海尔智家：2024年年度报告(英文版)

Company Code：600690 Short Name：Haier Smart Home

Haier Smart Home Co., Ltd.

2024 Annual Report

Important Notice

I. The Board of Directors, the Board of Supervisors, directors, supervisors and seniormanagement of Haier Smart Home Co., Ltd. (‘the Company’) hereby assure that the contentset 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 collectivelyresponsible for the content set out therein.II. All Directors of the Company have attended the board meetings.III. Hexin Certified Public Accountants Limited LLP has issued a standard and unqualified auditreport for the Company.IV. Li Huagang (legal representative of the Company), Gong Wei (chief financial officer of theCompany) and Ying Ke (the person in charge of accounting department) hereby certify thatthe financial report set out in the annual report is true, accurate and complete.V. Proposal of profit distribution or proposal of capitalizing capital reserves for the reportingperiod resoluted and adopted by the BoardProposal of profit distribution for the reporting period are examined and reviewed by the Board: todeclare a cash dividend of RMB9.65 per 10 shares (tax inclusive) to all shareholders based on the totalnumber of shares held on record date and after deducting the repurchased shares from therepurchase account upon the execution of distribution proposal, with proposed distribution amountingto RMB8,996,688,692.76 (tax inclusive). The proportion of cash distribution is 48.01% of the net profitattributable to shareholder of parent company of the Company for the year. If there is any change inthe total share capital of the Company during the period from the date of this report to the recorddate of the equity distribution, the total distribution amount will be remained unchanged withcorresponding adjustment to the proportion of distribution per share.VI. Disclaimer in respect of forward-looking statements

√ Applicable □Not Applicable

Forward-looking statements such as future plans, development strategies as set out in this report donot constitute the Company’s substantial commitment to investors. Investors are advised to payattention to investment risks.VII. Is there any fund occupation by controlling shareholders and other related parties for non-

operational purposes?NoVIII. Is there any provision of external guarantee in violation of the prescribed decision-making

procedures?No

Important Notice

IX. Are there more than half of the Directors who are unable to guarantee the truthfulness,accuracy and completeness of the annual report disclosed by the Company?NoX. Important Risk WarningsFor the possible risks which the Company may encounter, please refer to the relevant information setout in the section of ‘MANAGEMENT DISCUSSION AND ANALYSIS’ in this report.XI. Others

□ Applicable √ Not Applicable

Contents

LETTER TO SHAREHOLDERS4SECTION I

SECTION II

SECTION III

SECTION IV

SECTION V

SECTION VI

SECTION VIISECTION VIIISECTION IXSECTION X

DEFINITIONSGENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORSMANAGEMENT DISCUSSION AND ANALYSISCORPORATE GOVERNANCEENVIRONMENTAL AND SOCIAL RESPONSIBILITIESSIGNIFICANT EVENTSCHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERSRELEVANT INFORMATION OF PREFERENCE SHARESRELEVANT INFORMATION OF BONDSFINANCIAL REPORT

DOCUMENTSAVAILABLE FORINSPECTION

(I)Financial statements with signatures and seals of the legal representative,

chief accountant and person in charge of accounting department.(II)Original audit report with seals of accounting firm, signatures and seals ofregistered accountants.(III)Originals of all documents and announcements of the Company which havebeen publicly disclosed on the newspaper designated by China SecuritiesRegulatory Commission during the reporting period.

Letter to Shareholders

EMBRACING CHANGE, BUILDING MOMENTUM FOR GROWTHIn 2024, Haier Smart Home remained committed to “Creating Better Lives for Global Families” and achievednew heights in revenue and profit through strengthening technological innovation, accelerating digitaltransformation, and optimizing global strategic footprint while implementing business model transformation tolay down a solid foundation for sustainable growth.KEY PERFORMANCES IN 2024We delivered record-level revenue and net profit.In 2024, Haier Smart Home’s global revenue reached RMB285.981 billion, representing a year-on-yearincrease of 4.29%. Net profit attributable to shareholders grew 12.92% to RMB18.741 billion and operatingprofit was RMB 20.22 billion, up 15.8% year on year

.We generated net cash flow from operating activities totalled RMB26.543 billion, 1.4 times our net profit.We consolidate market leadership in refrigerators, washing machines, and water heaters in China. We havemade considerable progress in premium kitchen appliances, with the Casarte Ultra-realm (致境) seamlessbuilt-in range hood achieving 400% volume growth in the segment priced above RMB7,000.In 2024, we strengthened user engagement by implementing initiatives including digital inventorymanagement and marketing, driving improvements in both user experience and operational efficiency. As aresult, our domestic order response cycle improved by 13%.We actively capitalized on opportunities created by trade-in policy in China, to realized 10% overall revenuegrowth and over 30% Casarte growth in the fourth quarter.In the U.S., despite sluggish demand and intensifying competition, GE Appliances team focused on productleadership, channel partnerships, supply chain upgrades, and new opportunity expansion, to solidifying ourposition as the industry leader. Our innovative products including the Apex oven range, next-generationdishwashers with stainless steel tub, and Combo Core heat pump washer-dryer combos—have receivedwidespread acclaim. We upgraded our Roper factory to cover full range of kitchen appliances withindustry-leading manufacturing efficiency. GE Appliances’ HVAC revenue grew by 70% and RV appliancesachieved double-digit growth. The Company has been recognized as the “Smart Appliance Company of theYear” by IoT Breakthrough for eight consecutive years.2024 marks the 20th anniversary since we first entered India market and it has been a year of tremendousachievement as our revenue grew over 30% to USD 1 billion for the first time, the growth was attributable tolocal management team’s unwavering commitment to localization strategies. Our high value-added products,including the powerful 5-star energy-efficiency air conditioners and large-capacity front-load washingmachines, have performed exceptionally well.The first phase of our eco-park in Egypt commenced operations in May 2024, with production capacityexceeding 200,000 units.

[1] Operating profit = sales revenue—cost of sales—income tax—selling, administrative, R&D expenses + credit impairmentloss + assets impairment loss

Letter to Shareholders

In the HVAC sector, we continue to achieve technological breakthroughs, strengthen R&Dcapabilities, and implement supply chain integration for both residential air conditioning and smartbuilding businesses, while accelerating international expansion of water heater business.We have continuously strengthened R&D investments in residential air conditioners over the past three years,to renovate our product platforms and models while solidifying our modular technology. Our products nowlead the industry in both performance and consistency: wall-mounted units achieve APF values exceeding

6.3, while standing units surpass 5.2. Defect rate reduced by 11% year-on-year in 2024. With accelerated

product iteration, new products will comprise over 50% of our offerings in 2025, promising strong marketperformance. We continue to deepen supply chain integration to enhance cost competitiveness, in 2024, ourjoint compressor factory in Zhengzhou reached a production capacity of 2.24 million units, while a total of

5.3 million units of PCBs were produced in our facilities in Zhengzhou and Chongqing.

Our Smart Building business achieved revenue growth of 15% in 2024, surpassing the RMB10 billionmilestone despite downturn in real estate and public building market. This success was driven by ourlong-term investment in core technologies and launch of new product platforms. We maintain marketleadership in magnetic levitation systems, and our air suspension centrifugal chiller has been recognized forits high energy efficiency and included in the “Green Technology Promotion Catalog (2024 Edition)” jointlyissued by eight government departments led by the National Development and Reform Commission.Our Water Heater and Purifier business is rapidly expanding into overseas markets. In December 2024, wecompleted the acquisition of Kwikot, a century-old market-leading water heater manufacturer in South Africa.We will enhance its competitiveness through synergies in R&D, procurement, and supply chain operations, toaccelerate our global expansion in the water heater and purifier market.In October 2024, we completed the acquisition of Carrier’s commercial refrigeration business. Through thisacquisition, we will expand into commercial refrigeration including retail refrigeration and cold storage tolocking new growth opportunities. Carrier’s commercial refrigeration business has accumulated extensivetechnical expertise and commercial applications in CO

refrigeration. Following the acquisition, both partiesare actively promoting synergies in global markets, R&D, and platform capabilities, while implementingorganizational restructuring to provide rapid response and customer service, thus establishing a solidfoundation for sustainable development.Innovate marketing approach to deliver brand value in ways that resonate more with consumers,revitalize our brand, and strengthen user connections.We have systematically enhanced content creation, successfully launched IP series including “Haier Initiative(海廠總動員)”, which achieved over 2 million mentions in a single month. Meanwhile, we have increasedinvestment in Leader brand to attract young consumers through distinctive, minimalist designs and upgradedmarketing. As a result, Leader’s retail sales grew by 26% year-on-year in 2024.Our technological innovations have received wide recognition from the industry, leading the sectortowards smart and sustainable transformation.In 2024, our Multi-dimensional (temperature, humidity, oxygen, magnetic) Precision Control TechnologyInnovation and Industrialization for Household Preservation Appliances was honoured with the State Scienceand Technology Progress Award (Second Class), making it the only home preservation technology to receive

Letter to Shareholders

this prestigious award in its 40-year history. To date, our Company has accumulated 17 State Science andTechnology Progress Awards, making us the most decorated enterprise in the home appliance industry. In2024, Haier’s Hefei Refrigerator Interconnected Factory became the world’s first enterprise to receive theIndustrie 4.0

Award for its breakthrough in AI technology integration.We advanced sustainable development strategy by promoting “RenDanHeYi” ()management philosophy and strengthening commitment to diversity and inclusion.In 2024, our Company continued to implement sustainable development strategy, inspiring employeeinnovation and fostering diversity and inclusion. We strengthened sustainable risk management to navigatecomplexity and volatility in global market. At the same time, we established sustainability divisions in everyregion where we operate, fulfilling local social responsibilities and building direct interactions with allstakeholders.This year, we launched many energy-efficient and carbon-reducing green products across global markets toearn wide consumer recognition. Through our efficient energy-saving products and digital smart platforms,we provided comprehensive energy solutions for homes and buildings to fulfil Haier Smart Home’scommitment to a greener planet. We also catered for the well-being of elderly users by introducing productswith improved accessibility such as one-touch smart washing machines and gas stoves with automaticshut-off safety features.Guided by our “RenDanHeYi” (人單合一) management philosophy, we have created an inclusive workplacethat nurtures diverse, cohesive, and high-performing teams. We believe innovation thrives when diversecultures connect and blend. In 2024, we launched a women’s leadership empowerment program andstrengthened the cultivation and development of young creators, technology experts, and globalized talentsto build reserves for the future. We established a Company-wide Cultural Dialogue Platform where staff canengage in conversations about the work environment, organizational atmosphere, and cultural development,embodying our “employee-centred” principle to achieve more vibrant and diversified development.In 2024, Haier Smart Home was selected in Forbes’ World’s Best Employers list for the eighth consecutiveyear, while GE Appliances received “The Most Innovative Companies of 2024” award. MSCI upgraded ourESG rating to AA level, which serves not only as affirmation but also as encouragement, motivating us tocontinue the path of sustainable development.

2025: Accelerating Change to Embrace a New Era

The year 2025 presents an intricate tapestry of challenges and opportunities.Geopolitical uncertainties and rising tariff barriers are accelerating the fragmentation of global trade systems,triggering cascading effects that are reshaping global supply chains. Meanwhile, the remarkable evolution ofAI technology continues to drive transformative changes across industries.We anticipate a gradual recovery in real estate demand could be brought by interest rate cuts, offeringpromising prospects in the home appliance sector in the US and Europe. In emerging markets, economicgrowth, ongoing urbanization, and favourable demographic advantages are creating fertile ground forexpansion in the industry.

The Industrie 4.0 Award is one of the most prestigious global industry accolades. Organized and assessed by the internationallyrenowned management consultancy ROI-EFESO, this award recognizes organizations that have demonstrated exceptional digitaltransformation achievements in smart factories, smart supply chains, smart services, and smart sustainability.

Letter to Shareholders

Originated from China, Haier Smart Home has devoted our energy and expertise to developing the bestappliances to satisfy consumers all over the world by implementing global strategy leveraging Chineseengineering excellence. China’s sophisticated e-commerce and logistics infrastructures facilitate seamlesscommunication between consumers and businesses, bridging gaps and accelerating product iteration. Therobust supply chain and abundant talent pool are vital for Chinese enterprises to maintain substantialinvestments in innovation and create outstanding experience for users. Furthermore, by leveraging innovativetechnologies including AI, Chinese companies can enhance operational efficiency while optimizingorganizational structures and processes. I am full of anticipations as Haier Smart Home accelerates ourglobal strategy going forward.Our overseas markets still hold tremendous potential in both revenue scale and profitability. In 2025, we willcapitalize on our global R&D platform to accelerate country-specific product innovation and iteration toaddress unique local market needs and improve price index. We will enhance our global logistics andmarketing platforms as well as deploying end-to-end digitalization by adapting domestic models to localmarkets to drive operational efficiency. We will leverage localized production and the synergies of 131 globalmanufacturing facilities to build a well-balanced and resilient global supply chain, mitigating potentialgeopolitical impacts.In the domestic market, accelerated digital transformation of marketing and inventory management willenable us to connect with users more directly and swiftly, allowing distributors to operate with lighter assetswhich in turn will help accelerate product turnover, expand market share, and enhance profitability.In 2025, Haier Smart Home will fully embrace AI technologies to facilitate the implementation ofcomprehensive applications powered by advanced large models across our operations. Building on digitalfoundations, we will expand our AI capabilities. Our AI product series will deliver novel experiences to userswith more intelligent, versatile, and personalized natural language interactions. We will leverage AI toolsextensively to achieve more efficient development, targeted marketing, and optimized supply chain, whileempowering every Haier team member to develop their own smart applications.Direct yet efficient user communication and brand vitality have become critical in the era of fans economy.Since March 2024, our management team has successively launched social media accounts to share Haierstories, listen to user needs, and collect user suggestions, thereby strengthening emotional bonds. Thisinteractive model has injected new vitality into the Haier brand by involving users in product design andbrand creation. In response to suggestions on social media platforms, we launched the Leader triple-drumwashing machine on March 11th, eliminating the need for manual washing and unlocking a “new era forconvenience”. Its Mickey Mouse-inspired design stands out from traditional appliances and went viral onsocial media. Within just one week of its release, we have received over 88,000 orders. We will makegreater effort in engaging with young consumers, fully leveraging our advantages in R&D, manufacturing,quality, and service, while deepening interactions and connections, to provide not only authentic, high-qualityproducts but also create delightful experiences.Finally, I would like to express my sincere gratitude to all shareholders for your unwavering support andtrust. We are dedicated to overcoming challenges and creating greater value for shareholders, society, andusers worldwide.

Section I Definitions

I. DEFINITIONS

Unless otherwise stated in the context, the following terms should have the following meanings in thisreport:

Definition of frequently used termsCSRCChina Securities Regulatory CommissionSSEShanghai Stock ExchangeThe Company,

Haier Smart Home

Haier Smart Home Co., Ltd., its original name is “Qingdao Haier Co.,Ltd.”, and the original short name is “Qingdao Haier”Four Major SecuritiesNewspapers

China Securities Journal, Shanghai Securities News, Securities Times,Securities DailyHaier Electrics, 1169Haier Electronics Group Co., Ltd. (a company originally listed in Hong

Kong, stock code: 01169.HK), a subsidiary as accounted for in theconsolidated statement of the Company. Haier Electrics has beenprivatized by way of H shares issuance on 23 December 2020 andbecame a wholly owned subsidiary of the Company since then.GE AppliancesHousehold appliances assets and business of General Electric Group,

have currently been owned by the Company.FPAFisher & 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 oven, built-in freezer, washing

machine, clothes dryer and etc. Its business covers 50 countries/

regions across the world. FPA is a wholly-owned subsidiary of the

Company.CandyCandy Group (Candy S.p.A), is an international professional appliances

manufacturer from Italy. Since its establishment in 1945, it has been

committed to enabling the global users to enjoy a higher quality of life

through innovative technologies and quality services. Candy Group has

been prestigious in the global market with users all over the world via its

various self-owned professional household appliance brands. In January

2019, Candy became a wholly-owned subsidiary of the Company.Gfk CMMGfK CMM, is a wholly owned subsidiary of the German GfK Group in

China. It is an authoritative retail monitoring and market research

institute in the Chinese home appliance and consumer electronics

industry, specializing in market research in the field of consumer

durables.

Section I Definitions

EuromonitorEuromonitor, established in 1972, is the leading strategic market

information supplier and has over 40-years of experience in respect ofpublishing market report, commercial reference data and on-linedatabase. They create data and analysis on thousands of products andservices around the world.GfkGfk Group, the world’s leading market research company. After a long

period of development and accumulation, Gfk Group’s global marketresearch business covers consumer durables research, consumerresearch, media research, healthcare market research and specialstudies.All View CloudAll View Cloud (AVC) is a big data integrated solution provider to the

smart home field, providing enterprises with big data informationservices, regular data information services and special data services.IECThe International Electrotechnical Commission, founded in 1906, is the

world’s first organization for the preparation and publication ofinternational electrotechnical standardization and is responsible forinternational standardization for electrical engineering and electronicengineering. The goals of the commission include: to effectively meetthe needs of the global market; to ensure that the standards andconformity assessment programs are applied globally in a prioritizedmanner and to the greatest extent; to assess and improve the quality ofproducts and services involved in its standards; to create conditions forthe common use of complicated systems; to improve the effectivenessof the industrialization process; to improve human health and safety,and to protect the environment.IEEEThe 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 theworld. It is committed to the development and research of electrical,electronic, computer engineering and science-related fields, and hasnow developed into an international academic organization with greatinfluence in terms of the fields of space, computer, telecommunications,biomedicine, power and consumer electronics.Model of RenDanHeYi(人單合一)

The concept of “Achieving win-win via RenDanHeYi” is the guarantee ofHaier’s sustainable operation and the driving force of the Companyfeaturing a self-motivated and empowering corporate culture. “Ren” is anemployee who has the spirit of entrepreneurship and innovation; “Dan”is to create value for users. The “RenDanHeYi” management modelencourages employees to create value for users with an entrepreneurialmindset, and to achieve self-value in line with the those of theCompany and its shareholders.

Section II General Information of theCompany and Key Financial Indicators

I. INFORMATION OF THE COMPANY

Chinese name海尔智家股份有限公司Chinese short name海尔智家English nameHaier Smart Home Co., Ltd.English short nameHaier Smart HomeLegal representativeLi Huagang

II. CONTACT PERSON AND CONTACT INFORMATION

Secretary to theBoard

Representative ofsecurities affairs

Company Secretary(D/H shares)OthersNameLiu XiaomeiLiu TaoNg Chi Yin, TrevorGlobal Customer

Service HotlineAddressDepartment of

Securities of HaierSmart Home Co.,Ltd., Haier Scienceand TechnologyInnovationEcological Park,No.1 Haier Road,Qingdao City

Department ofSecurities of HaierSmart Home Co.,Ltd., Haier Scienceand TechnologyInnovationEcological Park,No.1 Haier Road,Qingdao City

Room 1908, 19thFloor, HarbourCentre, 25 HarbourRoad, Wan Chai,Hong Kong

/

Tel0532–889316700532–88931670+852 2169 00004006 999 999Fax0532–889316890532–88931689+852 2169 0880/[e-mail]@[e-mail]/

Section II General Information of the Company and Key Financial Indicators

III. SUMMARY OF THE GENERAL INFORMATION

Registered AddressHaier Industrial Park, Laoshan District, Qingdao City (now known as

Haier Science and Technology Innovation Ecological Park, LaoshanDistrict, Qingdao City)Historical Changes to theRegistered Address

Prior to the Company’s listing in 1993, the registered address of theCompany was No.165 Xiaobaigan Road, Sifang District, Qingdao City,Shandong Province, and has changed to the current address since1994, during which the address name was adjusted in line with thechange of name of the industrial park but the actual site remainsunchangedBusiness addressHaier Science and Technology Innovation Ecological Park, Laoshan

District, Qingdao CityPostal code of the businessaddress

266101Websitehttps://smart-home.haier.com/cn/[e-mail]. PLACE FOR INFORMATION DISCLOSURE AND DEPOSIT

Newspapers and websitesfor annual reportdisclosure

Shanghai Securities News, Securities Times, China Securities Journal,

Securities Daily

Stock Exchange Website for

annual report disclosureas designated by theCSRC

www.sse.com.cn

Other websites for annual

report disclosure

https://smart-home.haier.com/cn/, www.xetra.com, www.dgap.de,

https://www.hkexnews.hkDeposit place of annual

report

Department of Securities of Haier Smart Home Co., Ltd., Haier Science

and Technology Innovation Ecological Park, No.1 Haier Road,

Qingdao CityV. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY

Summarized information of shares of the CompanyType of Shares

Stock Exchange ofShares ListedStock Short NameStock Code

Stock ShortName BeforeVariationA-sharesShanghai Stock

Exchange

Haier Smart Home600690Qingdao HaierD-sharesFrankfurt Stock

Exchange

Haier Smart Home690DQingdao HaierH-sharesHong Kong Stock

Exchange

Haier Smart Home6690/

Section II General Information of the Company and Key Financial Indicators

VI. OTHER RELATED INFORMATION

Accounting firm engagedby the Company(domestic)

NameHexin Certified Public Accountants LLPBusiness Address24th Floor, Century Building,

No.39 Donghai Road West, Qingdao CityName of signing

accountant

Zuo Wei, Li Xiang ZhiAccounting firm engagedby the Company(overseas)

NameHLB Hodgson Impey Cheng LimitedBusiness address31st Floor, Gloucester Tower, The Landmark,

11 Pedder Street, Central, Hong Kong Special

Administrative RegionName of signingaccountant

Yau Wai IpNote:

Accounting firm engaged by the Company (domestic and overseas): Pursuant to the motion for the appointment of an auditorapproved at the Company’s 2023 Annual Shareholders’ Meeting, the Company engaged Hexin Certified Public Accountants LLP andHLB Hodgson Impey Cheng Limited to issue the China Accounting Standards and International Accounting Standards auditingreport respectively for the Company’s 2024 annual report.VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS IN THERECENT THREE YEARS(I) Key accounting data

Unit and Currency: RMB2023Key accounting data2024After adjustmentBefore adjustmentYoy change (%)2022Operating revenue285,981,225,203.93274,204,520,847.97261,427,783,050.104.29243,578,924,958.47Net profit attributable to

shareholders of the listedcompany18,741,120,122.9316,596,615,045.8716,596,615,045.8712.9214,712,054,763.24Net profit after deduction of

non- recurring profit orloss attributable toshareholders of the listedcompany17,804,732,809.6315,824,164,161.4315,824,164,161.4312.5213,962,931,853.78Net cash flows from

operating activities26,543,081,911.9626,535,780,568.3625,262,376,228.300.0320,256,557,145.86

Section II General Information of the Company and Key Financial Indicators

At the end of 2023At the end of 2024After adjustmentBefore adjustmentYoy change (%)At the end of 2022Net assets attributable toshareholders of the listedcompany111,366,118,999.17101,265,984,771.17103,514,153,535.049.9793,459,437,602.44Total assets290,113,822,824.61261,067,684,897.49253,379,859,977.9711.13236,017,821,177.50(II) Key financial indicators

2023Key financial indicators2024After adjustmentBefore adjustmentYoy change (%)2022Basic earnings pershare(RMB/share)2.021.791.7912.851.58Diluted earnings per share(RMB/share)2.021.781.7813.481.57Basic earnings per share

after deductingnon-recurring profit orloss (RMB/share)1.931.711.7112.871.50Weighted average return onnet assets (%)17.7017.2416.85

Increased by 0.46percentage points16.80Weighted average return on

net assets after deductingnon-recurring profit orloss (%)16.8116.0616.06

Increased by 0.75percentage points15.95

Explanation of the key accounting data and financial indicators of the Company as at the end ofthe reporting period for the previous three years

□ Applicable √ Not Applicable

Section II General Information of the Company and Key Financial Indicators

VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC ANDOVERSEAS ACCOUNTING STANDARDS

(I) Differences in net profit and net asset attributable to shareholders of listedcompany in financial report disclosed in accordance with InternationalAccounting Standards and China Accounting Standards

□ Applicable √ Not Applicable

There is no difference between the net profit and net assets attributable to shareholders of thelisted company presented in the consolidated financial statements disclosed in accordance withInternational Accounting Standards and China Accounting Standards.(II) Differences in net profit and net asset attributable to shareholders of the listed

company in financial statements disclosed in accordance with overseasaccounting standards and China Accounting Standards

□ Applicable √ Not Applicable

Apart from the financial statements prepared in accordance with International AccountingStandards, the Company did not prepare any financial statements in accordance with otheroverseas accounting standards.(III) Explanation on the difference between the domestic and overseas accountingstandards:

□ Applicable √ Not Applicable

IX. KEY FINANCIAL DATA OF 2024 BY QUARTER

Unit and Currency: RMBQ1(January-March)

Q2(April-June)

Q3(July-September)

Q4(October-December)Operating revenue71,866,159,446.5770,060,324,906.7170,811,687,817.1973,243,053,033.46Net profit attributable to shareholders ofthe listed Company4,772,967,900.815,647,250,488.414,734,229,394.773,586,672,338.94Net profit after deduction ofnon-recurring profit or lossattributable to shareholders of thelisted Company4,639,880,144.135,520,624,758.254,524,653,457.513,119,574,449.74Net cash flows from operating activities2,092,240,692.016,474,726,848.676,076,169,839.7711,899,944,531.51

Explanation on the difference between quarterly data and disclosed regular reporting data

√ Applicable □ Not Applicable

Section II General Information of the Company and Key Financial Indicators

During the reporting period (December 2024), the Company completed the consolidation of its logisticsbusiness (business combination under common control) and restated its financial data for the first threequarters in accordance with relevant accounting regulations.

X. NON-RECURRING PROFIT AND LOSS ITEMS AND AMOUNT

√ Applicable □ Not Applicable

Unit and Currency: RMB

Non-recurring profit and loss itemsAmount in 2024Amount in 2023

Profit or loss from disposal of non-current assets, includingthe write-off of provision for asset impairment–77,035,862.98–97,873,276.66Government subsidies included in current profit or loss,except for government subsidies that are closely related tothe Company’s normal business operations, conformed torequirements of state policies and granted according tospecific criteria, and have a sustained impact on theCompany’s profit or loss1,324,181,478.111,093,584,406.07Profit or loss arising from changes in fair value of financialassets and financial liabilities held by non-financial entities,and profit or loss arising from disposal of financial assetsand financial liabilities, except for effective hedgingactivities related to the Company’s normal businessoperations46,092,153.0220,829,305.37Net profit or loss of subsidiaries arising from businesscombinations under common control of the current periodfrom the beginning of the period to the date ofconsolidation–2,581,701.76Other non-operating income and expenses apart from theaforesaid items–139,979,862.69–71,400,519.77Less: Effect of income tax–178,092,484.16–150,225,774.23Effect of minority interests (after tax)–38,778,108.00–19,881,554.58Total936,387,313.30772,450,884.44

Section II General Information of the Company and Key Financial Indicators

For the Company’s recognition of items that are not listed in the “Explanatory Announcement onInformation Disclosure for Companies Offering Their Securities to the Public No.1—Non-recurringProfit or Loss” as non-recurring profit or loss items and the amount of which is significant, and fornon-recurring profit or loss items as illustrated in the “Explanatory Announcement on InformationDisclosure for Companies Offering Their Securities to the Public No.1—Non-recurring Profit or Loss”designated as recurring profit or loss items, reasons shall be specified.

□ Applicable √ Not Applicable

XI. ITEMS MEASURED BY FAIR VALUE

√ Applicable □ Not Applicable

Unit and Currency: RMB

ItemsOpening balanceClosing balance

Changes in thecurrent period

Affected amount toprofit of current

periodWealth management products490,968,101.81746,436,121.40255,468,019.5969,235,110.56Investment in other equity instruments6,403,694,954.775,986,688,663.46–417,006,291.3154,432,967.18Investment in trading equityinstruments243,224,439.64195,177,368.77–48,047,070.87–1,751,987.70Investment funds222,803,002.38294,404,349.3671,601,346.9841,204,390.70Financing receivables200,326,471.85360,069,391.56159,742,919.71–5,363,796.80Derivative financial instruments–101,059,175.5371,698,406.90172,757,582.4365,450,612.90Total7,459,957,794.927,654,474,301.45194,516,506.53223,207,296.84XII. OTHERS

□ Applicable √ Not Applicable

Section III Management Discussion and

Analysis

I. DISCUSSION AND ANALYSIS ON OPERATIONSPerformance Overview

In 2024, the Company achieved revenue of RMB285.981 billion, representing an increase of 4.29%compared to the same period in 2023. The growth in revenue was attributable to:

(1) China Market: We actively capitalized on the trade-in policy and leveraged high-end product and

brands, to realize double-digit growth in the fourth quarter, with Casarte revenue up by over30%. We strengthened strategic investments in Leader brand, focusing on building brandawareness among young consumers to drive strong revenue growth.

(2) Overseas Markets: We continuously expanded our market share across all regions, outperforming

the industry particularly in emerging markets such as Southeast Asia, South Asia, Middle Eastand Africa, where we focused on upgrading product mix and advancing retail transformation.

(3) Through external acquisitions and internal transformation, we accelerated the development of our

HVAC business. Strategic acquisitions of Carrier’s commercial refrigeration business (consolidatedin October 2024) and South Africa’s water heater leader Kwikot (consolidated in December 2024)have enabled us to expand our commercial refrigeration business and accelerate thedevelopment of water heater and purifier businesses in overseas markets. Global smart buildinggrew 15% to over RMB10 billion in revenue, supported by continuous investment in coretechnologies and ongoing product platform iterations.

(4) We actively seized development opportunities from improvement in living quality and transition to

low-carbon economy by building a comprehensive product portfolio including tumble dryers,dishwashers, water purifiers, home cleaning robots, heat pumps and recycling solutions.In 2024, the net profit attributable to shareholders of the parent company was RMB18.741 billion, up

12.9% from 2023; net profit attributable to shareholders of the parent company after deducting non-

recurring gains and losses was RMB17.805 billion, representing a 12.5% increase from 2023.

(1) The Company’s gross profit margin reached 27.8% in 2024, up 0.3 percentage points compared

to the same period in 2023. Margin improvement in domestic market was driven by lowercommodity prices, digitalization in procurement, R&D, production and sales coordination, andimproved product mix. Digitalized procurement and production capacity utilization alsocontributed to gross margin expansion in overseas markets.

(2) The selling expense ratio was 11.7% in 2024, a reduction of 0.2 percentage points compared to

the same period in 2023, leveraging digitally enhanced efficiency in marketing resource allocation,logistics and warehouse operations in China while increased spending in network expansion,promotions, and store upgrades causing selling expense to remain flat in the overseas markets.

Section III Management Discussion and Analysis

(3) The administrative expense ratio was 4.2% in 2024, an improvement of 0.1 percentage points

compared to the same period in 2023, driven by streamlined business processes and digitallyenhanced organizational efficiency.

(4) The financial expense ratio was 0.3% in 2024 (where expense is “+” and income is “

—”), anincrease of 0.2 percentage points compared to 2023, as increase in interest income generatedby better capital management was partly offset by higher interest payment.In 2024, the Company’s net cash flow from operating activities was RMB26.543 billion, flat year-on-year.I. Household Food Storage and Cooking Solutions

(1) Refrigerator business

In 2024, global refrigerator business achieved revenue of RMB83.556 billion, representing ayear-on-year growth of 2.01%. The Company maintained global leadership throughcontinuous innovation, targeted brand positioning, and efficient localized supply chaindeployment. The Company focused on advancing technologies including food preservation,built-in applications, and AI, to provide users with enhanced experiences and smart foodsolutions.Market Share Performance. According to GfK, the Company maintained domestic marketleadership as retail revenue share rose 1 percentage point year-on-year to 40.4% online,and 44.1% offline. According to Euromonitor, our overseas retail volume share was 14%,ranking first in 7 countries, among top three in 14 countries, and top five in 20 countries.Continuous technological innovation to lead the industryThe Company continued investing in cutting-edge technologies, focusing on preservationtechnology, integrated home appliance and furnishing design, energy efficiency and AIapplications to consolidate leadership. Our Multi-dimensional (temperature, humidity,oxygen, magnetic) Precision Control Technology Innovation and Industrialization forHousehold Preservation Appliances won the State Science and Technology ProgressAward, establishing a new technical benchmark in the industry. Our MSA nitrogen-oxygentechnology has achieved cellular-level freshness as fruits and vegetables could preserve upto 99% of nutrients after 7 days, while magnetic-controlled cooling and freezing technologycould preserve the taste and texture of raw meat after 10 days. For home appliance andfurnishing integration, our proprietary 594mm flat built-in technology does not only setindustry standard, but also has been widely implemented in the Casarte C-label series andHaier high-end products, positioning us at the forefront of integrated solutions for luxuryliving. The Company pioneered products featuring precision-controlled variable flowrefrigeration, frequency conversion, and new insulation technologies that meet the EuropeanA-20% energy efficiency standard. The Company also actively integrated cutting-edgetechnologies such as image recognition, voice interaction, and human movement detectionto create an AI large model specialized in food preservation, introduced personalizedelderly-friendly and gourmet chef modes, and offered customized over-the-air smartscenario upgrades. In 2024, we published the upgrade of IEC 63169 which was the

Section III Management Discussion and Analysis

industry’s first freshness preservation standard originally drafted by Haier and adopted inover 30 countries, the Company also took the lead in publishing the national preservationstandard GB/T 44494.The domestic market“Dual High-End Brand” strategy strengthened market leadership. The Company leveragedboth Haier and Casarte brands to maintain industry-leading market share through preciseproduct positioning and innovative marketing approaches. Casarte published Built-inRefrigerator White Paper and Consumer Guide, consolidating leadership with built-inspecifications and bottom-mounted refrigeration system after publishing Flat Built-inRefrigerators standard in 2023, contribution to 30% market share in segment pricedRMB10,000. The Haier Heyue (和悅) series, featuring innovative light-coloured exteriors,smart interactive lighting, and panoramic illumination design, increased the brand’s high-endmarket share. Our Mailang (麦浪) series drove sales of ultra-thin, zero-gap built-in productsbeyond 300,000 units with soft colour palette, storage segmentation and 594mm built-intechnology.The Company strategically launched content marketing campaign and promoted userengagement on social media platforms such as Douyin and Xiaohongshu, successfullyelevating Haier Mailang refrigerators to the top position in appliances trending list. CasarteUltra-realm (致境) refrigerators ranked among the top five in online searches, with brandawareness increasing by 124% year-on-year. Additionally, we strengthen brand influence byinteracting with premium users at Shanghai Haier Refrigerator Urban Experience Centre andhigh-end brand exhibition at Chengdu SKP.Overseas marketsIn 2024, the refrigerator business continued to gain momentum in major global markets andsteadily expanded our market share.The Company continued to strengthen market leadership in the U.S., Australia, NewZealand, Japan, and Pakistan. In Europe, the Candy brand successfully reshaped its imageand enhanced market competitiveness through innovative product series featuring Italiandesign. In India, our market share increased from 13% to 15% leveraging differentiatedhigh-end product portfolios and localized supply chain. In Vietnam, the Company doubledsales volume in mainstream capacity segment through precise product positioning andchannel expansion, elevating our overall market share to second place.In terms of product innovation, the high-end BM refrigerator launched in the U.S. becamean instant bestseller, while the Magic Cooling series in Southeast Asia rapidly gainedrecognition from both distributors and consumers, effectively driving market share growth.The continuous strengthening of supply chain competitiveness provided strong support forthe rapid market share growth overseas. Our Southeast Asian factories we significantlyimproved manufacturing efficiency through product mix and process optimization inSoutheast Asia and unlocked potentials in production capacity in South Asia.

Section III Management Discussion and Analysis

(2) Kitchen appliance business

In 2024, our kitchen appliance business remained committed to global smart kitchenappliances leader strategy, by driving innovation in product suites, built-in technologies, andsmart scenario-based solutions, to achieve global revenue of RMB41.184 billion.According to GfK, our market shares increased by 1 percentage point online and ranksthird with 0.2 percentage points expansion offline in China. According to EuromonitorInternational the Company’s global market share (by volume) reached 9.4% in 2024.The domestic marketThe Company actively integrated leading technologies of GE Appliances, FPA, and Candyto successfully overcome challenges such as range hood noise reduction, lifting technology,dry-fire protection, and automatic door opening for steam ovens to enhance userexperience and improve energy efficiency performance. By connecting global technologyand module platforms we were able to promote the application of advanced technologiesand modules in the Chinese market, spearheading industry trends. In 2024, Casarte’sUltra-realm (致境) range hood, with its seamless built-in design, drove a 400% salesvolume growth in the segment priced above RMB7,000. The Xingyue series, with itsoutstanding design and performance, successfully captured the largest market share in theRMB6,000 price segment.We focused on enhancing network capabilities and sales team competencies to supportbusiness growth. We upgraded 1,000 experience centres, improved the display and salesof Ultra-realm (致境) and Galaxy (銀河) series in store, and reinforced retail capabilities toincrease conversion ratio.The Company improved production efficiency and capacity by establishing automatedproduction lines and optimizing global supply chain while reducing production costs byincreasing in-house production of stove glass, sheet metal, and injection moulding.Overseas marketsDespite weak demand in the U.S., the Company enhanced brand competitiveness andmarket performance. New high-end products launched by GE Appliances continued to gainmarket recognition: the GE oven range with easy-to-clean baking tray won the USA TODAY“2024 KBIS Reviewed Awards”; the Café countertop air fryer oven was selected for Oprah’sannual gift list; and Profile and Café ovens were named best products of the year byReviewed.com, strengthening our position in the premium market.

Section III Management Discussion and Analysis

In Australia and New Zealand, FPA and Haier brands delivered outstanding performance: InAustralia, the two brands’ market share increased by 2 percentage points, propelling us tonumber one. Dishwasher market share grew by 4 percentage points, while kitchenappliances increased by 1 percentage point. In New Zealand, our dual brands maintainedtheir top position and Haier brand achieved double-digit growth across major retailchannels.In Europe, the Company successfully entered high-end retail channels including Darty inFrance and ECI in Spain, while expanding into professional kitchen channels in Italy. Wealso made progress in Southeast Asia and South Asia.II. Household Laundry Management SolutionsIn 2024, our laundry business continued to strengthen technological innovation, productupgrades, market expansion, and supply chain optimization. We accelerated the digital inventoryand marketing transformation to enhance omni-channel retail capabilities in the domestic marketwhile strengthening product innovation and channel expansion to achieve stable growth overseas.In 2024, global revenue reached RMB63.321 billion, representing a year-on-year increase of

2.98%.

According to GfK, the Company continued to lead in offline market in China. Online retail sharereached 37.9%, up 1.1 percentage points year-on-year. According to GfK and data fromdistribution channels, we captured leading market shares in multiple countries including Australia(29.5%), New Zealand (41.6%), and Pakistan (35%).The Company capitalized on the trends toward large capacity, smart, and integrated washing anddrying solutions through technological breakthroughs and pioneering products. To address thepost-washing odour issue in front-load washers, we introduced “Air Navigation Technology,”which refreshes the air inside the drum every 2 minutes. To solve the lint clogging problemduring drying, we implemented AI algorithms and multi-connected PTC heaters that adapt tomoisture levels, preventing temperature-related damage. The Haier LangJing (朗境) X11 serieswashing machine, equipped with these innovative technologies, received A-60% VDE certificationfrom the German Association for Electrical Engineering, making it one of the most energy-efficientwashing machines globally.The domestic marketThe Company enhanced operational efficiency and marketing effectiveness through digitalinventory management and content marketing to improve market responsiveness and userconversion. Through multi-brand synergy, we consolidated high-end market share, expanded intoboth youth and senior consumer segments to increase market share. We launched premiumwashing machines priced above RMB10,000 to capture a dominant 80.4% market share. We alsointroduced products with simplified operations and practical functions to meet the needs ofelderly consumers.

Section III Management Discussion and Analysis

The Company improved efficiency and supply chain stability by increasing the in-house production ratioof core components and optimizing spatial layout. During the reporting period, we achieved 100% in-house manufacturing of twin-tub washing machines in the factory in Chongqing. Through balancedproduction, equipment load optimization, and production-research collaboration, we achieved over 95%equipment utilization throughout the year. Additionally, we achieved self-manufacturing of sheet metalcomponents through the construction of new factories and resource integration in Sino-GermanEcopark Phase 2.Overseas marketsIn the overseas market, we responded to global demand by strengthening product innovation andexpanding distribution channels while continuously developing our global supply chain to enhanceagility and competitiveness. In the European market, we launched a heat pump washer-dryer combothat reduces energy consumption by 10% compared to the previously most energy-efficient model.This product addressed the problem of fabric damage caused by traditional drying methods,demonstrating our commitment toward high-end smart solutions. In the U.S., we introduced theCombo Core washer-dryer, which is 50% more energy-efficient than traditional vented electric dryersas it can complete washing and drying in just two hours without the need to transfer clothes. InJapan, we established 100 stores, with the sales volume of heat pump washers soared by 128%year-on-year. In Latin America, we expanded our fully automatic product line, driving a 35% increase inorders across all categories. We also enhanced supply chain agility and competitiveness, with Egyptianfactory commencing operations in 2024 to serve the Middle East and African regions.III. Air SolutionsDuring the reporting period, the Company realized sales revenue of RMB49.616 billion, up

7.62%.

(1) Home air conditioner business

In 2024, our home air conditioner business continued to advance R&D and modulartechnology while strengthening supply chain integration, thereby solidifying the foundationfor long-term development. In the Chinese market, we accelerated business transformationand developed comprehensive online retail capabilities. For overseas markets, westrengthened brand positioning, expanded product categories, and established franchisenetworks to achieve steady growth.We continued to increase R&D investments based on user demand to maintain leadershipin energy efficiency, health, and smart technologies, thereby building competitiveness inwhole-house smart air solutions. The Company has developed Positive Cycle Heat FlowDefrosting Technology for Heating, which achieves 24-hour heating with indoor temperaturefluctuations controlled within 0.5?C, addressing pain points in the Yangtze River region andother low-temperature, high-humidity areas where significant temperature fluctuations (5–9?C) was caused by frequent defrosting during winter. We developed core competitivenessin smart air ecosystems through AI technology integration, pioneering sound wave humansensing technology that allows airflow to follow people without direct blowing at them. Wealso developed AI energy-saving technology that enables air conditioners to operate on just2 kWh of electricity per day, saving up to 46% energy usage.

Section III Management Discussion and Analysis

The domestic marketWe launched star products such as Haier Smart Airflow (聰明風) and Casarte Ultra-realm(致境) series, the former uses dual-power mechanical arms to control airflow, achieving270? multi-directional air distribution without blowing directly at people to provide users withcomfortable, powerful, and energy-efficient air solutions leveraging AI energy-savingtechnology based on specialized air database and AI cloud-based model.Challenged by sluggish demand and intensified competition, the Company focused onaddressing consumer needs through business innovation, content marketing, and multi-brand initiatives to enhance end-to-end operational efficiency and improve trafficconversion. We pioneered the use of digital inventory in POP stores, facilitating distributorsto operate with lighter assets, shortening response lead-time, and accelerating productturnover. We precisely forecasted demand, dynamically adjusted production, and logistics toreduce waste leveraging big data models.We catered to specific user demand through multi-brand coordination. Casarte airconditioner reinforced its All Copper Components and Gentle Breeze Technology to expandits high-end market share. Leader air conditioner focused on Generation Z by creating thepopular “Ultra Energy-Saving” series. Through innovative social media marketing, Leadermaintained rapid growth while strengthening competitiveness in product lineup, user trafficacquisition, and conversion online.The Company accelerated supply chain integration, increased the in-house production ofcomponents, and strengthened cost control and improved global supply stability.Zhengzhou compressor factory commenced production in April 2024 with an annualcapacity of 2.24 million units. We also doubled in-house production of PCBs by expandingZhengzhou facility and establishing a new base in Chongqing.Overseas marketsThe Company committed to a multi-brand strategy while driving retail transformation,expanding professional channels, and localizing supply chain to enhance competitiveness inoverseas markets, thereby achieving sustainable growth with improved profitability.We continued to provide users with smart, health-oriented, and energy-efficient whole-house air solutions, driving product mix upgrades. In India, Haier’s price index exceeded100 for the first time, and our market share in TOP10 high-end chain stores reached

15.2%, ranking second in the industry.

We improved professional capabilities and expanded professional channels to achievemarket share leadership in Pakistan, Thailand, and Malaysia.We continued to enhance localized manufacturing capabilities. Our Indonesia andBangladesh factories have completed their expansion, while the Egypt factory has rapidlyimproved efficiency since commencing operations in March 2024. The second phase projectin Thailand has also been launched to increase risk resilience.

Section III Management Discussion and Analysis

(2) Smart building business

During the reporting period, global smart building revenue exceeded RMB10 billion, drivenby continuous investment and breakthroughs in compressors, iterations of MRV platforms,and expansion in overseas markets.China IoL places us among the top three in the industry as the Company’s domestic andexport combined market share increased by 1 percentage point to 9.3% in 2024.We strengthened in-house R&D and manufacturing of core components, establishedleadership in energy-saving, low-carbon, and smart technologies to solidify foundation forgrowth. The Company’s proprietary centrifugal compressors deliver industry-leadingperformance and we have established in-house development capabilities for corecomponents such as compressors. We addressed comfort, energy efficiency, and reliabilitychallenges in MRV units under varying application environments by developing compactcascade high-efficiency heat exchange, constant-temperature frost suppression, andcomfortable humidity control and energy-saving technologies which significantly improvedproduct safety and reliability, placing us at forefront of the global industry.The domestic marketThe continuous upgrade of product lineup has driven rapid revenue growth and improvedprofitability. We launched the new generation Max IoT multi-connected units, achievingbreakthroughs in four core technologies of high-efficiency heat exchangers, air supply,temperature and humidity control, and water-fluorine-electricity separation thermalmanagement systems to maximize the capacity of individual module to 48 HP. Theproduct won the only gold award in its category at the 2024 China Refrigeration Expo. Ithas already been applied in several projects including Fujian Future Technology Building,Huizhou Smart Industrial Park, and Yancheng Robot Industrial Park. The Company ownsproprietary property rights of core components of air suspension centrifugal chiller andachieved integrated R&D, production, and distribution from compressors to complete units.This product line was successfully included in the “Green Technology Promotion Catalog(2024 Edition)” issued by the National Development and Reform Commission for excellentenergy efficiency performance.

Section III Management Discussion and Analysis

The Company focused on network expansion by enhancing distributor operationalcapabilities and building professional solution systems to achieve growth despitechallenging market conditions. We expanded network coverage and quality by enhancingend-to-end user service capabilities and implementing differentiated network management.We helped customers signing multiple projects by building end-to-end service capabilities;while strengthening long-term engagement with strategic customers and hosting industryconferences in collaboration with design institutes to establish market insights and build anopen, efficient ecosystem that improves project acquisition. The establishment of the HVACcustomer club and a tiered distributor service system enabled us to respond to demandquickly, address complaints promptly, and implement clear promotion and eliminationmechanisms to maintain network competitiveness.Overseas marketsThe Company accelerated development of differentiated products and improvedprofessional channel capabilities to unlock potentials and achieve favourable growth.We optimized product platform design, improved product efficiency and profitability byenhancing energy-efficient, healthy, comfortable, convenient, and smart experience. Wesecured a contract for a data centre in Malaysia with a winning bid scale of 12,000refrigeration tons. We utilized the Company’s air-cooled magnetic levitation technology andoptimized product structure based on customer requirements, enhanced productperformance through integrated cooling system, and reduced maintenance costs with anoil-free structure. In the U.S., we launched ductless products featuring Smart HQ controlsand convenient OTA functions, achieving–22℉ low-temperature heating, 100% heatingcapacity at 5℉, and SEER2 ratings up to 27, all of which have been well-received.In the European market, the Company accelerated business development by expandingDistrict Service Centre. In Southeast Asia, we drove business growth through multi-category combinations and enhanced local professional service capabilities. In the U.S., weexpanded professional channels with comprehensive HVAC product solutions to ensuresustainable business development.IV. Water Heaters & Purifiers

In 2024, global water heater and purifier revenue reached RMB16.175 billion, representing ayear-on-year increase of 5.47%, driven by product innovation, business model transformation,digitalization, and operational efficiency improvements in the domestic market and strategicacquisition overseas.According to Gfk, the Company’s offline retail share was 45.2%, up 1.3 percentage points year-on-year; online retail share was 40.3%, up 1.1 percentage points year-on-year in China.The Company achieved continuous breakthroughs in temperature control, mineral health, energyefficient as well as noise control technologies, and launched multiple star products.

Section III Management Discussion and Analysis

Haier’s “Peach Blossom Water” (桃花水) series of electric water heaters has won widespreadacclaim from users for its excellent skin-nourishing effects and comfortable, constant-temperaturebathing experience. The “Butterfly Dance” (蝶舞) series of gas water heaters provide stable andquiet hot water with high efficiency and energy-saving advantages. The “Fresh Water” (鮮活水)purifier series ensures users enjoy fresh, pure drinking water through advanced filtrationtechnology, with annual sales reaching 100,000 units, making it a mainstream market choice.The domestic marketThe Company fuelled business growth by aligning with industry trends and evolving demandsthrough content marketing, distribution channel reform, and improving operational efficiency. Bycollaborating across the value chain, we highlighted products in everyday language and relatableformats. Through in-depth exploration of user needs and market trends, we successfully createdpopular water heater series such as “Peach Blossom Water” and “Butterfly Dance”, and the“Fresh Water” purifier series, establishing high-quality and influential IPs and content.Haier water heater and purifier streamlined SKUs, focused on popular products, eliminatedineffective models, and enhanced production efficiency. By optimizing product lines andconcentrating resources on developing bestsellers, we increased individual model output by 5%and optimized costs.Overseas marketsThe Company strengthened product innovation and localized professional capabilities whileentering key growth markets through acquisitions.We strengthened differentiated innovation. In the European market, to meet users’ demands forhealthy bathing, we launched water heaters with independent skincare certification that transformwater from cleansing to nourishing. In North America, our heat pump water heaters, featuringadvanced heat pump technology and high energy efficiency, has meet the new U.S. energyconsumption standards set for 2029. We also developed electric water heaters with valvestructures that precisely control water temperature at below 40?C, meeting the specific bathingneeds of users during Ramadan.During the reporting period, the Company acquired the century-old Kwikot brand which held a58% market share in South Africa. This acquisition accelerated our development in the local andEMEA markets, by enhancing global capabilities in professional water heating solutions.

Section III Management Discussion and Analysis

V. China Operations:

In 2024the company advanced its retail transformation by launching key initiativessuch as one-inventory and content-driven marketing, while enhancing its multi-brandstrategy to meet the needs of a diverse consumer base.One-inventory InitiativeWith content-based e-commerce channels on the rise, distributors seek faster response, greatercustomization, and tighter sales-logistics alignment. The Company built an end-to-end digitalplatform covering order management, operations, warehousing, distribution, and installation. Thisenabled full-network inventory sharing and asset-light operations boosting SKU efficiency. InDecember 2024, RRS Supply Chain Technology Co., Ltd. and its subsidiaries were consolidated,forming a unified logistics system that fully integrates personnel, systems, and data to accelerateretail model transformation.The Casarte BrandCasarte enhanced its brand strength through proprietary technology, expanded product suites,and digital marketing upgrades. We actively capitalized on the trade-in policy opportunities in Q42024, and Casarte’s retail revenue increased by 12% for the year of 2024.New Ultra-realm (致境) and Xingyue (星悅) suites addressed consumers’ demands for design andconnected living, driving a year-on-year 64.6% surge in suite sales. On Xiaohongshu, Casarteranked No.1 in high-end appliance searches.The Leader BrandIn 2024, the Leader brand focused on the lifestyle scenarios of young consumers. Throughproduct innovation and enhanced marketing, we dedicated ourselves to creating personalizedspaces and free lifestyles for Generation Z, achieving year-on-year increase of 26% in retailsales.Focusing on young consumers’ demands for personalized, minimalist, and efficient lifestyles, theCompany launched Cloud (雲朵) series washing machines with 45-minute efficient wash-and-drycycles and air conditioners with 180? rotating wing. We strengthened our youthful brandpositioning by launching the “Lifestyle Ambassador” campaign, manifests “Your Life, Your Way”.Additionally, the Company deepened partnerships with Douyin and Kuaishou to increaseexposure. Our monthly GSV on Douyin exceeded RMB100 million, with A3 user

data basegrowing by 55%, effectively promoting synergies between the brand and our business.

A3 user: users frequently interact with brands online

Section III Management Discussion and Analysis

The San Yi Niao Platform

San Yi Niao focused on the smart home strategy by implementing solutions that integrated smartappliances and home furnishing. We enhanced competitiveness through product solutions, outletsupgrades, platform improvements, and smart technology advancements. Our integrated cabinetsolution in partnership with Boloni has strengthened whole-house customization and high-endsuite product sales. In 2024, San Yi Niao’s suite product sales reached 57% of total, withCasarte accounting for 35% and pre-installation products for 40%. Our Smart Home APPconcentrated on improving user experience, while Smart Home Brain upgraded connectivity andvoice interaction. HomeGPT helped position our Connoisseur (鑑賞家) PRO suite product seriesas an industry leader in AI applications.During the reporting period, we introduced advanced large model tools to San Yi Niao,enhancing voice interaction and scenario data-driven capabilities. Through vertical domaintraining, we made the application of AI technology more precise and efficient in householdsettings. We upgraded the AI infrastructure with service-oriented and modular improvements,increasing data processing efficiency and enabling data-driven personalized services. Weenhanced voice interaction technology to achieve multi-intent recognition and more natural,complex conversations. Additionally, we incorporated visual recognition technologies such as AIEye to facilitate identification and monitoring of ingredients and environments, along with variousscenario applications.VI. Overseas MarketsIn 2024, the Company achieved revenue of RMB143.814 billion in overseas markets,representing a year-on-year increase of 5.43%.During the reporting period, the Company strengthened product innovation and high-endtransformation by leveraging R&D capabilities, integrating resources and technologies, and gaininguser insights to deliver industry-leading product solutions. In terms of retail channeltransformation, we promoted innovations online and offline while enhancing high-end productdisplays and standardization in stores. We also seized new e-commerce opportunities toaccelerate global retail transformation. The Company increased global brand recognition bysponsoring the Australian Open and French Open. We have over 20 million followers acrossmainstream social media platforms overseas, continuously enhancing our brand influence throughinnovative content.

1. North America

During the reporting period, the Company recorded sales revenue RMB79.529 billion whilesolidifying its market leadership in several categories including Range, Refrigerator, Freezer,Clothes Care and Dishwasher.

Section III Management Discussion and Analysis

The Company continued to unveil future-proof solutions that embrace sustainability,inclusion, and wellness at home. Through modular design, the company launched newApex freestanding range in early 2024, expanding its retail sales network and solidifying itsmarket leadership in cooking appliances. Its unique EasyWash? oven tray design won theBest Slide-In Range Award from TWICE VIP Award. Leveraging innovative Active SmokeFiltration technology, smoking food on kitchen countertop is made possible with GE ProfileSmart Indoor Smoker, which received Best Product award at CES 2024; facilitated bymajor investment in manufacturing base, a new stainless tub Dishwasher line was launchedto serve consumers seeking cleaner aesthetic design and enhanced functionality; buildingon the wild popularity of Opal Nugget Ice Makers, GE Profile Opal 2.0 Ultra features newindustry-leading enhancements to reduce maintenance and optimized design to producemore crispy nugget ice; the Company also expanded its industry-leading portfolio of multi-door refrigerators with the launch of two quad door models including CAF?? ENERGYSTAR? Smart Quad-Door which was selected as the Best Refrigerator by Reviewed.com;GE Profile UltraFast Combo won the Innovation Award at CES 2024 for utilizing ventlessheat pump technology which not only revolutionizes the way to wash and dry a large loadof clothes, but also delivers 50% more energy efficient drying. All these innovationachievements helped the Company win The Home Depot Partner of the Year award andrank first in kitchen appliances department at Lowe’s. Meanwhile, the Company continuedits leading position in the contact channel by signing up more new builder customers.The Air and Water business realized 70% growth with commercial air conditioners and 10xrevenue growth with Unitary AC, driven by the successful launch of comprehensive HVACsolutions. Meanwhile leveraging expertise as a leading cooking manufacturer, the Companycreated a range line-up with reliable performance and user-friendly controls for theRecreational Vehicle (RV) Industry and realized 24% year-over-year revenue growth. TheCompany also introduced Bodewell, a personalized appliance care service that sets theindustry standard by offering personalized care through its unique factory service networkfor all appliances, demonstrating our commitment to building relationships, earning trust,and delivering exceptional care.Through collaboration with partners including Savant and Tantalus Systems, the Companylaunched GE Appliances EcoBalance System, integrating innovative energy-efficientappliances and smart home products, paired with energy demand management, solarpanels, energy storage solutions and electric vehicle chargers. The system not only helpsreduce strain on electrical grids, but also cuts energy costs for homeowners and reducescarbon emissions.The Company integrated Google Cloud’s generative AI platform, Vertex AI, into SmartHQapp to add new features, including Flavorly AI, which creates personalized recipes andsimplifies the cooking experience based on consumers’ dietary preferences and existingingredients in their kitchen.In January 2024, GE Appliances was named “Smart Appliance Company of the Year” for 7consecutive years, and its SmartHQ app received the “IoT Innovation Award—ConsumerProduct of the Year” award at the 8th annual IoT Breakthrough Awards program.Additionally, for the 4th time, the Company also secured the “Consumer CybersecuritySolution of the Year” in October 2024.

Section III Management Discussion and Analysis

2. Europe

During the reporting period, the Company recorded sales revenue of RMB32.089 billion, up

12.42% compared with the same period in 2023.

The growth was driven by committed product and service upgrade including successfullaunch of multi-door refrigerators which contributed to market share reaching 40%,acceleration of New Candy initiatives such as Candy Fresco 700 that addresses consumerpain points in capacity, energy efficiency and preservation with innovative Panaroma Light,circle fresh air flow and Adaptive Humidity Area, was an immediate bestseller with numberone in Hitlist in Spain and top ten in Italy only three month after launch; the new X series11 washing machine contributed to market share expansion from 0.6% to 8% in unit priced�1,000 and above in Spain. A new line of H2O dish washers featuring energy efficiencytechnologies have been introduced to help Haier brand gain 12% market share in premiumsegment. The mite remover was well received by the market with sell-in volume of over60,000 units. The Company also made efforts to increase the number of outlets andimplement sellout management system that help market share reach 17%, ranking numberone in premium segment in Spain. Significant breakthroughs have been made in EasternEurope where premium X series washing machine and I-Proshine dishwashers have beenintroduced in Poland to give a complete makeover to instore displays; strategic partnershipincluding 20 premium store-in-stores and 1 concept showroom was formed with thebiggest distributor ALTEX in Romania and the introduction of three-door and multi-doorrefrigerators contributed to 50% market share and exponential growth in Chez Republic.This year the Company renewed strategic partnership with top-tier events including Roland-Garros, the Nitto ATP Finals and several ATP tournaments; the Company also became theOfficial Appliance Sponsor of the Davis Cup Finals 2024 Tournament in Malaga, to promotepremium hospitality experience, brand exposure and fan engagement.For the second consecutive year, Haier Europe is honoured as a Top Employer in the UKin recognition of its commitment to a better world of work and outstanding peoplepractices.

3. South Asia

During the period, the South Asian market generated revenue of RMB11.525 billion,representing a year-on-year growth of 21.05%.IndiaThe Company led the Indian market with remarkable 30% revenue growth in 2024. Thisachievement was attributed to the effective implementation of our high-end productstrategy including large capacity front-load washing machines which performed particularlywell, driving continuous improvement in average selling prices.By combining accurate market insights with strategic product portfolio, we continued todevelop bestselling items and optimize our product matrix. Our cross-category lineup ofhigh in demand products includes powerful air conditioners with 5-star energy efficiency,and three-door side-by-side refrigerators.

Section III Management Discussion and Analysis

We achieved remarkable results in distribution network expansion through successful onlineand offline strategic implementations. While maintaining rapid growth online, channelcoverage increased by 7% by expanding in national chain stores and traditional offlinechannels to establish strong presence in the entire distribution network in India.PakistanThe Company achieved 20% revenue increase in local currency and strengthenedleadership with 45% market share. This was accomplished through end-to-end costreduction, efficiency improvements, and lean management, which drove retail and premiumbrand transformation to boost high-end market share and price index.

4. Australia & New Zealand

During the reporting period, the Company recorded sales revenue of RMB6.642 billion, up

8.14%.

The Company also gained 2 percentage points market share and rose to number one inAustralia partly driven by robust performance of Haier brand with market share gain of 3percentage points in laundry, 2 percentages points in refrigerators, 4 percentage points indish washers and 5 percentage points in kitchen appliances. The Company continued tolead in New Zealand with double-digit growth from Haier brand, making it the fastestgrowing company in the local market.The Company continued to introduce cutting-edge product across categories includingHaier 8 star energy efficiency refrigerator which was well-received by distributors includingTGG and HVN, contributing to 8 percentage points market share gain in its specificcapacity segment; Gemini washer and dryer combo and Hero series, which was Haier’sfirst unit with retail price over AUD $3,000, contributing to 15 percentage points share gain;and Haier’s ultra-thin heat pump dryer featuring 7 star energy efficiency performance thathelp grow market share by 9 percentage points. FPA also introduced unparalleled range ofkitchen appliances including oven, microwave, and steamer. On the operational front, theCompany upgraded digital dashboard to optimize sell-in & sell through performances,improve data analysis and decision-making process while utilizing digital paymentmanagement, AI forecast, FPA GPT and warehousing management system to maximizeorder management and create the ultimate experience for both customers and consumers.On 25th November, the Company became the official TV and Appliance partner of theAustralian Open and Summer of Tennis events. The partnership aims to deliver immersivefan experiences by integrating advanced technologies in home appliances, includingkitchen, laundry, and climate control systems, with world-class tennis.

5. Southeast Asia

During the reporting period, revenue from the Southeast Asian market grew 14.75% toRMB6.633 billion.High-end products accounted for 38% of total volume sold in Malaysia and high-endproducts grew by 20% in volume in Vietnam.

Section III Management Discussion and Analysis

The Company launched T-door and French door refrigerators, high-end UV COOL VRA airconditioners in Malayia; upgraded from self-cleansing to UV anti-bacteria air conditioners inThailand; introduced UVC Pro and smart Eco air conditioners, large drum front-loadwashing machines, 700mm wide TM refrigerators equipped with magic zoom compartmentsand removable ice box in Vietnam where Aqua air conditioners also grew 40% in volume;and launched new series of multi-door refrigerators to create the ultimate food preservationexperience in Indonesia.The Company commenced construction of air conditioner factory in Thailand; assembledsmart manufacturing lines with lower costs and greater efficiency for refrigerators andwashing machines in Aqua facilities in Vietnam; upgraded pre-processing and completedpress machine project in refrigerator factory to increase cost competitiveness whilerenovated air conditioner production line to improve output by 30% in Indonesia.

6. Middle East & Africa

During the period, revenue from the Middle East and Africa grew 38.25% year-on-year toRMB2.674 billion.The Company drove rapid growth through localized manufacturing, upgraded marketoperations, and strategic acquisitions. The Company focused on brand and product mixupgrades, promoting the penetration of large-diameter washing machines and inverter airconditioners, while improving operations and retail capabilities to enhance brand image andpromote mid to high-end products. In Egypt, the Company’s eco-park phase one projectcommenced production to ramp up manufacturing of air conditioners, washing machines,and televisions thus unlock potentials in local market and neighbouring countries. In SaudiArabia, the Company addressed distribution system pain points and implemented channelreforms, significantly improving whole-seller incentives and revenue growth. In South Africa,the Company completed the acquisition of Electrolux’s water heater business that held thelargest local market share, leveraging Kwikot brand’s distribution channels to promote thedevelopment of Haier refrigerators, washing machines, and other white goods throughoutSouth Africa and neighbouring countries.

7. Japan

During the reporting period, the Company recorded sales revenue of RMB3.426 billion,ranking 2nd with 16.5% market share in refrigerator by volume: 1st in freezers with 40.1%and 3rd in washing machine with 17.0%.The Company introduced a collection of innovative products including TX refrigerator seriesin March with industry-leading full-space preservation utilizing smart temperature andhumidity control technologies; the ultimate compact 8kg washing machine with best-in-class performance leveraging PTC drying module, 10kg heat-pump dryer combo led themarket with 47.2% share in 10kg washers while sales volume of large TX refrigeratordoubled. The Company also announced Yuzuru Hanyu as the new brand Ambassador tomark the launch of campaigns across multiple platforms to capture maximum attentionduring year-end shopping season.

Section III Management Discussion and Analysis

VII. Deepening Digital Transformation and Implementing Cost Optimization Initiatives toEnhance End-to-End Cost and Expense CompetitivenessIn 2024, the Company focused on operational cost reduction, efficiency improvement, and userexperience enhancement. We deepened the end-to-end digital transformation of our domesticoperations to unlock reform dividends. Additionally, we initiated digital transformation in overseasregions by implementing our domestic operational model to improve operational standards andprofitability in overseas markets.On the market side, we continuously upgraded our business model to enhance operationalcapabilities. (1) We upgraded our offline channel model by actively leveraging national subsidyopportunities and implementing the Smart Home Cloud Store OTO model across more than20,000 stores, generating retail sales of RMB450 million. (2) We advanced full-chain digitalmarketing to improve our new media matrix operations, smart content creation, and leadmanagement capabilities, achieving over 1.4 billion new media impressions with a 24.7% leadconversion rate.In our service platform, we optimized resource allocation through smart tool applications,enhancing service efficiency and user retention. (1) In customer service operations, weestablished smart customer service capabilities by building a knowledge base system,standardizing interaction scenarios, and implementing smart interaction solutions. In 2024, theproportion of smart interactions increased by 25.52% year-on-year, while smart resolution ratesimproved by 10.35%. (2) In after-sales services, we completed the development of digitalcapabilities including smart scheduling, continuous online availability, and full-chain spare partsdigitalization. As a result, user complaints decreased by 33.22% year-on-year, and service costsdeclined by 5.2%.In our supply chain platform, we built smart forecasting capabilities to achieve agile response tomarket orders. We connected planning, marketing, manufacturing, procurement, and logisticsnodes to establish an algorithm-driven smart prediction model and a cloud-based smart analysisoperating system, which enhanced our order forecasting capabilities. We implemented a systemwhere production scheduling information is visible and accessible within T+6 weeks, withautomatic inventory replenishment and smart review capabilities, which improved our on-demanddelivery efficiency. In 2024, our domestic order response cycle improved by 13%, while thecustomer funds cycle decreased by 7 days.We replicated our domestic digitalization framework in overseas markets to enhance regionalcompetitiveness and profitability. (1) We established overseas customer experience platforms inThailand, Middle East and Africa, enabling online management of pricing policies and terminalsales. (2) We implemented digital systems across 17 overseas factories, improving capabilities inprocurement strategy, production planning, manufacturing execution, commodity storage, andfinished product warehouse management. (3) In customer service, by leveraging AI large models,we achieved precise guidance and rapid inquiry resolution for customer issues, reducing manualservice workload and improving customer service staff efficiency, with average conversationduration shortened by 15%.

Section III Management Discussion and Analysis

In 2024, the Company launched the Cost Optimization Project, benchmarking against globalleading practices to restructure our objectives. We drove implementation through organization-wide collaboration, systematically enhancing our cost competitiveness.In R&D processes, we optimized the product BOM lifecycle and built dynamic cost monitoringmodels to perform in-depth analysis of component cost structures and drive improvements. Weenhanced product platform management by eliminating over 1,500 redundant long-tail modelsand reducing over 5,000 specialized material codes, strengthening our product costcompetitiveness from the source. On the procurement side, we increased the openness of oursupplier network. By establishing an order journey platform, we promoted transparencythroughout the entire supplier process from ordering, delivery, and warehousing to usage andsettlement, thereby improving efficiency and reducing hidden costs.II. INTRODUCTION OF THE INDUSTRY WHERE THE COMPANY OPERATESDURING THE REPORTING PERIOD(I) Industry Overview for 2024

1. The domestic market

Following the implementation of the national home appliance trade-in policy since August2024, the industry has gradually recovered from the first half of the year. According toAVC, China’s home appliance retail sales across all categories (excluding 3C products)reached RMB907.1 billion in 2024, representing a year-on-year increase of 6.4%.

Home Air Conditioning IndustryAccording to AVC, the home air conditioner industry recorded retail volume of 59.78 millionunits in 2024, a year-on-year decrease of 1.8%, while retail value reached RMB207.1 billion,down 2.2% year-on-year. In the first half of the year, industry demand was hampered byrainy weather in southern regions and cautious consumer behaviour. High channel inventoryintensified price competition. Beginning in August, national subsidy policies were graduallyimplemented, effectively stimulating market demand.High-efficiency air conditioners were increasingly favoured by consumers with AnnualPerformance Factor (APF) becoming a key consideration, driving market share growth.Meanwhile, innovative products such as fresh air conditioners and integrated airconditioning systems continued to emerge, meeting consumers’ pursuit of healthier andmore comfortable living environments with product mix upgrade.Refrigerator IndustryIn 2024, the refrigerator industry achieved steady growth driven by replacement demandand continuous innovation. According to AVC, annual retail volume reached 40.19 millionunits, a year-on-year increase of 4.9%, while retail revenue reached RMB143.4 billion,representing a 7.6% year-on-year growth.Product upgrades primarily focused on built-in solutions, fresh food preservation, and smartfeatures to enhance users’ quality of life. Preservation technology emphasized nutrientretention and quality food storage, while appearance design incorporated new materials that

Section III Management Discussion and Analysis

harmonize with home environments, improving both aesthetics and functionality. In 2024,the market penetration of flat built-in refrigerators increased with from 7.1% to 20.1%online and from 12% to 38.9% offline.Laundry Care IndustryAccording to AVC, China’s washing machine industry had a retail volume of 42.97 millionunits in 2024, representing a year-on-year increase of 7.3%. Retail revenue reachedRMB101.4 billion, up 7.6% year-on-year. Tumble dryers demonstrated strong growthmomentum in 2024, with retail volume surging 30.6% year-on-year to 2.83 million units,and retail revenue rising 25.7% year-on-year to RMB16.2 billion.The washing machine product mix continued to improve driven by expanding front-loadwashing machines, whose online retail share rose by 4.8 percentage points to 44.1%, whileoffline retail share increased by 8.2 percentage points to 51.2% in 2024 according to Gfk.Industry trends continued to evolve towards larger capacity, multi-functionality, smart, andaesthetic appeal. Front-load washer-dryer combos maintained rapid growth, with GfK datashowing the market size for these combo products increased by 65.1% year-on-year toRMB8.4 billion. Product development was accelerating towards ultra-thin, flat built-indesigns to achieve better integration with home furnishings.Kitchen Appliance Industry

(1) Range hood and stove industry

According to AVC, the overall retail sales of range hoods reached RMB36.2 billion in2024, representing a year-on-year increase of 14.9%, with retail volume reaching

20.83 million units, up 10.5% year-on-year. The gas stove market achieved retail sales

of RMB20.4 billion, growing 15.7% year-on-year, with retail volume of 24.29 millionunits, up 15.2% year-on-year.Product upgrades focused on smart, integrated home appliances with furnishings, andhigh energy efficiency to meet consumer demands for operational convenience andspace utilization. Smart features such as gesture sensing, hood-stove integration, andAPP control continued to increase. New product styles including ultra-thin modelsand 7-shaped hoods were gaining market share. High-power, energy-efficient gasstoves gained popularity, with dry-fire prevention feature becoming a keyconsideration for consumers.

(2) Dishwasher industry

The dishwasher industry continued to experience rapid growth. According to AVC,retail sales reached RMB13.2 billion in 2024, representing a year-on-year increase of

17.2%, while retail volume grew to 2.29 million units, up 18.0% year-on-year.

Dishwashers have evolved to offer larger capacities, better kitchen renovationcompatibility, and zone washing capabilities to address user pain points such asinsufficient capacity and limited kitchen space. These improvements enhanced spaceutilization and user experience. Fully built-in models have become the mostrecommended style, with their retail market share rising from 34% to 47% online andfrom 79% to 81% offline.

Section III Management Discussion and Analysis

Water Heater IndustryAccording to AVC, the water heater market in 2024 had retail sales of RMB53.2 billion, ayear-on-year increase of 5.3%, with retail volume of 31.45 million units, up 5.1% year-on-year. Electric water heaters generated retail sales of RMB23.6 billion, up 1.3% year-on-year, with a retail volume of 18.02 million units, increasing 2.5% year-on-year. Gas waterheaters achieved retail sales of RMB29.6 billion, up 8.8% year-on-year, with a retail volumeof 13.43 million units, growing 8.7% year-on-year.Large capacity and high-power models have become mainstream in electric water heatermarket, with 60L models accounting for over 60% of total. Dual-tank ultra-thin productsgrew rapidly by 20% both online and offline, as they align with consumer demands forhome aesthetics and efficient space utilization. These products are expected to become afuture market trend. National subsidies significantly boosted demand high-efficiency gaswater heaters products, with GfK data showing that Level 1 energy efficiency productsexperienced a 69% increase in retail sales in offline markets from September to Decemberin 2024.Additionally, water home appliance products

maintained rapid growth in 2024, driven bytrade-in policies and home improvement subsidies, with industry retail sales reachingRMB34.6 billion, a year-on-year increase of 16.3%, and retail volume reaching 27.9 millionunits, up 6.2% year-on-year.Trade-in policy incentives helped offline channels accelerate in growth towards year-end,with particularly strong performance from both national and local chain retailors. Accordingto AVC, Q4 retail sales skyrocketed by 75.5% year-on-year, with annual retail sales growingby 22.3% year-on-year. Online channels showed mixed results, with traditional e-commerceplatforms posting a 6.9% year-on-year increase in annual retail sales. Content-basede-commerce has emerged as a new growth engine through innovative marketing and stronguser retention, achieving a remarkable 55.5% year-on-year growth in retail sales for 2024.Industry leaders leveraged technological, brand, and channel advantages through multi-brand portfolio strategies and full-category operations to capitalized on national subsidyopportunities and increase market share, resulting in higher concentration among domesticbrands. Meanwhile, internet-based brands, relying on their ecosystem and trafficadvantages, rapidly increased their market share online through innovative marketing andentry-level product offerings.

2. Overseas markets

According to Euromonitor, global retail sales of major home appliances reached USD288.2billion in 2024, up 2.1% year-on-year, while small appliances generated USD245.1 billion,growing 3.1% year-on-year. Developed markets was challenged by high interest rates andweak consumer confidence, while emerging markets achieved steady growth driven by airconditioners and online channel expansion, despite intensifying competition and risingcosts.1 Water purifiers, purified water dispensers, water dispensers, water purification equipment

Section III Management Discussion and Analysis

By market:

(1) The U.S.:

Federal Reserve’s interest rate hikes kept mortgage rates elevated, suppressing realestate market and affecting home appliance performance. As competition intensified,appliance manufacturers resorted to price reductions, putting pressure on profitability.High inflation led to lower-than-expected rate cut, further dampening consumption ofdurable goods like home appliances.

(2) Europe:

GfK data indicated that European consumers generally planned to reducediscretionary spending in 2024, with overall industry sales volume growing only 1.8%year-on-year. In 2024, cumulative online sales volume increased by 7.9% year-on-year, while traditional offline channels declined by 1%.

(3) South Asia:

India: Driven by strong air conditioner demand, overall sales volume increased 8.6%year-on-year, with revenue up 10.4% and average prices rising 2%. High-endproducts gained penetration in first and second-tier cities, while entry-level productsremained dominant in third and fourth-tier cities. Online growth was rapid and offlinechain stores were actively expanding, putting pressure on traditional channels.Leading companies responded through channel adjustments or cost reductions, whilelocal brands captured market share through aggressive pricing strategies.Pakistan: Sales volume increased 15% year-on-year, with revenue up 16% andaverage prices rising 2%. High inflation and rapidly rising electricity prices stimulateddemand for energy-efficient products, while the share of chain channels continued toincrease.

(4) Australia & New Zealand:

Based on channel estimates in 2024, the overall Australian market decreased 10%year-on-year, with average prices falling 5%. Consumer interest for value-for-moneyproducts was on the rise. New Zealand demand remained weak, with white goodsimport volumes in 2024 flat year-on-year and GDP contracting for two consecutivequarters. Consumer spending continued to tighten due to inflation and high interestrates, compounded by a sluggish real estate market, resulting in persistently weakappliance demand.

