantee at the end of report period (A3+B3+C3)731,955.93Total balance of actual guarantee at the end of report period (A4+B4+C4)204,500.00
Ratio of actual guarantee (A4+B4+C4) in net assets of the Company42.20%
Including:
Amount of guarantee for shareholders, actual controller and its related parties (D)0
The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly (E)173,000.00
Proportion of total amount of guarantee in net assets of the Company exceed 50% (F)0
Total amount of the aforesaid three guarantees (D+E+F)173,000.00
Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable)N/A
Explanations on external guarantee against regulated procedures (if applicable)N/A

Note 1: In order to unify the currency for totaling, the exchange rate here was converted from the US dollar to the 6.6177 yuan on 30 April 2022. For details, please refer to the announcement No.2022-037 disclosed by the company.The above-mentioned guarantee objects are the wholly-owned and holding subsidiaries of the Company, and these wholly-owned and holding subsidiaries are in normal production and operation,there are no overdue loans, and the guarantee risks are controllable. As of the end of the reporting period, the effective amount of guarantee provided to the subsidiaries that approved by theCompany amounted to 7,219,559,300 yuan, actually 3,050 million yuan occurred. At the end of the reporting period, the practical guarantee balance amounted to 2,040 million yuan, accountingfor the Company’s latest net assets ratio of 42.20%. As of the end of the reporting period, the effective amount of guarantee provided to the subsidiaries from subsidiary that approved by theCompany amounted to 100 million yuan, actually 10 million yuan occurred. As of 30 June 2022, the actual guarantee balance provided to subsidiaries by subsidiary was 5 million yuan, occupied

0.10% of the latest net assets of the Company.

Explanation on guarantee with composite way: Not applicable

(iii) Trust financing

√ Applicable □ Not applicable

In 10 thousand yuan

TypeCapital resourcesAmount for entrustUndue balanceOverdue amountImpairment amount for overdue financial management
Bank financing productsOwn funds38,00016,00000
Total38,00016,00000

Details of the single major amount, or high-risk trust investment with low security, poor fluidity

√ Applicable □ Not applicable

In 10 thousand yuan

Trustee institution (or name of trustee)Trustee typeProduct typeAmountSource of fundsStart dateExpiry dateCapital investment purposeCriteria for fixing rewardReference annual rate of returnAnticipated income (if applicable)Actual gains/losses in periodActual collected gains/losses in periodAmount of reserve for devaluation of withdrawing in the year(if applicable)Whether approved by legal procedure (Y/N)Whether has entrust finance plan in the futureSummary of the items and related query index (if applicable)
Hefei Branch of China Everbright BankBankPrincipal-guaranteed with floating income7,000.00Idle own funds2022-1-112022-4-11This product is an embedded financial derivatives of RMB structured deposits, the bank invests the raised structured deposits funds in fixed deposit of the bank, at the same time, the bank invests it in financial derivative transactions (including but notAgreement1.5%/3.45%/3.55%Not applicable60.3860.38N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-003)
Hefei Branch ofBankPrincipal-guaranteed3,000.00Idle own funds2022-1-122022-4-12This product is a structured deposit product, the derivative product of which is linked to the morningAgreement1.5%/3.21%/3.42%Not applicable23.7523.75N/AYNot applicableJuchao Website(www.cninfo.com.cn)
Industrial Bankwith floating incomebenchmark price of Shanghai Gold Exchange on the observation date.(Notice No.: 2022-003)
Hefei Luyang Branch of Bank of Hangzhou Co., Ltd.BankPrincipal-guaranteed with floating income1,000.00Idle own funds2022-1-142022-4-14The structured deposit product, the derivative products are partially linked to the spot rate published on Bloomberg page “BFIX” at 14:00 BST on the observation dayAgreement1.5%/3.3%/3.5%Not applicable8.168.16N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-003)
Hefei Branch of Industrial BankBankPrincipal-guaranteed with floating income1,000.00Idle own funds2022-1-142022-4-14This product is a structured deposit product, the derivative product of which is linked to the morning benchmark price of Shanghai Gold Exchange on the observation date.Agreement1.5%/3.21%/3.42%Not applicable7.927.92N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-004)
Zhongshan Branch of China Guangfa BankBankPrincipal-guaranteed with floating5,000.00Idle own funds2022-1-282022-4-28Principal of the structured deposit is included in the unified operation and management of Guangdong Development Bank, investor’s returns from the structured deposit depend onAgreement1%/3.7%/3.8%Not applicable46.8546.85N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-006)
Co., Ltd.incomethe performance of gold during the observation period
Zhongshan Branch of Bank of CommunicationsBankPrincipal-guaranteed with floating income5,000.00Idle own funds2022-3-22022-6-6Bank of Communications operates the funds raised by structured deposit products in a unified manner and manages them in accordance with the principle of separating basic deposits from derivative transactions. The raised principal will be included in the internal fund of Bank of Communications for unified operation and management, and will be included in the payment scope of deposit reserve fund and deposit insurance. The embedded derivative part of products will be linked to the exchange rate, interest rate, commodity and index, etc.Agreement1.85%/3.2%Not applicable42.0842.08N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-009)
Hefei Branch of China Everbright BankBankPrincipal-guaranteed with floating8,000.00Idle own funds2022-4-152022-7-15This product is an embedded financial derivatives of RMB structured deposits, the bank invests the raised structured deposits funds in fixed deposit of the bank, at the same time, the bank invests itAgreement1.5%/3.45%/3.55%Not applicable--N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-027)
incomein financial derivative transactions (including but not
Hefei High Tech Zone Branch of Huaxia Bank Co., Ltd.BankPrincipal-guaranteed with floating income2,000.00Idle own funds2022-5-252022-11-25The structured deposit product, and all or part of the interest generated by the deposit is linked to the CSI 500Agreement1.05%-3.91%Not applicable--N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-039)
Hefei Branch of Bank of Hangzhou Co., Ltd.BankPrincipal-guaranteed with floating income2,000.00Idle own funds2022-5-252022-8-26The structured deposit product, the derivative products are partially linked to the spot rate published on Bloomberg page “BFIX” at 14:00 BST on the observation dayAgreement1.5%/3.04%/3.24%Not applicable--N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-039)
Hefei Science and Technology Sub-branch of BankBankPrincipal-guaranteed with floating2,000.00Idle own funds2022-5-272022-11-23Principal of the structured deposit is included in on-balance sheet accounting and managed in accordance with the deposit, and included in the payment range payment of deposit reserves and deposit insurance premiums,Agreement2%/3.5%/3.55%Not applicable--N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-039)
of Dongguan Co., Ltd.incomerelevant assets are capitalized and pr
Zhongshan Shiqi Sub-branch of China Guangfa Bank Co., Ltd.BankPrincipal-guaranteed with floating income2,000.00Idle own funds2022-5-272022-11-23Principal of the structured deposit is included in the unified operation and management of Guangdong Development Bank, investor’s returns from the structured deposit depend on the performance of CSI 500 during the observation periodAgreement1.5%/3.25%/3.3%Not applicable--N/AYNot applicableJuchao Website(www.cninfo.com.cn) (Notice No.: 2022-040)
Total38,000.00-------------189.13---------

Entrust financial expected to be unable to recover the principal or impairment might be occurred

□ Applicable √ Not applicable

(iv) Other material contracts

□ Applicable √ Not applicable

No other material contracts in the period.

XIII. Explanation on other significant events

√ Applicable □ Not applicable

1. The Profit Distribution Plan of 2021 was deliberated and approved by the 16

th session of 10

th BOD, 13

thsessionof 10thBOS and Annual General Meeting of 2021, meanwhile, independent director of the Company expressedtheir independent approval of the Plan. By focusing on the investor’s interest and long-term development needs,based on the total share capital on the registration date when the annual equity distribution plan of 2021 isimplemented, distributed 0.5 yuan (tax included) in cash for every 10 shares to whole shareholders, no bonus sharesand no share capital increased from public reserves. After distribution, total share capital of the Company remainsunchanged. The remaining accumulated retain profit of the parent company amounted to 901,324,751.30 yuan, andthe remaining retained profit will carry forward for distribution in later years.On June 17, 2022, the profit distribution plan 2021 was released by the Company and above mentioned plan wasimplemented. Found more on appointed media “Securities Times”, “China Securities Journal”, “Hong KongCommercial Daily” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form ofannouncement (Announcement No: 2022-012, 2022-013, 2022-015, 2022-033 and 2022-046) on March 31, 2022,April 29, 2022 and June 17, 2022.

2. After deliberated and approved by the 16

th session of 10

thBOD and Annual General Meeting of 2021, it agreedthat the Company and its subsidiaries shall carry out forward foreign exchange fund trading business during theperiod from 1 July 2022 to 30 June 2023. Balance of trading not exceeding US$ 825 million (mainly including USD,AUD, EUR and other foreign exchange converted to USD), and the maximum period of delivery of a single businessshall not exceed one year. Found more on appointed media “Securities Times”, “China Securities Journal”, “HongKong Commercial Daily” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form ofannouncement (Announcement No. 2022-012, 2022-019 and 2022-033) on 3 March 2022 and 29 April 2022.

3. Since the completion of “Repurchase Plan for Some of the Domestically Listed Foreign Shares (B Share)” onFebruary 18, 2022 and the shares were cancel dated March 2, 2022. After deliberation and approved by the 16

th

session of 10

thBOD and Annual General Meeting of 2021, agreed to reduce registered capital of the Company from1,044,597,881 yuan to 1,029,923,715 yuan, further agreed to make corresponding amendment in the Article ofAssociation with registered capital, share capital structure concerned in line with the laws. Found more on appointedmedia “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and Juchao Website(www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2022-012,2022-020 and 2022-033) on 3 March 2022 and 29 April 2022.

4. After deliberated and approved by the 16

th

session of 10

th BOD, the 13

th session of 10

th

BOD and Annual General

Meeting of 2021, its was agreed that the Company will close the project of “intelligent R&D management platformconstruction” under the “intelligent manufacturing construction project” and “intelligent R&D project”. the45,665,621.17 yuan (subject to the bank balance on the day the fund transferred) fund raised balance up to December31, 2021 from the above mentioned projects and the balance resulting from the difference between interest incomeand fees generated before the cancellation of the special account of raised fund will be permanently replenish theworking capital for daily operation and business development of the Company. Found more on appointed media“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and Juchao Website(www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2022-012,2022-013, 2022-022 and 2022-033) on 3 March 2022 and 29 April 2022.

5.After deliberated and approved by the 16

th session of 10

th

BOD. The Company invested 10.45 million yuan forthe technical transformation of front-end production line in Hefei refrigerator base. Newly increased one multi-doorshell forming line to enhance the front-end manufacturing capability in refrigerators, accomplish the cost reductionand efficiency improvement, strengthen the market competitiveness of the products to meet the production demandof refrigerator products. Found more on appointed media “Securities Times”, “China Securities Journal”, “HongKong Commercial Daily” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form ofannouncement (Announcement No. 2022-012) on 3 March 2022.

6. The resolution of the 16

th

session of the 10

thBOD and the 2021 annual general meeting of shareholders approvedand agreed that the company and its subsidiaries apply to Industrial Bank Co., Ltd., Hefei Branch for a special creditline of bill pool of up to 400 million yuan, and applied to Ping An Bank Co., Ltd. Hefei Branch for a special creditline of bill pool of up to 300 million yuan, and applied to Jiujiang Bank Co., Ltd. Hefei Branch for a special creditline of bill pool of up to 400 million yuan. The credit period is one year, and the types of credit are mainly used forthe special business of bill pool, and endorsement for pledge is adopted. Found more on appointed media “SecuritiesTimes”, “China Securities Journal”, “Hong Kong Commercial Daily” and Juchao Website (www.cninfo.com.cn)that the Company disclosed in the form of announcement (Announcement No. 2022-012, 2022-023 and 2022-033)on 31 March 2022 and 29 April 2022.

7. On April 22, 2022, the Company received a Letter of Notification of Share Reduction from Ms. Li Xia-thesecretary of the BOD of the Company. Due to the need of Li’s own funds, within six months after 15 trading daysfrom the share reduction plan announced, Ms. Li Xia reduced 138,200 shares of the Company at most (0.0134% oftotal share capital of the Company) by way of centralized competitive bidding, shares reduction shall not exceed25% of the shares held by Ms. Li. On June 6, 2022, the Company received a Letter of Notification of Completionof the Share Reduction from Ms. Li Xia. As of June 6, 2022, Ms. Li Xia completed the reduction of 138,200 sharesaforesaid through centralized bidding trading on Shenzhen Stock Exchange. Found more on appointed media“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and Juchao Website(www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2022-032 and2022-041) on 25 April 2022 and 7 June 2022.

8.In the interest of establishing a diverse shareholder return mechanism, and to thanks the shareholders for theirconcern and support for a long period, also, allows shareholders to experience new products and services of the

Company, improve the understanding and recognition of the intrinsic value of the Company, a “Meiling ShareholderReturn Activity” was held by the Company from May 9, 2022 to May 15, 2022. Found more on appointed media“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and Juchao Website(www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2022-035) on7 May 2022.

9. After deliberated and approved by the 18

th

session of 10

thBOD and second extraordinary shareholders meetingof 2022, agreed the Company to provide a domestic guarantee for Changhong RUBA Trading Co., Ltd to apply fora loan from local banks. Guarantee amounted to $9 million at most, with a period of one year for the operatingcapital turnover of Changhong RUBA Trading Company. Meanwhile, Changhong RUBA Trading Company willprovide a corresponding counter-guarantee to the Company’s guarantee with its whole assets. Found more onappointed media “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and JuchaoWebsite (www.cninfo.com.cn) that the Company disclosed in the form of announcement (Announcement No. 2022-036, No.2022-037 and No.2022-044) on 18 May 2022 and 14 June 2022.

10. After deliberated and approved by the 19

th

session of 10

thBOD and second extraordinary shareholders meetingof 2022, and according to the “Guidelines for Article of Association of the Listed Companies”(Revised in 2022)from SCRC and relevant provisions of laws and regulations as “Listing Rules of Stocks” from Shenzhen StockExchange, take the actual situation of the Company into consideration, agreed to amend some Clauses of the Articleof Association, “Rules of Procedure for the GM”, “Rules of Procedure of the BOD” and “Rules of Procedure of theBOS”. Found more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong CommercialDaily” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement(Announcement No. 2022-042, No.2022-043 and No.2022-049) on 14 June 2022 and 30 June 2022.

11. On June 16, 2022, after the implementation of the company's share structure reform, the thirteenth batch oftradable shares with sales restrictions was lifted and listed for circulation. There were 4 holders of shares lifted fromsales restrictions this time, and the number of shares lifted from sales restrictions was 1,250,430 shares, accountingfor 0.1214% of the company's total share capital. Found more on appointed media “Securities Times”, “ChinaSecurities Journal”, “Hong Kong Commercial Daily” and Juchao Website (www.cninfo.com.cn) that the Companydisclosed in the form of announcement (Announcement No. 2022-045) on 15 June 2022.

XIV. Major event of the subsidiary

√ Applicable □ Not applicable

1. After deliberated and approved by the 16

th

session of 10

thBOD, with purpose of fulfilling the corporate socialresponsibility, the BOD agreed that subsidiary Zhongke Meiling Cryogenic Technology Co., Ltd endowed thescholarships to 11 well-known domestic universities in 10 years with 5.65 million yuan at most in total, forsupporting the development of university education and improving the brand reputation as well as the social imageand influences of the Company and its subsidiaries. Found more on appointed media “Securities Times”, “China

Securities Journal”, “Hong Kong Commercial Daily” and Juchao Website (www.cninfo.com.cn) that the Companydisclosed in the form of announcement (Announcement No. 2022-012, No.2022-021 and No.2022-033) on 31March 2022 and 29 April 2022.

2. After deliberated and approved by the 18

th session of 10

thBOD, on the basis of strategic planning and businessdevelopment needs of the controlling subsidiary- Zhongke Meiling Cryogenic Technology Co., Ltd, twins the trendof securities market development in China, agreed to proposed a public offering of shares to unspecified qualifiedinvestors under the name of Zhongke Meiling and listing on Beijing Stock Exchange to further improve itsgovernance standards, enhance the capital strength, expanding influence within the industry and heighten its overallcompetitiveness. On June 24, 2022, a “Letter of Acceptance Completion of the Coaching Work of ShenwanHongyuan Securities Underwriting Sponsor” issued by Anhui CSRC was received by Zhongke Meiling, theacceptance of coaching work in aspect of public offering of shares to unspecified qualified investors and listing onBeijing Stock Exchange was completed. On June 29, 2022, Zhongke Meiling received a “Notification of Acceptance”(GF2022060060) issued from Beijing Stock Exchange, BSE has formally accepted the application for publicoffering of shares to unspecified qualified investors and listing on BSE. On August 5, 2022, Beijing Stock Exchangeapproved the application of Zhongke Meiling to publicly issue shares to unspecified qualified investors and listthem. Found more on appointed media “Securities Times”, “China Securities Journal”, “Hong Kong CommercialDaily” and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form of announcement(Announcement No. 2022-036, No.2022-038, No.2022-048 , No.2022-050, No.2022-056, No.2022-057, No.2022-058 and No.2022-060) on 18 May 2022, 25 June and 30 June 2022.

Section VII Changes in Shares and Particular about ShareholdersI. Changes in Share Capital(i) Changes in Share Capital

Unit: Share

Before the ChangeIncrease/Decrease in the Change (+, -)After the Change
AmountProportionNew shares issuedBonus sharesPublic reserve transfer into share capitalOthersSubtotalAmountProportion
I. Restricted shares8,442,9220.81%000-1,250,430-1,250,4307,192,4920.70%
1. State-owned shares00.00%0000000.00%
2. State-owned legal person’s shares1,766,2690.17%000-625,216-625,2161,141,0530.11%
3. Other domestic shares5,409,2330.52%000-625,214-625,2144,784,0190.47%
Including: Domestic legal person’s shares3,884,5510.37%000-521,012-521,0123,363,5390.33%
Domestic natural person’s shares1,524,6820.15%000-104,202-104,2021,420,4800.14%
4. Foreign shares1,267,4200.12%000001,267,4200.12%
Including: Foreign legal person’s shares00.00%0000000.00%
Foreign natural person’s shares1,267,4200.12%000001,267,4200.12%
II. Unrestricted shares1,036,154,95999.19%000-13,423,736-13,423,7361,022,731,22399.30%
1. RMB ordinary shares874,558,37983.72%000+1,250,430+1,250,430875,808,80985.04%
2. Domestically listed foreign shares161,596,58015.47%000-14,674,166-14,674,166146,922,41414.26%
3. Overseas listed foreign shares00.00%0000000.00%
4. Others00.00%0000000.00%
III. Total shares1,044,597,881100.00%000-14,674,166-14,674,1661,029,923,715100.00%

1. Reasons for share changed

√ Applicable □ Not applicable

(1) In order to maintain the company's image in the capital market and effectively protect the rights and interests ofall shareholders, the company repurchased some domestically listed foreign shares (B shares) by means ofcentralized bidding transactions, and completed the cancellation procedures of the repurchased shares at the

Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. on March 2, 2022, a total of 14,674,166shares of the company (B shares) were cancelled, accounting for 1.4048% of the company's total share capital beforecancellation. After the cancellation, the total share capital of the company was reduced from 1,044,597,881 sharesto 1,029,923,715 shares.

(2) On June 16, 2022, after the implementation of the company's share structure reform, the thirteenth batch oftradable shares with sales restrictions was lifted and listed for circulation. There were 4 holders of shares lifted fromsales restrictions this time, and the number of shares lifted from sales restrictions was 1,250,430 shares, accountingfor 0.1214% of the company's total share capital.

2. Approval of share changed

√ Applicable □ Not applicable

Matters concerned the company’s repurchase of some domestically listed foreign shares (B shares) and thecancellation of the repurchased shares were reviewed and approved at the 40

thsession of the ninth board of directors,the third extraordinary general meeting of shareholders in 2020, the 11

th

session of the tenth board of directors, thethird extraordinary general meeting of shareholders in 2021, the 16

thsession of the tenth board of directors, and the2021 annual general meeting of shareholders of the company which respectively held on July 27, 2020, August 18,2020, August 24, 2021, September 10, 2021, March 29, 2022 and April 29, 2022.

3. Ownership transfer of share changed

√ Applicable □ Not applicable

The company cancelled the repurchased domestically listed foreign shares (B shares) of 14,674,166 shares andcompleted the cancellation procedures of the repurchased shares at Shenzhen Branch of China Securities Depositoryand Clearing Co., Ltd. on March 2, 2022.

4. Implementation progress of shares buy-back

√ Applicable □ Not applicable

Since the first repurchase of shares on November 4, 2020, the company had cumulatively repurchased 14,674,166shares of the company (B shares) in centralized bidding transactions through the special securities account forrepurchase until February 18, 2022, accounting for 1.4048% of the company's total share capital at that time, thehighest transaction price was HKD 2.36/share, the lowest transaction price was HKD 1.87/share, the average pricewas HKD 2.22/share, and the accumulative funds used for share repurchase were HKD 32,558,454.08 (excludingtransaction fees such as stamp duty and commission). During the reporting period, the 14,674,166 domesticallylisted foreign shares (B share) repurchased by the Company have been completed the cancellation procedures atShenzhen Branch of China Securities Depository and Clearing Co., Ltd. on March 2, 2022. Approved by the 16

th

session of the tenth board of directors of the company and the Annual General Meeting of 2021, it was agreed toreduce the company's registered capital from 1,044,597,881 yuan to 1,029,923,715 yuan, and agreed to revise theArticles of Association involving registered capital, share capital structure and other relevant provisions inaccordance with the law. Found more on appointed media Securities Times, China Securities Journal, Hong Kong

Commercial Daily and Juchao Website (www.cninfo.com.cn) that the Company disclosed in the form ofannouncement (Announcement No. 2022-011, No.2022-012, No.2022-020 and No.2022-033) on 4 March 2022, 31March and 29 April 2022.

5. Implementation progress of reducing holdings of shares buy-back by centralized bidding

□ Applicable √ Not applicable

6. Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per shareattributable to common shareholders of Company in latest year and period

√ Applicable □ Not applicable

In semi-annual of 2022, the net profit attributable to owners of parent company amounted to 60,375,199.25 yuan,the equity attributable to shareholder of parent company at end of the Period was 4,845,537,338.97 yuan. Based ontotal 1,044,597,881.00 shares capital at beginning of the period, EPS amounted as 0.0578 yuan, net assets value pershare was 4.64 yuan. Based on total 1,029,923,715.00 shares capital at end of the period, EPS amounted as 0.0586yuan, net assets value per share was 4.70 yuan.

7. Other information necessary to disclose or need to disclosed under requirement from security regulators

□ Applicable √ Not applicable

(ii) Changes of lock-up stocks

√ Applicable □ Not applicable

Unit: Share

ShareholdersOpening shares restrictedShares released in PeriodRestricted shares increased in PeriodEnding shares restrictedRestricted reasonsDate for released
Zhang Yong104,202104,20200Statutory commitment of the stock reform2022-6-16
China Life Insurance (Group) Company416,810416,81000Statutory commitment of the stock reform2022-6-16
China People's Insurance Group Co., Ltd.625,216625,21600Statutory commitment of the stock reform2022-6-16
Magang Community Resident Committee of Longgang Integrated Economic Development Zone, Hefei104,202104,20200Statutory commitment of the stock reform2022-6-16
Total1,250,4301,250,43000----

II. Securities issuance and listing

□ Applicable √ Not applicable

III. Amount of shareholders of the Company and particulars about shares holding

Unit: Share

Total shareholders at end of the Period66,228Total preference shareholders with voting rights recovered at end of reporting period (if applicable)0
Particulars about common shares held above 5% by shareholders or top ten common shareholders
Full name of ShareholdersNature of shareholderProportion of shares heldAmount of common shares held at the end of reporting periodChanges in report periodAmount of restricted common shares heldAmount of common shares held without restrictionInformation of shares pledged, tagged or frozen
State of shareAmount
Sichuan Changhong Electric Co., Ltd.State-owned legal person24.12%248,457,72400248,457,724--
Hefei Industry Investment Holding (Group) Co., Ltd.State-owned legal person4.64%47,823,4010047,823,401--
CHANGHONG (HK) TRADING LIMITEDForeign legal person2.63%27,077,7970027,077,797--
CAO SHENGCHUNForeign nature person1.43%14,766,0860014,766,086--
Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment Fund (Limited Partnership)Domestic non-state-owned legal person1.04%10,733,4520010,733,452--
Zhuhai Jin Yi Assets Management Co., Ltd. - Jin Yi Phase I Private Equity Investment FundDomestic non-state-owned legal person1.00%10,347,600+7,738,500010,347,600--
Xu AiyunDomestic nature person0.97%9,973,700+7,648,80009,973,700--
Ma GuobinDomestic nature person0.82%8,465,356-2,641,14408,465,356--
Philip Securities (H.K.) Co., Ltd.Foreign0.61%6,296,913006,296,913--
legal person
Chen QinDomestic nature person0.43%4,462,702+78,81404,462,702--
Strategy investors or general legal person becomes top 10 common shareholders due to rights issued (if applicable)Not applicable
Explanation on associated relationship among the aforesaid shareholdersAmong the above shareholders, CHANGHONG (HK) TRADING LIMITED (hereinafter referred to as Hong Kong Changhong) is the wholly-owned subsidiary of Sichuan Changhong Electric Co., Ltd.; except the shares of B-stock the Company directly held by Hong Kong Changhong, 6,296,913 shares of B-stock are also held through Phillip Securities (Hong Kong) Co., Ltd., the foregoing shareholders constitute persons of uniform action. There existed no associated relationship or belong to the concerted actors as specified in the Measures for the Administration of Information Disclosure of Shareholder Equity Changes of Listed Companies among Sichuan Changhong, Hong Kong Changhong and other top 7 shareholders (Excluding Phillip Securities (Hong Kong) Co., Ltd.); “Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment Fund (Limited Partnership)” refers to the products of Caitong Fund Management Company subscribe for privately placement of 2016; The company neither knows whether there is any association among other shareholders, nor knows whether other shareholders belong to the persons acting in concert that is stipulated in the “Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies”.
Description of the above shareholders in relation to delegate/entrusted voting rights and abstention from voting rights.Not applicable
Special note on the repurchase account among the top 10 shareholders (if applicable)Not applicable
Particulars about common shares held above 5% by shareholders or top ten common shareholders
Shareholders’ nameAmount of common shares held without restriction at Period-endType of shares
TypeAmount
Sichuan Changhong Electric Co., Ltd.248,457,724RMB ordinary shares248,457,724
Hefei Industry Investment Holding (Group) Co., Ltd.47,823,401RMB ordinary shares47,823,401
CHANGHONG (HK) TRADING LIMITED27,077,797Domestically listed foreign shares27,077,797
CAO SHENGCHUN14,766,086Domestically listed foreign shares14,766,086
Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment Fund (Limited Partnership)10,733,452RMB ordinary shares10,733,452
Zhuhai Jin Yi Assets Management Co., Ltd. - Jin Yi Phase I Private Equity Investment Fund10,347,600RMB ordinary shares10,347,600
Xu Aiyun9,973,700RMB ordinary shares9,973,700
Ma Guobin8,465,356RMB ordinary shares8,465,356
Philip Securities (H.K.) Co., Ltd.6,296,913Domestically listed foreign shares6,296,913
Chen Qin4,462,702RMB ordinary shares4,462,702
Expiation on associated relationship or consistent actors within the top 10 un-lock up common shareholders and between top 10 un-lock up common shareholders and top 10 common shareholdersFound more in “Particulars about shares held above 5% by common shareholders or top 10 common shares holding”
Explanation on top ten common shareholders involving margin business (if applicable)As of June 30, 2022, among the top 10 common shareholders, shareholder Zhuhai Jin Yi Assets Management Co., Ltd. - Jin Yi Phase I Private Equity Investment Fund held 9,535,900 shares of the Company through its customer credit guaranteed securities account and 811,700 shares through its ordinary securities account, resulting in a total of 10,347,600 shares of the Company. The shareholder-Ma Guobin holds 6,221,900 shares of the Company through customer credit trading secured account of Founder Securities Co., Ltd., and 2,243,456 shares hold through common securities account, thus 8,465,356 shares of the Company are held in total.

Note 1: At end of the reporting period, the person acting in concert with controlling shareholder Sichuan Changhong-- CHANGHONG(HK) TRADING LIMITED, holds B-stock of the Company as 33,374,710 shares, among which, 6,296,913 shares are held throughPhilip Securities (H.K.) Co., Ltd. by CHANGHONG (HK) TRADING LIMITEDNote 2: In the above table, "Particulars about shares held above 5% by shareholders or top 10 shares holding" is subject to the data onstock transfer books provided by China Securities Depository and Clearing Corporation Limited Shenzhen BranchWhether the top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestrictedconditions have made the repurchase transactions as agreed during the reporting period.

□Yes √ No

The top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestricted conditionshave not made the repurchase transactions as agreed during the reporting period.IV. Changes of shares held by directors, supervisors and senior executives

√ Applicable □ Not applicable

NameTitleWorking statusShares held at period-begin (share)Number of shares increased in this period (share)Number of shares decreased in this period (share)Shares held at period-end (share)Number of restricted shares granted at period-begin (share)Number of restricted shares granted at the period (share)Number of restricted shares granted at period-end (share)
Wu DinggangChairmanCurrently in570,50000570,500000
office
Zhong MingDirector, PresidentCurrently in office236,17500236,175000
Yong FengshanDirectorCurrently in office0000000
Zhao QilinDirectorCurrently in office0000000
Kou HuamengDirector, Deputy presidentCurrently in office0000000
Hu ZhaoguiDirector, Deputy presidentCurrently in office178,05000178,050000
Hong yuanjiaIndependent directorCurrently in office0000000
Mou WenIndependent directorCurrently in office0000000
Zhao GangIndependent directorCurrently in office0000000
Shao MinChairman of SupervisoryCurrently in office0000000
He XintanSupervisorCurrently in office0000000
Huang HongSupervisorCurrently in office0000000
Ji GeStaff supervisorCurrently in office0000000
Sun HongyingStaff supervisorCurrently in office0000000
Liu HongweiExecutive deputy presidentCurrently in office1,689,893001,689,893000
Huang DanianDeputy presidentCurrently in office356,45000356,450000
Tang YoudaoDeputy presidentCurrently in office0000000
Pang HaitaoCFO (person in charge of finance)Currently in office0000000
Li XiaSecretary of the BoardCurrently in office552,8000138,200414,600000
Total----3,583,8680138,2003,445,668000

V. Changes in controlling shareholders or actual controllers(i) Controlling shareholder changes in reporting period

□ Applicable √ Not applicable

Controlling shareholder stays the same in Period.(ii) Changes of actual controller in Period

□ Applicable √ Not applicable

Actual controller stays the same in Period

Section VIII Preferred Stock

□ Applicable √ Not applicable

The Company had no preferred stock in the Period

Section IX Corporate Bonds

□ Applicable √ Not applicable

Section X Financial ReportI. Audit report

Whether the semi annual report is audited

□ Yes √ No

The company's semi annual financial report has not been auditedII. Financial StatementStatement in Financial Notes are carried in RMB/CNY

1. Consolidated Balance Sheet

Prepared by CHANGHONG MEILING CO., LTD.

