Midea Group Co., Ltd.Interim Report for the First Quarter 2019 April 2019 Section I Important Reminders 1. The Board of Directors, the Supervisory Committee as well as all thedirectors, supervisors and senior management staff of Midea Group Co.,Ltd. (hereinafter referred to as the “Company”) have warranted that thisReport contains no false record, misleading statement or materialomission. And they shall be jointly and severally liable for the factuality,accuracy and completeness of the information given in this Report.2. All the directors have attended the Q1 report review board meeting.3. The financial statements contained in this Report have not beenaudited by a certified public auditors (CPAs) firm.4. Mr. Fang Hongbo, Chairman of the Board and President of theCompany, and Ms. Zhong Zheng, Director of Finance of the Company,have represented and warranted that the financial statements in thisReport are factual, accurate and complete.5. This Report has been prepared in both Chinese and English. Shouldthere be any discrepancy between the two versions, the Chinese versionshall prevail. Section II Company Profile 1. Major Accounting Data and Financial Indicators Does the Company adjust retrospectively or restate accounting data of previous years?□ Yes √ No | Jan.-Mar. 2019 | Jan.-Mar. 2018 | YoY Change (%) | Operating revenues (RMB'000) | 75,205,780 | 69,737,528 | 7.84% | Net profits attributable to shareholders of the Company (RMB'000) | 6,129,026 | 5,256,231 | 16.60% | Net profits attributable to shareholders of the Company before non-recurring profits and losses (RMB'000) | 6,084,881 | 5,077,715 | 19.84% | Net cash flows from operating activities (RMB'000) | 11,842,782 | 4,429,092 | 167.39% | Basic earnings per share (RMB/share) | 0.94 | 0.80 | 17.50% | Diluted earnings per share (RMB/share) | 0.93 | 0.79 | 17.72% | Weighted average ROE (%) | 7.08% | 6.87% | 0.21% | | 31 Mar. 2019 | 31 Dec. 2018 | Change (%) | Total assets (RMB'000) | 278,910,215 | 263,701,148 | 5.77% | Net assets attributable to shareholders of the Company (RMB'000) | 89,610,201 | 83,072,116 | 7.87% |
Total share capital of the Company on the last trading session before disclosure (share) | 6,585,838,349 | Fully diluted earnings per share based on the latest share capital above (RMB/share) | 0.93 |
Profit or loss from disposal of non-current assets | -6,368 | | Except for effectively hedging business related to normal business operations of the Company, profit or loss arising from the change in the fair value of held-for-trading financial assets and liabilities, as well as investment profit or loss produced from the disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets | -62,512 | | Other | 140,386 | | | | | Less: Corporate income tax | 22,714 | | Minority interests (after tax) | 4,647 | | Total | 44,145 | -- |
Total number of common shareholders at the period-end | 162,344 | Total number of preference shareholders with resumed voting rights at the period-end (if any) | 0 | Top ten shareholders | Name of shareholder | Nature of shareholder | Shareholding percentage (%) | Number of shares held | Number of restricted shares held | Pledged or frozen shares | Status of shares | Number of shares | Midea Holding Co., Ltd. | Domestic | 33.48 | 2,212,046,613 | | Pledg | 551,000,000 |
| non-state-owned corporation | | | | ed | | Hong Kong Exchanges and Clearing Limited | Foreign corporation | 16.18 | 1,069,044,139 | | | | China Securities Finance Co., Ltd. | State-owned corporation | 3.00 | 198,145,134 | | | | Fang Hongbo | Domestic individual | 2.07 | 136,990,492 | 102,742,869 | | | Canada Pension Plan Investment Board- own funds (stock exchange) | Foreign corporation | 1.82 | 120,379,067 | | | | Huang Jian | Domestic individual | 1.33 | 88,023,300 | | | | Central Huijin Asset Management Ltd. | State-owned corporation | 1.19 | 78,474,900 | | | | Hillhouse Capital Management Limited- HCM China Fund | Foreign corporation | 0.94 | 61,831,900 | | | | GIC Private Limited | Foreign corporation | 0.84 | 55,535,104 | | | | Xiaomi Technology Co., Ltd. | Domestic non-state-owned corporation | 0.81 | 53,500,000 | | | | Top ten non-restricted common shareholders | Name of shareholder | Number of non-restricted common shares held at the period-end | Type of shares | Type | Number | Midea Holding Co., Ltd. | 2,212,046,613 | RMB common stock | 2,212,046,613 | Hong Kong Exchanges and Clearing Limited | 1,069,044,139 | RMB common stock | 1,069,044,139 | China Securities Finance Co., Ltd. | 198,145,134 | RMB common stock | 198,145,134 | Canada Pension Plan Investment Board- own funds (stock exchange) | 120,379,067 | RMB common stock | 120,379,067 | Huang Jian | 88,023,300 | RMB common stock | 88,023,300 | Central Huijin Asset Management Ltd. | 78,474,900 | RMB common stock | 78,474,900 | Hillhouse Capital Management Limited- HCM China Fund | 61,831,900 | RMB common stock | 61,831,900 |