(5) Southeast Asia:

Thailand’s growth primarily relied on the expansion of air conditioners andrefrigerators. Vietnam showed increasing demand for washing machines and airconditioners. Malaysia experienced modest growth, while Indonesia remainedgenerally flat with only refrigerators achieving growth. Consumer prefer health-conscious (water purifiers, energy-efficient air conditioners), smart, and value formoney products.

Section III Management Discussion and Analysis

(6) Japan:

The weak currency has driven up costs, while high prices combined with an agingpopulation suppressed overall consumption. According to GfK, white goods includingrefrigerators, freezers, and washing machines experienced declines in both volumeand revenue in 2024: retail volume decreased 0.6% year-on-year, retail revenue fell

1.9% year-on-year, and average unit price dropped 1.3% year-on-year. Demand

shifted towards large-capacity and energy-efficient models, with front-load washingmachines and variable-frequency refrigerator/washer gaining popularity, while high-enddemand remained sluggish under economic pressures.(II) Industry Outlook for 2025

1. The domestic market

Currently, China’s home appliance market is characterized by high penetration and a largeinstalled base, with replacement purchases becoming the main growth driver. According toGfK, by the end of 2023, China’s home appliance ownership exceeded 6.9 billion units;66% of purchases were replacements, while 34% were first-time or additional purchases.The overall market is expected to grow in the future as consumers continue to improvequality of life thus driving value growth from product upgrades and increasing penetration ofcategories such as dishwashers and tumble dryers.The 2025 Government Work Report points out that China will firmly implement strategies toexpand domestic demand, allocating RMB300 billion in special ultra-long-term bonds tosupport trade-in programs for consumer goods. White goods, with their high value andnecessity in nature, are likely to continue benefiting from these initiatives. AVC expects thehome appliance industry to maintain growth in 2025.

2. Overseas markets

In 2025, global home appliance market will be affected by macroeconomic fluctuations andchanges in trade policies, with consumer upgrade trends and structural growthopportunities. Companies need to monitor economic and policy developments and adapt touncertainties through technological innovation, cost control, and flexible supply chainstrategies to capture growth.

(1) North America

OECD forecasts US economy to grow 1.9% and the FED expects PCE inflation to be

2.7% in 2025. However, tariffs continue to create uncertainties for business

investment and individual incomes, thus creating pressure for home appliance marketwhere consumers still prefer high efficiency and energy saving products. Theappliance industry is likely to benefit from rate-cut related property market recovery inthe long run.

Section III Management Discussion and Analysis

(2) Europe

The European economy continues to be affected by uncertainties from the Russia-Ukraine conflict and energy price fluctuations. However, production costs and retailprices of home appliances are expected to decrease with the gradual declining innatural gas prices. While trade uncertainties put pressure on the euro, EU fiscalexpansion and potential increases in defence spending may alleviate some economicpressure. The market is expected to remain focused on sustainable, environmentallyfriendly and energy-efficient products thus intensifying competition in ESGperformance and product innovation.

(3) Emerging Markets

Home appliance consumer demand in emerging markets is expected to maintainsteady growth. Accelerated urbanization and middle-class expansion in SoutheastAsia, South Asia, the Middle East, and Africa will create new market opportunitiesand interest rate cuts may improve consumer credit environment thus benefitinghome appliance consumption.

III. INTRODUCTION OF THE COMPANY’S BUSINESS DURING THEREPORTING PERIOD

Founded in 1984, the Company is committed to being an enterprise of its time. Through relentlessinnovation and iterations, we seize opportunities in the industry by continuously launching innovativeproducts that steer market development. After more than 30 years, the Company has become a globalleader in the major home appliance industry, as well as a pioneer in global smart home solutions.Market Position? Global leader of the major home appliance industry: According to data from Euromonitor—

an authoritative market researcher, the Company ranked first in terms of sales volume in globalmajor appliance market for 16 consecutive years. The Company has a global portfolio of brands,including Haier, Casarte, Leader, GE Appliances, Candy, Fisher & Paykel and AQUA. From 2008to 2024, Haier brand refrigerators and washing machines ranked first among global major homeappliance brands in sales volume for 17 and 16 consecutive years respectively.? Pioneer of global smart home solutions: Capitalizing on our full-range home appliancesproducts, the Company is recognised by Euromonitor as one of the first in the industry tointroduce smart home solutions. San Yi Niao remained committed to the mission of “providingsmart home experience for a better home”, by enhancing three major capabilities in respect oftailored platforms, delivery platforms and Smart Home’s main platform, we have been dedicatedto providing customised and specialised smart home appliance solutions for users.

Business LayoutOver the years, the Company has established a business layout that includes smart solutions for,amongst others, food storage and cooking, laundry, air and water, the Overseas Home Appliance andSmart Home Business, and Other Business.

Section III Management Discussion and Analysis

? Household food storage and cooking solutions: Through selling products such as refrigerators,

freezers, kitchen appliances in global market, as well as providing one-stop smart kitchenscenario solutions and ecosystem solutions including smart cooking and nutrition planning, theCompany fully addresses users’ need for convenient, healthy and tasteful gourmet experiences.For example，by upgrading the bottom front cooling technology and optimising the heatpreservation system, Casarte’s original built-in refrigerator is designed to address problem offitting home appliance into cabinet encountered in home appliances and furnishing integration,enabling a perfect match to the international standard cabinet with a depth of 600mm and awidth of 800mm/900mm, providing a seamless built-in solution.? Household laundry management solutions: Haier’s washing machine focuses on applyingoriginal technologies to directly address users’ pain points in home living scenarios and createnew experiences and value for users. With a product lineup of washing machines, tumble dryers,all- in-one laundry machines, garment care machines, and heated drying racks, the Company hasevolved from selling individual products to providing scenario-based solutions and offering end-to-end laundry care services. For example, the Zhongzihemei (中子和美) 3-in-1 washer combineswashing, drying, and fabric care functions into a single unit, and the Essence Wash washingmachine reduces washing time and improves cleaning effectiveness by producing a highlyconcentrated detergent solution that can quickly soak into clothes through detergent pre-mixingand high pressure spraying. In addition, Haier Smart Home has developed the first 3Dtransparent drying technology, which uses sensors to see through the outer layer of clothes anddirectly assess their inner condition. This allows the machine to accurately determine the level ofdryness and stop drying process instantly once the clothes are dry.? Air solutions (Internet of air):

Home air-conditioners: Through selling of our products (such as home air-conditioners andfresh air systems) to markets worldwide, as well as providing full-cycle solutions that includedesign, installation and services, with products featuring smart system based inter-connectivity,we have, for example, formulated all-spaces, all-scenarios intelligent air-conditioning solutionsconsist of multiple air-conditioner and purifier coordination, adaptive air flow, air qualitymonitoring and air disinfection, thereby delivering a healthy and comfortable experience at homeand during commuting that caters to users’ needs in terms of air temperature, humidity andquality. One notable example is our self-cleaning air-conditioners, which use smart sensors andautomated water-cleaning technology to run the automated cleaning process and ensurecleanliness and health of their interior.Smart buildings: The Company is committed to becoming a leader in efficient, sustainable andsmart building solutions based on China’s “carbon peaking and carbon neutrality” strategy.Focusing on business segments such as smart control, environment, energy and systemintegration of buildings, the Company provides green and smart building solutions integrating“technology + experience + space” for government and public buildings, commercial uses,railways, schools, and hospitals. In areas such as magnetic levitation centrifugal chillers, IoT-based multi-split system, and air-to-water heat pump, not only have Haier occupied a pivotalmarket position in China, but also have achieved remarkable success globally.

Section III Management Discussion and Analysis

? Household water solutions (Internet of water): Through providing worldwide users with electricwater heaters, gas water heaters, solar water heaters, air energy heat pump water heaters, POEwater purifiers, POU water purifiers, water softening equipment, Haier offers smart watersolutions including interactions between water heaters and purifiers, and between heatingappliances and water heaters, so as to comprehensively cater to users’ needs for waterpurification, softening and heating. One example is our water heater with instant hot water. Ituses smart hot water circulation technology to provide hot water quickly, eliminating the need forusers to wait for the water to heat up. In 2024, the Company acquired Kwikot, an establishedwater heater brand in South Africa. With its strong market reputation and well-established saleschannels, the acquisition enables the Company to rapidly expand its water heater business inSouth Africa market, boosting brand awareness and market share. This acquisition has furtherstrengthened Haier Smart Home’s business presence in the overseas water heater segment.

Global Market PresenceThe Company manufactures and sells a comprehensive portfolio of home appliance products andprovides value-added services in more than 200 countries and regions, including North America,Europe, South Asia, Southeast Asia, Australia, New Zealand, Japan, Middle East and Africa.To overseas markets, the Company has been manufacturing and selling proprietary appliance productscatering for local users’ demands for more than 20 years. During the time, a number of acquisitionscontributed to our growth including acquisitions of Haier Group Corporation’s overseas white goodsbusiness (which included Sanyo Electric Co., Ltd.’s white goods business in Japan and SoutheastAsia) in 2015, home appliances of GE in the US in 2016, Fisher & Paykel in 2018, and Candy in2019.In 2024, Haier Smart Home added another two brands, namely CCR and Kwikot, under its beltthrough mergers and acquisitions. The CCR acquisition has enabled Haier Smart Home to pushforward its comprehensive refrigeration chain strategy and broadened its business reach to thecommercial refrigeration segment, providing strong support for the Company’s development in theEuropean market while further promoting the development of the commercial refrigeration sector inAsia-Pacific and other regions. The acquisition of Kwikot, a century-old water heater brand in SouthAfrica, has strengthened Haier Smart Home’s business presence in the water heater sector and furtherfacilitated the rapid penetration of white goods business into the South African market.At present, the overseas business of the Company has entered a stage of healthy growth, havingachieved a multi-brand, cross-product and cross-regional presence on a global basis. According toEuromonitor, the Company’s market shares (by retail volume) for major home appliances in key regionsaround the globe in 2024 were as follows: ranked 1st in Asia in terms of retail volume with a marketshare of 25.9%; ranked 1st in North America with a market share of 24.5%; ranked 1st in Australiaand New Zealand with a market share of 15.9%; and ranked 3rd in Western Europe with a marketshare of 8%.

Section III Management Discussion and Analysis

Other BusinessesBuilding on our established smart home businesses, the Company has also developed small homeappliances, cleaning robots, channel distribution and other businesses. In particular, the small homeappliance business primarily involves small home appliances designed by the Company, produced byoutsourced third-party manufacturers and sold under the Company’s brands. It serves to enrich oursmart home solutions product mix. The channel distribution business primarily offers distributionservices for products such as televisions and consumer electronics for Haier Group or third-partybrands, leveraging the Company’s sales network. During the reporting period, the Company succeededin acquiring CCR, which has enabled further expansion of our commercial refrigeration segment, andexpedited Haier Smart Home’s comprehensive refrigeration chain strategy.Honours and RecognitionsDuring the reporting period, the Company was once again listed among the Top 500 World’sCompanies and named again as the 2024 World’s Most Admired Companies by the Fortune Magazine.We are the only company being selected in Europe and Asia in the home appliances industry and arethe only selected company incorporated outside the US. Meanwhile, the Company is also the world’sonly Internet-of-Things (IoT) ecosystem brand being named again as BrandZ

tmTop 100 Most ValuableGlobal Brands in 2024.At the same time, the Company was named again among Fortune’s China ESG Impact list andForbes’ The World’s Best Employers 2024 list. The Company’s ESG effort has also been recognisedby external rating agencies, receiving an MSCI ESG rating of AA, which is at leading levels withinhome appliance sector in China. Haier Smart Home was selected into the three major ESG indices ofthe Hang Seng Index, including the HSI ESG Enhanced Index, the HSI ESG Enhanced Select Indexand the HSCEI ESG Enhanced Index. In addition, the Company also won, amongst others, the “Top100 ESG Golden Bull Award”, “2024 ESG Pioneer 60th Annual Social Responsibility ExcellenceAward”, “Golden Bull Best Investment Award”, “Golden Information Disclosure Award” in 2024, furtherdemonstrating the Company’s influence and leading position in the industry.

Section III Management Discussion and Analysis

IV. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTINGPERIOD.

√ Applicable □ Not Applicable

The Company has established a solid strategic presence and competitive advantage in global market.In China’s major home appliance market, the Company has long maintained a leading position acrossall product categories. According to Gfk CMM’s report, the Company has established a continuedleading market position in key major home appliance categories in 2024. In overseas markets, theCompany has adhered to its high-end brand creation strategy. Coupling with the two newly acquiredbrands, namely CCR and Kwikot, this has served us well in building capacity to create globalsustainable growth and continuously gaining market share. Building on this foundation and byleveraging on the consolidation and synergy of our global unified platform, efficiency transformationdriven by digitalisation, technological strength and innovative capabilities, the Company will furtherconsolidate its leading position in the industry. As cornerstone for sustainable development, our“Rendanheyi (人單合一)” Model also provided management guidance to the Company and enabled usto replicate successful experiences. It is believed that the following advantages will help the Companyto continue to strengthen its leading position:

(i) Building up excellent high-end brand operation capabilities and creating a well-

recognised high-end brand through forward-looking layout and long-terminvestment in the global market to achieve a leading market position.

To better meet the need of consumers in pursuit of quality life, the Company has started todevelop the high-end brand Casarte in the Chinese market more than 10 years ago. The creationof high-end brands requires not only focus, experience and patience, but also continuousinnovation of technological standards and differentiated service capabilities to fulfil user demandfor high-quality experiences. The Casarte brand combined the Company’s global technologicalstrengths, product development capabilities and manufacturing craftsmanship, as well as privilegemarketing and differentiation services, which has won the trust of users in China’s high-endmarket. According to data from CMM, the Casarte brand has assumed a definitive leadingposition in China’s high-end major home appliance market in 2024, ranking first in the retail salesof refrigerator, washing machine and air-conditioner categories in the high-end segment. Inparticular, market shares (in terms of offline retail sales) of the Casarte brand of refrigerators, air-conditioners and washing machines reached 49%, 34% and 88% respectively in the market withproduct priced above RMB15,000 in China.

Section III Management Discussion and Analysis

(ii) Providing users with specialised and customised smart household solutionsthrough the San Yi Niao brand with cross-household design focusing onscenario-based experience to carry out the mission of “providing smart homeexperience for a better home”.As users continued to demand for higher living quality, coupled with the development oftechnologies such as Internet of Things and big data, the industry has shown a smart and high-end development trend that prioritised product suites, based upon scenarios, and homeappliances integrated with home furnishings. With leading user insights, extensive productcoverage and technological accumulation from algorithms, big data models and IoT equipmenttechnology, the Company enhanced its three major capabilities in respect of scenario-tailoredplatforms, delivery platforms and Smart Home’s main platform to create a new home appliancessales method with cross-household design focusing on scenario-based experience, and develophigh-end, package, and front-end sales capabilities.(iii) Extensive and solid global presence with localised operational capabilityIn respect of overseas markets, the Company seeks overseas expansion of its own brands aswell as synergies with acquired brands to develop overseas markets. Such business strategy hasguided the Company to establish R&D, manufacturing and marketing three-in-one structureacross multiple brands, products and regions, as well as the model of self-development,interconnection and synergised operation.The Company’s extensive global presence depends on its localised business teams as well as itsflexible and autonomous management mechanisms established in various overseas markets,which have enabled the Company to gain rapid insights and respond swiftly to local userdemands. The Company also proactively integrates into local markets and cultures and hasestablished a corporate image that is recognised by local communities in the overseas regionswhere the Company operates.In 2024, the Company established 10+N innovative ecosystems, 131 manufacturing centres, and108 marketing centres around the world, and achieved a coverage of nearly 230,000 points ofsales in global markets.(iv) A comprehensive portfolio of proprietary brands recognised by users of all tiersThrough organic growth and acquisitions, the Company has formed seven brand clusters,including Haier, Casarte, Leader, GE Appliances, Candy, Fisher & Paykel and AQUA. To addressthe needs of users from different tiers in various markets around the world, the Company hasadopted a differentiated multi-brand strategy in different regions that centred around users, toachieve an extensive and in-depth user coverage. For example, in the Chinese market: the threebrands of Casarte, Haier and Leader achieved the coverage of high-end, mainstream and nichemarket groups respectively; in the U.S. market, the six major brands such as Monogram, Café,GE Profile, GE, Haier, Hotpoint comprehensively covered all segments of high-end, mid-rangeand low-end markets, thereby meeting the preferences and needs of different types of users.

Section III Management Discussion and Analysis

In 2024, Haier Smart Home added another two brands, namely CCR and Kwikot, under its belt.The CCR acquisition has enabled Haier Smart Home to push forward its comprehensiverefrigeration chain strategy and broadened its business reach to the commercial refrigerationsegment, providing strong support for the Company’s development in the European market whilefurther promoting the development of the commercial refrigeration sector in Asia-Pacific and otherregions. The acquisition of Kwikot, a century-old water heater brand in South Africa, hasstrengthened Haier Smart Home’s business presence in the water heater sector and furtherfacilitated the rapid penetration of white goods business into the South African market.(v) Cross-border acquisition and synergy realisation capabilitiesThe Company has an excellent track record of acquisition and integration. The Company hasacquired Haier Group Corporation’s overseas white goods business, including Sanyo Electric Co.,Ltd.’s white goods businesses in Japan and Southeast Asia in 2015, the home appliancebusiness of General Electric in the US in 2016, the New Zealand company Fisher & Paykel(which has been entrusted by the Haier Group since 2015) in 2018, and the Italian companyCandy in 2019. In addition, the Company successfully acquired CCR in 2024, which hasexpedited the Company’s comprehensive refrigeration chain strategy and strengthened thedevelopment of its commercial refrigeration segment. The acquisition of Kwikot, a century-oldwater heater brand in South Africa, has expanded the Company’s business footprint in theAfrican market and strengthened its market competitiveness in the region. Capitalising on thelocal resources and technological strengths of CCR and Kwikot, Haier Smart Home has rapidlyincreased its brand awareness and market share in the region.The Company’s capability to perform acquisition and integration is reflected in the following: Firstof all, the Company implements the ‘Rendanheyi (人單合一)’ Model in the acquired companies,which is a value-added sharing mechanism for the whole-process team under a common goal.Such model can motivate the acquired companies and their employees and enable them togenerate more value. Secondly, the Company made use of its global platform to empower theacquired companies in terms of strategic planning, R&D and procurement in order to enhancetheir competitiveness. Thirdly, the Company’s open and inclusive corporate culture can supportthe acquired companies in establishing a flexible and autonomous management mechanism,which can easily earn recognition from the acquired companies and is conducive to thepromotion of integration.

Section III Management Discussion and Analysis

(vi) Comprehensive and in-depth global collaborations and empowermentThe Company has made full use of its global collaborative platform, as well as its integratedfunctions of R&D, product development, procurement, supply chain, sales and brand marketing.It was able to share and expand development experience to various markets around the world.By strengthening the synergies among its global businesses, the Company has created a strongdriving force for its future development.? Global product collaboration: Focusing on the needs of overseas users and customers,we leverage global R&D resources to ensure close collaboration across all stages, includinguser demand analysis, product planning, technical solution design, development testing andtrial production, and have launched top-selling products in various regions around theworld. For example, the only caravan air-conditioner in North America with a heat pumpthat operates at temperatures as low as–5 degrees Celsius, the first-ever 8.0 Energy Starrefrigerator in the Australian market (which is 40% more energy-efficient than its rivals), abrand-new washing machine platform that meets the needs of both the China-US andEurope-Australia markets, and the global micro-vaporisation and roasting platform thatintegrates the R&D capabilities of Haier from, among others, China, Italy, New Zealand,America, and Japan. Through global product collaboration, overseas brands such as Haier,Fisher & Paykel, Candy, and GE have significantly expanded their product portfolios.? Global capability collaboration: Development of high-caliber young engineers is conductedin accordance with the unified training model at both the Qingdao headquarters and GEAppliances in the U.S., which has yielded further progress. In Qingdao, young engineerstrained through the Global Engineer Development Programme (GEDP) are continuouslyjoining industrial R&D teams and becoming key players in product development. Meanwhile,driven by digital transformation, various global regions are progressively adopting advanceddevelopment tools and design methodologies from the automotive industry, significantlyenhancing development accuracy and product quality.? Global design collaboration: An industrial design collaboration system for global top-selling

products centred on user experience and branding has been established. Throughcollaboration with global designers, design quality has been greatly improved. For example,the headquarters design team collaborated with the CANDY design team to complete thecreation of Haier’s Titanium Series 2/4/6 ovens under the global platform oven, which havebeen successively launched in markets included Europe and Australia. Meanwhile, theheadquarters design centre supported Candy’s brand transformation and realised Candy’sprice index improvement.

Section III Management Discussion and Analysis

? Global procurement collaboration: The Company has established a global procurementcommittee to coordinate procurement activities. The committee has built a digital sourcingplatform that brought together partners across industries and regions to develop anautonomous and controlled global supply chain ecosystem. The committee also created aglobal database of preferred suppliers and materials to achieve cost reduction byaggregating resources at the Company level. By unifying procurement rules and processes,the Company established a standardised operating system with differentiated procurementstrategies to enhance efficiency while lowering risks. We have also developed a Company-level digital procurement platform to enhance shared capabilities through connecting“materials, businesses, people and mechanisms” to the platform, thereby improving theresilience of our global supply chain.? Global supply chain collaboration: The Company has built an end-to-end digitalmanagement system for the global supply chain that spanned from marketing to suppliersto production and logistics. Using intelligent algorithms, the system enabled real-timeflexible deployment of production capacity, and factories across the globe could share anddevelop smart manufacturing technologies to boost competitiveness.? Global marketing and brand promotion collaboration: The Company operates a multi-

level brand portfolio with collaborative brand promotions. The Company also promotes andintroduces successful marketing strategies among regional markets. For example, theCompany successfully replicated its sales and marketing model of China’s third and fourth-tier markets to markets such as India, Pakistan, and Thailand, strengthening the company’sbrand image and regional market competitiveness.(vii) Industry-leading R&D and technological capabilitiesHaier Smart Home delves into technological innovation to expedite the development ofinnovation-driven productivity that aims for high-end, smart and green upgrade. Leveraging onour industry-leading and comprehensive R&D presence, we constantly provide global users withhome appliances that meet their needs and customise their smart and convenient way of living,thus enriching users’ life experience as well as cementing our leading position in high-endbrands, scenario brands and ecosystem brands.

Section III Management Discussion and Analysis

? Leadership in original technologies:

In 2024, Haier Smart Home launched a refrigerator featuring magnetically controlled frozen-fresh technology that achieves a 98% nutrient retention rate and is the only one in theindustry capable of maintaining its fresh flavour and aroma even after 60 days of freezing.Building on its previous-generation MSA oxygen control freshness preservation technology,the upgraded MSA nitrogen-oxygen intelligent control freshness preservation refrigeratorboasts a nutrient retention rate of over 99% after 7 days of refrigeration, elevating theindustry standard to a “cellular level.” It also pioneered large drum diameter ultra-thintechnology to achieve a globally leading fully integrated washing machine design. An air-conditioner equipped with refrigerant directional distribution and dual evaporator couplingwith independent control technology increases the room’s comfortable area by 40%.Additionally, the ball-brush style drawer shoe washing machine revolutionises traditionalwater washing with a cleaning ratio exceeding 1.0, and the household cleaning robot basedon the SH-AI algorithm automatically recognises 41 common items across 7 categories inhome environments with 3mm high-precision linear recognition and obstacle avoidance,leading the industry with innovative products.? Certification from authorities:

As of the end of 2024, the Company received a total of 17 State Science and TechnologyProgress Award, more than any other company in the industry. The Company won thehighest accolade of the Disruptive Technology Innovation Competition (Winner Award), andis the only company to have won the highest accolade in the industry for 3 times.? Leadership in patent quality:

As of the end of 2024, Haier Smart Home has accumulated more than 112,000 patentsapplications globally, including more than 73,000 invention patents. The Company alsoaccumulated 12 state patent gold awards, ranking first in the domestic market. In the‘Global Smart Home Invention Patent Ranking’ in 2024, Haier Smart Home once againtopped the list with 5,582 published patent applications, ranking 1st in the world for 12consecutive times.? Leadership in international standards:

As of the end of 2024, Haier Smart Home has cumulatively led and participated in thedrafting of 110 international standards and 788 state/industrial standards. We are the onlycompany in the industry to have participated in smart home standards from internationalorganisations including the IEC, ISO, IEEE, OCF and Matter. We are also the onlyenterprise in the world to serve on both the IEC Board and the IEC Market Strategy Board,which have enabled the Company to stay actively involved in the formulation of internationalstandards.? Leadership in experience design:

Haier won over 600 accolades, including international design awards such as the GermanIF Design Award and the Red Dot Design Award. The Company won the most internationaldesign gold awards in the industry with six in total and won 3 China Excellent IndustrialDesign Gold Awards from the Ministry of Industry and Information Technology, which is theonly enterprise in China that have earned three consecutive gold awards.

Section III Management Discussion and Analysis

(viii) Leading logistics and delivery capabilities in the PRC

Haier RRS Logistics has demonstrated strong competitiveness, particularly in its supply chainmanagement solutions, which cover the entire process and various scenarios, as well as adelivery-loading synchronised logistics service network. By leveraging its digital operation andmanagement capabilities, Haier RRS Logistics has integrated resources such as warehouses,transportation, and service outlets. As a result, it has built a nationwide logistics network thatextends to villages and households, offering services that cover the entire process fromprocurement and factory manufacturing to end consumers. Additionally, Haier RRS Logistics hasacquired strong capability in provision of customized services, boasting its strength incustomising supply chain solutions according to individual customer needs, catering to a diverserange of needs of various clients. The Company also excels in cross-border supply chainmanagement, addressing client needs in cross-border logistics through air, marine, railway, andmulti-modal transportation.(ix) Sustainability

① Global ESG governance structure: To advance the implementation of ESG initiatives, Haier

Smart Home has further strengthened its organisational structure framework, building on its3-tier global ESG governance structure (the ESG Committee of the Board of Directors, theESG Global Executive Office and the Global ESG Executive Working Group). At theexecutive level, the structure has been expanded to include sub-clusters in areas such asenvironmental management, sustainable risk management, corporate governance, andsupply chain management, providing organisational support for the effective advancement ofESG management.

② Green development and low-carbon operation: Haier Smart Home has formulated the

“6 Green” strategy of green management throughout the entire life cycle, which includes“green design, green manufacturing, green marketing, green recycling, green disposal, andgreen procurement”, and promotes green actions throughout the entire life cycle. HaierSmart Home has integrated low-carbon, recycling, energy saving and emission reductioninto its daily operations to promote green upgrading of the industry.

③ Social responsibility and charity work: Haier Smart Home actively participates in public

welfare projects such as the Hope Project, rural revitalisation, and emergency relief on aglobal scale, and continues to give back to society through donations and volunteerservices.

④ Leading ESG rating: Haier Smart Home has the leading rating among its peers in China

in respect of the ESG ratings issued by three major organisations, namely CSI, MSCI andWind. Among which, its MSCI rating has been upgraded to an AA level. This demonstratesits excellent performance in environmental, social responsibility and corporate governance.

Section III Management Discussion and Analysis

(x) Staying committed to the principle of ‘value of people comes first’“Value of people comes first” has always been a guiding principle for Haier’s development. Fromthe autonomous operation team at the start of the venture to the current “Rendanheyi” (人單合一) model, Haier encourages every employee to maximise their own values while creating valuesfor users. In Haier’s “Rendanheyi” (人單合一) model, “Ren” refers to creators; “Dan” refers to uservalue; “Heyi” refers to the integration of values realised by employees and the values created forusers. “Value of people comes first” is the highest purpose of the “Rendanheyi” (人單合一)model.Haier Smart Home adheres to the values of recognising users’ demand as priority and denyingour own perceptions and is committed to the “two creative spirits” of entrepreneurship andinnovation. We turned employees into creators, implementers into entrepreneurs, and transformedenterprises into open ecosystem platforms, which have supported the Company to become aglobal leader of smart home in the Internet of Things era.V. MAJOR OPERATIONS DURING THE REPORTING PERIODPlease refer to “I. DISCUSSION AND ANALYSIS ON OPERATIONS” and “III. INTRODUCTION OF THECOMPANY’S BUSINESS DURING THE REPORTING PERIOD” under 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: RMBItemsCurrent Period

CorrespondingPeriod of Last YearChange (%)Operating revenue285,981,225,203.93274,204,520,847.974.29Operating cost206,487,065,182.92198,838,470,796.473.85Selling expenses33,585,903,561.6032,726,735,817.732.63Administrative expenses12,110,235,915.3511,874,420,922.311.99Financial expenses972,565,127.34505,658,528.2192.34R&D expenses10,740,112,353.4710,380,219,803.053.47Net cash flow from operatingactivities26,543,081,911.9626,535,780,568.360.03Net cash flow from investing activities–20,074,351,808.82–17,340,209,537.39N/ANet cash flow from financing activities–7,913,904,092.66–7,920,627,373.47N/AGain on changes in fair value47,130,324.6716,895,043.25178.96Non-operating incomes183,938,534.66134,470,855.0036.79Profits or losses attributable tominority shareholders834,492,378.75491,865,528.0969.66

Section III Management Discussion and Analysis

Reasons for significant changes in certain indicators:

1) Reasons for the changes in financial expenses: the increase of 92.34% in financial

expenses over the corresponding period was mainly due to the additional interestexpenses incurred overseas as a result of higher interest rates on borrowings due tointerest rate hikes during the current period;

2) Reasons for the changes in the gains on changes in fair value: the increase of 178.96%

in gains on changes in fair value over the corresponding period was mainly due to theincrease in changes in fair value of equity investments over the corresponding period;

3) Reasons for changes in non-operating incomes: the increase of 36.79% in

non-operating incomes over the corresponding period was mainly due to theyear-on-year increase in incomes generated during the current period that were notdirectly related to the Company’s ordinary operation;

4) Reasons for changes in profits or losses attributable to minority shareholders: the

increase of 69.66% in profits or losses attributable to minority shareholders over thecorresponding period was mainly due to the increase in earnings during the currentperiod of certain subsidiaries in which we hold minority interests.Detailed explanation of significant changes in the operation types and the components ofprofit or sources of profit of the company during the current period

□ Applicable √ Not Applicable

2. Analysis of Income and Cost

√ Applicable □ Not Applicable

(1). Principle Operating Activities by Sector, Product, Region and Sales Mode

Unit and Currency: RMBPrincipal operating activities by productBy productOperating revenueOperating cost

Gross profitmargin (%)

Operating revenueincreased/decreased yoy (%)

Operating costincreased/decreased yoy (%)

Gross profitmargin increased/decreased yoy (%)Air conditioner49,055,935,438.0937,346,454,702.3823.877.447.06

Increased by 0.27percentage pointsRefrigerator83,240,760,926.0357,624,075,173.2930.771.961.26

Increased by 0.48percentage pointsKitchen appliances41,111,204,777.7829,051,095,842.5029.34–

1.15

–

1.65

Increased by 0.36percentage pointsWater Appliances15,750,526,855.249,195,963,076.4641.614.933.04

Increased by 1.07percentage pointsWashing Machine63,028,390,279.4643,252,584,256.7731.382.872.02

Increased by 0.57percentage points

Section III Management Discussion and Analysis

Principal operating activities by productBy productOperating revenueOperating cost

Gross profitmargin (%)

Operating revenueincreased/decreased yoy (%)

Operating costincreased/decreased yoy (%)

Gross profitmargin increased/decreased yoy (%)Equipment parts and channelintegrated services32,395,819,286.8729,608,221,683.288.6016.1314.78

Increased by 1.07percentage pointsPrincipal operating activities by regionBy regionOperating revenueOperating cost

Gross profitmargin (%)

Operating revenueincreased/decreased yoy (%)

Operating costincreased/decreased yoy (%)

Gross profitmargin increased/decreased yoy (%)Domestic141,680,639,521.2799,470,097,778.9129.793.122.69

Increased by 0.30percentage pointsOverseas142,901,998,042.20106,608,296,955.7725.405.324.96

Increased by 0.26percentage pointsPrincipal operating activities by sales modeSales modeOperating revenueOperating cost

Gross profitmargin (%)

Operating revenue

increased/decreased yoy (%)

Operating costincreased/decreased yoy (%)

Gross profitmargin increased/decreased yoy (%)Domestic—direct salecustomers12,692,330,952.926,808,623,385.2546.365.145.04

Increased by 0.05percentage pointsDomestic—distribution andothers128,988,308,568.3592,661,474,393.6628.162.932.52

Increased by 0.29percentage pointsOverseas—direct salecustomers6,238,826,622.575,415,981,638.4513.1915.8715.78

Increased by 0.07percentage pointsOverseas—trading companiessales136,663,171,419.63101,192,315,317.3225.954.894.44

Increased by 0.32percentage points

Section III Management Discussion and Analysis

(2). Table of production and sales analysis

√ Applicable □ Not Applicable

Main productsUnits

ProductionvolumeSales VolumeInventory

Production volumeincreased/decreased yoy (%)

Sales volumeincreased/decreased yoy (%)

Inventoryincreased/decreased yoy (%)Home Appliance10,000 units/sets12,63612,6932,3885.96.0–

2.9

(3). Performance of major purchase contracts and major sales contracts

□ Applicable √ Not Applicable

(4). Table of cost analysis

Unit: RMB0’000

By sector

By sectorCost component

Amount for thecurrent period

Percentage of theamount for thecurrent period intotal costs (%)

Amount for thecorrespondingperiod of last year

Percentage of theamount for thecorrespondingperiod of last yearin total costs (%)

Percentage ofchange of theamount for thecurrent periodcompared to thecorrespondingperiod of last year

(%)Home Appliance IndustryPrimary operation costs17,647,017100.0017,264,618100.002.21

Raw materials14,474,21482.014,110,76481.72.58Labor1,142,2416.51,122,3346.51.77Depreciation298,6341.7280,7701.66.36Energy70,5370.465,9820.46.90Others1,661,3929.41,684,7699.8–

1.39

(5). Change of consolidation scope due to changes on shareholdings of major

subsidiaries during the reporting period

□ Applicable √ Not Applicable

(6). Relevant information on significant changes or adjustments in the Company’s

business, products or services during the reporting period

□ Applicable √ Not Applicable

Section III Management Discussion and Analysis

(7). Major distributors and major suppliers

A. Major distributors of the Company

√ Applicable □Not Applicable

Revenue from the top five distributors was RMB57,939.7307 million,representing 20.3% of the total sales for the year; among the revenue from thetop five distributors, the revenue from related parties was RMB0 million,representing 0% of the total sales for the year.The proportion of sales to a single distributor exceeded 50% of the total duringthe reporting period, and new distributor or depending heavily on a fewdistributors were seen among the top five distributors

□ Applicable √ Not Applicable

B. Major suppliers of the Company

√ Applicable □ Not Applicable

The purchase amount from the top five suppliers amounted to RMB33,456.9421million, representing 16.8% of the total purchase amount for the year; amongthe purchase amount from the top five suppliers, the purchase amount fromrelated parties was RMB11,330.7091 million, representing 5.7% of the totalpurchase amount for the year.The proportion of purchase from a single supplier exceeded 50% of the totalduring the reporting period, and new supplier or depending heavily on a fewsuppliers were seen among the top five suppliers

□ Applicable √ Not Applicable

3. Expenses

□ Applicable √ Not Applicable

Section III Management Discussion and Analysis

4. R&D expenditure

(1). Table of R&D expenditure

√ Applicable □ Not Applicable

Unit: RMBExpensed R&D expenditure for the current period10,733,830,471.53Capitalized R&D expenditure for the current period554,613,800.38Total R&D expenditure11,288,444,271.91Total R&D expenditure as a percentage inoperating revenue (%)3.95Proportion of capitalization of R&D expenditure (%)4.91

(2). Table of R&D Personnel

√ Applicable □ Not Applicable

Number of R&D personnel22,925Percentage of R&D personnel took up inthe total employees (%)19

Educational structure of R&D personnelCategories of educational structure

Number ofpersonnelDoctor’s degree140Master’s degree4,924Bachelor’s degree13,254College Diploma3,304High School diploma or below1,303

Age structure of R&D personnelCategories of age structure

Number ofpersonnelUnder 30 years old (not including 30)6,966

–40 years old (including 30 and not including 40)9,751

–50 years old (including 40 and not including 50)4,722

–60 years old (including 50 and not including 60)1,21660 years old and above270

Section III Management Discussion and Analysis

(3). Explanation

√ Applicable □ Not Applicable

Haier, as a global leader in home appliances, has accumulated 40 years of expertisein technology. Its innovations in R&D are driven by a deep understanding of userneeds and the ability to respond swiftly, enabling it to stay ahead of trends andanticipate future demands in its R&D efforts. This forward-thinking approach fuelscontinuous innovation in smart living. With the rise of the AI era, Haier leverages AItechnology and a digital R&D platform to further enhance its R&D capabilities inoriginal technologies. More than 200 of its original technologies have been replicatedacross the industry.In terms of product intelligence, Haier Smart Home utilises AI algorithms and visualtechnology to enhance the user experience. For instance, the AI refrigerator,equipped with a smart butler, can “see” and record the storage time of ingredients,thereby reminding users of their shelf life and consumption order. The AI washingmachine can identify the number and type of clothes, automatically adjust thewashing programme to prevent colour bleeding, and alert the user if any small itemsare left in the machine. The AI-powered ventilator can automatically adjust the heatlevel of the linked stove when it is about to overflow, ensuring it boils without spillingover. The AI-equipped oven can identify the type and specifications of ingredients,automatically adjusting the temperature and cooking time to deliver optimal results,allowing users to cook with a single button press or voice command.In terms of green development and the dual carbon goals, Haier supports the nationaldual-carbon strategy and actively embraces the ESG principles. It has established aagreen design system that integrates both online and offline elements, with a globalplanning and collaborative R&D approach. Haier continues to introduce moreeco-friendly home appliances, driving high-quality, green development throughout theentire industry chain.

(4). Reason for significant change in the composition of R&D personnel and its

impact on the future development of the Company

□ Applicable √ Not Applicable

5. Cash flow

□ Applicable √ Not Applicable

(II) Explanation for major changes in profit caused by non-principal businesses

□ Applicable √ Not Applicable

Section III Management Discussion and Analysis

(III) Analysis of assets and liabilities

√ Applicable □ Not Applicable

1. Assets and liabilities

Unit: RMB

Name of Item

Amount at theEnd of CurrentPeriodPercentage ofAmount at theEnd of CurrentPeriod to TotalAssets (%)

Amount at theEnd of PreviousPeriodPercentage ofAmount at theEnd of PreviousPeriod to TotalAssets (%)

Change in theAmount at theend of CurrentPeriod to theEnd of PreviousPeriod (%)DescriptionDerivative financial assets142,709,716.910.0567,565,829.440.03111.22Mainly as a result of the

fluctuation in fair valueof forward foreignexchange contractsBills receivable12,118,681,244.144.188,790,151,269.913.3737.87Mainly as a result of the

increase in billsreceived during thecurrent periodFinancing receivables360,069,391.560.12200,326,471.850.0879.74Mainly as a result of the

increase in theaccounts receivable andbank acceptance notesthat were discounted,endorsed andtransferredPrepayments2,382,805,400.240.821,391,536,213.260.5371.24Mainly as a result of the

increase inprepayments for goodsduring the currentperiodContract assets987,669,298.290.34260,939,408.730.10278.51Mainly as a result of the

acquisition of Carrier’sglobal commercialrefrigeration business(‘Carrier’)Non-current assets due within

one year

1,439,758,652.550.50100.00Mainly as a result of the

increase in long-termterm deposits that havematuredDebt investments15,474,759,856.995.339,117,874,328.663.4969.72Mainly as a result of the

growth in long-termtime deposits during thecurrent periodLong-term receivables224,724,107.310.08350,409,496.850.13–

35.87

Mainly as a result of the

partial recovery duringthe current periodInvestment properties246,161,259.830.0898,631,080.770.04149.58Mainly as a result of the

increase in leasesduring the currentperiodDeferred income tax assets2,477,206,492.360.851,849,094,792.400.7133.97Mainly as a result of the

increase in deductibletemporary differencesduring the currentperiod

Section III Management Discussion and Analysis

Name of Item

Amount at theEnd of CurrentPeriodPercentage ofAmount at theEnd of CurrentPeriod to TotalAssets (%)

Amount at theEnd of PreviousPeriodPercentage ofAmount at theEnd of PreviousPeriod to TotalAssets (%)

Change in theAmount at theend of CurrentPeriod to theEnd of PreviousPeriod (%)DescriptionDerivative financial liabilities71,011,310.010.02168,625,004.970.06–

57.89Mainly as a result of the

fluctuation in fair valueof forward foreignexchange contractsContract liabilities10,852,073,573.073.747,849,215,139.133.0138.26Mainly as a result of the

increase in accountsreceived in advanceTaxes payable3,915,081,920.181.352,941,772,155.371.1333.09Mainly as a result of the

increase in income taxpayableNon-current liabilities duewithin one year

16,528,817,805.465.704,046,582,815.191.55308.46Mainly as a result of the

increase in long-termborrowings due withinone year and othernon-current liabilitiesLong-term borrowings9,665,074,313.673.3318,365,302,925.777.03–

47.37Mainly as a result of the

reclassification of theportion of long-termborrowings that weredue within one year tonon-current liabilitiesdue within one yearLease liabilities4,480,895,997.361.543,429,765,203.811.3130.65Mainly as a result of the

increase in leasesLong-term payables188,220,056.590.0657,113,422.780.02229.55Mainly as a result of the

increase in overseas

long-term payablesLong-term payables for staff’sremuneration2,561,647,446.350.881,085,454,839.180.42136.00Mainly as a result of

mergers and

acquisitionsOther non-current liabilities98,073,333.450.032,085,322,390.900.80–

95.30Mainly as a result of the

reclassification of the

portion of other

non-current liabilities

that were due within

one year to other

non-current liabilities

due within one yearTreasury stock3,510,728,776.441.215,034,065,107.421.93–

30.26

Mainly as a result of the

cancellation of certain

treasury stocksOther comprehensive income793,828,357.470.271,969,365,062.650.75–

59.69

Mainly as a result of

changes in translation

differences in financial

statements

denominated in foreign

currency

Section III Management Discussion and Analysis

2. Overseas Assets

√ Applicable □Not Applicable

(1) Scope of assets

Among the assets, overseas assets amounted to 13,969,093.59 (unit and currency:

RMB0’000), representing 48.2% of the total assets.

(2) Explanation of high percentage of overseas assets

√ Applicable □ Not Applicable

Unit and Currency: RMBName of overseasassetReason for FormationOperating mode

Operating revenueduring the reporting

period

Net profit of thereporting periodOverseas Home

Appliance andSmart HomeBusiness

Overseas mergers &

acquisitions and theCompany’s owndevelopment

Localized Operationswith the integration ofR&D, manufacturingand marketing

143,813,971,6927,075,971,306

Note: Net profit stated in the above table represents operating profit.

3. Restrictions on major assets as of the end of reporting period

□ Applicable √ Not Applicable

4. Other Explanations

□ Applicable √ Not Applicable

Section III Management Discussion and Analysis

(IV) Analysis of industry operating information

□ Applicable √ Not Applicable

(V) Analysis of investment

Overall analysis on external equity investment

√ Applicable □ Not Applicable

1. Significant equity investment

□ Applicable √ Not Applicable

2. Significant non-equity investment

√ Applicable □ Not Applicable

During the reporting period, the 11th Meeting of the 11th Session of the Board of Directorsof the Company, among others, considered and approved a new construction project of 5million units of air conditioners in SCO Economic Demonstration Zone, Jiaozhou, Qingdao,with an estimated total investment of RMB2.494 billion. For details, please refer to theAnnouncement on Investing in Construction of a New Air-Conditioner Production Plant withan Annual Capacity of 5 Million Units of Haier Smart Home Co., Ltd. (Announcement No.:

Lin 2024–035) disclosed on 28 August 2024 by the Company. For details of other non-equity investments, please refer to “Section X Financial Report” for relevant information ofitems such as construction in progress.

Section III Management Discussion and Analysis

3. Items measured at fair value

Unit and Currency: RMB

Asset Type

OpeningBalanceProfits or Lossesof Changes inFair Value duringthe Period

CumulativeChanges in FairValue Included inEquity

Provision forImpairment ofduring thePeriod

Purchasesduring thePeriodSold/RedeemedAmount duringthe PeriodOther ChangesClosing BalanceWealth managementproducts

490,968,101.817,853,373.362,189,040,000.001,941,425,353.77746,436,121.40Investment in other equityinstruments

6,403,694,954.77–323,858,760.44–132,188,835.3039,041,304.435,986,688,663.46Investment in trading equityinstruments

243,224,439.64–19,520,349.0528,526,721.82195,177,368.77Investment funds222,803,002.3841,204,390.7043,590,973.9017,226,838.074,032,820.45294,404,349.36Financing receivables200,326,471.85763,691,982.67603,949,062.96360,069,391.56Derivative financialinstruments

–101,059,175.53182,083,626.05–7,784,352.50–1,541,691.1271,698,406.90Total7,459,957,794.92211,621,041.06–331,643,112.942,864,134,121.272,591,127,976.6241,532,433.767,654,474,301.45Investment in securities

√ Applicable □ Not Applicable

Unit and Currency: RMB

Type ofsecurities

SecuritiescodeSecuritiesabbreviation

Initial investment

costSources offundingCarrying amountat the beginning

of the Period

Profit and lossarising fromchanges in fairvalue during thePeriodAccumulated fairvalue changesincluded inequityPurchases duringthe PeriodDisposals duringthe PeriodInvestment profitor loss during the

period

Carrying amountat the end of the

PeriodAccounting itemsStock601328Bank of

Communications

1,803,769.50Self-funding7,819,326.482,765,371.5610,584,698.04Investments in other

equity instrumentsStock600827Bailian Group154,770.00Self-funding373,792.1256,718.72430,510.84Investments in other

equity instrumentsStock300183Neusoft Carrier18,713,562.84Self-funding11,795,641.743,329,982.3615,125,624.10Investments in other

equity instrumentsStock688455KENGIC20,226,905.31Self-funding146,788,044.20–13,881,210.0027,164,266.00–18,806,533.0086,936,035.20Trading financial assetsTotal//40,899,007.65/166,776,804.54–13,881,210.006,152,072.64—27,164,266.00–18,806,533.00113,076,868.18/

Section III Management Discussion and Analysis

Explanation of investment in securities

□ Applicable √ Not Applicable

Private equity investment

√ Applicable □ Not Applicable

By the end of the reporting period, the Company has historically invested in private equityfunds as follows: the Company invested 63.13% share in Qingdao Haier SAIF Smart HomeIndustry Investment Center (Limited Partnership); Qingdao RRS Huitong InvestmentManagement Co., Ltd. (青島日日順匯通投資管理有限公司), a subsidiary of the Company,invested 49% share in Guangzhou Heying Investment Partnership (Limited Partnership);Qingdao Haishang Chuangzhi Investment Co., Ltd. (青島海尚創智投資有限公司), asubsidiary of the Company, invested 30% share in Huizhixiangshun Equity Investment Fund(Qingdao) Partnership (Limited Partnership), a private equity fund, and 50% equity ofQingdao Ririshun Huizhi Investment Co., Ltd., a managing partner of such fund; QingdaoHaier Technology Investment Co., Ltd. (青島海爾科技投資有限公司), a subsidiary of theCompany, invested in the following private equity funds: 1.265% share in Beijing-Tianjin-Hebei Industrial Coordinated Development Investment Fund (Limited Partnership) (京津冀產業協同發展投資基金（有限合伙）), 14.85% share in Shenzhen TopoScend Capital Phase IFund (Limited Partnership) (深圳市投控東海一期基金（有限合伙）), 24% share in QingdaoHaimu Smart Home Investment Partnership (Limited Partnership), and invested in thefollowing fund management companies: 5.01% equity of CMG-SDIC Capital Co., Ltd. (国投招商投資管理有限公司), 15% equity of Shenzhen TopoScend Capital Co., Ltd. (深圳市投控東海投資有限公司), 49% equity of Qingdao Haimu Investment Management Co., Ltd.Derivative investment

√ Applicable □ Not Applicable

(1). Derivatives investments for hedging purposes during the reporting period

√ Applicable □ Not Applicable

Unit and Currency: RMB0’000

Type of derivativesinvestment

Initial investmentamount

Openingcarrying amount

Gains or losseson fair valuechanges for thecurrent period

Accumulativechanges in fairvalue included inequity

Amountpurchasedduring thereporting period

Amount soldduring thereporting period

Closing carryingamount

Proportion ofclosing carryingamount to netassets of theCompany at theend of thereporting period

(%)Forward foreign exchangecontracts

1,178,6571,178,65718,212–9931,014,3449.11Forward commoditycontracts

11,00911,009–

2144,2130.04Total1,189,6661,189,66618,209–7791,018,5579.15Explanation on anysignificant changes inthe accounting policiesand specific accountingand auditing principlesfor the hedgingbusiness during thereporting period ascompared to the lastreporting period

Accounting principles are based on the Accounting Standards for Business Enterprises. The Company carried out the accounting treatment for its business in

accordance with the relevant regulations of “Accounting Standards for Business Enterprises No. 22—Recognition and Measurement of FinancialInstruments”, “Accounting Standards for Business Enterprises No. 24—Hedge Accounting”, “Accounting Standards for Business Enterprises No. 37—Presentation of Financial Instruments” and “Accounting Standards for Business Enterprises No. 39—Fair Value Measurement” published by theMinistry of Finance and its guidance, to reflect the relevant items in the balance sheet and the statement of profit or loss, which are consistent with thoseof the previous reporting period.

Section III Management Discussion and Analysis

Type of derivatives

investment

Initial investmentamount

Openingcarrying amount

Gains or losseson fair valuechanges for thecurrent period

Accumulativechanges in fairvalue included inequity

Amountpurchasedduring thereporting period

Amount soldduring thereporting period

Closing carryingamount

Proportion ofclosing carryingamount to netassets of theCompany at theend of thereporting period

(%)Explanation on actual profitor loss during thereporting period

The actual profit and loss for the reporting period amounted to RMB39.85 million.Explanation on the effect ofhedging

Under the premise of ensuring normal production and operation, the Company carried out hedging business to reduce the impact of exchange ratefluctuations on the Company’s production and operation and to realize the Company’s long-term stable development.Source of funds for

derivative investments

Self-owned fundsRisk analysis andexplanations on riskcontrol measures forpositions in derivativesduring the reportingperiod (including butnot limited to marketrisk, liquidity risk, creditrisk, operational risk,legal risk, etc.)

I. Foreign exchange hedging business

1. Risk Analysis

The Company and its holding subsidiaries conduct foreign exchange derivatives business in accordance with the principle of stability, and do not conduct the

foreign exchange transaction for speculative purposes. All foreign exchange funds businesses are based on normal production and operation and rely onspecific business operations to avoid and prevent exchange rate risks. However, there are also certain risks in conducting foreign exchange fundsbusiness:

(1) Market risk: Forward settlement of foreign exchange: the Company will determine whether to sign a forward contract based on the cost of the product

(basically consisting of RMB) and market risk. Signing the contract equals to fixing the price of currency exchange. It is effective to resist marketfluctuation risk and ensure a reasonable and stable profit level of the Company through forward settlement of foreign exchange. Forward purchase offoreign exchange: according to the import contract entered with the customer and exchange rate risk, the future currency exchange cost will be fixedthrough the unilateral forward purchase of foreign exchange. Although there is a certain risk of loss, the forward purchase of foreign exchange willeffectively reduce the market fluctuation risk and fix procurement costs. Other NDF and options businesses are mainly carried out when failed to sign theordinary forward settlement/purchase of foreign exchange or the costs are too high, only serving as the supplement of the above businesses. Exchangerate fluctuation risk in currency swap business is avoided by adjusting the currency of assets and liabilities in order to match the currency of the assetswith the currency of liabilities. Interest rate fluctuation risk in interest rate swap business is avoided by transfer the floating-rate business to fix-ratebusiness or transfer the fixed-rate business to floating-rate business when the rate is going downward to reduce the costs. All of the above businesseshave a real business background and there is no speculation.

(2) Exchange rate fluctuation risk: After the Company fixing the forward exchange rate according to the foreign exchange management strategy, if the actual

trend of the foreign exchange rate deviates significantly from the direction of the Company’s fixed exchange rate fluctuation, the cost of the Companyafter fixing the exchange rate expenditure may exceed the cost of not fixing the exchange rate, thus forming a loss of the Company. When the foreignexchange rate changes greatly, if the fluctuating direction of the Company’s fixed foreign exchange hedging contract is inconsistent with that of theforeign exchange rate, the foreign exchange loss will be formed; if the exchange rate does not fluctuate in the future, the vast deviation from the foreignexchange hedging contract will also form a foreign exchange loss.

(3) Internal control risk: The foreign exchange derivatives business is highly specialized and complex so it may cause risks due to imperfect internal control

systems.

(4) Transaction default risk: In the event of a default in the counterparty of foreign exchange derivative transaction, the Company would not be able to obtain

hedging profits as agreed to hedge the Company’s actual exchange losses, resulting in a loss of the Company.

(5) Customer default risk: The overdue of customer’s accounts receivable and the customer’s order adjustment will make the actual payment inconsistent with

the expected payment, which may result in the actual cash flow could not match the carried out foreign exchange derivative business term or amountcompletely, leading to a loss of the Company.

Section III Management Discussion and Analysis

Type of derivativesinvestment

Initial investmentamount

Openingcarrying amount

Gains or losseson fair valuechanges for the

current period

Accumulativechanges in fairvalue included inequity

Amountpurchasedduring thereporting period

Amount soldduring thereporting period

Closing carryingamount

Proportion ofclosing carryingamount to netassets of theCompany at theend of thereporting period

(%)

2. Risk Control Measures Taken by the Company

(1) The Company may not engage in any foreign exchange derivative transactions except those carried out for the purpose of avoiding exchange rate risks,

and only for foreign exchange operations related to the Company’s import and export business and overseas asset/liability management.

(2) The Company implemented approval process in strict compliance with the Foreign Exchange Risk Management Policy and the Foreign Exchange

Derivatives Transaction Management Rules. The general meeting of shareholders of the Company and the Board of Directors delegate the President/President Office to take responsibility for the operation and management of the foreign exchange derivatives business, the Treasury Department shall actas the handling department, and finance department shall act as the daily review department.

(3) The Company conducts foreign exchange derivatives business with financial institutions such as large banks with legal qualifications. The financial

department timely tracks the changes in the transaction and strictly controls the occurrence of closing default risk.

(4) The Company conducts foreign exchange derivatives business must base on the Company’s cautious forecast on the foreign currency receipts and

payments and actual business exposure. The delivery date of the foreign exchange derivatives business must match with the Company’s predicted receipttime, deposit time or payment time of the foreign currency, or match with the corresponding redemption term of the foreign currency bank borrowing.II. Bulk Hedging Business

1. Risk Analysis

(1) Market risk: The futures and derivatives market itself has certain systematic risks, while hedging requires certain level of price trend prediction. If the price

prediction is directionally incorrect, it may cause losses to the Company.

(2) Policy risk: Significant changes in laws and regulations of the futures and derivatives markets may cause market fluctuations or make trading impossible,

which may result in risks.

(3) Funding risk: Due to the strict margin system and daily mark-to-market system in the futures market, there may be corresponding funding floating loss

risks. The Company will reasonably allocate its own funds for hedging business, control the scale of funds, and conduct funding projections whileformulating trading plans to ensure sufficient funds. In the process of business operations, the Company will plan and utilize margins reasonably, andadjust funds appropriately to avoid risks.

(4) Operational risk: There may be cases in which suppliers violate their agreements and cancel or delay deliveries, resulting in a mismatch between the actual

hedging quantity and period, causing losses to the Company.

(5) Internal control risk: Futures and derivatives transactions are more specialized and complex, which may give rise to risks caused by inadequate internal

control systems or human errors in operations. The Company has formulated the Management Measures for Hedging Business of Bulk Raw Materials,which contains clear provisions on the authorization scope, approval procedures, risk management and other aspects of hedging transactions. TheCompany shall strengthen internal control management and improve professionalism, implement risk prevention measures and improve the managementstandard of hedging business.

Section III Management Discussion and Analysis

Type of derivatives

investment

Initial investmentamount

Openingcarrying amount

Gains or losseson fair valuechanges for the

current period

Accumulativechanges in fairvalue included in

equity

Amountpurchasedduring thereporting period

Amount soldduring thereporting period

Closing carryingamount

Proportion ofclosing carryingamount to netassets of theCompany at theend of thereporting period

(%)

2. Risk control measures adopted by the Company

(1) Matching hedging business with the Company’s production and operation to maximize hedging against the risk of market fluctuations.

(2) Strictly control the scale of hedging funds and reasonably plan and use margins. The Company will reasonably allocate its own funds for hedging

business, and will not use raised funds directly or indirectly for hedging.

(3) The Company has formulated the Management Measures for Hedging Business of Bulk Raw Materials, which contains clear provisions on the

organizational structure and its responsibilities, business processes, risk management, file management, etc. The Company will strictly follow theprovisions of the internal control system to control all aspects of the business, and will implement the Management Measures in accordance with theestablished regulations.

(4) The Company will strengthen the training of relevant personnel to enhance their professionalism and overall quality; strengthen research on the futures and

derivatives market to grasp market changes and design specific operational plans for trading business.

(5) The internal audit department of the Company will conduct regular and irregular inspections of hedging trading business, supervise hedging trading

business personnel in the implementation of the risk management system and risk management procedures, and prevent operational risks in the businessin a timely manner.Changes in market price orfair value of investedderivatives during thereporting period, wherespecific methodologyused and the settingsof relevant assumptionsand parameters shouldbe disclosed in the fairvalue analysis ofderivatives

In respect of changes in market prices or fair value of products, gains or losses actually realized from the invested derivatives amounted to RMB39.85 million

during the reporting period. As for the specific methodology used and the related assumptions and parameter settings: Foreign exchange and interest rateswap forward quotations from financial institutions were used.

Litigation case (if

applicable)

N/ADisclosure date ofannouncement inrelation to theconsideration andapproval of derivativesinvestment by theBoard (if any)

28 March 2024

Disclosure date ofannouncement inrelation to theconsideration and theapproval of derivativesinvestment byshareholders’ generalmeeting (if any)

21 June 2024

Section III Management Discussion and Analysis

(2). Derivatives investments for investment purposes during the reporting period

□ Applicable √ Not Applicable

4. Detailed progression of material asset regrouping and integration during the

reporting period

□ Applicable √ Not Applicable

(VI) Sale of material assets and equity

□ Applicable √ Not Applicable

(VII) Analysis on major subsidiaries and Investees

√ Applicable □ Not Applicable

For details, please refer to the relevant contents of “(2) Explanation of high percentage ofoverseas assets” under “(III) Analysis of assets and liabilities” in this section.(VIII) Structured entities controlled by the Company

□ Applicable √ Not Applicable

VI. DISCUSSION AND ANALYSIS ON THE COMPANY’S FUTUREDEVELOPMENT(I) Setup and trend of the industry

√ Applicable □ Not Applicable

For details, please refer to the relevant contents of “II. INTRODUCTION OF THE INDUSTRYWHERE THE COMPANY OPERATES DURING THE REPORTING PERIOD” under “Section IIIManagement Discussion and Analysis” in this report.(II) Development strategy of the Company

√ Applicable □ Not Applicable

Guided by our vision to become a world-class smart living ecosystem enterprise, we areenhancing our capabilities in technological innovation, global operations, and digitaltransformation. We are doing so by developing proprietary technologies, fostering globalcollaboration, implementing scenario-based solutions, and accelerating digitalization. These effortswill reinforce our leadership in the smart home sector, drive growth in our smart HVAC business,and establish a presence in emerging industries—supporting sustainable, high-qualitydevelopment.

(1) Smart Home Business:

We will reinforce our leadership in in refrigeration, laundry care, and kitchen appliances. Byleveraging our comprehensive smart product suites, cutting-edge technology, and SmartHome Brain platform, we will continuously elevate the smart living experience across allscenarios.

Section III Management Discussion and Analysis

(2) Smart HVAC Business:

We will evolving from standalone products—such as home air conditioners, water heatersand purifiers, central air conditioners, and heat pumps to integrated smart HVAC solutions,rapidly enhancing our global competitiveness and industry position. Additionally, we fostersynergy between our commercial refrigeration and smart building segments to deliverleading-edge cold chain solutions for commercial and industrial applications.

(3) Emerging Businesses:

Capitalizing on trends like an aging population and the low-carbon circular economy, wewill expand into smart healthcare, home service robotics, and recycling sectors. Theseinitiatives are designed to offer consumers a more diverse smart and low-carbon lifestyleexperience.(III) Business plan

√ Applicable □ Not Applicable

In 2025, the Company will drive deep transformations in our business models and organizationalstructures across domestic and overseas markets. We will enhance our competitiveness inproduct innovation, digital inventory management, direct consumer engagement, contentmarketing, and cost optimization— laying a solid foundation for sustainable, high-quality growth.Refrigerator and Laundry Care Business:

? Domestic Market:

We will expand our omni-channel presence and leverage precise consumer insights toestablish leading position across all price segments, continuously growing our marketshare.? Overseas Markets:

By focusing on high-end brand development and tailoring our strategies to meet thespecific needs of different countries, we will fine-tune product features, design, andmarketing efforts to enhance our brand strength and profitability.Kitchen Appliance Business:

? Domestic Market:

We will concentrate on smart kitchen solutions featuring built-in product suites and continueto expand the Casarte lineup. Key initiatives include accelerating our new media marketingtransformation, developing end-to-end professional capabilities, and expanding targeteddistribution channels.? Overseas Markets:

We will integrate global product platforms to deliver universally appealing and market-leading offerings. By aligning products with regional market needs and leveraging globalresources, we aim to drive rapid growth across key markets.

Section III Management Discussion and Analysis

Home Air Conditioners:

? Domestic Market:

We will enhance user experience with a refreshed product lineup and improve the efficiencythrough the one-inventory system. In addition, we will strengthen our professional channels,expand into lower-tier markets, and improve our e-commerce performance. Our focus onnew media marketing—leveraging emerging platforms—will further broaden our brandinfluence and product awareness.? Overseas Markets:

Tailored breakthrough strategies will be deployed in each region. Through localized productdevelopment, the establishment of dedicated marketing teams, and expanded partnerships,we aim to scale our growth and capture additional market share.Water Heaters and Purifiers:

? Domestic Market:

We will accelerate our transformation toward integrated water and HVAC solutions. Byleveraging proprietary technologies and a broad product portfolio, we will maintain ourindustry leadership. A multi-channel approach—spanning both online and offline—alongwith refined operations will further enhance our competitiveness.? Overseas Markets:

We will continue to build localized capabilities by focusing on local R&D, manufacturing,and sales to drive expansion.Commercial Refrigeration:

We will focus on medium to long-term growth and profitability by strengthening internalcollaboration and advancing our digital capabilities. Key initiatives include:

? Enhancing end-to-end technical and product coordination with headquarters.? Expanding the application of industrial mechanical systems centred on CO

technology toseize emerging market opportunities.? Improving the competitiveness of display cases through better energy efficiency, automation,

and modular design.? Redesigning digital processes to create a more agile and high-performing operational

framework.China Region:

We will drive digital transformation across multiple areas to boost our overall competitiveness.Our strategic priorities include:

? One-inventory: Establishing an integrated online-offline inventory system with a centralized

toC network to improve product turnover, warehousing, and distribution efficiency while

lowering operational costs.

Section III Management Discussion and Analysis

? Digital marketing: Establishing a consumer-facing marketing team and developing newstrategies to better understand and reach customers. Our digital marketing platform willenable real-time performance tracking to maximize return on investment.? Optimal Smart Home Experience: Focusing on the implementation of the San Yi Niao

integrated cabinet-appliance solution, we aim to deliver a seamless, intelligent homeexperience. We will build end-to-end capabilities covering everything from consumer needsanalysis and solution design to installation and after-sales service.Overseas Regions:

We will committed to strengthening our global brand and profitability and entering a new phaseof transformation:

? Leveraging global R&D resources and collaborative systems to enable rapid product iterations

and create market-leading offerings.? Establishing lean, region-specific operational units under the principle of “lean platforms,

localized operations, and specialized industry focus”. With centralized support, each region

can fully leverage its strengths for efficient growth.? Integrating digital tools to restructure our marketing, R&D, and manufacturing processes,

building a flatter, more agile organization that responds swiftly to market and consumer

needs.? Improving supply chain efficiency through network optimization, supplier diversification, and

stronger cross-functional coordination—ensuring stable raw material supply and timely

product manufacturing and delivery.(IV) Potential risks of the Company

√ Applicable □ Not Applicable

1. Risk of Tariff Increases and more Retaliation Trade Policies. Potential tariff policies and

retaliation trade policies implemented and/or to be introduced by the U.S. and other major

economies could negatively impact the existing supply chains of the industry and the global

home appliance players. Higher tariffs would incur extra costs for export and import, reduce

profit margins, weaken the consumer sentiment and demand, and intensify market

competition in target markets. The increasing uncertainties regarding tariff policies would

force home appliance players to reevaluate their supply chain strategies and footprints,

increase operational complexities and management costs. To cope with the potential tariff

shocks, the Company will actively leverage our localized supply chain resources in

respective markets, further optimize supply chain management, enhance production

flexibilities, and strengthen regional manufacturing and collaboration capabilities.

2. Risk of Exchange Rate Fluctuations. In conjunction with the Company’s ongoing expansion

of global business operations, a material portion of its import/export transactions and

cross-border settlements are denominated in foreign currencies including but not limited to

the US Dollar (USD), Euro (EUR), and Japanese Yen (JPY). If the exchange rates of these

Section III Management Discussion and Analysis

currencies fluctuate to a certain extent, it will impact the Company’s financial performanceand potentially increase the financial costs. In addition, the Company’s consolidated financialstatements are denominated in Renminbi, while subsidiaries’ financial statements aremeasured and reported in the local currencies where they operate. To mitigate theseexposures, the Company maintains a structured currency risk management programutilizing authorized hedging instruments.

3. Risk of decreasing market demand due to macroeconomic slowdown. Sales of white goods

and home appliances exhibits inherent cyclicality tied to discretionary consumer spendingpatterns and their expectations of future disposable income growth. Economic slowdownwill reduce consumer spending and cause headwinds to industry growth. In addition, thepersistent sluggish property market will also indirectly affect market demand for homeappliances in a negative way.

4. Risk of price war caused by intensified industry competitions. As industry concentration level

continues to increase in recent years, the white goods industry is highly competitive withpersistent commoditization pressures across core product categories. However, theincrease in inventory level in certain verticals due to demand-supply imbalance may lead toprice wars. Furthermore, rapid technological development, scarcity of talents in theindustry, shortened product life cycles and relative easiness of copycat increase thedifficulty to maintain margin levels. Nevertheless, new products, services and technologiesare often associated with higher selling prices. The Company will actively invest more inR&D to sustain the product roll-out, attract more users through continuous innovation, andmaintain our brand awareness.

5. Risk of fluctuations in raw material prices. The Company’s products and core components

use metals such as steel, aluminum, and copper, as well as commodities such as plasticsand foams. If raw material prices continue to increase, it will put certain pressures on theproduction and operations. In addition, the Company relies on third party manufacturersand suppliers for selected raw materials, components, and manufacturing equipment. Anydisruption in supply chain or significant price increases will have a negative impact on theCompany’s business. As a leader in the industry, the Company will take actions and havecontingency plans including volume and price adjustment mechanism and hedging toreduce the volatility of raw material prices.

6. Operational risks in overseas markets. As manifested by the increasing percentage of revenue

from overseas markets, the Company has developed our global business to a certain extentand established production bases, R&D centers, and marketing centers in key regions ofthe world. Overseas markets are subject to political and economic events (including eventssuch as military conflicts and wars), different legal systems and regulatory regimes of thosecountries and regions. Significant changes in these factors will pose certain risks to theCompany’s local operations. The Company has taken various measures to mitigate therelevant impacts, including collaborating with suppliers and distributors, improvingproduction efficiency to offset the selling expenses, potentially expanding the Company’ssupply resources to other countries, and adopting safety measures to protect ouremployees and assets.

Section III Management Discussion and Analysis

7. Risk of relevant policy changes. The home appliance industry is closely related to the

consumer market and property market. Changes in macroeconomic policies, consumptionand investment policies, property policies and relevant laws and regulations will affect theproduct demands from distributors, and in turn the sales of the Company. The Companywill closely monitor changes in the relevant policies, laws, and regulations, and makeforecasts of market changes, in order to ensure further development of the Company.

8. Credit risk. There are possibilities that 1) the Company may be unable to collect all trade

receivables from its distributors, or 2) distributors are unable to settle the Company’s alltrade receivables in a timely manner. If that is the case, the Company’s business, financialstatus, and operation performance may be affected negatively. To mitigate this risk, theCompany will maintain flexibilities by offering credit period of 30 to 90 days to certaindistributors based on their credit history and transaction amount.

9. Inventory risk. Excess inventory might occur as the Company may not accurately predict

trends and events at all times and maintain optimal inventory levels. Therefore, theCompany may be forced to offer discounts or promotions to accelerate the slow-movinginventory in these extreme cases. On the other hand, inventory shortage may lead to lossof revenues. The Company will actively manage its inventory and adjust levels according tomarket demand movements, in addition to the regular impairment tests.

10. Capital Expenditure Risk. In the current macroeconomic environment characterized by slowing

global economy and declining consumer demand, the existing production capacities mayoverwhelm the market in extreme case. This could lead to low utilization rate across theindustry, lower down profitability and ROEs. The Company will actively manage thechanges in the macroeconomic environment by forecasting and recalibrating marketdemand trends, optimizing capacity footprint, and improving existing utilization rate, in orderto minimize capital expenditure risks.

(V) Others

□ Applicable √ Not Applicable

VII. EXPLANATION OF CIRCUMSTANCES AND REASONS FOR NON-

DISCLOSURE BY THE COMPANY IN CONSIDERATION OFINAPPLICABLE REGULATIONS, STATE SECRETS AND COMMERCIALSECRETES

□ Applicable √ Not Applicable

Section IV Corporate Governance

I. EXPLANATION OF CORPORATE GOVERNANCE

√ Applicable □ Not Applicable

During the reporting period, the Company has strictly complied with the requirements of the relevantlaws and regulations, including the Company Law of the People’s Republic of China, Securities Law ofthe People’s Republic of China, Code of Corporate Governance of Listed Companies and the listingrules of its listed jurisdictions. While maintaining high quality development in terms of performance, theCompany has been continuously improving its governance structure, regulating its operation, enhancingthe transparency and quality of its information disclosure, treating various investors fairly, focusing onshareholder return, implementing its equity incentive mechanism and upgrading the level of itscorporate governance.

1. Improving the governance structure

The Company has set up a standardized and orderly corporate governance structure composedof the general meeting of shareholders, the Board of Directors and its special committees(including the Strategy Committee, Audit Committee, Nomination Committee, Remuneration andAssessment Committee and ESG Committee (i.e. Environmental, Social and GovernanceCommittee)), the Board of Supervisors, and the senior management. We have established agovernance mechanism with clear lines of authority and responsibility, mutual coordination andchecks and balances, which has guaranteed efficient and compliant corporate governance.

Board of Supervisors

Remuneration and Assessment Committee

ESG Committee

Audit CommitteeStrategy Committee

Nomination Committee

General meeting of shareholders

Board of DirectorsSenior management

Governance structureDuring the reporting period, the Company has convened a total of five general meeting ofshareholders, four Board meetings, four meetings of the Board of Supervisors, three meeting ofthe Strategy Committee, five meetings of the Audit Committee, two meetings of theRemuneration and Assessment Committee, one meeting of the Nomination Committee and threemeetings of the ESG Committee. All meetings and voting procedures complied with relevantprovisions specified in laws and regulations, the Articles of Association and rules of negotiation,and all voting results were legal and valid. These laid a solid foundation for the Company’sstandardized operation.

Section IV Corporate Governance

2. General meetings

The Company has strictly complied with the provisions of the Articles of Association and theRules of Procedure for the General Meetings in convening and holding general meetings. Generalmeetings are witnessed by lawyers on site and legal opinions are issued on their legality. TheCompany has established and improved effective channels of communication betweenshareholders and the Board of Directors to ensure the shareholders’ right to information,participation and voting in respect of any significant issues of the Company. During the reportingperiod, the Company has held a total of five general meetings.

3. Board of Directors

The Board of Directors is mainly responsible for deciding the Company’s operational andinvestment plans, formulating the Company’s annual financial budget and final account plans,formulating the Company’s profit distribution plan and loss recovery plans, formulating theCompany’s plans for the increase or reduction of registered capital, issuance of bonds or othersecurities and listing, as well as the powers as stipulated in other laws and regulations and theArticles of Association. During the reporting period, the Board of Directors has held fourmeetings. The Board of Directors operated in accordance with rules and were able to performtheir duties under Articles of Association and relevant laws and regulations and practicallyimplement relevant decisions at the general meetings. The decision-making procedure andparticulars of the resolutions of the Board of Directors were in compliance with Articles ofAssociation and relevant requirements under laws and regulations, and the resolutions made werelegal and valid.

(1) Board Diversity

The Company is fully aware that board diversity will help to improve the efficiency indecision-making of the Board of Directors, reduce management risks, and make betterdecisions for the sustainable and healthy development of the Company. In determining thecomposition of the Board of Directors, the Company took full account of the diversity of themembers of the Board, including but not limited to gender, age, culture, educationbackground, industry experience, professional skills, knowledge, term of service and otherrelevant factors. The Nomination Committee is responsible for reviewing the effectivenessand implementation of the Board Diversity Policy and conducting regular annual diversityassessments.During the reporting period, the Board of Directors of the Company consists of 9 directors,including 2 executive directors, 3 non-executive directors and 4 independent directors. 2directors are female, accounting for 22.2% of the Board of Directors, representing anincrease of 13.2% as compared with the previous Board of Directors (9%); 4 of whom areindependent directors, accounting for 44.4% of the Board of Directors, representing anincrease of 8.1% as compared with the previous Board of Directors (36.3%). The membersof the Board of Directors have extensive knowledge and experience in industry experience,Internet of Things, corporate governance, global market experience, financial managementand risk management, which will help the Board of Directors to make the best decisionsand promote the sustainable and healthy development of the Company.

Section IV Corporate Governance

(2) Board Independence

The independent directors of the Company are all senior professionals with expertise inaccounting, finance and business management. During the reporting period, theindependent directors of the Company performed specific duties in accordance with theArticles of Association and the listing rules of its listed jurisdictions, including participating inthe meetings of each of the Company’s special committees, providing advice to theCompany on its operation and management; and providing independent opinion onconnected transactions, external guarantees and other significant transactions of theCompany. By performing their duties as mentioned above, the independent directors helpprotect the interests of the Company and the shareholders as a whole, and promote thedevelopment of the Company. The chairman of each of the Company’s special committees(except the Strategy Committee and ESG Committee) are all independent directors. Thenumber of independent directors present at the meetings of the Audit Committee, theRemuneration and Assessment Committee, the Nomination Committee and the StrategyCommittee accounted for at least one-half of the quorum of such meeting (inclusive).

4. Board of Supervisors

During the reporting period, the Board of Supervisors operated in accordance with rules andwere able to perform their duties under Articles of Association and relevant laws and regulations.The number and composition of the members of the Board of Supervisors complied withrequirements under laws and regulations. During the reporting period, the Supervisors of theCompany performed their duties earnestly and supervised finance matters of the Company andperformance of duty by the Company’s director and senior management in accordance withrequirements under Articles of Association and Rules of Procedure for the Board of Supervisors.

