2018 Annual Report of Qingdao Haier Co., Ltd.
2018 Annual Report of Qingdao Haier Co., Ltd.
Importance Notice
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior
management of Qingdao Haier Co., Ltd. (“the Company”) hereby assure that the content set out
in the annual report is true, accurate and complete, and free from any false record, misleading
representation or material omission, and are individually and collectively responsible for the
content set out therein.
II. Information of Directors absent from the meeting.
Position of director absent Name of director absent Reason for the absence of
Name of proxy
from the meeting from the meeting director from the meeting
Director Liu Haifeng Personal affair Wu Changqi
III. Shandong Hexin Certified Public Accountants LLP has issued a standard and unqualified
audit report for the Company.
IV. Liang Haishan (legal representative of the Company), Gong Wei (chief financial officer of the
Company) and Ying Ke (the person in charge of accounting department) hereby certify that the
financial report set out in the annual report is true, accurate and complete..
V. Proposal of profit distribution and proposal of capitalizing capital reserves for the reporting
period examined and reviewed by the Board
Proposal of profit distribution for the reporting period examined and reviewed by the Board: to declare a
cash dividend of RMB3.51 per 10 shares (tax inclusive) to all shareholders based on the total number of
shares as at the registration date in respect of future proposal for profit distribution.
VI. Disclaimer in respect of forward-looking statements
√Application □Not applicable
Forward-looking statements such as future plans, development strategies as set out in this report do not
constitute the Company‘s substantial commitment to investors. Investors are advised to pay attention to
investment risks.
VII. Is there any fund occupation by controlling shareholders and their related parties for
non-operational purposes?
No
2018 Annual Report of Qingdao Haier Co., Ltd.
VIII. Is there any provision of external guarantee in violation of prescribed decision-making
procedures?
No
IX. Important Risk Warnings
For the possible risks which the Company may encounter, please refer to the relevant information set out
in the Section of ―DISCUSSION AND ANALYSIS ON OPERATIONS‖ in this report.
X. Others
□Application √Not application
Chairman: Liang Haishan
Qingdao Haier Co., Ltd.
29 April 2019
（Note: This Report has been prepared in both Chinese and English. Should there be any discrepancies
or misunderstandings between the two versions, the Chinese version shall prevail.）
2018 Annual Report of Qingdao Haier Co., Ltd.
Contents
SECTION I DEFINITIONS........................................................................................................................ 1
SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS .... 3
SECTION III SUMMARY OF THE COMPANY‘S BUSINESS ............................................................... 9
SECTION IV DISCUSSION AND ANALYSIS ON OPERATIONS ....................................................... 17
SECTION V SIGNIFICANT EVENTS .................................................................................................... 47
SECTION VI CHANGES IN ORDINARY SHARES AND INFORMATION ABOUT SHAREHOLDERS . 89
SECTION VII RELEVANT INFORMATION OF PREFERRED SHARES............................................ 98
SECTION VIII DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES ..... 100
SECTION IX CORPORATE GOVERNANCE ...................................................................................... 111
SECTION X RELEVANT INFORMATION ON CORPORATE BONDS ............................................. 121
SECTION XI RESPONSIBILITY STATEMENT .................................................................................. 124
SECTION XII FINANCIAL REPORT ................................................................................................... 125
SECTION XIII DOCUMENTS AVAILABLE FOR INSPECTION ....................................................... 329
2018 Annual Report of Qingdao Haier Co., Ltd.
SECTION I DEFINITIONS
I. Definitions
Unless otherwise stated in context, the following terms should have the following meanings in this
report:
Definition of frequently used terms
CSRC China Securities Regulatory Commission
MOFCOM Ministry of Commerce of the PRC
SSE Shanghai Stock Exchange
The Company,
Qingdao Haier Co., Ltd.
Qingdao Haier
Four Major Securities China Securities Journal, Shanghai Securities News, Securities Times, Securities
Newspapers Daily
Haier Electronics Group Co., Ltd. (a company listed in Hong Kong, stock code:
Haier Electrics, 1169
01169.HK)
GEA GE Appliances, Household Appliance Assets and Business of General Electric
Fisher & Paykel Appliances Holdings Limited (Chinese Name:斐雪派克) was
established in 1934 and is known as the national appliance brand of New Zealand,
the global top-level kitchen appliance brand and the famous luxury brand of the
world. It has products including ventilator, gas stove, oven, dishwasher, microwave
FPA
oven, freezer, washing machine, clothes dryer and etc. Its business covers over 50
countries/regions across the world. The Company completed the acquisition of
100% equity interest in Haier New Zealand Investment Holding Company Limited
on July 2018, and FPA became a wholly-owned subsidiary of the Company.
China Market Monitor Co., Ltd., established in 1994, has been focusing on research
CMM on retail sales in China consumption market for a long term and is the nationally
recognized market research institute in terms of appliance area.
Euromonitor, established in 1972, is the leading strategic market information
supplier and owns over 40 years of experience in respect of publishing market
Euromonitor
report, commercial reference data and on-line database. They create data and
analysis on thousands of products and services around the world.
All view cloud (AVC) is a big data integrated solution provider perpendicular to the
All view cloud smart home field, providing enterprises with big data information services, regular
data information services and special data services.
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2018 Annual Report of Qingdao Haier Co., Ltd.
The International Electrotechnical Commission. Founded in 1906, it is the world‘s
first organization for the preparation and publication of international
electrotechnical standardization and is responsible for international standardization
for electrical engineering and electronic engineering. The goals of the commission
include: to effectively meet the needs of the global market; to ensure that the
IEC
standards and conformity assessment programs are applied globally in a prioritized
manner and to the greatest extent; to assess and improve the quality of products and
services involved in its standards; to create conditions for the common use of
complicated systems; to improve the effectiveness of the industrialization process;
to improve human health and safety, and to protect the environment.
Shenyang Refrigerator Interconnected Factory, Foshan Front-Loading Washing
Machine Interconnected Factory, Zhengzhou Air-conditioner Interconnected
Factory, Qingdao Mold Interconnected Factory, Qingdao Water Heater
Interconnected Factory, Qingdao FPA Electrical Machine Interconnected Factory,
11 Interconnected
Jiaozhou Air-Conditioner Interconnected Factory, Huangdao Central
Factories
Air-Conditioner Interconnected Factory, Huangdao Smart Kitchen Appliance Range
Hood Interconnected Factory, Huangdao Smart Kitchen Appliance Stove
Interconnected Factory, Qingdao Front-Loading Washing Machine Interconnected
Factory
―5‖ refers to five physical spaces where Haier keeps upgrading, including smart
living room, smart kitchen, smart bathroom, smart bedroom and smart balcony. ―7‖
“5+7+N” smart represents seven whole-house solutions, namely whole-house air, whole-house
full-scene customized water, whole-house cleansing and maintenance, whole-house security, whole-house
full set program interaction, whole-house health and whole-house internet, while N refers to
variables, i.e. users may customize their own smart living scene freely based on
their living habit, realizing unlimited possibilities.
―Ren‖ means staff; ―Dan‖ means the need of users, rather than the ―orders‖, the
English word of ―Dan‖, in narrow sense. The ―RenDanHeYi Model‖ encourages the
Model of RenDanHeYi
integration of staff with users, and ―win-win‖ means to realize every employee‘s
value while creating value for users.
The Institute of Electrical and Electronics Engineers, an international association of
electronic technology and information science engineers, is currently the largest
non-profit professional technology society in the world. It is committed to the
IEEE development and research of electrical, electronic, computer engineering and
science-related fields, and has now developed into an international academic
organization with great influence in terms of the fields of space, computer,
telecommunications, biomedicine, power and consumer electronics.
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2018 Annual Report of Qingdao Haier Co., Ltd.
SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY
FINANCIAL INDICATORS
I. Information of the Company
Chinese Name 青岛海尔股份有限公司
Chinese Short Name 青岛海尔
English Name QINGDAO HAIER CO.,LTD.
English Short Name HAIER
Legal representative Liang Haishan
II. Contact Person and Contact Information
Representative of securities
Secretary to the Board IR
affairs
Name Ming Guozhen Liu Tao Sophie (孙瑶)
Department of Securities of Department of Securities of Haier Deutschland GmbH,
Address Qingdao Haier Co., Ltd. Haier Qingdao Haier Co., Ltd. Haier Hewlett-Packard-Str. 4,
Information Industrial Park, No.1 Information Industrial Park, 61352 Bad Homburg,
Haier Road, Qingdao City No.1 Haier Road, Qingdao City Germany
+49 160 9469 3601
Tel 0532-88931670 0532-88931670
(Germany)
Fax 0532-88931689 0532-88931689 /
Email finance@haier.com finance@haier.com y.sun@haier.de
III. Summary of the General Information
Registered address Haier Industrial Park, Laoshan District, Qingdao City
Postal code
Haier Information Industrial Park, Laoshan District,
Business address
Qingdao City
Postal code
Website http://www.haier.net/en/
Email 9999@haier.com
IV. Place for Information Disclosure and Deposit
Designated newspaper for information Shanghai Securities News, Securities Times, China
disclosure Securities Journal, Securities Daily
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2018 Annual Report of Qingdao Haier Co., Ltd.
Website for publishing of annual report as www.sse.com.cn
designated by the CSRC www.xetra.com; www.degap.de
Department of Securities of Qingdao Haier Co., Ltd.
Deposit place of annual report Haier Information Industrial Park, No.1 Haier Road,
Qingdao City
V. Summarized Information of Shares of the Company
Summarized Information of Shares of the Company
Stock Exchange of Stock Short Name
Type of Shares Stock Short Name Stock Code
Shares Listed Before Variation
Shanghai Stock
A shares Qingdao Haier 600690 /
Exchange
Frankfurt Stock
D shares QINGDAO HAIER 690D /
Exchange
VI. Other Related Information
Name Shandong Hexin Certified Public Accountants LLP
Accounting firm
engaged by the 26th – 27th Floor, Century Building, No.39
Company Business address
Donghai Road West, Qingdao City
(domestic)
Name of signing accountant Wang Hui （王晖）, Wang Lin (王琳)
Name China International Capital Corporation Limited
Sponsor 27th & 28th Floor, China World Tower 2, No. 1
Business address
responsible for Jianguomenwai Avenue, Beijing
continuing
supervision Name of signing sponsors Sun Lei （孙雷）, Li Yang （李扬）
during the
reporting period Period of continuing supervision 18 January 2019 to 31 December 2020
Name China International Capital Corporation Limited
Financial
27th & 28th Floor, China World Tower 2, No. 1
advisor Business address
responsible for Jianguomenwai Avenue, Beijing
continuing
Name of signing representative
supervision Hu Xiaojun （胡霄俊）, Li Yang （李扬）
during the of financial advisor
reporting period
Period of continuing supervision 12 January 2017 to 31 December 2018
Notes:
（1）Financial advisor is responsible for continuing supervision during the reporting period: On 12
January 2017, the Company issued the Report on the Execution of Acquisition of Significant Assets by
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2018 Annual Report of Qingdao Haier Co., Ltd.
Qingdao Haier Co., Ltd., according to which, the acquisition of significant assets related to the
acquisition of the appliance business of General Electric had been completed. As the financial advisor
for this acquisition of significant assets, China International Capital Corporation Limited will carry out
continuing supervision on the Company during the continuing supervision period.
（2）Sponsor is responsible for continuing supervision: During the reporting period, the Company had
an issuance of convertible bonds, and the ―Haier Convertible Bonds‖ were listed on 18 January 2019.
China International Capital Corporation Limited, as the sponsor of such issue, is responsible for
continuing supervision for the remaining time of the year of listing and the following whole fiscal year.
VII. Key accounting data and financial indicators for the last three years
(I) Key accounting data
Unit and Currency: RMB
2017 yoy
Key accounting data 2018 change
After Before (%)
adjustment adjustment
Operating revenue 183,316,560, 163,428,82 159,254,466, 119,132,261,66
12.17
236.03 5,488.56 909.46 2.60
Net profit attributable to 7,440,228,85 6,907,629,1 6,925,792,32 5,041,782,280.
shareholders of the listed 7.71
company 5.90 88.39 1.27
Net profit after deduction of
6,601,505,59 5,624,061,7 5,624,061,70 4,332,453,050.
non-recurring profit or loss 17.38
attributable to shareholders 9.79 08.46 8.46
of the listed company
Net cash flow from 18,934,252,8 16,703,785, 16,086,588,0 8,135,878,351.
operating activities 13.35
99.16 279.98 28.31
yoy
As of 31
As of 31 As of 31 December 2017 change
December 2016
December (%)
2018 After Before
adjustment adjustment
Net assets attributable to 39,402,350,7 33,299,583, 32,215,515,2 26,438,188,226
shareholders of the listed 18.33
company 91.68 555.63 01.45 .56
Total assets 166,699,544, 157,164,34 151,463,110, 131,469,157,34
6.07
243.79 5,812.30 707.63 8.79
(II) Key financial indicators
Key financial indicators 2018 After Before yoy change (%) 2016
adjustment adjustment
Basic earnings per share 1.210 1.133 1.136 6.80 0.827
(RMB per share)
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Diluted earnings per share 1.182 1.085 1.088 8.94 0.824
(RMB per share)
Basic earnings per share after
deducting non-recurring profit 1.074 0.922 0.922 16.49 0.71
or loss (RMB per share)
Decreased by
Weighted average return on 21.00 22.89 23.59 20.38
net assets (%) 1.89 percent point
Weighted average return on Decreased by
net assets after deducting 18.63 19.15 19.15 17.56
non-recurring profit or loss 0.52 percent point
(%)
Explanation of the key accounting data and financial indicators of the Company as at the end of the
reporting period for the previous three years
□Applicable √Not applicable
VIII. Differences in accounting data under domestic and overseas accounting standards
(I) Differences in net profit and net asset attributable to shareholders of listed company in
financial report disclosed simultaneously according to international accounting standards and
according to China Accounting Standards(CAS)
□Applicable √Not applicable
(II) Differences in net profit and net asset attributable to shareholders of listed company in
financial report disclosed simultaneously according to overseas accounting standards and
according to China Accounting Standards(CAS)
□Applicable √Not applicable
(III) Reasons for the difference between the domestic and overseas accounting standards:
□Applicable √Not applicable
IX. Key financial data of 2018 by quarters
Unit and Currency: RMB
Q1 Q2 Q3 Q4
(January-March) (April-June) (July-September) (October-December)
Operating revenue 43,609,601,739 46,946,801,849 47,582,370,823 45,177,785,825
Net profit attributable
to shareholders of 1,952,610,308 2,832,731,503 1,341,445,310 1,313,441,735
listed company
Net profit after
deduction of
non-recurring profit 1,761,919,418 2,714,072,148 1,046,481,812 1,079,032,222
or loss attributable to
shareholders of listed
company
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Net cash flow from 3,378,067,727. 5,500,897,538.1
operating 2,170,214,541.28 7,885,073,092.10
60
activities
Reasons for difference between quarterly data and disclosed regular reporting data
√Applicable □Not Applicable
The difference between the quarterly data and the disclosed regular reporting data was due to the
Company's business combination under common control during the reporting period, which resulted in
retrospective adjustment to the data.
X. Non-recurring Profit or Loss Items and Amount
√Applicable □Not Applicable
Unit and Currency: RMB
Non-recurring profit or loss items Amount in 2018
Profit or loss from disposal of non-current assets 214,439,336.04
Profit from disposal of long-term equity investments 259,839,279.75
Government grants included in current profit or loss, except that
closely related to the normal operating business, complied with 640,822,529.56
requirements of the national policies, continued to be granted
with the amount and quantity determined under certain standards
Gains from the costs of investment in the acquisition of
subsidiaries, associated companies and joint ventures being lower 185,413.85
than the share of the fair value of the transferor‘s identifiable net
assets
Current net profit or loss of subsidiaries from the business
combination under common control from the opening of the -59,949,487.99
period to consolidation date
Profit and loss of changes in fair value arising from holding of
financial assets held for trading and financial liabilities held
for trading except for valid straddle business relevant to
normal business of the company, as well as investment gain -15,161,125.59
realized from disposal of financial assets held for trading,
financial liabilities held for trading, financial assets available
for sale
Trust fee income from entrusted business 1,493,710.69
Other non-operating income and expenses except the 292,041,683.31
aforementioned items
Minority interests -333,421,256.64
Income tax -161,566,826.87
Total 838,723,256.11
XI. Items Measured by Fair Value
√Applicable □Not Applicable
Unit and Currency: RMB
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Item Opening balance Closing balance Change Impact on profit
Forward foreign 92,274,790.28 -54,455,694.11 -146,730,484.39 -21,805,376.31
currency contract
Short-term wealth 1,567,648,908.00 1,567,648,908.00 111,636,330.40
management products
Investment in trading 19,322,411.35 19,322,411.35 -2,259,981.90
equity instruments
Interest rate swap 51,339,181.17 57,228,769.39 5,889,588.22
agreement
Contingency -5,384,860.29 -5,705,307.28 -320,446.99
consideration
Investment in other 1,415,354,307.82 1,400,316,460.34 -15,037,847.48 105,245,136.33
equity instruments
Long-term wealth 327,358,825.57 327,358,825.57 302,047.25
management products
Bulk effective 37,702,676.06 28,275,122.63 -9,427,553.43
hedging
Total 1,591,286,095.04 3,339,989,495.89 1,748,703,400.85 193,118,155.77
XII.Other
□Applicable √Not Applicable
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SECTION III SUMMARY OF THE COMPANY’S BUSINESS
I. Introduction of major business, operating model of the Company and industry background
during the reporting period
The Company mainly engages in research, development, production and sales of home appliances
with product portfolios covering refrigerators/freezers, washing machines, air-conditioners, water
heaters, kitchen appliance products, small home appliances, U-home smart home business, etc., offering
complete sets of smart home solutions to our consumers through rich portfolio of product and brand to
create a better life experience, and the Company's channel integration service business mainly provides
customers with full-process services such as distribution, logistic and after-sale of home appliances,
household appliances and other products, as well as other value-added services.
Since its establishment, the Company has been upholding the concept of ―taking the user as right
and ourselves as wrong‖, while adhering to the spirit of entrepreneurship and innovation and the strategy
of keeping up with new developments. The Company has always adhered to overseas independent brand
creation and through its persistent efforts and industry integration, it has successively acquired the white
goods business of Sanyo of Japan, the household appliances business of GE, the Fisher & Paykel
business in New Zealand, holds a 48.41% equity in MABE in Mexico, and acquires Italy-based Candy
Company to construct the global competitiveness of the trinity of \"R&D, manufacturing and marketing\".
Through continuous optimization of resource integration capabilities and global strategic synergies, the
Company achieves the layout and global operation of the seven world-class brands, including Haier,
Casarte, Leader, GE Appliances in the USA, Fisher & Paykel in New Zealand, AQUA in Japan and
Italy-based Candy. In 2018, revenue from overseas operation represented 42% of the total revenue
while near 100% of the revenue was generated from self-owned brands.
According to retail sales statistics on the large home appliances published by Euromonitor, the
world‘s leading independent provider of strategic market research, in 2018, sales of Haier‘s large home
appliances ranked No. 1 in the world for the 10th consecutive year. Meanwhile, global sales of Haier‘s
refrigerators, washing machines, wine cellars and freezers continued to rank No. 1 in the world. The
sales of Haier Health self-cleaning air-conditioner in 2018 represented a global market share of 40.7%
and ranked No. 1 in the world.
In face of the opportunities and challenges arising in the Internet of Things (―IoT‖) era, the
Company, through strategic market moves, has initiated the transformation to the IoT platform and
established three leading platforms, including U+ Smart Life platform, COSMOplat industrial internet
cloud platform, and Shunguang social group platform to focus on continuous iterations of the user's best
experience. By offering smart homes solutions and introducing full-range smart life experiences to
consumers, Haier has satisfied the needs of a better life for its customers.
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2018 Industry Summary
In 2018, the global economy maintained its moderate growth, but the momentum of growth slowed
down gradually due to the intensification of trade protectionism, the continued interest rate increase of
the U.S. Federal Reserve, the intensification of capital outflows from emerging economies and the
continuing turbulence of financial markets. Given the complex and severe situation at home and abroad,
China's economic growth remained within a reasonable range, and its economic structure was constantly
optimized; its new momentum for development was growing rapidly; people's livelihood continued to
improve.
(I) Performance of domestic white goods industry:
In 2018, affected by the weakening of economic growth and the reduced growth of real estate sales,
the household appliances industry grew slightly, showing a trend of fast growth first and slow growth
later in the year, and the pressure of growth increased continuously in the third and fourth quarters.
According to the calculation by China Market Monitor Co., Ltd. (CMM), the market size of China's
household appliances industry (excluding 3C) in 2018 was RMB948 billion, representing an increase of
1.1% yoy; the growth rate of the industry had fallen significantly compared with that in 2017 at 14.1%.
Domestic market in 2018: (1) White goods industry: Domestic retail sales of each white goods
sub-industry grew slightly. ① The retail volume and the value of the home-use air-conditioner increased
by 3.0% and 5.6% respectively; ② For the refrigerator and washing machine market, replacement
demand became the primary driver with weak sales volume growth, while the average prices were
boosted by structural upgrading, resulted in retail sales maintaining a slight growth trend: retail volume
in the refrigerator industry decreased by 5.9%, but the retail value increased by 7.9%; retail volume and
retail value of washing machine increased by 0.1% and 5.4% respectively. (2) Kitchen and bathroom
industry: ① The water heater industry recorded a decrease of 3.2% in retail volume and a growth of
0.5% in retail value in 2018; ② In the kitchen appliance market, hoods and stoves recorded negative
growth of 7.9% and 7.1% respectively in terms of retail value.
The trend of consumption upgrade continued, and the characteristics of experience economy
and community economy appeared. ① Brand, quality, design and technology became the major
factors influencing the consumption decision. Consumers are willing to pay a premium for \"good
products\", and healthy, smart, artistic products with large capacity are increasingly favored. Innovation
in product categories promoted industry upgrading, and the average price continued to rise. High
value-added sub-categories such as duplex drum washing machines provided space for price increases.
According to CMM‘s offline observed data, the average retail price in the refrigerator industry in 2018
was RMB4,167, representing an increase of 9.9% yoy; the average retail price in the washing machine
industry was RMB2,956, representing an increase of 9.93% yoy. ② The trend of consumption
differentiation was obvious, and there were more and more young users. ③ The development of the
Internet of Things, Big Data, Artificial Intelligence and other technologies accelerated the
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intellectualization trend. The interconnection of intelligent household appliances created a brand new,
convenient and smart experience. The requirement for household smart solutions has been constantly
raised and pushed the transformation of enterprises from manufacturing and marketing to providing a
smart life.
With increasing industry concentration, the leadership becomes a core asset. Haier as a leading
enterprise focusing on R&D innovation, brand building, and a long-term strategy, increased its market
share by relying on comprehensive advantages accumulated in long term market competition. In 2018,
new industrial innovation appeared in the household appliances industry, seeking breakthrough
opportunities in design, concept and price.
Offline channels showed a negative growth trend, while the proportion of online channels
continued to increase but the growth slowed down. The integration of online and offline channels has
progressed. E-commerce platform accelerated the deployment in rural markets. Traditional offline
channels were also trying to promote business using e-commerce resources. In this sense, channel
ecology has become diversified increasingly.
(II) Performance of overseas white goods industry: Due to the level of economic development
and market size in each region, performances differed across markets. ① In the U.S. market, the sales of
large appliances was basically the same in 2018 as in 2017 ② In the European market, refrigerators and
freezers industries benefited from the increase of the proportion of large-capacity refrigerators including
those with open doors and multi-doors; washing products maintained a small single-digit growth due to
the increasing proportion of large-capacity washing machines, heat pump dryers and intelligent
interconnection products. Sales of cookers and embedded products were basically unchanged compared
with 2017. ③ The Japanese market recorded a growth of 3% in 2018. ④ The Australian and New
Zealand market experienced a negative growth trend in the household appliances market, impacted by
the sustained decline in consumer spending and the weakening of the real estate industry. ⑤ In the South
Asia markets, affected by inflation, currency depreciation and other factors, Pakistan‘s economy
fluctuated and the growth of household appliances market slowed down; the Indian market was affected
by the depreciation of the rupee, rising costs and weakening demand, so growth was flat and lower than
expectation.
2019 Industry Outlook:
Domestic Market: In 2019, it is expected that the national economy will grow steadily at a low
rate; the real estate market will continue to grow slowly; and there will be no obvious favorable factors
for the external economic environment of the household appliances industry, but industrial restructuring
and consumption upgrading will continue. The market of household appliances is dominated by demand
of replacement, and the quality and improvement consumption demand will be further released.
According to AVC‘s prediction, the total retail sales of white goods (refrigerators, washing machines and
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air conditioners) will reach RMB372.9 billion in 2019, representing a growth of 0.4% yoy. The kitchen
and bathroom market will still be at a turning point. It is estimated that the retail sales of kitchen
appliances and water heaters will reach RMB62.6 billion and RMB64.3 billion, respectively,
representing 2.4% and 1.9% yoy decrease, respectively. Industry concentration will increase, and the
advantages of leading enterprises will be further strengthened. Industrial structure upgrade, experience
improvement and intellectualization will continue in the household appliances industry. Enterprises with
strong technological innovation ability, quality control ability and comprehensive product lines will
continue to benefit from industrial upgrading.
Overseas Markets: According to the World Bank‘s report, 2019 Global Economic Prospects, the
global economy will face more severe downside risks in 2019 due to potential escalating trade tensions
and fragile international finance markets. Global growth will decrease from 3% in 2018 to 2.9% in 2019,
and the slowdown of economic growth will be reflected in developed, emerging and developing
economies at the same time. The macroeconomic slowdown will affect the demand for home appliances.
II. Explanation on significant change on major assets of the Company during the reporting
period
□Applicable √Not Applicable
III. Analysis on core competitiveness during the reporting period
√Applicable □Not Applicable
Since incorporation in 1984, the Company has always adhered to the principle of driving the
sustainable and healthy development with innovation system focusing on the needs of users, and it has
successfully turned itself from a collectively owned small factory which was on the verge of bankruptcy
into one of the largest home appliances manufacturers in the world. The Company is committed to
realizing sustainable development across different cycles through continued innovations in development
strategy, management method, brand building, R&D, smart manufacturing, and expansion strategy in
foreign and domestic markets to achieve competitiveness regarding dynamic market changes.
(I) World-renowned brand competitiveness, comprehensive brand deployment and leading
solution capability for smart household appliances
According to the data published by Euromonitor, Haier has been ranked No. 1 among global large
home appliances brands for 10 consecutive years. In segments of refrigerators, washing machines, wine
cellars, and freezers, the Company continues to be No. 1 in the world. To meet the personalized and
diversified needs of users, the Company has broken down the global technical barriers in the household
appliances industry and promoted the healthy development of the industry through the global strategic
synergy among seven brands of household appliances, namely Haier, Casarte, Leader, GE Appliances in
the U.S., Fisher & Paykel in New Zealand, AQUA in Japan and Candy in Italy, realizing a coverage in
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global markets and communities.
Leading the high-end market. In 2018, Casarte‘s market share of air conditioners above
RMB10,000 is 42.7%, representing an annual increase of 7.7 percent point; the market share of Fisher &
Paykel, the world's top household appliance brand, is No. 1 in New Zealand and maintains its market
leadership.
Based on the all-round deployment of brand, research and development, intellectual building,
channel, service, ecology and U+ platform, Haier has built up one of the world's leading white goods,
kitchen and bathroom industry clusters, covering refrigerators and freezers, washing machines, air
conditioners, water heaters and kitchen appliances, and provides consumers with a complete set of
\"one-stop, full-scene, customized\" solutions for smart household appliances.
(II) Industry-leading R&D and technological competitiveness
1. Global R&D resources deployment: Relying on 10 R&D centers across the world and multiple
(N) innovation centers that focus on users demand changes, Haier has built a ―10+N‖open innovation
system to form a global network of resources and users, and attracted world-class resources to
participate with its ―cooperation, win-win and sharing‖ mechanism. Haier therefore plays a leading role
in the development of products and technologies in the industry, and realizes the goal that \"R&D goes
wherever users demand and innovations resources are\" to provide excellent experience for its users.
2. Leadership in the development of international standards: As of December 2018, Haier as a
household appliance enterprise proposed and reviewed the most proposals for international standard in
China: Participated in preparation and revision of 60 international standards and submitted 97
international standard revision proposals. At the same time, Haier is also the household appliance
enterprise leading the most industry standards in China and has led and participated in 490 national /
industrial standards revisions cumulatively. Haier is the only Chinese household appliance enterprise
with a seat in the International Electrotechnical Commission's Market Strategy Bureau (IEC/MSB), and
the only household appliance enterprise in China that undertakes the membership in International
Standards Technical Subcommittee. Haier took the lead in setting up the IEC TC59/SC59M WG4
Refrigerator Preservation International Standard Working Group and led the development of new
international standards for refrigerator preservation. In April 2018, in response to the national \"the Belt
and Road Initiative‖, Haier created the standard output model for such initiative; Haier also led the
development and official release of the world's first AI standard white paper. In addition, the Smart
Home, Internet of Clothing and other international standard projects under the leadership of Haier were
approved by IEEE.
3. Up to now, Haier has applied for more than 43,000 patents globally, and the proportion of
invention patents is higher than 60%, representing the high quality of R&D. With more than 10,000
overseas invention patents in 25 different countries, Haier is the household appliance enterprise with the
most overseas invention patents in China. Haier ranked No. 1 in ―2018 Hurun Report on IP
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Competitiveness‖ in China. In the 20th China Patent Awards in November 2018, Haier won 1 gold
award for patent and 1 gold award for designing, and 12 excellence awards for patents. Haier has won 7
gold awards cumulatively during past China Patent Awards and the total number of gold awards was the
highest in the industry, and the proportion of invention patents is higher than 60%. Haier has won 15
State Prizes for Progress in Science and Technology, the highest honor in China's science and technology
sector, becoming the household appliance enterprise with the most State Prizes for Progress in Science
and Technology, accounting for over half of the prizes within the industry.
4. Innovative R&D mechanism through the HOPE platform: In parallel to independent innovation,
Haier opened its global resources, built HOPE (an open innovation platform) to incorporate users,
enterprises and resources into the same interactive ecosystem. In addition, Haier continued to make
cross-border and disruptive innovation achievements through the effective collaboration and
zero-distance interaction of different roles within the community. Currently, the platform can reach 3.8
million world-leading resources, more than 400,000 registered users, and offers over 6,000 creative ideas
on average each year, supporting leadership in products and technologies.
(III) Competitiveness of smart manufacturing that leads to change
1. The core competitiveness of Haier‘s smart manufacturing is its commitment to long-term value
of users through its user-oriented approach and the transition from large-scale manufacturing to
large-scale customization. Haier has established 11 global-leading interconnected factories as examples
for the industry, and the interconnected capabilities and ecological system cover the whole process. Such
businesses cover refrigerators, washing machines, air-conditioners, water heaters, kitchen appliances,
electric motors, molds and other fields, fulfilling user's demand for perfect experiences in high-end
personalized products and services. Such initiatives resulted in notable effects: the orders from mass
customization with full user involvement accounted for 19%, and the orders from mass customization
with full client involvement accounted for 52%. This achieved a breakthrough, which eliminated or
shortened the period of products in the warehouses. In addition, operational efficiency throughout the
process has been enhanced (e.g. the new product R&D cycle has been shortened by more than 50%).
2. COSMOPlat, China‘s first and global-leading industrial Internet platform, digitized and
commercialized Haier's interconnected factory model. The platform established independent intellectual
property rights and integrated Haier's existing functionalities, such as intelligent equipment, intelligent
control, mold, and research institutes. The platform has already collaborated with relevant companies in
15 industries, and offered comprehensive solutions and value-added services by the combination of
software, hardware as well as relevant services for the clients‘ upgrading and smart manufacturing
transformation.
(IV) The layout of efficient and in-depth distribution channels and logistics network
1. Through an omni-channel distribution system, the Company has achieved full coverage of the
first, second, third and fourth-tier domestic markets and provided convenient shopping experience
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anywhere, anytime. The Company also maintained strong strategic cooperation with professional offline
distribution platforms for household appliances, such as Gome and Suning, as well as e-commerce
platforms, such as Tmall and JD.com. In respect of self-owned channels, Haier has established more
than 8,000 county-level stores, and more than 30,000 town-level stores. In the comprehensive store
channel, the Company has established a number of clubs, such as V58 and V140 Clubs, to maintain
close relationship with major regional distribution enterprises of household appliances. In addition, the
Company has accelerated the construction of the front channel contacts. Relying on the advantage of
multi-brand and product, the Company will build smart and full-scene experience stores to provide
displays, design, sales and services in the end-market, and further improve the channel stickiness.
2. Jushanghui (巨商汇) system covers 100% of dealers' customers, and Yilihuo (易理货) covers all
township stores, these two channels allow the Company to realize real-time monitoring of dealers from
orders taking, sales processing, inventory management to after-sales services.
3. The storage area of Gooday Logistics occupies an area of 4.70 million square meters with
100,000 registered vehicles. Gooday Logistics offers all-weather 24/7 delivery and installation services,
and it is dedicated to providing users with comprehensive, timely and high-quality services.
(V) Excellent global operational capability
Focusing on ―building own brand independently‖, the Company has completed its deployment of a
triple network comprising R&D, manufacturing and marketing in major overseas markets through
organic growth and mergers and acquisitions, and targets to identify and meet local consumers‘ demand.
The Company is succeeding in transforming from single-brand globalization to multi-brand
cross-industry cross-regional globalization. The Company targets a leap from \"going out, going in\" to
\"going up\" through the integration of global resources. In 2018, the Company focused on branding and
product upgrading, and the Company has accelerated the implementation of the transformation of
\"RenDanHeYi\" overseas, deepened its triple strategy of ―manufacturing, marketing and R&D‖, and
continued to promote leading smart home solutions overseas in the Internet of Things era. The
proportion of overseas revenue in 2018 reached 42% and nearly 100% of it comes from the Company‘s
own brands.
(VI) Integrity of corporate culture and the win-win under RenDanHeYi management
Integrity culture based on quality and service is the core driver of Haier‘s continued success.
Leveraging on ―user-oriented‖ and ―persistent honesty‖ values, Haier has turned itself from a
collectively owned small factory which was on the verge of bankruptcy into one of the largest white
goods manufacturers in the world, while keeping a leading position in world-wide innovation in the
Internet era. Haier upholds an user-oriented value, and this value stimulates the spirit of innovation,
revolution and entrepreneurship of Haier and motivates Haier to follow the trend and continuously
improve and challenge itself, so as to seize development opportunities. The win-win model of combining
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individual and goal is the assurance of sustainable development of Haier. In exploring the ―RenDanHeYi
2.0, Co-create and Win-win ecosystem‖, Haier endeavors to build a win-win ecosystem based on user
value interaction in a new stage of e-commerce era to make every employee his/her own CEO and
realize their own value while creating value for users, and benefiting every party in the ecosystem.
