读取中,请稍候

00-00 00:00:00
--.--
0.00 (0.000%)
昨收盘:0.000今开盘:0.000最高价:0.000最低价:0.000
成交额:0成交量:0买入价:0.000卖出价:0.000
市盈率:0.000收益率:0.00052周最高:0.00052周最低:0.000
虹美菱B:2023年半年度报告(英文) 下载公告
公告日期:2023-08-18

CHANGHONG MEILING CO., LTD.

Semi-Annual Report 2023

August 2023

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 2023Semi- 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 are advisedto 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 2023 that appointed by the Company. All public informationunder the name of the Company disclosed on the above said media and website shall prevail, and investors areadvised to exercise caution.Does the Company need to comply with disclosure requirements of the special industry: No

Profit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the Board in the semi-annualperiod

□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 Opinions for2023 Semi-Annual Report.Supervisory Committee of the Company formed Written Examination Opinions for 2023 Semi-Annual Report.

Contents

I.Important Notice, Table of contents and Definitions 1II. Company Profile and Main Financial Indexes 2III. Management Discussion & Analysis 10IV. Corporate Governance 33V. Environmental & Social Responsibility 34VI. Important Events 43VII. Change of share capital and shareholding of Principal Shareholders 91VIII. Situation of the Preferred Shares 98IX. Corporate Bond 99X. Financial Report 100

Documents Aavailable for Reference

I.Financial statement carrying the signatures and seals of the Chairman, principal of the accounting works andperson in charge of accounting organ;II. Original documents of the Company and manuscripts of public notices that disclosed in the website designatedby CSRC in the report period;

Definition

Terms to be definedRefers toDefinition
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

II. Company Profile and Main Financial Indexes

I.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)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 2022.(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 AnnualReport 2022.(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)12,828,694,323.5710,224,503,551.1925.47%
Net profit attributable to shareholders of the listed company (RMB)358,054,844.7460,375,199.25493.05%
Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB)381,989,843.824,107,468.919199.88%
Net cash flow arising from operating activities (RMB)1,410,519,809.81575,053,217.35145.29%
Basic earnings per share (RMB/Share)0.34770.0582497.42%
Diluted earnings per share (RMB/Share)0.34770.0582497.42%
Weighted average ROE6.69%1.24%Increase by 5.45 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)19,803,890,884.2016,200,361,212.8022.24%
Net assets attributable to shareholder of listed company (RMB)5,445,503,647.495,168,286,872.095.36%

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 GAAP358,054,844.7460,375,199.255,445,503,647.495,168,471,419.72
Items and amount adjusted by foreign accounting rules
Foreign accounting rules358,054,844.7460,375,199.255,445,503,647.495,168,471,419.72

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)
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)28,162,261.54Found 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,-59,214,422.03Found more in “Income of fair value changes”, “Investment income”
except for the effective hedging business related to normal operation of the Company
Switch back of the impairment for receivables that has impairment test independently3,588,165.07Found more in “Account receivable’’
Other non-operating income and expenses other than the above7,689,220.58Found more in “Non-operating income’’ and “Non-operating expenses’’
Less: impact on income tax-854,743.24
Impact on minority shareholders’ equity (post-tax)5,014,967.48
Total-23,934,999.08

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 AnalysisI. 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 core competitivenessof enterprises by technological innovation and product innovation. Relying on the cutting-edge R&D team andadvanced 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. The Company hasset up the first RoHS public testing center in Anhui Province, the national enterprise technology center, the nationalindustrial design center, and the 5G industrial internet innovation application laboratory. In recent years, the Companyhas successively awarded several national honorary titles as the “Smart Refrigerator Intelligent Manufacturing PilotDemonstration Project”, the “National Green Factory”, the “National Industrial Design Center” and “National LeadingEnterprises of Qualify in Home Appliance Industry” etc. At the same time, many products of Meiling have repeatedlywon a number of domestic awards, continuously demonstrating the capabilities and strength of Meiling's intelligentmanufacturing and Meiling brand intelligent innovation technology. At the 2023 China Refrigerator Industry SummitForum, Meiling won the 2023 China Refrigerator Industry Smart and Healthy Brand Award, and its product MeilingM-Fresh Refrigerator BCD-600WQ5S won the title of "Pioneer of Fresh Storage". At the same time, Meiling also wasawarded the first batch of Embedding Grade Certification of Embedded Refrigerator issued by the OrganizingCommittee of the 2023 China Refrigerator Industry Summit and the participation certificate of Quality Classificationand "Leader" Evaluation Requirements for Household Refrigerators; "Frozen fresh" BCD-506WP9BDZ refrigeratorwon the world record of "The World's Most Constant Temperature Refrigerator in the Freezer" by World RecordAssociation; Changhong all-dust-free fresh air conditioner won the "Nanshan Award" trophy and honorary certificatepersonally awarded by Academician Zhong Nanshan, Chairman of China Brand Building Indoor Air PurificationBrand Cluster and Honorary President of the Association; Meiling 10KG hand-washing-like drum washing machineRS2H100 set a world record in the World Record Association as "the fastest drum washing machine in the world forcleaning white shirts stained with 10ml old stains by clean water". In addition, the product also obtained CHCTcertificate of "mother-baby household appliances certification" and CVC certificate of "product double safety standardcertification"; Meiling range hood (CXW-188-MY-KD615) won the "Low Noise Range Hood Award" in the evaluationof 2023 FT Quality Award; Zhongke Meiling "XC-168L Intelligent Temperature Control Medical Blood Box" and

"CX-1000 Chromatography Cabinet" passed the new product appraisal in Anhui Province and obtained the newproduct appraisal certificate in Anhui Province.

In recent years, driven by the industry transformation and upgrades and consumption upgrades, the Companyalways adheres to the strategy of smart and variable frequency products, promoted the Company’s products totransform and upgrade to become intelligent and high-end and comprehensively enhanced the competitiveness ofproducts in the industry by grasping the opportunities of refreshment, thin-wall, odourless, air cooling and energyefficiency upgrades and effectively resolving the pain points of customers. Under the guidance of the “intelligent”strategy, in recent year, the Company has released and listed a number of CHiQ series of smart refrigerators and air-conditioning products, “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.During the reporting period, main income of the Company coming from refrigerator (freezer), air conditioner,washing machine, small home appliances, kitchen & toilet products and biomedical etc., total amounting to 12.735billion yuan, a 99.27% 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, The "Meiling" brand is listed as one of the most valuable brands in China, It has a younger sub-brand"AQNA", and in the meantime, it will gradually build the high-end product "M-Fresh" into a sub-brand of high-endfashion consumers, build a brand matrix and expand brand influence. The year 2023 is the 40th anniversary of theCompany's founding. The Company adheres to the brand positioning of "Meiling, may the happiness come", andaround the value proposition of "Beautiful China Fresh Meiling", and the brand association of "trend", "fun" and"freshness", creates a fresher lifestyle for consumers, shapes the brand impression of "Meiling = freshness" inconsumers' minds, and accelerates brand revitalization. During the reporting period, the Company carried out andplanned brand management activities such as event marketing and entering the campus around the young mainstreamconsumer groups, constantly improving brand activity and exposure, and accelerating well-knownness of the brand;It has been reported by mainstream media such as People's Daily for many times, which further enhanced the visibilityand reputation of the Company's brand. In terms of products, M-fresh, Wide Narrow Door, Seamless and Frozen Freshrefrigerators have become the phenomenal faddish in the industry, the hand-washing-like washing machines with"kneading, striking and washing" have become the pioneers of hand washing, Changhong all-dust-free fresh airconditioners provide users with 5A fresh air solutions, and tea machines with special temperature and refrigeratorswith a temperature of -180° continuously enhances the core competitiveness of the brand. The Company constantlyreshapes its brand image through differentiated innovation measures such as technological innovation, productinnovation and service innovation, creates refrigerators that keep food fresher, washing machines that make clothescleaner, air conditioners that make air fresher and household appliances that make water cleaner, thus creating a fresher

life for consumers.

(2) Product capacity

The Company has a relatively advanced and refined R&D and quality assurance system, and passed themanagement system certifications such as ISO9001 and ISO14001. Its products are guaranteed with high qualityand reliable performance. In the meantime, the Company has authoritative certifications such as "NationalEnterprise Technology Center", "National Industrial Design Center", "National Intellectual Property DemonstrationEnterprise, National Industrial Product Green Design Demonstration Enterprise", "National TechnologicalInnovation Demonstration Enterprise", "China Industry-University-Research Cooperative InnovationDemonstration Enterprise", "Anhui Green Energy-Saving Refrigerator Engineering Technology Research Center","Anhui Energy-Saving and Fresh Green Refrigerator Engineering Research Center" and "Anhui ManufacturingInnovation Center" as strong guarantees. In terms of technical research, the Company is committed to the applicationof basic technology research and industrialization transfer, and has established a technical strategic plan with"intelligence, frequency conversion, simulation and fresh-keeping" as the core technologies and "refrigeration, newmaterials and foaming" as the key technologies. In terms of product R&D, it has established a three-layer R&Dsystem, including technical research layer, platform module layer and product management layer. The productmanager responsibility system with the product management as the main body is for product definition anddevelopment, internally driving cost reduction and efficiency improvement, externally driving sales promotion,which promotes the high integration of "research, production and marketing", and links up the value chain andbusiness chain to achieve "the same desire and the same frequency and resonance".In terms of refrigerator products, the Company has been focusing on the refrigeration industry for 40 years,and has developed a number of different types of refrigerator products, mainly including "M-Fresh" first-generationseries fresh-keeping refrigerators equipped with water molecule activation fresh-keeping technology, "M-Fresh"second-generation series fresh-keeping refrigerators with zero impact "and "slight freezing" fresh-keepingtechnologies, "Very Clean" second-generation refrigerators with upgraded odor purification technology, "WideNarrow Door" series cross refrigerators, "Frozen Fresh" series refrigerators and French/Italian/two-door BCD-401WP, large-capacity and ADF+ negative ion antibacterial "Magic Stone" series (O2O) glass door refrigerators, e-commerce "Worry-free Embedded" series cross BCD-501WPU9CX, French BCD-505WPU9CX, and "Seamless"series refrigerators that are flush with the cupboard. In terms of freezer products, it has developed the thin-walleddefrosting and bacteriostatic freezers, -40°C cryogenic intelligent electric control freezers, DTEB series freezerswith intelligent round screen display, large-volume commercial freezers, export vertical air-cooled freezers, SC-270WE single-door refrigerated vertical display cabinets, and commercial kitchen cabinets.In terms of washing machine products, it released the hand-washing-like products on the "Very Thin" drumplatform, which not only inherits the core functions of ultra-thin and large drum diameter, but also returned to theessence of washing machine to strive to create the "clean" washing machine, establishing Meiling's position as apioneer in cleaning as hand washing, and demonstrating the hard-core strength of its washing machine products in

the core technology field with triple efforts in cleaning technology, cleaner washing and ultra-high standardtechnology. In terms of export, it has actively laid out and enriched the product formation around the energyefficiency upgrade, and expanded customers.Its air-conditioning products adhere to the product concept of "good air (dust-free and clean) + good comfort(far-reaching and near soft cooling) + good sleep (constant temperature and fresh air)", focusing on the threedimensions of "air-air sense, air vent and air control" for product upgrading and serialization layout. The Companycontinuously expands the breadth and depth of air-conditioning products, and based on the traditional air supplymode, deeply studies the user's use scenarios of air-conditioners, and introduces Changhong double-wing wall-mounted Q7V air-conditioner, which realizes the ultimate air supply comfort experience of "keeping out the airwithout blocking the coolness, blowing the air without blowing people". In addition, in order to meet the needs ofdifferent users for air-conditioning products, the Company will gradually develop high-volume cabinet air-conditioner and double-wing wall-mounted air-conditioner products. For overseas markets, the Company takes"what is suitable is the best" as its product core strategy, relies on key customers, and focuses on analyzing customerand market demand and product benchmarking, so as to finally form a product portfolio suitable for customers andeffectively meet their diversified needs.

In terms of kitchen, household appliances, it adheres to product driving as the strategic support and marketdemand as the guidance, strengthens the R&D capabilities and optimizes product structure. During the reportingperiod, the intelligent tea machine launched integrates the essence of modern technology and traditional tea art, andwith seven kinds of tea-making procedures, it subverts the traditional tea-making process and brings a newexperience of tea drinking. In terms of kitchen and bathroom products, aiming at the water leakage of water heatersin the industry, the Company launched an integrated fine steel heating product, which completely eliminates thepain point of water leakage, and takes the lead in putting forward the 8-year warranty commitment, leading theproduct upgrade and service reform. In the meantime, it released the industry-leading gas self-adaptive fullypremixed wall-hung boiler products, the thermal efficiency of which is higher than the national standard, and theemission of nitrogen oxides reaches five levels, achieving high efficiency, energy saving and green emission. Thegas self-adaptive function better adapted to the climate and gas source changes, and the fully premixed loadadjustment ratio reached 1:10, greatly improving the user's comfortable experience.In terms of the biomedical development, the Company adhered to the brand concept of "taking products as themain carrier and delivering core values to users", focused on the field of life sciences, continued to promote productiterative innovation and quality upgrading based on user scenario-based needs, and provided users with professionalfull-scenario solutions, so as to shape a safe and stable brand image and continuously enhanced brand influence. Inthe field of low-temperature storage in life science, it has independently developed a series of high-efficiencyrefrigeration system products, and adopted innovative auto-cascade technology, which greatly improved the stabilityand reliability of the products, and realized the 100% localization rate of the parts of this series of products, breakingthe monopoly of foreign countries in the field of ultra-low-temperature refrigerated storage. Its technologies of

"double engines and double frequency conversion" and "equipment full-time management" developed on the basisof high-efficiency refrigeration system broke through the existing domestic ultra-low-temperature refrigerationtechnology level, obviously improving the product competitiveness. The newly-launched Ruigu series desktop high-speed centrifuges are in the forefront of China in terms of centrifugal force, rotational speed, precision and vibrationafter repeated tempering in many dimensions, with all performances fully in line with the requirements of centrifugalpreparation equipment for biological components, thus guaranteeing the safety of multi-scenario laboratories.

(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. At the same time, continuously improved the internal control system and improved the ability toprevent risks.

(4) Marketing ability

The Company has established a relatively complete sales network and service system, which can provide userswith high-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 efficiency improvementand builds the capability for marketing system and development potential for long period of time.

For overseas markets, through internal and external cooperation, the Company makes full use of the excellentmarketing strategy and distribution experience accumulated by China household appliances, and combines theconsumption and usage habits of the local market to drive the promotion of comprehensive marketing capabilities forthe international market. It actively explores the market, consolidates core customers, explore potential customers,cooperates with internationally renowned household appliance brands and large-scale electrical appliance chainchannels, and continuously optimizes the customer structure. It strengthens the cooperation between ice washing andice belt washing, realizes the rapid growth of washing machine export and balances the industrial structure. Itaccelerates the construction of overseas brands, enhances the popularity of overseas brands, promotes "one country,one policy", and tailors market strategies to promote market expansion.

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. Overview

In the first half of 2023, the performance of the domestic household appliance market was less than expected.Although the overseas market rebounded in the second quarter, the household appliance market has already entereda mature stage, and the industry is facing a situation of saturation and weak growth. The household applianceindustry has entered a new cycle of inventory game. In the first half of the year, the Company's revenue scaleachieved year-on-year growth, profitability improved, and achieved benign development. Its operating incomeincreased by 25.47% and its net profit increased by 408.88%.

2. Progress of the company's development strategy and business plan during the reporting period

During the reporting period, according to the development strategy, the Company focused on "one goal",closely followed "three main lines", implemented "four management systems" and unswervingly deepenedmarketing transformation into business ideas, and actively promoted the implementation of business plans.

1. Refrigerator industry

At home, adhere to value orientation, improve efficiency in an all-round way, and achieve benign growth inperformance. With commercial inventory turnover as the core, improve the capability of the whole supply chain,and realize the improvement of capital efficiency through retail drive. Upgrade "fresh, thin, large and embedded"with users as the center, integrate product planning ability, R&D and manufacturing ability, marketing promotionability and user service ability, and realize the improvement of product gross profit margin. Consolidate its ownchannels offline to increase scale, focus on refined operations online to improve capacity, expand the pre-installationmarket to achieve rapid growth, and achieve double growth in both scale profit and loss in the market. Benchmarkand establish a full-value linked accounting system to greatly improve management efficiency and manufacturingefficiency.

Overseas, give full play to the advantages of industrial supply chain and domestic and foreign sales synergy,and promote product frequency conversion, energy saving and air cooling in combination with overseas marketdemand; implement "determining production by refrigerator" to promote the efficiency of capital and inventory, andpromote product efficiency through product globalization promotion.

During the reporting period, the Company's refrigerator (freezer) business realized an income of about RMB

4.098 billion, with a year-on-year increase of 22.54%.

2. Air conditioning industry

In domestic air conditioning, implement the marketing strategy of "zone management, channel expansion,

product upgrade and comprehensive retail". Under the framework of the overall strategy of benign operation,through channel expansion and product upgrade, constantly increase the market share of the base area, constantlyimprove the market position, and rapidly increase the online scale, achieving obvious effect of cost reduction andefficiency increase, and constant improvement of profitability. During the reporting period, the Company's domesticair-conditioning retail sales grew well, and CHIQ air-conditioning retail sales increased significantly year on year.The construction of the granary area was further strengthened. The offline self-owned channels and O2O channelsincreased substantially year on year, and the capital efficiency turnover increased steadily.In terms of overseas air conditioners, accelerate channel development and deepen customer transformation,further consolidate key regional markets such as the Middle East, Latin America and Africa, and continuouslyincrease the revenue share of TOP10 customers and new customers. Under the guidance of determining productionby "sales" and integrated and efficient operation of the whole value chain, improve the overall manufacturingefficiency, reduce the cost, and achieve obvious scale effect. Improve development efficiency, realize smoothplatform switching and year-on-year increase of the conversion rate of development projects and orders, achievethe annual set target of order quantity of newly developed product platforms and frequency conversion products,further enhance product competitiveness, and provide certain guarantee for sustained business growth. Reach a newhigh in production capacity, and increase the output in the first half of the year significantly year on year.During the reporting period, the Company's air-conditioning business realized an income of about RMB

6.997billion, with a year-on-year increase of 30.78%.

3. Washing machine industry

In washing machines, the Company insists on differentiated competition and optimizes and adjusts the productstructure. In the domestic market, based on the base market, focus on promoting outlet development, deepen channeltransformation, and achieve scale improvement. Give full play to the "Very Thin" differentiated competitiveadvantage, closely focus on the needs of users, and launch the "Hand-Washing-Like" series drum washing machines,defining the positioning of drum waist products, and further enhancing the competitiveness of high-end products ofMeiling washing machines. In terms of foreign markets, expand customer order resources through ice washingcooperation and achieve a huge breakthrough in overseas markets; Focus on ultra-thin drum, focus on resourceinvestment, quickly enrich the export product matrix, and significantly improve product profitability; Promote thetimely delivery of new products and comprehensively improve the customer service satisfaction.During the reporting period, the Company's washing machine business realized an income of about RMB 0.557billion, with a year-on-year increase of 41.71%.

4. Kitchen, bathroom and household appliance industry

Through accumulation and precipitation, sort out and determine the development direction with tea, cleaningand heating as the "troika" in kitchen, bathroom and household appliance industry, focus on the core product areasand help the high-quality development of the industry. Continue to promote the iteration of product technology

update, promote the successful launch of new products, optimize production processes, accelerate the upgrading ofproduct structure, improve the marketing network system, and constantly innovate and seek breakthroughs fromR&D, production to marketing.During the reporting period, the Company's kitchen, bathroom and household appliance business realized anincome of about RMB 0.853 billion, with a year-on-year increase of 17.21%.

5. Biomedical

In the biomedical industry, the Company commits to the field of life sciences, focuses on the scenario needs ofusers, continuously enhances the research on core technologies such as ultra-low temperature refrigeration,automation and informatization, optimizes the R&D process, and stimulates innovation vitality, dedicated toproviding users with professional full-scenario solutions. It insists on user-orientation, deeply subdivides the marketchannel layout, improves the professional service level and constantly shapes the brand value; Promotes thestandardization of production technology, improves the management level of value chain, continuously enhancesproduct quality and production efficiency, and provides users with first-class product and service experience. In thebiomedical industry, the Company mainly develops on the platform of its subsidiary Zhongke Meiling, and itsproducts are mainly the end products such as low-temperature and ultra-low-temperature storage equipment forbiological cells in the full temperature range from -180°C to 8°C, liquid nitrogen biological containers at -196°C,biosafety cabinets, clean benches, high-speed refrigerated centrifuges, as well as medical cold chain equipment andrelated comprehensive system solutions in the biomedical field. At present, the Company's products and solutionshave been widely used in medical system, blood system, disease control system, health system, universities andscientific research institutions, biomedical enterprises, and genetic engineering and material research fields.During the reporting period, the Company's biomedical business realized an income of about RMB 0.127billion, with a year-on-year decrease of 40.53%.

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

In RMB

Current PeriodSame period last yearY-o-y changes (+,-)Causes
Operation income12,828,694,323.5710,224,503,551.1925.47%No major changes
Operation cost11,178,914,075.839,061,080,531.0623.37%No major changes
Sales expense786,493,259.32666,066,309.9818.08%No major changes
Administrative expense182,962,865.60164,132,141.9711.47%No major changes
Financial expense-115,013,926.27-62,786,327.96-83.18%It is mainly due to the year-on-year increase in the Company's interest income and exchange income
Income tax expenses925,010.04-10,115,573.46109.14%It is mainly due to the increase in income tax expenses caused by the increase in taxable income of the Company in this period
R&D investment279,474,680.96272,521,887.722.55%No major changes
Net cash flow from operation activity1,410,519,809.81575,053,217.35145.29%It is mainly due to the year-on-year increase in cash received by the Company
in selling goods and providing services in this period
Net cash flow from investment activity-471,423,480.69-844,422,733.6844.17%It is mainly due to the year-on-year increase in cash received by the Company to recover its investment in this period
Net cash flow from financing activity187,731,430.13-352,220,645.93153.30%It is mainly due to limited changes in the Company's deposit in this period
Net increased amount of cash and cash equivalent1,132,355,171.56-602,548,686.03287.93%It is mainly due to the increase in net cash flow generated by the Company's operating activities in this period
Other income32,328,256.6648,325,391.81-33.10%It is mainly due to the year-on-year decrease in government subsidies received by the Company in this period
Fair value change income-56,428,183.433,562,737.04-1683.84%It is mainly due to changes in the fair value of the Company's foreign exchange contracts in this period
Assets impairment loss-18,167,335.89-29,791,822.84-39.02%It is mainly due to the year-on-year decrease in the provision for inventory depreciation loss of the Company in this period
Assets disposition income-8,358,775.10-100.00%It is mainly due to the Company's non-asset disposal income in this period
Non-operating income10,704,019.802,910,887.79267.72%It is mainly due to the year-on-year increase in the Company's fine income in this period

(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 revenue12,828,694,323.57100%10,224,503,551.19100%25.47%
On industry
Manufacture of household appliances12,734,698,313.8499.27%10,138,489,064.2899.16%25.61%
Other business93,996,009.730.73%86,014,486.910.84%9.28%
On products
Refrigerator, freezer4,224,670,444.6432.93%3,557,279,193.8034.79%18.76%
Air-conditioning6,997,497,159.2454.55%5,350,650,174.7652.33%30.78%
Washing machine557,352,305.324.34%393,315,713.023.85%41.71%
Small appliance and kitchen & toilet852,703,435.926.65%727,498,495.757.12%17.21%
Other products102,474,968.720.80%109,745,486.951.07%-6.62%
Other business93,996,009.730.73%86,014,486.910.84%9.28%
On Area
Domestic8,930,940,864.8069.62%7,556,599,775.0673.91%18.19%
Foreign3,897,753,458.7730.38%2,667,903,776.1326.09%46.10%

(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
On Industry
Manufacture of household appliances12,734,698,313.8411,126,041,806.0912.63%25.61%23.24%1.67%
On Products
Refrigerator, freezer4,224,670,444.643,452,620,652.7718.27%18.76%13.10%4.09%
Air-conditioning6,997,497,159.246,383,899,125.628.77%30.78%30.09%0.48%
On Area
Domestic8,842,681,381.117,682,608,633.4413.12%18.29%16.85%1.07%
Foreign3,892,016,932.733,443,433,172.6511.53%46.15%40.38%3.65%

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

IV. Analysis of the non-main business

√ Applicable □Not applicable

In RMB

AmountRatio in total profitNoteWhether be sustainable (Y/N)
Investment income14,377,940.053.88%It is mainly caused by the company's long-term equity investment and other non-current financial assets investment incomeN
Gains/losses from change of fair value-56,428,183.43-15.22%Mainly caused by the loss in the fair value of the company's forward foreign exchange contract in the current periodN
Asset impairment-18,167,335.89-4.90%It is mainly due to the year-on-year decrease in the provision for inventory depreciation loss of the Company in this periodN
Non-operating income10,704,019.802.89%Mainly due to the company received fines income inN
this period
Non-operating expense3,014,799.220.81%It is mainly caused by the scrap loss of non-current assets in the current periodN
Other income32,328,256.668.72%Mainly due to the company received government subsidiesN
Credit impairment loss-41,081,589.83-11.08%It is mainly caused by the credit impairment loss of the company's accounts receivable in the current 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 fund7,887,243,778.7739.83%6,839,421,779.1342.22%-2.39%It is mainly due to the decrease in the proportion caused by the increase in the total assets of the Company in this period
Account receivable2,626,925,077.9413.26%1,306,871,945.858.07%5.19%It is mainly due to the increase in the Company's operating income in this period
Contractual assets31,956,763.360.16%3,530,922.130.02%0.14%No major changes
Inventory2,300,494,914.5411.62%1,710,306,933.7110.56%1.06%It is mainly due to the increase in production of the company in this period
Investment real estate51,909,274.280.26%52,898,060.890.33%-0.07%No major changes
Long-term equity investment103,328,795.300.52%100,384,428.500.62%-0.10%No major changes
Fix assets2,192,986,380.3111.07%2,229,553,866.9613.76%-2.69%It is mainly due to the decrease in the proportion caused by the increase in the total assets of the Company in this period
Construction in progress62,914,871.290.32%66,522,492.770.41%-0.09%No major changes
Right-of-use assets32,936,873.960.17%36,646,135.100.23%-0.06%No major changes
Short-term loans881,207,127.014.45%674,143,916.674.16%0.29%No major changes
Contractual liability355,486,232.621.80%358,755,397.772.21%-0.41%No major changes
Long-term loans128,000,000.000.65%148,000,000.000.91%-0.26%No major changes
Lease liability25,339,886.550.13%28,164,287.970.17%-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 20172,017,966.960.01%N
40% equity of Changhong Ruba Electric Company(Private)Ltd.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 2017-0.45%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 20161,408,645.060.39%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.-699,475.840.01%N
Other notesN/A

(3) Assets and liability measured by fair value

√Applicable □ Not applicable

In RMB

ItemsAmount at the beginning periodChanges of fair valueAccumulatiDevaluatAmount of purchase in the periodSales in the periodOther changesAmount at end of the period
gains/losses in this periodve changes of fair value reckoned into equityion of withdrawing in the period
Financial assets
1.Trading financial assets (derivative financial assets excluded)57,660,588.6715,221,223.22650,000,000.00530,000,000.00192,881,811.89
2.Receivable financing1,446,358,719.88158,076,445.361,604,435,165.24
3.Other non-current financial assets628,549,448.31628,549,448.31
Subtotal of financial assets2,132,568,756.8615,221,223.22650,000,000.00530,000,000.00158,076,445.362,425,866,425.44
Financial liabilities41,961,524.7871,649,406.65113,610,931.43

Other changes:

Other changes in accounts receivable financing are caused by an increase in notes receivable that target both thecollection of contract cash flow (collection) and the sale (endorsement or discount).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 “64. 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

Name of investedPrincipal businessMethod of investmentAmount of investmentShareholding ratioCapital sourcesPartnersTerm of investmentType of productsStatus as of the balance sheet dateExpected returnCurrent investment profit and lossWhether involved in a lawsuit(Y/N)Date of disclosure (if any )Index of disclosure (if any )
Sichuan Hongyun Venture Capital Partnership (Limited Partnership)General items: Venture capital (limited to investment in unlisted enterprises).Newly established45,000,000.0030.41%Self-fundSichuan Hongyun Venture Stock Investment Management Co., Ltd.,Sichuan Changhong Electronics Holding Group Co., Ltd.,Sichuan Changhong Electric Co., Ltd.8 yearsNot applicableNot capital has been contributed during the reporting periodNot applicable--N2023-01-18Juchao Website(www.cninfo.com.cn)N.;2023-004
Total----45,000,000.00----------------------

(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

(1) Derivatives investment for hedging purposes during the reporting period

√ Applicable □ Not applicable

In 10 thousand yuan

TypeInitial investmentProfit and loss of fair value change in the current periodChanges in the cumulative fair value included in the equityAmount purchased in the reporting periodAmount sales in the reporting periodInvestment amount at period-endRatio of investment amount at period-end in net assets of the Company at period-end
Forward foreign exchange contract385,815.06-5,706.200352,403.63297,359.63273,522.0250.23%
Total385,815.06-5,706.200352,403.63297,359.63273,522.0250.23%
Specific principle of the accounting policy and calculation for derivatives in the Period compared with last period in aspect of major changesNot applicable
Description of actual profit and loss during the reporting periodDuring the reporting period, the Company confirmed the income from derivatives investment of RMB -12.8615 million.
Description of hedging effectDuring the reporting period, the Company adhered to the principle of exchange rate risk neutrality, used forward foreign exchange contracts as hedging tools, and signed forward foreign exchange contracts according to the foreign exchange receipt amount predicted by sales and the target cost exchange rate. The delivery period matched with the predicted return amount, and the agreed delivery amount matched with the predicted return amount to avoid the risks caused by exchange rate fluctuations. The cash flow changes in the hedging tools during the reporting period can offset the cash flow changes in the hedged items caused by exchange rate fluctuations, which met the requirements of hedging effectiveness and achieved the hedging objectives.
Capital resourceOwn fund
Risk analysis and controlling measures for derivatives holdings in the Period (including but not limited to market risk, liquidity risk, credit risks, operation risk and law risks etc.)R Risk analysis: 1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations, forward foreign exchange transactions are under certain market risk. Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign exchange settlement and sale prices, exchange rate fluctuations. The Company will follow up the exchange fluctuation, on the basis of target rate determined from the business, relying on the research of the foreign currency exchange rates, combined with prediction of consignments, and burdening ability to price variations due to exchange rate fluctuations, then determine the plan of forward foreign exchange contracts, and make dynamic management to the business, to ensure reasonable profit level.
2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business, to meet the requirements of the trade 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 --12.8615 million yuan.
Lawsuit involved (if applicable)Not applicable
Disclosure date for approval from the Board for investment of derivatives (if applicable)March 31,2023
Disclosure date for approval from board of shareholders for investment of derivatives (if applicable)April 26,2023
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 relevant rules and regulations and relevant business was conducted under corresponding decision-making procedures. Interests of the Company and entire shareholders, especially minority shareholders, were not prejudiced.

