Stock Code: 600690 Short Name: Haier Smart Home
Haier Smart Home Co., Ltd.2021 Third Quarter Report
The Board of Directors (the “Board”) and the Directors of Haier Smart Home Co., Ltd. (the“Company”) hereby assure that this announcement is free from any false record, misleadingrepresentation or material omission and are individually and collectively responsible for thetrueness, accuracy and completeness of the content set out herein.
Important Notice:
The board of directors (the “Board”), the board of supervisors, directors, supervisors and seniormanagement of the Company hereby assure that the content set out in the quarterly report is true,accurate and complete, and free from any false record, misleading representation or materialomission, and are individually and collectively responsible for the content set out therein.
The legal representative of the Company, chief financial officer of the Company and person incharge of accounting department hereby certify that the financial statement information set out inthe quarterly report is true, accurate and complete.
Whether the third quarterly report has been audited or not
□Yes √No
I. Key Financial Information
(I) Major accounting data and financial indicators
Unit and Currency: RMB
| Items | During the Reporting Period | Year-on-year increase/decrease during the Reporting Period (%) | From the beginning of the year to the end of the Reporting Period | Year-on-year increase/decrease during the beginning of the year to the end of the Reporting Period (%) |
| Operating revenue | 58,344,749,484.03 | -0.58 | 169,963,571,548.76 | 10.07 |
| Net profit attributable to shareholders of the listed Company | 3,082,339,695.41 | -12.43 | 9,934,611,508.38 | 57.68 |
| Net profit after deduction of non-recurring profit or loss attributable to shareholders of the listed Company | 2,785,809,654.46 | 82.93 | 9,055,716,061.18 | 121.28 |
| Net cash flow from operating activities | N/A | N/A | 13,359,284,075.18 | 133.91 |
| Basic earnings per share (RMB per share) | 0.331 | -38.13 | 1.072 | 11.90 |
| Diluted earnings per share (RMB per share) | 0.331 | -36.35 | 1.061 | 12.99 |
| Weighted average return on net assets (%) | 4.00% | Decrease by 3.03 percentage points | 13.29% | Increase by 0.58 percentage point |
| At the end of the Reporting Period | At the end of last year | Increase/decrease at the end of the Reporting Period compared to the end of last year (%) | ||
| Total assets | 212,940,580,271.32 | 203,459,495,879.65 | 4.66 | |
| Owner equity attributable to shareholders of the listed Company | 77,733,774,523.46 | 66,816,422,614.55 | 16.34 | |
Key Performance Indicators
I. Revenue and profit
In the first three quarters of 2021, the Company recorded revenue of RMB169.964 billion, netprofit of RMB10.064 billion, net profit attributable to shareholders of the listed Company ofRMB9.935 billion, net profit after deduction of non-recurring profit or loss attributable toshareholders of the listed Company of 9.056 billion, representing increases of 10.1%, 25.5%, 57.7%and 121.3%as compared to the same period in 2020, respectively. In particular, in the third quarter,its revenue reached RMB58.345 billion, net profit was RMB3.126 billion, and net profit attributableto shareholders of the listed Company was RMB3.083 billion, net profit after deduction of non-recurring profit or loss attributable to shareholders of the listed Company was 2.786 billion,representing changes of -0.6%, -29.1%, -12.4% and +82.9% respectively as compared to the sameperiod in 2020.
Excluding the impact from the deconsolidation of COSMOPlat in the third quarter of last year,and assuming 100% ownership of the privatised Haier Electronics (01169.HK) in the same periodlast year, the Company’s total revenue and net profit attributable to shareholders of the listedCompany would have increased by 20.4% and 60.2% in the first three quarters of 2021 as comparedwith the same period in 2020; and revenue and net profit attributable to shareholders of the listedCompany in the third quarter would have increased by 9.2% and 14.6% as compared with the sameperiod in 2020.
1. Smart Home and Other Business in China
Revenue of the smart home and other business in China in the first three quarters of2021 increased by 4.0% as compared with the same period in 2020; excluding the impact of thedeconsolidation of COSMOPlat, revenue would have increased by 24.3% in the first three quartersof 2021 as compared with the same period in 2020.
The Company remained committed to the development from high-end brands to scenario-based and ecosystem brands leveraging on innovation, premium product portfolio andcomprehensive solutions. The Company accelerated its digital transformation in terms ofdistribution network, service coverage and supply chain management. We have built a digitalplatform that gives sales people online access to the latest product offerings, so they could bettermanage existing as well as new users. Average customer acquisition by per salesperson increasedby 38%.
At the same time, the Company managed to grow market shares across the board. In the firstnine months, revenue from Casarte increased by 57% as compared with the same period in 2020,with market share gain as a whole and in all categories, where its share in refrigerator marketincreased by 2.4 percentage points.
(1) Household food solution (internet of food)
Refrigerator: The Company addressed users’ demand for upgrade with large capacity, health-oriented and freshness preservation technology, kitchen aesthetic designs, and smart scenarioexperience. According to CMM, by retail sales, our market share reached 38.7% online and 41.4%offline from January to September 2021, representing a year-on-year increase of 3.6 and 2.1
percentage points, our leadership further consolidated as Haier continued to rank no.1 in theindustry, while Casarte became no.2 with 14.2% market share or 2.4 percentage points year-on-yearexpansion.
During the Reporting Period, with the accelerated implementation of globalized operatingplatform, product upgrade and smart manufacturing, our refrigerator segment quickly responded tochange in consumer taste with successful launch of scenario-based solutions, Boguan seriesboasting cell-level freshness preservation and built-in design was an immediate bestseller. CasarteHomey series that caters for users’ taste with stone panel, simplicity in designs and seamlessintegration with cabinets facilitated by bottom-mounted cooling technology, has contributed to 46%sales revenue growth of Casarte’s refrigerators.