5. ESG Governance Structure

The ESG Executive Working Group has been further refined: In 2024, to deepen the practice ofESG management, Haier Smart Home strengthened its organizational structure system based onthe global three-tier ESG governance framework (ESG Committee of the Board of Directors, theESG Global Executive Office, and the Global ESG Executive Working Group,). The ESG ExecutiveWorking Group established new sub-clusters, including the Environmental Management Cluster,Sustainable Risk Management Cluster, Corporate Governance Cluster, and Supply ChainManagement Cluster, to provide organizational support for more solid advancement of globalESG management.Within this framework, the overseas structure has further integrated the ESG managementarchitecture on the basis of the existing sustainability management frameworks for GEAppliances, FPA, Candy, and India. Each overseas region has established its own ESGmanagement structure, which, in accordance with applicable laws and regulations, promotesESG-related work. This includes setting ESG goals, directions, and plans; monitoring andreviewing ESG commitments and related matters; preparing annual ESG reports; anddisseminating and promoting a culture of sustainability within teams, as well as sharing bestpractices. For details, please refer to relevant information in 2024 Sustainability Report of HaierSmart Home Co., Ltd. published on the same date of this report.

Section IV Corporate Governance

6. Information disclosure

Haier Smart Home has strictly complied with the regulatory requirements on informationdisclosure in China and overseas and fulfilled its information disclosure obligations. During thereporting period, on the basis of high-quality mandatory information disclosure, the Companycontinued to maintain voluntary disclosure on matters of key concern to domestic and overseasinvestors and the capital market, such as corporate strategy, investment and acquisition project,and ESG, so as to continuously enhance the quality and transparency of disclosure.

7. Treating various investors fairly and focusing on shareholder return

During the reporting period, the Company strengthened communication and exchange withinvestors in an active, open, innovative and professional manner so as to enhance investors’understanding and recognition of the Company and safeguard the legal rights of investors. Inaccordance with guideline of the Management System for Investor Relation, the Companyintegrated business and financial resources by the office of the board of Directors and realizedpositive and all-around access to investors in a multi-layer and diversified format throughintroduction reference, result announcement conference, and online forum. Meanwhile, theCompany replied investors on a timely basis by ways of interview, e-mail, phone, fax and thewebsite (http://sns.sseinfo.com) and enhanced interaction with investors, so as to respect andprotect the interests of investors, with the aim of achieving harmonious and mutual success withthe Company, staff and investors.The Company has always applied a stable and sustainable profit distribution policy. During thereporting period, the Company strictly followed the requirements set out in the Articles ofAssociation and in the Shareholder Return Plan for the Next Three Years of the Company inimplementing the profit distribution policy. As at 31 December 2024, the Company had achievedcumulative cash dividends of approximately RMB37,200 million since the listing of A-share in1993. During the reporting period, the Company repurchased a total of 20,082,042 A shares,with a payment of RMB470 million (with 54,051,559 repurchased treasury stocks beingcancelled), and repurchased 1.15 million Hong Kong shares, with a payment of HKD27 million.

8. Incentive mechanisms

The Company has been adhering to the management model of “RenDanHeYi”, and taking the“maximization of the value of people” as the core. In line with the global landscape of the capitalmarket, the Company has established a short-term plus mid to long-term incentive system whichaligns the interests of employees and all shareholders. During the reporting period, the Companyhas continued its incentive plan for the previous period and continued to introduce domestic andoverseas incentive plans with various appraisal cycle, multi-level and all-round benefits, includingA-Share Core Employee Stock Ownership Plan, H-Share Core Employee Stock Ownership Plan,H-Share Overseas Trust Incentive Plan, and A-Share Option Incentive Scheme. The Company hasalso optimized its relevant assessment indicators according to the Company’s situation to ensurea deeper and more effective alignment of interests between the participants and the Company.Whether there is a significant difference between the corporate governance and requirements inrespect of corporate governance of listed companies of laws, administrative regulations and theCSRC; if so, the reasons should be explained

□ Applicable √ Not Applicable

Section IV Corporate Governance

II. SPECIFIED MEASURES ADOPTED BY THE CONTROLLINGSHAREHOLDERS AND ULTIMATE CONTROLLERS TO MAINTAININDEPENDENCE WITH RESPECT TO ASSETS, PERSONNEL, FINANCE,ORGANIZATION, BUSINESS, AND THE SOLUTIONS ADOPTED,WORKING PROGRESS AND SUBSEQUENT WORKING PLANS IN CASEOF THE COMPANY’S INDEPENDENCE BEING AFFECTED

□ Applicable √ Not Applicable

Controlling shareholders, ultimate controllers and other parties controlled by them engaged in businessthat are same as or similar to the company, peer competition and impact of significant changes inpeer competition on the company, solutions adopted, working progress and subsequent solution plans

□ Applicable √ Not Applicable

III. BRIEF INTRODUCTION TO THE GENERAL MEETINGS OF

SHAREHOLDERSMeetingsDate

Index for details of websites designatedfor publishing resolutionsDate of disclosureResolutions approved2023 Annual General

Meeting

26 June 2023For details, please refer to the Announcement

on Resolutions Passed at the 2023 AnnualGeneral Meeting, 2024 First A SharesClass Meeting, 2024 First D Shares ClassMeeting and 2024 First H Shares ClassMeeting of Haier Smart Home Co., Ltd.(L2024–022) published by the Company onthe website of Shanghai Stock Exchange(www.sse.com.cn) and the four majorsecurities Newspapers.

21 June 2024Considered and approved the

resolutions related to annualreport, internal control auditreport, profit distributionproposal, reappointment ofauditor, external guarantees,general mandate to additionalissue/repurchase, employeestock ownership plans, etc.2024 First A Shares ClassMeeting

Considered and approved theresolutions for generalmandate to repurchase2024 First D Shares Class

Meeting2024 First H Shares ClassMeeting2024 First ExtraordinaryGeneral Meeting

20 December 2024For details, please refer to the Announcement

on Resolutions Passed at the 2024 FirstExtraordinary General Meeting of HaierSmart Home Co., Ltd. (L2024–046)published by the Company on the websiteof Shanghai Stock Exchange (www.sse.com.cn) and the four major securitiesNewspapers.

21 December 2024Pertains to the resolutions on the

acceptance of voting rightsentrustment and connectedtransactions

Preferred shareholders whose voting rights have been restored requested an extraordinary generalmeeting

□ Applicable √ Not Applicable

Section IV Corporate Governance

Explanation of Shareholders’ general meeting

√ Applicable □ Not Applicable

(1) The 2023 Annual General Meeting and the 2024 First A/D/H Shares Class Meetings of the

Company was held in successive order by way of on-site voting, off-site voting and networkvoting by poll at Room B101, Haier RenDanHeYi Research Center, Haier Science andTechnology Innovation Ecological Park, No.1 Haier Road, Qingdao, the PRC, in the afternoon on20 June 2024, considering the annual report and other relevant resolutions. The total number ofthe shares of the Company carrying voting right amounted to 9,292,876,856 shares (of which6,163,314,617 shares were A shares, 271,013,973 shares were D shares and 2,858,548,266shares were H shares). 602 shareholders and proxies, representing 6,427,260,204 shares or

69.16% of the total number of the shares of the Company carrying voting right, were present at

the 2023 Annual General Meeting. 545 shareholders and proxies, representing 4,144,199,609shares or 67.24% of the total number of A shares of the Company carrying voting rights, werepresent at the 2024 First A Shares Class Meeting. 51 shareholders and proxies, representing167,459,817 shares or 61.79% of the total number of D shares of the Company carrying votingrights, were present at the 2024 First D Shares Class Meeting. 6 shareholders and proxies,representing 2,111,641,413 shares or 73.87% of the total number of H shares of the Companycarrying voting rights, were present at the 2024 First H Shares Class Meeting. The Directors,supervisors and senior management of the Company as well as the lawyers engaged by theCompany also attended the abovementioned four meetings. The abovementioned four meetingswere convened by the Board of the Company, and Chairman Mr. Li Huagang presided overthese meetings. The Company had 9 Directors, of whom 9 directors attended the meetings; theCompany had 3 supervisors, of whom 3 supervisors attended the meetings. The secretary of theBoard of the Company attended the abovementioned meetings and other members of seniormanagement of the Company were invited to attend the abovementioned meetings.

(2) The 2024 First Extraordinary General Meeting of the Company was held in by way of on-

site voting, off-site voting and network voting by poll at Room B101, Haier RenDanHeYiResearch Center, Haier Science and Technology Innovation Ecological Park, No.1 Haier Road,Qingdao, the PRC, in the afternoon on 20 December 2024, considering resolutions on theacceptance of voting rights entrustment and connected transactions. The total number of theshares of the Company carrying voting right amounted to 9,322,993,464 shares (of which6,194,581,225 shares were A shares, 271,013,973 shares were D shares and 2,857,398,266shares were H shares). 2,420 shareholders and proxies, representing 6,639,001,298 shares or

71.21% of the total number of the shares of the Company carrying voting right, were present at

the 2024 First Extraordinary General Meeting. The Directors, supervisors and senior managementof the Company as well as the lawyers engaged by the Company also attended theabovementioned meeting. The abovementioned meeting was convened by the Board of theCompany, and Chairman Mr. Li Huagang presided over these meeting. The Company had 9Directors, of whom 9 directors attended the meeting; the Company had 3 supervisors, of whom3 supervisors attended the meeting. The secretary of the Board of the Company attended theabovementioned meeting and other members of senior management of the Company wereinvited to attend the abovementioned meeting.

Section IV Corporate Governance

IV. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT(I) Changes of shareholding and remuneration of current and retired directors,supervisors and senior management during the reporting period

√ Applicable □ Not Applicable

Unit: share

NameTitleGenderAge

Appointmentdate

Expiration dateof appointment

Shareholdingsat the beginningof the year

Shareholdingsat the end ofthe year

Increase/decrease inshares for theyearReason for increase/decrease

Totalremunerationreceived fromthe Companyduring thereportingperiod(RMB0’000)(before tax)

Whetherreceiveremunerationfrom theCompany’srelated partyLi HuagangChairman, Chief Executive

Officer

Male5628 June 202227 June 2025919,7101,050,444130,734Employee stock

ownership plan vested

345NOShao XinzhiVice ChairmanFemale5528 June 202227 June 202510125,55825,457YESGong WeiDirector, Chief Financial

Officer, vice president

Male5228 June 202227 June 20252,004,7242,072,52767,803Employee stock

ownership plan vested

214NOYu Hon ToDirectorMale7728 June 202227 June 202534NOLi Kam FunDirectorFemale7328 June 202227 June 202534NOChien Da-chunIndependent directorMale7228 June 202227 June 202534NOWong Hak KunIndependent directorMale6928 June 202227 June 202534NOLi ShipengIndependent directorMale5828 June 202227 June 202534NOWu QiIndependent directorMale5828 June 202227 June 202534NOLiu DalinChairman of the Board of

Supervisors

Male4528 June 202227 June 202536,67668,39131,715Employee stock

ownership plan vested

YESMa YingjieSupervisorFemale5628 June 202220 June 202412,71912,719Employee stock

ownership plan vested

34NOYu MiaoEmployee supervisorMale4328 June 202227 June 20256,43613,6487,212Employee stock

ownership plan vested

46NOLiu YongfeiSupervisorMale4021 June 202427 June 202519NOXie JuzhiVice presidentMale5928 June 202227 June 2025101,641180,80879,167Employee stock

ownership planvested, increasedthrough secondarymarket

189NOLi PanVice presidentMale4928 June 202227 June 2025598,480664,37565,895Employee stock

ownership plan vested

127NOZhao YanfengVice presidentMale4828 June 202227 June 2025146,458247,484101,026Employee stock

ownership plan vested

248NOLi YangVice presidentMale4928 June 202227 June 202571,262151,25279,990Employee stock

ownership plan vested

210NOSong YujunVice presidentMale5028 June 202227 June 2025191,182287,47896,296Employee stock

ownership plan vested

213NOGuan JiangyongVice presidentMale4728 June 202227 June 2025163,555264,867101,312Employee stock

ownership plan vested

233NOWu YongVice presidentMale4728 June 202227 June 2025238,964334,16695,202Employee stock

ownership plan vested

188NOHuang XiaoyuVice presidentMale4828 June 202227 June 202576,708110,69533,987Employee stock

ownership plan vested

126NOLiu XiaomeiSecretary to the Board of

Directors

Female4028 June 202227 June 202513,95324,91910,966Employee stock

ownership plan vested

64NOTotal/////4,582,5695,509,331926,762/2,460/

Section IV Corporate Governance

Note: (1) all the shares in the above table are A-shares: (2) for new directors, supervisors and senior management who joinedduring the reporting period, their shareholdings at the beginning of the year are based on the first day of theirappointment, and for directors, supervisors and senior management who left office during the reporting period, theirshareholdings at the end of the year are based on the date they left office.

NameMajor working experienceLi HuagangMale, born in 1969. He graduated from Huazhong University of Science

and Technology in 1991 with a Bachelor’s degree of Economics, andfrom China Europe International Business School in 2014 with a degreeof Executive Master of Business Administration (EMBA). He is currentlychairman and president of Haier Smart Home Co., Ltd. Mr. LI Huagangjoined Haier in 1991 and served as the sales head of the Marketing andPromotion Division of Haier (海爾商流本部銷售事業部長) and the generalmanager of China operations of Haier Smart Home. From August 2017 toMarch 2019, he served as the chief executive officer of Haier Electronics.Since March 2019, Mr. LI has been appointed as an executive director ofHaier Electronics. He has been an executive director and president of theCompany since 2019. Mr. LI Huagang has extensive experience in thefields of corporate management, marketing, brand operation, and globalbusiness operation. Mr. LI Huagang was successively awarded 2015China Home Appliance Marketing Leader, Award of OutstandingContribution in 40-Years Development of China’s Home ApplianceIndustry 2018, 2019 Person of the Year of China’s Top Ten Brands,2021 Taishan Industry Leading Talent and 2023 Model Worker inShandong Province.Shao XinzhiFemale, born in 1970, holds a Master of Business Administration degree,

and is a senior accountant. She currently serves as the vice presidentand Chief Financial Officer of Haier Group, as well as the vice chairmanof Haier Smart Home. Ms. Shao adheres to the goal of innovation andvalue-enhancement, empowering the high-quality development of theindustry, and comprehensively builds the group’s financial ecosystemthrough financial strategy formulation, financial system construction andoperation, asset management, capital operation and other financial fullvalue chain management. In 2000, Ms. Shao served as the chiefaccountant of Haier Air Conditioning Division and the general manager ofthe strategy center of Haier Group’s financial management department.In 2007, Ms. Shao established the first financial sharing center in thehome appliance industry, pioneering the “cloud + end” financialmanagement innovation model with Chinese characteristics to provideenterprises with comprehensive financial best solutions, becoming one ofthe industry benchmarks and winning the first prize of the NationalEnterprise Management Modernization Innovation Achievement. In 2019,Ms. Shao was appointed as the vice president of Haier Group and theoperator of the Big Sharing Empowerment Platform. In 2020, Ms. Shaowas appointed as vice president and Chief Financial Officer of HaierGroup. Ms. Shao has been honored as “National Advanced AccountingWorker”, “Qingdao Top Talent”, “ACCA Outstanding Achievement Award”and “IMA Outstanding Contribution Leader in Management Accounting”over the years.

Section IV Corporate Governance

NameMajor working experienceGong WeiMale, born in 1973. He graduated from the University of International

Business and Economics in 2011, and obtained a degree of ExecutiveMaster of Business Administration. He is also a member of the CharteredInstitute of Management Accountants (CIMA) and an International CertifiedPublic Accountant (ICPA). Mr. Gong Wei served as the financial managerof Haier Smart Home Co., Ltd, the senior finance manager and seniorfinancial analyst of Haier Group, the Chief Financial Officer of HaierWashing Machine Division, the Chief Financial Officer of Haier AirConditioning Division, the Chief Financial Officer of Haier White GoodsGroup, with extensive experience in financial management. Mr. Gong Weiwas granted honorary titles such as Young Post Expert in Qingdao City(青島市青年崗位能手), Qingdao Top Talent (青島市拔尖人才),Outstanding Accounting Workers in Shandong Province (山東省優秀會計工作者) and National Outstanding Accounting Workers (全國優秀會計工作者), and received several awards, including Top Ten CFO in China by“New Money” Magazine (《新理財雜志》), International Finance Leaders ofthe Year in China, and Outstanding CFO at the 13th JRJ “GoldenWisdom Award”(第十三屆金融屆「金智獎」傑出首席財務官). He iscurrently a director, the Chief Financial Officer and vice president of HaierSmart Home Co., Ltd.Yu Hon ToMale, born in 1948. He holds a Bachelor of Social Science degree from

Chinese University of Hong Kong. He is a Fellow of the Institute ofChartered Accountants in England and Wales and an Associate Memberof Hong Kong Institute of Certified Public Accountants. Mr. Yu is achartered accountant with over 40 years’ experience in the fields ofauditing, corporate finance (including advisory on IPO, mergers &acquisitions and financial restructuring), financial investigation andcorporate governance. Mr. Yu was formerly a partner of a renownedinternational accounting firm with extensive experience in the corporatefinance advisory assignments in Greater China for Hong Kongcorporations, private equity groups and multinationals. He is currently adirector of 11th session of the Board of Directors of Haier Smart HomeCo., Ltd.

Section IV Corporate Governance

NameMajor working experienceLi Kam FunFemale, born in 1952. She graduated from University of Hong Kong with

Bachelor of Arts and Master of Business Administration degrees. She wasconferred with the degree of Doctor of Business Administration, honoriscausa, from the Hong Kong Metropolitan University in 2014. Ms. Li KamFun served as an independent non-executive director in the board ofHaier Electronics Co., Ltd., from 2013 to 2020 and currently serves as adirector of the 11th Board of Directors of Haier Smart Home Co., Ltd.Prior to that, Ms. Li Kam Fun had a distinguished career that spanned34 years with Amway Corporation. When she resigned in 2011, she heldthe concurrent positions of Executive Vice President of AmwayCorporation and Executive Chairman of Amway China Co. Ltd.responsible for Amway Greater China & Southeast Asia Region. Fouryears later after her retirement from Amway, Ms. Li Kam Fun took up therole of president of Our Hong Kong Foundation in early 2015, and heldthe position until the end of 2022. Ms. Li Kam Fun had also been anindependent non-executive director of numerous world-renownedbusiness corporations including Nestle S.A, (a publicly listed company onthe SIX Swiss Exchange) from 2012 to 2023, Amcor Limited (a companylisted on the Australian Securities Exchange) from 2014 to 2019, TrinityLimited (a company listed on the Main Board of the Hong Kong StockExchange) from 2011 to 2020. Ms. Li Kam Fun’s leadership was wellrecognised in the business community. She was twice named the“World’s 100 Most Powerful Women” by Forbes Magazine in 2008 and2009. CNBC awarded Ms. Li Kam Fun with the “China TalentManagement Award” in its 2007 China Business Leaders Awards. Ms. LiKam Fun currently serves as a member of the Election Committee ofHong Kong Special Administration Region (“HKSAR”), a member of theSocial Development Expert Group of the Chief Executive’s Policy Unit ofHKSAR, an honorary special representative, a conference consultant andhonorary president of All-China Women’s Federation, a permanenthonorary director of The Chinese General Chamber of Commerce、acourt member of the Hong Kong Metropolitan University and a memberof the advisory panel of the Xiqu Centre of the West Kowloon CulturalDistrict Authority.Chien Da-chunMale, born in 1953. He served as Chief Executive Officer of IBM ASEAN/

South Asia, Chairman and Chief Executive of IBM Greater China region.He graduated from the Department of Mathematics of TamkangUniversity of Taiwan, and studied advanced management courses in theInstitute of Business Administration of Harvard University, as well as theglobal senior manager courses of International Business MachinesCorporation (IBM). He was a director of ENN Group, and is currently anindependent director of the 11th session of the Board of Directors ofHaier Smart Home Co., Ltd, and professor of Management Practice atthe School of Business of Renmin University of China/Academic Directorof EE Centre.

Section IV Corporate Governance

NameMajor working experienceWong Hak KunMale, born in 1956. He received a Bachelor’s of Social Science degree

from University of Hong Kong. He has over 36 years of experience inauditing, assurance and management in Deloitte China. He has been apartner of Deloitte China since 1992 and served as a member of theboard of directors of Deloitte China from 2000 to 2008. Prior to hisretirement in May 2017, he was Deloitte China’s National ManagingPartner of Audit & Assurance. Mr. Wong is an associate of the HongKong Institute of Certified Public Accountants (HKICPA), an associate ofthe Association of Chartered Certified Accountants (ACCA), an associateof the Chartered Institute of Management Accountants (CIMA), anassociate of The Chartered Governance Institute (previously known as“The Institute of Chartered Secretaries and Administrators”). He currentlyserves as an independent non-executive director of Yue Yuen IndustrialHoldings (Limited), Lung Kee (Bermuda) Holdings Limited, GuangzhouAutomobile Group Co., Ltd., Hangzhou SF Intra-City Industrial Co., Ltd.and Haier Smart Home Co., Ltd.Li ShipengMale, born in 1967. He holds a bachelor’s and Master’s degree from

University of Science and Technology of China, and a PhD degree fromLehigh University, USA. Mr. Li has extensive experience in Internet ofThings technology and artificial intelligence. Mr. Li is currently a chairscientist at the International Digital Economy Academy and an executivedirector of the Low Altitude Economic Branch. Prior to that, he served asthe Chief Researcher and Deputy Dean of Microsoft Research Asia, ChiefTechnology Officer of Cogobuy Group, Vice President of iFlytek Group,Executive President and Chief Scientist of Shenzhen Institute of ArtificialIntelligence and Robotics. Mr. Li is a member of the InternationalEurasian Academy of Sciences and a fellow of the International Instituteof Electrical and Electronics Engineers (IEEE fellow). He was listed as oneof the world’s top 1,000 computer scientists by Guide2Research andranked top 20 in Mainland China in 2020. Mr. Li is a renowned expert inInternet, computer vision, cloud computing, Internet of Things andartificial intelligence. He is currently an independent director of the 11thBoard of Directors of Haier Smart Home Co., Ltd.

Section IV Corporate Governance

NameMajor working experienceWu QiMale, born in 1967. He has 25 years of (New PCEBG) experience in

world-class management and consulting companies. He is currently anindependent director of the 11th session of the Board of Haier SmartHome Co., Ltd. He served as the vice president (Global) and vicechairman (Greater China) of Accenture, and the chairman of Shun ZheTechnology Development Co., Ltd. He was a member and the president(Greater China) of Roland Berger’s Global Management Committee, amember of Roland Berger’s Global Supervisory Board, a seniorconsultant for Foxconn’s D sub-business group strategy and intelligentmanufacturing and a consultant of Xnode, a famous accelerator forstartups. He was awarded 2015 Outstanding Talent in Jing’an District,Shanghai. Mr. Wu’s experience in consulting industry involvestransportation/logistics, high-tech manufacturing, tourism, finance,consumer goods, real estate, government departments and otherindustries. His has extensive experience in development strategy,organizational change, sales and brand strategy, corporate innovation,digital transformation and intelligent manufacturing, post-mergerintegration, regional industrial and economic development and upgrading.He is a well-known expert in China in Industry 4.0, transportation andregional planning and development. He served as a consultant forHangzhou Bay Development Planning, a member of the IntelligentManufacturing Expert Committee of Municipal Government, deputy headof the 13th Five-Year Planning Expert Committee of Zhengzhou City,Henan Province, vice chairman of China Cold Chain Alliance.Liu DalinMale, born in 1980, Chinese nationality with no right of permanent

residency abroad. He graduated from the School of MechanicalEngineering of Jinan University and holds a Master’s degree in BusinessAdministration from Renmin University of China. He is a senior engineerand a senior political engineer. From August 2005 to September 2010,he served as a designer of water heater department of Heater HeadOffice at Haier Group, an assistant R&D engineer, a R&D engineer and aR&D model manager of the heater R&D center of the Heater Head Officeof Haier Group successively. From September 2010 to October 2015, hewas the deputy secretary of the Youth League Committee of Haier Groupand the president of the Board of Supervisors of Gooday Supply ChainTechnologies Co., Ltd. Mr. Liu has been the executive director of theEmployee Care Committee of Haier Group since 2022. He has been thechairman of the Board of Supervisors of Haier Smart Home Co., Ltd.since June 2021.Ma YingjieFemale, born in 1969. She is a political engineer, once served as the

secretary of the Youth League Committee of Haier Smart Home Co., Ltd.,the secretary of the labour union of Haier Smart Home Co., Ltd., thecontact person of the customer service department of Qingdao HaierDishwasher Co., Ltd. She was a supervisor of Haier Smart Home Co.,Ltd. before her retirement and departure from office.

Section IV Corporate Governance

NameMajor working experienceLiu YongfeiMale, born in July 1985. Mr. Liu Yongfei graduated with a master’s

degree in management from Dongbei University of Finance andEconomics. He joined Haier Smart Home in July 2011, primarily focusingon strategic planning. Over the years, Mr. Liu has held various roles atthe Company, including strategy consultant, strategy planning specialist,and strategy planning manager. He wis responsible for market researchand analysis and has been involved in the formulation of the Company’sstrategic development plan and the management of strategic projects.Yu MiaoMale, born in 1982, Chinese nationality. Mr. Yu holds a master’s degree.

He serves as the legal manager of Haier Smart Home Co., Ltd. sinceApril 2012, and serves as the employee supervisor of Haier Smart HomeCo., Ltd. since January 2019.Xie JuzhiMale. He graduated from Shandong University of Finance and Economics

in July 1989 with a Bachelor’s degree, and joined Haier in the same year.Mr. Xie has experience in whole-process product management, product-wide services and product-wide marketing. Mr. Xie has held seniorpositions in Electrothermal Division of Haier Group and East ChinaMarketing and Promotion Division of the Haier Group. Since August2002, he has been the general manager of Haier Customer ServiceCompany (海爾顧客服務公司). Since July 2012, he has been the VicePresident of Haier Group in charge of the Group’s integration ofcommunity sales services in first and second-tier cities, and developingthe online and offline sales of new household products. Since December2015, he has been managing the newly developed business segments ofHaier Group, including water purification, logistics, Haier home andGooday services. He is also in charge of the water heater business since2019 and has been appointed as the Chief Executive Officer and anexecutive director of Haier Electronics since 27 March 2019. Since April2021, he is responsible for supervising the smart living appliancessegment. Mr. Xie was awarded honorary titles including the Gold Awardof Outstanding Contribution Award of China’s Home Appliance ServicesIndustry (中國家電服務行業突出貢獻獎金獎) and OutstandingEntrepreneur of Shandong Province (山東省優秀企業家). He is currentlyresponsible for supervising the intelligent industrial platform and is thevice president of Haier Smart Home.

Section IV Corporate Governance

NameMajor working experienceLi PanMale, born in 1976, is a senior engineer. He graduated from Wuhan

University in 1997 and obtained the double degree in economics andinternational business administration. He obtained a Master’s degree fromChina Europe International Business School in 2017. He joined Haier in1997 and currently serves as the general manager of the overseasplatform of Haier Smart Home. Mr. Li has held various positions in HaierGroup, including the assistant director of Asia-Pacific Division, themanager of the Haier ASEAN Center, the manager of the OverseasBrands Marketing Center, the manager of the Overseas Strategic Centerand the director on the operation of overseas markets. He has heldimportant positions of the overseas platform of Haier Group since 2004with extensive frontline management experience in product planning,brand marketing, market exploration and corporate operation. He iscurrently the vice president of Haier Smart Home Co., Ltd.Zhao YanfengMale, born in 1977. He graduated from Tianjin Institute of Light Industry

and obtained a Bachelor’s degree in Mechanical and ElectronicEngineering in 2001. He graduated from Renmin University of China andobtained an Executive Master degree in Business Administration in 2019.He is currently the vice president and general manager of the washingbusiness of Haier Smart Home Co., Ltd. Mr. Zhao joined Haier in 2001and served as the general manager of Haier Group’s regional branch,general manager of the refrigeration business in China and generalmanager of the refrigeration business. He possesses whole-processmanagement experience in product planning, research and development,manufacturing and marketing.

Section IV Corporate Governance

NameMajor working experienceLi YangMale, born in 1976, is a senior engineer. He currently serves as the

general manager for global procurement of Haier Smart Home and vicepresident of Haier Smart Home Co., Ltd. Mr. Li Yang graduated fromQingdao University of Science & Technology in 1998 and obtained aBachelor’s degree in Fine Chemical Engineering. He joined Haier inAugust of the same year. Mr. Li Yang has held positions of the head ofthe quality department of Haier Smart Home, the manufacturing director,the general manager of the internet of clothing platform, the generalmanager of the integrated supply chain. He has served as the generalmanager for global procurement of Haier Smart Home since 2025, andhas been involved in management related to the digital transformation ofglobal procurement at Haier Smart Home. He obtained a degree ofExecutive Master of Business Administration (EMBA) from Xi’an JiaotongUniversity in 2022. The ecological platform of the internet of clothingincubated under his leadership was awarded the first prize for “InnovationResults in Modern Management of National Light Industry Enterprises”(全國輕工業企業管理現代化創新成果) in 2019. Haier Smart Home wasselected as one of the “2023 Intelligent Supply Chain Cases” (2023數智化供應鏈案例) by the Alliance of Industrial Internet, and he received the“Most Promising Entrepreneur in Qingdao in 2018” and the “AdvancedIndividual in Management Innovation of National Light IndustryEnterprises”.Song YujunMale, born in 1975. He graduated from Shandong University of

Technology with a bachelor’s degree in equipment engineering andmanagement in 1998, and received a degree of Executive Master ofBusiness Administration from Tsinghua University in 2015. He joined Haierin 1998 and served as general manager of the Operation Department ofHaier Overseas Promotion Headquarters, director and general manager ofHaier Pakistan Company, executive director of Haier India Company,director of Haier Overseas businesses in South Asia and Southeast Asiaregion, and vice president of Haier Home Appliance Industry Group.Since 1998, he has held various important positions in Haier overseascompanies and has rich experience in product, manufacturing, R&D andmarketing. He was awarded the Labor Model of Qingdao City, theOutstanding Talent in Professional Technology in Qingdao City, QingdaoHigh-level Service Talent, the first prize of the 2023 Science andTechnology Advancement Award of China National Light Industry Council(2023年度中国輕工業聯合會科技進步獎) and the first prize of theInnovation Award 2023 of Energy Conservation Association (2023年節能協會創新獎) and other honorary titles, and ranked among Qingdao TopTen “Civilized Citizens” in 2024. He is currently the general manager ofHaier Air Industry Group and vice president of Haier Smart Home Co.,Ltd.

Section IV Corporate Governance

NameMajor working experienceGuan JiangyongMale, born in 1978. He graduated from Tsinghua University in 2024 with

a Master’s degree in Advanced Business Administration. Mr. Guan joinedHaier in 2001 and currently serves as the general manager of the LCprogramme at Haier Group and the general manager of water heater andthe internet of water platform at Haier Smart Home. Mr. Guan has beenresponsible for product management, production and manufacturing,product marketing and industrial pipeline management and served as aregional general manager, the market director of the water heaterbusiness and the general manager of the water heater business and theLC programme. He possesses whole-process management experience inproduct manufacturing, marketing, corporate planning management andindustrial platforms.Wu YongMale, born in 1978. He graduated from Tianjin College of Commerce in

2001 and obtained a Bachelor’s degree in Heat Supply, Ventilation andAir-conditioning Engineering. He obtained the double degree of EMBAfrom the School of Economics and Management of Tsinghua Universityand the INSEAD in 2015.He has also been recognised as a Mount TaiIndustrial Leader of Shandong Province by the Communist Party of China(中共山東省泰山產業領軍人才). Mr. WU Yong joined Haier Group in2001 and currently serves as the vice president and the general managerof the refrigeration business at Haier Smart Home. He is also responsiblefor the management of the kitchen appliances business. Mr. WU hasserved as the general manager of the PRC Region on manufacturing andproduction of refrigerators, overseas marketing and the air-conditioningbusiness, as well as the general manager of the kitchen appliancesbusiness since joining the Group and possesses whole-processmanagement experience in high-end manufacturing, marketing andindustrial platforms.

Section IV Corporate Governance

NameMajor working experienceHuang XiaowuMale, born in 1977. He graduated from the College of Photoelectric

Engineering, Chongqing University with a Bachelor’s degree inengineering in 1998 and graduated from the Faculty of Business andEconomics of the University of Hong Kong with a master’s degree inbusiness administration in 2004. Mr. Huang has many years of extensiveworking experience in commercial banking, strategic investment, industrialfund, corporate finance and capital market operation and management,and has participated in and led important strategic investment andfinancing projects involving numerous fields such as marketing channels,logistics, home appliances and technology industry. Mr. Huang wasappointed as the vice president of the Company in 2021, responsible for,amongst others, investor relations, capital market, equity financing andstrategic investment, and served as the Director of the ESG ExecutiveOffice of Haier. Prior to that, Mr. Huang worked as the deputy generalmanager of Haier Electronics Group Co., Ltd., a company listed on theStock Exchange, which is controlled by the Company. Before joiningHaier Group, Mr. Huang worked at the Ningbo branch and Shanghaibranch of the Industrial and Commercial Bank of China, InvestmentBanking Division of Guosen Securities and Anglo Chinese InvestmentBanking Group (英高投資銀行集團).Liu XiaomeiFemale, born in 1985. She graduated from the Law School of Minzu

University of China with a double bachelor’s degree in law and literaturein 2009, and graduated from the Department of International Law of theChina Foreign Affairs University with a master’s degree in internationallaw in 2011, and is qualified to practice law in China. Ms. Liu joined theCompany in June 2015 and has been in charge of legal and compliancematters of corporate governance, capital market, M&A and corporatefinance at Haier Electronics Group Co., Ltd. and Haier Smart Home. Sheis currently the Board Secretary of the Company. Prior to joining theCompany, Ms. Liu worked for Jingtian & Gongcheng in Beijing. Ms. Liuhas accumulated extensive work experience in corporate governance,capital market, industrial fund, and investment and financing.Other information

□ Applicable √ Not Applicable

Section IV Corporate Governance

(II) Appointment of current and departing of Directors, Supervisors and SeniorManagement during the reporting period

1. Appointment in shareholder units

√ Applicable □ Not Applicable

NameName of shareholder unitPosition

Start date ofappointment

End date ofappointmentShao XinzhiHaier Group CorporationVice president and Chief

Financial Officer ofHaier Group

2020Shao XinzhiQingdao Haier Venture &

Investment InformationCo., Ltd.

SupervisorLiu DalinHaier Group CorporationExecutive director of the

Employee CareCommittee

2022Explanation ofappointment inshareholderunits

Nil

2. Appointment in other units

√ Applicable □ Not Applicable

NameName of other unitPosition

Start date of

appointment

End date ofappointmentLi HuagangQingdao Haier Multimedia

Co Ltd.

ChairmanGong WeiPegasus Telecom (Qingdao)

Co., Ltd.

DirectorGong WeiPegasus Electronic

(Qingdao) Co., Ltd.

DirectorGong WeiQingdao Haier

CommunicationsCo., Ltd.

DirectorGong WeiQingdao Haier Multimedia

Co., Ltd.

DirectorGong WeiHaier Group Finance

Co., Ltd.

DirectorWong Hak KunYue Yuen Industrial

(Holdings) Limited

Independent directorJune 2018Wong Hak KunLung Kee (Bermuda)

Holdings Limited

Independent directorJune 2018Wong Hak KunGuangzhou Automobile

Group Co., Ltd.

Independent directorMay 2020Wong Hak KunHangzhou SF Intra-City

Industrial Co., Ltd.

Independent directorDecember 2021

Section IV Corporate Governance

NameName of other unitPosition

Start date ofappointment

End date ofappointmentYu Hon ToKeck Seng Investments

(Hong Kong) Limited

Independent non-executive director

April 2013Yu Hon ToMS Group Holdings LimitedIndependent non-

executive director

May 2018Yu Hon ToChina Resources Gas

Group Limited

Independent non-executive director

December 2012Yu Hon ToOne Media Group LimitedIndependent non-

executive director

June 2005Yu Hon ToPlaymates Toys LimitedIndependent non-

executive director

May 2021Li ShipengApplied Artificial Intelligence

Research Center Ofthe Suzhou IndustrialTechnology ResearchInstitute

Director (concurrently)August 2020

Li ShipengThe Chinese University of

Hong Kong (Shenzhen)

Visiting Professor(concurrently)

February 2021February 2024Li ShipengENN Group Co., Ltd.DirectorJune 2024May 2026Li ShipengInternational Digital

Economy Academy(Futian)

Chair scientistMay 2022Li ShipengThe Hong Kong University

of Science andTechnology (Guangzhou)

Part-time Professor(concurrently)

July 2022July 2024Li ShipengCommunication University

of Zhejiang

Director of theEngineeringDepartment(concurrently)

February 2023February 2026Li ShipengJiangsu Hichain Logistics

Co., Ltd.

Chief Scientist(concurrently)

October 2023Huang XiaowuQingdao Overseas Chinese

Industrial Co., Ltd.

DirectorOctober 2022To dateExplanation of

appointment inother units

Nil

Section IV Corporate Governance

(III) Compensation of Directors, Supervisors and Senior Management

√ Applicable □ Not Applicable

Decision-making process of

compensation of Directors,Supervisors and SeniorManagement

The Remuneration and Assessment Committee of theCompany shall formulate the standards, adjust principles,and assess and implement the principles of theremuneration of directors, supervisors and seniormanagement personnel and submit to the Board ofDirectors for consideration and approval.Directors abstain from discussionson their remuneration at theBoard of Directors

YesThe Remuneration and

Assessment Committee orspecial meeting of independentdirectors providedrecommendation oncompensation of Directors,Supervisors and SeniorManagement

During the reporting period, the Remuneration and

Assessment Committee of the Company considered and

approved the 2023 Annual Report of Haier Smart Home

Co., Ltd. on Incentives for Senior Management of the

Company and Implementation of Remuneration

Assessment for Directors and Senior Management, and

considered that the incentive mechanism for senior

management of the Company and the implementation of

Remuneration Assessment for Directors and Senior

Management were effectively carried out in accordance

with the principles and mechanisms established by the

Board of Directors at the beginning of the year; the 2024

Annual Report of Haier Smart Home Co., Ltd. on

Remuneration and Assessment Scheme of Directors and

Senior Management was considered and approved and

arrangements were made for the 2024 Remuneration and

Assessment Scheme of Directors and Senior Management

with proposed resolution submitted to the Board of

Directors for consideration and approval.

Section IV Corporate Governance

Determining basis of matrixcompensation of Directors,Supervisors and SeniorManagement

The cash remuneration of executives in 2024 consists ofmonthly remuneration, bonuses and sharing, and is linkedto orders triggered by the upgrade of the Company’sInternet of Things from “high-end brands” to “scenariobrands” to “ecological brands”. Focusing on the rapidimprovement of profitability and through digitaltransformation, the Company enhanced its competitivenessin the whole process, and achieved sharing of high added-value. Through the innovation of the mechanism, theCompany encouraged its executives to achieve highermarket goals, thus achieving a win-win situation for users,employees, enterprises and stakeholders. At the sametime, the Company continues to promote theimplementation of the employee stock ownership and otherlong-term incentive plans; multiple incentive tools will beeffectively utilised to mobilise competent management,frontline managers and business and technical backboneson a wider scale, further aligning the interests ofshareholders, the Company and incentive recipients, andbringing more efficient and sustainable returns toshareholders. After the approval by the general meeting,the allowance for directors consisted of three components:

fixed remuneration, job-related remuneration and variableallowances. The travelling expenses of directors attendingBoard meetings and general meetings and the expensesrequired for performing their duties and according to theArticles of Association will be reimbursed.Actual compensation paid toDirectors, Supervisors and SeniorManagement

Paid as prescribedTotal of actual compensation paidto all Directors, Supervisors andSenior Management at the endof the reporting period

RMB24.60 million

(IV) Changes in of Directors, supervisors and senior management of the Company

√ Applicable □ Not Applicable

NamePosition heldMovement

Reason ofMovementMa YingjieSupervisorDepartureDeparture due

to retirementLiu YongfeiSupervisorElectedElected

Section IV Corporate Governance

(V) Explanation of penalties imposed by securities regulators in the past three years

□ Applicable √ Not Applicable

(VI) Others

□ Applicable √ Not Applicable

V. RELEVANT INFORMATION ON THE BOARD MEETINGS HELD DURING

THE REPORTING PERIODMeetingDateResolutions approvedThe 9th meeting of theEleventh session of theBoard of Directors

27 March 2024Considered and approved the following resolutions: Report on the 2023 Annual Financial Statements of Haier

Smart Home Co., Ltd., 2023 Annual Report and Annual Report Summary of Haier Smart Home Co., Ltd., 2023Annual Internal Control Evaluation Report of Haier Smart Home Co., Ltd., 2023 Internal Control Audit Report ofHaier Smart Home Co., Ltd., 2023 Annual Profit Distribution Plan of Haier Smart Home Co., Ltd., theResolution on the Shareholder Return Plan for the Next Three Years (2024–2016) of Haier Smart Home Co.,Ltd., the 2023 Performance Evaluation Report on the Accountant Firm and the Report on the SupervisionObligation of the Aduit Committee of the Board of the Director on the Accountant Firm of Haier Smart HomeCo., Ltd., the Proposal on Re-appointment of PRC GAAP Auditor of Haier Smart Home Co., Ltd., the Proposalon Re-appointment of IFRS Auditor of Haier Smart Home Co., Ltd., the Risk Assessment Report on HaierGroup Finance Co., Ltd. in 2023 of Haier Smart Home Co., Ltd., the Resolution on the Anticipated Guarantees’Amounts for Haier Smart Home Co., Ltd. and its Subsidiaries in 2024, the Resolution on the Conduct ofForeign Exchange Fund Derivatives Business of Haier Smart Home Co., Ltd., the Feasibility Analysis Report onConducting Foreign Exchange Fund Derivatives Business of Haier Smart Home Co., Ltd, the Resolution onConducting Commodity Hedging Business of Haier Smart Home Co., Ltd., the Feasibility Analysis Report onConducting Commodity Hedging Business of Haier Smart Home Co., Ltd., the 2023 Environment, Social andGovernance Report of Haier Smart Home Co., Ltd., the Resolution of Haier Smart Home Co., Ltd. on theChange of Use of Certain Repurchased Shares and the Cancellation Thereof, the Resolution on Proposing theGeneral Meeting to Grant General Mandate to the Board of Directors on the Decision to Issue Domestic andOverseas Debt Financing Instruments of Haier Smart Home Co., Ltd. the Resolution on Proposing the GeneralMeeting to Grant General Mandate to the Board of Directors on Additional Issuance of A-shares of Haier SmartHome Co., Ltd., the Resolution on Proposing the General Meeting to Grant General Mandate to the Board ofDirectors on Additional Issuance of H-shares of Haier Smart Home Co., Ltd., the Resolution on Proposing theGeneral Meeting to Grant General Mandate to the Board of Directors on Additional Issuance of D-shares ofHaier Smart Home Co., Ltd., the Resolution on Proposing the General Meeting to Grant the General Mandateto the Board of Directors to Repurchase not more than 10% of the Total Number of H-shares of the Companyin Issue of Haier Smart Home Co., Ltd., the Resolution on Proposing the General Meeting to Grant the GeneralMandate to the Board of Directors to Repurchase not more than 10% of the Total Number of D-shares of theCompany in Issue of Haier Smart Home Co., Ltd., the Resolution on the Amendments to the Articles ofAssociation of Haier Smart Home Co., Ltd., the Resolution on the Amendments to the Rules of Procedure forGeneral Meetings of Haier Smart Home Co., Ltd., the Resolution on the Amendments to the Rules ofProcedure for the Board of Directors of Haier Smart Home Co., Ltd., the Resolution on the Amendments to theImplement Regulations of the Audit Committee of the Board of Directors of Haier Smart Home Co., Ltd., theResolution on the Amendments to the Implement Regulations of the Remuneration and Assessment Committeeof the Board of Directors of Haier Smart Home Co., Ltd., the Resolution on the Amendments to the ImplementRegulations of the Nomination Committee of the Board of Directors of Haier Smart Home Co., Ltd., theResolution on the Amendments to the Management Protocol for Fund-raising of Haier Smart Home Co., Ltd.,the Resolution on the Amendments to the Management System for Independent Directors of Haier Smart HomeCo., Ltd., the Resolution on the Amendments to the Management System for Information Disclosure of HaierSmart Home Co., Ltd., the Resolution on the Amendments to the Management System for Entrusted Finance ofHaier Smart Home Co., Ltd., the Resolution on Convening the 2023 Annual General Meeting and the FirstA-shares/D-shares/H-shares Class Meetings of 2024 of Haier Smart Home Co., Ltd., the Report onRemuneration and Assessment Scheme for the Senior Management for 2024 of Haier Smart Home Co., Ltd.,the Resolution on the 2023 Working Report of the Board of Directors of Haier Smart Home Co., Ltd.

Section IV Corporate Governance

The 10th meeting of theEleventh session of theBoard of Directors

29 April 2024Considered and approved the following resolutions: the 2024 First Quarter Report of Haier Smart Home Co.,

Ltd., the 2024 A Share Core Employee Stock Ownership Plan (draft) of Haier Smart Home Co., Ltd. and itsSummary, the 2024 H Share Core Employee Stock Ownership Plan (draft) of Haier Smart Home Co., Ltd. andits Summary, the Resolution on Partial Cancellation of Share Options under the 2021 A-share Option IncentiveScheme of Haier Smart Home Co., Ltd., the Resolution on Partial Cancellation of Share Options under the2022 A-share Option Incentive Scheme of Haier Smart Home Co., Ltd., the Resolution on the Change ofMembers of the Management Committee of the Restricted Share Plan of Haier Smart Home Co., Ltd., theResolution on the Adjustment to Directors’ Remuneration of Haier Smart Home Co., Ltd.The 11th meeting of theEleventh session of theBoard of Directors

27 August 2024Considered and approved the following resolutions: the 2024 Interim Report of Haier Smart Home Co., Ltd. and

its Summary, the Ongoing Risk Assessment Report on Haier Group Finance Co., Ltd. in the First Half of 2024of Haier Smart Home Co., Ltd., the Resolution on the Investment in a New Project with an Annual Capacity of5 Million Air Conditioners of Haier Smart Home Co., Ltd.,The 12th meeting of theEleventh session of theBoard of Directors

29 October 2024Considered and approved the following resolution: the 2024 Third Quarter Report of Haier Smart Home Co.,

Ltd., the Resolution on the Acceptance of Voting Rights Delegation and Connected Transactions of Haier SmartHome Co., Ltd., the Resolution on Convening the First Extraordinary General Meeting of 2024 of Haier SmartHome Co., Ltd.VI. PERFORMANCE OF DUTIES BY DIRECTORS

(I) Attendance of board meetings and general meetings by directors

Name of director

Whether anIndependentdirector or notAttendance of Board meetings

Attendancesat generalmeetingsRequiredattendances ofBoard meetings

Attendance inperson

Attendance bytelecommunication

Attendanceby proxyAbsence

Absence fromtwo consecutivemeetings inperson or not

Number ofattendance ofgeneralmeetingsLi HuagangNO44000NO5Shao XinzhiNO44000NO5Gong WeiNO44000NO5Chien Da-chunYES44000NO5Wong Hak KunYES44200NO5Li ShipengYES44100NO5Wu QiYES44400NO5Yu Hon ToNO44300NO5Li Kam FunNO44300NO5

Explanation for absence from two consecutive Board meetings in person

□ Applicable √ Not Applicable

Number of Board meetings held in the year4Of which: Number of on-site meetings0Number of meetings held by telecommunication0Number of meetings held both on site and by telecommunication4

(II) Directors’ objection to the relevant matters of the Company

□ Applicable √ Not Applicable

(III) Others

□ Applicable √ Not Applicable

Section IV Corporate Governance

VII. THE COMMITTEES OF THE BOARD

√ Applicable □ Not Applicable

(I) Personnel of The Special Committees of the Board

Categories ofThe Special CommitteesName of PersonnelAudit CommitteeWong Hak Kun, Yu Hon To, Chien Da-chun, Wu Qi, Shao XinzhiNomination CommitteeWu Qi, Li Shipeng, Li HuagangRemuneration andAppraisal Committee

Chien Da-chun, Li Shipeng, Li HuagangStrategy CommitteeLi Huagang, Li Shipeng, Wu Qi, Gong WeiESG (“Environment,Society andGovernance”) Committee

Li Kam Fun, Chien Da-chun, Gong Wei(II) The Company convened 5 Audit Committee meetings during the reporting period

Date of MeetingContents of Meeting

Major Opinionsand Suggestions

Other Notes onPerformance ofDuty25 March 2024Considered and approved the following resolutions:

Report on the 2023 Annual Financial Statements ofHaier Smart Home Co., Ltd., 2023 Report on InternalControl Assessment of Haier Smart Home Co., Ltd.,2023 Report on Internal Control Audit of Haier SmartHome Co., Ltd., the 2023 Performance EvaluationReport on the Accountant Firm and the Report on theSupervision Obligation of the Aduit Committee of theBoard of the Director on the Accountant Firm of HaierSmart Home Co., Ltd., the Proposal on Re-appointment of PRC GAAP Auditor of Haier SmartHome Co., Ltd., the Proposal on Re-appointment ofIFRS Auditor of Haier Smart Home Co., Ltd., theResolution on the Anticipated Guarantees’ Amountsfor Haier Smart Home Co., Ltd. and its Subsidiaries in2024, 2023 Annual Profit Distribution Plan of HaierSmart Home Co., Ltd., the Risk Assessment Reporton Haier Group Finance Co., Ltd. in 2023 of HaierSmart Home Co., Ltd., the Resolution on the Conductof Foreign Exchange Fund Derivatives Business ofHaier Smart Home Co., Ltd., the Feasibility AnalysisReport on Conducting Foreign Exchange FundDerivatives Business of Haier Smart Home Co., Ltd,2023 Annual Report on Performance of Duties of theAudit Committee of the Board of Haier Smart HomeCo., Ltd.

No objectionsNil

Section IV Corporate Governance

Date of MeetingContents of Meeting

Major Opinionsand Suggestions

Other Notes onPerformance ofDuty26 April 2024Considered and approved the following resolution:

the 2024 First Quarter Financial Report of Haier SmartHome Co., Ltd.

No ObjectionsNil26 August 2024Considered and approved the following resolutions:

the 2024 Interim Financial Report of Haier SmartHome Co., Ltd., the 2024 Interim Ongoing RiskAssessment Report on Haier Group Finance Co., Ltd.by Haier Smart Home Co., Ltd.

No ObjectionsNil

29 October 2024Considered and approved the following resolution:

the 2024 Third Quarter Financial Report of HaierSmart Home Co., Ltd., the Resolution on theAcceptance of Voting Rights Delegation andConnected Transactions of Haier Smart Home Co.,Ltd.

No ObjectionsNil

11 December 2024Considered and approved the following resolution:

the 2024 Annual Report on Audit Work Plan ofHaier Smart Home Co., Ltd.

No ObjectionsNil

(III) The Company convened 1 Nomination Committee meeting during the reportingperiodDate of MeetingContents of Meeting

Major Opinions

and Suggestions

Other Notes onPerformance ofDuty26 March 2024Considered and approved the following resolutions:

the Report on the Performance of Duty of CurrentDirectors of Haier Smart Home Co., Ltd., Supervisorsand Senior Management, the 2023 Annual Report onthe Performance of Duty of the Nomination Committeeof the Board of Haier Smart Home Co., Ltd.

No ObjectionsNil

Section IV Corporate Governance

(IV) The Company convened 2 Remuneration and Appraisal Committee meetingsduring the reporting periodDate of MeetingContents of Meeting

Major Opinionsand Suggestions

Other Notes onPerformance ofDuty26 March 2024Considered and approved the following resolutions:

the 2023 Annual Report of Haier Smart Home Co.,Ltd. on Incentives for Senior Management of theCompany and Implementation of RemunerationAssessment for Directors and Senior Management,the 2024 Annual Report of Haier Smart Home Co.,Ltd. on Remuneration and Assessment Scheme ofDirectors and Senior Management, the 2023 AnnualReport of Haier Smart Home Co., Ltd. onPerformance of Duties of the Remuneration andAppraisal Committee of the Board

No ObjectionsNil

25 April 2024Considered and approved the following resolutions:

the 2024 A Share Core Employee Stock OwnershipPlan (draft) of Haier Smart Home Co., Ltd. and itsSummary, the 2024 H Share Core Employee StockOwnership Plan (draft) of Haier Smart Home Co., Ltd.and its Summary, the Resolution on PartialCancellation of Share Options under the 2021 A-shareOption Incentive Scheme of Haier Smart Home Co.,Ltd., the Resolution on Partial Cancellation of ShareOptions under the 2022 A-share Option IncentiveScheme of Haier Smart Home Co., Ltd., theResolution on the Vesting of the Second Phase of the2022 A Share and H Share Core Employee StockOwnership Plan of Haier Smart Home Co., Ltd., theResolution on the Change of Members of theManagement Committee of the Restricted Share Planof Haier Smart Home Co., Ltd., the Resolution on theAdjustment to Directors’ Remuneration of Haier SmartHome Co., Ltd.

No ObjectionsNil

Section IV Corporate Governance

(V) The Company convened 3 Strategy Committee meetings during the reportingperiod

Date of MeetingContents of Meeting

Major Opinionsand Suggestions

Other Notes onPerformance ofDuty27 March 2024Considered and approved the following resolutions:

the Resolution on the Shareholder Return Plan for theNext Three Years (2024–2016) of Haier Smart HomeCo., Ltd., the 2023 Annual Report on thePerformance of Duties of the Strategy Committee ofthe Board of Haier Smart Home Co., Ltd.,

No ObjectionsNil

27 August 2024Considered and approved the following resolution:

the Resolution on the Investment in a New Projectwith an Annual Capacity of 5 Million Air Conditionersof Haier Smart Home Co., Ltd.

No ObjectionsNil29 October 2024Considered and approved the following resolution:

the Resolution on the Acceptance of Voting RightsDelegation and Connected Transactions of HaierSmart Home Co., Ltd.

No ObjectionsNil

(VI) The Company convened 3 meetings of the ESG Committee during the reportingperiodDate of MeetingContents of Meeting

Major Opinions

and Suggestions

Other Notes onPerformance ofDuty25 March 2024Considered and approved the following resolutions:

the 2023 Corporate Environmental, Social andGovernance Report of Haier Smart Home Co., Ltd.,2023 Annual Report on the Performance of Duties ofthe ESG Committee of Haier Smart Home Co., Ltd.

No ObjectionsNil

20 June 2024Theme Sharing: Assessment Report on Haier Smart

Home’s ESG Competency

No ObjectionsNil20 August 2024Considered and approved the following resolution:

ESG Work Report for the First Half of 2024 of HaierSmart Home Co., Ltd.

No ObjectionsNil(VII) Details of Disagreements

□ Applicable √ Not Applicable

Section IV Corporate Governance

VIII. BOARD OF SUPERVISORS’ EXPLANATION ON RISKS ABOUT THE

COMPANY

□ Applicable √ Not Applicable

Board of Supervisors had no objections to the supervising items during the reporting period.IX. INFORMATION ON STAFF OF THE PARENT COMPANY AND PRINCIPAL

SUBSIDIARIES AT THE END OF THE REPORTING PERIOD

(I) Staff Information

Number of staff of the parent company33Number of staff of principal subsidiaries122,700Total number of staff122,733Number of employees whose retirement expenses are borne by the parentcompany and the principal subsidiaries

Breakdown by FunctionFunctionNumberProduction75,424Sales19,848Technical22,925Financial1,994Administrative2,542Total122,733

Breakdown by Education BackgroundEducationNumber (person)Bachelor and above41,790College diploma36,351Secondary vocational training diploma and below44,592Total122,733(II) Remuneration policies

√ Applicable □ Not Applicable

Under the guidance of the “RenDanHeYi” management model, the Company adheres to theremuneration philosophy of uniting user pay, value creation and value sharing, and providesemployees with a short, medium and long-term remuneration incentive system that combineslabour income, super-profit sharing and capital gain, as well as all-rounded welfare policies andemployee caring schemes. The Company encourages its employees to work with anentrepreneurial mindset, aligning employee value with company value and shareholder value,continuously improving user experience and achieving a win-win development for both theCompany and its employees.

Section IV Corporate Governance

The Company has established a rich and multi-dimensional incentive mechanism and continuesto implement the “A+H” global incentive system covering both domestic and overseas employeesto attract, motivate and stabilise the Company’s core talent.(III) Personnel Training

√ Applicable □ Not Applicable

The Company has established a comprehensive and hierarchical system for talent training thatcovers all employees, including those based overseas. By providing employees with rich anddiverse learning resources through a wide range of methods such as course training, specialtraining and temporary exchange, the Company promotes talent growth in multiple dimensions foremployees with different needs, thus assisting them in improving their professionalism, expertiseand leadership skills. This year, to meet its employees’ training and development needs, theCompany has set up a learning platform called “Learn with Fun at Smart Home”. This platform isassessable to all employees, including interns and outsourced staffs, who can schedule their owntraining based on their particular needs, and at the times and locations that are most convenientfor them. The platform helps employees continuously improve their skills and advance theircareers. In 2024, the Company organised several training courses on corporate culture, officemanagement, and professional skills, and expanded its training channels to include livebroadcasts and community forums. It achieved 100% training coverage for its entire domesticworkforce, with an average of 68.55 training hours per employee.For details, please refer to relevant information in 2024 Sustainability Report of Haier Smart HomeCo., Ltd. published on the same date of this announcement.(IV) Labor Outsourcing

□ Applicable √ Not Applicable

X. PROPOSAL OF PROFIT DISTRIBUTION OR CAPITALIZATION OF

CAPITAL RESERVE(I) Formulation, implementation or adjustment of the cash dividend policies

√ Applicable □ Not Applicable

The Company’s 2023 profit distribution plan was passed on its 2023 Annual General Meetingheld on 20 June 2024: based on the Company’s total existing shares (deducting the repurchasedshares) of 9,324,143,464 (including 6,194,581,225 A shares, 271,013,973 D shares and2,858,548,266 H shares), it was proposed that the Company would distribute cash dividends ofRMB8.0131 (tax inclusive) per 10 shares to all shareholders, with a total amount before tax ofRMB7,471,472,992.22 (tax inclusive). The plan was implemented and completed in August 2024.Details were set out in the Announcement on Implementation of Rights and Interests Distributionof A-shares for 2023 of Haier Smart Home Co., Ltd. (No.: Lin 2024–032) published by theCompany on the four major securities newspapers and the website of Shanghai Stock Exchangeon 10 August 2024 and relevant announcements in respect of dividend distribution of D sharesand H shares published on the Company’s website, Hong Kong Stock Exchange and otherpublication platforms.

Section IV Corporate Governance

The Company has always applied a stable and sustainable profit distribution policy. During thereporting period, the Company strictly followed the requirements set out in the Articles ofAssociation and in the Shareholder Return Plan for the Next Three Years of the Company. Duringthe formulation of the profit distribution plan, the Company took full account of return forinvestors, the long-term interests of the Company, overall interests of all shareholders andsustainable development of the Company, and continued to implement the stable dividenddistribution policy to provide investors an opportunity to share the growth of value, so thatinvestors could form the expectation of a stable return. The procedures and mechanisms fordecision-making such as Articles of Association and planning of return of shareholdersimplemented by the Company were complete in compliance with laws and regulations. Theprocess was open and transparent while the standard and ratio of dividends was clear.Responsibilities of independent directors were clear during the policy-making process, andindependent directors were given the opportunities to play their roles. Minority shareholders werealso given the opportunity to fully express their views and demands, and the legitimate interestsof minority shareholders were adequately protected.The dividend distribution plan of 2024 of the Company: based on the total number of sharesafter deducting the repurchased shares on equity interest record date for future profitdistribution, it is proposed that the Company will distribute cash dividend of RMB9.65 per 10shares (tax inclusive) with cash dividend of RMB8,996,688,692.76. The retained undistributedprofit would be for the Company’s principal business in order to maintain sustainable and stabledevelopment and to create more value for investors. The proportion of this distribution is 48.01%of the net profit attributable to owners’ parent company in 2024 (In 2024, the Company spentRMB470 million on the purchase of A shares, and spent HKD27 million on the purchase of Hshares; if this is included in cash dividends, the ratio of cash dividends to net profit attributableto owners’ parent company for the year would be over 50.62%).100% dividend is paid in cash. Ifthere is any change in the total share capital of the Company during the period from the date ofthis report to the record date of the equity distribution, the total distribution amount will remainunchanged with corresponding adjustment to the proportion of distribution per share.

(II) Notes to the cash dividend policies

√ Applicable □ Not Applicable

Whether in compliance with regulations of the Articles of Association andRequirements of the resolutions of the general meeting

√Yes □No

Whether the standard and ratio of dividends were clear

√Yes □No

Whether relevant procedures and mechanisms for decision-making werecomplete

√Yes □No

Whether independent directors performed their duties and responsibilities

√Yes □No

Whether minority shareholders were given the opportunity to fully express theirviews and demands, and whether their legitimate interests were adequatelyprotected

√Yes □No

Section IV Corporate Governance

(III) The Company made profits and the profits for distribution to the owners’ ParentCompany was positive during the reporting period, but no cash profitdistribution plan was proposed; the Company should disclose the reasons indetail and the purpose of undistributed profits

□ Applicable √ Not Applicable

(IV) Plan for profit distribution and conversion of capital reserve into share capitalfor the reporting period

√ Applicable □ Not Applicable

Unit and Currency: RMBNumber of shares to be distributed for every ten shares (share)0Amount to be distributed for every ten shares (RMB) (tax inclusive)9.65Number of shares to be converted into share capital for every tenshares (share)

Amount of cash dividend (tax inclusive)8,996,688,692.76Net profit attributable to ordinary shareholders of listed company in theconsolidated financial statement

18,741,120,122.93Percentage of the amount of cash dividend to the net profit attributable

to the ordinary shareholders of the listed companies in theconsolidated financial statement (%)

48.01

Repurchase of shares by cash included in the amount of cash dividend491,570,695.48Total dividend amount (tax inclusive)9,488,259,388.24Percentage of total dividend amount to the net profit attributable to theordinary shareholders of the listed companies in the consolidatedfinancial statement (%)

50.63

Note: The aforementioned “repurchase of shares by cash included in the amount of cash dividend” refers to the amount of

shares repurchased during the reporting period, specifically, the Company repurchased A Shares for RMB470 millionand H Shares for HKD27 million during the reporting period.

Section IV Corporate Governance

(V) Cash dividend for the past three accounting years

√ Applicable □ Not Applicable

Unit and Currency: RMBCumulative amount of cash dividend for the past three accounting years(tax inclusive) (1)

21,765,691,238.08Cumulative amount of repurchase and cancellation for the last threeaccounting years (2)

2,026,389,613.95Cumulative amount of cash dividend and repurchase and cancellationfor the last three accounting years (3) = (1)+(2)

23,792,080,852.03Average annual net profit for the last three accounting years (4)16,682,886,220.26Cash dividend ratio for the last three accounting years (%) (5) = (3)/(4)142.61Net profit attributable to the ordinary shareholders of the listedcompanies in the consolidated financial statement for the lastaccounting year

18,741,120,122.93Year-end undistributed profit in the parent company’s financialstatement for the last accounting year

9,687,279,183.32XI. THE COMPANY’S SHARE OPTION INCENTIVE SCHEME, EMPLOYEESHAREHOLDING PLAN OR OTHER EMPLOYEE INCENTIVE MEASURESAND ITS INFLUENCE(I) Matters disclosed in temporary announcements and without any subsequentprogress or change

√ Applicable □ Not Applicable

Summary of mattersQuery indexCancellation of certain 2021 and 2022equity incentive options: In view of the factthat the third exercise period of the first/reserved grant portion of the 2021 A-shareOption Incentive Scheme and the secondexercise period of the 2022 A-share OptionIncentive Scheme of the Company did notmeet the exercise conditions, and due to theresignation of some of the participants, theCompany cancelled the corresponding

11.164621 million share options and

28.011543 million share options that had

been granted but had not yet beenexercised.

For details, please refer to the

Announcement of Haier Smart Home Co.,Ltd. on the Cancellation of Certain ShareOptions Granted under the 2021 A-shareOption Incentive Scheme, the 2022A-share Option Incentive Schemedisclosed by the Company on 30 April2024, the Announcement of Haier SmartHome Co., Ltd. on the Completion ofCancellation of Certain Share OptionsGranted under the 2021 A-share OptionIncentive Scheme, the 2022 A-shareOption Incentive Scheme and relevantcontents disclosed by the Company on28 May 2024.

Section IV Corporate Governance

Summary of mattersQuery indexIntroduction of New Phase of A Share andH Share Employee Stock OwnershipPlan: In order to further improve thegovernance mechanism of the Company,create shareholder value and promote thecomprehensive implementation of theCompany’s IoT smart home ecological brandstrategy, the Company considered andintroduced the 2024 H Share CoreEmployee Stock Ownership Plan of HaierSmart Home Co., Ltd. (Draft) and the 2024A Share Core Employee Stock OwnershipPlan of Haier Smart Home Co., Ltd. (Draft) atthe 10th meeting of the 11th session of theBoard of Directors held by the Company on29 April 2024 and the 2023 Annual GeneralMeeting held by the Company on 20 June2024. During the reporting period, theCompany has completed the related work,including the establishment of positions, forthe abovementioned 2024 A share and Hshare employee stock ownership plans.

For details, please refer to the 2024 AShare Core Employee Stock OwnershipPlan of Haier Smart Home Co., Ltd.(Draft), the 2024 H Share Core EmployeeStock Ownership Plan of Haier SmartHome Co., Ltd. (Draft) disclosed by theCompany on 30 April 2024, and theAnnouncement of Resolutions at theGeneral Meeting disclosed by theCompany on 21 June 2024.

(II) Incentive events not disclosed in provisional announcements or with subsequent

developmentEquity incentive

□ Applicable √ Not Applicable

Other explanations

□ Applicable √ Not Applicable

Employee stock ownership plan

□ Applicable √ Not Applicable

Other Incentives

□ Applicable √ Not Applicable

Section IV Corporate Governance

(III) Share option granted to directors and senior management during the reportingperiod

√ Applicable □ Not Applicable

Unit: 0’000 shares

NamePosition

Number of

stockoptions heldat thebeginning of

the year

Number ofnew stockoptionsgrantedduring thereportingperiodExercisablesharesduring thereportingperiod

Sharessubject tostock optionexercisedduring thereportingperiod

Stockoptionsexerciseprice(RMB)

Number ofstockoptions heldat the ending

of thereportingperiod

Marketvalue at theend of thereportingperiod(RMB)Li HuagangDirector54.83–

18.28

36.5528.47

Gong WeiDirector27.42–

9.14

18.2828.47

XieJuzhiSenior management54.83–

18.28

36.5528.47

Li PanSenior management27.42–

9.14

18.2828.47

Song YujunSenior management18.72–

6.24

12.4828.47

Zhao YanfengSenior management28.09–

9.36

18.7328.47

Huang XiaowuSenior management27.42–

9.14

18.2828.47

Wu YongSenior management13.71–

4.57

9.1428.47

Li YangSenior management27.42–

9.14

18.2828.47

Guan JiangyongSenior management13.71–

4.57

9.1428.47

Liu XiaomeiSenior management8.74–

2.91

5.8328.47

Total/302.31–

100.77

201.54/

Note: The “shares subject to stock option exercised during the reporting period” in the table above refer to the changes

resulting from the partial cancellation of share options by the Company during the reporting period (for details, pleaserefer to the disclosure in “(I) Matters disclosed in temporary announcements and without any subsequent progress orchange” in this section.(IV) Establishment and implementation of appraisal and incentive mechanism forsenior management during the reporting period

√ Applicable □ Not Applicable

The cash remuneration of executives in 2024 consists of monthly remuneration, bonuses andsharing, and is linked to orders triggered by the upgrade of the Company’s Internet of Thingsfrom “high-end brands” to “scenario brands” to “ecological brands”. Focusing on the rapidimprovement of profitability and through digital transformation, the Company enhanced itscompetitiveness in the whole process, and achieved sharing of high added-value. Through theinnovation of the mechanism, the Company encouraged its executives to achieve higher marketgoals, thus achieving a win-win situation for users, employees, enterprises and stakeholders. Atthe same time, the Company continues to promote the implementation of the employee stockownership and other long-term incentive plans; multiple incentive tools will be effectively utilisedto mobilise competent management, frontline managers and business and technical backboneson a wider scale, further aligning the interests of shareholders, the Company and incentiverecipients, and bringing more efficient and sustainable returns to shareholders.

Section IV Corporate Governance

XII. CONSTRUCTION AND IMPLEMENTATION OF INTERNAL CONTROLSYSTEM DURING THE REPORTING PERIOD

√ Applicable □ Not Applicable

In accordance with the “Rules for the Preparation and Reporting of Information Disclosure by ListedIssuers of Securities No. 21—General Provisions on the Annual Internal Control Assessment Report”jointly issued by the China Securities Regulatory Commission and the Ministry of Finance, the“Guidelines for Self-regulation of Listed Companies on the Shanghai Stock Exchange No. 1—

Regulation of Operations”, the “Guidelines for Self-Regulation of Listed Companies on the ShanghaiStock Exchange No. 2—Business Handling” and other relevant guidelines and requirements, theCompany has conducted a self-assessment of its internal control work. Based on the identification ofsignificant deficiencies in the Company’s internal control of financial reporting, no significantdeficiencies in the Company’s internal control of financial reporting were identified as at the basis dateof the internal control assessment report, and the Company had maintained effective internal control offinancial reporting in all material respects in accordance with the requirements of the internal controlregulatory system and relevant regulations. Based on the identification of significant deficiencies in theCompany’s internal control of non-financial reporting, no significant deficiencies in the Company’sinternal control of non-financial reporting were identified as at the basis date of the internal controlassessment report. No events have occurred between the basis date of the internal controlassessment report and the date of issuance of the internal control assessment report that would affectthe effectiveness of the internal control assessment.For details, please refer to the 2024 Internal Control Assessment Report of Haier Smart Home Co.,Ltd. disclosed on the same day of this report.Explanations on material defects found in internal control during the reportingperiod

□ Applicable √ Not Applicable

XIII. CONTROL OVER MANAGEMENT OF SUBSIDIARIES DURING THE

REPORTING PERIOD

√ Applicable □ Not Applicable

The listed company established an internal control and management system covering all subsidiarieswithin the scope of consolidated statement, which included four major areas of strategy, finance,operation and compliance with a total of 22 primary business processes and control metrics. Inparticular:

1. Unified control environment, such as strategy and culture, risk management system, internal control

manual, Rendanheyi remuneration system, unified accounting and information system in thefinancial sharing center, etc.

Section IV Corporate Governance

2. The company has clear selection methods and terms of reference in respect of appointment of

directors, supervisors and important senior management to their controlling subsidiaries.Meanwhile, relevant departments of the parent company stipulate the criteria and scope ofauthorization for major decision and important events, formulate the approval procedure for majordecision and important events beyond the scope of authorization. The management ofsubsidiaries at different levels shall exercise their authority and take responsibility within thescope of authorization.

3. Management of major events of subsidiaries: The relevant authority of the parent company of the

listed company stipulates the criteria and scope of authorization for major decision and importantevents, formulate the approval procedure for major decision and important events beyond thescope of authorization. If the Company and its subsidiaries provide external guarantees, the totalamount of which shall propose for consideration at the general meetings after approval by theBoard. Subject to the authorization by the general meetings, the Board decides the Company’sexternal investment, acquisition and disposal of assets, external guarantees, entrusted wealthmanagement, related-party transactions and other events.

4. Management of budget: The finance and budget center formulates the budget preparation policy

and guidance for the following year at the end of each year, and distributes them to eachsubsidiary together with the budget template, requiring the preparation of a comprehensivebudget in accordance with the unified budget preparation policy and guidance, which containsdetails of the preparation principles, explanation of filling the template, submission process andexamination. Each subsidiary has prepared a comprehensive budget in accordance with theunified budget preparation policy and guidance. Annual budgeting of the following year iscommenced in the third quarter every year by making profit and loss budgets for each industryand subsidiaries based on market forecasts to ensure accurate estimation in advance. Theexecution and adjustment of budgets are regularly monitored and evaluated.For non-fixed assets investment projects, the person in charge of fund of each subsidiary willsummarize the actual investment situation and report it to the manager of the investment,financing and fund management department of Haier Smart Home. The manager of theinvestment, financing and fund management department will monitor the execution of the budgetof investment and financing by comparing the report with the corresponding budget of theinvestment plan.

5. Operation analysis and performance evaluation: The Company regularly convenes global and

industry-specific performance and operations meetings to discuss the operations andperformance and carries out performance evaluation.

Section IV Corporate Governance

6. Information transmission: The Company widely collects macroeconomic and industry development

information, market information, regulatory compliance and other external information throughvarious channels, and analyzes and organizes the collected information into research reportsevery month, which are submitted to different levels of management after review. Themanagement of the parent company holds regular meetings with industries and segments toconvey the management requirements of the parent company and to be aware of the operationstatus of subsidiaries in a timely manner. At the same time, the Company has formulated theinformation security and internal report confidentiality system, which specifies the confidentialitycontent, confidentiality measures, confidentiality level and transmission scope to prevent thedisclosure of commercial secrets.

7. Test and audit of internal control: During the reporting period, the parent company conducts test

and audit of internal control for subsidiaries, which account for more than 85% and 86% ofrevenue and assets of the parent Company in aggregate, respectively, to identify problems in atimely manner and facilitate the closed-loop rectification of problems.

XIV. RELEVANT EXPLANATIONS ON THE AUDIT REPORT OF INTERNALCONTROL

□ Applicable √ Not Applicable

Whether to disclose the audit report on internal control: YesType of opinion on the audit report on internal control: Standard unqualified opinionXV. RECTIFICATION OF THE SELF-ASSESSMENT PROBLEMS UNDER THEGOVERNANCE SPECIAL ACTION OF THE LISTED COMPANY

Not Applicable

XVI. OTHERS

□ Applicable √ Not Applicable

Section V Environmental and Social

Responsibilities

I. ENVIRONMENTAL INFORMATIONEstablished environmental protection related mechanism or notYesEnvironmental protection funds invested during the Reporting Period(Unit: RMB0’000)

16,759(I) Explanation of the environmental protection status of companies and theirimportant subsidiaries that are key emission units announced by theenvironmental protection department

√ Applicable □ Not Applicable

1. Information on pollutant discharge

√ Applicable □ Not Applicable

The Company’s direct/indirect non-wholly owned subsidiaries Hefei Haier Refrigerator Co.,Ltd. (“Hefei Refrigerator”), Qingdao Haier Special Refrigerator Co., Ltd. (“Qingdao SpecialRefrigerator”), Wuhan Haier Water Heater Co., Ltd. (“Wuhan Water Heater”), Wuhan HaierFreezer Co., Ltd (“Wuhan Freezer”), Wuhan Haier Electronics Holding Co., Ltd. (“WuhanAir-Conditioning”), Zhengzhou Haier Air-conditioning Co., Ltd. (“ZhengzhouAir-Conditioning”), Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited (“JiaozhouAir-Conditioning”), are among the key emission units announced by the local environmentalprotection department. The main information on pollutant discharge is as follows:

(1) Hefei Refrigerator

① Main pollutants：

Exhaust gas. According to Emission Standard of Pollutants for Synthetic ResinIndustry (GB 31572–2015), Hefei Refrigerator should apply for a pollutantdischarge permit and detect pollutants. Main types of atmospheric pollutants:

non-methane hydrocarbon, toluene, ethylbenzene, styrene, particle matter

② Way of discharge: continuous discharge

③ Number and distribution of discharge outlets: 20 for exhaust gas, at the

Refrigerator Block A (9), Block B (8) and Phase III Factory (3)

Section V Environmental and Social Responsibilities

④ Concentration of discharge and discharge standard:

According to the discharge permit, the concentration and total amount ofpollutant discharge subject to approval for the total amount (2024 data) are asfollows:

No.Name of pollutant

Concentration ofdischarge

Totalamount ofdischarge

Approved totalamount ofdischarge

Whether it isexcessive discharge1Non-methanehydrocarbon

11 mg/m?2.25 tons/No2Toluene0.045 mg/m?0.008 tons/No3Ethylbenzene0.0085 mg/m?0.001 tons/No4Styrene0.024 mg/m?0.004 tons/No5Particle matter0.6 mg/m?0.38 tons/No

(2) Qingdao Special Refrigerator

① Main Pollutants：

Exhaust gas. According to the Administrative Measures for Pollutant DischargeLicensing (for Trial Implementation) (HJ 978–2018), Qingdao Special Refrigeratorshould apply for a pollutant discharge permit and detect the primary type ofpollutant in the atmosphere, namely non-methane hydrocarbon (VOC), with themaximum concentration of discharge not exceeding 60mg/m?. Online detectionfacilities are installed and networked with the Ecology and Environment Bureaufor exhaust gas emission according to the requirements of the EcologyEnvironment Bureau.Wastewater: There is no wastewater generated by the business department, andthe domestic wastewater is discharged into the municipal sewage networkthrough the sewage pipes in Haier Industrial Park.