(5).Application of raised proceeds

□ Applicable √ Not applicable

The Company had no Application of raised proceeds in the reporting period.VII. Sales of major assets and equity(i) 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 freezer96,730,934754,560,626.21593,012,409.58144,766,155.5210,135,504.628,290,186.98
Jiangxi Meiling Electric Appliance Co., Ltd.SubsidiaryManufacturing of refrigeration and freezer50,000,000328,184,589.23143,873,125.99342,624,762.272,351,405.662,351,405.66
Mianyang Meiling Refrigeration Co., Ltd.SubsidiaryManufacturing of refrigeration and freezer100,000,000159,522,694.57119,181,147.86137,328,929.86-1,357,020.65-1,348,944.20
Zhongshan Changhong Electric Co., Ltd.SubsidiaryR&D, manufacturing and foreign sales of air-conditioning334,000,0002,462,854,184.48244,766,429.532,169,881,371.6056,608,036.0756,165,205.29
Hefei Meiling Group Holdings LimitedSubsidiarySales of white goods80,000,0001,430,345,893.12-342,981,811.682,719,116,720.3685,143,362.3784,078,672.41
Changhong Meiling Ridian Technology Co., Ltd.SubsidiaryR&D, manufacturing and sales of kitchen and toilet products, small home appliances and water purifier83,000,000261,521,088.78136,476,648.31105,403,861.00-1,951,579.93-1,894,959.92
Hefei Changhong Meiling Life Appliances Co., Ltd.SubsidiaryR&D and sales of household appliances, kitchen appliances and small home appliances50,000,000553,004,901.45105,950,258.24775,737,017.9824,318,692.4123,764,641.11

Note: The basic information and financial information of the main subsidiaries and participatingcompanies can be found in the notes to the financial statements of this report, including "VIII. Equity inOther Entities"

(2) Subsidiary obtained and disposed in the period

□Applicable √ Not applicable

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

□Applicable √ Not applicable

IX. Structured entity controlled by the Company

□Applicable √ Not applicable

X. Risks and countermeasures

(1) Risks and countermeasures

Although the downward pressure on the domestic economy has been eased, the scissors gap between CPI andPPI still reveals the current situation of insufficient market demand, insufficient consumer willingness and lowprices. In the second half of 2023, the Company will face risks such as intensified industry competition, exchangerate fluctuation, price fluctuation risk of bulk materials, trade friction and geopolitical influence.

1. Risk of intensified industry competition

The household appliance industry market in which the Company is located has changed from incrementalmarket competition to stock market competition. The upgrading of household appliance product structure hasbecome a new growth point, and the demand for upgrading has become dominant. At the same time, under thebackground of the overall slowdown of the industry scale, the industry competition has become increasingly fierce.

2. Risk of exchange rate fluctuation

Affected by the international situation, the exchange rate fluctuated greatly in the first half of the year. TheCompany will pay close attention to the exchange rate changes in order to operate steadily, control risks and reducethe impact of exchange rate changes.

3. Risk of price fluctuation of bulk materials

The main raw materials of the company's products are steel, copper, aluminum, plastics and chemical materials,etc. If the prices of bulk raw materials fluctuate greatly, the related costs of the company will also change accordingly,which will have a certain impact on the company's operating performance.

4. Influence of trade friction and geopolitics

The Company pays close attention to the impact of uncertain factors such as international trade friction andgeopolitics on its global business.

In view of the above risks, combined with the industry situation in the second half of the year and the shortagein the first half of the year, in the second half of 2023, the Company will seize the opportunity, turn crisis intoopportunity, and implement the business plan from the following aspects in part (II).

(2)Operation plan for second half of the year

Under the guidance of strategic planning, in the second half of the year, the Company will continue to focuson "one goal", closely follow the "three main lines", implement the "four management systems" and unswervinglydeepen marketing transformation into business ideas, and strive for scale growth to exceed the industry averageunder the premise of continuous improvement of profit and loss; Around the trend and differentiation, it will createproducts with unique value, determine the competitors, formulate competitive strategies around products, regionsand channels, continuously promote the improvement of capital efficiency, channel efficiency, product efficiencyand management efficiency. The main work is as follows:

1. Refrigerator industry

The Company firmly promotes value orientation and comprehensively improves efficiency at home. Itaccelerates the marketing transformation and business model optimization, and based on the data support system, itcontinuously optimizes the delivery cycle, increases the proportion of direct delivery of products, continuouslyshortens the turnover days of commercial inventory, and improves the efficiency of funds. It insists on scientificand technological innovation and customer orientation, has insight into consumers' needs and technologicaldevelopment trends, constructs a three-layer R&D system, implements the product manager responsibility system,and forms the product competitive advantage of "excellent products + faddish products" based on the refinedmanagement of product structure. On the market side, it firmly promotes channel transformation, traditional channeltransformation, chain channel upgrading and incremental channel expansion, and maintains the improvement ofprofitability; It also continues to benchmark and strengthen the continuous improvement of internal efficiency.

In overseas markets, it adheres to the market strategy of "raising unit price, strengthening promotion, improvingstructure and enhancing coordination", focuses on large-volume products with high value and high potential,strengthens cooperation with OEM customers with brand thinking, increases customer loyalty through theCompany's product strength, gives full play to internal and external coordination advantages, focuses on theCompany's medium- and long-term strategic market and key markets and key customers whose scale has recoveredrapidly after the decline in sea freight, and explores new market opportunities. At the same time, it strengthens themanagement of production, marketing and storage internally to improve the efficiency of funds, increases team andproduct investment in brand business, and continues to promote the construction of overseas independent brands.

2. Air conditioning industry

In the domestic market, it focuses on products, regions and customers, activates the team, strengthens themanagement and control of the value chain, and focuses on "channel expansion and product upgrade". On thechannel side, it solidifies the basic channels, develops blank areas, expands cooperation areas, strengthens the efforts

in TOP channels and O2O sinking channels, and continues to strengthen the market construction and sharepromotion of Sichuan-Chongqing base areas; On the product side, it continues to innovate, optimizes the air supplymode, improves the appearance technology, enhances the product quality, and provides users with more comfortable,energy-saving and healthy air-conditioning products on the basis of continuously promoting "all-dust-free" and"living and dining cabinet" products. It also expands the scale of multi-connected, modular machines and low-temperature heat pump products, and promotes small heat pumps. At the same time, it makes brand promotion plans,plans brand TVC, invests in high-speed rail naming, strengthens new media cooperation, maintains online trafficand popularity, and strengthens brand promotion and communication.In terms of overseas market, on the marketing side, it balances the market area and improves the customerstructure; On the R&D side, it upgrades product iterations and improves team capabilities; On the manufacturingside, it realizes fine management of manufacturing and lean operation of production and marketing; On thepurchasing side, it continues to learn from benchmarking and improve supply capacity; On the operational side, itaccelerates system construction and provides organizational guarantee; On the financial side, it stabilizes the riskcontrol system and supports business development; In terms of informatization, it understands business logic andimproves process efficiency.

3. Washing machine industry

In terms of washing machine products, in the second half of the year, it will focus on waist products drum"hand-washing-like" and pulsator "Hercules", enrich the product formation and upgrade the product structurearound the outstanding features of washing machines such as "clean", "thin" and "intelligent", and through theappearance upgrade, function upgrade, cleaning upgrade and other optimization, it will comprehensively enhanceproduct competitiveness. In terms of market, in domestic sales, it continues to promote the "Anhui Take-off" planconsolidates the construction of basic channels, and ensures the steady growth of domestic sales. In export, it realizesthe ice washing cooperation of the whole product line, focuses on key areas and big customers, and takesdifferentiated products as a breakthrough to achieve a rapid breakthrough in scale.

4. Kitchen, bathroom and household appliance industry

It continues to consolidate the core product market and further enhances the brand influence. For the productline of tea, it focuses on the cost reduction and function enhancement of self-made products, constantly strengthensthe core competitiveness, and fully promotes the improvement of business quality; For the product line of cleaningappliances, it focuses on strengthening the functions of the project team and promoting the rapid development ofthe project; For the heating product line, it continues to take the marketing strategy as the guide, speeds up thedevelopment and marketing of gas core technologies, and quickly realizes the marketization of products. Itcontinuously integrates product resources, improves operating efficiency, and realizes the "troika" marching handin hand through measures such as R&D convergence and marketing strategy adjustment.

5. Biomedical

It unswervingly implements the development strategy of "diversification based on biomedical field", focuseson the field of life sciences, deepens the construction of customer-oriented domestic and international channelsystem, deeply explores the needs and potentials of users around the comprehensive user strategy, continuouslyinnovates products and technologies, improves service level, and expands user coverage and product market share.The Company always adheres to the business philosophy of "technology-founded, product-based, market-orientedand customer-centered", and continues to operate steadily around the business principles of deepening channels,innovating products, optimizing quality and improving efficiency.

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

(1)AGM held in the period

MeetingTypeParticipation ratio for investorsMeeting dateDisclosure dateResolution
2022 AGMAnnual General Meeting39.8034%April 25,2023April 26,2023The General Meeting have approved 16 proposals in total, including “Report on Works of BOD for year of 2022”, “Report on Works of BOS for year of 2022”, “Annual Report of 2022 and Its Summary”, “Financial Statement Report for year of 2022”, “ Plans of Profit Distribution for year of 2022”, “Renewal of the Audit Institution on Financial Report and Internal Control for year of 2023 and Payment of Remuneration”, found more in the “Resolution of 2022 Annual General Meeting” (No.: 2023-033) released on Juchao Website www.cninfo.com.cn
First Extraordinary General Meeting of 2022Extraordinary General Meeting36.9723%May 10,2023May 11,2023The General Meeting has approved Two proposals-“Change of the Accounting Policy of 2023”and “Proposal on Amending Part of the Articles of Association of the Company ”, found more in the “Resolution of 2022 First extraordinary General Meeting of 2023” (No.: 2023-033) 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

NameTitletypesdatereason
Liu Hongweiexecutive vice presidentDimissionMay 24, 2023Due to personal reasons, he applied to resign from his position as Executive Vice President of the company.

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-annualIV. 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

The Company and subordinate subsidiaries Changhong Air-conditioning are not belongs to the key emission unitsannounced by the authority of environmental protection.

1. Policies and industry standards related to environmental protection

In their daily production and operation, the Company and its subsidiaries strictly abide by the requirements inthe Environmental Protection Law of the People's Republic of China, Environmental Impact Assessment Law ofthe People's Republic of China, Law on Prevention and Control of Water Pollution of the People's Republic of China,Law on the Prevention and Control of Atmospheric Pollution of the People's Republic of China, Law on Preventionand Control of Environmental Pollution by Solid Waste of the People's Republic of China, Regulations on theAdministration of Construction Project Environmental Protection, Environmental Protection Regulations of AnhuiProvince, Regulations on Preventionand Control of Environmental Pollution by Solid Waste in Sichuan Province,and other relevant laws and regulations.During the reporting period, Changhong Air Conditioning, a subsidiary of the Company, carried out self-monitoring according to regulations, in which for VOCs, refer to Table 3 of Emission Standard for AtmosphericVolatile Organic Compounds from Stationary Pollution Sources in Sichuan Province DB51/2377-2017; For nitrogenoxides, refer to the secondary standard in Table 2 of Comprehensive Emission Standard for Air Pollutants(GB16297-1996); For sulfur-containing compounds, refer to the standard in Table 2 of Comprehensive EmissionStandard for Air Pollutants (GB16297-1996). For dust, refer to the secondary standard in Table 2 of ComprehensiveEmission Standard for Air Pollutants (GB16297-1996).

2. Environmental protection administrative license

The Company and its subsidiaries conscientiously implement the Environmental Protection Law, theEnvironmental Impact Assessment Law and the Regulations on the Administration of Construction ProjectEnvironmental Protection, and consciously abide by environmental protection laws and regulations, industry

requirements and government regulations at all levels. For new construction, renovation and expansion projects, theCompany and its subsidiaries adhere to the system of project environmental assessment and "three simultaneities",fully implement environmental protection measures, well ensure environmental protection management in allaspects of project planning, design, construction and operation, and make full use of advanced technology andscientific and technological means to lower and reduce environmental pollution. It carries out environmental impactassessment simultaneously in the feasibility study and demonstration stage of the construction project, and entruststhe third-party professional organization to analyze the feasibility of the industrial policy, land use planning,environmental impact and environmental protection measures of the project. The construction starts upon theapproval of the competent environmental protection department. During the construction of the project, it carefullyimplements the environmental protection requirements, and builds the environmental protection facilitiessimultaneously. After the completion, the environmental protection acceptance of the project is organized in time toensure that the project meets the acceptance criteria and meets the requirements of environmental assessment beforeit is officially put into use. During the operation period, it carries out pollution prevention and control actively instrict accordance with the environmental impact assessment documents of the project and the approval requirementsof the competent environmental protection department to ensure the normal operation of environmental protectionfacilities.The Company and subordinate subsidiaries Changhong Air-conditioning ,The sewage discharge permit wasapplied on March 31, 2020 and is valid until March 30, 2023.

3.Industrial emission standard and specific conditions of pollutant emissions involved in production and operation activities

Company or subsidiary nameMain pollutant and specific pollutant typeMain pollutant and specific pollutant nameWay of dischargenumber of discharge outletsDistribution of discharge outletsconcentration of dischargePollutants discharge standards enactedTotal discharge volumeTotal discharge volume certifiedDischarge beyond the standards
Sichuan Changhong Air-conditioning Co., Ltd.Volatile organic compoundsVOCsOrganized emission3Two outlets in Workshop J05 and one outlet in Workshop J07, No.128 Sanjiang Avenue, Economic Development Zone, Mianyang City≤29.9mg/m?Standard in Table 3 of Emission Standard for Atmospheric Volatile Organic Compounds from Stationary Pollution Sources in Sichuan Province (DB51/2377-2017), that is the volatile organic compounds shall be <60 mg/m3.3731.44kgSichuan Changhong Air Conditioning Co., Ltd. has completed the pollutant discharge registration of the national pollutant discharge permit management information platform and obtained the registration receipt according to the requirements of relevant laws and regulations, such as Measures for the Administration of Pollutant Discharge Permits (trial),Not exceeded
OxynitrideOxynitrideOrganized emission2Two outlets in Workshop J05, No.128 Sanjiang Avenue, Economic Development Zone, Mianyang City (the same outlet as J05VOC).<3mg/m?Secondary standard in Table 2 of Comprehensive Emission Standard for Air Pollutants (GB16297-1996), that is, the concentration of nitrogen624.63kgNot exceeded
oxides shall be <240 mg/m3Catalogue of Classified Management of Pollutant Discharge Permit of Stationary Pollution Sources (2019 Edition), etc. There was no requirement for the total amount of pollutant discharge of the Company in the pollutant discharge registration.

Sulfocompound

SulfocompoundSulphur dioxideOrganized emission2Two outlets in Workshop J05 and one outlet in Workshop J07, No.128 Sanjiang Avenue, Economic Development Zone, Mianyang City≤10mg/m?Secondary standard in Table 2 of Comprehensive Emission Standard for Air Pollutants (GB16297-1996),that is SO2<550mg/m?703.17kgNot exceeded
DustParticulate matterOrganized emission4Two outlets in Workshop J05 and one outlet in Workshop J07, No.128 Sanjiang Avenue, Economic Development Zone, Mianyang City<20mg/m?Secondary standard in Table 2 of Comprehensive Emission Standard for Air Pollutants (GB16297-that is Particulate matter<120mg/m?535.36kgNot exceeded

4. Treatment of pollutants

Zhongshan Changhong, a subsidiary company, treats pollutants in accordance with relevant laws andregulations on environmental protection, and disposes of them according to disposal requirements after they reachthe relevant standards.

(1) Waste gas

Changhong Air Conditioning has established a refined waste gas treatment system, and 4 sets of waste gastreatment facilities for wave-welding waste gas, and adopted the treatment process of "dry interception filter + UVphotolysis purifier", to achieve organized discharge up to the standard through the 20m-high exhaust funnel at thetop of the workshop.

It has established 3 sets of waste gas treatment facilities for the welding waste gas of the two devices, andadopted the treatment process of "pulse filter cartridge dust removal equipment + UV composite photocatalysis", toachieve organized discharge up to the standard through the 18m-high exhaust funnel at the top of the workshop;

It has established 2 sets of waste gas treatment facilities for the three-proof coating waste gas, and adopted thetreatment process of "dry interception filter+ activated carbon adsorption", to achieve organized discharge up thestandard through the 20m-high exhaust funnel at the top of the workshop;

It has established 4 sets of waste gas treatment facilities for degreasing waste gas, and adopted the treatmentprocess of "spray tower + drying defogging box + UV composite photocatalysis + activated carbon adsorption", toachieve the organized discharge up to the standard through the 18m-high exhaust funnel at the top of the workshop.

(2) Hazardous waste

Changhong Air Conditioning has built special storage facilities for hazardous wastes, with floor made ofnonflammable epoxy mortar, anti-leakage ditch and collection tank, which can effectively prevent the leakage riskof hazardous wastes and meet the current storage requirements of hazardous wastes. At the same time, it regularlyentrusts all kinds of hazardous wastes to units with qualifications for hazardous waste disposal for standardized andcentralized harmless disposal.

5. Emergency plan for environmental emergencies

The Company and its subsidiaries have set up related emergency plans for environmental emergencies. TheCompany and its subsidiaries have determined classified warning based on the different extent and severity ofenvironmental impacts that may be caused by the material environmental factors, defined the responsibilities foremergency response, regulated emergency handling procedures, established special team to handle emergencies andorganized regular rehearsal and appraisal of relevant emergency plans, so as to ensure the effectiveness of theseplans, improve their capability of emergency handling and take precautions against contingent emergencies.

6. Investment in environmental governance and protection and the relevant payment of environmentalprotection tax

The company's investment in environmental protection mainly includes the investment in the construction ofenvironmental protection facilities, that is, the investment in purchasing and installing fixed assets such asenvironmental protection facilities and equipment, as well as the operation and maintenance expenses ofenvironmental protection facilities, environmental protection tax, and third-party outsourcing testing.

7. Independent plan to monitor environment

The Company and its subsidiaries have established regular monitoring plan for environmental pollutants, set upspecial funds for pollutants monitoring, and engaged third-party authoritative to regularly monitor the operation ofmajor pollution-production links and environmental protection treatment facilities in connection with the majorpollutants produced by the Company and its subsidiaries, to make sure that the Company and its subsidiaries couldachieve emission standards in a full round.

8. Administrative penalties for environmental issues during the reporting period

NameCauseViolation of the situationResultImpact on the production and operation of listed companiesThe company's rectification measures
Not applicableNot applicableNot applicableNot applicableNot applicableNot applicable

During the reporting period, the Company and its subsidiaries were not subject to administrative punishmentfor environmental problems.

9. Other environment information that should be disclosed

According to the Environmental Information Disclosure Measures of Enterprises and Institutions, in line with theprinciple of mandatory disclosure and voluntary disclosure combined, the Company and its subsidiaries haverealized the disclosure of information relating to environmental impact assessment, project acceptance, pollutantsproduction and discharge, solid waste management, important environmental factors, environmental objectives andperformance of construction projects.

10.Measures taken to reduce carbon emissions and their effectiveness during the reporting period

√Applicable □ Not applicable

Combining the characteristics and special requirements of carbon emissions, the company strengthens theenergy management of each production unit, improves the internal energy management and energy efficiency indexassessment and energy consumption evaluation system, continues to carry out energy measurement and evaluation,follows the principles of system management, and establishes a complete and effective management system. Duringthe reporting period, the company vigorously promoted and applied the industry's advanced energy-savingequipment and technologies, and carried out energy-saving technical transformation; carried out energy-saving

transformation for high-consumption and low-efficiency air compressors, upgrading and transformation for aircompressor joint control systems, energy-saving transformation for steam pipelines, research and application forinfrared heating technology, application research for air energy units, application research for air compressor wasteheat recovery and utilization, and replacement of high-efficiency and energy-saving heating tiles and other energy-saving renovation measures, improved automation and intelligence, and combined energy management withinformatization construction, improved the production and manufacturing system through internet technology,realized lean production management, improved production efficiency, and reduced energy waste and CO

emissions. In addition, the Company also pays attention to the use of recyclable packaging and transshipmentmaterials to reduce carbon emissions in the procurement process, and is actively promoting the recycling ofmaterials such as pallets to reduce carbon emissions in the whole production process.

11. Other environment related information

In order to further realize the scientific and systematic environmental protection work of the Company and itssubsidiaries, the Company and its subsidiaries have established an environmental management system in accordancewith ISO14001 standards, set up an environmental protection organization, acquired environmental protectionresources, regularly identified, updated and appraised environmental factors, compliance obligations, environmentalrisks and opportunities, and regularly determined environmental objectives and management programs. Throughthe implementation of management programs and continuous normal improvement, the environmental performanceof the Company and its subsidiaries has been continuously improved. Through regular internal audit andmanagement review, as well as the verification and examination of the third parties, the environmental managementsystem of the Company and its subsidiaries has been effectively controlled and fully meets the system managementstandards and relevant regulations.II. Social responsibilityThe Company continues to promote win-win development with its stakeholders, earnestly fulfills its socialresponsibilities, pays close attention to the voices of all stakeholders, and actively gives back and improves, and isdetermined to become an enterprise that is respected by the society and loved by its employees. While achievingsound development, it pays attention to protecting the interests of its shareholders, employees, suppliers, customersand consumers, and actively engages in public welfare undertakings, thus promoting the harmonious developmentof the Company and the whole society.

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 andthe Rules of Procedure for the General Meeting of Shareholders, regulates the convening, holding and votingprocedures of the general meeting of shareholders, equally treats all shareholders, especially small and mediumshareholders equally, and ensures that all shareholders enjoy equal status and fully exercise their own rights. Underthe premise of strictly implementing the Administrative Measures for Information Disclosure of Listed Companies,

the company actively communicates and exchanges information with investors on the company's operations andmanagement, financial status, etc. through annual performance briefings, Anhui service week for investors by SZSE,investor telephone hotline, e-mails, and the investor relations interactive platform of the Shenzhen Stock Exchange,and discloses 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, According to theReturn Plan for Shareholders of Changhong Meiling Co., Ltd. for the Next Three Years (2021 -2023), combinedwith the Company's own operating conditions and other factors, during the reporting period, the Companyimplemented the profit distribution plan for 2022, paid dividends in cash and gave shareholders a reasonable returnon investment.In addition, in order to establish a variety of shareholder return mechanisms and thank investors for their long-term concern and support for the Company, during the reporting period, the Company held the "Meiling 40thAnniversary Shareholder Thanksgiving Festival" to give back to all shareholders with sincerity.

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 companyhas established 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 attaches importance to the vital interests of employees, protects thelegitimate rights and interests of employees to the maximum extent, establishes harmonious labor relations, andstrives to form a good mechanism for the company and employees to create and share together. At the same time,the company creates a people-oriented cultural atmosphere by providing various holidays, allowances, condolencesand organizing diversified employee activities, benchmarking personnel selection, carnivals, etc., and continuouslyimproves employee satisfaction.

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

The company has established a relatively complete procurement management system, optimized and revisedsystem documents in a timely manner, unified information system tools, strictly controlled every link of theprocurement business, cultivated core and strategic suppliers, and established a high-end supply chain cultivationplan for component suppliers of high-end products, so as to form a synergy, cooperation and win-win situationbetween the company and its suppliers.

The company attaches great importance to customer needs, has a relatively complete product developmentprocess, advanced R&D means, and develops competitive products. It pays attention to product quality, strongquality control ability and reliable product performance, and has a refined quality management system, and haspassed the management system certifications such as ISO9001, ISO14001 and ISO45001. The company hascomplete test items and strong detection ability. It has built one of the few laboratories in the industry, such as RoHSand intelligent IoT. The company's testing center has CNAS accreditation qualification, which meets therequirements of strict and high-level testing of products. In the domestic market, the company increases its attention

and support in terminal construction, user experience and product training to increase the sales of high-end products;In the export market, it fully recognizes the requirements of local laws and regulations, strictly certifies products,and fully verifies the reliability and environmental adaptability of products to ensure the reliability of products inthe target market. Its export products have covered more than 130 countries or regions. According to different typesof customers, it implements classification and system management, timely feedbacks customers' demands,continuously improves quality service and enhances brand image; And tracks market performance by means ofcustomer satisfaction survey and SCR monitoring.

For the protection of consumers' rights and interests, the company has a relatively advanced closed-loopmanagement system for user service. In order to meet users' service needs, it gradually improves the functionconstruction of official channel service platforms such as 400 service hotline, brand official website, WeChat officialaccount and Zhihuijia APP, attaches importance to and strengthens the user interaction and experience of socialplatforms such as Tik Tok, Xiaohongshu, Weibo, Bilibili and Zhihu, and understands and handles users' needs andquestions in time. In view of user demand processing, it promotes the process visualization management and userevaluation system management of work order processing timeline. In addition, the company pays attention toimproving consumers' product guarantee service ability, and has created Meiling's exclusive characteristic guaranteeservice measures, and upgraded and launched the services such as unconditional return within 180 days for MeilingM fresh refrigerator because of dissatisfaction in preservation, and unconditional return within 180 days for Meilingclean refrigerator because of dissatisfaction in disinfection and sterilization, so as to effectively meet users' needsand enhance 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 the reporting period, The Party Committee of the Company actively participated in the third partybuilding project of micro-public welfare venture capital in the Jinxiu Community Social Organization IncubationPark in Hefei Economic Development Zone; Adhering to the mission of "serving the country through industry andrejuvenating by us", Zhongke Meiling, a subsidiary of the Company, established the "Friends of Tsinghua - MeilingBiomedical Scholarship" to promote the independent innovation and high-quality development of the medicaldevices and scientific research instrument and equipment industry in China.