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SECTION IV DISCUSSION AND ANALYSIS ON OPERATIONS
I. Discussion and analysis on operations
Led by smart homes and driven by the model of \"RenDanHeYi\", the Company progressed its
product technology innovation, retail transformation and global brand marketing; deepened the triple
strategy of ―manufacturing, marketing and R&D‖ for localizing operations in foreign markets; and
continuously strengthened competitiveness to achieve growth. Facing the opportunities in the era of the
Internet of Things, Haier focused on continuous improvement of user experience, established a win-win
and value-added ecological circle with its stakeholders, so as to provide users with a better living
solution. In addition, an ecological strategy in the era of the Internet of Things was created to cultivate
ecological income.
In 2018, the Company's income, net profit attributable to shareholders of the parent company, and
net cash flow generated from operating activities all hit a record high, achieving revenue of RMB183.3
billion, representing an increase of 12.2%. Against the adverse industry trend in the third and fourth
quarters of 2018, the Company's revenue in the third and fourth quarters achieved a steady growth of
11.5% and 10.4%, respectively. Net profit attributable to shareholders of the parent company for the
whole year amounted to RMB7.44 billion and represented an increase of 7.7%; while net profit
attributable to shareholders of the parent company after deduction of non-recurring gains and losses
amounted to RMB6.6 billion and represented an increase of 17.4%. Net cash flow generated from
operating activities amounted to RMB18.93 billion and represented an increase of 13.4% over the same
period of last year.
Market share continued to rise: ① In the global market, according to Euromonitor International,
an authoritative international market research organization, Haier ranked first in retail sales of
large-scale household appliances globally in 2018. Haier has been ranking first for ten times. Haier
Refrigerator and Haier Washing Machine continued to rank first in the world. ② In the domestic market,
market share of the whole business line has maintained the overall improvement trend since 2017.
According to the monthly retail monitoring report by China Market Monitor Co., Ltd. (CMM), the retail
share of Haier refrigerators, washing machines, air conditioners, water heaters, range hoods and stoves
in the offline market increased by 3.52, 3.68, 0.43, 1.16, 0.99, 0.66 percent point respectively in 2018.
Haier refrigerators and washing machines continued to maintain the first place in the industry and
expanded their leading edge, the shares of which were 3.08, 1.89 times as much as those of the second
brand respectively, thus realizing the ring leading. ③ In the U.S. market, under the adverse environment
of a downturn in the household appliances industry, GEA has increased its market share by more than 3
percent point through the effective replication of the \"RenDanHeYi\" model.
In July 2018, the Company was listed in Fortune 500. In January 2019, as the only Asian household
appliances company on the list, it was listed in Fortune magazine as \"The Most Appreciated Enterprise
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in the World in 2019\".
Main Achievements in 2018
(I) Insisting on original technological innovation and leading the development of the industry.
Based on creating the best user experience as the starting point, the Company relied on the global
layout of its R&D system through technological upgrades and disruptive innovation, leading the
formulation of industry international standards, and continuously launching classic original products,
leading the upgrading trend of industry consumption and promoting development of the industry.
1. Refrigerator/freezer business
The Company addressed the experience mode and consumption demand of different user groups,
and provided a one-stop healthy diet solution for global users through the process of design, R&D and
manufacturing, thus creating a better food and scene experience and continuously increasing market
share. In 2018, the share of retail sales in the domestic offline market increased by 3.52 percent point to
35.4%; the share in the domestic online market increased by 4.1 percent point to 31.7%.
The Company led the development trend of industry products. ① Casarte refrigerators stand
out in the high-end market, with a revenue growth of 31%. Casarte refrigerators focus on the high-end
target audience and provide solutions for the best experience of home integration and high-end food
ingredients preservation according to users‘ high-quality lifestyle. The Company has established a
multi-layered and multi-dimensional high-end brand community, which interacts with users, and pushes
product design to be more relevant to the user needs. In 2018, the Company generated a new generation
of Tiancheng series refrigerators, freely embedded T-609 refrigerators. The platform with freely
embedded space and MSA oxygen-control preservation solutions, which can satisfy the needs for fresh
capacity of big families with three generations. Focusing on healthy diet lifestyle, the Company
launched F+420 Jingqiao series refrigerator, providing the best storage solution with a 2:1:1 golden
spacing ratio. It was well-received as soon as it was listed on the market. The \"F+\" product series also
won the international \"IFA\" award, the national \"A+ Star Awards\", etc. ② Haier Star Kitchen series
refrigerators. The full-space preservation series aims at meeting the storage needs of users for
―refrigerated dry and wet storage, with frozen original flavor‖. It realized the disruptive breakthrough of
refrigerated and frozen preservation technology through cross-regional, cross-domain and cross-industry
integration of R&D resources. The refrigerator‘s precisely-controlled breeze technology realizes the
mode of on-demand air supply and cooling in different partitions, which not only satisfies the needs of
consumers to store food in partitions, but also realizes rapid air supply and cooling of the ingredients in
the partition, effectively reducing energy consumption and avoiding repeated refrigeration of food in
other partitions. For freezing, the Company provided the world's first smart constant temperature system
to achieve defrosting hot air without leakage, and achieve that frozen ingredients will not be repeatedly
frozen, which leads to juice and texture loss. Compared with ordinary refrigerators, the freezing
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temperature fluctuation is reduced by 75%, the defrosting temperature increase is lowered by 50%, and
the juice loss rate is reduced by 18%, thus maintaining the original flavor of frozen ingredients. The
full-space preservation technology has been awarded the world's first VDE preservation certification and
IEC international preservation standard, and the industry‘s first \"China Patent Gold Award\" over the past
29 years.
2. Washing machine business
Under the general trend of consumption upgrading, with an aim of providing the best user
experience, the Company adheres to technological innovation and product iteration to bring more
convenient, efficient and healthier washing experience to users and achieve better market performance.
The share of retail sales in the domestic offline market increased by 3.7 percent point to 33.57%; the
domestic online market share increased by 6.5 percent point to 34.4%.
Technological innovation. In response to the problem that some high-end fabrics cannot be
washed with water, the Company innovated and improved air-washing technology in 2017, which was
continuously upgraded for 18 years, with optional washing parameters and smart cleaning procedures. In
addition, Haier‘s washing machine also iterated a number of innovative technologies such as triple IoT
clothing identification, smart washing, machine-on-demand, and KDF clean water washing. On 12
December 2018, the Company's \"Key Technology and Industrialization of Sectioned Washing of Roller
Washing Machines\" won the second-class prize of National Science and Technology Progress Award. It
was the only National Science and Technology Progress Award granted to the household appliance
industry in 2018. It was the first national science and technology advancement award in the history of
roller washing machines, and also the only National Science and Technology Progress Award in the
washing machine industry over the past decade.
Product iteration. The Company kept increasing the drum diameter of the washing machine
through directly driven crystal technology, achieving greater capacity and better washing results. Casarte
Shuangziyunshang provided double-roller partitioned washing, silent washing, washing and drying, and
enhanced the user experience; Casarte Xianjian, as the world's first \"Know Me Well\" IoT washing
machine for clothes, is equipped with RFID clothing identification technology that can automatically
scan the clothing‘s identification label, quickly identify the material, color, style and other information,
and help the softening and washing technology tailor a special fiber-level washing solution.
3. Home-use air conditioner business
The Company is dedicated to the innovation of smart, efficient and healthy products and
technologies, providing users with comfortable air solutions, leading the industry to develop a healthy,
comfortable and smart trend, and achieve breakthroughs in the high-end market. In the domestic market,
the offline share in 2018 increased by 0.43 percent point to 11.45% and maintained an upward trend for
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two consecutive years, of which the market share of RMB 15,000 or above reached 38%, representing
an increase of 17.7 percent point; in the global context, according to Euromonitor International, Haier
Health Self-cleaning air conditioner accounted for 40.7% market share in 2018, ranking first in the
world.
In 2018, Casarte TX VIP cabinets, Fresh Air conditioners and other innovative products were
introduced into the market, leading the industry development trend. ① Casarte TX VIP cabinets adopted
deep ultraviolet UV sterilization and carbon fiber technology to solve problems such as indoor air
turbulence and low oxygen content, smartly identify the best apparent temperature for different users in
the same room, and distribute air according to temperature partition to resolve health issues caused by
direct blowing by air conditioners such as joint pain, catching a cold and triggering of illnesses from air
conditioners. In 2018, Casarte home-use air conditioners achieved revenue growth of more than 60%,
and the share of high-end market (6,000+ hanging types, 15,000+ cabinets) reached 20%, representing
an increase of 125%.② Ordinary air conditioners adopted internal air circulation mode, which causes
repeat usage of indoor air, which increases carbon dioxide concentration and decreases oxygen content
in the case where the room was not well-ventilated. Haier‘s Fresh Air series products were launched to
tackle the problem. The products removed polluted indoor air through double-power
constant-temperature technology of fresh air purification and dynamic dual-motor technology of
balanced air supply; the five-tier purification function supplies fresh air to adjust indoor air to make us
comfortable, and a smart management App was added to provide users with comfortable and a healthy
air and smart and convenient control experience.
4. Central air conditioner business
Based on the needs of users in different market segments, we launched a series of energy-saving,
smart, healthy and convenient products, and seized market opportunities through personalized solutions
to further enhance the brand reputation. In 2018, the share of the central air-conditioning increased by
30%, and the share of domestic market reached 9%, representing an increase of one percent point.
Multi-functional air conditioners. The newly launched MX attains a wide range of temperatures,
and has smart, energy-saving and comfortable performance based on previous generation products,
achieving ―resist heat by low temperature and resist freezing by high temperature‖. It realizes heat
resistance by providing cold air down to -26 °C and freezing resistance by providing hot air up to +54 °C
in summer, with a heating effect that is 30% higher than that of conventional types. It is suitable for most
parts of the world including extremely hot and cold regions.
Transportation products. Evaporative cold magnetic suspension products were launched for the
fast-growing rail transit market. These products had the advantage of small size, high efficiency, low
noise, long life expectancy and easy operation. The advantage of power saving and water saving are
evident, and COP (equipment energy efficiency) is >5, which met the requirements of energy saving and
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reliability of subways. In view of poor construction conditions of subways, the area occupied by
large-scale central air-conditioning equipment, and the difficulty of hoisting the product, the structure is
made compact in design, flexible in installation, and requires no additional cooling towers and special
machine rooms.
Home products. Relying on the Company's global R&D and design and innovation platform, we
strengthened the research and development of Casarte‘s central air conditioning for high-end users in terms of
product comfort, quality and service, and integration of home appliances. The launch of Casarte‘s DYX
central air conditioners improved the appearance of traditional outdoor units. We were the first company in
the industry which created 21°aesthetic arc appearance, integrated panel and dynamic grille, and achieved
integration with the home decorative environment. The original smart breeze mode offered a technological
breakthrough with temperature, humidity, cleanliness and air supply control: After the set temperature was
reached, the panel closes, and the air deflector evenly distributes with 1,314 micropores with a diameter of 2.5
mm which breaks up the airflow, and air supply speed is close to 0.6 m/s. Precise temperature control and
more comfortable air supply is achieved. We were the first in the industry to offer 10-year warranty,
exceeding the 10-year life expectancy in the industry.
Internet of Things transformation. Haier‘s central air conditioning, as the pioneer of IoT central
air-conditioning, launched the industry's first E+ IoT cloud platform and a full range of IoT central
air-conditioning products with IoT magnetic machines. The IoT central air conditioning standard was
defined by three tags: self-networking, self-adaptation and self-optimization. We integrated with open
resources such as China Mobile and CAICT, and released the first Internet of Things central
air-conditioning model in the industry.
5. Water heater business
Focusing on user's demands in terms of safety, health, smart, comfort, etc., we carried out
technological innovation and product upgrades, and provided a full-house integrated smart water
solution through a range of electric water heaters, gas water heaters, solar water heaters and air energy
heat pumps. We continued to expand our leading edge in the industry. In 2018, the retail share of the
domestic offline market increased by 1.16 percent point, reaching 18.11%; the online market retail share
increased by 3.6 percent point, reaching 22.2%.
Electric water heater: In view of problems such as long heating time, large space occupation, and
vulnerability to bacteria and scaling of traditional electric water heaters, we launched Casarte TM series
and Haier Jingxiang series. With the application of 3D instant heating technology, a 15-minute bath only
needed to be preheated for 5 minutes, which greatly shortened the waiting time. The heaters had the
thickness reduced to 278mm, which greatly reduced the space occupation. In order to protect the user's
health during bathing, the double-effect anti-scaling function was offered to effectively suppress the
development of scale in the water heaters. Three-stage purification technology removed harmful
substances such as sediment, rust, residual chlorine and bacteria in the water. By running the smart
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module, the water heater automatically recorded and analyzed the user's water habits, and heated in
advance to achieve energy saving and comfort. In 2018, the electric water heater business achieved a
breakthrough in the technology and product portfolio strategy through the Haier & Casarte brands. The
volume increase in the price segment of RMB3,000 or above was 30%.
Gas water heater: Through the cooperation with China's first-class scientific research institutions,
we quickly formed a unique differentiated technology, and launched a series of products featuring
patented oxygen-enriched blue flame, NOCO and carbon monoxide security to provide safety for the
household gas environment. The precisely-controlled constant temperature realized zero-cold water, and
turbocharged technology realized waterfall washing, which constantly improved the user's bathing
experience. In 2018, Casarte gas water heater CH3 became the first product in China to pass the
European three-star certification for the highest level of hot water comfort in Europe. According to
CMM 2018 offline statistics, the Company's share of gas water heater retail sales reached 9.61%, being
the top five in the industry, representing an increase of 1.32 percent point over the same period of last
year, and the retail share reached 9.6%, representing an increase of 1.6 percent point over the same
period of last year.
Air energy water heater: The new generation of TM Power air energy water heaters can
automatically match the optimal frequency according to the ambient temperature, and makes it possible
that the heat pump can be heated up to a high temperature of 80℃ at the energy efficiency ratio COP of
up to 6.0. The product won the 2018 Best AWE Environmental Award.
Solar water heater: In response of the shortcomings of traditional water heaters, which adopted
heat exchange technology such as slow heating, the need of externally-mounted water tanks and
complex pipeline with large space occupation, we created the ALL-IN-ONE series to integrate the
collector and the heat storage unit into one, without using externally-mounted water tanks in order to
save the space. We advanced to localize the technology of GREEN one TEC Solarindustrie GmbH (the
world's largest flat solar heat collector manufacturer, an Austria-based subsidiary of the Company), and
introduced directly-heated flat-plate technology, which provides heating at twice the rate of traditional
solar water heaters. According to CMM offline data, the Company had retail sales and market shares
from solar water heaters of 30.37% and 28.29%, respectively.
6. Kitchen appliance business
Integrating FPA and GEA's globally-leading technological advantages, expanding into high-end
solutions and building a smart kitchen experience center, we achieved rapid growth in an unfavorable
market environment with negative growth in the kitchen appliance industry through our brands Casarte,
Haier and Leader. The kitchen appliance business of the Company (excluding North America) achieved
revenue growth of 20%, and Casarte kitchen appliance increased 200%. The retail sales share in the
domestic online/offline market increased significantly year-on-year: retail sales share of the range hoods
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and stoves in the offline market was 4.51% and 5.38%, respectively, an increase of 0.66, 0.99 percent
point, respectively; the retail share of the range hoods and stoves in the online market was 6.29% and
4.01% respectively, representing an increase of 1.6, 1.0 percent point, respectively.
Gas stoves: For the safety hazard caused by \"forgetting to turn off the stove\", we launched the
anti-dry gas stove series. The product was equipped with NTC active heat source tracking technology.
Once the oil temperature in the pot exceeded 230℃ and the bottom temperature reached 298℃, it would
start a flameout protection automatically; for fire without the stove working, it would automatically turn
off the heat within 3 minutes to ensure the safety of the stove. The industry's first Standard for
Anti-drying Household Gas Cookers was also drafted by the Company. Casarte‘s four-headed gas stove
won the AWE Award, and Haier‘s four-headed induction stove won the Golden Hook Award for the
Third China Integrated Kitchen Industrial Design Awards.
Range hoods: ① Casarte kinetic energy range hoods utilized dual-boosting technology to
significantly increase the speed and ability of exhaust discharge, redefined kitchen cleaning technology.
It won the global IF Design Award. ② Haier air curtain 8°oil range hoods set up an air curtain barrier
between users and range hoods through the oil smoke capture system, effectively avoiding the spread of
lampblack, and it won the Health Pioneer Award from the China Household Electric Appliances
Research Institute.
Ovens: Casarte steam energy-embedded refrigerator uses FPA cloud moisture-controlled
technology, a dynamic thermal temperature control system and frequency conversion temperature
technology to achieve steam energy surrounding, cell-level nutrition, providing ±1℃ precision
temperature control and keeping food flavor and moisture in an ideal stage.
(II) Domestic market: the Company deepened retail transformation to enhance
competitiveness and achieved growth against the trend.
In the domestic market in 2018, we continued the transformation ―from product selling to scheme
selling, from contact to conversion, from branch to contact, from price to value‖ by promoting smart
home solutions, improving the quantity and quality of interactions, deepening marketing transformation,
strengthening the superiority of Casarte high-end series, and building the young Leader brand. In 2018,
domestic market revenue of refrigerators, washing machines, air conditioners, kitchen appliances and
water heaters increased by 14%, 13%, 9%, 16% and 9% respectively.
Transformation from product selling to scheme selling: Leading the trend of embedded and
integrated home appliances, the Company relied on its multi-brand and product-wide advantages to
promote complete smart home appliance solutions and create a ―one-stop, full-scene, customized‖
experience. In 2018, we built 4 smart home city experience centers, 423 full-house smart home
integration stores, and 3,037 branch-wide smart home experience stores. Through the transformation of
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products, stores, personnel and platforms, we achieved full sets of products, programs, demonstrations,
personnel and services to resolve concerns by providing consumers with one-stop solutions to solve
problems from single products to complete sets of products to complete sets of solutions. In 2018, the
retail sales of whole house integration channel exceeded RMB5 billion, representing an increase of more
than 100%.
Transformation from branch to contact: (1) Offline channels: Based on the regional market
capacity, we promoted the construction of contact networks in business districts, building material
channels and cloud stores, in order to increase the breadth and depth of interactions. By creating service
brands such as ―one-stop building home‖ and ―love home‖, we provided a warm service and experience,
and promoted the transformation of store and terminal teams. (2) Online channels: ① E-commerce
channel: The Company improved the mid-to-high-end product category and full-scale layout, built
online boutique content to establish a complete communication matrix, and used data tools to achieve
interaction with members. We integrated branch-wide management and improved interaction in
e-commerce channels to achieve improved operational efficiency. E-commerce retail sales growth in
2018 was 29%. ② Shunguang: Taking ―home‖ as the core, community interaction as the basis, and user
experience iteration as the guide, the transformation from vertical sales channel to platform was realized
by introducing consumer brands related to good life. The number of store owners on the platform
increased to 1.6 million, representing an increase of 100%.
Transformation from contact to conversion: The Company deepened the marketing
transformation, enhanced the brand's volume, and strengthened the brand's leading position. ① By
participating in the comprehensive exhibition of high-standard large-scale home appliances in the
industry such as China Home Appliances and Consumer Electronics Expo (AWE) and International
Consumer Electronics Show (CES), and cooperating with CCTV's ―Challenge the Impossible‖ and other
famous programs, the Company strengthened its brand recognition. ② The Company achieved
recognition by targeting users through experiencing activities at stores including free air wash of
high-end clothes and half-cutting foods in refrigerators to show solutions to good life and smart living.
These activities were shared and made public in communities to support our reputation.
Transformation from price to value: (1) Casarte brand. Based on continuous iterations in leading
product lineups, contact networks, user experience, etc., Casarte stood out in the high-end market with
revenue growth of 44%. ① High-end market share continued to lead: CMM data showed that in 2018,
Casarte refrigerators priced at RMB10,000 or more had a market share of 36%, representing an increase
of 5 percent point; the share of washing machines priced at RMB8,000-10,000 was 48.8%, representing
an increase of 8.2 percent point; the share of those priced over RMB10,000 was 76.9%, representing an
increase of 8 percent point. ② The Company continued to enhance the brand's volume through the
programs of Sixianghui, Villa-style life, Hello Life, and the high-end user circle. ③ The Company
extended its contact network. According to the distribution of branches and core business districts, more
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than 1,800 Casarte stores were built in 2018, and more than 8,000 Casarte stores and 600 Casarte
complete brand halls were accumulatively built. (2) Leader brand. In response to the needs of the youth
consumer market, the Leader brand adhered to the concept of ―light fashion appliances‖ and achieved
rapid growth through breakthroughs in industrial design, products and marketing. The revenue growth in
2018 was 30%, which was more than 30% for two consecutive years. The Company launched the
industry's first set of light fashion home appliance L.ONE, to achieve the youthful of all categories of
products and meet the needs of fashion users; the youth community was gathered through the Times
Young Creative Awards, music festivals, lifestyle festivals, fashion shows and other diversified
marketing tools, so as to create a fashion brand concept and enhance brand influence.
(III) Overseas market: We strive for brand leadership, transformation to high-end brands
and achieving all-round growth
To localize branding in the overseas market, the Company promoted the coordination of the global
operation system and deepened the triple strategy for global deployment. Growth in major regions
exceeded that of the industry, and all white goods businesses have achieved a double-digit growth.
Detailed businesses and performances in major regions are as follows:
North American Market: the US household appliance market stayed flat and weak in demand and
GEA continued to promote the RenDanHeYi model in 2018. It promoted business transformation and
revenue in the US increased 13%, the fastest growth observed in the US home appliances market.
The Company established a user-centered organization system, to realize end-to-end management,
comprehensive responsibility for business results, and accelerate decision-making speed and product
launch speed through 12 internal industry platforms. The Company promoted nationwide marketing
campaigns targeting specific customers and regions to build brand image. The Company launched
leading products to fill shortcomings. In December 2018, GEA was ranked by TWICE the first in the list
of 2018 America top 10 Major Appliance Movers & Shakers.
The Company promoted a global co-operation mechanism to generate synergies. ① Procurement
synergy: By the end of 2018, GEA and its headquarters had completed 412 new synergies programs.
Global sourcing resources were shared through the Spend Cube (Global Sourcing Big Data) system and
the CVI (Global Selected Module Library) system. At the end of 2018, the GSOP (Global Sourcing
Operation Platform) began global collaborative negotiations, supporting global teams to collaborate
efficiently online. ② Supply chain synergy: We established a global supply chain committee to create a
world-class manufacturing platform featuring leading-edge technologies and processes and improve
operational efficiency by sharing successful practices.
R&D and product synergy: ① The Global R&D Center and Innovation Center made breakthroughs
in many core technologies of home appliances such as ice water technology, heat pump technology,
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direct drive motor technology, etc.; we made great achievements in unified engineering platform system,
home appliance size engineering, global patent management, global standards management and others;
② GEA‘s VP of Product led the global product committee meeting where six white good businesses, i,e,
refrigerators, washing machines, dishwashers, kitchen appliances, air conditioners and water heaters,
were covered. Product leadership and product synergy continued to be the focus.
European market: Continued efforts were made to adhere to the localization and transformation to
high-end brands strategy of the RenDanHeYi Business model. We relied on leading products to interact
with users and provide customers with comprehensive product portfolios so as to enhance the structure
and market reputation. In 2018, the Company‘s revenue in the European market increased 25%, within
which the Russian market revenue increased by 37.8%.
(1) Launch of products. ① The Company improved the product structure by launching products
including Cube series refrigerator, drawer-type refrigerator and direct drive frequency variable washing
machines. In 2018, the price index exceeded 100 for the first time, and it beat the industry average in
Europe. (2) Marketing and channel expansion: ① We replicated a successful channel model in China
and continued to implement the transformation to high-end channels to enhance point-of-sale display
and shopping experience. ② During exhibitions such as Shanghai Home Expo, Italy MCE Exhibition,
German IFA Exhibition and etc., we invited core customers to participate in the Company‘s launches and
visit the pavilions. In this way, we could promote their in-depth understanding of the Company's global
layout and innovation strength, and strengthen their confidence in cooperating with the Company. (3)
Supply Chain build-up: The Russian refrigerator factory operated at full capacity. We continued
construction of Haier Russia Industrial Park and Washing Machine Factory and enhanced the efficiency
of responding to localization requirements.
In 2018, the Company acquired Candy Group to further improve brand deployment and intensify
the efforts to expand in the European market. We made efforts to improve product categories and
enhance the coverage of different customer segments in order to accelerate the business development in
Europe.
South Asian market: In 2018, Company business in South Asia grew rapidly, with overall growth
of 25%.
Pakistan: In 2018, revenue increased 21.7%, with market share ranking first in the local market,
which was 1.5 times of the second player. (1) Product Leadership: We took the leading position by
developing a full range portfolio covering efficient, healthy, smart and fashionable products through
all-dimensional user interaction and product upgrading and iteration: we launched cleaning-free
air-conditioner, UPS uninterrupted refrigeration series air-conditioner, and ―ONE TOUCH‖ automatic
washing machine to lead the transformation of the automatic washing machine in the market. ② Brand
building: A connection was made between online and offline to create a high-end brand image. Online
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products took intelligence as the selling point, and attract attention from interactive advertisements and
videos; offline stores continued to intensify the point-of-sale by branding, sample product distribution
and demos to lead the home appliance shopping experience and educate the market . ③ Channel
construction: Promoted distribution transformation from policy-oriented mechanism, which required
overstock to retailing strategy led by user experience.
India: 2018 annual growth rate was 41% and that of high-end products was 74%. (1) Product
leadership: The refrigerator business has been guided by the differentiation of BM refrigerators to lead
the whole business; washing machines have driven the growth of medium and high-end products
through leading technologies such as partition washing and variable frequency direct drive; air
conditioners have led from frequency conversion technology to intelligent guidance. Air conditioning
and air purification were combined into one. The revenue increase in 2018 was 70%. (2) Channel
expansion: Efforts were made to promote retail transformation, standardize channel resources, expand
the network horizontally and vertically; we focused on e-commerce and regional chain channels to
enhance brand image; the Company focused on TOP100 retailers, especially with retailing and display
capability. With the training of direct sellers and standardization of customer product demonstrations,
the competitiveness of marketing was improved. (3) Brand and marketing: We levered IPL (Indian
Premier League) and Asian Cup to implant products and brands, enhance brand awareness and establish
a high-end product image. (4) After-sales: We had 500 after-sales service points, and 24-hour quick
response services covering 90% of the region; efforts were made to promote the construction of
information systems, empowering 3,000 front-line engineers through an APP platform to solve technical
issues; we provided innovative services such as safety measurement and mobile service stations to
improve brand reputation. (5) Supply chain: The production of Pune Industrial Park has reached 2.2
million sets. It realized the goal of putting into operation, reaching the design capacity and making
profits in the same year. The supply chain order guarantee structure and system construction ensures that
the order fulfillment and inventory rate of the Industrial Park continued to increase. The supply demands
and response rate of terminal sales were ensured. Efforts were made to promote the work related to new
projects in the North Industrial Park.
Southeast Asian market: Continued efforts were made to implement brand building and
RenDanHeYi business model. In 2018, business and platform resources were combined to continue
promoting business transformation. Outstanding performance was observed in Thailand and Malaysia,
recording growth of 30% and 36%, respectively. ① Product Leadership: Through efforts to promote
the simultaneous launch of global high-end product platforms in the Southeast Asian market and adjust
product structure, the proportion of high-end product sales rose to 10%. ② Offline and online resources
was integrated to enhance Haier brand awareness; high-end products and brand strategy launches were
held to boost the market confidence and enhanced customer stickiness. ③ Channel transformation:
Transformation was made from sell in to sell out. We made full efforts to promote direct seller
management and implement daily retail sales reviews; we optimized promoted standardization of the
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customer end demonstration, to achieve better shelf rate and display efficiency; we increased the sample
distribution of high-end products, enhanced the brand image, and sped up the selling process; ④
After-sales service upgrading: In 2018, we enhanced service satisfaction and reputation by building
after-sales outlets and mobile service stations, etc.; the training of technical personnel greatly improved
service efficiency and quality.
Japanese market: We adhered to brand building and the ―Three High‖ strategy to continue
optimizing refrigerator, freezer and washing machine businesses; a trend of high performance was seen
in the business; community washing has achieved a win-win situation in the eco-sphere, cross-industry
cooperation and overseas model replication continued to expand. The revenue growth in 2018 was 10%,
better than the increase of 3% in Japanese home appliance market. (1) Branding: efforts were made to
actively implement online and offline three-dimensional marketing activities for target users from
multiple dimensions, improve brand awareness and support high-end branding strategy. Efforts were
also made to actively implement new life marketing. The three-dimensional marketing from all rounds
were carried out according to the strategy of online warming-up/promotion + offline mass media
advertising + user interaction experience. (2) Product strategy: Continuous efforts were made to
transform towards mid-to-high-end products. AQUA refrigerator had a new VBL appearance. And the
new SV full range appeared in the market. Ultra-thin T-door refrigerator began its mass production;
home-use washing machine continued the efforts to expand vertical washing and drying machine,
machines with large capacity and other high-end model lineup. (3) Channel strategy: focuses were put
on the development of retail channels. In particular, efforts were made to strengthen cooperation with
core customers; (4) AQUA commercial washing machines increased by 15% in 2018, and ecological
income continued to increase. The second generation system for commercial washing machine IoT
platform was developed and launched. Cross-industry cooperation was promoted, and cooperation with
the Family Mart was progressing smoothly; we developed the introduction plan for Thailand and South
Korea for the commercial washing platform of Internet of Things.
Australian and New Zealand market: Under the unfavorable environment with negative growth
in the Australian and New Zealand home appliance industry, FPA has achieved growth in a soft industry
by localize the RenDanHeYi business model and promoting the globally consistent high-quality,
standard high-end brand experience. The income (NZD) growth in 2018 reached 3%. New Zealand
ranked the first for the market share; Australia had a market share of 17.3%, ranking the second place.
① Efforts were made to create the globally leading high-end home appliance range, including Columns
full-embedded refrigerator, French refrigerator with black stainless steel appearance, T-door refrigerator,
FL10 large-volume roller washing machine and new series of independent oven stoves launched. With
innovative technology and seamlessly integrated modular design concept, a stable, high-quality,
high-end experience was provided for the user in every detail. ② Innovation was made toward
high-quality kitchen demonstration and in-store experience. Retail terminal demonstration systems were
provided. Experience centers were set up in New York, Los Angeles, Toronto, Sydney, Shanghai and
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other cities. The best full-process experience was provided or users at all contacts through differentiated
experience and all-dimensional delivery, installation and after-sales service.③ Promoting well-organized
market growth: great efforts were made to develop the North American market, consolidate and
strengthen its market position in the Australian and New Zealand markets. We made breakthroughs and
entered the European market. FPA China branch was established in domestic market in 2018. Businesses
were expanded through the development of high-end property customer, branding and retail services.
In addition, FPA was selected a kitchen appliance brand most trusted by consumers by New
Zealand Reader‘s Digest in 2018.
Latin American market: In 2018, Haier continued to implement the RenDanHeYi business model
in the Latin and American market to improve the competitiveness of products and services. A rapid
revenue growth of 58% was achieved through R&D cooperation and market synergy with MABE. Our
full-set smart home appliances entered Latin American households step by step.
Middle East and African market: Facing negative changes in the local market, political and
economic environment, efforts were made to actively respond to the adverse situation by product
restructuring and development of new business and channels. High-end products including refrigerator /
T-door refrigeration, large capacity washing machines, variable frequency smart air conditioners etc.
were launched. In the Israeli market, Haier T-door refrigerator kept its third-place ranking in terms of
market share.
(IV) Smart home life platform: focusing on IoT+AI strategy and empowering the full scene
solution to enhance market competitiveness and promote the implementation of market terminal.
Create ecological circles such as the Internet of Clothes and the Internet of Food.
With \"IoT+AI\" dual-engine as the core, we released and consolidated the strategy of
\"1+2+3N\" platform: namely a smart home operating system UHomeOS and \"IoT+AI\" dual engine to
serve the three customizations, which are \"customized interaction, scenarios and services\".
1. As the only smart home operating system included in the 13th Five-Year Project for Core, High
and Fundamental Technologies of the Ministry of Industry and Information Technology, UHomeOS has
fulfilled the stage target on schedule, started small-batch market-oriented mass production and applied
such in Haier network devices on a large scale. 2. On the basis of IoT's comprehensive interconnection
and interoperability and driven by the ―+ AI strategy‖, the Company expanded the application of voice
interaction, and formed a variety of user interaction portals such as APP, voice and screen network. The
application of large data AI in user scenarios was strengthened and the value-added of network devices
was enhanced, so the initial realization from passive control to active service was achieved. 3. Focusing
on the whole-house scenario customized by the user, the Company realized 200+ home's main scene
which cover 4000+ product model and promoted the continuous scale sales of \"5+7+N\" full-scene
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solutions. In addition, the Company realized 10000+ scene customization by continuously improving
user's experience through user scenario operation and the stability of the scene interconnection achieved
99%. In view of the delivery difficulties of smart home, we have led to establish the capabilities for
delivery of a packaged solution, implemented the ―packaged experience, design, sales and services‖ for
the user side, and built smart home experience stores. In addition, the B-end market of large real estate
and hotel customers was expanded for the full coverage of smart home customer channels.
The Company took the lead in proposing the industry's first big data energy-saving standard and
became the only leading household appliances company to initiate and publish projects. The Company
led the IEEE Intelligent Family Standards Working Group and acted as the chairman. Furthermore, the
Company obtained the global interconnection certificate issued by OCF (Open Connectivity Foundation)
and achieved seamless interconnection with OCF through the Haier U+ platform.
Create ecological brand in Internet of Clothing and Internet of Food. ① Haier‘s Internet of
Clothing is the world's first clothing full-life management platform based on the Internet of Things.
Through this technology, we combined the upstream and downstream industrial chains of \"factories,
stores and homes\" and provided users with smart solutions for the whole life cycle from washing, caring,
storing, matching to purchasing. In May 2018, GS1 China selected Haier‘s Internet of Clothing Alliance
to jointly develop national standards for clothing commodity coding rules, and jointly promoted the
application of the standard in the apparel industry. The application for the clothing association standards
submitted by the Company was also accepted by IEEE. ② The Internet of Food takes smart refrigerators
and kitchen appliances as the interaction portals to combine data, such as eating habits generated during
the interactive process of smart kitchen scenes with individual health data in order to provide users with
value-added services, including physical examination, smart cooking, safe food purchases and healthy
diet planning. The Company collected seven modules with resources coming from 400 parties and took
the lead in establishing the Internet of Food Alliance.
In 2018, the sales volume of smart appliance increased by 79.8%, the number of smart home users
increased by 15.6%, the sales of whole house packaged solution accounted for 25% and increased over
100%, and the ecological revenue of Internet of Things amounted to RMB2.8 billion, representing an
increase of 1622%.