Kitchen appliances: According to CMM, by retail sales, our market share reached 7.3%offline in the first nine months, representing an increase of 1 percentage point as compared to thesame period last year, and Casarte’s market share grew by 1.2 percentage points, representing anincrease of 75%.
During the Reporting Period, the Company's kitchen appliance segment made breakthroughs inthe high-end market by continuously expanding Casarte's product portfolio. Ideal Home Galaxyseries was launched with 114 patents and 5 ground-breaking technologies in the industry, providingusers with a premium and comprehensive smart kitchen experience, driving Casarte’s kitchenappliance sales revenue to grow 123% from January to September 2021, among which Casartedishwashers grew by 152%. At the same time, the Company continued to upgrade scenario-basedsolutions, accelerated lower tier network expansion and increased presence in home improvementmarkets. By introducing GEA and FPA in commercial projects, the Company fully leveraged theglobal brand portfolio to address diverse customer demands and achieve steady growth. During thefirst three quarters of 2021, revenue from kitchen appliance grew by 31% as compared with thesame period last year, among which the sales of dishwashers grew by 92%.
(2) Household clothing solutions (internet of clothing)
Washing machine: According to CMM, by retail sales, our market shares reached 40.5%online and 43.6% offline from January to September 2021, representing increases of 1.1 and 3.1percentage points.
Our washing machine segment appreciates the growing diversification in users’ demand withcontinued technological innovations. During the period, several "New Species" products werelaunched, including Casarte Neutron Hemei Washing and Drying Machine, which integrateswashing, drying and garment care. Facilitated by innovative patented technology, it is 20cm lowerthan the height of traditional washer-and-dryer combo, allowing users to enjoy a comfortable"China height" (中国高度) of 150cm, where they do not have to raise their hands above shoulderlevel, all of which contributing to our front-loading machines’ further market share expansion of 8.5percentage points, reaching 45.8%. In order to eliminate bacteria contamination when wet clothesare left behind after laundry, we developed the unique Deep Breathing series, which canautomatically air-dry the laundry and the drum when users do not pick them up in time. Its launchattracted wide attention and a total of 32,000 units have been sold since then.
At the same time, the washing machine segment rapidly expanded into new categories such astumble dryers, shoe washers. In order to address demand in drying large items, delicate items andreducing crease, the Company developed industry leading technologies including independent fan,hybrid fast drying and smart wind speed control, thus effectively improved drying experience. Salesrevenue of tumble dryers grew by more than 260% and its market share offline reached 36.7%,representing an increase of 19.3 percentage points over the same period, and 1.32 times the marketshare of runner-up according to CMM.
(3) Household air solutions
Household air conditioner: Based on CMM’s retail sales data, from January to September2021, our market share reached 17.0% offline, representing an increase of 2.5 percentage points ascompared with the same period last year, while market share online reached 13.6%, representing anincrease of 2.4 percentage points as compared with the same period last year. Through the rapidexpansion of Casarte's product portfolio and distribution network, our share in high-end market(wall-mounted units > RMB 4,000 and cabinet units > RMB 10,000) reached 20.8%, representing ayear-on-year increase of 5.6 percentage points. In the single third quarter, an impressive 9.2percentage points market share expansion was achieved, reaching 25% in high-end market, amongwhich installation of Casarte units doubled.
During the period, the household air conditioning business focused primarily on health-conscious and smart products, accelerated the channel reorganization, improved store layout in
order to foster a closer user interaction through various marketing strategies including “experience+ air-conditioning cleaning(体验官+全民洗空调)”, while implementing operational efficiencyinitiatives in procurement, R&D, manufacturing and marketing, streamlining SKU as well as
improving the efficiency of individual models. During the first three quarters, revenue from
household air conditioning grew by 20% as compared with the same period last year, with revenuefrom Casarte up by 68.6%.
Central air conditioner: According to China IOL, the Company’s market share in central airconditioners was 11.1% from January to August 2021, representing an increase of 0.7 percentagepoints compared to the same period last year.
During the period, Haier’s central air conditioner actively implemented the national “carbonneutral” strategy, continued to achieve technology breakthrough, product innovations in providing
customized air energy solutions, and sustained our leadership. For instance, the launch of the newintegrated all-in-one air conditioner targets to reduce conventional water system’s complication ininstallation and limited choices in fluorine unit by creating customized air solution integratingmanagement of temperature, humidification, purification, oxygenation, circulation, freshness andquietness, catering to more specific demands from medical and archaeological industries. In respectof clean energy, the Company rolled out the IoT-enabled ultra-low temperature air-drive heat pump“Flame+ (赤焰+)” series, which features 62℃ water temperature and ensures -35℃ ultra-lowtemperature heating. It also targets diversified user demands such as subdivided household heating,regional heating, agricultural heating, commercial hot water usage and drying scenarios, thusproviding innovative solutions to hospitality, industrial parks, office buildings and agriculturalfacilities. Based on the HAI-BMS smart system, the Company developed the industry’s first cleanenergy smart Heat platform that facilitates efficient, convenient and energy-saving scenario-basedsolutions.
(4) Household water solution
Water heater: CMM’s retail sales data indicates, from January to September 2021, theCompany’s market share online and offline was 31.2% and 27.7%, representing a year-on-yearincrease of 4.8 percentage points and 3.9 percentage points.
During the period, the Company focused on Casarte Galaxy series with crystal rods, gas-electric hybrid series, mid and high-end ceramic heating chamber series and slim instantaneous heatseries to cater for demand in different pricing ranges. In particular, Casarte Galaxy series adoptsground-breaking materials and processes to create a heater rod that does not require magnesium norleave limescale and form crud. Meanwhile, the Company actively expanded HVAC channels andhome improvement markets, increased the number of small outlets, and acquired users through
experience-based service and word-of-mouth marketing. In addition, we strengthened partnershipwith designers to target new homeowners.
Water purifier: According to CMM, from January to September, by retail revenue, theCompany’s market share offline increased by 23.7%, and its market share ranking rose by one placeto the fourth, while the online share increased by 26.8% and maintained industry leading position.