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

□ Applicable √ Not applicable

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

Basic situation of litigation(arbitration)Amount involved (Ten thousand yuan)Whether to form estimated liabilitiesLitigation(arbitration)progressLitigation(arbitration)trial results and impactImplementation of litigation(arbitration)judgmentsDisclosure dateDisclosure index
Zhiyijia, an affiliated enterprise of the company, signed a sales contract with the defendant, Tianjin Pengsheng Logistics Co., Ltd. (hereinafter referred to as "Tianjin Pengsheng"). The above contract stipulated that the order confirmation, shipment, reconciliation and settlement would be handled through the ECP platform of Gome Electrical Appliances Co., Ltd. (hereinafter referred to as "Gome Electrical Appliances"). After the contract was signed, Zhiyijia, the plaintiff, supplied the goods to Tianjin Pengsheng, the defendant as agreed, but Tianjin Pengsheng, the defendant, failed to fulfill the payment obligation to Zhiyijia as agreed. As of November 30, 2022, according to the data of Gome's ECP platform, the business expenses payable by Zhiyijia, the newly-increased return amount, etc., Tianjin Pengsheng still owed Zhiyijia a payment of RMB 96,174,308.42. Based on this, Zhiyijia, the plaintiff brought a lawsuit against Tianjin Pengsheng, the defendant to the People's Court of Mianyang High-tech Industrial Development Zone. The defendant Gome is an associated shareholder of Tianjin Pengsheng, and the defendants Dong Xiaohong and Rong Duo are the executive director and supervisor of Tianjin Pengsheng respectively. According to the provisions of relevant laws and regulations, Zhiyijia claims that the aforementioned defendants should be jointly and severally liable for the above debts, and requests the court to order Tianjin Pengsheng to immediately pay the plaintiff RMB 96,174,308.42 and the corresponding liquidated damages for overdue payment, and bear the related litigation costs and property preservation guarantee fees.9,617.43NoUnder trial of first instanceNo trial result yetNo trial result yetDecember 24,2022Juchao (www.cninfo.com.cn)(2022-101)

Notes: The Company's shareholding in Zhiyijia is 50%, and the products are sold through Zhiyijia's smart tradingplatform. The customers, channels and sales transactions corresponding to the products sold are controlled anddocked by the company itself, and the external transaction object is Zhiyijia, and related transactions are formedbetween the Company and Zhiyijia. In terms of payment settlement, the Company and Zhiyijia follow the principle

of "external customer account period is Zhiyijia's account period to the Company, and external customer paymentis Zhiyijia's payment to the Company, which is not allowed to be remained or transited at Zhiyijia". The amountsinvolved in this case are all accounts receivable and liquidated damages for overdue payment caused by theCompany's sales through the smart trading platform of Zhiyijia, but the subject of the agreement is Zhiyijia, andthis lawsuit will be filed by Zhiyijia. The Company and its affiliated enterprise Zhiyijia will claim their legitimaterights and interests according to law and actively take relevant measures to safeguard the legitimate rights andinterests of the Company, Zhiyijia and the investors.(ii) Other litigation matters

□ Applicable √ Not applicable

IX. Penalty and rectification

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

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 purchasedPressure regulator, integrated circuit, transistors, steel plate, plastic parts, etcMarketing price21,647.3021,647.302.00%65,000.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2021Juchao Website(www.cninfo.com.cn)N.:2022-087,2022-088,2022-089,2022-100
2Changhong Huayi Compressor Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedCompressor,air compressionMarketing price25,980.6225,980.622.40%54,000.00NBank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
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 price47,227.0047,227.004.37%100,000.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
4Sichuan Changhong Jijia Fine Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedBase plate assembly, black plate, bracket etc.Marketing price29,862.3929,862.392.76%65,000.00NBank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
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 price6,932.796,932.790.64%20,000.00NBank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
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 price1,776.191,776.190.16%4,500.00NBank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
7081 Electronics Group Co., Ltd.Other enterprise control under the same controlling shareholder and ultimateCommodity purchasedpower transformerMarketing price5.305.300.00%8,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
controller
8Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedFoam and cartonMarketing price400.10400.100.04%8,000.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
9Sichuan Changhong Intelligence Manufacturing Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedOutside cover partsMarketing price0.050.050.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
10Sichuan Hongwei Technology Co., LtdOther enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedElectric toothbrush, body fat weighing, smart watches, etcMarketing price4.064.060.00%8,000.00NCash settlementDecember 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
11Hefei Changhong Industrial Co., Ltd.Other enterprise control under the same controllingCommodity purchasedInverter integrated boardMarketing price385.14385.140.04%8,000.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
shareholder and ultimate controller
12Sichuan Changhong New Energy Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedBatteriesMarketing price2.402.400.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
13Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedAir conditioner, LCD TVMarketing price461.50461.500.04%8,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
14.Sichuan Changhong Source Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedBushingMarketing price0.180.180.00%8,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
15Changhong InternationalOther enterprise control under theCommodity purchasedTelevisionMarketing price1,538.321,538.320.14%12,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
Holdings (Hong Kong) Co., Ltd.same controlling shareholder and ultimate controller
16Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedprinted boardMarketing price559.39559.390.05%8,000.00NBank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
17Sichuan 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 price2,034.052,034.050.19%3,000.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
18Sichuan Jiahong Industrial Co., LtdOther enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedCatering servicesMarketing price0.330.330.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
19Sichuan Ailian Science &Other enterpriseCommodity purchasedInternet access modules, electronicMarketing price868.04868.040.08%5,000.00NSpot exchange,-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-
Technology Co., Ltd.control under the same controlling shareholder and ultimate controllercomponents, etcBank acceptance088,2022-089,2022-100
20Sichuan Aichuang Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedInverter integrated boardMarketing price7,075.577,075.570.65%20,000.00NBank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
21Sichuan Service Exp. Appliance Service Chain Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedFilter element, etcMarketing price0.180.180.00%8,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
22Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerCommodity purchasedInverter integrated board ,Electronic control componentsMarketing price1,155.211,155.210.11%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
23Sichuan Changhong Electronics Holding Group Co., Ltd.Controlling shareholder and ultimate controllerAccept labor serviceShuttle transportation fee, training feeMarketing price45.5245.520.06%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
24Sichuan Changhong Electric Co., Ltd.Controlling shareholderAccept labor serviceSoftware usage fee, information consultation fee, inspection and certification feeMarketing price201.21201.210.25%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
25Sichuan 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 price36,849.7836,849.7845.07%82,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
26Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor servicecommission processing fee,Change the mold serviceMarketing price1,917.821,917.822.35%10,000.00NBank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
27Sichuan Service Exp. ApplianceOther enterprise control under the sameAccept labor serviceThree packages, equipment repair, miscellaneous fees, installation fee etc.Marketing price18,074.7218,074.7222.11%45,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
Service Chain Co., Ltd.controlling shareholder and ultimate controller
28Sichuan Hongxin Software Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceSoftware usage fee, service supporting fee and information service feeMarketing price76.3276.320.09%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
29Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceService support fee, network service fee etc.Marketing price36.1236.120.04%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
30Sichuan Jiahong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceMeals, property management fees etc.Marketing price418.14418.140.51%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
31Sichuan ChanghongOther enterprise controlAccept labor serviceMeetings fee, accommodation,Travel serviceMarketing price6.426.420.01%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
International Hotel Co., Ltd.under the same controlling shareholder and ultimate controller
32Sichuan Changhong Property Services Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceproperty management feesMarketing price7.347.340.01%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
33Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceDesign service fee and platform usage feeMarketing price6.946.940.01%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
34Sichuan Changhong Intelligent Manufacturing Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceGreen product declaration serviceMarketing price9.439.430.01%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
35SichuanOtherAccept laborcommissionMarketin158.54158.540.19%10,000.00NCash-December 7, 2022,Juchao Website
Changhong Jijia Fine Co., Ltd.enterprise control under the same controlling shareholder and ultimate controllerserviceprocessing feeg pricesettlementDecember 23,2022(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
36Sichuan Changhong Gerun Environmental protection Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceEnvironmental protection serviceMarketing price20.2220.220.02%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
37Sichuan Changhong Electronic Products Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceLabor servesMarketing price16.2016.200.02%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
38Sichuan 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 price585.50585.500.72%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
39Sichuan Changhong International Travel Service Co., LtdOther enterprise control under the same controlling shareholder and ultimate controllerAccept labor serviceTravel serviceMarketing price1.691.690.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
40注Mianyang High tech Zone Hongfu Technology Co., LtdEnterprises where the supervisor of the controlling shareholder serves as its legal representativeAccept labor serviceTransportation servicesMarketing price45.4345.430.06%200.00NCash settlement-
41Sichuan Changhong Electric Co., Ltd.Controlling shareholderSales of goodsAir conditioner, Kitchen and bathroom, small appliancesMarketing price30.2330.230.00%1,500.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
42Sichuan Changhong Electronics Holding Group Co., Ltd.Controlling shareholder and ultimate controllerSales of goodsKitchen and bathroom, small appliancesMarketing price0.260.260.00%3,000.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
43Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controllingSales of goodsPlastic partsMarketing price57.0057.000.00%5,000.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
shareholder and ultimate controller
44Sichuan Zhiyijia Network TechNlogy Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodswashing machine, Refrigerator, freezer, Air conditioner, small appliancesMarketing price375,670.47375,670.4729.50%800,000.00NSpot exchange, Bank acceptance-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
45Sichuan Changhong Minsheng Logistics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditioner, RefrigeratorMarketing price44.0344.030.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
46Sichuan 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 price253.80253.800.02%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
47Guangdong Changhong Electronics Co., Ltd.Other enterprise control under theSales of goodssmall appliances, Air conditionerMarketing price7.237.230.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
same controlling shareholder and ultimate controller
48Sichuan Changhong Intelligence Manufacturing Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigerators, freezers, and air-conditionersMarketing price258.76258.760.02%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
49Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigeratorMarketing price0.770.770.00%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
50Sichuan Changhong Source Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditionerMarketing price5.465.460.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
51Guangyuan ChanghongOther enterpriseSales of goodsAir conditionerMarketing price22.4522.450.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-
Electronic Technology Co., Ltd.control under the same controlling shareholder and ultimate controller088,2022-089,2022-100
52CHANGHONG(HK)TRADINGLIMITEDOther enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditionerMarketing price38,739.7838,739.783.04%150,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
53CHANGHONGELECTRIC(AUSTRALIA)PTY.LTD.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigerator, freezers and accessoriesMarketing price5,714.995,714.990.45%150,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
54Orion.PDP.Co.,ltdOther enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigeratorMarketing price1,964.811,964.810.15%6,500.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
55Changhong Europe Electrics.r.oOther enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigeratorMarketing price4,109.314,109.310.32%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
56Changhong International Holdings (Hong Kong) Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsRefrigerator, freezers, Air conditioner, kitchen utensilsMarketing price5,017.475,017.470.39%80,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
57Sichuan Aichuang Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsICMarketing price0.730.730.00%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
58Suchuan Hongmofang Network Service Co., Ltd.Other enterprise control under the same controlling shareholder and ultimateSales of goodsRefrigeratorMarketing price4.334.330.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
controller
59Sichuan Ansifei Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsPrint board componentsMarketing price0.010.010.00%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
60Sichuan Qiruike Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsICMarketing price0.230.230.00%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
61Sichuan Qisai Microelectronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsAir conditionerMarketing price4.994.990.00%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
62Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controllingProviding servicesLabor costMarketing price39.3139.313.10%500.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
shareholder and ultimate controller
63Sichuan Changhong Jijia Fine Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price5.835.830.46%500.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
64Sichuan Aichuang Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service fee, Labor costMarketing price11.1511.150.88%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
65Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesService feeMarketing price13.1013.101.03%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
66Sichuan Changhong Electric Co., Ltd.Controlling shareholderProviding servicesLabor costMarketing price2.832.830.22%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
67Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service feeMarketing price12.4012.400.98%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
68Mianyang Huafeng Hulian Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesRepair ServiceMarketing price9.369.360.74%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
69Changhong Huayi Compressor Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service feeMarketing price11.6911.690.92%500.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
70Sichuan Changhong Minsheng Logistics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimateProviding servicesLabor costMarketing price36.7136.712.90%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
controller
71Sichuan Ailian Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price0.010.010.00%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
72Hefei Changhong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price0.0040.0040.00%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
73Sichuan Service Exp. Appliance Service Chain Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price123.97123.979.78%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
74Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controllingProviding servicesInstallation service ,Labor costMarketing price0.110.110.01%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
shareholder and ultimate controller
75Sichuan Changhong International Hotel Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesMaintenance feesMarketing price3.163.160.25%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
76Sichuan Changhong Electronic Products Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerprovide laborLabor costsMarketing price0.450.450.04%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
77Sichuan Qiruike Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesLabor costMarketing price0.130.130.01%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
78Sichuan Changhong Precision Electronics Technology Co., LtdOther enterprise control under the same controllingProviding servicesLabor serviceMarketing price0.270.270.02%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
shareholder and ultimate controller
79Yuanxin Finance Lease Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesConsultation serviceMarketing price18.5518.551.46%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
80Sichuan Changhong Property Service Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service feeMarketing price13.5613.561.07%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
81Sichuan Hongwei TechNlogy Co.,Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerProviding servicesTechnical service feeMarketing price6.976.970.55%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
82Guangdong Changhong Electronics Co., Ltd.Other enterprise control under theProvide fuel powerLabor serviceMarketing price48.6748.673.84%10,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
same controlling shareholder and ultimate controller
83Sichuan Qisai Microelectronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyInstallation serviceMarketing price4.464.460.35%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
84Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerSales of goodsWater, electricity, and compressed airMarketing price4.054.050.00%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
85Hefei Changhong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartment, warehousesMarketing price14.6514.650.23%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
86Chonghong Huayi Compressor Co.,Other enterprise controlLeasing from relatedLease of workshopMarketing price0.580.580.01%500.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-
Ltd.under the same controlling shareholder and ultimate controllerparty088,2022-089,2022-100
87Sichuan Aichuang Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyWarehouse for rentMarketing price1.951.950.03%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
88Sichuan Ailian Science & Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyWarehouse for rentMarketing price0.160.160.00%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
89Sichuan Aoku Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyWarehouse for rentMarketing price2.102.100.03%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
90Sichuan Hongxin Software Co., Ltd.Other enterpriseRent to the related partyRental apartmentMarketing price0.440.440.01%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)
control under the same controlling shareholder and ultimate controllerN.;2022-087,2022-088,2022-089,2022-100
91Sichuan Service Exp. Appliance Service Chain Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartmentMarketing price8.468.460.13%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
92Sichuan Qiruike Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyLease of factoryMarketing price4.734.730.07%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
93Sichuan Changhong Electric Co., Ltd.Controlling shareholderRent to the related partyLease of factory, equipmentMarketing price44.8744.870.70%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
94Sichuan Changhong Electronics Holding Group Co., Ltd.Controlling shareholder and ultimate controllerLease from related partiesLease of factoryMarketing price0.00040.00040.00%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
95SichuanOtherRent to theRental apartment,Marketin230.21230.213.59%4,000.00NCash-December 7, 2022,Juchao Website
Changhong Jijia Fine Co., Ltd.enterprise control under the same controlling shareholder and ultimate controllerrelated partywarehouses,plants,equipmentg pricesettlementDecember 23,2022(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
96Sichuan Changhong Precision Electronics Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartmentMarketing price4.314.310.07%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
97Sichuan Changhong Minsheng Logistics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartment, office, factoryMarketing price12.6612.660.20%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
98Sichuan Changhong Mold Plastic Tech. Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyServiced apartment, warehouse, workshop, equipment and living quartersMarketing price465.93465.937.27%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
99Sichuan Changhong Device Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyLease of factoryMarketing price107.36107.361.68%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
100Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerRent to the related partyRental apartmentMarketing price9.419.410.15%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
101Chengdu Changhong Electronic Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerLeasing from related partyLeasing officeMarketing price42.5642.560.66%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
102Guangdong Changhong Electronics Co., Ltd.Other enterprise control under the same controlling shareholder and ultimateLeasing from related partyLease of staff dormitory, plantMarketing price6.826.820.11%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
controller
103Hefei Changhong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerLeasing from related partylease of plantMarketing price107.64107.641.68%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
104Sichuan Jiahong Industrial Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerLeasing from related partyLease of staff dormitoryMarketing price23.2823.280.36%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
105Sichuan Changhong Electric Co., Ltd.Controlling shareholderLeasing from related partyLease of laboratory and workshopMarketing price184.45184.452.88%4,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
106Sichuan Changhong Electronics Holding Group Co., Ltd.Controlling shareholder and ultimate controllerLeasing from related partyLease of laboratory and workshopMarketing price6.476.470.10%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
107Sichuan Changhong Intelligent Manufacturing Technology Co., Ltd.Other enterprise control under the same controllingPurchase and construction of fixed assetsInformation management system projectMarketing price45.4245.420.30%3,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
shareholder and ultimate controller
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 price90.2490.240.59%2,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
109Sichuan Hongxin Software Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase Intangible assetsInformation managementMarketing price12.1112.110.08%2,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
110Sichuan Zhiyijia Network Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fixed assetsTVMarketing price1.571.570.01%2,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
111Sichuan Changhong Jiahua Information Co., ltd.Other enterprise control under the samePurchase fixed assetsInformation managementMarketing price27.5827.580.18%2,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
controlling shareholder and ultimate controller
112Sichuan Qiruike Technology Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerPurchase of fixed assetsProduct quality data platformMarketing price28.8028.800.19%5,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
113Yuanxin Financial Lease Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerFinancing businessFinancing businessMarketing price27,779.6727,779.6782,000.00NCash settlement-December 7, 2022, December 23,2022Juchao Website(www.cninfo.com.cn)N.;2022-087,2022-088,2022-089,2022-100
Total----667,931.73--------------
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 2023 was 2775 million yuan at most (tax-excluded), actually 1,128.3389 million yuan occurred in reporting period.
2. It is estimated that the related transaction amount resulted by purchasing compressors, Sell goods, accept or provide services with Changhong Huayi and its subsidiary by the Company for year of 2023 was 545 million yuan at most (tax-excluded), actually 259.9289 million 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 2023 was 20 million yuan at most (tax-excluded), actually 1.3150 million 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 2023 was 10,465 million yuan at most (tax-excluded), actually 4,296.8060 million 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 2023 was 40 million yuan at most (tax-excluded), actually12.3977 million 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 2023 was 820 million yuan at most (tax-excluded), actually 368.4978 million 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 2023 was 450 million yuan at most actually 180.7472 million 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 2023 was 110 million yuan at most (tax-excluded), actually 27.2221 million 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 2023 was 95 million yuan at most (tax-excluded), actually 22.8144 million 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 2023 was 330 million yuan at most (tax-excluded), actually 102.9983 million 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 277.7967 million yuan occurred in reporting period.
12. It is expected that the labor service provided by the related party Mianyang High tech Zone Hongfu Technology Co., Ltd. will not exceed 2 million yuan, and the actual amount incurred during the reporting period is 454300 yuan.
Reasons for major differences between trading price and market reference price (if applicable)Not applicable

Note: According to the Shenzhen Stock Exchange's "Listing Rules" and the company's "Authorization Management System" and other relevant regulations, relatedparty transactions between the company and related parties with an amount less than 3 million yuan (including 3 million yuan) shall be implemented with the approvalof the company's president. During the reporting period, it is expected that the amount of related party transactions between the company and its affiliated party,Mianyang High tech Zone Hongfu Technology Co., Ltd. (which is an enterprise with a supervisor serving as its legal representative as the controlling shareholder),will not exceed 2 million yuan, and has been approved by the company's president.

(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

Co-investorAssociationName of the invested enterpriseMain business of the invested enterpriseRegistered capital of the invested enterpriseTotal assets of the invested enterprise (RMB '0,000)Net assets of the invested enterprise (RMB '0,000)Net profit of the invested enterprise (RMB '0,000)
Sichuan Changhong Electronic (Group) Co., Ltd., Sichuan Changhong Electric Co.,Ltd., Sichuan Shenwan Hongyuan Changhong Equity Investment Management Co., Ltd., Guangdong Changhong Electronics Co., Ltd., Sichuan Qiruike Technology Co., Ltd., Sichuan Changhong Power Supply Co., Ltd., Sichuan Changhong New Energy Technology Co., Ltd., Changhong Sanjie New Energy Co., Ltd., Sichuan Changhong Green Environmental Science and Technology Co., Ltd., Yibin Red-star Electronics Co., Ltd., Sichuan Changhong Digital Technology Co., Ltd., and Changhong Huayi Compressor Co.,Ltd.Controlling shareholder and ultimate controller, other enterprises controlled by the same controlling shareholder and ultimate controller, and listed companies with natural persons as directorsChanghong Group Sichuan Shenwan Hongyuan Strategic New Industry Parent Fund Partnership (Limited Partnership)Engagement in equity investment, investment management, asset management and other activities with private equity funds (registration and filing must be completed in Asset Management Association of China before the engagement in business activities).1,500 million30,295.6230,294.54-422.44
Sichuan Hongyun Venture Equity Investment Maqnagement Co., Ltd., Sichuan Changhong Electronics Holding Group Co., Ltd., Sichuan Changhong Electric Co., Ltd.For controlling shareholder and ultimate controllerSichuan Hongyun Venture Capital Partnership (Limited partnership)General items: venture capital (limited to unlisted enterprises). (Except for items that are subject to approval according to law, business activities148 million000
shall be independently carried out according to law by virtue of business license.
Accumulated amount of other litigation that does not meet the disclosure standard of major litigation(If any)not have

(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%-3.5%346,499.992,000,368.771,977,591.68369,277.08

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 issuance300,000.0072,397.63
Sichuan Changhong Group Finance Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerOther financial services - note discounting300,000.0046,049.51
Sichuan Changhong Group Finance Co., Ltd.Other enterprise control under the same controlling shareholder and ultimate controllerOther financial services - Letter of Guarantee600,000.00130.72

Note 1: As of June 30,2023, registered capital of Changhong Finance Company is 2,693,938,365.84 yuan. TheCompany and Changhong Huayi holds 14.96% equity of Chonghong Finance Company respectively, andcontrolling shareholder of the Company -Sichuan Changhong Electric Co., Ltd and its controlling shareholderSichuan 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

th

extraordinary shareholders generalmeeting of 2020 held on 14 August 2020 and 12 October, it is agreed to continue the financial services cooperation

between the Company and Changhong Finance Company and renew the “Financial Service Agreement” for a periodof three years. Changhong Finance Company will provides a series of financial services such as deposit and loanswithin scope of operation according to the requirements of Company and its subsidiaries.(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

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
Zhongshan Changhong Electric Co., Ltd.Announcement No.: 2023-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively.140,000.00March 10,0222,000.00Joint liability guarantyN/AY1-yearYN
March 28,20227,000.00Joint liability guarantyY1-yearYN
April 22,202218,000.00Joint liability guarantyY1-yearNN
May 6,20226,000.00Joint liability guarantyY1-yearYN
June 10,202210,000.00Joint liability guarantyY1-yearNN
June 25,202213,000.00Joint liability guarantyY1-yearNN
July 2,202220,000.00Joint liability guarantyY1-yearNN
August 19,20225,000.00Joint liability guarantyY1-yearNN
October 11,202215,000.00Joint liability guarantyY1-yearNN
Announcement No.: 2023-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.150,000.00April 7,20236,000.00Joint liability guarantyY1-yearNN
April 24,202310,000.00Joint liability guarantyY1-yearNN
June 8,202310,000.00Joint liability guarantyY1-yearNN
June 27,20237,000.00Joint liability guarantyY1-yearNN
Changhong MeilingRidian Technology Co., Ltd.Announcement No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively.16,000.00June 6,20223,000.00Joint liability guarantyY1-yearYN
July 7,20224,000.00Joint liability guarantyY1-yearNN
October 25,20222,000.00Joint liability guarantyY1-yearNN
December 8,20223,500.00Joint liability guarantyY11.2 monthsNN
Announcement No.: 2023-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.16,000.00
ZhongkeMeiling Cryogenic Technology Co., Ltd.Announcement No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively.26,000.00September 20,20222,000.00Joint liability guarantyY4.5 monthsYN
November 14,20225,000.00Joint liability guarantyY7.2 monthsNN
Announcement No.: 2023-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.20,000.00
Sichuan Changhong Air-conditioner Co., Ltd.Announcement No.: 2020-097,2020-098, 2020-101 and 2020-107 released on 12 December 2020 and 30 December 2020 respectively.100,000.00September 24,20215,000.00Joint liability guarantyY1-yearYN
December 7,202115,000.00Joint liability guarantyY1-yearYN
Announcement No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively.100,000.00March 18,20228,000.00Joint liability guarantyY1-yearYN
April 18,202230,000.00Joint liability guarantyY1-yearYN
Announcement No.: 2023-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.250,000.00January 17,202310,000.00Joint liability guarantyY9 monthsNN
January 17,20235,000.00Joint liability guarantyY1-yearNN
February 27,202316,000.00Joint liability guarantyY1-yearNN
March 16,202330,000.00Joint liability guarantyY1-yearNN
March 24,202360,000.00Joint liability guarantyY1-yearNN
April 14,202312,000.00Joint liability guarantyY1-yearNN
June 28,20233,500.00Joint liability guarantyY6 monthsNN
Changhong RUBA Trade CompanyAnnouncement No.: 2022-036, 2022-037and 2022-049 released on 18 May 2022 and 30 June 2022 respectively.5,955.93注1-------
Jiangxi Meiling Electric Appliance Co., Ltd.Announcement No.: 2023-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.15,000.00
Hefei Meiling Nonferrous Metal Products Co., Ltd.Announcement No.: 2023-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.3,000.00---
Hefei Meiling Group Holdings LimitedAnnouncement No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December40,000.00April 18,20225,000.00Joint liability guarantyY1-yearYN
2021 and 24 December 2021 respectively.
Announcement No.: 2023-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.60,000.00May 11,20234,500.00Joint liability guarantyY1-yearNN
Hefei Changhong Meiling Life Appliances Co., Ltd.Announcement No.: 2021-008, 2021-009, 2021-011 and 2021-034 released on 3 March 2021 and 29 April 2021 respectively.35,000.00December 9,20214,000.00Joint liability guarantyY11 monthsYN
Announcement No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively.35,000.00January 26,20223,000.00Joint liability guarantyY1-yearYN
March 17,20225,000.00Joint liability guarantyY1-yearYN
August 25,2022500.00Joint liability guarantyY1-yearNN
September 8,20221,000.00Joint liability guarantyY1-yearYN
September 22,20225,000.00Joint liability guarantyY1-yearNN
November 21,20225,000.00Joint liability guarantyY1-yearNN
December 8,20224,500.00Joint liability guarantyY10.5 monthsNN
Announcement No.: 2023-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.35,000.00February 22,20238,000.00Joint liability guarantyY11 monthsNN
May 4,20235,000.00Joint liability guarantyY1-yearNN
April 24,20232,000.00Joint liability guarantyY1-yearNN
Total amount of approving guarantee for subsidiaries in report period (B1)0Total amount of actual occurred guarantee for subsidiaries in report period (B2)395,500.00
Total amount of approved guarantee for subsidiaries at the end of reporting period (B3)771,955.93Total balance of actual guarantee for subsidiaries at the end of reporting period (B4)299,500.00
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 (if applicable)Guarantee termComplete implementation or notGuarantee for related party
Anhui Tuoxing Technology Co., Ltd.Announcement No.: 2021-091, 2021-092, 2021-096 and 2021-109 released on 7 December 2021 and 24 December 2021 respectively.5,000.00June 27,2022500.00Joint liability guaranty1 yearYN
Announcement No.: 2022-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.8,000.00June 20,20231,000.00Joint liability guaranty1 yearNN
Anhui Ling'an Medical Equipment Co., Ltd.Announcement No.: 2022-087, 2022-088, 2022-091 and 2022-100 released on 7 December 2022 and 23 December 2022 respectively.12,000.00------
Total amount of approving guarantee for subsidiaries in report period (C1)0.00Total amount of actual occurred guarantee for subsidiaries in report period (C2)1,500.00
Total amount of approved guarantee for subsidiaries at the end of reporting period (C3)25,000.00Total balance of actual guarantee for subsidiaries at the end of reporting period (C4)1,000.00
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of approving guarantee in report period (A1+B1+C1)0.00Total amount of actual occurred guarantee in report period (A2+B2+C2)397,000.00
Total amount of approved guarantee at the end of report period796,955.93Total balance of actual guarantee at the end of report period300,500.00
(A3+B3+C3)(A4+B4+C4)
Ratio of actual guarantee (A4+B4+C4) in net assets of the Company55.18%
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)285,000.00
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)285,000.00
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 tothe 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 normalproduction 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 guaranteeprovided to the subsidiaries that approved by the Company amounted to 7,719.5593 million yuan, actually 3,950 million yuan occurred. At the end of the reporting period,the practical guarantee balance amounted to 2,995 million yuan, accounting for the Company’s latest net assets ratio of 55%. As of the end of the reporting period, theeffective amount of guarantee provided to the subsidiaries from subsidiary that approved by the Company amounted to 250 million yuan, actually 15 million yuan occurred.As of 30 June 2023, the actual guarantee balance provided to subsidiaries by subsidiary was 10 million yuan, occupied 0.18% 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 productsIdle own funds15,000.0010,000.0000
Total15,000.0010,000.0000

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)
Zhongshanbranch of China Guangfa Bank Co., Ltd.BankPrincipal-guaranteed with floating income5,000.00Idle own fundsFebruary 14, 2023May 15, 2023The principal of this structured deposit is included in the unified operation and management of funds of Guangfa Bank, and the income of investors' structured deposits depends on the performance of USD/JPY during the observation period.Agreement1.5%Not applicable18.4918.49NYNot applicableJuchao Website(www.cninfo.com.cn) ( Announcement No.: 2023-009)
Zhongshan branch of Bank of Communications Co., LtdBankPrincipal-guaranteed with floating income5,000.00Idle own fundsMarch 10, 2023July 10, 2023Bank 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 fundAgreement1.75%/3%/3.2%Not applicable--NYNot applicableJuchao Website(www.cninfo.com.cn) ( Announcement No.: 2023-010)
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.
Mianyang branch of SPD BankBankPrincipal-guaranteed with floating income5,000.00Idle own fundsJune 28, 2023September 28, 2023The structured deposits are included in the payment scope of deposit reserve and deposit insurance premium in accordance with deposit management and regulatory requirements,Agreement1.3%/2.8%/3%Not applicable--NYNot applicableJuchao Website(www.cninfo.com.cn) ( Announcement No.: 2023-038)
Total15,000.00-------------18.49---------

Note: Zhongke Meiling, a subsidiary of the Company, is a listed company of the Beijing Stock Exchange. For details of its entrusted financial management, please refer to

Zhongke Meiling's 2023 Semi-annual Report.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. According to the resolutions adopted at the 30st meeting of the 10th Board of Directors, the 21nd meetingof the 10th Board of Supervisors and the 2022 Annual General Meeting of Shareholders, it was agreed that theCompany and its subsidiaries would make a single provision for bad debts for the receivables of the customer,Changhong RUBA Electric Co., Ltd. (a joint venture of Zhongshan Changhong Electric Co., Ltd., a subsidiary ofthe Company) in the fourth quarter of 2022, and it was agreed that in the fourth quarter of 2022, the Company, itssubsidiaries Hefei Meiling Group Holding Co., Ltd., Sichuan Changhong Air Conditioning Co., Ltd. and itsaffiliated company Sichuan Zhiyijia Network Technology Co., Ltd. would make a single provision for bad debts forthe receivables of Gome (Gome is a general term for the subsidiaries, branches, offices and agencies at all levels ofGome Retail), and the total amount of the above-mentioned single provision for bad debts is RMB 101,962,546.44.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. 2023-002, 2023-005 and 2023-030) on 18 January 2023 and 26 April 2023.

2. According to the resolutions of the 31st meeting of the 10th Board of Directors, the 22nd meeting of the 10thBoard of Supervisors and the 2022 Annual General Meeting of Shareholders, the Plan on the Company's ProfitDistribution in 2022 was adopted, and at the same time, the independent directors of the Company issuedindependent approval opinions on the plan. Considering the interests of shareholders and the long-term developmentneeds of the Company, based on the Company's total share capital of 1,029,923,715 shares on December 31, 2022,the Company distributed a cash dividend of RMB 0.9 (including tax) to all shareholders for every 10 shares, withno bonus or conversion of reserve funds into share capital.After this distribution, the remaining accumulatedundistributed profit of the parent company was RMB 971,443,732.63, and the remaining undistributed profit wascarried forward to the next year for distribution.On June 10, 2023, the Company disclosed the Announcement onthe Implementation of the Profit Distribution Plan for 2022, and implemented the aforementioned profit distributionplan.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. 2023-011, 2023-012 ,2023-014,2023-030 and 2023-037) on 31 March 2023, 26 April 2023and 10 June 2023.