② Way of discharge: continuous emission

③ Number and distribution of discharge outlets: one in total, which is for absorption

and foaming exhaust at the west side of the Special Refrigerator plant roof, andthe treatment facilities were replaced and updated to activated carbonadsorption and desorption + catalytic combustion process.

Section V Environmental and Social Responsibilities

④ Concentration and total amount of discharge and approved total amount of

discharge:

According to the discharge permit, the concentration and total amount ofpollutant discharge subject to approval for the total amount are as follows:

No.Name of Pollutant

Concentration ofdischarge

Totalamount ofdischarge

Approved totalamount ofdischarge

Whether it isexcessive discharge1Non-methane

hydrocarbon

4.06 mg/m?0.87 tonsNo total amount of

discharge control

No

⑤ Pollutant discharge standards implemented: Volatile Organic Compounds

Discharge Standards Part 7: Other Industries in Shandong Province(DB37/2801.7–2019)

(3) Wuhan Water Heater

① Main Pollutant：

Wastewater. According to the Technical Specification for Application andIssuance of Pollutant Permit— Wastewater Treatment (for Trial) (HJ 978–2018),Wuhan Water Heater should apply for a pollutant discharge permit and detect 9types of pollutants (including specific pollutants), namely, COD, total zinc,suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygendemand (BOD5), PH, anionic surface active agent, total phosphorus, and animaland vegetable oils.

② Way of discharge: indirect discharge

③ Number and distribution of discharge outlets: one, on the southwest of the

wastewater treatment plant, pipeline discharge

④ Concentration and total amount of discharge and approved total amount of

discharge:

According to the discharge permit, the concentration and total amount ofpollutant discharge subject to approval for the total amount are as follows:

No.Name of Pollutant

Concentration ofdischarge

Totalamount ofdischarge

Approved total

amount ofdischarge

Whether it isexcessive discharge1COD12.43 mg/L1.82 tons9.075 tonsNo2Ammonia nitrogen0.061 mg/L0.149 tons0.9075 tonsNo3Total phosphorus0.086 mg/L0.036 tons/No

⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for

Discharge to Municipal Sewers (GBT 31962–2015)

Section V Environmental and Social Responsibilities

(4) Wuhan Freezer

① Main pollutants：

Exhaust gas. Exhaust gas pollutant discharge refers to the Integrated EmissionStandard of Air Pollutants, and the primary type of pollutant in the atmospheredetected are namely non-methane hydrocarbon, with the maximumconcentration of discharge not exceeding 120 mg/m?. A qualified third-partytesting unit is commissioned to conduct organic exhaust gas concentrationtesting and issue a report on a half-yearly basis.

② Way of discharge: continuous discharge

③ Number and distribution of discharge outlets: three in total, one for doors at the

southwest side of the plant; one for curing at the southwest side of the plant;and one for injection molding.

④ Concentration and total amount of discharge and approved total amount of

discharge: No control regarding the total amount of discharge of organicexhaust gasNo.Name of Pollutant

Concentration ofDischarge

Totalamount ofdischarge

Approved totalamount ofdischarge

Whether it isexcessive discharge1Non-methanehydrocarbon

7.46 mg/m? 0.306 tonsNo control

regarding thetotal amount of

discharge

No

⑤ Implementation of Grade 2 standards according to Table 2 indicated in the

national Integrated Emission Standard of Air Pollutants (GB16297–1996)

(5) Wuhan Air-Conditioning

① Main Pollutants：

Organic exhaust gas. Exhaust gas pollutant discharge refers to the IntegratedEmission Standard of Air Pollutants, and the primary type of pollutant in theatmosphere detected are namely non-methane hydrocarbon (VOC), with themaximum concentration of discharge not exceeding 120 mg/m?. A qualifiedthird-party testing unit is commissioned to conduct organic exhaust gasconcentration testing and issue a report on a half-yearly basis.

Section V Environmental and Social Responsibilities

② Way of discharge: continuous discharge

③ Number and distribution of discharge outlets: five in total, one degreasing exhaust

port at the south side of the plant roof, and three stamping exhaust ports at thesouth side of the plant roof and one spraying exhaust port at the north side ofthe spraying workshop roof.

④ Concentration and total amount of discharge and approved total amount of

discharge: No control regarding the amount of discharge of organic exhaust gasNo.Name of pollutant

Concentration ofdischarge

Total amount ofdischarge

Approved totalamount ofdischarge

Whether it isexcessive discharge1VOC2.382 mg/m?0.0605232 tonsNo control

regarding thetotal amount ofdischarge

No

⑤ Implementation of Grade 2 standards according to Table 2 indicated in the

national Integrated Emission Standard of Air Pollutants (GB16297–1996)

(6) Zhengzhou Air-Conditioning

① Main Pollutant：

Wastewater. According to the Technical Specification for Application andIssuance of Pollutant Permit— Wastewater Treatment (for Trial) (HJ 978–2018),Zhengzhou Air-Conditioning should apply for a pollutant discharge permit anddetect 9 types of pollutants (including specific pollutants), namely, COD, totalzinc, suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygendemand (BOD5), PH, total phosphorus, and animal and vegetable oils.

② Way of discharge: indirect discharge

③ Number and distribution of discharge outlets: one, on the north side of the

air-conditioning wastewater treatment plant, pipeline discharge

④ Concentration and total amount of discharge and approved total amount of

discharge:

According to the discharge permit, the concentration and total amount ofpollutant discharge subject to approval for the total amount are as follows:

No.Name of pollutant

Concentration of

discharge

Totalamount ofdischarge

Approved totalamount ofdischarge

Whether it isexcessive discharge1COD40.72 mg/L0.1788 tons/No2Ammonia nitrogen6.16 mg/L0.0347 tons/No

Section V Environmental and Social Responsibilities

(7) Jiaozhou Air-Conditioning

① Main pollutants：

Hazardous waste. According to the national directory, 8 types of hazardouswaste detected are namely: waste oil, sludge, activated carbon, cotton filters,lightning tubes, soldering flux buckets, paint buckets and forklift battery.

② Way of discharge: Hazardous waste is transferred to a qualified hazardous waste

disposal unit for disposal

③ Total amount of discharge and approved total amount of discharge:

No.

Name ofhazardous waste

Totalamount oftransfer (tons)

Totalamount ofmanagedplan (tons)

Whether it isexcessive discharge1Cotton filters0.742No2Waste oil31.7833No3Soldering flux buckets1.163No4Forklift battery16.320No5Sludge3650No6Paint buckets1.75No7Activated carbon2.586No8Lightning tubes0.080.5No

④ Pollutant discharge standards implemented: Directory of National Hazardous

Wastes (Version 2021), Law of the People’s Republic of China on thePrevention and Control of Environmental Pollution by Solid Waste

2. Construction and operation of pollution prevention and treatment facilities:

√ Applicable □ Not Applicable

Jiaozhou Air-conditioning, Zhengzhou Air-conditioning, Wuhan Freezer, Wuhan WaterHeater, have one, one, one and two wastewater treatment plants with a designedtreatment capacity of 500 tons/day, 550 tons/day, 360 tons/day, 300 tons/day and 260tons/day, respectively. The construction, maintenance and daily operation of all wastewatertreatment facilities are conducted in accordance with the requirements of national and localenvironmental laws and regulations. Information on all wastewater discharge is subject to24-hour online monitoring and such monitored information is transmitted to environmentalauthorities in a real-time manner. All equipment is operating normally, and the discharge ofwastewater is steady and in compliance with standards. In addition, the Company fullypromotes all plants to install exhaust treatment facilities and VOCs online monitoringfacilities. All equipment is operating normally and exhaust produced is treated by theprevention and treatment facilities before compliant release and is monitored.

Section V Environmental and Social Responsibilities

3. Environmental impact assessment of construction projects and other environmental

protection administrative permits

√ Applicable □ Not Applicable

The Company and its subsidiaries execute construction project implementation andproduction in accordance with the requirements of laws and regulations and strictly complywith the three simultaneous requirements of environmental protection for constructionprojects in the process of environmental impact assessment, and have passedenvironmental assessment acceptance and are not involved in any environmental illegalconducts such as construction before approval.

4. Emergency plans for environmental incidents

√ Applicable □ Not Applicable

The Company and its subsidiaries have formulated Emergency Plans for EnvironmentalIncidents in accordance with the requirements of laws and regulations and organized drills,and continue to improve and upgrade the plans based on drill results.

5. Self-monitoring environmental programs

√ Applicable □ Not Applicable

All pollutants of the Company are tested regularly, of which the discharge complies withnational and local environmental standard requirements. Wastewater collected is subject tostandard treatment and is released in a compliant manner. It is under real-time monitoringthrough the automatic online wastewater monitoring system, which shares its informationwith Haier Smart Energy System. In March 2017, the Company passed the upgradedcertification in relation to ISO14001 environment management system; In May 2021, aprofessional certification firm was appointed to conduct a review and audit on the operationof ISO14001 system in 2020, where satisfactory results were obtained to demonstrate itsgood operating condition; In May 2022, a second review and audit was conducted on theoperation of system in 2021; In May 2023, a recertification audit was conducted on theoperation of system in 2022. In May 2024, a first review and audit was conducted on theoperation of system in 2023.

6. Administrative penalty due to environmental issues during the Reporting Period

□ Applicable √ Not Applicable

7. Other environmental information that should be disclosed

□ Applicable √ Not Applicable

(II) Explanation on environmental protection of companies other than major pollutant

emission units

√ Applicable □ Not Applicable

Section V Environmental and Social Responsibilities

1. Administrative penalty due to environmental issues

□ Applicable √ Not Applicable

2. Other environmental information disclosure with reference to major pollutant

emission units

√ Applicable □ Not Applicable

All divisions of the Company execute construction project implementation and production inaccordance with the requirements of laws and regulations and strictly comply with the threesimultaneous requirements of environmental protection for construction projects in theprocess of environmental impact assessment, and have passed environmental assessmentacceptance and are not involved in any environmental illegal conducts such as constructionbefore approval.Through the industry leading energy big data analysis system-Haier Smart Energy Center, adigital energy and carbon management platform, the Company adopts“source—network—load—storage—control” all-around energy management, and implements centralizeddynamic monitoring and digitalized management in respect of major energy consumption,such as water, electricity and gas, of all plants across the country by utilizing automatizedand informationalized technology and an integrated management model. It automaticallycollects precise information on energy resources, construct a standard data layer andcompletes prediction and analysis of energy consumption information to optimize energyadjustment, reduce energy consumption per unit production and form an energymanagement platform and carbon asset management platform to support the business, soas to achieve energy conservation and green transformation.

3. Reasons for failure to disclose other environmental information

□ Applicable √ Not Applicable

(III) Relevant information favorable to ecological protection, pollution prevention andcontrol and environmental responsibility fulfillment

√ Applicable □ Not Applicable

Wuhan Air-Conditioning has been awarded a national green factory certification for its remarkableachievement in energy saving, environmental protection, clean production, comprehensiveutilization of resources, etc., and has become a benchmark for green development in theindustry. It has set up a green manufacturing model with its excellent performance in resourcerecycling, pollution prevention and control, as well as environmental management. WuhanAir-Conditioning, Wuhan Freezer and Wuhan Water Heater were awarded the title of “Waste-FreeFactory” in Wuhan, fully demonstrating the excellent practice of the three factories in wastemanagement, efficient utilization of resources and promotion of circular economy. QingdaoSpecial Refrigerator actively participated in the selection of “Green Supply Chain ManagementEnterprises” organized by local government departments and was included on the list of QingdaoGreen Supply Chain Management Enterprises in 2024. Adhering to the concept of green andlow-carbon development, Qingdao Special Refrigerator has improved the greening level of theentire supply chain.

Section V Environmental and Social Responsibilities

The Company and its subsidiaries have always been committed to integrating the green conceptinto all aspects of corporate development, actively practicing the principles of low carbon cycle,energy saving and consumption reduction, pollution reduction and efficiency enhancement in dailyoperations. Through consistent technological innovation and management optimization, we havecontributed to achieving the goals of “carbon peaking” and “carbon neutrality”, with a view tobuilding a beautiful home planet.(IV) Measures taken during the Reporting Period to reduce its carbon emission and

their effectivenessWhether carbon reduction measures wereimplemented

YesReduction of carbon dioxide equivalentemission (unit: tonnes)Types of carbon reduction measures(such as using clean energy for powergeneration, using carbon reductiontechniques in the production process,developing and producing new productswhich help reduce carbon emission, etc.)

Taking carbon reduction in production as an entrypoint, the Company builds a green manufacturingsystem within its global operations, continuouslyoptimises the energy structure, enhances resourceefficiency, improves its emissions managementand disposal, and reduces carbon emissions in theproduction process. The company improves itscarbon reduction design, accelerates low-carbonproduct development, and continuously enhancesproduct energy efficiency, reduces resourceusage, and lowers pollutant emissions throughinnovative structural design, production processes,and raw material selection.

For details of the above-mentioned measures,

please refer to relevant information in the 2024Sustainability Report of Haier Smart Home Co.,LTD. published on the same date of this report.Specifications

□ Applicable √ Not Applicable

Section V Environmental and Social Responsibilities

II. PERFORMANCE OF SOCIAL RESPONSIBILITIES

(I) Whether the social responsibility report, sustainable development report or ESGreport is disclosed individually

√ Applicable □ Not Applicable

The Company adhered to the concept of “in the world, for the world” in its global operations.Leveraging the strengths of its products and innovations, the Company actively engaged in publicwelfare initiatives such as youth education, rural revitalisation, supporting the disadvantaged,disaster relief, and volunteer services. It was committed to creating social value, fulfilling its socialresponsibilities, and promoting synergistic development and shared prosperity between theCompany and the community.For details, please refer to the 2024 Sustainability Report of Haier Smart Home Co., LTD.published on the same date of this report.

(II) Details of social responsibility works

√ Applicable □ Not Applicable

External donation, public welfare projectsQuantity/ContentTotal Contribution (RMB0’000)436.55Among which: Funds (RMB0’000)436.55Specifications

√ Applicable □ Not Applicable

For details, please refer to the 2024 Sustainability Report of Haier Smart Home Co., Ltd.disclosed on the date of this periodic report.

Section V Environmental and Social Responsibilities

III. PARTICULARS ON THE EFFORTS TO CONSOLIDATE AND EXPAND ITSACHIEVEMENTS IN POVERTY ALLEVIATION AND RURAL AREAINVIGORATION

√ Applicable □ Not Applicable

Poverty alleviation and

rural revitalization projectsQuantity/ContentTotal Contribution (RMB0’000)47.17Among which: Funds (RMB0’000)47.17Value of Goods (RMB0’000)Forms of assistance (such as poverty alleviation through industrydevelopment, poverty alleviation through employment, povertyalleviation through education, etc.)

Education and povertyalleviationSpecifications

□ Applicable √ Not Applicable

Section VI Significant Events

I. FULFILLMENT STATUS OF UNDERTAKINGS(I) The undertakings made by the ultimate controller, shareholders, related parties,

acquirer as well as the Company and other relevant parties during or up to thereporting period

√ Applicable □ Not Applicable

Background ofundertakingsType of undertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayUndertakingrelated tosignificantreorganization

Eliminate the right defects

in land property etc.

Haier GroupCorporation

During the period from September 2006 to

May 2007, the Company issued sharesto Haier Group Corporation (“HaierGroup”) to purchase the controllingequity in its four subsidiaries, namelyQingdao Haier Air-ConditionerElectronics Co., Ltd. (青島海爾空調電子有限公司), Hefei Haier Air-conditioning Co., Limited (合肥海爾空調器有限公司), Wuhan Haier ElectronicsHolding Co., Ltd. (武漢海爾電器股份有限公司), Guizhou Haier Electronics Co.,Ltd. (貴州海爾電器有限公司). Withregard to the land and property requiredin the operation of three companies,namely Qingdao Haier Air-ConditionerElectronics Co., Ltd. (青島海爾空調電子有限公司), Hefei Haier Air-conditioning Co., Limited (合肥海爾空調器有限公司), Wuhan Haier ElectronicsHolding Co., Ltd. (武漢海爾電器股份有限公司) (the “Covenantees”), HaierGroup made an undertaking (the “2006Undertaking”). According to the contentof 2006 Undertaking and currentcondition of each Covenantee, HaierGroup will constantly assure thatCovenantees will lease the land andproperty owned by Haier Group for free.Haier Group will make compensation inthe event that the Covenantees sufferloss due to the unavailability of suchland and property.

27 September2006

YesLong-termYes

Address peer competitionHaier Smart Home

Co., Ltd.

Prior to the Transaction (hereinafter “the

Transaction” refers to the transaction inrelation to the privatization of HaierElectronics by Haier Smart Home), HaierElectric was a controlling subsidiary ofthe Company and did not have peercompetition with the Company; after thecompletion of the Transaction, HaierElectric became a wholly-owned orcontrolling subsidiary of the Companyand no new peer competition with theCompany existed or will arise. There isno new peer competition or potentialcompetition between the Company andother related parties controlled by thecontrolling shareholders or the de factocontroller of the Company.

31 July 2020YesLong-termYes

Section VI Significant Events

Background ofundertakingsType of undertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayAddress connectedtransactions

Haier Group

Corporation

1. The Transaction constitutes a connected

transaction and the connectedtransaction procedures performed underthe Transaction are in compliance withthe relevant regulations. The pricing ofthe connected transaction is fair andthere are no circumstances under whichthe interests of the listed company andthe non-connected shareholders areprejudiced. 2. Upon completion of theTransaction, the Company and itsaffiliates will take lawful and effectivemeasures to minimize and regulate theconnected transactions with the listedcompany, take the initiative tosafeguard the interests of the listedcompany and all shareholders, andrefrain from taking advantages ofconnected transactions for improperbenefits. 3. Provided that there is noconflict with laws and regulations, ifconnected transactions between theCompany and its affiliates and the listedcompany occur or exist which cannotbe avoided or for which there arereasonable reasons, the Company andits affiliates will legally enter into atransaction agreement with the listedcompany to ensure strict compliancewith the procedures of connectedtransactions required by the laws,regulations, regulatory documents andthe articles of association of theCompany, conduct transactions inaccordance with the principles ofmarketability and fair prices to ensurethe fairness and compliance ofconnected transactions, and refrain fromtaking advantages of such connectedtransactions to engage in any acts thatare detrimental to the interests of thelisted company or its minorityshareholders, and at the same time,comply with the information disclosureobligations in accordance with relevantregulations.

29 July 2020YesLong-termYes

Section VI Significant Events

Background ofundertakingsType of undertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayAddress peer competitionHaier Group

Corporation

1. The Company and its controlling

subsidiary, Haier COSMO Co., Ltd.,were principally engaged in investmentbusiness during the reporting period,and the Company and its controllingsubsidiary, Haier COSMO Co., Ltd.(including its subsidiaries and entitieswith more than 30% shareholding), haveno real or potential per competition withHaier Smart Home; 2. the domestic andoverseas white goods businesses andassets held by the Company (includingthe Company’s subsidiaries and entitieswith more than 30% shareholding) havebeen injected into Haier Smart Homethrough asset consolidation and equitytransfer in accordance with thecommitments made by the Company inJanuary 2011 and the requirements foradjusting such commitments asconsidered and approved by HaierSmart Home at its 2014 annual generalmeeting; 3. Since the acquisition of100% of Haier New Zealand InvestmentHolding Company Limited (which holds100% of the shares in Fisher & PaykelAppliances Holdings Limited) by HaierSmart Home’s offshore subsidiary, HaierSingapore Investment Holding Co., Ltd.,following the completion in July 2018,the Company (including the Company’ssubsidiaries and entities with more than30% shareholding) and Haier SmartHome do not have any peer competingrelationship in any business areas bothwithin and outside the PRC. During thereporting period, the Company(including the Company’s subsidiariesand entities with more than 30%shareholding) did not have any newpeer competition with Haier SmartHome; 4. Upon completion of theTransaction, the Company (including theCompany’s subsidiaries and entities withmore than 30% shareholding) and itsaffiliates do not have any new orpotential peer competition with HaierSmart Home; 5. During the period whenthe company is the controllingshareholder of Haier Smart Home andthe shares of Haier Smart Home arelisted on the Hong Kong StockExchange, the company and its othersubsidiaries and entities with more than30% shareholding will not operate anybusiness that competes with thebusiness engaged by Haier Smart Homeand will not engage in real or potentialpeer competition with Haier SmartHome.

29 July 2020YesLong-termYes

Section VI Significant Events

Background ofundertakingsType of undertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayOthersHaier Group

Corporation

Upon completion of the Transaction, thecompany will strictly comply with theCompany Law, the Securities Law, therelevant regulations of the ChinaSecurities Regulatory Commission, theShanghai Stock Exchange and thearticles of association of Haier SmartHome, etc., fairly exercise shareholders’rights and fulfill shareholders’obligations, refrain from takingadvantage of its shareholding positionfor improper benefits, ensure the listedcompany will continue to be completelyseparate from the company and otherenterprises on which the companyexercises control and exerts significantinfluence in terms of management,personnel, assets, finance, organizationand business operations, and maintainthe continued independence of thelisted company in terms ofmanagement, personnel, assets,finance, organization and businessoperations. Upon completion of theTransaction, the company will complywith the provisions of the Notice onSeveral Issues concerning RegulatingFund Transactions between ListedCompanies and Their Affiliates and theExternal Guarantee of Listed Companiesand the Circular of China SecuritiesRegulatory Commission and ChinaBanking Regulatory Commission onRegulating the External GuarantiesProvided by Listed Companies toregulate the external guarantees bylisted companies and their subsidiaries,and will not misappropriate the funds ofthe listed company and theirsubsidiaries. The company undertakesto strictly fulfill the above commitments.In the event that the interests of thelisted company are damaged as a resultof any breach of the abovecommitments by the company and otherenterprises on which the companyexercises control and exerts significantinfluence, the company will legally bearthe corresponding liability for damage.

29 July 2020YesLong-termYes

Section VI Significant Events

Background ofundertakingsType of undertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayAddress connectedtransactions

HCH (HK)INVESTMENTMANAGEMENTCO., LIMITED

1. The Transaction constitutes a connected

transaction and the connectedtransaction procedures performed underthe Transaction are in compliance withthe relevant regulations. The pricing ofthe connected transaction is fair andthere are no circumstances under whichthe interests of the listed company andthe non-connected shareholders areprejudiced. 2. Upon completion of theTransaction, the company and otherenterprises on which the companyexercises control will take lawful andeffective measures to minimize andregulate the connected transactions withthe listed company, take the initiative tosafeguard the interests of the listedcompany and all shareholders, andrefrain from taking advantages ofconnected transactions for improperbenefits. 3. Provided that there is noconflict with laws and regulations, ifconnected transactions between thecompany and other enterprises onwhich the company exercise control andthe listed company occur or exist whichcannot be avoided or for which thereare reasonable reasons, the companyand other enterprises on which thecompany exercises control will legallyenter into a transaction agreement withthe listed company to ensure strictcompliance with the procedures ofconnected transactions required by thelaws, regulations, regulatory documentsand the articles of association of thecompany, conduct transactions inaccordance with the principles ofmarketability and fair prices, and refrainfrom taking advantages of suchconnected transactions to engage in anyacts that are detrimental to the interestsof the listed company or its minorityshareholders, and at the same time,comply with the information disclosureobligations in accordance with relevantregulations. 4. Any covenants andarrangements between the companyand other enterprises on which thecompany exercise control and the listedcompany in relation to connectedtransactions shall not prevent the otherparty from conducting business ordealing with any third party for its ownbenefit and on equal competitive termsin the market.

29 July 2020YesLong-termYes

Section VI Significant Events

Background ofundertakingsType of undertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayUndertakingrelated torefinancing

Eliminate the right defectsin land property andetc.

Haier Group

Corporation

Haier Group Corporation undertakes that it

will assure Haier Smart Home and itssubsidiaries of the constant, stable andunobstructed use of the leasedproperty. In the event that Haier SmartHome or any of its subsidiaries suffersany economic loss due to the fact thatleased property has no relevantownership certificate, Haier GroupCorporation will make compensation toimpaired party in a timely and sufficientway and take all reasonable andpracticable measures to support theimpaired party to recover to normaloperation before the occurrence of loss.Upon the expiration of relevant leasingperiod, Haier Group Corporation willgrant or take practicable measures toassure Haier Smart Home and itssubsidiaries of priority to continue tolease the property at a price not higherthan the rent in comparable market atthat time. Haier Group Corporation willassure Haier Smart Home and itssubsidiaries of the constant, stable, freeand unobstructed use of self-builtproperty and land of the Group. In theevent that Haier Smart Home or any ofits subsidiaries fails to continue to useself-built property according to its ownwill or in original way due to the factthat self-built property has no relevantownership certificate, Haier GroupCorporation will take all reasonable andpracticable measures to eliminateobstruction and impact, or will supportHaier Smart Home or its affectedsubsidiary to obtain alternative propertyas soon as possible, if Haier GroupCorporation anticipates it is unable tocope with or eliminate the externalobstruction and impact with itsreasonable effort. For details, pleaserefer to the Announcement of QingdaoHaier Co., Ltd. on the Formation,Current Situation of the DefectiveProperty, the Influence on Operation ofIssuer Caused by Uncertainty ofOwnership, Solution for the Defect andGuarantee Measures (Lin 2014–005)published by the Company on the fourmajor securities newspapers and thewebsite of Shanghai Stock Exchangeon 29 March 2014.

24 December

2013

YesLong-termYes

Section VI Significant Events

Background ofundertakingsType of undertakingsCovenanterContents of undertakings

Date ofundertakings

Anydeadline forperformance

Term ofundertakings

Whetherperformed ina timely andstrict wayUndertakingsrelated toEquityincentive

OthersHaier Smart Home

Co., Ltd.

The Company will not provide loans or anyother forms of financial assistance,including guaranteeing their loans, toany incentive recipient for acquiringrelevant stock options under thisincentive plan.

15 September2021/28June 2022

YesThe completion of

equity incentiveimplementation

Yes

Otherundertakings

Asset injectionHaier Group

Corporation

Inject the assets of Haier Photoelectric tothe Company or dispose such assetsthrough other ways according to therequirements of the domesticsupervision before June 2025. For moredetails, please refer to theAnnouncement of Haier Smart HomeCo., Ltd. on the Changes of SomeCommitments on Asset Injection(Lin 2020–024) published on the fourmajor securities newspapers and thewebsite of Shanghai Stock Exchangeon 30 April 2020.

December

2015

YesJune 2025Yes

(II) The Company’s explanation on whether the earnings forecast on assets or

projects was met and its reasons in the situation that earnings in theCompany’s assets or projects have a forecast, and the period of whichincludes the reporting period

□ Reached □ Not Reached √ Not Applicable

(III) Completion of performance commitments and their impact on the impairment

test of goodwill

□ Applicable √ Not Applicable

II. NON-OPERATING UTILIZATION OF FUNDS BY CONTROLLING

SHAREHOLDERS AND OTHER RELATED PARTIES DURING THEREPORTING PERIOD

□ Applicable √ Not Applicable

III. INFORMATION ON NON-COMPLIANCE GUARANTEES

□ Applicable √ Not Applicable

IV. EXPLANATION OF THE BOARD OF THE COMPANY ON THE

‘NON-STANDARD AUDIT REPORT’ ISSUED BY THE ACCOUNTINGFIRM

□ Applicable √ Not Applicable

Section VI Significant Events

V. EXPLANATION OF THE COMPANY’S ANALYSIS ON REASONS ANDEFFECTS OF CHANGES IN ACCOUNTING POLICIES ANDACCOUNTING ESTIMATES OR CORRECTION OF SIGNIFICANTACCOUNTING ERRORS

(I) Explanation of the Company’s analysis on reasons and effects of changes inaccounting policies and accounting estimates

√ Applicable □ Not Applicable

In accordance with the Interpretation No. 18 of Accounting Standards for Business Enterprisesissued by the Ministry of Finance, provision for the guarantee-type quality assurance expenses ofthe Company are included in “Operating cost” instead of “Selling expenses”.The Company adopted the retrospective approach to adjust the data of financial statements forcomparable periods accordingly, and the effects of the above changes in accounting policies onthe consolidated income statement for the same period are as follows:

Statement ItemAdjustmentOperating cost8,328,087,511.15Selling expenses–8,328,087,511.15(II) Explanation of the Company’s analysis on reasons and effects of correction ofsignificant accounting errors

□ Applicable √ Not Applicable

(III) Communication with former accounting firm

□ Applicable √ Not Applicable

(IV) Approval processes and other explanations

□ Applicable √ Not Applicable

Section VI Significant Events

VI. APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRM

Unit and Currency: RMB0’000Current appointmentName of domestic accounting firmHexin Certified Public Accountants LLPRemuneration of domestic accounting firm655Audit period of domestic accounting firm12 yearsNames of certified public accountants of domestic

accounting firm

Zuo Wei, Li Xiang ZhiNumber of accumulative years of audit services of certifiedpublic accountants in domestic accounting firms

1 year, 3 yearsName of overseas accounting firmHLB Hodgson Impey Cheng LimitedRemuneration of overseas accounting firm389Audit period of overseas accounting firm5 years

NameRemunerationAccounting firm for Internal control auditHexin Certified Public Accountants LLP223Explanation of appointment and dismissal of accounting firm

□ Applicable √ Not Applicable

Explanation of change of accounting firm during the auditing period

□ Applicable √ Not Applicable

Explanation of audit fees falling by more than 20% (inclusive) compared with the previous year

□ Applicable √ Not Applicable

VII. POSSIBILITY OF DELISTING

(I) Reasons of warning for delisting risks

□ Applicable √ Not Applicable

(II) Response measures to be taken by the Company

□ Applicable √ Not Applicable

(III) Circumstances and reasons for termination of listing

□ Applicable √ Not Applicable

Section VI Significant Events

VIII. MATTERS RELATING TO BANKRUPTCY AND RESTRUCTURING

□ Applicable √ Not Applicable

IX. MATERIAL LITIGATION AND ARBITRATION MATTERS

□ Material litigation and arbitration matters during the year

√ No material litigation and arbitration matters during the year

X. PUNISHMENT AND CORRECTION ON THE LISTED COMPANY AND ITS

DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLINGSHAREHOLDERS AND ULTIMATE CONTROLLERS DUE TO SUSPECTOF LAW VIOLATIONS AND THE ISSUE OF RECTIFICATION

□ Applicable √ Not Applicable

XI. EXPLANATION OF THE INTEGRITY STATUS OF THE COMPANY AND

ITS CONTROLLING SHAREHOLDERS AND ULTIMATE CONTROLLERDURING THE REPORTING PERIOD

□ Applicable √ Not Applicable

XII. SIGNIFICANT RELATED-PARTY TRANSACTIONS

(I) Related-party transactions from daily operation

1. Matters that have been disclosed in temporary announcements and with no

subsequent progress or change

□ Applicable √ Not Applicable

2. Matters that have been disclosed in temporary announcements and with subsequent

progress or change

√ Applicable □ Not Applicable

Pursuant to, among others, the “Product and Materials Procurement Framework Agreementbetween Haier Smart Home Co., Ltd. and Haier Group Corporation” (《海爾智家股份有限公司與海爾集團公司之產品及物料採購框架協議》) and the “Services ProcurementFramework Agreement between Haier Smart Home Co., Ltd. and Haier Group Corporation”(《海爾智家股份有限公司與海爾集團公司之服務採購框架協議》) considered and approvedat the 28th meeting of the 10th session of the Board of Directors and the 2021 AnnualGeneral Meeting, and the “Resolution of Haier Smart Home Co., Ltd. on Renewing theFramework Agreement on Financial Services with Haier Group Corporation and Haier GroupFinance Co., Ltd. and Estimated Amount of Connected Transactions” (《海爾智家股份有限公司關於與海爾集團公司、海爾集團財務有限責任公司續簽〈金融服務框架協議〉暨預計關聯交易額度的議案》) considered and approved at the 4th meeting of the 11th session ofthe Board of Directors and the 2022 Annual General Meeting, the Company has madeestimation on the connected transactions for the next three years, as detailed in theaforesaid announcements regarding the resolutions of the meetings.

Section VI Significant Events

For the actual performance of the Company’s connected transactions in the year of 2024,please refer to “XIII. Related parties and related-party transactions” under Section X—

Financial and Accounting Report set out in this regular report.

3. Matters 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

2. Matters that have been disclosed in temporary announcements and with subsequent

progress or change

√ Applicable □ Not Applicable

Guanmei (Shanghai) Enterprise Management Co., Ltd. (貫美（上海）企業管理有限公司)(hereinafter referred to as “Guanmei”), a wholly-owned subsidiary of the Company, directlyholds 45% of the equity interests in Youjin (Shanghai) Corporate Management Co., Ltd. (優瑾（上海）企業管理有限公司) (hereinafter referred to as “Youjin”), which is directly held asto 55% by Bingji (Shanghai) Enterprise Management Co., Ltd. (冰戟（上海）企業管理有限公司) (hereinafter referred to as “Bingji”), a related party of the Company. On 29 October2024, Bingji entered into a voting rights entrustment with Guanmei, pursuant to which Bingjishall irrevocably entrust to Guanmei the exercise of the voting rights in respect of its 55%equity interests in Youjin (hereinafter referred to as the “Matter”). Upon completion of theMatter, Guanmei will effectively control 100% of the voting rights of Youjin, andGoodaymart (Shanghai) Investment Co., Ltd. (hereinafter referred to as “Goodaymart(Shanghai)”), Gooday Supply Chain Technologies Co., Ltd. (hereinafter referred to as“Gooday”) and their controlled subsidiaries, which are both under the control of Youjin, willbecome entities under the effective control of the Company. Youjin, Goodaymart(Shanghai), Gooday and their controlled subsidiaries (hereinafter referred to as the“Consolidated Companies”) will be included within the scope of the Company’sconsolidated statements. For details, please refer to the Announcement on SigningEntrustment of Voting Rights Agreement and Related-Party Transaction of Haier SmartHome Co., Ltd. (Announcement No.: Lin 2024–040) disclosed on 30 October 2024 by theCompany and relevant announcement. As at the end of the reporting period, the Matterhas completed the procedures of deliberation by the Board of Directors and the GeneralMeeting of Shareholders of the Company, and the Company has completed theconsolidation of the aforesaid Consolidated Companies.

3. Matters not disclosed in temporary announcements

□ Applicable √ Not Applicable

4. If performance agreement is involved, the performance achieved during the reporting

period shall be disclosed

□ Applicable √ Not Applicable

Section VI Significant Events

(III) Significant related-party transactions of joint external investment

1. Matters that have been disclosed in temporary announcements and with no

subsequent progress or change

□ Applicable √ Not Applicable

2. Matters that have been disclosed in temporary announcements and with subsequent

progress or change

□ Applicable √ Not Applicable

3. Matters not disclosed in temporary announcements

□ Applicable √ Not Applicable

(IV) Amounts due to or from related parties

1. Matters that have been disclosed in temporary announcements and with no

subsequent progress or change

□ Applicable √ Not Applicable

2. Matters that have been disclosed in temporary announcement and with subsequent

progress or change

□ Applicable √ Not Applicable

3. Matters that haven’t been disclosed in temporary announcements

□ Applicable √ Not Applicable

(V) Financial business between the Company and the finance company with whichit has a related relationship, or it is the company’s controlling finance companyand related parties

√ Applicable □ Not Applicable

1. Deposit business

√ Applicable □ Not Applicable

Unit and Currency: RMB

Changes of the periodRelated partyRelationship

Maximum dailydeposit limit

Range of depositinterestBalance as at thebeginning of the

period

Total amountdeposited duringthe period

Total amountwithdrawn duringthe period

Balance as at theend of the periodHaier Finance

Co., Ltd.

Subsidiary ofHaier Group

34 billion0.00012% to 4.1%33,656,348,914.68534,999,293,526.47534,704,123,310.3433,951,519,130.81Total///33,656,348,914.68534,999,293,526.47534,704,123,310.3433,951,519,130.81

Section VI Significant Events

2. Lending business

√ Applicable □ Not Applicable

Unit and Currency: RMBChanges of the periodRelated partyRelationshipLoan limit

Range of loan

interestBalance as at thebeginning of the

period

Total loanamount for theperiodTotal repaymentamount for theperiodBalance as at theend of the periodHaier FinanceCo., Ltd.

Subsidiary ofHaier Group

10 billion4.4%–

4.9%196,209,983.669,800.00196,200,183.66Total///196,209,983.669,800.00196,200,183.66

3. Credit business or other finance businesses

√ Applicable □Not Applicable

Unit and Currency: RMBRelated partyRelationshipType of businessTotal amount

Actual amountof occurrenceHaier FinanceCo., Ltd.

Subsidiary ofHaier Group

Foreign exchangederivativesproducts

5,500,000,000.00400,132,613.78Haier FinanceCo., Ltd.

Subsidiary ofHaier Group

Service charge80,000,000.008,377,892.14

4. Other explanations

□ Applicable √ Not Applicable

(VI) Others

□ Applicable √ Not Applicable

XIII. SIGNIFICANT CONTRACTS AND THEIR EXECUTION

(I) Trusteeship, contracting and leasing

1. Trusteeship

□ Applicable √ Not Applicable

During the reporting period, the Company had no material escrow matters. Up to now, thefollowing entrusted assets that have been approved by the Company’s shareholders’meeting are still in effect:

According to Haier Group’s commitment in 2011 on further supporting the development ofQingdao Haier and resolving peer competition to reduce connected transactions, based onthe fact that Qingdao Haier Optoelectronics Co., Ltd. (青島海爾光電有限公司) and itssubsidiaries, the main body of Haier Group engaging in the color television business, are

Section VI Significant Events

still in a period of transformation and integration, and their financial performance has notyet met the Company’s expectations, Haier Group is unable to complete the transfer beforethe aforesaid commitment period. Haier Group intends to entrust the Company with theoperation and management of the escrow assets and pay the Company an annual escrowfee of RMB1 million during the escrow period.

2. Contracting

□ Applicable √ Not Applicable

3. Leasing

□ Applicable √ Not Applicable

(II) Guarantee

√ Applicable □ Not Applicable

Unit and Currency: RMB0’000External guarantees provided by the Company (excluding guarantees for subsidiaries)Guarantor

Relationshipbetween theguarantor andthe listedcompany

SecuredpartyAmount ofguarantee

Date ofoccurrenceof theguarantee(date ofagreement)

Commencement

date ofguaranteeExpirationdate ofguarantee

Type ofguaranteeCollateral (ifany)Whether theguaranteehas beenfulfilledWhether theguarantee isoverdueOverdueamount oftheguarantee

Whetherthere is acounter-guarantee

WhetherRelated-partyguaranteeor notRelationshipTotal 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 for subsidiariesTotal amount of guarantees for subsidiaries occurred during the reporting period1,885,559Total balance of guarantees for subsidiaries at the end of the reporting period (B)1,280,383

Total amount of guarantees provided by the Company (including guarantees for subsidiaries)Total amount of guarantee (A + B)1,280,383Ratio of total amount of guarantees to net assets of the Company (%)11.5Including:

Amount of guarantees for shareholders, ultimate controllers and their related parties (C)0Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio exceeding 70% (D)808,117The amount of total amount of guarantee in excess of 50% of net assets (E)0Total amount of the above three guarantees (C + D + E)808,117Explanation of possibly bearing related discharge duty for premature guaranteesNilExplanation of guarantee statusNil

Section VI Significant Events

(III) Entrusted others to manage cash assets

1. Entrusted wealth management

(1) Overall of entrusted wealth management

√ Applicable □ Not Applicable

Unit and Currency: RMBTypeSources of fundsAmount

Premature

balance

Past dueuncollectedamountBank wealthmanagementproduct

Self-owned funds10,773,000,000.00722,000,000.00OthersSelf-owned funds

(Assetmanagementaccount foremployee stockownership)

22,210,902.2222,210,902.22

Others

√ Applicable □ Not Applicable

By the end of the reporting period, the balance of the Company’s entrusted wealthmanagement amounted to RMB744 million, including two parts:①Temporarily-idlefunds wealth management by certain subsidiaries of the Company: Under the premiseof ensuring sufficient capital required by the principal operating activities and dailyoperations, some subsidiaries of the Company purchased some short-term principal-guaranteed wealth management products and structured deposits from majorcommercial banks to improve the yield of temporarily-idle funds and the return forshareholders within the authority of the president’s office meeting and under thecondition of ensuring fund safety. By the end of the reporting period, the balance ofthe entrusted wealth management amounted to RMB722 million; ②Idle funds in theasset management account of the Employee Stock Ownership Scheme: the assetmanagement institution purchased cash products such as money funds according tothe liquidity of the products with some idle funds in the asset management accountof the Employee Stock Ownership Scheme of the Company. The balance of cashassets amounted to RMB22 million.

Section VI Significant Events

(2) Individual entrusted wealth management

Trustee

Type ofentrusted wealthmanagement

Amount ofentrustedwealthmanagement

Commencementdate ofentrusted wealthmanagement

Expiration dateof entrustedwealthmanagementSources offundsInvestment

Whether therearerestrictionsDeterminationof returnAnnualizedyieldExpectedreturn (ifany)Actualgains orlosses

UndueamountPast dueuncollectedamountWhetherapprovedby dueprocessAny futureplan forentrustedwealthmanagementAmount ofprovisionforimpairment(if any)Asset management account ofIndustrial Bank CO., LTD.

Bank wealthmanagementproduct

22,210,902Self-owned

funds

NOYESNOQingdao Sub-branch of ChinaMerchants Bank

Bank wealthmanagementproduct

30,000,0002024/11/182025/1/27Self-owned

funds

NO2.00%YESNOQingdao Sub-branch of ChinaMerchants Bank

Bank wealthmanagementproduct

140,000,0002024/12/32025/4/1Self-owned

funds

NO2.40%YESNOHaier Road sub-branch ofConstruction Bank

Bank wealthmanagementproduct

300,000,0002024/9/302025/1/30Self-owned

funds

NO2.25%YESNOHaier Road sub-branch ofConstruction Bank

Bank wealthmanagementproduct

252,000,0002024/12/92025/1/9Self-owned

funds

NO2.30%YESNOOthers

□ 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

Section VI Significant Events

3. Others

□ Applicable √ Not Applicable

(IV) Other Major Contracts

□ Applicable √ Not Applicable

XIV. EXPLANATION OF PROGRESS IN USE OF PROCEEDS

□ Applicable √ Not Applicable

XV. EXPLANATION OF OTHER SIGNIFICANT MATTERS THAT HAVE A

SIGNIFICANT IMPACT ON THE VALUE JUDGMENTS AND INVESTMENTDECISIONS OF INVESTORS

□ Applicable √ Not Applicable

Section VII Changes in Shares and

Information about Shareholders

I. CHANGES IN SHARE CAPITAL(I) Table of Changes in shares

1. Table of Changes in shares

Unit: sharePrior to the changeIncrease and decrease of the change (,—)After the changeNumberPercentage(%)

New sharesissued

Bonusshares

Sharesconvertedfrom reserveOthersSubtotalNumber

Percentage(%)I. Shares with sellingrestrictions

1. Shares held by

the state

2. Shares held by

the state-ownedlegal entities

3. Shares held by

other domesticinvestorsIncluding:

shares heldby Domesticnon-state-owned legalentitiesShares held bydomesticindividuals

4. Shares held by

foreign investorsIncluding:

shares heldby foreignlegal entitiesShares held byforeignindividualsII. Tradable shareswithout sellingrestrictions9,438,114,893100.00–55,201,559–55,201,5599,382,913,334100.00

1. RMB ordinary

shares6,308,552,65466.84–54,051,559–54,051,5596,254,501,09566.66

2. Domestic listed

foreign shares

3. Overseas listed

foreign shares3,129,562,23933.16–1,150,000–1,150,0003,128,412,23933.34

4. Others

III. Total shares9,438,114,893100.00–55,201,559–55,201,5599,382,913,334100.00

Section VII Changes in Shares and Information about Shareholders

2. Statement on the changes in shares

√ Applicable □ Not Applicable

(1) Cancellation of repurchased A shares: The Resolution on the Change of Use and

Cancellation of Partial Repurchased Shares of Haier Smart Home Co., Ltd. wasconsidered and approved by the Company at the 2023 Annual General Meeting, 2024First A Share Class Meeting, 2024 First D Share Class Meeting, and 2024 First HShare Class Meeting held on 20 June 2024. The Company proposes to change theuse of the repurchased shares under the Company’s 2021 Annual Repurchase Planfrom “for equity incentives/employee stock ownership plan” to “for cancellation toreduce registered capital”, i.e., all 54,051,559 shares in the designated securitiesaccount under the 2021 Annual Repurchase Plan is proposed to be canceled and theregistered capital of the Company is proposed to be reduced accordingly. Thiscancellation was completed on 10 September 2024. For details, please refer to the“Announcement on the Completion of Cancellation of Partial Repurchased Shares andChanges in Share Capitial of Haier Smart Home Co., Ltd.” (Announcement No.: Lin2024–036) disclosed by the Company on 10 September 2024.

(2) Cancellation of repurchased H shares: On 20 June 2024, the Resolution on

Proposing the General Meeting to Grant the General Mandate to the Board ofDirectors to Repurchase not more than 10% of the Total Number of H shares of theCompany in Issue of Haier Smart Home Co., Ltd. was considered and approved bythe Company at the 2023 Annual General Meeting, 2024 First A Share ClassMeeting, 2024 First D Share Class Meeting, and 2024 First H Share Class Meeting.The Company intends to repurchase H shares and cancel them within the agreedperiod. During the reporting period, the Company repurchased a total of 1,150,000 Hshares, which have been cancelled. For details, please refer to the Announcement onChanges in Share Capitial of Overseas Listed Foreign Shares (H Shares) of HaierSmart Home Co., Ltd. (No.: Lin 2024–042) disclosed by the Company on2 November 2024.Based on the above, during the reporting period, the share capital of the Companywas changed from 9,438,114,893 shares at the beginning of the reporting period to9,382,913,334 shares.

Section VII Changes in Shares and Information about Shareholders

3. Effect of changes in 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 2024, the Company achieved net profit attributable to shareholders of the ParentCompany of RMB18,741,120,122.93, equity attributable to owners of the Parent Companyat the end of the reporting period of RMB111,366,118,999.17, in terms of total sharecapital of 9,438,114,893 shares at the beginning of the period, profit per share wasRMB1.99 and net asset per share was RMB11.80 accordingly; in terms of total sharecapital of 9,382,913,334 shares at the end of the period, profit per share was RMB2.00and net asset per share was RMB11.87 accordingly.

4. Other disclosure deemed necessary by the Company or required by securities

regulatory authorities

□ Applicable √ Not Applicable

(II) Changes in shares with selling restriction

□ Applicable √ Not Applicable

II. ISSUANCE AND LISTING OF SECURITIES(I) Issuance of securities as of the reporting period

□ Applicable √ Not Applicable

Details of issuance of securities as of the reporting period (please specify separately for bondswith different interest rates within the duration):

□ Applicable √ Not Applicable

(II) Changes in total shares and shareholder structure as well as assets and liabilities

structure of the Company

√ Applicable □ Not Applicable

For the total number of ordinary shares of the Company and changes in shareholder structure,please refer to the relevant explanations in “I. Changes in share capital” and “III. Information onshareholder and ultimate controllers” in this section. For the impact of the aforesaid changes on“Paid-in capital (or share capital)” in the Company’s balance sheet and other items, please referto the relevant content in “Section X Financial Report” of this report.(III) Information on existing shares specifically issued for staff

□ Applicable √ Not Applicable

Section VII Changes in Shares and Information about Shareholders

III. INFORMATION ON SHAREHOLDERS AND ULTIMATE CONTROLLERS(I) Total number of shareholders

Total number of ordinary shareholders up to the end of the reporting period135,677Total number of ordinary shareholders as at the end of the last month priorto the disclosure day of the annual report

166,471Total number of preferential shareholders with restoration of voting rights asat the end of the reporting period

N/ATotal number of preferential shareholders with restoration of voting rights asat the end of the last month prior to the disclosure day of the annualreport

N/A(II) Table of top ten shareholders, top ten common shareholders (or the shareholdersnot subject to selling restrictions) by the end of the reporting period

Unit: share

Shareholdings of top ten shareholders (excluding the lending of shares under refinancing)Name of shareholder(full name)

Increase/decreaseduring thereportingperiodNumber ofshares heldat the end ofthe period

Percentage(%)Number ofshares heldwith sellingrestrictions

Status of shares pledged,

marked or frozen

Nature ofshareholderStatusNumberHKSCC NOMINEES LIMITED2,313,483,37324.66UnknownUnknownHaier COSMO Co., Ltd.

(海爾卡奧斯股份有限公司)

1,258,684,82413.41NoneDomestic non-state-

owned legal entityHaier Group Corporation1,072,610,76411.43NoneHong Kong Securities Clearing

Co., Ltd.

672,563,4407.17NoneUnknownHCH (HK) INVESTMENT

MANAGEMENT CO.,LIMITED

538,560,0005.74UnknownUnknownChina Securities Finance

Corporation Limited

182,592,6541.95NoneUnknownQingdao Haier Venture &

Investment Information Co.,Ltd. (青島海爾創業投資諮詢有限公司)

172,252,5601.84NoneDomestic non-state-

owned legal entityQingdao Haichuangzhi

Management ConsultingEnterprise (LimitedPartnership) (青島海創智管理諮詢企業（有限合夥）)

133,791,0581.43NoneIndustrial and Commercial Bankof China—Shanghai 50Exchange-traded Open-EndIndex Securities InvestmentFund (中國工商銀行—上證50交易型開放式指數證券投資基金)

70,524,3010.75NoneUnknown

Section VII Changes in Shares and Information about Shareholders

Shareholdings of top ten shareholders (excluding the lending of shares under refinancing)Name of shareholder(full name)

Increase/decreaseduring thereportingperiodNumber ofshares heldat the end of

the period

Percentage(%)Number ofshares heldwith sellingrestrictions

Status of shares pledged,marked or frozen

Nature ofshareholderStatusNumberIndustrial and Commercial Bank

of China Limited—

Huatai-PineBridge CSI 300Exchange-traded Open-endIndex Securities InvestmentFund (中國工商銀行股份有限公司—華泰柏瑞滬深300交易型開放式指數證券投資基金)

64,708,5280.69NoneUnknown

Shareholdings of top ten shareholders not subject to selling restrictions

(excluding the lending of shares under refinancing)

Name of shareholder

Number oftradable shares

without sellingrestrictionsClass and number of shares

ClassNumberHKSCC NOMINEES

LIMITED

2,313,483,373Overseas listed foreign

shares

2,313,483,373Haier COSMO Co., Ltd.

(海爾卡奧斯股份有限公司)

1,258,684,824RMB ordinary1,258,684,824Haier Group

Corporation

1,072,610,764RMB ordinary1,072,610,764Hong Kong Securities

Clearing Co., Ltd.

672,563,440RMB ordinary672,563,440HCH (HK) INVESTMENTMANAGEMENT CO.,LIMITED

538,560,000Overseas listed foreign

shares

538,560,000China Securities Finance

Corporation Limited

182,592,654RMB ordinary182,592,654Qingdao Haier Venture &

InvestmentInformation Co., Ltd.(青島海爾創業投資諮詢有限公司)

172,252,560RMB ordinary172,252,560

Section VII Changes in Shares and Information about Shareholders

Shareholdings of top ten shareholders not subject to selling restrictions

(excluding the lending of shares under refinancing)

Name of shareholder

Number oftradable shareswithout selling

restrictionsClass and number of shares

ClassNumberQingdao Haichuangzhi

ManagementConsulting Enterprise(Limited Partnership)(青島海創智管理諮詢企業（有限合夥）)

133,791,058RMB ordinary133,791,058

Industrial andCommercial Bank ofChina—Shanghai 50Exchange-tradedOpen-End IndexSecurities InvestmentFund (中國工商銀行—上證50交易型開放式指數證券投資基金)

70,524,301RMB ordinary70,524,301

Industrial andCommercial Bank ofChina Limited—

Huatai-PineBridgeCSI 300 Exchange-traded Open-endIndex SecuritiesInvestment Fund (中國工商銀行股份有限公司—華泰柏瑞滬深300交易型開放式指數證券投資基金)

64,708,528Overseas listed foreign

shares

64,708,528

Explanation on

repurchase account oftop ten shareholders

As at the end of the reporting period, the Company’s dedicated

repurchase account held a total of 59,919,870 shares.Explanation ondelegated votingrights, entrustedvoting rights,abstained votingrights of the aforesaidshareholders

Nil

Section VII Changes in Shares and Information about Shareholders

Shareholdings of top ten shareholders not subject to selling restrictions

(excluding the lending of shares under refinancing)

Name of shareholder

Number oftradable shareswithout sellingrestrictionsClass and number of shares

ClassNumberRelated parties orparties acting inconcert among theaforesaidshareholders

(1) Haier COSMO Co., Ltd. (海爾卡奧斯股份有限公司) is a holding

subsidiary of Haier Group Corporation. Haier GroupCorporation holds 51.20% of its equity. Each of Qingdao HaierVenture & Investment Information Co., Ltd. (青島海爾創業投資諮詢有限公司), HCH (HK) INVESTMENT MANAGEMENTCO., LIMITED and Qingdao Haichuangzhi ManagementConsulting Enterprise (Limited Partnership) (青島海創智管理諮詢企業（有限合夥）) is a party acting in concert with HaierGroup Corporation; (2) The Company is not aware of theexistence of any connections of other shareholders.Explanation of

preferentialshareholders withrestoration of votingrights and theirshareholdings

Not Applicable

Note: HKSCC NOMINEES LIMITED is the Banking Collection Account for the shareholders of the Company’s H-shares, which

is the original data provided by China Hong Kong securities registration agency to the Company after the mergeraccording to local market practices and technical settings, not representing the ultimate shareholder.

Shareholders holding more than 5% of the shares, the top ten shareholders, and the top tenholders of tradable shares without selling restrictions who have participated in the lending ofshares under the refinancing business

□ Applicable √ Not Applicable

Changes in the top ten shareholders and the top ten holders of tradable shares without sellingrestrictions compared with the previous period due to the lending/returning of shares under therefinancing business

□ Applicable √ Not Applicable

Number of shares held by the top ten shareholders with selling restrictions and their sellingrestrictions

□ Applicable √ Not Applicable

Section VII Changes in Shares and Information about Shareholders

(III) Strategic investors or general legal persons who became the top tenshareholders 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

NameHaier COSMO Co., Ltd. (海爾卡奧斯股份有限公司)Person in charge of theCompany or legalrepresentative

Zhou Yunjie (周云杰)Establishment date1988–

–

Principal businessInformation technology integration and Internet of

Things technology services: industrial automationtechnology research and development, technicalconsulting; research and development andmanufacturing of electrical appliances, electronicproducts, mechanical products, communicationequipment and related accessories, industrialautomation control equipment, computer hardwareand software and auxiliary equipment; import andexport business (operated within the scopeapproved by MOFCOM); wholesale and retail:

domestic commerce (except for merchandisesprohibited by the state); investment in medicalindustry; investment advisory services; enterprisemanagement consulting. (For projects subject toapproval, business activities can only be carried outafter the approval by relevant departments)Shareholding of other controllingand participating domestic andoverseas listed companies inthe reporting period

Indirect/direct control of/participation in the Company:

‘Qingdao Haier Biomedical Co., Ltd.’ (青島海爾生物醫療股份有限公司) (stock name: ‘HaierBiomedical’, stock code: 688139), Yingkang LifeTechnology Co., Ltd. (盈康生命科技股份有限公司)(stock name: ‘Yingkang Life’, stock code: 300143),‘Qingdao Bank Co., Ltd.’ (青島銀行股份有限公司)(stock name: ‘Bank of Qingdao’, stock code:

002948 and 3866.HK), etc.Other explanationNil

Section VII Changes in Shares and Information about Shareholders

2. Natural person

□ Applicable √ Not Applicable

3. Explanation on the absence of controlling shareholders of the Company

□ Applicable √ Not Applicable

4. Explanation on the change 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

Haier Smart Home Co., Ltd.

13.41%

Haier COSMO Co., Ltd.()

(II) Status of the ultimate controller

1. Legal person

√ Applicable □ Not Applicable

NameHaier Group CorporationPerson in charge of the

Company or legalrepresentative

Zhou Yunjie (周云杰)Establishment date1980–

–

Section VII Changes in Shares and Information about Shareholders

Principal businessTechnology development, technology consultation,

technology transfer and technology services(including industrial Internet, etc.); data processing;digital technology, intelligent technology, softwaretechnology; research and development, sales andafter-sales service of robots and automationequipment products; logistics information service;research and development and sales of softwaretechnology for smart home products and solutionssystems; manufacturing of household appliances,electronic products, communication equipment,electronic computers and accessories, generalmachinery, kitchen utensils, industrial robots;wholesale and retail of domestic commerce (exceptfor the national dangerous prohibition franchiseexclusive control merchandises); import and exportbusiness (see the foreign trade enterprise finalizedcertification for details); economic and technologicalconsultation; research and development andtransfer of technological achievements; rental ofowned properties. (For projects subject to approval,business activities can only be carried out after theapproval by relevant departments)Shareholding of other controlling

and participating domestic andoverseas listed companies inthe reporting period

Indirect/direct control of/participation in the Company:

‘Qingdao Haier Biomedical Co., Ltd.’ (青島海爾生物醫療股份有限公司) (stock name: ‘HaierBiomedical’, stock code: 688139), Yingkang LifeTechnology Co., Ltd. (盈康生命科技股份有限公司)(stock name: ‘Yingkang Life’, stock code: 300143),‘Qingdao Bank Co., Ltd.’ (青島銀行股份有限公司)(stock name: ‘Bank of Qingdao’, stock code:

002948 and 3866.HK), China International CapitalCorporation Limited’ (stock name: ‘CICC’, stockcode: 601995 and 3908.HK), ‘QingdaoThunderobot Technology. Co., Ltd.’ (stock name:

‘THUNDEROBOT’, stock code: 872190), ShanghaiRaas Blood Products Co.,Ltd (上海萊士血液製品股份有限公司) (stock name: ‘Shanghai Raas’, stockcode: 002252), Zhongmiao Holdings (Qingdao) Co.,Ltd. (stock name: ‘Zhongmiao Holdings’, stockcode: 1471.HK), etc.Other explanationNil

Section VII Changes in Shares and Information about Shareholders

2. Natural person

□ Applicable √ Not Applicable

3. Explanation on the absence of ultimate controller of the Company

□ Applicable √ Not Applicable

4. Explanation on the change in control over the Company during the reporting period

□ Applicable √ Not Applicable

5. Framework of ownership and controlling relationship between the Company and the

ultimate controllers

√ Applicable □ Not Applicable

Haier Smart Home Co., Ltd.

Haier Group Corporationpartiesin concert100%

1.84%

(A Shares)

1.43%

(A Shares)

11.43%

(A Shares)

13.41%

(A Shares)

5.74%

(H Shares)

0.62%

(D Shares)

51.20%

67%

00%Qingdao Haier Venture &Investment Information

Co., Ltd.(

)

Qingdao HaichuangzhiManagement Consulting

Enterprise(Limited Partnership)(

)

Haier COSMO

Co., Ltd.(

)

HCH (HK)INVESTMENTMANAGEMENTCO., LIMITED

HaierInternationalCo. Limited

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 statementissued by the State-owned Assets Management Office of Qingdao on 1 June 2002, it is believedthat the enterprise nature of Haier Group Company is a collective owned enterprise.

Section VII Changes in Shares and Information about Shareholders

V. THE PROPORTION OF THE ACCUMULATED NUMBER OF SHARESPLEDGED BY THE CONTROLLING SHAREHOLDERS OR THE LARGESTSHAREHOLDER OF THE COMPANY, TOGETHER WITH THE PARTIESACTING IN CONCERT WITH THEM, TO THE NUMBER OF SHARES OFTHE COMPANY HELD BY THEM AMOUNTS TO MORE THAN 80%

□ Applicable √ Not Applicable

VI. OTHER CORPORATE SHAREHOLDERS WITH A SHAREHOLDINGPERCENTAGE OVER 10%

□ Applicable √ Not Applicable

VII. EXPLANATION OF RESTRICTIONS ON SHAREHOLDING REDUCTION

□ Applicable √ Not Applicable

VIII. SPECIFIC IMPLEMENTATION OF SHARE REPURCHASE DURING THE

REPORTING PERIOD

√ Applicable □ Not Applicable

Unit and Currency: RMBName of share repurchase planHaier Smart Home Co., Ltd.’s public share proposal in relation

to the partial repurchase of A SharesDate of disclosure of the sharerepurchase plan

28 April 2023Number of shares proposed to berepurchased and its percentageto the total share capital (%)

46.88 million shares to 93.75 million shares, 0.50 to 0.99

Proposed amount of repurchaseRMB1.5 billion to RMB3 billionProposed period of repurchase28 April 2023 to 27 April 2024Purpose of repurchaseUsed for employee share ownership plansAmount repurchased (share)20,082,042Repurchased amount as apercentage to the underlyingshares covered by the equityincentive scheme (%) (if any)

Not Applicable

Progress of the Company’sreduction of its holdings ofrepurchased shares by way ofcentralised bidding

Not Applicable

Note: During the reporting period, the Company also implemented the H-share repurchase scheme. For details, please refer to “2.Statement on the changes in shares” under “Section VII Changes in Shares and Information about Shareholders” of thisreport and the Announcement on the Changes in Shares of Overseas Listed Foreign Shares (H Shares) of Haier Smart HomeCo., Ltd. (《海尔智家股份有限公司關於境外上市外資股（H股）股份变动情況的公告》) (No.: Lin 2024–042) disclosed by theCompany on 2 November 2024.

Section VIII Relevant Information of

Preference Shares

□ Applicable √ Not Applicable

Section IX Relevant Information of Bonds

I. ENTERPRISE BOND (INCLUDING CORPORATE BOND) ANDNON-FINANCIAL CORPORATE DEBT FINANCING INSTRUMENTS

□ Applicable √ Not Applicable

II. CONVERTIBLE CORPORATE BOND

□ Applicable √ Not Applicable

Section X Financial Report

I. AUDIT REPORT

√ Applicable □ Not Applicable

Audit Report

He Xin Shen Zi. (2025) No.000286To all shareholders of Haier Smart Home Co., Ltd.:

I. AUDIT OPINIONWe have audited the financial statements of Haier Smart Home Co., Ltd. (hereinafter referred to as the‘Haier Smart Home Co.’), which comprise the Consolidated and the Company’s Balance Sheet as at31 December 2024, the Consolidated and the Company’s Income Statement, the Consolidated and theCompany’s Cash Flow Statement, the Consolidated and the Company’s Statement of Changes inShareholders’ Equity for the year 2024, and notes related to the financial statements.In our opinion, the accompanying financial statements present fairly, in all material respects, theConsolidated and the Company’s financial position of the Haier Smart Home Co as at 31 December2024, and the Consolidated and the Company’s financial performance and cash flow for the year 2024in 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 underthose standards are further described in Auditor’s responsibilities for the Audit of Financial Statementssection of the report. We are independent of Haier Smart Home Co in accordance with the CICPA’sCode of Ethics for Professional Accountants (the Code), and we have fulfilled our other ethicalresponsibilities in accordance with the Code. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.III. KEY AUDIT MATTERSKey audit matters are those matters that, in our professional judgment, were of most significance in ouraudit of the financial statements for the current period. These matters were addressed in the contextof our audit of the financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters. We identify the following matters as the key auditmatters that need to be communicated in the audit report:

Section X Financial Report

Key Audit MattersAudit Response(I) Provision for impairment of goodwill and intangible assets with indefinite useful livesRelevant disclosures are included in Note V. 30Other significant accounting policies and accountingestimates and Note V.20 Impairment of long-termassets to the financial statements.As of 31 December 2024, the book value ofgoodwill was RMB27.384 billion, and the bookvalue of intangible assets with indefinite useful liveswas RMB2.597 billion, without any provision forasset impairment. Whether the provision forimpairment of long-term assets was sufficient hadgreat influence to the financial statements.Significant management judgments are involved incalculation of asset group’s recoverable amount,such as revenue growth rate, gross margin,discount rate, etc.Provision for impairment of goodwill and intangibleassets with indefinite useful lives is considered asthe key audit matter due to the significant amountand management judgement involved in calculation.

We mainly implemented the following auditprocedures on the provisions for the impairment ofgoodwill and intangible assets with indefinite usefullife:

(1) Compared the actual operating results of the

related assets group with previous year’sforecasted figures, to assess the reliability ofthe management forecast on cash flow;

(2) Compared the input of cash flow forecast with

historical data, approved budget and businessplan;

(3) Tested the calculation accuracy of the

discounted cash flow model;

(4) Assessed the appropriateness of parameters

in the cash flow conversion model, such asthe discount rate and the perpetual growthrate. The assessment is based ourunderstanding of the Company’s businessesand the industry.

Section X Financial Report

Key Audit MattersAudit Response(II) Provision for impairment of inventoryRelevant disclosures are included in Note VII.9Inventory to the financial statements.The Company’s inventories are measured at thelower of cost and net realizable value. As of31 December 2024, the inventory balance wasRMB44.717 billion, and the provision for impairmentof inventory was RMB1.673 billion and the bookvalue was RMB43.044 billion. Whether the provisionfor the impairment of inventories was sufficient andaccurate had great influence to the financialstatements.The Company determines the net realizable value ofinventory based on the estimated selling priceminus the estimated selling expenses and relatedtaxes.Management estimates the selling price based onthe status of inventory. The estimation processinvolves significant management judgments such asinventory status, repair rate, discount rate, etc.Provision for inventories is considered as the keyaudit matter due to the significant amount andmanagement judgement involved in calculation.

We mainly implemented the following auditprocedures on the provision for impairment ofinventories:

(1) Obtained the calculation table for provision for

impairment of inventory of the Company, andreviewed the conditions and aging of theproducts models stated in the table to seewhether they are consistent with theinformation obtained through physicalinventory on a sample basis;

(2) Compared the major parameters estimated by

management with historical data, andassessed the appropriateness;

(3) Assessed the selling price estimated by the

management, and checked the inventoryagainst the actual selling price after thebalance sheet date on a sample basis;

(4) Assessed selling expenses and related tax

estimated by management and compared withactual amounts incurred.

IV. OTHER INFORMATIONThe management of Haier Smart Home Co (hereinafter referred to as the “Management”) is responsiblefor other information. Other information includes the information covered in the 2024 annual report ofHaier Smart Home Co, 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 expressany form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.

Section X Financial Report

V. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGEDWITH GOVERNANCE FOR THE FINANCIAL STATEMENTSThe Management is responsible for the preparation of the financial statements that give a true and fairview in accordance with the requirements as set out in the Accounting Standards for BusinessEnterprises, and for such internal control as necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the Management are responsible for assessing the ability of HaierSmart Home Co to continue as a going concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unless the management either intends toliquidate Haier Smart Home Co 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 HaierSmart Home Co.VI. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF FINANCIALSTATEMENTSOur objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an audit report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee thatan audit conducted in accordance with auditing standards will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.As part of an audit in accordance with auditing standards, we exercise professional judgment andmaintain 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 tofraud or error, design and perform audit procedures responsible to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting 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 overrideof 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 thereasonableness of accounting estimates and related disclosures made by the Management.

Section X Financial Report

(IV) Conclude on the appropriateness of the Management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty existsrelated to events or conditions that may cause significant doubt on the ability of Haier SmartHome Co to continue as a going concern. If we conclude that a material uncertainty exists, weare required by the auditing standards to draw attention in our audit report to the relateddisclosures in the financial statements or; if such disclosures are inadequate, to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of our auditreport. However, future events or conditions may cause Haier Smart Home Co to cease tocontinue as a going concern.(V) Evaluate the overall presentation, structure and content of the financial statements, and whetherthe financial statements represent the underlying transactions and events in a manner thatachieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entitiesor business activities within Haier Smart Home Co to express an opinion on the financialstatements. We are responsible for the direction, supervision and performance of the groupaudit, and remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.From the matters communicated with those charged with governance, we determine those matters thatare of most significance in the audit of the financial statements of the current period and thereforeconstitute the key audit matters. We describe these matters in our audit report unless law orregulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our audit report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interest benefits ofsuch communication.Hexin Certified Public Accountants LLPCertified Public Accountant: Zuo Wei (Engagement Partner)Certified Public Accountant: Li Xiang ZhiJinan, China27 March 2025

Section X Financial Report

II. FINANCIAL STATEMENTSConsolidated Balance Sheet31 December 2024Prepared by: Haier Smart Home Co., Ltd.

Unit and Currency: RMBItemsNotes

31 December

2024

31 December

2023Current assets:

Monetary fundsVII.155,583,842,589.7057,255,962,206.24Provision of settlement fundFunds lentFinancial assets held for tradingVII.21,236,017,839.53956,995,543.83Derivative financial assetsVII.3142,709,716.9167,565,829.44Bills receivableVII.412,118,681,244.148,790,151,269.91Accounts receivableVII.526,473,001,745.0122,682,921,254.25Financing receivablesVII.6360,069,391.56200,326,471.85PrepaymentsVII.72,382,805,400.241,391,536,213.26Premiums receivableReinsurance accounts receivableReinsurance contract reserves receivableOther receivablesVII.83,489,181,537.802,949,235,439.77Including: Interest receivables771,591,076.67748,496,020.24

Dividends receivablesFinancial assets purchased under resale

agreementsInventoriesVII.943,044,414,227.3839,524,006,616.33Including: Data resourcesContract assetsVII.10987,669,298.29260,939,408.73Assets held for saleNon-current assets due in one yearVII.111,439,758,652.55—Other current assetsVII.124,431,384,633.614,833,636,680.17Total current assets151,689,536,276.72138,913,276,933.78

Section X Financial Report

ItemsNotes

31 December

2024

31 December

2023Non-current assets:

Loans and advances grantedDebt investmentsVII.1315,474,759,856.999,117,874,328.66Other debt investmentsLong-term receivables224,724,107.31350,409,496.85Long-term equity investmentsVII.1420,932,439,255.9320,196,199,306.57Investments in other equity instrumentsVII.155,986,688,663.466,403,694,954.77Other non-current financial assetsInvestment propertiesVII.16246,161,259.8398,631,080.77Fixed assetsVII.1737,518,645,325.0833,425,684,876.90Construction in progressVII.185,680,101,282.665,951,859,455.98Biological assets for productionOil and gas assetsRight-of-use assetsVII.195,841,869,564.364,776,765,275.90Intangible assetsVII.2014,034,674,912.5412,454,321,237.18Including: Data resourcesDevelopment costVIII.2267,267,592.92266,490,235.10Including: Data resourcesGoodwillVII.2127,384,007,599.0624,482,559,414.46Long-term prepaid expensesVII.22597,870,603.85746,836,562.89Deferred income tax assetsVII.232,477,206,492.361,849,094,792.40Other non-current assetsVII.241,757,870,031.542,033,986,945.28

Total non-current assets138,424,286,547.89122,154,407,963.71Total assets290,113,822,824.61261,067,684,897.49

Section X Financial Report

ItemsNotes

31 December

2024

31 December

2023Current liabilities:

Short-term borrowingsVII.2513,784,367,443.9310,895,076,014.86Borrowings from central bankFunds borrowedFinancial liabilities held for tradingDerivative financial liabilitiesVII.2671,011,310.01168,625,004.97Bills payableVII.2721,149,134,964.2122,260,991,114.42Accounts payablesVII.2854,587,992,129.5849,917,971,699.31Receipts in advanceContract liabilitiesVII.2910,852,073,573.077,849,215,139.13Disposal of repurchased financial assetsAbsorbing deposit and deposit in inter-bank marketCustomer deposits for trading in securitiesAmounts due to issuer for securitiesunderwritingPayables for staff’s remunerationVII.305,040,549,927.875,151,708,664.19Taxes payableVII.313,915,081,920.182,941,772,155.37Other payablesVII.3221,744,240,823.5018,921,220,225.78Including: Interest payablesDividends payables14,082,609.411,880,719.69Fees and commissions payableReinsurance Accounts payablesLiabilities held for saleNon-current liabilities due within one yearVII.3316,528,817,805.464,046,582,815.19Other current liabilitiesVII.341,898,104,621.951,661,115,570.16Total current liabilities149,571,374,519.76123,814,278,403.38

Section X Financial Report

ItemsNotes

31 December

2024

31 December

2023Non-current liabilities:

Deposits for insurance contractsLong-term borrowingsVII.359,665,074,313.6718,365,302,925.77Bonds payableIncluding: Preference shares

Perpetual bondsLease liabilitiesVII.364,480,895,997.363,429,765,203.81Long-term payablesVII.37188,220,056.5957,113,422.78Long-term payables for staff’sremunerationVII.382,561,647,446.351,085,454,839.18Estimated liabilitiesVII.392,386,261,752.921,935,014,042.24Deferred incomeVII.401,231,612,436.091,237,427,710.34Deferred income tax liabilitiesVII.231,541,697,550.831,527,665,985.75Other non-current liabilities98,073,333.452,085,322,390.90Total non-current liabilities22,153,482,887.2629,723,066,520.77Total liabilities171,724,857,407.02153,537,344,924.15Owners’ equity (or shareholders’

equity):

Paid-in capital (or share capital)VII.419,382,913,334.009,438,114,893.00Other equity instrumentsIncluding: Preference sharesPerpetual bondsCapital reserveVII.4220,115,358,921.9321,514,544,884.54Less: treasury stockVII.433,510,728,776.445,034,065,107.42Other comprehensive incomeVII.44793,828,357.471,969,365,062.65Special reserveSurplus reserveVII.455,296,602,892.454,842,338,543.80General risk provisionsUndistributed profitsVII.4679,288,144,269.7668,535,686,494.60Total equity attributable to owners (or

shareholders) of the Parent Company111,366,118,999.17101,265,984,771.17Minority shareholders’ interests7,022,846,418.426,264,355,202.17

Total owners’ equity (or shareholders’

equity)118,388,965,417.59107,530,339,973.34Total liabilities and owners’ equity (or

shareholders’ equity)290,113,822,824.61261,067,684,897.49Person in charge of the Company: Li HuagangPerson in charge of accounting function: Gong WeiPerson in charge of accounting department: Ying Ke

Section X Financial Report

Balance Sheet of the Parent Company31 December 2024Prepared by: Haier Smart Home Co., Ltd.