During the period, the water purifier segment focused on meeting increasing demand for safeand healthy water, and launched the Connoisseur series, that is “a mineral water purifier, and a fruitand veggie washer at the same time”, and their popularity drove steady revenue growth of the waterpurifier products.
2. Overseas Home Appliance and Smart Home Segment
In the first three quarters of 2021, revenue of the Company’s overseas business increased by
16.8% as compared with the same period in 2020; operating profit margin increased by 1.7percentage points as compared with the same period in 2020. The continued strong momentum wasattributable to: (1) adhering to the 3-in-1 model of R&D, manufacturing and marketing, theCompany provided precise services and optimal experiences to users through diversified solutions,thereby achieving better than industry performance in every overseas markets; (2) in the postpandemic period, the Company continued to step up online and strengthened strategic partnershipwith leading e-commerce players, while expanding the offline network and developing high-endbrands and scenario-based ecosystem brands through retail transformation; (3) the Companyoptimized the global supply chain platform to respond to raw material inflation, componentshortage, rising international freight costs, and labour disruption.
① The Americas Market: During the period, GEA continued to upgrade consumer experiencewith the introduction of high-end products. GEA’s front-load washing machines withantibacterial function were awarded the highest recognition of Good Housekeeping Seal ofApproval by the Good Housekeeping Institute. High-end multi-door refrigerators and ovenscontinued to achieve double-digit growth. The launch of the Swordfish series, a newdishwasher with outstanding drying capability and the advantage of easy installation,contributed to a 70% growth in the segment. GEA also launched a brand-new high-enddishwasher from the Profile brand with antibacterial technology, which was well-received bythe market. Meanwhile, GEA obtained the Great Place to Work? Certification? and it wasnamed in Achievers 50 Most Engaged Workplaces 2021.
② The European Market: The Company actively expanded online channels and enhanced
recognition as a smart home brand with its diversified high-end product portfolio and value-
added ecosystem services. In the meantime, Hoover brand received the “Consumer Superbrand”
award, and the Company actively assumed social responsibilities in the post pandemic era.
③ The Australian and New Zealand Markets: Faced with pandemic resurgence, the Company
implemented product differentiation and scenario solutions to boost the market share of the
two brands by 0.7 percentage points in major channels. While FPA’s drawer dishwasher
achieved a revenue growth of 13% in spite of the headwinds, high-end kitchen solutions drove
the price index of refrigerators, kitchen appliances and dishwashers to 120%. Meanwhile, the
Company actively seized the opportunity online to achieve rapid growth.
④ The Japanese Market: AQUA expedited diversification of high-end products, while Haier
brand implemented a shift to medium-to-large products in order to expand the community-
based washing business to different scenarios.
⑤ The South Asian Market: Under the pressure of the pandemic, Pakistan continued to record
high revenue growth. Refrigerators, freezers, air conditioners and washing machinesmaintained market leading position, topping the market in terms of overall share for fiveconsecutive years.
⑥ The Southeast Asian Market: Business development was driven by high-end branding. The
Company continued to invest in e-commerce channels while deploying industry opinionleaders and event marketing to promote brand affinity and image.
II. Gross Profit
The Company’s gross margin was 30.2% for the first three quarters of 2021, representing anincrease of 2.2 percentage points as compared with the same period in 2020. The increase in grossmargin was primarily attributable to several factors, where in domestic market, the Companyaccelerated revenue growth of Casarte, optimized product mix, implemented the super factoryproject, streamlined SKU and improved manufacturing efficiency to partially mitigate the impact ofrising raw material prices, while the prior disposal of businesses with low profitability alsocontributed positively to gross profit margin. In the overseas market, the cost pressure waseffectively mitigated by optimization of product mix, continuous optimization of supply chainlayout and improvement in manufacturing efficiency in each region.
III. Operating Expenses Ratio
1. The selling expense ratio of the Company in the first three quarters was 15.4%. Excluding the
revenue contribution of COSMOPlat in the first three quarters of 2020, the selling expense
ratio decreased by 1.1 percentage point (including the revenue contribution of COSMOPlat,
the expense ratio from January to September 2020 was 15.1%). In domestic market, the
Company continuously implemented digital transformation, facilitating digital management of
salespeople, while working on the digital transformation of after-sale service personnel and
supply chain. In the overseas market, the Company benefited from economies of scale arising
from rapid revenue growth, and accelerated information system implementation to improve
operational efficiency and optimize the selling expense ratio through effective expense control.
2. The administrative expense ratio in the first three quarters was 4.4%. Excluding the revenue
contribution of COSMOPlat in 2020, the administrative expense ratio would have decreased
by 0.6 percentage point (including the revenue contribution of COSMOPlat, the expense ratio
from January to September 2020 was 4.6%). The improvement in administrative expense ratio
was attributable to improved operation efficiency.
3. The research and development expense ratio in the first three quarters was 3.7%, representing
an increase of 0.5 percentage points year on year. It was mainly due to the step up efforts in
building smart capabilities, such as iteration and upgrade of Smart Home APP, Smart Home
cloud and other cutting-edge technologies, the incubation of new categories as well as the
iteration of Three-Winged Bird scenario experience.
4. The financial expense ratio in the first three quarters was 0.2%, representing a decrease of 0.6
percentage point year on year. The decrease was mainly due to the conversion of convertiblebonds and debt repayment.
IV. Working Capital
1. Trade and bill receivable turnover days
The trade and bill receivable turnover days of the Company was 50 days in the first threequarters, representing an increase of 2.6 days as compared with the end of 2020, which was mainlyattributable to growth in revenue and increase in trade and bill receivables.
2. Inventory turnover days
The inventory turnover days of the Company was 76 days in the first three quarters,representing an increase of 4.3 days as compared to the end of 2020, which was mainly attributableto the inventory preparation arising from increased sales orders.