June 30, 2022

In RMB

ItemJune 30, 2022January 1, 2022
Current assets:
Monetary funds6,183,005,095.115,938,823,396.21
Settlement provisions
Capital lent
Trading financial assets208,184,795.2317,997,086.19
Derivative financial assets
Note receivable439,419.032,216,752.22
Account receivable2,270,853,232.121,440,874,691.28
Receivable financing1,380,100,294.091,808,109,301.56
Accounts paid in advance28,724,589.9229,766,797.34
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable101,572,345.96111,652,635.86
Including: Interest receivable
Dividend receivable
Buying back the sale of financial assets
Inventories1,607,718,382.711,356,357,419.80
Contractual assets2,313,522.40
Assets held for sale
Non-current asset due within one year
Other current assets93,325,665.28124,240,934.45
Total current assets11,876,237,341.8510,830,039,014.91
Non-current assets:
Loans and payments on behalf
Debt investment291,305,319.44
Other debt investment
Long-term account receivable
Long-term equity investment88,915,648.0886,631,660.53
Investment in other equity instrument
Other non-current financial assets576,200,641.50581,980,440.70
Investment real estate52,191,185.6853,149,934.45
Fixed assets2,266,504,611.742,303,122,699.92
Construction in progress103,923,104.0898,469,862.45
Productive biological asset
Oil and gas asset
Right-of-use assets40,286,720.5345,367,918.31
Intangible assets910,035,679.68953,403,100.33
Expense on Research and Development137,625,624.6987,728,990.86
Goodwill
Long-term expenses to be apportioned362,898.05
Deferred income tax asset173,152,065.58147,488,353.28
Other non-current asset999,030.663,087,780.59
Total non-current asset4,641,502,529.714,360,430,741.42
Total assets16,517,739,871.5615,190,469,756.33
Current liabilities:
Short-term loans1,087,291,446.15622,874,652.77
Loan from central bank
Capital borrowed
Trading financial liability38,929,244.4112,304,272.41
Derivative financial liability
Note payable4,502,920,235.464,839,837,317.78
Account payable3,832,859,258.272,299,103,796.88
Accounts received in advance
Contractual liability351,317,980.38515,004,115.23
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable222,392,707.91247,044,421.56
Taxes payable149,559,048.33141,874,861.88
Other account payable903,778,941.60751,452,768.00
Including: Interest payable
Dividend payable19,793,050.414,753,764.56
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year30,243,710.95332,718,478.25
Other current liabilities22,377,103.2224,373,759.16
Total current liabilities11,141,669,676.689,786,588,443.92
Non-current liabilities:
Insurance contract reserve
Long-term loans158,000,000.00168,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability30,061,422.3033,225,912.15
Long-term account payable1,241,464.861,337,643.24
Long-term wages payable8,710,896.439,828,300.06
Accrual liability11,912,507.9411,363,601.63
Deferred income163,159,009.25175,664,038.83
Deferred income tax liabilities8,889,141.909,670,435.45
Other non-current liabilities
Total non-current liabilities381,974,442.68409,089,931.36
Total liabilities11,523,644,119.3610,195,678,375.28
Owner’s equity:
Share capital1,029,923,715.001,044,597,881.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve2,670,335,732.532,682,829,400.26
Less: Inventory shares26,430,571.38
Other comprehensive income-20,842,082.96-20,903,270.57
Reasonable reserve
Surplus public reserve423,111,236.90423,111,236.90
Provision of general risk
Retained profit743,008,737.50734,129,724.00
Total owner’ s equity attributable to parent company4,845,537,338.974,837,334,400.21
Minority interests148,558,413.23157,456,980.84
Total owner’ s equity4,994,095,752.204,994,791,381.05
Total liabilities and owner’ s equity16,517,739,871.5615,190,469,756.33

Legal Representative: Wu DinggangPerson in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun

2. Balance Sheet of Parent Company

In RMB

ItemJune 30, 2022January 1, 2022
Current assets:
Monetary funds3,266,271,511.033,423,276,377.52
Trading financial assets17,312,173.847,200,222.04
Derivative financial assets
Note receivable330,000.00
Account receivable1,735,966,866.261,582,651,896.25
Receivable financing966,511,549.261,484,609,403.08
Accounts paid in advance44,903,647.8948,212,105.70
Other account receivable38,833,840.9740,708,614.68
Including: Interest receivable
Dividend receivable
Inventories364,105,226.52351,523,851.67
Contractual assets46,970.75
Assets held for sale
Non-current assets maturing within one year
Other current assets28,957,697.04
Total current assets6,433,951,786.526,967,470,167.98
Non-current assets:
Debt investment291,305,319.44
Other debt investment
Long-term receivables
Long-term equity investments1,882,997,437.731,882,557,241.66
Investment in other equity instrument
Other non-current financial assets576,200,641.50581,980,440.70
Investment real estate3,648,311.423,752,737.75
Fixed assets1,171,285,355.311,209,058,847.63
Construction in progress78,324,001.2650,287,155.16
Productive biological assets
Oil and natural gas assets
Right-of-use assets17,686,308.6918,632,705.13
Intangible assets454,904,294.76477,739,048.08
Research and development costs86,047,186.8644,387,584.10
Goodwill
Long-term deferred expenses
Deferred income tax assets141,353,431.80125,174,589.66
Other non-current assets299,020.00638,649.57
Total non-current assets4,704,051,308.774,394,208,999.44
Total assets11,138,003,095.2911,361,679,167.42
Current liabilities:
Short-term borrowings1,052,171,543.37612,863,194.44
Trading financial liability14,509,627.085,766,743.33
Derivative financial liability
Notes payable1,877,201,607.342,409,104,654.05
Account payable1,485,308,607.131,356,405,016.24
Accounts received in advance
Contractual liability152,733,929.04238,437,143.59
Wage payable6,018,076.5642,679,625.89
Taxes payable22,888,141.5720,596,813.11
Other accounts payable1,078,306,911.70909,832,533.11
Including: Interest payable
Dividend payable19,193,050.414,153,764.56
Liability held for sale
Non-current liabilities due within one year22,098,167.21322,202,348.59
Other current liabilities6,982,077.346,703,328.85
Total current liabilities5,718,218,688.345,924,591,401.20
Non-current liabilities:
Long-term loans158,000,000.00168,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability16,523,542.3217,114,473.86
Long-term account payable
Long term employee compensation payable7,562,998.288,760,963.52
Accrued liabilities6,135,182.747,539,547.19
Deferred income77,695,276.5382,658,197.54
Deferred income tax liabilities5,700,451.846,131,087.92
Other non-current liabilities
Total non-current liabilities271,617,451.71290,204,270.03
Total liabilities5,989,836,140.056,214,795,671.23
Owners’ equity:
Share capital1,029,923,715.001,044,597,881.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve2,740,508,510.572,753,002,178.30
Less: Inventory shares26,430,571.38
Other comprehensive income
Special reserve
Surplus reserve422,893,071.22422,893,071.22
Retained profit954,841,658.45952,820,937.05
Total owner’s equity5,148,166,955.245,146,883,496.19
Total liabilities and owner’s equity11,138,003,095.2911,361,679,167.42

3. Consolidated Profit Statement

In RMB

ItemSemi-annual of 2022Semi-annual of 2021
I. Total operating income10,224,503,551.199,602,759,345.29
Including: Operating income10,224,503,551.199,602,759,345.29
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost10,156,306,873.889,556,489,547.17
Including: Operating cost9,061,080,531.068,177,231,196.17
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras79,701,444.2961,077,730.97
Sales expense666,066,309.98984,805,928.94
Administrative expense164,132,141.97152,957,426.98
R&D expense248,112,774.54186,113,254.21
Financial expense-62,786,327.96-5,695,990.10
Including: Interest expenses16,913,382.9637,292,383.25
Interest income66,581,155.3762,433,816.96
Add: Other income48,325,391.8157,250,100.93
Investment income (Loss is listed with “-”)13,816,261.7552,533,705.90
Including: Investment income on affiliated company and joint venture8,971,315.55-16,047,810.77
The termination of income recognition for financial assets measured by amortized cost-10,198,142.54
Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with “-”)3,562,737.04-9,731,654.29
Loss of credit impairment (Loss is listed with “-”)-50,466,619.13-15,121,003.89
Losses of devaluation of asset (Loss is listed with “-”)-29,791,822.84-43,310,366.42
Income from assets disposal (Loss is listed with “-”)8,358,775.10-208,978.90
III. Operating profit (Loss is listed with “-”)62,001,401.0487,681,601.45
Add: Non-operating income2,910,887.795,862,320.71
Less: Non-operating expense2,332,960.83760,592.62
IV. Total profit (Loss is listed with “-”)62,579,328.0092,783,329.54
Less: Income tax expense-10,115,573.4637,086,971.38
V. Net profit (Net loss is listed with “-”)72,694,901.4655,696,358.16
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”)72,694,901.4655,696,358.16
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company60,375,199.2537,157,511.54
2.Minority shareholders’ gains and losses12,319,702.2118,538,846.62
VI. Net after-tax of other comprehensive income161,477.79-1,257,750.59
Net after-tax of other comprehensive income attributable to owners of parent company61,187.61-1,271,363.35
(I) Other comprehensive income items which will not be reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot be transfer to gain/loss
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss61,187.61-1,271,363.35
1.Other comprehensive income under equity method that can transfer to gain/loss-177,046.32
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other comprehensive income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign61,187.61-1,094,317.03
currency financial statements
7.Other
Net after-tax of other comprehensive income attributable to minority shareholders100,290.1813,612.76
VII. Total comprehensive income72,856,379.2554,438,607.57
Total comprehensive income attributable to owners of parent Company60,436,386.8635,886,148.19
Total comprehensive income attributable to minority shareholders12,419,992.3918,552,459.38
VIII. Earnings per share:
(i) Basic earnings per share0.05820.0356
(ii) Diluted earnings per share0.05820.0356

As for the enterprise combined under the same control, net profit of 0 yuan achieved by the merged party beforecombination while 0 yuan achieved last periodLegal Representative: Wu DinggangPerson in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun

4. Profit Statement of Parent Company

In RMB

ItemSemi-annual of 2022Semi-annual of 2021
I. Operating income3,276,506,161.473,975,751,904.29
Less: Operating cost3,060,604,345.523,701,614,201.55
Taxes and surcharge27,794,762.5521,839,365.11
Sales expenses80,728,268.2399,271,533.62
Administration expenses53,782,990.8956,254,420.78
R&D expenses108,366,509.3072,054,454.73
Financial expenses-22,635,899.49-4,429,587.19
Including: Interest expenses16,599,488.0129,845,405.90
Interest income36,123,851.0039,962,405.83
Add: Other income21,184,281.2536,911,268.50
Investment income (Loss is listed with “-”)47,530,171.2737,411,973.74
Including: Investment income on affiliated Company and joint venture5,509,596.07-15,045,065.49
The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”)-1,663,033.71
Net exposure hedging income (Loss is listed with “-”)
Changing income of fair value (Loss is listed with “-”)1,369,068.05-21,631,996.66
Loss of credit impairment (Loss is listed with “-”)-7,829,056.61-528,447.83
Losses of devaluation of asset (Loss is listed with “-”)-1,325,668.27-3,955,719.18
Income on disposal of assets (Loss is listed with “-”)8,344,824.89-82,639.64
II. Operating profit (Loss is listed with “-”)37,138,805.0577,271,954.62
Add: Non-operating income857,194.102,299,511.52
Less: Non-operating expense1,088,570.22288,232.95
III. Total Profit (Loss is listed with “-”)36,907,428.9379,283,233.19
Less: Income tax-16,609,478.2215,578,001.89
IV. Net profit (Net loss is listed with “-”)53,516,907.1563,705,231.30
(i) continuous operating net profit (net loss listed with ‘-”)53,516,907.1563,705,231.30
(ii) termination of net profit (net loss listed with ‘-”)
V. Net after-tax of other comprehensive income
(i) Other comprehensive income items which will not be reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot be transfer to gain/loss
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss
1.Other comprehensive income under equity method that can transfer to gain/loss
2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other comprehensive income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign currency financial statements
7.Other
VI. Total comprehensive income53,516,907.1563,705,231.30
VII. Earnings per share:
(i) Basic earnings per share0.05160.0610
(ii) Diluted earnings per share0.05160.0610

5. Consolidated Cash Flow Statement

In RMB

ItemSemi-annual of 2022Semi-annual of 2021
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor10,312,619,575.608,512,320,086.90
services
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Cash received from interest, commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Net cash received by agents in sale and purchase of securities
Write-back of tax received379,915,276.10316,502,790.54
Other cash received concerning operating activities72,807,336.4779,642,427.61
Subtotal of cash inflow arising from operating activities10,765,342,188.178,908,465,305.05
Cash paid for purchasing commodities and receiving labor service8,685,143,427.787,728,511,418.75
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Net increase of capital lent
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers859,700,605.67860,117,506.67
Taxes paid254,144,466.19145,836,080.82
Other cash paid concerning operating activities391,300,471.18762,496,415.63
Subtotal of cash outflow arising from operating activities10,190,288,970.829,496,961,421.87
Net cash flows arising from operating activities575,053,217.35-588,496,116.82
II. Cash flows arising from investing activities:
Cash received from recovering investment221,539,824.00700,000,000.00
Cash received from investment income17,907,264.726,856,855.12
Net cash received from disposal of fixed, intangible and other long-term assets15,074,662.601,095,433.16
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities65,647,218.13138,387,471.00
Subtotal of cash inflow from investing activities320,168,969.45846,339,759.28
Cash paid for purchasing fixed, intangible and other long-term assets132,916,669.27125,772,890.37
Cash paid for investment1,024,040,000.001,420,000,000.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities7,635,033.8647,506.93
Subtotal of cash outflow from investing activities1,164,591,703.131,545,820,397.30
Net cash flows arising from investing activities-844,422,733.68-699,480,638.02
III. Cash flows arising from financing activities:
Cash received from absorbing investment15,000,000.00
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries15,000,000.00
Cash received from loans647,040,918.37934,661,487.16
Other cash received concerning financing activities84,181.374,675,857.30
Subtotal of cash inflow from financing activities647,125,099.74954,337,344.46
Cash paid for settling debts490,000,000.001,232,876,410.00
Cash paid for dividend and profit distributing or interest paying76,995,651.4066,120,511.52
Including: Dividend and profit of minority shareholder paid by subsidiaries21,318,560.001,598,892.00
Other cash paid concerning financing activities432,350,094.2711,341,697.18
Subtotal of cash outflow from financing activities999,345,745.671,310,338,618.70
Net cash flows arising from financing activities-352,220,645.93-356,001,274.24
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate19,041,476.23-14,000,285.27
V. Net increase of cash and cash equivalents-602,548,686.03-1,657,978,314.35
Add: Balance of cash and cash equivalents at the period -begin5,840,194,931.576,425,529,815.10
VI. Balance of cash and cash equivalents at the period -end5,237,646,245.544,767,551,500.75

6. Cash Flow Statement of Parent Company

In RMB

ItemSemi-annual of 2022Semi-annual of 2021
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services3,474,091,634.503,289,172,496.97
Write-back of tax received130,797,515.16161,887,225.42
Other cash received concerning operating activities26,282,682.8952,318,868.30
Subtotal of cash inflow arising from operating activities3,631,171,832.553,503,378,590.69
Cash paid for purchasing commodities and receiving labor service3,359,375,348.843,656,146,099.06
Cash paid to/for staff and workers238,053,008.99234,676,912.75
Taxes paid27,088,361.6826,688,550.76
Other cash paid concerning operating activities113,679,202.41313,451,006.32
Subtotal of cash outflow arising from operating activities3,738,195,921.924,230,962,568.89
Net cash flows arising from operating activities-107,024,089.37-727,583,978.20
II. Cash flows arising from investing activities:
Cash received from recovering investment1,539,824.00700,000,000.00
Cash received from investment income51,118,076.007,992,927.12
Net cash received from disposal of fixed, intangible and other long-term assets15,055,871.00867,706.09
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities36,717,526.6694,536,857.03
Subtotal of cash inflow from investing activities104,431,297.66803,397,490.24
Cash paid for purchasing fixed, intangible and other long-term assets94,314,583.8371,849,222.83
Cash paid for investment440,000,000.001,455,000,000.00
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities2,906,095.09102,662.47
Subtotal of cash outflow from investing activities537,220,678.921,526,951,885.30
Net cash flows arising from investing activities-432,789,381.26-723,554,395.06
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Cash received from loans612,040,918.37924,661,487.16
Other cash received concerning financing activities182,953,531.16170,670,545.80
Subtotal of cash inflow from financing activities794,994,449.531,095,332,032.96
Cash paid for settling debts480,000,000.001,149,699,750.00
Cash paid for dividend and profit distributing or interest paying55,402,489.4163,099,086.76
Other cash paid concerning financing activities46,535,119.44146,209,276.30
Subtotal of cash outflow from financing activities581,937,608.851,359,008,113.06
Net cash flows arising from financing activities213,056,840.68-263,676,080.10
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate7,291,862.96-5,782,949.41
V. Net increase of cash and cash equivalents-319,464,766.99-1,720,597,402.77
Add: Balance of cash and cash equivalents at the period -begin3,414,961,989.344,597,503,833.78
VI. Balance of cash and cash equivalents at the period -end3,095,497,222.352,876,906,431.01

7. Statement of Changes in Owners’ Equity (Consolidated)

This Period

In RMB

ItemSemi-annual of 2022
Owners’ equity attributable to the parent CompanyMinority interestsTotal owners’ equity
Share capitalOther equity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveProvision of general riskRetained profitOtherSubtotal
Preferred stockPerpetual capital securitiesOther
I. The ending balance of the previous year1,044,597,881.002,682,829,400.2626,430,571.38-20,903,270.57423,111,236.90734,129,724.004,837,334,400.21157,456,980.844,994,791,381.05
Add: Changes of accounting policy
Error correction of the last period
Enterprise combine under the same control
Other
II. The beginning balance of the current year1,044,597,881.002,682,829,400.2626,430,571.38-20,903,270.57423,111,236.90734,129,724.004,837,334,400.21157,456,980.844,994,791,381.05
III. Increase/ Decrease in the period (Decrease is listed with “-”)-14,674,166.00-12,493,667.73-26,430,571.3861,187.618,879,013.508,202,938.76-8,898,567.61-695,628.85
(i) Total comprehensive income61,187.6160,375,199.2560,436,386.8612,419,992.3972,856,379.25
(ii) Owners’ devoted and decreased capital-14,674,166.00-12,493,667.73-26,430,571.38-737,262.35-737,262.35
1.Common shares invested by shareholders-14,674,166.00-12,493,667.73-26,430,571.38-737,262.35-737,262.35
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution-51,496,185.75-51,496,185.75-21,318,560.00-72,814,745.75
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (or shareholders)-51,496,185.75-51,496,185.75-21,318,560.00-72,814,745.75
4. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves
conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined benefit plans
5. Carry-over retained earnings from other comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
IV. Balance at the end of the period1,029,923,715.002,670,335,732.53-20,842,082.96423,111,236.90743,008,737.504,845,537,338.97148,558,413.234,994,095,752.20

Last Period

In RMB

ItemSemi-annual of 2021
Owners’ equity attributable to the parent CompanyMinority interestsTotal owners’ equity
Share capitalOther equity instrumentCapital reserveLess: InventoryOther comprehensiveReasonabSurplus reserveProvisionRetained profitOtheSubtotal
Preferred stockPerpetual capital securitiesOthersharesincomele reserveof general riskr
I. The ending balance of the previous year1,044,597,881.002,683,837,229.129,929,336.18-21,451,084.17416,364,790.43740,754,202.234,854,173,682.43107,921,283.494,962,094,965.92
Add: Changes of accounting policy
Error correction of the last period
Enterprise combine under the same control
Other
II. The beginning balance of the current year1,044,597,881.002,683,837,229.129,929,336.18-21,451,084.17416,364,790.43740,754,202.234,854,173,682.43107,921,283.494,962,094,965.92
III. Increase/ Decrease in the period (Decrease is listed with “-”)-3,735.207,029,141.10-1,271,363.35-14,618,909.06-22,923,148.7131,953,567.389,030,418.67
(i) Total comprehensive-1,271,363.3537,157,511.5435,886,148.1918,552,459.3854,438,607.57
income
(ii) Owners’ devoted and decreased capital-3,735.207,029,141.10-7,032,876.3015,000,000.007,967,123.70
1.Common shares invested by shareholders-3,735.207,029,141.10-7,032,876.3015,000,000.007,967,123.70
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution-51,776,420.60-51,776,420.60-1,598,892.00-53,375,312.60
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (or shareholders)-51,776,420.60-51,776,420.60-1,598,892.00-53,375,312.60
4. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined benefit plans
5. Carry-over retained earnings from other comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
IV. Balance at the end of the period1,044,597,881.002,683,833,493.9216,958,477.28-22,722,447.52416,364,790.43726,135,293.174,831,250,533.72139,874,850.874,971,125,384.59

8. Statement of Changes in Owners’ Equity (Parent Company)

This Period

In RMB

ItemSemi-annual of 2022
Share capitalOtherCapital reserveLess:OtherReasonablSurplus reserveRetained profitOtheTotal owners’
equity instrumentInventory sharescomprehensive incomee reserverequity
Preferred stockPerpetual capital securitiesOther
I. The ending balance of the previous year1,044,597,881.002,753,002,178.3026,430,571.38422,893,071.22952,820,937.055,146,883,496.19
Add: Changes of accounting policy
Error correction of the last period
Other
II. The beginning balance of the current year1,044,597,881.002,753,002,178.3026,430,571.38422,893,071.22952,820,937.055,146,883,496.19
III. Increase/ Decrease in the period (Decrease is listed with “-”)-14,674,166.00-12,493,667.73-26,430,571.382,020,721.401,283,459.05
(i) Total comprehensive income53,516,907.1553,516,907.15
(ii) Owners’ devoted and decreased capital-14,674,166.00-12,493,667.73-26,430,571.38-737,262.35
1.Common shares invested by shareholders-14,674,166.00-12,493,667.73-26,430,571.38-737,262.35
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution-51,496,185.75-51,496,185.75
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)-51,496,185.75-51,496,185.75
3. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined benefit plans
5. Carry-over retained earnings from other comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
IV. Balance at the end of the period1,029,923,715.002,740,508,510.57422,893,071.22954,841,658.455,148,166,955.24

Last period

In RMB

ItemSemi-annual of 2021
Share capitalOther equity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveRetained profitOtherTotal owners’ equity
Preferred stockPerpetual capital securitiesOther
I. The ending balance of the previous year1,044,597,881.002,753,137,787.999,929,336.18416,146,624.75943,879,339.465,147,832,297.02
Add: Changes of accounting policy
Error correction of the last period
Other
II. The beginning balance of the current year1,044,597,881.002,753,137,787.999,929,336.18416,146,624.75943,879,339.465,147,832,297.02
III. Increase/ Decrease in the period (Decrease is listed with “-”)-3,735.207,029,141.1011,928,810.704,895,934.40
(i) Total comprehensive income63,705,231.3063,705,231.30
(ii) Owners’ devoted and decreased capital-3,735.207,029,141.10-7,032,876.30
1.Common shares invested by shareholders-3,735.207,029,141.10-7,032,876.30
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution-51,776,420.60-51,776,420.60
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)-51,776,420.60-51,776,420.60
3. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined benefit plans
5. Carry-over retained earnings from other comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
IV. Balance at the end of the period1,044,597,881.002,753,134,052.7916,958,477.28416,146,624.75955,808,150.165,152,728,231.42

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

I. Company profileChanghong Meiling Co., Ltd (hereinafter referred to as “the Company”) ,originally named as Hefei MeilingCo., Ltd. is an incorporated Company established and reorganized by Hefei Meiling Refrigerator GeneralFactory and approved on June 12

th1992 through [WanTiGaiHanZi (1992) No.039] issued by originalMechanism Reform Committee of Anhui Province. On August 30

th1993, through Anhui ProvincialGovernment [Wanzhenmi (1993) No.166] and re-examination of China Securities Regulatory Commission,the Company made first public issue for 30 million A shares and the Company was listed on Oct. 18

th, 1993 inShenzhen Stock Exchange. On August 13

th

, 1996, the Company was approved to issue 100 million B shares toinvestors abroad through [ZhengWeiFa (1996) No.26] issued by China Securities Regulatory Commission. TheCompany went public in Shenzhen Stock Exchange on August 28

th, 1996.

State-owned Assets Supervision & Administration Commission of the State Council approved such transferswith Document Guozi Chanquan (2007) No.253 Reply on Matters of Hefei Meiling Group Holdings LimitedTransferring Partial State-owned Ownership, Hefei Meiling Group Holdings Limited (hereinafter referred toas Meiling Group) transferred its holding 37,852,683 shares in 82,852,683 state-owned shares of the Companyto Sichuan Changhong Electronic Group Co., Ltd (hereinafter referred to as Changhong Group), other45,000,000 shares to Sichuan Changhong Electric Co. Ltd (hereinafter referred to as Sichuan Changhong). OnAug 15, 2007, the above ownership was transferred and Cleaning Corporation Limited.

On 27 August 2007, State-owned Assets Supervision & Administration Commission of Anhui ProvincialGovernment replied with Document [WGZCQH (2007) No.309] Reply on “Related Matters of Share MergerReform of Hefei Meiling Co., Ltd.”, agreed the Company’s ownership split reform plan. The Company madeconsideration that non-tradable share holders deliver 1.5 shares to A share holders per 10 shares, and originalMeiling Group made prepayment 3,360,329 shares for some non-tradable share holders as consideration forsplit reform plan.On 29 May 2008, concerning 34,359,384 state-owned shares (including 3,360,329 shares paid for other non-tradable shareholders by original Meiling Group in share reform) held by original Meiling Group, the “Noticeof Freely Transfer of Meiling Electrics Equity held by Meiling Group”[HGZCQ(2008) No. 59] issued fromState-owned Assets Supervision & Administration Commission of Hefei Municipal, agrees to transfer theabove said shares to Hefei Xingtai Holding Group Co., Ltd.(“Xingtai Holding Co.,”) for free. On 7 August2008, the “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-ownedshareholders” [GZCQ (2007) No. 752] issued by SASAC, agrees the above said transferring.

On October 29, 2008, Changhong Group signed Agreement on Equity Transfer of Hefei Meiling Co., Ltdwith Sichuan Changhong, in which 32,078,846 tradable A-shares with conditional subscription of the Company(accounting for 7.76% in total shares) held by Changhong Group. On 23 December 2008, “Reply of Transfer

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-owned shareholders” [GZCQ (2008) No.1413] issued by SASAC agrees the above said share transferring.

On 24 December 2010, being deliberated and approved in 32

nd Session of 6

th BOD and 2

ndExtraordinaryShareholders’ General Meeting of 2010 as well as approval of document [ZJXK (2010) No. 1715] from CSRC,totally 116,731,500 RMB ordinary shares (A stock) were offering privately to target investors with issue priceof RMB 10.28/share. Capital collecting amounting to RMB 1,199,999,820 after issuing expenses RMB22,045,500 deducted, net capital collected amounting to RMB 1,177,954,320, and paid-in capital (share capital)increased RMB 116,731,500 with capital reserve (share premium) RMB 1,061,106,088.5 increased. Theincreasing capital has been verified by Capital Verification Report No.: [XYZH2010CDA6021]issued fromShin Wing CPA Co., Ltd.

On 20 June 2011, the general meeting of the Company considered and approved the 2010 profit distributionplan, namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for every ten shares heldby shareholders to all shareholders, based on the total share capital of 530,374,449 shares as of 31 December2010. The total share capital of the Company upon profit distribution increased to 636,449,338 shares. Thecapital increase was verified by Anhui Huashen Zhengda Accounting Firm with the verification reportWHSZDKYZ (2011) No.141.

On 26 June 2012, the general meeting of the Company considered and approved the 2011 profit distributionand capitalization of capital reserve plan, namely to distribute cash dividends of RMB0.5 (tax included) plustwo shares for every ten shares to all shareholders capitalized from capital reserve, based on the total sharecapital of 636,449,338 shares as of 31 December 2011. The total share capital of the Company uponimplementation of capitalization of capital reserve increased to 763,739,205 shares from 636,449,338 shares,and was verified by Anhui Anlian Xinda Accounting Firm with the verification report WALXDYZ (2012)No.093.

On November 18, 2015, considered and approved by the 12

th Session of the 8

thBOD of the company and thefirst extraordinary general meeting in 2016, and approved by the document of China Securities RegulatoryCommission [CSRC License No. (2016) 1396] “Reply to the approval of non-public offering of shares of HefeiMeiling Co., Ltd.”, the company has actually raised funds of 1,569,999,998.84 yuan by non-public offering ofno more than 334,042,553 new shares at face value of 1 yuan per share and with issue price no less than 4.70yuan per share, after deducting the issue costs of 29,267,276.08 yuan, the net amount of raised funds is1,540,732,722.76 yuan, the increased paid-in capital (share capital) of 280,858,676.00 yuan, increased capital

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

reserve (share premium) of 1,259,874,046.76 yuan. This capital increase has been verified by No.[XYZH2016CDA40272]capital verification report of Shine Wing Certified Public Accountants (LLP).Since the first repurchase of shares on November 4, 2020, the company had cumulatively repurchased14,674,166 shares of the company (B shares) in centralized bidding transactions through the special securitiesaccount for repurchase until February 18, 2022, and completed the cancellation procedures of the repurchasedshares at the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. on March 2, 2022, a totalof 14,674,166 shares of the company (B shares) were cancelled, accounting for 1.4048% of the company's totalshare capital before cancellation. After the cancellation, the total share capital of the company was reducedfrom 1,044,597,881 shares to 1,029,923,715 shares.Ended as June 30, 2022, total share capital of the Company amounting to 1,029,923,715 shares with ordinaryshares in full. Among which, 881,733,881 shares of A-share accounting 85.61% in total shares while B-sharewith 148,189,834 shares accounting 14.39% in total shares. Specific capital structure is as follows:

Type of stockQuantityProportion
(I)Restricted shares7,192,4920.70%
1. State-owned shares
2. State-owned legal person’s shares1,141,0530.11%
3. Other domestic shares4,784,0190.46%
Including: Domestic legal person’s shares3,363,5390.33%
Domestic natural person’s shares1,420,4800.14%
4. Foreign shares1,267,4200.12%
Including: Overseas legal person’s shares
Overseas natural person’s shares1,267,4200.12%
(II)Unrestricted shares1,022,731,22399.30%
1. RMB Ordinary shares875,808,80985.04%
2. Domestically listed foreign shares146,922,41414.27%
3. Overseas listed foreign shares
4. Others
Total shares1,029,923,715100.00%

The Company belongs to the manufacture of light industry, and engaged in the production and sale ofrefrigerator, freezer and air-conditioner. Unified social credit code of the Company: 9134000014918555XK;Address: No.2163, Lianhua Road, Economy and Technology Development Zone, Hefei City; LegalRepresentative: Wu Dinggang; register capital (paid-in capital): 1,029,923,715 yuan; type of company: limitedliability company(joint venture and listed of Taiwan, Hong Kong and Macao) Business Scope: R&D,manufacture and sales of cooling apparatus, air-conditioner, washing machine, water heater, kitchenware,home decoration, bathroom, lamps & lanterns, household & similar appliance, injection plastic machine of

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

computer controlling, plastic products, metalwork, packaging products and decorations as well as theinstallation and technical consultant services. Business of self-produced products, technology export andimport-export of the raw& auxiliary materials, machinery equipment, instrument and technology; departmentsales and transportation (Excluding dangerous chemicals), computer network system integration, intelligentproduct system integration, software development and technical information services, development,production, sales and service of automation equipment and electronic products, sales services of cold chaintransport vehicles and refrigerator and freezer van,development, production, sales and service of cold chaininsulation boxes, research and development, production, sales and service of cold storage, commercial freezerchain display cabinets, commercial cold chain products.(Projects that require approval in accordance with thelaw can only be operated after approval by relevant departments)

II. Scope of consolidated financial statementIn the reporting period, the consolidated financial statements of the Company cover 26 subsidiaries, includingSichuan Changhong Air-conditioner Co., Ltd, Zhongshan Changhong Electric Co., Ltd. and Zhongke MeilingCryogenic Technology Co., Ltd, and the rest. Compared with the previous year, one subsidiary Jinan XiangyouElectric Appliances Marketing Co., Ltd was decreased in the consolidation scope for liquidation. TheZhengzhou Meiling Electric Appliances Marketing Co., Ltd was decreased for mergers & acquisition.

More details can be seen in the report “VII. Changes in the scope of the merger” and “XIII. Equity in otherentities”carry in the Note

III. Basis for preparation of financial statement

1. Basis for preparation

The financial statements of the Company were prepared in accordance with the actual transactions andproceedings, and relevant regulation of Accounting Standards for Business Enterprise released by the Ministryof Finance, and was on the basis of sustainable operation, and the accounting policy and estimation stated inthe “IV. Significant Accounting Policy and Accounting Estimation”

2.Continuous operation

The Company recently has a history of profitability operation and has financial resources supporting, andprepared the financial statement on basis of going concern is reasonable.

IV. Significant Accounting Policy and accounting Estimation

1. Statement on observation of accounting standards for enterprise

The financial statement prepared by the Company applies with the requirements of Accounting Standard for

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Business Enterprise, and reflects the financial condition, operational achievements and cash flow of theCompany effectively and completely.