GIC Private Limited | 55,535,104 | RMB common stock | 55,535,104 | Xiaomi Technology Co., Ltd. | 53,500,000 | RMB common stock | 53,500,000 | Yuan Liqun | 51,994,300 | RMB common stock | 51,994,300 | Explanation of related relationship or/and acting-in-concert parties among the above-mentioned shareholders | N/A | Top ten non-restricted common shareholders taking part in securities margin trading (if any) | N/A |
Section III Significant Events 1. Major changes of main items in financial statements and financial indicatorswithin the Report Period, as well as the reasons for the changes √ Applicable □ N/A Unit: RMB’000 Financial statement items (consolidated) | 31 March 2019/January-March 2019 | 31 December 2018/January-March 2018 | Change (%) | Reasons for the changes | Derivative financial assets | 87,975 | 220,197 | -60.05% | Mainly due to the changes in the fair value of derivative financial instruments | Long-term receivables | 16,280 | 34,815 | -53.24% | Mainly due to the reclassification to current assets as a result of business changes | Short-term borrowings | 1,270,263 | 870,390 | 45.94% | Mainly due to the increased borrowings | Borrowings from the Central Bank | 50,996 | 99,754 | -48.88% | Mainly due to the repayment of borrowings to the Central Bank | Customer deposits and deposits from banks and other financial institutions | 91,638 | 44,386 | 106.46% | Mainly due to the changes in the operation of Midea Group Finance | Derivative financial liabilities | 275,822 | 756,299 | -63.53% | Mainly due to the changes in the fair value of derivative financial instruments | Employee benefits payable | 3,979,688 | 5,788,004 | -31.24% | Mainly due to the payment of salaries to employees | Treasury stock | 1,473,697 | 4,918,427 | -70.04% | Mainly due to the retirement of treasury stock | Interest income | 294,332 | 549,959 | -46.48% | Mainly due to the changes in the operation of Midea Group Finance | Interest expenses | 75,120 | 150,518 | -50.09% | Mainly due to the changes in the operation of Midea Group Finance | Finance expenses | -481,058 | 95,978 | -601.22% | Mainly due to the increased interest income on deposits | Other income | 66,516 | 224,233 | -70.34% | Mainly due to the decreased governmental subsidies |
Investment income | -146,977 | 317,938 | -146.23% | Mainly due to the decreased gains on delivered derivative financial instruments | Profit/loss on changes in fair value | 230,915 | -118,467 | 294.92% | Mainly due to the changes in the fair value of derivative financial instruments | Profit/loss on disposal of assets | -6,369 | -13,053 | 51.21% | Mainly due to the decreased losses on disposal of non-current assets | Net cash flows from operating activities | 11,842,782 | 4,429,092 | 167.39% | Mainly due to the increased cash received from sales of goods or rendering of services | Net cash flows from investing activities | -16,811,399 | -7,250,092 | -131.88% | Mainly due to the increased cash paid to acquire investments | Net cash flows from financing activities | 4,139,282 | -2,254,205 | 283.62% | Mainly due to the increased cash received from borrowings |