3. According to the resolution adopted at the 31st meeting of the 10th Board of Directors and the 2022 AnnualGeneral Meeting of Shareholders, it was agreed to re-appoint ShineWing Certified Public Accountants (specialgeneral partnership) as the auditing agency for the Company's 2023 annual financial report and internal control for

one year.In the meantime, the General Meeting of Shareholders authorized the management of the Company tonegotiate with ShineWing to determine the relevant audit remuneration according to the specific audit requirementsand audit scope of the Company in 2023.Found more on appointed media “Securities Times”, “China SecuritiesJournal”, “Hong Kong Commercial Daily” and Juchao Website (www.cninfo.com.cn) that the Company disclosedin the form of announcement (Announcement No. 2023-011, 2023-015 and 2023-030) on 31 March 2023 and , 26April 2023.

4. After deliberated and approved by the 31st session of 10

th

BOD and Annual General Meeting of 2022, it agreedthat the Company and its subsidiaries shall carry out forward foreign exchange fund trading business during theperiod from 1 July 2023 to 30 June 2024. Balance of trading not exceeding US$ 1.046 billion (mainly includingUSD, AUD, EUR and other foreign exchange converted to USD), and the maximum period of delivery of a singlebusiness shall not exceed one year. 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 formof announcement (Announcement No. 2023-011, 2023-016 and 2023-030) on 31 March 2023 and 26 April 2023.

5. By the resolution passed at the 31st meeting of the Tenth Board of Directors and the 2022 Annual General Meetingof Shareholders, it was agreed that the Company and its holding subsidiaries should apply for a special credit linefor RMB bill pool of maximum RMB 400 million from Hefei Branch of Industrial Bank Co., Ltd., that of maximumRMB 300 million from Hefei Branch of Ping An Bank Co., Ltd., and that of RMB 400 million from Hefei Branchof Jiujiang Bank Co., Ltd., with a credit period of one year. The credit lines are mainly used for special business ofbill pools and are pledged by bills. 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 formof announcement (Announcement No. 2023-011, 2023-018 and 2023-030) on 31 March 2023 and 26 April 2023.

6. During the period from April 17, 2023 to April 19, 2023, the deviation of the closing price of the Company's stocktrading for three consecutive trading days exceeded 20%. According to the relevant regulations of Shenzhen StockExchange, the Company issued the Announcement of Abnormal Fluctuations in Stock Trading.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. 2023-029) on 20 April 2023.

7. According to the resolutions of the 32nd meeting of the 10th Board of Directors and the first extraordinary GeneralMeeting of Shareholders in 2023, it was agreed to revise some articles of the Articles of Association according tothe needs of the Company's operation and management and the actual situation of the Company.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. 2023-023, 2023-027 and 2023-033) on 20 April 2023 and 11 Mayl 2023.

8. On April 27, 2023, the Company received a notice from Mr. Tang Youdao, Vice President of the Company. Basedon his firm confidence in the Company's future development prospects and recognition of the Company's long-terminvestment value, Mr. Tang Youdao increased his holdings of common shares (A shares) by 800,000 shares throughcentralized bidding in the trading system of Shenzhen Stock Exchange.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. 2023-032) on 29 April 2023.

9. In order to establish a variety of shareholder return mechanisms, thank shareholders for their long-term concernand support, and at the same time to allow shareholders to experience the Company's new products and services,and improve investors' understanding and recognition of the Company's intrinsic value, the Company held the

"Meiling 40th Anniversary Shareholder Thanksgiving Festival" from May 20, 2023 to May 28, 2023.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. 2023-034) on 18 May 2023.

10. On May 25, 2023, the Company issued the Announcement on the Resignation of Senior Managers of theCompany, and Mr. Liu Hongwei, the former Executive Vice President of the Company, applied to resign as theexecutive vice president of the Company for personal reasons. After resigning, Mr. Liu Hongwei still works in thecompany. 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. 2023-036) on 25 May 2023.

11. On May 24, 2023, the Company received the Notice on Share Reduction Plan from Mr. Huang Danian, VicePresident of the Company. Due to the needs of personal family funds, Mr. Huang Danian planned to reduce hisshares by no more than 89,113 shares (accounting for 0.0087% of the Company's total share capital) throughcentralized bidding within 6 months after 15 trading days upon the announcement date of the reduction plan, withthe amount of reduction not exceeding 25% of his shares 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. 2023-035) on25 May 2023.XIV. Major event of the subsidiary

√ Applicable □ Not applicable

According to the resolutions of the 31st meeting of the 10th Board of Directors and the 22nd meeting of the 10thBoard of Supervisors, it was agreed that Zhongshan Changhong, a subsidiary of the Company would write off theuncollectible bad debts totaling RMB 1,307,424.41.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. 2023-011, 2023-012 and 2023-017) on 31 March 2023.

Section VII Changes in Shares and Particular about Shareholders

I. Changes in Share Capital(i) Changes in Share Capital

In Shares

Before the ChangeIncrease/Decrease in the Change (+, -)After the Change
AmountProportionNew shares issuedBonus sharesPublic reserve transfer into share capitalOthersSubtotalAmountProportion
I. Restricted shares7,192,4920.70%000+918,823+918,8238,111,3150.79%
1. State-owned shares00.00%0000000.00%
2. State-owned legal person’s shares1,141,0530.11%000001,141,0530.11%
3. Other domestic shares4,784,0190.47%000+496,350+496,3505,280,3690.51%
Including: Domestic legal person’s shares3,363,5390.33%000003,363,5390.33%
Domestic natural person’s shares1,420,4800.14%000+496,350+496,3501,916,8300.18%
4. Foreign shares1,267,4200.12%000+422,473+422,4731,689,8930.17%
Including: Foreign legal person’s shares00.00%0000000.00%
Foreign natural person’s shares1,267,4200.12%000+422,473+422,4731,689,8930.17%
II. Unrestricted shares1,022,731,22399.30%000-918,823-918,8231,021,812,40099.21%
1. RMB ordinary shares875,808,80985.04%000-496,350-496,350875,312,45984.99%
2. Domestically listed foreign shares146,922,41414.26%000-422,473-422,473146,499,94114.22%
3. Overseas listed foreign shares00.00%0000000.00%
4. Others00.00%0000000.00%
III. Total shares1,029,923,715100.00%000001,029,923,715100.00%

1. Reasons for share changed

√ Applicable □ Not applicable

(1) On April 27, 2023, Mr. Tang Youdao, Vice President of the Company, based on his firm confidence in theCompany's future development prospects and recognition of the Company's long-term investment value, increasedhis holdings of common shares by 800,000 shares through centralized bidding in the trading system of ShenzhenStock Exchange. According to the Rules for the Administration of the Shares of the Company Held by Directors,Supervisors and Senior Managers of Listed Companies and Their Changes and other relevant regulations, 75% of

the total shares of the company held by Mr. Tang Youdao, namely 600,000 shares, were locked.

(2) On May 25, 2023, Mr. Liu Hongwei, Executive Vice President of the Company, resigned as the executivevice president of the Company for personal reasons, and his original term of office expired on October 12, 2023.According to the Detailed Rules for the Implementation of Shareholding Reduction by Shareholders, Directors,Supervisors and Senior Managers of Companies Listed in Shenzhen Stock Exchange, during the reporting period,25% of the total shares of the Company held by Mr. Liu Hongwei, namely 422,473 shares, were locked because heleft office less than six months ago, that is, the full amount of Meiling shares held by Mr. Liu Hongwei was locked.

(3) According to the relevant provisions of the Company Law, the Securities Law and the Rules for theAdministration of the Shares of the Company Held by Directors, Supervisors and Senior Managers of ListedCompanies and Their Changes, 75% of 414,600 common shares held by Ms. Li Xia at the beginning of 2023,namely 310,950 shares, were restricted from sale, and the other 25%, namely 103,650 shares, were lifted from suchrestriction.

2. Approval of share changed

□ Applicable √ Not applicable

3. Ownership transfer of share changed

□ Applicable √ Not applicable

4. Implementation progress of shares buy-back

□ Applicable √ Not applicable

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

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

In: Shares

ShareholdersOpening shares restrictedShares released in PeriodRestricted shares increased in PeriodEnding shares restrictedRestricted reasonsDate for released
Liu Hongwei1,267,4200422,4731,689,893Top management lock-in stockOn May 25, 2023, Mr. Liu Hongwei, Executive Vice President of the Company, resigned as the executive vice president of the Company for personal reasons, and his original term of office expired on October 12, 2023. According to the relevant provisions of the Detailed Rules for the Implementation of Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Managers of Companies Listed in Shenzhen Stock Exchange, directors, supervisors and senior managers who leave their posts before the expiration of their term of office shall not transfer more than 25% of the total shares held by them within the term of office determined when they take office and within six months after the expiration of their term of office; Within six months after leaving their post, they shall
not transfer their shares of the Company. Therefore, the lifting of the restrictions on the sale of the Company's shares held by them must comply with the above provisions.
Tang Youdao00600,000600,000Top management lock-in stockOn April 27, 2023, Mr. Tang Youdao, Vice President of the Company, based on his firm confidence in the Company's future development prospects and recognition of the Company's long-term investment value, increased his holdings of common shares by 800,000 shares through centralized bidding in the trading system of Shenzhen Stock Exchange. According to the Company Law and other relevant regulations, the number of shares transferred each year during their tenure shall not exceed 25% of the total number of shares held by them.
Li Xia414,600103,6500310,950Top management lock-in stockAt the beginning of 2023, 103,650 shares held by Ms. Li Xia, accounting for 25% of the total shares, were lifted from the restricted sale.
Total1,682,020103,6501,022,4732,600,843----

II. Securities issuance and listing

□ Applicable √ Not applicable

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

In Shares

Total shareholders at end of the Period53,068Total preference shareholders with voting rights recovered at end of reporting period (if any)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 sharesAmount of common shares held without restrictionInformation of shares pledged, tagged or frozen
State ofAmount
heldshare
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--
The National Social Security Fund 602 portfolioDomestic non-state-owned legal person1.70%17,525,935+17,525,935017,525,935--
CAO SHENGCHUNForeign nature person1.43%14,766,0860014,766,086--
Taiping Assets-ICBC- Taiping Star 19 investment productsDomestic non-state-owned legal person1.14%11,772,400+11,772,400011,772,400--
China Europe AMC-China Life Insurance Co., Ltd.-Divident- China Europe Fund Guoshou Equilibrium Stock Portfolio Single Asset Management Plan (Available for Sale)Domestic non-state-owned legal person1.11%11,438,335+11,438,335011,438,335--
SPD bank-Bo Shi innovation economy hybrid securities investment fundDomestic non-state-owned legal person1.01%10,412,300+10,412,300010,412,300--
China Europe AMC-China Life Insurance Co., Ltd.-Traditional risk-China Europe Fund Guoshou Equilibrium Stock Traditional Available for Sale Single Asset Management PlanDomestic non-state-owned legal person0.64%6,566,700+6,566,70006,566,700--
Philip Securities (H.K.) Co., Ltd.Foreign legal person0.61%6,296,913006,296,913--
Description of the above shareholders in relation to delegate/entrusted voting rights and abstention from voting rights.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 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.); 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
Particular about top ten shareholders with un-restrict shares held
Shareholders’ nameAmount of unrestricted shares held at end of PeriodType of shares
TypeAmount
Sichuan Changhong Electric Co., Ltd.248,457,724Common shares in RMB248,457,724
Hefei Industry Investment Holding (Group) Co., Ltd.47,823,401Common shares in RMB47,823,401
CHANGHONG (HK) TRADING LIMITED27,077,797Foreign shares in domestic market27,077,797
The National Social Security Fund 602 portfolio17,525,935Common shares in RMB17,525,935
CAO SHENGCHUN14,766,086Foreign shares in domestic market14,766,086
Taiping Assets-ICBC- Taiping Star 19 investment products11,772,400Common shares in RMB11,772,400
China Europe AMC-China Life Insurance Co., Ltd.-Divident- China Europe Fund Guoshou Equilibrium Stock Portfolio Single Asset Management Plan (Available for Sale)11,438,335Common shares in RMB11,438,335
SPD bank-Bo Shi innovation economy hybrid securities investment fund10,412,300Common shares in RMB10,412,300
China Europe AMC-China Life Insurance Co., Ltd.-Traditional risk-China Europe Fund Guoshou Equilibrium Stock Traditional Available for Sale Single Asset Management Plan6,566,700Common shares in RMB6,566,700
Philip Securities (H.K.) Co., Ltd.6,296,913Foreign shares in domestic market6,296,913
Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholdersFound more in “Particulars about shares held above 5% by shareholders or top 10 shares holding”
Explanation on top ten common shareholders involving margin business (if any)Not applicable

Note 1: At end of the reporting period, the person acting in concert with controlling shareholder Sichuan Changhong-- CHANGHONG (HK) TRADING LIMITED, holds B-stock of the Company as 33,374,710 shares, among which,6,296,913 shares are held through Philip 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" issubject to the data on stock transfer books provided by China Securities Depository and Clearing CorporationLimited 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 increaseNumber of shares decreased in thisShares held at period-end (share)Number of restricted shares granted atNumber of restricted shares granted atNumber of restricted shares granted at
d in this period (share)period (share)period-begin (share)the period (share)period-end (share)
Wu DinggangChairmanIn office570,50000570,500000
Zhong MingDirector, PresidentIn office236,17500236,175000
Yong FengshanDirectorIn office0000000
Zhao QilinDirectorIn office0000000
Kou HuamengDirector, Deputy presidentIn office0000000
Hu ZhaoguiDirector, Vice presidentIn office178,05000178,050000
Hong yuanjiaIndependent directorIn office0000000
Mou WenIndependent directorIn office0000000
Zhao GangIndependent directorIn office0000000
Shao MinChairman of SupervisoryIn office0000000
He XintanSupervisorIn office0000000
Huang HongSupervisorIn office0000000
Ji GeStaff supervisorIn office0000000
Sun HongyingStaff supervisorIn office0000000
Huang DanianVice presidentIn office356,45000356,450000
Tang YoudaoVice presidentIn office0800,0000800,000000
Pang HaitaoCFO (person in charge of finance)In office0000000
Li XiaSecretary of the BoardIn office414,60000414,600000
Liu HongweiExecutive vice presidentDimission1,689,893001,689,893000
Total----3,445,668800,00004,245,668000

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 reportWhether 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, 2023

In RMB

ItemJune 30, 2023January 1, 2023
Current assets:
Monetary funds7,887,243,778.776,839,421,779.13
Settlement provisions
Capital lent
Trading financial assets192,881,811.8957,660,588.67
Derivative financial assets
Note receivable
Account receivable2,626,925,077.941,306,871,945.85
Receivable financing1,604,435,165.241,446,358,719.88
Accounts paid in advance19,506,880.3745,859,491.55
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable84,080,620.2388,354,803.24
Including: Interest receivable
Dividend receivable
Buying back the sale of financial assets
Inventories2,300,494,914.541,710,306,933.71
Contractual assets31,956,763.363,530,922.13
Assets held for sale
Non-current asset due within one year292,055,597.22170,167,638.89
Other current assets319,262,837.45120,589,431.85
Total current assets15,358,843,447.0111,789,122,254.90
Non-current assets:
Loans and payments on behalf
Debt investment182,033,111.11121,543,750.00
Other debt investment
Long-term account receivable
Long-term equity investment103,328,795.30100,384,428.50
Investment in other equity instrument
Other non-current financial assets628,549,448.31628,549,448.31
Investment real estate51,909,274.2852,898,060.89
Fixed assets2,192,986,380.312,229,553,866.96
Construction in progress62,914,871.2966,522,492.77
Productive biological asset
Oil and gas asset
Right-of-use assets32,936,873.9636,646,135.10
Intangible assets908,117,247.23900,568,008.21
Expense on Research and Development97,944,716.31102,148,390.57
Goodwill
Long-term expenses to be apportioned16,136,485.0514,900,600.59
Deferred income tax asset166,501,193.86161,565,695.30
Other non-current asset1,689,040.18893,238.57
Total non-current asset4,445,047,437.194,416,174,115.77
Total assets19,803,890,884.2016,205,296,370.67
Current liabilities:
Short-term loans881,207,127.01674,143,916.67
Loan from central bank
Capital borrowed
Trading financial liability113,610,931.4341,961,524.78
Derivative financial liability
Note payable5,767,919,542.574,964,374,512.60
Account payable4,898,495,830.712,917,997,138.00
Accounts received in advance
Contractual liability355,486,232.62358,755,397.77
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable367,774,567.58348,154,915.13
Taxes payable138,928,253.5080,287,878.62
Other account payable1,041,304,135.56828,207,568.21
Including: Interest payable
Dividend payable32,049,708.694,978,994.16
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year40,699,158.1230,287,099.08
Other current liabilities25,838,465.2822,605,269.51
Total current liabilities13,631,264,244.3810,266,775,220.37
Non-current liabilities:
Insurance contract reserve
Long-term loans128,000,000.00148,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability25,339,886.5528,164,287.97
Long-term account payable1,049,108.101,145,286.48
Long-term wages payable12,164,985.1810,790,859.64
Accrual liability32,038,544.3132,685,631.78
Deferred income146,434,187.24161,013,911.91
Deferred income tax liabilities14,990,512.9617,509,503.08
Other non-current liabilities
Total non-current liabilities360,017,224.34399,309,480.86
Total liabilities13,991,281,468.7210,666,084,701.23
Owner’s equity:
Share capital1,029,923,715.001,029,923,715.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve2,806,493,904.302,806,493,904.30
Less: Inventory shares
Other comprehensive income-18,859,546.08-20,881,462.63
Reasonable reserve12,115,806.612,467,205.78
Surplus public reserve441,218,691.48441,218,691.48
Provision of general risk
Retained profit1,174,611,076.18909,249,365.79
Total owner’ s equity attributable to parent company5,445,503,647.495,168,471,419.72
Minority interests367,105,767.99370,740,249.72
Total owner’ s equity5,812,609,415.485,539,211,669.44
Total liabilities and owner’ s equity19,803,890,884.2016,205,296,370.67

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, 2023January 1, 2023
Current assets:
Monetary funds3,540,317,124.783,104,218,400.02
Trading financial assets30,140,685.0721,847,922.36
Derivative financial assets
Note receivable
Account receivable1,441,902,097.391,145,561,769.05
Receivable financing1,393,714,963.301,433,254,352.52
Accounts paid in advance36,005,676.6666,583,414.71
Other account receivable63,707,764.3129,903,408.82
Including: Interest receivable
Dividend receivable
Inventories468,949,759.30463,576,760.77
Contractual assets46,970.7546,970.75
Assets held for sale
Non-current assets maturing within one year292,055,597.22170,167,638.89
Other current assets12,317,946.46165,510.80
Total current assets7,279,158,585.246,435,326,148.69
Non-current assets:
Debt investment182,033,111.11121,543,750.00
Other debt investment
Long-term receivables
Long-term equity investments1,860,476,731.211,856,359,424.33
Investment in other equity instrument
Other non-current financial assets608,527,275.52608,527,275.52
Investment real estate3,439,458.783,543,885.11
Fixed assets1,119,839,034.701,127,344,454.50
Construction in progress49,041,675.5651,057,550.03
Productive biological assets
Oil and natural gas assets
Right-of-use assets15,793,515.8316,739,912.26
Intangible assets466,120,745.38467,075,020.10
Research and development costs68,139,791.6260,386,906.45
Goodwill
Long-term deferred expenses13,065,918.4711,686,542.49
Deferred income tax assets126,890,037.15127,720,739.83
Other non-current assets638,649.57638,649.57
Total non-current assets4,514,005,944.904,452,624,110.19
Total assets11,793,164,530.1410,887,950,258.88
Current liabilities:
Short-term borrowings850,185,752.01618,091,666.67
Trading financial liability42,195,286.3213,537,472.81
Derivative financial liability
Notes payable2,379,822,967.922,230,728,460.34
Account payable1,810,626,157.251,531,945,762.15
Accounts received in advance
Contractual liability104,082,063.96121,216,205.12
Wage payable46,305,781.0364,869,503.19
Taxes payable18,333,467.7020,168,907.95
Other accounts payable900,903,884.00708,015,820.72
Including: Interest payable
Dividend payable31,449,708.694,378,994.16
Liability held for sale
Non-current liabilities due within one year32,284,472.2622,238,340.38
Other current liabilities5,453,243.815,978,477.02
Total current liabilities6,190,193,076.265,336,790,616.35
Non-current liabilities:
Long-term loans128,000,000.00148,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability15,179,183.4315,861,027.13
Long-term account payable
Long term employee compensation payable7,799,060.357,184,302.85
Accrued liabilities7,785,977.557,785,977.55
Deferred income79,205,880.6684,762,685.97
Deferred income tax liabilities8,656,161.8211,153,985.85
Other non-current liabilities
Total non-current liabilities246,626,263.81274,747,979.35
Total liabilities6,436,819,340.075,611,538,595.70
Owners’ equity:
Share capital1,029,923,715.001,029,923,715.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve2,740,508,510.572,740,508,510.57
Less: Inventory shares
Other comprehensive income
Special reserve2,231,892.40687,069.38
Surplus reserve441,000,525.80441,000,525.80
Retained profit1,142,680,546.301,064,291,842.43
Total owner’s equity5,356,345,190.075,276,411,663.18
Total liabilities and owner’s equity11,793,164,530.1410,887,950,258.88

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

3. Consolidated Profit Statement

In RMB

ItemSemi-annual of 2023Semi-annual of 2022
I. Total operating income12,828,694,323.5710,224,503,551.19
Including: Operating income12,828,694,323.5710,224,503,551.19
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost12,396,558,239.0310,156,306,873.88
Including: Operating cost11,178,914,075.839,061,080,531.06
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 extras98,025,766.6279,701,444.29
Sales expense786,493,259.32666,066,309.98
Administrative expense182,962,865.60164,132,141.97
R&D expense265,176,197.93248,112,774.54
Financial expense-115,013,926.27-62,786,327.96
Including: Interest expenses13,185,503.1516,913,382.96
Interest income83,240,562.0766,581,155.37
Add: Other income32,328,256.6648,325,391.81
Investment income (Loss is listed with “-”)14,377,940.0513,816,261.75
Including: Investment income on affiliated company and joint venture12,544,969.448,971,315.55
The termination of income recognition for financial assets measured by amortized cost-14,192,040.21-10,198,142.54
Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with “-”)-56,428,183.433,562,737.04
Loss of credit impairment (Loss is listed with “-”)-41,081,589.83-50,466,619.13
Losses of devaluation of asset (Loss is listed with “-”)-18,167,335.89-29,791,822.84
Income from assets disposal (Loss is listed with “-”)8,358,775.10
III. Operating profit (Loss is listed with “-”)363,165,172.1062,001,401.04
Add: Non-operating income10,704,019.802,910,887.79
Less: Non-operating expense3,014,799.222,332,960.83
IV. Total profit (Loss is listed with “-”)370,854,392.6862,579,328.00
Less: Income tax expense925,010.04-10,115,573.46
V. Net profit (Net loss is listed with “-”)369,929,382.6472,694,901.46
(i) Classify by business continuity
1.continuous operating net profit (net369,929,382.6472,694,901.46
loss listed with ‘-”)
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company358,054,844.7460,375,199.25
2.Minority shareholders’ gains and losses11,874,537.9012,319,702.21
VI. Net after-tax of other comprehensive income2,267,837.82161,477.79
Net after-tax of other comprehensive income attributable to owners of parent company2,021,916.5561,187.61
(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 loss2,021,916.5561,187.61
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 statements2,021,916.5561,187.61
7.Other
Net after-tax of other comprehensive income attributable to minority shareholders245,921.27100,290.18
VII. Total comprehensive income372,197,220.4672,856,379.25
Total comprehensive income attributable to owners of parent Company360,076,761.2960,436,386.86
Total comprehensive income attributable to minority shareholders12,120,459.1712,419,992.39
VIII. Earnings per share:
(i) Basic earnings per share0.34770.0582
(ii) Diluted earnings per share0.34770.0582

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 period

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

4. Profit Statement of Parent Company

ItemSemi-annual of 2023Semi-annual of 2022
I. Operating income4,338,699,541.923,276,506,161.47
Less: Operating cost3,954,954,574.253,060,604,345.52
Taxes and surcharge36,432,651.4227,794,762.55
Sales expenses94,839,586.4980,728,268.23
Administration expenses49,060,555.6053,782,990.89
R&D expenses118,815,372.05108,366,509.30
Financial expenses-36,066,516.62-22,635,899.49
Including: Interest expenses12,503,638.7416,599,488.01
Interest income39,678,411.2936,123,851.00
Add: Other income10,946,996.5621,184,281.25
Investment income (Loss is listed with “-”)68,376,405.7547,530,171.27
Including: Investment income on affiliated Company and joint venture11,539,929.525,509,596.07
The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”)-4,223,097.22-1,663,033.71
Net exposure hedging income (Loss is listed with “-”)
Changing income of fair value (Loss is listed with “-”)-20,365,050.801,369,068.05
Loss of credit impairment (Loss is listed with “-”)-7,182,062.31-7,829,056.61
Losses of devaluation of asset (Loss is listed with “-”)-808,792.91-1,325,668.27
Income on disposal of assets (Loss is listed with “-”)8,344,824.89
II. Operating profit (Loss is listed with “-”)171,630,815.0237,138,805.05
Add: Non-operating income496,859.54857,194.10
Less: Non-operating expense2,712,957.691,088,570.22
III. Total Profit (Loss is listed with “-”)169,414,716.8736,907,428.93
Less: Income tax-1,667,121.35-16,609,478.22
IV. Net profit (Net loss is listed with “-”)171,081,838.2253,516,907.15
(i) continuous operating net profit (net loss listed with ‘-”)171,081,838.2253,516,907.15
(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 income171,081,838.2253,516,907.15
VII. Earnings per share:
(i) Basic earnings per share0.16610.0516
(ii) Diluted earnings per share0.16610.0516

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

5. Consolidated Cash Flow Statement

In RMB

ItemSemi-annual of 2023Semi-annual of 2022
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services12,198,688,836.7310,312,619,575.60
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 received335,722,174.27379,915,276.10
Other cash received concerning operating activities45,885,272.4772,807,336.47
Subtotal of cash inflow arising from operating activities12,580,296,283.4710,765,342,188.17
Cash paid for purchasing commodities and receiving labor service9,633,823,103.988,685,143,427.78
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 workers969,995,100.78859,700,605.67
Taxes paid220,348,189.39254,144,466.19
Other cash paid concerning operating activities345,610,079.51391,300,471.18
Subtotal of cash outflow arising from operating activities11,169,776,473.6610,190,288,970.82
Net cash flows arising from operating activities1,410,519,809.81575,053,217.35
II. Cash flows arising from investing activities:
Cash received from recovering investment530,000,000.00221,539,824.00
Cash received from investment income29,194,568.7917,907,264.72
Net cash received from disposal of fixed, intangible and other long-term assets2,580,708.6815,074,662.60
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities83,960,584.7765,647,218.13
Subtotal of cash inflow from investing activities645,735,862.24320,168,969.45
Cash paid for purchasing fixed, intangible and other long-term assets112,867,755.64132,916,669.27
Cash paid for investment990,000,000.001,024,040,000.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities14,291,587.297,635,033.86
Subtotal of cash outflow from investing activities1,117,159,342.931,164,591,703.13
Net cash flows arising from investing activities-471,423,480.69-844,422,733.68
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries
Cash received from loans738,227,027.56647,040,918.37
Other cash received concerning financing activities246,707,138.5084,181.37
Subtotal of cash inflow from financing activities984,934,166.06647,125,099.74
Cash paid for settling debts543,000,000.00490,000,000.00
Cash paid for dividend and profit distributing or interest paying94,160,552.9676,995,651.40
Including: Dividend and profit of minority shareholder paid by subsidiaries16,677,010.6321,318,560.00
Other cash paid concerning financing activities160,042,182.97432,350,094.27
Subtotal of cash outflow from financing activities797,202,735.93999,345,745.67
Net cash flows arising from financing activities187,731,430.13-352,220,645.93
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate5,527,412.3119,041,476.23
V. Net increase of cash and cash equivalents1,132,355,171.56-602,548,686.03
Add: Balance of cash and cash equivalents at the period -begin6,113,222,069.765,840,194,931.57
VI. Balance of cash and cash equivalents at the period -end7,245,577,241.325,237,646,245.54

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

6. Cash Flow Statement of Parent Company

In RMB

ItemSemi-annual of 2023Semi-annual of 2022
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services3,881,403,178.063,474,091,634.50
Write-back of tax received105,626,324.39130,797,515.16
Other cash received concerning operating activities11,635,429.6126,282,682.89
Subtotal of cash inflow arising from operating activities3,998,664,932.063,631,171,832.55
Cash paid for purchasing commodities and receiving labor service3,259,367,184.553,359,375,348.84
Cash paid to/for staff and workers253,472,494.63238,053,008.99
Taxes paid49,530,385.1627,088,361.68
Other cash paid concerning operating activities89,990,627.33113,679,202.41
Subtotal of cash outflow arising from operating activities3,652,360,691.673,738,195,921.92
Net cash flows arising from operating activities346,304,240.39-107,024,089.37
II. Cash flows arising from investing activities:
Cash received from recovering investment1,539,824.00
Cash received from investment income74,682,585.1551,118,076.00
Net cash received from disposal of fixed, intangible and other long-term assets2,534,831.9015,055,871.00
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities38,996,739.6136,717,526.66
Subtotal of cash inflow from investing activities116,214,156.66104,431,297.66
Cash paid for purchasing fixed, intangible and other long-term assets76,197,096.3794,314,583.83
Cash paid for investment180,000,000.00440,000,000.00
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities13,796,171.192,906,095.09
Subtotal of cash outflow from investing activities269,993,267.56537,220,678.92
Net cash flows arising from investing activities-153,779,110.90-432,789,381.26
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Cash received from loans738,227,027.56612,040,918.37
Other cash received concerning financing activities95,587,946.50182,953,531.16
Subtotal of cash inflow from financing activities833,814,974.06794,994,449.53
Cash paid for settling debts518,000,000.00480,000,000.00
Cash paid for dividend and profit distributing or interest paying76,787,308.9855,402,489.41
Other cash paid concerning financing activities48,994,977.3646,535,119.44
Subtotal of cash outflow from financing activities643,782,286.34581,937,608.85
Net cash flows arising from financing activities190,032,687.72213,056,840.68
IV. Influence on cash and cash2,973,726.157,291,862.96
equivalents due to fluctuation in exchange rate
V. Net increase of cash and cash equivalents385,531,543.36-319,464,766.99
Add: Balance of cash and cash equivalents at the period -begin3,086,968,775.613,414,961,989.34
VI. Balance of cash and cash equivalents at the period -end3,472,500,318.973,095,497,222.35

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

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

This Period

In RMB

ItemSemi-annual of 2023
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 year1,029,923,715.002,806,493,904.30-20,881,462.632,467,205.78441,201,471.98909,082,037.665,168,286,872.09370,748,395.265,539,035,267.35
Add: Changes of accounting policy17,219.50167,328.13184,547.63-8,145.54176,402.09
Error correction of the last period
Enterprise combine under the same control
Other
II. The beginning balance of the current year1,029,923,715.002,806,493,904.30-20,881,462.632,467,205.78441,218,691.48909,249,365.795,168,471,419.72370,740,249.725,539,211,669.44
III. Increase/2,021,916.559,648,600.83265,361,710.39277,032,2-273,397,7
Decrease in the period (Decrease is listed with “-”)27.773,634,481.7346.04
(i) Total comprehensive income2,021,916.55358,054,844.74360,076,761.2912,120,459.17372,197,220.46
(ii) Owners’ devoted and decreased capital
1.Common shares invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution-92,693,134.35-92,693,134.35-16,677,010.63-109,370,144.98
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution-92,693,134.35---
for owners (or shareholders)92,693,134.3516,677,010.63109,370,144.98
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 reserve9,648,600.839,648,600.83922,069.7310,570,670.56
1. Withdrawal15,558,156.1415,558,151,133,609.016,691,76
in the report period6.1465.20
2. Usage in the report period5,909,555.315,909,555.31211,539.336,121,094.64
(vi) Others
IV. Balance at the end of the period1,029,923,715.002,806,493,904.30-18,859,546.0812,115,806.61441,218,691.481,174,611,076.185,445,503,647.49367,105,767.995,812,609,415.48

Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun

Last 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

Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun

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

This Period

In RMB

ItemSemi-annual of 2023
Share capitalOther equity instrumentCapital reserveLess: Inventory sharesOther comprehensiReasonable reserveSurplus reserveRetained profitOtherTotal owners’ equity
Preferred stockPerpetual capital securitiesOther
ve income
I. The ending balance of the previous year1,029,923,715.002,740,508,510.57687,069.38440,983,306.301,064,136,866.985,276,239,468.23
Add: Changes of accounting policy17,219.50154,975.45172,194.95
Error correction of the last period
Other
II. The beginning balance of the current year1,029,923,715.002,740,508,510.57687,069.38441,000,525.801,064,291,842.435,276,411,663.18
III. Increase/ Decrease in the period (Decrease is listed with “-”)1,544,823.0278,388,703.8779,933,526.89
(i) Total comprehensive income171,081,838.22171,081,838.22
(ii) Owners’ devoted and decreased capital
1.Common shares invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution-92,693,134.35-92,693,134.35
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)-92,693,134.35-92,693,134.35
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 reserve1,544,823.021,544,823.02
1. Withdrawal in the report period4,278,881.394,278,881.39
2. Usage in the report period2,734,058.372,734,058.37
(vi) Others
IV. Balance at the end of the period1,029,923,715.002,740,508,510.572,231,892.40441,000,525.801,142,680,546.305,356,345,190.07

Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang JunLast period

In RMB

ItemSemi-annual of 2022
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 year1,044,597,881.002,753,002,178.3026,430,571.38422,893,071.22952,820,937.055,146,883,496.19
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

Legal Representative: Wu Dinggang Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Yang Jun

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

From 1 January 2023 to 30 June 2023(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.The Company 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., Ltd withSichuan 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 TransferFreely 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,

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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 capitalreserve (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.