Unit and Currency: RMBItemsNotes

31 December

2024

31 December

2023Current Assets:

Monetary funds8,721,089,765.377,579,640,524.79Financial assets held for tradingDerivative financial assetsBills receivableAccounts receivableXIX.12,089,263,590.361,625,777,099.03Financing receivablesPrepayments3,124,793.193,212,938.83Other receivablesXIX.235,309,208,101.7323,649,977,816.57Including: Interest receivables137,951,583.62117,439,655.79

Dividends receivables955,746,044.23570,000,000.00Inventories9,092,410.785,400,498.27Including: Data resourcesContract assetsAssets held for saleNon-current assets due within one year1,105,291,666.67Other current assets174,671,080.161,530,274,566.66

Total current assets47,411,741,408.2634,394,283,444.15

Section X Financial Report

ItemsNotes

31 December

2024

31 December

2023Non-current assets:

Debt investments7,243,616,935.472,884,204,032.25Other debt investmentsLong-term receivablesLong-term equity investmentsXIX.362,193,654,756.1755,828,696,006.06Investments in other equity instruments1,602,852,951.001,619,260,874.04Other non-current financial assetsInvestment propertiesFixed assets131,874,644.27154,588,551.47Construction in progress490,452.836,054.40Biological assets for productionOil and gas assetsRight-of-use assetsIntangible assets35,196,337.8641,307,540.86Including: Data resourcesDevelopment costIncluding: Data resourcesGoodwillLong-term prepaid expenses3,502,636.813,777,722.63Deferred income tax assetsOther non-current assets1,738,121,667.231,501,734,455.48Total non-current assets72,949,310,381.6462,033,575,237.19Total assets120,361,051,789.9096,427,858,681.34Current liabilities:

Short-term borrowings2,000,000,000.00Financial liabilities held for tradingDerivative financial liabilitiesBills payableAccounts payables1,526,611,034.491,120,671,258.40Receipts in advanceContract liabilities12,597,148.6322,930,469.11Payables for staff’s remuneration7,798,419.3928,602,784.57Taxes payable884,572.315,590,668.41Other payables63,003,711,744.7245,012,683,942.96Including: Interest payable

Dividends payableLiabilities held for saleNon-current liabilities due within one year1,495,350,000.00134,000,000.00Other current liabilities20,115,610.8812,486,915.31

Total current liabilities68,067,068,530.4246,336,966,038.76

Section X Financial Report

ItemsNotes

31 December

2024

31 December

2023Non-current liabilities:

Long-term borrowings3,292,370,000.003,779,500,000.00Bonds payableIncluding: Preference sharesPerpetual bondsLease liabilitiesLong-term payableLong-term payables for staff’sremunerationEstimated liabilitiesDeferred income14,265,249.5012,973,300.00Deferred income tax liabilities394,292,088.98420,053,312.58Other non-current liabilitiesTotal non-current liabilities3,700,927,338.484,212,526,612.58Total liabilities71,767,995,868.9050,549,492,651.34Owners’ equity (or Shareholders’equity):

Paid-in capital (or share capital)9,382,913,334.009,438,114,893.00Other equity instrumentsIncluding: Preference sharesPerpetual bondsCapital reserve25,680,561,451.5727,263,651,777.44Less: treasury stock1,467,523,464.563,175,293,942.36Other comprehensive income618,368,749.67630,674,691.95Special reserveSurplus reserve4,691,456,667.004,237,192,318.35Undistributed profits9,687,279,183.327,484,026,291.62Total owners’ equity (or shareholders’

equity)48,593,055,921.0045,878,366,030.00Total liabilities and owners’ equity (or

shareholders’ equity)120,361,051,789.9096,427,858,681.34Person in charge of the Company: Li HuagangPerson in charge of accounting function: Gong WeiPerson in charge of accounting department: Ying Ke

Section X Financial Report

Consolidated Profit Statement

January-December 2024

Unit and Currency: RMBItemsNotes20242023I. Total operating revenue285,981,225,203.93274,204,520,847.97Including: Operating revenueVII.47285,981,225,203.93274,204,520,847.97

Interest incomeInsurance premiums earnedFee and commission incomeII. Total cost of operations265,171,922,970.95255,477,540,690.98Including: Operating costVII.47206,487,065,182.92198,838,470,796.47

Interest expensesFee and commission expensesInsurance withdrawal paymentNet payment from indemnityNet provisions withdrew forinsurance contract liabilityInsurance policy dividend paidReinsurance costTaxes and surchargesVII.481,276,040,830.271,152,034,823.21Selling expensesVII.4933,585,903,561.6032,726,735,817.73Administrative expensesVII.5012,110,235,915.3511,874,420,922.31R&D expensesVII.5110,740,112,353.4710,380,219,803.05Financial expensesVII.52972,565,127.34505,658,528.21Including: Interest expenses2,726,955,697.102,165,467,567.74

Interest income1,897,955,730.261,553,163,297.95Add: Other incomeVII.531,704,282,380.721,716,169,518.48Investment income

(losses arerepresented by ‘-’)VII.541,912,557,544.861,698,715,871.28Including: in vestment income of

associates andjoint ventures1,816,477,749.421,575,371,896.37

Income generatedfrom thederecognition offinancial assetsmeasured atamortized cost

Exchange gain(losses arerepresented by‘-’)

Section X Financial Report

ItemsNotes20242023

Gains on netexposure hedges(losses arerepresented by‘-’)Income from changein fair value(losses arerepresented by‘-’)VII.5547,130,324.6716,895,043.25Loss on creditimpairment(losses arerepresented by‘-’)VII.56–266,317,578.03–253,401,373.48Loss on assetsimpairment(losses arerepresented by‘-’)VII.57–1,283,980,232.53–1,512,214,011.21Gain from disposalof assets (lossesare representedby ‘-’)VII.58–11,258,612.64–12,153,756.13III. Operating profit (losses are represented

by ‘-’)22,911,716,060.0320,380,991,449.18Add: non-operating incomeVII.59183,938,534.66134,470,855.00Less: non-operating expensesVII.60362,862,166.24303,818,511.47IV. Total profit (total losses are represented

by ‘-’)22,732,792,428.4520,211,643,792.71Less: income tax expenseVII.613,157,179,926.773,123,163,218.75V. Net profit (net losses are represented by

‘-’)19,575,612,501.6817,088,480,573.96

(1) Classification by continuous operation

1. Net profit from continuous operation

(net losses are represented by ‘-’)19,575,612,501.6817,088,480,573.96

2. Net profit from discontinued

operation (net losses arerepresented by ‘-’)

(2) Classification by ownership of the

equity

1. Net profit attributable to

shareholders of the ParentCompany (net losses arerepresented by ‘-’)18,741,120,122.9316,596,615,045.87

2. Profit or loss attributable to minority

shareholders (net losses arerepresented by ‘-’)834,492,378.75491,865,528.09

Section X Financial Report

ItemsNotes20242023VI. Other comprehensive income, net of taxVII.62–1,173,713,256.17–35,103,681.56(I) Other comprehensive income

attributable to owners of the ParentCompany, net of tax–1,175,640,971.05–20,647,041.14

1. Other comprehensive income that

cannot be reclassified into the profitor loss–285,109,509.13503,462,953.84

(1) Changes arising from re-

measurement of defined benefitplans–1,011,523.0440,317,053.23

(2) Other comprehensive income

that cannot be transferred intoprofit or loss under equitymethod

(3) Changes in fair value of

investments in other equityinstruments–284,097,986.09463,145,900.61

(4) Changes in fair value of credit

risks of the enterprise

2. Other comprehensive income to be

reclassified into the profit or loss–890,531,461.92–524,109,994.98

(1) Other comprehensive income

that can be transferred into profitor loss under equity method–16,560,814.12–104,019,712.68

(2) Changes in fair value of other

debt Investments

(3) Reclassified financial assets that

are credited to othercomprehensive income

(4) Credit impairment provision for

other debt investments

(5) Reserve for cash flow hedging

–27,453,055.10–98,556,869.01

(6) Exchange differences on

translation of financial statementsdenominated in foreigncurrencies–846,517,592.70–321,533,413.29

(7) Others

(II) Other comprehensive incomeattributable to minority shareholders,net of tax1,927,714.88–14,456,640.42

Section X Financial Report

ItemsNotes20242023VII. Total comprehensive income18,401,899,245.5117,053,376,892.40(I) Total comprehensive income

attributable to the owners of ParentCompany17,565,479,151.8816,575,968,004.73(II) Total comprehensive incomeattributable to the minorityshareholders836,420,093.63477,408,887.67VIII. Earnings per share:

(I) Basic earnings per share (RMB/share)XXI.12.021.79(II) Diluted earnings per share (RMB/share)XXI.12.021.78For business combination under common control occurring in the current period, the net profit of theacquiree before the combination was RMB0, and the net profit of the acquiree for the previous periodwas RMB–2,581,701.76.Person in charge of the Company: Li HuagangPerson in charge of accounting function: Gong WeiPerson in charge of accounting department: Ying Ke

Section X Financial Report

Profit Statement of the Parent CompanyJanuary-December 2024

Unit and Currency: RMBItemsNotes20242023I. Operating income494,626,718.01720,992,484.07Less: operating costXIX.4435,635,653.30626,285,718.42

Taxes and surcharges4,150,024.065,260,953.75Selling expenses9,832,864.3014,931,713.80Administration expenses582,561,636.48629,589,430.69R&D expenses13,959,129.6220,148,355.05Financial expenses–345,610,897.81–194,423,911.53Including: interest expenses119,101,225.2481,607,850.71

Interest income429,448,235.99287,121,435.40Add: other income3,266,837.7310,186,535.00Investment income (losses are

represented by ‘-’)XIX.510,349,967,347.918,651,024,353.84

Including: in vestment income of

associates and jointventures330,033,883.50147,523,868.11Derecognition income on financial

assets measured at amortizedcostGains on net exposure hedges

(losses are represented by ‘-’)Income from change in fair value

(losses are represented by ‘-’)Loss on credit impairment (losses

are represented by ‘-’)–1,138.9374,824.58Loss on assets impairment (losses

are represented by ‘-’)Gain from disposal of assets

(losses are represented by ‘-’)6,653.7134,882.70II. Operating profit (losses are represented

by ‘-’)10,147,338,008.488,280,520,820.01Add: non-operating income3,053,172.0099,051.41Less: non-operating expenses566,088.2878,702.83III. Total profit (total losses are represented

by ‘-’)10,149,825,092.208,280,541,168.59Less: income tax expenses–21,659,242.84–938,036.98IV. Net profit (net losses are represented by

‘-’)10,171,484,335.048,281,479,205.57(I) Net profit from continuous operations

(net losses are represented by ‘-’)10,171,484,335.048,281,479,205.57

Section X Financial Report

ItemsNotes20242023(II) Net profit from discontinued operations

(net losses are represented by ‘-’)V. Other comprehensive income, net of tax–12,305,942.2828,583,342.21(I) Other comprehensive income thatcannot be reclassified into the profit orloss–12,305,942.28560,863.17

1. Changes arising from re-

measurement of defined benefitplans

2. Other comprehensive income that

cannot be transferred into profit orloss under equity method

3. Changes in fair value of investments

in other equity instruments–12,305,942.28560,863.17

4. Changes in fair value of credit risks

of the enterprise(II) Other comprehensive income to be

reclassified into the profit or loss28,022,479.04

1. Other comprehensive income that

can be transferred into profit or loss

under equity method28,022,479.04

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

6. Exchange differences on translation

of financial statements denominated

in foreign currencies

7. Others

VI. Total comprehensive income10,159,178,392.768,310,062,547.78VII. Earnings per share:

(I) Basic earnings per share (RMB/share)(II) Diluted earnings per share (RMB/share)Person in charge of the Company: Li HuagangPerson in charge of accounting function: Gong WeiPerson in charge of accounting department: Ying Ke

Section X Financial Report

Consolidated Cash Flow StatementJanuary-December 2024

Unit and Currency: RMBItemsNotes20242023I. Cash flow from operating activities:

Cash received from the sale of goods andrendering services306,799,219,762.12289,485,600,146.01Net increase in distributor and inter-bank

depositsNet increase in borrowing from the centralbankNet cash increase in borrowing from otherfinancial institutesCash received from premiums under original

insurance contractNet cash received from reinsurance businessNet increase in deposits of policy holders and

investmentCash received from interest, fee and

commissionsNet increase in cash borrowedNet increase in cash received from

repurchase operationNet cash received from customer deposits for

trading in securitiesRefunds of taxes1,906,821,720.291,863,779,679.64Cash received from other related operating

activitiesVII.632,789,234,773.242,890,574,427.22Sub-total of cash inflows from operating

activities311,495,276,255.65294,239,954,252.87Cash paid on purchase of goods and

services211,638,020,104.71196,599,208,044.16Net increase in loans and advances of

distributorsNet increase in deposits in the PBOC and

inter bankCash paid for compensation payments under

original insurance contactNet increase in cash lentCash paid for interest, bank charges and

commissionsCash paid for insurance policy dividendCash paid to and on behalf of employees31,533,130,822.6529,658,260,579.04

Section X Financial Report

ItemsNotes20242023Cash paid for all types of taxes16,325,590,236.0815,293,845,486.63Cash paid to other operation related activitiesVII.6325,455,453,180.2526,152,859,574.68Sub-total of cash outflows from operatingactivities284,952,194,343.69267,704,173,684.51Net cash flow from operating activitiesVII.6426,543,081,911.9626,535,780,568.36II. Cash flow from investing activities:

Cash received from recovery of investments17,220,575,654.679,445,029,555.85Cash received from return on investments765,484,396.51828,595,098.73Net cash received from the disposal of fixedassets, intangible assets and other long-term assets42,340,809.10170,521,170.92Net cash received from disposal ofsubsidiaries and other operating entitiesOther cash received from investment activitiesSub-total of cash inflows from investing

activities18,028,400,860.2810,444,145,825.50Cash paid on purchase of fixed assets,intangible assets and other long-termassets10,071,556,473.5410,541,562,038.81Cash paid for investments23,621,681,494.7117,086,481,212.21Net increase in secured loansNet cash paid on acquisition of subsidiaries

and other operating entitiesVII.644,409,336,291.58156,312,111.87Other cash paid on investment activitiesVII.63178,409.27Sub-total of cash outflows from investing

activities38,102,752,669.1027,784,355,362.89Net cash flow from investing activities–20,074,351,808.82–17,340,209,537.39III. Cash flow from financing activities:

Cash received from capital contributions268,823,131.22945,821,071.73Including: cash received from capital

contributions by minority shareholders of

subsidiariesCash received from borrowings13,648,752,061.2420,942,089,528.60Other cash received from financing activitiesSub-total of cash inflows from financing

activities13,917,575,192.4621,887,910,600.33Cash paid on repayment of loans9,568,987,868.6718,853,901,331.62Cash paid on distribution of dividends, profits

or repayment of interest expenses9,981,640,214.867,256,095,863.08Including: dividend and profit paid to minority

shareholders by subsidiariesOther cash paid to financing activitiesVII.632,280,851,201.593,698,540,779.10Sub-total of cash outflows from financing

activities21,831,479,285.1229,808,537,973.80

Section X Financial Report

ItemsNotes20242023Net cash flow from financing activities–7,913,904,092.66–7,920,627,373.47IV. Effect of fluctuations in exchange rates on

cash and cash equivalents–256,948,972.75250,797,230.85V. Net increase in cash and cash equivalents–1,702,122,962.271,525,740,888.35Add: balance of cash and cash equivalents atthe beginning of the periodVII.6456,683,006,209.3255,157,265,320.97VI. Balance of cash and cash equivalents atthe end of the periodVII.6454,980,883,247.0556,683,006,209.32Person in charge of the Company: Li HuagangPerson in charge of accounting function: Gong WeiPerson in charge of accounting department: Ying Ke

Section X Financial Report

Cash Flow Statement of the Parent CompanyJanuary-December 2024

Unit and Currency: RMBItemsNotes20242023I. Cash flow from operating activities:

Cash received from the sale of goodsand rendering of services79,770,736.6587,985,716.98Refunds of taxesOther cash received from operatingactivities242,684,813.63161,504,582.95Sub-total of cash inflows from operatingactivities322,455,550.28249,490,299.93Cash paid on purchase of goods andservices11,757,139.141,410,519.44Cash paid to and on behalf of

employees59,924,608.5733,473,832.54Cash paid for all types of taxes15,354,015.1423,469,049.21Other cash paid to operation activities331,913,231.15166,310,707.28Sub-total of cash outflows from operating

activities418,948,994.00224,664,108.47Net cash flow from operating activities–96,493,443.7224,826,191.46II. Cash flow from investing activities:

Cash received from recovery of

investments15,046,000,000.007,310,000,000.00Cash received from return on

investments9,817,956,966.619,221,548,256.67Net cash received from the disposal of

fixed assets, intangible assets and

other long-term assets74,850.43Net cash received from disposal of

subsidiaries and other operating

entitiesOther cash received from investment

activities417,440,719.2838,509,682.22Sub-total of cash inflows from investing

activities25,281,472,536.3216,570,057,938.89Cash paid on purchase of fixed assets,

intangible assets and other long-term

assets4,791,247.3511,225,015.05Cash paid for investments25,143,152,357.0012,184,423,958.00Net cash paid on acquisition of

subsidiaries and other operating

entities

Section X Financial Report

ItemsNotes20242023Other cash paid on investment activities30,000,000.001,228,069,045.00Sub-total of cash outflows from investingactivities25,177,943,604.3513,423,718,018.05Net cash flow from investing activities103,528,931.973,146,339,920.84III. Cash flow from financing activities:

Cash received from capital injectionsCash received from borrowings2,940,000,000.001,938,000,000.00Other cash received from financingactivities6,347,134,479.623,933,896,501.13Sub-total of cash inflows from financingactivities9,287,134,479.625,871,896,501.13Cash paid on repayment of borrowings65,780,000.00219,500,000.00Cash paid on distribution of dividends,profits or repayment of interestexpenses7,631,548,707.925,383,785,133.91Other cash paid on financing activities491,581,396.891,614,517,322.60Sub-total of cash outflows from financing

activities8,188,910,104.817,217,802,456.51Net cash flow from financing activities1,098,224,374.81–1,345,905,955.38IV. Effect of fluctuations in exchangerates on cash and cash equivalents36,189,377.527,023,776.68V. Net increase in cash and cash

equivalents1,141,449,240.581,832,283,933.60Add: balance of cash and cash

equivalents at the beginning of the

period7,579,640,524.795,747,356,591.19VI. Balance of cash and cash equivalents

at the end of the period8,721,089,765.377,579,640,524.79Person in charge of the Company: Li HuagangPerson in charge of accounting function: Gong WeiPerson in charge of accounting department: Ying Ke

Section X Financial Report

Consolidated Statement of Changes in Owner’s EquityJanuary-December 2024

Unit and Currency: RMB

2024

Equity attributable to owners of the Parent Company

Other equity instruments

Items

Paid-in capital (orshare capital)Preference sharesPerpetual bondsOthersCapital reserve

Less: treasurystockOthercomprehensiveincomeSpecial reserveSurplus reserve

General riskprovisionUndistributedprofitsOthersSub-total

Minorityshareholders’interestsTotal owners’equity

I. Closing balance for the previous year9,438,114,893.0023,762,354,684.055,034,065,107.421,969,724,027.014,842,338,543.8068,535,686,494.60103,514,153,535.042,397,589,814.47105,911,743,349.51

Add: changes in accounting policiesError correction for prior periodBusiness combination undercommon control

–2,247,809,799.51

–358,964.36

–2,248,168,763.873,866,765,387.701,618,596,623.83

OtherII. Opening balance for the current year9,438,114,893.0021,514,544,884.545,034,065,107.421,969,365,062.654,842,338,543.8068,535,686,494.60101,265,984,771.176,264,355,202.17107,530,339,973.34III. Increase/decrease for the current period(decrease is represented by ‘-’)

–55,201,559.00

–1,399,185,962.61–1,523,336,330.98–1,175,536,705.18

454,264,348.6510,752,457,775.1610,100,134,228.00758,491,216.2510,858,625,444.25

(I) Total comprehensive income

–1,175,640,971.05

18,741,120,122.9317,565,479,151.88836,420,093.6318,401,899,245.51

(II) Capital injection and reduction by owners

–55,201,559.00

–1,399,081,696.74–1,523,336,330.98

69,053,075.2431,960,403.41101,013,478.65

1. Ordinary shares invested by owners31,960,403.4131,960,403.41

2. Capital contribution by holders of other

equity instruments

3. Share-based payment included in

owners’ equity374,067,374.04374,067,374.04374,067,374.04

4. Others

–55,201,559.00

–1,773,149,070.78–1,523,336,330.98

–305,014,298.80

–305,014,298.80

(III) Profit distribution454,264,348.65

–7,898,653,350.24

–7,444,389,001.59–107,636,353.38–7,552,025,354.97

1. Withdrawal of surplus reserves454,264,348.65

–454,264,348.65

2. Withdrawal of general risk provision

3. Distribution to owners (or shareholders)

–7,444,389,001.59

–7,444,389,001.59–107,636,353.38–7,552,025,354.97

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 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. Withdrawal for the period

2. Utilization for the period

(VI) Others

–104,265.87

104,265.87

–90,008,997.53

–90,008,997.53–2,252,927.41–92,261,924.94

IV. Closing balance for the period9,382,913,334.0020,115,358,921.933,510,728,776.44793,828,357.475,296,602,892.4579,288,144,269.76111,366,118,999.177,022,846,418.42118,388,965,417.59

Section X Financial Report

2023

Equity attributable to owners of the Parent Company

Other equity instruments

Items

Paid-in capital

(or share capital)Preference

sharesPerpetual bondsOthersCapital reserve

Less: treasury

stockOther

comprehensive

incomeSpecial reserveSurplus reserve

General risk

provisionUndistributed

profitsOthersSub-total

Minorityshareholders’

interestsTotal owners’

equity

I. Closing balance for the previous year9,446,598,493.0023,882,037,324.763,857,807,196.381,990,683,498.454,014,190,623.2457,983,734,859.3793,459,437,602.441,290,895,044.4594,750,332,646.89

Add: changes in accounting policies

—

Error correction for prior period

—

Business combination undercommon control

–2,225,555,632.23

–671,394.66

–2,226,227,026.893,584,138,376.901,357,911,350.01

OtherII. Opening balance for the current year9,446,598,493.0021,656,481,692.533,857,807,196.381,990,012,103.794,014,190,623.2457,983,734,859.3791,233,210,575.554,875,033,421.3596,108,243,996.90III. Increase/decrease for the current period(decrease is represented by ‘-’)

–8,483,600.00

–141,936,807.991,176,257,911.04–20,647,041.14

828,147,920.5610,551,951,635.2310,032,774,195.621,389,321,780.8211,422,095,976.44

(I) Total comprehensive income

–20,647,041.14

16,596,615,045.8716,575,968,004.73477,408,887.6717,053,376,892.40

(II) Capital injection and reduction by

owners

–8,483,600.00

–141,936,807.991,176,257,911.04

–1,326,678,319.03936,624,897.15–390,053,421.88

1. Ordinary shares invested by owners936,624,897.15936,624,897.15

2. Capital contribution by holders of

other equity instruments

3. Share-based payment included in

owners’ equity179,238,533.70179,238,533.70179,238,533.70

4. Others

–8,483,600.00

–321,175,341.691,176,257,911.04

–1,505,916,852.73

–1,505,916,852.73

(III) Profit distribution828,147,920.56

–6,082,584,047.78

–5,254,436,127.22–24,712,004.00–5,279,148,131.22

1. Withdrawal of surplus reserves828,147,920.56

–828,147,920.56

2. Withdrawal of general risk provision

—

3. Distribution to owners (or

shareholders)

–5,254,436,127.22

–5,254,436,127.22–24,712,004.00–5,279,148,131.22

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 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. Withdrawal for the period

2. Utilization for the period

(VI) Others37,920,637.1437,920,637.1437,920,637.14

IV. Closing balance for the period9,438,114,893.0021,514,544,884.545,034,065,107.421,969,365,062.654,842,338,543.80

—68,535,686,494.60101,265,984,771.176,264,355,202.17107,530,339,973.34

Legal representative of the Company:

Li Huagang

Person in charge of accounting function:

Gong Wei

Person in charge of accounting department:

Ying Ke

Section X Financial Report

Statement of Changes in Owners’ Equity of the Parent CompanyJanuary-December 2024

Unit and Currency: RMB2024Other equity instrumentsItems

Paid-in capital (or

share capital)

Preference

sharesPerpetual bondsOthersCapital reserve

Less: treasurystock

Othercomprehensive

incomeSpecial reserveSurplus reserve

UndistributedprofitsTotal owners’equityI. Closing balance for the previousyear9,438,114,893.0027,263,651,777.443,175,293,942.36630,674,691.954,237,192,318.357,484,026,291.6245,878,366,030.00Add: changes in accountingpoliciesError correction for priorperiodOthersII. Opening balance for the currentyear9,438,114,893.0027,263,651,777.443,175,293,942.36630,674,691.954,237,192,318.357,484,026,291.6245,878,366,030.00III. Increase/decrease for the currentperiod (decrease is representedby ‘-’)–55,201,559.00–1,583,090,325.87–1,707,770,477.80–12,305,942.28454,264,348.652,203,252,891.702,714,689,891.00(I) Total comprehensive income—–12,305,942.2810,171,484,335.0410,159,178,392.76(II) Capital injection and reductionby owners–55,201,559.00–1,583,090,325.87–1,707,770,477.8069,478,592.93

1. Ordinary shares invested by

owners

2. Capital contribution by

holders of other equityinstruments

3. Share-based payment

included in owners’ equity389,757,180.67389,757,180.67

4. Others

–55,201,559.00–1,972,847,506.54–1,707,770,477.80–320,278,587.74(III) Profit distribution454,264,348.65–7,968,231,443.34–7,513,967,094.69

1. Withdrawal of surplus

reserves454,264,348.65–454,264,348.65

2. Distribution to owners (or

shareholders)–7,513,967,094.69–7,513,967,094.69

3. Others

(IV) Internal transfer of owner’s

equity

1. Transfer of capital reserves

into capital (or sharecapital)

2. Transfer of surplus

reserves into capital (orshare capital)

3. Surplus reserves used for

remedying loss

4. Changes in defined benefit

plans carried forward toretained earnings

5. Other comprehensive

income carried forward toretained earnings

6. Others

(V) Special reserve

1. Withdrawal for the period

2. Utilization for the period

(VI) OthersIV. Closing balance for the period9,382,913,334.0025,680,561,451.571,467,523,464.56618,368,749.674,691,456,667.009,687,279,183.3248,593,055,921.00

Section X Financial Report

2023Other equity instrumentsItems

Paid-in capital (orshare capital)

Preference

sharesPerpetual bondsOthersCapital reserve

Less: treasurystock

OthercomprehensiveincomeSpecial reserveSurplus reserve

UndistributedprofitsTotal owners’equityI. Closing balance for the previous

year9,446,598,493.0027,300,899,019.762,308,138,558.42602,091,349.743,409,044,397.795,328,311,799.6243,778,806,501.49Add: changes in accounting

policiesError correction for priorperiodOthersII. Opening balance for the currentyear9,446,598,493.0027,300,899,019.762,308,138,558.42602,091,349.743,409,044,397.795,328,311,799.6243,778,806,501.49III. Increase/ decrease for the currentperiod (decrease is representedby ‘-’)–8,483,600.00–37,247,242.32867,155,383.9428,583,342.21828,147,920.562,155,714,492.002,099,559,528.51(I) Total comprehensive income28,583,342.218,281,479,205.578,310,062,547.78(II) Capital injection and reduction

by owners–8,483,600.00–37,247,242.32867,155,383.94–912,886,226.26

1. Ordinary shares invested by

owners

2. Capital contribution by

holders of other equityinstruments

3. Share-based payment

included in owners’ equity135,995,049.35135,995,049.35

4. Others

–8,483,600.00–173,242,291.67867,155,383.94–1,048,881,275.61(III) Profit distribution828,147,920.56–6,125,764,713.57–5,297,616,793.01

1. Withdrawal of surplus

reserves828,147,920.56–828,147,920.56

2. Distribution to owners (or

shareholders)–5,297,616,793.01–5,297,616,793.01

3. Others

(IV) Internal transfer of owner’s

equity

1. Transfer of capital reserves

into capital (or sharecapital)

2. Transfer of surplus

reserves into capital (orshare capital)

3. Surplus reserves used for

remedying loss

4. Changes in defined benefit

plans carried forward toretained earnings

5. Other comprehensive

income carried forward toretained earnings

6. Others

(V) Special reserve

1. Withdrawal for the period

2. Utilization for the period

(VI) OthersIV. Closing balance for the period9,438,114,893.0027,263,651,777.443,175,293,942.36630,674,691.954,237,192,318.357,484,026,291.6245,878,366,030.00

Legal representative of the Company:

Li Huagang

Person in charge of accountingfunction: Gong Wei

Person in charge of accounting

department: Ying Ke

Section X Financial Report

III. GENERAL INFORMATION OF THE COMPANY

1. Overview of the Company

√ Applicable □ Not Applicable

The predecessor of Haier Smart Home Co., Ltd (hereinafter referred to as the Company) wasQingdao Refrigerator Factory, which was established in 1984. As permitted to offering byPeople’s Bank of China, Qingdao Branch on 16 December 1989, with the document of Qing TiGai [1989] No. 3 issued on 24 March 1989, based on the reconstruction of the original QingdaoRefrigerator Factory, a limited company was set up by directional fund raising of RMB150 million.In March and September 1993, as approved by the document of Qing Gu Ling Zi [1993] No. 2and No. 9 issued by the pilot leading team of Qingdao joint stock company, the Company wasconverted from a directional offering company to a public subscription company and issuedadditional 50 million shares to the public and listed with trading on Shanghai Stock Exchange inNovember 1993. In October 2018, D-shares in issue of the Company were listed on the ChinaEurope International Exchange AG. In December 2020, H-shares in issue of the Company werelisted on the Stock Exchange of Hong Kong Limited by way of introduction.The Company’s registered office is located at the Haier Science and Technology InnovationEcological Park of Laoshan District, Qingdao, Shandong Province, and the headquarters islocated at the Haier Science and Technology Innovation Ecological Park of Laoshan District,Qingdao, Shandong Province.The Company is mainly engaged in research and development, manufacturing and sales of homeappliances including refrigerators/freezers, kitchen appliances, air-conditioners, laundry appliancesand water appliances, and other smart home business, as well as providing smart homepackaged solutions.The ultimate controlling parent company of the Company is Haier Group Corporation.These financial statements have been approved for publication by the Board of the Company on27 March 2025.

2. Scope of consolidated statements

For details of changes in the scope of consolidated financial statements for the current period,please refer to “IX. Changes in Consolidation Scope” and “X. Interest in Other Entities” of thisnote.

Section X Financial Report

IV. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

1. Basis of preparation

The financial statements of the Company were prepared on the going concern basis according tothe transactions and matters actually occurred, in accordance with the Accounting Standards forEnterprises—Basic Standards published by the Ministry of Finance, specific accountingstandards, and guidance on application of accounting standards for enterprises, interpretations toaccounting standards for enterprises and other relevant requirements (hereinafter collectivelyreferred to as the “Accounting Standards for Enterprises”) which issued subsequently, and incombination with the disclosure provisions of the Rules for the Information Disclosure andCompilation of Companies Publicly Issuing Securities No. 15: General Provisions for FinancialReport (Revised in 2023) of CSRC as well as the following significant accounting policies andaccounting estimation.

2. Going Concern

√ Applicable □ Not Applicable

The Company has ability to continue its operation for at least 12 months since the end of thereporting period and there are no significant events affecting its ability to continue as a goingconcern.V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

Specific accounting policies and accounting estimates:

√ Applicable □ Not Applicable

According to the characteristics of its production and operation, the Company formulated a series ofspecific accounting policies and accounting estimates, including the provisions for impairment foraccounts receivable (Note V.11); the measurement of inventories (Note V.12); the depreciation andamortization of the investment properties (Note V.15); the depreciation of fixed assets (Note V.16), theamortization of intangible assets (Note V.19), the criterion for determining of long-term assetsimpairment (Note V.20); and the date of revenue recognition (Note V.26), etc.

1. Statement of compliance with Accounting Standards for Enterprises

The financial statements prepared by the Company meet the requirements of the AccountingStandards for Enterprises, which accurately and completely reflected information relating to thefinancial position, results of operations, changes in shareholders’ equity and cash flows of theCompany.

2. Accounting period

The accounting year of the Company is from 1 January each year to 31 December of the sameyear in solar calendar.

Section X Financial Report

3. Operating period

√ Applicable □ Not Applicable

The Company takes the period from the acquisition of assets for processing to the ultimaterealization of cash or cash equivalents as a normal operating cycle. The Company takes 12months as an operating period, which is also the classification basis for the liquidity of its assetsand liabilities.

4. Recording currency

Renminbi is the recording currency of the Company.

5. Materiality criteria determination method and selection basis

√ Applicable □ Not Applicable

CaseMateriality criteriaMaterial receivables forwhich bad debtprovision is individuallyassessed

The amount of provision on an individual basis accounts formore than 10% of the total bad debt provisions for varioustypes of receivables and is greater than RMB100 millionMaterial receivables andbad debt provisionswhich are recovered orreversed

The amount of recovery or reversal on an individual basisaccounts for more than 10% of the total amount of varioustypes of receivables and is greater than RMB100 millionActual write-off of materialaccounts receivable

The amount of write-off on an individual basis accounts for

more than 10% of the total bad debt provisions of varioustypes of receivables and is greater than RMB100 millionMaterial prepayments agedmore than one year

Prepayment aged more than 1 year on an individual basis

accounts for more than 10% of the total prepayments and isgreater than RMB100 millionMaterial projects under

construction

The ending balance of a project on an individual basis is

greater than RMB100 millionMaterial capitalized R&D

projects

The ending balance of a project on an individual basis

accounts for more than 10% of the ending balance of

development expenditure and is greater than RMB100 millionMaterial accounts payableand other payables agedmore than one year

Accounts payable/other payables with aged more than 1 year

on an individual basis account for more than 10% of the total

accounts payable/other payables and are greater than

RMB100 millionMaterial contract liabilities

aged more than oneyear

Contract liabilities aged more than 1 year on an individual basis

account for more than 10% of the total contract liabilities and

are greater than RMB100 millionMaterial non-wholly owned

subsidiaries

The net assets of the subsidiaries account for more than 5% of

the Company’s net assets or the net profits and losses of the

subsidiaries account for more than 10% of the Company’s

consolidated net profitMaterial joint ventures or

associates

The book value of long-term equity investment in an individual

invested unit accounts for more than 5% of the Company’s

net assets or the investment profits and losses under the

long-term equity investment equity method account for more

than 10% of the Company’s consolidated net profit

Section X Financial Report

6. Accounting methods of business combinations under common control and not

under common control

√ Applicable □ Not Applicable

A business combination is a transaction or event that brings together two or more separateentities into one reporting entity. Business combinations are classified into business combinationsunder common control and business combinations not under common control.

(1) Business combinations under common control

A business combination under common control is a business combination in which all ofthe combining entities are ultimately controlled by the same party or parties both beforeand after the combination, and that control is not transitory. For business combinationunder common control, the party that obtains the control over the other parties on thecombination date is the acquirer, and other parties involving in the business combinationare the transferors. The combination date is the date on which the acquiring partyeffectively obtains the control over the party being acquired.For business combination under common control, the transferor’s assets and liabilitiesobtained by the Company (as the acquirer) in a business combination are accounted for atthe carrying amount of the transferor in the ultimate controller’s consolidated financialstatements as at the date of combination, except for adjustments due to differences inaccounting policies. The difference between the carrying amount of the combinationconsideration paid by the Company (or the aggregate nominal value of shares issued) andthe carrying amount of net assets obtained in a business combination shall be adjusted tocapital reserve, in case the capital reserve is insufficient for the elimination, the retainedearnings shall be adjusted.Intermediary fees (such as audit, legal services and valuation consultancy) and otherrelevant management fees incurred in the business combination by the Company (as theacquirer) are credited in profit or loss in the period when they occurred. Trading expensesin direct relation to the issuance of equity instrument as the consideration for thecombination is written down to the capital reserve (share premium), where the capitalreserve (share premium) is insufficient, and to surplus reserves and undistributed profits inorder. Trading expenses in direct relation to the issuance of debt instrument as theconsideration for the combination is included in the initial recognition amount of the debtinstrument.

Section X Financial Report

(2) Business combinations involving entities not under common control

A business combination not under common control is a business combination in which allof the combining entities are not ultimately controlled by the same party or parties bothbefore and after the combination. For business combination not under common control, theparty that obtains the control of the other parties at the combination date is the acquirer;other parties involving in the business combination are the transferors. The combinationdate is the date on which the acquirer effectively obtains control of the transferors.In business combination involving entities not under common control, the cost ofcombination of the Company (as the acquirer) shall be the sum of the assets paid,obligations incurred or assumed and the fair value of the equity securities issued by theCompany for obtaining control of the transferor at the date of acquisition. Intermediary fees(such as audit, legal services and valuation consultancy) and other relevant managementfees incurred by the Company for the purpose of business combination are credited inprofit or loss in the period when they occurred. Transaction fees for the equity instrumentsor debt instruments issued by the Company as combination consideration is included in theinitial recognition amount of such equity instruments or debt instruments. Contingentconsideration involved shall be recorded as the combination cost based on its fair value onthe acquisition date. Should any new or further evidence arise within 12 months after theacquisition date and makes it necessary to adjust the contingent consideration on theacquisition date, the goodwill arising from the business combination shall be amendedaccordingly.The cost of combination and identifiable net assets obtained by the Company (as theacquirer) in a business combination involving entities not under common control aremeasured at fair value on the acquisition date. Where the cost of the combination exceedsthe acquirer’s interest in the fair value of the transferor’s identifiable net assets, thedifference is recognized as goodwill; where the cost of combination is lower than theacquirer’s interest in the fair value of the transferor’s identifiable net assets, the differenceis initially recognized in profit or loss for the current year after the Company conducted areview of computation for the identifiable assets, liabilities or fair value of contingentliabilities and combination cost, and where the combination cost is still lower than the fairvalue of the identifiable net assets of the transferor obtained during the course ofcombination, then the difference is recorded in the profit and loss.

Section X Financial Report

7. Judgement Criteria for Control and Preparation of Consolidated Financial

Statements

√ Applicable □ Not Applicable

Judgement Criteria for Control:

The scope of consolidation of consolidated financial statements is on the basis of control. Controlmeans that the Company has the power over the investee, enjoys variable returns byparticipating in relevant activities of the investee, and has the ability to use its power over theinvestee to influence the amount of its return. Control refers to the Company’s right over theinvestee to enjoy variable returns through involvement in the investee and have the ability to exertthe right to affect those returns The Company will reassess when changes in relevant facts andcircumstances result in changes in the relevant elements involved in the definition of control.Preparation method of consolidated statements:

(1) Scope of consolidated financial statements

The Company incorporated all subsidiaries under its control (including the separate entitiescontrolled by the Company) into the scope of consolidation financial statements, includingthe enterprises under the Company’s control, divisible part in the investees and structuredentities. Control refers to the Company having power over the investee and is entitled tovariable returns from its involvement with the investee and has the ability to use its powerover the investee to affect the amount of those return.

(2) To unify the accounting policies, balance sheets date and accounting periods of the

Company and subsidiariesWhen preparing consolidated financial statements, adjustments are made if subsidiaries’accounting policies or accounting periods are different from that of the Company, inaccordance with the Company’s accounting policies and accounting periods.

Section X Financial Report

(3) Offset matters in the consolidated financial statements

The consolidated financial statements shall be prepared by the Company on the basis ofthe financial statements of the Company and subsidiaries and based on other relevantinformation. In preparing the consolidated financial statements, all significant balances,transactions and unrealized profits between the Company and subsidiaries and amongsubsidiaries are eliminated. In preparing the consolidated financial statements, the Companytreats the entire enterprise group as one accounting entity and reflects the overall financialposition, operating results and cash flows of the Group in accordance with therequirements for recognition, measurement and presentation of relevant accountingstandards for enterprises and consistent accounting policies. The owner’s equity of thesubsidiaries not attributable to the Company shall be presented separately as ‘minorityequity’ under the owner’s equity item in the consolidated balance sheet. The minority equityattributable to net profit or loss of subsidiaries in the current period shall be presented as‘minority interest’ under the ‘net profit’ item in the consolidated profit statement. Where theamount of loss of a subsidiary attributable to the minority shareholders exceeds their shareof the opening balance of owner’s equity of the subsidiary, the excess shall be allocatedagainst minority equity. The long-term equity investment of the Company held by thesubsidiaries, deemed as treasury stock of the corporate group as well as the reduction ofowners’ equity, shall be presented as ‘Less: Treasury stock’ under the owner’s equity itemin the consolidated balance sheet.

(4) Accounting treatment of subsidiaries acquired from combination

For subsidiaries acquired from business combination under common control of theCompany, the opening amount of the consolidated balance sheet is adjusted, as if thebusiness combination has taken place since the ultimate controller began its control. Theincome, expenses and profits of subsidiaries or business combinations from the beginningof the current period to the end of the reporting period are included in the consolidatedprofit statement. The cash flows from the beginning of the current period to the end of thereporting period of a subsidiary or business combination are included in the consolidatedcash flow statement, and the related items in the comparative statements are adjustedWhere control can be exercised over the investee under the same control due to additionalinvestment and other reasons, the Company shall deem the parties participating in thebusiness combination to have made adjustments in their current status when the ultimatecontroller began its control. Equity investments held by the Company before control of thetransferor are recognised for profit or loss, other comprehensive income and other changesin net assets between the later of the date on which the original equity interest is acquiredand the date on which the Company and the transferor are under the same control and thedate of combination, which are offset against the opening retained earnings or current profitor loss, respectively, in the period of the comparative statements.

Section X Financial Report

For subsidiaries acquired from business combination under non-common control, theopening amount of the consolidated balance sheet is not adjusted. The income, expensesand profits of the subsidiary or business from the date of purchase to the end of thereporting period are included in the consolidated profit statement. The cash flows of thesubsidiary or business from the date of purchase to the end of the reporting period areincluded in the consolidated statement of cash flows. Where control can be exercised overan investee that is not under the same control due to additional investment or otherreasons, the Company remeasures the equity interest of the investee held before thepurchase date based on the fair value of the equity interest at the purchase date, and thedifference between the fair value and its carrying amount is included in the currentinvestment income. Where the equity interest in the transferor held before the purchasedate relates to other comprehensive income under the equity method and other changes inowner’s equity other than net profit or loss, other comprehensive income and profitdistribution, other comprehensive income and other changes in owner’s equity relatingthereto are transferred to investment income of the current period as at the purchase date,except for other comprehensive income arising from the remeasurement of net liabilities orchanges in net assets of defined benefit plans by the investee.

(5) Dispose of equity interests in subsidiaries achieved in stages until losing control

① General treatment

During the reporting period, when the Company disposes of a subsidiary or business,the income, expenses and profits of that subsidiary or business from the beginning ofthe period to the date of disposal are included in the consolidated income statementof the Company; The cash flows from the beginning of the period to the disposaldate of the subsidiary or operation are included in the consolidated statement of cashflows of the Company.When control over the investee is lost due to the disposal of part of the equityinvestment or other reasons, the Company remeasures the remaining equityinvestment after disposal at its fair value at the date when control is lost. Thedifference between the sum of the consideration obtained on disposal of the equityinterest and the fair value of the remaining equity interest, less the sum of the shareof the net assets of the original subsidiary calculated by the Company based on theoriginal shareholding ratio and goodwill calculated on a continuing basis from the dateof purchase or consolidation, is included in investment income in the period in whichcontrol is lost and goodwill is written off. The Company converts other comprehensiveincome relating to the equity investment in the original subsidiary, etc to investmentincome in the current period when control is lost.

Section X Financial Report

② Disposal of subsidiaries step by step

Where the Company disposed of equity investment in a subsidiary step by stepthrough multiple transactions until control is lost, for example, the terms, conditionsand economic impact of each transaction that disposes of the equity investment in asubsidiary meet one or more of the following conditions, the Company accounts formultiple transactions as a single transaction:

i. The transactions were entered into simultaneously or with mutual influence inmind;ii. The transactions as a whole are capable of achieving a complete commercialoutcome;iii. The occurrence of one transaction depends on the occurrence of at least one

other transaction;iv. The transaction is uneconomical by itself but economic when considered inconjunction with other transactions.Where each transaction that disposes of an equity investment in a subsidiary untilcontrol is lost is a blanket transaction, the Company accounts for each transaction asa transaction that disposes of the subsidiary and loses control; However, theCompany recognises the difference between each disposal price before the loss ofcontrol and the share of net assets of the subsidiary corresponding to the disposal ofthe investment as other comprehensive income in the consolidated financialstatements and is transferred to profit or loss in the period in which control is lostwhen control is lost.Where each transaction that disposes of an equity investment in a subsidiary until theloss of control is not a blanket transaction, the relevant policy for partial disposal ofan equity investment in a subsidiary without loss of control is accounted for beforethe loss of control by the Company; When control is lost, accounting is performed inthe same manner as would be done for a disposal subsidiary.

(6) Purchase of minority interests in subsidiaries

The difference between the Company’s costs of newly acquired long-term equityinvestment resulting from the purchase of minority interests and the share of net assetsattributable to the subsidiary calculated on an ongoing basis from the date of purchase (orthe date of combination) based on the newly increased shareholding ratio, the equitypremium in the capital reserve in the consolidated balance sheet is adjusted, and if theequity premium in the capital reserve is insufficient to offset, the retained earnings isadjusted.

Section X Financial Report

(7) Partial disposal of equity investments in subsidiaries without loss of control

The Company adjusts the equity premium in the capital reserve in the consolidated balancesheet for the difference between the disposal price obtained from the partial disposal of thelong-term equity investment in the subsidiary without loss of control and the share of thenet assets of the subsidiary that would continue to be calculated from the purchase date orthe combination date corresponding to the disposal of the long-term equity investment, oradjust the retained earnings if the equity premium in the capital reserve is insufficient tooffset.

8. Classification of joint arrangement and accounting methods of joint operations

√ Applicable □ Not Applicable

A joint arrangement refers to an arrangement jointly controlled by two or more parties. Inaccordance with the Company’s rights and obligations under a joint arrangement, the Companyclassifies joint arrangements into joint operations and joint ventures.

(1) Joint operations

Joint operations refer to a joint arrangement in which the Company is a party and isentitled to relevant assets and obligations of this arrangement.The Company recognizes the following items in relation to its interest in a joint operation,and accounts the same in accordance with relevant accounting standards for businessenterprises: ① recognize the assets held solely by the Company, and recognize assetsheld jointly by the Company in appropriation to the share of the Company; ② recognize theobligations assumed solely by the Company, and recognize obligations assumed jointly bythe Company in appropriation to the share of the Company; ③ recognize revenue fromdisposal of joint operations in appropriation to the share of the Company; ④ recognizerevenue from disposal of joint operations in appropriation to the share of the Company; ⑤recognize fees solely occurred by the Company and recognize fees from joint operations inappropriation to the share of the Company.When the Company, as a joint venture, invests or sells assets to or purchase assets (theassets do not constitute a business, the same below) from joint operations, the Companyshall only recognize the part of profit or lost from this transaction attributable to otherparties of joint operations before these assets are sold to a third party. In case of animpairment loss incurred on these assets which meets the requirements as set out inAccounting Standards for Business Enterprises No. 8—Asset Impairment, the Companyshall full recognize the amount of this loss in relation to its investment in or sale of assetsto joint operations or recognize the loss according to the Company’s share of commitmentin relation to the its purchase of assets from joint operations.

(2) Joint ventures

Joint ventures refer to a joint arrangement during which the Company only is entitled to netassets of this arrangement. Investment in joint venture is accounted for using the equitymethod according to the accounting policies referred to under “14. Long-term equityinvestment” of Note V.

Section X Financial Report

9. Recognition standard for cash and cash equivalents

Cash recognized in the cash flow statements represents the cash on hand and deposits availablefor payment of the Company at any time.Cash equivalents recognized in the cash flow statements refer to short-term, highly liquidinvestments held by the Company that are readily convertible to known amounts of cash andwhich are subject to an insignificant risk on change in value.

10. Foreign currency businesses and translation of foreign currency statements

√ Applicable □ Not Applicable

(1) Foreign currency transactions

If foreign currency transactions occur, they are translated into the amount of functionalcurrency by applying the exchange rate at the transaction date.Monetary items denominated in foreign currencies are translated by the Company intofunctional currencies at the rates of exchange ruling at the balance sheet date. All foreignexchange difference are credited in the profit or loss of the current period, except thosearising from the funds denominated in foreign currency specially borrowed for theestablishment of the qualifying assets are treated based on the principal of capitalization ofborrowing costs.Non-monetary items in foreign currency measured at historical cost are translated by theCompany using the spot exchange rate prevailing on the date when transaction occurredand its functional currency shall remain unchanged. Non-monetary items denominated inforeign currencies that are measured at fair value are translated using the foreign exchangerate at the date the fair value is determined; the exchange differences between thetranslated and original amounts of functional currencies are recognized in the statement ofprofit or loss or other comprehensive income as changes in fair value (including changes inexchange rate).

(2) Translation of foreign currency financial statements

If the functional currencies used as the bookkeeping base currency by the subsidiaries, jointventures and associates under the control of the Company are different from that of theCompany, their financial statements denominated in foreign currencies shall be translated toperform accounting and prepare the consolidated financial statements.The assets and liabilities of the foreign currency balance sheet of the Company aretranslated using the spot exchange rate at the balance sheet date; all items except for‘undistributed profits’ of the owner’s equity are translated at the spot exchange rate on thetransaction date. The revenue and expenses in the foreign currency income statement ofthe Company are translated using the approximate rate of the spot exchange rate on thetransaction date. Exchange differences on translation of financial statements denominated inforeign currencies are presented as the ‘other comprehensive income’ in the owner’s equityof the balance sheet.

Section X Financial Report

Foreign currency cash flow and cash flows of a foreign subsidiary of the Company istranslated using the approximate rate of the spot exchange rate on the date of the cashflows. The impact of exchange rate changes on cash amount is regarded as areconciliation item and reflected separately in the cash flow.When disposing overseas operations, the translation difference in the foreign currencyfinancial statements as shown in the owner’s equity of the balance sheet and related to theoverseas operation shall be transferred from owner’s equity to profit or loss in the currentperiod of disposal. If part of the overseas operations is disposed of, the translationdifference in the foreign currency financial statements of the disposal part shall becalculated based on the proportion of the disposal and transferred to profit or loss in thecurrent period of disposal.

11. Financial instruments

√ Applicable □ Not Applicable

A financial instrument refers to any contract that gives rise to a financial asset of one entity anda financial liability or equity instrument of another entity. A financial asset or financial liability andequity instrument is recognized when the Company becomes a party to the contract of afinancial instrument.

(1) Classification, recognition and measurement of financial assets

On initial recognition of a financial asset, according to the business model for managingfinancial assets and the contractual cash flow characteristics of financial assets, theCompany classifies financial assets into: Financial assets measured at amortized cost;financial assets measured at fair value through other comprehensive income; financialassets measured at fair value through profit or loss of the current period.Financial assets are measured at fair value upon initial recognition. For financial assetsmeasured at fair value through profit and loss of the current period, related transactioncosts are directly included in profit and loss of the current period; for other types offinancial assets, related transaction costs are included in their initial recognized amounts.For the accounts receivable or bills receivable arising from the sale of products or theprovision of labor services that do not contain or consider the significant financingcomponents, etc, the Company shall take the consideration amount entitled to be receivedas the initial recognized amount.

Section X Financial Report

1) The debt instruments held by the Company:

① Financial assets measured at amortized cost

The Company’s business model for managing such financial assets is: With theaim of obtaining contractual cash flow, the contractual cash flow characteristicsof such financial assets shall be consistent with the basic lending arrangements,that is, the cash flow generated on a specific date is only the payment for theprincipal and the interest based on the outstanding principal amount. For suchfinancial assets, the Company recognizes the interest income in accordancewith the effective interest method. Such financial assets are subsequentlymeasured at amortised cost. The gains or losses arising from amortisation orimpairment are recognised in profit or loss of the current period. Such financialassets of the Company mainly include cash and cash equivalents, billsreceivable, accounts receivable, other receivables, creditor’s right investmentand long-term receivables. The Company lists the creditor’s rights investmentsand long-term receivables matured within one year (including one year) from thebalance sheet date as non-current assets matured within one year; thecreditor’s rights investments matured within one year (including one year) whenbeing obtained are listed as other current assets.

② Financial assets measured at fair value through other comprehensive income

The Company’s business mode for managing such financial assets is: With theaim of obtaining contractual cash flow and selling the financial assets, thecontractual cash flow characteristics of such financial assets shall be consistentwith the basic lending arrangements. Such financial assets are measured at fairvalue through other comprehensive income, but impairment gains and losses,exchange gains and losses, and interest income calculated by the effectiveinterest method are included in profit and loss of the current period. Suchfinancial assets of the Company mainly include financing receivables and othercreditor’s rights investments. The Company lists other creditor’s rightsinvestments matured within one year (including one year) from the balancesheet date as non-current assets matured within one year; other creditor’srights investments matured within one year (including one year) when beingobtained are listed as other current assets.

③ Financial assets measured at fair value through profit or loss of the current period

The Company classifies financial assets other than those above measured atamortized cost and those measured at fair value through other comprehensiveincome as financial assets measured at fair value through profit or loss of thecurrent period. In addition, at the time of initial recognition, in order to eliminateor significantly reduce accounting mismatch, the Company designated somefinancial assets as financial assets measured at fair value through profit or lossof the current period. Such financial assets are subsequently measured at fairvalue and changes in fair value are included in profit or loss of the currentperiod. Such financial assets that are matured more than one year and areexpected to be held for more than one year from the balance sheet date arelisted as other non-current financial assets.

Section X Financial Report

2) Equity instrument investments of the Company:

The Company classifies equity instrument investments that have no control, jointcontrol and significant influence on itself as financial assets measured at fair valuethrough profit or loss of the current period; investments that are expected to be heldfor more than one year from the balance sheet date are listed as other non-currentfinancial assets.In addition, the Company designated some non-trading equity instrument investmentsas financial assets measured at fair value through other comprehensive income, whichare listed as other equity instrument investments. Such designation cannot berevoked once made. The Company includes the relevant dividends and interestincome of such financial assets in profit and loss of the current period, and changesin fair value are included in other comprehensive income. When the financial asset isderecognised, the Company transfers the cumulative gain or loss previously includedin other comprehensive income directly to retained earnings and is not included inprofit or loss of the current period.

(2) Classification, recognition and measurement of financial liabilities

On initial recognition, financial instruments or their components issued by the Company areclassified into financial liabilities or equity instruments based on the contractual terms of thefinancial instruments and the economic nature, rather than solely on its legal form, togetherwith the definition of financial liability and equity instruments.The Company classifies financial liabilities as financial liabilities at fair value through profitand loss of the current period and other financial liabilities at initial recognition.Financial liabilities at fair value through profit and loss of the current period aresubsequently measured at fair value. Any gains or losses arising from changes in the fairvalue and any interest expenses related to the financial liabilities are recognized in profit orloss of the current period. The financial liabilities at fair value through profit and loss of thecurrent period of the Company mainly consist of financial liabilities held for trading.Other financial liabilities are subsequently measured at amortized costs using effectiveinterest method. Other financial liabilities of the Company are financial liabilities measured atamortized cost, including bills payable, accounts payable, other payables, borrowings,bonds payable, etc. Such financial liabilities are recognized initially at fair value lesstransaction costs and subsequently measured using the effective interest method. Financialliabilities with a maturity of less than one year (including one year) are listed as currentliabilities: those with maturity of more than one year but are mature within one year fromthe balance sheet date (including one year) are listed as non-current liabilities due withinone year; the rest are presented as non-current liabilities.

Section X Financial Report

(3) Classification and treatment of financial liabilities and equity instruments

The Company classifies financial liabilities and equity instruments on the followingprinciples: (1) Where the Company is unable to unconditionally avoid delivering cash oranother financial asset to fulfil a contractual obligation, the contractual obligation meets thedefinition of a financial liability. Although some financial instruments do not explicitly includethe terms and conditions imposing the contractual obligation to deliver cash or anotherfinancial asset, they may indirectly give rise to the contractual obligation through otherterms and conditions. (2) Where a financial instrument shall or may be settled in theCompany’s own equity instrument, consideration shall be given to whether the Company’sown equity instrument as used to settle the instrument is a substitute of cash or anotherfinancial asset or the residual interest in the assets of the Company after deducting all of itsliabilities. In the former case, the instrument shall be the Company’s financial liability; in thelatter case, the instrument shall be the equity instrument of the Company. Under certaincircumstances whereby a financial instrument contract stipulates that the Company shall ormay use its own equity instrument to settle the financial instrument, and the amount of thecontractual right or obligation equal to the number of its own equity instruments to bereceived or delivered multiplied by their fair value at the time of settlement, the contractshall be classified as a financial liability, regardless of whether the amount of thecontractual right or obligation is fixed, or fluctuates in full or in partly in response tochanges in a variable other than the market price of the Company’s own equity instruments(for example an interest rate, a commodity price or a financial instrument price).When classifying a financial instrument (or a component thereof) in consolidated financialstatements, the Company shall consider all terms and conditions agreed between membersof the Group and the holders of the financial instrument. If the Group as a whole has anobligation in respect of the instrument to settle it by delivering cash or another financialasset or in such a way that it would be a financial liability, such instrument shall beclassified as a financial liability.If the financial instrument or its component is attributable to the financial liability, therelevant interests, dividends, gains or losses, and gains or losses arising from redemptionor refinancing, shall be recorded in the profit or loss of the current period.If the financial instrument or its component is attributable to equity instrument, theCompany treats it as change in equity when it is issued (including refinanced), repurchased,sold or cancelled. Changes in fair value of equity instrument is not recognized by theCompany. Transaction costs related to equity transactions are deducted from equity. TheCompany recognizes the distribution to holders of the equity instruments as distribution ofprofits, and dividends paid do not affect total amount of shareholders’ equity.

Section X Financial Report

(4) Recognition and measurement on transfer of financial assets

A financial asset shall be de-recognized when one of the following conditions is met: ① thecontractual right for receiving cash flows from the financial asset is terminated; ②thefinancial asset is transferred, and the risk and rewards of ownership of the financial assethave been substantially transferred to the transferee; and ③ the financial asset istransferred; the Company neither transfers nor retains substantially all the risks and rewardsof ownership of the financial asset, but ceases the control over the financial asset. If theCompany neither transfers nor retains substantially all the risks and rewards of ownership ofthe financial asset, and the control over the financial asset is not ceased, the financial assetand the related financial liabilities should be recognized based on the degree of continuinginvolvement. The degree of continuing involvement means the level of risks borne by theCompany resulting from the change in value of the financial asset.On de-recognition of other equity instruments investment, the difference between thecarrying amount and the sum of the consideration received and the cumulative changes infair value that had been recognized directly in other comprehensive income is recognized inthe retained earnings. On de-recognition of other financial assets, the difference betweenthe carrying amount and the sum of the consideration received and the cumulative changesin fair value that had been recognized directly in other comprehensive income is recognizedin current profit or loss.For financial assets that are sold with recourse or endorsement, the Company needs todetermine whether the risk and rewards of ownership of the financial asset have beensubstantially transferred. If the risk and rewards of ownership of the financial asset havebeen substantially transferred, the financial asset shall be derecognized. If the risk andrewards of ownership of the financial asset have been substantially retained, the financialasset shall not be de-recognized. If the Company neither transfers nor retains substantiallyall the risks and rewards of ownership of the financial asset, the Company shall assesswhether the control over the financial asset is retained, and the financial assets shall beaccounted for according to the above paragraphs.

(5) Derecognition of financial liabilities

If the current obligation of a financial liability (or part of it) has been discharged, theCompany derecognizes the financial liability (or part of the financial liability). The Company(borrower) enters into an agreement with the lender to replace the original financial liabilityin the form of a new financial liability, and if the new financial liability is substantiallydifferent from the original financial liability, the original financial liability is derecognized andthe new financial liability is recognized. If the Company makes substantial changes to thecontractual terms of the original financial liability (or a part thereof), the original financialliability is derecognized and the new financial liability is recognized in accordance with therevised terms.If the financial liability (or a part thereof) is derecognized, the difference between thecarrying amount and the consideration paid (including the transferred non-cash assets orliabilities assumed) is recognized in current profit or loss.

Section X Financial Report

(6) Offsetting financial assets and financial liabilities

When the Company has the legal right to offset recognized financial assets and financialliabilities, and the legal right can be executed at present, and the Company has a plan tosettle the financial assets and financial liabilities at the same time or at net amount, thefinancial assets and financial liabilities can be presented in the balance sheet at net amountafter offsetting. Except for the above circumstances, financial assets and financial liabilitiescannot be offset and shall be presented separately in the balance sheet.

(7) Determination of fair value of financial assets and financial liabilities

Fair value is the amount at which an asset could be sold or a liability could be transferredbetween willing parties in an orderly transaction on a measurement date. The fair value of afinancial instrument that is traded in an active market is determined at the quoted price inthe active market. Quoted price in the active market represents quoted price which can beeasily obtained periodically from exchange market, brokers, industry associations or pricingservices agency, etc., which is the transactions amount in arm’s length transactions. Thefair value of a financial instrument that is not traded in an active market is determined byusing a valuation technique. Valuation techniques include using prices of recent markettransactions between knowledgeable and willing parties, reference to the current fair valueof another financial asset that is substantially the same with this instrument, discountedcash flow analysis and option pricing models, etc. During the valuation, the Companyadopts an applicable valuation technique under current conditions and there are enoughavailable data and other information to support. Those inputs should be consistent with theinputs a market participant would use when pricing the asset or liability, and the Companyshould maximize the use of relevant observable inputs. When related observable inputscan’t be acquired or are not feasible to be acquired, then use unobservable inputs.In summary, the Company categorizes inputs for fair value measurement into three levelsand uses the inputs by the order of Level 1, Level 2 and Level 3. Level 1: quoted prices(unadjusted) in active markets for identical assets or liabilities at the measurement date.Level 2: inputs other than quoted prices included within Level 1 that are observable for theasset or liability, either directly or indirectly. Level 3: unobservable inputs for the asset orliability.

(8) Impairment of financial assets

For financial assets measured at amortized cost and debt instrument investments measuredat fair value through other comprehensive income, contract assets and financial guaranteecontracts, the Company recognizes the loss provision based on the expected credit losses.The Company considers reasonable and reliable information about past events, currentconditions and forecasts of future economic conditions, and takes the risk of default as aweight, and calculates the probability-weighted amount of the present value of thedifference between the cash flow receivable and the cash flow expected to be received ofthe contract to confirm the expected credit losses.

Section X Financial Report

On each balance sheet date, the Company measures the expected credit losses offinancial instruments in different phases. If the credit risk has not increased significantlysince the initial recognition, the financial instruments are in the first phase. The Companymeasures the loss provision according to the expected credit losses in the next 12 months;if credit risk has increased significantly but credit impairment has not yet occurred since theinitial recognition, the financial instruments are in the second phase. The Companymeasures the loss provision according to the expected credit losses of the instrumentsduring the entire duration; if credit impairment has occurred since the initial recognition, thefinancial instruments are in the third phase. The Company measures the loss provisionaccording to the expected credit losses of the instruments during the entire duration.For financial instruments with lower credit risk on the balance sheet date, the Companymeasures the loss provision according to the expected credit losses in the next 12 months,assuming that its credit risk has not increased significantly since the initial recognition.For financial instruments in the first phase and second phase and financial instruments withrelatively lower credit risk, the Company calculates interest income based on their bookbalance before the deduction of provisions and effective interest rate. For financialinstruments in the third phase, the Company calculates interest income based on theiramortized cost after the impairment provision has been deducted from the book balanceand effective interest rate.For bills receivable, accounts receivable and contract assets, whether there exist significantfinancing components, the Company measures loss provision based on expected creditloss over the entire duration.The Company classifies accounts receivable into groups on the basis of shared credit riskcharacteristics, and calculates the expected credit losses on groups, the bases of groupdetermination are as follows:

For each group of bills receivable, the Company applies exposure at default and expectedcredit losses rate over the entire duration to calculate the expected credit losses by takinginto account the historical credit losses experience, the existing conditions and forecast offuture economic conditions.For each group of accounts receivable, the Company makes the comparison of expectedcredit losses rates of accounts receivable in overdue days and over the entire duration tocalculate the expected credit losses by taking into account the historical credit lossesexperience, the existing conditions and forecast of future economic conditions.For each group of other accounts receivable, the Company applies exposure at default andexpected credit losses rate within the next 12 months or over the entire duration tocalculate the expected credit losses by taking into account the historical credit lossesexperience, the existing conditions and forecast of future economic conditions.

Section X Financial Report

The Company recognizes the loss impairment provision or reversed in profit or loss of thecurrent period. For held debt instruments at fair value through other comprehensiveincome, the Company recognizes loss/gain on impairment in profit or loss of the currentperiod, and adjusts other comprehensive income at the same time.

12. Inventory

√ Applicable □ Not Applicable

(1) Classification of inventory

√ Applicable □ Not Applicable

Inventory refers to finished products and commodities held by the Company in dailyactivities for sale, products in progress, materials and supplies consumed in the process ofproduction or provision of labour services, including mainly raw materials, turnovermaterials, materials for commissioned processing work, packaging materials, products inprogress, semi-finished products through in-house manufacturing, finished products(products in stock) and project construction, among others.

(2) Pricing of dispatch of inventory

√ Applicable □ Not Applicable

The actual cost of inventories upon delivery is calculated using the weighted averagemethod.

(3) Impairment provision for inventory

At the balance sheet date, inventory is measured at the lower of cost and net realisablevalue.The net realisable value of inventories that can be directly put to sale, including finishedproducts, commodities and materials for sale is determined as the estimated selling price ofsuch inventory less estimated selling expenses and related tax expenses; the net realisablevalue of or inventories held for production, is determined as the estimated selling price offinished products manufactured less estimated cost incurred upon completion, estimatedselling expenses and related tax expenses; the net realisable value of inventory held for theexecution of sales contract or labour contract is computed on the basis of the contractprice. If the quantity of inventories held by the Company is more than the quantity orderedunder a sales contract, the net realisable value of the inventories in excess is computed onthe basis of the general selling price.Inventory impairment provision is made on the basis of individual inventory items, providedthat if certain inventories are related to a series of products manufactured and sold in thesame region with identical or similar end uses or purposes and are difficult to measureseparately with other items, their cost and net realisable value may be measured on anaggregate basis. Inventories The cost and net realizable value of inventories in largequantity with low unit prices are measured according to inventory types.

Section X Financial Report

At the balance sheet date, if the cost of inventory of the Company is higher than its netrealisable value, impairment provision is made and charged to current profit or loss. If thefactor causing the write-down of inventory value has been removed, the amount ofwrite-down should be reversed and transferred out of the previous inventory impairmentprovision amount. The reversed amount is included in current profit or loss.

(4) Inventory system

The Company adopts the perpetual inventory system as its inventory system.

(5) Amortisation of low-value consumables and packaging materials

The Company adopts one-off amortisation of its low-value consumables and packagingmaterials.

13. Contract assets

√ Applicable □ Not Applicable

The Company presents the right of the Company to charge consideration from the customerunconditionally (i.e. only depends on the passage of time) as a receivable, while theconsideration that the Company has the right (and this right depends on factors other thanpassage of time) to receive for goods transferred to customers is presented as a contractassets. If the Company sells two clearly distinguishable goods to the customer, and it has theright to receive payment because one of the goods has been delivered, but the receipt of suchpayment is conditioned on the delivery of another goods, the Company shall recognise such rightto receive payment as contract asset.For the determination and accounting treatment methods of the expected credit loss of contractassets, please see note V.11 “Impairment of financial assets”.

14. Long-term equity investments

√ Applicable □ Not Applicable

Long-term equity investments hereunder refer long-term equity investments in which theCompany exercises control, joint control or significant influence over the investee.

(1) Determination of initial investment cost

① The initial cost of long-term equity investments acquired through business combination

involving parties under common control should be recognised as the share of thecarrying value of the owner’s equity of the acquired party; the initial cost of long-termequity investments acquired through business combination involving parties not undercommon control should be recognised as the combination costs determined at thedate of acquisition;

Section X Financial Report

② The Company invested in other equity investment other than long-term equity

investments acquired through combination, the initial investment cost of long-termequity investments acquired with cash payment is the acquisition price actually paid;the initial investment cost of long-term equity investments acquired with the issuanceof equity- based securities is represented by the fair value of equity-based securities;the initial investment cost of long-term equity investments acquired through debtrestructuring is determined in accordance with relevant provisions under “AccountingStandards for Business Enterprises No.12—Debt Restructuring”; the initialinvestment cost acquired in exchange for non-monetary assets shall be determined inaccordance with relevant provisions of the standard.

(2) Subsequent measurement and recognition of profit or loss

Cost methodLong-term equity investments in which the Company is able to exercise control overthe investee is accounted for using the cost method. Under the cost method, thecarrying value of long-term equity investments, other than additional investment orrecouped investment, shall remain constant. The Company declared the distribution ofprofit or cash dividend to the investee and calculated the portion of entitlement,which is recognised as investment income. Equity methodThe equity method is used by the Company to account for long-term equityinvestments in associates and joint ventures. Under the equity method, the initialinvestment cost is not adjusted for any excess of the initial investment cost over theshare of the net fair value of the investee’s identifiable assets. When the initialinvestment cost is less than the share of the fair value of the investment’s identifiablenet assets, the difference is recognised in current profit or loss and the cost oflong-term equity investment is adjusted accordingly.Under the equity method, share of net profit or losses and other comprehensiveincome of the investee are recognised by the Company as investment income andother comprehensive income, respectively, and the carrying amount of the long-termequity investment is adjusted accordingly. Share of profit or cash dividend declaredby the investee is charged against the carrying value of the long-term equityinvestment; changes in owners’ equity of the investee other than net profit or loss,other comprehensive income and profit distribution are adjusted against the carryingvalue of long-term equity investment and included in capital reserve. Share of netprofit or loss of the investee is recognised by the Company on the basis of the fairvalue of the identifiable assets of the investee when the investment is acquired andadjusted against the net profit of the investee. If the accounting policy andaccounting period of the investee are inconsistent with those of the Company, thefinancial statements of the investee is adjusted to align with the accounting policy andaccounting period of the Company, and investment income and other comprehensiveincome is recognised accordingly.

Section X Financial Report

Net losses of the investee is recognised by the Company by deducting the carryingvalue of the long-term equity investment together with long-term equity that insubstance forms part of the net investment in the investee until it reaches zero.Moreover, if the Company has incurred obligations to assume additional losses of theinvestee, estimated liabilities are recognised according to the obligation expected tobe assumed and charged to current investment loss. If the investee records net profitin future periods, the Company shall recognise its share of gains after applying suchshare of gains to make up for the unrecognised share of loss.

(3) Change of accounting method for long-term equity investment

① Change from fair value measurement to the equity method: If an equity investment in

the investee not previously affording control, joint control or significant influence andaccounted for in accordance with the standard for recognition and measurement offinancial instruments becomes capable of affording joint control or significant influenceover the investee as a result of increased shareholding following additionalinvestment, the accounting method should be changed to the equity method, and thefair value of the original equity investment determined according to the standard forrecognition and measurement of financial instruments plus the fair value ofconsideration paid for the acquisition of the new investment shall be changed theinitial investment cost under the equity method.

② Change from fair value measurement or equity method to cost method: if an equity

investment previously held in the investee not previously affording control, joint controlor significant influence and accounted for in accordance with the standard forrecognition and measurement of financial instruments, or a long- term equityinvestment previously held in associates or joint ventures becomes capable ofaffording control over the investee, it is accounted for long-term equity investmentformed through business combination.

③ Change from equity method to fair value measurement: if a long-term equity investment

previously held in the investee affording joint control or significant influence ceases toafford joint control or significant influence as a result of decrease in shareholdingpercentage following partial disposal, the remaining equity investment is recognised inaccordance with the standard for recognition and measurement of financialinstruments, and the difference between the fair value at the date of loss of jointcontrol or significant influence and the carrying value is included in current profit orloss.

Section X Financial Report

④ Change from cost method to equity method or fair value measurement: when preparing

separate financial statements, if the Company losses control over an investee due todisposal of some equity-based investment and other reasons, the Company accountsfor the remaining equity affording joint control or significant influence over an investeeas a result of disposal based on the equity method, and the remaining equity will beadjusted as if it is accounted for using the equity method from the date ofacquisition; for the remaining equity not affording joint control or significant influenceover an investee as a result of disposal, it is accounted for in accordance withrelevant requirements of Accounting Standards for Business Enterprises No. 22—

Recognition and measurement of financial assets, and the differences between the fairvalue and book value on the date when control is lost are included in profit or loss.When preparing consolidated financial statements, it shall be accounted for inaccordance with relevant requirements of Accounting Standards for BusinessEnterprises No.33— Consolidated financial statements.

(4) Bases for determining joint control or significant influence over an investee

Joint control is the contractually agreed sharing of control over an arrangement, whichrelevant activities of such arrangement must be decided by unanimously agreement fromparties who share control. If all the parties or a group of parties must act in concert todecide on the relevant activities of certain arrangement, it can be considered that all partiesor a group of parties have collective control over the arrangement. When determining ifthere is any joint control, it should first be determined if the arrangement is controlledcollectively by all parties or a combination of parties, and then determined whetherdecisions about activities related to the arrangement must be made by the unanimousagreement of those parties who have collective control over the arrangement. If there aretwo or more party groups that can collectively control certain arrangement, it does notconstitute joint control. When determining if there is any joint control, the relevantprotection rights will not be taken into account.Significant influence is the power of the investor to participate in the decision-making of aninvestee’s financial and operational policies, but neither control nor jointly control theformulation of such policies with other parties. When determining if there is any significantinfluence on the investee, the influence of the voting shares of the investee held directly orindirectly and the potential voting rights held by the Company and other parties which areexercisable in the current period and converted to the equity of the investee, including thewarrants, stock options and convertible bonds that are issued by the investee and can beconverted in the current period, shall be taken into account by the Company.When the Company holds directly or indirectly through the subsidiary 20% (inclusive) to50% of the voting shares of the investee, it is generally considered to have significantinfluence on the investee, unless there is concrete evidence to prove that it cannotparticipate in the production and operational decisions of the investee and cannot posesignificant influence in this situation.

Section X Financial Report

The Company usually determines whether there is significant influence on the investeethrough the following one or several circumstances:

① Representation at the board or similar authority of the investee.

② Participation in the decision-making process of the investee’s financial and operational

policies.

③ Having important transactions with the investee.

④ Posting of management personnel at the investee.

⑤ Providing key technical data to the investee.

Having one or several of the above circumstances does not mean that the Company musthave significant influence on the investee. The Company needs to comprehensivelyconsider all the facts and circumstances to make an appropriate judgment.

(5) Methods for impairment test and impairment provision

At the balance sheet date, the Company inspects whether there are indications of possibleimpairment of a long-term equity investment. If there are indications of impairment, animpairment test should be performed to ascertain its recoverable amount, and animpairment provision equivalent to the margin by which the recoverable amount is lowerthan the carrying value should be made. Once recognised, impairment loss will not bereversed in subsequent accounting periods. The recoverable amount is determined as thehigher of net fair value of the long-term equity investment on disposal and present value ofestimated future cash flow.

(6) Disposal of long-term equity investments

Upon the Company’s disposal of long-term equity investments, the difference between thecarrying value and consideration actually acquired is included in current profit or loss. Upondisposal of long-term equity investment, the portion previously included in othercomprehensive income is accounted for according to the relevant percentage on the samebasis adopted in the direct disposal of the relevant assets or liabilities by the investee.

Section X Financial Report

15. Investment properties

(1) Types and measurement models of investment properties

The Company’s investment properties include the following types: leased land-use rightsand leased buildings.The Company’s investment properties are initially measured at cost and subsequently on acost basis.

(2) Adoption of cost model as accounting policy

Among the Company’s investment properties, leased buildings are subject to depreciationon a straight-line basis in accordance with accounting policies identical with accountingpolicies for fixed assets. Leased land-use rights and land-use rights held for disposal afterappreciation land- use rights in investment properties are amortised using the straight-linemethod in accordance with accounting policies identical with fixed asset accountingpolicies for intangible assets.At the balance sheet date, the Company inspects whether there are indications of possibleimpairment of an investment property. If there are indications of impairment, an impairmenttest should be performed to ascertain its recoverable amount, and an impairment provisionequivalent to the margin by which the recoverable amount is lower than the carrying valueshould be made. Once recognised, impairment loss will not be reversed in subsequentaccounting periods.Where the investment properties are sold, transferred, retired or damaged, the differencesfrom disposal after deducting the carrying amount and related taxes are recognised in profitor loss for the current period by the Company. When the Company has evidence indicatingthe self-occupied houses and buildings are converted to leasing or leasing out itsproperties held for sale under operating leases, the carrying amount of such fixed assets,intangible assets or inventories before the conversion are transferred to investmentproperties. When the Company has evidence indicating the property held to earn rentals orfor capital appreciation are converted to self-occupation or the property intended foroperating lease purpose are open for sale, the carrying amount of such properties beforethe conversion are transferred to fixed assets, intangible asset or inventories.

Section X Financial Report

16. Fixed assets

(1) Recognition criteria and measurement of fixed assets

√ Applicable □ Not Applicable

Fixed assets of the Company refer to tangible assets held for the production ofcommodities, provision of labour services, lease or operational management with a usefullife of more than one accounting year. Fixed assets are recognised if all of the followingconditions are met:

① Economic benefits relating to such fixed assets are likely to flow into the Company;

② The cost of the fixed assets can be reliably measured.