(V) COSMOPlat Industrial Internet Platform: As a large-scale customized industrial Internet
Platform centered on the user’s experience and created by the relevant parties, it forms a leading
advantage by shaping core capacities; empowers enterprises to transform and upgrade and
achieve high-quality development through building the new industrial ecosystem.
During the reporting period, COSMOPlat Industrial Internet Platform empowered enterprises to
transform by promoting model innovation, platform innovation and ecological construction. As of the
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end of 2018, 11 interconnected factories have been built, forming the world's leading large-scale
customization solution. The platform has linked 26 million industrial equipment, building thousands of
industrial APP/industrial models, 12 development languages/tools, and tens of thousands of platform
developers. The seven modules including Haier user interaction, R&D innovation, synergic procurement,
intelligent manufacturing, smart logistics, precision marketing and intelligent service have been digitized
and productized to form a complete solution empowers the companies to transform and upgrade.
Users, customers and the relevant parties participate in the whole process customization makes the
R& D cycle of new products shortened, the efficiency improved, and the non-stock rate reache 71%,
realizes users, R&D resources and supplier resources participating in the lifecycle management of
product, upgrades products and user bodies and will upgrade the user to lifetime user Haier COSMOPlat
has successively become the first demonstration platform of Intelligent Manufacturing Integrated
Application based on Industrial Internet of the Development and Reform Commission and the first test
platform of Industrial Internet of the Ministry of Industry and Information Technology. In September
2018, the Company became the only Chinese company in the list of the world's first nine \"lighthouse
factories\" published by the World Economic Forum.
Develop international standards for mass customization: during the reporting period, IEEE
approved Haier to lead the development of international standards for the model of mass customization,
and the standard draft was completed. ISO approved Haier to lead the development of ISO standards for
the model of mass customization.
Make the model of mass customization modularized and intelligentized by software and
realize its cross-industry and cross-domain applications through 1+7 (modules) +N (industries)
platform architecture. Empowering the Internet of Clothing, the Internet of Food, agriculture, and RVs
to provide single or complete solutions for 15 major industries, and to replicate to 20 countries across
cultures. For example, COSMOPlat built the first intelligent manufacturing interconnection plant in the
auto industry, with a view to solving the problem of fragmentation of parts procurement in the RV
industry. It provided more value-added services for users in \"booking, transportation, travel and
housing\" through the IoT users, IoT smart RV, and IoT smart camps as well as the Internet of Things of
the RV and camps themselves. In addition, the platform also provides value-added services to other
companies by taking advantage of its centralized procurement system. In 2018, COSMOPlat recorded a
revenue over RMB7 billion.
(VI) Logistics service business: We maintained rapid growth based on the growth of offline
business of household appliances and household products and the expansion of new businesses
such as cross-border freight forwarding.
The Company continuously strengthened the platform network and actively deployed intelligent
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and automated warehouses to set a benchmark for the logistics industry of large-scale packages. As of
the end of 2018, the total warehouse area was 4.7 million square meters, of which the proportion of
self-built warehouses reached 26%. In Hangzhou and Qingdao, intelligent unmanned warehouses in a
total area of 5,000 square meters were deployed to realize intelligent management in the whole process.
We continued to deepen the cooperation with major e-commerce platforms to provide high-quality
regional distribution and last-mile service for large-sized household appliances of Tmall platform. In
order to help e-commerce customers reduce the number of goods deposited, Gooday Logistics reduced
the delivery time from 2.3 days to 1.9 days in 2018, while the public praise (DSR) reached 4.91, much
higher than the industrial average of 4.84 and that of peers. During the 18 June and 11 October
E-commerce Shopping Festivals, the punctuality rates of Gooday Logistics were as high as 99% and
98.5% respectively, higher than the 97.5% and 97% of the industry respectively.
We continued to expand the large-scale home market and provide customers with full-channel
logistics services. At present, we have achieved the front-end collection of 10 industrial clusters in the
home sector, established three Cainiao warehouse management systems, and integrated the resources of
117 trunk lines to 2,200 regions in the country. Furthermore, the Company continued to improve its
delivery and assembly capacities and network coverage.
We continued to accelerate the development of the new business sectors and actively optimize the
asset portfolio. On the one hand, the Company expanded the international freight forwarding business
through the merger and acquisition of Peiji Logistics for the expansion to new business sectors; on the
other hand, considering the unfavorable competitive environment faced by the LTL business, the
founding shareholders of Shengfeng Logistics, a joint venture company in the LTL sector, and Gooday
Logistics executed an equity transfer agreement, pursuant to which the transfer of 50.37% of Shengfeng
Logistics‘ equity held by Gooday Logistics in cash shall be completed during the year.
II. Principle operating conditions during the reporting period
Please refer to the related statement in ―I. Discussion and analysis on operations‖ of this section.
(I) Analysis of principal business
1. Table of movement analysis on the related items in income statement and cash flow statement
Unit and Currency: RMB
Corresponding
Items Current period Change (%)
period of last year
Operating revenue 183,316,560,236.03 163,428,825,488. 12.17
Operating cost 130,154,144,638.08 112,607,222,004. 15.58
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Selling expenses 28,653,223,738.07 28,996,237,421.8 -1.18
Administrative expenses 8,324,327,164.18 7,164,848,718.59 16.18
R&D expenses 5,080,604,505.93 4,509,850,773.96 12.66
Gains on changes in fair value -145,191,723.49 614,071,259.47 -123.64
Gains on disposal of assets 267,800,599.46 13,512,402.32 1,881.89
Credit impairment loss 97,513,831.50 100.00
Non-operating income 474,156,808.14 689,516,709.14 -31.23
Other comprehensive income, net of 843,463,106.56 -554,105,703.86 252.22
tax
Financial expenses 939,176,200.46 1,603,968,750.90 -41.45
Net cash flow generating from 18,934,252,899.16 16,703,785,279.9 13.35
operating activities
Net cash flow generating from -7,665,644,782.77 -5,741,587,992.1 -33.51
investing activities
Net cash flow generating from -10,489,353,519.24 510,476,992.91 -2,154.81
financing activities
Analysis on reasons for the relatively large fluctuation of the indicators:
1) Income from change in fair value decreased by 123.64% yoy, which was mainly due to the
movement of fair value of hedge and lock exchange business caused by the fluctuation of
exchange rate.
2) Gain from disposal of assets increased by 1881.89% yoy, which was mainly due to disposal of
part of the plants and lands for the current period.
3) Credit impairment loss increased by 100% yoy, which was mainly due to the implementation of
New Financial Instrument Standards, whereby the expected credit loss from various financial
instruments originally credited to the asset impairment loss are adjusted to be credited to credit
impairment loss. And no restatement is needed for the same period of last year.
4) Non-operating income decreased by 31.23% yoy, which was mainly due to the relatively large
amount of one-off revenue for the same period of last year.
5) Other comprehensive income, net of tax increased by 252.22% yoy, which was mainly due to
the increase of translation difference of the financial statement in foreign currency caused by
the fluctuation of exchange rate as compared to the same period of last year.
2. Analysis of income and cost
□Applicable √Not Applicable
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(1). Principle operating activities by sectors, products and regions
Unit and Currency: RMB0‘000
Principle operating activities by products
Gross
Operating Operating
profit
Gross revenue cost
Operating Operating margin
By products profit increased/de increased/de
revenue cost increased/dec
margin(%) creased yoy creased yoy
reased yoy
(%) (%)
(%)
Air-conditioners 3,177,252 2,169,525 31.72 10.59 10.77 Decreased by
0.11 pct pts
Refrigerators 5,433,917 3,784,104 30.36 12.07 14.85 Decreased by
1.68 pct pts
Kitchen appliance 2,495,053 1,722,286 30.97 7.37 19.18 Decreased by
products 6.84 pct pts
Water heaters 792,412 431,066 45.60 11.48 6.97 Increased by
2.29 pct pts
Washing 3,626,849 2,396,733 33.92 15.06 19.55 Decreased by
machines 2.48 pct pts
Equipment 147,785 128,760 12.87 -49.42 -53.47 Increased by
components 7.58 pct pts
Channel Decreased by
integrated 2,576,156 2,365,158 8.19 23.76 26.32 1.86 pct pts
services business
and others
Principle operating activities by regions
Gross
Operating Operating
profit
Gross revenue cost
Operating Operating margin
By regions profit increased/de increased/de
revenue cost increased/dec
margin(%) creased yoy creased yoy
reased yoy
(%) (%)
(%)
Mainland China 10,581,757 7,243,848 31.54 15.25 16.64 Decreased by
0.82 pct pts
Other countries 7,667,666 5,753,782 24.96 7.98 14.05 Decreased by
and regions 3.99 pct pts
Explanation of principle operating activities by sectors, products and regions
□Applicable √Not Applicable
(2). Table of production and sales analysis
√Applicable □Not Applicable
Unit: (10k units /set)
Sales
Production Inventory
volume
Main Sales increased/de increased/decre
Production Inventory increased/de
products volume creased yoy ased yoy
creased yoy
(%) (%)
(%)
Household 7,030 9,153 1,284 7.1 11.7 4.7
appliance
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(3). Table of cost analysis
Unit: RMB0‘000
By sectors
Percentage of
Percentage
Percentage of change of the
of the
the amount for amount for the
Amount amount Amount for the
the current period
Cost for the for the corresponding
By sectors corresponding compared to
component current current period of last
period of last the
period period in year
year in total corresponding
total costs
costs (%) period of last
(%)
year (%)
Household Primary 10,503,7
appliance business 100.00 8,870,105 100
industry cost
Raw 8,817,24
materials 83.94 7,625,896 85.97 -2.03
Labor 588,073 5.60 614,318 6.93 -1.33
Depreciati 174,804 1.66 163,759 1.85 -0.19
on
Energy 60,780 0.58 39,437 0.44 0.14
Others 862,807 8.21 426,695 4.81 3.40
Other explanation of cost analysis
□Applicable √Not Applicable
(4). Major customers and major suppliers
√Applicable □Not Applicable
Revenue from the top five customers was RMB 36,797.08 million, representing 20.07% of the total
sales for the year; among the revenue from the top five customers, the revenue from related parties was
RMB0, representing 0% of the total sales for the year.
The purchase amount from the top five suppliers amounted to RMB 44,485.08 million, representing
26.62% of the total purchase amount for the year; among the purchase amount from the top five
suppliers, the purchase amount from related parties was RMB 31,568.43 million, representing 18.89% of
the total purchase amount for the year.
3. Expenses
√Applicable □Not Applicable
1) Financial expenses decreased by 41.45% compared with last year, which was mainly due to the
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increase of exchange gain.
4. R&D expenditure
Table of R&D expenditure
√Applicable □Not Applicable
Unit: RMB
Expensed R&D expenditure for the current period 5,080,604,506
Capitalized R&D expenditure for the current period 317,634,389
Total R&D expenditure 5,398,238,895
Total R&D expenditure as a percentage in operating revenue (%) 2.94
Number of R&D personnel 14,941
Number of R&D personnel as a percentage in total employees (%) 17.09
Proportion of capitalization of R&D expenditure (%) 5.88
Explanation of R&D expenditure
□Applicable √Not Applicable
5. Cash flow
√Applicable □Not Applicable
1) Net cash flow from investing activities decreased by 33.51% yoy, which was mainly due to the
increase of cash payment on merge and acquisition of FPA as compared to the same period of
last year.
2) Net cash flow from financing activities decreased by 2154.81% yoy, which was mainly due to
the increase of net repayment of borrowings for the period.
(II) Major changes in profits caused by non-principal businesses
□Applicable √Not Applicable
(III) Analysis of assets and liabilities
√Applicable □Not Applicable
1. Assets and liabilities
Unit and Currency: RMB
Amount as at Percentag Amount Percenta Percenta
the e of as at the ge of ge of
Items Explanations
end of the amount as end of amount change
period at the end previous as at the in
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2018 Annual Report of Qingdao Haier Co., Ltd.
of the period end of amount
period the from
over total previous the end
assets period of
(%) over previous
total period to
assets current
(%) period
(%)
Mainly due to the
reclassification of
Financial 1,775,648,387. financial assets in
assets held 1.07 100.00 accordance with the
for trading New Financial
Instrument
Standards.
Financial
assets
measured at Mainly due to the
fair value reclassification of
and 20,681,695 financial assets in
changes of 0.01 -100.00 accordance with the
.50
which New Financial
included in Instrument
current Standards.
profit and
loss
Mainly due to the
reclassification of
Derivative financial assets in
financial 96,723,164.37 0.06 100.00 accordance with the
assets New Financial
Instrument
Standards.
Mainly because that
the amount from
disposal of part of
the plants and lands
1,626,975,864. 1,192,291,3
Other 0.98 0.76 36.46 by 1169, a
receivables 98 02.17 subsidiary of the
Company has not
been recovered as of
the end of the
reporting period.
Mainly due to the
business used for
accounting for the
settlement amount
due but not yet
Contract 456,781,406.54 0.27 100.00 received of which
assets the Company has
already achieved
progress target in
accordance with the
new income
standard.
37 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Mainly representing
the assets of the
27,453,950.
Assets held 144,091,213.39 0.09 0.02 424.85 business that 1169, a
for sale 07 subsidiary of the
Company intended
to dispose.
Mainly due to the
Available-f reclassification of
1,415,354,3
or-sale 0.90 -100.00 items in accordance
financial 07.82 with the New
assets Financial Instrument
Standards.
Mainly due to the
Investments reclassification of
1,400,316,460.
in other 0.84 100.00 items in accordance
equity 34 with the New
instruments Financial Instrument
Standards.
Mainly due to the
Other reclassification of
non-current 327,358,825.57 0.20 100.00 items in accordance
financial with the New
assets Financial Instrument
Standards.
Mainly because that
the Company
Constructio 3,873,492,230. 1,610,615,0
2.33 1.02 140.50 expands its
n in
24 34.68 investment in order
progress
to cater for the
capacity needs.
Mainly because that
part of the
self-developed
technology of GEA,
966,051,333
Developme 538,382,288.33 0.32 0.61 -44.27 a subsidiary of the
nt cost .81 Company, has been
transferred to
intangible assets
after the completion
of development.
Mainly due to the
Other 2,325,688,982. 1,254,064,1 increase of amount
non-current 1.40 0.80 85.45 prepaid for
56 81.76
assets purchasing
equipment.
6,298,504,892. 10,878,580, Mainly due to
Short-term 3.78 6.92 -42.10 repayment of the
borrowings 57 275.18
borrowings.
Mainly due to the
Financial reclassification in
liabilities 218,748,280.33 0.13 100.00 accordance with the
held for New Financial
trading Instrument
Standards.
Financial 2,524,569.4 0.00 -100.00 Mainly due to the
liabilities reclassification in
38 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
measured at 5 accordance with the
fair value New Financial
and Instrument
changes of Standards.
which
included in
current
profit and
loss
Mainly due to the
reclassification in
Derivative
35,603,754.54 0.02 100.00 accordance with the
financial
New Financial
liabilities
Instrument
Standards.
Mainly due to the
5,861,949,1 reclassification to
Receipts in 14,681,466.58 0.01 3.73 -99.75 contract liabilities in
advance 82.62
accordance with new
income standard.
Mainly due to the
reclassification from
5,482,325,888.
Contract 3.29 100.00 receipts in advance
liabilities 59 in accordance with
new income
standard.
Mainly due to the
liabilities of the
Liabilities
32,362,267.88 0.02 100.00 business that 1169, a
held for
subsidiary of the
sale
Company intends to
dispose.
Non-curren Mainly due to the
3,015,060,105. 6,149,302,9 repayment of
t liabilities 1.81 3.91 -50.97
due within 58 81.65 borrowings for the
one year current period. 。
Mainly due to the
recognition of
Other 42,961,121. liabilities arising
current 423,638,804.62 0.25 0.03 886.10 from possible
liabilities returns of sales in
accordance with new
income standard.
Mainly due to the
9,191,896,302. 6,211,088,36 new issuance of
Bonds 5.52 3.95 47.99 convertible
payable 70 2.68
corporate bonds for
the current period.
Mainly due to the
increase of
Other 1,823,866,693. 1,197,485,4
1.09 0.76 52.31 obligation of
non-current
93 22.75 repurchase to the
liabilities
minority equity
rights.
Other 904,485,788.71 0.54 431,424,524 0.27 109.65 Mainly due to the
39 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
equity .07 recognition of equity
instruments value of the new
issuance of
convertible
corporate bonds for
the current period.
Mainly due to the
increase of the
translation
Other 4,424,024.9 difference in the
comprehens 772,632,347.35 0.46 0.00 17,364.47 statements
ive income recognized for the
movements in
fluctuation of
exchange rate.
Other explanations
Nil
2. Restrictions on major assets as of the end of reporting period
□Applicable √Not Applicable
3. Other explanations
□Applicable √Not Applicable
(IV) Analysis of industry operating information
□Applicable √Not Applicable
(V) Analysis of investment
1. Overall analysis on external equity investment
√Applicable □Not Applicable
During the reporting period, investments in external significant equities of the Company (including the
planned investment amount that has been considered) amounted to RMB 8.742 billion.
Amount of
Percentage of
Name of Principle planned
the equity of
company operating Remarks investment
the company
invested activities (RMB 100
invested (%)
million)
Guangzhou For details, please refer to the
Haier Air Production Announcement on Newly
Conditioner of air Constructing Project of 5 11.50
Appliances
conditioner Million Sets of Self-cleaning Air
Co.,Ltd.(广州 products etc. Conditioning by Qingdao Haier
海尔空调器 Co., Ltd. disclosed on 26 April
40 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
有限公司） 2018 as well as relevant
announcements of the Board.
For details, please refer to the
Announcement on Related-party
Haier New
Transaction of Receiving 100%
Zealand
Equity of Haier New Zealand
Investment Investment 19.06
100 Investment Holding Company
Holding Holding etc.
Limited by Qingdao Haier Co.,
Company
Ltd. disclosed on 26 April 2018
Limited
as well as relevant
announcements of the Board.
For details, please refer to the
Announcement on Purchasing
Production 100% Equity of Italy-based
Candy S.p.A and sale of Candy Company by Qingdao 37.24
(note) home Haier Co., Ltd. disclosed on 29
appliances September 2018 as well as
relevant announcements of the
Board.
For details, please refer to the
Haier Announcement on Newly
Appliances Production Constructing Industrial Park
and sale of Project in North India by 19.62
（India）
home Qingdao Haier Co., Ltd.
Private disclosed on 30 August 2018 as
appliances
Limited well as relevant announcements
of the Board.
Note:
（1）As of the date of disclosure of this periodic report, the aforesaid equity transfer has been
completed.
（2）The above investment amount involving foreign currency shall be converted at the foreign
exchange rate as at 31 December 2018.
(1) Significant equity investment
√Applicable □Not Applicable
Please refer to above ―1. Overall analysis on external equity investment‖.
(2) Significant non-equity investment
□Applicable √Not Applicable
(3) Financial assets measured at fair value
√Applicable □Not Applicable
41 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Current Investment Changes in
purchase/sal income fair value
Financial assets Initial cost of Sources of
e during the during the during the
measured at fair value investment funds
reporting reporting reporting
period period period
Bank of
Communications 1,803,769.50 Own funds 389,059.17 -572,145.84
(601328)
BAILIAN (600827) 154,770.00 Own funds -198,515.52
Eastsoft (300183) 18,713,562.84 Own funds -5,823,560.70
1,559,253,309 1,559,253,30
Short-term wealth 8,395,598.95
Own funds
management products .05 9.05
327,056,778.3 327,056,778.
Long-term wealth 302,047.25
Own funds
management products 2
Interest rate swap -5,329,684.14
Own funds
agreement
Forward commodity 1,791,718.92
Own funds
contracts
129,824,011.4 -151,334,742.9
Forward foreign
Own funds
exchange contract 8
1,426,491,908 52,967,663.8 104,856,077.1
Others Own funds -41,326,895.67
.20 0
3,333,474,097 1,939,277,75 235,069,147.8 -194,096,179.6
Total
.91 1.17 1
Note: As of 31 December 2018, the aggregate balance of foreign exchange derivative transactions
amounted to approximately US$4.6 billion.
(VI) Sale of material assets and equity
√Applicable □Not Applicable
During the reporting period, the Company transferred its 22% of equity interests in Qingdao Haier
Special Electrical Appliance Co., Ltd. to Qingdao Haier BioMedical Holdings Co., Ltd. (青岛海尔生物医
疗控股有限公司)with a consideration of RMB505 million. For details, please refer to the Announcement
on Related-party Transaction of Transferring 22% Equity of Qingdao Haier Special Electrical Appliance
Co., Ltd. by Qingdao Haier Co., Ltd. (No. L2018-037) disclosed on 22 June 2018.
(VII) Analysis on major controlling companies
√Applicable □Not Applicable
RMB0‘000
42 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Name of company Scope of business Total asset Net assets Net Profit
Haier Electronics Group Production and sale of 4,693,677.19 2,574,828.37 399,010.60
Co., Ltd. home appliances
Haier US APPLIANCE 4,643,124.39 2,029,721.81 186,758.91
Holding GEA, etc.
SOLUTIONS,INC.
Note: The financial data of Haier Electronics Group Co., Ltd. is determined in accordance with the
China Accounting Standards (CAS) and the accounting policies of the Company.
(VIII) Structured entities controlled by the Company
□Applicable √Not Applicable
III. Discussion and analysis on the Company’s future development
(I) Setup and trend of the industry
√Applicable □Not Applicable
For details, please refer to the relevant contents of ―SECTION III SUMMARY OF THE COMPANY‘S
BUSINESS‖ in this report.
(II) Development strategies
√Applicable □Not Applicable
After more than 30 years of development, the Company has become a world-leading household
appliance enterprise. In the future, the company will continue to achieve synergies in its global business
and optimize operational efficiency to improve market share and maintain its leadership. In the face of
the opportunities and challenges in the IoT era, the Company took the mode of \"RenDanHeYi\" as the
core driving force, built a win-win chain group ecology around the strategic origin of smart homes, and
created an ecological brand led by smart homes to continuously innovate and iterate the user experience
and satisfy the needs of consumers to achieve a better life.
(III) Business plan
√Applicable □Not Applicable
In 2019, on the basis of its leadership in various industries, the Company will enhance the
competitiveness of smart home solutions, further promote its global operations, continuously enhance
the industry status of refrigerators, washing machines, water heaters and other dominant products, and
continue to strengthen the development of air conditioners and kitchen appliances.
Domestic market: Focusing on user experience and customer interests, the Company will adhere
to the working principles of \"building network of contact points, building industry barriers, building
43 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
parallel platforms and creating lifelong users\", deepen the retail transformation, and mainly promote the
following works: (1) Promote channel transformation and e-commerce transformation. ① In terms of
channel transformation, the Company will upgrade the channel competitiveness under the whole
network management to enhance the network coverage in weak areas, blank business circles and blank
towns. ② In terms of e-commerce channels, the Company will enhance the competitiveness of air
conditioner and kitchen appliances, and plan and implement the complete high-end online solutions. (2)
Build scheme and brand barriers. ①The Company will focus on the competitiveness of the first set of
solutions in the industry, promote the construction of different networks of contact points, and
continuously upgrade the five sets of capabilities. ② Casarte brand promotes the upgrade of operation
system from product-led to lifestyle-led by focusing on users' extreme experience. ③ Leader brand
builds the younger barrier and becomes the first choice for young people in terms of customization. (3)
Promote the transformation of marketing and enhance the competitiveness of digital platforms to
achieve the word of mouth of users first.
Overseas market: Focusing on the needs of users and taking \"high-end, terminal\" as the direction
of market transformation and upgrading, the Company will accelerate the implementation and leading of
\"RenDanHeYi\" overseas, enhance the global resource coordination ability, and further deepen the triple
strategy‘ of ―manufacturing, marketing and R&D‖. ① In terms of products, we will adhere to the
strategy of high-end leading and brand creation and lead the market through differentiated high-end
products. ② In terms of the market, we will focus on the strategy of \"branding and leadership as well as
high-end transformation\", and actively promote the construction of the whole process and zero-distance
interactive platform including creators, customers and users through the model mechanism and resource
betting. We will display the upgrading standards by issuing overseas terminals and effectively enhance
user experience of high-end Haier brands.
Smart home life platform: ① In order to satisfy the needs of all types of personalized home users,
\"5+7+N\" home space and domain life solutions are designed iteratively for the implementation of seven
major brands. ② Intensify IoT platform, iteratively build big data home cloud brain, and launch active
services of touch control and voice. ③ Optimize all online and offline contact points, and focus on the
layout of first-tier cities and backbone cities. ④ Continue to solve the ecological problems of food and
clothing, and iterate the integrity platform for the Internet of Food and the ecological model for the
Internet of Clothes.
Cosmoplat platform: Focus on \"value-added sharing and experience iteration\" to drive the
continuous iteration of Internet ecology with business model realization. ① Capacity building: The
industrial Internet platform shall build nine core capacities in accordance with the four-tier architecture
and one security system. ②Industry duplication: The Company shall focus on agriculture, machinery,
medical treatment, energy and other industries. Regional duplication: The Company shall promote the
six major functions of regional centers and promote the existing industry solutions.
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2018 Annual Report of Qingdao Haier Co., Ltd.
(IV) Potential risks of the Company
√Applicable □Not Applicable
1. Risk of soft demand due to a slowdown in macro-economic growth. As white home appliance
products fall into the category of durable consumer electronic products, the income level and expectation
on future income growth will have an effect on the purchase of white home appliance. In the event of a
slowdown in the macro economic growth, which will decrease the purchasing power of consumers,
growth of the industry will be adversely affected. In addition, uncertainties from the real estate market
will have some negative effect on market demand, which will in turn have some indirect effect on
demand for home appliance products.
2. Price war risk caused by intensifying industry competition. The industry of white goods
products has intense competition with a high homogeneity of products. In recent years, the industry has
shown a trend of increasing concentration. In addition, the increase of industry inventory caused by
imbalance between supply and demand in individual sub-industries may lead to price wars and other
risks.
3. Risk of price fluctuation of raw materials. The Company's products and core components are
mainly made of metal raw materials such as steel, aluminum and copper, as well as plastics, foaming
materials and other bulk raw materials. The potential increase of prices of raw materials may pose a
certain pressure on the Company's production and operation.
4. Operating risk in overseas market. With the stable development of business globalization, the
Company has set up several production bases, research and development centers and marketing centers
in a number of countries around the world, leading to the continuous rise of overseas business. As the
overseas market is subject to the impact of local political and economic situation, legal system and
supervisory system, significant changes of such factors would pose risks to the Company‘s operation
locally. Under the influence of global trade protectionism, the emergence of a series of problems, such as
superpower games, trade frictions, tariff barriers, foreign exchange fluctuations, together with the
complexity of global politics and economy, will increase the international trade cost, labor cost and
foreign exchange transaction cost, as well as the uncertainty of the Company's overseas operations.
5. Risk of fluctuation in foreign currency exchange rate. With the deepening of the Company's
global layout, the import and export of Company's products involve the exchange of foreign currencies
such as US dollars, Euro and Japanese yen. If the exchange rate of relevant currencies fluctuates, the
Company's financial situation may be influenced to some extent and its financial costs may be increased.
6. Risk of policy changes. The industry of household appliances is closely related to the consumer
goods market and real estate market. The changes in macroeconomic policy, consumption investment
policy, real estate policy and other relevant laws and regulations will influence customer demands of
products, and may influence sales of the Company's products.
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2018 Annual Report of Qingdao Haier Co., Ltd.
(V) Other
√Applicable □Not Applicable
Future capital expenditure plan: In 2019, the Compan‘s investment will focus on the research and
development of leading technologies and modules, the construction of smart interconnected factories,
the construction of complete set of smart home experience stores, the smart home living platform and
COSMOplat. The Company will actively seize opportunities for external development and promote the
Company‘s leapfrog development in related industries and regions. Investment funds will be financed
through the Company‘s own funds and equity financing, etc.
IV. Explanation of circumstances and reasons for non-disclosure by the Company in
consideration of inapplicable regulations, state secrets and commercial secretes
□Applicable √Not Applicable
46 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
SECTION V SIGNIFICANT EVENTS
I. Proposal for profit distribution of ordinary shares or capital reserve conversion into the
increase in share capital
(I) Formulation, implementation or adjustment of the cash dividend policies
√Applicable □Not Applicable
The Company‘s 2017 profit distribution plan was passed on its 2017 Annual General Meeting held
on 18 May 2018: based on the Companys total existing shares of 6,097,402,727, it is proposed that the
Company will distribute cash dividends of RMB3.42 (tax inclusive) per 10 shares to all shareholders,
with a total expected amount before tax of RMB2,085,311,732.63. The plan has been implemented and
completed in June 2018. Details are set out in the Announcement on Implementation of Rights and
Interests Distribution for 2017 of Qingdao Haier Co., Ltd. (No. L2018-033) published by the Company
on the four major securities newspapers and the website of Shanghai Stock Exchange on 1 June 2018.
The Company has always applied a stable and sustainable profit distribution policy. During the
reporting period, the Company strictly followed the requirements set out in the Articles of Association
and in the Shareholder Return Plan for the Next Three Years (2015-2017) of Qingdao Haier Co., Ltd..
During the formulation of the profit distribution plan, the Company took full account of return for
investors, the long-term interests of the Company, overall interests of all shareholders and sustainable
development of the Company, and provided investors an opportunity to share the growth of value, so
that investors could form the expectation of a stable return. In addition, after approval on the 2017 First
Extraordinary General Meeting of the Company, the Company formulated the Shareholder Return Plan
for the Next Three Years (2018-2020) of Qingdao Haier Co., Ltd. and will continue to implement the
stable dividend distribution policy. The procedures and mechanisms for system decision-making such as
Articles of Association and planning of return of shareholders implemented by the Company were
complete in compliance with laws and regulations. The process was open and transparent while the
standard and ratio of dividends was clear. Responsibilities of independent directors were clear during the
policy-making process, and independent directors were given the opportunities to play their roles.
Minority shareholders were also given the opportunity to fully express their views and demands, and the
legitimate interests of minority shareholders were adequately protected.
The dividend distribution plan of 2018 of the Company: based on the total shares as at the date of
profit distribution, it is proposed that the Company will distribute cash dividend of RMB3.51 per 10
shares (tax inclusive) with expected cash dividend not less than RMB2,235,314,261.70. The remaining
reserved profits will be mainly used for project construction, foreign investment, R&D investment and
daily operations related to the Company's principal business and therefore to maintain sustainable and
stable development and to bring more benefits for investors. The proportion of this distribution is not
less than 30% of the net profit attributable to parent company of the Company in 2018. 100% dividend
of bonus scheme is paid in cash.
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2018 Annual Report of Qingdao Haier Co., Ltd.
(II) Plans or Proposals for Dividends of Ordinary Shares Distribution and for Capital
Reserve Conversion into Share Capital of the Company in Recent Three Years (Including the
Reporting Period)
Unit and Currency: RMB
Net profit Percentage of the
attributable to the net profit
Cash ordinary attributable to the
Number of Number
dividend shareholders of ordinary
bonus of shares
per 10 the listed shareholders of
share for converte Cash dividend
Year shares companies in the the listed
per 10 d per 10 (tax inclusive)
(RMB) consolidated companies in the
shares shares
(tax financial consolidated
(share) (share)
inclusive) statement during financial
the year of statement
distribution (%)
2018 0 3.51 0 2,235,314,261.70 7,440,228,855.90 30.04
2017 0 3.42 0 2,085,311,732.63 6,925,792,321.27 30.11
2016 0 2.48 0 1,624,803,749.32 5,036,652,240.84 32.26
(III) Share repurchased by cash and included in cash dividend
□Applicable √Not Applicable
(IV) The Company made profits and the profits for distribution to the shareholders of
ordinary shares of the Parent Company was positive during the reporting period, but no cash
profit distribution plan for ordinary shares was proposed; the Company should disclose the
reasons in detail and the purpose and use plan of undistributed profits
□Applicable √Not Applicable
48 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
II. Performance of undertakings
(I) The undertakings made by the ultimate controllers, shareholders, related parties, acquirer as well as the Company and other relevant parties during
or up to the reporting period
√Applicable □Not Applicable
Whethe
r
Any
Date and perform
deadline
Background of Type of term of ed in a
Covenanter Contents of undertakings for
undertakings undertakings undertakin timely
performa
gs and
nce
strict
way
Undertakings Eliminate Haier During the period from September 2006 to May 2007, the Company 27 YES YES
associated with the right Group issued shares to Haier Group Corporation (―Haier Group‖) to purchase the September
major asset defects in Corporation controlling equity in its four subsidiaries, namely Qingdao Haier 2006,
reorganization land property Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电子有限公司), long term
and etc. Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司）,
Wuhan Haier Electronics Co., Ltd. (武汉海尔电器股份有限公司), and
Guizhou Haier Electronics Co., Ltd. (贵州海尔电器有限公司). With
regard to the land and property required in the operation of Qingdao Haier
Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电子有限公司),
Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司),
and Wuhan Haier Electronics Co., Ltd. (武汉海尔电器股份有限公司)
(the ―Covenantees‖), Haier Group made an undertaking (the ―2006
Undertaking‖). According to the content of 2006 Undertaking and current
condition of each Covenantee, Haier Group will constantly assure that
Covenantees will lease the land and property owned by Haier Group for
free. Haier Group will make compensation in the event that the
Covenantees suffer loss due to the unavailability of such land and
property.
49 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Eliminate Haier Group Haier Group Corporation undertakes that it will assure Qingdao Haier and 24 YES YES
the right Corporation its subsidiaries of the constant, stable and unobstructed use of the leased December
defects in property. In the event that Qingdao Haier or any of its subsidiaries suffers 2013,
land property any economic loss due to the fact that leased property has no relevant long term
and etc. ownership certificate, Haier Group Corporation will make
compensation to impaired party in a timely and sufficient way and take all
reasonable and practicable measures to support the impaired party to
recover to normal operation before the occurrence of loss. Upon the
expiration of relevant leasing period, Haier Group Corporation will grant
or take practicable measures to assure Qingdao Haier and its subsidiaries
of priority to continue to lease the property at a price not higher than the
rent in comparable market at that time. Haier Group Corporation will
assure Qingdao Haier and its subsidiaries of the constant, stable, free and
unobstructed use of self-built property and land of the Group. In the event
that Qingdao Haier or any of its subsidiaries fails to continue to use
self-built property according to its own will or in original way due to the
Undertakings
fact that self-built property has no relevant ownership certificate, Haier
associated with
Group Corporation will take all reasonable and practicable measures to
refinancing
eliminate obstruction and impact, or will support Qingdao Haier or its
affected subsidiaries to obtain alternative property as soon as possible, if
Haier Group Corporation anticipates it is unable to cope with or eliminate
the external obstruction and impact with its reasonable effort. For details,
please refer to the Announcement of Qingdao Haier Co., Ltd. on the
Formation, Current Situation of the Defective Property, the Influence on
Operation of Issuer Caused by Uncertainty of Ownership, Solution for the
Defect and Guarantee Measures (L2014-005) published by the Company
on the four major securities newspapers and the website of Shanghai Stock
Exchange on 29 March 2014.