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Ended as June 30, 2023, total share capital of the Company amounting to 1,029,923,715shares 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 shares8,111,3150.79%
1. State-owned shares
2. State-owned legal person’s shares1,141,0530.11%
3. Other domestic shares5,280,3690.51%
Including: Domestic legal person’s shares3,363,5390.33%
Domestic natural person’s shares1,916,8300.18%
4. Foreign shares1,689,8930.17%
Including: Overseas legal person’s shares
Overseas natural person’s shares1,689,8930.17%
(II)Unrestricted shares1,021,812,40099.21%
1. RMB Ordinary shares875,312,45984.99%
2. Domestically listed foreign shares146,499,94114.22%
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 ofcomputer 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 statement

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

In the reporting period, the consolidated financial statements of the Company cover 24 subsidiaries, includingSichuan Changhong Air-conditioner Co., Ltd, Zhongshan Changhong Electric Co., Ltd. and Zhongke MeilingCryogenic Technology Co., Ltd, and the rest.More details can be seen in the report “VII. Changes in the scope of the merger” and “XIII. Equity in otherentities”carry in the NoteIII. 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 forBusiness 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 case thatcapital reserve is insufficient to offset, the Company would adjust retained earnings.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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.

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 existing

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

when the ultimate controller commenced control in connection of preparing consolidated financial statement;in connection with preparing comparative statement, the Company shall consolidate the relevant assets 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.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 from

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

disposal 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 subsidiary is realized through multi pletran section sunlit loss ofcontrol and is a pack age deal. the accounting treatment of the sterna sections should be dealt with as onetransaction of disposal of the subsidiary until loss of control. However, before the Company loses total controlof 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 bereadily with drawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group,that are readily convertible to known amounts of cash and which are subject to an in significant risk of changesin 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 itemsexpressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of the balancesheet date. The conversion difference occurred is recorded into prevailing gains and losses, other than thedisclosure which is made according to capitalization rules for the exchange difference occurred from the specialforeign currency borrowings borrowed for constructing and producing the assets satisfying condition ofcapitalization. As for the foreign currency non-monetary items measured by fair value, the amount is thenconverted into RMB according to the spot exchange rate as of the confirmation day for fair value. And the

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

conversion difference occurred during the procedure is recorded into prevailing gains and losses directly aschange of fair value. As for the foreign currency non-monetary items measured by historical cost, conversionis made with the spot exchange rate as of the business day, with no change in RMB amount.

(2) Conversion of foreign currency financial statement

Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in 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 theaforementioned 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.

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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-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,

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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,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.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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,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.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

(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.

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 new

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

financial liabilities are substantially different from the existing financial liabilities, terminated for recognizedthe existing financial liabilities and at the same time recognize the new financial liabilities. If the financialliability is terminated for recognized in whole or in part, the difference between the carrying amount of thepart that terminated for recognized and the consideration paid (including the transferred non-cash assets or theassumed new financial liabilities) is included in current profits and losses.

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

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

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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 adjustedby 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-mentionedAccounting treatment methods for financial instrument impairment. The Company calculates the expectedcredit loss of contract assets on the balance sheet date, if the expected credit loss is greater than the book valueof provision for impairment of contract assets, the Company shall recognize the difference as an impairmentloss, debiting the "asset impairment loss" and crediting the "contract asset impairment provision". On thecontrary, the Company shall recognize the difference as an impairment gain and keep the opposite accountingrecords.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

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

(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 sametime 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 ofcommodity income 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.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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 carryingamount 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 which the 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 which

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

the 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 toequity 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 by itscost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes and otherexpenditure which is attributable to the assets directly; while cost of self-built investment real estate is formedwith all necessary expenditures occurred before construction completion of the assets arriving at the estimatedutilization 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 real

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

estate. 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.

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 value ofmore 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%

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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

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

Upon becoming a lessee under a lease contract, the Company is entitled to receive substantially all of theeconomic benefits, arising from the use of the identified assets during the period of use and is entitled torecognized the right-of-use assets at the sum of the present value of the lease liability, prepaid rent and initialdirect costs, and to recognized the depreciation and interest expenses respectively, when the use of theidentified assets dominates during that period of use.

When the Company becomes the lessee of a lease contract, for short-term leases of less than one year withouta purchase option and leases with a value of less than 40000 yuan (excluding sublease or expected sublease

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

assets), the Company elects to follow simplified treatment and record the related assets at cost or currentgain/loss on a straight-line basis over the lease period.

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

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 2023 to 30 June 2023(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. 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 haspaid 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.

24. Goodwill

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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.

25.Long-term deferred expenses

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

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 2023 to 30 June 2023(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

Upon becoming a lessee under a lease contract, the Company recognizes a lease liability for the leased-in assetat the present value of the unpaid lease payments, net of lease incentives (except for short-term leases andleases of low-value assets for which simplified treatment is elected), when it is entitled to receive substantiallyall of the economic benefits arising from the use of the identified asset during the period of use and is entitledto dominate the use of the identified asset during that 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. Special reserve

The work safety expense extracted according to the regulations will be included in the cost of relatedproducts or the current profit and loss, and also included in the special reserve; When used, it will be treatedseparately according to whether fixed assets are formed or not: if it is an expense expenditure, the specialreserve will be directly offset; If the fixed assets are formed, the expenses incurred shall be collected, and thefixed assets shall be confirmed when the predetermined usable state is reached, and at the same time, theequivalent special reserve shall be offset and the equivalent accumulated depreciation shall be confirmed.

30. Revenue

The Company’s sales revenue is mainly comprised of revenue from sale of goods, labor providing incomeand revenue from assignment of asset use rights.The Company has fulfilled the performance obligations in the contract, that is, revenue is recognized when 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.

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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 determinethe transaction price based on the amount payable on the assumption that the customer pays in cash whenobtaining the control of the goods or services. The difference between the transaction price and the contractconsideration shall be amortized by the effective interest method during the contract period. On the startingdate of the contract, if the Company expects that the interval between the customer's acquisition of control ofthe goods or 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.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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.

31. 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.

32. 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,

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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. For the confirmeddeferred income tax assets, the book value of deferred income tax assets shall be written down when it isestimated that it is likely that sufficient taxable income will not be obtained to offset the deferred income taxassets in the future. When sufficient taxable income is likely to be obtained, the amount written down will bereversed.

33.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 a lease contract, for short-term leases of less than one year withouta purchase option and leases with a value of less than 40,000 yuan (excluding sublease or expected subleaseassets), the Company elects to follow simplified treatment and record the related assets at cost or currentgain/loss on a straight-line basis over the lease period.When the Company becomes the lessor of a lease contract, it classifies the lease into an operating lease and afinance lease at the lease commencement date. A finance lease is a lease that transfers substantially all the risksand rewards associated with the ownership of an asset. Operating leases are leases other than finance leases.Rentals under operating leases are recognized as income on a straight-line basis over the lease term. Financeleases are recorded at the net lease investment value of the finance lease receivable, which is the sum of theunguaranteed residual value and the present value of the lease receipts not yet received as of thecommencement 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 the

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

lessee, 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.

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.

34. Held-for-sale

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

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

such 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 amountreverted 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.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

(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.

35. 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.

36. 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 tothe taxlaws on the events and transactions incurred in the current period. The deferred income tax refersto thedifference between the carrying amount and the deferred tax assets and deferred tax liabilities at CurrentYear-end recognized in the method of debit in the balance sheet.

37. 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.

38. 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, incomeand expense. 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 futureperiods.

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

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

(1) Inventory impairment provision

The Company's provision for impairment of inventories on the balance sheet date is the part of the netrealizable value lower than the cost of inventories. The net realizable value of the inventory of goods that aredirectly used for sale, such as the goods in stock, the goods sent out, and the materials for sale, and the low-consumption goods, shall be determined by the amount of the estimated selling price of the inventory minusthe estimated selling expenses and relevant taxes. The net realizable value of the material inventory held forproduction is determined by the amount of the estimated selling price of the finished product produced minusthe estimated cost to be incurred at the time of completion, the estimated selling expenses and relevant taxes.

(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

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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

39. 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.

40. Change of significant accounting policies and accounting estimates

(1) Change of significant accounting policy

Contents and reasons of changes in accounting policiesApproval procedureRemark
On November 30, 2022, the Ministry of Finance issued the "Interpretation of Accounting Standards for Business Enterprises No. 16". WhenRelevant accounting policy changes have been approved

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Contents and reasons of changes in accounting policiesApproval procedureRemark

preparing the financial statements for the half year of 2023, the companyimplemented the relevant accounting standards interpretation andprocessed them in accordance with relevant bridging regulations.

preparing the financial statements for the half year of 2023, the company implemented the relevant accounting standards interpretation and processed them in accordance with relevant bridging regulations.at the 32nd meeting of the 10th Board of Directors of the Company

The names and amounts of the report items that are significantly affected are as follows:

Affected itemsConsolidated statementParent company statement
2022-12-31 (before change)Adjustment amount2023-1-1 (after change)2022-12-31 (before change)Adjustment amount2023-1-1 (after change)
Deferred income tax assets156,630,537.434,935,157.87161,565,695.30125,037,558.042,683,181.79127,720,739.83
Deferred income tax liabilities12,750,747.304,758,755.7817,509,503.088,642,999.012,510,986.8411,153,985.85
Surplus public441,201,471.9817,219.50441,218,691.48440,983,306.3017,219.50441,000,525.80
Undistributed profit909,082,037.66167,328.13909,249,365.791,064,136,866.98154,975.451,064,291,842.43
Minority equity370,748,395.26-8,145.54370,740,249.72

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

(3) The implementation of new accounting standards or standard interpretations for the first time since 2023involves adjusting the relevant items in the financial statements at the beginning of the year of the firstimplementationExplanation of the merger and adjustment of the parent company's balance sheet: Starting from January 1,2023, the company will implement the "Interpretation of Accounting Standards for Business Enterprises No.16", and adjust the retained earnings and other related financial statement items at the beginning of the year ofthe first implementation based on the cumulative impact of the interpretation of the first implementation of thestandards. The specific adjustment details are shown in 40 and (1).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% or7%
Education surchargeTurnover tax3%
Local education surchargeTurnover tax2%
Corporate income taxTaxable income15%,20%,25%,22%,29%,30%
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:

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

NameIncome tax rate
Changhong Meiling Co., Ltd.15%
Zhongke Meiling Cryogenic Technology Co., Ltd.15%
Zhongshan Changhong Electric Co., Ltd.15%
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., Ltd.15%
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., Ltd15%
Hefei Changhong Meiling Life appliance Co., Ltd.15%
CH-Meiling International (Philippines) Inc.30%
Changhong Ruba Trading Company (Private) Limited29%
CHANGHONG MEILING ELECTRIC INDONESIA,PT22%

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 ofScience 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.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

(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 thequalification of high-tech enterprise certification on 22 December 2022, and enjoys 15% rate for the incometax for State Hi-Tech Enterprise for three years term.

(7) The subsidiary Hong Yuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. has passed thequalification of high-tech enterprise certification on 22 December 2022, and enjoys 15% rate for the incometax 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 4 November 2022, and enjoys 15% rate for the income tax for State Hi-TechEnterprise for three years term.

(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 Implementation ofPreferential Income Tax Policies for Small & Micro Enterprises (No.: 6 of 2023)” of the Ministry of Financeand the State Administration of Taxation, and temporarily implements below policies: the part of annualtaxable income that does not exceed one million yuan is included in taxable income by 25% after a reduction,and corporate income tax is paid at a tax rate of 20%, valid until December 31, 2024; while the part of annualtaxable income exceeds one million yuan but not exceeding three million yuan is included in taxable income

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

by 25% after a reduction, and corporate income tax is paid at a tax rate of 20%, which is valid until December31, 2024.

(13) The subsidiary Hebei Meiling Wulian Technology Co., Ltd. has passed the qualification of high-techenterprise certification on 18 September 2021, and enjoys 15% income tax rate for national payroll technologyeenterprises for three years term.

(14) The subsidiary Hebei Changhong Meiling Life Appliance Co., Ltd. has passed the qualification of high-tech enterprise certification on 18 November 2022, and enjoys 15% income tax rate for national payrolltechnology eenterprise for three years term.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, 2023; “period-end” refers to Jun. 30, 2023; “Current Period” refers to Jan. 1 to Jun.30, 2023; “the last period” refers to Jan. 1 to Jun. 30, 2022; the currency is RMB.

1. Monetary fund

ItemEnding balanceOpening balance
Cash35,553.7121,243.42
Bank deposit7,273,692,594.586,119,260,150.47
Other monetary fund604,060,046.35712,717,808.79
Interest receivable on deposit9,455,584.137,422,576.45
Total7,887,243,778.776,839,421,779.13
Including: total amount deposited in overseas30,493,701.019,295,065.32
Total use of restricted funds632,210,953.32718,777,132.92

Other monetary fund:

ItemEnding balanceOpening balance
Cash deposit603,498,782.91712,177,743.52
Co-managed account funds506,802.20506,171.40
Union Pay online54,461.2433,893.87
Total604,060,046.35712,717,808.79

(1) At the end of Team, the funds deposited in Sichuan Changhong Group Finance Co., Ltd. (hereinafterreferred to as "Changhong Finance Company", a non-bank financial institution approved by China BankingRegulatory Commission (CBRC) [YJF (2013) No.423]) were converted into functional currency, totallingRMB3,692,770,838.31, of which RMB 2,351,440,000.00 was time deposit, RMB1,183,730,703.78 wascurrent deposit, and RMB 157,600,134.53 was the earnest money.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

(2) The restricted monetary funds are the earnest money of RMB 603,498,782.91, the restricted balance ofthe co-management account of RMB506,802.20, and the bank deposit of RMB 28,205,368.21 frozen due tolitigation.

2. Tradable financial assets

ItemBalance at year-endBalance at year-begin
Financial assets measured at fair value and whose changes are included in current gains/losses192,881,811.8957,660,588.67
Including: Derivative financial assets72,248,082.8257,660,588.67
Principal and interest of wealth management products120,633,729.07

Transactional financial assets in this period are caused by forward foreign exchange contracts, unconfirmedfirm commitment evaluation and new wealth management products.

3. Note receivable

(1) Notes endorsement or discount and undue on balance sheet date

N/A

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

ItemAmount of accounts receivable transferred at year-end
Bank acceptance300,000.00
Trade acceptance75,254,715.65
Total75,554,715.65

(3) Bad debt provision of note receivable that has been accrued, withdrawn, and reversed this year

N/A

(4) No note receivable actually written off in this year

4. Account receivable

(1) Category of account receivable by bad debt accrual

CategoryAmount at year-end
Book balanceBad debt provisionBook value
AmountRatio (%)AmountRatio (%)
Account receivable that withdrawal bad debt provision by single item895,845,148.8030.62140,437,086.1915.68755,408,062.61
Including: current payment with related party827,188,790.9328.27112,043,400.7413.55715,145,390.19
Account receivable with letter of credit32,327,946.921.1132,327,946.92

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

CategoryAmount at year-end
Book balanceBad debt provisionBook value
AmountRatio (%)AmountRatio (%)
Account receivable with single minor amount but withdrawal single item bad debt provision36,328,410.951.2428,393,685.4578.167,934,725.50
Account receivable withdrawal bad debt provision by portfolio2,030,047,327.0869.38158,530,311.757.811,871,517,015.33
Including: account receivable of engineering customers209,090,087.007.1537,951,059.3818.15171,139,027.62
Receivables other than engineering customers1,820,957,240.0862.23120,579,252.376.621,700,377,987.71
Total2,925,892,475.88100.00298,967,397.9410.222,626,925,077.94

Continued

CategoryAmount at year-begin
Book balanceBad debt provisionBook value
AmountRatio (%)AmountRatio (%)
Account receivable that withdrawal bad debt provision by single item781,312,227.1849.90140,035,432.6017.92641,276,794.58
Including: current payment with related party651,212,122.1441.60111,191,911.6517.07540,020,210.49
Account receivable with letter of credit70,940,571.454.5370,940,571.45
Account receivable with single minor amount but withdrawal single item bad debt provision59,159,533.593.7728,843,520.9548.7630,316,012.64
Account receivable withdrawal bad debt provision by portfolio784,251,607.9750.10118,656,456.7015.13665,595,151.27
Including: account receivable of engineering customers201,410,848.7012.8724,773,169.6412.30176,637,679.06
Receivables other than engineering customers582,840,759.2737.2393,883,287.0616.11488,957,472.21
Total1,565,563,835.15100.00258,691,889.3016.521,306,871,945.85

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 theminor single receivables, and withdrawal bad debt provision by combination shows no risk characteristicof the receivables, 87 clients involved.

2) Account receivable withdrawal bad debt provision by portfolio

A. Account receivable of engineering customers

Account ageBalance at year-end
Book balanceBad debt provisionProvision ratio (%)
Within 3 months (3 months included)20,993,865.75
More than 3 months and less than 6 months (6 months included)18,706,778.91

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Account ageBalance at year-end
Book balanceBad debt provisionProvision ratio (%)
Over 6 months and within one year (One year included)49,497,042.61
Over one year - within 2 years (2 years included)97,118,733.2919,423,746.6620.00
Over 2 years - within 3 years (3 years included)8,492,707.444,246,353.7250.00
Over 3 years14,280,959.0014,280,959.00100.00
Total209,090,087.0037,951,059.38-

Continued

Account ageBalance at year-begin
Book balanceBad debt provisionProvision ratio (%)
Within 3 months (3 months included)46,445,327.67
More than 3 months and less than 6 months (6 months included)18,955,344.03
Over 6 months and within one year (One year included)42,492,137.30
Over one year - within 2 years (2 years included)73,286,167.3814,657,233.4820.00
Over 2 years - within 3 years (3 years included)20,231,872.3210,115,936.1650.00
Over 3 years100.00
Total201,410,848.7024,773,169.64

B. Receivables other than engineering customers

Account ageBalance at year-end
Book balanceBad debt provisionProvision ratio (%)
Within 3 months (3 months included)1,628,734,258.4116,287,342.581.00
More than 3 months and less than 6 months (6 months included)32,679,767.593,267,976.7610.00
Over 6 months and within one year (One year included)13,861,990.092,772,398.0220.00
Over one year - within 2 years (2 years included)68,867,704.0934,433,852.0550.00
Over 2 years - within 3 years (3 years included)64,979,184.6951,983,347.7580.00
Over 3 years11,834,335.2111,834,335.21100.00
Total1,820,957,240.08120,579,252.37-

Continued

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Account ageBalance at year-begin
Book balanceBad debt provisionProvision ratio (%)
Within 3 months (3 months included)388,904,609.293,889,046.091.00
More than 3 months and less than 6 months (6 months included)27,600,654.772,760,065.4810.00
Over 6 months and within one year (One year included)11,098,413.192,219,682.6420.00
Over one year - within 2 years (2 years included)136,495,488.0368,247,744.0250.00
Over 2 years - within 3 years (3 years included)9,874,225.807,899,380.6480.00
Over 3 years8,867,368.198,867,368.19100.00
Total582,840,759.2793,883,287.06

(2) By account age

Account ageBalance at year-endBalance at year-begin
Within 3 months (3 months included)2,394,643,994.46839,113,924.70
More than 3 months and less than 6 months (6 months included)104,895,819.62319,861,920.01
Over 6 months and within one year (One year included)84,052,227.3794,045,030.09
Over one year - within 2 years (2 years included)203,369,644.26241,992,516.95
Over 2 years - within 3 years (3 years included)89,504,254.9232,346,833.25
Over 3 years49,426,535.2538,203,610.15
Total2,925,892,475.881,565,563,835.15

(3) Bad debt provision of accounts receivable this year

CategoryBalance at year-beginChanges this yearBalance at year-end
AccrualWithdrawal or reversalResale or write-offOther decreases
Bad debt provision258,691,889.3046,016,573.153,588,165.07-2,152,899.44298,967,397.94
Total258,691,889.3046,016,573.153,588,165.07-2,152,899.44298,967,397.94

(4) Account receivable actually written-off in Current Year: N/A.

(5) Top five receivables collected by arrears party amounting to 1,735,301,853.62 yuan in total, accounted for

59.31% of the receivables of current year-end, the bad debt provision accrual correspondingly amounting to153,978,176.56 yuan at year-end balance.

(6) Account receivable terminated recognization due to the transfer of financial assets of 1,421,087,329.97yuan.

(7) No assets and liability transfer Account receivable and continues to involve at year-end.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

5. Receivables financing

ItemEnding balanceOpening balance
Bank acceptance1,604,435,165.241,446,358,719.88
Total1,604,435,165.241,446,358,719.88

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

ItemAmount pledged at period-endAmount pledged at period-begin
Bank acceptance444,382,921.22405,400,483.49

Note: with purpose of improving the note utilization, the Company draw up bank acceptance by pledge partsof the outstanding notes receivable to the bank. For details of the pledge of bills receivable, see Note VI.64.Assets with restricted ownership or use rights.

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

ItemAmount derecognition at period-endAmount without derecognition at period-end
Bank acceptance796,716,204.94
Total796,716,204.94

6. Accounts paid in advance

(1) Age of account paid in advance

ItemEnding balanceOpening balance
AmountRatio (%)AmountRatio (%)
Within one year17,214,800.0488.2539,700,777.6986.57
1-2 years670,023.283.435,042,628.2911.00
2-3 years958,898.564.921,116,085.572.43
Over 3 years663,158.493.40
Total19,506,880.37100.0045,859,491.55100.00

(2) Top 5 of account paid in advance in balance at period-end amounting to10,927,827.80yuan, accountedfor56.02% of the account.