2. Accounting period

The accounting period of the Company is the calendar date from 1 January to 31 December.

3. Operation cycle

Operation cycle of the Company was 12 months, and it is the standard of flow classification for assets andliabilities.

4. Standard currency for accounting

The Company takes RMB as the standard currency for accounting.

5. Accountant arrangement method of business combination under common control and not under commoncontrolAs acquirer, the Company measures the assets and liabilities acquired through business combination undercommon control at their carrying values as reflected in the consolidated financial statement of the ultimatecontroller as of the combination date. Capital reserve shall be adjusted in respect of any difference betweencarrying value of the net assets acquired and carrying value of the combination consideration paid. In casethat capital reserve is insufficient to offset, the Company would adjust retained earnings.

The acquiree’s net identifiable assets, liabilities or contingent liabilities acquired through business combinationnot under common control shall be measured at fair value as of the acquisition date. The cost of combinationrepresents the fair value of the cash or non-cash assets paid, liabilities issued or committed and equity securitiesissued by the Company as at the date of combination in consideration for acquiring the controlling power inthe acquiree, together with the sum of any directly related expenses occurred during business combination(incase of such business combination as gradually realized through various transactions, the combination costrefers to the sum of each cost of respective separate transaction). Where the cost of the combination exceedsthe acquirer’s interest in the fair value of the acquirer’s identifiable net assets acquired, the difference isrecognized as goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value ofthe acquiree’s identifiable net assets, the Company shall firstly make further review on the fair values of thenet identifiable assets, liabilities or contingent liabilities acquired as well as the fair value of the non-cash assetsportion of combination consideration or the equity securities issued by the Company. In case that the Companyfinds the cost of combination is still lower than the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets after such further review, the difference is recognized in non-operating income for thecurrent period when combination occurs.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

6. Measures on Preparation of Consolidated Financial Statements

The Company shall put all the subsidiaries controlled and main body structured into consolidated financialstatements.

Any difference arising from the inconformity of accounting year or accounting policies between thesubsidiaries and the Company shall be adjusted in the consolidated financial statements.

All the material inter-company transactions, non-extraordinary items and unrealized profit within thecombination scope are written-off when preparing consolidated financial statement. Owners’ equity ofsubsidiary not attributable to parent company and current net gains and losses, other comprehensive incomeand total comprehensive income attributable to minority shareholders are recognized as non-controllinginterests, minority interests, other comprehensive income attributable to minority shareholders and totalcomprehensive income attributable to minority shareholders in consolidated financial statement respectively.

As for subsidiary acquired through business combination under common control, its operating results and cashflow will be included in consolidated financial statement since the beginning of the period when combinationoccurs. When preparing comparative consolidated financial statement, the relevant items in previous yearsfinancial statement shall be adjusted as if the reporting entity formed upon combination has been existing sincethe ultimate controller commenced relevant control.

As for equity interests of the investee under common control acquired through various transactions whicheventually formed business combination, the Company shall supplement disclosure of the accounting treatmentin consolidated financial statement in the reporting period when controlling power is obtained. For example,as for equity interests of the investee under common control acquired through various transactions whicheventually formed business combination, adjustments shall be made as if the current status had been existingwhen the ultimate controller commenced control in connection of preparing consolidated financial statement;in connection with preparing comparative statement, the Company shall consolidate the relevant assets andliabilities of the acquiree into the Company’s comparative consolidated financial statement to the extent notearlier than the timing when the Company and the acquiree are all under control of the ultimate controller, andthe net assets increased due to combination shall be used to adjust relevant items under owners’ equity incomparative statement. In order to prevent double computation of the value of the acquiree’s net assets, therelevant profits and losses, other comprehensive income and change of other net assets recognized during theperiod from the date when the Company acquires original equity interests and the date when the Company andthe acquiree are all under ultimate control of the same party (whichever is later) to the date of combination inrespect of the long-term equity investment held by the Company before satisfaction of combination shall beutilized to offset the beginning retained earnings and current gains and losses in the period as the comparativefinancial statement involves, respectively.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

As for subsidiary acquired through business combination not under common control, its operating results andcash flow will be included in consolidated financial statement since the Company obtains controlling power.When preparing consolidated financial statement, the Company shall adjust the subsidiary’s financial statementbased on the fair value of the various identifiable assets, liabilities or contingent liabilities recognized as of theacquisition date.

As for equity interests of the investee not under common control acquired through various transactions whicheventually formed business combination, the Company shall supplement disclosure of the accounting treatmentin consolidated financial statement in the reporting period when controlling power is obtained. For example,as for equity interests of the investee not under common control acquired through various transactions whicheventually formed business combination, when preparing consolidated financial statement, the Companywould re-measure the equity interests held in the acquiree before acquisition date at their fair value as of theacquisition date, and any difference between the fair value and carrying value is included in current investmentincome. in case that the equity interests in acquiree held by the Company before the relevant acquisition dateinvolves other comprehensive income at equity method and change of other owners’ equity (other than netgains and losses, other comprehensive income and profit distribution), then the equity interests would transferto investment gains and losses for the period which the acquisition date falls upon. The other comprehensiveincome arising from change of the net liabilities or net assets under established benefit scheme as acquiree’sre-measured such scheme is excluded.

The transaction with non-controlling interest to dispose long-term equity investment in a subsidiary withoutlosing control rights over the subsidiary, the difference between the proceeds from disposal of interests and thedecrease of the shared net assets of the subsidiary is adjusted to capital premium (share premium). In casecapital reserve is not sufficient to offset the difference, retained earnings will be adjusted.

As for disposal of part equity investment which leads to losing control over the investee, the Company wouldre-measure the remaining equity interests at their fair value as of the date when the Company loses controlover the investee when preparing consolidated financial statement. The sum of consideration received fromdisposal of equity interest and fair value of the remaining equity interest, less the net assets of the originalsubsidiary attributable to the Company calculated based on the original shareholding proportion since theacquisition date or the date then consolidation commences, is included in investment gains and losses for theperiod when control is lost, meanwhile to offset goodwill. Other comprehensive income related to equityinterest investment in original subsidiaries is transferred into current investment gains and losses upon lost ofcontrol.

If the disposal of the equity investment of a subsidiary is realized through multiple transactions until loss ofcontrol and is a package deal, the accounting treatment of these transactions should be dealt with as onetransaction of disposal of the subsidiary until loss of control. However, before the Company loses total control

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

of the subsidiary, the differences between the actual disposal price and the share of the net assets of thesubsidiary disposed of in every transaction should be recognized as other comprehensive income in theconsolidated financial statements,and transferred to profit or loss when losing control.

7. Accounting treatment for joint venture arrangement and joint controlled entityThe joint venture arrangement of the Company consists of joint controlled entity and joint venture. As forjointly controlled entity, the Company determines the assets held and liabilities assumed separately as a partyto the jointly controlled entity, recognizes such assets and liabilities according to its proportion, and recognizesrelevant income and expense separately under relevant agreement or according to its proportion. As for assettransaction relating to purchase and sales with the jointly controlled entity which does not constitute businessactivity, part of the gains and losses arising from such transaction attributable to other participators of thejointly controlled entity is only recognized.

8.Cash and cash equivalents

Cash in the cash flow statement comprises the Group’s cash on hand and deposits that can be readily withdrawn on demand.Cash equivalents are short-term,highly liquid investments held by the Group,that are readilyconvertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

9. Foreign currency business and foreign currency financial statement conversion

(1) Foreign currency business

As for the foreign currency business, the Company converts the foreign currency amount into RMB amountpursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary items expressedby foreign currency are converted into RMB pursuant to the spot exchange rate as of the balance sheet date.The conversion difference occurred is recorded into prevailing gains and losses, other than the disclosure whichis made according to capitalization rules for the exchange difference occurred from the special foreign currencyborrowings borrowed for constructing and producing the assets satisfying condition of capitalization. As forthe foreign currency non-monetary items measured by fair value, the amount is then converted into RMBaccording to the spot exchange rate as of the confirmation day for fair value. And the conversion differenceoccurred during the procedure is recorded into prevailing gains and losses directly as change of fair value. Asfor the foreign currency non-monetary items measured by historical cost, conversion is made with the spotexchange rate as of the business day, with no change in RMB amount.

(2) Conversion of foreign currency financial statement

Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in foreigncurrency balance sheet; as for the items in statement of owners’ equity except for “Retained profit”, conversionis made pursuant to the spot exchange rate of business day; income and expense items in income statementthen are also converted pursuant to the spot exchange rate of transaction day. Difference arising from the

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

aforementioned conversions shall be listed separately in items of owners’ equity. Spot exchange rate as of theoccurrence date of cash flow is adopted for conversion of foreign currency cash flow. The amount of cashaffected by exchange rate movement shall be listed separately in cash flow statement.

10. Financial assets and liabilities

A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.The financial assets and financial liabilities are measured at fair value on initial recognition. For the financialassets and liabilities measured by fair value and with variation reckoned into current gains/losses, the relatedtransaction expenses are directly included in current gains or losses; for other types of financial assets andliabilities, the related transaction costs are included in the initial recognition amount.

(1) Method for determining the fair value of financial assets and financial liabilitiesFair value refers to the price that a market participant can get by selling an asset or has to pay for transferringa liability in an orderly transaction that occurs on the measurement date. For a financial instrument having anactive market, the Company uses the quoted prices in the active market to determine its fair value. Quotationsin an active market refer to prices that are readily available from exchanges, brokers, industry associations,pricing services, etc., and represent the prices of market transactions that actually occur in an arm's lengthtransaction. If there is no active market for a financial instrument, the Company uses valuation techniques todetermine its fair value. Valuation techniques include reference to prices used in recent market transactions byparties familiar with the situation and through voluntary trade, and reference to current fair values of otherfinancial instruments that are substantially identical, discounted cash flow methods, and option pricing models.

(2) Category and measurement on financial assets

The group divided the financial assets as the follow while initially recognized: the financial assets measured atamortized cost; the financial assets measured at fair value and whose changes are included in othercomprehensive income; and the financial assets measured by fair value and with variation reckoned into currentgains/losses. The classification of financial assets depends on the business model that the Group's enterprisesmanage the financial assets and the cash flow characteristics of the financial assets.

1) The financial assets measured at amortized cost

Financial assets are classified as financial assets measured at amortized cost when they also meet the followingconditions: The group's business model for managing the financial assets is to collect contractual cash flows;the contractual terms of the financial assets stipulate that cash flow generated on a specific date is only paidfor the principal and interest based on the outstanding principal amount. For such financial assets, the effectiveinterest method is used for subsequent measurement according to the amortized cost, and the gains or lossesarising from amortization or impairment are included in current profits and losses. Such financial assets mainlyinclude monetary funds, notes receivable, accounts receivable, other receivables, debt investment and long-

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

term receivables, and so on. The Group lists the debt investment and long-term receivables due within one year(including one year) from the balance sheet date as non-current assets due within one year, and lists the debtinvestment with time limit within one year (including one year) when acquired as other current assets.

2) Financial assets measured at fair value and whose changes are included in other comprehensive incomeFinancial assets are classified as financial assets measured at fair value and whose changes are included inother comprehensive income when they also meet the following conditions: The Group's business model formanaging the financial assets is targeted at both the collection of contractual cash flows and the sale of financialassets; the contractual terms of the financial asset stipulate that the cash flow generated on a specific date isonly the payment of the principal and the interest based on the outstanding principal amount. For such financialassets, fair value is used for subsequent measurement. The discount or premium is amortized by using theeffective interest method and is recognized as interest income or expenses. Except the impairment losses andthe exchange differences of foreign currency monetary financial assets are recognized as the current profitsand losses, the changes in the fair value of such financial assets are recognized as other comprehensive incomeuntil the financial assets are derecognized, the accumulated gains or losses are transferred to the current profitsand losses. Interest income related to such financial assets is included in the current profit and loss. Suchfinancial assets are listed as other debt investments, other debt investments due within one year (including oneyear) from the balance sheet date are listed as non-current assets due within one year; and other debtinvestments with time limit within one year (including one year) when acquired are listed as other currentassets.

3) Financial assets measured at fair value and whose changes are included in current gains/lossesFinancial assets except for the above-mentioned financial assets measured at amortized cost and financialassets measured at fair value and whose changes are included in other comprehensive income are classified asfinancial assets measured at fair value and whose changes are included in current profits and losses, whichadopt fair value for subsequent measurement and all changes in fair value are included in current profits andlosses. The Group classifies non-trading equity instruments as financial assets measured at fair value and whosechanges are included in current profits and losses. Such financial assets are presented as trading financial assets,and those expire after more than one year and are expected to be held for more than one year are presented asother non-current financial assets.

(3) Devaluation of financial instrument

On the basis of expected credit losses, the Group performs impairment treatment on financial assets measuredat amortized cost and financial assets measured at fair value and whose changes are included in othercomprehensive income and recognize the provisions for loss.Credit loss refers to the difference between all contractual cash flows that the Company discounts at the originalactual interest rate and are receivable in accordance with contract and all cash flows expected to be received,

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

that is, the present value of all cash shortages. Among them, for the purchase or source of financial assets thathave suffered credit impairment, the Company discounts the financial assets at the actual interest rate adjustedby credit.The Group considers all reasonable and evidenced information, including forward-looking information, basedon credit risk characteristics. When assessing the expected credit losses of receivables, they are classifiedaccording to the specific credit risk characteristics as follows:

1) For receivables and contractual assets and lease receivables (including significant financing componentsand not including significant financing components), the Group measures the provisions for loss based on theamount of expected credit losses equivalent to the entire duration.

①Evaluate expected credit losses based on individual items: credit notes receivable (including accepted lettersof credit) of financial institutions in notes receivable and accounts receivable, and related party payments(related parties under the same control and significant related parties); dividends receivable, interest receivable,reserve funds, investment loans, cash deposits (including warranty), government grants (including dismantlingsubsidies) in other receivables, and receivables with significant financing components (i.e. long-termreceivables);

②Evaluate expected credit losses based on customer credit characteristics and ageing combinations: inaddition to evaluating expected credit losses based on individual items, the Group evaluates the expected creditlosses of notes receivable and accounts receivable and other receivables financial instruments based oncustomer credit characteristics and ageing combinations.The Group considers all reasonable and evidenced information, including forward-looking information, whenassessing expected credit losses. When there is objective evidence that its customer credit characteristics andageing combination cannot reasonably reflect its expected credit loss, the current value of the expected futurecash flow is measured by a single item, and the cash flow shortage is directly written down the book balanceof the financial asset.

2) Assess the expected credit losses on a case-by-case basis for other assets to which the financial instrumentsare impaired, such as the loan commitments and financial guarantee contracts that are not measured at fairvalue through profit or loss, financial assets measured at fair value and whose changes are recognized in othercomprehensive income; other financial assets measured at amortized cost (such as other current assets, othernon-current financial assets, etc.).

(4) Reorganization basis and measure method for transfer of financial assets

The financial assets meet one of following requirements will be terminated recognition: ① The contract rightsof collecting cash flow of the financial assets is terminated; ②The financial assets has already been transferred,

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

and the Company has transferred almost all risks and remunerations of financial assets ownership to thetransferee; ③The financial assets has been transferred, even though the Company has neither transferred norkept almost all risks and remunerations of financial assets ownership, the Company has given up controllingthe financial assets.If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets ownership,nor given up controlling the financial assets, then confirm the relevant financial assets according to how itcontinues to involve into the transferred financial assets and confirm the relevant liabilities accordingly. Theextent of continuing involvement in the transferred financial assets refers to the level of risk arising from thechanges in financial assets value faced by the enterprise.

If the entire transfer of financial assets satisfies the demand for derecognition, reckon the balance between thebook value of the transferred financial assets and the sum of consideration received from transfer andfluctuation accumulated amount of fair value formerly reckoned in other consolidated income in the currentprofits and losses.

If part transfer of financial assets satisfies the demand for derecognition, apportion the integral book value ofthe transferred financial assets between the derecognized parts and the parts not yet derecognized according toeach relative fair value, and reckon the balance between the sum of consideration received from transfer andfluctuation accumulated amount of fair value formerly reckoned in other consolidated income that should beapportioned to the derecognized parts and the apportioned aforementioned carrying amounts in the currentprofits and losses.When the Group sells financial assets adopting the mode of recourse, or endorses and transfers its financialassets, it is necessary to ensure whether almost all the risks and rewards of ownership of the financial assetshave been transferred. If almost all the risks and rewards of ownership of the financial assets have beentransferred to the transferee, the financial assets shall be derecognized; if almost all the risks and rewards ofownership of the financial assets are retained, the financial assets shall not be derecognized; if almost all therisks and rewards of ownership of the financial assets are neither transferred nor retained, continue to judgewhether the company retains control over the assets, and conduct accounting treatment according to theprinciples described in the preceding paragraphs.

(5) Category and measurement of financial liability

Financial liability is classified into financial liability measured by fair value and with variation reckoned intocurrent gains/losses and other financial liability at initially measurement. Financial liability shall be initiallyrecognized and measured at fair value. As for the financial liability measured by fair value and with variationreckoned into current gains/losses, relevant trading costs are directly reckoned into current gains/losses whileother financial liability shall be reckoned into the initial amount recognized.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

① the financial liability measured by fair value and with variation reckoned into current gains/lossesThe conditions to be classified as trading financial liabilities and as financial liabilities designated to bemeasured at fair value and whose changes are included in current profit or loss at the initial recognition areconsistent with the conditions to be classified as trading financial assets and as financial assets designated tobe measured at fair value and whose changes are included in current profit or loss at the initial recognition.Financial liabilities measured at fair value and whose changes are included in current profit or loss aresubsequently measured at fair value, and the gain or loss arising from changes in fair value and the dividendsand interest expense related to these financial liabilities are included in current profit or loss.

② Other financial liability

It must go through the delivery of the derivative financial liabilities settled by the equity instrument to link tothe equity instruments that are not quoted in an active market and whose fair value cannot be reliably measured,and the subsequent measurement is carried out in accordance with the cost. Other financial liabilities aresubsequently measured at amortized cost by using the effective interest method. The gain or loss arising fromderecognition or amortization is included in current profit or loss.

③Financial guarantee contract

The financial guarantee contract of a financial liability which is not designated to be measured at fair valuethrough profit or loss is initially recognized at fair value, and its subsequent measurement is carried out by thehigher one between the amount confirmed in accordance with the Accounting Standards for BusinessEnterprises No. 13 — Contingencies after initial recognition and the balance after deducting the accumulatedamortization amount determined in accordance with the principle of Accounting Standards for BusinessEnterprises No. 14—Revenue from the initial recognition amount.

(6) Termination of recognition of financial liability

The financial liability or part of it can only be terminated for recognized when all or part of the currentobligation of the financial liability has been discharged. The Group (debtor) and the creditor sign an agreementto replace the existing financial liabilities with new financial liabilities, and if the contract terms of the newfinancial liabilities are substantially different from the existing financial liabilities, terminated forrecognizedthe existing financial liabilities and at the same time recognize the new financial liabilities. If thefinancial liability is terminated for recognized in whole or in part, the difference between the carrying amountof the part that terminated for recognized and the consideration paid (including the transferred non-cash assetsor the assumed new financial liabilities) is included in current profits and losses.

(7) Off-set between the financial assets and liabilities

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

When the Company has a legal right to offset a recognized financial asset and a financial liability and suchlegal right is currently enforceable, and the Company plans to settle the financial asset on a net basis or torealize the financial asset and settle the financial liability simultaneously, the financial asset and the financialliability are presented in the balance sheet at their respective offsetting amounts. In addition, the financial assetsand financial liabilities are presented in the balance sheet separately, and are not offset against each other.

(8) Derivatives and embedded derivatives

Derivatives are initially measured at fair value on the signing date of the relevant contract, and are subsequentlymeasured at fair value. Except for derivatives that are designated as hedging instruments and are highlyeffective in hedging, the gains or losses arising from changes in fair value will be determined based on thenature of the hedging relationship in accordance with the requirements of the hedge accounting and be includedin the period of profit and loss, other changes in fair value of derivatives are included in current profits andlosses. For a hybrid instrument that includes an embedded derivative, if it is not designated as a financial assetor financial liability measured at fair value and whose changes are included in current profit or loss, theembedded derivative does not have a close relationship with the main contract in terms of economiccharacteristics and risks, and as with embedded derivatives, if the tools existing separately conform to thedefinition of the derivatives, the embedded derivatives are split from the hybrid instruments and are treated asseparate derivative financial instruments. If it is not possible to measure the embedded derivative separately atthe time of acquisition or subsequent balance sheet date, the whole hybrid instrument is designated as afinancial asset or financial liability measured at fair value and whose changes are included in current profitsand losses.

(9) Equity instrument

The equity instrument is the contract to prove the holding of the surplus stock of the assets with the deductionof all liabilities in the Group. The Company issues (including refinancing), repurchases, sells or cancels equityinstruments as movement of equity.No fair value change of equity instrument would be recognized by theCompany.Transaction costs associated with equity transactions are deducted from equity. The Group's variousdistributions to equity instrument holders (excluding stock dividends) reduce shareholders' equity.

11. Inventory

Inventories of the Company principally include raw materials, stock goods; work in process, self-made semi-finished product, materials consigned to precede, low-value consumption goods, goods in transit, goods inprocess, mould and contract performance costs.

Perpetual inventory system is applicable to inventories. For daily calculation, standard price is adopted for rawmaterials, low-value consumption goods and stock goods. Switch-back cost of the current month is adjusted

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

by distribution price difference at the end of the month, the dispatched goods will share the cost differences ofinventory while in settlement the business income; and low-value consumption goods is carried forward atonce when being applied for use and the mould shall be amortized within one year after receipt.Inventory at period-end is valued by the Lower-of-value between the cost and net realizable value.Theprovision for inventory depreciation shall be drawn from the difference between the book cost of a singleinventory item and its net realizable value, and the provision for inventory depreciation shall be recorded intothe current profit and loss.

12. Contract assets

(1) Confirmation methods and standards of contract assets

Contract assets refer to the right of the Company to receive consideration after transferring goods to customers,and this right depends on factors other than the passage of time. If the Company sells two clearlydistinguishable commodities to a customer and has the right to receive payment because one of thecommodities has been delivered, but the payment is also dependent on the delivery of the other commodity,the Company shall take the right to receive payment as a contract asset.

(2) Determination method and accounting treatment method of expected credit loss of contract assetsFor the determination method for expected credit loss of contract assets, please refer to the above-mentioned

10. (3) Accounting treatment methods for financial instrument impairment. The Company calculates theexpected credit loss of contract assets on the balance sheet date, if the expected credit loss is greater than thebook value of provision for impairment of contract assets, the Company shall recognize the difference as animpairment loss, debiting the "asset impairment loss" and crediting the "contract asset impairment provision".On the contrary, the Company shall recognize the difference as an impairment gain and keep the oppositeaccounting records.If the Company actually incurs credit losses and determines that the relevant contract assets cannot berecovered, for those approved to be written off, debit the "contract asset impairment reserve" and credit the"contracted asset" based on the approved write-off amount. If the written-off amount is greater than theprovision for loss that has been withdrawn, the "asset impairment loss" is debited based on the difference.

13. Contract cost

(1) The method of determining the amount of assets related to the contract cost

The Company’s assets related to contract costs include contract performance cost and contract acquisition cost.The contract performance cost is the cost incurred by the Company for the performance of the contract, thosethat do not fall within the scope of other accounting standards and meet the following conditions at the same

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

time are recognized as as an asset as the contract performance cost: the cost is directly related to a current orexpected contract, including direct labor, direct materials, manufacturing expenses (or similar expenses), costsclarified to be borne by the customer, and other costs incurred solely due to the contract; this cost increases theCompany's future resources for fulfilling the contract's performance obligations; this cost is expected to berecovered.Contract acquisition cost is the incremental cost incurred by the Company to obtain the contract, those that areexpected to be recovered are recognized as the contract acquisition cost as an asset; if the asset amortizationperiod does not exceed one year, it shall be included in the current profit and loss when it occurs. Incrementalcost refers to the cost (such as sales commission, etc.) that will not incur if the Company doesn’t obtain thecontract. The Company’s expenses (such as travel expenses incurred regardless of whether the contract isobtained) incurred for obtaining the contract other than the incremental costs expected to be recovered areincluded in the current profits and losses when they are incurred, except those are clarified to be borne by thecustomer.

(2) Amortization of assets related to contract costs

The Company’s assets related to contract costs are amortized on the same basis as the recognition of commodityincome related to the asset and included in the current profit and loss.

(3) Impairment of assets related to contract costs

When the Company determines the impairment loss of assets related to the contract cost, it first determines theimpairment loss of other assets related to the contract that are confirmed in accordance with other relevantaccounting standards for business enterprises; then based on the difference between the book value of whichis higher than the remaining consideration that the Company is expected to obtain due to the transfer of thecommodity related to the asset and the estimated cost of transferring the related commodity, the excess shallbe provided for impairment and recognized as an asset impairment loss.If the depreciation factors of the previous period changed later, causing the aforementioned difference to behigher than the book value of the asset, the original provision for asset impairment shall be reversed andincluded in the current profit and loss, but the book value of the asset after the reversal shall not exceed thebook value of the asset on the reversal date under the assumption that no impairment provision is made.

14.Long-term equity investment

Long-term equity investment of the Company is mainly about investment in subsidiary, investment inassociates and investment in joint-ventures.For long-term equity investments acquired through business combination under common control, the initialinvestment cost shall be the acquirer’s share of the carrying amount of net assets of the acquiree as of thecombination date as reflected in the consolidated financial statement of the ultimate controller. If the carrying

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

amount of net assets of the acquiree as of the combination date is negative, the investment cost of long-termequity investment shall be zero. For long-term equity investment acquired through business combination notunder common control, the initial investment cost shall be the combination cost.

Excluding the long-term equity investment acquired through business combination, there is also a king of long-term equity investment acquired through cash payment, for whichthe actual payment for the purchase shall beinvestment cost; If Long-term equity investments are acquired by issuing equity securities, fair value of issuingequity investment shall be investment cost; for Long-term equity investments which are invested by investors,the agreed price in investment contract or agreement shall be investment cost; and for long-term equityinvestment which is acquired through debt reorganization and non-monetary assets exchange, regulations ofrelevant accounting standards shall be referred to for confirming investment cost.The Company adopts cost method for investment in subsidiaries, makes calculation for investments in joint-ventures and associates by equity method.

When calculated by cost method, long-term equity investment is priced according to its investment cost, andcost of the investment is adjusted when making additional investment or writing off investment; Whencalculated by equity method, current investment gains and losses represent the proportion of the net gains andlosses realized by the invested unit in current year attributable to or undertaken by the investor. When theCompany is believed to enjoy proportion of net gains and losses of invested unit, gains and losses attributableto the Company according to its shareholding ratio is to computer out according to the accounting policy andaccounting period of the Company, on the basis of the fair value of various recognizable assets of the investedunit as at the date of obtaining of the investment, after offset of gains and losses arising from internaltransactions with associates and joint-ventures, and finally to make confirmation after adjustment of net profitof the invested unit. Confirmation on gains and losses from the long-term equity investment in associates andjoint-ventures held by the Company prior to the first execution day, could only stand up with the precedentcondition that debit balance of equity investment straightly amortized according to its original remaining termhas already been deducted, if the aforementioned balance relating to the investment do exist.

In case that investor loses joint control or significant influence over investee due to disposal of part equityinterest investment, the remaining equity interest shall be calculated according to Accounting Standards forBusiness Enterprise No.22-Recognition and Measurement of Financial Instrument. Difference between the fairvalue of the remaining equity interest as of the date when loss of joint control or significant influence and thecarrying value is included in current gains and losses. Other comprehensive income recognized in respect ofthe original equity interest investment under equity method should be treated according to the same basis whichthe investee adopts to directly dispose the relevant assets or liabilities when ceasing adoption of equity methodcalculation; and also switches to cost method for calculating the long-term equity investments which entitlesthe Company to have conduct control over the invested units due to its additional investments; and switches to

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

equity method for calculating the long-term equity investments which entitles the Company to conductcommon control or significant influence, while no control over the invested units due to its additionalinvestments, or the long-term equity investments which entitles the Company with no control over the investedunits any longer while with common control or significant influence.

When disposing long-term equity investment, the balance between it carrying value and effective price forobtaining shall be recorded into current investment income. When disposing long-term equity investmentwhich is calculated by equity method, the proportion originally recorded in owners’ equity shall be transferredto current investment income according to relevant ratio, except for that other movements of owners’ equityexcluding net gains and losses of the invested units shall be recorded into owners’ equity.

15. Investment real estate

The investment real estate of the Company includes leased houses and buildings, and is accounted value byits cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes andother expenditure which is attributable to the assets directly; while cost of self-built investment real estate isformed with all necessary expenditures occurred before construction completion of the assets arriving at theestimated utilization state.

Consequent measurement of investment estate shall be measured by cost method. Depreciation is providedwith average service life method pursuant to the predicted service life and net rate of salvage value. Thepredicted service life and net rate of salvage value and annual depreciation are listed as follows:

CategoryDepreciation term(Year)Predicted rate of salvage value (%)Depreciation rate per annual (%)
House and buildings30-40 years4%-5%2.375%-3.20%

When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible assetscommencing from the date of such turning. And when self-used real estate turns to be leased out for rental oradditional capital, the fixed assets or intangible assets shall switch to investment real estate commencing fromthe date of such turning. In situation of switch, the carrying value before the switch shall be deemed as thecredit value after the switch.

When investment real estate is disposed, or out of utilization forever and no economic benefit would bepredicted to obtain through the disposal, the Company shall terminate recognition of such investment realestate. The amount of income from disposal, transfer, discarding as scrap or damage of investment real estateafter deducting the asset’ s carrying value and relevant taxation shall be written into current gains and losses.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

16.Fixed assets

Fixed assets of the Company are tangible assets that are also held for the production of goods, provision ofservices, rental or management of operations, have a useful life of more than one year and have a unit valueof more than 2,000 yuan.

Their credit value is determined on the basis of the cost taken for obtaining them. Of which, cost of purchased-in fixed assets include bidding price and import duty and relevant taxes, and other expenditure which occursbefore the fixed assets arrive at the state of predicted utilization and which could be directly attributable to theassets; while cost of self-built fixed asset is formed with all necessary expenditures occurred beforeconstruction completion of the assets arriving at the estimated utilization state; credit value of the fixed assetsinjected by investors is determined based on the agreed value of investment contracts or agreements, while asfor the agreed value of investment contracts or agreements which is not fair, it shall take its fair value as creditvalue; and for fixed assets which are leased in through finance leasing, credit value is the lower of fair valueof leased assets and present value of minimized leasing payment as at the commencing date of leasing.

Consequent expenditure related to fixed assets consists of expenditures for repair and update reform. For thosemeeting requirements for recognization of fixed assets, they would be accounted as fixed asset cost; and forthe part which is replaced, recognization of its carrying value shall cease; for those not meeting requirementsfor recognization of fixed assets, they shall be accounted in current gains and losses as long as they occur.When fixed asset is disposed, or no economic benefit would be predicted to obtain through utilization ordisposal of the asset, the Company shall terminate recognization of such fixed asset. The amount of incomefrom disposal, transfer, discarding as scrap or damage of fixed asset after deducting the asset’ s carrying valueand relevant taxation shall be written into current gains and losses.

The Company withdraws depreciation for all fixed assets except for those which have been fully depreciatedwhile continuing to use. It adopts average service life method for withdrawing depreciation which is treatedrespectively as cost or current expense of relevant assets according to purpose of use. The depreciation term,predicted rate of salvage value and depreciation rate applied to fixed assets of the Company are as follows:

No.CategoryDepreciation termPredicted rate of salvage valueDepreciation rate per year
1House and buildings30-40 years4%-5%2.375%-3.20%
2Machinery equipment10-14 years4%-5%6.786%-9.60%
3Transport equipment5-12 years4%-5%7.92%-19.20%
4Other equipment8-12 years4%-5%7.92%-12.00%

End of each year, the Company makes re-examination on predicted service life, predicted rate of salvagevalue and depreciation method at each year-end. Any change will be treated as accounting estimation change.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

17. Construction in progress

On the day when the construction in progress reaches the expected usable state, it will be carried forward tofixed assets according to the estimated value based on the construction budget, cost or actual construction cost,and depreciation will be accrued from the next month, and the difference in the original value of fixed assetsshall be adjusted after the completion of the final accounting procedures.