Eliminate Qingdao The Company undertakes that it will eliminate the property defects of 24 YES YES
the right Haier Co., the Company and main subsidiaries within five years with reasonable December
defects in Ltd. business effort since 24 December 2013, so as to achieve the legality and 2013,
land property compliance of the Company and main subsidiaries in terms of land and eight years
and etc. property. For details, please refer to the Announcement of Qingdao Haier
Co., Ltd. on the Formation, Current Situation of the Defective Property,
50 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
the Influence on Operation of Issuer Caused by Uncertainty of
Ownership, Solution for the Defect and Guarantee Measures
(L2014-005) published by the Company on the four major securities
newspapers and the website of Shanghai Stock Exchange on 29 March
2014. During the aforesaid period, the Company has formulated relevant
performance guarantee measures, including the re-application by the
Company and its main subsidiaries to the competent government
department for the property ownership certificate and to procure Haier
Group Corporation to make guarantee undertakings in respect of the
defective property owned by it and its subsidiaries. As of the expiration
date, the Company has resolved the property defects of itself and its eight
major subsidiaries, while that of the other remaining five major
subsidiaries is in process. The Company will make reasonable business
efforts to resolve the property defects of these five major subsidiaries.
Because of historical issues and other reasons, the approval procedure
involved in solving some defective property problems is complicated,
including that of multiple government departments, and it takes a long
time to handle and coordinate related matters. Due to the above external
factors, the Company was unable to complete the above undertakings
within the original undertaking period. Therefore, after the approval of the
board meeting held by the Company on 5 November 2018 and the general
meeting held on 21 December 2018, the term of the above undertakings
were extended for three years on the basis of the original deadline.
Asset Haier Inject the assets of Fisher & Paykel to the Company or dispose such assets May YES YES
injection Group through other ways according to the requirements of the domestic 2015-June
Corporation supervision before June 2020. For more details, please refer to the
Announcement of Qingdao Haier Co., Ltd. on the Changes of Funding
Other Commitment (L2015-015) published on the four major securities
undertakings newspapers and the website of Shanghai Stock Exchange on 26 May 2015.
During the reporting period, after considered and approved by the 13th
meeting of the 9th session of the Board of Directors and 2017 Annual
General Meeting of the Company, the Group has injected the above assets
into the Company and this commitment has been completed.
51 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Asset Haier Inject the assets of Haier Photoelectric to the Company or dispose such December YES YES
injection Group assets through other ways according to the requirements of the domestic 2015-June
Corporation supervision before June 2020. For more details, please refer to the 2020
Other
Announcement of Qingdao Haier Co., Ltd. on the Changes of Funding
undertakings
Commitment of Haier Group Corporation (L2015-063) published on the
four major securities newspapers and the website of Shanghai Stock
Exchange on 23 December 2015.
Profit forecast Haier In December 2015 and January 2016, the meeting of the Board of December YES YES
and Group Directors and general meeting of the shareholders considered and 2015-Dec
compensation Corporation approved the matters in relation to the acquisition of minority equity ember
interest of Mitsubishi Heavy Industries Haier and Carrier Refrigeration 2018
Equipment held by Haier Group. The Company signed the Profit
Compensation Agreement with Haier Group to forecast the profits to be
Other achieved by the aforementioned two companies in 2015-2018. If the
undertakings profits are not reached during the commitment period, the difference part
will be made up to the Company by Haier Group in cash. For more details,
please refer to the Announcement of Qingdao Haier Co., Ltd. on the
Acquisition of Equity in Sino-foreign Joint Venture Held by Haier Group
Corporation and Related-party Transaction (L2015-062) published on the
four major securities newspapers and the website of Shanghai Stock
Exchange on 23 December 2015.
52 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
The Company’s explanation on whether the earnings estimate on assets or projects was met and
its reasons in the situation that earnings in the Company’s assets or projects is estimated, and the
period of which includes the reporting period.
□Reached √Not Reached □Not Applicable
In December 2015 and January 2016, the meetings of the Board of Directors/Shareholders of the
Company reviewed and approved related resolutions to acquire 45% equity of Mitsubishi Heavy
Industries Haier (Qingdao) Air Conditioner Co., Ltd. (hereinafter referred to as ―Mitsubishi Heavy
Industries Haier‖) and 49% equity of Qingdao Haier Carrier Refrigeration Equipment Co., Ltd.
(hereinafter referred to as ―Haier Carrier‖) held by Haier Group Corporation. According to the Profit
Compensation Agreement signed between the Company and Haier Group, the corresponding predictive
net profit from 2015 to 2018 of Mitsubishi Heavy Industries Haier are RMB90.6612 million,
RMB92.8607 million, RMB100.6592 million and RMB108.6862 million, respectively and the
corresponding predictive net profit from 2015 to 2018 of Haier Carrier are RMB76.0470 million,
RMB76.0472 million, RMB76.7156 million, and RMB76.9840 million respectively. If the audited net
profit in any year of the target companies during the commitment period is lower than the predictive net
profit, the gap will be compensated by Haier Group in cash (For more details, please refer to the
Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Equity in Sino-foreign Joint Venture
Held by Haier Group Corporation and Related Party Transaction (L 2015-062) published on the four
major securities newspapers and the website of Shanghai Stock Exchange on 23 December 2015).
According to the Special Verification Report on the Completion of the Predictive Profit （―Hexin
Zhuan Zi (2019) No.000151‖ and ―Hexin Zhuan Zi (2019) No. 000152‖） and Special Statement of
Qingdao Haier Co., Ltd on the Completion of the Predictive Profit in 2018 issued by Shandong Hexin
Certified Public Accountants LLP, the actual net profit of Mitsubishi Heavy Industries Haier in 2018
was RMB339.061 million, the actual net profit exceeded the Predictive Profit; the actual net profit of
Haier Carrier in 2018 was RMB60.31 million,. The gap between the actual net profit and the predictive
profit has been made up to the Company by Haier Group in cash.
(II) Completion of performance commitments and their impact on the impairment test of
goodwill
□Applicable √Not Applicable
III. Misappropriation and repayment plan of funds during the reporting period
□Applicable √Not Applicable
IV. Explanation of the Company on the “non-standard audit report” issued by the accounting
firm
□Applicable √Not Applicable
53 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
V. Explanation of the Company’s analysis on reasons and effects of changes in accounting
policies and accounting estimates or correction of significant accounting errors
(I) Explanation of the Company’s analysis on reasons and effects of changes in accounting
policies and accounting estimates
√Applicable □Not Applicable
Ministry of Finance promulgated Accounting Standard for Business Enterprises No. 22 —
Recognition and Measurement of Financial Instruments, Accounting Standard for Business Enterprises
No. 23 — Transfer of Financial Assets and Accounting Standard for Business Enterprises No. 37 —
Presentation of Financial Instruments, etc., (collectively the ―New Financial Instrument Standards‖) as
well as Accounting Standard for Business Enterprises No. 14 — Income, respectively in 2017, and
promulgated the Notice of the Ministry of Finance on Revising and Issuing the Format of Financial
Statements of General Enterprises for 2018 (《财政部关于修订印发 2018 年度一般企业财务报表格式的通
知》) (Cai Kuai (2018) No.15) in 2018. the Company and its subsidiaries have started to implement the
above amendments to the Accounting Standards for Business Enterprises and the Notice since 1 January
2018, and adjusted the relevant contents of accounting policies and financial statements accordingly.
The Company and its subsidiaries implemented the New Financial Instrument Standards and
income standard initially for the current period. According to the requirements under the Interpretation
of Issues Relating to the Format of the Financial Statements of General Enterprises（《关于一般企业财务
报表格式有关问题的解读》）issued by the Accounting Bureau of the Ministry of Finance, the above
changes in accounting policies cause influence on the opening amounts of the consolidated balance
sheet.
Please refer to the relevant contents in SECTION XI financial report‘ of this report for the above
adjustments in accounting policies.
(II) Explanation of the Company’s analysis on reasons and effects of correction of significant
accounting errors
□Applicable √Not Applicable
(III) Communication with former accounting firm
□Applicable √Not Applicable
(IV) Other explanations
□Applicable √Not Applicable
54 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
VI. Appointment and dismissal of accounting firm
Unit and Currency: RMB0‘000
Current appointment
Name of domestic accounting firm Shandong Hexin Certified Public Accountants LLP
Remuneration of domestic accounting firm
Audit period of domestic accounting firm
Name Remuneration
Internal control audit Shandong Hexin Certified Public Accountants LLP
accounting firm
Sponsor China International Capital Corporation Limited 2,390.95
Explanation of appointment and dismissal of accounting firm
□Applicable √Not Applicable
Explanation of change of accounting firm during the auditing period
□Applicable √Not Applicable
VII. Possibility of listing suspension
（I） Reasons of listing suspension
□Applicable √Not Applicable
（II） Response to be taken by the Company
□Applicable √Not Applicable
VIII. Circumstances and reasons for listing termination
□Applicable √Not Applicable
IX. Matters relating to bankruptcy and restructuring
□Applicable √Not Applicable
X. Material litigation and arbitration matters
□Material litigation and arbitration matters during the year √No material litigation and arbitration
matters in the reporting year
55 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
XI. Punishment on the listed company and its directors, supervisors, senior management,
controlling shareholders, ultimate controllers and acquirers and the issue of rectification
□Applicable √Not Applicable
XII. Explanation of the integrity status of the Company and its controlling shareholders and
ultimate controller during the reporting period
□Applicable √Not Applicable
XIII. The Company’s share option incentive scheme, employee shareholding plan or other
employee incentive measures and its influence
(I) Matters disclosed in temporary announcements and without any subsequent progress or
change
□Applicable √Not Applicable
(II) Share incentives not disclosed in temporary announcements or with subsequent progress
Share Option Incentive
□Applicable √Not Applicable
Other explanations
□Applicable √Not Applicable
Employees Shareholding Plan
√Applicable □Not Applicable
(1) The Phase III Employees Stock Ownership Scheme launched and completed the share
purchase: On 24 April 2018, the Company considered and approved relevant resolutions such as the
Phase III Stock Ownership Scheme of the Core Employees Stock Ownership Scheme of Qingdao Haier
Co., Ltd. (Draft) and it’s Summary at the 13th meeting of the 9th session of the Board of Directors. The
635 staffs who participated into the Stock Ownership Scheme are the directors (excluding independent
directors), supervisors, senior management of the Company and regular employees who serve at the
Company and its subsidiaries and sign employment contracts with the Company or its subsidiaries and
receive remuneration from them, together holding RMB271.30 million in the fund. On 23 May 2018, the
Company disclosed the Announcement on the Completion of Share Purchase by the Phase III Stock
Ownership Scheme of Core Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd., and the
Employees Stock Ownership Scheme has been entrusted to Industrial Securities Assets Management Co.,
Ltd.(兴证证券资产管理有限公司), who will establish a directional asset management plan for the Phase
III Stock Ownership Scheme of Core Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd.
(―Assets Management Plan‖) for the management. As of 22 May 2018, the Assets Management Plan has
purchased an aggregate of 16,063,800 shares of the Company, representing 0.26% of the total share
capitals of the Company through the block trade in secondary market at an average trading price of
56 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
RMB16.72 per share with a trading volume of RMB268,586,736.00. The Phase III Stock Ownership
Scheme of Core Employees Stock Ownership Scheme has completed the purchase of shares of the
Company. Those shares purchased aforesaid will be locked in accordance with requirements, and the
locking period will be 12 months from the date of the disclosure of this announcement, being 23 May
2018 to 22 May 2019.
(2) Partially vesting of the employee stock ownership plan:
①Initial vesting of the Phase II Employees Stock Ownership Scheme etc.: During the
reporting period, the lock-up period of the Company's Phase II Stock Ownership Scheme of the Core
Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd. (Draft) and it’s Summary (referred to
as ―Phase II Stock Ownership Scheme‖) has expired. According to the Audit Report of Qingdao Haier
Co., Ltd. (Hexin Shen Zi. (2018) No.000267) issued by Shandong Hexin Certified Public Accountants
LLP, the annual net profits vested in parent company shareholders with allowance for non-recurring
gains and losses in 2017 increased by 29.81% compared to 2016. Upon examination by the
Management Committee, the assessment results of 556 holders of Phase II Stock Ownership Scheme
were satisfactory. 19 holders had unsatisfactory assessment results or resigned before determination of
the equity for the year 2017 under Phase II Stock Ownership Scheme.
On 2 May 2018, upon consideration by Employees Stock Ownership Scheme Management
Committee, 556 holders of Phase II Core Employees Stock Ownership Scheme were determined
according to performances for the year 2017 to be allocated with 8,717,600 shares. The shares of the
said 19 holders with unsatisfactory assessment or who resigned were suspended for allocation or
adjusted for their shares.
There are 7 directors, supervisors and senior executives of the Company. A total of 1,617,300
shares can be allocated for Phase II Stock Ownership Scheme. Upon application by Mr. Gong Wei as
chief financial officer and vice president, 121,325 shares he applied for not being allocated in December
2017 when shares of the Phase I Employees Stock Ownership Scheme were allocated (for the relevant
announcement, refer to the Notice of Qingdao Haier Co., Ltd. on the Quota Distribution and Equity
Allocation of the Phase I Core Employees Stock Ownership Scheme disclosed by the Company on 7
December 2017, No. L 2017-046) are allocated at this time. In summary, the number of shares held by
directors, supervisors and senior executives actually allocated this time is 1,738,700 shares. Any change
of the shares they hold must be subject to provisions of the Rules Governing the Holding of Shares in the
Company by Directors, Supervisors and Senior Management of Listed Companies and Changes Thereof.
In summary, according to the aforementioned resolutions, the Company has completed the transfer
of relevant stocks at China Securities Depository and Clearing Corporation Shanghai Branch on 10 May
2018, with a total of 8,838,931 shares.
②Second vesting of the Phase I Stock Ownership Scheme: During the reporting period, the
lock-up period of the Company's Core Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd.
(Draft) (referred to as ―Phase I Stock Ownership Scheme‖) has expired. According to the Audit Report
of Qingdao Haier Co., Ltd. (Hexin Shen Zi. (2018) No.000267) issued by Shandong Hexin Certified
57 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Public Accountants LLP, the annual net profits vested in parent company shareholders with allowance
for non-recurring gains and losses in 2017 increased by 29.81% compared to 2016. Upon examination
by the Management Committee, the assessment results of 481 holders of Phase I Stock Ownership
Scheme were satisfactory. 34 holders had unsatisfactory assessment results or resigned before
determination of the equity for the year 2017 under Phase I Stock Ownership Scheme.
On 3 December 2018, upon consideration by Employees Stock Ownership Scheme Management
Committee, 481 holders of Phase I Core Employees Stock Ownership Scheme were determined
according to performances for the year 2017 to be allocated with 13,156,332 shares. The shares of the
said 34 holders with unsatisfactory assessment or who resigned were suspended for allocation or
adjusted for their shares.
There are 7 directors, supervisors and senior executives of the Company. A total of 2,454,400
shares can be allocated for Phase I Stock Ownership Scheme. Any change of the shares they hold must
be subject to provisions of the Rules Governing the Holding of Shares in the Company by Directors,
Supervisors and Senior Management of Listed Companies and Changes Thereof.
In summary, according to the aforementioned resolutions, the Company has completed the transfer
of relevant stocks at China Securities Depository and Clearing Corporation Shanghai Branch on 12
December 2018, with a total of 13,156,332 shares.
Other incentives
□Applicable √Not Applicable
XIV. Significant related party transactions
(I) Related party transactions from routine operation
1. Matter disclosed in temporary announcements and with no subsequent progress or change
□Applicable √Not Applicable
2. Matter disclosed in temporary announcements and with subsequent progress or change
√Applicable □Not Applicable
The Company made a forecast on the related-party transaction matters of the Company for the year
of 2018 at the 13th meeting of the 9th session of Board Meeting held on 24 April 2018. For details,
please refer to the Announcement of Qingdao Haier Co., Ltd. regarding the Renewal of Daily
Related-party Transactions Agreement and the Anticipation on the Daily Related-party Transactions for
2018 and the announcement on the relevant resolutions of the Board disclosed on 26 April 2018.
For the actual implementation of the Related-party transaction of January to December 2018, please
refer to ―Note12 –Related Parties and Related-party Transactions‖ under SECTION X - Financial and
Accounting Report set out in this regular report.
58 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
3. Matter not disclosed in temporary announcements
□Applicable √Not Applicable
(II) Related-party transactions regarding acquisition or disposal of assets/equity
1. Matter disclosed in temporary announcements and with no subsequent progress or change
√Applicable □Not Applicable
Summary Index for details
Acquisition of FPA shares: The Company passed the acceptance Refer to the Announcement of Qingdao
of transfer of 100% shares of Haier New Zealand Investment Haier Co., Ltd. on Related-party
Holding Company Limited held by the overseas subsidiary Transaction of Accepting the Transfer
Haier (Singapore) Management Holding Co. Pte. Limited under of 100% Shares of Haier New Zealand
Haier Group Corporation by Haier Singapore Investment Investment Holding Company Limited
Holding Pte. Ltd. (―Haier Singapore Investment‖) in cash who (L2018-020) and relevant
should accept, in proportion to 100%, the principal and interests announcements disclosed by the
of shareholder borrowings payable by the Target Company to Company on 26 April 2018 for more
Haier Singapore Management. Haier Singapore Investment, an information.
overseas subsidiary of the Company, intends to pay
US$303,040,997.28 (equivalent to RMB1,905,552,095.01) to
Haier Singapore Management for accepting the transfer of the
underlying shares.
Transfer shares of Qingdao Haier Special Electrical Appliance Refer to the Announcement of Qingdao
Co., Ltd.: As the shareholder of Qingdao Haier Special Haier Co., Ltd. on Related-party
Electrical Appliance Co., Ltd. (―QHSPA‖), the Company Transaction of Transferring 22%
transferred 22% of QHSPA shares to Qingdao Haier Biomedical Shares of Qingdao Haier Special
Holdings Co., Ltd. at the consideration of RMB505,129,570 for Electrical Appliance Co., Ltd.
the transaction. Upon completion of the share transfer, the (L2018-037) and relevant
Company no longer holds any share of QHSPA. announcements disclosed by the
Company on 22 June 2018 for more
information.
2. Matter disclosed in temporary announcements and with subsequent progress or change
□Applicable √Not Applicable
3. Matter not disclosed in temporary announcements
□Applicable√Not Applicable
4. If performance agreement is involved, the performance achieved during the reporting period shall
disclosed
□Applicable √Not Applicable
(III) Significant related-party transactions of joint external investment
1. Matter disclosed in temporary announcements and with no subsequent progress or change
□Applicable √Not Applicable
2. Matters disclosed in temporary announcements and with subsequent progress or change
□Applicable √Not Applicable
59 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
3. Matter not disclosed in temporary announcements
□Applicable √Not Applicable
(IV) Amounts due to or from related parties
1. Matter disclosed in temporary announcements and with no subsequent progress or change
□Applicable √Not Applicable
2. Matters disclosed in temporary announcement and with subsequent progress or change
□Applicable √Not Applicable
3. Matter not disclosed in temporary announcements
□Applicable √Not Applicable
(V) Others
□Applicable √Not Applicable
XV. Significant contracts and their execution
(I) Trusteeship, contracting and leasing
1. Trusteeship
□Applicable √Not Applicable
During the reporting period, there was no material trusteeship. To date, the following trusteeships
have been considered and approved on the general meeting of the Company and still within the validity
period:
According to the Haier Group's commitment in 2011 to further support the development of Qingdao
Haier and resolve intra-industry competition to reduce related-party transactions, and given the fact that
Qingdao Haier Photoelectric Co., Ltd. and its subsidiaries, who purchase of the color TV business from
Haier Group, are still under transformation and consolidation period and their financial performance
fails to reach the expectation of the Company. Therefore, Haier Group is unable to complete the transfer
before the aforementioned commitment period. Haier Group intends to entrust the Company with the
operation and management of assets under custody and will pay RMB1 million custodian fee to the
Company each year during the period of custody.
2. Contracting
□Applicable √Not Applicable
3. Leasing
□Applicable √Not Applicable
60 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
(II) Guarantee
√Applicable □Not Applicable
Unit and Currency: RMB0‘000
External guarantees provided by the Company (excluding guarantees for subsidiaries)
Relati
Date
onshi
of Whet
p Whet
occurr Com her Whet Whet
betwe Expir Overdu her
ence mence the her her
en the Amoun ation Type e relate
Secur of the ment guara the there Relati
Guara guara t of date of amount d
ed guara date ntee guara is a onshi
ntor ntor guarant of guara of the party
party ntee of has ntee is count p
and ee guara ntee guarant guara
(date guara been overd er-gua
the ntee ee ntee
of ntee fulfill ue rantee
listed or not
agree ed
compa
ment)
ny
Total amount of guarantee occurred during
the reporting period (excluding guarantees
for subsidiaries)
Total balance of guarantee at the end of the
reporting period (A) (excluding guarantees
for subsidiaries)
Guarantees provided by the Company and its subsidiaries for subsidiaries
Total amount of guarantees for subsidiaries 3,968,860
occurred during the reporting period
Total balance of guarantees for subsidiaries 2,504,621
at the end of the reporting period (B)
Total amount of guarantees provided by the Company (including guarantees for subsidiaries)
Total guarantee (A + B) 2,504,621
Ratio of total amount of guarantees to net
assets of the Company (%)
Among which:
Amount of guarantees for shareholders,
ultimate controllers and their related parties
(C)
Amount of debt guarantees provided
directly or indirectly for the secured party 1,532,947
with asset-liability ratio exceeding 70% (D)
The amount of total amount of guarantee in 534,503
excess of 50% of net assets (E)
Total amount of the above three guarantees 2,067,450
(C + D + E)
Explanation of possibly bearing related
discharge duty for premature guarantees
61 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Explanation of guarantee status 1. In 2016, the Company acquired the assets of GEA at a
total consideration of US$5.61 billion, which was sourced
from self-owned funds and loan for merger, of which, the
loan for merger in the amount of US$5.61 billion was
applied for by Haier US Appliance Solutions, Inc., a
wholly-owned subsidiary of the Company, to China
Development Bank Co., Ltd. The loan was fully secured
by the Company and Haier Group Corporation. At the end
of the reporting period, the amount of guarantee was
equivalent to approximately RMB13.655 billion. The
balance of the guarantee amounted to RMB9.046 billion as
at the end of the reporting period. The provision of
guarantee had been considered and approved by the Board
and the general meeting of shareholders of the Company;
2. In May 2018, the resolution on the Expected Provision
of Guarantee for a Subsidiary in 2018 was passed on the
2017 Annual General Meeting of the Company, according
to which, the Company had provided guarantee in respect
of the application for comprehensive facility made by
certain subsidiaries to financial institutions. During the
reporting period, the accumulated amount of guarantee
offered by the Company to subsidiaries was approximately
RMB26.034 billion. As at the end of the reporting period,
the balance of the guarantee was RMB16 billion.
(III) Entrusted others to manage cash assets
1. Entrusted wealth management
(1) Overall of entrusted wealth management
√Applicable □Not Applicable
Unit and Currency: RMB
Premature Past due
Type Sources of funds Amount
balance uncollected amount
Principal-guaranteed
wealth management 4,018,200,000 4,018,200,000
Own funds
products and
structured deposit
Overseas US dollar 682,232,567 682,232,567
Own funds
bills and bonds
Note: As an independently operating Hong Kong listed company, Haier Electric Co., Ltd. has purchased
some short-term principal-protected wealth management and structural deposits from the four major
banks in order to increase the efficiency of the use of idle funds within the authorities of the
management. In the purchase process, all the necessary board reports were subject to the procedures
such as filling and management‘s review according to the regulations requirements for Hong Kong listed
company, so as to ensure sufficient funds for the day-to-day operations of the main business and improve
the shareholders' returns.
62 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Others
□Applicable √Not Applicable
63 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
(2) Individual entrusted wealth management
√Applicable □Not Applicable
Unit and Currency: RMB
Any
Expirati Det
Act Whethe future
Type of on date erm Provision
Amount of Commencement Inv ual r plan for
entrusted of Sourc inat Expected Coll for
entrusted date of entrusted est Annualized gain approv entrust
wealth entrusted es of ion return (if ecti impairme
Trustee wealth wealth me yield s or ed by ed
management wealth funds of any) on nt loss (if
management management nt loss due wealth
product manage retu any)
es process manage
ment rn
ment
Haier Road 17 Own
Principal-gu
sub-branch 210,000,000. June funds
aranteed 14 December 4.20% 4,470,411
of 2019 YES YES
wealth 0
Construction
management
Bank
Qingdao 21 June Own
branch of 204,000,000. 2019 funds
Structured 21 December 4.00% 4,068,822
China YES YES
deposit 0
Minsheng
Bank
Qingdao Principal-gu 18 June Own
423,200,000.
branch of aranteed 2019 funds 4.00% 8,997,348
6 December 2018 YES YES
Bank of wealth
China management
Qingdao 10 June Own
branch of 183,000,000. 2019 funds
Structured 10 December 4.20% 3,832,471
Bank of YES YES
deposit 0
Communicat
ions
Qingdao Structured 102,000,000. 10 December 10 June Own 4.20% 2,136,132 YES YES
branch of deposit 2018 2019 funds
64 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Bank of
Communicat
ions
Qingdao 24 April Own
branch of 188,000,000. 2019 funds
Structured 4.10% 3,801,205
Bank of 26 October 2018 YES YES
deposit
Communicat
ions
Sichuan 16 May Own
Road 2019 funds
105,700,000.
sub-branch Structured 16 November 4.00% 2,096,625 YES YES
of China deposit 0
Minsheng
Bank
Qingdao 20 May Own
branch of 102,300,000. 2019 funds
Structured 20 November 4.00% 2,029,184
China YES YES
deposit 0
Minsheng
Bank
Qingdao Principal-gu 26 Own
100,000,000.
branch of aranteed 25 December June funds 4.00% 2,005,479 YES YES
Bank of wealth 00 2018 2019
China management
Qingdao 25 Own
branch of 100,000,000. June funds
Structured 25 December 4.00% 1,994,521
China 2019 YES YES
deposit 00
Minsheng
Bank
Qingdao 26 Own
branch of 100,000,000. June funds
Structured 26 December 4.22% 2,104,219
Bank of 2019 YES YES
deposit 00
Communicat
ions
Haier Road Principal-gu 400,000,000. 20 December 20 June Own 3.90% 7,778,630 YES YES
65 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
sub-branch aranteed 0 2018 2019 funds
of wealth
Construction management
Bank
Qingdao Principal-un 31 Own
branch of guaranteed Decemb funds
350,000,000.
Postal and floating er 2018 4.30% 7,339,452
6 July 2018 YES YES
Savings proceeds
Bank of wealth
China management
Qingdao 7 Own
branch of 250,000,000. January funds
Structured 4.75% 5,856,164
Bank of 11 July 2018 2019 YES YES
deposit
Communicat
ions
Qingdao 11 Own
branch of 220,000,000. February funds
Structured 4.20% 4,759,233
China 7 August 2018 2019 YES YES
deposit
Minsheng
Bank
Qingdao 11 Own
branch of February funds
Structured 50,000,000.0 4.20% 1,070,137
China 9 August 2018 2019 YES YES
deposit
Minsheng
Bank
Qingdao Principal-gu 18 June Own
250,000,000.
branch of aranteed 2019 funds 4.00% 5,287,671
7 December 2018 YES YES
Bank of wealth
China management
Qingdao 18 June Own
branch of 180,000,000. 2019 funds
Structured 18 December 4.00% 3,590,137
China YES YES
deposit 0
Minsheng
Bank
66 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Haier Road 20 June Own
Principal-gu
sub-branch 260,000,000. 2019 funds
aranteed 20 December 3.90% 5,056,110
of YES YES
wealth 0
Construction
management
Bank
Qingdao 19 Own
Jinsong Road 240,000,000. February funds
21 November 4.00% 2,367,123
sub-branch 2019 YES YES
0
of China
CITIC Bank
JPMorgan 23 Own
Chase Bank, AT1 bond 5,412,879.6 6 July 2018 October funds 4.65% 239,318 YES YES
N.A.
JPMorgan 23 Own
Chase Bank, AT1 bond 10,482,765.9 11 July 2018 October funds 4.66% 472,351 YES YES
N.A.
JPMorgan 23 Own
Chase Bank, AT1 bond 10,556,608.8 24 August 2018 October funds 4.51% 551,076 YES YES
N.A.
JPMorgan 23 Own
Chase Bank, AT1 bond 18,835,747.3 27 August 2018 October funds 4.49% 992,547 YES YES
N.A.
JPMorgan 10 Own
Chase Bank, AT1 bond 6,365,000.0 12 July 2018 Decemb funds 4.08% 212,000 YES YES
N.A. er 2019
JPMorgan 29 July Own
Chase Bank, AT1 bond 6,270,833.3 12 July 2018 2020 funds 5.12% 285,833 YES YES
N.A.
JPMorgan 16 Own
Chase Bank, AT1 bond 1,480,607.1 12 July 2018 Decemb funds 4.88% 38,582 YES YES
N.A. er 2020
Citibank 31 May Own Max
N.A. HK Bill 10,000,000.0 12 June 2018 2021 funds (3%,Fund YES YES
increase*269
67 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
%)
Own max(3%,Fund
Citibank 10,000,000.0
Bill 13 June 2018 31 May funds increase*270 YES YES
N.A. HK
2021 %)
JPMorgan 18 June Own max(3%,Fund
Chase Bank, Bill 10,000,000.0 29 June 2018 2021 funds increase*185 YES YES
N.A. %)
JPMorgan 30 July Own max(3%,Fund
Chase Bank, Bill 10,000,000.0 14 August 2018 2021 funds increase*185 YES YES
N.A. %)
68 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Others
□Applicable √Not Applicable
(3) Provisions for impairment of entrusted wealth management
□Applicable √Not Applicable
2. Entrusted loans
(1) Overall entrusted loans
□Applicable √Not Applicable
Others
□Applicable √Not Applicable
(2) Individual entrusted loans
□Applicable √Not Applicable
Others
□Applicable √Not Applicable
(3) Provisions for impairment of entrusted loans
□Applicable √Not Applicable
3. Others
√Applicable □Not Applicable
Unit and Currency: RMB0‘000
A
mo
unt
Name Initial of Amou
Closing
of investme pur nt of
Type Opening balance of
party nt cha dispos Impair Closing
of balance investmen Actual profit
operati amount Comme se al ment balance
derivat Expiration of t amount or loss for the
ng the in ncement dur during provisi of
ives date investme as a reporting
derivat derivativ date ing the on (if investmen
invest nt percentag period
ives es the reporti any) t amount
ment amount e of the
invest investme rep ng
net asset
ment nt orti period
ng
per
iod
Forwa
rd
2018/1/ 2018/12/3
exchan 792,625 792,625 1,212,854 5,209
Bank
ge 1
contra
ct
69 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Interes
t
2016/5/
rate/ex 1,594,081 2021/6/2 1,594,081 1,938,854 10,907
Bank
change
rate
swap
Source of funds for
Entirely internal funds of the Company
derivative investment
Market prices or fair value
change of invested
Change in market price or product fair value:
derivatives during the
1. Profit or loss of foreign exchange forward contract during the reporting period was RMB52.09 million;
reporting period, including
2. Profit or loss of interest rate/exchange rate during the reporting period was RMB109.07 million.
the specific methods,
Specific methods, assumptions and parameters: quotes for swaps and forwards of foreign exchange and
assumptions and parameters
interest rate provided by financial institutes.
adopted in the analysis of the
fair values of the derivatives
(IV) Other Major Contracts
□Applicable √Not Applicable
XVI. Other major events
√Applicable □Not Applicable
During the Reporting Period, the Company disclosed the following information and all the information
will be disclosed on SSE (www.sse.com.cn):
Name of Newspaper and
Subject matter Date of publication
Page
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (B009)
Announcement on Receiving \"First-time Feedback Shanghai Securities News ( (75)
Notice of Examining Administrative Licensing Project 11 January 2018
from China Securities Regulatory Commission\" Securities Times (B056)
(L2018-001) Security Daily (C3)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (B045)
Announcement on Applying for Postponement of Shanghai Securities News (32)
Reply to \"One-time Feedback Notice of Examining 01 February 2018
Administrative Licensing Project by China Securities Securities Times (B036)
Regulatory Commission\" (L2018-002) Security Daily (D33)
China Securities Journal (B015)
Shanghai Securities News (116)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Securities Times (B033) 09 February 2018
Change of Shareholder's Equity (L2018-003)
Security Daily (D95)
China Securities Journal (B015)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (25)
Announcement on Remarks on Media Report Securities Times (B052) 10 February 2018
(L2018-004)
Security Daily (D95)
China Securities Journal (B007)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News (232)
Publishing Annual Performance of 2017 by Holding Securities Times (B028) 22 March 2018
Subsidiary Haier Electronics Group Co., Ltd.