7. Other account receivable

ItemEnding balanceOpening balance
Other account receivable84,080,620.2388,354,803.24
Total84,080,620.2388,354,803.24

(1) Category of other account receivable

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

NatureBook balance at period-endBook balance at period-begin
Export rebate42,386,850.4613,304,094.59
Cash deposit20,679,027.0053,876,630.71
Loans of employee’s pretty cash20,993,064.3319,142,320.86
Related party not in consolidation statement664,271.43716,725.90
Advance money temporary489,599.013,122,122.93
Other503,366.481,174,866.78
Total85,716,178.7191,336,761.77

(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. 20231,690,724.901,291,233.632,981,958.53
Book balance of other account receivable in Current Period as at 1 Jan. 2023
--Transfer to the second stage
-- Transfer to the third stage
-- Reversal to the second stage
-- Reversal to the first stage
Provision in Current Period-1,346,818.25-1,346,818.25
Reversal in Current Period
Conversion in Current Period
Write off in Current Period
Other change418.20418.20
Balance as at 30 Jun. 2023344,324.851,291,233.631,635,558.48

(3) By account age

Account ageEnding balanceOpening balance
Within 3 months (3 months included)70,162,312.0532,703,626.46
More than 3 months and less than 6 months (6 months included)2,105,772.113,033,052.73
Over 6 months and within one year (One year included)2,121,730.119,242,123.46
Over one year - within 2 years (2 years included)4,722,444.0116,985,265.38

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Account ageEnding balanceOpening balance
Over 2 years - within 3 years (3 years included)1,969,439.0022,359,916.12
Over 3 years4,634,481.437,012,777.62
Total85,716,178.7191,336,761.77

(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 IExport rebate42,265,562.52Within 3 months49.31
Unit IICash deposit10,000,000.00Within 3 months11.67
Unit IIIPretty cash1,433,682.65Within 3 months ,2-3 years1.67
Unit IVPretty cash1,307,420.291-2 years1.53
Unit VPretty cash1,195,854.22Within 3 months1.40
Total56,202,519.6865.58

(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 materials233,187,901.466,749,428.55226,438,472.91
Stock commodities1,150,829,725.9147,629,987.511,103,199,738.40
Low value consumable articles2,620,734.88800,989.071,819,745.81
Goods in transit896,671,476.946,775,018.04889,896,458.90
Goods-in-process8,908,329.878,908,329.87
Contract performance cost29,232,475.4729,232,475.47
Deferred expense for mould40,999,693.1840,999,693.18
Total2,362,450,337.7161,955,423.172,300,494,914.54

(Continued)

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemOpening balance
Book balanceInventory price decline provision/contract performance cost impairment provisionBook value
Raw materials174,848,711.846,676,011.97168,172,699.87
Stock commodities938,676,768.8848,374,183.50890,302,585.38
Low value consumable articles2,653,770.39871,871.721,781,898.67
Goods in transit578,924,325.366,074,817.77572,849,507.59
Goods-in-process7,901,880.537,901,880.53
Contract performance cost41,622,651.0841,622,651.08
Deferred expense for mould27,675,710.5927,675,710.59
Total1,772,303,818.6761,996,884.961,710,306,933.71

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

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
AccrualOtherReversal or resellingOther
Raw materials6,676,011.971,774,507.491,701,090.916,749,428.55
Stock commodities48,374,183.5014,540,441.6915,211,189.6273,448.0647,629,987.51
Goods in transit6,074,817.771,684,831.46984,631.196,775,018.04
Low value consumable articles871,871.7270,882.65800,989.07
Total61,996,884.9617,999,780.6417,967,794.3773,448.0661,955,423.17

(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

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Warranty34,142,084.992,185,321.6331,956,763.364,301,610.03770,687.903,530,922.13
Total34,142,084.992,185,321.6331,956,763.364,301,610.03770,687.903,530,922.13

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

ItemAccrualWithdrawal or reversalResale or write-offReason
Bad debt provision1,414,633.73
Total1,414,633.73

10. Non-current assets coming due within one year

ItemsBalance at year-endBalance at year-begin
Debt investment due within one yea292,055,597.22170,167,638.89
Total292,055,597.22170,167,638.89

11. Other current assets

ItemBalance at year-endBalance at year-begin
Value-added tax to be deducted71,901,466.0939,540,856.28
Advance payment of income tax29,557,102.7122,673,762.88
Contract acquisition cost4,528,691.045,654,727.03
Local sales tax in Pakistan741,552.161,269,125.78
Fixed deposits and interest211,840,756.9450,559,479.17
Other693,268.51891,480.71
Total319,262,837.45120,589,431.85

12.Creditor's rights investment

ItemsBalance at year-endBalance at year-begin
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Large certificates of deposit182,033,111.11182,033,111.11121,543,750.00121,543,750.00
Total182,033,111.11182,033,111.11121,543,750.00121,543,750.00

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

13. Long-term equity investment

Invested enterpriseBalance at year-beginChanges in Current YearBalance at year-endBalance at year-end 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.19,899,176.44-13,428.805,793,600.0014,092,147.64
2.Sichuan Zhiyijia Network Technology Co., Ltd. note151,850,179.6111,553,358.321,629,022.6461,774,515.29
3.Hong Yuan Ground Energy Heat Tech. Co., Ltd.note217,019,041.81-555,510.5516,463,531.26
4.Sichuan Tianyou Guigu Technology Co., Ltd.note33,110,581.87-165,237.442,945,344.43
5.Chengdu Guigu Environmental Tech. Co., Ltd.note48,505,448.77-452,192.098,053,256.68
6.ChanghongRuba Electric Company(Private)Ltd.
7.Hefei Xinmei Solar Energy Technology Co., Ltd.note62,177,980.002,177,980.00
Total100,384,428.5012,544,969.449,600,602.64103,328,795.30

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(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 controllingshareholder Sichuan Changhong Electric Co., LTD, targeting to jointly establish Sichuan ZhiyijiaNetwork Technology Co., Ltd. On 5 January 2015, Sichuan Zhiyijia Network Technology Co., Ltd wasofficially incorporated with registered capital of 50 million yuan, among which, the Company madecontribution of 15 million yuanwith shareholding proportion of 30% and Sichuan Changhong ElectricCo., LTD made contribution of 35 million yuanwith shareholding proportion of 70%. In 2019, theCompany increase capital of 29,087,040.00 yuan (of which: 20 million yuan reckoned in registeredcapital and 9,087,040 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”) andHengyou yuan Technology Development Group Co., Ltd. (“Hengyou yuan”) cooperated to establishHong Yuan Ground Energy Heat Technology Co., Ltd. on 28 October 2015. The registered capital ofthe company is 50 million yuan, among which, Changhong Air Conditioner contributed 24.5 millionyuan, accounting for 49% of the registered capital, and Hengyou yuan 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 withregistered capital of 100 million yuan. Our subsidiary Changhong Air Conditioner made capitalcontribution of RMB 25 million in cash, accounting for 25% of the registered capital. Chengdu JiaodaoProperty Development Company made capital contribution of 20 million yuan, accounting for 20% ofthe registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capitalcontribution 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 theregistered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capitalcontribution of 5 million yuan, accounting for 5% of the registered capital. Jiangsu Runye InvestmentCo., Ltd. made capital contribution of 10 million yuan, accounting for 10% of the registered capital. InNovember 2015, Jiangsu Runye Investment Co., Ltd. transferred all its 10% shares to Sichuan ShuyeJiachen Real Estate Development Co., Ltd.;Chengdu Dongyu Shangmao Co., Ltd made capitalcontribution of 15 million yuan, accounting for 15% of the registered capital.In November 2015,Chengdu Dongyu Shangmao Co., Ltd. transferred all its 15% shares to Chengdu Dongyu No. 1Enterprise Management Consulting Partnership (Limited Partnership).In 2016, shareholders meeting ofSichuan Tianyou Guigu Technology Co., Ltd. agreed to reduce the 50 million Yuan capital, theshareholders are reducing the capital by ratio of share-holding. After capital reduction, subsidiaryChanghong Air conditioner contributed 12.5 million Yuan, representing 25% of the registered capital.Note 4: Chengdu Guigu Environmental Tech. Co., Ltd. was incorporated on 22 May 2013 withregistered capital of 40 million yuan. Our subsidiary Changhong Air Conditioner made capitalcontribution of 10 million yuan, accounting for 25% of the registered capital. Chengdu Jiaodao PropertyDevelopment Company made capital contribution of 8 million yuan, accounting for 20% of the

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capitalcontribution of 8 million yuan, accounting for 20% of the registered capital. Mianyang InvestmentHolding (Group) Co., Ltd made capital contribution of 2 million yuan, accounting for 5% of theregistered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capitalcontribution of 2 million yuan, accounting for 5% of the registered capital. Sichuan Shuye JiachenProperty Development Company made capital contribution of 4 million yuan, accounting for 10% ofthe registered capital. Chengdu Dongyu Shangmao Co., Ltd made capital contribution of 6 million yuan,accounting for 15% of the registered capitalNote 5: Zhongshan Changhong, a subsidiary of the Company, entered into a supplemental joint ventureagreement with RUBA Comprehensive Trading Company in 2017, pursuant to which, both partiesagreed to increase capital contribution of US$ 1,130,191.00, among which, Zhongshan Changhongsubscribed to contribute US$ 452,076.00 (equivalent to 3,001,649.02 yuan on the actual contributiondate) according to the original shareholding proportion of 40% and RUBA Comprehensive TradingCompany subscribed to contribute US$ 678,115.00 according to the original shareholding proportion of60%.Note 6: Hefei Meiling Solar Energy Technology Co., Ltd. was incorporated on April 18, 2002, with aregistered capital of 10 million yuan. Subsidiary Hefei Meiling Group Holdings Limited invested 3.1114million 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 AssetManagement Co., Ltd. invested 1.9166 million yuan, accounting for 19.166% of the registered capital.

14. Other non-current financial assets

ItemEnding balanceOpening balance
Sichuan Changhong Group Finance Co., Ltd.542,489,224.37542,489,224.37
Sichuan Hongyun New-Generation Information technology Venture Capital Fund Partnership (limited partnership)41,015,878.3641,015,878.36
Changhong Group Sichuan Shenwan Hongyuan Strategic New Industrial Parent Fund Partnership (limited partnership)40,044,345.5840,044,345.58
Huishang Bank Co., Ltd.5,000,000.005,000,000.00
Total628,549,448.31628,549,448.31

15. Investment real estate

(1) Investment real estate measured at costs

ItemHouse and buildingsTotal
I.Original book value
1.Balance at year-begin62,361,143.4762,361,143.47

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemHouse and buildingsTotal
2.Increase in this year
3.Decrease in this year
4.Balance at year-end62,361,143.4762,361,143.47
II.Accumulated depreciation and accumulated amortization
1.Balance at year-begin9,463,082.589,463,082.58
2.Increase in this year988,786.61988,786.61
(1)Provision or amortization988,786.61988,786.61
3.Decrease in this year
4.Balance at year-end10,451,869.1910,451,869.19
III.Impairment provision
IV.Book value
1.Ending book value51,909,274.2851,909,274.28
2. Opening book value52,898,060.8952,898,060.89

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

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

NameOriginal book valueAccumulated depreciationImpairment provisionBook value
House and buildings5,795,017.722,607,186.173,187,831.55

(4) Investment real estate without property certification held

ItemBook valueReasons for failing to complete property rights certificate
J04workshop27,114,336.31Related property rights in procedure
J03workshop18,737,282.11Related property rights in procedure
J20 air compressor station workshop1,338,934.08Related property rights in procedure
J18 opening and closing office647,949.55Related property rights in procedure
Total47,838,502.05

16. Fixed assets

ItemEnding book valueOpening book value
Fixed assets2,160,693,196.552,197,260,683.20
Disposal of fixed assets32,293,183.7632,293,183.76
Total2,192,986,380.312,229,553,866.96

16.1 Fixed assets

(1) Fixed assets

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemHouse and buildingsMachinery equipmentTransport equipmentOther equipmentTotal
I.Original book value
1.Balance at year-begin1,712,329,446.721,865,348,912.3234,208,114.60243,498,921.363,855,385,395.00
2.Increase in this year25,653,197.7150,705,887.101,103,299.9814,907,151.9492,369,536.73
(1)Purchase490,616.612,095,819.5338,938.05791,757.343,417,131.53
(2)Construction in progress transfer-in25,162,581.1048,610,067.571,064,361.9314,106,565.4788,943,576.07
(3)Transfer-in of investment real estate8,829.138,829.13
3.Decrease in this year46,817.0064,221,505.55476,682.085,443,479.6270,188,484.25
(1)Dispose or retirement46,817.0042,519,363.60361,051.435,281,934.9348,209,166.96
(2)Construction in progress transfer-in17,772,238.7017,772,238.70
(3)Decreased for change of foreign rate115,630.65161,544.69277,175.34
(4)Temporary estimated decrease3,929,903.253,929,903.25
4.Balance at year-end1,737,935,827.431,851,833,293.8734,834,732.50252,962,593.683,877,566,447.48
II.Accumulated depreciation
1.Balance at year-begin455,256,950.471,064,311,933.4822,446,081.44114,040,153.791,656,055,119.18
2.Increase in this year27,438,255.6071,816,205.511,657,445.7210,174,918.40111,086,825.23
(1)Accrual27,438,255.6071,816,205.511,657,445.7210,174,918.40111,086,825.23
3.Decrease in this year22,180.2945,982,327.20373,083.545,023,272.9051,400,863.93
(1)Dispose or retirement22,180.2938,410,281.87340,863.374,951,895.8943,725,221.42
(2)Construction in progress transfer-in7,572,045.337,572,045.33
(3)Decreased for change of foreign rate32,220.1771,377.01103,597.18
4.Balance at year-end482,673,025.781,090,145,811.7923,730,443.62119,191,799.291,715,741,080.48
III.Impairment provision
1.Balance at year-begin1,060,299.521,009,293.102,069,592.62
2.Increase in this year
3.Decrease in this year924,106.5613,315.61937,422.17
(1)Dispose or retirement924,106.5613,315.61937,422.17
4.Balance at year-end136,192.96995,977.491,132,170.45
IV.Book value
1.Ending book value1,255,262,801.65761,551,289.1211,104,288.88132,774,816.902,160,693,196.55
2. Opening book value1,257,072,496.25799,976,679.3211,762,033.16128,449,474.472,197,260,683.20

The new fixed assets in this year mainly due to the 88,943,576.07 yuan transfer from construction inprocess; decrease of the fixed assets in Current Year mainly including assets dispose for retirement.

(2) Fixed assets temporary idle at year-end.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

NameOriginal book valueAccumulated depreciationImpairment provisionBook value
House and buildings477,550,851.88149,722,150.78327,828,701.10

(3) Fixed assets leased through operating lease at year-end

ItemOriginal book valueAccumulated depreciationImpairment provisionBook value
House and buildings68,259,223.9424,519,269.1243,739,954.82
Machinery equipment25,239,848.6814,358,682.6710,881,166.01
Other equipment10,720.0010,184.00536.00
Total93,509,792.6238,888,135.7954,621,656.83

(4) Fixed assets without property certificate

ItemBook valueReason of not complete the property certificate
J07 electrical workshop44,560,929.51Related property rights in procedure
Testing and experiment Centre building36,562,708.23Related property rights in procedure
J02workshop28,665,997.64Related property rights in procedure
J05 evaporator and condenser workshop27,606,764.56Related property rights in procedure
J01workshop26,569,665.08Related property rights in procedure
J06 central air-conditioner workshop18,746,521.73Related property rights in procedure
J50finished product warehouse16,517,248.77Related property rights in procedure
J51finished product warehouse16,026,355.05Related property rights in procedure
J53finished product warehouse12,160,761.67Related property rights in procedure
J52finished product warehouse11,620,348.71Related property rights in procedure
J54finished product warehouse11,365,905.87Related property rights in procedure
J55finished product warehouse10,478,943.02Related property rights in procedure
J56 finished product warehouse10,478,943.02Related property rights in procedure
J09raw material warehouse6,354,485.42Related property rights in procedure
J10raw material warehouse4,910,894.55Related property rights in procedure
J11raw material warehouse4,837,841.15Related property rights in procedure
J08 packing materials warehouse4,407,803.29Related property rights in procedure
J17 chemical storage1,509,106.19Related property rights in procedure
J15 house of refrigerant forklift1,478,859.01Related property rights in procedure
J16 chemical storage1,217,926.31Related property rights in procedure

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemBook valueReason of not complete the property certificate
J19 main guard room361,280.93Related property rights in procedure
J19A guard room191,669.11Related property rights in procedure
J19D guard room140,873.20Related property rights in procedure
J19E guard room140,873.20Related property rights in procedure
Total296,912,705.22

(5) No fixed assets held for sale at year-end

16.2 Disposal of fixed assets

ItemAmount at year-endAmount at year-beginReasons for disposal transferred
Relevant assets disposal for reserved lands32,293,183.7632,293,183.76Relocation for land reserve

Pursuant to the urban planning requirements of Hefei Municipal Government and the Government ofFeidong county, the land reserve center of Feidong county will purchase and store the land use right ofan economic development zone located at Feidong county, Hefei city, which is owned by the Company’ssubordinate companies, Equator Electric and Equator Home Appliance, respectively, with an area of19,245.09 sq.m. (Approximately 28.87 mu, Land Use Right Certificate No.: Dong Guo Yong (2008)No. 0366, the stated use of the land is for industrial purpose) and an area of 46,161.9 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 isapproximately 36 million yuan, of which the consideration for the land use right owned by EquatorElectric and Equator Home Appliance is approximately 10.59 million yuan and 25.41 million yuan,respectively. The Company has completed the relocation of occupants of the premises, and the net fixedassets in relation to the land will transfer as disposal, accounting treatment will be conduct in line withrelevant rules upon receiving of the relocation compensation.No impairment of relevant assets disposal for reserved lands at year-end.

17. Construction in progress

ItemBalance at year-endBalance at year-begin
Construction in progress62,914,871.2966,522,492.77
Total62,914,871.2966,522,492.77

(1) Details of construction in progress

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemsAmount at year-endAmount at year-begin
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Meiling extrusion line relocation and capacity expansion project11,567,669.0311,567,669.036,938,682.026,938,682.02
Industrial Internet Changhong Meiling Promotion Project7,137,735.857,137,735.8513,041,733.9313,041,733.93
Multi-door shell molding line5,166,461.815,166,461.815,053,126.875,053,126.87
Laboratory investment projects3,842,360.053,842,360.052,384,325.392,384,325.39
Front-end expansion project of Hefei base with an annual output of 10 million refrigerator cabinets3,361,716.273,361,716.273,242,813.993,242,813.99
Commercial kitchen3,100,427.303,100,427.302,627,743.252,627,743.25
Large refrigerator jl line production capacity upgrading project2,434,540.152,434,540.15
Door lining to homemade phase I project2,321,860.502,321,860.502,328,292.802,328,292.80
Large refrigerator door hair line efficiency improvement and transformation project2,235,416.562,235,416.56
Full value data operation and Ling Cloud platform2,046,226.412,046,226.41
Accident response pool construction1,966,932.761,966,932.761,539,361.491,539,361.49
Supporting production equipment of washing machine1,919,823.021,919,823.021,919,823.021,919,823.02
Large refrigerator low boiling point foaming equipment renovation project1,325,333.391,325,333.391,652,011.041,652,011.04
Enthalpy difference laboratory project1,266,165.001,266,165.00
Freeze lining structure changed to bottom package side1,039,571.511,039,571.512,886,521.552,886,521.55
Liquid nitrogen tank production line construction560,521.11560,521.11560,521.11560,521.11
Efficiency improvement of refrigerator cabinet107,974.38107,974.38182,748.20182,748.20
Technical transformation project of Zhongshan Changhong7,547.177,547.17615,619.91615,619.91
Comprehensive renovation project of mixed flow of rainwater and sewage in freezer park and living area6,995,545.896,995,545.89
Refrigerator park rainwater system rectification project2,597,950.952,597,950.95
Refrigerator park 35 kV substation construction project1,273,661.541,273,661.54
21 years of Manufacturing System Automation Project (Phase I)186,700.00186,700.00
Meiling PLM project237,168.14237,168.14
Other petty projects11,506,589.0211,506,589.0210,258,141.6810,258,141.68

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemsAmount at year-endAmount at year-begin
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Total62,914,871.2962,914,871.2966,522,492.7766,522,492.77

(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 refrigerator cabinets3,242,813.99118,902.283,361,716.27Self-raised

(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 cabinets4,121.2477%85%

18. Right-of-use assets

ItemHouse and buildingsTotal
I.Original book value
1.Balance at year-begin58,322,978.9558,322,978.95
2.Increase in this year1,534,315.051,534,315.05
(1) Rent in1,534,315.051,534,315.05
3. Decrease in this year11,230,936.2811,230,936.28
(1)The lease expires11,230,936.2811,230,936.28
4.Balance at year-end48,626,357.7248,626,357.72
II.Accumulated depreciation
1.Balance at year-begin21,676,843.8521,676,843.85
2. Increase in this year4,155,504.304,155,504.30
(1)Accrual4,155,504.304,155,504.30
3. Decrease in this year10,142,864.3910,142,864.39
(1)The lease expires10,142,864.3910,142,864.39

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemHouse and buildingsTotal
4.Balance at year-end15,689,483.7615,689,483.76
III.Impairment provision
IV.Book value
1.Ending book value32,936,873.9632,936,873.96
2. Opening book value36,646,135.1036,646,135.10

The Company accrual the depreciation on right-of-use assets from the commencement date of the leaseperiod. Depending on use of the assets, amount of accrual will included in costs of relevant assets orcurrent gain/loss.

19. Intangible assets

(1) Intangible assets

ItemLand use rightTrademark special rightNon-patent technologyOtherTotal
I.Original book value
1.Balance at year-begin864,798,616.68283,292,439.34637,791,820.51159,787,652.351,945,670,528.88
2.Increase in this year54,097,658.1628,102,115.8482,199,774.00
(1) Internal research54,097,658.1628,023,329.8782,120,988.03
(2)Other78,785.9778,785.97
3.Decrease in this year138,785.97400,000.00538,785.97
(1)Other decreases138,785.97400,000.00538,785.97
4.Balance at year-end864,798,616.68283,292,439.34691,750,692.70187,489,768.192,027,331,516.91
II.Accumulated amortization
1.Balance at year-begin214,959,291.84283,292,439.34449,672,240.1551,575,018.09999,498,989.42
2.Increase in this year9,200,721.8951,637,960.4213,991,650.3174,830,332.62
(1)Accrual9,200,721.8951,637,960.4213,991,650.3174,830,332.62
3.Decrease in this year718,583.61718,583.61
(1)Other decreases718,583.61718,583.61
4.Balance at year-end224,160,013.73283,292,439.34501,310,200.5764,848,084.791,073,610,738.43
III.Impairment provision
1.Balance at year-begin33,820,367.2011,783,164.0545,603,531.25
2.Balance at year-end33,820,367.2011,783,164.0545,603,531.25
IV.Book value
1.Ending book value640,638,602.95156,620,124.93110,858,519.35908,117,247.23
2. Opening book value649,839,324.84154,299,213.1696,429,470.21900,568,008.21

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

The intangible assets resulted from internal research takes 4.05% of the balance of intangible assets atyear-end

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

(3) Up to end of June 2023, mortgage of intangible assets is as follows:

NameProperty certificate serialsArea(M2)Net book valueNote
Land use rightHGYJCZi No.: 012127,120.2216,152,510.89
Land use rightWan (2019) Property right of Hefei No.: 1148244/1148249/1148243/1148240/1148248/1148246/1148241/1148238/1149101/1148242/1148245/1148239/1148237/1148250/1148247/1149102477,550.03222,085,682.43
Land use rightWan (2019) Property right of Feixi County No.: 0061435/006144533,383.1012,709,009.31
Land use rightWan (2019) Property right of Feixi County No.: 0061456/0061447/0061438/0061440/0061452/0061450/0061430/006165782,850.5117,524,515.89
Total620,903.86268,471,718.52

20. Development expense

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Internal development expenditureOtherIncluded in current profits and lossesConfirmed as intangible assetsOther
Technology development for Air-conditioner41,761,484.1235,426,036.6086,880.5947,295,715.4429,804,924.69
Technology development for refrigerator60,386,906.4542,578,157.7634,825,272.5968,139,791.62
Total102,148,390.5778,004,194.3686,880.5982,120,988.0397,944,716.31

21. 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

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

(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

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

22. Long-term prepaid expenses

ItemOpening balanceIncrease this periodAmortization for the periodOther decreasesEnding balance
Long-term prepaid expenses14,900,600.592,747,813.141,511,928.6816,136,485.05
Total14,900,600.592,747,813.141,511,928.6816,136,485.05

23. 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 impairment255,060,365.1138,259,054.75220,654,506.5033,098,175.98
Deferred income tax assets recognized from accrual liability32,038,544.314,805,781.6512,624,332.221,893,649.84
Deferred income tax assets recognized from Dismission welfare14,759,193.932,213,879.099,072,708.081,360,906.21
Deferred income tax assets recognized from deferred income88,454,568.7213,268,185.30100,794,535.0015,119,180.24
Deferred income tax assets recognized from ir-reparable losses677,537,739.37101,630,660.91684,314,381.95102,647,157.29
Accrued income tax assets8,981,546.381,736,596.698,718,636.161,666,526.91
Deferred income tax assets recognized for development expenditure5,632,939.75844,940.96
Deferred income tax assets recognized by lease liabilitie35,872,336.064,587,035.4738,239,898.154,935,157.87
Total1,112,704,293.88166,501,193.861,080,051,937.81161,565,695.30

(2) Deferred income tax liabilities without the offset

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Taxable temporary differencesDeferred income tax liabilityTaxable temporary differencesDeferred income tax liability
Recognized by fixed assets depreciation34,009,463.425,101,419.5227,362,815.804,104,422.37
Recognized by changes in fair value37,277,115.415,591,567.3157,642,166.208,646,324.93
Deferred income tax liabilities recognized by use asset32,936,873.964,297,526.1336,646,135.084,758,755.78
Total104,223,452.7914,990,512.96121,651,117.0817,509,503.08

(3) Details of unrecognized deferred income tax assets

ItemEnding balanceOpening balance
Deductible temporary difference185,418,241.82168,621,827.52
Deductible loss541,747,042.631,068,180,146.62
Total727,165,284.451,236,801,974.14

24. Other non-current assets

ItemEnding balanceOpening balance
Prepaid equipment, engineering, etc.1,689,040.18893,238.57
Total1,689,040.18893,238.57

25. Short-term loans

(1)Classification of short-term loan

CategoryEnding balanceOpening balance
Guaranteed loan30,000,000.0055,000,000.00
Loan in credit851,064,263.12619,000,000.00
Interest payable142,863.89143,916.67
Total881,207,127.01674,143,916.67

(2)Short-term loans overdue:N/A.

26. Trading financial liability

ItemBalance at year-endBalance at year-begin
Trading financial liability113,610,931.4341,961,524.78
Including: Derivative financial liability113,610,931.4341,961,524.78

27. Note payable

TypeBalance at year-endBalance at year-begin
Bank acceptance5,492,928,745.284,814,889,712.60

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

TypeBalance at year-endBalance at year-begin
Trade acceptance274,990,797.29149,484,800.00
Total5,767,919,542.574,964,374,512.60

28. Account payable

(1) Account payable

ItemAmount at year-endAmount at year-begin
Total4,898,495,830.712,917,997,138.00
Including: Amount aged over 1 year67,269,129.2460,523,652.84

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

29. Contract liabilities

ItemBalance at year-endBalance at year-begin
Total355,486,232.62358,755,397.77
Including: Amount aged over 1 year52,336,364.6329,823,819.05

30. Wages payable

(1) Category

ItemBalance at year-beginIncrease this yearDecrease this yearBalance at year-end
Short-term compensation323,031,068.96927,323,947.64888,046,345.49362,308,671.11
After-service welfare- defined contribution plans20,496,424.3262,544,169.5981,261,440.911,779,153.00
Dismiss welfare4,627,421.852,707,330.283,648,008.663,686,743.47
Total348,154,915.13992,575,447.51972,955,795.06367,774,567.58

(2) Short-term compensation

ItemBalance at year-beginIncrease this yearDecrease this yearBalance at year-end
Wages, bonuses, allowances and subsidies311,848,079.07845,449,873.90805,163,354.58352,134,598.39
Welfare for workers and staff402,556.8222,718,448.5622,912,965.59208,039.79
Social insurance5,220,685.8526,491,775.5327,834,413.863,878,047.52
Including: Medical insurance4,811,752.3924,351,636.1425,395,168.343,768,220.19
Work injury insurance325,176.621,833,894.292,133,000.4226,070.49
Maternity insurance83,756.84306,245.10306,245.1083,756.84

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemBalance at year-beginIncrease this yearDecrease this yearBalance at year-end
Housing accumulation fund5,115,350.8630,892,298.6430,627,966.165,379,683.34
Labor union expenditure and personnel education expense444,396.361,771,551.011,507,645.30708,302.07
Total323,031,068.96927,323,947.64888,046,345.49362,308,671.11

(3) Defined contribution plans

ItemBalance at year-beginIncrease this yearDecrease this yearBalance at year-end
Basic endowment insurance18,215,805.2860,472,648.9178,129,106.10559,348.09
Unemployment insurance2,280,619.042,071,520.683,132,334.811,219,804.91
Total20,496,424.3262,544,169.5981,261,440.911,779,153.00

31. Tax payable

ItemBalance at year-endBalance at year-begin
Value-added tax72,798,122.8830,277,729.74
Enterprise income tax3,726,139.681,822,555.65
Individual income tax2,130,253.924,799,031.61
Urban maintenance and construction tax12,821,215.919,544,272.36
Real estate tax3,875,148.803,658,985.41
Land use tax1,430,562.331,431,191.08
Educational surtax9,259,480.506,850,511.36
Stamp tax5,228,108.393,654,400.08
Construction fund of Water Conservancy Projects645,330.26668,948.01
Treatment fund for abandon electrics & electronics26,819,774.0017,508,786.00
Other194,116.8371,467.32
Total138,928,253.5080,287,878.62

32. Other account payable

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemBalance at year-endBalance at year-begin
Dividend payable32,049,708.694,978,994.16
Other account payable1,009,254,426.87823,228,574.05
Total1,041,304,135.56828,207,568.21

32.1 Dividend payable

ItemBalance at year-endBalance at year-begin
Sichuan Changhong Electric Co., Ltd.22,361,195.16
Hefei Industry Investment Holding (Group) Co., Ltd.4,304,106.09
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 Bank of China446,576.60391,245.50
Hefei collective industry association446,575.90391,244.89
Entrust Investment Wuhu of Provincial ABC357,261.30312,996.42
Other units3,259,284.093,008,797.80
Total32,049,708.694,978,994.16

31.2 Other account payable

(1) Other account payable by nature

NatureEnding balanceOpening balance
1.Accrued expenses (expenses occurred without reimbursed)478,420,630.84344,028,624.89
2. Receivables received temporary and deducted temporary12,146,256.5413,166,091.61
3.Deposit, margin169,269,731.58174,331,550.53
4.Not the come-and-go with related parties in statement scope335,210,024.79278,716,366.01
5. Other14,207,783.1212,985,941.01
Total1,009,254,426.87823,228,574.05

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

33. Non-current liability due within one year

ItemEnding balanceOpening balance
Long-term loan principal and interest due within one year30,166,708.6120,211,488.89
Lease liabilities due within one year10,532,449.5110,075,610.19

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemEnding balanceOpening balance
Total40,699,158.1230,287,099.08

34. Other current liabilities

ItemEnding balanceOpening balance
Pending sales tax25,480,359.5021,970,126.59
Factoring fees payable358,105.78635,142.92
Total25,838,465.2822,605,269.51

35. Long term borrowings

(1) Category of long term borrowings

CategoryEnding balanceAmount at year-begin
Loan in mortgage128,000,000.00148,000,000.00
Total128,000,000.00148,000,000.00

(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 12020/3/262026/11/25RMB4.105%98,000,000.0098,000,000.00
EIBC (Export-Import Bank) Anhui Province Branch Note 22019/12/232026/11/25RMB4.105%30,000,000.0050,000,000.00
Total128,000,000.00148,000,000.00

Note 1: The Company signed the "Loan Contract (Promoting the Opening-up of Loans in China - FixedAssets)" with the Export-Import Bank of China Anhui Branch, the Company's fixed assets andintangible assets are used as mortgage for a long-term loan under the contract. And withdrawal of98,000,000.00 yuan on March 26, 2020. The term of the loan is from March 26, 2020 to November 25,2026, the interest rate of the loan is determined according to the market quotation rate of the loan witha term of more than 5 years reduced by 0.195%, which fluctuates annually, and the amount of the loanis 98,000,000.00 yuan. The balance at the end of the year is RMB 98,000,000.00.Note 2: The Company signed the "Loan Contract (Promoting the Opening-up of Loans in China - FixedAssets)" with the Export-Import Bank of China Anhui Branch, the Company's investment real estate,fixed assets and intangible assets are used as mortgage for the loan. The term of the loan is fromDecember 23, 2019 to November 25, 2026, the interest rate of the loan is determined according to themarket quotation rate of the loan with a term of more than 5 years reduced by 0.195%, which fluctuates

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

annually, and the amount of the loan is 100,000,000.00 yuan. According to the repayment plan agreedwith the bank, the Company has repaid 40,000,000.00 yuan. It plans to repay 10,000,000.00 yuan onDecember 25, 2023 and repay 20,000,000.00 yuan on June 25, 2024, a total of 30,000,000.00 yuan hasbeen reclassified to non-current liabilities due within one year. The balance at the end of the year isRMB 30,000,000.00.