3. Trade and bill payable turnover days
In the first three quarters, trade and bill payable turnover days was 142 days, representing anincrease of 5.5 days as compared to the end of 2020, which was mainly attributable to an increase inprocurement scale.
V. Cash Flow Analysis
1. Net cash flow from operating activities for the period amounted to RMB13.36 billion,
representing an increase of RMB7.65 billion as compared to the corresponding period. It was
mainly due to the increase in operating profit and enhanced operation efficiency;
2. Net cash outflow from investing activities for the period amounted to RMB5.20 billion,
representing an increase of 93.1% as compared to the corresponding period, which was mainly
due to cash outflow as a result of the increase in investments this year and cash inflow from the
disposal of subsidiaries in 2020;
3. Net cash outflow from financing activities for the period amounted to RMB13.08 billion, while
net cash inflows in financing activities for the corresponding period amounted to RMB5.75
billion, which was mainly due to the repayment of debt, shares buyback and increase in new
borrowings.
VI. Capital Expenditure
The Company assesses its capital expenditure and investments in each segment in China andoverseas from time to time. The capital expenditure in the first three quarters of 2021 was RMB4.91billion, of which RMB2.18 billion and RMB2.73 billion were used in China and overseasrespectively in plant and equipment construction, property rental, and digital infrastructure.
VII. Gearing Ratio
As of the end of the third quarter in 2021, the Company’s gearing ratio was 62.8%,representing a decrease of 3.7 percentage points as compared to the end of 2020, which was mainlydue to the conversion of convertible bonds, increase in net profit and the repayment of borrowings.
(II) Non-recurring profit or loss items and amounts
Unit and Currency: RMB
| Items | Amounts in the Reporting Period | Amounts from the beginning of the year to the end of the Reporting Period |
| Profit or loss from disposal of non-current assets (including the write-off portion of the provision for impairment of assets) | 65,166,649.46 | 200,578,022.11 |
| Government grants included in current profit or loss, except that closely related to the normal operating business, complied with requirements of the national policies, continued to be granted with the amount and quantity determined under certain standards | 161,823,554.89 | 445,358,693.42 |
| Profit or loss on change in fair value from financial assets and financial liabilities held for trading, as well as investment income from disposal of financial assets and financial liabilities held for trading and financial assets and liabilities available for sales except for effective hedging related with normal businesses of the Company | 67,954,039.04 | 297,181,061.03 |
| Other non-operating income and expenses except as listed above | 14,073,114.60 | 49,512,691.88 |
| Less: Effect of income taxation | -8,311,500.59 | -101,590,091.60 |
| Effect of minority interest, net of tax | -4,175,816.45 | -12,144,929.64 |
| Total | 296,530,040.95 | 878,895,447.20 |
| Items | Percentage of change (%) | Main reasons |
| Net profit after deduction non-recurring profit or loss attributable to shareholders of the listed Company_ Reporting period | 82.93 | Mainly as a result of the increase in operating profit for the period and the increase in proportion of net profit attributable to shareholders of the listed Company due to the completion of the introduction of H-share listing and privatization of Haier Electric by the Company |
| Basic earnings per share | -38.13 | Mainly as a result of the investment gain arising from |
| (RMB per share) _Reporting period | the disposal of equity in a subsidiary (nil in the current period) during the same period, the H shares issued by the Company as the compensation for the cancellation of the scheme shares in accordance with the privatization proposal, and the additional H shares issued by the Company due to the conversion of H share convertible bonds | |
| Diluted earnings per share (RMB per share) _Reporting period | -36.35 | Mainly as a result of the investment gain arising from the disposal of equity in a subsidiary (nil in the current period) during the same period, the H shares issued by the Company as the compensation for the cancellation of the scheme shares in accordance with the privatization proposal, and the additional H shares issued by the Company due to the conversion of H share convertible bonds |
| Weighted average return on net assets (%) _Reporting period | Decrease by 3.03 percentage points | Mainly as a result of H shares issued by the Company as the compensation for the cancellation of the scheme shares in accordance with the privatization proposal, additional H shares issued by the Company due to the conversion of H share convertible bonds, resulting in an increase in shareholders’ equity and investment gain arising from the disposal of equity in a subsidiary (nil in the current period) during the same period |
| Net profit attributable to shareholders of the listed Company from the beginning of the year to the end of the Reporting Period | 57.68 | Mainly as a result of the increase in operating profit for the period, and the increase in proportion of net profit attributable to shareholders of the listed Company due to the completion of the introduction of H-share listing and privatization of Haier Electric by the Company, partially offset by investment gain arising from the disposal of equity in a subsidiary (nil in the current period) during the same period |
| Net profit after non-recurring profit or loss attributable to shareholders of the listed Company from the beginning of the year to the end of the Reporting Period | 121.28 | Mainly as a result of the increase in operating profit for the period and the increase in proportion of net profit attributable to shareholders of the listed Company due to the completion of the introduction of H-share listing and privatization of Haier Electric by the Company |
| Net cash flow from operating activities from the beginning of the year to the end of the Reporting Period | 133.91 | Mainly as a result of the increase in operating profit for the period and improvement in operating efficiency |
| Total number of ordinary shareholders as of the end of the Reporting Period | 186,277 | Total number of preferential shareholders with restored voting rights as of the end of the | N/A |
| Reporting Period (if any) | ||||||||||
| Shareholdings of the top 10 shareholders | ||||||||||
| Name of shareholders | Nature of shareholders | Number of shares held | Percentage of shareholdings (%) | Number of shares held subject to trading moratorium | Pledged, marked or frozen | |||||
| Status | Number | |||||||||