(L2018-005) Security Daily (C4)
70 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
China Securities Journal (B048)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (121)
Announcement on Express on Performance of 2017 Securities Times (B136) 04 April 2018
(L2018-006)
Security Daily (D86)
China Securities Journal (B048)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (121)
Announcement on Reply to Feedback of Application Securities Times (B136) 04 April 2018
Document for Public Issuance of Convertible
Corporate Bonds (L2018-007) Security Daily (D86)
China Securities Journal (B107)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (133)
Announcement on Resolutions of 12th Session of 9th Securities Times (B132) 11 April 2018
Directorate Meeting (L2018-008)
Security Daily (D104)
China Securities Journal (B107)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (133)
Announcement on Resolutions of 11th Session of 9th Securities Times (B132) 11 April 2018
Board of Supervisors Meeting (L2018-009)
Security Daily (D104)
China Securities Journal (B107)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (133)
Announcement on Amending \"Articles of Association\" Securities Times (B132) 11 April 2018
(L2018-010)
Security Daily (D108)
China Securities Journal (B107)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News (133)
Convening 1st Special Shareholders' Meeting of 2018 Securities Times (B132) 11 April 2018
(L2018-011)
Security Daily(D108)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) --Summary (265-267)
Securities Times (B290) 26 April 2018
of 2017Annual Report
Security Daily (D341)
China Securities Journal(B287)
Shanghai Securities News(265-267)
\"Qingdao Haier Co., Ltd.\" (the Company) --First Securities Times(B290) 26 April 2018
Quarterly Report 2018
Security Daily(D342)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) -- (265-267)
Announcement on Resolutions of 13th Session of 9th Securities Times (B290) 26 April 2018
Directorate Meeting (L2018-012)
Security Daily (D341)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) -- (265-267)
Announcement on Resolutions of 12th Session of 9th Securities Times (B290) 26 April 2018
Board of Supervisors Meeting (L2018-013)
Security Daily (D342)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) -- (265-267)
Announcement on Renewing Engagement of Securities Times (B290) 26 April 2018
Accounting Firm (L2018-014)
Security Daily (D341)
China Securities Journal (B287)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News
Announcement on Re-signing Agreement on Daily 26 April 2018
(265-267)
Connected Transaction and Prediction on Daily Securities Times (B290)
71 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Connected Transaction in 2018 (L2018-015)
Security Daily (D343)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) -- (265-267)
Announcement on Prediction on Providing Guarantees Securities Times (B290) 26 April 2018
for Subsidiary in 2018 (L2018-016)
Security Daily (D342)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) -- (265-267)
Announcement on Conducting Foreign Exchange Securities Times (B290) 26 April 2018
Funds Derivatives Business (L2018-017)
Security Daily (D344)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) -- (265-267)
Announcement on Amending \"Articles of Association\" Securities Times (B290) 26 April 2018
(L2018-018)
Security Daily (D342)
China Securities Journal (B287)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News
Announcement on Newly Constructing Project of 5 (265-267)
Securities Times (B290) 26 April 2018
Million Sets of Self-cleaning Air Conditioning
(L2018-019)
Security Daily (D342)
China Securities Journal (B287)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News
Announcement on Connected Transaction of Receiving (265-267)
Securities Times (B290) 26 April 2018
100% Equity of Haier New Zealand Investment
Holding Company Limited (L2018-020)
Security Daily (D344)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of (265-267)
Convening Annual General Meeting of Securities Times (B290) 26 April 2018
2017(L2018-021)
Security Daily (D344)
China Securities Journal (B287)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News
2nd Line Distribution and Equity Ownership of Phase I (265-267)
Securities Times (B290) 26 April 2018
Core Staff Shareholding Plan and Advance Term
Expiration (L2018-022)
Security Daily (D341)
China Securities Journal (B287)
Shanghai Securities News
\"Qingdao Haier Co., Ltd.\" (the Company) -- Summary
(265-267)
of Phase III Shareholding Plan of Core Staff 26 April 2018
Securities Times (B290)
Shareholding Plan（Draft)
Security Daily (D343)
China Securities Journal (B063)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (536)
Announcement on Resolutions of 1st Special Securities Times (B401) 28 April 2018
Shareholders' Meeting of 2018 (L2018-023)
Security Daily (C289)
China Securities Journal (B053)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (76)
Announcement on Resolutions of 1st Meeting for Securities Times (B116) 03 May 2018
Holders of Phase III Shareholding Plan of Core Staff
Shareholding Plan(L2018-024) Security Daily (B3)
China Securities Journal(B056)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News(76) 10 May 2018
Announcement on Changing Representative of Securities Times(B101)
72 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Sponsor and Organizer of Independent Financial
Advisor (L2018-025) Security Daily(D39)
China Securities Journal (B060)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (128)
Announcement on Line Distribution and Rights Securities Times (B121) 12 May 2018
Belongingness of Core Staff Shareholding Plan
(L2018-026) Security Daily (C83)
China Securities Journal (B004)
Shanghai Securities News (64)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Securities Times (B048) 17 May 2018
Condensed Report on the Equity Change
Security Daily (D77)
China Securities Journal (B004)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News (64)
Equity Change of Shareholder with over 5% Shares Securities Times(B048) 17 May 2018
(L2018-027)
Security Daily(D77)
China Securities Journal (B135)
―Qingdao Haier Co., Ltd.\" (the Company) – Proposal Shanghai Securities News (117)
for Public Offering of Convertible Corporate Bonds Securities Times (B004) 19 May 2018
(Amendment)
Security Daily (C111)
China Securities Journal (B135)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (117)
Announcement on Resolutions of Annual General Securities Times (B003) 19 May 2018
Meeting of 2017 (L2018-028)
Security Daily (C112)
China Securities Journal (B135)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (117)
Announcement on Resolutions of 15th Session of 9th Securities Times (B003) 19 May 2018
Directorate Meeting (L2018-029)
Security Daily (C112)
China Securities Journal (B135)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (117)
Announcement on Resolutions of 13th Session of 9th Securities Times (B003) 19 May 2018
Board of Supervisors Meeting (L2018-030)
Security Daily (C112)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (B135)
Announcement on Risk Alert on Diluted Current Shanghai Securities News (117)
Return of Public Issuance of Convertible Corporate Securities Times (B003) 19 May 2018
Bonds and Filling Measures (Amendment)
Security Daily (C112)
(L2018-031)
China Securities Journal (B005)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (40)
Announcement on Completion of Purchase of 3rd Securities Times (B064) 23 May 2018
Shareholding Plan of Core Staff Shareholding Plan
(L2018-032) Security Daily (D25)
China Securities Journal (B005)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (57)
Announcement on Implementation of Rights and Securities Times (B037) 01 June 2018
Interests Distribution for 2017 (L2018-033)
Security Daily (D31)
China Securities Journal (B065)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (89)
Announcement on Obtaining Approval of Issuance of Securities Times (B101) 13 June 2018
Overseas Listed Foreig-funded Shares from CSRC
(L2018-034) Security Daily (D41)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (B009)
Announcement on Resolutions of 16th Session of 9th Shanghai Securities News (52) 22 June 2018
Directorate Meeting (L2018-035) Securities Times (B076)
73 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Security Daily (D84)
China Securities Journal (B009)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (52)
Announcement on Resolutions of 14th Session of 9th Securities Times (B076) 22 June 2018
Board of Supervisors Meeting (L2018-036)
Security Daily (D84)
China Securities Journal (B009)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (52)
Announcement on Connected Transaction of Securities Times (B076) 22 June 2018
Transferring 22% Equity of Qingdao Haier Special
Electrical Appliance Co., Ltd. (L2018-037) Security Daily (D84)
China Securities Journal (B044)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (29)
Announcement on Shareholding Increase by Concerted Securities Times (B001) 02 August 2018
Actor of Actual Controller (L2018-038)
Security Daily (D35)
China Securities Journal (B037)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (25)
Announcement on Progress in Shareholding Increase Securities Times (B117) 07 August 2018
by Actual Controller's Concerted Actor (L2018-039)
Security Daily (D68)
China Securities Journal (A16)
Qingdao Haier Co., Ltd.\" (the Company) – Proposal Shanghai Securities News (94)
for Public Offering of Convertible Corporate Bonds Securities Times (B007) 25 August 2018
(Amendment)
Security Daily (C205/206)
China Securities Journal (A16)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (95)
Announcement on Resolutions of 17th Session of 9th Securities Times (B008) 25 August 2018
Directorate Meeting (L2018-040)
Security Daily (C207)
China Securities Journal (A16)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (95)
Announcement on Resolutions of 15th Session of 9th Securities Times (B008) 25 August 2018
Board of Supervisors Meeting (L2018-041)
Security Daily (C207)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (A16)
Announcement on Risk Alert of Diluted Current Shanghai Securities News (95)
Return on Public Issuance of Convertible Corporate Securities Times (B007) 25 August 2018
Bonds and Filling Measures (Amendment)
Security Daily (C207)
(L2018-042)
China Securities Journal (B036)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News (193)
Publishing Semi-annual Performance of 2018 by Securities Times (B213) 30 August 2018
Holding Subsidiary Haier Electronics Group Co., Ltd.
(L2018-043) Security Daily (D197)
China Securities Journal (A39)
Shanghai Securities News (160)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Summary Securities Times (B176) 31 August 2018
of 2018 Half-year Report
Security Daily (D149)
China Securities Journal (A39)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (160)
Announcement on Resolutions of 18th Session of 9th Securities Times (B176) 31 August 2018
Directorate Meeting (L2018-044)
Security Daily (D150)
China Securities Journal (A39)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (160)
Announcement on Resolutions of 16th Session of 9th Securities Times (B176) 31 August 2018
Board of Supervisors Meeting (L2018-045)
Security Daily (D149)
74 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
China Securities Journal (A39)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (160)
Announcement on Newly Constructing Industrial Park Securities Times (B176) 31 August 2018
Project in North India (L2018-046)
Security Daily (D150)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (A39)
Announcement on Connected Transaction of Planning Shanghai Securities News (160)
to Conduct Equity Replacement by Holding Subsidiary Securities Times (B176) 31 August 2018
and Haier Electronics International Co., Ltd.
Security Daily (D149)
(L2018-047)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (A39)
Announcement on Receiving Decision on Adopting Shanghai Securities News (160)
Measure of Regulatory Interview Issued for Relevant Securities Times (B176) 31 August 2018
Personal by Qingdao Securities Regulatory Bureau
Security Daily (D150)
(L2018-048)
China Securities Journal (B020)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (72)
Announcement on Participating in Activity of Online Securities Times (B36) 21 September 2018
Collective Reception Day for Investors (L2018-049)
Security Daily (D2)
China Securities Journal (B008)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (120)
Announcement on Increasing Capital in Oversea Securities Times (B036) 22 September 2018
Wholly-owned Subsidiary (L2018-050)
Security Daily (C48)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (B013)
Announcement on Obtaining Approval of Application Shanghai Securities News (32)
for Public Issuance of Convertible Corporate Bonds by Securities Times (B036) 27 September 2018
Issuance Examination Committee of CSRC upon
Security Daily (D20)
Verification (L2018-051)
China Securities Journal (B128)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (156)
Announcement on Resolutions of 21st Session of 9th Securities Times (B173) 29 September 2018
Directorate Meeting (L2018-052)
Security Daily (C92)
China Securities Journal (B128)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (156)
Announcement on Resolutions of 17th Session of 9th Securities Times (B173) 29 September 2018
Board of Supervisors Meeting (L2018-053)
Security Daily (C92)
China Securities Journal (B128)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (156)
Announcement on Purchasing 100% Equity of Securities Times (B173) 29 September 2018
Italy-based Candy Company (L2018-054)
Security Daily (C92)
China Securities Journal (B004)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (41)
Announcement on Resolutions of 22nd Session of 9th Securities Times (B028) 09 October 2018
Directorate Meeting (L2018-055)
Security Daily (D45)
China Securities Journal (B004)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (41)
Announcement on Resolution of 18th Session of 9th Securities Times (B028) 09 October 2018
Board of Supervisors Meeting (L2018-056)
Security Daily (D45)
China Securities Journal (B004)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (41)
Announcement on Connected Transaction of Planning Securities Times (B028) 09 October 2018
to Sign \"Agreement on Financial Services\"
(L2018-057) Security Daily (D45)
75 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (B004)
Announcement on Reply to \"Letter on Verification Shanghai Securities News (41)
Opinion on Application Documents on Public Issuance Securities Times (B028) 09 October 2018
of Convertible Corporate Bonds from 17th Issuance
Security Daily (D45)
Examination Committee\" (L2018-058)
China Securities Journal (B004)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (41)
Announcement on Issuing Promise by Its Actual Securities Times (B028) 09 October 2018
Controller (L2018-059)
Security Daily (D45)
China Securities Journal (B012)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (28)
Announcement on Price Range of Issuance of D Shares Securities Times (B028) 13 October 2018
(L2018-060)
Security Daily (C35)
China Securities Journal (B025)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (36)
Announcement on Obtaining Approval from Federal Securities Times (B028) 15 October 2018
Financial Supervisory Authority for Overseas Listing
of Foreign Shares (D Shares) (L2018-061) Security Daily (B4)
China Securities Journal (B045)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (24)
Announcement on Public Issuance Price of Oversea Securities Times (B132) 20 October 2018
Listed Foreign Shares (D Shares) (L2018-062)
Security Daily (D25)
China Securities Journal (B002)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (544)
Announcement on Listing of Overseas Listing of Securities Times (B020) 25 October 2018
Foreign Shares (D Shares) and Change of Shares
(L2018-063) Security Daily (C144)
China Securities Journal (B002)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (205)
Announcement on Continuous Shareholding Increase Securities Times (B216) 27 October 2018
by Concerted Actor of Actual Controller (L2018-064)
Security Daily (C144)
China Securities Journal (B174)
Shanghai Securities News (205)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Third Securities Times (B280) 31 October 2018
Quarterly Report of 2018
Security Daily (D214)
China Securities Journal (B174)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (205)
Announcement on Resolutions of 23rd Session of 9th Securities Times (B280) 31 October 2018
Directorate Meeting (L2018-065)
Security Daily (D214)
China Securities Journal (B174)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (205)
Announcement on Resolutions of 19th Session of 9th Securities Times (B280) 31 October 2018
Board of Supervisors Meeting (L2018-066)
Security Daily (D214)
China Securities Journal (B048)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (36)
Announcement on Resolutions of 24th Session of 9th Securities Times (B076) 06 November 2018
Directorate Meeting (L2018-067)
Security Daily (D42)
China Securities Journal (B048)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (36)
Announcement on Resolutions of 20th Session of 9th Securities Times (B076) 06 November 2018
Board of Supervisors Meeting (L2018-068)
Security Daily (D42)
China Securities Journal (B048)
\"Qingdao Haier Co., Ltd.\" (the Company) -- 06 November 2018
Shanghai Securities News (36)
76 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Announcement on Changing Promise about Flawed Securities Times (B076)
House Properties (L2018-069)
Security Daily (D42)
China Securities Journal (B048)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News (36)
Convening 2nd Special Shareholders' Meeting of 2018 Securities Times (B076) 06 November 2018
(L2018-070)
Security Daily (D42)
China Securities Journal (B005)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (49)
Announcement on Exercising Part of Over-allotment Securities Times (B102) 26 November 2018
Option, Activities for Stabilizing Price and End of
Term of Stable Price of D Shares (L2018-071) Security Daily (A4)
China Securities Journal (B004)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (52)
Announcement on Listing and Trading of Option Securities Times (B056) 04 December 2018
Shares of Over-allotted Options of D Shares and
Equity Change (L2018-072) Security Daily (D14)
China Securities Journal (B004)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (52)
Announcement on Changing \"Articles of Association\" Securities Times (B056) 04 December 2018
(L2018-073)
Security Daily (D14)
China Securities Journal (B016)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (45)
Announcement on Continuous Shareholding Increase Securities Times (B085) 05 December 2018
by Actual Controller's Concerted Actor (L2018-074)
Security Daily (C4)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (B016)
Announcement on Obtaining Written Reply to Shanghai Securities News (45)
Application for Public Issuance of Convertible Securities Times (B085) 05 December 2018
Corporate Bonds from CSRC upon Approval and
Security Daily (C4)
Verification (L2018-075)
China Securities Journal (B028)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News (72)
Reaching 1% by Shares Increased by Shareholder Securities Times (B016) 11 December 2018
(L2018-076)
Security Daily (D82)
China Securities Journal (B016)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (80)
Announcement on Resolutions of 25th Session of 9th Securities Times (B008) 14 December 2018
Directorate Meeting (L2018-077)
Security Daily (D10)
China Securities Journal (B016)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (25)
Announcement on Resolutions of 21st Session of 9th Securities Times (B008) 14 December 2018
Board of Supervisors Meeting (L2018-078)
Security Daily (D10)
China Securities Journal (B016)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (25)
Announcement on Public Issuance of Convertible Securities Times (B008) 14 December 2018
Corporate Bonds (L2018-079)
Security Daily (D9)
China Securities Journal (B016)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (25)
Announcement on Online Road Show for Public Securities Times (B008) 14 December 2018
Issuance of Convertible Corporate Bonds (L2018-080)
Security Daily (D9)
\"Qingdao Haier Co., Ltd.\" (the Company) -- China Securities Journal (B012)
Announcement on 2nd Line Distribution and Rights Shanghai Securities News (25) 15 December 2018
Belongingness of Phase I Core Staff Shareholding Plan Securities Times (B040)
77 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
(L2018-081)
Security Daily (C51)
China Securities Journal (B012)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News (25)
2nd Line Distribution and Equity Ownership of Phase Securities Times (B040) 15 December 2018
II Shareholding Plan in Core Staff Shareholding Plan
and Advance Term Expiration (L2018-082) Security Daily (C51)
China Securities Journal (A17)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Notice of Shanghai Securities News (41)
Issuance of Publicly Issuing Convertible Corporate Securities Times (B029) 18 December 2018
Bonds (L2018-083)
Security Daily (D28)
China Securities Journal (A33)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (17-20)
Announcement on Online Lot-winning Rate and Securities Times (B89-92) 19 December 2018
Offline Allotment Result of Public Issuance of
Convertible Corporate Bonds (L2018-084) Security Daily (D69-72)
China Securities Journal (A07)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (61)
Announcement on Online Lot-winning Result for Securities Times (B073) 20 December 2018
Public Issuance of Convertible Bonds (L2018-085)
Security Daily (D58)
China Securities Journal (B060)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (17)
Announcement on Resolutions of 2nd Special Securities Times (B093) 22 December 2018
Shareholders' Meeting of 2018 (L2018-086)
Security Daily (C79)
China Securities Journal (A10)
\"Qingdao Haier Co., Ltd.\" (the Company) -- Shanghai Securities News (45)
Announcement on Issuance Result of Public Issuance Securities Times (B017) 24 December 2018
of Convertible Corporate Bonds (L2018-087)
Security Daily (D15)
XVII. Proactive performance of social responsibilities
(I) Information on poverty alleviation of the listed companies
√Applicable □Not Applicable
1. Targeted measures in poverty alleviation plan
√Applicable □Not Applicable
In accordance with the national plan for targeted measures in poverty alleviation and the
requirements set out in relevant documents, the Company places great emphasis on poverty alleviation,
and carries out initiatives of targeted measures in poverty alleviation within the scope as authorized by
the general meetings on related matters (such as donation). Over the years, the Company has been
devoted to education undertakings and making significant contributions, with a view to targeting the
weakest area of education and to blocking the transmission of poverty between generations through
focused efforts in raising the basic cultural quality in poverty and the skill levels of labor force from
poor families. As at the end of the reporting period, the Company and the Haier Group Corporation (its
ultimate controller) and its subsidiaries (referred to as the ―Haier Group‖) has built nearly 300 hope
schools, covering 26 provinces, municipalities directly under the central government and autonomous
regions in China, and continuously provide the above-mentioned schools support in materials and other
78 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
respects in each year including the reporting period. These initiatives have effectively enhanced the basic
educational capabilities in poverty-stricken areas and improved the quality of education. At the same
time, the Company actively responded to the national rural revitalization strategy to implement targeted
measures in poverty alleviation and together with the county-level governments and ecological resources
to actively plan for farmer entrepreneurship to create a better life in the countryside.
2. Summary of targeted measures in poverty alleviation during the year
√Applicable □Not Applicable
In 2018, the Companys expenditures on targeted measures in poverty alleviation was
approximately RMB17.44 million, which was mainly utilized in the education improvement, physical
and mental health development of adolescents and children. At the same time, the Company also
explored feasible methods in agricultural poverty alleviation. For instance, for rural entrepreneurs, Haier
customized skill enhancement solutions for them among which the Xiaoshun Business School（小顺商
学院）, jointly established by RRS Health（日日顺健康）and Haier University, is a good example. The
school was built with a multi-level training system based on rural talent revitalization strategy to
enhance farmers' entrepreneurial skills. By providing local platforms and employment opportunities, we
strive to build a sound brain circulation ecological system that can ―cultivate and retain competent
talents‖. In addition, given the economic condition in different rural areas, the Company has customized
the entrepreneurial poverty alleviation model with programs, platforms, networks, achievements and
practicability to follow, implemented the national targeted poverty alleviation initiative and spared no
effort to rural poverty alleviation.
3. Results of targeted measures in poverty alleviation
√Applicable □Not Applicable
Unit and Currency: RMB0‘000
Indicators Amount and the status
I. General information
Including: 1. Funds 1,744
II. Breakdown of the use of funds
1. Poverty alleviation through education
1.1 Increase the amount of educational resources invested in 1,264
poverty-stricken areas
2. Poverty alleviation through health enhancement
Including: 2.1 Amount invested in medical and health resources in
poverty areas
3.Basic guarantees
3.1 Amount invested in helping poor people with disabilities
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2018 Annual Report of Qingdao Haier Co., Ltd.
4. Poverty alleviation in the society
4.1 Contributed amount in targeted poverty alleviation works
4.2 Charity funds for poverty alleviation
4. Subsequent targeted measures in poverty alleviation plans
√Applicable □Not Applicable
The Company will make concerted efforts with Haier Group and continue to implement the
proposition of the documents issued by the central government in respect of poverty alleviation, dedicate
to improve the education in poverty-stricken areas, promote the revitalization of rural talents and other
initiatives, and will perform our social responsibilities in a proactive manner.
(II) Performance of social responsibilities
√Applicable □Not Applicable
For details, please refer to the 2018 Social Responsibility Report of Qingdao Haier Co., Ltd.
disclosed on the date of this periodic report.
(III) Environmental information
1. Explanation of the environmental protection status of companies and their important subsidiaries
that are key emission units announced by the environmental protection department
√Applicable □Not Applicable
Innovation drive and green development are the development goals of modern manufacturing. The
Company continues to promote green development, actively promote green consumption, enhance the
application of energy-saving technologies, and integrate low carbon, cycling, energy saving and
emission reduction into all aspects of enterprise development. Besides, the Company also continues to
promote technological innovation, research and develop the products integrating smart IoT and green
development to strive to increase the green of products at full life span, extend the green supply
chain, lead innovation, green, interaction and win-win of the industry, and contribute to the national
green development.
(1) Pollution discharge information
√Applicable □Not Applicable
The Company and its holding subsidiaries including Qingdao Haier Refrigerator Co., Ltd. (―Haier
Refrigerator‖) and Guizhou Haier Electronics Co., Ltd. (―Guizhou Haier‖) are key emission units
announced by the environmental protection department.
The polluted industrial wastewater of the Company is mainly domestic water (water for toilets and
bathrooms) to be discharged to municipal pipelines through sewer pipes. The exhaust gas is mainly
assembly welding fume, and is exhausted out of the workshop with the high-power exhaust fans. After
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2018 Annual Report of Qingdao Haier Co., Ltd.
collection and filtering through the collection hood, the workshop welding fume is exhausted to the
outside of the workshop through the exhaust pipe. The foamed injection exhaust gas is discharged to the
outside of the workshop with high-power exhaust fans and through the special fan stack pipes and the
exhaust funnel in an organized way.
The major pollutants and emission standards are as shown in the table below:
Reaching
Monitoring Monitoring
Plant Pollutant Standard Value Measured Value Standard or
Point Index
not
Emission
120mg/m 2.68mg/m
Particulate density
1# Welding matter 3.5 (15m in height)
Emission rate 0.042kg/h
of Assembly kg/h Yes
A Emission
Carbonic / ＜0.3mg/m
density
oxide
Emission rate / /
Emission
120mg/m 3.92mg/m
Particulate density
2# Welding matter 3.5 (15m in height)
Emission rate 0.044kg/h
of Assembly kg/h Yes
B Emission
Carbonic / ＜0.3mg/m
density
oxide
Emission rate / /
Emission
120mg/m /
Particulate density
matter 3.5 (15m in height)
Emission rate /
kg/h
Emission
12mg/m ＜5.0×10-4mg/m
density
Benzene
0.9 (20m in height)
Emission rate /
kg/h
Emission
Exhaus 40mg/m 0.197mg/m
density
t gas Toluene
3# Fan Stack 5.2 (20m in height)
Emission rate 8.2×10-4kg/h
of Foam kg/h Yes
Station A Emission
70mg/m 4.75mg/m
density
Xylene
1.7 (20m in height)
Emission rate 0.020kg/h
kg/h
Non-methan Emission
120mg/m 1.12mg/m
e density
Hydrocarbo 17 (20m in height)
Emission rate 0.005kg/h
n kg/h
Emission
Carbonic / /
density
oxide
Emission rate / /
Emission
120mg/m /
Particulate density
matter 3.5 (15m in height)
Emission rate /
kg/h
4# Fan Stack
Emission
of Foam 12mg/m ＜5.0×10-4mg/m Yes
density
Station B Benzene
0.9 (20m in height)
Emission rate /
kg/h
Emission
Toluene 40mg/m 0.059mg/m
density
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2018 Annual Report of Qingdao Haier Co., Ltd.
5.2 (20m in height)
Emission rate 2.5×10-4kg/h
kg/h
Emission
70mg/m 4.13mg/m
density
Xylene
1.7 (20m in height)
Emission rate 0.017kg/h
kg/h
Non-methan Emission
120mg/m 1.21mg/m
e density
Hydrocarbo 17 (20m in height)
Emission rate 0.005kg/h
n kg/h
Emission
Carbonic / /
density
oxide
Emission rate / /
Emission
2.0mg/m 1.81mg/m
5# density
Emission rate / /
Hood Yes
Emission
2.0mg/m 0.33mg/m
6# density
Emission rate / /
The polluted industrial wastewater of Haier Refrigerator is also mainly domestic water (water for
toilet, bathroom) to be discharged to the municipal pipelines through sewer pipes. The production
exhaust gas mainly includes welding fume, foaming exhaust gas and canteen oil fume, all of which are
collected by the gas collecting hood and discharged to high altitude through the exhaust funnel in an
organized way.
The major pollutants and emission standards are as shown in the table below:
Reaching
Monitoring Monitoring
Plant Pollutant Standard Value Measured Value Standard or
Point Index
not
Exhaust Emission
120 mg/m 2.0 mg/m
Stack at 1# Particulate density
Yes
Welding of matter
Emission rate 5.9 kg/h 0.047 kg/h
Assembly A
Exhaust Emission
120 mg/m 1.8 mg/m
Stack at 2# Particulate density
Yes
Welding of matter
Emission rate 5.9 kg/h 0.031 kg/h
Assembly B
Non-methan Emission
120 mg/m 3.93 mg/m
e density
Hydrocarbon Emission rate 17 kg/h 0.044 kg/h
Exhaus
Emission
t gas 12 mg/m <0.004 mg/m
Benzene density
Emission rate 0.90 kg/h /
Pre-mixer 3# Yes
Emission
40 mg/m <0.004 mg/m
Toluene density
Emission rate 5.2 kg/h /
Emission
70 mg/m <0.004 mg/m
Xylene density
Emission rate 1.7 kg/h /
Vacuum Non-methan Emission
120 mg/m 3.14 mg/m Yes
Infusion e density
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2018 Annual Report of Qingdao Haier Co., Ltd.
Assembly 5# Hydrocarbon Emission rate 17 kg/h 0.038 kg/h
Emission
12 mg/m <0.004 mg/m
Benzene density
Emission rate 0.90 kg/h /
Emission
40 mg/m <0.004 mg/m
Toluene density
Emission rate 5.2 kg/h /
Emission
70 mg/m <0.004 mg/m
Xylene density
Emission rate 1.7 kg/h /
Non-methan Emission
120 mg/m 22.4 mg/m
e density
Hydrocarbon Emission rate 17 kg/h 0.253 kg/h
Emission
12 mg/m <0.004 mg/m
Benzene density
Emission rate 0.90 kg/h /
Adsorption
Emission Yes
Process 5# 40 mg/m <0.004 mg/m
Toluene density
Emission rate 5.2 kg/h /
Emission
70 mg/m <0.004 mg/m
density
Xylene
Emission rate 1.7 kg/h /
Emission
Hood Hood 2.0 mg/m 0.86 mg/m Yes
density
Pollutants of Guizhou Haier mainly involve noise and foaming exhaust gas. For noise, plant
barriers, greening for sound absorption and attenuation over distance, etc. The foaming exhaust gas is
discharged to high altitude through the exhaust funnel in an organized way.
The major pollutants and emission standards are as shown in the figure below:
Reaching
Monitoring Monitoring Standard Measured
Item Pollutant Standard
Point Index Value Value
or not
Diurnal noise
60 dB 48.7 dB Yes
value
1# Plant Gate
Night noise
50 dB 41.5 dB Yes
value
Diurnal noise
2# Air 60 dB 48.9 dB Yes
value
Noise Compression Noise
Night noise
Station 50 dB 42.5 dB Yes
value
Diurnal noise
60 dB 55.6 dB Yes
value
3#EMR
Night noise
50 dB 47.6 dB Yes
value
Volatil Upwind
Non-metha
e direction of
ne Emission
organic unauthorized 4.0 mg/m 0.13mg/m Yes
Hydrocarb density
compo exhaust gas at
on
und boundary
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2018 Annual Report of Qingdao Haier Co., Ltd.
Downwind
direction of
Emission
unauthorized 4.0 mg/m 0.28mg/m Yes
density
exhaust gas at
boundary
Upwind
direction of
Emission
unauthorized 0.40mg/m 1.8*10-3 mg/m Yes
density
exhaust gas at
boundary
Benzene
Downwind
direction of
Emission
unauthorized 0.40mg/m 2.0*10-3mg/m Yes
density
exhaust gas at
boundary
Upwind
direction of
Emission ND（below
unauthorized 2.4 mg/m Yes
density detection limit）
exhaust gas at
boundary
Toluene
Downwind
direction of
Emission
unauthorized 2.4 mg/m 2.8*10-3mg/m Yes
density
exhaust gas at
boundary
Upwind
Inspect
direction of
ion of Emission
unauthorized 1.2 mg/m 5.6*10-3 mg/m Yes
organic density
exhaust gas at
matter
boundary
Xylene
Downwind
direction of
Emission
unauthorized 1.2 mg/m 1.12mg/m Yes
density
exhaust gas at
boundary
Upwind
direction of
Emission
unauthorized 0.080 mg/m 0.005 mg/m Yes
density
exhaust gas at
boundary
Phenols
Downwind
direction of
Emission
unauthorized 0.080mg/m 0.008mg/m Yes
density
exhaust gas at
boundary
Upwind
direction of
Emission
unauthorized 0.40 mg/m 0.09 mg/m Yes
density
exhaust gas at
boundary
Anilines
Downwind
direction of
Emission
unauthorized 0.40mg/m 0.10mg/m Yes
density
exhaust gas at
boundary
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2018 Annual Report of Qingdao Haier Co., Ltd.
(2) Construction and operation of pollution control facility
√Applicable □Not Applicable
The Company and Haier Refrigerator have provided activated carbon filtration equipment for the
treatment of the exhaust gas from assembly welding absorbed by the foaming door. The restaurants are
provided with electric ion fume decomposition devices. The exhaust gas treatment equipment is
controlled by designated personnel，the pollution prevention and control facilities are included in the
TPM management scope of the equipment, and the daily inspection, weekly maintenance, and monthly
maintenance are carried out to ensure the normal operation of the equipment. The management of the
operations of pollution control facilities for exhaust gas generation is strengthened. We have ensured
efficient operation of pollution control facilities. Exhaust gas is tested by delegation on an annual basis.
The fan stacks are cleaned and inspected on a weekly, monthly and quarterly basis. Spot inspection
records are kept. Fan stack cleaning records are archived. All these are to ensure normal operation of the
exhaust facilities and smooth exhaust gas emission. The exhaust pipes are inspected periodically for
presence of foreign matters and looseness or falling. Preparations for emergency response are also made.
Guizhou Haier Electric Appliance Co., Ltd. regulates the waste oil generated by the equipment (the
annual production of waste oil is within 0.8 tons), establishes the controlling account, and is in charge of
the designated personnel. Emergency storage materials (sawdust, cotton yarn, absorbent cotton, etc.) are
kept in the storage location, emergency plans for waste oil leakage are prepared and drills are conducted;
anti-leakage measures are made in storage places, walls are tiled and roofs are covered with colored steel
tile to prevent leakage; environmental management supervision signs, hazardous waste warning signs,
risk management signs are well-founded.
(3) Evaluation of the effect of construction projects on the environment and other environmental
administration license
√Applicable □Not Applicable
The Company and its subsidiaries perform the implementation and production of construction
projects according to the laws and regulations. We perform environmental impact evaluation procedures
in strict accordance with the Three Simultaneous system for environmental protection of construction
projects which have been approved in the environmental impact assessment. There are no environmental
violations such as having constructions without approval.
(4) Emergency plan for environmental emergencies
√Applicable □Not Applicable
The Emergency Plan for Environmental Emergencies is developed according to the laws and
regulations by the Company and its subsidiaries. Drills have been organized. The Plan is continuously
optimized and upgraded according to the drill results.
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2018 Annual Report of Qingdao Haier Co., Ltd.
(5) Environmental self-monitoring plan
√Applicable □Not Applicable
All pollutant discharges of the Company comply with national and local environmental standards.
The sewage is discharged after being collected and treated, and is monitored in real time through the
automatic online sewage monitoring system. The data is connected to the Haier Smart Energy System. In
March 2017, the Company received and passed the certification of version change of ISO14001
environmental management system. In March 2018, the professional certification body conducted the
first supervision and audit of the operation of 2017 ISO14001 system after version change. The
operation was approved and functioned smoothly.
(6) Other environmental information to be disclosed
√Applicable □Not Applicable
Remarkable results in energy-saving and emission reduction have been made by the Company
through promoting energy-saving and emission reduction projects such as transforming the use of
liquefied gas to natural gas, aerial lighting renovation and provision of filtration devices with
compressed gas and also by the Haier Refrigerator through promoting energy-saving and emission
reduction projects such as cooling oil to water for adsorption machines, lighting renovation and etc..
2. Statement on environmental protection of companies other than key pollution discharge units
√Applicable □Not Applicable
All units of the Company perform the implementation and production of construction projects
according to the requirements of laws and regulations. We complete environmental impact evaluation
procedures in strict accordance with the Three Simultaneous system for environmental protection of
construction projects which have been approved in the environmental impact assessment. There are no
environmental violations such as having construction without approval.
The Company has established Haier Smart Energy Center, a leading energy big data analysis
system in the industry. It uses automation, information technology and centralized management mode to
implement centralized dynamic monitoring and digital management of main energy for consumption
such as water, electricity and gas in all factories across the country; automatically and accurately collects
energy data, and completes the prediction and analysis of energy consumption data, optimizes energy
deployment and reduce the energy consumption by producing a single product, thus truly achieving
low-carbon production.
3. Statement on reasons for non-disclosure of environmental information by companies other than
key pollution discharge units
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
4. Statement on subsequent development or changes of environmental information contents disclosed
in the reporting period
√Applicable □Not Applicable
The Company will continue to maintain and keep optimizing existing results and allows up-to-standard
discharge in strict accordance with existing environmental discharge and emission standards.
(IV) Other explanations
□Applicable √Not Applicable
XVIII. Convertible corporation bonds
(I) Information on the issuance of convertible bonds
√Applicable □Not Applicable
On 23 November 2017, the Proposal of the Plan of Public Offering of Convertible Corporate
Bonds of Qingdao Haier Co., Ltd. was passed at the 2017 First Extraordinary General Meeting of the
Company. In accordance with the resolutions passed at this general meeting and the documents approved
by China Securities Regulatory Commission, the Company has completed the issuance of convertible
corporate bonds in December 2018, which issued convertible corporate bonds of RMB 3.00749 billion
in total. Such bonds has been listed on 18 January 2019, with the listed name ―Haier Convertible Bonds‖
and the Bonds Code is 110049. For the details, please refer to relevant documents, such as the
Company‘s Prospectus on the Public Issuance of the A Share Convertible Corporate Bonds of Qingdao
Haier Co., Ltd. disclosed on 14 December 2018 and Announcement on the Listing of the Convertible
Corporate Bonds of Qingdao Haier Co., Ltd. disclosed on 16 January 2019.