18. Borrowing expense

For the incurred borrowing expense that can be directly attributable to fixed assets, investment real estate, andinventory which require more than one year of purchase, construction or production activities to reach theintended usable or saleable state, the capitalization begins when the asset expenditure has occurred, theborrowing expense have occurred, and the acquisition, construction or production activities necessary to makethe asset reach the intended usable or saleable state have begun; when the acquisition, construction orproduction of assets that meet the capitalization conditions reaches the intended usable or saleable state, stopthe capitalization, the borrowing expense incurred thereafter are included in the current profit and loss. If anasset that meets the capitalization conditions is abnormally interrupted during the acquisition, construction orproduction process, and the interruption lasts for more than 3 months, the capitalization of borrowing expenseshall be suspended until the acquisition, construction or production activities of the asset restart.

Capitalization shall be exercised for interest expense actually occurred from special borrowings in currentperiod after deduction of the interest income arising from unutilized borrowing capital which is saved in banksor deduction of investment income obtained from temporary investment; For recognization of capitalizedamount of common borrowing,it equals to the weighted average of the assets whose accumulated expense orcapital disburse is more than common borrowing times capitalization rate of occupied common borrowing.Capitalization rate is determined according to weighted average interest rate of common borrowing.

19. Right-of-use assets

When the Company becomes the lessee of the lease contract and is entitled to receive almost all the economicbenefits arising from the use of the identified assets during the use period and is entitled to lead the use of theidentified assets during the use period, the right-of-use assets shall be recognized based on the sum of thepresent value of lease liabilities, the prepaid rents and the initial direct expenses, and depreciation and interestexpenses shall be recognized respectively.When the Company becomes the lessee of the lease contract, for short-term leases with no purchase optionwithin one year and lease contracts with a value of less than 40,000 yuan (excluding the sublease or expectedsublease of assets), we choose to follow the simplified treatment and record into the related asset cost of orcurrent profit and loss in accordance with the straight-line method during the lease period.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

20. Intangible assets

The Company’s intangible assets include land use rights, trademark rights and non-proprietary technology,which are measured at actual cost at the time of acquisition, of which, acquired intangible assets are stated atactual cost based on the price actually paid and related other expenditure; the actual cost of an intangible assetinvested by an investor is determined at the value agreed in the investment contract or agreement, except wherethe agreed value in the contract or agreement is not fair, in which case the actual cost is determined at fairvalue.The land use rights are amortized equally over the period from the commencement date of the grant; theremaining intangible assets are amortized equally over the shortest of the estimated useful life, the contractualbeneficial life and the effective life as prescribed by law. Amortization is charged to the cost of the relevantasset and to current profit or loss in accordance with the object of its benefit. The estimated useful life andamortization method for intangible assets with finite useful lives are reviewed at the end of each year and anychanges are treated as changes in accounting estimates.

21. Research and development(R&D)

As for expenditure for research and development, the Company classifies it into expenditure on research phaseand development phase, based on nature of the expenditure and that whether the final intangible assets formedby research & development is of great uncertainty. Expenditure arising during research should be recorded incurrent gains and losses upon occurrence; expenditure arising during development is confirmed as intangibleassets when satisfying the following conditions:

-Completions of the intangible assets make it available for application or sell in technology;-Equipped with plan to complete the intangible asset and apply or sell it;-There is market for products produced with this intangible asset or the intangible asset itself;-Have sufficient technology, financial resource and other resources to support development of the intangibleassets, and have ability to apply or sell the assets;-Expenditure attributable to development of the intangible assets could be reliable measured.Expenditure arising during development not satisfying the above conditions shall be recorded in current gainsand losses upon occurrence. Development expenditure which had been recorded in gains and losses in previousperiod would not be recognized as assets in later period. Expenditure arising during development phase whichhas been starting capitalization is listed in balance sheet as development expenditure, and transferred tointangible assets since the project reaches at predicted utilization state.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

22. Impairment of long-term assets

As at each balance sheet date, the Company has inspection on fixed assets, construction in process andintangible assets with limited service life. When the following indications appear, assets may be impaired, andthe Company would have impairment test. As for goodwill and intangible assets which have uncertain servicelife, no matter there is impairment or not, impairment test shall be conducted at the end of every year. If it ishard to make test on recoverable amount of single asset, test is expected to make on the basis of the assetsgroup or assets group portfolio where such asset belongs to.After impairment test, if the carrying value exceeds the recoverable amount of the asset, the balance isrecognized as impairment loss. As long as impairment loss of the aforementioned assets is recognized, itcouldn’t be switched back in later accounting periods. Recoverable amount of assets refers to the higher of fairvalue of assets net disposal expense and present value of predicted cash flow of the asset.Indications for impairment are as follows:

(1) Market value of asset drops a lot in current period, the drop scope is obviously greater than the predicteddrop due to move-on of times or normal utilization;

(2) Economy, technology or law environment where enterprise operates or market where asset is located willhave significant change in current or recent periods, which brings negative influence to enterprise;

(3) Market interest rate or returning rate of other market investments have risen in current period, which bringsinfluence in calculating discount rate of present value of predicted future cash flow of assets, which leads to agreat drop in recoverable amount of such assets;

(4) Evidence proving that asset is obsolete and out of time or its entity has been damaged;

(5) Asset has been or will be keep aside, terminating utilization or disposed advance;

(6) Internal report of enterprise shows that economic performance of asset has been or will be lower thanprediction, such as that net cash flow created by asset or operation profit (or loss) realized by asset is greatlylower (or higher) than the predicted amount;

(7) Other indications showing possible impairment of assets

23. Long-term deferred expenses

The company's long-term deferred expenses refer to the expenses that have been paid, but should be borneby the current period and future periods with an amortization period of more than one year (excluding oneyear), and these expenses are amortized evenly during the benefit period. If the long-term deferredexpense item cannot benefit the future accounting period, all the amortized value of the item that has notbeen amortized will be transferred into the current profit and loss.

24. Contract liability

Contract liabilities reflect the Company's obligation to transfer goods to customers for consideration receivedor receivable from customers. Before the Company transfers the goods to the customer, if the customer has

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

paid the contract consideration or the Company has obtained the right to unconditionally receive the contractconsideration, the contract liability is recognized based on the received or receivable amount at the earlier timepoint of the actual payment by the customer and the payment due.

25. Goodwill

Goodwill represents balance between equity investment cost or business combination cost under no commoncontrol exceeding the attributable part or fair value of recognizable net assets of party invested or purchased(obtained through business combination) as of acquisition day or purchase day.

Goodwill relating to subsidiaries is separately listed in consolidated financial statement. And goodwill relatingto associates and joint-ventures is included in carrying value of long-term equity investment.

26. Staff remuneration

Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered byemployees or compensation to the termination of employment relationship such as short-term wages, post-employment benefits, compensation for the termination of employment relationship and other long-termemployee welfare.

Short-term remuneration includes: staff salary, bonus, allowances and subsidies, staff benefits, socialinsurances like medical insurance, work-related injury insurance and maternity insurance, housing fund, laborunion funds and staff education funds, short-term paid absence of duty, short-term profit sharing scheme, andnon-monetary benefits as well as other short-term remuneration. During the accounting period when staffprovides services, the short-term remuneration actually occurred is recognized as liabilities and shall beincluded in current gains and losses or related asset costs according to the beneficial items.

Retirement benefits mainly consist of basic pension insurance, unemployment insurance and early-retirementbenefits, etc. retirement benefit scheme represents the agreement reached by the Company and its employeesin respect of retirement benefits, or the rules or regulations established by the Company for providingretirement benefits to employees. In particular, defined contribution plan means a retirement benefit plan,pursuant to which, the Company makes fixed contribution to independent fund, upon which, and it is notobliged to make further payment. Defined benefit plan refers to retirement benefit scheme other than definedcontribution plan.

The early retirement policy for staff and workers of the Company is the compensation for encouraging staffand workers to accept the reduction voluntarily. The employees make applications voluntarily, the two partiessign the compensation agreement after approved by the Company and calculate the compensation amount

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

according to the compensation standard passed by the staff representative conference, and the Companyconfirms it as dismiss welfare and reckons it in current profits and losses. As the Company promises to adjustthe treatment for early retiring staff and workers with the increase of social basic cost of living allowances, thediscount elements will not be considered for calculating the dismiss welfare.

27.Lease liability

When the Company becomes the lessee of the lease contract, it is entitled to obtain almost all economic benefitsarising from the use of the identified assets during the period of use, and also has the right to recognize thelease liabilities of the leased assets at the present value of the outstanding lease payments after deducting thelease incentive (except for short-term leases for which simplified treatment is selected and leases of low-valueassets) when directing the use of the identified assets during the period of use.

28.Accrual liability

If the business in connection with such contingencies as a security involving a foreign party, commercialacceptance bill discount, pending litigation or arbitration, product quality assurance, etc. meets all of thefollowing conditions, the Company will confirm the aforesaid as liabilities: the obligation is an existingobligation of the Company; performance of the obligation is likely to cause economic benefits to flow out ofthe enterprise; the amount of the obligation is reliably measurable.

29. Revenue

The Company’s sales revenue is mainly comprised of revenue from sale of goods, labor providing income andrevenue from assignment of asset use rights.The Company has fulfilled the performance obligations in the contract, that is, revenue is recognizedwhen thecustomer obtains control of the relevant goods or services.

If the contract contains two or more performance obligations, the Company will allocate the transaction priceto each individual performance obligation according to the relative proportion of the stand-alone selling priceof the goods or services promised by each individual performance obligation on the date of the contract. Therevenue is measured according to the transaction price of each individual performance obligation.

The transaction price is the amount of consideration that the Company expects to be entitled to receive due tothe transfer of goods or services to customers, excluding payments on behalf of third parties. The transactionprice confirmed by the Company does not exceed the amount at which the cumulatively recognized revenuewill most likely not to undergo a significant switch back when the relevant uncertainty is eliminated. Themoney expected to be returned to the customer will be regarded as a return liability and not included in thetransaction price.If there is a significant financing component in the contract, the Company shall determine thetransaction price based on the amount payable on the assumption that the customer pays in cash when obtaining

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

the control of the goods or services. The difference between the transaction price and the contract considerationshall be amortized by the effective interest method during the contract period. On the starting date of thecontract, if the Company expects that the interval between the customer's acquisition of control of the goodsor services and the customer's payment of the price doesn’t exceed one year, the significant financingcomponents in the contract shall be ruled out.

When meeting one of the following conditions, the Company is to perform its performance obligations withina certain period of time, otherwise, it is to perform its performance obligations at a certain point in time:

1) The customer obtains and consumes the economic benefits brought by the Company's performance at thesame time as the Company's performance;

2) Customers can control the products under construction during the performance of the Company;

3) The goods produced by the Company during the performance of the contract have irreplaceable uses, andthe Company has the right to collect payment for the accumulated performance part of the contract during theentire contract period.

For performance obligations performed within a certain period of time, the Company recognizes revenue inaccordance with the performance progress during that period and determine the progress of performance inaccordance with the output method. When the performance progress cannot be reasonably determined, if thecost incurred by the Company is expected to be compensated, the revenue shall be recognized according to theamount of the cost incurred until the performance progress can be reasonably determined.

For performance obligations performed at a certain point in time, the Company recognizes revenue at the pointwhen the customer obtains control of the relevant goods or services. When judging whether a customer hasobtained control of goods or services, the Company will consider the following signs:

1) The Company has the current right to collect payment for the goods or services;

2) The Company has transferred the goods in kind to the customer;

3) The Company has physically transferred the goods to the customer;

4) The Company has transferred the principal risks and rewards of ownership of the goods to the customer;

5) The customer has accepted the goods or services, etc.

The Company’s right to receive consideration for goods or services that have been transferred to customers arepresented as contractual assets, which are impaired on the basis of expected credit losses. The Company’sunconditional right to receive consideration from customers is shown as a account receivable. The obligationto transfer goods or services to customers for which the Company has received consideration receivable fromthem is shown as a contractual liability.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

30. Government subsidy

Government subsidy of the Company include project grants, financial subsidies and job stabilizationsubsidies.Of which, asset-related government subsidy are government subsidy acquired by the Company forthe acquisition or other formation of long-term assets; government subsidy related to revenue are governmentsubsidy other than those related to assets. If the government document does not clearly specify the subsidyobject, the Company will judge according to the above-mentioned distinguishing principle. If it is difficult todistinguish, it will be overall classified as a government subsidy related to income.If government subsidies are monetary assets, they are measured according to the amount actually received. Forsubsidies paid on the basis of a fixed quota standard, when there is conclusive evidence at the end of the yearthat it can meet the relevant conditions stipulated by the financial support policy and is expected to receivefinancial support funds, they are measured according to the amount receivable. If the government subsidy is anon-monetary asset, it shall be measured at its fair value, when the fair value cannot be obtained reliably, itshall be measured at its nominal amount (1 yuan).

Government subsidies related to assets are recognized as deferred income. Asset-related government subsidiesthat are recognized as deferred income are included in the current profit and loss in installments according tothe average life method during the useful life of the relevant assets.

If the relevant asset is sold, transferred, scrapped or damaged before the end of its useful life, the undistributeddeferred income balance shall be transferred to the current profit and loss of asset disposal.

31. Deferred Income Tax Assets and Deferred Income Tax Liabilities

A deferred tax asset and deferred tax liability shall be determined by a difference (temporary difference)between the carrying amount of an asset or liability and its tax base. The deferred tax asset shall be recognizedfor the carry forward of unused deductible losses that it is probable that future taxable profits will be availableagainst which the deductible losses can be utilized. For temporary difference arising from initial recognitionof goodwill, no corresponding deferred income tax liabilities will be recognized. For temporary differencearising from initial recognition of assets and liabilities occurred in the transaction related to non-businesscombination which neither affect accounting profit nor taxable income (or deductible losses), no correspondingdeferred income tax assets and deferred income tax liabilities will be recognized. As of the balance sheet date,deferred income tax assets and deferred income tax liabilities are measured at the effective tax rate applicableto the period when recovery of assets or settlement of liabilities occur.

The Company recognizes deferred income tax assets to the extent of future taxable income tax which is likelyto be obtained to offset deductible temporary difference, deductible losses and tax credits.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

32.Lease

When the Company becomes the lessee of the lease contract, has the right to obtain almost all the economicbenefits arising from the use of the identified assets during the period of use, and has the right to lead the useof the identified assets during the period of use, the present value of unpaid lease payments of the lease assetsafter deducting lease incentives (except for short-term leases and leases of low-value assets for whichsimplified treatment is selected) is recognized as a lease liability, and a right-of-use asset is recognized basedon the sum of the present value of the lease liability, prepaid rent, and initial direct costs, and depreciation andinterest expenses are recognized separately.When the Company becomes the lessee of the lease contract, for short-term leases without purchase optionswithin one year and lease contracts with a value of less than 40,000 yuan (excluding sublease or expectedsublease assets), choose simplified treatment, and include in the related asset cost or current profit and lossaccording to the straight-line method during the lease period.

When the Company becomes the lessor of a lease contract, the lease is divided into operating lease and financelease on the start date of lease. A finance lease is a lease that transfers substantially all the risks and rewardsassociated with ownership of an asset. An operating lease refers to a lease other than finance leases. The rentof an operating lease is recognized as income on a straight-line basis during the lease term. For an finance lease,the net investment in the lease is regarded as the entry value of the finance lease receivables, and the netinvestment in the lease is the sum of the unguaranteed residual value and the present value of the lease receiptsthat have not been received on the start date of the lease term.There are both leasing and non-leasing businesses in the contract and can be split, and the leasing business isfinancially accounted according to the lease standards. There are both leasing and non-leasing businesses inthe contract and cannot be split, and the entire contract is included in the lease business for financial accountingaccording to the lease standards.The lease change needs to be judged whether it can be recognized as a single leasing business, and it needs tobe recognized separately if it meets the recognition conditions of a single lease; if it does not meet therecognition of a single leasing business, or there is a major event or change within the controllable range of thelessee, re-evaluate and measure the present value of lease liabilities, and adjust the book value of the right-of-use asset accordingly. If the book value of the right-of-use asset has been reduced to zero, but the lease liabilitystill needs to be further reduced, the lessee shall include the remaining amount in the corresponding expensesfor the current period.

33. Held-for-sale

(1)The Company classifies non-current assets or disposal groups that meet all of the following conditions as

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

held-for-sale: 1) according to the practice of selling this type of assets or disposal groups in a similar transaction,the non-current assets or disposal group can be sold immediately at its current condition; 2) The sale is likelyto occur, that is, the Company has made resolution on the selling plan and obtained definite purchasecommitment, the selling is estimated to be completed within one year. Those assets whose disposal is subjectto approval from relevant authority or supervisory department under relevant requirements are subject to thatapproval. Prior to the preliminary classification of non-current assets or disposal group as the category of held-for-sale, the Company measures the carrying value of the respective assets and liabilities within the non-currentassets or disposal group under relevant accounting standards. For non-current asset or disposal group held forsale, for which it is found that the carrying value is higher than its fair value less disposal expense during theinitial measurement or re-measurement on the balance sheet date, the carrying value shall be deducted to thenet amount of fair value less disposal expense, and the reduced amount shall be recognized as impairment lossin profit or loss for the period, and provision of impairment of assets held for sale shall be provided foraccordingly.

(2)The non-current assets or disposal group that the Company has acquired specially for resale are classifiedas held for sale on the acquisition date when they meet the condition that “the selling is estimated to becompleted within one year” on the acquisition date, and are likely to satisfy other conditions of being classifiedas the type of held for sale in a short-term (usually being 3 months). Non-current assets or disposal groupclassified as held for sale are measured at the lower of their initial measurement amount and the net amountafter their fair value less the selling expenses based on the assumption that such non-current assets or disposalgroup are not classified as held for sale at the time of initial measurement. Except for the non-current assets ordisposal group acquired in a business combination, the difference arising from considering the net amount ofsuch non-current assets or disposal group after their fair value less the selling expenses as the initialmeasurement amount is recorded in the current profit or loss.

(3)In case of loss of control over the subsidiaries due to the sales of investment in subsidiaries, no matterwhether the Company retains part of the equity investment after selling investment in subsidiaries, theinvestment in subsidiaries shall be classified as held for sale on an aggregate basis in the separate financialstatements of the parent company when the investment in subsidiaries proposed to be sold satisfies theconditions for being classified as held for sale; and all the assets and liabilities of the subsidiary shall beclassified as held for sale in the consolidated financial statements.

(4)If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balancesheet date increases, the amount previously reduced for accounting shall be recovered and reverted from theimpairment loss recognized after the asset is classified under the category of held for sale, with the amount

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

reverted recorded in profit or loss for the period. Impairment loss recognized before the asset is classified underthe category of held for sale shall not be reverted.

(5)For the amount of impairment loss on assets, the carrying value of disposal group’s goodwill shall be offsetagainst first, and then offset against the book value of non-current assets according to the proportion of bookvalue of non-current assets.If the net amount of fair value of the disposal group held for sale on the subsequent balance sheet date lesssales expenses increases, the amount reduced for accounting in previous periods shall be restored, and shall bereverted in the impairment loss recognized in respect of the non-current assets which are applicable to relevantmeasurement provisions after classification into the category of held for sale, with the reverted amount chargedin profit or loss for the current period. The written-off carrying value of goodwill and impairment loss of non-current assets which is recognized prior to classification into the category of held for sale shall not be reverted.The subsequent reversed amount in respect of the impairment loss on assets recognized in the disposal groupheld for sale will increase the book value in proportion of the book value of each non-current asset (other thangoodwill) in the disposal group.

(6) The non-current assets in the non-current assets or disposal group held for sale is not depreciated oramortized, and the debt interests and other fees in the disposal group held for sale continue to be recognized.

(7)If the non-current assets or disposal group are no longer classified as held for sale since they no longer meetthe condition of being classified as held for sale or the non-current assets are removed from the disposal groupheld for sale, they will be measured at the lower of the following: 1) the amount after their book value beforethey are classified as held for sale is adjusted based on the depreciation, amortization or impairment that shouldhave been recognized given they are not classified as held for sale; 2) the recoverable amount.

(8) The unrecognized profits or loss will be recorded in the current profits or loss when derecognizing the non-current assets or disposal group held for sale.

34. Discontinued operation

A discontinued operation is a separately identified component of the Group that either has been disposed of oris classified as held for sale, and satisfies one of the following conditions: (1) represents a separate major lineof business or geographical area of operations; (2) is part of a single co-ordinate plan to dispose of a separatemajor line of business or geographical area of operations; and (3) is a subsidiary acquired exclusively with aview to resale.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

35. Income tax accounting

The Company accounted the income tax in a method of debit in balance sheet. The income tax expenses includeincome tax in the current year and deferred income tax. The income tax associated with the events andtransactions directly included in the owners’ equity shall be included in the owners’ equity; and the deferredincome tax derived from business combination shall be included in the carrying amount of goodwill, exceptfor that above, the income tax expense shall be included in the profit or loss in the current period.The income tax expense in the current year refers to the tax payable, which is calculated according to the taxlaws on the events and transactions incurred in the current period. The deferred income tax refers to thedifference between the carrying amount and the deferred tax assets and deferred tax liabilities at Current Year-end recognized in the method of debit in the balance sheet.

36. Segment information

Business segment was the major reporting form of the Company, which divided into four parts: air-conditioning, refrigerator & freezer& washing machine,small home appliance and others. The transfer priceamong the segments will recognize based on the market price, common costs will allocated by incomeproportion between segments except for the parts that without reasonable allocation.

37. Explanation on significant accounting estimation

The management of the Company needs to apply estimation and assumption when preparing financialstatement which will affect the application of accounting policy and amounts of assets, liabilities, income andexpense. The actual condition may differ from the estimation. Constant evaluation is conducted by themanagement in respect of the key assumption involved in the estimation and judgment of uncertainties. Effectresulting from change of accounting estimation is recognized in the period the change occurs and future periods.

The following accounting estimation and key assumption may result in material adjustment to the book valueof assets and liabilities in future period.

(1) Inventory impairment provision

The Company's provision for impairment of inventories on the balance sheet date is the part of the net realizablevalue lower than the cost of inventories. The net realizable value of the inventory of goods that are directlyused for sale, such as the goods in stock, the goods sent out, and the materials for sale, and the low-consumptiongoods, shall be determined by the amount of the estimated selling price of the inventory minus the estimatedselling expenses and relevant taxes. The net realizable value of the material inventory held for production isdetermined by the amount of the estimated selling price of the finished product produced minus the estimatedcost to be incurred at the time of completion, the estimated selling expenses and relevant taxes.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(2) Accounting estimation on long-term assets impairment provision

The Company makes impairment test on fixed assets such as buildings, machine and equipment which haveimpairment indication and long-term assets such as goodwill as at the balance sheet date. The recoverableamount of relevant assets and assets group shall be the present value of the projected future cash flow whichshall be calculated with accounting estimation.

If the management amends the gross profit margin and discount rate adopted in calculation of future cash flowof assets and assets group and the amended gross profit margin is lower than the currently adopted one or theamended discount rate is higher than the currently adopted one, the Company needs to increase provision ofimpairment provision. If the actual gross profit margin is higher (or the discount rate is lower) than theestimation of management, the Company can not transfer back the long term assets impairment provisionprovided already.

(3) Accounting estimation on realization of deferred income tax assets

Estimation on deferred income tax assets needs estimation on the taxable income and applicable tax rate foreach future year. Realization of deferred income tax assets depends on whether a company is able to obtainsufficient taxable income in future. Change of future tax rate and switch back of temporary difference couldaffect the balance of income tax expense (gains) and deferred income tax. Change of the aforesaid estimationmay result in material adjustment to deferred income tax.

(4) Usable term and residual value rate of fixed assets and intangible assets

The Company, at least at the end of each accounting year, reviews the projected usable life and residual valuerate of fixed assets and intangible assets. The projected usable life and residual value rate are determined bythe management based on the historical experiences of similar assets by reference to the estimation generallyused by the same industry with consideration on projected technical upgrade. If material change occurs toprevious estimation, the Company shall accordingly adjust the depreciation expenses and amortizationexpenses for future period.

(5) Projected liabilities arising from product quality guarantee

The Company commits to repair the major spare parts of refrigerators sold through go-to-countrysidepromotion activity for free for ten years. As to the maintenance expenses that may be increased arising fromsuch commitment, the Company has provided projected liabilities.

Taking into account the various uncertainties during the ten years, the Company considers no discount factorof such projected liabilities. Instead, the Company reviews the parameters (probility, proportion, maintenanceexpense per single set) based on the actual occurrence of maintenance expenses as of each balance sheet date.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

If obvious change is found, the Company will adjust the projected liabilities according to the latest parametersso as to reflect the best estimation.

38. Other comprehensive income

Other comprehensive income represents various gains and losses not recognized in current gains and lossesaccording to other accounting rules.Other comprehensive income items shall be reported in the following two classes under other relevantaccounting rules:

(1)Other comprehensive income items that can not be reclassified into gains and losses in future accountingperiods, mainly including changes arising from re-measurement of net liabilities or net assets under definedbenefit plan and interest in investee’s other comprehensive income which are measured under equity methodand which can not be reclassified into gains and losses in future accounting periods;

(2) Other comprehensive income items that will be reclassified into gains and losses in future accountingperiods upon satisfaction of required conditions, mainly includes the share of other comprehensive income thatis reclassified into profit and loss when the investee’s subsequent accounting periods are accounted for inaccordance with the equity method and meet the specified conditions, the fair value changes occurred by thedebt investment that is measured at fair value and whose changes are included in other comprehensive income,the difference between the original book value included in other comprehensive income and the fair valuewhen a financial asset measured at amortized cost is reclassified as a financial asset measured at fair value andits changes are included in other comprehensive income, the loss provisions for financial assets measured atfair value and whose changes are included in other comprehensive income, the gains or losses generated fromcash flow hedging instruments are part of effective hedging, and the differences in conversion of foreigncurrency financial statements.

39. Change of significant accounting policies and accounting estimates

(1) Change of significant accounting policy: N/A

(2) Change of significant accounting estimates: N/A

V. Taxation

1. Major taxes and tax rates

Tax (expenses)Tax (expenses) baseTax (expenses) rate
VATIncome from sales of goods and from processing13%, 9%, 6%, 5%, 3%
Urban maintenance and construction taxTurnover tax5% or 7%

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Tax (expenses)Tax (expenses) baseTax (expenses) rate
Education surchargeTurnover tax3%
Local education surchargeTurnover tax2%
Corporate income taxTaxable income15%, 20%, 25%, 30%, 33%
House property taxOriginal Book value of house property×(1-30%)or annual rent income1.2% or 12%
Land use taxActual land area used1 yuan/M2 to 15 yuan /M2

Description of taxpayers with different corporate income tax rates:

NameIncome tax rate
Changhong Meiling Co., Ltd.15%
Zhongke Meiling Cryogenic Technology Co., Ltd15%
Zhongshan Changhong Electric Co., Ltd15%
Sichuan Hongmei Intelligent Technology Co., Ltd.15%
Mianyang Meiling Refrigeration Co., Ltd.15%
Changhong Meiling Ridian Technology Co., Ltd.15%
Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd.15%
Hefei Meiling Nonferrous Metal Products Co., Ltd.15%
Jiangxi Meiling Electric Appliance Co., Ltd.15%
Sichuan Changhong Air-conditioner Co., Ltd15%
Hebei Hongmao Daily Appliance Technology Co., Ltd.15%
Anhui Tuoxing Technology Co., Ltd.20%
Guangzhou Changhong Trading Co., Ltd.20%
Anhui Ling'an Medical Equipment Co., Ltd20%
Hefei Meiling Wulian Technology Co., Ltd20%
CH-Meiling International (Philippines) Inc.30%
Changhong Ruba Trading Company (Private) Limited33%

2. Preferential tax

(1) On August 17, 2020, the company obtained the high-tech enterprise certificate numbered GR202034000222approved by the Anhui Provincial Department of Science and Technology, Anhui Provincial Department ofFinance, and Anhui Provincial Taxation Bureau of the State Administration of Taxation, and enjoys 15% ratefor the income tax for State Hi-Tech Enterprise for three years term.

(2) On August 17, 2020, the subsidiary Zhongke Meiling Cryogenic Technology Co., Ltd. obtained the high-tech enterprise certificate numbered GR202034000072 approved by the Anhui Provincial Department of

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Science and Technology, Anhui Provincial Department of Finance, and Anhui Provincial Taxation Bureau ofthe State Administration of Taxation, and enjoys 15% rate for the income tax for State Hi-Tech Enterprise forthree years term.

(3) On December 9, 2020, the subsidiary Zhongshan Changhong Electric Co., Ltd., was included in the “Noticeon Publicizing the List of the Second Batch of High-tech Enterprises to be Recognized in Guangdong Provincein 2020'' published by the Office of the National High-tech Enterprise Certification Management LeadingGroup, and continues to enjoy 15% rate for the income tax for State Hi-Tech Enterprise for three years term.

(4) The subsidiary Sichuan Hongmei Intelligent Technology Co., Ltd. has passed the qualification of high-techenterprise certification on 9 October 2021, and enjoys 15% rate for the income tax for State Hi-Tech Enterprisefor three years term.

(5) Subsidiary Mianyang Meiling Refrigeration Co., Ltd., belongs to the encouraged industry in the IndustrialStructure Adjustment Guidance Catalog and enjoys the preferential taxation policy of corporate income tax forthe Western Development, and the corporate income tax is levied at a reduced tax rate of 15%, valid untilDecember 31, 2030.

(6) The subsidiary Guangdong Changhong Meiling Ridian Technology Co., Ltd. has passed the qualificationof high-tech enterprise certification on 2 December 2019, and enjoys 15% rate for the income tax for State Hi-Tech Enterprise for three years term.

(7) The subsidiary Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. has passed the qualification ofhigh-tech enterprise certification on 2 December 2019, and enjoys 15% rate for the income tax for State Hi-Tech Enterprise for three years term.

(8) The subsidiary Hefei Meiling Nonferrous Metal Products Co., Ltd. has passed the qualification of high-tech enterprise certification on 18 September 2021, and enjoys 15% rate for the income tax for State Hi-TechEnterprise for three years term.

(9) The subsidiary Jiangxi Meiling Electric Appliance Co., Ltd. has passed the qualification of high-techenterprise certification on 16 September 2019, and enjoys 15% rate for the income tax for State Hi-TechEnterprise for three years term.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(10) The subsidiary Sichuan Changhong Air-conditioner Co., Ltd., belongs to the encouraged industry in theIndustrial Structure Adjustment Guidance Catalog and enjoys the preferential taxation policy of corporateincome tax for the Western Development, and the corporate income tax is levied at a reduced tax rate of 15%,valid until December 31, 2030.

(11) The subsidiary Hebei Hongmao Daily Appliance Technology Co., Ltd. has passed the qualification ofhigh-tech enterprise certification on 18 September 2021, and enjoys 15% income tax rate for national payrolltechnology enterprise for three years term.

(12) The subsidiary Anhui Tuoxing Technology Co., Ltd., Anhui Ling’an Medical Equipment Co., Ltd., HefeiMeiling Wulian Technology Co., Ltd., Guangzhou Changhong Trading Co., Ltd. are in compliance with therelevant standards for small and medium-sized enterprises with meager profits in the “Notice on matters relatedto the implementation of preferential income tax policy to support the development of small & medium-sizeenterprise and individual entrepreneurs” (Guoshui [2021] No. 8) and “Notice on Further Implementationof Preferential Income Tax Policies for Small & Micro Enterprises (No.: 13 of 2022)” of the Ministry ofFinance and the State Administration of Taxation, and temporarily implements below policies: the part ofannual taxable income that does not exceed one million yuan is included in taxable income by 12.5% after areduction, and corporate income tax is paid at a tax rate of 20%, valid until December 31, 2022; while the partof annual taxable income exceeds one million yuan but not exceeding three million yuan is included in taxableincome by 25% after a reduction, and corporate income tax is paid at a tax rate of 20%, which is valid untilDecember 31, 2024.VI. Notes to the major items in the consolidated financial statementsWith respect to the financial statements’ figures disclosed below, unless otherwise specified, “period-beginning”refers to Jan. 1, 2022; “period-end” refers to Jun. 30, 2022; “Current Period” refers to Jan. 1 to Jun. 30, 2022;“the last period” refers to Jan. 1 to Jun. 30, 2021; the currency is RMB.