36. Lease liability

ItemBalance at year-endBalance at year-begin
Lease liability25,339,886.5528,164,287.97
Total25,339,886.5528,164,287.97

37. Long-term payable

ItemBalance at year-endBalance at year-begin
Special payable1,049,108.101,145,286.48
Total1,049,108.101,145,286.48

37.1 Special payable

ItemBalance at year-beginIncrease this yearDecrease this yearBalance at year-endReason
Special funds for technological transformation from Zhongshan Changhong1,145,286.4896,178.381,049,108.10Technology plan project in Zhongshan City

38. Long-term wage payable

ItemBalance at year-endBalance at year-begin
Dismissal welfare12,164,985.1810,790,859.64
Total12,164,985.1810,790,859.64

According to the internal early retirement policy, the long-term payable dismissal welfare bears by theCompany up to year-end amounting to 12,164,985.18yuan

39. Accrual liability

ItemBalance at year-endBalance at year-beginReason
Product quality guarantee note130,318,009.8930,965,097.36Guarantee of product
Litigation matters note21,720,534.421,720,534.42
Total32,038,544.3132,685,631.78

Note 1: Product quality deposit is the maintenance expense provided by the Company under the nationalpolicy.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Note2: In November 2021, Zhejiang Teruisi Pharmaceutical Inc. filed a lawsuit against ZhongkeMeiling for the "Cold Storage Design, Equipment Purchase and Installation Construction Contract".Currently, quality of the subject under the contract is being authenticated by a third party engineeringquality appraisal agency, the initial start-up operation test is now completed. Zhongke Meiling intendsto maintain the cold storage project, and the estimated maintenance cost is 1,720,534.42 yuan.

40. Deferred income

(1) Classification of deferred income

ItemOpening balanceIncrease this periodDecrease this periodEnding balanceReason
Government subsidies---subsidies of development project127,493,219.761,117,000.0014,405,014.01114,205,205.75
Government subsidies---subsidies of Relocation33,520,692.15-1,291,710.6632,228,981.49
Total161,013,911.911,117,000.0015,696,724.67146,434,187.24

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(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
Demolition compensation of Changhong Meiling33,520,692.151,291,710.6632,228,981.49Assets related
Demonstration factory construction for the intelligent manufacturing of intelligent air-conditioner35,088,607.613,759,493.6831,329,113.93Assets related
District-level subsidy funds for advanced manufacturing policies in the first half of 202210,339,500.00689,300.009,650,200.00Assets related
Key chip and module for transducer used and detection capacity building6,966,666.65760,000.026,206,666.63Assets related
Centre for external cooperation of the environmental protection6,655,859.14515,754.536,140,104.61Assets related
Changhong Air Conditioner- relocation of production base and upgrading & expansion5,351,111.04573,333.364,777,777.68Assets related
District-level subsidy funds for advanced manufacturing policies in the first half of 20215,116,200.00393,553.844,722,646.16Assets related
Subsidy for industrial development policy from Hefei for first half of 20185,294,000.00625,000.004,669,000.00Assets related
Municipal award and subsidy for the advanced manufacturing policy in first half of 20205,056,094.11421,341.184,634,752.93Assets related
Special fund, government subsidy CZ0590014,200,000.004,200,000.00Assets related
Adaptability improvement on new coolants production4,729,963.291,182,490.863,547,472.43Assets related
20-year subsidy for advancing technological transformation projects3,572,833.34267,962.503,304,870.84Assets related
Subsidy for industrial development policy from Hefei for second half of 20193,577,100.00447,137.503,129,962.50Assets related
2021 manufacturing strong provincial policy subsidy funds2,794,285.71214,945.062,579,340.65Assets related
Subsidy for industrial development policy from Hefei for first half of 20202,571,383.33217,300.002,354,083.33Assets related
Policy funds for manufacturing a strong province, subsidy for equipment for the technological transformation of industrial strong base2,500,000.00312,500.002,187,500.00Assets related

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(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
20 supporting funds to support the innovation and development of artificial intelligence industry2,228,571.42171,428.582,057,142.84Assets related
Government subsidy for new plant construction - industrialization of cryogenic refrigeration equipment2,291,666.67250,000.002,041,666.67Assets related
2020 fund allocation for Anhui Province's triple innovation project2,044,791.67162,500.001,882,291.67Assets related
Subsidies for intelligent transformation & upgrading of enterprises from the new industrialization policy in economic development zone2,069,389.58302,837.501,766,552.08Assets related
21 District-level high-quality development policy (the second batch) award and subsidy funds1,791,700.00130,644.801,661,055.20Assets related
Special funds for strategic emerging industry and high-end growth industry1,482,758.72206,896.501,275,862.22Assets related
Research and application of the MCU chip for inverter control1,150,000.00143,750.001,006,250.00Assets related
Upgrading technology transformation of AC production line1,135,088.84172,750.29962,338.55Assets related
Equipment subsidy for the industrial base technical renovation from Economic and Information Commission1,077,083.33117,500.00959,583.33Assets related
FREQUENCY VOLUME INTEGRATED INTELLIGENT AIR-CONDITIONER)1,644,186.08704,651.16939,534.92Assets related
Upgrade project for the production line of Mianyang Meiling Intelligent Refrigerator921,666.8098,749.98822,916.82Assets related
Subsidy for equipment purchasing for Hefei Tech. Improvement project in 2017821,150.0089,580.00731,570.00Assets related
Subsidy from Zhongshan Finance Bureau (CZ028001 provincial special project 2019)786,413.72150,951.43635,462.29Assets related
22 years of digital network intelligent upgrading project517,000.00517,000.00Assets related
Emerging Industry Base Fund Support Item536,907.2138,350.52498,556.69Assets related
Industrialization of intelligent white household appliances software platform and typical application research and development848,484.88363,636.36484,848.52Assets related
Special fund for technical improvement536,326.6299,810.02436,516.60Assets related

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(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
Subsidy for purchase of R & D instruments and equipment517,880.1691,056.26426,823.90Assets related
Robot policy-rewards for purchasing robots414,906.2635,062.50379,843.76Assets related
Promotion of the energy-saving room air conditioner438,144.45105,154.62332,989.83Assets related
Technical transformation of refrigerator evaporator workshop372,008.7144,829.02327,179.69Assets related
Manufacturing industry digital network project subsidies600,000.00327,285.42272,714.58Assets related
2018 Zhongshan Special fund for industrial development214,658.3838,996.16175,662.22Assets related
Technical transformation subsidy145,658.3715,890.00129,768.37Assets related
Subsidy of advanced manufacturing policy for second half of 202151,152.073,568.7647,583.31Assets related
Promoting the new industry (annual output of 0.6 million medium& large volume environmental protection and energy saving freezer)152,206.17152,206.17Assets related
Subsidy for the development on production line technical reform for green-friendly high-quality metal pipe6,815.436,815.43Assets related
Total161,013,911.911,117,000.0015,696,724.67146,434,187.24

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

41. Share capital

ItemOpening balanceChange during the period (+、-)Ending balance
New shares issuedBonus shareShares transferred from capital reserveOtherSubtotal
Total shares1,029,923,715.001,029,923,715.00

42. Capital reserve

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Share premium2,758,450,812.902,758,450,812.90
Other capital reserve48,043,091.4048,043,091.40
Total2,806,493,904.302,806,493,904.30

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-20,881,462.632,267,837.822,021,916.55245,921.27-18,859,546.08
Total-20,881,462.632,267,837.822,021,916.55245,921.27-18,859,546.08

44. Capital reserve

ItemOpening balanceIncrease this periodDecrease this periodEnding balance
Statutory surplus reserve2,467,205.7815,558,156.145,909,555.3112,115,806.61
Total2,467,205.7815,558,156.145,909,555.3112,115,806.61

45. Surplus reserves

ItemAmount at year-beginIncrease this yearDecrease this yearAmount at year-end
Statutory surplus reserve325,610,989.32325,610,989.32
Discretionary surplus reserve115,607,702.16115,607,702.16

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemAmount at year-beginIncrease this yearDecrease this yearAmount at year-end
Total441,218,691.48441,218,691.48

46. Retained profit

ItemCurrent YearLast Year
Prior year-end balance909,082,037.66734,129,724.00
Adjustment from undistributed profit at year-begin167,328.13
Balance at year-begin909,249,365.79734,129,724.00
Add: net profit attributable to shareholders of parent company for this year358,054,844.74244,538,734.49
Less: withdraw of statutory surplus reserve18,090,235.08
withdraw of discretionary surplus reserve
Withdraw of general risk provision
Dividend payable for ordinary shares92,693,134.3551,496,185.75
Dividend of ordinary shares transferred to share capital
Balance at year-end1,174,611,076.18909,082,037.66

47. Operation income and operation cost

(1) Operation income and operation cost

ItemCurrent YearLast Year
IncomeCostIncomeCost
Main business12,734,698,313.8411,126,041,806.0910,138,489,064.289,027,583,283.96
Other business93,996,009.7352,872,269.7486,014,486.9133,497,247.10
Total12,828,694,323.5711,178,914,075.8310,224,503,551.199,061,080,531.06

(2) Main business classified according to product

ProductCurrent YearLast Year
Operation incomeOperation costOperation incomeOperation cost
Refrigerator, freezer4,224,670,444.643,452,620,652.773,557,279,193.803,052,742,990.21
Air-conditioner6,997,497,159.246,383,899,125.625,350,650,174.764,907,155,572.46
Washing machine557,352,305.32458,999,445.42393,315,713.02330,678,793.62
Small household appliances and kitchen and bathroom852,703,435.92746,076,815.25727,498,495.75642,738,038.67
Other102,474,968.7284,445,767.03109,745,486.9594,267,889.00
Total12,734,698,313.8411,126,041,806.0910,138,489,064.289,027,583,283.96

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

(3) Main business classified according to sales region

RegionCurrent YearLast Year
Operation incomeOperation costOperation incomeOperation cost
Domestic8,842,681,381.117,682,608,633.447,475,522,523.096,574,576,772.52
Overseas3,892,016,932.733,443,433,172.652,662,966,541.192,453,006,511.44
Total12,734,698,313.8411,126,041,806.0910,138,489,064.289,027,583,283.96

(4) At end of the Period, the amount of revenue corresponding to performance obligations that havebeen contracted for but not yet fulfill or not yet fulfilled was 197,126,467.81 yuan, of which,106,519,063.69 yuan is expected to recognized as revenue in 2023, 79,438,448.37 yuan is expected torecognized as revenue in 2024 and 11,168,955.75 yuan is expected to recognized as revenue in 2025.

(5) Top five clients have income in sales of7,606,038,977.43yuan in total, a 59.29% in total operationincome.

48. Business tax and extra charges

ItemCurrent PeriodLast Period
Treatment fund for abandon electrics & electronics45,585,295.0034,053,294.00
City construction tax13,473,561.5911,595,547.22
Extra charge for education and local education surcharge10,374,633.258,453,214.37
Real estate tax10,697,322.7910,082,904.39
Stamp duty10,239,001.407,967,068.56
Land use tax3,870,702.263,745,329.40
Water fund3,778,106.413,799,503.15
Other7,143.924,583.20
Total98,025,766.6279,701,444.29

49. Sales expense

ItemCurrent PeriodLast Period
Salary, extra charges and labor service expenses327,557,081.46276,149,382.91
Market support expenses140,461,155.25141,739,223.51
Shipping and Installation expense86,493,787.0760,200,021.37
National three guarantees expense81,830,891.0187,232,488.89
Storage lease expenses45,248,950.3641,176,101.46
Travelling expenses27,620,363.017,399,226.17
Insurance11,544,975.602,678,788.57
Business activity expenses8,433,498.607,058,303.94
Vehicle expenses6,329,264.056,683,479.81

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
Depreciation expenses4,023,917.383,923,388.83
House-lease expenses1,711,742.101,546,666.83
Advertising expenses601,625.161,933,500.47
Other expenses44,636,008.2728,345,737.22
Total786,493,259.32666,066,309.98

50. Administration expense

ItemCurrent YearLast Year
Salary and social insurance etc.119,736,522.57103,835,407.55
Depreciation11,309,060.9211,251,858.42
Amortized intangible assets9,135,614.879,079,708.19
Business activities fee3,157,527.782,119,039.65
Water and electricity fee2,425,289.582,245,082.21
Property insurance1,875,442.731,759,716.41
Domestic travelling fee1,841,650.971,270,723.15
Office fee627,214.85709,951.38
Other expenses32,854,541.3331,860,655.01
Total182,962,865.60164,132,141.97

51. R&D expenses

ItemCurrent YearLast Year
Salary and social insurance etc.116,235,127.25106,201,825.59
Amortized intangible assets63,618,830.7463,948,921.59
Trial fee of R&D36,151,513.4629,904,070.97
Cost of mould13,061,216.3215,297,848.50
Depreciation10,012,109.728,315,504.26
Inspection and authentication fee8,613,510.998,120,934.36
Water and electricity fee5,616,418.285,776,873.50
Software royalty1,212,469.151,166,276.97
Other expenses10,655,002.029,380,518.80
Total265,176,197.93248,112,774.54

52. Financial expenses

ItemCurrent YearLast Year
Interest expenditure13,185,503.1516,913,382.96
Less: Interest income83,240,562.0766,581,155.37
Add: exchange loss-35,883,923.32-9,470,041.33

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemCurrent YearLast Year
Procedure charge expenditure7,339,147.696,582,921.01
Discount expenditure-17,235,858.76-11,270,142.69
Interest expense on lease liability821,767.041,038,707.46
Total-115,013,926.27-62,786,327.96

53. Other income

ItemCurrent PeriodLast Period
Salary, extra charges and labor service expenses4,165,995.126,981,697.33
Multi-level capital market capital reward4,000,000.00
Demonstration factory construction for the intelligent manufacturing of intelligent air-conditioner3,759,493.683,759,493.66
Award funds for supporting the development of China Sound Valley3,255,000.004,385,000.00
Demolition compensation of Changhong Meiling1,291,710.661,291,710.56
Adaptability improvement on new coolants production1,182,490.861,182,490.86
Key chips, modules and testing capacity building projects for inverters760,000.02
VISA (Variable Frequency Integrated Smart Air Conditioning System) research and application704,651.16704,651.16
District-level subsidy funds for advanced manufacturing policies in the first half of 2022689,300.00
Personal tax handing fee refund648,855.83597,590.71
Subsidy for industrial development policy from Hefei for first half of 2018625,000.00625,000.00
High-tech enterprise awards600,000.00
Changhong Air Conditioner- relocation of production base and upgrading & expansion573,333.36573,333.33
Centre for external cooperation of the environmental protection515,754.53515,754.53
Subsidy for industrial development policy from Hefei for second half of 2019447,137.50447,137.50
Municipal award and subsidy for the advanced manufacturing policy in first half of 2020421,341.18373,062.50
District-level subsidy funds for advanced manufacturing policies in the first half of 2021393,553.84373,056.26
Industrialization of intelligent white household appliances software platform and typical application research and development363,636.36363,636.36
Manufacturing industry digital network project subsidy327,285.42
Manufacturing strong province policy funds, industrial strong base technical transformation equipment subsidies312,500.00312,500.00
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 projects267,962.50267,962.50
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
Stable post subsidies216,067.212,266,011.87
Provincial policy subsidy funds for strong manufacturing province of 2021214,945.06203,750.00

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
Special funds for strategic emerging industry and high-end growth industry206,896.50206,896.55
Air conditioning production line upgrade technical transformation project172,750.29113,903.75
2020 supporting funds to support the innovation and development of artificial intelligence industry171,428.58162,500.00
2020 fund allocation for Anhui Province's triple innovation project162,500.00162,500.00
Promoting the new industry (annual output of 0.6 million medium& large volume environmental protection and energy saving freezer)152,206.17152,206.26
Subsidy from Zhongshan Finance Bureau (CZ028001 provincial special project 2019)150,951.43152,823.25
R&D and application of frequency conversion control MCU chips143,750.00
21 District-level high-quality development policy (the second batch) award and subsidy funds130,644.80
Equipment subsidies for industrial strong base technology transformation projects by the Economic and Information Commission117,500.00117,500.00
Energy-saving room air conditioner promotion project105,154.62105,154.62
21 years of high-quality policy industrial Internet project award and subsidy4,663,100.00
22 Provincial foreign trade funds (key and brand markets, enterprise market development)2,500,000.00
Supporting the industrial internet construction and scene application2,000,000.00
Promotion of insurance1,819,544.22
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
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
Demolition compensation of Jiangxi Meiling404,839.96
Other petty projects4,308,322.485,389,351.57
Total32,328,256.6648,325,391.81

54. Investment income

ItemCurrent PeriodLast Period
Long-term equity investment income by equity method12,544,969.448,971,315.55
Investment income obtained from disposal of Trading financial assets-7,608,161.737,825,971.39
Investment income of other non-current financial assets during holding period11,409,029.331,784,208.22
Income from financial products4,821,923.1376,200.80
The termination of income recognition for financial assets measured by amortized cost-14,192,040.21-10,198,142.54
Interest income from debt investment during the holding period7,402,220.095,356,708.33
Total14,377,940.0513,816,261.75

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

55. Changes in fair value gains

ItemCurrent PeriodLast Period
Trading financial assets15,221,223.2230,187,709.04
Including :Income of fair value changes from derivative financial instruments14,587,494.1529,478,307.89
Interest accrual for wealth management products633,729.07709,401.15
Trading financial liability-71,649,406.65-26,624,972.00
Including: Income of fair value changes from derivative financial instruments-71,649,406.65-26,624,972.00
Total-56,428,183.433,562,737.04

56. Credit impairment loss

ItemCurrent PeriodLast Period
Account receivable bad debt loss-42,428,408.08-50,863,838.62
Other account receivable bad debt loss1,346,818.25397,219.49
Total-41,081,589.83-50,466,619.13

57. Assets impairment loss

ItemCurrent PeriodLast Period
Loss on inventory valuation-16,752,702.16-28,983,106.69
Impairment loss on contractual assets-1,414,633.73-808,716.15
Total-18,167,335.89-29,791,822.84

58. Asset disposal income

ItemCurrent PeriodLast PeriodAmount reckoned into non-recurring gains/losses in Current Period
Income from disposal of non current assets8,358,775.10
Among them: income from disposal of non current assets held for sale
Income from disposal of non current assets not classified as held for sale8,358,775.10
Including: Income from disposal of fixed assets4,141,767.54
Income from disposal of intangible assets4,217,007.56
Total8,358,775.10

59. Non-operation revenue

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast PeriodAmount reckoned into non-recurring gains/losses in Current Period
Income of penalty4,888,567.59567,772.744,888,567.59
Profit from disposal of non-current assets36,750.89321,759.2736,750.89
Other5,778,701.322,021,355.785,778,701.32
Total10,704,019.802,910,887.7910,704,019.80

60. Non-operating expenditure

ItemCurrent PeriodLast PeriodAmount reckoned into non-recurring gains/losses in Current Period
Non-current asset retirement losses2,758,202.881,142,293.892,758,202.88
Penalty and late fee16,581.942,264.7516,581.94
Other240,014.401,188,402.19240,014.40
Total3,014,799.222,332,960.833,014,799.22

61. Income tax expenses

ItemCurrent PeriodLast Period
Current income tax8,379,498.7216,329,432.39
Deferred Income Tax-7,454,488.68-26,445,005.85
Total925,010.04-10,115,573.46

62. Other comprehensive income

Found more in 43. Other comprehensive income in VI

63. Items of cash flow 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
Cash deposit, deposit24,366,520.5219,397,785.91
Government subsidy and rewards13,652,143.1031,397,968.22
Rental income2,985,657.333,346,435.18
Compensations1,718,745.991,724,086.13
Petty cash collection140,806.4362,136.33
Collection of restriction fund14,531,658.71

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemCurrent PeriodLast Period
Other3,021,399.102,347,265.99
Total45,885,272.4772,807,336.47

2) Cash paid for other activities relating to operation

ItemCurrent PeriodLast Period
Market expenses79,956,267.3982,409,839.91
Rental fee57,695,362.2352,784,034.29
Petty cash, deposit, Cash deposit36,861,764.0622,367,764.50
Travel expenses, meeting fees and exhibition fees20,534,988.9513,095,827.32
Inspection and certification fee, certification charge and reviewing fee18,485,143.9714,909,635.84
Service support fee14,138,646.0115,879,324.80
Transportation and vehicle costs13,537,381.247,774,128.45
Business activity fee13,330,172.3810,637,980.89
Technological cooperation costs and consulting charge10,091,050.8313,589,880.67
Repair fee8,093,631.1713,247,556.80
Handling fee5,048,350.855,441,203.36
Labor fee3,896,600.301,277,408.41
Advertising fee3,821,240.004,240,519.54
Office expenses3,729,327.853,180,729.46
Communication costs876,307.591,061,789.96
Board expenses258,739.56277,495.67
Convert to restricted funds85,623,704.49
Other expenses55,255,105.1343,501,646.82
Total345,610,079.51391,300,471.18

3) Cash received from other activities relating to investment

ItemCurrent PeriodLast Period
Interest income arising from bank savings81,700,559.4264,456,820.07
Income of forward exchange settlement1,303,892.658,021.82
Cash deposit956,132.701,182,376.24
Total83,960,584.7765,647,218.13

4) Cash paid for other activities relating to investment

ItemCurrent PeriodLast Period
Loses of forward exchange settlement13,791,587.297,635,033.86
Refund the bid security of the engineering project500,000.00
Total14,291,587.297,635,033.86

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

5) Cash received from other activities relating to financing

ItemCurrent PeriodLast Period
Collection of restriction fund220,652,668.19
Meiling series (internal) bill discounting fundraising26,054,470.3184,181.37
Total246,707,138.5084,181.37

6) Cash paid for other activities relating to financing

ItemCurrent PeriodLast Period
Convert to restricted funds134,086,488.59420,619,026.50
Meiling series (internal) bill discounting fundraising23,536,567.332,341,617.17
Lease liability principal and interest2,353,526.717,095,354.40
Handling charge of dividend65,600.3436,509.97
Payment for B share repurchase737,262.35
Financing lease175,323.88
Intermediary service fee1,345,000.00
Total160,042,182.97432,350,094.27

(2) Supplementary of the consolidated cash flow statement

ItemCurrent amountPrevious period amount
1. Net profit is adjusted to cash flow of operation activities:
Net profit369,929,382.6472,694,901.46
Add: provision for depreciation of assets39,369,845.6160,861,695.16
Depreciation of fixed assets, consumption of oil gas assets and depreciation of productive biological assets112,075,611.84112,530,324.02
Amortization of intangible assets74,830,332.6274,908,844.79
Depreciation of right-of-use assets4,155,504.306,170,422.64
Amortization of long-term retained expense1,235,884.4619,080.92
Loss from disposal of fixed assets, intangible assets and other long term assets (gain is listed with “-”)-8,358,775.10
Loss from discarding fixed assets as useless (gain is listed with “-”)2,721,451.99-820,534.62
Loss from change of fair value (gain is listed with “-”)56,428,183.43-3,562,737.04
Financial expense (gain is listed with “-”)-105,938,982.24-59,137,813.74
Investment loss (gain is listed with “-”)-14,377,940.05-13,816,261.75
Decrease of deferred income tax assets (increase is listed with “-”)-4,935,498.56-25,663,712.30
Increase of deferred income tax liabilities (decrease is listed with “-”)-2,518,990.12-781,293.55
Decrease of inventories (increase is listed with “-”)-590,146,519.04-262,649,097.49
Decrease of operational accounts receivable (increase is listed with “-”)-1,555,010,894.69-410,183,298.77
Increase of operational accounts receivable (decrease is listed with “-”)3,022,702,437.621,103,933,518.50

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemCurrent amountPrevious period amount
Other-71,092,045.78
Net cash flow arising from operation activities1,410,519,809.81575,053,217.35
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 cash7,245,577,241.325,237,646,245.54
Less: Opening balance of cash6,113,222,069.765,840,194,931.57
Add: Balance at period-end of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents1,132,355,171.56-602,548,686.03

(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
Cash7,245,577,241.326,113,222,069.76
Including: cash in stock35,553.7121,243.42
Bank deposits available for payment at any time.7,245,487,226.376,113,166,932.47
Other monetary fund available for payment at any time54,461.2433,893.87
Cash equivalents
Including: bond investment due within 3 months
Balance of cash and cash equivalents at period-end7,245,577,241.326,113,222,069.76
Including: using the restricted cash and cash equivalents of the parent company or subsidiary of the group

64. Assets with ownership or the right to use restricted

ItemBook value at period-endReasons
Monetary fund632,210,953.32Margin, Fixed Deposit, Frozen Funds
Receivables financing note 1444,382,921.22Pledged
Investment real estate note 23,187,831.55Mortgage
Fixed assets note 2327,828,701.10Mortgage
Intangible assets note 2268,471,718.52Mortgage
Total1,676,082,125.71

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Note 1: The note receivable listed in receivables financing was pledged for: short-term financing fromthe bank; with purpose of improving the note utilization, the Company draw up bank acceptance bypledge parts of the outstanding notes receivable to the bankNote 2: The mortgage of investment real estate, fixed assets, and intangible assets is the mortgage ofhouses and buildings and land use rights. For details, please refer to Note VI. 35. Long-term loans.

65. Foreign currency

(1) Foreign currency

ItemEnding foreign currency balanceExchange rateEnding RMB converted balance
Monetary fund168,929,106.19
Including: USD4,780,088.897.225834,539,966.30
Euro7,892,305.667.877162,168,480.91
GBP1,062.079.14329,710.72
AUD8,639,694.654.799241,463,622.56
HKD3,298.060.92203,040.81
Pakistan Rupi917,605,931.390.025223,123,669.47
IDR11,708,623,592.400.0004835,655,265.20
PHP14,500,815.740.13031,889,456.29
KRW13,811,452.230.00549575,893.93
Account receivable1,263,350,903.51
Including: USD150,034,843.917.22581,084,121,775.12
Euro7,401,823.087.877158,304,900.58
GBP453,936.789.14324,150,434.77
AUD10,637,854.254.799251,053,190.12
KRW3,359,631,340.000.00549518,461,174.21
Pakistan Rupi468,374,237.540.025211,803,030.79
IDR69,882,620,637.810.00048333,753,305.77
PHP13,070,546.070.13031,703,092.15
Other account receivable1,959,571.87
Including: USD143,670.837.22581,038,136.68
Pakistan Rupi5,796,393.390.0252146,069.11
IDR1,427,128,226.000.000483689,302.93
PHP660,500.000.130386,063.15
Account payable49,230,856.69
Including: USD132,118.937.2258954,664.96
Euro13,419.327.8771105,705.33
Pakistan Rupi828,101,628.020.025220,868,161.03

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemEnding foreign currency balanceExchange rateEnding RMB converted balance
IDR45,205,388,984.000.00048321,834,202.88
PHP41,965,636.910.13035,468,122.49
Other account payable9,168,564.96
Including: USD7,528.007.225854,395.82
Pakistan Rupi307,952,031.040.02527,760,391.18
IDR2,263,910,878.000.0004831,093,468.95
PHP1,997,766.790.1303260,309.01

(2) Foreign operational entity

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

66. Hedging

The Company adopts forward foreign exchange contracts to hedge the risk of exchange rate fluctuations.The Company designates the purchased forward foreign exchange contracts as hedging instruments, andmanages them in accordance with the hedge accounting method, and evaluates the hedged items ofunrecognized asset and liability items, such as unrecognized definite commitments, on the balance sheetdate. The Company adopts the ratio analysis method to evaluate the hedging effectiveness.Hedging instrument is as follows:

ItemBook value of the hedging instrument on 30 June 2023Item of balance sheet with hedging instrument
Fair value hedges
Exchange rate risk-forward foreign exchange contracts and definite commitments not yet confirmed, etc.72,248,082.82Trading financial assets
Exchange rate risk-forward foreign exchange contracts and definite commitments not yet confirmed, etc.113,610,931.43Tradable financial liabilities

67. Government subsidy

ItemAmountItemAmount reckoned into current gain/loss
VAT refund on software products4,165,995.12Other income4,165,995.12
Multi-level capital market capital reward4,000,000.00Other income4,000,000.00

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemAmountItemAmount reckoned into current gain/loss
Award funds for supporting the development of China Sound Valley3,255,000.00Other income3,255,000.00
Refund of individual tax handling fee648,855.83Other income648,855.83
High-tech Enterprise Award600,000.00Other income600,000.00
Stable job subsidies216,067.21Other income216,067.21
22 years of digital network intelligent upgrading project517,000.00Deferred income
Manufacturing industry digital network project subsidies600,000.00Deferred income327,285.42
Other petty projects3,745,613.83Other income3,745,613.83
Total17,748,531.9916,958,817.41

VII. Changes of consolidation rage

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: nil

6. Subsidiary newly established: nil

7. Subsidiary merger by absorption:nil

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 sales47.4512Investment establishment
Sichuan Hongmei Intelligent Technology Co., Ltd.2)MianyangMianyangSoftware development100Investment establishment
Mianyang Meiling Refrigeration Co., Ltd.3)MianyangMianyangManufacturing and sales955Investment establishment

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

SubsidiaryMain office placeRegistration placeBusiness natureShareholding ratio(%)Acquire by
DirectlyIndirectly
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 ELECTRIC INDONESIA,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
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 sales47.4512Investment establishment
CH-Meiling.International (Philippines) Inc.22)PhilippinesPhilippinesSales100Investment establishment
Hefei Changhong Meiling Life Appliances Co., Ltd. 24)HefeiHefeiSales70Investment establishment
Anhui Ling'an Medical Equipment Co., Ltd 25)Lu'anLu'anManufacturing and sales47.4512Investment establishment

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Note:

1) Zhongke Meiling Cryogenic Technology Co., Ltd. (hereinafter referred to as Zhongke Meiling), thepredecessor of which was Zhongke Meiling Cryogenic Technology Limited Liability Company, wasestablished on 29 October 2002 by joint contribution from the Company and Technical Institute of Physicsand Chemistry, CAS (“TIPC”), with registered capital of 60 million yuan upon the establishment, amongwhich, the Company made capital contribution of 42 million yuan (including the assets in specie at theconsideration of35,573,719.70 yuan as evaluated by Beijing Zhongzheng Appraisal Co., Ltd. with issuance ofthe Appraisal Report (ZZPBZ(2002)No.029) and cash contribution of 6,426,280.30 yuan) accounting for 70%of the aforesaid registered capital, and TIPC made capital contribution of 18 million yuan with intangibleassets of such value (namely the single compressor mixture industrial low temperature refrigerationtechnology) 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 aboveregistered capital has been verified by Huazheng Accounting Firm by issuance of the Assets VerificationReport (HZYZ (2002) No. B157) dated 16 October 2002.In October 2014, according to the relevant provision under the Management Rules on Application of StateOwned Assets by Central Business Organs, TIPC transferred the 30% equity interests held by it in ZhongkeMeiling Cryogenic Technology Company Limited to its wholly-owned subsidiary Zhongke Xianxing (Beijing)Assets Management Co., Ltd (hereinafter referred to as Zhongke Xianxing) which would perform managementover the operating assets of TIPC. Upon consideration and approval at the 37

th session of the 7

thBOD of HefeiMeiling 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 CryogenicTechnology Company Limited, pursuant to which, they decided to change the firm type of Zhongke MeilingCryogenic Technology Company Limited to a joint stock company. Based on the net assets of 96, 431,978.25yuan as audited by Xinyong Zhonghe CPA as of 30 June 2015, an aggregate of 65,000,000 shares have beenconverted at the proportion of 1:0.67, which are to be held by the original shareholders according to theirrespective entitlement. In case that the net assets exceed registered capital, the balance shall be recorded incapital reserve. On 28 August 2015, Xinyong Zhonghe CPA reviewed the registered capital and paid-in thereofin respect of the stock reform, and issued Assets Verification Report (XYZH/2015CDA40161). The Companyregistered 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;Zhongke Meiling Company issued 3,150,000 shares to specific investors by the non-public offering of sharesat 1.63 yuan per share. The current capital increase was verified by the No.[XYZH/2016CDA40294]capitalverification report issued by ShineWing CPA (special general partnership). After the completion of theissuance, the share capital of Zhongke Meiling Company increased to 68,150,000 shares and the Company'sshareholding ratio was 66.76%.