(II) Information on holders and guarantors of convertible bonds during the reporting period
√Applicable □Not Applicable
Number of convertible bond holders at the end of the period 49,125
Guarantor of the convertible bonds of the Company Nil
Top ten convertible bond holders are as below:
Bonds held at the
Ownership held
Name of convertible corporate bond holders end of the period
(%)
(RMB)
Haier Electric Appliances International Co., Ltd. 620,532,000 20.63
Haier Group Corporation 528,797,000 17.58
GIC PRIVATE LIMITED 129,860,000 4.32
Qingdao Haier Venture & Investment Information Co., Ltd. 84,921,000 2.82
(青岛海尔创业投资咨询有限公司)
National social security fund, Portfolio 104 51,365,000 1.71
87 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Qingdao Haichuangzhi Management Consulting Enterprise 32,480,000 1.08
(Limited Partnership)
Industrial and Commercial Bank of China - SSE 50 Trading 20,510,000 0.68
Open Index Securities Investment Funds
Agricultural Bank of China Limited - E Fund Consumer 17,561,000 0.58
Industry Equity Securities Investment Funds
Bank of China Limited- E Fund's small and medium-sized 17,255,000 0.57
hybrid securities investment funds
Tibet Lianhai Capital Management Limited（西藏联海资产
管理有限公司）- Neutron Star Road, 9 B Yue Jin No. 1 15,125,000 0.50
Private Equity Funds
(III) Information on the change in convertible bonds during the reporting period
□Applicable √Not Applicable
Information on the accumulated number of convertible bonds being converted into shares during the
reporting period
□Applicable √Not Applicable
(IV) Information on the past adjustment of prices for conversion into shares
□Applicable √Not Applicable
(V) Information on the indebtedness, changes in creditability of the Company and the cash
arrangement for repayment of debts in the coming years
√Applicable □Not Applicable
At the end of the reporting period, the Company‘s liabilities amounted to RMB 111,569.27 million
in total, including current liabilities RMB80,081.66 million and non-current liabilities RMB31,487.60
million.
Through the evaluation of the credit status of the Company and the public issuance of convertible
corporate bonds, United Credit Ratings Co., Ltd. determined the long-term credit rating of the Company
is AAA, the rating outlook is ―stable‖ and the bond credit rating is AAA.
The Company's operations in all aspects are stable, the asset structure is reasonable, and the credit
status is good, thus being able to provide stable and sufficient working capital for the payment of
convertible corporate bond interest and repayment of principle in the future.
(VI) Explanation on other information regarding convertible bonds
□Applicable √Not Applicable
88 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
SECTION VI CHANGES IN ORDINARY SHARES AND INFORMATION ABOUT SHAREHOLDERS
I. Changes in ordinary share capital
(I) Table of Changes in ordinary shares
1. Table of Changes in ordinary shares
Unit: share
Prior to the change Increase and decrease of the change (＋,－) Balance
New shares Bonus Shares converted
Number % Others Subtotal Number %
issued shares from reserve
I. Shares with selling restrictions
1. Shares held by the state
2. Shares held by the state-owned legal
entities
3. Shares held by other domestic investors
Including: shares held by domestic
non-state -owned legal entities
Shares held by domestic
individuals
4. Shares held by foreign investors
Including: shares held by foreign legal
entities
shares held by foreign individuals
II.Tradable shares without selling 6,097,402,727 100.000 271,013,973 271,013,973 6,368,416,700 100.00
restrictions
1. RMB ordinary shares 6,097,402,727 100.000 6,097,402,727 95.74
89 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
2. Domestic listed foreign shares
3. Overseas listed foreign shares 271,013,973 271,013,973 271,013,973 4.26
4. Others
III. Total ordinary shares 6,097,402,727 100.000 271,013,973 271,013,973 6,368,416,700 100.00
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2018 Annual Report of Qingdao Haier Co., Ltd.
2. Statement on the changes in ordinary shares
√Applicable □Not Applicable
On 27 April 2018, Proposal of Intended Application for the Initial Public Offering and Listing of
Shares at the D Shares Market of China Europe International Exchange AG of Qingdao Haier Co., Ltd.
was passed on the 2018 First Extraordinary General Meeting. The Company intended to apply for the
initial public offering and listing of shares at the D shares market of China Europe International
Exchange AG, such issuance and listing would be achieved through the entrance of Frankfurt Stock
Exchange and listing for dealing. Such issuance has been completed in November 2018, and
271,013,973 D shares in total were issued.
3. Effect of changes in ordinary shares on the financial indicators such as earnings per share and net
assets per share (if any) over the last year and the last reporting period
√Applicable □Not Applicable
In 2018, the Company achieved net profit attributable to shareholders of the parent company of
RMB7,440,228,855.90，equity attributable to owners of the parent company of RMB39,402,350,791.68,
in terms of total share capital of 6,097,402,727 shares of the Company before issuance of D shares,
revenue was RMB1.22 per share and net asset was RMB6.46 per share accordingly; in terms of total
share capital of 6,368,416,700 shares of the Company after issuance of D shares, revenue was RMB1.17
per share and net asset was RMB6.19 per share accordingly.
4. Other disclosure deemed necessary by the Company or required by securities regulatory
authorities
□Applicable √Not Applicable
(II) Changes in shares with selling restrictions
□Applicable √Not Applicable
II. Issuance and listing of securities
(I) Issuance of securities as of the reporting period
√Applicable □Not Applicable
Unit: 0‘000 shares Currency: RMB
Number of
Type of shares Number shares
Price (or Date of Date of
and its derivative Date of issue of under
interests rate) listing termination
securities issuance listing
approval
Ordinary shares
RMB ordinary 7 July 2014 7.73 244.04 20 June 2 488.08
shares - grant of
restricted shares 366.06 20 June 2 /
under the Share
Option Incentive
Scheme
Non-public 17 July 201 10.83 30,299.3 17 July 60,598.60
91 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Issuance of 4 0
RMB ordinary
shares
RMB ordinary 8 April 201 10.06 19.00 /
shares - exercise 5 5 August
of share option 28 July 201 8.07 3,090.40 2015 3,090.40
and grant of
restricted shares
under the Share
Option Incentive
Scheme
D shares 24 October EUR1.05 26,500 24 Octobe 26,500
2018 r 2018
30 Novembe 601.397 30 Novem 601.3973
r 2018 3 ber 2018
Convertible corporation bonds, convertible bonds with warrants and corporate bonds
Convertible 18 December Interest rates RMB3,0 18 January RMB3,007
corporation 2018 for the first 07,490,0 2019 ,490,000
bonds of year to sixth 00
Qingdao Haier year are 0.2%,
Co., Ltd. 0.5%, 1.0%,
1.5%, 1.8%,
2.0%,
respectively
Details of issuance of securities in the latest 3 years as of the reporting period (please specify separately
for bonds with different interest rates within the duration):
√Applicable □Not Applicable
(1) In April 2014, the Company introduced Phase IV Share Option Incentive Scheme. The Scheme
involves 54,560,000 options in total, of which, 49,110,000 options (including 42,879,000 share options
and 6,231,000 restricted shares) were granted under the first grant and 5,450,000 options (including
4,761,000 share options and 689,000 restricted shares) were reserved shares. After no objection filing
with the CSRC and the approval of the Scheme at a general meeting of the shareholders of the Company,
the Board determined the date of the First Grant was 20 June 2014 and 48,780,000 options (including
42,679,000 share options at the exercise price of RMB16.63 per share; and 6,101,000 restricted shares at
the grant price of RMB7.73 per share) were granted to scheme participants (adjusted after one
participant left the Company) under the first grant. The registration of transfer of the abovementioned
restricted shares was completed on 7 July 2014. For details, please refer to the Announcement of
Completion of Registration of Restricted Shares Granted under the Phase IV Share Option Incentive
Scheme of Qingdao Haier Co., Ltd. (L2014-038) published by the Company on the four major securities
newspapers and the website of Shanghai Stock Exchange (www.sse.com.cn) on 8 July 2014.
(2) In September 2013, the Company induced a proposal on the introduction of the strategic
investor through non-public issuance of no more than 305 million A ordinary shares to KKR
(Luxembourg) with proceeds of not more than RMB3.447 billion. After the approval received from the
general meeting of the shareholders of the Company, Ministry of Commerce and CSRC, the Board of the
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2018 Annual Report of Qingdao Haier Co., Ltd.
Company conducted relevant share transfer procedures in July 2014 and determined 302,992,994 shares
to be issued at the issue price of RMB10.83 per share. The listing of the relevant share will be effective
on 17 July 2017. For details, please refer to Announcement on Results of Non-public Issuance of Shares
and Change in Share Capital of Qingdao Haier Co., Ltd. (L2014-041) published by the Company on the
four major securities newspapers and the website of Shanghai Stock Exchange (www.sse.com.cn) on 22
July 2014.
(3) In February 2015, according to the Company‘s reserved equity under the Phase IV Share Option
Incentive Scheme, an aggregate of 650,000 share options were granted with the exercise price of
RMB20.44 per share while 190,000 restricted shares were granted with the granting price of RMB10.06
per share. The Board of Directors determined that the Grant date was 26 February 2015. Registration
and transfer issues of the restricted shares have been completed on 8 April 2015. For details, please refer
to the Announcement of Qingdao Haier Co., Ltd. on the Completion of Registration of Reserved
Restricted Shares Granted under the Phase IV Share Option Incentive Scheme (L2015-011) published by
the Company on the four major securities newspapers and the Shanghai Stock Exchange website
(www.sse.com.cn) on 9 April 2015.
(4) In July 2015, the conditions of the first exercise/unlocking of equity initially granted under
Phase IV Share Option Incentive Scheme were fulfilled. The Company directionally issued additional
30,904,000 ordinary shares to determined and qualified participants of the first exercise of equity
granted under Phase IV Share Option Scheme at a price of RMB8.07 per share on 28 July 2015. The
above shares were listed on 5 August 2015. For details, please refer to the Announcement of Qingdao
Haier Co., Ltd. on the Share Option Incentive Exercise Result and New Shares Listing under the Share
Option Incentive Scheme (L2015-031) published by the Company on the four major securities
newspapers and the Shanghai Stock Exchange website (www.sse.com.cn) on 30 July 2015.
(5) In April 2018, after considering and approving at the 11th meeting of the 9th session of the
Board and the 2018 First Extraordinary General Meeting of the Company, the Company intended to
apply for the initial public offering and listing of shares at the D shares market of China Europe
International Exchange AG. After obtaining relevant approval and examination, the Company issued
265,000,000 and 6,013,973 D shares (which were issued pursuant to the exercise of Over-allotment
Share Option), respectively in October and November 2018, resulting in an aggregate of 271,013,973 D
shares being issued and listed for trading. For details, please refer to Announcement on Listing of
Overseas Listing of Foreign Shares (D Shares) and Change of Shares of Qingdao Haier Co., Ltd.
(L2018-063) and Announcement on Listing and Trading of Option Shares of Over-allotted Options of D
Shares and Equity Change of Qingdao Haier Co., Ltd. (L2018-072) published by the Company on the
four major securities newspapers and the website of Shanghai Stock Exchange (www.sse.com.cn) on 25
October 2018 and 4 December 2018, respectively.
(6) In September 2017, after considering and approving at the 8th meeting of the 9th session of the
Board of the Company, the Company intended to issue convertible corporate bonds up to
RMB5,640,000,000 (subject to the adjustment of the Board with up to RMB3,007,490,000). After
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2018 Annual Report of Qingdao Haier Co., Ltd.
obtaining relevant approval and examination, the Company issued convertible corporate bonds of
RMB3,007,490,000 on 18 December 2018,which listed for trading on 18 January 2019. For details,
please refer to relevant announcements, such as Announcement on Public Issuance of Convertible
Corporate Bonds of Qingdao Haier Co., Ltd. (L2018-079) and Announcement on the Listing of the
Convertible Corporate Bonds of Qingdao Haier Co., Ltd. (L2019-004) disclosed by the Company on 13
December 2018 and 16 January 2019, respectively.
(II) Changes in total shares and shareholder structure as well as assets and liabilities structure of
the Company
□Applicable √Not Applicable
(III) Information on existing shares held by the staff
□Applicable √Not Applicable
III. Information on shareholder and ultimate controllers
(I) Total number of shareholders
Total number of ordinary shareholders up to the end of the reporting period 173,027
Total number of ordinary shareholders as at the end of the last month prior to the disclosure
172,948
day of the annual report
Note: The above number of shareholders is the total number of the Company‘s shareholders of A shares
and D shares.
(II) Table of top ten shareholders, top ten common shareholders (or the shareholders without
selling restrictions) by the end of the reporting period
Unit: share
Shareholdings of top ten shareholders
Numbe Status of shares
r of pledged or frozen
Change Number of shares
Name of Percent
during the shares held at held Nature of
shareholder (full age
reporting the end of the with Numbe shareholder
name) (%) Status
period period selling r
restrict
ions
Haier Electric Domestic
Appliances 1,258,684,824 19.76 non-state-o
Nil
International wned legal
Co., Ltd. entity
Haier Group Domestic
Corporation 1,072,610,764 16.84 non-state-o
Nil
wned legal
entity
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2018 Annual Report of Qingdao Haier Co., Ltd.
Hong Kong Unknown
Securities 496,233,305 7.79 Unkno
Clearing Co., wn
Ltd.
GIC PRIVATE 263,406,745 4.14 Unkno Foreign
LIMITED wn legal entity
Deutsche Bank Foreign
209,115,801 3.28 Unkno
Aktiengesellscha legal entity
wn
ft (note)
China Securities Unknown
Finance 182,592,697 2.87 Unkno
Corporation wn
Limited
Qingdao Haier Domestic
Venture & non-state-o
Investment wned legal
Information Co., 172,252,560 2.70 Nil entity
Ltd.(青岛海尔创
业投资咨询有限
公司)
KKR HOME Foreign
161,116,436 2.53 Unkno
INVESTMENT legal entity
wn
S.A R.L.
National social Unknown
102,211,900 1.60 Unkno
security fund,
wn
Portfolio 104
Central Huijin Unknown
Asset 69,539,900 1.09 Unkno
Management wn
Ltd.
Shareholdings of top ten shareholders not subject to selling restrictions
Number of tradable shares without Class and number of shares
Name of shareholder
selling restrictions Class Number
Haier Electric Appliances 1,258,684,824 RMB 1,258,684,824
International Co., Ltd. ordinary
Haier Group Corporation 1,072,610,764 RMB 1,072,610,764
ordinary
Hong Kong Securities 496,233,305 RMB 496,233,305
Clearing Co., Ltd. ordinary
GIC PRIVATE LIMITED 263,406,745 RMB 263,406,745
ordinary
Deutsche Bank Overseas
Aktiengesellschaft (note) 209,115,801 listed 209,115,801
foreign
shares
China Securities Finance 182,592,697 RMB 182,592,697
Corporation Limited ordinary
Qingdao Haier Venture &
Investment Information Co., 172,252,560 RMB 172,252,560
Ltd.(青岛海尔创业投资咨询 ordinary
有限公司)
KKR HOME INVESTMENT 161,116,436 RMB 161,116,436
S.A R.L. ordinary
National social security fund, 102,211,900 RMB 102,211,900
Portfolio 104 ordinary
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2018 Annual Report of Qingdao Haier Co., Ltd.
Central Huijin Asset 69,539,900 RMB 69,539,900
Management Ltd. ordinary
Related-parties or parties (1) Haier Electric Appliances International Co., Ltd. is a holding
acting in concert among the subsidiary of Haier Group Corporation. Haier Group Corporation holds
aforesaid shareholders 51.20% of its equity. Qingdao Haier Venture & Investment Information
Co., Ltd.(青岛海尔创业投资咨询有限公司) is a party acting in
concert with Haier Group Corporation;
(2) The Company is not aware of the existence of any connections of
other shareholders.
Explanation of preferential Not applicable
shareholders with restoration
of voting rights and their
shareholdings
Note: This account is the Deutsche Bank collection account for the Company's D shares, which is the
original data provided by the German securities registration agency to the Company after the merger
according to local market practices and technical settings, not representing the ultimate shareholder.
Number of shares held by top ten shareholders with selling restrictions and the selling restrictions
□Applicable √Not Applicable
(III) Strategic investors or general legal persons who became the top ten shareholders due to
placing of new shares
□Applicable √Not Applicable
IV. Controlling shareholder and the ultimate controller
(I) Status of controlling shareholder
1 Legal person
√Applicable □Not Applicable
Name Haier Electric Appliances International Co., Ltd.
The person in charge of the Zhang Ruimin (张瑞敏)
Company or legal representative
Establishment date 1988-06-30
Principal business Manufacturing of freezer, electromagnetic stove, house electrical
fan, hairdryer, freezing machine, gas fire, air cleaner,
dishwasher, electric heater, electric cooker, water dispenser,
vacuum cleaner, kitchen ventilator, gas stove and oven focal; the
export of the products produced by the Company, the import and
export of technology and equipment for the Company's own use
and the import business of raw materials for production.
2 Natural person
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
3 Explanation on the absence of controlling shareholders of the Company
□Applicable √Not Applicable
4 Index and dates in respect of the changes in controlling shareholders during the reporting period
□Applicable √Not Applicable
5 Framework of the ownership and controlling relationship between the Company and its
controlling shareholder
√Applicable □Not Applicable
(II) Status of the ultimate controller
1 Legal person
√Applicable □Not Applicable
Name Haier Group Corporation
The person in charge of the Company Zhang Ruimin（张瑞敏）
or legal representative
Establishment date 1980-03-24
Principal business Manufacturing of home appliances, digital products,
communication equipment, electronic computers and
accessories, ordinary machineries, kitchen utensils and
industrial use robots; domestic commercial wholesale
distribution and retail sale (excluding those operated exclusively
by the State, which are dangerous and limited by the State); the
import and export business (please refer to Foreign Trade
Enterprise Validation Certificate for details).
2 Natural person
□Applicable √Not Applicable
3 Explanation on the absence of ultimate controller of the Company
□Applicable √Not Applicable
4 Index and dates in respect of the changes in ultimate controller during the reporting period
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
5 Framework of ownership and controlling relationship between the Company and the ultimate
controllers
√Applicable □Not Applicable
6 The ultimate controller controls the Company by way of Trust or other assets management
□Applicable √Not Applicable
(III) Introduction of controlling shareholders and ultimate controllers
√Applicable □Not Applicable
Haier Group Company is registered as a joint-stock enterprise. According to the statement issued by
the State-owned Assets Management Office of Qingdao on 1 June 2002, it is believed that the enterprise
nature of Haier Group Company is a collective owned enterprise.
V. Other legal shareholders with a shareholding percentage over 10%
□Applicable √Not Applicable
VI. Explanation of reduction of share restrictions
□Applicable √Not Applicable
SECTION VII RELEVANT INFORMATION OF PREFERRED SHARES
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
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SECTION VIII DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES
I. Changes of Shareholding and Remuneration
(I) Changes of shareholding and remuneration of current and retired directors, supervisors and senior management during the reporting period
√Applicable □Not Applicable
Unit: share
Total Whether
remuneration receive
received from remuneration
Expiration Shareholding Increase/ Reason
Shareholding the Company from the
Title Appointmen date of s at the decrease in for
Name Gender Age s at the end during the Companys
(note) t date appointmen beginning of shares for increase/
of the year reporting related party
t the year the year decrease
period
(RMB0000)
(before tax)
Liang Chairman male 53 2016-05-31 2019-05-30 10,904,065 12,859,062 1,954,997 Employee 190 NO
Haishan & CEO shareholdi
Tan Vice female 49 2016-05-31 2019-05-30 ng plan No receipt of YES
Lixia president vested
remuneration
5,272,740 6,836,737 1,563,997
from the
Company
Peng Director male 58 2016-05-31 2019-05-30 20 NO
Jianfeng
Wu Director male 64 2016-05-31 2019-05-30 20 NO
Changqi
Zhou Director male 57 2016-05-31 2019-05-30 20 NO
Hongbo
Liu Director male 49 2016-05-31 2019-05-30 No receipt of NO
Haifeng
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2018 Annual Report of Qingdao Haier Co., Ltd.
remuneration
from the
Company
Wu Independ male 79 2016-05-31 2019-05-30 NO
Cheng ent
director
Dai Independ male 57 2016-05-31 2019-05-30 NO
Deming ent
director
Shi Independ male 57 2016-05-31 2019-05-30 NO
Tiantao ent
director
Wang Chairman male 62 2016-05-31 2019-05-30 No receipt of YES
Peihua of the
remuneration
Board of 27,004 91,213 64,209
Superviso from the
rs
Company
Ming Superviso male 59 2016-05-31 2019-05-30 No receipt of YES
Guoqing r
remuneration
17,612 59,518 41,906
from the
Company
Wang Employe female 44 2016-05-31 2019-01-08 NO
Yuqing e 2,231 7,532 5,301
superviso
r
Yu Miao Employe male 37 2019-01-08 2019-05-30 NO
e
superviso
r
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2018 Annual Report of Qingdao Haier Co., Ltd.
Gong Chief male 46 2016-05-31 2019-05-30 Employee NO
Wei financial shareholdi
officer, 1,050,000 1,450,556 400,556 ng plan
vice vested
president
Ming Secretary female 55 2016-05-31 2019-05-30 NO
Guozhen to the
board of 944,446 1,106,579 162,133
directors,
vice
president
Total / / / / / 18,218,098 22,411,197 4,193,099 / 472 /
Name Major work experience
Liang Male, born in 1966, is a senior engineer. He had served as head of the quality department of Qingdao Haier Refrigerator Co., Ltd., general manager
Haishan of Qingdao Haier Air Conditioner Gen Corp., Ltd, senior vice president of Haier Group, rotation president of Haier Group. He is vice president of
the board of directors of Haier Group, chairman of 9th session of the Board and general manager of Qingdao Haier Co., Ltd.; he was rewarded
National May 1st Labor Medal, Outstanding Leadership Award of the National Light Industry Enterprise Information (全国轻工业企业信息化优
秀领导奖), Top 10 Leaders in China Strategic Emerging Industries in recent year; Prize of Technology Advancement for China Household
Appliances, First Prize Award of Science and Technology Progress of China National Light Industry Council, 2017 Forbes China Best CEO of
Listed Company, 2017 Taishan Industry Leading Talent of Shandong Province.
Tan Lixia Female, born in 1970, had served as assistant to director and general manager of Haier Air Conditioning Electronics Import and Export Company
(海尔空调电子进出口公司), the head of integrated department, deputy director, director of department of overseas market development of Haier
Group, and head of department of financial management of Haier Group, CFO of Haier Group currently serves as the executive vice president of
Haier Group, the president of Haier Financial Holdings Limited, the vice chairman of the 9th session of the Board of Qingdao Haier Co., Ltd.. In
recent years, she was successively awarded Model Worker of Shandong Province, Outstanding Entrepreneur of the State, \"March 8 Red-Banner
Holders of the State \", PRC CFO of the Year, China Top Ten Women in Economic Area, China Top Ten Brand Female (中国十大品牌女性),
member of the 12th Standing Committee of the All-China Women's Federation and the vice president of the China Women Entrepreneurs
Association and so on.
Peng Male, born in 1961, professor and tutor of doctorate students of School of Labor and Human Resources of Remin University of China, president of
Jianfeng China Stone Management Consulting Group, vice chairman of China Human Resource Development Association, vice director of Management
Consulting Committee of China Enterprise Confederation, director of the 9th session of the Board of Qingdao Haier Co., Ltd.. He once was the
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2018 Annual Report of Qingdao Haier Co., Ltd.
deputy dean of School of Labor and Human Resources of Remin University of China.
Wu Changqi Male, born in 1955, professor and tutor of doctorate students of department of Strategic Management of Guanghua School of Management of
Peking University. He graduated from Shandong University in 1982 with a bachelor degree in economics. He graduated from Katholieke
Universiteit Leuven in Belgium in 1990, with a MBA degree and a doctorate degree in applied economics successively. He was an assistant
professor and associate professor of Department of Economics of School of Business and Management of Hong Kong University of Science and
Technology, professor and director of Department of Strategic Management of Guanghua School of Management of Peking University, deputy dean
of Guanghua School of Management, Peking University, Director of EMBA degree programme center and so on. He is currently the president of the
National Hi-Tech Industrial Development Zone Strategy Research Institute of Peking University (国家高新技术产业开发区发展战略研究院) and
president of Guanghua Leadership Institute, director of the 9th session of the Board of Qingdao Haier Co., Ltd..
Zhou Male, born in 1962, chairman of UbiLink, member of the board of directors of Beijing Hanbang Technology Co., Ltd., part-time chief scientist of
Hongbo Kyland Technology Co., Ltd (东土科技); he was once the general manager of Beiqi iFoton Co., Ltd. (北汽福田车联网公司), chief software
specialist of Tsinghua Tongfang, senior engineer / manager of research and development of IBM/Oracle and other companies in the United States,
postdoctoral researcher of Oak Ridge National Laboratory of America etc. He has engaged in the research and development work in
supercomputing and cloud computing. He was distinguished expert of Beijing, Guiyang and other municipal government; part-time professor of
Beijing Jiaotong University, University of Electronic Science and Technology of China and other colleges; He was the pioneer engaged in IoT
development in Tsinghua Tongfang after his return from abroad in 2003, and has published three treatises at home and abroad, and he is one of the
nine global IoT experts interviewed by the internationally renowned magazine \"Economist\". He is currently a director of the 9th session of the
Board of Qingdao Haier Co., Ltd..
Liu Haifeng Male, born in 1970, currently is the president of Dehong Capital（德弘资本）and was the KKR global partner, co-head of KKR Asian Private Equity
(KKR 亚洲私募业务) and CEO of KKR Greater China Region. He once served as the managing director of Morgan Stanley and co-head of the
Direct Investment Department of Morgan Stanley Asia. In years of direct investment career, he achieved an excellent long-term investment
performance, he was responsible for and led a number of successful and pioneering direct investment projects in the Greater China region, such as:
Ping An Insurance, Mengniu Dairy, Qingdao Haier, Sunner Development, Belle International, Far East Horizon, Nanfu Battery, China Modern
Dairy, United Envirotech Ltd., China International Capital Corporation Limited (CICC), China Cord Blood Corporation, Yongle Household
Appliances, Hengan International, COFCO Meat, Guangdong Feed(粤海饲料), Asia Dairy, Uxin Limited, Tarena Education and etc. He graduated
from Columbia University, and achieved the highest honor of science degree in Department of Electronic Engineering; he is a member of Tau Beta
Pi (National Engineering Honor Society of America) (全美工程荣誉学会), and he has won the Edwin Howard Armstrong Award as the most
outstanding electronic engineering student of Columbia University.
Wu Cheng Male, born in 1940, expert in information and automation, academician of Chinese Academy of Engineering. He graduated from Tsinghua
University in 1962 and got a postgraduate degree of Tsinghua University in 1966. He is a professor and doctoral supervisor of department of
Automation of Tsinghua University, head of National CIMS Engineering Research Center, independent director of the 9th session of the Board of
Qingdao Haier Co., Ltd.
Dai Deming Male, born in 1962. He is a professor and doctoral supervisor of the accounting department of School of Business at Remin University of China. He
also concurrently holds other positions such as a vice-chairman of Accounting Society of China, Independent director of the 9th session of the
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2018 Annual Report of Qingdao Haier Co., Ltd.
Board of Directors of Qingdao Haier. He served as an independent director for Beijing Capital Development Co., Ltd.（北京首都开发股份有限公
司） and other companies.
Shi Tiantao Male, born in 1962. He currently serves as a professor and doctoral supervisor of the School of Law at Tsinghua University as well as director of
Finance & Law Research Center under the School of Law at Tsinghua University. He also serves on the 9th session of the Board of Directors of
Qingdao Haier as an independent director. Meanwhile, he concurrently holds other positions such as a vice president of the Chinese Research
Association of Securities Law, an arbitrator of CIETAC, and a member of the Case Guidance Committee of the Supreme People's Court.
Wang Peihua Male, born in 1957, senior political analyst, he has served as the deputy secretary of Party Committee of Haier Group Air-Conditioner Head Office
(海尔集团空调本部), Washing Machine Head Office (洗衣机本部), and Haier Group Freezer & Heater Head Office (海尔集团冷柜电热本部),
chairman of the labor union of Haier Group Technology and Equipment Head Office, deputy secretary of Discipline Inspection Committee etc.. He
is the head of the Organizational Department of Haier Group and the president of the 9th session of the Board of Supervisors of Qingdao Haier Co.,
Ltd..
Ming Male, born in 1960, senior political analyst, has served as deputy secretary of Discipline Inspection Committee of Qingdao Refrigerator General
Guoqing Factory, party branch secretary and assistant manager of Qingdao Haier Transportation Company (青岛海尔运输公司), head of the comprehensive
department of Qingdao Haier Co., Ltd., deputy secretary of party committee and secretary of discipline inspection committee of Haier Refrigerator
Products Head Office (海尔冰箱产品本部), chairman of the labor union. He is the chairman of the labor union of Haier Group, and the supervisor
of the 9th session of the board of supervisors of Qingdao Haier Co., Ltd..
Wang Yuqing Female, born in 1975, has served as the employee supervisor of the Board of Supervisors of Qingdao Haier Co., Ltd., the office secretary of
Qingdao Haier Co., Ltd., employee supervisor of the board of supervisors of Qingdao Haier Co., Ltd., and head of the general manager office of
Qingdao Haier Co., Ltd..
Yu Miao Male, born in 1982, Chinese nationality with a master degree. He serves as legal manager of Qingdao Haier Co., Ltd. since April 2012.
Gong Wei Male, born in 1973, has served as the financial manager of Qingdao Haier Co., Ltd., senior financial manager and senior financial analyst of Haier
Group, chief financial officer of Haier Washing Machine Head Office (海尔洗衣机本部), chief financial officer of Haier Air-Conditioner Head
Office (海尔空调本部), chief financial officer of White Goods Group, he is currently the vice president and chief financial officer of Qingdao Haier
Co., Ltd.. He was granted the honorary titles such as Outstanding Youth in Post of Qingdao City, Outstanding Accounting Workers of Shandong
Province, National Outstanding Accounting Workers and so on, and won the awards of Top Ten CFO in China as appraised by \"New Money\"
Magazine (《新理财杂志》) in 2011.
Ming Female, born in 1964, senior economist, was the lecturer of the investment department of China Institute of Finance, deputy head of the Teaching
Guozhen and Research section of Investment Economy Department, a member of treasury department of Everbright International Investment Consultancy
Company, deputy director and director of general manager office, general manager of business management department and general manager of
personnel department, assistant to the general manager of the Company, executive vice president of Everbright International Investment
Consultancy Company; she was the office director of analysts professional committee of the Securities Association of China, vice director of
Qualification Management Department of the Association, vice director of Practice Standards Committee (执业标准委员会) of the Association.
She is currently the vice general manager and secretary to the Board of Directors of Qingdao Haier Co., Ltd..
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2018 Annual Report of Qingdao Haier Co., Ltd.
Other information
□Applicable √Not Applicable
(II) Incentive share option granted to directors and senior management during the reporting period
□Applicable √Not Applicable
II. Positions held by current and retired directors, supervisors and senior management during the reporting period
(I) Positions held in shareholders’ entities
√Applicable □Not Applicable
Name Company Position Appointment date End date of appointment
Liang Haishan Haier Electric Appliances International Director November 1997
Co., Ltd.
Tan Lixia Haier Electric Appliances International Director
Co., Ltd.
Tan Lixia Qingdao Haier Venture & Investment Supervisor March 2009
Information Co., Ltd. (青岛海尔创业投
资咨询有限公司)
Tan Lixia Haier Group Corporation Executive vice president February 2016
Wang Peihua Haier Group Corporation Head of Organizational
Department
Ming Guoqing Haier Group Corporation Chairman of the Labor Union
Positions in shareholders Nil
entities
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2018 Annual Report of Qingdao Haier Co., Ltd.
(II) Positions held in other entities
√Applicable □Not Applicable
Name Company Position Appointment date End date of appointment
Liang Haishan Haier Group Finance Co., Ltd. Director
Liang Haishan Haier Financial Holdings Limited Director
Ming Guozhen Qingdao Overseas Chinese Industrial Director July 2008
Holding Co., Ltd.
Tan Lixia Haier Group Finance Co., Ltd. Supervisor
Tan Lixia Haier Financial Holdings Limited Legal representative, director
Wu Cheng Tsinghua University Professor February 1967
Wu Cheng Kingdee International Software Group Independent Non-executive March 2018
Company Limited director
Wu Changqi Peking University Professor
Wu Changqi Huaxia Bank Co., Ltd.（华夏银行股份 Supervisor 12 May 2015 12 May 2021
有限公司）
Wu Changqi Beijing Electronic Zone Investment and Independent director 28 December 2012 22 April 2019
Development Co., Ltd.
Wu Changqi Yijiahe Technology Co., Ltd. Independent director 24 August 2018 24 August 2021
Shi Tiantao Tsinghua University Professor
Shi Tiantao Jiajiayue Group Holding Co., Ltd.（家家 Independent director
悦集团股份有限公司）
Shi Tiantao Beijing Zeho Waterfront Co., Ltd.（北京 Independent director
正和恒基滨水生态环境治理股份有限
公司）
Shi Tiantao Rongtong Fund Management Co., Ltd. Independent director
（融通基金管理有限责任公司）
Liu Haifeng Far East Horizon Co., Ltd（远东宏信有 Non-executive director October 2009
限公司）
Liu Haifeng China International Capital Corporation Non-executive director February 2015
Limited（中国国际金融股份有限公司）
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2018 Annual Report of Qingdao Haier Co., Ltd.
Liu Haifeng Sunpower Group（中圣集团） Non-executive director November 2017
Dai Deming China Zheshang Bank Co., Ltd.（浙商银 Independent Non-executive March 2015
行股份有限公司） director
Dai Deming BOC Aviation Limited（中银航空租赁 Independent Non-executive May 2016
有限公司） director
Dai Deming China Securities Co., Ltd.（中信建投证 Independent Non-executive August 2016
券股份有限公司） director
Dai Deming Power Construction Corporation of China(中 Independent Non-executive March 2018
国电力建设股份有限公司) director
Dai Deming Poly Developments and Holdings Independent Non-executive September 2018
Corporation Limited(中国保利发展股 director
份有限公司)
Peng Jianfeng Beijing Chinastone Enterprise President
Management Consulting Co., Ltd.（北京
华夏基石企业管理咨询有限公司）
Peng Jianfeng School of Labor and Human Resources Professor
of Remin University of China
Peng Jianfeng China Merchants Shekou Industrial Independent director
Zone Holdings Co., Ltd.
Peng Jianfeng Jinko Power Technology Co., Ltd.（晶科 Independent director
电力科技股份有限公司）
Zhou Hongbo Beijing Hanbang Technology Co., Ltd. Director November 2017 November 2020
Positions in other entities Nil
III. Remuneration of directors, supervisors and senior management
√Applicable □Not Applicable
Decision-making procedures of the remuneration The procedures for decision- making of remuneration of directors, supervisors and senior management of the
of directors, supervisors and senior management Company are establishing platform, clearing standards, communication and consultation, and making objective
decision. The Remuneration Committee of the Company formulate remuneration standards, adjust principles and
assess the principles of realizing, then propose them to the board of directors for approval, thus form a system
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2018 Annual Report of Qingdao Haier Co., Ltd.
platform, then to determine the actual remuneration of that year according to the principle of ―salary paid by
users‖ and the two-dimensional lattice examination results of the bet against cycle and the two-dimensional
lattice annual examination results and win-win value-added statement examination results.