1. Monetary fund

ItemEnding balanceOpening balance
Cash31,633.8628,447.21
Bank deposit5,236,987,879.705,121,110,089.59
Other monetary fund932,537,330.83805,215,921.34
Interest receivable on deposit13,448,250.7212,468,938.07
Total6,183,005,095.115,938,823,396.21
Including: total amount deposited in overseas6,255,478.318,156,154.33

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Total use of restricted funds931,910,598.8586,159,526.57

Other monetary fund:

ItemEnding balanceOpening balance
Cash deposit544,756,104.36776,959,862.25
Time deposit354,040,000.00
Litigation Freeze32,103,675.006,603,675.00
Co-managed account funds1,010,819.49504,702.66
Account of foreign currency for verification397,936.85
Union Pay online228,412.93546,234.06
Taobao account74,572.96
B share account payment382.2020,526,874.41
Total1,069,654,408.78805,215,921.34

Those not included in cash and cash equivalent are: balance of deposit for bank acceptance bill 543,272,065.16 yuan, L/C depositof 1,484,039.20 yuan and time deposit of 354,040,000.00 yuan. Bank deposit 32,103,675.00 yuan frozen due to the litigation,balance of 1,010,819.49 yuan that have use restriction in condominium account and interest receivable on deposit 13,448,250.72yuan. The remaining Monetary funds are treated as cash and cash equivalents.

2. Trading financial assets

ItemEnding balanceOpening balance
Financial assets measured at fair value and whose changes are included in current gains/losses208,184,795.2317,997,086.19
Including: Derivative financial assets47,475,394.0817,997,086.19
Principal and interest of wealth management products160,709,401.15

Trading financial assets refer to the RMB forward exchange fund in Current Period

3. Note receivable

(1) Category of note receivable

ItemEnding balanceOpening balance
Bank acceptance439,419.032,216,752.22
Total439,419.032,216,752.22
Less: bad debt provision
Book value439,419.032,216,752.22

(2) No notes endorsement or discount and undue on balance sheet date

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(3) Notes transfer to account receivable due for failure implementation by drawer at period-end

ItemAmount of accounts receivable transferred at period-end
Bank acceptance300,000.00
Trade acceptance102,470,414.97
Total102,770,414.97

(4) By accrual of bad debt provision

CategoryEnding balance
Book balanceBad debt provisionBook value
AmountRatio (%)AmountRatio (%)
With bad debt provision accrual on single item439,419.03100439,419.03
Including: bank acceptance439,419.03100439,419.03
Total439,419.03100439,419.03

(Continued)

CategoryOpening balance
Book balanceBad debt provisionBook value
AmountRatio (%)AmountRatio (%)
With bad debt provision accrual on single item2,216,752.22100.002,216,752.22
Including: bank acceptance2,216,752.22100.002,216,752.22
Total2,216,752.22100.002,216,752.22

1) Note receivable withdrawal bad debt provision on single item

NameEnding balance
Book balanceBad debt provisionProvision ratio (%)Provision reason
Bank acceptance439,419.03Minimal risk, holding maturity acceptance
Total439,419.03

(Continued)

NameOpening balance
Book balanceBad debt provisionProvision ratio (%)Provision reason
Bank acceptance2,216,752.22Minimal risk, holding maturity acceptance
Total2,216,752.22

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(5) No bad debt provision of note receivable that has been accrued, withdrawn, and reversed this period

(6) No note receivable actually written off in this period.

4. Account receivable

(1) Category of account receivable by bad debt accrual

CategoryEnding balance
Book balanceBad debt provisionBook value
AmountRatio (%)AmountRatio (%)
Account receivable that withdrawal bad debt provision by single item1,042,626,200.8143.0829,155,889.892.801,013,470,310.92
Including: current payment with related party1,017,575,253.2442.056,982,193.830.691,010,593,059.41
Account receivable with letter of credit1,192,657.900.051,192,657.90
Account receivable with single minor amount but withdrawal single item bad debt provision23,858,289.670.9822,173,696.0692.941,684,593.61
Account receivable withdrawal bad debt provision by portfolio1,377,396,479.0956.92120,013,557.898.711,257,382,921.20
Including: account receivable of engineering customers225,796,909.419.3321,022,556.399.31204,774,353.02
Receivables other than engineering customers1,151,599,569.6847.5998,991,001.508.601,052,608,568.18
Total2,420,022,679.90100.00149,169,447.786.162,270,853,232.12

(Continued)

CategoryOpening balance
Book balanceBad debt provisionBook value
AmountRatio (%)AmountRatio (%)
Account receivable that withdrawal bad debt provision by single item822,475,594.5553.4025,372,653.493.08797,102,941.06
Including: current payment with related party754,228,757.4148.974,149,753.850.55750,079,003.56
Account receivable with letter of credit47,023,937.503.0547,023,937.50
Account receivable with single minor amount but withdrawal single item bad debt provision21,222,899.641.3821,222,899.64100.00
Account receivable withdrawal bad debt provision by portfolio717,853,201.8346.6074,081,451.6110.32643,771,750.22
Including: account receivable of engineering customers191,420,885.4912.4315,308,246.278.00176,112,639.22
Receivables other than engineering customers526,432,316.3434.1758,773,205.3411.16467,659,111.00
Total1,540,328,796.38100.0099,454,105.106.461,440,874,691.28

1) Account receivable that withdrawal bad debt provision by single item

Account receivable with single minor amount but withdrawal bad debt provision singly, refers to the minor

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

single receivables, and withdrawal bad debt provision by combination shows no risk characteristic of thereceivables, 64 clients involved.

2) Account receivable withdrawal bad debt provision by portfolio

A. Account receivable of engineering customers

Account ageEnding balance
Book balanceBad debt provisionProvision ratio (%)
Within 3 months (3 months included)29,837,468.00
More than 3 months and less than 6 months (6 months included)28,454,538.58
Over 6 months and within one year (One year included)113,588,126.66
Over one year - within 2 years (2 years included)26,977,783.975,395,556.7920.00
Over 2 years - within 3 years (3 years included)22,623,985.2011,311,992.6050.00
Over 3 years4,315,007.004,315,007.00100.00
Total225,796,909.4121,022,556.39

(Continued)

Account ageOpening balance
Book balanceBad debt provisionProvision ratio (%)
Within 3 months (3 months included)47,442,159.78
More than 3 months and less than 6 months (6 months included)66,786,580.82
Over 6 months and within one year (One year included)24,376,909.49
Over one year - within 2 years (2 years included)38,592,189.767,718,437.9520.00
Over 2 years - within 3 years (3 years included)13,266,474.646,633,237.3250.00
Over 3 years956,571.00956,571.00100.00
Total191,420,885.4915,308,246.27

B. Receivables other than engineering customers

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Account ageEnding balance
Book balanceBad debt provisionProvision ratio (%)
Within 3 months (3 months included)907,144,840.159,071,448.401.00
More than 3 months and less than 6 months (6 months included)47,241,864.844,724,186.4810.00
Over 6 months and within one year (One year included)77,647,870.8915,529,574.1820.00
Over one year - within 2 years (2 years included)96,831,997.3648,415,998.6850.00
Over 2 years - within 3 years (3 years included)7,416,013.415,932,810.7380.00
Over 3 years15,316,983.0315,316,983.03100.00
Total1,151,599,569.6898,991,001.50

(Continued)

Account ageOpening balance
Book balanceBad debt provisionProvision ratio (%)
Within 3 months (3 months included)299,994,550.942,999,945.511.00
More than 3 months and less than 6 months (6 months included)68,972,844.556,897,284.4610.00
Over 6 months and within one year (One year included)126,004,879.5725,200,975.9120.00
Over one year - within 2 years (2 years included)12,130,576.346,065,288.1750.00
Over 2 years - within 3 years (3 years included)8,598,768.256,879,014.6080.00
Over 3 years10,730,696.6910,730,696.69100.00
Total526,432,316.3458,773,205.34

(2) By account age

Account ageEnding balanceOpening balance
Within 3 months (3 months included)1,835,823,014.201,081,226,013.94
More than 3 months and less than 6 months (6 months included)145,211,963.66162,654,138.54
Over 6 months and within one year (One year included)163,722,660.71179,880,109.29
Over one year - within 2 years (2 years included)159,003,059.6263,134,405.85

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Account ageEnding balanceOpening balance
Over 2 years - within 3 years (3 years included)78,284,260.6723,736,943.93
Over 3 years37,977,721.0429,697,184.83
Total2,420,022,679.901,540,328,796.38

(3) Bad debt provision of accounts receivable this period

CategoryOpening balanceChanges this periodEnding balance
AccrualWithdrawal or reversalResale or write-offOther decreases
Bad debt provision99,454,105.1051,578,302.20714,463.581,148,495.94149,169,447.78
Total99,454,105.1051,578,302.20714,463.581,148,495.94149,169,447.78

(4) Account receivable actually written-off in Current Period: nil

(5) Top five receivables collected by arrears party amounting to 1,628,322,390.23 yuan in total, accountedfor 67.29% of the receivables of Current Period-end, the bad debt provision accrual correspondinglyamounting to 60,335,952.55 yuan at period-end balance.

(6) Account receivable terminated recognition due to the transfer of financial assets: 1,193,151,944.08 yuan

(7) No assets and liability transfer account receivable and continues to involve

5. Receivables financing

ItemEnding balanceOpening balance
Bank acceptance1,380,100,294.091,808,109,301.56
Total1,380,100,294.091,808,109,301.56

(1)Notes receivable already pledged that presented in receivables financing:

ItemAmount pledged at period-endAmount pledged at period-begin
Bank acceptance515,578,650.05385,477,263.99

Note: with purpose of improving the note utilization, the Company draw up bank acceptance by pledge parts of the outstandingnotes receivable to the bank. For details of the pledge of bills receivable, see Note VI. 63. Assets with restricted ownership oruse rights.

(2)Receivable financing that have been endorsed or discounted at end of the Period and are not yet dueat balance sheet date

ItemAmount derecognition at period-endAmount without derecognition at period-end
Bank acceptance1,145,936,133.26
Total1,145,936,133.26

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

6. Accounts paid in advance

(1) Age of account paid in advance

ItemEnding balanceOpening balance
AmountRatio (%)AmountRatio (%)
Within one year24,668,194.5785.8828,208,857.4994.77
1-2 years3,188,170.8611.101,557,939.855.23
2-3 years868,224.493.02
Over 3 years
Total28,724,589.92100.0029,766,797.34100.00

(2) Top 5 of account paid in advance in balance at period-end amounting to 19,882,246.82 yuan, accountedfor 69.22% of the account.

7. Other account receivable

ItemEnding balanceOpening balance
Other account receivable101,572,345.96111,652,635.86
Total101,572,345.96111,652,635.86

(1) Category of other account receivable

NatureBook balance at period-endBook balance at period-begin
Export rebate8,001,439.5426,634,190.54
Cash deposit57,304,812.8770,481,345.37
Loans of employee’s pretty cash14,573,159.5512,299,111.06
Related party not in consolidation statement872,583.65718,189.14
Advance money temporary95,223.40355,045.58
Compensation payments21,077,786.35
Other373,164.282,289,144.60
Total102,298,169.64112,777,026.29

(2) Other account receivable bad debt reserves

Bad debt provisionFirst stageSecond stageThird stageTotal
Expected credit loss in next 12 monthsExpected credit loss for the whole duration (no credit impairment)Expected credit loss for the whole duration (credit impairment has occurred)
Balance as at 1 Jan. 20221,074,390.4350,000.001,124,390.43
Book balance of other account receivable in Current Period as

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Bad debt provisionFirst stageSecond stageThird stageTotal
Expected credit loss in next 12 monthsExpected credit loss for the whole duration (no credit impairment)Expected credit loss for the whole duration (credit impairment has occurred)
at 1 Jan. 2022
--Transfer to the second stage
-- Transfer to the third stage
-- Reversal to the second stage
-- Reversal to the first stage
Provision in Current Period-397,219.49-397,219.49
Reversal in Current Period
Conversion in Current Period
Write off in Current Period
Other change-1,347.26-1,347.26
Balance as at 30 Jun. 2022675,823.6850,000.00725,823.68

(3) By account age

Account ageEnding balanceOpening balance
Within 3 months (3 months included)46,412,715.3450,798,283.74
More than 3 months and less than 6 months (6 months included)4,165,411.2515,511,159.70
Over 6 months and within one year (One year included)16,711,089.167,875,791.66
Over one year - within 2 years (2 years included)25,648,393.7828,844,885.97
Over 2 years - within 3 years (3 years included)4,068,922.944,113,598.75
Over 3 years5,291,637.175,633,306.47
Total102,298,169.64112,777,026.29

(4) Top 5 other receivables collected by arrears party at balance of period-end:

NameNatureEnding balanceAccount ageProportion in total other receivables ending balance (%)Ending balance of bad debt provision
Unit IInsurance compensation18,970,000.00Within 3 months18.54
Unit IICash deposit8,780,849.401-2 years8.58
Unit IIITax rebate8,001,439.54Within 3 months7.82
Unit IVCash deposit5,320,000.00Within 3 months5.20
Unit VCash deposit3,692,993.006 months-1 year & 2-33.61

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

NameNatureEnding balanceAccount ageProportion in total other receivables ending balance (%)Ending balance of bad debt provision
years
Total44,765,281.9443.75

(5) No other account receivable involved government subsidies

(6) No other receivables terminated recognition due to the transfer of financial assets

(7) No assets and liability transfer other receivables and continues to involve

8. Inventories

(1) Classification of inventories

ItemEnding balance
Book balanceInventory price decline provision/contract performance cost impairment provisionBook value
Raw materials174,635,938.3810,907,638.25163,728,300.13
Stock commodities979,870,437.6556,093,198.50923,777,239.15
Low value consumable articles4,953,458.191,381,368.563,572,089.63
Goods in transit406,727,070.6111,467,431.64395,259,638.97
Goods-in-process8,957,686.738,957,686.73
Contract performance cost85,722,861.49238,513.9085,484,347.59
Deferred expense for mould26,939,080.5126,939,080.51
Total1,687,806,533.5680,088,150.851,607,718,382.71

(Continued)

ItemOpening balance
Book balanceInventory price decline provision/contract performance cost impairment provisionBook value
Raw materials129,438,627.368,482,723.94120,955,903.42
Stock commodities828,837,153.5051,052,406.21777,784,747.29
Low value consumable articles5,564,313.19954,827.344,609,485.85
Goods in transit295,059,984.058,068,827.90286,991,156.15
Goods-in-process5,351,870.755,351,870.75
Contract performance cost123,275,655.95241,230.88123,034,425.07
Deferred expense for mould37,629,831.2737,629,831.27
Total1,425,157,436.0768,800,016.271,356,357,419.80

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(2) Provision for inventory depreciation and contract performance cost impairment provision

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
AccrualOtherReversal or resellingOther
Raw materials8,482,723.943,175,642.94750,728.6310,907,638.25
Stock commodities51,052,406.2120,087,356.0814,760,739.90285,823.8956,093,198.50
Goods in transit8,068,827.906,097,340.322,698,736.5811,467,431.64
Low value consumable articles954,827.34451,521.7424,980.521,381,368.56
Contract performance cost241,230.88129,268.24131,985.22238,513.90
Total68,800,016.2729,941,129.3218,367,170.85285,823.8980,088,150.85

(3) Accrual for inventory falling price reserves

ItemSpecific basis for determining of net realizable valueReasons for the reversal or reselling in Current Period
Raw materialsCost is higher than net realizable value (The processed products are decline)For production
Stock commoditiesCost is higher than net realizable value (The market price at period-end fell)For sale
Goods in transitCost is higher than net realizable value (The market price at period-end fell)For sale
Low value consumable articlesCost is higher than net realizable valueAlready used
Contract performance costEngineering construction cost is higher than net realizable value (The processed products are decline)Already used

9. Contract assets

(1) Contract assets

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Warranty3,122,238.55808,716.152,313,522.40
Total3,122,238.55808,716.152,313,522.40

(2) Provision for impairment of contract asset in the Period

CategoryOpening balanceChanges this periodEnding balance
AccrualWithdrawal or reversalResale or write-offOther decreases
Bad debt provision808,716.15808,716.15
Total808,716.15808,716.15

10. Other current assets

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Value-added tax to be deducted80,696,124.37110,346,536.34
Advance payment of income tax6,655,545.536,114,297.55
Contract acquisition cost3,417,508.137,740,783.12
Prepaid disability insurance39,317.4439,317.44
Prepaid listing fee2,517,169.81
Total93,325,665.28124,240,934.45

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

11. Long-term equity investment

Invested enterpriseOpening balanceChanges in Current PeriodEnding balanceEnding balance of impairment
Additional investmentDisinvestmentInvestment profit and loss confirmed by equity methodOther comprehensive income adjustmentOther changes of equityDeclaration of cash dividends or profitsProvision for impairmentOther
Associated companies
1.Hefei Xingmei Assets Management Co., Ltd.19,835,366.844,686,303.375,069,400.0019,452,270.21
2.Sichuan Zhiyijia Network Technology Co., Ltd.note 134,084,025.623,133,405.4237,217,431.04
3.Hong Yuan Ground Energy Heat Tech. Co., Ltdnote220,630,114.17-569,440.9220,060,673.25
4.Sichuan Tianyou Guigu Technology Co., Ltdnote32,974,188.9469,455.433,043,644.37
5.Chengdu Guigu Environmental Tech. Co., Ltdnote49,107,964.9633,664.259,141,629.21
6.ChanghongRuba ElectricCompany(Private)Ltd.note5
7.Hefei Xinmeitai Energy Technology Co., Ltdnote61,617,928.001,617,928.00
Total86,631,660.538,971,315.556,687,328.0088,915,648.08

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Note 1: on 16 December 2014, the Company executed a joint venture agreement with its controlling shareholder SichuanChanghong Electric Co., LTD, targeting to jointly establish Sichuan Zhiyijia Network Technology Co., Ltd. On 5 January2015, Sichuan Zhiyijia Network Technology Co., Ltd was officially incorporated with registered capital of 50 millionyuan, among which, the Company made contribution of 15 million yuan with shareholding proportion of 30% andSichuan Changhong Electric Co., LTD made contribution of 35 million yuan with shareholding proportion of 70%. In2019, the Company increase capital of 29,087,040.00 yuan (of which: 20 million yuan reckoned in registered capital and9,087,040 yuan reckoned in capital reserves) to Zhiyijia with shareholding ratio up to 50%.Note 2: subsidiary Sichuan Changhong Air Conditioner Co., Ltd (“Changhong Air Conditioner”) and HengyouyuanTechnology Development Group Co., Ltd. (“Hengyouyuan”) cooperated to establish Hongyuan Ground Energy HeatTechnology Co., Ltd. on 28 October 2015. The registered capital of the company is 50 million yuan, among which,Changhong Air Conditioner contributed 24.5 million yuan, accounting for 49% of the registered capital, andHengyouyuan contributed 25.5 million yuan, accounting for 51% of the registered capital.Note 3: Sichuan Tianyou Guigu Technology Co., Ltd. was incorporated on 31 March 2015 with registered capital of 100million yuan. Our subsidiary Changhong Air Conditioner made capital contribution of RMB 25 million in cash,accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contributionof 20 million yuan, accounting for 20% of the registered capital. Chengdu Southwest Jiaotong University Industry (Group)Co., Ltd made capital contribution of 20 million yuan, accounting for 20% of the registered capital. Mianyang InvestmentHolding (Group) Co., Ltd made capital contribution of 5 million yuan, accounting for 5% of the registered capital.Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capital contribution of 5 million yuan,accounting for 5% of the registered capital. Jiangsu Runye Investment Co., Ltd. made capital contribution of 10 millionyuan, accounting for 10% of the registered capital. In November 2015, Jiangsu Runye Investment Co., Ltd. transferredall its 10% shares to Sichuan Shuye Jiachen Real Estate Development Co., Ltd.;Chengdu Dongyu Shangmao Co., Ltdmade capital contribution of 15 million yuan, accounting for 15% of the registered capital.In November 2015, ChengduDongyu Shangmao Co., Ltd. transferred all its 15% shares to Chengdu Dongyu No. 1 Enterprise Management ConsultingPartnership (Limited Partnership).In 2016, shareholders meeting of Sichuan Tianyou Guigu Technology Co., Ltd. agreedto reduce the 50 million Yuan capital, the shareholders are reducing the capital by ratio of share-holding. After capitalreduction, subsidiary Changhong Air conditioner contributed 12.5 million Yuan, representing 25% of the registeredcapital.Note 4: Chengdu Guigu Environmental Tech. Co., Ltd. was incorporated on 22 May 2013 with registered capital of 40million yuan. Our subsidiary Changhong Air Conditioner made capital contribution of 10 million yuan, accounting for25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 8 millionyuan, accounting for 20% of the registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltdmade capital contribution of 8 million yuan, accounting for 20% of the registered capital. Mianyang Investment Holding(Group) Co., Ltd made capital contribution of 2 million yuan, accounting for 5% of the registered capital. ShanghaiZhongcheng Xindaya Financial Information Service Co., Ltd made capital contribution of 2 million yuan, accounting for5% of the registered capital. Sichuan Shuye Jiachen Property Development Company made capital contribution of 4million yuan, accounting for 10% of the registered capital. Chengdu Dongyu Shangmao Co., Ltd made capitalcontribution of 6 million yuan, accounting for 15% of the registered capitalNote 5: Zhongshan Changhong, a subsidiary of the Company, entered into a supplemental joint venture agreement withRUBA Comprehensive Trading Company in 2017, pursuant to which, both parties agreed to increase capital contributionof US$ 1,130,191.00, among which, Zhongshan Changhong subscribed to contribute US$ 452,076.00 (equivalent to3,001,649.02 yuan on the actual contribution date) according to the original shareholding proportion of 40% and RUBAComprehensive Trading Company subscribed to contribute US$ 678,115.00 according to the original shareholding

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

proportion of 60%.Note 6: Hefei Meiling Solar Energy Technology Co., Ltd. was incorporated on April 18, 2002, with a registered capitalof 10 million yuan. Subsidiary Hefei Meiling Group Holdings Limited invested 3.1114 million yuan, accounting for

31.114% of the registered capital; Hefei Huayi Investment Co., Ltd. invested 4.972 million yuan, accounting for 49.72%of the registered capital; Hefei Xingtai Asset Management Co., Ltd. invested 1.9166 million yuan, accounting for 19.166%of the registered capital.

12. Debt investment

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
negotiable large certificate of deposit291,305,319.44291,305,319.44
Total291,305,319.44291,305,319.44

13. Other non-current financial assets

ItemEnding balanceOpening balance
Sichuan Changhong Group Finance Co., Ltd.532,961,488.43532,961,488.43
Huishang Bank Co., Ltd.5,000,000.005,000,000.00
Hongyun Fund38,239,153.0744,018,952.27
Total576,200,641.50581,980,440.70

14. Investment real estate

(1) Investment real estate measured at costs

ItemHouse and buildingsTotal
I. Original book value
1.Opening balance60,688,532.1060,688,532.10
2.Increase this period
3.Decrease this period
4.Ending balance60,688,532.1060,688,532.10
II. Accumulated depreciation and accumulated amortization
1.Opening balance7,538,597.657,538,597.65
2.Increase this period958,748.77958,748.77
(1) Provision or amortization958,748.77958,748.77
3.Decrease this period
4.Ending balance8,497,346.428,497,346.42
III. Impairment loss
IV. Book value

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemHouse and buildingsTotal
1. Ending book value52,191,185.6852,191,185.68
2. Opening book value53,149,934.4553,149,934.45

(2) No investment real estate measured by fair value at period-end.

(3) Particular about mortgage of investment property at period-end

NameOriginal book valueAccumulated depreciationImpairment provisionBook value
House and buildings5,795,017.722,426,406.413,368,611.31

(4) Investment real estate without property certification held

ItemBook valueReasons for failing to complete property rights certificate
J04workshop28,103,467.30Related property rights in procedure
J03workshop18,040,910.63Related property rights in procedure
J20 air compressor station workshop1,192,213.84Related property rights in procedure
J18 opening and closing office551,938.73Related property rights in procedure
Total47,888,530.50

15. Fixed assets

ItemBook value at period-endBook value at period-begin
Fixed assets2,190,629,094.632,227,247,182.81
Disposal of fixed assets75,875,517.1175,875,517.11
Total2,266,504,611.742,303,122,699.92

13.1 Fixed assets

(1) Fixed assets

ItemHouse and buildingsMachinery equipmentTransport equipmentOther equipmentTotal
I. Original book value
1.Opening balance1,688,670,197.571,768,708,568.1634,465,918.34220,259,731.033,712,104,415.10
2.Increase this period1,527,440.2262,840,181.44821,337.3618,511,910.8883,700,869.90
(1) Purchase3,338,545.54334,766.924,235,165.597,908,478.05
(2) Construction in progress transfer-in1,527,440.2259,486,692.69486,570.4414,246,357.4575,747,060.80
(3) Inventory transfer in for own use14,943.2130,387.8445,331.05
3.Decrease this period5,980,029.3939,198,584.991,730,980.47969,718.0147,879,312.86
(1) Dispose or retirement5,603,921.9034,173,122.181,632,488.00714,514.0542,124,046.13

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemHouse and buildingsMachinery equipmentTransport equipmentOther equipmentTotal
(2) Transfer to construction in progress5,025,462.815,025,462.81
(3) decrease in exchange rate changes98,492.47255,203.96353,696.43
(4) Temporary estimated decrease376,107.49376,107.49
4.Ending balance1,684,217,608.401,792,350,164.6133,556,275.23237,801,923.903,747,925,972.14
II. Accumulated depreciation
1.Opening balance404,141,977.35959,058,685.1422,160,271.7098,094,721.611,483,455,655.80
2.Increase this period26,975,224.2073,994,008.091,415,411.889,186,931.08111,571,575.25
(1)Accrual26,975,224.2073,994,008.091,415,411.889,186,931.08111,571,575.25
3.Decrease this period2,650,171.0333,470,253.501,625,490.89834,083.1138,579,998.53
(1) Dispose or retirement2,650,171.0332,083,131.271,557,800.57661,820.4736,952,923.34
(2) Transfer to construction in progress1,387,122.231,387,122.23
(3) decrease in exchange rate changes67,690.32172,262.64239,952.96
4.Ending balance428,467,030.52999,582,439.7321,950,192.69106,447,569.581,556,447,232.52
III. Impairment loss
1.Opening balance1,260,961.87140,614.621,401,576.49
2.Increase this period
3.Decrease this period551,931.50551,931.50
(1) Dispose or retirement551,931.50551,931.50
4.Ending balance709,030.37140,614.62849,644.99
IV. Book value
1. Ending book value1,255,750,577.88792,058,694.5111,606,082.54131,213,739.702,190,629,094.63
2. Opening book value1,284,528,220.22808,388,921.1512,305,646.64122,024,394.802,227,247,182.81

The new fixed assets in this period mainly due to the 75,747,060.80 yuan transfer from construction in process;decrease of the fixed assets in Current Period mainly including assets dispose for retirement.

(2) No fixed assets temporary idle at period-end.

(3) Fixed assets for collateral at period-end

NameOriginal book valueAccumulated depreciationImpairment provisionBook value
House and buildings475,337,823.38132,590,551.27342,747,272.11

(4) Fixed assets leased through operating lease at period-end

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemOriginal book valueAccumulated depreciationImpairment provisionBook value
House and buildings57,978,587.5517,205,319.3840,773,268.17
Machinery equipment32,253,032.1711,990,197.8020,262,834.37
Other equipment3,142,260.301,794,727.881,347,532.42
Total93,373,880.0230,990,245.0662,383,634.96

(5) Fixed assets without property certificate

ItemBook valueReason of not complete the property certificate
Testing and experiment center building37,912,934.58Related property rights in procedure
J07 electrical workshop33,100,480.42Related property rights in procedure
J02workshop29,714,921.96Related property rights in procedure
J01workshop27,541,882.00Related property rights in procedure
J05 evaporator and condenser workshop26,165,222.29Related property rights in procedure
II section canteen of living area20,201,985.47Related property rights in procedure
J06 central air-conditioner workshop16,740,068.06Related property rights in procedure
J50finished product warehouse15,815,784.10Related property rights in procedure
J51finished product warehouse15,307,197.71Related property rights in procedure
J53finished product warehouse11,763,841.04Related property rights in procedure
J54finished product warehouse10,940,337.26Related property rights in procedure
J52finished product warehouse10,923,969.80Related property rights in procedure
J55finished product warehouse10,021,406.73Related property rights in procedure
J56finished product warehouse10,021,406.73Related property rights in procedure
J09raw material warehouse5,964,585.42Related property rights in procedure
J10raw material warehouse4,659,638.21Related property rights in procedure
J11raw material warehouse4,576,541.18Related property rights in procedure
4# makeshift shelter4,448,271.27Related property rights in procedure
J08 packing materials warehouse4,338,927.47Related property rights in procedure
J15 house of refrigerant forklift1,259,120.19Related property rights in procedure
J17 chemical storage1,236,545.52Related property rights in procedure
J16 chemical storage1,130,705.63Related property rights in procedure
J19 main guard room310,812.99Related property rights in procedure
J19A guard room196,303.42Related property rights in procedure
J19D guard room143,640.17Related property rights in procedure
J19E guard room143,640.17Related property rights in procedure
Total304,580,169.79

(7) No fixed assets held for sale at period-end

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

15.2 Disposal of fixed assets

ItemEnding balanceOpening balanceReasons for disposal transferred
Relevant assets disposal for reserved lands75,875,517.1175,875,517.11Relocation for land reserve

Pursuant to the urban planning requirements of the People’s Government of Hefei city, Hefei Land Reserve Center plansto purchase and store the land use right of an integrated economic development zone of the Company located at Longgangof Hefei with an area of 103,978.9 sq.m. (Approximately 155.9684 mu, Land Use Right Certificate No.: Dong Guo Yong(2004) Zi No. 0200, the stated use of the land is for industrial purpose). The estimated consideration for purchasing andstorage is RMB74.48 million. The land is mainly used for the Company’s warehouse, product finishing workshop andthe factory of Zhongke Meiling. Pursuant to the purchasing and storage requirements of land use right, the land will bepurchased and stored with vacant possession. In April 2013, the Company completed the relocation of occupants of thepremises, and the net fixed assets in relation to the land will transfer as disposal, accounting treatment will be conduct inline with relevant rules upon receiving of the relocation compensation.

Pursuant to the urban planning requirements of Hefei Municipal Government and the Government of Feidong county,the land reserve center of Feidong county will purchase and store the land use right of an economic development zonelocated at Feidong county, Hefei city, which is owned by the Company’s subordinate companies, Equator Electric andEquator Home Appliance, respectively, with an area of 19,245.09 sq.m. (Approximately 28.87 mu, Land Use RightCertificate No.: Dong Guo Yong (2008) No. 0366, the stated use of the land is for industrial purpose) and an area of46,161.9 sq.m. (Approximately 69.24 mu, Land Use Right Certificate No.: Dong Guo Yong (2008) No. 0367, the stateduse of the land is for industrial purpose). The total consideration for purchasing and storage is approximately 36 millionyuan, of which the consideration for the land use right owned by Equator Electric and Equator Home Appliance isapproximately 10.59 million yuan and 25.41 million yuan, respectively. The Company has completed the relocation ofoccupants of the premises, and the net fixed assets in relation to the land will transfer as disposal, accounting treatmentwill be conduct in line with relevant rules upon receiving of the relocation compensation.

No impairment of relevant assets disposal for reserved lands at period-end.