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

On 15 September 2017, the Proposal of the First Stock Placement of Zhongke Meiling Cryogenic TechnologyCo., Ltd for year of 2017 was deliberated and approved by 4

thsession extraordinary of shareholders generalmeeting of 2017. Zhongke Meiling offering 490,300 shares to specific investors by way of privately placement,which has 1.72 yuan per share in amount. The capital increasement has been verified by the No.[XYZH/2017CDA40324]capital verification report issued by ShineWing CPA (special generalpartnership). After the completion of shares placement, stock of the Company increased to 68,640,300 sharesand 66.87% held by the Company.On September 9, 2019, the 10

th Meeting of the 2

ndBOD and the Fourth Extraordinary Shareholders’ Meetingreviewed and approved the Proposal on the First Stock Issuance Plan of Zhongke Meiling CryogenicTechnology Co., Ltd. in 2019 (Revised Version), the number of shares to be issued this time does not exceed3,907,900 shares (including 3,907,900 shares), the issue price is not less than 2.16 yuan per share, and theraised funds are expected to not exceed 8,441,064.00 yuan (including 8,441,064.00 yuan). After thecompletion of the additional issue, the company’s share capital increased to 72,548,200 shares, which wasverified by [No. XYZH/2020CDA30002] “Capital Verification Report” issued by Shine Wing Certified PublicAccountants (LLP), and the Company’s shareholding ratio was 63.2683%.On September 16, 2022, the Management Committee of China Securities Regulatory Commission issuedthe Reply on Approving the Registration of Zhongke Meiling Cryogenics Co.,Ltd. to Public Offering of Sharesto Unspecified Qualified Investors (ZJXK [2022] No. 2182), which approved the registration application ofZhongke Meiling to Public Offering of Shares to Unspecified Qualified Investors. The price of this issue isRMB 16.00/share, the initial number of shares issued is 24,182,734, and the actual net fund raised is RMB364,573,394.95. By September 30, 2022, all the above-mentioned raised funds had been received and verifiedby the Capital Verification Report [XYZH/No. 2022CDAA70693] issued by ShineWing Certified PublicAccountants (special general partnership). After the issuance, the share capital of Zhongke Meiling is96,730,934 shares, and the shareholding ratio of the Company is 47.4512%.

2) Sichuan Hongmei Intelligent Technology Co., Ltd. (hereinafter referred to as Hongmei Intelligent) wasestablished on Jan. 24, 2014. It is a limited company jointly invested by the Company and Mianyang MeilingRefrigeration Co., Ltd., being approved by the Industrial and Commerce Bureau of Peicheng District,Mianyang City. The company owes registered capital of 5 million yuan, including 4.95 million yuancontributed by Changhong Meiling Company in cash, accounted for 99% of the registered capital; MianyangMeiling Refrigeration Co., Ltd. contributed 50000 yuan in cash with 1% of the register capital occupied. Theabove mentioned register capital have been verified by verification report of Chuanjinlai Yanzi No. [2014]B039 issued by Sichuan Jinlai Accounting Firm Co., Ltd. In July 2016, the shares of Hongmei Intelligent, heldby the Company has transferred to Sichuan Changhong AC Co., Ltd., after transferred, Changhong AC has99% 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 limitedliability company jointly set up by the Company and China-tech Meiling Company, was founded on Mar. 6,

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

2009. Its registered capital and paid-in capital were 50 million yuan upon establishment, of which, theCompany invested 45 million yuan, accounting for 90% of the registered capital; Zhongke Meiling Companyinvested 5 million yuan, accounting for 10% of the registered capital. The capital receipt was verified by theverification report [CXKY (2009) No. 008] of Sichuan Xingrui Certified Public Accountants. On 19 January2011, the Company increase 50 million yuan in capital of Mianyang Meiling, of which 95 million yuan investedby the Company, a 95% of total register capital while 5 million yuan invested by Zhongke Meiling, a 5% oftotal 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 Meilingentered into “Equity Transfer Agreement” with Jiangxi Meiling Refrigeration Co., Ltd. 5 percent equity ofMianyang Meiling held by Zhongke Meiling was transferred to Jiangxi Meiling Refrigerator. In September2013, Jiangxi Meiling Refrigeration was combined by Jiangxi Meiling Electric Appliance Co., Ltd., than 5percent equity was transfer to Jiangxi Meiling Electric Appliance.

4) Jiangxi Meiling Electric Appliance Co., Ltd. (hereinafter referred to as Jiangxi Meiling ElectricAppliance) was a limited liability company jointly established by the Company and Mianyang Meiling on 23May 2011. Register capital of the company totally as 50 million yuan, 49.375 million yuan invested by theCompany, 98.75% in total register capital while 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 2011with 10 million yuan from the Company and 0.5 million yuan from Mianyang Meiling. Rest of the capital shallbe invested fully within 2 years after the joint ventures established according to capital requirement. The initialinvestment capital were verified by the Capital Verification Report [JXKYZi (2011) No. 090] issued fromJingdezhen Xingci CPA Co., Ltd. Second capital 39.5 million yuan was fully funded on 28 July 2011, theCompany 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 from JDZ Xingci CPA Co., Ltd.

5) Hefei Meiling Wulian Technology Co., Ltd. (hereinafter referred to as Wulian Technology) wasestablished dated 21 January 2019 with registered capital of 10 million yuan, and it is the subsidiary of theCompany with fully-owned establishment. 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) isthe limited company jointly invested by the Company and Mianyang Meiling Company on 21 Oct. 2009.Registered capital and paid-up capital were 10 million yuan, including 9.9 million yuan invested by theCompany, a 99% of the registered capital; Mianyang Meiling Company contributed 0.1 million yuan, a 1% ofthe registered capital. The above mentioned paid-up register capital have been verified by verification reportof [Wan An Lian Xin Da Yan Zi (2009) No. 074] issued by Anhui An Lian Xin Da Accounting Firm Co., Ltd.On 25 Nov. 2010, the Company increased capital 45 million yuan, registered capital amounting to 55 millionyuan, including 54.9 million yuan contributed by the Company, a 99.82% of the registered capital, whileMianyang Meiling invested 0.1 million yuan, a 0.18% of the registered capital. The increased capital has been

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

verified by verification report of [Wan Hua Shen Zheng Da Kuai Yan Zi (2010) No. 1514] issued by AnhuiHua Shen Zhengda CPA Co., Ltd.

7) Wuhan Meizirong Electrical Marketing Co., Ltd (hereinafter referred to as Wuhan Meizirong) wasestablished dated 10 January 2011 with registered capital of 5 million yuan; Meiling Marketing invested 4.60million yuan, accounted for 92% of the registered capital.

8) Hefei Meiling Nonferrous Metal Products Co., Ltd. (hereinafter referred to as Nonferrous Metal) was theSino-foreign joint venture jointly set up by original Meiling Group, Hefei Meiling Copper Co., Ltd. And Singapore KimShin Development Co., Ltd., which have been originally approved by the [WJMWFZZ (1996) No.349] of ForeignTrade and Economic Committee of Anhui Province. Its registered capital was US$ 2.92 million uponestablishment, of which, original Meiling Group invested US$ 1.46 million (monetary capital), accounting 50%of the registered capital, Hefei Meiling Copper Co., Ltd invested US$ 0.584 million (monetary capital of RMB 0.18million and real assets of US$ 0.404 million), accounting 20% of registered capital while Singapore Kim ShinDevelopment Co., Ltd invested US$ 0.876 million (monetary capital), accounting 30% of the 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% equityheld by Singapore Kim Shin Development Co., Ltd and Hefei Meiling Copper Co., Ltd respectively transferred tooriginal Meiling Group Totally. The Company’s register capital came into 24,286,808.00 yuan aftertransference, and was not the joint-venture any more.

9) Changhong Meiling Ridian Technology Co., Ltd. (hereinafter referred to as Ridian Technology) is alimited liability company invested and established by Sichuan Changhong Electric Co., Ltd. (hereinafterreferred to as Sichuan Changhong) and Sichuan Changhong Motor Transport Co., Ltd. (hereinafter referred toas Changhong Motor Transport Company) on May 25, 2016. The registered capital and paid-in capital are 40million yuan, of which Sichuan Changhong has invested 32 million yuan by monetary capital, accounting for80% of the registered capital; Changhong Motor Transport Company has invested 8 million yuan, accountingfor 20% of the registered capital. The official receipts of registered capital have been verified by originalSichuan Junhe Accounting Firm [No. JHYZ (2006) 3027]. Ridian Technology increased registered capital of43 million yuan on January 4, 2007, changing from 40 million yuan to 83 million yuan, for the newly increased43 million yuan, Sichuan Changhong invested 1.8 million yuan, Guangdong Xiongfeng Electric Co., Ltd.invested 40 million yuan, and Kou Huameng and other 9 natural person shareholders invested 1.2 million yuan,at the same time, the shareholders' meeting considered and agreed to transfer the investment of 8 million yuanof Changhong Motor Transport Company to Sichuan Changhong Venture Investment Co., Ltd, the structureof 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%; SichuanChanghong Venture Investment Co., Ltd Invested 8 million yuan, accounting for 9.64%; Kou Huameng andother 9 natural person shareholders invested 1.2 million yuan, accounting for 1.45%. The change of registeredcapital was verified by Zhongshan Promise Accounting Firm [No. ZCHZ (2007)501010].

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

On February 18, 2009, seven natural person shareholders transferred total 0.76% stock rights to Hu Zhiheng,after the transfer, the registered capital of Changhong Ridian was still 83 million yuan, the structure ofregistered 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%; SichuanChanghong Venture Investment Co., Ltd invested 8 million yuan, accounting for 9.64%; Hu Zhiheng and othertwo 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 KouHuameng to transfer its stock rights of total 250,000 yuan which accounts for 0.301% of the RidianTechnology’s registered capital to Sichuan Changhong Venture Investment Co., Ltd at the cost of 317,802yuan. The other shareholders of the Ridian Technology waived the right of pre-emption. On December 11,2014, Ridian Technology held the shareholders meeting which considered and agreed Guangdong XiongfengElectric Co., Ltd. to transfer its stock rights of total 40 million yuan which accounts for 48.19 % of thecompany's registered capital to Sichuan Changhong Electric Co., Ltd. at the cost of 43,977,300 yuan. The othershareholders of the Ridian Technology waived the right of pre-emption. The structure of registered capital afterchanges was that Sichuan Changhong invested 73.8 million yuan, accounting for 88.92%; Sichuan ChanghongVenture 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. transferredtotal 98.855% equity of the Ridian Technology to the Company. After the transfer, the Company directly holds

98.855% stock rights of Ridian Technology.

On 7 April 2020, Ridian Technology convened the shareholders’ meeting, and agreed the Wu Chang yuanto transferred total 0.18% equity of the Ridian Technology to the Company. After the transfer, the Companydirectly holds 99.0361% stock rights of Ridian Technology.

10) CHANGHONG MEILING ELECTRIC INDONESIA, PT.(hereinafter referred to as Indonesia Meiling)is a subsidiary established in Indonesia and jointly invested by Zhongshan Changhong and Sichuan Changhongin 2016, the company’s registered capital is 6 million US dollars, of which Zhongshan Changhong subscribedand paid 5.88 million US dollars in cash, accounting for 98% of the registered capital, Changhong AirConditioning subscribed and paid 120,000 US dollars in cash, accounting for 2% of the registered capital. On4 July 2017, rests of the 2.94 million US dollars are subscribed by Zhongshan Changhong in line with theagreement.

11) Changhong Ruba Trading Company (Private) Limited (hereinafter referred to as Changhong Ruba)was a joint venture established by Zhongshan Changhong Appliances Company Limited and RUBAGENERAL TRADING FZE Company (“RUBA”) on 5 August 2011 with the approval from GuangdongDevelopment and Reform Commission by issuance of the Approval Relating to Joint Construction of aManufacturing and Selling Platform Project in Pakistan by Zhongshan Changhong Appliances CompanyLimited (YFGWZ(2011)958). The resolution of the second extraordinary shareholders' meeting of Zhongshan

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Changhong in 2016 passed the "Proposal on the Company's Capital Increase to Changhong Ruba TradingCompany (Private) Limited", and agreed that the company and UAE RUBA Company jointly increase capitalto Changhong Ruba Trading Company(Private) Limited which was invested by both sides in Pakistan at anearlier stage, Zhongshan Changhong invested 3.84 million US dollars in this capital increase, and UAE RUBACompany invested 2.56 million US dollars, the shares held by both sides remained unchanged. After the capitalincrease, the company’s registered capital became 12.4 million US dollars, of which Zhongshan ChanghongHome Appliances Company Limited invested 7.44 million US dollars in cash, shareholding ratio was 60%,UAE RUBA Company invested 4.96 million US dollars in cash, and shareholding ratio was 40%.

In 2017, the shareholder meeting of Zhongshan Changhong Electric Co., Ltd. passed the "Proposal on the Company's Increased Investment in Pakistan Refrigerator Project", agreeing that Zhongshan Changhong and the UAE RUBA company will jointly increase the capital of ChanghongRuba. , the shares held by both parties remain unchanged. After the capital increase, the registered capital of ChanghongRuba is US$13,004,923, of which Zhongshan Changhong contributed US$7,802,954 in cash, holding 60% of the shares, andRUBA of the United Arab Emirates contributed US$5,201,969 in cash, holding 40% of the shares.

12) Sichuan Changhong Air Conditioning Co., Ltd. (hereinafter referred to as Changhong Air Conditioner),a limited liability company jointly set up by Sichuan Changhong and Changhong Chuangtou, was founded onNovember 28, 2008. Its registered capital was 200 million yuan upon establishment, of which, SichuanChanghong invested 298 million yuan ( 210,088,900 yuan invested by monetary capital while 87,911,100 yuaninvested by real material), equivalent to 198 million yuan shares, accounting for 99% of the registered capital;and Changhong Chuangtou invested 3 million yuan, accounting for 1% of the registered capital with equivalentof 2 million yuan shares. The registered capital receipt was verified 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, the Company increasedcapital of 650 million yuan to Changhong Air Conditioner, after capital increased, registered capital of SichuanChanghong 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 theoriginal Guangdong Changhong Electric Co., Ltd., and is a limited liability company jointly set up by SichuanChanghong and China Minmetals on May 22, 2001. Its registered capital was RMB 80 million uponestablishment, of which, Sichuan Changhong invested 72 million yuan, including 69.3 million yuan biding forthe estate/non-estate from original Zhongshan Sanrong Air-conditioner Co., Ltd. And its patent use-right of

2.7 million yuan, accounting for 90% of the registered capital; Chine Minmetals invested 8 million yuan inmonetary capital accounting 10% of the registered capital. The Company changed its name originally fromGuangdong Changhong Electric Co., Ltd in July 2003. In December 2009, the Company obtained 90% equityof Zhongshan Changhong by consolidated under same control. 10% equity held by China Minmetals has beentransferred by Changhong Air-conditioner on April 11, 2010. On 25 May 2014, the Company increased 36million yuan to Zhongshan Changhong, and Changhong AC increased 4 million yuan. In 2016, according to

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

the overseas development strategy of the Company and the development and operation needs of the subsidiaries,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 capitalincrease of the Company was 57.6 million yuan, and the capital increase of Changhong Air Conditioning was

6.4 million yuan. After the completion of this capital increase, the registered capital Zhongshan Changhongshall increase to184 million yuan, the shareholding ratio of the company and Changhong Air Conditioningremained unchanged and was still 90% and 10%, of which the Company invested 165.6 million yuan,accounting for 90% of the registered capital, Changhong Air Conditioning invested 18.4 million yuan,accounting for 10% of the registered capital. In March 2020, in accordance with the Company’s overseasdevelopment strategy and the operation and development needs of its subsidiaries, the Company and its wholly-owned subsidiary Changhong Air Conditioning increased capital of 150 million yuan to Zhongshan Changhongaccording 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 registered capital of Zhongshan Changhong has increased to 334 million yuan. The Company’s andChanghong’s shareholding ratios in Zhongshan Changhong remain unchanged at 90% and 10%, of which theCompany funded 300.6 million yuan, accounting for 90% of the registered capital, while Changhong AirConditioning funded 33.4 million yuan, accounting for 10% of the registered capital.

14) Hefei Meiling Group Holdings Limited (hereinafter referred to as Meiling Group), was the state-ownedcompany originally approved by People’s Government of Hefei Province and established authorized by SASAC of HefeiCity. On July 14, 2008, 100% state-owned equity of Meiling Group has freely transferred to Xingtai Holdingby Hefei SASAC. Agreement by the approval of < State-owned property agreement transfer from MeilingGroup> [ HGZCQ (2010) No.34] of Hefei SASAC on April 9, 2010, 100% state-owned property of MeilingGroup after partial assets and liabilities separated transferred to the Company from Xingtai Holding as amountof 113.2 million yuan. The re-registration of industrial and commercial procedure for Meiling Group afterseparated partial assets liability has finished on July 28, 2010. The new Meiling Group has register capital of80 million yuan, and has been verified by the [AD (2010) YZD No. 016] from Anhui Auding CPAs Co., Ltd.

15) Meiling EquatorHousehold Appliance (Hefei) Co., Ltd. (hereinafter referred to as EquatorHouseholdAppliance) was the Sino-foreign joint venture jointly set up by original Meiling Group and EQUATORINVESTMENTS (USA) INC. (EQUATOR for short), which have been approved by the [SWZWFZZ(2004)No.0103] of Approval Certificate of Foreign Enterprise from People’s Government of Anhui Province. Itsregistered capital was US$ 3 million upon establishment, of which, Sino company invested US$ 2.25 millionin machinery equipment, accounting 75% of the registered capital while foreign company invested US$ 0.5million in monetary capital and US$ 0.25 million in intangible assets, amounting to US$0.75 million,accounting 25% of the registered capital. The above mentioned investment verified by the verification reportof [WYAYZ (2004) No. 135] from Anhui Yongan CPAs Co., Ltd. In July 2007, approved by [HWJ (2007)No.136] from Foreign Trade Economic Cooperation Bureau of Hefei City, 25% equity held by EQUATORtransferred to Anhui Meiling Electric Co., Ltd. Totally. The Company’s register capital came into 24,793,200

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

yuan after transference, and was not the joint-venture any more. 25% equity owned by Anhui Meiling ElectricCo., Ltd has been transferred totally to original Meiling Group in July 2009.

16) Hefei Equator Appliance Co., Ltd. (hereinafter referred to as Equator Appliance) was jointly set up byoriginal Meiling Group and Yingkaite Appliance on September 26, 2007. Its register capital was 12 million yuan,among which, original Meiling Group invested 8,670,600 yuan in monetary capital, accounting 72.255% inregistered capital; Equator Appliance invested 3,329,400 yuan in the assessment value of intangible assets(land-use right), accounting 27.745% of total registered 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 YuanGround Energy) was established on 28 August 2015, it is a limited liability company authorized byAdministration for Industry and Commerce of Peicheng District, Mianyang, Sichuan, contributed by SichuanChanghong Air Conditioner Co., Ltd (hereinafter referred to as Changhong Air Conditioner) and Hengyouyuan Technology Development Group Co., Ltd. together. Registered capital amounted as 50 million yuan,including 25.5 million yuan contributed by Changhong Air Conditioner in cash, a 51% in total registeredcapital; Hengyou yuan Technology Development Group Co., Ltd. invested 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 Hongyuan Zhongshan) was established and invested on 18 July 2017 with registered capital of 15 million yuan, TheHong Yuan Ground Energy Heat Pump Tech. Co., Ltd contributed 1.5 million yuan with own funds and takes100% in the registered capital.In 2018, the shareholders of the Hong yuan Zhongshan decided to increasecapital of 30 million yuan, and contributed by the shareholder Hong Yuan Ground Energy; thus registeredcapital of Hong yuan Zhongshan up to 45 million yuan

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

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

21) Anhui Tuoxing Technology Co., Ltd. (hereinafter referred to as Tuoxing Technology) was establishedon 20 May 2019 with registered capital of 10 million yuan and it is the subsidiary of Zhongke Meiling withfully-owned establishment. On May 21, 2020 and February 21, 2021, Zhongke Meiling invested RMB 5million, with a total investment of RMB 10 million, accounting for 100% of its registered capital.

22) CH-Meiling.International (Philippines) Inc. was established on 13 February 2020 in Philippines withregistered capital of US$ 1,000,000, takes 100% of the equity. As of December 31,2020, the Company hasinvested US$ 1,000,000,

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

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

24) Anhui Ling’an Medical Equipment Co., Ltd. (hereinafter referred to as Ling’an Medical) wasestablished on 4 September 2021, which is a wholly-owned subsidiary of Zhongke Meiling, and registeredcapital of 10 million yuan. On June 29, 2021, Zhongke Meiling actually contributed 10 million yuan,accounting for 100% of the registered capital. In 2022, the Board of Directors of Zhongke Meiling decidedto increase the registered capital by RMB 40 million. On December 30, 2022, the paid-in capital wascompleted, and the registered capital of Ling'an Medical increased to RMB 50 million.

(2) Major non-wholly-owned subsidiary

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 Meiling52.5488%4,356,392.829,149,568.12311,620,837.36
Ground Energy49.00%-938,293.8924,002,637.56
Ridian Technology0.9639%-18,264.671,315,437.58
Meiling Life Appliances30.00%7,129,392.337,527,442.5131,785,077.47

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

SubsidiaryEnding balance
Current assetsNon-current assetsTotal assetsCurrent liabilityNon-current liabilityTotal liabilities
Zhongke Meiling603,508,047.37151,052,578.84754,560,626.21146,845,445.8414,702,770.79161,548,216.63
Ground Energy280,925,952.0116,282,068.93297,208,020.94248,047,384.10175,662.22248,223,046.32
Ridian Technology221,343,407.0540,177,681.73261,521,088.78124,557,450.91486,989.56125,044,440.47
Meiling Life Appliances552,729,372.79275,528.66553,004,901.45447,054,643.21447,054,643.21

(Continued)

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

SubsidiaryOpening balance
Current assetsNon-current assetsTotal assetsCurrent liabilityNon-current liabilityTotal liabilities
Zhongke Meiling649,452,399.30157,673,698.36807,126,097.66190,256,989.7915,715,771.32205,972,761.11
Ground Energy190,767,892.4818,222,456.16208,990,348.64158,674,964.71214,658.38158,889,623.09
Ridian Technology231,271,013.1042,012,672.36273,283,685.46135,113,073.14538,894.36135,651,967.50
Meiling Life Appliances559,068,082.42224,882.24559,292,964.66452,015,872.49452,015,872.49

(Continued)

SubsidiaryCurrent Period
Operation incomeNet profitTotal comprehensive incomeCash flow from operation activity
Zhongke Meiling144,766,155.528,290,186.988,290,186.98-13,661,569.66
Ground Energy276,522,437.81-1,914,885.50-1,914,885.50-87,545,869.73
Ridian Technology105,403,861.00-1,894,959.92-1,894,959.9210,295,047.76
Meiling Life Appliances775,737,017.9823,764,641.1123,764,641.1150,850,277.81

(Continued)

SubsidiaryLast 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

(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

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

Joint venture or associate enterpriseMain office placeRegister placeBusiness natureShareholding ratio(%)Accounting treatment for investment of joint venture or associate enterprise
DirectlyIndirectly
Associated companies:
1.ChanghongRubaElectricCompany(Private)Ltd.Lahore, PakistanLahoreManufactures, 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., Ltd.MianyangMianyangR & D, sales, after-sales49.00Equity
5.Sichuan Tianyou Guigu Technology Co., Ltd.MianyangMianyangManufactures, 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

ItemBalance at year-end/Current Year
ChanghongRubaElectricCompany(Private)Ltd.Hefei Xingmei Assets Management Co., Ltd.Sichuan Zhiyijia Network Technology Co., Ltd.Hong Yuan Ground Energy Heat Tech. Co., Ltd.Sichuan Tianyou Guigu Technology Co., Ltd.Chengdu Guigu Environmental Tech. Co., Ltd
Current assets62,529,324.5230,335,123.032,740,899,469.9434,245,689.0712,618,841.1838,973,338.86
Including: cash and cash equivalent961,904.8130,289,160.836,159,949.6630,374.254,312,689.7329,446,573.43
Non-current assets24,273,312.30-14,014,037.2426,881.0312,352.491,183,886.51
Total assets86,802,636.8230,335,123.032,754,913,507.1834,272,570.1012,631,193.6740,157,225.37
Current liability151,666,691.641,146,747.642,627,537,908.62647,139.81792,985.579,793,973.98
Non-current liability--5,470,322.55-11,616.402,697,843.01
Total liabilities151,666,691.641,146,747.642,633,008,231.17647,139.81804,601.9712,491,816.99
Minority's interest1,092,993.99
Equity attributable to shareholder of parent company-64,864,054.8229,188,375.39121,905,276.0133,625,430.2911,826,591.7026,572,414.39
Share of net assets measured by shareholding-25,945,621.9314,092,147.6460,952,638.0116,476,460.842,956,647.936,643,103.60
Adjustment
--Goodwill821,877.281,416,227.93
Unrealized profit of the internal-12,929.5811,303.506,074.85

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemBalance at year-end/Current Year
ChanghongRubaElectricCompany(Private)Ltd.Hefei Xingmei Assets Management Co., Ltd.Sichuan Zhiyijia Network Technology Co., Ltd.Hong Yuan Ground Energy Heat Tech. Co., Ltd.Sichuan Tianyou Guigu Technology Co., Ltd.Chengdu Guigu Environmental Tech. Co., Ltd

downstreamtransactions

downstream transactions
Unrealized profit of the internal upstream transactions
Other25,945,621.93
Book value of the equity investment for associate enterprise-14,092,147.6461,774,515.2916,463,531.262,945,344.438,053,256.68
Fair value of equity investment for the affiliates with consideration publicly
Operation income11,940,445.57-5,238,453,286.912,371,427.432,197,630.991,810,893.32
Financial expenses11,216.86-43,456.82-19,188,756.89244.40-52,908.82-256,294.31
Income tax expenses144,001.23-3,112,952.18-
Net profit-29,900,142.32-17,952.2923,268,872.28-1,232,689.06-693,291.38-1,814,859.16
Other comprehensive income7,582,766.35--
Total comprehensive income-22,317,375.97-17,952.2923,268,872.28-1,232,689.06-693,291.38-1,814,859.16
Dividend received from associate enterprise in Current Year5,793,600.001,629,022.64

(Continued)

ItemsBalance at year-begin /Last Year
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., Ltd.Sichuan Tianyou Guigu Technology Co., Ltd.Chengdu Guigu Environmental Tech. Co., Ltd
Current assets81,268,806.1645,818,917.653,283,851,057.0238,746,877.5614,399,461.7341,590,971.33
Including: cash and cash equivalent4,921,365.6945,763,227.6514,808,208.8829.185,469,142.3823,853,311.23
Non-current assets30,867,707.495,635,867.44819,281.4312,352.491,244,940.57
Total assets112,136,513.6545,818,917.653,289,486,924.4639,566,158.9914,411,814.2242,835,911.90

Annotations of Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

ItemsBalance at year-begin /Last Year
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., Ltd.Sichuan Tianyou Guigu Technology Co., Ltd.Chengdu Guigu Environmental Tech. Co., Ltd
Current liability154,683,192.504,602,727.843,185,798,119.474,708,039.641,891,931.1410,624,102.18
Non-current liability1,632,200.332,731,542.18
Total liabilities154,683,192.504,602,727.843,187,430,319.804,708,039.641,891,931.1413,355,644.36
Minority's interest1,096,374.40
Equity attributable to shareholder of parent company-42,546,678.8541,216,189.81102,056,604.6634,858,119.3512,519,883.0828,383,893.14
Share of net assets measured by shareholding-17,018,671.5419,899,176.4451,028,302.3317,080,478.483,129,970.777,095,973.29
Adjustment
--Goodwill821,877.281,416,227.93
Unrealized profit of the internal downstream transactions61,436.6719,388.906,752.44
Unrealized profit of the internal upstream transactions
Other17,018,671.54
Book value of the equity investment for associate enterprise19,899,176.4451,850,179.6117,019,041.813,110,581.878,505,448.77
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
Total comprehensive income-12,064,565.949,758,023.961,646,585.39-1,163,205.15260,813.27123,763.39
Dividend received from associate5,069,400.00

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

From 1 January 2023 to 30 June 2023(Unless other wise specified, RMB for record in the Statement)

<
ItemsBalance at year-begin /Last Year