Limited in a Share Swap via A-share Offering, setting the record date for the appraisal right on 7 May2019. And trading in the Company’s stock will be suspended from 8 May 2019 for the distribution anddeclaration of appraisal right, etc. Summary of the significant event | Disclosure date | Index to the related announcement | The Proposal on the Plan of Midea Group Co., Ltd. to Merge with Wuxi Little Swan Company Limited in a Share Swap via A-share Offering and other relevant proposals were considered and approved at the 2nd Meeting of the 3rd Board. | 24 October 2018 | Announcement No. 2018-087 on www.cninfo.com.cn | The Proposal on the Review of the Report of Midea Group Co., Ltd. on Merging with Wuxi Little Swan Company Limited in a Share Swap via A-share Offering and the Related Transaction (Draft) and Its Summary, together with other relevant proposals, were considered and approved at the 4th Meeting of the 3rd Board. | 22 November 2018 | Announcement No. 2018-095 on www.cninfo.com.cn | The Proposal on the Plan of Midea Group Co., Ltd. to Merge with Wuxi Little Swan Company Limited in a Share Swap via A-share Offering, together with other relevant proposals, were considered and approved at the 3rd Special Meeting of Shareholders of 2018. | 22 December 2018 | Announcement No. 2018-105 on www.cninfo.com.cn | The Company received the CSRC Reply on the Approval of the Merger of Midea Group Co., Ltd. with Wuxi Little Swan Company Limited (ZJXK [2019] No. 352). | 13 March 2019 | Announcement No. 2019-032 on www.cninfo.com.cn | The Company received the Reply of the Foshan Central Sub-Branch of the State Administration of Foreign Exchange on the Foreign Exchange Affairs in Midea Group Co., Ltd.’s Merger with Wuxi Little Swan Company Limited in a Share Swap via A-share Offering (FHF [2019] No. 1). | 24 April 2019 | Announcement No. 2019-049 on www.cninfo.com.cn | The Company disclosed the Indicative Announcement on the Distribution and Implementation of Appraisal Right for the Merger with Wuxi Little Swan Company Limited in a Share Swap via A-share Offering, setting the record date for the appraisal right on 7 May 2019. And trading in the Company’s stock will be suspended from 8 May 2019 for the distribution and declaration of appraisal right, etc. | 26 April 2019 | Announcement No. 2019-052 on www.cninfo.com.cn |
√Applicable □N/AThe Proposal on the Plan for the Repurchase of Some Public Shares was approved at the 7th Meetingof the 3rd Board of Directors on 22 February 2019. As such, the Company was agreed to repurchase,with its own funds, no less than 60,000,000 shares and no more than 120,000,000 shares throughbidding at the stock exchange at a price not exceeding RMB55/share. The Report on the Repurchase ofSome Public Shares was disclosed on 28 February 2019.As per the Measures on the Administration of Listed Companies’ Buying back Shares Held by the Public(Trial), the Supplementary Provisions on the Share Repurchase by Listed Companies by Means ofCentralized Bidding, the Specific Implementation Rules of the Shenzhen Stock Exchange for the ShareRepurchase by Listed Companies, and other applicable rules, the Company shall disclose the sharerepurchase progress in its periodic reports. Therefore, the Company hereby discloses its sharerepurchase progress up to the end of April 2019 as follows: Up to 29 April 2019, the Company has repurchased a total of 17,584,338 shares (0.2663% of theCompany’s total share capital) in its securities account for repurchase through bidding at the stockexchange, with a total payment of RMB855,786,862.34 (exclusive of transaction charges). The highestrepurchase price was RMB54.90/share and the lowest was RMB45.62/share. The repurchase is incompliance with the applicable laws and regulations, as well as the Company’s repurchase plan.Progress of any repurchased share reduction through bidding at the stock exchange□ Applicable √ N/A 3. Overdue commitments of the Company’s actual controller, shareholders, relatedparties and acquirer, as well as the Company and other commitment makers in theReport Period or ongoing at the period-end □ Applicable √ N/ANo such cases in the Reporting Period. 4. Operating result forecast for January-June 2019 Warning of possible loss or considerable YoY change of the accumulated net profit made during theperiod-start until the end of the next Report Period according to predictions as well as any explanationsfor these reasons: □ Applicable √ N/A 5. Securities investment √Applicable □N/A Unit: RMB’000 Type of securities | Code of securities | Abbreviation of securities | Initial investment cost | Measurement method | Opening carrying amount | Profit or loss from change in fair value during the period | Cumulative fair value change charged to equity | Purchased in the period | Sold in the period | Profit or loss in the period | Closing carrying amount | Accounting title | Funding source | Domestically/Overseas listed stock | 1810 | XIAOMI-W | 1,272,584 | Fair value method | 1,122,609 | -130,555 | -24,030 | - | - | - | 968,024 | Financial assets available for sale | Own Funds | Total | 1,272,584 | -- | 1,122,609 | -130,555 | -24,030 | - | - | - | 968,024 | - | -- |