| HKSCC NOMINEES LIMITED | Unknown | 2,188,987,197 | 23.30 | Unknown | ||||||
| Haier Electric Appliances International Co., Ltd. | Domestic non-state owned legal entity | 1,258,684,824 | 13.40 | Nil | ||||||
| Haier Group Corporation | Domestic non-state owned legal entity | 1,072,610,764 | 11.42 | Nil | ||||||
| HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED | Foreign legal entity | 538,560,000 | 5.73 | Nil | ||||||
| Hong Kong Securities Clearing Company Limited | Unknown | 555,229,444 | 5.91 | Unknown | ||||||
| China Securities Finance Corporation Limited | Unknown | 182,592,654 | 1.94 | Unknown | ||||||
| Qingdao Haier Venture & Investment Information Co., Ltd. | Domestic non-state owned legal entity | 172,252,560 | 1.83 | Nil | ||||||
| Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) | Domestic non-state owned legal entity | 98,014,946 | 1.04 | Nil | ||||||
| China Merchants Bank Co., Ltd. －Xingquan Herun Hybrid Securities Investment Fund | Unknown | 91,780,653 | 0.98 | Unknown | ||||||
| ALIBABA INVESTMENT LIMITED | Unknown | 83,823,993 | 0.89 | Unknown | ||||||
| Shareholdings of the top 10 shareholders not subject to trading moratorium | ||||||||||
| Name of shareholders | Number of listed shares not subject to trading moratorium held | Class and number of shares | ||||||||
| Class | Number | |||||||||
| HKSCC NOMINEES LIMITED | 2,188,987,197 | Overseas listed foreign shares | 2,188,987,197 | |||||||
| Haier Electric Appliances International Co., Ltd | 1,258,684,824 | RMB ordinary shares | 1,258,684,824 | |||||||
| Haier Group Corporation | 1,072,610,764 | RMB ordinary shares | 1,072,610,764 | |||||||
| HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED | 538,560,000 | Overseas listed foreign shares | 538,560,000 | |||||||
| Hong Kong Securities Clearing Co., Ltd. | 555,229,444 | RMB ordinary shares | 555,229,444 | |||||||
| China Securities Finance | 182,592,654 | RMB ordinary shares | 182,592,654 | |||||||
| Corporation Limited | |||
| Qingdao Haier Venture & Investment Information Co., Ltd. | 172,252,560 | RMB ordinary shares | 172,252,560 |
| Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) | 98,014,946 | RMB ordinary shares | 98,014,946 |
| China Merchants Bank Co., Ltd. －Xingquan Herun Hybrid Securities Investment Fund | 91,780,653 | RMB ordinary shares | 91,780,653 |
| ALIBABA INVESTMENT LIMITED | 83,823,993 | Overseas listed foreign shares | 83,823,993 |
| Explanation of associations or actions in concert among the above shareholders | (1) Haier Electric Appliances International Co., Ltd. (currently named as Haier COSMO Co., Ltd.) is a subsidiary of Haier Group Corporation. Haier Group Corporation holds 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), HCH (HK) INVESTMENT MANAGEMENT CO., LIMITED, Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) are parties acting in concert with Haier Group Corporation; (2) The Company is not aware of the existence of any connections of other shareholders. | ||
| Explanation of the top 10 shareholders and the top 10 shareholders not subject to trading moratorium engaging in the margin trading and short selling and refinancing business (if any) | As at the end of the Reporting Period, Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) engaged in refinancing and securities lending business, involving a total of 2,004,000 shares, whilst the ownership of which had not been transferred. The actual number of shares held by it totaled 100,018,946 shares. | ||
(3) Entrusted wealth management: By the end of the Reporting Period, the balance of theCompany’s entrusted wealth management amounted to RMB2.21 billion, including two parts:
① wealth management products for temporarily idle fund raised previously: at the end ofDecember 2018, the Company’s proceeds for the issuance of convertible corporate bonds werefully received. In order to improve the yield of temporarily-idle funds, the Company intendedto carry out cash management with the amounts not exceeding RMB0.5 billion after approvedby the Board. By the end of the Reporting Period, the balance of the entrusted wealthmanagement amounted to RMB0.36 billion; ② temporary-idle funds wealth managementused by certain subsidiaries of the Company: Under the premise of ensuring sufficientcapital required by the principal operating activities and daily operations, some subsidiaries ofthe Company purchased some short-term principal-guaranteed wealth management productsand structured deposits from major commercial banks to improve the yield of temporarily-idlefunds and the return for shareholders within the authority of the president’s office meeting andunder the condition of ensuring fund safety. By the end of the Reporting Period, the balance ofthe entrusted wealth management amounted to RMB1.85 billion.
(4) Progress of the A-share repurchases: On 5 March 2021, the Company convened the 16thmeeting of the 10th session of the Board, which considered and approved the Resolution inRelation to the Repurchase Plan of a Portion of Public Shares of Haier Smart Home Co., Ltd. Itapproved the Company to use its own funds to repurchase a portion of A shares of theCompany by way of centralised bidding. The repurchase price is no more than RMB46 pershare and the proposed total repurchase amount is no more than RMB4.0 billion and no lessthan RMB2.0 billion, with no more than 86.96 million shares to be repurchased. The period ofthis repurchase is within 12 months from the date the Board considered and approved theresolution of repurchase of shares. As at the end of the Reporting Period, the Company hadrepurchased a total of 71,838,966 shares, representing 0.76% of the total share capital of theCompany. The highest price purchased was RMB32.80 per share and the lowest price wasRMB24.89 per share, and the total amount paid was RMB1,994,364,263.42. For details, pleaserefer to the announcement on the progress of the repurchase disclosed by the Company on amonthly basis.
(5) Progress of the Employee Stock Ownership Plan: During the Reporting Period, according tothe relevant arrangements in Core Employees A Share Ownership Plan of Haier Smart HomeCo., Ltd. (for Years 2021–2025) (Draft) and its Summary and the Core Employees H ShareOwnership Plan of Haier Smart Home Co., Ltd. (for Years 2021–2025) (Draft) and its
Summary, which were considered and approved at the general meeting and have come intoeffect, the Company completed the shares pool building for the above share ownership plans.Please refer to Announcement of Haier Smart Home Co., Ltd. on the Completion of Non-transactional Transfer of Share Certificates for Core Employees A Share Ownership Plan andAnnouncement of Haier Smart Home Co., Ltd. on the Completion of Share Purchase for CoreEmployees H Share Ownership Plan (for Year 2021) issued on 24 July 2021 and 27 July 2021for further details.