Subsequent expenditure incurred for a fixed asset that meets the recognition criteria shallbe included in the cost of the fixed asset, and the carrying amount of the component ofthe fixed asset that is replaced shall be derecognised. Otherwise, such expenditure shall berecognised in profit or loss for the period in which it is incurred.Fixed assets of the Company are initially measured at cost. The purchase cost of a fixedasset comprises its purchase price, related taxes and any directly attributable expenditurefor bringing the asset to its working condition for its intended use, such as transportationcosts and installation expenses. If the payment for a purchased fixed asset is deferredbeyond the normal credit terms, the cost of the fixed asset shall be determined based onthe present value of the instalment payments. The difference between the actual paymentand the present value of the purchase price is recognised in profit or loss over the creditperiod, except for such difference that is capitalised according to Accounting Standard forBusiness Enterprises No. 17— Borrowing Costs.

(2) Classification and depreciation of fixed assets

√ Applicable □ Not Applicable

The Company’s fixed assets are mainly classified into: buildings, machinery equipment,transportation equipment and office and other equipment; depreciation is conducted on astraight-line basis. The useful life and estimated net residual value of fixed assets aredetermined based on the nature and use of the fixed assets. At the end of the year, theuseful life and estimated residual value of and depreciation method for fixed assets arereviewed, and adjustment is made for any difference with the original estimated amount.Other than fully depreciated fixed assets which remain in use and the land which isseparately priced and recorded, the Company measures depreciation for all fixed assets.

Section X Financial Report

The type, depreciation method, estimated useful lives, estimated residual values and yearlydepreciation of the Company’s fixed assets are as follows:

TypeDepreciation method

Depreciation

life(years)

ResidualvaluesBuildingsLife average method8–

–5%Machinery equipmentLife average method4–

–5%Transportation equipmentLife average method5–

–5%Office and other equipmentLife average method3–

–5%

(3) Methods for impairment test and impairment provision for fixed assets

At the balance sheet date, the Company inspects whether there are indications of possibleimpairment of fixed assets. If there are indications of impairment, an impairment test shouldbe performed to ascertain its recoverable amount, and an impairment provision equivalentto the margin by which the recoverable amount is lower than the carrying value should bemade. Once recognised, impairment loss will not be reversed in subsequent accountingperiods.

(4) Disposal of fixed assets

Fixed assets are derecognised upon disposal, or when no economic benefits are expectedfrom use or disposal. The difference between gains on disposal, transfer, retirement ordamage of fixed assets, net of their book value and related taxes, are included in profit andloss.

17. Construction in progress

√ Applicable □ Not Applicable

(1) Measurement of construction in progress

The cost of the Company’s construction in progress is recognised at actual constructionexpenses, including all necessary construction expenses incurred during the construction,and borrowing costs capitalized before the work reaches the expected conditions for useand other related costs.

(2) Criteria for and timing of the transfer of construction in progress to fixed assets

The Company’s construction in progress is transferred to fixed assets when the work iscompleted and reaches the expected conditions for use. The criteria for judgement ofexpected conditions for use should meet one of the following:

① The physical construction (including installation) of fixed assets has been completed in

full or substantially completed in full;

Section X Financial Report

② Trial production or operation has commenced and the result indicates that the asset

can operate normally or can manufacture compliant products in a consistent manner,or the trial operation indicates that it can operate or conduct business normally;

③ The amount of fixed asset expenditure of the construction is minimal or almost certain

not be further incurred;

④ Fixed assets acquired have reached design or contractual requirements, or are

essentially consistent with design and contractual requirements.

(3) Methods for impairment test and impairment provision for construction in progress

At the balance sheet date, the Company inspects whether there are indications of possibleimpairment of construction in progress. If there are indications of impairment, animpairment test should be performed to ascertain its recoverable amount, and animpairment provision equivalent to the margin by which the recoverable amount is lowerthan the carrying value should be made. Once recognised, impairment loss will not bereversed in subsequent accounting periods.The recoverable amount is determined as the higher of net fair value of the asset lessdisposal cost and the present value of estimated future cash flow.

18. Borrowing costs

√ Applicable □ Not Applicable

(1) Principle for recognition of capitalisation of borrowing cost

Borrowing costs incurred by the Company that can be directly attributed to the acquisitionor production of assets qualified for capitalisation are capitalised and included in relevantasset costs; other borrowing costs are recognised as cost at the amount incurred at thetime of incurrence and charged to current profit or loss. Assets qualified for capitalisationrefer to fixed assets, investment properties and inventory that require a considerably longperiod of acquisition or production activities to reach the expected conditions for use orsale.

(2) Computation of capitalised amounts

Capitalisation period: from the point of time at which the capitalisation of borrowing costsbegins to the point of time at which capitalisation ceases. The period of suspension ofcapitalisation of borrowing costs is not included.Period of suspension of capitalisation: In case of abnormal disruption during the acquisitionor production process for a consecutive period of more than 3 months, the capitalisationperiod for borrowing costs should be suspended.

Section X Financial Report

Computation of capitalised amount: ① For specific borrowings, the amount is determinedas interest expense incurred for the period in respect of the specific borrowing less interestincome received through the deposit of unutilised borrowed funds or investment gainsreceived through provisional investments; ② For general borrowings utilised, the amount isdetermined as the weighted average amount of the portion of cumulative asset expenses inexcess of the asset expense of specific borrowings multiplied by the capitalisation rate forthe general borrowings utilised, where the capitalisation rate is the weighted averageinterest rate of general borrowings; ③ where there is a discount or premium in theborrowings, the amortisation of such discount or premium for each accounting period isdetermined according to the effective interest rate and the interest amount for each periodis adjusted accordingly.

19. Intangible assets

Intangible assets are the identifiable non-monetary assets which have no physical form and arepossessed or controlled by the Company, and are recognized when the following conditions aremet:

① it is probable that economic benefits attributable to the intangible assets will flow into the

Company;

② the costs of the intangible assets can be measured reliably.

(1) Measurement of intangible assets

Intangible assets of the Company are initially recognized at costs. The actual costs ofpurchased intangible assets include the consideration and relevant expenses actually paid.For intangible assets contributed by investors, relevant actual costs are determined basedon the value agreed in the investment contract or agreement. But if the value agreed in theinvestment contract or agreement is not a fair value, the actual costs should be determinedbased on the fair value. The cost of a self-developed intangible asset is the totalexpenditure incurred in bringing the asset to its intended use. Intangible assets acquired ina business combination not under common control that are owned by the acquiree but notrecognised in its financial statements are recognised as intangible assets at fair value oninitial recognition of the acquiree’s assets.Subsequent measurement of intangible assets of the Company: ①Intangible assets withfinite useful lives are amortized on a straight-line basis; their useful lives and amortizationmethods are reviewed at the end of each year, and adjusted accordingly if there is anyvariance with the previous estimates; ②Intangible assets with indefinite useful lives are notamortized and their useful lives are reviewed at the end of each year. If there is anobjective evidence that the useful life of an intangible asset is finite, an estimation shouldbe made on the useful life and the intangible asset should be amortized using the straight-line method.

Section X Financial Report

(2) Criterion of determining indefinite useful life

√ Applicable □ Not Applicable

The useful life of an intangible asset is indefinite if the period in which the asset bringseconomic benefits for the Company is unforeseeable, or the useful life could not beascertained.Criterion of determining indefinite useful lives: ① the period is derived from contractualrights or other legal rights and there are no explicit years of use stipulated in the contractor laws and regulations; ② the period in which the intangible assets generate benefits forthe Company still could not be estimated after considering the industrial practice orrelevant expert opinions.At the end of each year, the Company reviews the useful lives of the intangible assets withindefinite useful lives. The assessment is primarily reviewed by relevant departments thatuse the intangible assets, using the down-to-top approach, to determine if there arechanges to the determination basis of indefinite useful lives.

(3) Methods of test and provision for impairment of intangible assets

At the balance sheet date, the Company reviews intangible assets to check whether thereis any sign of impairment. If yes, the recoverable amount is recognized through animpairment test and provision for impairment is made based on the difference between thecarrying value and the recoverable amount.Impairment loss will not be reversed in subsequent accounting periods once provision ismade for it. The recoverable amount of intangible assets should be based on the higher ofthe net fair value of the assets less the disposal expense and the present value ofestimated future cash flow of the assets.

(4) Basis for research and development phases for internal research and development

project and basis for capitalization of expenditure incurred in development stageAs for an internal research and development project, expenditure incurred in the researchstage is recognized in the profit or loss as incurred. Expenses incurred in the developmentstage are capitalized only if all of the following conditions are met: ①the technicalfeasibility of completing the intangible assets so that they will be available for use or forsale; ②the intention to complete the intangible assets for use or for sale; ③ how theintangible assets will generate economic benefits, including there is evidence that theproducts produced by the intangible assets has a market or the intangible assetsthemselves have a market; if the intangible assets are for internal use, there is evidencethat there exists usage for the intangible assets; ④ the availability of adequate technical,financial and other resources to complete the development and gain the ability to use orsell the intangible assets; ⑤ the capability to reliably measure the expenditures attributableto the development stage of the intangible assets.

Section X Financial Report

Specific standards for distinguishing research stage and development stage of an internalresearch and development project: the Company refers to the research stage as the stageof planned investigation and search for obtaining new technology and knowledge, whichfeatures planning and exploration; before commercial production or other uses, theCompany regards the stage of applying the research achievements and other knowledge ina plan or design to produce new or substantially improved materials, equipment andproducts as development stage, which features pertinence and is very likely to formresults.All the expenditures incurred on research and development which cannot be distinguishedbetween research stage and development stage are recognized in the profit or loss.

20. Impairment of long-term assets

√ Applicable □ Not Applicable

Long-term equity investment, investment properties measured based on cost model, fixed assets,construction in progress, intangible assets and other long-term assets are tested for impairmentif there is any sign of impairment at the balance sheet date. If the result of the impairment testindicates that the recoverable amount of the assets is less than the carrying amount, a provisionfor impairment will be made based on the difference and will be recorded in impairment loss. Therecoverable amount is the higher of the net fair value of the assets less the disposal expenseand the present value of estimated future cash flow of the assets. Provision for asset impairmentis calculated and recognized on the individual asset basis. If it is not possible to estimate therecoverable amount of an individual asset, the recoverable amount of the asset group to whichthe asset belongs is determined. An asset group is the smallest asset portfolio that can generatecash inflows independently.Goodwill arising from a business combination and an intangible asset with an indefinite useful lifeis tested for impairment at least at each year end, irrespective of whether there is any indicationthat the asset may be impaired. Intangible assets that have not been ready for intended use aretested for impairment each year.When the Company carries out impairment test of the goodwill, the carrying amount of thegoodwill, arising from business combination, shall be allocated to the related asset groups onreasonable basis since the acquisition date, or to the related asset group portfolios if it is difficultto be allocated to the related asset groups. When the carrying amount of the goodwill isallocated to the related asset groups or asset group portfolios, it shall be allocated in theproportion of the fair value of each asset group or asset group portfolio against the total fairvalue of related asset groups or asset group portfolios. If it is difficult to measure the fair valuereliably, it shall be allocated in the proportion of the carrying amount of each asset group orasset group portfolio against the total carrying amount of related asset groups or asset groupportfolios.

Section X Financial Report

When impairment test is made by the Company to the related asset groups or asset groupportfolios including goodwill, if there is a sign that the related asset groups or asset groupportfolios are prone to impair, the Company shall first conduct impairment test on the assetgroups or asset group portfolios excluding goodwill, calculate the recoverable amount andrecognize the corresponding impairment loss by comparing with its carrying amount. TheCompany shall then conduct impairment test on the asset groups or asset group portfoliosincluding goodwill and compare the carrying amount (including the carrying amount of allocatedgoodwill) of related asset groups or asset group portfolios with the recoverable amount thereof.Impairment loss shall be recognized in accordance with the differences when the recoverableamount of the related asset groups or asset group portfolios is lower than the carrying amountthereof. The amount of the impairment loss is first reduced by the carrying amount of thegoodwill allocated to the asset group or set of asset groups, and then the carrying amount ofother assets (other than the goodwill) within the asset group or set of asset groups, pro ratabased on the carrying amount of each asset.Once the above impairment loss on assets is recognized, it shall not be reversed by theCompany in any subsequent accounting period.

21. Long-term prepaid expense

√ Applicable □ Not Applicable

Long-term prepaid expenses of the Company are expenditures which have incurred but thebenefit period of which is more than one year (exclusive). They are amortized by installments overthe benefit period based on each item under the expenses. If items under the long-term pre-paidexpenses are no longer beneficial to the subsequent accounting periods, the amortized value ofsuch unamortized items is then fully transferred to the profit or loss.

22. Contract liabilities

√ Applicable □ Not Applicable

A contract liability represents the Company’s obligation to transfer goods to a customer forwhich the Company has received consideration (or an amount of consideration is due) from thecustomer. If the customer has already paid the contract consideration before the Companytransfers goods to the customer or the Company has obtained the unconditional collection right,the Company will recognise such amount received or receivable as contract liabilities at earlier ofthe actual payment by the customer or the amount payable becoming due. Contract assets andcontract liabilities under the same contract are presented on a net basis, and contract assetsand contract liabilities under different contracts are not offset.

Section X Financial Report

23. Staff’s remuneration

Staff’s remunerations are all forms of compensation and other relevant expenditure given by theCompany in exchange for services rendered by employees, including short-term remunerations,post-employment benefits, termination benefits and other long-term benefits.

(1) Accounting treatment of short-term remunerations

√ Applicable □ Not Applicable

Short-term remunerations provided by the Company include short-term salaries, bonus,allowance, subsidies, employee welfare, housing provident fund, labor union fee andeducation fee, medical insurance premiums, work-related injury insurance premiums,maternity insurance premiums, short-term compensated leave, short-term profit-sharingplans, etc. During the accounting period when employees render services, the Companyshall recognize short-term remunerations that actually incurred as liabilities and credited intothe current profit or loss or the cost of relevant assets on an accrual basis by the benefitobjects.

(2) Accounting treatment of post-employment benefits

√ Applicable □ Not Applicable

Post-employment benefits mainly include the basic pension insurance, enterprise annuity,etc., In accordance with the risks and obligations undertaken by the Company, thepost-employment benefits are classified as defined contribution plans and defined benefitplans.Defined contribution plans: the Company shall recognize the sinking funds paid on thebalance sheet date to individual entities in exchange for services from employees in theaccounting period as liabilities, and shall credit such funds into the profit or loss or the costof relevant assets in accordance with the benefit objects.Defined benefit plans: the Company determines the cost for providing benefits using theexpected cumulative welfare unit method, with actuarial valuations being carried out byindependent actuary at the interim and annual balance sheet date. The costs for staff’sremunerations incurred by the defined benefit plans of the Group are categorized asfollows: (1) service cost, including current period service cost, past service cost andsettlement profit or loss. Specifically, current period service cost means the increase of thepresent value of defined benefit obligations resulted from the current period services offeredby employees. Past service cost means the increase or decrease of the present value ofdefined benefit obligations resulted from the revision of the defined benefit plans related tothe prior period services offered by employees; (2) interest expenses of defined benefitplans; (3) changes caused by the remeasurement of liabilities for defined benefit plans.Unless other accounting standards require or permit the credit of the costs for employeewelfare into the cost of assets, the Company will credit (1) and (2) above into the profit orloss; and recognize (3) above as other comprehensive income and will not transfer it backto the profit or loss in subsequent accounting periods.

Section X Financial Report

(3) Accounting treatment of termination benefits

√ Applicable □ Not Applicable

Termination benefits are the indemnity proposal provided by the Company for employeesfor the purpose of terminating labor relations with employees before expiry of the laborcontracts or encouraging employees to accept downsizing voluntarily. When the Companycould not unilaterally withdraw the termination benefits provided as a result of plan fortermination of labor relations or the redundancy offer, or upon recognition of costs orexpenses related to a restructuring involving the payment of termination benefits, whicheveris earlier, the staff’s remuneration liabilities arising from such termination benefits arerecognized and included in current profit or loss.

24. Estimated liability

√ Applicable □ Not Applicable

(1) Criterion for determining of estimated liability

If an obligation in relation to contingencies such as external guarantees, discounting ofcommercial acceptance bills, pending litigation or arbitration and product quality assuranceis the present obligation of the Company and the performance of such obligation is likely tolead to an outflow of economic interests and its amount can be reliably measured, suchobligation shall be recognized as an estimated liability.

(2) Measurement of estimated liability

The estimated liability shall be initially measured according to the best estimate of thenecessary expenses for the performance of the present obligation. If there is a continuousrange for the necessary expenses and if all the outcomes within this range are equally likelyto occur, the best estimate shall be determined according to the middle estimate within therange.; if there are multiple items involved, the best estimate should be determinedaccording to all possible outcomes and relevant probabilities.At the balance sheet date, the carrying value of estimated liabilities should be reviewed. Ifthere is objective evidence that the carrying value could not reflect in the current bestestimate, the carrying value shall be adjusted to reflect the current best estimate.If all or part of the expense necessary for settling the provisions is expected to becompensated by the third party, the amount of compensation is separately recognized asan asset when it is basically determined to be recoverable, and the recognized amount ofthe compensation shall not exceed the carrying amount of the provisions.

Section X Financial Report

25. Share-based payments

√ Applicable □ Not Applicable

Share-based payments of the Company are transactions in which equity instruments are grantedto employees in exchange for services rendered by employees or for the assumption of liabilitiesbased on equity instruments. Share-based payments of the Company are equity-settledshare-based payments and cash-settled share-based payments.For equity-settled share-based payment transaction in return for services from employees, it shallbe measured at the fair value of equity instruments granted to the employees at the date ofgrant by the Company. On each balance sheet date within the vesting period, the Companymakes the best estimation of the number of vested equity instruments based on subsequentinformation such as the updated changes in the number of employees who are granted to vestand the achievement of specified performance conditions. Based on the above results, theservices received in the current period are included in the relevant cost or expenses based onthe fair value on the date of grant, with the increase in the capital reserve accordingly. Therecognized relevant cost or expenses and the total amount of owners’ interest shall no longer beadjusted after the vesting date. However, equity instruments vested immediately after the date ofgrant shall be included in the relevant cost or expenses based on its fair value on the date ofgrant, with the increase in the capital reserve accordingly.The cash-settled share-based payment shall be measured at the fair value of liability assumed bythe Company, which is determined based on the shares or other equity instruments. For thecash-settled share-based payment that may be exercised immediately after the grant, the fairvalue of the liability assumed by the Company shall, on the date of the grant, be recognized inrelevant costs or expenses and the liabilities shall be increased accordingly. For cash-settledshare-based payment that may be exercised if services are fulfilled during the vesting period orthe specified performance condition is achieved, on each balance sheet date within the vestingperiod, the services acquired in the current period shall, based on the best estimate of exercise,be recognized in relevant costs or expenses at the fair value of the liability assumed by theCompany, and the liabilities shall be adjusted correspondingly. At each balanced sheet date andthe settlement date prior to the settlement of liabilities, the fair value of the liability isre-measured with its change consolidated in profit/loss.

Section X Financial Report

When there is changes to the Company’s share-based payment plans, if the modificationincreases the fair value of the equity instruments granted, corresponding recognition of serviceincrease in accordance with the increase in the fair value of the equity instruments; if themodification increases the number of equity instruments granted, the increase in fair value of theequity instruments is recognized as a corresponding increase in service achieved. Increase in thefair value of equity instruments refer to the difference between the fair values of the equityinstrument on the modified date before or after the modification. If the Company modifies thevesting conditions in such manner conductive to the employees, including the shortening of thevesting period, change or cancellation of the performance conditions (rather than marketconditions), the modified vesting conditions are considered upon the disposal of vestingconditions. If the modification reduces the total fair value of shares paid or the Company usesother methods not conductive to employees to modify the terms and conditions of share-basedpayment plans, the Company will continue to be accounted for the services obtained in theaccounting treatment, as if the change had not occurred, unless the Company cancelled some orall of the equity instruments granted.During the vesting period, if the Company cancel equity instruments granted which will be treatedas accelerating the exercise of rights and any amount to be charged over the remaining vestingperiod should be recognized immediately in the profit or loss, while at the same time recognizethe capital reserve. Employees or other parties can choose to meet non-vesting conditions, butfor those that are not met in the vesting period, the Company will treat it as cancellation ofequity instruments granted.

26. Revenue

√ Applicable □ Not Applicable

Revenue is the total inflow of economic benefits formed by the Company and its subsidiariesduring day-to-day operations which might lead to increase of shareholders’ equity and beirrelevant to capital invested by shareholders.The Company and its subsidiaries performed performance obligations stated in the contract, i.e.,recognized revenue when the client obtains the control right of relevant goods or services.Where the contract includes two or more performance obligations, during the starting date of thecontract, the Company and its subsidiaries allocate transaction price to various singleperformance obligation in accordance with the relevant proportion of separate selling price ofgoods or services promised by various single performance obligation, and measure revenue inaccordance with transaction price allocated to various single performance obligation.Transaction price is the amount of consideration that the Company and its subsidiaries areexpected to be entitled to collect due to transfer of goods and services transferred to the client,excluding the amount collected for third parties. The transaction price recognized by theCompany and its subsidiaries does not exceed the amount of recognized revenue when relevantuncertainties are eliminated and might not incur material carrying back. The amount that isexpected to be returned to the client is taken as liability of returned goods and is not recordedin transaction price.

Section X Financial Report

When one of the following conditions is met, the Company and its subsidiaries performperformance obligations during a certain time horizon, otherwise, it belongs to fulfillingperformance obligations at a certain time point:

① The client simultaneously obtains and consumes economic benefits as the Company and its

subsidiaries perform the contract;

② The client is able to control goods under construction during the process of performance of

the Company and its subsidiaries;

③ Goods produced by the Company and its subsidiaries during the process of performance

have no alternative use, and the Company and its subsidiaries are entitled to collect theamount for the cumulative completed and performed portion to date during the entirecontractual period.For the performance obligations performed during a certain time horizon, the Company and itssubsidiaries recognize revenue in accordance with the schedule of performance during such timehorizon. When the schedule of performance can’t be reasonably recognized, where the costs thathave been incurred by the Company and its subsidiaries are estimated to be compensated,revenue shall be recognized in accordance with the amount of costs that has been incurred untilthe schedule of performance can be reasonably confirmed.For performance obligations performed at a certain time point, the Company and its subsidiariesrecognize revenue at the time point when the client obtains the control right of relevant goods orservices. When judging whether the client has obtained control right over goods or services, theCompany and its subsidiaries will consider the following signs:

① The Company and its subsidiaries enjoy the right of instant collection over such goods and

services;

② The Company and its subsidiaries have transferred the material objects of such goods to

the client;

③ The Company and its subsidiaries have transferred statutory ownership right of the goods

or major risks and rewards of the ownership to the client;

④ The client has accepted such goods or service.

The right that the Company and its subsidiaries are entitled to collect the consideration forhaving transferred goods or services to the client (and such right depends on other factors otherthan time lapse) is presented as contract asset, and contract asset is provisioned impairment onthe basis of expected credit losses. The right owned by and unconditionally collected from theclient by the Company and its subsidiaries (only depend on time lapse) shall be presented asaccounts receivable. Obligations that the Company and its subsidiaries have collected or shallcollect consideration from the client and shall transfer goods or services to the client arepresented as contractual obligations.

Section X Financial Report

Specific accounting policies relating to major activities that the Company and its subsidiariesobtain revenue are described as follows:

(1) Sale of goods

Generally, contracts for sale of goods between the Company and its clients only includeperformance obligation of transferring the whole machine of home appliance. Generally, onthe basis of taking into account the following factors comprehensively, the Companyrecognizes the revenue at the time point of transfer of control right of goods: the right ofinstant collection for obtaining goods, transfer of major risks and rewards on ownership ofgoods, transfer of statutory ownership of goods, transfer of assets of material objects ofgoods, the client’s acceptance of such goods.

(2) Construction contract income

Construction contract between the Company and the client generally includes performanceobligations of construction and installation of commercial air-conditioner and smart home,because the client is able to control goods under construction during the Company’sperformance process, the Company takes them as performance obligations performedduring a certain time horizon, and recognizes revenue in accordance with the schedule ofperformance, and it is an exemption when the schedule of performance can’t bereasonably confirmed. The Company confirms the schedule of performance of servicesprovided in accordance with the input method. When the schedule of performance can’t bereasonably confirmed, where the costs that have been incurred by the Company areestimated to be compensated, the revenue will be recognized in accordance with theamount of costs that has been incurred until the schedule of performance can bereasonably confirmed.

(3) Warranty obligations

According to contractual agreement and regulations of laws, the Company provides qualityassurance for goods sold and project constructed. For guarantee-type quality assurance inorder to ensure the client that goods sold comply with existing standards, the Companyconducts accounting treatment in accordance with estimated liabilities. For service-typequality assurance in order to ensure the client that we also provide a separate service otherthan that the goods sold comply with existing standards, the Company takes it as aseparate performance obligation, and allocates partial transaction price to service-typequality assurance in accordance with the relevant proportion of separate selling price ofgoods and service-type quality assurance, and recognizes revenue when the client obtainscontrol right over services. When assessing whether quality assurance provides a separateservice other than ensuring the client that the goods sold comply with existing standards,the Company shall consider factors such as whether such quality assurance is understatutory requirements or industrial practices, the term of quality assurance and the natureof the Company’s commitment to perform the tasks.

Section X Financial Report

27. Government grants

√ Applicable □ Not Applicable

(1) Types of government grants

Government grants refer to the gratuitous monetary assets or non-monetary assetsobtained by the Company from the government, excluding the capital invested by thegovernment as an owner. The government grants are mainly divided into asset-relatedgovernment grants and revenue-related government grants.

(2) Accounting treatment of government grants

Asset-related government grants shall be recognized as deferred income in current profit orloss on an even basis over the useful life of relevant assets; government grants measuredat nominal amount shall be recognized directly in current profit or loss. Revenue-relatedgovernment grants shall be treated as follows: ①those used to compensate relevantexpenses or losses to be incurred by the enterprise in subsequent periods are recognizedas deferred income and recorded in current profit or loss when such expenses arerecognized; ②those used to compensate relevant expenses or losses that have beenincurred by the enterprise are recorded directly in current profit or loss.

(3) Basis for determination of asset-related government grant and revenue-related

government grantIf the government grant received by the Company is used for purchase, construction orother project that forms a long-term asset, it is recognized as asset-related governmentgrant.If the government grant received by the Company is not asset-related, it is recognized asrevenue-related government grant.Government grant received without clear objective shall be classified as asset-relatedgovernment grant or revenue-related government grant by:

① Government grant subject to a certain project shall be separated according to the

proportion of expenditure budget and capitalization budget, and the proportion shallbe reviewed and modified if necessary on each balance sheet date;

② Government grant shall be categorized as revenue-related if its usage is described in

general statement and no specific project is specified in the relevant governmentdocument.

(4) Amortization method and determination of amortization period of deferred revenue

related to government grantsAsset-related government grant received by the Company is recognized as deferredrevenue and is evenly amortized to the profit or loss in the current period over theestimated useful life of the relevant asset starting from the date when the asset is availablefor use.

Section X Financial Report

(5) Recognition of government grants

Government grant measured at the amounts receivable is recognized at the end of theperiod when there is clear evidence that the relevant conditions set out in the financialsubsidy policies and regulations are fulfilled and the receipt of such financial subsidy isassured.Other government grants other than those measured at the account receivable isrecognized upon actual receipt of such subsidies.

28. Deferred tax assets/deferred tax liabilities

√ Applicable □ Not Applicable

Deferred income tax assets and deferred income tax liabilities of the Company are calculated andrecognized based on the differences between the tax bases and the carrying amounts of assetsand liabilities (temporary differences).

(1) Deferred income tax assets are recognized by the Company to the extent that it is probable

that future taxable profits will be available against which the deductible temporarydifferences can be utilized. For deductible losses and tax credits that can be carriedforward to future years, deferred income tax assets shall be recognized to the extent that itis probable that taxable profit will be available in the future to offset the deductible lossesand tax credits. Save as the exceptions, deferred income tax liabilities shall be recognizedfor the taxable temporary differences.

(2) Deferred income tax asset of the Company is recognized to the extent that there is enough

taxable income for the deduction of the deductible temporary difference. At the balancesheet date, if there is sufficient evidence that there will be enough taxable income in thefuture for the deduction of the deductible temporary difference, the deferred income taxasset not recognized in previous accounting period is recognized. If there is no sufficientevidence that there will be enough taxable income in the future for the deduction of thedeferred income tax asset, the carrying value of the deferred income tax asset is reduced.

(3) The Company recognizes deferred income tax liability for taxable temporary difference arising

from investments in subsidiaries and associated companies, unless the Company couldcontrol the time of reversal of the temporary differences and the temporary differenceswould not be probably reversed in the foreseeable future. The Company recognizesdeferred income tax asset for deductible temporary differences arising from investments insubsidiaries and associated companies, if the temporary difference will be very probablyreversed in the foreseeable future and it is highly probable that taxable income will beavailable in the future to deduct the deductible temporary difference.

Section X Financial Report

(4) The Company does not recognize deferred income tax liability for a temporary difference

arising from the initial recognition of goodwill. No deferred income tax asset or deferredincome tax liability is recognized for the temporary differences resulting from the initialrecognition of assets or liabilities due to a transaction other than a business combination,which affects neither accounting profit nor taxable income (or deductible loss). At thebalance sheet date, deferred income tax assets and deferred income tax liabilities of theCompany are measured at the tax rates that apply to the period when the asset isexpected to be recovered or the liability is expected to be settled.

(5) Deferred income tax assets and deferred income tax liabilities are offset when:

1) deferred tax assets and deferred tax liabilities relate to income taxes levied by the same

taxation authority on the same taxable entity within the Company; and

2) such taxable entity within the Company has a legally enforceable right to settle current

income tax assets and current income tax liabilities on a net basis.

29. Leases

√ Applicable □ Not Applicable

Lease is a contract in which the Company transfers or obtains the right of use of an identifiedasset or several identified assets under control for the exchange or payment of considerationwithin a certain period of time. On the commencement date of a contract, the Companyassesses whether a contract is, or contains, a lease.

(1) The Company as the lessee

√ Applicable □ Not Applicable

1) Initial measurement

On the commencement date of the lease term, the Company recognizes its right touse leased assets over the lease term as right-of-use assets and recognizes thepresent value of the lease payments that have not been paid as lease liabilities,except for short-term leases and low-value leases. The lease payments arediscounted using the implicit interest rate in the lease when calculating the presentvalue of the lease payments. If that rate cannot be readily determined, the Companyuses its incremental borrowing rate as the discount rate.Right-of-use assets shall be initially measured at costs. The costs include:

a. initial measurement amount of the lease liabilities;b. a lease payment paid on or before the date of commencement of the lease term,where there were lease incentives, such incentives received shall be deducted;

Section X Financial Report

c. initial direct costs incurred by the lessee;d. costs expected to be incurred by the Company for demolition and removal of

leased assets, restoration of the premises where the leased assets are located,or restoration of the leased assets to the conditions of the lease terms.

2) Subsequent measurement

If the Company accrues depreciation for right-of-use assets by reference to thedepreciation policy for fixed assets (see this Note V.16, “Fixed assets” for details), andcan reasonably determine that the ownership of the leased asset can be acquired atthe expiration of the lease term, the Company shall depreciate the leased asset withinits remaining useful life. If the Company cannot reasonably determine that theownership of the leased asset can be acquired at the expiration of the lease term, theCompany shall depreciate the leased asset within the lease term or its remaininguseful life, whichever is shorter. For lease liabilities, the Company shall calculate theinterest expenses for each period over the lease term at the fixed periodic interestrate, and recognize it in current profit or loss or the cost of relevant assets. Variablelease payments that are not included in the measurement of lease liabilities arerecognized in current profit or loss or the cost of relevant assets when they areactually incurred. After the commencement date of the lease term, in the event thatthere is a change in the substantive fixed payments, a change in expected paymentunder a guaranteed residual value, a change in an index or rate used in determiningthe lease payments, or a change in the evaluation result or actual exercise ofpurchase option, extension option or termination option, the Company remeasures thelease liabilities based on the present value of the lease payments after the changeand adjusts the carrying value of the right-of-use asset accordingly. If the carryingamount of the right-of-use asset has been reduced to zero, but a further reduction inthe measurement of the lease liabilities is still warranted, the Company recognizes theremaining amount of the remeasurement in current profit or loss.

3) Short-term leases and leases of low-value assets

For short-term leases (leases with a term of less than 12 months as of the leasecommencement date) and leases of low-value assets, the Company adopts asimplified approach by not recognizing the right-of-use assets and lease liabilities, andinstead recognizes the cost of relevant assets or current profit or loss on astraight-line basis for each period over the lease term.

Section X Financial Report

(2) The Company as the lessor

√ Applicable □ Not Applicable

The Company classifies leases into finance leases and operating leases based on thesubstance of the transaction on the commencement date of the lease. A finance lease is alease that transfers substantially all the risks and rewards incidental to ownership of theleased asset. An operating lease is a lease other than a finance lease.

1) Operating leases

The Company uses the straight-line method to recognize lease receipts underoperating leases as rental income for each period during the lease term. Variablelease payments relating to operating leases that are not recognized as lease receiptsare recognized in current profit or loss when they are actually incurred.

2) Finance leases

On the commencement date of the lease term, the Company recognizes finance leasereceivables and derecognizes finance lease assets. Finance lease receivables areinitially measured at the net investment in the lease (the sum of the unguaranteedresidual value and the present value of the lease receipts not yet received on thecommencement date of the lease term discounted at the interest rate embedded inthe lease), and interest income is recognized over the lease term calculated at a fixedperiodic interest rate. Variable lease payments acquired by the Company that are notincluded in the measurement of the net investment in the lease are recognized incurrent profit or loss when they are actually incurred.

30. Other significant accounting policies and accounting estimates

√ Applicable □ Not Applicable

(1) Asset securitisation

The Company has securitised certain receivables to entrust the assets to specific-purposeentities which would issue such securities to investors. As asset service provider, theCompany is responsible for the provision of maintenance and daily management of theassets, formulation of annual asset disposal plans, formulation and implementation of assetdisposal plan, signing of relevant asset disposal agreements and preparation asset servicereports on a regular basis.In applying the accounting policy for the securitisation of financial assets, the Company hasconsidered the extent to which the risk and reward of the assets have been transferred toother entities, and the extent to which the Company exercises control over the entity:

① When the Company has transferred substantially all risk and reward relating to the

ownership of a financial asset, such financial asset is derecognised;

② When the Company retains substantially all risk and reward relating to the ownership

of a financial asset, the Company continues to recognise such financial asset;

Section X Financial Report

③ If the Company neither transfers nor retains substantially all risk and reward relating to

the ownership of a financial asset, the Company considers whether it has control overthe financial asset. If the Company does not retain control, the financial asset isderecognised, and the rights and obligations arising from or retained the transfer arerecognised as assets and liabilities, respectively. If the Company retains control, thefinancial asset is recognised according to the extent of continued involvement in thefinancial assets.

(2) Hedge accounting

Hedge refers, in respect of the risk exposure arising from the company’s management ofspecific risks such as foreign exchange risks, interest rate risks, price risks and credit risks,to risk management activity of designating financial instruments as hedging instrumentssuch that the change in the fair value or cash flow of the hedging instruments can beexpected to set off the change in the fair value or cash flow of the hedged item.The hedged item refers to an item designated for hedge against the risk of change in fairvalue or cash flow that can be reliably measured.Hedging instruments are financial instruments designated for hedge, the change in fair valueor cash flow of which is expected to set off the change in the fair value or cash flow of thehedged item.The Company assesses whether the hedge relationship fulfills the requirement for hedgeeffectiveness on the commencement date of the hedge and continuously in subsequentperiods. The effectiveness of hedge refers to the extent to which the change in the fairvalue or cash flow of the hedging instruments can offset the change in the fair value orcash flow of the hedged item caused by the risk against which the hedge is made. Thechange in the fair value or cash flow of a hedging instrument in excess or shortfall of thechange in the fair value or cash flow of the hedging instruments can offset the change inthe fair value or cash flow of the hedged item represents the ineffective portion of thehedge.

(3) Significant accounting estimates

In the course of applying accounting policies, the Company is required to makejudgements, estimations and assumptions on the carrying values of statement items thatcannot be accurately measured owing to uncertainties to which operating activities aresubject. Such judgements, estimations and assumptions are made based on the pastexperience of the management and taking into consideration of other relevant factors. Suchjudgements, estimations and assumptions affect the reported amounts of income,expenses, assets and liabilities and the disclosure of contingent liabilities as at the balancesheet date. However, the actual outcome resulting from the uncertainty of such estimatescould be different from the current estimates of the management, thereby resulting insignificant adjustments to the carrying value of the future assets or liabilities affected. TheCompany regularly reviews such judgements, estimations and assumptions on a goingconcern basis. If the change in accounting estimates affects only the current period inwhich the change occurs, the affected amount is recognized for the period in which thechange occurs; if both the current period and future periods are affected, the affectedamount is recognised for the current period and the future periods.

Section X Financial Report

At the balance sheet date, important aspects in which the Company is required to makejudgements, estimations and assumptions on the amount of items on the financialstatements are as follows:

Estimated liabilitiesThe Company estimates and makes provision for product warranty and estimatedcontract loss according to contract terms, existing knowledge and historicalexperience. When such contingencies have given rise to a present obligation, and theperformance of such present obligation is likely to result in the outflow of economicbenefit from the Company, the Company recognises estimated liabilities for thecontingencies based on the best estimates of expenses required for the performanceof relevant present obligations. The recognition and measurement of estimatedliabilities is dependent to a large extent on management judgement. In the course ofjudgement, the Company is required to assess factors such as risks, uncertaintiesand the time value of currency relating to such contingencies. In particular, theCompany recognises estimated liabilities in respect of after-sales undertaking tocustomers for return and replacement, maintenance and installation of goods sold.The recognition of estimated liabilities has taken into account the maintenanceexperience and data of the Company for recent years, although past experience inmaintenance may not reflect maintenance in the future. Any increase or decrease inthis provision might affect the profit or loss of future years. Provision for ECLThe Company measures ECL through default risk exposure and the ECL rate, whichis determined based on the default probability rate and default loss rate. Indetermining the ECL rate, the Company uses data such as internal historic credit lossexperience and adjusts the historic data taking into consideration current conditionsand prospective information. When considering prospective information, indicatorsadopted by the Company include the risk of economic downside, expected growth inunemployment rate, and changes in external market conditions, technical conditionsand customer conditions. The Company monitors and reviews the assumptionsrelating to ECL computation on a regular basis. There was no significant change toaforesaid estimation technique and key assumptions during the year.

Impairment provisions for inventory

The Company makes impairment provisions for inventory of which cost is higher thannet realisable value and obsolete and slow-moving inventory based on the lower ofcost and net realisable value according to its inventory accounting policy. Theimpairment of inventory to its net realisable value is based on assessment of thesellability of inventory and its net realisable value. The authentication of inventoryimpairment requires the management to obtain conclusive evidence and makejudgment and estimates taking into consideration factors such as the purpose ofinventory and post-balance sheet date events. Any difference between the actualoutcome and the previous estimate will affect the carrying value of inventory and thecharge or reversal of impairment provisions for inventory during the period in whichthe estimates are modified.

Section X Financial Report

Fair value of financial instrumentsFor financial instruments without an active trading market, the Company determinesits fair value using valuation techniques. Such valuation techniques include discountedcash flow model analysis and others. During the assessment, the Company isrequired to make estimates on future cashflow, credit risk, market volatility rate andrelevance and select an appropriate discount rate. Such relevant assumptions aresubject to uncertainty, and any change will affect the fair value of financialinstruments. Impairment of other equity instrument investmentsThe Company’s determination of impairment for other equity instrument investments islargely dependent on the management’s judgment and assumptions to determinewhether impairment should be recognised. In the course of making judgments andassumptions, the Company is required to assess the extent and duration of the fairvalue of the investment being lower than cost, as well as the financial conditions andshort-term business prospects of the investee, including industry conditions,technological revolution, credit rating, default rate and counterparty risks.

Impairment provision for long-term assetsAt the balance sheet date, the Company assesses whether there are indications ofpossible impairment of non-current assets other than financial assets. In addition tothe annual impairment test, intangible assets with indefinite useful life are also testedfor impairment when there are indications of the same. Impairment tests on non-current assets other than financial assets are conducted when there are indicationsthat its carrying value may not be recoverable. An impairment has occurred when thecarrying value of an asset or asset group is higher than the recoverable amount (thehigher of net fair value less disposal cost and the present value of estimated futurecash flow). The net fair value less disposal cost is determined with reference to theagreed selling price of similar assets in a fair transaction or observable market pricesless incremental costs attributable directly to the disposal of such asset. In estimatingthe present value of future cashflow, significant judgement is required to be made inrespect of the production volume and selling price of the asset or (asset group),relevant operating cost and discount rate for the computation of present value. TheCompany takes into consideration all available relevant information when makingestimates on the recoverable amount, including forecasts on production volume,selling price and relevant operating costs based on reasonable and justifiableassumptions. The Company conducts goodwill impairment tests at least annually. Thisrequires estimates on the present value of future cashflow of asset group or portfolioof asset groups to which goodwill has been allocated. When making estimates on thepresent value of future cashflow, the Company is required to make estimates oncashflow generated from future asset group or portfolio of asset groups, and at thesame time select an appropriate discount rate to determine the present value offuture cashflow.

Section X Financial Report

Depreciation and amortisationDepreciation and amortisation of investment properties, fixed assets and intangible assets ischarged on a straight-line basis over their useful life after taking their residual values intoaccount. The Company reviews the useful life on a regular basis to determine the amountof depreciation and amortisation charge to be allocated to each reporting period. The usefullife is determined based on past experience relating to similar assets taking intoconsideration expected technological upgrades. If there are significant changes in previousestimates, the depreciation and amortisation charge for future periods will be adjusted.

Deferred income tax assetsThe Company recognises deferred income tax assets in respect of all unutilised tax losses,to the extent that it is probable that sufficient taxable profit will be available to offset theloss. This requires the exercise of significant judgement by the Company’s management toestimate the timing and amount of future taxable profit, taking into account its tax planningstrategy, to determine the amount of deferred income tax assets to be recognised. Income taxIn the Company’s usual operating activities, the final tax treatment and computation ofcertain transactions are subject to uncertainty. Whether certain items can be presented ona pretax basis is subject to approval of the competent taxation authority. If the finalconfirmed outcome of such taxation matters is different from the amount of the initialestimates, such difference will affect the current income tax and deferred income tax forthe period of final confirmation. Provision for sales rebate

The Company and its subsidiaries adopt a sales rebate policy for sales agent customers.Based on relevant provisions of the sales agreements, vetting of specific transactions,market conditions, channel inventory level and past experience with reference to the statusof completion of agreed appraisal indicators by sales agent customers, the Company andits subsidiaries makes estimates on and provision for sales rebate on a regular basis. Theprovision of sales rebate involves judgment and estimation by the management. In theevent of any material change in previous estimates, the aforesaid difference will affect thesales rebate for the period for which the estimates are changed.

Section X Financial Report

31. Changes in major accounting policies

√ Applicable □ Not Applicable

In accordance with the provisions of the Accounting Standards for Business EnterprisesInterpretation No. 18 issued by the MOF, the warranty-type quality assurance expenses providedby the Company shall be included in “operating cost” and are no longer included in “sellingexpenses”.The Company has adopted the retrospective adjustment method to make correspondingadjustments to the financial statements for the comparable periods. The impacts of the aforesaidchange in accounting policy on the consolidated profit statement for the corresponding periodare as follows:

Statement itemAdjustmentOperating cost8,328,087,511.15Selling expenses–8,328,087,511.15

Section X Financial Report

VI. TAXATION

1. Main tax categories and rates

Main tax categories and rates

√ Applicable □ Not Applicable

Tax typesBasis of taxationTax rateValue-added taxTaxable revenue from sales of

goods and rendering services

6%, 9%, 13%City maintenance and construction taxCirculation tax payable7%(Local) education surchargeCirculation tax payable1%, 2%, 3%EITTaxable incomeStatutory tax rate

or preferentialrates as follows

2. Preferential tax

√ Applicable □ Not Applicable

Companies subjected to preferential tax and preferential tax rate:

CompanyTax ratePreferential taxQingdao Haier Refrigerator Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Special Refrigerator

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Dishwasher Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Special Freezer Co.,

Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Intelligent Home

Appliance Technology Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseWuhan Haier Electronics Holding Co.,

Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseWuhan Haier Freezer Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterprise

Section X Financial Report

CompanyTax ratePreferential taxHefei Haier Refrigerator Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Air Conditioner GenCorp., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseHefei Haier Air-conditioning Co.,Limited

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseZhengzhou Haier Air-conditioning Co.,Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseShenyang Haier Refrigerator Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Air-Conditioner

Electronics Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Meier Plastic Powder Co.,Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Hai Gao Design andManufacture Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Hairi High Technology Co.,

Ltd

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier (Jiaozhou) Air-

conditioning Co., Limited

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Intelligent Technology

Development Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseFoshan Haier Freezer Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Central Air ConditioningCo., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseHaier U+smart Intelligent Technology

(Beijing) Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterprise

Section X Financial Report

CompanyTax ratePreferential taxQingdao Haier Electronic Plastic Co.,Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Wei Xi Intelligent Technology

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Special Refrigerating

Appliance Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Smart Kitchen

Appliance Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseHefei Haier Air Conditioning

Electronics Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseShanghai Haier Medical Technology

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseShanghai Haier Smart Technology Co.,Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Yunshang Yuyi IOTTechnology Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseHaier (Shanghai) Home ApplianceResearch and Development CenterCo., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseHaier (Shenzhen) R&D Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseLaiyang Haier Smart Kitchen Appliance

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseGuangdong Haier Intelligent

Technology Co. Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseDalian Haier Refrigerator Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Jijia Cloud Intelligent

Technology Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterprise

Section X Financial Report

CompanyTax ratePreferential taxHefei Haier Washing Machine Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Washing Machine Co.,Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Laundry AppliancesCo., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseFoshan Shunde Haier Electric Co.,Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseTianjin Haier Cleaning ElectricalAppliances Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Economic and Technological

Development Zone Haier WaterHeater Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseWuhan Haier Water Heater Co., Ltd.15.00%entitled to the preferential

taxation policies as a hi-techenterpriseZhengzhou Haier New Energy

Technology Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseFoshan Haier Drum Washing Machine

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Strauss Technology

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier New Energy Electric

Appliance Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Washing Appliance Co.,

Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Lexin Cloud Technology

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseHefei Haier Drum Washing MachineCo., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterprise

Section X Financial Report

CompanyTax ratePreferential taxQingdao Haier Smart Electrics

Equipment Co. Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao Haier Smart Living Appliance

Co. Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseQingdao RRS Lejia IoT Technology

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseTongfang Energy TechnologyDevelopment Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseJiangxi Haier Medical Technology Co.,

Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCChongqing Haier Electrical Appliance

Sales Co., Ltd. and some Westerncompanies

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCChongqing Haier Air-conditioning Co.,

Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCChongqing Haier Refrigeration

Appliance Co., Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCChongqing Haier Washing Machine

Co., Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCGuizhou Haier Electronics Co., Ltd.15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCChongqing Hairishun Home Appliance

Sales Co., Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCChongqing Haier Washing MachineCo., Ltd

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRC

Section X Financial Report

CompanyTax ratePreferential taxChongqing Haier Water Heater Co.,

Ltd

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCChongqing Haier Drum WashingMachine Co., Ltd

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCGuizhou Peiji Logistics Co., Ltd.15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCCentral Asia Baofeng InternationalLogistics Co., Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCCentral Asia Baofeng InternationalLogistics Co., Ltd. Xi’an Branch

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCShenzhen Furunde Supply Chain

Management Co., Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCGooday Supply Chain Technologies

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseHaier Robotics Technology (Qingdao)

Co., Ltd.

15.00%entitled to the preferential

taxation policies as a hi-techenterpriseGuiyang Ririshun Logistics Co., Ltd.15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCXi’an Gooday Smart Supply Chain Co.,

Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCChongqing Gooday Supply Chain

Management Co., Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRC

Section X Financial Report

CompanyTax ratePreferential taxQusong Tonghai Energy Technology

Co., Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCLinzhou Tonghai Energy TechnologyCo., Ltd.

15.00%entitled to the preferential

taxation policies under theWestern Development initiativeof the PRCQingdao Haier Technology Co., Ltd.10.00%entitled to the preferential

taxation policies as a keysoftware enterprise

Section X Financial Report

VII. EXPLANATORY NOTES FOR ITEMS IN CONSOLIDATED FINANCIALSTATEMENTSUnless otherwise specified, the following closing balances represent the amount as at 31 December2024 and opening balances represent the amount as at 31 December 2023; amount for the periodrepresents the amount from 1 January to 31 December 2024 and amount for the previous periodrepresents the amount from 1 January to 31 December 2023.

1. Monetary funds

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceCash on hand560,953.91541,712.70Cash in bank54,242,293,247.7256,229,872,824.79Other cash balances1,340,988,388.071,025,547,668.75Total55,583,842,589.7057,255,962,206.24Include: total amount of overseas deposits21,113,746,333.4015,931,149,416.11

Deposit in Finance Company20,565,469,130.8126,278,848,914.68Other explanations:

Other monetary funds mainly included investment fund, deposit on third party payment platforms,guarantees and other restricted fund, etc.

2. Financial assets held for trading

ItemsClosing balanceOpening balanceShort-term wealth management products746,436,121.40490,968,101.81Investments in other equity instruments195,177,368.77243,224,439.64Investment funds294,404,349.36222,803,002.38Total1,236,017,839.53956,995,543.83

Section X Financial Report

3. Derivative financial assets

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceForward foreign exchange contracts138,404,575.6667,565,829.44Cross-currency interest rate swaps4,254,681.44Forward commodity contracts50,459.81Total142,709,716.9167,565,829.44

4. Bills receivable

(1) Bills receivable presented by types

ItemsClosing balanceOpening balanceBank acceptance notes10,320,913,982.408,614,523,632.63Commercially acceptance notes1,798,754,865.96181,293,140.94Balance of bills receivable12,119,668,848.368,795,816,773.57Allowance for bad debts987,604.225,665,503.66

Bills receivable, net12,118,681,244.148,790,151,269.91

(2) Changes in allowance for bad debts of bills receivable in the current period:

Items

Increase for thecurrent period

Decrease for thecurrent periodOpeningbalance

Provision forthe currentperiod

OthermovementReversal

Write-off/othermovement

ClosingbalanceAllowance for bad

debts5,665,503.6631,201.384,709,100.82987,604.22Total5,665,503.6631,201.384,709,100.82987,604.22The Company’s bills receivables were mainly generated from daily operation activities suchas sales of commodity, provision of labor, etc., and the allowance for bad debts wasmeasured based on expected credit loss over the entire duration whether there existsignificant financing components.The bills receivable pledged by the Company at the end of the period wasRMB5,115,222,700.13 (amount at the beginning of the period RMB4,389,991,243.14).

Section X Financial Report

5. Accounts receivable

(1) Accounts receivable are disclosed by aging as follow:

AgingClosing balanceOpening balanceWithin one year26,216,927,940.9222,427,202,887.23

–2 years672,013,189.07893,998,152.18

–3 years387,632,769.92515,974,118.90Over 3 years251,771,355.77314,497,935.82

Balance of accounts receivable27,528,345,255.6824,151,673,094.13Allowance for bad debts1,055,343,510.671,468,751,839.88

Accounts receivable, net26,473,001,745.0122,682,921,254.25

(2) By method of provision of allowance for bad debts

CategoriesClosing balance

Book balanceAllowance for bad debtsAmount

Percentage(%)Amount

Percentageof provision

(%)Carrying valueAccount receivablessubject to provisionfor bad debts on aseparate basis381,087,498.621.38373,559,289.6998.027,528,208.93Account receivables

subject to provisionfor bad debts on acollective basis27,147,257,757.0698.62681,784,220.982.5126,465,473,536.08Total27,528,345,255.68100.001,055,343,510.673.8326,473,001,745.01

Section X Financial Report

(continued)

CategoriesOpening balance

Book balanceAllowance for bad debtsAmount

Percentage(%)Amount

Percentageof provision

(%)Carrying valueAccount receivablessubject to provisionfor bad debts on aseparate basis893,766,546.473.70891,454,689.4199.742,311,857.06Account receivablessubject to provisionfor bad debts on acollective basis23,257,906,547.6696.30577,297,150.472.4822,680,609,397.19Total24,151,673,094.13100.001,468,751,839.886.0822,682,921,254.25

(3) Account receivables subject to provision for bad debts on a separate basis at the

end of the period

√ Applicable □ Not Applicable

Unit and Currency: RMBNameClosing balance

Book balance

Allowance forbad debts

Percentage ofprovision (%)Reason for provision53 customers intotal

381,087,498.62373,559,289.6998.02The obligors were in

significant financialdifficultyTotal381,087,498.62373,559,289.6998.02Explanation of provision for bad debts on a separate basis:

√ Applicable □ Not Applicable

The account receivables of significant individual amount and subject to provision for baddebts on a separate basis at the end of the period was RMB195,473,905.66 (amount at thebeginning of the period RMB726,379,640.82).

Section X Financial Report

(4) Account receivables subject to provision for bad debts on a collective basis

√ Applicable □ Not Applicable

AgingClosing balance

Book balance

Allowance for

bad debts

Percentage of

provision (%)Within 1 year26,099,988,338.37388,387,571.711.49

–2 years652,850,246.4999,745,518.3215.28

–3 years180,573,436.5060,603,223.8933.56Over 3 years213,845,735.70133,047,907.0662.22Total27,147,257,757.06681,784,220.982.51(continued)AgingOpening balance

Book balance

Allowance forbad debts

Percentage of

provision (%)Within 1 year22,396,592,487.53307,174,739.101.37

–2 years481,720,399.3668,901,595.8614.30

–3 years198,138,057.8976,046,328.8038.38Over 3 years181,455,602.88125,174,486.7168.98Total23,257,906,547.66577,297,150.472.48

(5) Changes in allowance for bad debts of accounts receivable in the current period:

Items

Increase for thecurrent period

Decrease for thecurrent periodOpeningbalance

Provision forthe currentperiod

OthermovementReversal

Write-off/othermovement

ClosingbalanceAllowance for

bad debts1,468,751,839.88777,647,482.69467,171,673.98723,884,137.921,055,343,510.67

(6) The aggregate amount of the top 5 account receivables and contract assets as at the end

of the period was RMB6,775,144,962.81 (amount at the beginning of the period:

RMB5,525,018,986.65), accounting for 23.68% (at the beginning of the period: 22.57%) ofthe book balance of account receivables and contract assets, and the amount of provisionfor bad debts was RMB18,226,518.24 (amount at the beginning of the periodRMB604,983,462.26).

Section X Financial Report

(7) Actual write-off of accounts receivable in the current period

The amount of accounts receivable actually written off in the current period wasRMB713,599,798.71 (amount for the corresponding period: RMB98,653,261.10) and therewas a significant bad debt write-off of accounts receivable amounting toRMB532,621,082.38.

(8) The Company’s accounts receivable that were terminated due to the transfer of

financial assets in the current periodThe amount of accounts receivable that the company terminated at the end of the perioddue to the transfer of financial assets was RMB6,095,179,589.77 (amount at the beginningof the period: RMB6,411,839,897.28) and the transfer method was outright sale factoring/asset securitization.

(9) Restricted accounts receivable in the current period

The amount of accounts receivable restricted at the end of the period is RMB0.00 (amountat the beginning of the period: RMB1,255,120.80).

6. Financing receivables

(1) Presentation of financing receivables by category

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceBills receivable182,877,006.03159,043,672.58Accounts receivable177,192,385.5341,282,799.27Total360,069,391.56200,326,471.85

(2) The Company’s pledged financing receivables at the end of the period

□ Applicable √ Not Applicable

Section X Financial Report

(3) Financing receivables at the end of the period that had been endorsed or discounted

by the Company and were not yet due at the balance sheet date

√ Applicable □ Not Applicable

Unit and Currency: RMB

Items

Amountsderecognized atthe end of the

period

Amounts notderecognized atthe end of the

periodBills receivable243,441,635.91Total243,441,635.91

(4) No provision for bad debts has been made for financing receivables during the period.

(5) There were no financing receivables written off during the period.

7. Prepayments

(1) Prepayments are presented by aging:

AgingClosing balanceOpening balance

AmountPercentageAmountPercentageWithin one year2,323,736,109.0697.16%1,313,132,280.6393.67%

–2 years43,056,825.131.80%64,461,541.564.60%

–3 years8,098,753.240.34%9,803,629.270.70%Over 3 years16,669,039.880.70%14,389,100.021.03%Balance of prepayments2,391,560,727.31100.00%1,401,786,551.48100.00%Provision for impairment

of prepayments8,755,327.0710,250,338.22Net prepayments2,382,805,400.241,391,536,213.26

Section X Financial Report

(2) Provision for impairment

Items

Increase for thecurrent period

Decrease for thecurrent periodOpeningbalance

Provision forthe currentperiod

OthermovementReversal

Write-off/othermovement

ClosingbalanceProvision forimpairment10,250,338.22450.001,495,461.158,755,327.07Total10,250,338.22450.001,495,461.158,755,327.07

(3) The total amount of the top 5 in the prepayments at the end of the period was

RMB974,866,936.72, accounting for 40.76% of the book balance of prepayment (amount atthe beginning of the period: RMB214,815,987.16, accounting for 15.32%).

(4) There was no significant prepayment aged over 1 year at the end of the period.

8. Other receivables

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceInterest receivable771,591,076.67748,496,020.24Other receivables2,717,590,461.132,200,739,419.53Total3,489,181,537.802,949,235,439.77Interest receivable

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceWithin one year374,172,658.71473,678,991.02

–2 years316,667,022.35199,801,995.25

–3 years80,000,932.6070,063,170.96Over 3 years750,463.014,951,863.01Total771,591,076.67748,496,020.24

Section X Financial Report

Other receivablesOther receivables are disclosed by aging as follows:

AgingClosing balanceOpening balanceWithin one year2,141,649,731.451,624,778,228.56

–2 years159,124,600.82135,651,949.25

–3 years73,549,505.88228,571,280.41Over 3 years392,681,572.53309,547,157.86Balance of other receivables2,767,005,410.682,298,548,616.08Allowance for bad debts49,414,949.5597,809,196.55Other receivables, net2,717,590,461.132,200,739,419.53Provision of allowance for bad debts based on the general model of expectedcredit lossesAllowance forbad debtsStage 1Stage 2Stage 3

Expected creditlosses for thecoming 12months

Lifetimeexpected creditlosses (notcredit-impaired)

Lifetimeexpected creditlosses (credit-impaired)TotalOpening balance90,287,637.417,521,559.1497,809,196.55Provision for the

current period30,272,592.942,650,774.9132,923,367.85Reversal for the

current period72,403,699.0972,403,699.09Write-off and

others for the

current period8,913,915.768,913,915.76Closing balance39,242,615.5010,172,334.0549,414,949.55

Changes in allowance for bad debt provision of other receivables in the currentperiodItems

Increase for thecurrent period

Decrease for thecurrent periodOpeningbalance

Provision for

the currentperiod

OthermovementReversal

Write-off/othermovement

ClosingbalanceAllowance forbad debts97,809,196.5532,923,367.85 72,403,699.098,913,915.7649,414,949.55

Section X Financial Report

The total amount of the top 5 other receivables at the end of the period wasRMB1,038,763,021.83 (amount at the beginning of the period: RMB671,641,747.67),accounting for 37.54% of the book balance of other receivables (at the beginning ofthe period: 29.22%), and the amount of provision for bad debts was RMB0.00(amount at the beginning of the period: RMB3,359,976.38). Other receivables written off during the period

The amount of other receivables actually written off in the current period wasRMB9,318,523.34 (amount for the corresponding period: RMB22,976,816.47) and nosignificant other receivables were written off for bad debts.

Other receivables mainly included deposits, quality guarantees, employee loans, taxrefunds, and advance payments, etc.

9. Inventories

(1) Category of inventories

ItemsClosing Balance

Book balance

ImpairmentProvision ofinventoriesCarrying valueRaw materials6,898,376,954.19206,532,089.326,691,844,864.87Work in progress222,237,024.07222,237,024.07Finished goods37,596,787,128.821,466,454,790.3836,130,332,338.44Total44,717,401,107.081,672,986,879.7043,044,414,227.38(continued)

ItemsOpening Balance

Book balance

ImpairmentProvision of

inventoriesCarrying valueRaw materials5,873,703,173.53208,533,811.425,665,169,362.11Work in progress47,535,985.8647,535,985.86Finished goods35,084,012,597.821,272,711,329.4633,811,301,268.36Total41,005,251,757.211,481,245,140.8839,524,006,616.33

Section X Financial Report

(2) Impairment provision of inventories

Items

Increase for thecurrent period

Decrease for the

current periodOpeningbalance

Provision forthe currentperiod

OthermovementReversal

Write-off/other

movement

ClosingbalanceRaw materials208,533,811.4278,559,353.3380,561,075.43206,532,089.32Work in progressFinished goods1,272,711,329.46879,931,397.48686,187,936.561,466,454,790.38Total1,481,245,140.88958,490,750.81766,749,011.991,672,986,879.70

(3) Details of impairment provision of inventories are as follows

Items

Specific basis fordetermining netrealizable value

Reason for reversing orwriting off the impairmentprovision of inventoriesRaw materialsMeasurement at the lower of

cost and net realizable value

Production, use or salesFinished goodsMeasurement at the lower of

cost and net realizable value

sales

10. Contract assets

(1) Contract assets

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsClosing BalanceOpening Balance

Book balance

Allowance forbad debtsCarrying ValueBook balance

Allowance for

bad debtsCarrying ValueRelating to constructionservice contract1,079,073,650.4391,404,352.14987,669,298.29327,870,850.3066,931,441.57260,939,408.73Total1,079,073,650.4391,404,352.14987,669,298.29327,870,850.3066,931,441.57260,939,408.73

Section X Financial Report

(2) Classification by method of provision for bad debts

CategoriesClosing balance

Book balanceAllowance for bad debtsAmount

Percentage(%)Amount

Percentageof provision

(%)Carrying valueContract assetssubject to provisionfor bad debts on aseparate basis55,755,776.065.1755,755,776.06100.00Contract assetssubject to provisionfor bad debts on acollective basis1,023,317,874.3794.8335,648,576.083.48987,669,298.29Total1,079,073,650.43100.0091,404,352.148.47987,669,298.29(continued)CategoriesOpening balance

Book balanceAllowance for bad debtsAmount

Percentage(%)Amount

Percentageof provision

(%)Carrying valueContract assets

subject to provisionfor bad debts on aseparate basis58,419,039.5317.8258,419,039.53100.00Contract assetssubject to provisionfor bad debts on acollective basis269,451,810.7782.188,512,402.043.16260,939,408.73Total327,870,850.30100.0066,931,441.5720.41260,939,408.73

Section X Financial Report

(3) Contract assets subject to provision for bad debts on a separate basis at the end

of the period

√ Applicable □ Not Applicable

Unit and Currency: RMBNameClosing balance

Book balance

Allowance forbad debts

Percentage ofprovision (%)Reason for provision7 customers in total55,755,776.0655,755,776.06100.00The obligors were in

significant financialdifficultyTotal55,755,776.0655,755,776.06100.00

(4) Contract assets subject to provision for bad debts on a collective basis at the end

of the period

√ Applicable □ Not Applicable

Unit and Currency: RMBNameClosing balance

Contract assets

Allowance forbad debts

Percentage ofprovision (%)Relating to constructionservice contract1,023,317,874.3735,648,576.083.48Total1,023,317,874.3735,648,576.083.48

(5) Provision for bad debts on contract assets during the current period

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsChanges in amount for the current period

Openingbalance

Provision forthe currentperiod

Recovery orreversal forthe currentperiod

Write-off/cancellation

for thecurrentperiod

Othermovement

ClosingbalanceRelating to

constructionservicecontract66,931,441.5724,472,910.5791,404,352.14Total66,931,441.5724,472,910.5791,404,352.14

Section X Financial Report

11. Non-current assets due within one year

ItemsClosing balanceOpening balanceDebt investments due within one year1,439,758,652.55Total1,439,758,652.55Including: time deposit in finance company334,466,985.88

12. Other current assets

(1) Details

ItemsClosing BalanceOpening Balance

Book balance

ImpairmentProvisionBook balance

ImpairmentProvisionDeductible taxes products3,606,518,536.872,856,635,351.76Short-term financialproducts and deposits491,724,709.591,530,274,566.66Returns cost receivables566,481,435.22281,079,517.50670,702,791.81325,055,055.98Others47,739,469.43101,079,025.92Total4,712,464,151.11281,079,517.505,158,691,736.15325,055,055.98

(2) Impairment Provision

Items

Increase for thecurrent period

Decrease for thecurrent periodOpeningbalance

Provision forthe currentperiod

OthermovementReversal

Write-off/othermovement

ClosingbalanceReturns costreceivables325,055,055.98281,079,517.50325,055,055.98281,079,517.50Total325,055,055.98281,079,517.50325,055,055.98281,079,517.50

(3) Time deposit in finance company was RMB458,892,056.45 at the end of the period.

Section X Financial Report

13. Debt investments

ItemsClosing balanceOpening balance

PrincipalInterestPrincipalInterestTime deposit -long term16,292,500,000.00622,018,509.548,947,500,000.00170,374,328.66Less: Debt investments duewithin one year1,327,500,000.00112,258,652.55Total14,965,000,000.00509,759,856.998,947,500,000.00170,374,328.66Include: time deposit in FinanceCompany12,605,000,000.00448,060,172.047,377,500,000.0086,374,745.33

14. Long-term equity investments

InvesteesIncrease/decrease for the current period

Openingbalance

Investmentincrease

Investment profitrecognized underequity method

Adjustment inothercomprehensiveincome

Otherchanges inequity

Declaration ofcash dividendsor profitsAssociate：

Haier Group Finance Co., Ltd.7,910,945,697.72543,550,675.222,464.93–235,200,000.00Bank of Qingdao Co., Ltd.3,200,132,708.75349,318,326.560.10–76,288,906.55Wolong Electric (Jinan) MotorCo., Ltd.177,662,547.0420,805,084.62Qingdao Hegang New Material

Technology Co., Ltd.329,713,566.3615,832,935.36–3,231,156.20Qingdao Haier SAIF Smart HomeIndustry Investment Center(Limited Partnership)206,764,442.761,746,626.13–17,234,474.03Mitsubishi Heavy Industries Haier

(Qingdao) Air-conditionersCo., Ltd.663,804,966.31148,581,027.30–113,540,000.00Qingdao Haier Carrier Refrigeration

Equipment Co., Ltd.412,107,471.535,470,343.29Qingdao Haier Multimedia Co., Ltd.88,300,000.00Baoshihua Tong Fang Energy

Technology Co., Ltd. (宝石花同

方能源科技有限公司)30,326,966.78805,476.98Zhengzhou Highly Electric Appliance

Co., Ltd. (鄭州海立電器有限

公司)98,000,000.00642,245.31–81,664.30Zhejiang Futeng Fluid Technology

Co., Ltd.77,584,161.99–4,123,612.88Hongtong Environmental Technology

(Guangzhou) Co., Ltd. (宏通環境

技術（廣州）有限公司)4,265,965.733,000,000.00–801,579.47Beijing ASU Tech Co., Ltd.7,919,009.51–7,919,009.51Qingdao Haimu Investment

Management Co., Ltd.2,609,456.5783,298.43

Section X Financial Report

InvesteesIncrease/decrease for the current period

Openingbalance

Investmentincrease

Investment profitrecognized underequity method

Adjustment inothercomprehensiveincome

Otherchanges in

equity

Declaration ofcash dividendsor profitsQingdao Haimu Smart HomeInvestment Partnership (LimitedPartnership)57,989,007.18–1,239,966.39Haineng Wanjia (Shanghai)Technology DevelopmentCo., Ltd.606,029.71Qingdao Guochuang Intelligent HomeAppliance Research InstituteCo., Ltd.38,574,227.532,346,186.01Guangzhou Heying InvestmentPartnership (Limited Partnership)194,416,881.3217,961,049.12–79,757,835.91Qingdao Home Wow Cloud NetworkTechnology Co., Ltd.2,192,669.49–1,108,987.02Bingji (Shanghai) Corporate

Management Co., Ltd.1,056,245,062.8743,668,374.42–4,463,430.14Shangang Luhai International

Logistics (Jinan) Co., Ltd.(山港陸海國際物流（濟南）有限公司)58,446,674.35504,858.85–10,206.14Haier Best Water Technology

Co., Ltd.148,369,638.40Huizhixiangshun Equity Investment

Fund (Qingdao) Partnership

(Limited Partnership)238,175,637.03–24,847,187.69Qingdao Ririshun Huizhi Investment

Co., Ltd.4,083,482.78Qingdao Xiaoshuai Intelligent

Technology Co., Ltd9,578,046.65Qingdao Xinshenghui Technology

Co., Ltd.10,005,915.151,359,312.06Ningbo Beilian Intelligent TechnologyCo., Ltd. (寧波貝立安智能科技有限

公司)3,500,000.00224,499.78Orygin LLC22,296,931.04Konan Electronic Co., Ltd.64,378,952.07343,619.30–5,094,655.48–212,850.00HNR (Private) Company Limited111,225,806.5128,804,194.49500,746.42HPZ LIMITED3,483,576.501,155,070.726,564,610.55Controladora Mabe, S.A. de C.V.5,078,418,321.53649,490,187.5659,857,980.24–5,145,711.23–144,141,910.33Middle East Air conditioning

Company, Limited7,299,166.60–46,571.55137,395.86Total20,306,344,941.1124,461,049.121,809,070,662.22–42,718,145.38–9,619,347.41–589,849,297.11

Section X Financial Report

(continued)

Investees

Increase/decrease for the

current periodOthermovement

The disposal ofthe investment

Closingbalance

ImpairmentProvisionClosingBalanceAssociate：

Haier Group Finance Co., Ltd.8,219,298,837.87Bank of Qingdao Co., Ltd.3,473,162,128.86Wolong Electric (Jinan) Motor Co., Ltd.198,467,631.66Qingdao Hegang New MaterialTechnology Co., Ltd.342,315,345.52Qingdao Haier SAIF Smart HomeIndustry Investment Center (Limited Partnership)191,276,594.86Mitsubishi Heavy Industries Haier(Qingdao) Air-conditioners Co., Ltd.698,845,993.61Qingdao Haier Carrier RefrigerationEquipment Co., Ltd.–417,577,814.82Qingdao Haier Multimedia Co., Ltd.88,300,000.00–88,300,000.00Baoshihua Tong Fang EnergyTechnology Co., Ltd. (寶石花同方能源科技有限公司)31,132,443.76Zhengzhou Highly Electric Appliance

Co., Ltd. (鄭州海立電器有限公司)98,560,581.01Zhejiang Futeng Fluid TechnologyCo., Ltd.73,460,549.11Hongtong Environmental Technology

(Guangzhou) Co., Ltd. (宏通環境

技術（廣州）有限公司)6,464,386.26Beijing ASU Tech Co., Ltd.Qingdao Haimu Investment

Management Co., Ltd.2,692,755.00Qingdao Haimu Smart Home

Investment Partnership

(Limited Partnership)56,749,040.79Haineng Wanjia (Shanghai) Technology

Development Co., Ltd.–606,029.71Qingdao Guochuang Intelligent Home

Appliance Research Institute

Co., Ltd.40,920,413.54Guangzhou Heying Investment

Partnership (Limited Partnership)132,620,094.53

Section X Financial Report

Investees

Increase/decrease for thecurrent periodOthermovement

The disposal ofthe investment

Closingbalance

ImpairmentProvisionClosingBalanceQingdao Home Wow Cloud Network

Technology Co., Ltd.1,083,682.47Bingji (Shanghai) CorporateManagement Co., Ltd.1,095,450,007.15Shangang Luhai International Logistics(Jinan) Co., Ltd. (山港陸海國際物流（濟南）有限公司)58,941,327.06Haier Best Water Technology Co., Ltd.148,369,638.40Huizhixiangshun Equity Investment Fund(Qingdao) Partnership(Limited Partnership)–24,420,938.74188,907,510.60Qingdao Ririshun Huizhi Investment

Co., Ltd.4,083,482.78Qingdao Xiaoshuai Intelligent

Technology Co., Ltd9,578,046.65Qingdao Xinshenghui Technology

Co., Ltd.11,365,227.21Ningbo Beilian Intelligent TechnologyCo., Ltd. (寧波貝立安智能科技有限

公司)3,724,499.78Orygin LLC–22,296,931.04Konan Electronic Co., Ltd.59,415,065.89HNR (Private) Company Limited140,530,747.42HPZ LIMITED11,203,257.77–11,203,257.77Controladora Mabe, S.A. de C.V.5,638,478,867.77Middle East Air conditioning Company,

Limited7,389,990.91–845,634.54Total–464,901,714.3121,032,788,148.24–100,348,892.31

Section X Financial Report

15. Investments in other equity instruments

(1) Details of investments in other equity instruments at the end of the period:

ItemsClosing balanceOpening balanceSINOPEC Fuel Oil Sales Corporation Limited1,674,427,670.511,986,156,165.17Haier COSMO IOT Ecosystem TechnologyCo., Ltd.2,786,307,000.002,817,408,000.00Other1,525,953,992.951,600,130,789.60Total5,986,688,663.466,403,694,954.77

(2) Dividends from investment in other equity instruments during the current period:

Items

Amount for thecurrent periodSINOPEC Fuel Oil Sales Corporation Limited36,674,287.52Other17,758,679.66Total54,432,967.18

Section X Financial Report

16. Investment properties

(1) The changes in investment properties measured at cost this year are as follows:

Items

Houses andbuildings

Land userightsTotalI. Original book value

1. Opening balance93,701,271.1129,370,397.68123,071,668.79

2. Increase for the period

(1) External acquisition

(2) Intangible asset/fixed

assets/construction inprogress transferred in95,572,599.6379,529,678.08175,102,277.71

(3) Increase in business

combinations

3. Decrease for the period

(1) Disposal

(2) Disposal of subsidiaries

(3) Other transferring out26,634,424.8726,634,424.87

4. Change in foreign exchange

rate and others61,273.0461,273.04

5. Closing balance162,700,718.91108,900,075.76271,600,794.67II. Accumulated depreciation andaccumulated amortization

1. Opening balance21,095,536.783,345,051.2424,440,588.02

2. Increase for the period

(1) Provision or amortization6,659,895.881,777,561.568,437,457.44

(2) Intangible asset/fixed

assets/construction inprogress transferred in1,058,132.701,058,132.70

3. Decrease for the period

(1) Disposal

(2) Disposal of subsidiaries

(3) Other transferring out8,516,659.188,516,659.18

4. Change in foreign exchange

rate and others20,015.8620,015.86

5. Closing balance19,258,789.346,180,745.5025,439,534.84III. Provision for impairment

1. Opening balance

2. Increase for the period

(1) Provision

3. Decrease for the period

(1) Disposal

(2) Disposal of subsidiaries

(3) Other transferring out

4. Change in foreign exchange

rate and others

5. Closing balance

IV. Book value

1. Closing book value143,441,929.57102,719,330.26246,161,259.83

2. Opening book value72,605,734.3326,025,346.4498,631,080.77

Section X Financial Report

(2) The depreciation and amortization amount charge for the period is RMB8,437,457.44 (amount

for the corresponding period: RMB4,654,288.22).

(3) The recoverable amount of the investment real estate of the Company at the end of the

period is not less than its book value, so no provision for impairment is made.