Operating party | Relationship with the Company | Related transaction | Type of derivative | Initial investment amount | Starting date | Ending date | Opening investment amount | Purchased in Reporting Period | Sold in Reporting Period | Amount provided for impairment (if any) | Closing investment amount | Closing investment amount as a percentage of the Company’s closing net assets | Actual gain/loss in Reporting Period | Futures company | No | No | Futures contracts | 276 | 1 January 2019 | 31 December 2019 | 276 | - | - | - | 659 | 0.001% | 2,893 |
Bank | No | No | Forward forex contracts | -644,052 | 1 January 2019 | 31 December 2019 | -644,052 | - | - | - | -48,933 | -0.055% | 246,936 | Total | -643,776 | -- | -- | -643,776 | - | - | - | -48,274 | -0.054% | 249,829 | Source of derivatives investment funds | All from the Company’s own funds | Litigation involved (if applicable) | N/A | Disclosure date of the announcement about the board’s consent for the derivative investment (if any) | 18 April 2019 | Disclosure date of the announcement about the general meeting’s consent for the derivative investment (if any) | - | Risk analysis of positions held in derivatives during the Reporting Period and explanation of control measures (Including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | For the sake of eliminating the cost risk of the Company's bulk purchases of raw materials as a result of significant fluctuations in raw material prices, the Company not only carried out futures business for some of the materials, but also made use of bank financial instruments and promoted forex funds business, with the purpose of avoiding the risks of exchange and interest rate fluctuation, realizing the preservation and appreciation of forex assets, reducing forex liabilities, as well as achieving locked-in costs. The Company has performed sufficient evaluation and control against derivatives investment and position risks, details of which are described as follows: 1. Legal risk: The Company's futures business and forex funds businesses shall be conducted in compliance with laws and regulations, with clearly covenanted responsibility and obligation relationship between the Company and the agencies. Control measures: The Company has designated relevant responsible departments to enhance learning of laws and regulations and market rules, conducted strict examination and verification of contracts, defined responsibility and obligation well, and strengthened compliance check, so as to ensure that the Company's derivatives investment and position operations meet the requirements of the laws and regulations and internal management system of the Company. 2. Operational risk: Imperfect internal process, staff, systems and external issues may cause the Company to suffer from loss during the course of its futures business and forex funds business. Control measures: The Company has not only developed relevant management systems that clearly defined the assignment of responsibility and approval process for the futures business and forex funds business, but also established a comparatively well-developed monitoring mechanism, aiming to effectively reduce operational risk by strengthening risk control over the |
| business, decision-making and trading processes. 3. Market risk: Uncertainties caused by changes in the prices of bulk commodity and exchange rate fluctuations in foreign exchange market could lead to greater market risk in the futures business and forex funds business. Meanwhile, inability to timely raise sufficient funds to establish and maintain hedging positions in futures operations, or the forex funds required for performance in forex funds operations being unable to be credited into account could also result in loss and default risks. Control measures: The futures business and forex funds business of the Company shall always be conducted by adhering to prudent operation principles. For futures business, the futures transaction volume and application have been determined strictly according to the requirements of