(6) Progress of the matters in relation to share incentives: The Company held the secondextraordinary general meeting of 2021 and other relevant meetings on 15 September 2021 toconsider and approve the "2021 A Share Option Incentive Scheme (draft) of Haier SmartHome Co., Ltd. and its summary". The share incentive plan involved a total of 51,000,000share options (of which 46,000,000 options would be granted under the first grant and5,000,000 options would be reserved), with an exercise price of RMB25.63 per share. On 15September 2021, the Company held the 23rd meeting of the tenth session of Board and otherrelevant meetings to consider and approve the "Resolution on the First Grant of Share Optionsto the Participants of Haier Smart Home Co., Ltd.", after which the works related to the firstgrant of the share incentives were completed. Please refer to Announcement of Haier SmartHome Co., Ltd. on the First Award of the 2021 A Share Options to the Participants issued onthe same date for further details.
IV. Quarterly Financial Statements
(I) Type of Audit Opinion
□Applicable √Not Applicable
(II) Financial Statements
Consolidated Balance Sheet30 September 2021
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB Type of Audit: Unaudited
| Items | 30 September 2021 | 31 December 2020 |
| Current assets: | ||
| Cash at bank and on hand | 41,415,025,484.61 | 46,461,329,426.91 |
| Provision of settlement fund | ||
| Funds lent | ||
| Financial assets held for trading | 2,888,189,624.36 | 2,165,192,497.83 |
| Derivative financial assets | 136,885,409.17 | 77,839,006.63 |
| Bills receivable | 14,584,132,119.43 | 14,136,349,754.34 |
| Accounts receivable | 18,116,053,952.58 | 15,930,024,286.67 |
| Financing receivables | ||
| Prepayments | 1,145,689,726.84 | 765,427,571.70 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable | ||
| Other receivables | 2,464,638,317.25 | 1,717,152,945.65 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Financial assets purchased under resale agreements | ||
| Inventories | 36,070,094,427.60 | 29,446,973,404.75 |
| Contract assets | 239,570,182.64 | 263,412,927.58 |
| Assets held for sale | ||
| Non-current assets due in one year | ||
| Other current assets | 2,965,185,089.86 | 3,283,888,900.58 |
| Total current assets | 120,025,464,334.34 | 114,247,590,722.64 |
| Non-current assets: | ||
| Loans and advances granted | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | 304,741,668.20 | 330,588,978.97 |
| Long-term equity investments | 22,807,807,301.52 | 21,567,658,450.89 |
| Investments in other equity instruments | 4,242,437,904.06 | 2,659,125,265.54 |
| Other non-current financial assets | ||
| Investment properties | 26,816,851.55 | 28,387,002.81 |
| Fixed assets | 20,995,893,489.10 | 20,895,504,722.21 |
| Construction in progress | 5,818,491,926.80 | 3,596,902,447.07 |
| Biological assets for production | ||
| Oil and gas assets | ||
| Right-of-use assets | 2,827,110,733.34 | 2,839,858,259.27 |
| Intangible assets | 9,810,514,844.04 | 10,017,867,645.93 |
| Development cost | 233,229,783.08 | 167,746,724.13 |
| Goodwill | 22,243,100,696.36 | 22,518,460,337.64 |
| Long-term prepaid expenses | 516,927,472.21 | 455,742,504.13 |
| Deferred income tax assets | 1,837,596,917.04 | 2,208,301,258.25 |
| Other non-current assets | 1,250,446,349.68 | 1,925,761,560.17 |
| Total non-current assets | 92,915,115,936.98 | 89,211,905,157.01 |
| Total assets | 212,940,580,271.32 | 203,459,495,879.65 |
| Current liabilities: | ||
| Short-term borrowings | 8,458,180,631.47 | 7,687,908,165.88 |
| Borrowings from central bank | ||
| Due to banks and other financial institutions | ||
| Financial liabilities held for trading | 2,224,705.72 | 26,952,508.66 |
| Derivative financial liabilities | 95,516,212.72 | 239,582,532.90 |
| Bills payable | 24,375,581,162.68 | 21,236,057,053.67 |
| Accounts payable | 41,409,432,997.78 | 36,302,971,944.48 |
| Receipts in advance | ||
| Contract liabilities | 9,324,774,033.42 | 7,048,637,659.48 |
| Disposal of repurchased financial assets | ||
| Absorbing deposit and deposit in inter-bank market | ||
| Customer deposits for trading in securities | ||
| Amounts due to issuer for securities underwriting | ||
| Payables for staff's remuneration | 3,451,424,281.99 | 3,760,099,978.82 |
| Taxes payable | 2,376,641,406.71 | 2,399,705,460.12 |
| Other payables | 17,978,525,705.73 | 17,056,156,167.28 |
| Including: Interest payable | ||
| Dividend payable | ||
| Fees and commissions payable | ||
| Reinsurance Accounts payables | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 8,213,205,476.08 | 7,522,724,913.40 |
| Other current liabilities | 355,285,824.66 | 6,112,053,944.63 |
| Total current liabilities | 116,040,792,438.96 | 109,392,850,329.32 |
| Non-current liabilities: | ||
| Deposits for insurance contracts | ||
| Long-term borrowings | 9,520,261,665.11 | 11,821,416,259.81 |
| Bonds payable | 383,013,786.19 | 6,713,501,050.27 |
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,075,728,389.63 | 2,072,702,352.68 |
| Long-term payables | 93,735,949.10 | 98,203,261.27 |
| Long-term payables for staff’s remuneration | 1,399,631,122.57 | 1,245,775,024.35 |
| Estimated liabilities | 1,547,293,356.78 | 1,442,844,036.73 |
| Deferred income | 633,114,817.93 | 633,761,669.48 |
| Deferred income tax liabilities | 2,089,444,332.80 | 1,900,401,265.97 |