17. Fixed assets

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceFixed assets37,518,645,325.0833,425,684,876.90Total37,518,645,325.0833,425,684,876.90

Section X Financial Report

(1) Fixed assets:

Items

Houses and

buildings

Productionequipment

TransportationequipmentI. Original book value:

1. Opening balance20,205,787,759.2135,819,966,814.36244,560,469.60

2. Increase for the period

(1) Acquisition294,716,925.191,580,424,818.3728,049,735.69

(2) Construction in progress

transferred in2,776,425,780.963,082,467,917.5924,215,098.11

(3) Increase in business

combinations595,230,466.94390,716,596.4114,997,168.18

(4) Investment properties

transferred in26,634,424.87

3. Decrease for the period

(1) Disposal or write-off74,548,173.08920,826,843.8724,067,113.20

(2) Disposal of subsidiaries260,017.70

(3) Transfer to hold for sale

4. Change in foreign exchange

rate and others–259,962,091.67–320,672,263.63–7,668,619.44

5. Closing balance23,564,285,092.4239,632,077,039.23279,826,721.24II. Accumulated depreciation

1. Opening balance6,136,755,668.1718,385,208,823.46153,620,804.45

2. Increase for the period

(1) Provision1,019,753,910.403,126,033,296.9926,730,335.25

(2) Investment properties

transferred in8,516,659.18

3. Decrease for the period

(1) Disposal or write-off17,678,488.60725,976,914.4317,773,912.30

(2) Disposal of subsidiaries82,335.70

(3) Transfer to hold for sale

4. Change in foreign exchange

rate and others–69,720,343.7126,909,533.73–3,105,575.45

5. Closing balance7,077,627,405.4420,812,174,739.75159,389,316.25III. Provision for impairment

1. Opening balance27,599,976.4217,285,684.25108,327.40

2. Increase for the period

(1) Provision294,934.435,893,725.09

(2) Investment properties

transferred in

3. Decrease for the period

(1) Disposal or write-off5,468,976.68455.06

(2) Disposal of subsidiaries

(3) Transfer to hold for sale

4. Change in foreign exchange

rate and others–1,554,951.00–85,512.83–2,770.56

5. Closing balance26,339,959.8517,624,919.83105,101.78IV. Book value

1. Closing book value16,460,317,727.1318,802,277,379.65120,332,303.21

2. Opening book value14,041,432,114.6217,417,472,306.6590,831,337.75

Section X Financial Report

(continued)

ItemsOffice furnitureOtherTotalI. Original book value:

1. Opening balance1,529,695,668.353,298,744,338.0861,098,755,049.60

2. Increase for the period

(1) Acquisition131,660,964.4934,441,004.102,069,293,447.84

(2) Construction in progress

transferred in244,772,250.66417,861,057.646,545,742,104.96

(3) Increase in business

combinations39,152,285.665,213,698.991,045,310,216.18

(4) Investment properties

transferred in26,634,424.87

3. Decrease for the period

(1) Disposal or write-off109,473,196.84118,934,495.931,247,849,822.92

(2) Disposal of subsidiary112,851.77269,174.26642,043.73

(3) Transfer to hold for sale

4. Change in foreign exchange

rate and others21,755,734.00–72,296,826.75–638,844,067.49

5. Closing balance1,857,450,854.553,564,759,601.8768,898,399,309.31II. Accumulated depreciation

1. Opening Balance952,113,705.931,997,869,134.8327,625,568,136.84

2. Increase for the period

(1) Provision204,403,412.90324,681,985.254,701,602,940.79

(2) Investment properties

transferred in8,516,659.18

3. Decrease for the period

(1) Disposal or write-off100,232,268.9977,062,189.34938,723,773.66

(2) Disposal of subsidiary88,013.33122,374.63292,723.66

(3) Transfer to hold for sale

4. Change in foreign exchange

rate and others29,303,205.94–46,823,210.15–63,436,389.64

5. Closing Balance1,085,500,042.452,198,543,345.9631,333,234,849.85III. Provision for impairment

1. Opening balance237,957.132,270,090.6647,502,035.86

2. Increase for the period

(1) Provision6,188,659.52

(2) Investment properties

transferred in

3. Decrease for the period

(1) Disposal or write-off11,423.765,480,855.50

(2) Disposal of subsidiary

(3) Transfer to hold for sale

4. Change in foreign exchange

rate and others–17,006.23–30,464.88–1,690,705.50

5. Closing balance209,527.142,239,625.7846,519,134.38IV. Book value

1. Closing book value771,741,284.961,363,976,630.1337,518,645,325.08

2. Opening book value577,344,005.291,298,605,112.5933,425,684,876.90

Section X Financial Report

(2) In the current period, the balance of the construction in progress transferred to the original

value of the fixed assets in a total of RMB6,545,742,104.96 (amount for the correspondingperiod: RMB5,384,593,708.10).

(3) As at 31 December 2024, the net book value of the buildings for which the Company has

not yet obtained certificates of title was RMB396 million (amount at the beginning of theperiod RMB408 million), and the relevant certificates of title were being processed. TheCompany can legally and effectively occupy and operate the above-mentioned buildings forwhich no certificates of title have been obtained.

(4) There was no mortgage secured by the fixed assets mortgage at the end of the period, and

there was no mortgage secured by the fixed assets mortgage at the beginning of theperiod.

18. Construction in progress

√ Applicable □ Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceConstruction in progress5,680,101,282.665,951,859,455.98Total5,680,101,282.665,951,859,455.98

Section X Financial Report

Construction in progress

(1) Construction in progress

√ Applicable □ Not Applicable

Unit and Currency: RMB

ProjectsClosing BalanceOpening Balance

Bookbalance

Impairment

Provision

BookValue

Bookbalance

Impairmentprovision

BookValueQingdao Water EcologyTechnology Project1,066,513,889.601,066,513,889.60529,949,339.20529,949,339.20Qingdao HVAC Project723,210,085.38723,210,085.38530,979,038.43530,979,038.43Qingdao RefrigerationAppliance Project598,424,118.21598,424,118.21914,078,742.21914,078,742.21New Zealand FPA Project404,446,522.30404,446,522.30200,943,871.90200,943,871.90RRS Shanghai Project321,856,664.58321,856,664.58548,389,859.22548,389,859.22America GE Appliances

Project255,332,644.9324,814,364.49230,518,280.44343,482,203.7322,622,250.04320,859,953.69Europe Candy Project195,308,817.72195,308,817.721,092,171,521.231,092,171,521.23Eastern European Project134,970,342.861,890,763.38133,079,579.48148,106,777.45148,106,777.45Others2,007,581,060.80837,735.852,006,743,324.951,667,477,441.251,097,088.601,666,380,352.65Total5,707,644,146.3827,542,863.725,680,101,282.665,975,578,794.6223,719,338.645,951,859,455.98

Section X Financial Report

(2) Details of significant changes of construction in progress for the period

Project name

Openingbalance

Increase for the

current period

Transferto fixed assets

Transferto investment

properties

Change inforeignexchange rate

and others

Closingbalance

Source offundQingdao Water EcologyTechnology Project529,949,339.20549,852,465.9913,287,915.591,066,513,889.60Self-fundingQingdao HVAC Project530,979,038.43196,773,080.184,542,033.23723,210,085.38Self-fundingQingdao RefrigerationAppliance Project914,078,742.211,386,740,227.691,702,394,851.69598,424,118.21Self-fundingNew Zealand FPA

Project200,943,871.90434,764,213.29207,347,988.48–23,913,574.41404,446,522.30Self-fundingRRS Shanghai Project548,389,859.22374,389,605.93600,922,800.57321,856,664.58Self-fundingAmerica GE Appliances

Project343,482,203.73492,531,006.22584,839,651.534,159,086.51255,332,644.93Self-fundingEurope Candy Project1,092,171,521.2358,737,277.161,013,136,719.4657,536,738.79195,308,817.72Self-fundingEastern EuropeanProject148,106,777.45392,076,195.03373,676,828.91–31,535,800.71134,970,342.86Self-fundingOthers1,667,477,441.252,477,460,729.092,045,855,030.4895,572,599.634,070,520.572,007,581,060.80Self-fundingTotal5,975,578,794.626,363,324,800.586,546,003,819.9495,572,599.6310,316,970.755,707,644,146.38

(3) Impairment provision of construction in progress

Project name

OpeningbalanceIncrease for thecurrent period

Transfer tofixed assets

Otherdecrease

Change inforeignexchange rateand others

ClosingbalanceAmerica GE ApplianceProject22,622,250.041,835,282.46356,831.9924,814,364.49Eastern European Project2,204,865.05–314,101.671,890,763.38Lejia IOT Project837,735.85837,735.85Others259,352.75261,714.982,362.23Total23,719,338.644,040,147.51261,714.9845,092.5527,542,863.72

Section X Financial Report

19. Right-of-use assets

Items

Houses and

buildings

Productionequipment

TransportationequipmentI. Original book value:

1. Opening balance6,193,009,150.65299,296,129.76272,631,734.00

2. Increase for the current

period

(1) Acquisition2,262,181,085.1115,588,281.8594,347,135.09

(2) Increase in business

combinations261,329,285.46150,889,823.61

3. Decrease for the current

period

(1) Disposal1,220,501,007.6946,566,316.5958,234,818.39

(2) Disposal of subsidiary

4. Change in foreign

exchange rate and others–81,693,328.675,127,561.64–20,949,675.04

5. Closing balance7,414,325,184.86424,335,480.27287,794,375.66II. Accumulated depreciation

1. Opening balance2,519,692,318.0437,365,343.09133,592,322.52

2. Increase for the current

period

(1) Provision1,226,001,005.3344,251,638.7478,794,289.40

3. Decrease for the current

period

(1) Disposal993,213,137.549,343,956.7556,450,194.27

(2) Disposal of subsidiary

4. Change in foreign

exchange rate and others–24,373,985.0427,534.22–14,663,063.86

5. Closing balance2,728,106,200.7972,300,559.30141,273,353.79III. Impairment provision

1. Opening balance

2. Increase for the current

period

(1) Provision

3. Decrease for the current

period

(1) Disposal

(2) Disposal of subsidiary

4. Change in foreign

exchange rate and others

5. Closing balance

IV. Book Value

1. Closing book balance4,686,218,984.07352,034,920.97146,521,021.87

2. Opening book balance3,673,316,832.61261,930,786.67139,039,411.48

Section X Financial Report

(continued)

ItemsOffice furnitureOtherTotalI. Original book value:

1. Opening balance

415,131,711.53539,051,832.407,719,120,558.34

2. Increase for the current

period

(1) Acquisition

14,723,124.9384,010,782.192,470,850,409.17

(2) Increase in business

combinations412,219,109.07

3. Decrease for the current

period

(1) Disposal

2,664,029.097,028,433.411,334,994,605.17

(2) Disposal of subsidiary

4. Change in foreign

exchange rate andothers–19,770,673.338,807,250.72–108,478,864.68

5. Closing balance

407,420,134.04624,841,431.909,158,716,606.73II. Accumulated depreciation

1. Opening balance

50,526,926.52201,178,372.272,942,355,282.44

2. Increase for the current

period

(1) Provision

43,328,435.62108,569,478.061,500,944,847.15

3. Decrease for the current

period

(1) Disposal

2,664,029.094,541,595.181,066,212,912.83

(2) Disposal of subsidiary

4. Change in foreign

exchange rate andothers–25,289,689.194,059,029.48–60,240,174.39

5. Closing balance

65,901,643.86309,265,284.633,316,847,042.37III. Impairment provision

1. Opening balance

2. Increase for the current

period

(1) Provision

3. Decrease for the current

period

(1) Disposal

(2) Disposal of subsidiary

4. Change in foreign

exchange rate andothers

5. Closing balance

IV. Book Value

1. Closing book balance

341,518,490.18315,576,147.275,841,869,564.36

2. Opening book balance

364,604,785.01337,873,460.134,776,765,275.90

Section X Financial Report

20. Intangible assets

(1) Intangible assets:

Items

ProprietarytechnologyLicencesLand use rightsI. Original book value

1.Opening balance2,212,581,138.654,840,851,378.403,824,946,518.91

2.Increase for the current

period

(1) Purchase22,164,271.12175,600,520.59

(2) Internal research and

development129,337,714.48

(3) Increase in business

combination

3. Decrease for the current

period

(1) Disposal

(2) Disposal of subsidiary

(3) Transfer to Investment

properties79,529,678.08

4. Change in foreign exchange

rate and others–108,080,161.91182,274,481.71–24,266,983.66

5. Closing balance2,233,838,691.225,045,290,131.233,896,750,377.76II. Accumulated amortization

1. Opening balance1,399,798,673.121,199,637,889.22529,430,385.93

2. Increase for the current

period

(1) Provision201,869,853.26185,303,692.9283,274,750.93

(2) Increase in business

combination

3. Decrease for the current

period

(1) Disposal

(2) Disposal of subsidiary

(3) Transfer to Investment

properties1,058,132.70

4. Change in foreign exchange

rate and others–57,156,754.05–5,141,961.25–142,496.95

5. Closing balance1,544,511,772.331,379,799,620.89611,504,507.21III. Impairment provision

1. Opening balance66,630,354.13

2. Increase for the current

period

(1) Provision

(2) Increase in business

combination

3. Decrease for the current

period

(1) Disposal

(2) Disposal of subsidiary

(3) Transfer to Investment

properties

4. Change in foreign

exchange rate and others957,873.20

5. Closing balance67,588,227.33IV. Book Value

1. Closing book balance689,326,918.893,597,902,283.013,285,245,870.55

2. Opening book balance812,782,465.533,574,583,135.053,295,516,132.98

Section X Financial Report

(continued)

Items

Trademarkrights

CustomerRelationship

Applicationmanagementsoftware andothersTotalI. Original book value

1. Opening balance2,747,290,392.78189,756,322.276,043,711,061.9419,859,136,812.95

2. Increase for the current

period

(1) Purchase639,118,792.33836,883,584.04

(2) Internal research and

development434,701,160.56564,038,875.04

(3) Increase in business

combination119,238,108.511,518,023,231.14257,436,729.631,894,698,069.28

3. Decrease for the current

period

(1) Disposal23,706,512.5323,706,512.53

(2) Disposal of subsidiary

(3) Transfer to Investment

properties79,529,678.08

4. Change in foreign exchange

rate and others–95,020,603.90–72,223,993.08–180,828,665.77–298,145,926.61

5. Closing balance2,771,507,897.391,635,555,560.337,170,432,566.1622,753,375,224.09II. Accumulated amortization

1. Opening balance26,594,701.49176,130,128.103,982,949,777.457,314,541,555.31

2. Increase for the current

period

(1) Provision6,588,115.3723,958,467.01901,375,011.621,402,369,891.11

(2) Increase in business

combination

3. Decrease for the current

period

(1) Disposal11,551,728.2711,551,728.27

(2) Disposal of subsidiary

(3) Transfer to Investment

properties1,058,132.70

4. Change in foreign exchange

rate and others1,052,349.81–15,715,839.38271,534.26–76,833,167.56

5. Closing balance34,235,166.67184,372,755.734,873,044,595.068,627,468,417.89III. Impairment provision

1. Opening balance23,643,666.3390,274,020.46

2. Increase for the current

period

(1) Provision

(2) Increase in business

combination

3. Decrease for the current

period

(1) Disposal

(2) Disposal of subsidiary

(3) Transfer to Investment

properties

4. Change in foreign exchange

rate and others957,873.20

5. Closing balance23,643,666.3391,231,893.66IV. Book Value

1. Closing book balance2,737,272,730.721,451,182,804.602,273,744,304.7714,034,674,912.54

2. Opening book balance2,720,695,691.2913,626,194.172,037,117,618.1612,454,321,237.18

Section X Financial Report

(2) At the end of the period, the intangible assets developed through the Company accounted

for the 18.63% of the original value at the end of the period (accounting for 18.67% at thebeginning of the period).

(3) The amount of intangible assets pledged at the end of the period was RMB97,328,830.10.

21. Goodwill

ItemsOpening balance

Increase for thecurrent period

Decrease for thecurrent period

Change in foreign

exchange rate

and othersClosing balanceGEA21,046,390,260.10314,532,245.8721,360,922,505.97Candy2,043,391,984.29–97,146,045.571,946,245,938.72CCR2,213,337,139.51–71,957,837.292,141,379,302.22Others1,392,777,170.07594,772,759.90–52,090,077.821,935,459,852.15Total24,482,559,414.462,808,109,899.4193,338,285.1927,384,007,599.06In the case of a goodwill impairment test, the Company compares the carrying amount of therelevant asset group or asset group combination (including goodwill) with its recoverable amount.If the recoverable amount is less than the book value, corresponding difference will berecognized in profit or loss.The recoverable amount of the asset group (including goodwill) is calculated with discountedestimated future cash flow method based on a management-approved 5–15 years budget. Futurecash flows beyond the budget period are estimated using the estimated perpetual annual growthrate. The perpetual annual growth rate (mainly 1.5%–

2.0%) adopted by the management is

consistent with industry forecast data and does not exceed the long-term average growth rate ofeach product. The management determines the compound income growth rate (mainly 2.58%-

9.39%) and the EBITDA profit margin (mainly 5.80%

–

10.57%) based on historical experience and

market development forecasts, and adopts the pre-tax interest rate that can reflect the specificrisks of the relevant asset group as the discount rate (mainly 10.31%–

12.63%). The management

analyzes the recoverable amount of each asset group based on these assumptions and believesthat there is no need to make provision for goodwill.

Section X Financial Report

22. Long-term amortized expenses

ItemsOpening balance

Increase for the

current period

Amortization forthe current

periodOther decrease

Change inforeignexchange rateand othersClosing balanceRenovation356,810,041.83195,626,454.31347,931,551.46–381,566.11204,123,378.57Improvement on leasedproperty136,201,326.38106,194,740.5741,134,688.19–1,278,207.48199,983,171.28Others253,825,194.6820,795,901.8978,193,660.45–2,663,382.12193,764,054.00Total746,836,562.89322,617,096.77467,259,900.10–4,323,155.71597,870,603.85

23. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets before elimination

ItemsClosing balanceOpening balanceProvision for assets impairment601,791,456.35482,581,464.39Liabilities3,015,752,813.852,736,306,802.32Internal unrealized earnings eliminated due to

combination887,557,367.83707,589,929.59Uncovered losses248,331,903.96231,808,187.84R&D expenses1,523,977,439.361,171,434,607.38Others620,466,885.20324,595,635.91Total6,897,877,866.555,654,316,627.43

(2) Deferred income tax liabilities before elimination

ItemsClosing balanceOpening balanceAsset amortisation4,823,267,766.464,159,827,001.61Remeasurement of fair value of the reaming

equity on the day when the control right

was lost374,198,127.62374,198,127.62Changes in fair value of investments in other

equity instruments301,550,087.64306,253,762.39Others463,352,943.30492,608,929.16Total5,962,368,925.025,332,887,820.78

(3) The deferred income tax assets and the deferred income tax liabilities eliminated at the end

of the period was RMB4,420,671,374.19 (amount at the beginning of the periodRMB3,805,221,835.03).

Section X Financial Report

24. Other non-current assets

ItemsClosing balanceOpening balancePrepayments for equipment and land1,381,218,293.011,747,355,221.82Others376,651,738.53286,631,723.46Total1,757,870,031.542,033,986,945.28

25. Short-term borrowings

√ Applicable □ Not Applicable

Unit and Currency: RMBBorrowing typeClosing balanceOpening balanceBorrowings— secured by pledge46,809,229.31157,672,633.33Borrowings— secured by guarantee466,702,681.40148,149,681.94Borrowings— secured by credit13,270,855,533.2210,589,253,699.59Total13,784,367,443.9310,895,076,014.86

26. Derivative financial liabilities

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceForward foreign exchange contracts71,011,310.01166,573,028.22Forward commodity contracts2,051,976.75Total71,011,310.01168,625,004.97

Section X Financial Report

27. Bills payable

√ Applicable □Not Applicable

Unit and Currency: RMBTypesClosing balanceOpening balanceCommercial acceptance notes8,488,327,100.215,234,670,724.72Bank acceptance notes12,660,807,864.0017,026,320,389.70Total21,149,134,964.2122,260,991,114.42

28. Accounts payables

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceAccounts payables54,587,992,129.5849,917,971,699.31Total54,587,992,129.5849,917,971,699.31The book balance at the end of the period was mainly the unpaid expenditures on material andlabour. There were no significant accounts payables aged over 1 year at the end of the period.

29. Contract liabilities

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceContract liabilities10,852,073,573.077,849,215,139.13Total10,852,073,573.077,849,215,139.13The book balance at the end of the period was mainly due to the advance payment that hasbeen collected and has not yet performed the contractual obligations. There were no significantcontract liabilities aged over 1 year at the end of the period.

Section X Financial Report

30. Payables for staff remuneration

(1) Payables for staff remuneration

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

ClosingbalanceI. Short-termremuneration4,986,109,052.0529,934,191,744.1929,966,490,338.554,953,810,457.69II. Post-employmentbenefits definedcontribution plan27,339,681.981,628,906,301.251,632,315,747.0923,930,236.14III. Termination benefits5,252,101.2798,601,690.6886,086,509.7417,767,282.21IV. Other benefits due

within one year133,007,828.891,052,498.6889,018,375.7445,041,951.83Total5,151,708,664.1931,662,752,234.8031,773,910,971.125,040,549,927.87

(2) Short-term remuneration

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Openingbalance

Increase for the

current period

Decrease for the

current period

ClosingbalanceI. Salaries, bonus,allowances and benefit3,586,755,729.2722,719,374,694.9322,836,192,471.883,469,937,952.32II. Employee welfare348,956,337.471,221,642,475.811,183,120,347.78387,478,465.50III. Social benefit231,309,098.961,981,757,805.491,945,775,912.73267,290,991.72IV. Housing fund10,979,228.75639,434,247.53645,057,275.435,356,200.85V. Labor union fee and

education fund5,767,745.57159,404,243.30151,718,342.0113,453,646.86VI. Short-term

compensated leave266,918,130.07509,070,730.36497,029,070.98278,959,789.45VII. Others535,422,781.962,703,507,546.772,707,596,917.74531,333,410.99Total4,986,109,052.0529,934,191,744.1929,966,490,338.554,953,810,457.69

Section X Financial Report

(3) Defined contribution plan

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

Closingbalance

1. Basic pension

insurance25,696,962.801,509,649,543.101,513,327,496.7722,019,009.13

2. Unemployment

insurance506,470.6042,227,033.3742,348,963.10384,540.87

3. Enterprise annuity

payment1,136,248.5877,029,724.7876,639,287.221,526,686.14Total27,339,681.981,628,906,301.251,632,315,747.0923,930,236.14

(4) Termination benefits

ItemsClosing balanceOpening balanceTermination compensation17,767,282.215,252,101.27Total17,767,282.215,252,101.27

31. Taxes payable

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceValue-added tax961,504,803.99960,396,482.91Corporate income tax2,649,673,418.471,586,255,400.96Individual income tax127,490,100.60185,154,739.72City maintenance and construction tax40,152,216.3528,821,254.16Education surcharge16,711,119.949,117,000.14The electrical and electronic products wastetreatment fund89,138,721.00Other taxes119,550,260.8382,888,556.48Total3,915,081,920.182,941,772,155.37

Section X Financial Report

32. Other payables

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceDividends payable14,082,609.411,880,719.69Other payables21,730,158,214.0918,919,339,506.09Total21,744,240,823.5018,921,220,225.78

(1) Dividends payable

√ Applicable □Not Applicable

ItemsClosing balanceOpening balanceOther public shareholders14,082,609.411,880,719.69Total14,082,609.411,880,719.69

(2) Other payables

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceOther payables21,730,158,214.0918,919,339,506.09Total21,730,158,214.0918,919,339,506.09The closing balance mainly included the incurred but unpaid costs. There were nosignificant other payables aged over 1 year at the end of the period.

Section X Financial Report

33. Non-current liabilities due within one year

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceLong-term borrowings due within one year10,365,227,785.72161,126,226.19Long term payables due within one year50,806,318.7314,105,028.65Lease liabilities due within one year1,351,253,699.031,339,478,470.73Estimated liabilities due within one year2,710,430,236.342,531,873,089.62Other non-current liabilities due within one year2,051,099,765.64Total16,528,817,805.464,046,582,815.19

34. Other current liabilities

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balancePayable refund624,122,847.31639,149,848.05Tax amount to be transferred to output tax1,133,069,475.291,000,494,825.61Others140,912,299.3521,470,896.50Total1,898,104,621.951,661,115,570.16

35. Long-term borrowings

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceBorrowings— secured by pledge108,200,000.00Borrowings— unsecured by credit9,556,874,313.6718,365,302,925.77Total9,665,074,313.6718,365,302,925.77The interest rates of the Company’s long-term borrowings: 1.30%–

5.40%.

Section X Financial Report

36. Lease liabilities

ItemsClosing balanceOpening balanceLease liabilities5,832,149,696.394,769,243,674.54Less: lease liabilities due within one year1,351,253,699.031,339,478,470.73Total4,480,895,997.363,429,765,203.81

37. Long-term payables

ItemsClosing balanceOpening balanceInvestment from CDB development fund36,500,000.0036,500,000.00Others202,526,375.3234,718,451.43Less: long-term payables due within one year50,806,318.7314,105,028.65Total188,220,056.5957,113,422.78Under the Investment Contract of China Development Fund executed by the Company and itssubsidiaries including Qingdao Haier Air Conditioner Gen Corp., Ltd., Qingdao Haier (Jiaozhou)Air-conditioning Co., Limited together with China Development Fund Co. Ltd. in 2015 and 2016,China Development Fund Co. Ltd. invested RMB73 million in Qingdao Haier (Jiaozhou)Air-conditioning Co., Limited. China Development Fund Co. Ltd. obtained an annual return of

1.2% by means of dividends or buyback premium for the above investments. As of the end of

the period, the subsidiaries of the Company made buyback in amount of RMB36.5 million.

38. Long-term employee benefits payable

√ Applicable □Not Applicable

(1) Table of Long-term employee benefits payable

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceI. Post-employment benefits: net liability ofdefined benefit plan1,766,487,772.54364,213,564.08II. Termination benefits541,765,948.00575,644,959.29III. Other long-term benefits100,022,169.77IV. Provision for work-related injury

compensation153,371,556.04145,596,315.81Total2,561,647,446.351,085,454,839.18

Section X Financial Report

(2) Defined benefits plan

Some subsidiaries of the Company have set several defined benefit plans for the qualified staff.Under these plans, the employees are entitled to the retirement benefits agreed in such definedbenefit plans.These plans are exposed to interest rate risks, changes in life expectancy of the beneficiary andother risks.The recent actuarial evaluation of the assets and the present value of defined benefit obligationsunder such plans are determined by using the projected unit credit method.The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of theCompanyHaier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has providedpost-retirement defined benefit plan of health care benefits for the eligible employees.Actuarial assumptions used in defined benefit plans

ItemsRateDiscount rate5.51%Present value of defined benefit obligationsItemsAmountI. Opening balance165,901,942.17II. Business combination not under common controlIII. Defined benefit cost recognized in current profit or loss7,416,499.67

1. Current service cost

2. Past service cost

3. Settlement gains (loss indicated in ‘

–’)

4. Interest cost7,416,499.67IV. Defined benefit cost recognized in other comprehensiveincomes–18,564,643.70

1. Actuarial loss (gain indicated in ‘

–’)–18,564,643.70V. Other changes–16,741,952.57

1. The consideration paid at the time of settlement

2. Benefit paid

–18,903,727.59

3. Exchange differences2,161,775.02VI. Closing balance138,011,845.57

Section X Financial Report

Net liability (net asset) of defined benefit planItemsAmountI. Opening balance165,901,942.17II. Business combination not under common controlIII. Defined benefit cost recognized in current profit or loss7,416,499.67IV. Defined benefit cost recognized in other comprehensive

incomes–18,564,643.70V. Other changes–16,741,952.57VI. Closing balance138,011,845.57The defined benefit plan of Carrier Refrigeration Benelux B.V., a subsidiary of the

CompanyCarrier Refrigeration Benelux B.V., a subsidiary of the Company, has provided definedbenefit plan of pension for the eligible employees.Actuarial assumptions used in defined benefit plansItemsRateDiscount rate3.30%Present value of defined benefit obligations

ItemsAmountI. Opening balanceII. Business combination not under common control1,437,891,737.24III. Defined benefit cost recognized in current profit or loss14,258,213.98

1. Current service cost2,243,752.75

2. Past service cost

3. Settlement gains (loss indicated in ‘

–’)

4. Interest cost12,014,461.23IV. Defined benefit cost recognized in other comprehensiveincomes44,068,147.50

1. Actuarial loss (gain indicated in ‘

–’)44,068,147.50V. Other changes–72,774,628.31

1. The consideration paid at the time of settlement

2. Benefit paid

–10,566,766.81

3. Exchange differences

–62,207,861.50VI. Closing balance1,423,443,470.41

Section X Financial Report

Fair value of plan assetsItemsAmountI. Opening balanceII. Business combination not under common control53,408,532.35III. Defined benefit cost recognized in current profit or loss458,942.14

1. Interest income458,942.14IV. Defined benefit cost recognized in other comprehensiveincomes–1,174,558.30

1. Return on plan assets (except those included in

net interests)–1,174,558.30

2. Changes in impact of asset cap (except those included in net

interests)V. Other changes–2,122,518.77

1. Employer contributions584,288.23

2. Benefits paid out

–455,085.21

3. Exchange differences

–2,251,721.79VI. Closing balance50,570,397.42Net liability (net asset) of defined benefit planItemsAmountI. Opening balanceII. Business combination not under common control1,384,483,204.89III. Defined benefit cost recognized in current profit or loss13,799,271.84IV. Defined benefit cost recognized in other comprehensive

income45,242,705.80V. Other changes–70,652,109.54VI. Closing balance1,372,873,072.99Classification of the balance of defined benefit planItemsClosing balanceOpening balanceShort-term Benefit37,042,017.0733,170,713.47Long-term Benefit1,766,487,772.54364,213,564.08Total1,803,529,789.61397,384,277.55

Section X Financial Report

39. Estimated liabilities

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceActive litigation52,893,571.3132,259,609.59Others353,215,103.35315,280,800.19Projection of warranty expenses and installationfees1,980,153,078.261,587,473,632.46Total2,386,261,752.921,935,014,042.24Significant assumption and estimation relating to estimation of warranty expenses and installationfees: the Company reasonably estimated the warranty expenses and installation fees rate basedon its actual expenses on the warranty expenses and installation fees as well as sales data in thepast. The Company estimated the warranty expenses and installation fees that are likely to beincurred in the future according to its policies on the warranty expenses and installation fees, aswell as the actual sales data.

40. Deferred income

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

ClosingbalanceGovernment grants1,237,427,710.34153,465,569.55159,280,843.801,231,612,436.09Total1,237,427,710.34153,465,569.55159,280,843.801,231,612,436.09

Section X Financial Report

41. Share capital

Share category

Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

ClosingbalanceI. Restricted shares

1. State-owned shares

2. Shares held by domestic non-

state-owned legal entities

3. Shares held by domestic

individuals

4. Shares held by offshore

non-state-owned legal entitiesII. Non-restricted shares9,438,114,89355,201,5599,382,913,334

1. Ordinary shares in RMB6,308,552,65454,051,5596,254,501,095

2. Domestic listed foreign Shares

3. Offshore listed foreign Shares3,129,562,2391,150,0003,128,412,239

4. Others

III. Total shares9,438,114,89355,201,5599,382,913,334

42. Capital reserve

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

ClosingbalanceCapital premium (Share premium)19,669,458,656.94191,268,662.291,488,425,582.1418,372,301,737.09Others capital reserve1,845,086,227.60374,067,374.04476,096,416.801,743,057,184.84Total21,514,544,884.54565,336,036.331,964,521,998.9420,115,358,921.93The main reasons for the change in capital premium: the cancellation of treasury stock for thecurrent period resulted in the decrease in capital premium of RMB1,426,420,139.11; sharepremium in the current period was offset by share-based payment exercise ofRMB31,800,787.20.The main reasons for the change in other capital reserves: the amortized share-based paymentfor the current period included in other capital reserves of RMB374,067,374.04 and other capitalreserves were offset by share-based payment exercise of RMB476,096,416.80.

Section X Financial Report

43. Treasury stock

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

ClosingbalanceTreasury stock5,034,065,107.42559,346,231.122,082,682,562.103,510,728,776.44Total5,034,065,107.42559,346,231.122,082,682,562.103,510,728,776.44The main reasons for the change in treasury stock: the repurchase of treasury stock for thecurrent period of RMB559,346,231.12, the cancellation for the current period ofRMB1,520,151,861.54, share-based payment exercise for the current period ofRMB562,530,700.56.

44. Other comprehensive income

Amounts for the current periodItems

Openingbalance

Amount beforecurrent income

taxDeduction ofimpact onincome tax

Attributable tothe parentcompany after

taxAttributable tominorityshareholdersafter taxOthers

Closingbalancea–345,568,801.14–42,718,145.3826,151,255.88–16,560,814.12–6,075.38–609,008.33–362,738,623.59b–94,630,058.56–3,939,340.54–22,601,631.95–27,453,055.10912,082.61–122,083,113.66c929,575,208.94–846,503,547.37–846,517,592.7014,045.3383,057,616.24d1,332,769,480.78–323,858,760.4440,768,458.68–284,097,986.091,007,684.33713,274.201,049,384,768.89e147,219,232.63959,425.68–1,970,970.73–1,011,523.04–

22.01146,207,709.59

Total1,969,365,062.65–1,216,060,368.0542,347,111.88–1,175,640,971.051,927,714.88104,265.87793,828,357.47Notes:

(1) Item a, b, and c are other comprehensive income that will be reclassified to profit or loss, the details are as follows:

Item a represents other comprehensive income classified to profit and loss under the equity method.Item b represents cash flow hedge reserves (the effective part of the cash flow hedge profit and loss).Item c represents exchange differences on translation of financial statements denominated in foreign currencies.

(2) Item d and e are other comprehensive income that cannot be reclassified into profit or loss. Details are as follows:

Item d represents the change in fair value of investments in other equity instruments.Item e represents changes arising from remeasurement of net liabilities or assets of defined benefit plans.

Section X Financial Report

45. Surplus reserve

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

ClosingbalanceStatutory surplus reserve4,794,681,742.21454,264,348.655,248,946,090.86Discretionary surplus reserve26,042,290.4826,042,290.48Reserve fund11,322,880.6411,322,880.64Enterprise expansion fund10,291,630.4710,291,630.47Total4,842,338,543.80454,264,348.655,296,602,892.45Pursuant to the Company Law of the People’s Republic of China and the Articles of Association,the Company is required to appropriate the statutory surplus reserve at 10% of its net profit ofthe year. When the accumulated statutory surplus reserve reaches 50% of the registered capital,no further withdrawal will be made.

46. Undistributed profits

√ Applicable □Not Applicable

ItemsAmountsUndistributed profits at the end of previous year68,535,686,494.60Change in accounting policyCombination under common controlUndistributed profits at the beginning of the year68,535,686,494.60Add: net profit attributable to owners of the parent company18,741,120,122.93Other transfer in–90,008,997.53Adjustment due to implementation of enterprise accounting standardProfit available for appropriation for the year87,186,797,620.00Less: appropriation of statutory surplus reserve454,264,348.65Dividend payable for ordinary shares7,444,389,001.59Undistributed profits at the end of period79,288,144,269.76

Section X Financial Report

47. Operating income and operating cost

(1) Operating income

Items

Amount for the

current period

Amount for theprevious periodPrimary business284,582,637,563.47273,069,452,908.83Other Business1,398,587,640.461,135,067,939.14Total285,981,225,203.93274,204,520,847.97

(2) Primary business income and primary business cost by product category

CategoriesAmount for the current periodAmount for the previous period

Primarybusiness income

Primarybusiness cost

Primarybusiness income

Primarybusiness costAir conditioner49,055,935,438.0937,346,454,702.3845,659,954,167.6734,882,379,289.82Refrigerator83,240,760,926.0357,624,075,173.2981,640,696,197.1856,904,460,178.81Kitchen appliance41,111,204,777.7829,051,095,842.5041,588,961,234.8329,538,184,860.47Water appliance15,750,526,855.249,195,963,076.4615,010,842,426.778,924,840,941.25Washing machine63,028,390,279.4643,252,584,256.7761,272,315,753.2842,396,315,265.09Equipment productand integratedchannel services32,395,819,286.8729,608,221,683.2827,896,683,129.1025,795,447,427.14Total284,582,637,563.47206,078,394,734.68273,069,452,908.83198,441,627,962.58

48. Taxes and surcharge

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for the

current period

Amount for theprevious periodCity construction tax418,078,929.97399,203,679.22Property tax153,245,071.02125,826,259.04Land use tax51,642,926.8444,917,047.99Stamp duty356,016,637.51311,927,175.36Education surcharge240,177,292.25215,622,114.23Others56,879,972.6854,538,547.37Total1,276,040,830.271,152,034,823.21

Section X Financial Report

49. Selling expenses

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for the

current period

Amount for theprevious periodSelling expenses33,585,903,561.6032,726,735,817.73Total33,585,903,561.6032,726,735,817.73The Company’s selling expenses are mainly salary expenses, transportation and storage fees andadvertising and promotion fees.

50. Administrative expenses

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent period

Amount for theprevious periodAdministrative expenses12,110,235,915.3511,874,420,922.31Total12,110,235,915.3511,874,420,922.31The Company’s administrative expenses are mainly salary expenses, office fees, depreciation andamortization of assets fees, etc.

51. R&D expenses

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent period

Amount for theprevious periodR&D expenses10,740,112,353.4710,380,219,803.05Total10,740,112,353.4710,380,219,803.05The Company’s R&D expenses are mainly salary expenses, R&D equipment expenses, inspectionand testing fees.

Section X Financial Report

52. Financial expenses

Items

Amount for thecurrent period

Amount for theprevious periodInterest expense2,726,955,697.102,165,467,567.74Less: interest income1,897,955,730.261,553,163,297.95Less: cash discount122,627,794.57123,733,614.83Exchange gains and losses (gains are representedby ‘–’)120,037,587.73–132,600,813.70Others146,155,367.34149,688,686.95Total972,565,127.34505,658,528.21Interest expenditure in lease liabilities for the current period was RMB222,325,367.55 (amount forthe corresponding period: RMB168,403,595.66).

53. Other income

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent period

Amount for theprevious periodGovernment grants related to revenue1,575,833,075.281,591,337,200.11Government grants related to assets128,449,305.44124,832,318.37Total1,704,282,380.721,716,169,518.48

54. Investment income

Items

Amount for thecurrent period

Amount for theprevious periodLong-term equity investments income calculatedby the equity method1,816,477,749.421,575,371,896.37Investment income from disposal of long-term

equity investments–26,833,481.4513,984,506.23Investment income from other equity instrument

investments during holding period54,432,967.1858,671,224.25Income from wealth management products69,518,481.3649,612,602.11Investment income from disposal of financial

assets measured at fair value with changes

included in current profit and loss–1,038,171.651,075,642.32Total1,912,557,544.861,698,715,871.28

Section X Financial Report

55. Gains on changes in fair value

√ Applicable □Not Applicable

Unit and Currency: RMBSource of gains on change in fair value

Amount for the

current period

Amount for theprevious periodChange in fair value of equity investments–713,816.05–21,952,224.65Change in fair value of fund investments41,204,390.7038,833,850.27Others6,639,750.0213,417.63Total47,130,324.6716,895,043.25

56. Credit impairment loss

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent period

Amount for theprevious periodBad debts losses on bills receivable4,677,899.44–1,656,250.86Bad debts losses on accounts receivable–310,475,808.71–294,241,324.72Bad debts losses on other receivable39,480,331.2442,496,202.10Total–266,317,578.03–253,401,373.48

57. Impairment loss on assets

Items

Amount for thecurrent period

Amount for theprevious periodImpairment losses on inventory–958,490,750.81–1,091,405,923.13Impairment losses on other current assets–281,079,517.50–325,055,055.98Impairment losses on fixed assets–6,188,659.52–2,840,089.52Impairment losses on construction in progress–4,040,147.51–22,513,947.38Impairment losses on intangible assets–66,381,834.15Impairment losses on contract assets–24,472,910.573,043,824.14Impairment losses on long-term equity investment–11,203,257.77Impairment losses on prepayments1,495,011.15–7,060,985.19Total–1,283,980,232.53–1,512,214,011.21

Section X Financial Report

58. Gains on disposal of assets

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent period

Amount for theprevious periodGains on disposal of non-current assets15,695,650.1526,798,466.20Losses on disposal of non-current assets–26,954,262.79–38,952,222.33Total–11,258,612.64–12,153,756.13

59. Non-operating income

Items

Amount for the

current period

Amount for theprevious periodGains on disposal of non-current assets1,552,662.432,906,374.71Quality claims and fines43,621,777.2936,865,779.80Others138,764,094.9494,698,700.49Total183,938,534.66134,470,855.00

60. Non-operating expenses

Items

Amount for thecurrent period

Amount for theprevious periodLosses on disposal of non-current assets40,496,431.3299,173,963.87Others322,365,734.92204,644,547.60Total362,862,166.24303,818,511.47

Section X Financial Report

61. Income tax expenses

(1) Statement of income tax expenses

Items

Amount for thecurrent period

Amount for theprevious periodCurrent income tax expense4,026,894,346.663,690,537,340.62Deferred income tax expense–869,714,419.89–567,374,121.87Total3,157,179,926.773,123,163,218.75

(2) Reconciliation between accounting profit and income tax expenses for the current

periodItemsAmountsTotal accounting profit22,732,792,428.45Income tax expense calculated pursuant to statutory tax rate5,683,198,107.11Impact from different tax rates applicable to subsidiaries–1,709,482,004.03Impact from adjustment to income tax in prior periods–273,808,394.43Impact from non-taxable income–527,013,528.95Impact from non-deductible cost, expense and loss377,481,185.73Impact from deductible provisional differences or deductible losses

of unrecognized deferred tax–35,418,726.98Others–357,776,711.68Total income tax expense3,157,179,926.77

62. Other comprehensive income

√ Applicable □Not Applicable

Please refer to Note VII.44 for details.

Section X Financial Report

63. Cash flow statement items

(1) Cash related to operating activities

Other cash received from operating activities

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent periodDeposits and securities294,652,374.61Government grants917,797,196.52Non-operating income excluding government grants47,129,201.90Interest income1,307,972,766.83Others221,683,233.38Total2,789,234,773.24Other cash paid to operating activities

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for the

current periodCash paid on selling and after-sales expenses17,881,597,949.16Cash paid on administrative and R&D expenses6,986,725,503.43Cash paid on financial expenses206,102,472.09Non-operating expenses39,324,844.34Deposits and securities137,970,875.95Others203,731,535.28Total25,455,453,180.25

Section X Financial Report

(2) Cash related to investing activities

Other cash received from significant investing activities

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for the

current periodRedemption of wealth management products17,114,167,465.24Total17,114,167,465.24Other cash paid to significant investing activities

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent periodPurchase of wealth management products23,611,939,894.71Total23,611,939,894.71Other cash paid to other investing activities

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent periodDisposal of net cash outflows from subsidiaries178,409.27Total178,409.27

Section X Financial Report

(3) Cash related to financing activities

Other cash paid to financing activities

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent periodRepurchase of shares559,346,231.13Cash paid to lease1,691,063,359.83Purchase of minority interests in subsidiaries16,281,293.00Others14,160,317.63Total2,280,851,201.59

Changes of various liabilities arising from financing activities

√ Applicable □Not Applicable

Unit and Currency: RMB

ItemsIncrease for the current periodDecrease for the current period

Openingbalance

Cashchange

Non-cashchange

Cashchange

Non-cashchange

ClosingbalanceShort-termborrowings10,895,076,014.8611,800,552,061.24459,704,053.549,294,148,245.7276,816,439.9913,784,367,443.93Long-termborrowings(includinglong-termborrowings duewithin one year)18,526,429,151.961,848,200,000.00 274,839,622.9569,487,429.6220,030,302,099.39Lease liabilities(including leaseliabilities duewithin one year)4,769,243,674.54 3,086,487,071.131,691,063,359.83332,517,689.455,832,149,696.39Total34,190,748,841.3613,648,752,061.243,546,191,124.6711,260,051,228.50478,821,559.0639,646,819,239.71

Section X Financial Report

64. Supplementary information to the cash flow statement

(1) Supplementary information to the cash flow statement

√ Applicable □Not Applicable

Unit and Currency: RMBSupplementary information

Amount for thecurrent period

Amount for theprevious period

1. Net profit adjusted to cash flow of operating activities:

Net profit19,575,612,501.6817,088,480,573.96Add: impairment provision for assets1,283,980,232.531,512,214,011.21Loss from credit impairment266,317,578.03253,401,373.48Depreciation of fixed assets, depletion of oil

and gas assets, depreciation of biologicalassets for production4,710,040,398.234,231,698,278.31Amortization of right-of-use assets1,500,944,847.151,598,757,800.78Amortization of intangible assets1,402,369,891.111,296,398,118.40Amortization of long-term prepaid expenses467,259,900.10511,293,684.15Loss from disposal of fixed assets, intangible

assets and other long-term assets (gainrepresented by “—”)50,202,381.53108,421,345.29Loss from retirement of fixed assets

(gain represented by “—”)Loss from change of fair value (gain

represented by “—”)–47,130,324.67–16,895,043.25Financial expenses (gain represented by “—”)2,279,772,377.831,865,565,572.80Loss from investments (gain represented by“—”)–1,912,557,544.86–1,698,715,871.28Decrease in deferred income tax assets

(increase represented by “—”)–790,601,936.80–674,065,174.28Increase of deferred income tax liabilities

(decrease represented by “—”)–79,112,483.06106,691,052.42Decrease in inventories (increase representedby “—”)–3,607,137,396.14982,047,266.87Decrease of operational account receivables(increase represented by “—”)–7,752,774,676.94–4,246,507,152.58Increase of operational account payables(decrease represented by “—”)8,827,644,066.452,917,578,563.52Others368,252,099.79699,416,168.56Net cash flow generated from operational

activities26,543,081,911.9626,535,780,568.36

2. Significant investment and financing activities not involving cash inflows and

outflows:

Capital transferred from debtsConvertible corporate bonds due within oneyearFixed assets under finance lease

3. Net changes of cash and cash equivalents:

Cash balance at the end of the period54,980,883,247.0556,683,006,209.32Less: cash balance at the beginning of theperiod56,683,006,209.3255,157,265,320.97Add: cash equivalents balance at the end of

the periodLess: cash equivalents balance at the

beginning of the periodNet increase of cash and cash equivalents–1,702,122,962.271,525,740,888.35

Section X Financial Report

(2) Net cash paid on acquisition of subsidiaries for the current period

√ Applicable □Not Applicable

Unit and Currency: RMB

AmountCash or cash equivalents paid for business combination occurredfor the current period5,366,396,025.08Including: Carrier Refrigeration Benelux B.V.4,394,931,642.96Carrier commercial refrigeration(India)234,577,785.33Kwikot (Haier) SA (Pty) Ltd736,886,596.79Less: Cash or cash equivalents held by subsidiaries on theacquisition date957,059,733.50Including: Carrier Refrigeration Benelux B.V.888,103,310.17Carrier commercial refrigeration(India)Kwikot (Haier) SA (Pty) Ltd68,956,423.33Net cash paid on acquisition of subsidiaries4,409,336,291.58

(3) Net cash received from acquisition of subsidiaries and other operating units for the

current period

AmountCash or cash equivalents paid for business combination occurred

for the current periodIncluding: Shenzhen Yunshang Yilian Technology Co., Ltd. (深圳云裳衣聯科技有限公司)Chengdu Yunshang Yilian Technology Co., Ltd. (成都云裳衣聯科技有限公司)Chongqing Yunshang Haihong Yilian Technology Co., Ltd. (重庆云

裳海宏衣聯科技有限公司)Less: Cash or cash equivalents held by subsidiaries on the

acquisition date178,409.27Including: Shenzhen Yunshang Yilian Technology Co., Ltd. (深圳

云裳衣聯科技有限公司)134,298.69Chengdu Yunshang Yilian Technology Co., Ltd. (成都云裳衣聯科

技有限公司)41,115.75Chongqing Yunshang Haihong Yilian Technology Co., Ltd. (重庆云

裳海宏衣聯科技有限公司)2,994.83Net cash paid on acquisition of subsidiaries–178,409.27

Section X Financial Report

(4) Composition of cash and cash equivalents

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing balanceOpening balanceI. Cash54,980,883,247.0556,683,006,209.32Including: Cash on hand560,953.91541,712.70Bank deposits always available for payment54,116,504,817.0556,245,207,377.36Other monetary funds always available forpayment863,817,476.09437,257,119.26II. Cash equivalentsIncluding: bond investments due within threemonthsIII. Closing balance of cash and cashequivalents54,980,883,247.0556,683,006,209.32Including: restricted cash and cashequivalents used by the parent companyor subsidiaries of the Group

(5) Monetary funds that are not cash and cash equivalents

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for the

current period

Amount for theprevious periodReasonsDeposit532,703,901.59484,415,621.35Poor marketability, not

readily realizable, oravailable for paymentRestricted specialaccount deposit

36,317,505.4754,996,888.29Others33,937,935.5933,543,487.28Total602,959,342.65572,955,996.92/

Section X Financial Report

(6) Information about Supplier Financing Arrangements

1) Terms and conditions of supplier financing arrangements

① Accounts payable financing factoring: The subsidiaries of the Company engage

in accounts payable financing with banks, whereby the subsidiaries of theCompany apply to the banks for the banks to directly pay the supplier on thedue date of the accounts payable. Upon the expiration of the agreed financingperiod (generally 6–12 months), the subsidiaries of the Company will repay thecorresponding amount to the banks. When the banks make payment to thesupplier on behalf of the subsidiaries, the subsidiaries of the Company cease torecognize the related accounts payable and simultaneously incur a liability to thebanks.

② Accounts payable supply chain factoring: The subsidiaries of the Company

conduct supply chain financing business. According to the relevantarrangements, participating suppliers can choose to receive payment forinvoices under this arrangement in advance from financial institutions withoutbeing influenced by the Company. Regardless of whether the supplier opts forearly payment, the subsidiaries of the Company will repay the full invoiceamount on the agreed payment due date and are not responsible for payinginterest or other fees to the financial institutions. Since this arrangement doesnot extend the original payment period, the subsidiaries’ debts to the financialinstitutions are classified as accounts payable.

2) Information of financial liabilities related to supplier financing arrangements

ItemClosing balanceShort-term borrowings98,355,349.41Including: Amounts received by suppliers from financing

provider98,355,349.41Accounts payable8,502,906,169.43Including: Amounts received by suppliers from financing

provider4,674,536,705.90The payment period for comparable accounts payable not under supplier financingarrangements ranges from 30 to 270 days.

Section X Financial Report

65. Monetary items in foreign currency

ItemsClosing balanceOpening balance

Balance inforeign currencyExchange rateBalance in RMB

Balance inforeign currencyExchange rateBalance in RMBMonetary fundsUSD2,212,325,253.417.188415,903,078,851.591,706,547,575.507.082712,086,964,513.02EUR171,400,140.177.52571,289,906,034.89175,320,608.197.85921,377,879,723.86JPY4,381,349,907.640.046233202,562,950.284,478,977,012.530.050213224,902,872.73HKD539,613,158.970.9260499,681,785.21353,808,079.170.9062320,620,881.34Others 3,453,401,844.51 2,377,241,597.06Subtotal 21,348,631,466.48 16,387,609,588.01Accounts receivablesUSD1,463,282,401.937.188410,518,659,218.061,139,193,238.377.08278,068,563,949.37EUR637,522,791.087.52574,797,805,268.81480,196,918.947.85923,773,963,625.34JPY4,138,295,194.990.046233191,325,801.754,914,686,701.050.050213246,781,163.32Others 4,807,501,407.14 4,873,677,549.96Subtotal 20,315,291,695.76 16,962,986,287.99Short-term borrowingsUSD774,590,743.797.18845,568,068,102.65486,876,813.467.08273,448,402,406.69EUR129,161,874.077.5257972,033,515.70250,039,963.327.85921,965,114,079.70JPY1,952,854,108.540.04623390,286,304.002,017,059,526.420.050213101,282,610.00HKD2,530,000,000.000.92602,342,780,000.002,600,000,000.000.90622,356,120,000.00Others 1,734,146,904.27 1,323,813,159.10Subtotal10,707,314,826.62 9,194,732,255.49Accounts payablesUSD2,204,807,610.207.188415,849,039,025.171,909,489,893.667.082713,524,344,069.80EUR799,305,156.447.52576,015,330,815.80621,708,354.097.85924,886,130,296.44JPY4,562,773,337.010.046233210,950,699.696,641,786,186.840.050213333,504,009.80NZD144,506,699.364.0955591,827,187.21146,250,125.134.4991657,993,937.97Others 3,963,471,194.55 3,451,938,860.63Subtotal 26,630,618,922.42 22,853,911,174.64Non-current liabilities due

within one yearUSD500,000,000.007.18843,594,200,000.00138,292,003.547.0827979,480,773.48EUR573,987,092.007.52574,319,654,658.2697,148,817.207.8592763,511,984.14JPY1,027,109,699.080.05021351,574,259.32RUB685,662,519.930.080355,058,700.35Others 941,786,481.62 361,870,186.58Subtotal8,855,641,139.88 2,211,495,903.87Long-term borrowingsUSD660,000,000.007.18844,744,344,000.001,160,000,000.007.08278,215,932,000.00EUR597,689,081.077.85924,697,358,025.92Others 1,034,286,451.77Subtotal4,744,344,000.00 13,947,576,477.69

Section X Financial Report

66. Leases

(1) As lessee

√ Applicable □Not Applicable

Variable lease payments not included in the measurement of lease liabilities

√ Applicable □Not Applicable

RMB86,254,726.09Lease expenses of short-term leases or leases of low-value assets which are subject tosimplified treatment

√ Applicable □Not Applicable

RMB977,684,758.78Total cash outflow for leases 2,755,002,844.70 (Unit and Currency: RMB)The leased assets leased by the Company include housing and buildings, productionequipment, transportation equipment, office equipment and others used in the course ofoperations. Some of the leases contain renewal options and termination options.

(2) As lessor

a. Lease incomes from operating leases as lessor for the current period:

RMB10,177,349.55, including incomes related to variable lease payments not includedin lease receipts: RMB0.00.b. Undiscounted lease receipts for the next five years:

Lease receipts

Undiscounted leasereceipts per yearClosing amountOpening amountWithin 1 year11,744,103.004,582,971.432 to 5 years41,375,812.002,933,400.00Over 5 years132,155,812.00Total185,275,727.007,516,371.43The leased assets leased out by the Company are mainly housing, buildings and landuse rights. For details of changes of the leased assets, please refer to Note VII.16.

Section X Financial Report

VIII. RESEARCH AND DEVELOPMENT EXPENDITURE

1. By the nature of expenses

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent period

Amount for theprevious periodIndependent research and development expenses10,388,092,175.059,885,960,837.98Outsourcing research and development expenses900,352,096.861,094,490,715.76Total11,288,444,271.9110,980,451,553.74Including: expensed research and developmentexpenditure10,733,830,471.5310,378,491,009.51Capitalized research and development expenditure554,613,800.38601,960,544.23

2. Development expenditure on research and development projects eligible for

capitalizationItemsDecrease for the current period

Opening balance

Increase for the

current period

Recognized asintangible asset

Included incurrent profitand loss

Change inforeign exchangerate and othersClosing balanceHome Appliance IntelligentInteraction Project97,519,232.7265,524,861.56163,044,094.28Whole House IntelligentEnergy Saving Project136,688,734.94136,688,734.94Living Environment IntelligentDetection PROGRAM28,814,783.2528,814,783.25OWNERSHIP EXPERIENCEPROGRAM48,780,235.2045,381,001.9743,255,166.37750,249.1351,656,319.9391ABD.ERP IT PROGRAM3,340,845.5635,793,264.6611,431,948.55305,043.1828,007,204.85Others116,849,921.62242,411,154.00209,618,930.906,281,881.9415,429,022.11158,789,284.89Total266,490,235.10554,613,800.38564,038,875.046,281,881.9416,484,314.42267,267,592.92

Section X Financial Report

IX. CHANGES OF CONSOLIDATION SCOPE

1. Business combination not under common control

√ Applicable □Not Applicable

(1) Business combination not under common control occurring in the current period

√ Applicable □Not Applicable

Unit and Currency: RMB

Name of the acquiree

Acquisition dateof equity interest

Acquisition cost ofequity interest

Theproportion ofequityinterestacquired(%)Acquisitionmethod ofequityinterest

Combinationdate

Basis for determiningthe combination

Revenue of theacquiree fromcombination dateto the end of the

period

Net profit of the

acquiree fromcombination dateto the end of the

periodCarrier RefrigerationBeneluxB.V.October 2024EUR627,814,425.99100AcquisitionOctober 2024Equity deliveryEUR263,306,053.00EUR–13,727,190.49Carrier commercialrefrigeration (India)October 2024INR2,758,296,970.00100AcquisitionOctober 2024

The relevant rights and

obligations of thetarget assets havebeen vested in theCompanyINR623,298,762.01INR40,815,851.97Kwikot (Haier) SA (Pty)

LtdDecember 2024ZAR1,850,254,429.87100AcquisitionDecember 2024Equity deliveryZAR123,215,699.26ZAR10,632,788.92

(2) Combination cost and goodwill

Items

CarrierRefrigerationBenelux B.V.

(EUR)

Carriercommercialrefrigeration(India) (INR)

Kwikot (Haier) SA

(Pty) Ltd (ZAR)—Cash577,144,563.242,758,296,970.001,850,254,429.87—Long-term equity investments50,669,862.75Total combination cost627,814,425.992,758,296,970.001,850,254,429.87Less: acquired identifiableShare of fair value of net assets344,855,883.14270,835,968.03878,979,223.35Amount of goodwill282,958,542.852,487,461,001.97971,275,206.52

Section X Financial Report

(3) Identifiable assets and liabilities of the acquiree on the combination date

ItemsCarrier Refrigeration Benelux B.V.

Fair value (EUR)Book value (EUR)Monetary funds113,470,978.85113,470,978.85Accounts receivables205,875,299.04205,875,299.04Inventories87,108,006.8187,108,006.81Contact assets120,559,931.74120,559,931.74Fixed assets102,643,181.7354,846,661.54Construction in progress5,978,303.785,978,303.78Right-of-use assets52,668,316.0352,668,316.03Intangible assets208,974,071.973.29Deferred income tax assets54,687,376.3054,687,376.30Other non-current assets3,894,798.343,894,798.34Short-term borrowings–854,234.65–854,234.65Accounts payables–224,646,695.69–224,646,695.69Payables for staff’s remuneration–41,366,863.85–41,366,863.85Taxes payable–12,411,327.69–12,411,327.69Other current liabilities–9,006,090.64–9,006,090.64Lease liabilities–40,569,314.40–40,569,314.40Long-term payables for remuneration–183,468,876.41–183,468,876.41Deferred income tax liabilities–72,993,393.09–15,468,713.95Other long-term liabilities–25,687,585.03–25,687,585.03Net assets344,855,883.14145,609,973.41Less: minority interestsNet assets acquired344,855,883.14145,609,973.41

Section X Financial Report

Items

Carrier commercial refrigeration

(India)Fair value(INR)Book value(INR)Accounts receivables446,516,162.52446,516,162.52Inventories210,940,217.05210,940,217.05Fixed assets5,072,112.295,072,112.29Contract assets10,588,032.8710,588,032.87Intangible assets130,000,000.00Accounts payables–447,925,005.43–447,925,005.43Payables for staff’s remuneration–9,994,580.11–9,994,580.11Long-term payables for remuneration–45,787,776.00–45,787,776.00Estimated liabilities–28,573,195.16–28,573,195.16Net assets270,835,968.03140,835,968.03Less: minority interestsNet assets acquired270,835,968.03140,835,968.03ItemsKwikot (Haier) SA (Pty) Ltd

Fair value(ZAR)Book value(ZAR)Monetary funds173,344,452.83173,344,452.83Accounts receivables173,073,152.86173,073,152.86Inventories440,417,572.58440,417,572.58Fixed assets607,159,086.45314,902,670.67Construction in progress69,510,672.3069,510,672.30Intangible assets642,000,000.00Deferred income tax assets51,807,644.9351,807,644.93Accounts payables–136,918,970.45–136,918,970.45Payables for staff’s remuneration–56,978,869.59–56,978,869.59Taxes payable–35,275,239.99–35275239.99Long-term borrowings–461,744,232.75–461,744,232.75Estimated liabilities–329,850,570.00–329,850,570.00Deferred income tax liabilities–252,249,232.26

Other non-current liabilities–5,316,243.56–5,316,243.56Net assets878,979,223.35196,972,039.83Less: minority interestsNet assets acquired878,979,223.35196,972,039.83

Section X Financial Report

2. Business combination under common control

√ Applicable □Not Applicable

(1) Business combination under common control occurring in the current period

Name of the acquiree

The proportion ofequity acquired inthe businesscombination

The basis for thetransaction ofconstituting businesscombination undercommon controlCombination date

Recognition basis ofcombination dateYoujin (Shanghai) CorporateManagement Co., Ltd.

45.00%Controlled by Haier Group

Corporation before andafter combination

2024.12Transfer of voting rights(Continued)

Name of the acquiree

The income of theacquiree from the

beginning of thecurrent period tocombination date

Net profit of theacquiree from the

beginning of the

current period tocombination date

The income of theacquiree during thecomparison period

Net profit of theacquiree during thecomparison periodYoujin (Shanghai) Corporate

Management Co., Ltd.)19,260,781,435.26597,737,186.3618,423,619,653.79567,874,621.44

(2) Combination cost

Combination costCashEquityYoujin (Shanghai) Corporate

Management Co., Ltd.N/A5,648,886,120.89

Section X Financial Report

a. Acquiree’s assets and liabilities

Items

Youjin (Shanghai) CorporateManagement Co., Ltd.Combination date

End of theprevious periodMonetary funds1,268,529,652.152,769,509,365.10Accounts receivables5,139,684,771.284,483,423,789.01Other current assets301,892,714.87286,501,011.49Long-term equity investments58,941,327.0558,446,674.34Fixed assets4,144,593,883.583,821,748,054.12Construction in progress321,856,664.58548,389,859.22Right-of-use assets239,083,706.98409,683,596.16Intangible assets1,401,123,255.871,448,090,536.25Other non-current assets2,289,961,775.23517,714,175.15Accounts payables–4,521,382,789.25–4,328,946,614.97Short-term borrowings–514,637,345.29–576,724,172.98Payables for staff’s remuneration–84,513,450.56–74,190,835.69Taxes payable–99,123,353.83–100,556,630.64Non-current liabilities–2,379,529,509.27–2,235,451,364.75Net assets7,566,481,303.397,027,637,441.81Less: minority interests–4,156,432,325.24–3,866,765,387.70Net assets acquired3,410,048,978.153,160,872,054.11

3. Disposal of subsidiary

Whether single disposal of investment in subsidiary will result in losing control power:

Items

QingdaoHairuijiejingElectronics Co.,Ltd. (

)

Beijing HaierGuangke DigitalTechnology Co.,Ltd. (

)

Beijing YunshangYilian Technology

Co., Ltd.(

)Equity disposal price———Proportion of equity disposal51%55%51%Method of equity disposalCancellationCancellationCancellationTime of loss-of-control2024.32024.22024.3Basis for determination the time of loss-of- controlCancellationCancellationCancellationDifference between consideration and itsshare of net assets of the subsidiaryas respect to the disposal in theconsolidated level–3,297,883.69–

941.361,286.02

Section X Financial Report

Items

ShenzhenYunshang YilianTechnology Co.,Ltd. (

)

ChengduYunshang YilianTechnology Co.,Ltd. (

)

ChongqingYunshangHaihong YilianTechnology Co.,Ltd. (

)Equity disposal priceProportion of equity disposal90%100%51%Method of equity disposalTransferTransferTransferTime of loss-of-control2024.112024.102024.10Basis for determination the time of loss-of- control

Transfer ofcontrol right

Transfer ofcontrol right

Transfer ofcontrol rightDifference between consideration and its

share of net assets of the subsidiaryas respect to the disposal in theconsolidated level—–603,827.88308,031.30

Items

Hefei HaierHome AppliancesSales Co., Ltd.(

)Equity disposal price—Proportion of equity disposal100%Method of equity disposalCancellationTime of loss-of-control2024.11Basis for determination the time of loss-of- controlCancellationDifference between consideration and its share of net assets of the

subsidiary as respect to the disposal in the consolidated level39,827.87

Section X Financial Report

4. Changes of consolidation scope due to other reasons

√ Applicable □Not Applicable

(1) During the period, Qingdao Haier Dishwasher Co., Ltd., a subsidiary of the Company,

established a wholly-owned subsidiary, Qingdao Haier Smart Dishwasher Co., Ltd. (青島海爾智慧洗碗機有限公司).

(2) During the period, Qingdao Haier Air Conditioner Gen Corp., Ltd., a subsidiary of the

Company, established a wholly-owned subsidiary, Zhongshan Haier HV Equipment Co., Ltd.(中山海爾暖通設備有限公司).

(3) During the period, Qingdao Haier Air Conditioner Gen Corp., Ltd., a subsidiary of the

Company, established a wholly-owned subsidiary, Qingdao Haier HV Equipment TechnologyCo., Ltd. (青島海爾暖通設備科技有限公司).

(4) During the period, Qingdao Ruibo Ecological Environmental Technology Co., Ltd. (青島瑞博

生態環保科技有限公司), a subsidiary of the Company, established a subsidiary, JingzhouHaier Environmental Protection Material Technology Co., Ltd. (荊州海爾環保材料科技有限公司).

(5) During the period, Qingdao Ruibo Ecological Environmental Technology Co., Ltd. (青島瑞博

生態環保科技有限公司), a subsidiary of the Company, established a subsidiary, JingzhouHaizhi Cycle Technology Co., Ltd. (荊州海智循環科技有限公司).

Section X Financial Report

X. INTERESTS IN OTHER ENTITIES

1. Interests in subsidiaries

(1) Composition of the Group

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectFlourishing Reach

Limited

Mainland of ChinaBermudaGroup company, which mainly

engage in investment holding,the production and sale ofwashing machines and waterheaters, distribution service

100.00%Establishment

Haier ElectronicsGroup Co., Ltd.

Mainland of Chinaand Hong Kong

BermudaGroup company, which mainly

engage in investment holding,the production and sale ofwater equipment, distributionservice

100.00%Establishment

Haier U.S. ApplianceSolutions, Inc.

the United Statesthe United

States

Group company, which mainlyengage in home appliancesproduction and distributionbusiness

100.00%Establishment

Haier Singapore

Investment HoldingCo., Ltd.

Singapore andother overseasareas

SingaporeGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%Business combination

under common controlHaier New ZealandInvestment HoldingCompany Limited

New ZealandNew ZealandGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%Business combination

under common controlCandy S.p.AEuropeItalyGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%Business combination not

under common controlCarrier RefrigerationBenelux B.V.

EuropeGermanyGroup company, which mainly

engage in home appliancesproduction and distributionbusiness

100.00%Business combination not

under common controlKwikot (Haier) SA (Pty)

Ltd

South AfricaSouth AfricaMainly engage in water heater

production and distributionbusiness

100.00%Business combination not

under common controlQingdao Haier AirConditioner GenCorp., Ltd.

Qingdao High-tech

Zone

QingdaoHigh-techZone

Manufacture and sale ofhousehold air-conditioners

92.37%Business combination

under common controlGuizhou HaierElectronics Co., Ltd.

Huichuan District,Zunyi City,Guizhou Province

HuichuanDistrict, ZunyiCity, GuizhouProvince

Manufacture and sale of

refrigerator

59.00%Business combination

under common controlHefei Haier Air-conditioning Co.,Limited

Hefei HaierIndustrial Park

Hefei HaierIndustrial Park

Manufacture and sale of

air-conditioners

100.00%Business combination

under common controlWuhan Haier

Electronics HoldingCo., Ltd.

Wuhan HaierIndustrial Park

Wuhan HaierIndustrial Park

Manufacture and sale of

air-conditioners

59.86%Business combination

under common controlQingdao Haier

Air- ConditionerElectronics Co., Ltd.

QingdaoDevelopmentZone

QingdaoDevelopmentZone

Manufacture and sale ofair-conditioners

97.43% Business combination

under common control

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectQingdao Haier

Information PlasticDevelopment Co.,Ltd.

Qingdao High-techZone

QingdaoHigh-techZone

Manufacturing of plasticproducts

100.00% Business combination

under common controlDalian Haier PrecisionProducts Co., Ltd.

Dalian ExportExpressing Zone

Dalian ExportExpressingZone

Manufacture and sale of preciseplastics

90.00% Business combination

under common controlHefei Haier PlasticCo., Ltd.

Hefei Economic &TechnologicalDevelopmentArea

Hefei Economic&TechnologicalDevelopmentArea

Manufacture and sale of plastic

parts

95.17%4.83%Business combination

under common controlQingdao Meier PlasticPowder Co., Ltd.

QingdaoDevelopmentZone

QingdaoDevelopmentZone

Manufacture of plastic powder,

plastic sheet and high-performance coatings

40.00%60.00%Business combination

under common controlChongqing HaierPrecision PlasticCo., Ltd.

Jiangbei District,Chongqing City

Jiangbei District,ChongqingCity

Plastic products, sheet metal

work, electronics andhardware

90.00%10.00%Business combination

under common controlQingdao HaierRefrigerator Co.,Ltd.

Qingdao High-techZone

QingdaoHigh-techZone

Manufacture and production of

fluorine-free refrigerators

97.91% Establishment

Qingdao Haier

Refrigerator(International) Co.,Ltd.

PingduDevelopmentZone, Qingdao

PingduDevelopmentZone, Qingdao

Manufacture of refrigerators100.00% EstablishmentQingdao Household

ApplianceTechnology andEquipment ResearchInstitute

Qingdao High-techZone

QingdaoHigh-techZone

Research and development of

home appliances mold andtechnological equipment

100.00% Establishment

Qingdao Haier Whole

Set Home ApplianceService Co., Ltd.

Qingdao High-tech

Zone

Qingdao

High-techZone

Research, development and

sales of health- related smallhome appliance

98.33% Establishment

Qingdao Haier Special

Refrigerator Co.,Ltd.

QingdaoDevelopmentZone

QingdaoDevelopmentZone

Manufacture and sales of

fluorine-free refrigerators

100.00% Establishment

Qingdao Haier

Dishwasher Co.,Ltd.

QingdaoDevelopmentZone

QingdaoDevelopmentZone

Manufacture of dish washing

machine and gas stove

99.59% Establishment

Qingdao Haier Special

Freezer Co., Ltd.

QingdaoDevelopmentZone

QingdaoDevelopmentZone

Research, manufacture and

sales of freezer and otherrefrigeration products

96.78% Establishment

Dalian Haier

Air- conditioningCo., Ltd.

Dalian ExportExpressing Zone

Dalian ExportExpressingZone

Air conditioner processing andmanufacturing

90.00% Establishment

Dalian Haier

Refrigerator Co.,Ltd.

Dalian ExportExpressing Zone

Dalian ExportExpressingZone

Refrigerator processing andmanufacturing

100.00% Establishment

Qingdao HaierElectronic PlasticCo., Ltd.

QingdaoDevelopmentZone

QingdaoDevelopmentZone

Development, assembling and

sales of plastics, electronicsand products

100.00% Establishment

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectWuhan Haier Freezer

Co., Ltd

Wuhan Economic &

TechnologicalDevelopmentZone High-techIndustrial Park

Wuhan Economic&TechnologicalDevelopmentZone High-techIndustrial Park

Research, manufacture andsales of freezer and otherrefrigeration products

82.93%4.36%Establishment

Qingdao HaidaruiProcurement ServiceCo., Ltd.

Qingdao High-techZone

QingdaoHigh-techZone

Develop, purchase and sell

electrical products andcomponents

98.00%2.00%Establishment

Qingdao HaierIntelligent HomeApplianceTechnology Co.,Ltd.

Qingdao High-techZone

QingdaoHigh-techZone

Development and application of

home appliances,communication, electronicsand network engineeringtechnology

91.46%1.01%Establishment

Chongqing HaierAir-conditioning Co.,Ltd.

Jiangbei District,

Chongqing City

Jiangbei District,ChongqingCity

Manufacture and sales of air

conditioners

76.92%23.08%Establishment

Qingdao HaierPrecision ProductsCo., Ltd.

Qianwang angRoad, JiaonanCity

Qianwang ang

Road, JiaonanCity

Development and manufacture of

precise plastic, metal plate,mold and electronic productsfor home appliances

70.00%EstablishmentQingdao Haier Air

ConditioningEquipment Co., Ltd.

Jiaonan City,Qingdao

Jiaonan City,Qingdao

Manufacture of home appliances

and electronics

100.00%EstablishmentDalian Free Trade

Zone HaierAir-conditioningTrading Co., Ltd.

Dalian ExportExpressing Zone

Dalian ExportExpressingZone

Domestic trade 100.00%EstablishmentDalian Free TradeZone HaierRefrigerator TradingCo., Ltd.

Dalian ExportExpressing Zone

Dalian ExportExpressingZone

Domestic trade 100.00%EstablishmentChongqing Haier

Electronics SalesCo., Ltd.

Jiangbei District,Chongqing City

Jiangbei District,ChongqingCity

Sales of home appliances95.00% 5.00% EstablishmentChongqing Haier

RefrigerationAppliance Co., Ltd.

Jiangbei District,Chongqing City

Jiangbei District,ChongqingCity

Processing and manufacturing of

refrigerator

84.95%15.05%Establishment

Hefei Haier

Refrigerator Co.,Ltd.

Hefei HaierIndustrial Park

Hefei HaierIndustrial Park

Processing and manufacturing ofrefrigerator

100.00% Establishment

Qingdao HaierIntelligent BuildingTechnology Co.,Ltd.

QingdaoDevelopmentZone

QingdaoDevelopmentZone

Air-conditioning engineer 100.00%EstablishmentChongqing Lianmai

Electric ApplianceSales Co., Ltd. (重慶聯邁電器銷售有限公司)

Jiangbei District,Chongqing City

Jiangbei District,ChongqingCity

Sales of home appliances and

electronics

51.00%EstablishmentQingdao Haier

(Jiaozhou)Air-conditioning Co.,Limited

Jiaozhou City,Qingdao

Jiaozhou City,

Qingdao

Manufacture and sale of

air-conditioners

100.00%Establishment

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectQingdao Haier

Component Co.,Ltd.

Jiaozhou City,

Qingdao

Jiaozhou City,

Qingdao

Manufacture and sales of plasticand precise sheet metalproducts

100.00%EstablishmentHaier Shareholdings

(Hong Kong) Limited

Hong KongHong KongInvestment100.00% EstablishmentHarvest International

Company

Cayman IslandsCayman IslandsInvestment100.00%EstablishmentShenyang HaierRefrigerator Co.,Ltd.

Shenbei New Area,Shenyang City

Shenbei NewArea,Shenyang CityS

Manufacture and sales of

refrigerator

100.00% Establishment

Foshan Haier Freezer

Co., Ltd.

Sanshui District,Foshan City

Sanshui District,Foshan City

Manufacture and sales ofrefrigerator

100.00% Establishment

Zhengzhou HaierAir-conditioning Co.,Ltd.

ZhengzhouEconomic andTechnologicalDevelopmentZone

ZhengzhouEconomic andTechnologicalDevelopmentZone

Manufacture and sales offreezer

100.00% Establishment

Qingdao HaidayuanProcurement ServiceCo., Ltd.

QingdaoDevelopmentZone

QingdaoDevelopmentZone

Develop, purchase and sell

electrical products andcomponents

100.00% Establishment

Qingdao Haier

IntelligentTechnologyDevelopment Co.,Ltd.

Qingdao High-techZone

QingdaoHigh-techZone

Development and research of

home appliance products

100.00% Establishment

Qingdao Hairi HighTechnology Co.,Ltd.

Qingdao High-techZone

QingdaoHigh-techZone

Design, manufacture and sales of

product model and mould

100.00%Business combination

under common controlQingdao Hai GaoDesign andManufacture Co.,Ltd.

Qingdao High-techZone

QingdaoHigh-techZone

Industrial design and prototype

production

75.00%Business combination

under common controlZhongshan Haier HVEquipment Co., Ltd.(中山海爾暖通設備有限公司)

ZhongshanZhongshanSales of home appliances100.00%EstablishmentQingdao Haier HV

EquipmentTechnology Co.,Ltd. (青島海爾暖通設備科技有限公司)

QingdaoQingdaoManufacturing and sales of

air-conditioning equipment

100.00%Establishment

Shanghai Haier

Medical TechnologyCo., Ltd.

ShanghaiShanghaiWholesale and retail of medical

facility

66.87%EstablishmentQingdao HaierTechnology Co.,Ltd.

QingdaoQingdaoDevelopment and sales of

software and informationproduct

100.00%Business combination

under common controlQingdao HaierTechnologyInvestment Co., Ltd.

QingdaoQingdaoEntrepreneurship investment and

consulting

100.00%Establishment

Qingdao CasarteSmart LivingAppliances Co., Ltd.

QingdaoQingdaoDevelopment, production and

sales of appliances

100.00%Establishment

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectQingdao

HaichuangyuanAppliances SalesCo., Ltd.