Determination basis of the remuneration of The management personnel salary system of the Company in 2018 is linked to the vertical and horizontal
directors, supervisors and senior management matching statement and the win-win value-added statement, of which the tool is the two-dimensional lattice
model (二维点阵模型). The two-dimensional lattice (二维点阵) could reflect the strategy support, emerging
small companies and leading platform vertically, and the global leading market competitiveness horizontally.
The highest allowance of outside directors of the 9th session of the board of directors of the Company is
RMB200,000 (before tax) in total per year, including the fixed allowances of RMB150,000 per year, the highest
performance allowance is RMB50,000 per year, and the exact amount of performance allowance will be
determined based on the comprehensive consideration of the contribution of directors to the Board decision
making, the effectiveness of the proposals and recommendations to the board of directors, the participation of
the meetings of the Board, attendance rate of all Board meetings and other factors. The travelling expense for
attending the meetings of the board of directors and shareholders and other expenses necessary for performing
their duties pursuant to the Articles of Association shall be fully reimbursed.
Remuneration payables of directors, supervisors Paid as required.
and senior management
Total actual remuneration of all the directors, RMB4.72 million
supervisors and senior management at the end of
the reporting period
IV. Changes in directors, supervisors and senior management of the Company
√Applicable □Not Applicable
Name Position Changes Reasons
Wang Yuqing employee supervisor Resigned Personal reasons
Yu Miao employee supervisor Appointed Appointed at the Employee Representatives Meeting
V. Punishment by the Securities Supervisory Institute in last three years
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
VI. Staff of the parent company and principal subsidiaries
(I) Staff information
Number of staff of the parent company 3,338
Number of staff of principle subsidiaries 84,109
Total number of staff 87,447
Number of employees whose retirement expenses
are borne by the parent company and the principal
subsidiaries
Breakdown by function
Function Number
Production 50,897
Sales 17,565
R&D 14,941
Financial 1,327
Administrative 2,717
Total 87,447
Breakdown by education
Education Number (person)
Bachelor and above 21,275
College 22,641
Technical secondary school and others 43,531
Total 87,447
(II) Remuneration policies
√Applicable □Not Applicable
The Company conducted the system of ―salary paid by users‖, individual paid separately and
entirety paid in advanced, which originates from the strategic balance sheet of Haier, and carried out the
evaluation of the four aspects, namely the creation of user values, the enhancement of emerging small
companies, the budget implementation of the leading targets and the continuous optimization based on
the vertical and horizontal matching statement and the win-win value-added statement. The incentive
system leads to ―salary paid by users‖, win-win sharing through everybody creating values to the users
who will pay for the values, leading to create ecological value, achieving the emerging small companies
and the leading platform.
(III) Personnel training
√Applicable □Not Applicable
Please also refer to relevant content set out in 2018 Social Responsibility Report of Qingdao Haier Co.,
Ltd. published on the same date as this report.
(IV) Labor Outsourcing
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
VII. Other
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
SECTION IX CORPORATE GOVERNANCE
I. Explanation of Corporate Governance
√Applicable □Not Applicable
During the reporting period, the Company strictly complied with the requirements under the
Company Law, the Securities Law, Code on Corporate Governance for Listing Company and the
requirements of the relevant laws and regulations, to improve its corporate governance structure,
regulate its operation, improve its information disclosure system, strengthen the communication with
investors and elevate the standard of the Company‘s corporate governance. In respect of corporate
governance structure, the general meeting, the Board and the management standardized its operation to
practically guarantee the legal interests of the Company and its shareholders; all Directors duly
discharged their duties in a diligent way; each committee of the Board of the Company performed their
work according to their respective detailed working rules to ensure that the Board operate in a more
effective and scientific way; independent Directors fulfilled their duties independently and issued
independent opinion on major matters in order to effectively protect the interests of the Company as a
whole and the lawful rights and interests of medium and small investors. In respect of information
disclosure, the Company strictly executed the registration and management system for insiders, achieved
the management of inside information on significant events and eliminating the act of using the
Company‘s inside information for stocks trading by insider. Meanwhile, the Company reinforced the
accountability of people who are responsible for annual report disclosure and enhanced the quality and
transparency of information disclosure in annual reports. The Company has placed a lot of emphasis on
information disclosure and disclosed relevant information on a true, accurate, complete and timely basis
strictly in accordance with the requirements of laws and regulations to ensure all shareholders have
equal access to such information. In respect of the management of investor relation, in accordance with
guideline of the Management System for Investor Relation, the Company integrated business and
financial resources by the office of board secretary and realized positive and all-around access to
investors in a multi-layer and diversified format through introduction reference, result announcement
conference and online forum. Meanwhile, the Company replied investors on a timely basis by ways of
interview, e-mail, phone, fax and the website (http://sns.sseinfo.com) and enhanced interaction with
investors, so as to respect and protect the interests of various investors, with the aim of achieving
harmonious and mutual success with the Company, staff and investors. The corporate governance
structure of the Company is sound and there is no difference between the corporate governance structure
and the requirement of relevant documents from CSRC.
(1) Shareholders and general meeting of shareholders:
The Company could ensure that all shareholders, especially the minority shareholders enjoy equal
treatment and are able to fully exercise their rights; during the reporting period, the Company convened
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and held three shareholders‘ general meetings in compliance with the requirements of the Articles of
Association and Rules Governing Shareholders‘ General Meeting of the Company. Attendance of
shareholders at the meeting is relatively high, which ensured that the shareholders fully excised voting
rights; the Company also engaged lawyers who possess the qualification to engage in securities business
to attend and witness the shareholders‘ general meeting; the resolutions were considered and approved in
accordance with legal procedures, which could guarantee the power and rights of minority shareholders.
(2) Relationship between controlling shareholders and the listed company:
The controlling shareholders acted normatively and did not interfere with the Company‘s
management decisions and operations, directly or indirectly. The Company and the controlling
shareholders are independent of each other in terms of their staff, assets, finance, organization and
business. Their respective board of directors, the Board of Supervisors and internal administrative
departments are all independent of each other. The specific requirements for regulating Related-party
transactions and fund flow are set out in the Articles of Association, Fair Decision-Making System for
Related-party Transactions and the Administrative System for Regulation of Fund Flow between the
Company and Related Parties, Risk Control System for Related-party Transaction with Haier Group
Finance Co., Ltd., and Proposal for Emergency Response System for Risk of Deposits with Haier Group
Finance Co., Ltd., which guaranteed the interests of investors. The daily related-party transactions are
subject to the consideration and approval at the annual general meeting and set specialized execution
procedure. The basis of pricing and reasonability of operation agreement shall be supervised and
reviewed by special departments, so as to regulate the execution of related-party transactions. Internal
control and internal control audit of the Company would also focus on the compliance of the
related-party transactions, in order to protect the interests of minority shareholders and non-related
shareholders. During the reporting period, further increased self-procurement capability and scope of the
self-procurement platform Qingdao Haidarui Procurement Service Co., Ltd.(青岛海达瑞采购服务有限
公司) and Qingdao Haidayuan Procurement Service Co., Ltd.(青岛海达源采购服务有限公司) and
strengthened the procurement capability of the Company, which further reduced related-party
transactions.
（3） Directors and the Board:
During the reporting period, the Board of the Company operated in accordance with rules and
continued to perform their duties under the Articles of Association and relevant laws and regulations
better and practically implement relevant decisions at the shareholders‘ general meeting. The number
and composition of the members of the Board complied with relevant laws and regulations; the directors
attended the board meeting and shareholders‘ general meeting with diligent and responsible attitude and
protected the interests of the Company. In accordance with the requirements in the Code on Corporate
Governance for Listing Company, the Company has 7 external directors, of which three are independent
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2018 Annual Report of Qingdao Haier Co., Ltd.
directors, representing over three quarters of the total number of the directors (9 in total) of the Company.
Each of the independent directors of the Company respectively acted as member of the nomination
committee, remuneration and appraisal committee and audit committee of the Board and practically
carried out their duties.
During the reporting period, all directors and independent directors performed their duties earnestly
strictly in compliance with the Articles of Association, the Rules of Procedure for the Board of Directors,
the System for Independent Directors and relevant requirements under laws and regulations and each
committees of the Board operated normatively according to its own work rules. During the reporting
period, the Board of the Company considered and approved the following matters: the Phase III
Employees Stock Ownership Scheme and periodical reports, so as to encourage the Company to further
consolidate its resources to better implement the networking and globalize development strategy.
（4） Supervisors and the Board of Supervisors:
During the reporting period, the Board of Supervisors operated in accordance with rules and
continued to practically perform their duties under the Articles of Association and relevant laws and
regulations. The number and composition of the members of the Board of Supervisors complied with
requirements under laws and regulations. During the reporting period, the Supervisors of the Company
performed their duties earnestly and adhered to the principle of being responsible to the Company and
all shareholders to supervise legality and compliance on finance matters of the Company and
performance of duty by the Company‘s directors, managers of the Company and other senior
management strictly in accordance with requirements under the Articles of Association, the Rules of
Procedure for the Board of Supervisors and relevant laws and regulations.
（5） Performance evaluation and incentive and disciplinary mechanism:
In accordance with the Articles of Association, the Board shall appoint or remove the general
manager and the secretary of the Board; the Board shall appoint or remove the deputy general manager
and other senior management (including the chief financial officer) of the Company based on the
nomination by the general manager and determine their remunerations and rewards and penalties. The
human resource department of the Company shall make routine appraisal and evaluation on the
performance of directors, supervisors and senior management and Remuneration and Appraisal
Committee shall make inspection and evaluation on their performance to determine their remunerations
at the end of the year.
During the reporting period, the Company adopted the Phase III Employees Stock Ownership
Scheme which further perfected the incentive and disciplinary mechanism and mechanism of the
shareholders shares benefits and risks with the management of the Company, so as to enhance the
competitiveness and promote the sustainable and sound development of the Company.
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2018 Annual Report of Qingdao Haier Co., Ltd.
（6） Stakeholders:
The Company was able to fully respect and protect the lawful rights and interests of the suppliers,
channels, banks, other creditors, employees, consumers and other stakeholders. Meanwhile, the
Company actively took part in public welfare undertaking in such place where it operates, placed a lot of
emphasis on environment protection, performed its social duties earnestly and worked together with
these stakeholders actively with good communication to promote the sustainable and sound development
of the Company. For details, please refer to relevant information in 2018 Social Responsibility Report of
Qingdao Haier Co., Ltd. published on the same date of this report.
（7） Information disclosure and transparency:
During the reporting period, the Company positively disclosed the relevant information in a true,
accurate and complete manner which was strictly in accordance with relevant laws and regulations
including the Articles of Association, Administrative Measure for Information Disclosure and
requirements in the Information Disclosure Management System of the Company, Work Rules and
Procedures Regarding the Annual Report and the Management System for Investor Relation, proactively
communicated with regulatory authorities and investors and designated newspapers including Shanghai
Securities News, China Securities Journal, Securities Times and Securities Daily for information
disclosure to ensure that all shareholders access to such information equally. The Company authorized
the secretary of the Board to take charge of information disclosure, reception of visits by shareholders
and handling of shareholder's enquiries. Meanwhile, the Company broadened communication channels
for investors to get relevant information of the Company through telephone conference calls after
periodical reporting and occasionally holding on-site and online forums. With respect to the significant
Related-party transactions, the Company performed necessary approval procedures and disclosed
relevant information strictly in compliance with the Articles of Association and Fair Decision-Making
System for Related-party Transactions to protect the interests of investors. During the reporting period,
the Company further perfected the confidentiality procedure for information disclosure strictly in
compliance with the Registration System of Insiders, the Responsibility System for Major Errors in
Information Disclosure in Annual Reports and the Management System of External Information Users to
ensure the fairness and equity of information disclosure.
（8） Implementation of corporate governance campaign in 2018:
During the reporting period, the Company continued to carry out works relating to ―solution of
business competition and reduction of related-party transactions‖. In 2018, trading volume of
related-party transactions regarding procurement amounted to RMB33.59 billion, which accounted for
20.1% of the similar transactions, representing a decrease of 3.9 pct pt compared to the same period of
the previous year. Trading volume of related-party transactions regarding sales amounted to RMB4.49
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2018 Annual Report of Qingdao Haier Co., Ltd.
billion, which accounted for 2.4% of the similar transactions, representing a decrease of 0.9 pct pt
compared to the same period of the previous year. The effective optimization of the related-party
transactions in the previous period has been maintained. The Company will continue to increase
investment in independent purchase and promote the continuous optimization of related-party
transactions.
Leveraging on the further implementation of governance campaign and enhancing the
establishment of fundamental systems, the Company further improved the corporate governance
structure and improved the corporate governance. The Company carried out various activities to
strengthen the consciousness of learning and further strengthened the consciousness on regulating
governance in the listed company among directors, supervisors and senior management of the listed
company with organizational training to improve the ability to regulate governance and continuously
improve and perfect corporate governance of the Company, thus to protect the minority equity interests
and to guarantee and promote the healthy, stable and sustainable development of the Company.
Whether there is a significant difference between the corporate governance and requirements of relevant
provisions of the CSRC; if so, the reasons should be explained
□Applicable √Not Applicable
II. Brief Introduction to the General Meeting of Shareholders
Index for details of websites designated
Meeting Date Date of disclosure
for publishing resolutions
2018 First 27 April 2018 For details, please refer to the 28 April 2018
Extraordinary Announcement on Resolutions Passed
General Meeting at the 2018 First Extraordinary
General Meeting of Qingdao Haier
Co., Ltd. (L2018-023) published by the
Company on the website of Shanghai
Stock Exchange (www.sse.com.cn) and
the four major securities newspapers.
2017 Annual 18 May 2018 For details, please refer to the 19 May 2018
General Meeting Announcement on Resolutions Passed
at the 2017 Annual General Meeting
of Qingdao Haier Co., Ltd.
(L2018-028) published by the
Company on the website of Shanghai
Stock Exchange (www.sse.com.cn) and
the four major securities newspapers.
2018 Second 21 December For details, please refer to the 22 December 2018
Extraordinary 2018 Announcement on Resolutions Passed
General Meeting at the 2018 Second Extraordinary
General Meeting of Qingdao Haier
Co., Ltd. (L2018-086) published by the
Company on the website of Shanghai
Stock Exchange (www.sse.com.cn) and
the four major securities newspapers.
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2018 Annual Report of Qingdao Haier Co., Ltd.
Explanation of shareholders‘ general meetings
√Applicable □Not Applicable
(1) The 2018 First Extraordinary General Meeting of the Company (the ―2018 First EGM‖) was
held by way of on-site voting and online voting by poll at Room A108, Haier University, Haier
Information Park, No.1 Haier Road, Qingdao, the PRC in the afternoon on 27 April 2018 for deliberation
of the proposals concerning the issuance of D shares of the Company. The Company had a total of
6,097,630,727 shares. Attendance of shareholders and proxies at the 2018 First EGM are as follows:
there were 96 shareholders of the Company in attendance either in person or by proxy at the 2018 First
EGM, holding a total of 3,502,250,459 shares, representing 57.44% of the total number of shares of the
Company with voting rights. The directors, supervisors and senior management of the Company as well
as the lawyers engaged by the Company also attended the 2018 First EGM. The 2018 First EGM was
convened by the Board of the Company. Ms. Tan Lixia, Vice Chairman of the Board, presided over the
2018 First EGM. The Company had 9 Directors, of whom 2 Directors attended the 2018 First EGM
(Directors Liang Haishan, Wu Changqi, Peng Jianfeng, Zhou Hongbo, Liu Haifeng David, Wu Cheng,
Dai Deming were unable to attend the 2018 First EGM due to personal engagement); the Company had
3 Supervisors, of which 2 Supervisors attended the 2018 First EGM (employee supervisor Wang Yuqing
was unable to attend the 2018 First EGM due to personal engagement). The secretary to the Board of the
Company attended the 2018 First EGM and other members of senior management of the Company were
invited to attend the 2018 First EGM.
(2) The 2017 Annual General Meeting of the Company (the ―2017 AGM‖) was held by way of
on-site voting and online voting by poll at Room A108, Haier University, Haier Information Park, No.1
Haier Road, Qingdao, the PRC in the afternoon on 18 May 2018 for deliberation of the proposals
concerning the annual report of the Company and other issues. The Company had a total of
6,097,630,727 shares. Attendance of shareholders and proxies at the 2017 AGM is as follows: there were
73 shareholders of the Company in attendance either in person or by proxy at the 2017 AGM, holding a
total of 3,485,550,588 shares, representing 57.16% of the total number of shares of the Company with
voting rights. The directors, supervisors and senior management of the Company as well as the lawyers
engaged by the Company also attended the 2017 AGM. The 2017 AGM was convened by the Board of
the Company. Mr. Liang Haishan, Chairman of the Board, presided over the 2017 AGM. The Company
had 9 Directors, of whom 2 Directors attended the 2017 AGM (Directors Tan Lixia, Wu Changqi, Peng
Jianfeng, Zhou Hongbo, Liu Haifeng David, Wu Cheng, Shi Tiantao were unable to attend the 2017
AGM due to personal engagement); the Company had 3 Supervisors, all of whom attended the 2017
AGM. The secretary to the Board of the Company attended the 2017 AGM and other members of senior
management of the Company were invited to attend the 2017 AGM.
(3) The 2018 Second Extraordinary General Meeting of the Company (the ―2018 Second EGM‖)
was held by way of on-site voting and online voting by poll at Room A108, Haier University, Haier
Information Park, No.1 Haier Road, Qingdao, the PRC in the afternoon on 21 December 2018 for
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2018 Annual Report of Qingdao Haier Co., Ltd.
deliberation of the proposals concerning change in defective property commitment and improvement of
the framework agreement on financial related-party transactions. The Company had a total of
6,368,416,700 shares. Attendance of shareholders and proxies at the 2018 Second EGM is as follows:
there were 128 shareholders of the Company in attendance either in person or by proxy at the 2018
Second EGM, holding a total of 3,572,492,799 shares, representing 56.10% of the total number of shares
of the Company with voting rights. The directors, supervisors and senior management of the Company
as well as the lawyers engaged by the Company also attended the 2018 Second EGM. The 2018 Second
EGM was convened by the Board of the Company. Mr. Liang Haishan, Chairman of the Board, presided
over the 2018 Second EGM. The Company had 9 Directors, of whom 1 Director attended the 2018
Second EGM (Directors Tan Lixia, Wu Changqi, Peng Jianfeng, Zhou Hongbo, Liu Haifeng David, Dai
Deming, Shi Tiantao, Wu Cheng were unable to attend the 2018 Second EGM due to personal
engagement); the Company had 3 supervisors, all of whom attended the 2018 Second EGM. The
secretary to the Board of the Company attended the 2018 Second EGM and other members of senior
management of the Company were invited to attend the 2018 Second EGM.
III. Performance of duties by directors
(I) Attendance of board meetings and general meetings by directors
Attendance
Attendance of Board meetings of general
meetings
Whether an Requir
Absence
Name of independent ed Atte Attenda
from two
director director or attenda ndan nce by Attenda Attendances
Absenc consecutive
not nces of ce in telecom nce by at general
e meetings in
Board pers municati proxy meetings
person or
meetin on on
not
gs
Liang No 15 15 7 0 0 No
Haishan
Tan No 15 14 7 1 0 No
Lixia
Peng No 15 15 15 0 0 No
Jianfeng
Wu No 15 15 14 0 0 No
Changqi
Zhou No 15 15 14 0 0 No
Hongbo
Liu No 15 15 15 0 0 No
Haifeng
David
Dai Yes 15 14 12 1 0 No
Deming
Wu Yes 15 15 15 0 0 No
Cheng
Shi Yes 15 15 13 0 0 No
Tiantao
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2018 Annual Report of Qingdao Haier Co., Ltd.
Statement for failure to attend the Board meetings in person for two consecutive times
□Applicable √Not Applicable
Number of Board meetings held in the year
Of which: Number of on-site meetings
Number of meetings held by telecommunication
Number of meetings held both on site and by
telecommunication
(II)Independent directors’ objection to the relevant matters of the Company
□Applicable √Not Applicable
(III) Other
□Applicable √Not Applicable
IV. Major opinions and suggestions of the Special Committees of the Board in performing their
duties during the reporting period, details should be disclosed if any disagreements
√Applicable □Not Applicable
（1）Audit Committee: during the reporting period, the Company convened 7 meetings of the Audit
Committee to consider the annual report audit-related work for three times, namely, pre-audit, mid-audit
and post audit and made relevant arrangement. The Audit Committee believed that the 2017 financial
and accounting statement issued by the Company was in compliance with the requirements of the
Accounting Standards for Business Enterprises, and gave a true and fair view of the Company‘s assets
and liabilities as of 31 December 2017 and operating results and cash flow for the year 2017. There was
no significant unresolved disagreement between accounting and auditing. There was no material risk
affecting the Company‘s operation. The Company operated prudently and would be able to continue as a
going concern. Other meetings considered the plans for the annual budget of related-party transactions,
internal control self-assessment reports, profit distribution plan, engagement of accounting firm, issue D
shares, transfer shareholdings of subsidiaries and related-party transactions, and the 2017 annual report,
the first quarterly report/the semi-annual report/the third quarterly report of 2018. The Audit Committee
agreed the above resolutions and submitted the same to the Board for consideration.
（2）Remuneration and Appraisal Committee: during the reporting period, the Company convened
1 meeting of the Remuneration and Appraisal Committee to consider the Phase III Stock Ownership
Scheme of Core Employees Stock Ownership Scheme and the annual remuneration package of directors,
supervisors and senior management. The Remuneration and Appraisal Committee agreed the above
resolutions and submitted the same to the Board for consideration.
（3）Nomination Committee: during the reporting period, the Company convened 1 meeting of the
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2018 Annual Report of Qingdao Haier Co., Ltd.
Nomination Committee to summarize the annual performance of duties by directors, supervisors and
senior management. The Nomination Committee agreed the above resolutions.
（4）Strategy Committee: during the reporting period, the Company convened 7 meetings of the
Strategy Committee to consider and approve the plan for transferring shareholdings of subsidiaries and
related-party transactions, performance of duties, and issuance of D shares. The Strategy Committee
agreed the above resolutions and submitted the same to the Board for consideration.
V. Board of Supervisors’ explanation on risks about the Company
□Applicable √Not Applicable
VI. Statements of the Company on inability to maintain the independence or the ability of
independent operations between the Company and the controlling shareholders with respect to
business, personnel, assets, organization and finance
□Applicable √Not Applicable
Corresponding solutions, working progress and subsequent working plans of the Company in case of
horizontal competition
√Applicable □Not Applicable
In recent years, the Company made constant efforts in solving the horizontal competition, and
reduced the number of related-party transactions. During the reporting period, the Company further
solved the horizontal competition, and reduced the number of related-party transactions by acquiring
FPA, etc. In 2018, the trading amount of related-party transactions regarding procurement amounted to
RMB33.59 billion, which accounted for 20.1% of similar transactions, representing a year-on-year
decrease of 3.9 pct pt (including trading amount with the joint ventures, the same below); the trading
amount of related-party transactions regarding sales amounted to RMB4.49 billion, which accounted for
2.4% of similar transactions, representing a year-on-year decrease of 0.9 pct pt.
VII. Establishment and implementation of appraisal and incentive mechanism for senior
management during the reporting period
√Applicable □Not Applicable
In 2018, the Company adopted a system ―salary paid by users‖ individual paid separately and
entirety paid in advanced, which is linked to the vertical and horizontal matching statement and the
win-win value-added statement for management personnel, of which the tool is the two-dimensional
lattice model (二维点阵模型). The two-dimensional lattice (二维点阵) could reflect the strategy
support, emerging small companies and leading platform vertically, and the global leading market
competitiveness horizontally. The competitiveness of compensation was determined by such elements as
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2018 Annual Report of Qingdao Haier Co., Ltd.
―support for strategy‖, ―competitiveness of market leading target‖ and ―emerging small companies,
leading platform‖. The senior management receives annual appraisal of the annual performance, which
was the key factor to performance bonus and development. On the one hand, the Company‘s ―salary paid
by users‖ overall compensation system of connecting sales force with their orders and remuneration
diversified the way of salary incentive of the management, leading to create user value and create
ecological value, and made the compensation mechanism for management more flexible on the other
hand, which drove the innovation of management.
Meanwhile, the Company‘s salary incentive system was further improved, the incentive and
restriction mechanism was strengthened and a mechanism that shares interests and risks with the
Company and the management was formulated in the principle of ―salary paid by users‖ by
implementing such initiatives as Core Employees Stock Ownership Scheme.
VIII. Whether to disclose the self-assessment report on internal control
√Applicable □Not Applicable
For details, please refer to the 2018 Internet Control Assessment Report of Qingdao Haier Co., Ltd.
disclosed on the same day of this report.
Explanations on material defects found in internal control during the reporting period
□Applicable √Not Applicable
IX. Relevant explanations on the audit report of internal control
√Applicable □Not Applicable
The Company‘s auditor Shandong Hexin Certified Public Accountants LLP （山东和信会计师事
务所（特殊普通合伙）） has audited the efficiency of internal control relating to the financial report of
the Company, and has issued its standard unqualified audit report for the Company‘s internal control
(Hexin Shen Zi.(2019) No.000267).
For the details of Audit Report of Internal Control of Qingdao Haier Co., Ltd., please refer to
relevant announcements published on the website of Shanghai Stock Exchange (www.sse.com.cn) on 30
April 2019.
Whether to disclose the audit report on internal control: Yes
X. Other
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
SECTION X RELEVANT INFORMATION ON CORPORATE BONDS
√Applicable □Not Applicable
I. Overview of corporate bonds
Unit and Currency: RMB0‘000
Method
of
Balanc Places of
Name of Abbrevi Issuing Date of Interest capital
Code e of transacti
bonds ation date expiry rate(%) repayme
bonds on
nt with
interest
Converti Haier 110049 18 17 300,74 Interest rates On an Shangha
ble Converti Decem Decem 9 for the first annual i Stock
Corporat ble ber ber year to sixth basis Exchang
e Bonds Bonds 2018 2024 year are 0.2, e
of 0.5, 1.0, 1.5,
Qingdao 1.8, 2.0,
Haier respectively
Co., Ltd.
Interest payment and repayment of corporate bonds
□Applicable √Not Applicable
The interest of convertible corporate bonds in this Issuance is paid on an annual basis, while the
principal and the interest for the last year of convertible corporate bonds which do not convert to shares
shall be returned when expired. The interest payment day for each year is the date of first anniversary of
the issuance of convertible corporate bonds. Based on the issuance date, the first interest payment day is
18 December 2019. As such, interest payment and repayment within the reporting period is not
applicable.
Other information on corporate bonds
√Applicable □Not Applicable
For other information, please refer to the ―II. Issuance and listing of securities‖ under the
SECTION VI ―CHANGES IN ORDINARY SHARES AND INFORMATION ABOUT
SHAREHOLDERS‖ in this report.
II. Contact person and method of corporate bonds trustee manager and contact method of credit
rating agency
Name United Credit Ratings Co., Ltd.
Credit rating agency 12th Floor, PICC Office Tower, No.2 Jianguomen
Address
Outer Street, Chaoyang District, Beijing, China
Other explanation:
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2018 Annual Report of Qingdao Haier Co., Ltd.
□Applicable √Not Applicable
III. Use of funds raised from corporate bonds
√Applicable □Not Applicable
The Company received a net proceeds of RMB2,983,580,454.50 from the public issuance of
convertible corporate bonds (the amount of proceeds of RMB3,007,490,000 net of sponsorship and
underwriting fees paid of RMB23,909,545.50) on 24 December 2018, which has not been used in 2018.
IV. Introduction of corporate bonds rating
√Applicable □Not Applicable
The convertible corporate bonds have been rated by the United Credit Ratings Co., Ltd., which
issued the Credit Rating Report Regarding Public Issuance of A Shares Convertible Corporate Bonds of
Qingdao Haier Co., Ltd.. According to this rating report, the main credit rating of Qingdao Haier is AAA
and the credit rating of convertible corporate bonds is AAA. During the period of convertible corporate
bonds, the United Credit Ratings Co., Ltd. will perform regular follow-up rating on an annual basis.
V. Corporate bonds credit enhancement mechanism, solvency plan and others during the
reporting period
√Applicable □Not Applicable
The interest of convertible corporate bonds in this issuance is paid on an annual basis, while the
principal and the interest for the last year of convertible corporate bonds which do not convert to shares
shall be returned when expired. The coupon rate of convertible corporate bonds in the issuance is: 0.20%
for the first year, 0.50% for the second year, 1.00% for the third year, 1.50% for the fourth year, 1.80%
for the fifth year and 2.00% for the sixth year.
VI. Meeting of corporate bondholders
□Applicable √Not Applicable
VII. Duty fulfillment of corporate bonds trustee manager
□Applicable √Not Applicable
VIII. Accounting data and financial indicators in the last two years of the Company at the end
of the reporting period
√Applicable □Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
Unit and Currency: RMB
Key indicators 2018 2017 yoy change (%)
EBITDA 16,235,696,024.33 15,043,238,436.36 7.93
Liquidity ratio 1.18 1.11 5.66
Quick ratio 0.90 0.84 7.26
Debt to assets ratio (%) 66.93 69.55 -2.62
Total liabilities ratio of EBITDA 20.69% 19.86% 0.83
Interest coverage ratio 8.94 8.34 7.21
Cash interest coverage ratio 12.93 11.67 10.76
EBITDA interest coverage ratio 11.09 10.51 5.46
IX. Interest payment of other bonds and debt financing instruments of the Company
□Applicable √Not Applicable
X. Bank credit business of the Company during the reporting period
√Applicable □Not Applicable
During the reporting period, the Company had bank credit business amounted to RMB70,942.38
million.
XI. Execution status of promises or commitments in prospectus of corporate bonds during the
reporting period
√Applicable □Not Applicable
On 24 December 2018, the Company fulfilled the issuance of convertible corporate bonds in
accordance with the issuance scheme and schedule committed in the prospectus, and the proceeds of the
issuance of convertible corporate bonds has been remitted to the Special-account of proceeds specified
by the Company at the same day by the lead underwriter. (For details, please refer to the Announcement
on Public Issuance Results of Convertible Corporate Bonds of Qingdao Haier Co., Ltd. (No.
L2018-087)).
XII. Impact of major events on operating status and solvency of the Company
□Applicable √Not Applicable
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2018 Annual Report of Qingdao Haier Co., Ltd.
SECTION XI RESPONSIBILITY STATEMENT
“As the executive board of Qingdao Haier Co., Ltd, we hereby confirm to the best of our knowledge, and
in accordance with the applicable reporting principles, that the financial statements give a true and fair
view of the assets, liabilities, financial position and profit or loss of the company; and the management
report includes a fair review of the development and performance of the business including the results and
the position of the company, together with a description of the principal opportunities and risks associated
with the expected development of the company.‖
Qingdao, 29 April 2019
Qingdao Haier Co., Ltd
The Board of Management
Liang, Haishan __________________
Tan, Lixia __________________
Wu, Changqi __________________
Zhou, Hongbo __________________
Peng, Jianfeng __________________
Liu, Haifeng __________________
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2018 Annual Report of Qingdao Haier Co., Ltd.
SECTION XII FINANCIAL REPORT
I. Audit Report
√Applicable □ Not Applicable
Audit Report
Hexin Shen Zi. (2019) No.000266
To all shareholders of Qingdao Haier Co., Ltd.:
I. AUDIT OPINION
We have audited the financial statements of Qingdao Haier Co., Ltd. (hereinafter referred to as the
―Haier Co., Ltd.‖), which comprise the Consolidated and the Company‘s Balance Sheet as at 31
December 2018, the Consolidated and the Company‘s Income Statement, the Consolidated and the
Company‘s Cash Flow Statement, the Consolidated and the Company‘s Statement of Changes in
Shareholders‘ Equity for the year 2018, and notes related to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
Consolidated and the Company‘s financial position of the Haier Co., Ltd. as at 31 December 2018, and
the Consolidated and the Company‘s financial performance and cash flow for the year 2018 in
accordance with the requirements of Accounting Standards for Business Enterprises.
II. BASIS OF OUR AUDIT OPINION
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under
those standards are further described in Auditor‘s responsibilities for the Audit of Financial Statements
section of the report. We are independent of Haier Co., Ltd. in accordance with the CICPA‘s Code of
Ethics for Professional Accountants (the Code), and we have fulfilled our other ethical responsibilities in
accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
III. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements for the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.We identify the following matters as the key audit matters
that need to be communicated in the audit report:
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2018 Annual Report of Qingdao Haier Co., Ltd.
Key Audit Matters Audit Response
(Ⅰ) Provision for impairment of goodwill
Relevant disclosures are included in notes V.27 We mainly implemented the following audit
Other significant accounting policies and procedures on the provisions for the
accounting estimates and notes V.18 Impairment of impairment of goodwill and intangible assets
long-term assets to the financial statements. with indefinite useful life:
As of 31 December 2018, the book value of (1) Compared the actual operating results of
goodwill was RMB21.156 billion, and the book the related assets group with previous year‘s
value of intangible assets with indefinite useful forecasted figures, to assess the reliability of
lives was RMB1.339 billion, without any provision the management forecast on cash flow;
for asset impairment. Whether the provision for
(2) Compared the input of cash flow forecast
impairment of long-term assets was sufficient had
with historical data, approved budget and
great influence to the financial statements.
business plan;
Significant management judgments are involved in
(3) Tested the calculation accuracy of the
calculation of asset group‘s recoverable amount,
discounted cash flow model;
such as revenue growth rate, gross margin, discount
rate, etc. (4) Assessed the appropriateness of parameters
in the cash flow conversion model, such as the
Provision for impairment of goodwill and intangible
discount rate and the perpetual growth rate.
assets with indefinite useful lives is considered as
The assessment is based our understanding of
the key audit matter due to the significant amount
the Company's businesses and the industry.
and management judgement involved in calculation.
(Ⅱ) Provision for impairment of inventory
Relevant disclosures are included in notes VII.8 We mainly implemented the following audit
Inventory to the financial statements. procedures on the provision for impairment of
inventories:
The Company's inventories are measured at the
lower of cost and net realizable value. As of 31 (1) Obtained the calculation table for provision
December 2018, the inventory balance was for impairment of inventory of the Company,
RMB23.246 billion, and the provision for and reviewed the conditions and aging of the
impairment of inventory was RMB869 million and products models stated in the table to see
the book value was RMB22.377 billion.Whether the whether they are consistent with the
provision for the impairment of inventories was information obtained through physical
sufficient and accurate had great influence to the inventory on a sample basis;
financial statements.