production & operations, and the stop-loss mechanism has been implemented. Besides, to determine the prepared margin amount which may be required to be supplemented, the futures risk measuring system has been established to measure and calculate the margin amount occupied, floating gains and losses, margin amount available and margin amount required for intended positions. As for forex funds business, a hierarchical management mechanism has been implemented, whereby the operating unit which has submitted application for funds business should conduct risk analysis on the conditions and environment affecting operating profit and loss, evaluate the possible greatest revenue and loss, and report the greatest acceptable margin ratio or total margin amount, so that the Company can update operating status of the funds business on a timely basis to ensure proper funds arrangement before the expiry dates. | Changes in market prices or fair value of derivative products during the Reporting Period, specific methods used and relevant assumption and parameter settings shall be disclosed for analysis of fair value of derivatives | 1. Profit/loss from futures contracts during the Reporting Period was RMB2,893,000. 2. Profit/loss from forward forex contracts during the Reporting Period was RMB246,936,000. 3. Public quotations in futures market or forward forex quotations announced by the Bank of China are used in the analysis of derivatives fair value. | Explanation of significant changes in accounting policies and specific financial accounting principles in respect of the Company's derivatives for the Reporting Period as compared to the previous Reporting Period | No change |
Special opinions expressed by independent directors concerning the Company's derivatives investment and risk control | The Company's independent directors are of the view that the futures hedging business is an effective instrument for the Company to eliminate price volatility and implement risk prevention measures through enhanced internal control, thereby improving the operation and management of the Company; the Company's foreign exchange risk management capability can be further improved through the forex funds business, so as to maintain and increase the value of foreign exchange assets and the abovementioned investment in derivatives can help the Company to fully bring out its competitive advantages. Therefore, it is practicable for the Company to carry out derivatives investment business, and the risks are controllable. |
Date | Type of visit | Type of visitor | Discussions | 14-15 January 2019 | Field research | Institution | Please refer to Investor Relations Activities from 14 January 2019 to 15 January 2019 on the website of www.cninfo.com.cn | 17 January 2019 | Field research | Institution | Please refer to Investor Relations Activities on 17 January 2019 on the website of www.cninfo.com.cn | 21-22 February 2019 | Field research | Institution | Please refer to Investor Relations Activities from 21 February 2019 to 22 February 2019 on the website of www.cninfo.com.cn |
Section IV Financial Statements 1. Financial statements Balance Sheet | | | | | | Prepared by Midea Group Co., Ltd. 31 March 2019 | Unit: RMB’000 |
ASSETS | 31 March 2019 | 31 December 2018 | 31 March 2019 | 31 December 2018 | | | | | Consolidated | Consolidated | Company | Company | Current assets: | | | | | Cash at bank and on hand | 29,004,072 | 27,888,280 | 15,384,459 | 15,361,626 | Trading financial assets | 5,170,374 | | 4,189,001 | | Derivative financial assets | 87,975 | 220,197 | - | - | Notes and accounts receivable | 38,877,726 | 31,946,468 | - | - | Advances to suppliers | 2,456,293 | 2,215,888 | 33,871 | 55,069 | Loans and advances | 12,786,217 | 11,328,392 | - | - | Other receivables | 3,063,118 | 2,971,368 | 11,845,517 | 11,593,020 | Inventories | 24,090,062 | 29,645,018 | - | - | Other current assets | 85,126,533 | 76,473,827 | 68,060,974 | 55,052,256 | Total current assets | 200,662,370 | 182,689,438 | 99,513,822 | 82,061,971 | Non-current assets: | | | | | Available-for-sale financial assets | | 1,906,878 | | 56,579 | Long-term receivables | 16,280 | 34,815 | - | - | Long-term equity investments | 2,723,743 | 2,713,316 | 28,271,761 | 28,236,295 | Other non-current financial assets | 861,403 | | 56,579 | | Investment properties | 387,008 | 391,765 | 551,306 | 560,954 | Fixed assets | 21,974,050 | 22,437,212 | 1,018,460 | 1,056,790 | Construction in progress | 2,033,026 | 2,077,621 | 62,237 | 51,872 | Intangible assets | 15,657,203 | 16,186,675 | 712,715 | 712,454 | Goodwill | 28,178,411 | 29,100,390 | - | - | Long-term prepaid expenses | 1,167,629 | 1,191,373 | 166,648 | 174,684 | Deferred tax assets | 4,742,976 | 4,421,313 | 162,094 | 202,703 | Other non-current assets | 506,116 | 550,352 | 1,355 | 4,576 | Total non-current assets | 78,247,845 | 81,011,710 | 31,003,155 | 31,056,907 | TOTAL ASSETS | 278,910,215 | 263,701,148 | 130,516,977 | 113,118,878 |
| | | | | Legal representative: Principal in charge of accounting: Head of accounting department: Fang Hongbo Zhong Zheng Chen Lihong |
Balance Sheet (Continued) | | | | | | Prepared by Midea Group Co., Ltd. 31 March 2019 | Unit: RMB’000 |
LIABILITIES AND SHAREHOLDERS' EQUITY | 31 March 2019 | 31 December 2018 | 31 March 2019 | 31 December 2018 | | | | | Consolidated | Consolidated | Company | Company | Current liabilities: | | | | | Short-term borrowings | 1,270,263 | 870,390 | 1,309,000 | 575,000 | Borrowings from the Central Bank | 50,996 | 99,754 | - | - | Customer deposits and deposits from banks and other financial institutions | 91,638 | 44,386 | - | - | Derivative financial liabilities | 275,822 | 756,299 | - | - | Notes and accounts payable | 65,882,696 | 60,226,741 | - | - | Advances from customers | 13,144,610 | 16,781,666 | - | - | Employee benefits payable | 3,979,688 | 5,788,004 | 559,160 | 573,632 | Taxes payable | 3,694,302 | 3,875,298 | 188,579 | 280,499 | Other payables | 2,933,143 | 3,346,129 | 86,359,825 | 74,714,012 | Current portion of non-current liabilities | 6,808,447 | 7,122,712 | - | - | Other current liabilities | 37,552,173 | 31,319,709 | 33,248 | 44,414 | Total current liabilities | 135,683,778 | 130,231,088 | 88,449,812 | 76,187,557 | Non-current liabilities: | | | | | Long-term borrowings | 34,913,366 | 32,091,439 | 4,000,000 | - | Long-term payables | 103,240 | 88,890 | - | - | Provisions | 276,291 | 268,887 | - | - | Deferred income | 682,961 | 647,583 | - | - | Long-term employee benefits payable | 2,351,078 | 2,480,318 | - | - | Deferred tax liabilities | 4,420,366 | 4,422,074 | - | - | Other non-current liabilities | 1,011,153 | 1,016,352 | - | - | Total non-current liabilities | 43,758,455 | 41,015,543 | 4,000,000 | - | Total liabilities | 179,442,233 | 171,246,631 | 92,449,812 | 76,187,557 | Shareholders' equity: | | | | | Share capital | 6,603,423 | 6,663,031 | 6,603,423 | 6,663,031 | Capital surplus | 15,432,472 | 18,451,307 | 7,606,037 | 10,615,389 | Less: Treasury stock | (1,473,697) | (4,918,427) | (1,473,697) | (4,918,427) | Other comprehensive income | (1,291,512) | (1,332,153) | 10,010 | 6,020 | General risk reserve | 366,947 | 366,947 | - | - | Surplus reserve | 5,079,096 | 5,079,096 | 5,079,096 | 5,079,096 | Undistributed profits | 64,893,472 | 58,762,315 | 20,242,296 | 19,486,212 |
Total equity attributable to shareholders of the Company | 89,610,201 | 83,072,116 | 38,067,165 | 36,931,321 | Minority interests | 9,857,781 | 9,382,401 | - | - | Total shareholders' equity | 99,467,982 | 92,454,517 | 38,067,165 | 36,931,321 | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 278,910,215 | 263,701,148 | 130,516,977 | 113,118,878 | | | | | | Legal representative: Principal in charge of accounting: Head of accounting department: Fang Hongbo Zhong Zheng Chen Lihong |
Income Statement | | | | | | Prepared by Midea Group Co., Ltd. January-March 2019 Unit: RMB’000 | Item | | | | | | | January-March 2019 | January-March 2018 | January-March 2019 | January-March 2018 | Consolidated | Consolidated | Company | Company | 1. Total revenue | 75,500,426 | 70,287,509 | 467,215 | 414,674 | Including: Operating revenue | 75,205,780 | 69,737,528 | 467,215 | 414,674 | Interest income | 294,332 | 549,959 | - | - | Fee and commission income | 314 | 22 | - | - | 2. Total Cost | (67,960,739) | (63,943,697) | 305,333 | (55,101) | Including: Cost of sales | (53,877,858) | (51,869,174) | (13,345) | (14,077) | Interest expenses | (75,120) | (150,518) | - | - | Fee and commission expenses | (2,456) | (808) | - | - | Taxes and surcharges | (489,405) | (403,126) | (7,116) | (13,485) | Selling and distribution expenses | (9,513,634) | (7,468,456) | - | - | General and administrative expenses | (1,977,121) | (1,818,424) | (109,198) | (103,980) | Research and development expenses | (2,205,598) | (1,938,818) | - | - | Finance expenses | 481,058 | (95,978) | 435,139 | 76,092 | Including: Interest expenses | (224,786) | (190,329) | (297,552) | (125,483) | Interest income | 953,378 | 299,045 | 736,263 | 201,028 | Asset impairment losses | (12,317) | (198,395) | - | 349 | Credit impairment losses | (288,288) | | (147) | | Add: Other income | 66,516 | 224,233 | - | - | Investment income | (146,977) | 317,938 | 71,992 | 117,752 |