| Other non-current liabilities | 29,056,984.15 | 27,033,458.13 |
| Total non-current liabilities | 17,771,280,404.26 | 25,955,638,378.69 |
| Total liabilities | 133,812,072,843.22 | 135,348,488,708.01 |
| Owners' equity (or shareholders' equity): | ||
| Paid-in capital (or share capital) | 9,395,905,824.00 | 9,027,846,441.00 |
| Other equity instruments | 133,398,235.40 | 2,364,195,333.79 |
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserve | 22,479,232,117.98 | 15,009,027,407.40 |
| Less: treasury stock | 2,215,540,540.97 | 28,896,550.65 |
| Other comprehensive income | -231,890,423.78 | -1,046,216,729.06 |
| Special reserve | ||
| Surplus reserve | 3,045,334,539.60 | 3,045,334,539.60 |
| General risk provisions | ||
| Undistributed profits | 45,127,334,771.23 | 38,445,132,172.47 |
| Total equity attributable to owners (or shareholders) of the Parent Company | 77,733,774,523.46 | 66,816,422,614.55 |
| Minority shareholders' interests | 1,394,732,904.64 | 1,294,584,557.09 |
| Total owners' equity (or shareholders' equity) | 79,128,507,428.10 | 68,111,007,171.64 |
| Total liabilities and owners' equity (or shareholders' equity) | 212,940,580,271.32 | 203,459,495,879.65 |
| Items | 2021 First Three Quarters (January-September) | 2020 First Three Quarters (January-September) |
| Ⅰ. Total operating revenue | 169,963,571,548.76 | 154,411,813,689.44 |
| Including: Operating revenue | 169,963,571,548.76 | 154,411,813,689.44 |
| Interest income | ||
| Insurance premiums earned | ||
| Fee and commission income | ||
| Ⅱ. Total cost of operations | 159,343,921,456.82 | 148,193,548,528.82 |
| Including: Operating cost | 118,623,829,079.36 | 111,131,091,030.65 |
| Interest expenses | ||
| Fee and commission expenses | ||
| Insurance withdrawal payment | ||
| Net payment from indemnity | ||
| Net provisions withdrew for insurance liability | ||
| Insurance policy dividend paid | ||
| Reinsurance cost | ||
| Taxes and surcharges | 562,361,108.77 | 469,361,548.05 |
| Selling expenses | 26,098,146,035.41 | 23,362,019,340.66 |
| Administrative expenses | 7,557,331,611.69 | 7,081,266,745.91 |
| R&D expenses | 6,204,288,536.34 | 5,007,098,365.49 |
| Financial expenses | 297,965,085.25 | 1,142,711,498.06 |
| Including: Interest expenses | 542,540,233.96 | 1,032,220,170.47 |
| Interest income | 400,822,923.36 | 358,504,311.40 |
| Add: other income | 635,028,802.34 | 923,669,481.27 |
| investment income (losses are represented by “-”) | 1,664,671,227.93 | 3,503,301,030.65 |
| Including: Investment income of associates and joint ventures | ||
| Income generated from the derecognition of financial assets measured at amortized cost | ||
| Exchange gain (losses are represented by “-”) |
| Gains on net exposure hedges (losses are represented by “-”) | ||
| Income from change in fair value (losses are represented by “-”) | 39,767,883.33 | 6,595,588.63 |
| Loss on credit impairment (losses are represented by “-”) | -141,683,845.18 | -116,103,151.35 |
| Loss on assets impairment (losses are represented by “-”) | -728,421,071.61 | -727,876,621.09 |
| Gain from disposal of assets (losses are represented by “-”) | 207,581,603.71 | -52,591,373.95 |
| Ⅲ. Operating profit (losses are represented by “-”) | 12,296,594,692.46 | 9,755,260,114.78 |
| Add: non-operating income | 147,370,992.20 | 107,820,893.69 |
| Less: non-operating expenses | 104,861,881.92 | 122,983,406.06 |
| Ⅳ. Total profit (total losses are represented by “-”) | 12,339,103,802.74 | 9,740,097,602.41 |
| Less: income tax expense | 2,274,926,783.00 | 1,721,111,958.00 |
| Ⅴ. Net profit (net losses are represented by “-”) | 10,064,177,019.74 | 8,018,985,644.41 |
| (I) Classification by continuous operation | ||
| 1.Net profit from continuous operation (net losses are represented by “-”) | 10,064,177,019.74 | 8,018,985,644.41 |
| 2. Net profit from discontinued operation (net losses are represented by “-”) | ||
| (II) Classification by ownership of the equity | ||
| 1. Net profit attributable to shareholders of the Parent Company (net losses are represented by “-”) | 9,934,611,508.38 | 6,300,507,503.54 |
| 2. Profit or loss attributable to minority shareholders (net losses are represented by “-”) | 129,565,511.36 | 1,718,478,140.87 |
| VI. Other comprehensive income, net of tax | 768,015,269.00 | -1,726,210,230.61 |
| (I) Other comprehensive income attributable to shareholders of the listed Company, net of tax | 776,465,493.58 | -1,664,084,285.15 |
| 1. Other comprehensive income that cannot be reclassified into the profit or loss | 1,180,689,883.33 | -58,986,038.62 |
| (1) Changes arising from re-measurement of defined benefit plans | -355,977.81 | -2,796,373.04 |
| (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 instruments | 1,181,045,861.14 | -56,189,665.58 |
| (4) Changes in fair value of credit risks of the enterprise | ||
| 2. Other comprehensive income to be reclassified into the profit or loss | -404,224,389.75 | -1,605,098,246.53 |
| (1) Other comprehensive income that | 37,327,753.73 | -189,651,363.03 |
| can be transferred into profit or loss under equity method | ||
| (2) Changes in fair value of other debt investments | ||
| (3) Reclassified financial assets that are credited to other comprehensive income | ||
| (4) Credit impairment provision for other debt investments | ||