(2) Compared the major parameters estimated
The Company determines the net realizable value of by management with historical data, and
inventory based on the estimated selling price assessed the appropriateness;
minus the estimated selling expenses and related
(3) Assessed the selling price estimated by the
taxes.
management, and checked the inventory
Management estimates the selling price based on against the actual selling price after the balance
the status of inventory. The estimation process sheet date on a sample basis;
involves significant management judgments such as
(4) Assessed selling expenses and related tax
inventory status, repair rate, discount rate, etc.
estimated by management and compared with
Provision for inventories is considered as the key actual amounts incurred.
audit matter due to the significant amount and
management judgement involved in calculation.
(III) Product warranty
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2018 Annual Report of Qingdao Haier Co., Ltd.
Relevant disclosures are included in notes VII. 42 We mainly implemented the following audit
Provisions to the financial statements. procedures on the provisions:
Provisions of the Company are mainly accrued due (1) Obtained the calculation table on
to current obligations arising from product provisions of the management;
warranty. As of 31 December 2018, the balance of
(2) Compared the main parameters estimated
the provision related to product warranty was
by management with historical data;
RMB2.822 billion, and whether the provision for
warranty was sufficient and accurate had great (3) Tested the accuracy of the calculation on
influence to the financial statements. provisions;
Estimated provision for product warranty of the (4) Compared and analyzed the calculation
Company was measured in accordance with the best results of the provisions and the Company‘s
estimate of the cost to fulfill the relevant current actual operation;
obligations.
Calculation of the product warranty involves
management‘s significant judgments based on
historical experience, such as: replacement rate,
repair rate, and loss due to disassemble product.
Provisions are considered as the key audit matters
due to the significant amount and management
judgement involved in calculation.
IV. OTHER INFORMATION
The management of Haier Co.,Ltd.(hereinafter referred to as the―Management‖)is responsible for other
information.Other information includes the information covered in the 2018 annual report of Haier
Co.,Ltd.,but does not include the financial statements and our audit reports.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements,our responsibility is to read the other information
and,in doing so,consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If,based on the work we have performed,we conclude that there is a material misstatement of this other
information,we are required to report that fact.We have nothing to report in this regard.
V. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED WITH
GOVERNANCE FOR THE FINANCIAL STATEMENTS
The Management is responsible for the preparation of the financial statements that give a true and fair
view in accordance with the requirements as set out in the Accounting Standards for Business
Enterprises, and for such internal control as necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
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2018 Annual Report of Qingdao Haier Co., Ltd.
In preparing the financial statements, the Management are responsible for assessing the ability of Haier
Co., Ltd. to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the management either intends to liquidate Haier Co.,
Ltd. or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of Haier
Co., Ltd..
VI. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an audit report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with auditing standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also perform the following tasks:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsible to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used by the Management and the
reasonableness of accounting estimates and related disclosures made by the Management.
(IV) Conclude on the appropriateness of the Management‘s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cause significant doubt on the ability of Haier Co., Ltd. to continue as a
going concern. If we conclude that a material uncertainty exists, we are required by the auditing
standards to draw attention in our audit report to the related disclosures in the financial statements or; if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our audit report. However, future events or conditions may cause Haier Co.,
Ltd. to cease to continue as a going concern.
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2018 Annual Report of Qingdao Haier Co., Ltd.
(V) Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the
entities or business activities within Haier Co., Ltd. to express an opinion on the financial statements. We
are responsible for the direction, supervision and performance of the group audit, and remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
are of most significance in the audit of the financial statements of the current period and therefore
constitute the key audit matters. We describe these matters in our audit report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our audit report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Shandong Hexin Certified Public Accountants LLP
Certified Public Accountant: Wang Hui (Engagement Partner)
Certified Public Accountant: Wang Lin
Jinan, China
29 April 2019
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2018 Annual Report of Qingdao Haier Co., Ltd.
II. Financial Statements
CONSOLIDATED BALANCE SHEETS
31 December 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB
Items Notes 31 December 2018 31 December 2017
Current assets:
Cash and cash equivalents VII. 1 37,456,355,407.28 35,825,439,039.22
Provision of settlement fund
Funds lent
Financial assets held for trading VII. 2 1,775,648,387.76
Financial assets measured at fair VII. 3
value and changes of which 20,681,695.50
included in current profit and loss
Derivative financial assets VII. 4 96,723,164.37
Bills receivable and accounts VII. 5
24,652,130,810.52 25,924,283,460.99
receivable
Including: bills receivable 14,220,937,323.02 13,033,083,520.99
accounts receivable 10,431,193,487.50 12,891,199,940.00
Prepayments VII. 6 594,555,015.00 628,892,321.35
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
Other receivables VII. 7 1,626,975,864.98 1,192,291,302.17
Financial assets purchased under
resale agreements
Inventories VII. 8 22,377,191,121.53 22,537,617,217.87
Contract assets VII. 9 456,781,406.54
Assets held for sale VII. 10 144,091,213.39 27,453,950.07
Non-current assets due in one
year
Other current assets VII. 11 5,079,878,909.67 4,425,579,572.68
Total current assets 94,260,331,301.04 90,582,238,559.85
Non-current assets:
Loans and advances granted
Debt investments
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2018 Annual Report of Qingdao Haier Co., Ltd.
Available-for-sale financial assets VII. 12 1,415,354,307.82
Other debt investments
Held-to-maturity investments
Long-term receivables 245,791,343.37 289,785,899.38
Long-term equity investments VII. 13 13,966,481,596.07 12,987,255,645.28
Investments in other equity VII. 14
1,400,316,460.34
instruments
Other non-current financial VII. 15
327,358,825.57
assets
Investment properties VII. 16 30,879,147.42 31,214,015.99
Fixed assets VII. 17 17,319,638,881.37 17,202,199,462.03
Construction in progress VII. 18 3,873,492,230.24 1,610,615,034.68
Biological assets for production
Oil and gas assets
Intangible assets VII. 19 9,209,242,721.71 8,226,559,783.38
Development cost VII. 20 538,382,288.33 966,051,333.81
Goodwill VII. 21 21,155,552,557.16 20,344,616,586.99
Long-term prepaid expenses VII. 22 230,763,172.48 177,755,371.21
Deferred tax assets VII. 23 1,815,624,736.13 2,076,635,630.12
Other non-current assets VII. 24 2,325,688,982.56 1,254,064,181.76
Total non-current assets 72,439,212,942.75 66,582,107,252.45
Total assets 166,699,544,243.79 157,164,345,812.30
Current liabilities:
Short-term borrowings VII. 25 6,298,504,892.57 10,878,580,275.18
Borrowings from central bank
Absorbing deposit and deposit in
inter-bank market
Placements from banks
Financial liabilities held for
VII. 26 218,748,280.33
trading
Financial liabilities measured at
fair value and changes of which VII. 27 2,524,569.45
included in current profit and loss
Derivative financial liabilities VII. 28 35,603,754.54
Bills payable and accounts
VII. 29 47,385,218,141.38 42,616,065,864.06
payable
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2018 Annual Report of Qingdao Haier Co., Ltd.
Receipts in advance VII. 30 14,681,466.58 5,861,949,182.62
Contract liabilities VII. 31 5,482,325,888.59
Disposal of repurchased financial
assets
Fees and commissions payable
Payables for staff‘s remuneration VII. 32 2,651,399,418.05 2,480,636,328.53
Taxes payable VII. 33 1,838,440,727.39 1,970,178,186.86
Other payables VII. 34 12,685,677,402.91 11,309,575,304.78
Reinsurance accounts payable
Deposits for insurance contracts
Customer deposits for trading in
securities
Amounts due to issuer for
securities underwriting
Liabilities held for sale VII. 35 32,362,267.88
Non-current liabilities due within
VII. 36 3,015,060,105.58 6,149,302,981.65
one year
Other current liabilities VII. 37 423,638,804.62 42,961,121.03
Total current liabilities 80,081,661,150.42 81,311,773,814.16
Non-current liabilities:
Long-term borrowings VII. 38 15,541,466,325.22 16,036,492,809.81
Bonds payable VII. 39 9,191,896,302.70 6,211,088,362.68
Including: preference shares
perpetual bonds
Long-term payables VII. 40 106,763,243.99 106,020,029.74
Long-term payables for staff‘s
VII. 41 934,974,735.49 950,505,434.38
remuneration
Provisions VII. 42 2,839,741,079.48 2,660,788,654.43
Deferred income VII. 43 643,551,987.30 497,141,088.72
Deferred tax liabilities VII. 23 405,343,787.76 343,846,086.34
Other non-current liabilities VII. 44 1,823,866,693.93 1,197,485,422.75
Total non-current liabilities 31,487,604,155.87 28,003,367,888.85
Total liabilities 111,569,265,306.29 109,315,141,703.01
Owners’ equity (or shareholders’
equity):
Paid-in capital (or share capital ) VII. 45 6,368,416,700.00 6,097,402,727.00
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2018 Annual Report of Qingdao Haier Co., Ltd.
Other equity instruments VII. 46 904,485,788.71 431,424,524.07
Including: preference shares
perpetual bonds
Capital reserve VII. 47 2,208,773,474.57 2,312,322,267.08
Less: treasury stock
Other comprehensive income VII. 48 772,632,347.35 4,424,024.90
Special reserve
Surplus reserve VII. 49 2,288,301,317.10 2,103,057,782.41
General risk provisions
Undistributed profits VII. 50 26,859,741,163.95 22,350,952,230.17
Total equity attributable to
39,402,350,791.68 33,299,583,555.63
owners of the Parent Company
Minority equity interests 15,727,928,145.82 14,549,620,553.66
Total owners‘ equity (or
55,130,278,937.50 47,849,204,109.29
shareholders‘ equity)
Total liabilities and owners‘
166,699,544,243.79 157,164,345,812.30
equity (or shareholders‘ equity)
Legal representative: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Balance Sheet of the Parent Company
31 December 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB
Items Notes 31 December 2018 31 December 2017
Current Assets:
Cash and cash equivalents 7,068,899,574.96 2,070,527,802.97
Financial assets held for
trading
Financial assets measured at
fair value and changes of which
included in current profit and
loss
Derivative financial assets
Bills receivable and accounts XVIII. 1 222,622,017.43 288,499,726.07
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2018 Annual Report of Qingdao Haier Co., Ltd.
receivable
Including: bills receivable
accounts receivable 222,622,017.43 288,499,726.07
Prepayments 28,809,797.43 20,000,000.00
Other receivables XVIII. 2 2,082,767,166.58 1,206,903,377.12
Inventories 124,773,163.23 89,650,514.91
Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets 109,865,313.53 87,165,597.70
Total current assets 9,637,737,033.16 3,762,747,018.77
Non-current assets:
Debt investments
Available-for-sale financial
5,818,587.80
assets
Other debt investments
Held-to-maturity investments
Long-term receivables 8,600,000,000.00
Long-term equity investments XVIII. 3 33,844,234,315.30 23,581,254,928.08
Investments in other equity
5,262,480.92
instruments
Other non-current financial
assets
Investment properties
Fixed assets 119,546,157.40 118,553,830.32
Construction in progress 37,655,076.18 13,594,976.50
Biological assets for
production
Oil and gas assets
Intangible assets 17,186,540.33 14,601,582.38
Development cost
Goodwill
Long-term prepaid expenses 5,779,229.64
Deferred tax assets 81,511,748.07 106,347,777.99
Other non-current assets 28,632,829.14
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2018 Annual Report of Qingdao Haier Co., Ltd.
Total non-current assets 34,139,808,376.98 32,440,171,683.07
Total assets 43,777,545,410.14 36,202,918,701.84
Current liabilities:
Short-term borrowings 1,500,000,000.00
Financial liabilities held for
trading
Financial liabilities measured
at fair value and changes of
which included in current profit
and loss
Derivative financial liabilities
Bills payable and accounts
334,747,358.40 310,387,267.67
payable
Receipts in advance 2,465,908,721.32
Contract liabilities 2,391,211,509.89
Payables for staff‘s
65,387,056.03 51,533,384.22
remuneration
Taxes payable 67,279,606.39 62,255,803.87
Other payables 21,834,869,774.34 21,268,590,528.36
Including: interest payable
dividends payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities 2,089,282.56 12,498,265.43
Total current liabilities 26,195,584,587.61 24,171,173,970.87
Non-current liabilities:
Long-term borrowings
Bonds payable 2,510,530,062.86
Including: preference shares
perpetual bonds
Long-term payable 20,000,000.00 20,000,000.00
Long-term payables for staff‘s
remuneration
Provisions
Deferred income 67,360,000.00 37,700,000.00
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2018 Annual Report of Qingdao Haier Co., Ltd.
Deferred tax liabilities 29,485,678.28 36,152,815.34
Other non-current liabilities
Total non-current liabilities 2,627,375,741.14 93,852,815.34
Total liabilities 28,822,960,328.75 24,265,026,786.21
Owners’ equity (or
shareholders’ equity):
Paid-in capital (or share
6,368,416,700.00 6,097,402,727.00
capital )
Other equity instruments 473,061,264.64
Including: preference shares
perpetual bonds
Capital reserve 4,182,825,672.98 2,317,907,947.71
Less: treasury stock
Other comprehensive income 7,791,344.47 -43,234,737.77
Special reserve
Surplus reserve 1,683,155,091.65 1,437,313,649.93
Undistributed profits 2,239,335,007.65 2,128,502,328.76
Total owners‘ equity (or
14,954,585,081.39 11,937,891,915.63
shareholders‘ equity)
Total liabilities and
owners‘ equity (or shareholders‘ 43,777,545,410.14 36,202,918,701.84
equity)
Legal representative: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Income Statement
January-December 2018
Unit and Currency: RMB
Items Notes 2018
Ⅰ.Total operating revenue VII. 51 183,316,560,236.03 163,428,825,488.56
Including: operating revenue VII. 51 183,316,560,236.03 163,428,825,488.56
interest income
insurance premiums earned
fee and commission income
Ⅱ. Total cost of operations 174,866,506,302.15 156,375,381,544.85
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2018 Annual Report of Qingdao Haier Co., Ltd.
Including: operating cost VII. 51 130,154,144,638.08 112,607,222,004.03
interest expenses
Fee and commission expenses
Insurance withdrawal
payment
Net payment from indemnity
Net provisions withdrew for
insurance contract
Insurance policy dividend
paid
Reinsurance cost
Taxes and surcharges VII. 52 857,232,037.80 821,897,157.16
Selling expenses VII. 53 28,653,223,738.07 28,996,237,421.82
Administrative expenses VII. 54 8,324,327,164.18 7,164,848,718.59
R&D expenses VII. 55 5,080,604,505.93 4,509,850,773.96
Financial expenses VII. 56 939,176,200.46 1,603,968,750.90
Including: interest expenses 1,464,649,826.98 1,431,139,429.49
interest income 475,642,501.12 332,391,211.97
Loss on assets impairment VII. 57 760,284,186.13 671,356,718.39
Loss on credit impairment VII. 58 97,513,831.50
Add: other income VII. 57 894,644,138.22 912,008,519.02
Investment income (losses are
VII. 58 1,923,204,044.99 1,482,994,709.82
represented by ―-‖)
Including: Investment income
1,324,848,299.56 1,190,693,804.93
of associates and joint ventures
Gains on net exposure hedges
(losses are represented by ―-‖)
Income from change in fair
VII. 61 -145,191,723.49 614,071,259.47
value (losses are represented by ―-‖)
Gain from disposal of assets
VII. 62 267,800,599.46 13,512,402.32
(losses are represented by ―-‖)
Exchange gain (losses are
represented by ―-‖)
Ⅲ. Operating profit (losses are
11,390,510,993.06 10,076,030,834.34
represented by ―-‖)
Add: non-operating income VII. 63 474,156,808.14 689,516,709.14
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2018 Annual Report of Qingdao Haier Co., Ltd.
Less: non-operating expenses VII. 64 235,290,974.40 262,270,333.43
Ⅳ. Total profit (total losses are
11,629,376,826.80 10,503,277,210.05
represented by ―-‖)
Less: income tax expense VII. 65 1,858,776,965.55 1,474,868,894.11
Ⅴ. Net profit (net losses are
9,770,599,861.25 9,028,408,315.94
represented by ―-‖)
(I) Classification by continuous
operation
1. Net profit from continuous
operation (net losses are represented 9,770,599,861.25 9,028,408,315.94
by ―-‖)
2. Net profit from discontinued
operation (net losses are represented
by ―-‖)
(II)Classification by ownership of
the equity
1. Net profit attributable to
7,440,228,855.90 6,907,629,188.39
shareholders of the Parent Company
2. Profit or loss attributable to
2,330,371,005.35 2,120,779,127.55
minority shareholders
VI. Other comprehensive income, net
VII. 66 843,463,106.56 -554,105,703.86
of tax
Other comprehensive income
attributable to owners of the Parent 727,607,989.62 -553,401,257.78
Company, net of tax
(I) Other comprehensive income
that cannot be reclassified into the 51,065,061.29 -3,683,444.37
profit or loss
1. Changes arising from
re-measurement of defined benefit 80,039,412.97 -3,683,444.37
plans
2. Other comprehensive
income that cannot be transferred into
profit or loss under equity method
3. Changes in fair value of
investments in other equity -28,974,351.68
instruments
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2018 Annual Report of Qingdao Haier Co., Ltd.
4. Changes in fair value of
credit risks of the enterprise
(II) Other comprehensive
income to be reclassified into the 676,542,928.33 -549,717,813.41
profit or loss
1. Other comprehensive
income that can be transferred into 166,426,767.08 -307,016,515.96
profit or loss under equity method
2. Changes in fair value of
other debt investments
3. Profit or loss from changes
in fair value of available-for-sale -3,059,092.10
financial assets
4. Reclassified financial assets
that are credited to other
comprehensive income
5. Profit or loss arising from
reclassification from held-to-maturity
investments to available-for-sale
financial assets
6. Credit impairment
provision for other debt investments
7. Reserve for cash flow
hedging (effective portion of profit or -5,946,207.24 11,682,207.38
loss arising from cash flow hedging)
8. Exchange differences on
translation of financial statements 516,062,368.49 -251,324,412.73
denominated in foreign currencies
9. Others
Other comprehensive income
attributable to minority shareholders, 115,855,116.94 -704,446.08
net of tax
Ⅶ. Total comprehensive income 10,614,062,967.81 8,474,302,612.08
Total comprehensive income
attributable to the owners of Parent 8,167,836,845.52 6,354,227,930.61
Company
Total comprehensive income 2,446,226,122.29 2,120,074,681.47
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2018 Annual Report of Qingdao Haier Co., Ltd.
attributable to the minority
shareholders
Ⅷ . Earnings per share:
(I) Basic earnings per share
XIX. 1 1.210 1.133
(RMB/share)
(II) Diluted earnings per share
XIX. 1 1.182 1.085
(RMB/share)
The party being absorbed in the business combination under common control incurred in the current
period recorded a net profit of RMB -59,792,419.70 before the combination.
Legal representative: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Income Statement of the Parent Company
January-December 2018
Unit and Currency: RMB
Items Notes 2018
Ⅰ. Operating revenue XVIII. 4 3,260,311,127.79 3,452,002,347.60
Less: Operation cost XVIII. 4 2,233,751,914.63 2,383,868,807.01
Taxes and surcharges 23,431,092.16 25,962,529.33
Selling expenses 297,812,493.19 223,849,142.89
Administrative expenses 484,750,355.15 468,862,149.99
R&D expenses 234,134,826.42 247,120,344.03
Financial expenses 191,246,337.05 107,748,195.00
Including: interest expenses 288,596,787.96 252,486,855.12
interest income 108,547,077.81 148,760,720.22
Loss in assets impairment 2,609,224.31 9,321,788.24
Loss on credit impairment -974,670.56
Add: Other income 41,275,162.37 104,805,952.53
Investment income (losses are
XVIII. 5 2,649,879,889.56 1,290,751,070.45
represented by ―-‖)
Including: investment income
of associates and joint ventures
Gains on net exposure hedges
(losses are represented by ―-‖)
Income from change in fair
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2018 Annual Report of Qingdao Haier Co., Ltd.
value (losses are represented by ―-‖)
Gain from disposal of assets
25,693.17
(losses are represented by ―-‖)
Ⅱ. Operating profit (losses are
2,484,730,300.54 1,380,826,414.09
represented by ―-‖)
Add: non-operating income 49,665,765.66 74,298,043.16
Less: non-operating expenses 311,781.90 1,041,948.86
Ⅲ. Total Profit (total losses are
2,534,084,284.30 1,454,082,508.39
represented by ―-‖)
Less: income tax expense 75,669,867.06 24,059,104.64
Ⅳ. Net Profit (net losses are
2,458,414,417.24 1,430,023,403.75
represented by ―-‖)
(I) Net profit from continuous
operations (net losses are represented 2,458,414,417.24 1,430,023,403.75
by ―-‖)
(II) Net profit from discontinued
operations (net losses are represented
by ―-‖)
V. Other comprehensive income, net
35,908,964.35 -32,353,134.62
of tax
(I) Other comprehensive income
that cannot be reclassified into the -472,690.84
profit or loss
1. Changes arising from
re-measurement of defined benefit
plans
2. Other comprehensive
income that cannot be transferred into
profit or loss under equity method
3. Changes in fair value of
investments in other equity -472,690.84
instruments
4. Changes in fair value of
credit risks of the enterprise
(II) Other comprehensive income
to be reclassified into the profit or 36,381,655.19 -32,353,134.62
loss
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2018 Annual Report of Qingdao Haier Co., Ltd.
1. Other comprehensive income
that can be transferred into profit or 36,381,655.19 -32,642,433.78
loss under equity method
2. Changes in fair value of other
debt investments
3. Profit or loss from changes in
fair value of available-for-sale 289,299.16
financial assets
4. Reclassified financial assets
that are credited to other
comprehensive income
5. Profit or loss arising from
reclassification from held-to-maturity
investments to available-for-sale
financial assets
6. Credit impairment provision
for other debt investments
7. Reserve for cash flow hedging
(Effective portion of profit or loss
arising from cash flow hedging)
8. Exchange differences on
translation of financial statements
denominated in foreign currencies
9. Others
VI. Total comprehensive income 2,494,323,381.59 1,397,670,269.13
VII. Earnings per share:
(I) Basic earnings per share
(RMB/ share)
(II) Diluted earnings per share
(RMB/share)
Legal representative: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Cash Flow Statement
January-December 2018
Unit and Currency: RMB
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2018 Annual Report of Qingdao Haier Co., Ltd.
Items Notes 2018
Ⅰ. Cash flow from operating
activities:
Cash received from the sale of
188,502,180,240.53 167,634,360,394.07
goods and rendering of services
Net increase in consumer and
inter-bank deposits
Net increase in borrowing
from the central bank
Net cash increase in borrowing
from other financial institutes
Cash received from premiums
under original insurance contract
Net cash received from
reinsurance business
Net increase in deposits of
policy holders and investment
Net increase from the disposal
of financial assets measured at
fair value and changes of which
included in current profit and loss
Cash received from interest,
fee and commissions
Net increase in cash borrowed
Net increase in cash received
from repurchase operation
Refunds of taxes 1,020,648,785.98 1,138,156,799.93
Cash received from other
VII. 67 1,399,241,411.60 1,132,225,428.45
related operating activities
Sub-total of cash inflows
190,922,070,438.11 169,904,742,622.45
from operating activities
Cash paid on purchase of
129,527,764,143.78 113,457,029,529.02
goods and services
Net increase in loans and
advances of customers
Net increase in deposits in the
PBOC and inter-bank
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2018 Annual Report of Qingdao Haier Co., Ltd.
Cash paid for compensation
payments under original
insurance contract
Cash paid for interest, fee and
commissions
Cash paid for insurance policy
dividend
Cash paid to and on behalf of
19,535,008,791.13 17,488,214,316.24
employees
Cash paid for all types of taxes 8,929,864,726.88 7,883,550,053.38
Cash paid to other operation
VII. 68 13,995,179,877.16 14,372,163,443.83
related activities
Sub-total of cash outflows
171,987,817,538.95 153,200,957,342.47
from operating activities
Net cash flow from
VII. 73 18,934,252,899.16 16,703,785,279.98
operating activities
Ⅱ. Cash flow from investing
activities:
Cash received from disposal of
732,403,890.79 600,030,958.51
investments
Cash received from return on
241,445,771.93 282,045,768.46
investments
Net cash received from the
disposal of fixed assets,
471,243,957.95 201,509,894.89
intangible assets and other
long-term assets
Net cash received from
disposal of subsidiaries and other 660,267,394.34 23,620,711.45
operating entities
Cash received from other
VII. 69 124,732,422.41 191,730,448.52
investment related activities
Sub-total of cash inflows
2,230,093,437.42 1,298,937,781.83
from investing activities
Cash paid on purchase of fixed
assets, intangible assets and other 6,757,036,466.58 4,334,646,288.63
long-term assets
Cash paid for investments 3,016,793,911.86 2,653,531,765.16
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2018 Annual Report of Qingdao Haier Co., Ltd.
Net increase in secured loans
Net cash paid on acquisition of
subsidiaries and other operating 103,834,291.75 52,334,438.58
entities
Cash paid on other investment
VII. 70 18,073,550.00 13,281.59
related activities
Sub-total of cash outflows
9,895,738,220.19 7,040,525,773.96
from investing activities
Net cash flow from
-7,665,644,782.77 -5,741,587,992.13
investing activities
Ⅲ. Cash flow from financing
activities:
Cash received from capital
2,968,757,948.54 1,379,989,798.26
contributions
Including: cash received from
capital contributions by minority
shareholders of subsidiaries
Cash received from
12,700,627,739.40 18,694,640,060.56
borrowings
Cash received from issuing
2,983,580,454.50 6,796,000,000.00
bonds
Cash received from other
VII. 71 55,243,447.30
financing related activities
Sub-total of cash inflows
18,708,209,589.74 26,870,629,858.82
from financing activities
Cash paid on repayment of
22,418,202,111.13 23,246,738,489.11
borrowings
Cash paid on distribution of
dividends, profits or interest 3,819,915,954.99 2,898,969,569.61
expenses
Including: dividend and profit
paid to minority shareholders by
subsidiaries
Cash paid on other financing
VII. 72 2,959,445,042.86 214,444,807.19
related activities
Sub-total of cash outflows
29,197,563,108.98 26,360,152,865.91
from financing activities
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2018 Annual Report of Qingdao Haier Co., Ltd.
Net cash flow from
-10,489,353,519.24 510,476,992.91
financing activities
Ⅳ. Effect of fluctuations in
exchange rates on cash and 277,347,107.36 -362,172,916.04
cash equivalents
Ⅴ. Net increase in cash and
1,056,601,704.51 11,110,501,364.72
cash equivalents
Add: balance of cash and cash
equivalents at the beginning of VII. 74 34,988,175,709.53 23,877,674,344.81
the period
Ⅵ. Balance of cash and cash
equivalents at the end of the VII. 74 36,044,777,414.04 34,988,175,709.53
period
Legal representative: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Cash Flow Statement of the Parent Company
January-December 2018
Unit and Currency: RMB
Items Notes 2018
Ⅰ. Cash flow from operating
activities:
Cash received from the sale of
1,919,626,804.58 3,062,693,505.16
goods and rendering of services
Refunds of taxes 30,486,213.87 27,750,963.05
Cash received from other
153,333,607.15 104,679,759.70
related operating activities
Sub-total of cash inflows
2,103,446,625.60 3,195,124,227.91
from operating activities
Cash paid on purchase of
902,047,204.49 2,094,136,731.85
goods and services
Cash paid to and on behalf of
786,264,085.93 679,495,971.97
employees
Cash paid for all types of taxes 195,198,666.67 181,894,997.28
Cash paid to other operation
187,916,659.58 194,723,652.37
related activities
146 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Sub-total of cash outflows
2,071,426,616.67 3,150,251,353.47
from operating activities
Net cash flow from operating
32,020,008.93 44,872,874.44
activities
Ⅱ. Cash flow from investing
activities:
Cash received from disposal of
505,207,895.00
investments
Cash received from return on
1,173,089,808.18 421,211,612.57
investments
Net cash received from the
disposal of fixed assets,
intangible assets and other
long-term assets
Net cash received from
disposal of subsidiaries and other
operating entities
Cash received from other
20,000,000.00
investment related activities
Sub-total of cash inflows
1,678,297,703.18 441,211,612.57
from investing activities
Cash paid on purchase of fixed
assets, intangible assets and other 67,865,088.69 32,789,662.23
long-term assets
Cash paid for investments 1,291,347,820.45 1,006,813,576.50
Net cash paid on acquisition of
subsidiaries and other operating
entities
Cash paid on other investment
related activities
Sub-total of cash outflows
1,359,212,909.14 1,039,603,238.73
from investing activities
Net cash flow from
319,084,794.04 -598,391,626.16
investing activities
Ⅲ. Cash flow from financing
activities:
Cash received from capital 2,187,186,732.01
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2018 Annual Report of Qingdao Haier Co., Ltd.
contributions
Cash received from
1,500,000,000.00
borrowings
Cash received from issuing
2,983,580,454.50
bonds
Cash received from other
326,374,080.44 462,368,825.80
financing related activities
Sub-total of cash inflows
6,997,141,266.95 462,368,825.80
from financing activities
Cash paid on repayment of
borrowings
Cash paid on distribution of
dividends, profits or interest 2,280,582,650.27 1,725,900,890.96
expenses
Cash paid on other financing
52,345,130.43 1,041,960.00
related activities
Sub-total of cash outflows
2,332,927,780.70 1,726,942,850.96
from financing activities
Net cash flow from
4,664,213,486.25 -1,264,574,025.16
financing activities
Ⅳ. Effect of fluctuations in
exchange rates on cash and -16,946,517.23 -2,820.43
cash equivalents
Ⅴ. Net increase in cash and
4,998,371,771.99 -1,818,095,597.31
cash equivalents
Add: balance of cash and cash
equivalents at the beginning of 2,070,527,802.97 3,888,623,400.28
the period
Ⅵ. Balance of cash and cash
equivalents at the end of the 7,068,899,574.96 2,070,527,802.97
period
Legal representative: Liang Haishan Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
148 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
Consolidated Statement of Changes in Owner’s Equity
January-December 2018
Unit and Currency: RMB
Equity attributable to owners of the Parent Company
Total
Minority
Items Other equity Other General owners‘
Less: Undistri equity
Share instruments Capital compreh Special Surplus risk
treasury buted equity
capital Preferen Perpetua reserve ensive reserve reserve provisio
Others stock profits
ce share l bonds income n
Ⅰ . Closing balance for the 6,097,402 431,424,524. 826,883,093.8 -36,363,809.9 2,103,057,78 22,793,110,88 14,534,490,935.9 46,750,006,137.3
previous year ,727.00 07 4 6 2.41 4.09 1
Add: changes in accounting -54,905,584.4
40,604,722.79 -7,036,266.71 -21,337,128.37
policies
Error correction for
prior year
Business combination 1,485,439,173 -442,158,653.
40,787,834.86 15,129,617.75 1,099,197,971.93
under common control .24
Others
-
Ⅱ. Opening balance for the 6,097,402 431,424,524. 2,312,322,267 2,103,057,78 22,296,046,64 14,542,584,286.9 47,827,866,980.9
45,028,747.69
current year ,727.00 07 .08 2.41 5.72 5
Ⅲ. Increase/decrease for the
271,013,9 473,061,264. -103,548,792. 727,603,599.6 185,243,534. 4,563,694,518
current period (decrease is 1,185,343,858.87 7,302,411,956.58
73.00 64 51 6 69 .23
represented by ―-‖)
(I) Total comprehensive 727,607,989.6 7,440,228,855 10,614,062,967.8
2,446,226,122.29
income 2 .90
(II) Capital contribution and 271,013,9 473,061,264. -103,548,792. -4,389.96 -60,597,907. -545,381,163. -692,115,415.19 -657,572,430.37
149 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
withdrawal by shareholders 73.00 64 51 03
1. Ordinary shares invested 271,013,9 -125,885,336.
-692,115,415.19 -546,986,778.87
by shareholders 73.00
2. Capital contribution by
473,061,264.
holders of other equity 473,061,264.64
instruments
3. Share-based payment
included in shareholders‘
equity
4. Others -60,597,907. -545,381,163.
22,336,544.17 -4,389.96 -583,646,916.14
03
(III) Profit distribution 245,841,441. -2,331,153,17 -2,654,078,580.8
-568,766,848.23
72 4.35
1. Appropriation of surplus 245,841,441. -245,841,441.
reserves 72
2. Appropriation of
provisions for general risks
3. Distribution to owners (or -2,085,311,73 -2,654,078,580.8
-568,766,848.23
shareholders) 2.63
4. Others
(IV) Internal transfer of
owner‘s equity
1. Transfer of capital
reserves into capital (or
share capital)
2. Transfer of surplus
reserves into capital (or
150 / 333
2018 Annual Report of Qingdao Haier Co., Ltd.
share capital)
3. Surplus reserves used for
remedying loss
4. Changes in defined
benefit plans carried
forward to retained earnings
5. Other comprehensive
income carried forward to
retained earnings
6. Others
(V) Special reserve
1. Appropriation for the
period
2. Utilization for the period
(VI) Others
Ⅳ. Closing balance for the 6,368,416 904,485,788. 2,208,773,474 772,632,347.3 2,288,301,31 26,859,741,16 15,727,928,145.8 55,130,278,937.5
period ,700.00 71 .57 5 7.10 3.95 2
Equity attributable to owners of the Parent Company
Total
Minority
Items Other equity Other General owners‘
Less: Undistri equity
Share instruments Capital compreh Special Surplus risk
treasury buted equity
capital Preferen Perpetua reserve ensive reserve reserve provisio
Others stock profits
ce share l bonds income n
Ⅰ. Closing balance for the 6,097,630 566,987,435.5 2,076,460,077 17,614,768,75 11,242,352,161.1 37,680,540,387.7
83,383,194.51 1,041,960.00
previous year ,727.00 7 .78 1.70 6
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2018 Annual Report of Qingdao Haier Co., Ltd.
Add: changes in accounting
policies
Error correction for
prior year
Business combination 1,166,287,869 -423,995,521.
-9,162,152.89 3,910,765.98 737,040,961.90
under common control .85
Others
Ⅱ. Opening balance for the 6,097,630 1,249,671,064 557,825,282.6 2,076,460,077 17,190,773,23 11,246,262,927.1 38,417,581,349.6
1,041,960.00
current year ,727.00 .36 8 .78 0.66 4
Ⅲ. Increase/decrease for the
-228,000. 431,424,524. 1,062,651,202 -553,401,257. 5,160,178,999
current period (decrease is -1,041,960.00 26,597,704.63 3,303,357,626.52 9,431,622,759.67
00 07 .72 78 .51
represented by ―-‖)
(I) Total comprehensive -553,401,257. 6,907,629,188
2,120,074,681.47 8,474,302,612.08
income 78 .39
(II) Capital contribution and -228,000. 431,424,524. 1,062,651,202 -20,869,660.7 -187,826,947.
-1,041,960.00