16. Construction in progress

ItemEnding balanceOpening balance
Construction in progress103,923,104.0898,469,862.45
Total103,923,104.0898,469,862.45

(1) Details of construction in progress

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Front-end expansion project of Hefei base with an annual output of 10 million refrigerator cabinets22,408,137.8722,408,137.8716,686,639.6916,686,639.69
Industrial Internet Changhong Meiling Promotion Project9,609,549.939,609,549.9310,480,730.4310,480,730.43
Meiling extrusion line relocation and capacity expansion project7,380,555.557,380,555.553,875,215.733,875,215.73

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Comprehensive renovation project of mixed flow of rainwater and sewage in freezer park and living area6,598,693.276,598,693.274,385,756.914,385,756.91
Blister production line construction5,604,355.205,604,355.20
Freeze lining structure changed to bottom package side2,747,345.122,747,345.12
The third floor testing and packaging line technical transformation project2,729,203.562,729,203.562,707,964.622,707,964.62
Liquid nitrogen tank production line construction2,580,258.292,580,258.296,778,105.416,778,105.41
Efficiency improvement of refrigerator cabinet2,362,746.252,362,746.254,704,867.174,704,867.17
Y21 manufacturing system automation (Phase I)2,198,496.562,198,496.5613,973,307.4313,973,307.43
Multi-door shell molding line2,163,716.892,163,716.89
Supporting production equipment of washing machine2,144,601.772,144,601.77
Efficiency improvement for 2022 in manufacturing center1,991,238.961,991,238.96
Tank replacement and testing1,656,656.371,656,656.37
Accident response pool construction1,389,325.451,389,325.45
Technical transformation project of Zhongshan Changhong787,667.26787,667.264,530,389.504,530,389.50
2022 capacity and capability improvement of the manufacturing system in Air Conditioning Company173,455.15173,455.156,419,964.726,419,964.72
Overseas product upgrade supporting box shell line, door shell line and some old product competitiveness improvement projects3,731,036.223,731,036.22
Washing machine business unit MES system online project2,457,735.832,457,735.83
Meiling PLM Project1,636,792.461,636,792.46
Other petty projects29,397,100.6329,397,100.6316,101,356.3316,101,356.33
Total103,923,104.08103,923,104.0898,469,862.4598,469,862.45

(2) Changes in significant construction in progress

ProjectsBook balance at period-beginIncrease in Current PeriodTransfer to fixed assets in Current PeriodOther decreaseBook balance at period-endSource of funds
Front-end expansion project of Hefei base with an annual output of 10 million refrigerator16,686,639.697,606,453.911,884,955.7322,408,137.87Self-raised

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ProjectsBook balance at period-beginIncrease in Current PeriodTransfer to fixed assets in Current PeriodOther decreaseBook balance at period-endSource of funds

cabinets

cabinets

(Continued)

ProjectsBudget (in 10 thousand Yuan)Proportion of project investment in budgetProgressAccumulated amount of interest capitalizationincluding: interest capitalized amount of Current PeriodInterest capitalization rate of Current Period
Front-end expansion project of Hefei base with an annual output of 10 million refrigerator cabinets4,121.2472.58%80.00%

17. Right-of-use assets

18. Intangible assets

ItemHouse buildingTotal
I. Original book value
1.Opening balance54,071,205.9754,071,205.97
2.Increase this period1,089,224.861,089,224.86
(1) Rent in1,089,224.861,089,224.86
3.Decrease this period
4.Ending balance55,160,430.8355,160,430.83
II. Accumulated depreciation
1.Opening balance8,703,287.668,703,287.66
2.Increase this period6,170,422.646,170,422.64
(1) Accrual6,170,422.646,170,422.64
3.Decrease this period
4.Ending balance14,873,710.3014,873,710.30
III. Provision for impairment
1.Opening balance
2.Increase this period
3.Decrease this period
4.Ending balance
IV. Book value
1. Ending book value40,286,720.5340,286,720.53
2. Opening book value45,367,918.3145,367,918.31

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(1) Intangible assets

ItemLand use rightTrademark special rightNon-patent technologyOtherTotal
I. Original book value
1.Opening balance869,724,297.57283,292,439.34549,144,800.67137,253,797.421,839,415,335.00
2.Increase this period25,171,017.1713,983,835.0839,154,852.25
(1) Purchase693,451.31693,451.31
(2) Internal research25,171,017.1713,290,383.7738,461,400.94
3.Decrease this period4,925,680.8910,362,539.5315,288,220.42
(1) Disposal4,925,680.893,280,328.888,206,009.77
(1) Other decreases7,082,210.657,082,210.65
4.Ending balance864,798,616.68283,292,439.34574,315,817.84140,875,092.971,863,281,966.83
II. Accumulated amortization
1.Opening balance198,473,939.86283,292,439.34348,547,882.1227,185,807.78857,500,069.10
2.Increase this period9,213,047.6446,299,922.3419,395,874.8174,908,844.79
(1)Accrual9,213,047.6446,299,922.3419,395,874.8174,908,844.79
3.Decrease this period1,924,297.315,750,495.007,674,792.31
(1) Disposal1,924,297.313,280,328.885,204,626.19
(2) Other decreases2,470,166.122,470,166.12
4.Ending balance205,762,690.19283,292,439.34394,847,804.4640,831,187.59924,734,121.58
III. Provision for impairment
1.Opening balance24,003,670.244,508,495.3328,512,165.57
2.Increase this period
3.Decrease this period
4.Ending balance24,003,670.244,508,495.3328,512,165.57
IV. Book value
1. Ending book value659,035,926.49155,464,343.1495,535,410.05910,035,679.68
2. Opening book value671,250,357.71176,593,248.31105,559,494.31953,403,100.33

The intangible assets resulted from internal research takes 2.06% of the balance of intangible assets atperiod-end

(2) No land use right without property certification done at period-end

(3) Up to end of June 2022, mortgage of intangible assets is as follows:

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

NameProperty certificate serialsArea(M2)Net book valueNote
Land use rightHGYJCZi No.: 012127,120.2216,765,001.87
Land use rightWan (2019) Property right of Hefei No.: 1148244/1148249/1148243/1148240/1148248/1148246/1148241/1148238/1149101/1148242/1148245/1148239/1148237/1148250/1148247/1149102477,550.03229,136,021.56
Land use rightWan (2019) Property right of Feixi County No.: 0061435/006144533,383.1013,039,829.51
Land use rightWan (2019) Property right of Feixi County No.: 0061456/0061447/0061438/0061440/0061452/0061450/0061430/006165782,850.5117,969,112.49
Total620,903.86276,909,965.43

19. Development expense

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Internal development expenditureOtherIncluded in current profits and lossesConfirmed as intangible assetsOther
Technology development for Air-conditioner39,938,415.0341,134,297.634,073,227.8325,421,047.0051,578,437.83
Technology development for refrigerator47,790,575.8354,891,134.713,594,169.7413,040,353.9486,047,186.86
Total87,728,990.8696,025,432.347,667,397.5738,461,400.94137,625,624.69

20. Goodwill

(1) Original value of goodwill

Invested enterpriseOpening balanceIncrease this periodDecrease this periodEnding balance
Formation from enterprise mergerOtherFormation from enterprise mergerOther
Hefei Meiling Group Holdings Limited3,553,367.773,553,367.77
Total3,553,367.773,553,367.77

(2) Impairment loss of goodwill

Invested enterpriseOpening balanceIncrease this periodDecrease this periodEnding balance
AccrualOtherAccrualOther
Hefei Meiling Group Holdings Limited3,553,367.773,553,367.77
Total3,553,367.773,553,367.77

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Note: The Company’s goodwill has been fully accrued for impairment reserves at period-end.

21. Long-term prepaid expenses

ItemOpening balanceIncrease this periodAmortization for the periodOther decreasesEnding balance
Engineering renovation expenses381,978.9719,080.92362,898.05
Total381,978.9719,080.92362,898.05

22. Deferred tax assets and deferred tax liabilities

(1) Deferred income tax assets without the offset

ItemEnding balanceOpening balance
Deductible temporary differenceDeferred income tax assetsDeductible temporary differenceDeferred income tax assets
Deferred income tax assets recognized from assets impairment167,988,006.7425,269,308.51145,988,355.3021,966,046.25
Deferred income tax assets recognized from accrual liability11,912,507.941,786,876.1911,363,601.651,704,540.25
Deferred income tax assets recognized from Dismission welfare9,745,724.621,461,858.6911,268,982.331,690,347.35
Deferred income tax assets recognized from deferred income99,391,000.7814,908,650.12110,534,463.5416,580,169.53
Deferred income tax assets recognized from ir-reparable losses834,217,626.07125,132,643.91695,409,549.32104,311,432.40
Accrued income tax assets5,727,967.73862,496.048,238,783.301,235,817.50
Other24,868,214.113,730,232.12
Total1,153,851,047.99173,152,065.58982,803,735.44147,488,353.28

The Company’s long-term equity investment impairment provisions are the investments in its subsidiary Meiling CandyWashing Machine Co., Ltd., expected to be cancelled in 2022, and the Company also confirmed deferred income taxassets while confirming the impairment provisions. The subsidiaries have unrecovered losses, at the consolidation level,the deferred income tax assets recognized in the Company’s long-term equity investment impairment provisions areadjusted to be the deferred income tax assets generated from the recoverable losses.

(2) Deferred income tax liabilities without the offset

ItemEnding balanceOpening balance
Taxable temporary differencesDeferred income tax liabilityTaxable temporary differencesDeferred income tax liability
Recognized by fixed assets depreciation21,257,933.763,188,690.0623,595,650.263,539,347.53
Recognized by changes in fair value38,003,012.265,700,451.8440,873,919.416,131,087.92

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Taxable temporary differencesDeferred income tax liabilityTaxable temporary differencesDeferred income tax liability
Total59,260,946.028,889,141.9064,469,569.679,670,435.45

(3) Details of unrecognized deferred income tax assets

ItemEnding balanceOpening balance
Deductible temporary difference108,844,382.5594,823,765.42
Deductible loss980,228,966.201,075,371,859.07
Total1,089,073,348.751,170,195,624.49

23. Other non-current assets

ItemEnding balanceOpening balance
Prepaid equipment, engineering, etc.999,030.663,087,780.59
Total999,030.663,087,780.59

24. Short-term loans

CategoryEnding balanceOpening balance
Guaranteed loan35,000,000.005,000,000.00
Loan in credit1,052,040,918.37615,000,000.00
Interest payable250,527.782,874,652.77
Total1,087,291,446.15622,874,652.77

Short-term loans at Current Period-end:

1) The Company entered into a Loan Contract with Hefei Luyang Branch of Hangzhou Bank Co., Ltd. with 364 days interm. Term of borrowing is from 16 July 2021 to 15 July 2022. The interest rate is the quoted market rate for one yearloans minus 55bp, floating on an annual basis and borrowing amounted to 10,000,000.00 yuan.

2) The Company entered into aBorrowing Contract of Working Capital Loans with Hefei Branch of China MinshengBank Co., Ltd. with 1 year in term. Term of borrowing is from 27 August 2021 to 27 August 2022. Fixed rate of 3.20%,the loan amount is 50,000,000.00 yuan.

3) The Company entered into a Master Agreement on Domestic Letter of Credit Financing with Hefei Branch of IndustrialBank Co., Ltd. with 364 days in term. Term of borrowing is from 17 December 2021 to 16 December 2022. Fixed rateof 2.90%, the loan amount is 100,000,000.00 yuan.

4) The Company entered into Contract for the assignment of the seller’s claims without recourse (domestic forfaitingbusiness) under a domestic letter of credit with Hefei Branch of China Everbright Bank Co., Ltd. with 357 days in term.Term of borrowing is from 24 December 2021 to 16 December 2022. Fixed rate of 2.9%, the loan amount is180,000,000.00 yuan.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

5) The Company entered into a Master Agreement on Domestic Letter of Credit Financing with Hefei Branch of ChinaMinsheng Bank Co., Ltd. with 349 days in term. Term of borrowing is from 29 December 2021 to 13 December 2022.Fixed rate of 2.20%, the loan amount is 100,000,000.00 yuan.

6) The Company entered into a Master Agreement on Domestic Letter of Credit Financing with Hefei Branch of IndustrialBank Co., Ltd. with 179 days in term. Term of borrowing is from 28 February 2022 to 26 August 2022. Fixed rate of

2.70%, the loan amount is 30,000,000.00 yuan.

7)The Company entered into a Buyer’s Interest Payment Agreement under Domestic Letter of Credit with Hefei Branchof China Guangfa Bank. The contract signed with 182 days in term and contractual borrowing is from March 15, 2022to September 13, 2022, borrowing amounted to 30,000,000.00 yuan with a fixed interest rate of 2.50%.

8) The Company entered into the Domestic Letter of Credit Opening Contract of Hangzhou Bank with Hefei Branchof HZ Bank. The contract signed with 180 days in term and borrowing is from March 17, 2022 to September 13, 2022,borrowing amounted to 25,000,000.00 yuan with a fixed interest rate of 2.58%.

9) The Company entered into Application for opening a domestic letter of credit with Anhui Branch of Bank of ChinaLimited with 180 days in term. Term of borrowing is from 17 March 2022 to 13 September 2022. Fixed interest rate of

2.60%, the loan amount is 10,000,000.00 yuan.

10)The Company entered into the Borrowing Contract of RMB Working Capital Loan with Hefei Luyang Branch ofChina Construction Bank. The contract signed with one year in term and borrowing is from March 30, 2022 to March 29,2023, borrowing amounted to 100,000,000.00 yuan with a fixed interest rate of 3.30%.

11)The Company entered into the Opening Line Contract of Domestic L/C with Hefei Baohe District Branch ofAgricultural Bank of China. The contract signed with 177 days in term and borrowing is from April 2, 2022 to September26, 2022, borrowing amounted to 50,000,000.00 yuan with a fixed interest rate of 2.65%.

12)The Company entered into the Cooperation Agreement on Opening the Domestic L/C with Hefei Branch of ChinaMerchants Bank. The contract signed with 178 days in term and borrowing is from April 19, 2022 to October 14, 2022,borrowing amounted to 20,000,000.00 yuan with a fixed interest rate of 2.66%.

13) The Company entered into Weishang Bank Domestic Letter of Credit Forfaiting Business Contract with HefeiEconomic Development Zone Branch of Huishang Bank Co., Ltd. with 180 days in term. Term of borrowing is from 20April 2022 to 17 October 2022. Fixed interest rate of 2.70%, the loan amount is 50,000,000.00 yuan.

14)The Company entered into the Agreement on Opening the L/C Business with Hefei Branch of SPD Bank. The contractsigned with 180 days in term and borrowing is from April 21, 2022 to October 18, 2022, borrowing amounted to25,000,000.00 yuan with a fixed interest rate of 2.60%.

15) The Company entered into a Master Agreement on Domestic Letter of Credit Financing with Hefei Branch of ChinaMinsheng Bank Co., Ltd. with 181 days in term. Term of borrowing is from 22 April 2022 to 20 October 2022. Fixedrate of 2.10%, the loan amount is 50,000,000.00 yuan.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

16) The Company entered into the Contract of Opening the Domestic L/C with Anhui Branch of Bank of Communications.The contract signed with 180 days in term and borrowing is from May 26, 2022 to November 22, 2022, borrowingamounted to 50,040,918.37 yuan with a fixed interest rate of 2.05%.

17)The Company entered into the Issuing Contract of Domestic L/C with Hefei Branch of Postal Savings Bank of China.The contract signed with 182 days in term and borrowing is from May 30, 2022 to November 28, 2022, borrowingamounted to 50,000,000.00 yuan with a fixed interest rate of 1.30%.

18) The Company entered into a Buyer’s Interest Payment Agreement under Domestic Letter of Credit with Hefei Branchof China Guangfa Bank. The contract signed with 180 days in term and contractual borrowing is from June 23, 2022 toDecember 20, 2022, borrowing amounted to 30,000,000.00 yuan with a fixed interest rate of 1.98%.

19)The Company entered into an Agency Cooperation Agreement of Domestic L/C with Hefei Branch of Ping An Bank.The contract signed with 180 days in term and contractual borrowing is from June 24, 2022 to December 21, 2022,borrowing amounted to 50,000,000.00 yuan with a fixed interest rate of 2.10%.

20) The Company entered into a Master Agreement on Domestic Letter of Credit Financing with Hefei Branch ofIndustrial Bank Co., Ltd. with 179 days in term. Term of borrowing is from 27 June 2022 to 23 December 2022. Fixedrate of 2.05%, the loan amount is 40,000,000.00 yuan.

21) The Company entered into Application for opening a domestic letter of credit with Anhui Branch of Bank of ChinaLimited with 180 days in term. Term of borrowing is from 30 June 2022 to 27 December 2022. Fixed annual interest rateof 2.23%, the loan amount is 2,000,000.00 yuan.

22) Subsidiary Hefei Changhong Meiling Life Appliances Co., Ltd entered into the Borrowing Contract with HefeiLuyang Branch of HZ Bank. The contract signed with 364 days in term and borrowing is from March 23, 2022 to March22, 2023, borrowing amounted to 20,000,000.00 yuan with a fixed loan APR of 3.45% which is guaranteed by theCompany.

23)Subsidiary Hefei Changhong Meiling Life Appliances Co., Ltd entered into the Issuing Agreement on Domestic L/Cwith Huining Road Branch of Hefei Science & Technology Rural Commercial Bank. The borrowing term is from March24, 2022 to December 27, 2022, borrowing amounted to 10,000,000.00 yuan with a fixed loan APR of 3.65% which isguaranteed by the Company.

24)Anhui Tuoxing Technology Co., Ltd.- the wholly owned subsidiary of Zhongke Meiling Cryogenic Technology Co.,Ltd(subsidiary of the Company) obtained a secured loans from Hefei Feicui Road Branch of Bank of China. Theborrowing term is from June 27, 2022 to June 27, 2023, borrowing amounted to 5,000,000.00 yuan with a fixed rate of

3.30% which is guaranteed by the subsidiary-Zhongke Meiling Cryogenic Technology Co., Ltd.

25. Trading financial liability

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

NameEnding balanceOpening balance
Trading financial liability38,929,244.4112,304,272.41
Including: Derivative financial liability38,929,244.4112,304,272.41

26. Note payable

ItemEnding balanceOpening balance
Bank acceptance4,356,012,661.734,663,885,311.94
Trade acceptance146,907,573.73175,952,005.84
Total4,502,920,235.464,839,837,317.78

27. Account payable

(1) Account payable

ItemEnding balanceAmount at year-begin
Total3,832,859,258.272,299,103,796.88
Including: Amount aged over 1 year63,148,576.1694,640,539.62

(2) No major account payable with over one year book age at period-end.

28. Contract liabilities

ItemEnding balanceOpening balance
Total351,317,980.38515,004,115.23
Including: Amount aged over 1 year50,182,899.3217,740,130.48

29. Wages payable

(1) Category

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Short-term compensation241,024,057.25788,097,986.06815,373,920.31213,748,123.00
After-service welfare- defined contribution plans2,495,637.6555,818,890.8153,551,087.074,763,441.39
Dismiss welfare3,524,726.662,590,110.442,233,693.583,881,143.52
Total247,044,421.56846,506,987.31871,158,700.96222,392,707.91

(2) Short-term compensation

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Wages, bonuses, allowances and subsidies234,141,842.08706,008,342.70733,642,135.12206,508,049.66

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Welfare for workers and staff100,023.7821,013,093.9720,948,269.79164,847.96
Social insurance1,151,987.2424,350,886.1624,169,042.301,333,831.10
Including: Medical insurance1,080,480.5622,933,010.6122,864,576.831,148,914.34
Work injury insurance10,353.311,384,970.711,293,906.58101,417.44
Maternity insurance61,153.3732,904.8410,558.8983,499.32
Housing accumulation fund4,861,802.6835,184,312.7334,985,686.895,060,428.52
Labor union expenditure and personnel education expense768,401.471,541,350.501,628,786.21680,965.76
Total241,024,057.25788,097,986.06815,373,920.31213,748,123.00

(3) Defined contribution plans

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Basic endowment insurance759,812.4453,845,096.3051,671,296.452,933,612.29
Unemployment insurance1,735,825.211,973,794.511,879,790.621,829,829.10
Total2,495,637.6555,818,890.8153,551,087.074,763,441.39

30. Tax payable

ItemEnding balanceOpening balance
Value-added tax83,798,823.9193,229,596.44
Enterprise income tax6,116,146.523,665,806.85
Individual income tax2,189,279.192,593,701.11
Urban maintenance and construction tax11,824,224.078,227,864.32
Real estate tax3,777,438.113,758,773.24
Land use tax1,430,344.511,550,831.89
Educational surtax8,535,924.184,932,682.07
Stamp tax2,826,337.463,798,892.56
Construction fund of Water Conservancy Projects648,405.12606,448.87
Treatment fund for abandon electrics & electronics28,410,536.0018,489,806.00
Other1,589.261,020,458.53
Total149,559,048.33141,874,861.88

31. Other account payable

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Dividend payable19,793,050.414,753,764.56
Other account payable883,985,891.19746,699,003.44
Total903,778,941.60751,452,768.00

31.1 Dividends payable

ItemEnding balanceOpening balance
Sichuan Changhong Electric Co., Ltd.12,422,886.20
Hefei Industry Investment Holding (Group) Co., Ltd.2,391,170.05
China Life Insurance (Group) Company288,404.82288,404.82
The People’s Insurance Company (Group) of China Limited432,607.23432,607.23
BOC- Fullgoal Tianyi Securities Investment Fund153,697.50153,697.50
Hefei Branch of BOC391,245.50360,506.00
Hefei collective industry association391,244.89360,505.44
Entrust Investment Wuhu of Provincial ABC312,996.42288,404.82
Other units3,008,797.802,869,638.75
Total19,793,050.414,753,764.56

31.2 Other account payable

(1) Other account payable by nature

NatureEnding balanceOpening balance
1.Accrued expenses (expenses occurred without reimbursed)356,156,653.46364,248,335.74
2. Receivables received temporary and deducted temporary25,026,463.9726,847,048.85
3.Deposit, margin155,717,250.89148,778,715.05
4.Not the come-and-go with related parties in statement scope320,375,542.82187,411,658.83
5. Other26,709,980.0519,413,244.97
Total883,985,891.19746,699,003.44

(2) At end of Current Period, the major other account payable with account age over one yearmainly refers to deposit and margin.

32. Non-current liability due within one year

ItemEnding balanceOpening balance
Long-term loan principal and interest due within one year20,201,972.50320,520,933.33
Long term account payable due within one year173,499.29
Lease liabilities due within one year10,041,738.4512,024,045.63

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Total30,243,710.95332,718,478.25

33. Other current liabilities

ItemEnding balanceOpening balance
Pending sales tax21,957,205.6323,388,239.94
Factoring fees payable419,897.59785,519.22
Bill recovery200,000.00
Total22,377,103.2224,373,759.16

34. Long term borrowings

(1) Category of long term borrowings

CategoryEnding balanceAmount at year-begin
Loan in mortgage158,000,000.00168,000,000.00
Total158,000,000.00168,000,000.00

(2) Long-term borrowings at period-end

Loan fromBorrowing dayReturning dayForeign currencyInterest rateEnding balance (RMB)Opening balance (RMB)
EIBC (Export-Import Bank) Anhui Province Branch Note 12019/12/232026/11/25RMB4.455%60,000,000.0070,000,000.00
EIBC (Export-Import Bank) Anhui Province Branch Note 22020/3/262026/11/25RMB4.405%98,000,000.0098,000,000.00
Total158,000,000.00168,000,000.00

Note 1: The Company signed the "Loan Contract (Promoting the Opening-up of Loans in China - Fixed Assets)" with theExport-Import Bank of China Anhui Branch, the Company's investment real estate, fixed assets and intangible assets areused as mortgage for the loan. The term of the loan is from December 23, 2019 to November 25, 2026, the interest rateof the loan is determined according to the market quotation rate of the loan with a term of more than 5 years reduced by

0.195%, which fluctuates annually, and the amount of the loan is 100,000,000.00 yuan. According to the repayment planagreed with the bank, the Company has repaid 20,000,000.00 yuan. It plans to repay 10,000,000.00 yuan on December25, 2022 and repay 10,000,000.00 on June 25, 2023, a total of 20,000,000.00 yuan has been reclassified to non-currentliabilities due within one year. The ending balance is 60,000,000.00 yuan.Note 2: The Company signed the "Loan Contract (Promoting the Opening-up of Loans in China - Fixed Assets)" with theExport-Import Bank of China Anhui Branch, the Company's fixed assets and intangible assets are pledge against long-

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

term borrowings under the contract. On March 26, 2020, withdrawing 98,000,000.00 yuan from the bank. Term ofthe loan is from March 26, 2020 to November 25, 2026. The interest rate of loan is determined based on the quotedmarket rate for loans with a maturity of 5 years or more minus 0.195% and fluctuates annually. Amount of loans are98,000,000.00 yuan, ending balance amounted to 98,000,000.00 yuan.

35. Lease liability

ItemEnding balanceOpening balance
Lease liability30,061,422.3033,225,912.15
Total30,061,422.3033,225,912.15

36. Long-term payable

ItemEnding balanceOpening balance
Special payable1,241,464.861,337,643.24
Total1,241,464.861,337,643.24

36.1 Special payable

ItemOpening balanceIncrease this periodDecrease this periodEnding balanceReason
Special funds for technological transformation from Zhongshan Changhong1,337,643.2496,178.381,241,464.86Technology plan project in Zhongshan City

37. Long-term wage payable

ItemEnding balanceOpening balance
Dismissal welfare8,710,896.439,828,300.06

According to the internal early retirement policy, the long-term payable dismissal welfare bears by theCompany up to end of Current Period amounting to 8,710,896.43 yuan

38. Accrual liability

ItemEnding balanceOpening balanceReason
Product quality guarantee note19,754,392.419,170,710.48Guarantee of product
Guarantee fund for quality service note1365,085.53399,861.15Guarantee of product
Litigation matters note21,793,030.001,793,030.00
Total11,912,507.9411,363,601.63

Note 1: Product quality deposit is the maintenance expense provided by the Company under the national policy, whilequality service special guarantees capital is the warranty costs provided for product quality in addition to such policy.

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

Note2: In November 2021, Zhejiang Teruisi Pharmaceutical Inc. filed a lawsuit against Zhongke Meiling for the "ColdStorage Design, Equipment Purchase and Installation Construction Contract". Currently, quality of the subject under thecontract is being authenticated by a third party engineering quality appraisal agency, the initial start-up operation test isnow completed. Zhongke Meiling intends to maintain the cold storage project, and the estimated maintenance cost is1,793,030.00 yuan.

39. Deferred income

(1) Classification of deferred income

ItemOpening balanceIncrease this periodDecrease this periodEnding balanceReason
Government subsidies---subsidies of development project139,155,085.631,442,700.0012,251,179.06128,346,606.57
Government subsidies---subsidies of Relocation36,508,953.201,696,550.5234,812,402.68
Total175,664,038.831,442,700.0013,947,729.58163,159,009.25

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(2) Government subsidy

ItemOpening balanceNew subsidy in Current PeriodAmount reckoned into other income in Current PeriodOther changesEnding balanceAssets related/Income related
Demonstration factory construction for the intelligent manufacturing of intelligent air-conditioner42,607,594.973,759,493.6638,848,101.31Assets related
Demolition compensation of Changhong Meiling36,104,113.241,291,710.5634,812,402.68Assets related
Key chip and module for transducer used and detection capacity building7,600,000.007,600,000.00Assets related
Centre for external cooperation of the environmental protection7,687,368.20515,754.537,171,613.67Assets related
Changhong Air Conditioner- relocation of production base and upgrading & expansion6,497,777.76573,333.335,924,444.43Assets related
Subsidy for industrial development policy from Hefei for first half of 20186,544,000.00625,000.005,919,000.00Assets related
Adaptability improvement on new coolants production7,094,945.011,182,490.865,912,454.15Assets related
District-level subsidy funds for advanced manufacturing policies in the first half of 20215,595,843.75373,056.265,222,787.49Assets related
Municipal award and subsidy for the advanced manufacturing policy in first half of 20205,222,875.00373,062.504,849,812.50Assets related
Special fund, government subsidy CZ0590014,200,000.004,200,000.00Assets related
Subsidy for industrial development policy from Hefei for second half of 20194,471,375.00447,137.504,024,237.50Assets related
20-year subsidy for advancing technological transformation projects4,108,758.34267,962.503,840,795.84Assets related
2021 manufacturing strong provincial policy subsidy funds3,056,250.00203,750.002,852,500.00Assets related
Policy funds for manufacturing a strong province, subsidy for equipment for the technological transformation of industrial strong base3,125,000.00312,500.002,812,500.00Assets related
Subsidy for industrial development policy from Hefei for first half of 20203,005,983.33217,300.002,788,683.33Assets related
Government subsidy for new plant construction - industrialization of cryogenic refrigeration equipment2,791,666.67250,000.002,541,666.67Assets related
Subsidies for intelligent transformation & upgrading of enterprises from the new industrialization policy in economic development zone2,675,064.58302,837.502,372,227.08Assets related

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemOpening balanceNew subsidy in Current PeriodAmount reckoned into other income in Current PeriodOther changesEnding balanceAssets related/Income related
RESEARCH AND APPLICATION OF THE VISA (VARIABLE FREQUENCY VOLUME INTEGRATED INTELLIGENT AIR-CONDITIONER)3,053,488.40704,651.162,348,837.24Assets related
Research and application of the MCU chip for inverter control2,300,000.002,300,000.00Assets related
2020 supporting funds to support the innovation and development of artificial intelligence industry2,437,500.00162,500.002,275,000.00Assets related
2020 fund allocation for Anhui Province's triple innovation project2,369,791.67162,500.002,207,291.67Assets related
Special funds for strategic emerging industry and high-end growth industry1,896,551.72206,896.551,689,655.17Assets related
Upgrading technology transformation of AC production line1,385,600.00113,903.751,271,696.25Assets related
Industrialization of intelligent white household appliances software platform and typical application research and development1,575,757.60363,636.361,212,121.24Assets related
Equipment subsidy for the industrial base technical renovation from Economic and Information Commission1,312,083.33117,500.001,194,583.33Assets related
Upgrade project for the production line of Mianyang Meiling Intelligent Refrigerator1,119,166.7698,749.981,020,416.78Assets related
Subsidy from Zhongshan Finance Bureau (CZ028001 provincial special project 2019)1,092,060.21152,823.25939,236.96Assets related
Subsidy for equipment purchasing for Hefei Tech. Improvement project in 20171,000,310.0089,580.00910,730.00Assets related
Subsidy for purchase of R & D instruments and equipment699,992.6891,056.26608,936.42Assets related
Emerging Industry Base Fund Support Item613,608.2538,350.52575,257.73Assets related
Promotion of the energy-saving room air conditioner648,453.69105,154.62543,299.07Assets related
Robot policy-rewards for purchasing robots485,031.2635,062.50449,968.76Assets related
Special fund for technical improvement355,708.6247,905.22307,803.40Assets related
Promoting the new industry (annual output of 0.6 million medium& large volume environmental protection and energy saving freezer)456,618.69152,206.26304,412.43Assets related
Technical transformation of refrigerator evaporator workshop333,437.5030,312.50303,125.00Assets related

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemOpening balanceNew subsidy in Current PeriodAmount reckoned into other income in Current PeriodOther changesEnding balanceAssets related/Income related
Special fund for technical improvement380,238.0451,904.80328,333.24Assets related
2018 Zhongshan Special fund for industrial development292,650.7038,996.16253,654.54Assets related
Technical transformation subsidy177,438.3715,890.00161,548.37Assets related
Refrigerator evaporator production workshop128,229.2414,516.51113,712.73Assets related
Technical renovation of air conditioner production line94,758.2730,578.5564,179.72Assets related
Subsidy of advanced manufacturing policy for second half of 202157,100.002,379.1754,720.83Assets related
Subsidy for the development on production line technical reform for green-friendly high-quality metal pipe47,708.0220,446.3027,261.72Assets related
Demolition compensation of Jiangxi Meiling404,839.96404,839.96Assets related
Total175,664,038.831,442,700.0013,947,729.58163,159,009.25

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

40. Share capital

ItemOpening balanceChange during the period (+、-)Ending balance
New shares issuedBonus shareShares transferred from capital reserveOtherSubtotal
Total shares1,044,597,881.00-14,674,166.00-14,674,166.001,029,923,715.00

41. Capital reserve

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Share premium2,634,786,308.8612,493,667.732,622,292,641.13
Other capital reserve48,043,091.4048,043,091.40
Total2,682,829,400.2612,493,667.732,670,335,732.53

Note: change of share premium in the Period refers to the handling charge from repurchase of B-Share 64.58 yuan,cancellation of treasury stock in the Period was 12,493,603.15 yuan.