QingdaoQingdaoSales of home appliances and

digital products

100.00%EstablishmentHaier Overseas

Electric ApplianceCo., Ltd.

QingdaoQingdaoSales of home appliances,

international freight forwarding

100.00%Establishment

Haier Group (Dalian)Electrical AppliancesIndustry Co., Ltd.

DalianDalianSales of home appliances,

international freight forwarding

100.00%Business combination

under common controlQingdao Haier CentralAir Conditioning Co.,Ltd.

QingdaoQingdaoProduction and sales of air and

refrigeration equipment

100.00%EstablishmentChongqing Haier

Home ApplianceSale Hefei Co., Ltd.

HefeiHefeiSales of home appliances100.00%EstablishmentQingdao Weixi SmartTechnology Co.,Ltd.

QingdaoQingdaoIntelligent sanitary ware85.00%EstablishmentHaier U+smartIntelligentTechnology (Beijing)Co., Ltd.

BeijingBeijingSoftware development100.00%EstablishmentHaier (Shanghai)Electronics Co., Ltd.

ShanghaiShanghaiSales, research and

development of homeappliances

100.00%Establishment

Shanghai HaierZhongzhi FangChuang KeManagement Co.,Ltd.

ShanghaiShanghaiBusiness management

consulting, chuangkemanagement

100.00% Establishment

Qingdao Haier Smart

Kitchen ApplianceCo., Ltd.

QingdaoQingdaoProduction and sales of kitchen

smart home appliances

85.82%EstablishmentGE Appliance

(Shanghai) Co., Ltd.

ShanghaiShanghaiSales of home appliances 100.00%EstablishmentQingdao Haier SpecialRefrigeratingAppliance Co., Ltd.

QingdaoQingdaoProduction and sales of home

appliances

100.00%EstablishmentShanghai Zhihan

Technology Co.,Ltd. (上海摯瀚科技有限公司)

ShanghaiShanghaiPromotion of technological

development

100.00%EstablishmentLaiyang Haier Smart

Kitchen ApplianceCo., Ltd.

LaiyangLaiyangProduction and sales of home

appliances

100.00%EstablishmentHefei Haier Air

ConditioningElectronics Co., Ltd.

HefeiHefeiProduction and sales of home

appliances

100.00%EstablishmentHaier (Shanghai)

Home ApplianceResearch andDevelopment CenterCo., Ltd.

ShanghaiShanghaiResearch and development of

home appliances

100.00%Establishment

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectHaier (Shenzhen) R&D

Co., Ltd.

ShenzhenShenzhenDevelopment, research and

technical services of householdand commercial electrical

100.00%Establishment

Guangzhou Haier AirConditioner Co.,Ltd.

GuangdongGuangdongManufacturing of refrigeration

and air conditioning equipment

100.00%Establishment

Qingdao Yunshang

Yuyi IOT TechnologyCo., Ltd.

QingdaoQingdaoIoT technology research and

development

60.00%Establishment

Qingdao Jijia CloudIntelligentTechnology Co.,Ltd.

QingdaoQingdaoR&D and sales of lighting

appliances

80.00%Establishment

Qingdao HaimeihuiManagementConsulting Co., Ltd.(青島海美匯管理諮詢有限公司)

QingdaoQingdaoLeasing and business services 100.00%EstablishmentWuxi YunshangInternet of ClothingTechnology Co.,Ltd. (無錫云裳衣聯網科技有限公司)

WuxiWuxiInternet of Things technology R

& D

100.00%EstablishmentQingdao Haidacheng

Procurement ServiceCo., Ltd.

QingdaoQingdaoDevelop, purchase and sell

electrical products andcomponents

100.00%Establishment

Guangdong HaierIntelligentTechnology Co. Ltd.(廣東海爾智能科技有限公司)

GuangzhouGuangzhouScientific research and

technology service sector

76.72%Business combination not

under common controlBeijing HaixianghuiTechnology Co.,Ltd. (北京海享匯科技有限公司)

BeijingBeijingScientific research and

technology service sector

100.00%Establishment

Haier Smart Home

Experience CloudEcologicalTechnology Co.,Ltd. (海爾智家體驗云生態科技有限公司)

QingdaoQingdaoTechnology development of

smart home products, wholefurniture customization, etc.

100.00%Establishment

Haier Smart Home(Qingdao) NetworkCo., Ltd. (海爾智家（青島）網絡有限公司)

QingdaoQingdaoTechnical services, development,

consulting, transfer, etc.

100.00%Establishment

Haier Smart Home(Qingdao) NetworkOperation Co., Ltd.(海爾智家（青島）網絡運營有限公司)

QingdaoQingdaoResidential interior decoration,

professional constructionoperation, special equipmentinstallation, upgrading andrepair, etc.

100.00%Establishment

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectQingdao Internet ofWine TechnologyCo., Ltd. (青島酒聯網物聯科技有限公司)

QingdaoQingdaoUrban distribution and

transportation services, importand export of goods,technology import and exportand food business, etc.

100.00%Establishment

Qingdao Linghai AirConditioningEquipment Co., Ltd.(青島菱海空調設備有限公司)

QingdaoQingdaoManufacture and production of

air conditioner and refrigerationequipment

100.00%Establishment

Qingdao HaixiangxueHuman ResourcesCo., Ltd. (青島海享學人力資源有限公司)

QingdaoQingdaoProfessional intermediary

activities

100.00%Establishment

Jiangxi Haier MedicalTechnology Co.,Ltd.

JiangxiJiangxiWholesale and retail of medical

equipment

100.00%Establishment

Qingdao HaizhiShenlan TechnologyCo., Ltd.

QingdaoQingdaoTechnical service development 100.00%EstablishmentQingdao Haishengze

Technology Co.,Ltd.

QingdaoQingdaoAir conditioning equipment

technical services

100.00%Establishment

Qingdao HailvyuanRecyclingTechnology Co.,Ltd.

QingdaoQingdaoElectrical and electronic

products waste treatment

100.00%Establishment

Qingdao Haier HVAC

Equipment Co., Ltd.(青島海爾暖通空調設備有限公司)

QingdaoQingdaoManufacture and sale of

air-conditioners

75.00% 25.00%Establishment

Qingdao Haier Home

AI IndustryInnovation CenterCo., Ltd. (青島海爾家庭人工智能產業創新中心有限公司)

QingdaoQingdaoIntegrated service of AI industry

application system

100.00%Establishment

Zhejiang Weixi IoTTechnology Co.,Ltd. (浙江衛璽物聯科技有限公司)

ZhejiangZhejiangIoT application service 100.00%EstablishmentQingdao Haier Quality

Inspection Co., Ltd.(青島海爾質量檢測有限公司)

QingdaoQingdaoInspection and testing of home

appliance

100.00% Business combination

under common controlQingdaoHaiyongchengCertification ServiceCo., Ltd. (青島海永成認證服務有限公司)

QingdaoQingdaoProduct certification service 100.00%Business combination

under common control

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectQingdao ZhonghaiBorui TestingTechnology ServiceCo., Ltd. (青島中海博睿檢測技術服務有限公司)

QingdaoQingdaoHome appliance testing and

technology consulting

100.00%Business combination

under common controlsQingdao Haier SpecialPlastic DevelopmentCo., Ltd.

QingdaoQingdaoManufacture and sale of

refrigerator doors

100.00%Business combination

under common controlsQingdao Haizhiling AirConditioningEngineering Co.,Ltd. (青島海智菱空調工程有限公司)

QingdaoQingdaoSoftware development and sale

of daily necessities

100.00%EstablishmentHaier Smart Home

(Xiongan, Hebei)Technology Co.,Ltd. (海爾智家科技（河北雄安）有限公司)

QingdaoQingdaoPromotion of energy-saving

technology

100.00%Establishment

Qingdao Ruibo

EcologicalEnvironmentalTechnology Co.,Ltd. (青島瑞博生態環保科技有限公司)

QingdaoQingdaoEnvironmental and AI technology

consulting

89.13% Establishment

Qingdao Sanyiniao

Technology Co.,Ltd. (青島三翼鳥科技有限公司)

QingdaoQingdaoTechnology service and

advertisement design

100.00%EstablishmentQingdao Jingzhi

RecycleEnvironmentalTechnology Co.,Ltd. (青島鯨智再生環保科技有限公司)

QingdaoQingdaoOperation of dangerous waste 100.00%Establishment

Qingdao Yunshang

Jieshen YilianTechnology Co.,Ltd. (青島云裳潔神衣聯科技有限公司)

QingdaoQingdaoProfessional cleaning and sale of

daily necessities

51.00%EstablishmentShanghai Yunshang

Yuyi IoT TechnologyCo., Ltd. (上海云裳羽衣物聯科技有限公司)

ShanghaiShanghaiProfessional cleaning and sale of

daily necessities

100.00%EstablishmentShijiazhuangYunshang YilianTechnology Co.,Ltd. (石家莊云裳衣聯科技有限公司)

ShijiazhuangShijiazhuangProfessional cleaning and sale of

daily necessities

51.00%EstablishmentNanjing Yunshang

Yilian TechnologyCo., Ltd. (南京云裳衣聯科技有限公司)

NanjingNanjingProfessional cleaning and sale of

daily necessities

80.00%Establishment

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectShanxi YunshangYilian TechnologyCo., Ltd. (山西云裳衣聯科技有限公司)

ShanxiShanxiProfessional cleaning and sale of

daily necessities

51.00%EstablishmentTianjin Yunshang

Yilian TechnologyCo., Ltd. (天津云裳衣聯網科技有限公司)

TianjinTianjinProfessional cleaning and sale of

daily necessities

51.00%EstablishmentChengdu YunshangMeier YilianTechnology Co.,Ltd. (成都云裳美爾衣聯科技有限公司)

ChengduChengduProfessional cleaning and sale of

daily necessities

80.00%EstablishmentQingdao Haier Smart

Dishwasher Co.,Ltd. (青島海爾智慧洗碗機有限公司)

QingdaoQingdaoManufacture, R&D and sales of

home appliances

100.00%EstablishmentQingdao Haixiangmian

Technology Co.,Ltd. (青島海享眠科技有限公司)

QingdaoQingdaoSale of food and daily

necessities

100.00%EstablishmentQingdao Haier Kitchen

IoT Technology Co.,Ltd. (青島海爾廚聯網物聯科技有限公司)

QingdaoQingdaoTechnology service and sale of

daily necessities

100.00%EstablishmentTibet Haifeng

Intelligent InnovationTechnology Co.,Ltd. (西藏海峰智能創新科技有限公司)

TibetTibetDevelopment of software and

medical equipment

100.00%EstablishmentQingdao Haixiangzhi

Technology Co.,Ltd. (青島海享智科技有限公司)

QingdaoQingdaoManufacturing of home

appliances

100.00%Establishment

Qingdao Haier

RefrigerationAppliance Co., Ltd.(青島海爾製冷電器有限公司)

QingdaoQingdaoManufacturing of home

appliances

100.00%Establishment

Chongqing HaierWashing ApplianceCo., Ltd. (重慶海爾洗滌電器有限公司)

ChongqingChongqingManufacturing of home

appliances

100.00%Establishment

Tongfang Energy

TechnologyDevelopment Co.,Ltd. (同方能源科技發展有限公司)

BeijingBeijingTechnology development service84.32%Business combination not

under common controlQingdao HaierYouyang TechnologyCo., Ltd. (青島海爾有養科技有限公司)

QingdaoQingdaoTechnology development service51.00%Establishment

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistrationNature of businessShareholdingMethod

DirectIndirectQingdao Haier YikangTechnology Co.,Ltd. (青島海爾益康科技有限公司)

QingdaoQingdaoTechnology development service100.00%EstablishmentQingdao Haier Smart

Dishwasher Co.,Ltd. (青島海爾智慧洗碗機有限公司)

QingdaoQingdaoManufacture of home appliances100.00%EstablishmentZhongshan Haier HVEquipment Co., Ltd.(中山海爾暖通設備有限公司)

ZhongshanZhongshanManufacture of home appliances100.00%EstablishmentQingdao Haier HVEquipmentTechnology Co.,Ltd. (青島海爾暖通設備科技有限公司)

QingdaoQingdaoManufacture of home appliances100.00%EstablishmentJingzhou HaierEnvironmentalProtection MaterialTechnology Co.,Ltd. (荊州海爾環保材料科技有限公司)

JingzhouJingzhouRenewable Energy Recycling100.00%Establishment

Jingzhou Haizhi CycleTechnology Co.,Ltd. (荊州海智循環科技有限公司)

JingzhouJingzhouRenewable Energy Recycling100.00%EstablishmentMicroenterprises suchas Qingdao HaiHeng Feng ElectricalAppliances Sale &Service Co., Ltd.

All over thecountry

All over thecountry

Sales of home appliancesEstablishment

Reasons for including subsidiaries which the Company has 50% or less of the equity intothe scope of consolidated financial statements:

At the end of the reporting period, the Company had substantial control over the financeand operation of companies like Qingdao Hai Heng Feng Electrical Appliances Sale &Service Co., Ltd, which were included into the scope of consolidated financial statements.

(2) There were no material non-wholly owned subsidiaries for the Company

Section X Financial Report

2. Transactions leading to the change of shareholding in subsidiaries but not losing

the control

√ Applicable □Not Applicable

(1) Description of changes in the share of owners’ equity in subsidiaries

√ Applicable □Not Applicable

Capital contribution by minority shareholders of the subsidiary of the Company leads tochanges in the Company’s shareholding ratio.

(2) Impact of the transactions on minority interest and the equity attributable to shareholders of

the CompanyItemsAmountTotal Consideration for acquisition/disposal83,668,779.14Less: share of net assets of subsidiaries in respect to the

shareholding proportion acquired/disposed244,732,785.60Difference161,064,006.46Including: adjustment to decrease capital reserve161,064,006.46

Section X Financial Report

3. Interests in joint ventures and associates

√ Applicable □Not Applicable

(1) Joint ventures and associates

Name of joint venture and associates

Principal place ofbusiness

Place ofregistrationNature of businessShareholding

Accounting treatmentof investmentHaier Group Finance Co., LtdQingdaoQingdaoFinancial services42.00%Equity methodBank of Qingdao Co., LtdQingdaoQingdaoCommercial Bank8.19%Equity methodWolong Electric (Jinan) Motor Co., Ltd.JinanJinanMotor Manufacturing30.00%Equity methodQingdao Hegang New Material Technology

Co., Ltd. (青島河鋼新材料科技股份有限公司)

QingdaoQingdaoSteel plate manufacturing23.94%Equity methodQingdao Haier SAIF Smart Home IndustryInvestment Center (Limited Partnership)

QingdaoQingdaoVenture Capital63.13%Equity methodMitsubishi Heavy Industries Haier (Qingdao)

Air-conditioners Co., Ltd.

QingdaoQingdaoManufacturing of home

appliances

45.00%Equity method

Qingdao Haier Multimedia Co., Ltd.QingdaoQingdaoR&D and sales of

television

20.20%Equity method

Baoshihua Tong Fang Energy Technology

Co., Ltd. (寶石花同方能源科技有限公司)

BeijingBeijingTechnology service

development

20.00%Equity method

Zhengzhou Highly Electric Appliance Co.,

Ltd. (鄭州海立電器有限公司)

ZhengzhouZhengzhouManufacture and sale of

press

49.00%Equity method

Zhejiang Futeng Fluid Technology Co., Ltd.HuzhouHuzhouGas compression

machinerydevelopment andmanufacturing

48.00%Equity method

Hongtong Environmental Technology

(Guangzhou) Co., Ltd. (宏通環境技術（廣州）有限公司)

GuangzhouGuangzhouMachinery and equipment

development andmanufacturing

15.00%Equity method

Qingdao Haimu Investment Management

Co., Ltd.

QingdaoQingdaoInvestment management49.00%Equity methodQingdao Haimu Smart Home Investment

Partnership (Limited Partnership)

QingdaoQingdaoInvestment management24.00%Equity methodQingdao Guochuang Intelligent Household

Appliance Research Institute Co., Ltd.(青島國創智能家電研究院有限公司)

QingdaoQingdaoDevelopment of home

appliances

35.51%Equity method

Guangzhou Heying Investment Partnership

(Limited Partnership)

GuangzhouGuangzhouInvestment49.00%Equity methodQingdao Home Wow Cloud NetworkTechnology Co., Ltd

QingdaoQingdaoHome online service22.10%Equity methodBingji (Shanghai) Corporate ManagementCo., Ltd.

ShanghaiShanghaiInvestment management45.00%Equity methodShangang Luhai International Logistics(Jinan) Co., Ltd. (山港陸海國際物流（濟南）有限公司)

JinanJinanLogistic service40.00%Equity methodHaier Best Water Technology Co., Ltd. (倍世海爾飲水科技有限公司)

QingdaoQingdaoWater equipment

technologydevelopment service

49.00%Equity method

HuizhiXiangshun Equity Investment Fund

(Qingdao) Partnership (LimitedPartnership)

QingdaoQingdaoInvestment management30.00%Equity method

Section X Financial Report

Name of joint venture and associates

Principal place ofbusiness

Place ofregistrationNature of businessShareholding

Accounting treatmentof investmentQingdao RRS Huizhi Investment Co., Ltd.QingdaoQingdaoInvestment management50.00%Equity methodQingdao Xiaoshuai Intelligent TechnologyCo., Ltd. (青島小帥智能科技股份有限公司)

QingdaoQingdaoInformation technology

development

32.13%Equity method

Qingdao Xinshenghui Technology Co., Ltd.(青島鑫晟匯科技有限公司)

QingdaoQingdaoTechnology service

development

20.00%Equity method

Ningbo Beilian Intelligent Technology Co.,Ltd. (寧波貝立安智能科技有限公司)

NingboNingboTechnology service

development

35.00%Equity method

Konan Electronic Co., LtdJapanJapanMotor Manufacturing50.00%Equity methodHPZ LIMITEDNigeriaNigeriaManufacturing of home

appliance

25.01%Equity method

HNR (Private) Company LimitedPakistanPakistanManufacturing of home

appliance

31.72%Equity method

Controladora Mabe, S.A. de C.V.MexicoMexicoManufacturing of home

appliance

48.41%Equity method

Middle East Air conditioning

Company,Limited

Saudi ArabiaSaudi ArabiaSales of home appliances49.00%Equity method

(2) The basic profile and financial information of important associates

The basic profile of important associates:

Haier Group Finance Co., Ltd. (hereinafter referred to as ‘Finance company’) wasestablished by Haier Group Corporation and its three affiliates. Registration place andprincipal place of business: No.178–2 Haier Road, Laoshan District, Qingdao City. TheCompany’s subsidiaries hold an aggregate of 42.00% equity interest in FinanceCompany.

Section X Financial Report

Key financial information of important associates:

Finance companyItems

Closing balance/

Amount for thecurrent period

Opening balance/Amount for theprevious periodCurrent assets55,206,996,489.1258,471,449,425.14Non-current assets20,913,398,205.8217,215,510,844.97Total assets76,120,394,694.9475,686,960,270.11Current liabilities55,911,360,017.9656,268,320,103.08Non-current liabilities639,275,539.37583,055,172.64Total liabilities56,550,635,557.3356,851,375,275.72Minority interestsEquity attributable to shareholders of the parentcompany19,569,759,137.6118,835,584,994.39Including: share of net assets calculated pershareholding percentage8,219,298,837.807,910,945,697.64Operating income1,983,012,738.311,699,389,982.11Net profit1,294,168,274.341,417,734,620.57Other comprehensive income5,868.88–22,595,635.58Total comprehensive income1,294,174,143.221,395,138,984.99Dividend received from associates for the year235,200,000.00235,200,000.00

Section X Financial Report

(3) Summarized financial information of insignificant joint ventures and associates

Investment in associates

Closing balance/

Amount for thecurrent period

Opening balance/Amount for theprevious periodBank of Qingdao Co., Ltd.3,473,162,128.863,200,132,708.75Wolong Electric (Jinan) Motor Co., Ltd.198,467,631.66177,662,547.04Qingdao Hegang New Material Technology Co., Ltd.(青島河鋼新材料科技股份有限公司)342,315,345.52329,713,566.36Qingdao Haier SAIF Smart Home Industry InvestmentCenter (Limited Partnership)191,276,594.86206,764,442.76Mitsubishi Heavy Industries Haier (Qingdao)Airconditioners Co., Ltd.698,845,993.61663,804,966.31Qingdao Haier Carrier Refrigeration Equipment Co.,Ltd.412,107,471.53Qingdao Haier Multimedia Co., Ltd.88,300,000.0088,300,000.00Baoshihua Tong Fang Energy Technology Co., Ltd.

(寶石花同方能源科技有限公司)31,132,443.7630,326,966.78Zhengzhou Highly Electric Appliance Co., Ltd. (鄭州海

立電器有限公司)98,560,581.0198,000,000.00Zhejiang Futeng Fluid Technology Co., Ltd.73,460,549.1177,584,161.99Hongtong Environmental Technology (Guangzhou)

Co., Ltd. (宏通環境技術（廣州）有限公司)6,464,386.264,265,965.73Beijing ASU Tech Co., Ltd.7,919,009.51Qingdao Haimu Investment Management Co., Ltd.2,692,755.002,609,456.57Qingdao Haimu Smart Home Investment Partnership

(Limited Partnership)56,749,040.7957,989,007.18Haineng Wanjia (Shanghai) Technology Development

Co., Ltd.606,029.71Qingdao Guochuang Intelligent Household Appliance

Research Institute Co., Ltd. (青島國創智能家電研究

院有限公司)40,920,413.5438,574,227.53Guangzhou Heying Investment Partnership (Limited

Partnership)132,620,094.53194,416,881.32Qingdao Home Wow Cloud Network Technology

Co., Ltd1,083,682.472,192,669.49Bingji (Shanghai) Corporate Management Co., Ltd.1,095,450,007.151,056,245,062.87Shangang Luhai International Logistics (Jinan) Co., Ltd.

(山港陸海國際物流（濟南）有限公司)58,941,327.0658,446,674.35Haier Best Water Technology Co., Ltd. (倍世海爾飲水

科技有限公司)148,369,638.40148,369,638.40HuizhiXiangshun Equity Investment Fund (Qingdao)

Partnership (Limited Partnership)188,907,510.60238,175,637.03Qingdao RRS Huizhi Investment Co., Ltd.4,083,482.784,083,482.78

Section X Financial Report

Investment in associates

Closing balance/Amount for thecurrent period

Opening balance/Amount for theprevious periodQingdao Xiaoshuai Intelligent Technology Co., Ltd.

(青島小帥智能科技股份有限公司)9,578,046.65Qingdao Xinshenghui Technology Co., Ltd. (青島鑫晟匯科技有限公司)11,365,227.2110,005,915.15Ningbo Beilian Intelligent Technology Co., Ltd. (寧波貝

立安智能科技有限公司)3,724,499.78Orygin LLC22,296,931.04Konan Electronic Co., Ltd59,415,065.8964,378,952.07HNR (Private) Company Limited140,530,747.42111,225,806.51HPZ LIMITED11,203,257.773,483,576.50Controladora Mabe, S.A. de C.V.5,638,478,867.775,078,418,321.53Middle East Air conditioning Company, Limited7,389,990.917,299,166.60Total book balance12,813,489,310.3712,395,399,243.39Total amount of the following financial data of

associates calculated based on shareholding

percentageNet profit1,265,519,987.00965,127,497.98Other comprehensive income–42,720,610.31–99,733,719.86Total comprehensive income1,222,799,376.69865,393,778.12

Section X Financial Report

XI. SEGMENT REPORT

√ Applicable □Not Applicable

The Company is principally engaged in manufacture and sales of home appliances and relevantservices business, manufacture of upstream home appliances parts, distribution of products of thirdparty, logistics and after-sale business.The Company has five business segments: (1) Household Food Storage and Cooking Solutions: mainlymanufacturing and selling refrigerator/freezers and kitchen appliances; (2) Air Solutions: mainlymanufacturing and selling air conditioners; (3) Household Laundry Management Solutions: mainlymanufacturing and selling washing machines and dryers; (4) Household Water Solutions: mainlymanufacturing and selling water home appliances such as water heaters and water purifiers; (5) Otherbusiness: mainly include channel, equipment components, small home appliance business and others.The management of the Company assesses operating performance of each segment and allocatesresources according to the division. Sales between segments were mainly based on market price.Due to centralized management under the headquarters or exclusion from the assessment scope ofsegment management, the total assets of segments exclude monetary funds, financial assets held fortrading, derivative financial assets, dividends receivable, held-for-sale financial assets, other currentassets, debt investment, long-term accounts receivable, long-term equity investment, other equityinstruments investment, other non-current financial assets, goodwill and deferred income tax assets;the total liabilities of segments exclude long-term and short-term borrowings, financial liabilities held fortrading, derivative financial liabilities, taxes payable, interests payable, dividends payable, held-for-saleliabilities, bonds payable, deferred income tax liabilities and other non-current liabilities; profits ofsegments exclude financial expenses, profit or loss in fair value changes, income from investment, andincome on disposal of assets, Non-value-added tax refundable upon imposition component of otherincome, non-operating incomes and expenses and income tax.

Section X Financial Report

(1) Information of reportable segments

Segment information for the period

Household Food Storage and Cooking Solutions

Air Solutions

Household Laundry

Management

SolutionsSegment informationRefrigerator/freezersKitchen appliancesSegment revenue83,555,822,435.7741,183,935,202.5049,616,332,409.2063,320,888,484.87Including: external revenue83,343,535,295.3941,119,050,248.2249,300,597,408.4163,134,454,557.06Inter-segment revenue212,287,140.3864,884,954.28315,735,000.79186,433,927.81Total segment operating cost77,581,357,166.4538,004,968,260.4747,312,616,024.5056,822,308,929.18Segment operating profit5,974,465,269.323,178,966,942.032,303,716,384.706,498,579,555.69Total segment assets50,542,675,724.2821,839,636,887.2932,728,708,862.9637,335,152,980.59Total segment liabilities71,520,224,809.9314,943,277,260.4329,805,083,060.2727,393,275,290.67

(continued)

Segment information

Household WaterSolutionsOther business

Inter-segmenteliminationsTotalSegment revenue16,175,189,916.78118,228,547,392.23–86,099,490,637.42285,981,225,203.93Including: external revenue16,014,265,716.8933,069,321,977.96285,981,225,203.93Inter-segment revenue160,924,199.8985,159,225,414.27–86,099,490,637.42Total segment operating cost13,954,084,938.03117,801,013,220.48–86,106,793,787.55265,369,554,751.56Segment operating profit2,221,104,978.75427,534,171.757,303,150.1320,611,670,452.37Total segment assets11,352,587,655.4097,865,643,471.33–96,864,122,164.65154,800,283,417.20Total segment liabilities4,228,086,063.7481,054,508,694.98–96,724,763,108.65132,219,692,071.37

Section X Financial Report

Segment information for the corresponding period of last year

Household Food Storage and Cooking Solutions

Air Solutions

Household LaundryManagementSolutionsSegment informationRefrigerator/freezersKitchen appliancesSegment revenue81,910,667,160.8241,654,343,658.3646,104,262,503.6361,491,493,913.78Including: external revenue81,731,369,432.1741,594,458,746.7345,810,371,440.4761,311,742,096.32Inter-segment revenue179,297,728.6559,884,911.63293,891,063.16179,751,817.46Total segment operating cost76,758,622,485.9438,696,410,568.9044,200,167,062.9255,842,001,077.19Segment operating profit5,152,044,674.882,957,933,089.461,904,095,440.715,649,492,836.59Total segment assets47,691,504,886.5021,251,460,357.5223,813,820,117.0031,675,160,583.53Total segment liabilities62,419,237,019.1512,952,916,364.3722,843,183,005.6918,786,107,463.36

(continued)

Segment information

Household WaterSolutionsOther business

Inter-segmenteliminationsTotalSegment revenue15,335,988,639.36110,275,737,616.58–82,567,972,644.56274,204,520,847.97Including: external revenue15,169,679,363.0628,586,899,769.22 274,204,520,847.97Inter-segment revenue166,309,276.3081,688,837,847.36–82,567,972,644.56Total segment operating cost13,497,874,408.80109,925,101,294.60–82,647,959,599.18256,272,217,299.17Segment operating profit1,838,114,230.56350,636,321.9879,986,954.6217,932,303,548.80Total segment assets7,188,919,188.9778,982,614,930.00–75,049,787,719.42135,553,692,344.10Total segment liabilities6,071,202,326.9869,157,215,619.58–74,904,708,377.42117,325,153,421.71

Section X Financial Report

(2) Geographical information

‘Other countries/regions’ in this report refers to all other countries/regions (including Hong Kongand Macau Special Administration Region and Taiwan) other than the mainland China for thepurpose of information disclosure.a. External transaction revenue

Items

Amount for the

current period

Amount for theprevious periodMainland China142,167,253,511.94137,792,624,846.50Other countries/regions143,813,971,691.99136,411,896,001.47Among which:

America79,528,519,635.1879,751,236,167.61Australia6,642,441,139.996,142,491,032.57South Asia11,525,063,724.029,520,761,970.29Europe32,089,184,505.3328,543,893,610.21Southeast Asia6,632,695,292.075,779,907,984.73Middle East and Africa2,674,195,861.211,934,336,705.54Japan3,425,631,328.283,662,478,664.81Others1,296,240,205.911,076,789,865.71Total285,981,225,203.93274,204,520,847.97b. Total non-current assets

ItemsClosing balanceOpening balanceMainland China30,088,619,868.8328,602,514,680.93Other countries/regions35,855,840,703.9531,152,060,989.07Total65,944,460,572.7859,754,575,670.00Total non-current assets exclude: debt investments, long-term receivable, long-term equityinvestments, other equity instrument investments, other non-current financial assets,goodwill and deferred income tax assets.

Section X Financial Report

XII. DISCLOSURE OF FAIR VALUE

1. Fair value of assets and liabilities measured at fair value

The level to which the fair value measurement result belongs is determined by the lowest level towhich the input value is significant to the fair value measurement as a whole:

Level 1: Unadjusted quotes for the same asset or liability in an active market.Level 2: Inputs that are directly or indirectly observable for related assets or liabilities, except

for Level 1 inputs.Level 3: Unobservable inputs of related assets or liabilities.At the end of the period

Input used for fair value measurementItems

Quotes in anactive market(Level 1)

Importantobservableinput(Level 2)

Importantunobservable

input(Level 3)TotalContinuously measured at fairvalueFinancial assets held for trading381,340,384.56746,436,121.40108,241,333.571,236,017,839.53Including: Bank wealth management

products746,436,121.40746,436,121.40Investment fund294,404,349.36294,404,349.36Investment in equity instruments86,936,035.20108,241,333.57195,177,368.77Derivative financial assets142,709,716.91142,709,716.91Including: Forward foreign exchange

contracts138,404,575.66138,404,575.66Forward commodity contracts50,459.8150,459.81Cross currency interest rate swap

contracts4,254,681.444,254,681.44Financing receivables360,069,391.56360,069,391.56Including: Bills receivable182,877,006.03182,877,006.03Accounts receivable177,192,385.53177,192,385.53Other equity instruments26,140,832.985,960,547,830.485,986,688,663.46Including: Equity instruments measured

at fair value through othercomprehensive income26,140,832.985,960,547,830.485,986,688,663.46Derivative financial liabilities71,011,310.0171,011,310.01Including: Forward foreign exchange

contracts71,011,310.0171,011,310.01

Section X Financial Report

At the beginning of the period

Input used for fair value measurementItems

Quotes in anactive market(Level 1))

Importantobservableinput(Level 2)

Importantunobservable

input(Level 3)TotalContinuously measured at fairvalueFinancial assets held for trading369,591,046.58490,968,101.8196,436,395.44956,995,543.83Including: Bank wealth management

products490,968,101.81490,968,101.81Investment fund222,803,002.38222,803,002.38Investment in equity instruments146,788,044.2096,436,395.44243,224,439.64Derivative financial assets67,565,829.4467,565,829.44Including: Forward foreign exchange

contracts67,565,829.4467,565,829.44Financing receivables200,326,471.85200,326,471.85Including: Bills receivable159,043,672.58159,043,672.58Accounts receivable41,282,799.2741,282,799.27Other equity instruments19,988,760.346,383,706,194.436,403,694,954.77Including: Equity instruments measured

at fair value through other

comprehensive income19,988,760.346,383,706,194.436,403,694,954.77Derivative financial liabilities168,625,004.97168,625,004.97Including: Forward foreign exchangecontracts166,573,028.22166,573,028.22Forward commodity contracts2,051,976.752,051,976.75

For financial instruments traded in an active market, the Company determines its fair value basedon its quotes in an active market; for financial instruments not traded in an active market, theCompany uses valuation techniques to determine its fair value.

Section X Financial Report

2. The basis for determining the fair value of the continual Level 2 fair value

measurement items

√ Applicable □Not Applicable

Items

Fair value at theend of the periodValuation techniquesFinancial assets held for tradingIncluding: Bank wealth managementproducts

746,436,121.40Discounted cash flowDerivative financial assetsIncluding: Forward foreign exchangecontracts

138,404,575.66Discounted cash flowForward commodity contracts50,459.81Discounted cash flowCross currency interest rate swapcontracts

4,254,681.44Discounted cash flowFinancing receivablesIncluding: Bills receivable182,877,006.03Discounted cash flowAccounts receivable177,192,385.53Discounted cash flowDerivative financial liabilitiesIncluding: Forward foreign exchange

contract

71,011,310.01Discounted cash flow

Section X Financial Report

3. Continual Level 3 fair value measurement major items, the valuation techniques

adopted and information of important parameters

√ Applicable □Not Applicable

Items

Fair value at theend of the period

Valuationtechnique

Significantunobservable inputRange

Sensitivity of fair valueto the inputOther equity instrumentsIncluding:

1. COSMO IoT

TechnologyCo., LTD. (卡奧斯物聯科技股份有限公司)

2,786,307,000.00Market approach1. Average P/S

multiple ofpeers

2. Discount for

lack ofmarketability

1. 3.51 to

3.59

2. 32.47% to

34.47%

1. 1% increase

(decrease) in averageP/S multiple of theComparableCompanies wouldresult in increase(decrease) in fairvalue by RMB22.05million.

2. 1% increase

(decrease) in thelack of marketabilitywould result indecrease (increase)in fair value byRMB32.92 million.

2. SINOPEC Fuel

Oil SalesCorporationLimited (中國石化銷售股份有限公司)

1,674,427,670.51Market approach1. Average P/E

multiple ofpeers

2. Discount for

lack ofmarketability

1. 43.59 to

44.47

2. 24.55% to

26.55%

1. 1% increase

(decrease) in averageP/E multiple of theComparableCompanies wouldresult in increase(decrease) in fairvalue by RMB16.75million.

2. 1% increase

(decrease) in thelack of marketabilitywould result indecrease (increase)in fair value byRMB22.49 million.

4. Financial instruments not measured at fair value

Financial assets and financial liabilities not measured at fair value include: monetary funds, billsreceivable, accounts receivable, other receivables, other current assets, long-term and short-termborrowings, bills payable, accounts payable, other payables, long-term payables, bonds payable,etc. The difference between the book value and the fair value of financial assets and financialliabilities not measured at fair value at the end of the period is small.

Section X Financial Report

XIII. RELATED PARTIES AND RELATED-PARTY TRANSACTIONS(I) Explanation for basis of identifying related partyAccording to Accounting Standards for Business Enterprises No. 36—Related PartyDisclosures, parties are considered to be related if one party has the ability to control or jointlycontrol the other party or exercise significant influence over the other party. Parties (two or morethan two) are also considered to be related if they are subject to common control, joint controlor significant influence from another party.According to Management Practices for Information Disclosure of Listed Company (ChinaSecurities Regulatory Commission Order No. 182), related legal entity or individual will beidentified as related parties in certain occasions.(II) Relationships between related parties

1. Information about the parent company and other companies holding shares of the

CompanyName

Type ofenterpriseRegistered place

Registeredcapital

Legalrepresentative

Relationships withthe Company

Interest in theCompany

Voting rightsto theCompanyHaier GroupCorporation

Collectiveownershipcompany

Qingdao High-techZone Haier Park

311,180,000Zhou YunjieParent Company11.43%11.43%Haier COSMO Co.,

Ltd. (海尔卡奥斯股份有限公司)

Joint-stock

company

Qingdao High-tech

Zone Haier Park

404,500,000Zhou YunjieSubsidiary of

ParentCompany

13.41%13.41%

HCH (HK) Investment

Management Co.,Limited

Privatecompany

Hong KongHKD10,000/Parties acting in

concert ofParentCompany

5.74%5.74%

Qingdao Haier Venture

& InvestmentInformation Co.,Ltd.

Company withlimitedliability

Qingdao Free Trade

Zone

923,000,000Zhou YunjieParties acting in

concert ofParentCompany

1.84%1.84%

Qingdao Haichuangzhi

ManagementConsultingEnterprise (LimitedPartnership)

Limitedpartnershipcompany

Qingdao High-techZone Haier Park

1,616,120,000/Parties acting in

concert ofParentCompany

1.43%1.43%

Haier InternationalCo., Limited

Privatecompany

Hong KongHKD2/Parties acting in

concert ofParentCompany

0.62%0.62%

2. Subsidiaries of the Company

The details of the subsidiaries of the Company are detailed in Note X.1. Interests insubsidiaries

3. Joint ventures and associates of the Company

The details of material associates and joint ventures of the Company are detailed in NoteVII.14 and Note X.3.

Section X Financial Report

4. Connected companies with no relationship of control

NameRelationship with the CompanyQingdao Haier Parts Procurement Co., Ltd.Subsidiary of Haier GroupChongqing Haier Electrical Appliances SalesCo., Ltd.

Subsidiary of Haier GroupQingdao Haier International Trading Co., Ltd.Subsidiary of Haier GroupCosmoplat Chuangzhi IOT TechnologyCo., Ltd.

Subsidiary of Haier GroupQingdao Haiyun Chuangzhi BusinessDevelopment Co., Ltd.

Subsidiary of Haier GroupQingdao Haina Cloud Intelligent SystemCo., Ltd.

Subsidiary of Haier GroupQingdao Maidirui Ecological EnvironmentTechnology Co., Ltd. (青島邁帝瑞生態環境科技有限公司)

Subsidiary of Haier GroupChongqing Haier Electrical Appliances Sales

Co., Ltd.

Subsidiary of Haier GroupQingdao Haier International Trading Co., Ltd.Subsidiary of Haier GroupCOSMO Industrial Intelligence ResearchInstitute (Qingdao) Co., LTD (卡奧斯工業智慧研究院（青島）有限公司)

Subsidiary of Haier GroupWuhan Haizhi Real Estate Development Co.,Ltd. (武漢海智房地產開發有限公司)

Subsidiary of Haier GroupHaier International Co., Ltd.Subsidiary of Haier GroupQingdao Oasis Technology Co., Ltd.Subsidiary of Haier GroupDalian Haier International Trade Co., Ltd.Subsidiary of Haier GroupShanghai Ruihai Chuangfeng IndustrialDevelopment Co., Ltd. (上海睿海創豐實業發展有限公司)

Subsidiary of Haier GroupQingdao Manniq Intelligent Technology

Co., Ltd.

Subsidiary of Haier GroupFeiketeng Intelligent Technology (Qingdao)Co., Ltd.(斐科騰智能科技（青島）有限公司)Subsidiary of Haier GroupDalian Haier International Trade Co., Ltd.Subsidiary of Haier GroupShandong COMSMO Smart Carbon

Technology Co., Ltd. (山東卡奧斯智碳科技有限公司)

Subsidiary of Haier GroupCOSMO Industrial Intelligence Research

Institute (Qingdao) Co., LTD (卡奧斯工業智慧研究院（青島）有限公司)

Subsidiary of Haier GroupQingdao Haier International Travel Agency

Co., Ltd.

Subsidiary of Haier Group

Section X Financial Report

NameRelationship with the CompanyCOSMO Energy Technology Co., Ltd. (卡奧

斯能源科技有限公司)Qingdao Blue Whale Technology Co., Ltd.Subsidiary of Haier GroupQingdao Haiyunlian Industrial DevelopmentCo., Ltd. (青島海雲聯產業發展有限公司)

Subsidiary of Haier GroupCOSMO Moulds (Qingdao) Co., Ltd. (卡奧斯

模具（青島）有限公司)

Subsidiary of Haier GroupCOSMO Energy Technology (Chongqing) Co.,Ltd. (卡奧斯能源科技（重慶）有限公司)

Subsidiary of Haier GroupCOSMO Energy Technology (Dalian) Co.,

Ltd. (卡奧斯能源科技（大連）有限公司)

Subsidiary of Haier GroupQingdao Haier New Materials R & DCo., Ltd.

Subsidiary and associate of HaierGroupQingdao Haier Multi-media Co., Ltd.AssociateHNR (Private) Company LimitedAssociateWolong Electric (Jinan) Motor Co., Ltd.AssociateMitsubishi Heavy Industry Haier (Qingdao) AirConditioner Co., Ltd.

AssociateQingdao Home Wow Cloud Network

Technology Co., Ltd.

AssociateControladora Mabe, S.A. de C.V.AssociateQingdao HBIS Composite New MaterialCo., Ltd.

Subsidiary of associateHefei Hegang New Material Technology

Co., Ltd.

Subsidiary of associate

Section X Financial Report

(III) Related party transactions

1. Details of the Company’s procurement of goods and services from related parties are as

follows:

√ Applicable □Not Applicable

Unit and Currency: RMBRelated parties

Amount for thecurrent period

Amount for theprevious periodControladora Mabe S.A.de C.V.15,276,391,329.0915,526,699,638.30Qingdao Haier Parts Procurement Co., Ltd.6,036,753,675.436,413,180,580.72HNR (Private) Company Limited2,794,389,779.882,514,374,986.36Chongqing Haier Electrical Appliances Sales

Co., Ltd.2,289,682,866.242,114,941,629.47Qingdao Haier International Trading Co., Ltd.726,222,998.48547,788,113.32Other related parties3,080,752,099.114,062,063,110.89Total30,204,192,748.2331,179,048,059.06

2. Details of the Company’s sales of goods to related parties are as follows:

√ Applicable □Not Applicable

Unit and Currency: RMBRelated parties

Amount for thecurrent period

Amount for theprevious periodControladora Mabe S.A.de C.V.1,355,540,753.071,202,388,632.22HNR (Private) Company Limited880,955,311.941,245,177,362.70Qingdao Haier International Trading Co., Ltd.538,731,523.78557,630,937.13Qingdao Haier Multi-media Co., Ltd.143,708,540.52122,202,322.75Other related parties660,055,947.39886,533,934.60Total3,578,992,076.704,013,933,189.40

Section X Financial Report

3. Amount of unsettled items of related parties

Items and name of customers

ClosingBalance

OpeningBalanceBills receivable:

Cosmoplat Chuangzhi IOT Technology Co., Ltd.12,712,495.66Qingdao Haiyun Chuangzhi BusinessDevelopment Co., Ltd.5,525,942.99Qingdao Haina Cloud Intelligent System Co., Ltd.186,140.424,820,740.99Other related parties3,674,621.2215,819,790.67Accounts receivable:

HNR (Private) Company Limited488,559,920.901,191,001,767.66Qingdao Haier Parts Procurement Co., Ltd.66,821,220.2588,974,390.06Qingdao Maidirui Ecological EnvironmentTechnology Co., Ltd.(青島邁帝瑞生態環境科技有限公司)34,693,294.3137,264,581.99Qingdao Haier International Trade Co., Ltd.29,353,831.7713,320,054.89Qingdao Home Wow Cloud Network TechnologyCo., Ltd.26,282,212.7332,831,602.55Qingdao Haina Cloud Intelligent System Co., Ltd.18,686,494.1520,810,291.74Mitsubishi Heavy Industry Haier (Qingdao) AirConditioner Co., Ltd.16,206,223.737,670,776.81Qingdao Haier International Travel AgencyCo., Ltd.14,673,521.4466,704,908.59Other related parties161,340,167.10384,873,987.78Prepayments:

HNR (Private) Company Limited527,935,926.53Qingdao Haier Parts Procurement Co., Ltd.319,433,156.932,956,547.28Chongqing Haier Electrical Appliances SalesCo., Ltd.43,625,340.53Qingdao Haier International Trade Co., Ltd.13,105,977.208,594,602.74Other related parties14,442,879.5333,676,799.62Other receivables:

Qingdao Haier International Trade Co., Ltd.20,305,273.827,951,101.19Controladora Mabe S.A.de C.V.17,263,596.8214,824,407.91COSMO Industrial Intelligence Research Institute(Qingdao) Co., LTD (卡奧斯工業智慧研究院（青島）有限公司)11,408,491.68807,590.07Wuhan Haizhi Real Estate Development Co., Ltd.(武漢海智房地產開發有限公司)8,231,801.503,200,000.00Qingdao Haiyunlian Industrial Development Co.,Ltd. (青島海雲聯產業發展有限公司)3,731,122.30Haier International Co., Ltd.3,617,694.353,685,669.87Qingdao Haier International Travel AgencyCo., Ltd.2,791,636.171,876,394.96

Section X Financial Report

Items and name of customers

ClosingBalance

OpeningBalanceOther related parties16,718,799.6014,217,658.11Bills payable:

Qingdao Haier New Materials R & D Co., Ltd.336,704,809.61390,891,579.36Wolong Electric (Jinan) Motor Co., Ltd.6,643,894.0030,416,664.00Others49,577,085.49Accounts payable:

Controladora Mabe S.A.de C.V.1,036,070,558.181,017,676,511.30Qingdao Haier International Trading Co., Ltd.220,206,536.59197,267,091.22Qingdao Oasis Technology Co., Ltd.115,396,480.6973,359,102.94Qingdao Haier New Materials R&D Co., Ltd.92,751,346.4696,592,224.43Wolong Electric (Jinan) Motor Co., Ltd.71,939,568.1151,564,219.44Qingdao Haier Parts Procurement Co., Ltd.70,470,274.28247,164,539.11Other related parties400,986,332.92788,695,925.79Contract liabilities:

Chongqing Haier Electrical Appliances SalesCo., Ltd.23,346,968.98Dalian Haier International Trade Co., Ltd.3,460,894.14Shanghai Ruihai Chuangfeng IndustrialDevelopment Co., Ltd. (上海睿海創豐實業發展有限公司)2,912,845.29Other related parties4,699,012.2478,203,164.61Other payables:

Qingdao Manniq Intelligent Technology Co., Lt46,404,473.4914,038,277.93Feiketeng Intelligent Technology (Qingdao) Co.,

Ltd. (斐科騰智能科技（青島）有限公司)21,925,926.0851,986,700.46Dalian Haier International Trade Co., Ltd.21,899,297.2622,120,898.79Shandong COMSMO Smart Carbon Technology

Co., Ltd. (山東卡奧斯智碳科技有限公司)19,403,922.642,272,679.75COSMO Industrial Intelligence Research Institute

(Qingdao) Co., LTD (卡奧斯工業智慧研究院（青

島）有限公司)15,933,086.9015,494,371.98Qingdao Haier International Travel Agency Co.,

Ltd.15,356,340.9619,571,334.53COSMO Energy Technology Co., Ltd. (卡奧斯能

源科技有限公司)14,925,462.422,868,441.37Qingdao Blue Whale Technology Co., Ltd.9,749,402.252,969,397.03COSMO Moulds (Qingdao) Co., Ltd. (卡奧斯模具

（青島）有限公司)7,948,596.833,667,694.07COSMO Energy Technology (Chongqing) Co., Ltd.

(卡奧斯能源科技（重慶）有限公司)6,134,610.975,833,122.08Qingdao Haier Parts Procurement Co., Ltd.5,066,668.8073,915.22Qingdao Haier International Trading Co., Ltd.4,866,175.063,131,710.44

Section X Financial Report

Items and name of customers

ClosingBalance

OpeningBalanceCOSMO Energy Technology (Dalian) Co., Ltd.

(卡奧斯能源科技（大連）有限公司)4,289,091.82Other related parties47,972,244.44192,694,915.49

4. Other related party transactions

(1) On 30 March 2023, Haier Group Corporation and Haier Group Finance Co., Ltd.

(hereafter, the “Finance Company”) renewed the Financial Services FrameworkAgreement, and the “resolution on the renewal of the Financial Services FrameworkAgreement between Haier Smart Home Co., Ltd. and Haier Group Corporation andthe estimated amount of connected transaction” was considered and passed at thegeneral meeting. The Financial Services Framework Agreement became effective fromthe passing of the resolution.Various current balances of the Company and the Finance Company are as follows:

ItemsClosing BalanceOpening BalanceMonetary funds deposited at the FinanceCompany20,565,469,130.8126,278,848,914.68Debt investment deposited at the Finance

Company12,605,000,000.007,377,500,000.00Debt investment due within one year deposited

at the Finance Company327,500,000.00Other current assets deposited at the Finance

Company453,550,000.00Loans of the Finance Company196,200,183.66Interest receivable from the Finance Company1,164,072,073.76688,144,130.70Interest payable to the Finance Company2,070,180.99Bills issued7,770,695,481.538,909,470,662.88Foreign exchange derivatives of the Finance

Company2,413,311.00–10,143,691.03

Section X Financial Report

Various balances of the Company and the Finance Company are as follows:

Items

Amount for thecurrent period

Amount for theprevious periodInterest income of the Finance Company873,841,715.67765,875,670.14Interest expense of the Finance Company2,285,259.96435,000.00Service fee of the Finance Company8,377,892.1423,618,778.66Spot foreign exchange business (foreign

exchange settlement and sale)11,311,708,350.089,015,944,003.06

(2) The lease expense of the Company and its subsidiaries for production and operation

leased from related parties for the current period was RMB105 million (amount for thecorresponding period: RMB99 million).

(3) Haier Group Corporation provided joint liability guarantee for certain bills payable of

the subsidiaries of the Company with the guaranteed amount of RMB2,182 million atthe end of the period (amount at the beginning of the period: RMB2,639 million).

(4) Haier Group Corporation provided joint liability guarantee for certain loans of the

subsidiaries of the Company with the guaranteed amount of RMB320 million at theend of the period (amount at the beginning of the period: RMB0 million).(IV) Pricing Policy

1. Related-party Sales

Some related parties purchase components through the independent procurement platformof the Company, purchase electrical appliances for sales from the Company, and receiveafter-sales services, R&D service, housing rental and other business provided by thecompany due to their business needs. In April 2022, according to the implementation ofconnected transactions in the early stage and the relevant listing requirements in HongKong, the Company and Haier Group Corporation revised and signed the Product andMaterials Sales Framework Agreement, the Service Provision Framework Agreement and theProperty Leasing Framework Agreement on the basis of the original execution contract,which agreed on the financial connected transactions. The pricing principle included thatboth parties should agree on the price which is not less favourable than those provided bythe Company to the Independent Third Parties on arm’s length to ensure the fairness andreasonableness of connected transactions. The valid term of the agreement commencedfrom 1 January 2023 to 31 December 2025, which can be renewed for another three yearsupon expire.

Section X Financial Report

2. Related-party Procurement

In addition to independent procurement platform, the Company entrusted Haier GroupCorporation and its subsidiaries for procurements of part of raw materials. Moreover, theCompany entrusted Haier Group Corporation and its subsidiaries to provide the Companywith logistics and distribution, energy and power, basic research and testing, equipmentleasing, house leasing and maintenance, greening and cleaning, gift procurement, design,consulting, various ticket booking and other services. In April 2022, according to theimplementation of connected transactions in the early stage and the relevant listingrequirements in Hong Kong, the Company and Haier Group Corporation revised and signedthe Product and Materials Sales Framework Agreement, the Service Provision FrameworkAgreement and the Property Leasing Framework Agreement on the basis of the originalexecution contract, which agreed on the financial connected transactions. The pricingprinciple included that both parties should agree on the price which is not less favourablethan those provided by the Company to the Independent Third Parties on arm’s length toensure the fairness and reasonableness of connected transactions. The valid term of theagreement commenced from 1 January 2023 to 31 December 2025, which can berenewed for another three years upon expire.

3. Financial aspect

Some of the financial services such as deposit and loan service, discounting service andforeign exchange derivatives needed by the Company are provided by Haier GroupCorporation, its subsidiaries and other companies. According to the Financial ServiceAgreement entered among the Company, Haier Group Corporation and other parties, theprice of financial services is determined by the principle of not less favourable than marketvalue fair. The Company is entitled to decide whether to keep cooperation relationship withthem with the knowledge of the price prevailing in the market and in combination with itsown interests. While performing the agreement, the Company could also require otherfinancial service institutions to provide related financial services basing on actual situation.In order to meet the Company’s demands such as the avoidance of foreign exchangefluctuation risk, the Company may choose Haier Group Finance Co., Ltd. to provide someforeign exchange derivative business after comparing with comparable companies. TheCompany will uphold the safe and sound, appropriate and reasonable principle, underwhich all foreign exchange capital business shall have a normal and reasonable businessbackground to eliminate speculative operation. At the same time, the Company hasspecified the examination and permission rights, management positions and responsibilitiesat all levels for its foreign exchange capital business to eradicate the risks of operation bypersons and improved its response speed to risks on the premise that the risks areeffectively controlled. In March 2023, the Company and Haier Group Corporation renewedthe Financial Services Framework Agreement, which agreed on the financial connectedtransactions. The pricing principle included the deposit interest rate not lower than themaximum interest rate of major banks listed and the loan interest rate not less favourablethan the market price to ensure the fairness and reasonableness of connected transactions.The valid term of the agreement lasts until 31 December 2026, which can be renewed foranother three years upon expire.

Section X Financial Report

4. Others

The Company signed the Intellectual Property Licensing Framework Agreement with HaierGroup Corporation in November 2020. According to the agreement, Haier Group hasagreed to grant or procure its subsidiaries and contact persons to grant the license to theCompany at nil consideration to use all its intellectual property rights, including but notlimited to trademarks, patents, copyrights and logos for the products, packaging, servicesand business introduction documents of the Company. The date of the Intellectual PropertyLicensing Framework Agreement shall be permanently effective from the listing date. Whensuch specific intellectual property rights expire and are not renewed by Haier Group, ourright to use certain intellectual property rights under the Intellectual Property LicensingFramework Agreement will terminate.XIV. SHARE-BASED PAYMENTS

1. Equity instruments

√ Applicable □Not Applicable

Unit of number: shares

Unit and Currency of Amount: RMBCategories ofparticipantsGranted during the periodExercised during the periodVested during the periodLapsed during the period

NumberAmountNumberAmountNumberAmountNumberAmountDirectors and seniormanagement3,163,12173,168,417.40 1,932,86141,835,982.181,760,86320,427,509.29Staff35,828,312890,724,440.75 21,559,039486,054,338.7550,433,093560,851,925.40Total38,991,433963,892,858.15 23,491,900527,890,320.9452,193,956581,279,434.68

Section X Financial Report

Outstanding share options or other equity instruments at the end of the period

√ Applicable □Not Applicable

Outstanding share options at the end of the periodOutstanding other equity instruments at the end of the periodCategories of participantsExercise price

The remaining contractualtermExercise price

The remaining contractualterm2021 First OptionRMB25.63 per shareSeptember 2021—

September 20262021 Second OptionRMB25.63 per shareDecember 2021—

December 20262022 OptionRMB23.86 per shareJune 2022— June 20262022 Stock Ownership Plan AN/AAugust 2022–August 20242022 Stock Ownership Plan HN/AAugust 2022–August 20242023 Stock Ownership Plan AN/AJuly 2023–July 20252023 Stock Ownership Plan HN/AJuly 2023–July 20252024 Stock Ownership Plan AN/AAugust 2024–August 20262024 Stock Ownership Plan HN/AAugust 2024–August 20262021 Restricted SharesN/AAugust 2021–July 20242022 Restricted SharesN/AJuly 2022–June 20252023 Restricted SharesN/AJuly 2023–June 20262024 Restricted SharesN/AJune 2024–May 2027

2. Equity-settled share-based payments

√ Applicable □Not Applicable

Unit and Currency: RMBMethod of determining the fair value of equityinstrument on the date of grant

Closing price of share on the date of

grant, Black-Scholes ModelImportant parameters of the fair value of equityinstrument on the date of grant

Historical volatility rate, risk-free rate,

yield rateBasis for determining the number of exercisable

equity instruments

The best estimate of the managementReason for significant differences between current

and prior period estimates

NilAccumulated amount of equity-settled share-based

payment included in the capital reserve

RMB1.085 billion

3. Cash-settled share-based payments

□ Applicable √ Not Applicable

Section X Financial Report

4. Share-based payments for the current period

√ Applicable □Not Applicable

Unit and Currency: RMB

Categories of participants

Equity-settled

share-based

payment

Cash-settledshare-basedpaymentDirector, Senior management63,372,149.20Staff310,695,224.84Total374,067,374.04

5. Modification and termination of share-based payments

□ Applicable √ Not Applicable

XV. CONTINGENCIES

As of 27 March 2025, the Company has no significant contingencies that need to be disclosed.

Section X Financial Report

XVI. EVENTS AFTER THE BALANCE SHEET DATE

(1) On February 16, 2025, a fire broke out in the warehouse of Shanghai Cotai Supply Chain

Management Co., Ltd., a subsidiary of the Company, which was located in Songjiang District,Shanghai, resulting in the destruction of buildings, warehousing facilities and goods stored in thewarehouse, with a preliminary estimated loss of RMB146 million. As at the date of this report,the relevant departments are in the process of determining the cause of the accident. TheCompany has purchased property insurance for the above buildings, warehousing facilities andgoods, and is currently liaising with the insurance company in respect of the insurance claims.

(2) According to the resolution of the 13th meeting of the 11th session of the Board of Directors of

the Company held on 27 March 2025, the profit for the year is proposed to be distributed on thebasis of the total number of shares on the record date after deducting the repurchased sharesfrom the repurchased account when the plan is implemented in the future, the Company willdeclare cash dividend of RMB9.65 (including taxes) for every 10 shares to all shareholders.

Section X Financial Report

XVII. RISKS RELATED TO FINANCIAL INSTRUMENTS

1. Risk of financial instruments

√ Applicable □Not Applicable

The book value of various financial instruments on the balance sheet date is as follows:

Financial assets

Closing Balance

Items

Financial assetsmeasured at fairvalue andchanges of whichincluded incurrent profit and

loss

Measured atamortized cost

Financial assetsmeasured at fairvalue andchanges of whichincluded in othercomprehensive

incomeTotalMonetary funds55,583,842,589.7055,583,842,589.70Financial assets held for trading1,236,017,839.531,236,017,839.53Derivative financial assets142,709,716.91142,709,716.91Bills receivable12,118,681,244.1412,118,681,244.14Accounts receivable26,473,001,745.0126,473,001,745.01Financing receivables360,069,391.56360,069,391.56Other receivables3,489,181,537.803,489,181,537.80Non-current assets due within

one year1,439,758,652.551,439,758,652.55Other current assets491,724,709.59491,724,709.59Debt investments15,474,759,856.9915,474,759,856.99Long-term receivables224,724,107.31224,724,107.31Other equity instruments5,986,688,663.465,986,688,663.46Financial assets (continued)

Opening Balance

Items

Financial assetsmeasured at fairvalue andchanges of whichincluded incurrent profit and

loss

Measured atamortized cost

Financial assetsmeasured at fairvalue andchanges of whichincluded in other

comprehensive

incomeTotalMonetary funds57,255,962,206.2457,255,962,206.24Financial assets held for trading956,995,543.83956,995,543.83Derivative financial assets67,565,829.4467,565,829.44Bills receivable8,790,151,269.918,790,151,269.91Accounts receivable22,682,921,254.2522,682,921,254.25Financing receivables200,326,471.85200,326,471.85Other receivables2,949,235,439.772,949,235,439.77Other current assets1,530,274,566.661,530,274,566.66Debt investments9,117,874,328.669,117,874,328.66Long-term receivables350,409,496.85350,409,496.85Other equity instruments6,403,694,954.776,403,694,954.77

Section X Financial Report

Financial liabilities

Closing Balance

Items

Financialliabilitiesmeasured at fair

value

Financialliabilitiesmeasured atamortised costTotalShort-term borrowings13,784,367,443.9313,784,367,443.93Derivative financial liabilities71,011,310.0171,011,310.01Bills payable21,149,134,964.2121,149,134,964.21Accounts payable54,587,992,129.5854,587,992,129.58Other payables21,744,240,823.5021,744,240,823.50Non-current liabilities due in one year12,389,280,182.9812,389,280,182.98Long-term borrowings9,665,074,313.679,665,074,313.67Long-term payables188,220,056.59188,220,056.59Financial liabilities (continued)

Opening Balance

Items

Financialliabilitiesmeasured at fair

value

Financialliabilitiesmeasured atamortised costTotalShort-term borrowings10,895,076,014.8610,895,076,014.86Derivative financial liabilities168,625,004.97168,625,004.97Bills payable22,260,991,114.4222,260,991,114.42Accounts payable49,917,971,699.3149,917,971,699.31Other payables18,921,220,225.7818,921,220,225.78Non-current liabilities due in one year161,126,226.19161,126,226.19Long-term borrowings18,365,302,925.7718,365,302,925.77Long-term payables57,113,422.7857,113,422.78Other non-current liabilities1,977,104,051.661,977,104,051.66Please refer to related items in Note VII for details on each of the financial instruments of theCompany. Risks related to these financial instruments and the risk management policies taken bythe Company to mitigate these risks are summarized below. The management of the Companymanages and monitors these risk exposures to ensure the above risks are well under control.

Section X Financial Report

1. Credit risk

The credit risk of the Company mainly arises from bank deposits, bills receivable, accountsreceivable, interest receivable, other receivables and wealth management products.

(1) The Company’s bank deposits and wealth management products are mainly deposited

in Haier Finance Co., Ltd., state-owned banks and other large and medium-sizedlisted banks. The interest receivables are mainly the accrued interests from fixeddeposits which are deposited in the above banks. The Group does not believe thereis any significant credit risk due to defaults of its counterparties which would causeany significant loss. (2) Accounts receivable and bills receivable: The Company onlytrades with approved and reputable third parties. All customers who are traded bycredit are subject to credit assessment according to the policies of the Company, andthe payment terms shall be determined on a reasonable basis. The Companymonitors the balances of accounts receivable on an ongoing basis and purchasescredit insurance for receivables of large-amount credit customers in order to ensurethe Company is free from material bad debts risks. (3) Other receivables of theCompany mainly include export tax refund, borrowings and contingency provision. TheCompany strengthened its management and continuous monitoring in respect ofthese receivables and relevant economic business based on historical data, so as toensure that the Company’s significant risk of bad debts is controllable and will befurther reduced.

2. Liquidity risk

Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfillingobligations associated with financial liabilities. To control such risk, the Company utilizesvarious financing methods such as notes settlement and bank loans to strive for a balancebetween sustainable and flexible financing. It also has obtained bank credit facilities fromseveral commercial banks to satisfy its needs for working capital and capital expenditures.

3. Exchange rate risk

The Company’s businesses are based in mainland China, USA, Japan, Southeast Asia,South Asia, central and east Africa, Europe, and Australia, etc. and are settled in RMB,USD, and other currencies.The Company’s overseas assets and liabilities denominated in foreign currencies as well astransactions to be settled in foreign currencies expose the Company to fluctuations inexchange rates. The Company’s finance department is responsible for monitoring the sizeof transactions in foreign currencies and assets and liabilities denominated in foreigncurrencies to minimize the risk of exposure to fluctuation in exchange rate; the Companyresorts the way of signing forward foreign exchange contracts to avoid the risk ofexchange fluctuation.

Section X Financial Report

4. Interest rate risk

The Company’s interest rate risk arises primarily from its long- and short- term bank loansand bonds payables which are interest-bearing debts. Financial liabilities with floatinginterest rates expose the Company to cash flow interest rate risk, while financial liabilitieswith fixed interest rates expose the Company to fair value interest rate risk. The Groupdetermines the relative proportion of fixed-interest rate and floating interest rate contracts inlight of the prevailing market conditions.XVIII. OTHER SIGNIFICANT EVENTSAs at 27 March 2025, the Company has no other significant events that need to be disclosed.XIX.NOTES TO MAIN ITEMS OF FINANCIAL STATEMENTS OF THE PARENTCOMPANY

1. Accounts receivable

Aging

ClosingBalance

OpeningBalanceWithin one year467,689,337.45715,238,098.86

–2 years714,128,728.58378,071,982.79

–3 years378,071,982.79532,467,268.93Over 3 years529,373,541.54Accounts receivable balance2,089,263,590.361,625,777,350.58Allowance for bad debts251.55Net receivables2,089,263,590.361,625,777,099.03Changes in bad debt provision for accounts receivable in the current period:

Increase for the current

period

Decrease for the current

periodItems

OpeningBalance

Provision forthe currentperiod

OtherincreaseReversal

Write-off and

othermovement

ClosingBalanceAllowance for baddebts251.55251.55

Section X Financial Report

2. Other receivables

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing BalanceOpening BalanceInterest receivable137,951,583.62117,439,655.79Dividend receivable955,746,044.23570,000,000.00Other receivables34,215,510,473.8822,962,538,160.78Total35,309,208,101.7323,649,977,816.57Interest receivable

√ Applicable □Not Applicable

Unit and Currency: RMBItemsClosing BalanceOpening BalanceWithin 1 year70,005,254.26117,439,655.79More than 1 year67,946,329.36Total137,951,583.62117,439,655.79Dividend receivable

√ Applicable □Not Applicable

Unit and Currency: RMBItems (or investees)Closing BalanceOpening BalanceWithin 1 year385,746,044.23570,000,000.00More than 1 year570,000,000.00Total955,746,044.23570,000,000.00

Section X Financial Report

Other receivables

① The disclosure of other receivables by aging is as follows:

AgingClosing BalanceOpening BalanceWithin one year23,315,358,021.4513,256,949,623.31More than one year10,903,518,725.809,708,953,420.36Other receivables balance34,218,876,747.2522,965,903,043.67Allowance for bad debts3,366,273.373,364,882.89Net other receivables34,215,510,473.8822,962,538,160.78

② Changes in bad debt provision for other receivables in the current period:

Items

OpeningBalance

Increase for the current

period

Decrease for the current

period

ClosingBalanceProvision forthe currentperiod

OtherincreaseReversal

Write-off andothermovementAllowance for bad debts3,364,882.891,390.483,366,273.37

3. Long-term equity investment

√ Applicable □Not Applicable

(1) Details of long-term equity investments:

Unit and Currency: RMBClosing BalanceOpening BalanceItemsBook balance

Provision forimpairmentBook balance

Provision forimpairmentLong-term equity investmentIncluding: Long-term equity investments in

subsidiaries59,022,876,043.317,100,000.0052,823,723,686.317,100,000.00Long-term equity investments in

associates3,287,178,712.86109,300,000.003,121,372,319.75109,300,000.00Total62,310,054,756.17116,400,000.0055,945,096,006.06116,400,000.00

Section X Financial Report

(2) Long-term equity investments to subsidiaries

Name of investeeOpening Balance

Increase/Decrease for thecurrent periodClosing Balance

Impairmentprovisions at theend of the periodI. Subsidiaries:

Chongqing Haier Electronics Sales Co., Ltd.9,500,000.009,500,000.00Haier Group (Dalian) Electrical AppliancesIndustry Co., Ltd34,735,489.7934,735,489.79Qingdao Haier Refrigerator Co., Ltd.402,667,504.64402,667,504.64Qingdao Haier Special Refrigerator Co., Ltd.426,736,418.99426,736,418.99Qingdao Haier Information PlasticDevelopment Co., Ltd.102,888,407.30102,888,407.30Dalian Haier Precision Products Co., Ltd.41,836,159.3341,836,159.33Hefei Haier Plastic Co., Ltd.72,350,283.2172,350,283.21Qingdao Haier Technology Co., Ltd.16,817,162.0316,817,162.03Qingdao Household Appliance Technologyand Equipment Research Institute66,778,810.8066,778,810.80Qingdao Meier Plastic Powder Co., Ltd.24,327,257.7724,327,257.77Chongqing Haier Precision Plastic Co., Ltd.47,811,283.2447,811,283.24Qingdao Haier Electronic Plastic Co., Ltd.69,200,000.0069,200,000.00Dalian Haier Refrigerator Co., Ltd.138,600,000.00138,600,000.00Dalian Haier Air-conditioning Co., Ltd.99,000,000.0099,000,000.00Hefei Haier Air-conditioning Co., Limited79,403,123.8579,403,123.85Qingdao Haier Refrigerator (International)Co., Ltd.238,758,240.85238,758,240.85Qingdao Haier Air-Conditioner ElectronicsCo., Ltd.1,131,107,944.511,131,107,944.51Qingdao Haier Air Conditioner Gen Corp.,Ltd.220,636,306.02220,636,306.02Qingdao Haier Special Freezer Co., Ltd.471,530,562.76471,530,562.76Qingdao Haier Dishwasher Co., Ltd.206,594,292.82206,594,292.82Wuhan Haier Freezer Co., Ltd.47,310,000.0047,310,000.00Wuhan Haier Electronics Holding Co., Ltd.100,715,445.04100,715,445.04Chongqing Haier Air-conditioning Co., Ltd100,000,000.00100,000,000.00Hefei Haier Refrigerator Co., Ltd.49,000,000.0049,000,000.00Qingdao Haier Whole Set Home ApplianceService Co., Ltd.118,000,000.00118,000,000.00Chongqing Haier Refrigeration ApplianceCo., Ltd.91,750,000.0091,750,000.00Haier Shanghai Zhongzhi Fang Chuang KeManagement Co., Ltd.2,000,000.002,000,000.00Qingdao Haier Special Refrigerating Appliance

Co., Ltd.100,000,000.00100,000,000.00Haier Shareholdings (Hong Kong) Limited29,249,228,284.246,199,152,357.0035,448,380,641.24Shenyang Haier Refrigerator Co., Ltd.100,000,000.00100,000,000.00Foshan Haier Freezer Co., Ltd.100,000,000.00100,000,000.00Zhengzhou Haier Air-conditioning Co., Ltd.100,000,000.00100,000,000.00Qingdao Haidayuan Procurement Service

Co., Ltd.20,000,000.0020,000,000.00Qingdao Haier Intelligent Technology

Development Co., Ltd.130,000,000.00130,000,000.00

Section X Financial Report

Name of investeeOpening Balance

Increase/Decrease for thecurrent periodClosing Balance

Impairmentprovisions at theend of the periodQingdao Haier Technology InvestmentCo., Ltd.410,375,635.00410,375,635.00Qingdao Casarte Smart Living AppliancesCo., Ltd.10,000,000.0010,000,000.00Haier Overseas Electric Appliance Co., Ltd.500,000,000.00500,000,000.00Haier (Shanghai) Electronics Co., Ltd.12,500,000.0012,500,000.00Haier U+smart Intelligent Technology (Beijing)Co., Ltd.143,000,000.00143,000,000.00Haier Electronics Group Co., Ltd.3,979,407,602.613,979,407,602.617,100,000.00Flourishing Reach Limited (SPVX)12,751,300,336.0212,751,300,336.02Qingdao Haidarui Procurement ServiceCo., Ltd.107,800,000.00107,800,000.00Qingdao Haier Intelligent HouseholdAppliances Co., Ltd.326,400,000.00326,400,000.00Qingdao Haidacheng Procurement ServiceCo., Ltd.100,000,000.00100,000,000.00Qingdao Haier Quality Inspection Co., Ltd.18,657,135.4918,657,135.49Qingdao Haier Home AI Industry InnovationCenter Co., Ltd.100,000,000.00100,000,000.00Haier Zhjia Experience Cloud Ecological

Technology Co., Ltd.100,000,000.00100,000,000.00Qingdao Ruibo Ecological EnvironmentalTechnology Co., Ltd.55,000,000.0055,000,000.00Total52,823,723,686.316,199,152,357.0059,022,876,043.317,100,000.00

Section X Financial Report

(3) Long-term equity investments to associates

Increase/Decrease for the current periodName of investee

OpeningBalance

Increased/decreasedamount for thecurrent period

Investment

incomerecognized underequity methodOthers

ClosingBalance

Impairmentprovisions at theend of the periodWolong Electric (Jinan)

Motor Co., Ltd.172,054,149.94 21,314,938.91 193,369,088.85Qingdao Haier SAIF Smart

Home Industry

Investment Center

(Limited Partnership)206,764,442.76 1,746,626.13–17,234,474.03191,276,594.86Bank of Qingdao Co., Ltd.1,267,732,987.42 138,382,500.35–30,221,860.161,375,893,627.61Mitsubishi Heavy Industries

Haier (Qingdao)

Air-conditioners Co.,

Ltd.663,804,966.31 148,581,027.30–113,540,000.00698,845,993.61Qingdao Haier Carrier

Refrigeration Equipment

Co., Ltd.412,107,471.53 4,175,855.45 416,283,326.9821,000,000.00Qingdao Haier Multimedia

Co., Ltd88,300,000.00 88,300,000.0088,300,000.00Qingdao HBIS New Material

Technology Co., Ltd.310,608,301.79 15,832,935.36–3,231,156.20323,210,080.95Total3,121,372,319.75330,033,883.50–164,227,490.393,287,178,712.86109,300,000.00

4. Operating revenue and operating cost

√ Applicable □Not Applicable

Unit and Currency: RMBAmount for the current periodAmount for the previous periodItemsRevenueCostRevenueCostPrimary Business415,969,097.84360,553,019.13633,158,770.00546,305,360.36Other Business78,657,620.1775,082,634.1787,833,714.0779,980,358.06Total494,626,718.01435,635,653.30720,992,484.07626,285,718.42

Section X Financial Report

5. Investment income

√ Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for thecurrent period

Amount for theprevious periodInvestment income from long-term equity investment

accounted for using cost method9,958,795,244.238,458,124,538.41Long-term equity investments income calculated by theequity method330,033,883.50147,523,868.11Income from wealth management products60,818,942.1845,058,372.14Investment income from investment in other equityinstrument during the holding period319,278.00317,575.18Total10,349,967,347.918,651,024,353.84

XX. APPROVAL OF FINANCIAL REPORTThis financial report was approved for publication by the Directors of the Company on 27 March2025.XXI. SUPPLEMENTARY INFORMATION

1. Basic earnings per share and diluted earnings per share

Amount for the current periodAmount for the previous period

Earnings per share

(RMB)

Earnings per share(RMB)

Items

Weightedaveragereturn onnet assets

Basicearningsper share

Dilutedearnings

Weightedaveragereturn onnet assetsper share

Basicearningsper share

Dilutedearningsper shareNet profit attributable to ordinary

shareholders of the Company17.70%2.022.0217.24%1.791.78Net profit attributable to ordinary

shareholders of the Company

after deduction of non-recurring

profit or loss16.81%1.931.9216.06%1.711.69

Section X Financial Report

2. Non-recurring profit or loss

Items

Amount for the

current period

Amount for theprevious periodNet profit attributable to ordinary shareholders of the ParentCompany18,741,120,122.9316,596,615,045.87Less: non-recurring profit or loss936,387,313.30772,450,884.44Net profit attributable to ordinary shareholders of the ParentCompany after deduction of non-recurring profit or loss17,804,732,809.6315,824,164,161.43Breakdown of non-recurring profit and loss for the current periodNon-recurring profit and loss itemsAmounts for the current periodProfit and loss from disposal of non-current assets–77,035,862.98Government subsidies included in current profit or loss,except for government subsidies that are closely relatedto the Company’s normal business operations, to beenjoyed in a fixed amount or fixed quantity based onthe national unified standards1,324,181,478.11Profit and loss from fair value changes of financial assetsheld for trading, financial liabilities held for trading, aswell as investment gains arising from disposal offinancial assets held for trading, financial liabilities heldfor trading and financial assets held for sale, except theeffective hedging related to the normal operations of theCompany46,092,153.02Other non-operating income and expenses except theaforementioned items–139,979,862.69Effect of minority equity interest–38,778,108.00Effect of income tax–178,092,484.16Effect of profit from business combination under common

controlTotal936,387,313.30For the Company’s recognition of items that are not listed in the “Explanatory Announcement onInformation Disclosure for Companies Offering Their Securities to the Public No.1—

Non-recurring Profit or Loss” as non-recurring profit or loss items and the amount of which issignificant, and for non-recurring profit or loss items as illustrated in the “ExplanatoryAnnouncement on Information Disclosure for Companies Offering Their Securities to the PublicNo.1—Non-recurring Profit or Loss” designated as recurring profit or loss items, reasons shallbe specified.

□ Applicable √ Not Applicable