| (5) Reserve for cash flow hedging | 116,947,915.82 | -84,274,049.94 |
| (6) Exchange differences on translation of financial statements denominated in foreign currencies | -558,500,059.30 | -1,331,172,833.56 |
| (7) Others | ||
| (II) Other comprehensive income attributable to minority shareholders, net of tax | -8,450,224.58 | -62,125,945.46 |
| Ⅶ. Total comprehensive income | 10,832,192,288.74 | 6,292,775,413.80 |
| (I) Total comprehensive income attributable to the owners of Parent Company | 10,711,077,001.96 | 4,636,423,218.39 |
| (II) Total comprehensive income attributable to the minority shareholders | 121,115,286.78 | 1,656,352,195.41 |
| Ⅷ. Earnings per share: | ||
| (I) Basic earnings per share (RMB/share) | 1.072 | 0.958 |
| (II) Diluted earnings per share (RMB/share) | 1.061 | 0.939 |
| Items | 2021 First Three Quarters (January-September) | 2020 First Three Quarters (January-September) |
| I. Cash flow from operating activities: | ||
| Cash received from the sale of goods and rendering services | 173,651,240,498.75 | 147,291,023,850.68 |
| Net increase in customer 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 | ||
| Cash received from interest, fee and commissions | ||
| Net increase in placement from banks and other financial institutions | ||
| Net increase in cash received from repurchase operation | ||
| Net cash received from customer deposits for trading in securities | ||
| Refunds of taxes | 1,375,729,622.99 | 976,790,858.07 |
| Cash received from other related operating activities | 1,625,799,358.48 | 858,777,749.41 |
| Sub-total of cash inflows from operating activities | 176,652,769,480.22 | 149,126,592,458.16 |
| Cash paid on purchase of goods and services | 118,817,633,261.77 | 107,290,072,174.03 |
| Net increase in loans and advances of customers | ||
| Net increase in deposits in the PBOC and inter-bank | ||
| Cash paid for compensation payments under original insurance contract | ||
| Net increase in cash lent | ||
| Cash paid for interest, bank charges and commissions | ||
| Cash paid for insurance policy dividend | ||
| Cash paid to and on behalf of employees | 18,881,393,407.16 | 16,400,625,372.03 |
| Cash paid for all types of taxes | 7,580,113,678.87 | 5,612,184,299.93 |
| Cash paid to other operation related activities | 18,014,345,057.24 | 14,112,505,937.72 |
| Sub-total of cash outflows from operating activities | 163,293,485,405.04 | 143,415,387,783.71 |
| Net cash flow from operating activities | 13,359,284,075.18 | 5,711,204,674.45 |
| II. Cash flow from investing activities: | ||
| Cash received from recovery of investments | 4,665,552,636.62 | 2,810,432,335.20 |
| Cash received from return on investments | 578,040,778.24 | 348,202,313.61 |
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | 42,303,385.93 | 80,436,732.37 |
| Net cash received from disposal of subsidiaries and other operating entities | 1,314,096,598.53 | |
| Other cash received from investment activities | 8,051,012.31 | |
| Sub-total of cash inflows from investing activities | 5,285,896,800.79 | 4,561,218,992.02 |
| Cash paid on purchase of fixed | 4,907,211,978.77 | 5,099,603,609.64 |
| assets, intangible assets and other long-term assets | ||
| Cash paid for investments | 5,582,993,847.32 | 1,758,422,705.33 |
| Net increase in secured loans | ||
| Net cash paid on acquisition of subsidiaries and other operating entities | 345,271,380.17 | |
| Other cash paid on investment activities | 250,000.00 | 52,942,942.62 |
| Sub-total of cash outflows from investing activities | 10,490,455,826.09 | 7,256,240,637.76 |
| Net cash flow from investing activities | -5,204,559,025.30 | -2,695,021,645.74 |
| III. Cash flow from financing activities: | ||
| Cash received from capital contributions | 39,420,000.00 | 1,326,697,709.68 |
| Including: Cash received from capital contributions by minority shareholders of subsidiaries | ||
| Cash received from borrowings | 7,143,577,184.22 | 23,485,842,921.55 |
| Other cash received from financing activities | 4,422,492.60 | |
| Sub-total of cash inflows from financing activities | 7,182,997,184.22 | 24,816,963,123.83 |
| Cash paid on repayment of loans | 12,788,537,940.13 | 14,546,595,992.83 |
| Cash paid on distribution of dividends, profits or repayment of interest expenses | 3,853,421,860.00 | 3,966,850,550.91 |
| Including: Dividend and profit paid to minority shareholders by subsidiaries | ||
| Other cash paid to financing activities | 3,622,853,443.72 | 552,815,827.98 |
| Sub-total of cash outflows from financing activities | 20,264,813,243.85 | 19,066,262,371.72 |
| Net cash flow from financing activities | -13,081,816,059.63 | 5,750,700,752.11 |
| IV. Effect of fluctuations in exchange rates on cash and cash equivalents | -19,753,211.46 | -400,075,956.59 |
| V. Net increase in cash and cash equivalents | -4,946,844,221.21 | 8,366,807,824.23 |
| Add: balance of cash and cash equivalents at the beginning of the period | 45,635,132,638.48 | 34,962,947,399.85 |
| VI. Balance of cash and cash equivalents at the end of the period | 40,688,288,417.27 | 43,329,755,224.08 |
(III) The adjustments of the relevant items of the financial statements at the beginning of the yeardue to the first implementation of new leasing standards since 2021
□Applicable √Not Applicable
The Board of Haier Smart Home Co., Ltd.
29 October 2021