42. Treasury stock

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Repurchase of B shares26,430,571.38737,197.7727,167,769.15
Total26,430,571.38737,197.7727,167,769.15

Note: The Company held the 40

th session of the 9

thBOD, the 21

st session of the 9

th

BOS, and the third extraordinary generalmeeting of shareholders in 2020 on July 27 and August 18, 2020, which reviewed and approved the Proposal on theRepurchase of Part of the Company's Domestically Listed Foreign Shares (B Shares)", and agreed that the companywould use its own funds to repurchase part of the company's domestically listed foreign shares (B shares) throughcentralized bidding transactions, and the repurchased B shares would be cancelled in accordance with the law and theregistered capital of the company would be reduced accordingly. The total amount of the repurchase should be no lessthan 50 million yuan(inclusive) and no more than 100 million yuan (inclusive), based on the central parity rate of HongKong Dollar against RMB on July 24, 2020: 1 HKD = 0.9023 yuan, equivalent to Hong Kong dollars of not less thanHK$55,413,942.15 (inclusive) and not more than HK$110,827,884.30 (inclusive). The specific total amount ofrepurchase funds should be subject to the total amount of funds actually used for the repurchase of shares at the expirationof the repurchase period. The price of repurchasing B shares this time should not exceed HK$2.21/share (inclusive). Afterthe implementation of the 2020 annual profit distribution plan, the upper limit of the price of repurchasing B shares wouldbe adjusted from HK$2.21/share (inclusive) to HK$2.15/share (inclusive).On August 24, 2021 and September 10, the Company held 11

th session of 10

th BOD, the 9

th session of 10

thBOS and third

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

extraordinary shareholders meeting of 2021 to deliberated and approved the Proposal on Continue and Partially Adjustedthe Repurchase Program of Certain Domestic Listed Foreign Shares (B share), agreed that the Company continue toimplement the Repurchase of Part of Domestic Listed Foreign Shares (B share) which has been approved at the previousshareholders general meeting. At the same time, to extend the repurchase period of the aforementioned program toFebruary 18, 2022, that is repurchase implementation period starts from August 18, 2020 to February 18, 2022. Price ofthe shares repurchased adjusted to not more than HK$ 2.36 per share (inclusive). the 9,582,882 shares (B share) thatrepurchased at previous period will be cancelled in accordance with the law and regulations after the expiration of theextended period.Since the first repurchase of shares on November 4, 2020, the company had cumulatively repurchased 14,674,166 sharesof the company (B shares) in centralized bidding transactions through the special securities account for repurchase untilFebruary 18, 2022, representing 1.4048% of the total shares of the Company. The highest traded price was HK$2.36 pershare, and lowest traded price was HK$1.87 per share, the average price was HK$2.22. the funds used for repurchase ofshares amounted to HK$ 32,558,454.08 accumulative (transaction fees such as stamp duty and commission exclusive).The 14,674,166 domestically listed foreign shares (B share) repurchased by the Company have been completed thecancellation procedures at Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. on March 2, 2022

43. Other comprehensive income

ItemOpening balanceCurrent PeriodEnding balance
Account before income tax in Current PeriodLess: written in other comprehensive income in previous period and carried forward to gains and losses in current periodLess:Income tax expensesBelong to parent company after taxBelong to minority shareholders after tax
Other comprehensive income re-divided into gains/losses
Conversion difference arising from foreign currency financial statement-20,903,270.57161,477.7961,187.61100,290.18-20,842,082.96
Total-20,903,270.57161,477.7961,187.61100,290.18-20,842,082.96

44. Surplus reserves

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Statutory surplus reserve307,503,534.74307,503,534.74
Discretionary surplus reserve115,607,702.16115,607,702.16

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Total423,111,236.90423,111,236.90

45. Retained profit

ItemCurrent PeriodLast Year
Amount at the end of last year734,129,724.00740,754,202.23
Add: adjustment from undistributed profit at year-begin
Including: retroactive adjustment by Accounting Standards for Business Enterprise
change of accounting policy
Correction of former material error
Change of combination scope under common control
Amount at the beginning of this period734,129,724.00740,754,202.23
Add: net profit attributable to shareholders of parent company for this period60,375,199.2551,898,388.84
Less: withdraw of statutory surplus reserve6,746,446.47
withdraw of discretionary surplus reserve
Withdraw of general risk provision
Dividend payable for ordinary shares51,496,185.7551,776,420.60
Dividend of ordinary shares transferred to share capital
Ending balance743,008,737.50734,129,724.00

46. Operation income and operation cost

(1) Operation income and operation cost

ItemCurrent PeriodLast Period
IncomeCostIncomeCost
Main business10,138,489,064.289,027,583,283.969,076,019,575.567,709,772,571.05
Other business86,014,486.9133,497,247.10526,739,769.73467,458,625.12
Total10,224,503,551.199,061,080,531.069,602,759,345.298,177,231,196.17

(2) Main business classified according to product

ProductCurrent PeriodLast Period
Operation incomeOperation costOperation incomeOperation cost
Refrigerator, freezer3,557,279,193.803,052,742,990.214,083,961,202.333,333,608,452.02
Air-conditioner5,350,650,174.764,907,155,572.463,958,753,350.503,540,481,498.57
Washing machine393,315,713.02330,678,793.62322,671,076.35245,250,873.36
Small727,498,495.75642,738,038.67571,948,185.39474,186,822.18

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ProductCurrent PeriodLast Period
Operation incomeOperation costOperation incomeOperation cost
household appliances and kitchen and bathroom
Other109,745,486.9594,267,889.00138,685,760.99116,244,924.92
Total10,138,489,064.289,027,583,283.969,076,019,575.567,709,772,571.05

(3) Main business classified according to sales region

RegionCurrent PeriodLast Period
Operation incomeOperation costOperation incomeOperation cost
Domestic7,475,522,523.096,574,576,772.526,392,384,758.435,212,930,284.17
Overseas2,662,966,541.192,453,006,511.442,683,634,817.132,496,842,286.88
Total10,138,489,064.289,027,583,283.969,076,019,575.567,709,772,571.05

(4) At end of the Period, the amount of revenue corresponding to performance obligations that have been contracted forbut not yet fulfill or not yet fulfilled was 137,082,770.11 yuan, of which, 39,802,951.78 yuan is expected to recognizedas revenue in 2022, 67,649,790.28 yuan is expected to recognized as revenue in 2023 and 29,630,028.05 yuan is expectedto recognized as revenue in 2024.

(5) Top five clients have income in sales of 6,155,942,986.63 yuan in total, a 60.21% in total operation income.

47. Business tax and extra charges

ItemCurrent PeriodLast Period
Treatment fund for abandon electrics & electronics34,053,294.0024,442,938.00
City construction tax11,595,547.226,500,216.07
Extra charge for education and local education surcharge8,453,214.375,016,280.65
Real estate tax10,082,904.399,677,275.48
Stamp duty7,967,068.567,917,813.37
Land use tax3,745,329.404,111,310.87
Water fund3,799,503.153,408,779.05
Other4,583.203,117.48
Total79,701,444.2961,077,730.97

48. Sales expense

ItemCurrent PeriodLast Period
Salary, extra charges and labor service expenses276,149,382.91265,425,977.62
Market support expenses141,739,223.51146,558,469.94
National three guarantees expense87,232,488.8962,323,679.78

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
Shipping and Installation expense60,200,021.37383,528,356.21
Storage lease expenses41,176,101.4658,782,655.17
Travelling expenses7,399,226.1716,450,518.67
Business activity expenses7,058,303.948,575,130.77
Vehicle expenses6,683,479.813,175,822.45
Depreciation expenses3,923,388.834,209,609.23
Advertising expenses1,933,500.471,247,421.22
House-lease expenses1,546,666.831,207,473.65
Other expenses31,024,525.7933,320,814.23
Total666,066,309.98984,805,928.94

49. Administration expense

ItemCurrent PeriodLast Period
Salary and social insurance etc.103,835,407.5595,733,835.85
Depreciation11,251,858.4212,053,427.34
Amortized intangible assets9,079,708.199,407,284.87
Water and electricity fee2,245,082.213,137,429.43
Business activities fee2,119,039.652,501,946.80
Property insurance fee1,759,716.411,557,260.98
Domestic travelling fee1,270,723.151,462,423.83
Office fee709,951.381,063,725.75
Other expenses31,860,655.0126,040,092.13
Total164,132,141.97152,957,426.98

50. R&D expenses

ItemCurrent PeriodLast Period
Salary and social insurance etc.106,201,825.5964,787,655.99
Amortized intangible assets63,948,921.5958,589,406.22
Trial fee of R&D29,904,070.9732,578,184.91
Cost of mould15,297,848.501,384,855.16
Depreciation8,315,504.266,808,269.93
Inspection and authentication fee8,120,934.366,718,245.74
utility bill5,776,873.504,976,797.24
Software royalty1,166,276.971,291,273.00
Other expenses9,380,518.808,978,566.02
Total248,112,774.54186,113,254.21

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

51. Financial expenses

ItemCurrent PeriodLast Period
Interest expenditure16,913,382.9637,292,383.25
Less: Interest income66,581,155.3762,433,816.96
Add: exchange loss-9,470,041.3319,162,463.83
Procedure charge expenditure6,582,921.018,002,685.90
Discount expenditure-11,270,142.69-7,719,706.12
Interest expense on lease liability1,038,707.46
Total-62,786,327.96-5,695,990.10

52. Other income

ItemCurrent PeriodLast Period
Immediate refund of VAT for software products6,981,697.332,548,001.17
Awards of high quality policy industrial internet for 20214,663,100.00
Award funds for supporting the development of China Sound Valley4,385,000.00544,200.00
Demonstration factory construction for the intelligent manufacturing of intelligent air-conditioner3,759,493.663,132,911.40
2022 provincial foreign trade funds (market development of key and brand market enterprise)2,500,000.00
Subsidy for employment stable2,266,011.87111,761.05
Supporting the industrial internet construction and scene application2,000,000.00
Promotion of insurance1,819,544.22
Demolition compensation of Changhong Meiling1,291,710.561,069,128.53
Adaptability improvement on new coolants production1,182,490.861,182,490.86
Dispersed to collected for tablet in Nanjing Port1,165,095.00
2022 Provincial industrial development special funds1,000,000.00
Support the linage development of enterprises in the region716,000.00
RESEARCH AND APPLICATION OF THE VISA (VARIABLE FREQUENCY VOLUME INTEGRATED INTELLIGENT AIR-CONDITIONER)704,651.16704,651.16
Subsidy for industrial development policy from Hefei for first half of 2018625,000.00625,000.00
Personal tax handing fee refund597,590.71435,495.15
Changhong Air Conditioner- relocation of production base and upgrading & expansion573,333.33
Centre for external cooperation of the environmental protection515,754.53257,877.27
2021 Anhui Science & technology support funds for major special projects500,000.00
2021 advanced manufacturing development policy500,000.00
Award of innovation for the new third board500,000.00
Subsidy for industrial development policy from Hefei for second half of 2019447,137.50447,137.50
Demolition compensation of Jiangxi Meiling404,839.96889,944.30
Municipal award and subsidy for the advanced manufacturing policy in first373,062.50

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
half of 2020
District-level subsidy funds for advanced manufacturing policies in the first half of 2021373,056.26
Industrialization of intelligent white household appliances software platform and typical application research and development363,636.36363,636.36
Policy funds for manufacturing a strong province, subsidy for equipment for the technological transformation of industrial strong base312,500.00312,500.00
Subsidies for intelligent transformation & upgrading of enterprises from the new industrialization policy in economic development zone302,837.50302,837.50
2020 subsidy for advancing technological transformation projects267,962.50
Government subsidy for new plant construction - industrialization of cryogenic refrigeration equipment250,000.00250,000.00
Subsidy for industrial development policy from Hefei for first half of 2020217,300.00217,300.00
Special funds for strategic emerging industry and high-end growth industry206,896.55
2021 manufacturing strong provincial policy subsidy funds203,750.00
2020 fund allocation for Anhui Province's triple innovation project162,500.00
2020 supporting funds to support the innovation and development of artificial intelligence industry162,500.00
Subsidy from Zhongshan Finance Bureau (CZ028001 provincial special project 2019)152,823.25152,823.24
Promoting the new industry (annual output of 0.6 million medium& large volume environmental protection and energy saving freezer)152,206.26152,206.26
Upgrading technology transformation of AC production line113,903.7530,601.92
Equipment subsidy for the industrial base technical renovation from Economic and Information Commission117,500.00117,500.00
Promotion of the energy-saving room air conditioner105,154.62105,154.62
Corporate policy funding27,000,000.00
Loan discount3,000,000.00
Subsidy of the featured dual innovation vehicle in economic development zone of Hefei2,000,000.00
VAT refund 20191,635,266.39
Economic Development Zone Industrialization Policy Award and Supplementary Funds in 20191,140,400.00
Hefei City 2020 smart home appliance (home) technology award and subsidy1,000,000.00
Reward for the enterprise with fast revenue growth500,000.00
Technical transformation of the Athena project474,375.00
2018 special funds for industrial development of Zhongshan -topic of technology transformation132,861.90
Other petty projects5,389,351.576,414,039.35
Total48,325,391.8157,250,100.93

53. Investment income

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
Long-term equity investment income by equity method8,971,315.55-16,047,810.77
Investment income obtained from disposal of Trading financial assets7,825,971.3965,827,326.06
Income from financial products1,784,208.222,754,190.61
Investment income of other non-current financial assets during holding period76,200.80
The termination of income recognition for financial assets measured by amortized cost-10,198,142.54
Interest income from debt investment during the holding period5,356,708.33
Total13,816,261.7552,533,705.90

54. Changes in fair value gains

ItemCurrent PeriodLast Period
Trading financial assets30,187,709.04-11,569,560.58
Including :Income of fair value changes from derivative financial instruments29,478,307.89-18,496,182.50
Interest accrual for wealth management products709,401.156,926,621.92
Trading financial liability-26,624,972.001,837,906.29
Including: Income of fair value changes from derivative financial instruments-26,624,972.001,837,906.29
Total3,562,737.04-9,731,654.29

55. Credit impairment loss

ItemCurrent PeriodLast Period
Note receivable bad debt loss546,876.51
Account receivable bad debt loss-50,863,838.62-15,669,395.22
Other account receivable bad debt loss397,219.491,514.82
Total-50,466,619.13-15,121,003.89

56. Assets impairment loss

ItemCurrent PeriodLast Period
Loss on inventory valuation-28,983,106.69-43,310,366.42
Impairment loss on contractual assets-808,716.15
Total-29,791,822.84-43,310,366.42

57. Income from assets disposal

ItemCurrent PeriodLast PeriodAmount reckoned into non-recurring gains/losses in Current Period
Income from non-current assets disposal8,358,775.10-208,978.908,358,775.10

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast PeriodAmount reckoned into non-recurring gains/losses in Current Period
Including: income classify to assets ready for sale
income not classify as to assets ready for sale8,358,775.10-208,978.908,358,775.10
Including: Income from fixed assets disposal4,141,767.54-208,978.904,141,767.54
Income from intangible assets disposal4,217,007.564,217,007.56
Total8,358,775.10-208,978.908,358,775.10

58. Non-operation revenue

ItemCurrent PeriodLast PeriodAmount reckoned into non-recurring gains/losses in Current Period
Income of penalty567,772.74854,054.88567,772.74
Profit from disposal of non-current assets321,759.27117,430.00321,759.27
Other2,021,355.784,890,835.832,021,355.78
Total2,910,887.795,862,320.712,910,887.79

59. Non-operating expenditure

ItemCurrent PeriodLast PeriodAmount reckoned into non-recurring gains/losses in Current Period
Non-current asset retirement losses1,142,293.89645,034.441,142,293.89
Penalty and late fee2,264.7534,829.072,264.75
Other1,188,402.1980,729.111,188,402.19
Total2,332,960.83760,592.622,332,960.83

60. Income tax expenses

ItemCurrent PeriodLast Period
Current income tax16,329,432.3921,302,275.31
Deferred Income Tax-26,445,005.8515,784,696.07
Total-10,115,573.4637,086,971.38

61. Other comprehensive income

Found more in 43. Other comprehensive income in VI

62. Items of cash flow statement

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(1) Cash received (paid) from (for) other activities relating to operation/investment/financing

1) Cash received from other activities relating to operation

ItemCurrent PeriodLast Period
Government subsidy and rewards31,397,968.2240,956,209.27
Cash deposit, deposit19,397,785.919,420,313.94
Collection of restriction fund14,531,658.7122,688,330.93
Rental income3,346,435.182,178,291.38
Compensations1,724,086.132,605,385.53
Petty cash collection62,136.3381,130.50
Other2,347,265.991,712,766.06
Total72,807,336.4779,642,427.61

2) Cash paid for other activities relating to operation

ItemCurrent PeriodLast Period
Market expenses82,409,839.91103,773,740.45
Rental fee52,784,034.2957,814,676.41
Petty cash, deposit, Cash deposit22,367,764.5027,666,562.51
Service support fee15,879,324.8031,063,421.76
Inspection and certification fee, certification charge and reviewing fee14,909,635.8411,298,717.35
Technological cooperation costs and consulting charge13,589,880.676,098,074.18
Repair fee13,247,556.808,129,554.19
Travel expenses, meeting fees and exhibition fees13,095,827.3223,609,336.42
Business activity fee10,637,980.8911,888,247.82
Transportation and vehicle costs7,774,128.458,370,198.29
Handling fee5,441,203.368,259,452.97
Advertising fee4,240,519.542,917,266.75
Office expenses3,180,729.463,172,145.59
Labor fee1,277,408.412,003,400.19
Communication costs1,061,789.961,073,434.97
Board expenses277,495.67295,899.82
Convert to restricted funds85,623,704.49397,877,095.29
Other expenses43,501,646.8257,185,190.67
Total391,300,471.18762,496,415.63

3) Cash received from other activities relating to investment

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
Interest income arising from bank savings64,456,820.0769,755,550.75
Cash deposit1,182,376.24925,112.51
Income of forward exchange settlement8,021.8267,706,807.74
Total65,647,218.13138,387,471.00

4) Cash paid for other activities relating to investment

ItemCurrent PeriodLast Period
Loses of forward exchange settlement7,635,033.8647,506.93
Total7,635,033.8647,506.93

5) Cash received from other activities relating to financing

ItemCurrent PeriodLast Period
Meiling series (internal) bill discounting fundraising84,181.374,675,857.30
Total84,181.374,675,857.30

6) Cash paid for other activities relating to financing

ItemCurrent PeriodLast Period
Lease liability principal and interest7,095,354.404,097,081.48
Meiling series (internal) bill discounting fundraising2,341,617.17
Intermediary service fee1,345,000.00
Payment for B share repurchase737,262.357,032,876.30
Financing lease175,323.88175,323.88
Handling charge of dividend36,509.9736,415.52
Convert to restricted funds420,619,026.50
Total432,350,094.2711,341,697.18

(2) Supplementary of the consolidated cash flow statement

ItemCurrent PeriodLast Period
1. Net profit is adjusted to cash flow of operation activities:
Net profit72,694,901.4655,696,358.16
Add: provision for depreciation of assets60,861,695.1632,172,406.39
Depreciation of fixed assets, consumption of oil gas assets and depreciation of productive biological assets112,530,324.02108,832,291.21
Depreciation of right-of-use assets6,170,422.643,296,977.97
Amortization of intangible assets74,908,844.7970,475,493.03
Amortization of long-term retained expense19,080.92

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
Loss from disposal of fixed assets, intangible assets and other long term assets (gain is listed with “-”)-8,358,775.10208,978.90
Loss from discarding fixed assets as useless (gain is listed with “-”)-820,534.62527,604.44
Loss from change of fair value (gain is listed with “-”)-3,562,737.049,731,654.29
Financial expense (gain is listed with “-”)-59,137,813.74-5,978,969.88
Investment loss (gain is listed with “-”)-13,816,261.75-52,533,705.90
Decrease of deferred income tax assets (increase is listed with “-”)-25,663,712.3019,447,731.84
Increase of deferred income tax liabilities (decrease is listed with “-”)-781,293.55-3,655,216.54
Decrease of inventories (increase is listed with “-”)-262,649,097.49-587,211,166.68
Decrease of operational accounts receivable (increase is listed with “-”)-410,183,298.77-988,302,199.73
Increase of operational accounts receivable (decrease is listed with “-”)1,103,933,518.50748,795,645.68
Other-71,092,045.78
Net cash flow arising from operation activities575,053,217.35-588,496,116.82
2. Major investment and financing activities that do not involve cash receipts:
Conversion of debt into capital
Switching Company bonds due within one year
financing lease of fixed assets
3. Net change in cash and cash equivalents:
Balance at period-end of cash5,237,646,245.544,767,551,500.75
Less: Opening balance of cash5,840,194,931.576,425,529,815.10
Add: Balance at period-end of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents-602,548,686.03-1,657,978,314.35

(3) No net cash paid for subsidiary obtained in Current Period

(4) No net cash received from subsidiary disposal in Current Period

(5) Cash and cash equivalent

ItemCurrent PeriodLast Period
Cash5,237,646,245.544,767,551,500.75
Including: cash in stock31,633.8689,912.16
Bank deposits available for payment at any time.5,236,987,879.704,083,081,613.97
Other monetary fund available for payment at any time626,731.98684,379,974.62
Cash equivalents
Including: bond investment due within 3 months
Balance of cash and cash equivalents at period-end5,237,646,245.544,767,551,500.75

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
Including: using the restricted cash and cash equivalents of the parent company or subsidiary of the group

63. Assets with ownership or the right to use restricted

ItemBook value at period-endReasons
Monetary fund931,910,598.85Margin, Fixed Deposit, Frozen Funds
Receivables financing note 1515,578,650.05Pledged
Investment real estate note 23,368,611.31Mortgage
Fixed assets note 2342,747,272.11Mortgage
Intangible assets note 2276,909,965.43Mortgage
Total2,070,515,097.75

Note 1: The note receivable listed in receivables financing was pledged for: short-term financing from the bank; withpurpose of improving the note utilization, the Company draw up bank acceptance by pledge parts of the outstanding notesreceivable to the bankNote 2: The mortgage of investment real estate, fixed assets, and intangible assets is the mortgage of houses and buildingsand land use rights. For details, please refer to Note VI. 34. Long-term loans.

64. Foreign currency

(1) Foreign currency

ItemEnding foreign currency balanceExchange rateEnding RMB converted balance
Monetary fund260,304,768.74
Including: USD31,417,800.496.7114210,857,426.21
Euro525,770.717.00843,684,811.44
GBP78.798.1365641.07
AUD8,666,462.894.614539,991,393.01
HKD3,744.650.85523,202.42
Pakistan Rupi38,723,401.720.03271,266,255.24
IDR7,009,051,052.000.0004513,161,082.02
PHP11,010,331.410.12171,339,957.33
Account receivable776,926,671.15
Including: USD95,324,543.666.7114639,761,142.32
Euro1,893,377.787.008413,269,548.83
GBP44,831.458.1365364,771.09

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemEnding foreign currency balanceExchange rateEnding RMB converted balance
AUD9,845,522.004.614545,432,161.27
KRW1,673,068,607.000.0051558,624,668.67
Pakistan Rupi1,581,761,874.440.032751,723,613.29
IDR35,381,410,841.210.00045115,957,016.29
PHP14,739,107.580.12171,793,749.39
Other account receivable6,779,003.68
Including: USD795,202.496.71145,336,921.99
Pakistan Rupi13,780,264.890.0327450,614.66
IDR2,019,467,700.000.000451910,779.93
PHP663,000.000.121780,687.10
Account payable59,980,957.43
Including: USD770,106.516.71145,168,492.83
Euro13,419.327.008494,047.96
Pakistan Rupi997,494,603.030.032732,618,073.52
IDR33,734,917,734.000.00045115,214,447.90
PHP56,580,897.420.12176,885,895.22
Other account payable15,476,885.84
Including: USD100,496.426.7114674,471.67
Pakistan Rupi326,408,714.370.032710,673,564.96
IDR8,729,895,798.000.0004513,937,183.00
PHP1,574,907.220.1217191,666.21

(2) Foreign operational entity

The foreign operational entity of the Company was Changhong Ruba Trading Company (Private) Limited, mainlyoperates in Lahore, Pakistan; Recording currency is Pakistan Rupi. CHANGHONG MEILING ELECTRIC INDONESIA,PT, mainly operates in Jakarta; recording currency is IDR. CH-Meiling International (Philippines) Inc, mainly operatesin Philippines; Recording currency is PHP.

65. Hedging

The Company adopts forward foreign exchange contracts to hedge the risk of exchange ratefluctuations.The Company designates the purchased forward foreign exchange contracts as hedginginstruments, and manages them in accordance with the hedge accounting method, and evaluates thehedged items of unrecognized asset and liability items, such as unrecognized definite commitments, on

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

the balance sheet date. The Company adopts the ratio analysis method to evaluate the hedgingeffectiveness.Hedging instrument is as follows:

ItemBook value of the hedging instrument on 30 June 2022Item of balance sheet with hedging instrument
Fair value hedges
Exchange rate risk-forward foreign exchange contracts and definite commitments not yet confirmed, etc.47,475,394.08Trading financial assets
Exchange rate risk-forward foreign exchange contracts and definite commitments not yet confirmed, etc.38,929,244.41Tradable financial liabilities

66. Government subsidy

ItemAmountItemAmount reckoned into current gain/loss
VAT refund on software products6,981,697.33Other income6,981,697.33
Awards of high quality policy industrial internet for 20214,663,100.00Other income4,663,100.00
Award funds for supporting the development of China Sound Valley4,385,000.00Other income4,385,000.00
2022 provincial foreign trade funds (market development of key and brand market enterprise)2,500,000.00Other income2,500,000.00
Subsidy for employment stable2,266,011.87Other income2,266,011.87
Supporting the industrial internet construction and scene application2,000,000.00Other income2,000,000.00
Promotion of insurance1,819,544.22Other income1,819,544.22
Upgrading technology transformation of AC production line1,385,600.00Deferred income113,903.75
Dispersed to collected for tablet in Nanjing Port1,165,095.00Other income1,165,095.00
2022 Provincial industrial development special funds1,000,000.00Other income1,000,000.00
Support the linage development of enterprises in the region716,000.00Other income716,000.00
Personal tax handling fee refund597,590.71Other income597,590.71
2021 Anhui Science & technology support funds for major special projects500,000.00Other income500,000.00
2021 advanced manufacturing development policy500,000.00Other income500,000.00
Award of innovation for the new third board500,000.00Other income500,000.00
Subsidy of advanced manufacturing policy for second half of 202157,100.00Deferred income2,379.17
Other petty projects4,687,444.72Other income4,687,444.72
Total35,724,183.8534,397,766.77

VII. Changes of consolidation rage

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

1. Enterprise combined under the different control: nil

2. Enterprise combined under the same control: nil

3. Reversed takeover: nil

4. Disposal of subsidiary: nil

5. Subsidiary liquidated

SubsidiaryEquity disposal priceShare disposal ratio (%)Equity disposal methodPoint o at which the control is lostBasis for determining the point at which the control is lostDifference between the disposal price and the share of net assets of the subsidiary at the consolidate financial statement corresponding to the disposal of the investmentAmount of investment gain/loss transferred from other comprehensive income that related to equity investment of original subsidiary
Jinan Xiangyou Electric Appliances Marketing Co., Ltd93.4Liquidation & cancellation2022.02Completed the liquidation & cancellation

6. Subsidiary newly established: nil

7. Subsidiary merger by absorption

Name of companyEquity ratio before absorption (%)Time for absorption
Zhengzhou Meiling Electric Appliances Marketing Co., Ltd100March 2022

In March 2022, consolidation by merger, Hefei Meiling Group Holdings Limited purchased 100% equity of ZhengzhouMeiling Electric Appliances Marketing Co., Ltd (hereinafter referred to as Zhengzhou Meiling) from Hefei MeilingElectric Appliances Marketing Co., Ltd. As of 30 June 2022, the industrial & commercial and tax cancellation under thename of Zhengzhou Meiling has not been completed.VIII. Equity in other entity

1. Equity in subsidiary

(1) Composition of the enterprise group

SubsidiaryMain office placeRegistration placeBusiness natureShareholding ratio(%)Acquire by
DirectlyIndirectly
Zhongke Meiling Cryogenic Technology Co., Ltd1)HefeiHefeiManufacturing and sales63.2683Investment establishment

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

SubsidiaryMain office placeRegistration placeBusiness natureShareholding ratio(%)Acquire by
DirectlyIndirectly
Sichuan Hongmei Intelligent Technology Co., Ltd.2)MianyangMianyangSoftware development100Investment establishment
Mianyang Meiling Refrigeration Co., Ltd.3)MianyangMianyangManufacturing and sales955Investment establishment
Jiangxi Meiling Electric Appliance Co., Ltd. 4)JingdezhenJingdezhenManufacturing and sales98.751.25Investment establishment
Hefei Meiling Wulian Technology Co., Ltd5)HefeiHefeiSoftware development100Investment establishment
Hefei Meiling Electric Appliances Marketing Co., Ltd6)HefeiHefeiSales99.820.18Investment establishment
Wuhan Meizhirong Electric Appliances Marketing Co., Ltd7)WuhanWuhanSales92Investment establishment
Hefei Meiling Nonferrous Metal Products Co., Ltd.8)HefeiHefeiManufacturing and sales100Enterprise combined not under the same control
Changhong Meiling Ridian Technology Co., Ltd.9)ZhongshanZhongshanManufacturing and sales99.0361Enterprise combined under the same control
CHANGHONG MEILING ELECTRICINDON ESIA,PT 10)JakaptaJakaptaSales100Investment establishment
ChanghongRubaTradingCompany(Private)Limited 11)PakistanPakistanSales60Investment establishment
Sichuan Changhong Air-conditioner Co., Ltd12)MianyangMianyangManufacturing and sales100Enterprise combined under the same control
Zhongshan Changhong Electric Co., Ltd13)ZhongshanZhongshanManufacturing and sales9010Enterprise combined under the same control
Hefei Meiling Group Holdings Limited14)HefeiHefeiManufacturing and sales100Enterprise combined not under the same control
Meiling Equator Household Appliance (Hefei) Co., Ltd.15)HefeiHefeiManufacturing and sales100Enterprise combined not under the same control
Hefei Equator Appliance Co., Ltd16)HefeiHefeiManufacturing and sales100Enterprise combined not under the same control
Ground Energy Heat Pump Tech. Co., Ltd.17)MianyangMianyangManufacturing and sales51Investment establishment
Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. 18)ZhongshanZhongshanManufacturing and sales51Investment establishment
Meiling CANDY Washing Machine Co., Ltd19)HefeiHefeiR&D, sales60Investment establishment
Guangzhou Changhong Trading Co., Ltd.20)GuangzhouGuangzhouSales100Investment establishment
Hebei Hongmao Daily Appliance Technology Co., Ltd.21)HandanHandanManufacturing and sales99.0361Investment establishment
Anhui Tuoxing Technology Co., Ltd.22)HefeiHefeiManufacturing and sales63.2683Investment establishment

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.

From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

SubsidiaryMain office placeRegistration placeBusiness natureShareholding ratio(%)Acquire by
DirectlyIndirectly
CH-Meiling.International (Philippines) Inc.23)PhilippinesPhilippinesSales100Investment establishment
Hefei Changhong Meiling Life Appliances Co., Ltd. 24)HefeiHefeiSales70Investment establishment
Anhui Ling'an Medical Equipment Co., Ltd 25)Lu'anLu'anManufacturing and sales63.2683Investment establishment

Note:

1) Zhongke Meiling Cryogenic Technology Co., Ltd. (hereinafter referred to as Zhongke Meiling), the predecessor ofwhich was Zhongke Meiling Cryogenic Technology Limited Liability Company, was established on 29 October 2002 byjoint contribution from the Company and Technical Institute of Physics and Chemistry, CAS (“TIPC”), with registeredcapital of 60 million yuan upon the establishment, among which, the Company made capital contribution of 42 millionyuan (including the assets in specie at the consideration of35,573,719.70 yuan as evaluated by Beijing ZhongzhengAppraisal Co., Ltd. with issuance of the Appraisal Report (ZZPBZ(2002)No.029) and cash contribution of 6,426,280.30yuan) accounting for 70% of the aforesaid registered capital, and TIPC made capital contribution of 18 million yuan withintangible assets of such value (namely the single compressor mixture industrial low temperature refrigeration technology)as evaluated by Jingzhongzi Assets Appraisal Co., Ltd. with issuance of the Appraisal Report (ZZPBZ(2002)No.225)accounting for 30% of the aforesaid registered capital. The paid-in of the above registered capital has been verified byHuazheng Accounting Firm by issuance of the Assets Verification Report (HZYZ (2002) No. B157) dated 16 October2002.In October 2014, according to the relevant provision under the Management Rules on Application of State Owned Assetsby Central Business Organs, TIPC transferred the 30% equity interests held by it in Zhongke Meiling CryogenicTechnology Company Limited to its wholly-owned subsidiary Zhongke Xianxing (Beijing) Assets Management Co., Ltd(hereinafter referred to as Zhongke Xianxing) which would perform management over the operating assets of TIPC. Uponconsideration and approval at the 37

th session of the 7

thBOD of Hefei Meiling Co., Ltd, it is agreed to waive the pre-emptive right.On 10 August 2015, all the founders signed the Founder Agreement of Zhongke Meiling Cryogenic Technology CompanyLimited, pursuant to which, they decided to change the firm type of Zhongke Meiling Cryogenic Technology CompanyLimited to a joint stock company. Based on the net assets of 96, 431,978.25 yuan as audited by Xinyong Zhonghe CPAas of 30 June 2015, an aggregate of 65,000,000 shares have been converted at the proportion of 1:0.67, which are to beheld by the original shareholders according to their respective entitlement. In case that the net assets exceed registeredcapital, the balance shall be recorded in capital reserve. On 28 August 2015, Xinyong Zhonghe CPA reviewed theregistered capital and paid-in thereof in respect of the stock reform, and issued Assets Verification Report(XYZH/2015CDA40161). The Company registered industrial and commercial information on 11 September 2015.On November 25, 2016, the first Extraordinary Shareholders' General Meeting of Zhongke Meiling CryogenicTechnology Co., Ltd. in 2016 considered and approved the Proposal on the Issuance Plan of the Company; ZhongkeMeiling Company issued 3,150,000 shares to specific investors by the non-public offering of shares at 1.63 yuan pershare. The current capital increase was verified by the No.[XYZH/2016CDA40294]capital verification report issuedby ShineWing CPA (special general partnership). After the completion of the issuance, the share capital of ZhongkeMeiling Company increased to 68,150,000 shares and the Company's shareholding ratio was 66.76%.On 15 September 2017, the Proposal of the First Stock Placement of Zhongke Meiling Cryogenic Technology Co., Ltdfor year of 2017 was deliberated and approved by 4

th

session extraordinary of shareholders general meeting of 2017.Zhongke Meiling offering 490,300 shares to specific investors by way of privately placement, which has 1.72 yuan per

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

share in amount. The capital increasement has been verified by the No. [XYZH/2017CDA40324]capital verificationreport issued by ShineWing CPA (special general partnership). After the completion of shares placement, stock of theCompany increased to 68,640,300 shares and 66.87% held by the Company.On September 9, 2019, the 10

th

Meeting of the 2

nd

BOD and the Fourth Extraordinary Shareholders’ Meeting reviewedand approved the Proposal on the First Stock Issuance Plan of Zhongke Meiling Cryogenic Technology Co., Ltd. in 2019(Revised Version), the number of shares to be issued this time does not exceed 3,907,900 shares (including 3,907,900shares), the issue price is not less than 2.16 yuan per share, and the raised funds are expected to not exceed 8,441,064.00yuan (including 8,441,064.00 yuan). After the completion of the additional issue, the company’s share capital increasedto 72,548,200 shares, which was verified by [No. XYZH/2020CDA30002] “Capital Verification Report” issued by ShineWing Certified Public Accountants (LLP), and the Company’s shareholding ratio was 63.2683%.

2) Sichuan Hongmei Intelligent Technology Co., Ltd. (hereinafter referred to as Hongmei Intelligent) was established onJan. 24, 2014. It is a limited company jointly invested by the Company and Mianyang Meiling Refrigeration Co., Ltd.,being approved by the Industrial and Commerce Bureau of Peicheng District, Mianyang City. The company owesregistered capital of 5 million yuan, including 4.95 million yuan contributed by Changhong Meiling Company in cash,accounted for 99% of the registered capital; Mianyang Meiling Refrigeration Co., Ltd. contributed 50000 yuan in cashwith 1% of the register capital occupied. The above mentioned register capital have been verified by verification reportof Chuanjinlai Yanzi No. [2014] B039 issued by Sichuan Jinlai Accounting Firm Co., Ltd. In July 2016, the shares ofHongmei Intelligent, held by the Company has transferred to Sichuan Changhong AC Co., Ltd., after transferred,Changhong AC has 99% equity of Hongmei Intelligent, the Company has no shares of Hongmei Intelligent directly.

3) Mianyang Meiling Refrigeration Co., Ltd. (hereinafter referred to as Mianyang Meiling), a limited liability companyjointly set up by the Company and China-tech Meiling Company, was founded on Mar. 6, 2009. Its registered capital andpaid-in capital were 50 million yuan upon establishment, of which, the Company invested 45 million yuan, accountingfor 90% of the registered capital; Zhongke Meiling Company invested 5 million yuan, accounting for 10% of theregistered capital. The capital receipt was verified by the verification report [CXKY (2009) No. 008] of Sichuan XingruiCertified Public Accountants. On 19 January 2011, the Company increase 50 million yuan in capital of Mianyang Meiling,of which 95 million yuan invested by the Company, a 95% of total register capital while 5 million yuan invested byZhongke Meiling, a 5% of total capital occupied. The paid-in capital has been verified by Capital Verification Report[XYZH/2010CDA6040]from Chengdu Branch of Shinewing CPA CO., Ltd. In 2011, Zhongke Meiling entered into“Equity Transfer Agreement” with Jiangxi Meiling Refrigeration Co., Ltd. 5 percent equity of Mianyang Meiling held byZhongke Meiling was transferred to Jiangxi Meiling Refrigerator. In September 2013, Jiangxi Meiling Refrigeration wascombined by Jiangxi Meiling Electric Appliance Co., Ltd., than 5 percent equity was transfer to Jiangxi Meiling ElectricAppliance.

4) Jiangxi Meiling Electric Appliance Co., Ltd. (hereinafter referred to as Jiangxi Meiling Electric Appliance) was alimited liability company jointly established by the Company and Mianyang Meiling on 23 May 2011. Register capitalof the company totally as 50 million yuan, 49.375 million yuan invested by the Company, 98.75% in total register capitalwhile 0.625 million yuan invested by Mianyang Meiling, a 1.25% in total register capital occupied. The initial investment

10.50 million yuan was received dated 13 May 2011 with 10 million yuan from the Company and 0.5 million yuan fromMianyang Meiling. Rest of the capital shall be invested fully within 2 years after the joint ventures established accordingto capital requirement. The initial investment capital were verified by the Capital Verification Report [JXKYZi (2011)No. 090] issued from Jingdezhen Xingci CPA Co., Ltd. Second capital 39.5 million yuan was fully funded on 28 July

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

2011, the Company contributed 39.375 million yuan while Mianyang Meiling Company invested 125,000 yuan, thecontributions have been verified by the capital verification report [Jing Xing Kuai Yan Zi (2011) No.: 134] issued fromJDZ Xingci CPA Co., Ltd.

5) Hefei Meiling Wulian Technology Co., Ltd. (hereinafter referred to as Wulian Technology) was established dated 21January 2019 with registered capital of 10 million yuan, and it is the subsidiary of the Company with fully-ownedestablishment. On 19 March 2019, paid in capital is 6 million yuan

6) Hefei Meiling Electric Appliances Marketing Co., Ltd (hereinafter referred to as Meiling Marketing) is the limitedcompany jointly invested by the Company and Mianyang Meiling Company on 21 Oct. 2009. Registered capital andpaid-up capital were 10 million yuan, including 9.9 million yuan invested by the Company, a 99% of the registered capital;Mianyang Meiling Company contributed 0.1 million yuan, a 1% of the registered capital. The above mentioned paid-upregister capital have been verified by verification report of [Wan An Lian Xin Da Yan Zi (2009) No. 074] issued by AnhuiAn Lian Xin Da Accounting Firm Co., Ltd. On 25 Nov. 2010, the Company increased capital 45 million yuan, registeredcapital amounting to 55 million yuan, including 54.9 million yuan contributed by the Company, a 99.82% of the registeredcapital, while Mianyang Meiling invested 0.1 million yuan, a 0.18% of the registered capital. The increased capital hasbeen verified by verification report of [Wan Hua Shen Zheng Da Kuai Yan Zi (2010) No. 1514] issued by Anhui HuaShen Zhengda CPA Co., Ltd.

7) Wuhan Meizirong Electrical Marketing Co., Ltd (hereinafter referred to as Wuhan Meizirong) was established dated10 January 2011 with registered capital of 5 million yuan; Meiling Marketing invested 4.60 million yuan, accounted for 92%of the registered capital.

8) Hefei Meiling Nonferrous Metal Products Co., Ltd. (hereinafter referred to as Nonferrous Metal) was the Sino-foreignjoint venture jointly set up by original Meiling Group, Hefei Meiling Copper Co., Ltd. And Singapore Kim Shin Development Co., Ltd.,which have been originally approved by the [WJMWFZZ (1996) No.349] of Foreign Trade and Economic Committee ofAnhui Province. Its registered capital was US$ 2.92 million upon establishment, of which, original Meiling Groupinvested US$ 1.46 million (monetary capital), accounting 50% of the registered capital, Hefei Meiling Copper Co., Ltdinvested US$ 0.584 million (monetary capital of RMB 0.18 million and real assets of US$ 0.404 million), accounting 20% of registeredcapital while Singapore Kim Shin Development Co., Ltd invested US$ 0.876 million (monetary capital), accounting 30% ofthe registered capital. The above mentioned investment verified by the verification report of [HSWZ (1995) No. 0737],[HSWZ (1996) No. 328] and [HSWZ (1998) No. 088] from Anhui CPAs Co., Ltd. In July 2008, approved by [HWS(2008) No.53] from Foreign Trade Economic Cooperation Bureau of Hefei City, 30% equity and 20% equity held bySingapore Kim Shin Development Co., Ltd and Hefei Meiling Copper Co., Ltd respectively transferred to original Meiling GroupTotally. The Company’s register capital came into 24,286,808.00 yuan after transference, and was not the joint-ventureany more.

9) Changhong Meiling Ridian Technology Co., Ltd. (hereinafter referred to as Ridian Technology) is a limited liabilitycompany invested and established by Sichuan Changhong Electric Co., Ltd. (hereinafter referred to as SichuanChanghong) and Sichuan Changhong Motor Transport Co., Ltd. (hereinafter referred to as Changhong Motor TransportCompany) on May 25, 2016. The registered capital and paid-in capital are 40 million yuan, of which Sichuan Changhonghas invested 32 million yuan by monetary capital, accounting for 80% of the registered capital; Changhong MotorTransport Company has invested 8 million yuan, accounting for 20% of the registered capital. The official receipts of

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

registered capital have been verified by original Sichuan Junhe Accounting Firm [No. JHYZ (2006) 3027]. RidianTechnology increased registered capital of 43 million yuan on January 4, 2007, changing from 40 million yuan to 83million yuan, for the newly increased 43 million yuan, Sichuan Changhong invested 1.8 million yuan, GuangdongXiongfeng Electric Co., Ltd. invested 40 million yuan, and Kou Huameng and other 9 natural person shareholdersinvested 1.2 million yuan, at the same time, the shareholders' meeting considered and agreed to transfer the investmentof 8 million yuan of Changhong Motor Transport Company to Sichuan Changhong Venture Investment Co., Ltd, thestructure of the registered capital after changes was that Sichuan Changhong invested 33.8 million yuan, accounting for

40.72%; Guangdong Xiongfeng Electric Co., Ltd. invested 40 million yuan, accounting for 48.19%; Sichuan ChanghongVenture Investment Co., Ltd Invested 8 million yuan, accounting for 9.64%; Kou Huameng and other 9 natural personshareholders invested 1.2 million yuan, accounting for 1.45%. The change of registered capital was verified by ZhongshanPromise Accounting Firm [No. ZCHZ (2007)501010].On February 18, 2009, seven natural person shareholders transferred total 0.76% stock rights to Hu Zhiheng, after thetransfer, the registered capital of Changhong Ridian was still 83 million yuan, the structure of registered capital afterchanges was that Sichuan Changhong invested 33.8 million yuan, accounting for 40.72%; Guangdong Xiongfeng ElectricCo., Ltd. invested 40 million yuan, accounting for 48.19%; Sichuan Changhong Venture Investment Co., Ltd invested 8million yuan, accounting for 9.64%; Hu Zhiheng and other two natural person shareholders invested 1.2 million yuan,accounting for 1.45%.On October 9, 2014, Changhong Ridian held the shareholders meeting which considered and agreed Kou Huameng totransfer its stock rights of total 250,000 yuan which accounts for 0.301% of the Ridian Technology’s registered capital toSichuan Changhong Venture Investment Co., Ltd at the cost of 317,802 yuan. The other shareholders of the RidianTechnology waived the right of pre-emption. On December 11, 2014, Ridian Technology held the shareholders meetingwhich considered and agreed Guangdong Xiongfeng Electric Co., Ltd. to transfer its stock rights of total 40 million yuanwhich accounts for 48.19 % of the company's registered capital to Sichuan Changhong Electric Co., Ltd. at the cost of43,977,300 yuan. The other shareholders of the Ridian Technology waived the right of pre-emption. The structure ofregistered capital after changes was that Sichuan Changhong invested 73.8 million yuan, accounting for 88.92%; SichuanChanghong Venture Investment Co., Ltd Invested 8.25 million yuan, accounting for 9.94%; Hu Zhiheng and anothernatural person shareholder invested 950,000 yuan, accounting for 1.14%.On 4 January 2016, Sichuan Changhong and Sichuan Changhong Venture Investment Co., Ltd. transferred total 98.855%equity of the Ridian Technology to the Company. After the transfer, the Company directly holds 98.855% stock rights ofRidian Technology.On 7 April 2020, Ridian Technology convened the shareholders’ meeting, and agreed the Wu Chang yuan to transferredtotal 0.18% equity of the Ridian Technology to the Company. After the transfer, the Company directly holds 99.0361%stock rights of Ridian Technology.

10) CHANGHONG MEILING ELECTRIC INDONESIA, PT.(hereinafter referred to as Indonesia Meiling) is asubsidiary established in Indonesia and jointly invested by Zhongshan Changhong and Sichuan Changhong in 2016, thecompany’s registered capital is 6 million US dollars, of which Zhongshan Changhong subscribed and paid 5.88 millionUS dollars in cash, accounting for 98% of the registered capital, Changhong Air Conditioning subscribed and paid120,000 US dollars in cash, accounting for 2% of the registered capital. On 4 July 2017, rests of the 2.94 million USdollars are subscribed by Zhongshan Changhong in line with the agreement.

11) Changhong Ruba Trading Company (Private) Limited (hereinafter referred to as Changhong Ruba) was a joint ventureestablished by Zhongshan Changhong Appliances Company Limited and RUBA GENERAL TRADING FZE Company

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(“RUBA”) on 5 August 2011 with the approval from Guangdong Development and Reform Commission by issuance ofthe Approval Relating to Joint Construction of a Manufacturing and Selling Platform Project in Pakistan by ZhongshanChanghong Appliances Company Limited (YFGWZ(2011)958). The resolution of the second extraordinary shareholders'meeting of Zhongshan Changhong in 2016 passed the "Proposal on the Company's Capital Increase to Changhong RubaTrading Company (Private) Limited", and agreed that the company and UAE RUBA Company jointly increase capital toChanghong Ruba Trading Company(Private) Limited which was invested by both sides in Pakistan at an earlier stage,Zhongshan Changhong invested 3.84 million US dollars in this capital increase, and UAE RUBA Company invested 2.56million US dollars, the shares held by both sides remained unchanged. After the capital increase, the company’s registeredcapital became 12.4 million US dollars, of which Zhongshan Changhong Home Appliances Company Limited invested

7.44 million US dollars in cash, shareholding ratio was 60%, UAE RUBA Company invested 4.96 million US dollars incash, and shareholding ratio was 40%.

12) Sichuan Changhong Air Conditioning Co., Ltd. (hereinafter referred to as Changhong Air Conditioner), a limitedliability company jointly set up by Sichuan Changhong and Changhong Chuangtou, was founded on November 28, 2008.Its registered capital was 200 million yuan upon establishment, of which, Sichuan Changhong invested 298 million yuan( 210,088,900 yuan invested by monetary capital while 87,911,100 yuan invested by real material), equivalent to 198million yuan shares, accounting for 99% of the registered capital; and Changhong Chuangtou invested 3 million yuan,accounting for 1% of the registered capital with equivalent of 2 million yuan shares. The registered capital receipt wasverified by the verification report [CGYYZ (2008) No. 177] of Sichuan Guang yuan Certified Public Accountants Co.,Ltd. and [HLTHYZ (2008) No. 12-006] of Sichuan Henglitai Certified Public Accountants Co., Ltd. In December 2009,the Company obtained 100% equity of Changhong Air-conditioner by consolidated under the same control. In 2017, theCompany increased capital of 650 million yuan to Changhong Air Conditioner, after capital increased, registered capitalof Sichuan Changhong comes to 850 million yuan from 200 million yuan, shareholding still counted as 100%.

13) Zhongshan Changhong Electric Co., LTD (hereinafter referred to as Zhongshan Changhong), was the originalGuangdong Changhong Electric Co., Ltd., and is a limited liability company jointly set up by Sichuan Changhong andChina Minmetals on May 22, 2001. Its registered capital was RMB 80 million upon establishment, of which, SichuanChanghong invested 72 million yuan, including 69.3 million yuan biding for the estate/non-estate from originalZhongshan Sanrong Air-conditioner Co., Ltd. And its patent use-right of 2.7 million yuan, accounting for 90% of theregistered capital; Chine Minmetals invested 8 million yuan in monetary capital accounting 10% of the registered capital.The Company changed its name originally from Guangdong Changhong Electric Co., Ltd in July 2003. In December2009, the Company obtained 90% equity of Zhongshan Changhong by consolidated under same control. 10% equity heldby China Minmetals has been transferred by Changhong Air-conditioner on April 11, 2010. On 25 May 2014, theCompany increased 36 million yuan to Zhongshan Changhong, and Changhong AC increased 4 million yuan. In 2016,according to the overseas development strategy of the Company and the development and operation needs of thesubsidiaries, the Company and the wholly-owned subsidiary Changhong Air Conditioning have increased capital of 64million yuan to Zhongshan Changhong according to the existing shareholding ratio, among which the capital increase ofthe Company was 57.6 million yuan, and the capital increase of Changhong Air Conditioning was 6.4 million yuan. Afterthe completion of this capital increase, the registered capital Zhongshan Changhong shall increase to184 million yuan,the shareholding ratio of the company and Changhong Air Conditioning remained unchanged and was still 90% and 10%,of which the Company invested 165.6 million yuan, accounting for 90% of the registered capital, Changhong AirConditioning invested 18.4 million yuan, accounting for 10% of the registered capital. In March 2020, in accordance withthe Company’s overseas development strategy and the operation and development needs of its subsidiaries, the Company

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

and its wholly-owned subsidiary Changhong Air Conditioning increased capital of 150 million yuan to ZhongshanChanghong according to the existing shareholding ratios, of which the Company increased capital of 135 million yuan,Changhong Air-Conditioning increased capital of 15 million yuan. After the completion of capital increase, the registeredcapital of Zhongshan Changhong has increased to 334 million yuan. The Company’s and Changhong’s shareholdingratios in Zhongshan Changhong remain unchanged at 90% and 10%, of which the Company funded 300.6 million yuan,accounting for 90% of the registered capital, while Changhong Air Conditioning funded 33.4 million yuan, accountingfor 10% of the registered capital.

14) Hefei Meiling Group Holdings Limited (hereinafter referred to as Meiling Group), was the state-owned company originallyapproved by People’s Government of Hefei Province and established authorized by SASAC of Hefei City. On July 14, 2008, 100%state-owned equity of Meiling Group has freely transferred to Xingtai Holding by Hefei SASAC. Agreement by theapproval of < State-owned property agreement transfer from Meiling Group> [ HGZCQ (2010) No.34] of Hefei SASACon April 9, 2010, 100% state-owned property of Meiling Group after partial assets and liabilities separated transferred tothe Company from Xingtai Holding as amount of 113.2 million yuan. The re-registration of industrial and commercialprocedure for Meiling Group after separated partial assets liability has finished on July 28, 2010. The new Meiling Grouphas register capital of 80 million yuan, and has been verified by the [AD (2010) YZD No. 016] from Anhui Auding CPAsCo., Ltd.

15) Meiling EquatorHousehold Appliance (Hefei) Co., Ltd. (hereinafter referred to as EquatorHousehold Appliance) was theSino-foreign joint venture jointly set up by original Meiling Group and EQUATOR INVESTMENTS (USA) INC. (EQUATORfor short), which have been approved by the [SWZWFZZ(2004) No.0103] of Approval Certificate of Foreign Enterprisefrom People’s Government of Anhui Province. Its registered capital was US$ 3 million upon establishment, of which,Sino company invested US$ 2.25 million in machinery equipment, accounting 75% of the registered capital while foreigncompany invested US$ 0.5 million in monetary capital and US$ 0.25 million in intangible assets, amounting to US$0.75million, accounting 25% of the registered capital. The above mentioned investment verified by the verification report of[WYAYZ (2004) No. 135] from Anhui Yongan CPAs Co., Ltd. In July 2007, approved by [HWJ (2007) No.136] fromForeign Trade Economic Cooperation Bureau of Hefei City, 25% equity held by EQUATOR transferred to Anhui MeilingElectric Co., Ltd. Totally. The Company’s register capital came into 24,793,200 yuan after transference, and was not thejoint-venture any more. 25% equity owned by Anhui Meiling Electric Co., Ltd has been transferred totally to originalMeiling Group in July 2009.

16) Hefei Equator Appliance Co., Ltd. (hereinafter referred to as Equator Appliance) was jointly set up by original Meiling Group

and Yingkaite Appliance on September 26, 2007. Its register capital was 12 million yuan, among which, original MeilingGroup invested 8,670,600 yuan in monetary capital, accounting 72.255% in registered capital; Equator Applianceinvested 3,329,400 yuan in the assessment value of intangible assets (land-use right), accounting 27.745% of totalregistered capital. The investment being verified by [WYAZ (2004) No. 135] from Anhui Yongan CPAs Co., Ltd.

17) Hong Yuan Ground Energy Heat Pump Technology Co., Ltd. (hereinafter referred to as Hong Yuan Ground Energy)was established on 28 August 2015, it is a limited liability company authorized by Administration for Industry andCommerce of Peicheng District, Mianyang, Sichuan, contributed by Sichuan Changhong Air Conditioner Co., Ltd(hereinafter referred to as Changhong Air Conditioner) and Hengyou yuan Technology Development Group Co., Ltd.together. Registered capital amounted as 50 million yuan, including 25.5 million yuan contributed by Changhong AirConditioner in cash, a 51% in total registered capital; Hengyou yuan Technology Development Group Co., Ltd. invested

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

24.5 million yuan in cash, a 49% in registered capital.

18) Hong Yuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd.(hereinafter referred to as Hong yuan Zhongshan)was established and invested on 18 July 2017 with registered capital of 15 million yuan, The Hong Yuan Ground EnergyHeat Pump Tech. Co., Ltd contributed 1.5 million yuan with own funds and takes 100% in the registered capital.In 2018,the shareholders of the Hong yuan Zhongshan decided to increase capital of 30 million yuan, and contributed by theshareholder Hong Yuan Ground Energy; thus registered capital of Hong yuan Zhongshan up to 45 million yuan

19) Meiling Candy Washing Machine Co., Ltd. (hereinafter referred to as Meiling Candy) was established and registeredon 27 April 2017, which was contributed by the Company and Candy Hoover Group S.r.l. together. Registered capitalcounted as 150 million yuan, including 90 million yuan invested by the Company, a 60% in registered capital.

20) Guangzhou Changhong Trading Co., Ltd. (hereinafter referred to as Changhong Trading) was established on 6 Jan.2017, the wholly-owned subsidiary of Zhongshan Changhong Electric Co., LTD (hereinafter referred to as ZhongshanChanghong) with registered capital of one million yuan

21) Hebei Hongmao Household Appliance Technology Co., Ltd (hereinafter referred to as Hebei Hongmao) wasestablished on 21 July 2017 with registered capital of 5 million yuan. Changhong Ridian invested 5 million yuan by ownfund and takes 100% in registered capital.

22) Anhui Tuoxing Technology Co., Ltd. (hereinafter referred to as Tuoxing Technology) was established on 20 May2019 with registered capital of 10 million yuan and it is the subsidiary of Zhongke Meiling with fully-ownedestablishment. As of June 30, 2021, actually 5 million yuan contributed.

23) CH-Meiling.International (Philippines) Inc. was established on 13 February 2020 in Philippines with registeredcapital of US$ 1,000,000, takes 100% of the equity. As of June 30, 2021, the Company has invested US$ 1,000,000,

24) Hefei Changhong Meiling Life Electric Co., Ltd was established on 24 December 2020, jointly established by theCompany and Ningbo Hongling Enterprise Management Partnership (Limited Partnership). the Company contributed 35million yuan, representing 70% of the equity while 15 million yuan invested by Ningbo Hongling Enterprise ManagementPartnership (Limited Partnership), a 30% takes in the equity. The paid-in capital contribution from the Company andNingbo Hongling Enterprise Management Partnership (Limited Partnership) has been completed on January 21, 2021and on January 18, 2021 respectively.

25) Anhui Ling’an Medical Equipment Co., Ltd. (hereinafter referred to as Ling’an Medical) was established on 4September 2021, which is a wholly-owned subsidiary of Zhongke Meiling, and registered capital of 10 million yuan. OnJune 29, 2021, Zhongke Meiling actually contributed 10 million yuan, accounting for 100% of the registered capital.

(2) Major non-wholly-owned subsidiary

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

SubsidiaryShareholding ratio of minorityGains/losses attributable to minority in Current PeriodDividend distributed to minority announced in Current PeriodBalance of minority’s interest at period-end
Zhongke Meiling36.7317%12,847,677.8621,318,560.0082,651,413.42
Ground Energy49.00%-2,799,196.8018,254,403.84
Ridian Technology0.9639%17,674.121,336,747.61
Meiling Life Appliances30.00%2,626,607.1926,736,159.74

(3) Financial information for major non-wholly-owned subsidiary

SubsidiaryEnding balance
Current assetsNon-current assetsTotal assetsCurrent liabilityNon-current liabilityTotal liabilities
Zhongke Meiling304,506,787.02155,860,330.99460,367,118.01218,415,104.3916,938,268.93235,353,373.32
Ground Energy139,050,914.6921,187,129.74160,238,044.43122,730,504.51253,654.54122,984,159.05
Ridian Technology242,076,461.9344,379,277.31286,455,739.24147,021,172.76747,001.92147,768,174.68
Meiling Life Appliances484,426,059.03302,642.82484,728,701.85395,608,169.40395,608,169.40

(Continued)

SubsidiaryOpening balance
Current assetsNon-current assetsTotal assetsCurrent liabilityNon-current liabilityTotal liabilities
Zhongke Meiling371,876,985.25153,246,440.33525,123,425.58260,324,038.6516,724,150.21277,048,188.86
Ground Energy167,092,910.8423,932,195.59191,025,106.43147,765,923.82292,650.70148,058,574.52
Ridian Technology256,926,013.0946,283,555.98303,209,569.07165,637,349.70718,345.11166,355,694.81
Meiling Life Appliances421,039,031.17169,482.39421,208,513.56340,843,338.42340,843,338.42

(Continued)

SubsidiaryCurrent Period
Operation incomeNet profitTotal comprehensive incomeCash flow from operation activity
Zhongke Meiling235,704,905.7534,977,067.9734,977,067.97-22,750,957.05
Ground Energy50,705,949.97-5,712,646.53-5,712,646.53-63,167,443.52
Ridian Technology121,903,975.391,833,690.301,833,690.30-2,113,312.10
Meiling Life Appliances618,374,856.058,755,357.318,755,357.3147,550,153.24

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

(Continued)

SubsidiaryLast Period
Operation incomeNet profitTotal comprehensive incomeCash flow from operation activity
Zhongke Meiling271,384,729.7951,828,122.3551,828,122.3544,525,447.06
Ground Energy49,226,548.73-10,132,057.22-10,132,057.22-57,732,313.13
Ridian Technology152,108,811.31-2,059,812.01-2,059,812.01-206,486,307.38
Meiling Life Appliances486,144,189.5617,370,883.7517,370,883.7561,431,363.80

(4) Major limitation on using enterprise group’s assets and liquidate debts of enterprise group: nil

(5) Offering financial supporting or other supports for structured entity that included in consolidationstatement scope: nil

2. Changes of owner’ equity shares in subsidiary and its impacts: nil

3. Equity in joint venture or associate enterprise

(1) Major joint venture or associate enterprise

Joint venture or associate enterpriseMain office placeRegister placeBusiness natureShareholding ratio(%)Accounting treatment for investment of joint venture or associate enterprise
DirectlyIndirectly
Associated companies:
1.Changhong Ruba Electric Company (Private)Ltd.Lahore, PakistanLahoreManufacturing and sales40.00Equity
2.Hefei Xingmei Assets Management Co., Ltd.HefeiHefeiRental, agency48.28Equity
3.Sichuan Zhiyijia Network Technology Co., Ltd.MianyangMianyangSales50.00Equity
4.Hong Yuan Ground Energy Heat Tech. Co., LtdMianyangMianyangR & D, sales, after-sales49.00Equity
5.Sichuan Tianyou Guigu Technology Co., LtdMianyangMianyangManufacturing and sales25.00Equity
6.Chengdu Guigu Environmental Tech. Co., LtdChengduChengduR&D, manufacturing and sales25.00Equity

(2) Financial information for major Joint venture: nil

(3) Financial information for associate enterprise

Annotations of Financial Statements of ChangHong Meiling Co., Ltd.From 1 January 2022 to 30 June 2022(Unless other wise specified, RMB for record in the Statement)

ItemEnding balance/Current Period
Changhong Ruba Electric Company(Private)Ltd.Hefei Xingmei Assets Management Co., Ltd.Sichuan Zhiyijia Network Technology Co., Ltd.Hong Yuan Ground Energy Heat Tech. Co., LtdSichuan Tianyou Guigu Technology Co., LtdChengdu Guigu Environmental Tech. Co., Ltd
Current assets115,822,999.4344,689,824.374,539,911,822.6539,312,447.0513,512,755.8144,124,500.11
Including: cash and cash equivalent7,300,923.9120,072,152.502,377,264,858.2626,568.045,633,698.0819,283,218.08
Non-current assets34,151,444.946,357,713.737,486,157.0912,352.491,322,469.48
Total assets149,974,444.3744,689,824.374,546,269,536.3846,798,604.1413,525,108.3045,446,969.59
Current liability177,107,936.274,399,289.564,453,320,440.265,694,974.021,350,530.8110,727,625.88
Non-current liability1,372,236.182,696,009.39
Total liabilities177,107,936.274,399,289.564,454,692,676.445,694,974.021,350,530.8113,423,635.27
Minority's interest1,100,054.64
Equity attributable to shareholder of parent company-27,133,491.9040,290,534.8191,576,859.9441,103,630.1212,174,577.4930,923,279.68
Share of net assets measured by shareholding-10,853,396.7619,452,270.2145,788,429.9720,140,778.763,043,644.377,730,819.92
Adjustment
--Goodwill821,877.281,416,227.93
Unrealized profit of the internal downstream transactions9,392,876.2180,105.515,418.64
Unrealized profit of the internal upstream transactions
Other10,853,396.76
Book value of the equity investment for associate enterprise19,452,270.2137,217,431.0420,060,673.253,043,644.379,141,629.21
Fair value of equity investment for the affiliates with consideration publicly
Operation income114,113,833.32-5,469,059,501.7794,133.063,778,843.3424,509,987.79
Financial expenses70,820.09-27,341.72-22,176,910.19267.75-57,394.00-289,738.80
Income tax expenses1,215,849.993,252,674.65554,942.41
Net profit-14,180,304.249,758,023.961,646,585.39-1,163,205.15260,813.27123,763.39
Other comprehensive income2,115,738.30