Including: Investment income from associates and joint ventures | 105,865 | 75,515 | 66,507 | 58,704 | Profit/(loss) on changes in fair value | 230,915 | (118,467) | 33,665 | - | Profit /(loss) on disposal of assets | (6,369) | (13,053) | - | 263 | 3. Operating profit | 7,683,772 | 6,754,463 | 878,205 | 477,588 | Add: Non-operating income | 57,022 | 60,554 | 4,372 | 1,769 | Less: Non-operating expenses | (21,839) | (25,846) | (85) | (4,003) | 4. Total profit | 7,718,955 | 6,789,171 | 882,492 | 475,354 | Less: Income tax expenses | (1,177,710) | (1,143,376) | (128,539) | 24,669 | 5. Net profit | 6,541,245 | 5,645,795 | 753,953 | 500,023 | (1) Classified by continuity of operations | | | | | Net profit from continuing operations | 6,541,245 | 5,645,795 | 753,953 | 500,023 | Net profit from discontinued operations | - | - | - | - | (2) Classified by ownership of the equity | | | | | Attributable to equity owners of the Company | 6,129,026 | 5,256,231 | 753,953 | 500,023 | Minority interests | 412,219 | 389,564 | - | - | 6. Other comprehensive income, net of tax | 2,436 | 137,056 | 3,990 | 71,838 | Other comprehensive income attributable to shareholders of the Company, net of tax | 40,641 | 213,386 | 3,990 | 71,838 | (1) Other comprehensive income items which will not be reclassified subsequently to profit or loss | (38,094) | 8,985 | - | - | 1) Changes arising from remeasurement of defined benefit plan | (38,094) | 8,985 | - | - | (2) Other comprehensive income items which will be reclassified subsequently to profit or loss | 78,735 | 204,401 | 3,990 | 71,838 | 1) Other comprehensive income that will be transferred subsequently to profit or loss under the equity method | (1,994) | 22,831 | 3,990 | 17,101 | 2) Changes in fair value of available-for-sale financial assets | - | 45,797 | - | 54,737 | 3) Reserve for cash flow hedges | 90,207 | 33,437 | - | - | 4) Translation of foreign currency | (9,478) | 102,336 | - | - |
financial statements | | | | | Other comprehensive income attributable to minority shareholders, net of tax | (38,205) | (76,330) | - | - | 7. Total comprehensive income | 6,543,681 | 5,782,851 | 757,943 | 571,861 | Attributable to shareholders of the Company | 6,169,667 | 5,469,617 | 757,943 | 571,861 | Minority interests | 374,014 | 313,234 | - | - | 8. Earnings per share: | | | | | Basic earnings per share (RMB Yuan) | 0.94 | 0.80 | N/A | N/A | Diluted earnings per share (RMB Yuan) | 0.93 | 0.79 | N/A | N/A |
| | | | | Legal representative: Principal in charge of accounting: Head of accounting department: Fang Hongbo Zhong Zheng Chen Lihong |
Cash Flow Statement | | | | | | Prepared by Midea Group Co., Ltd. January-March 2019 Unit: RMB’000 | Item | | | | | | | | January-March 2019 | January-March 2018 | January-March 2019 | January-March 2018 | Consolidated | Consolidated | Company | Company | 1. Cash flows from operating activities: | | | | | Cash received from sales of goods or rendering of services | 61,230,159 | 55,069,088 | - | - | Net increase in customer deposits and deposits from banks and other financial institutions | 47,252 | - | - | - | Net decrease in loans and advances | - | 6,203 | - | - | Net decrease in deposits with the Central Bank | 228,122 | - | - | - | Cash received for interest, fee and commission | 433,884 | 465,657 | - | - | Refund of taxes and surcharges | 2,255,964 | 1,855,685 | - | - | Cash received relating to other operating activities | 675,619 | 1,555,171 | 12,053,410 | 6,054,301 | Sub-total of cash inflows | 64,871,000 | 58,951,804 | 12,053,410 | 6,054,301 | Cash paid for goods and services | (32,531,577) | (35,207,473) | - | - | Net increase in loans and advances | (1,486,229) | - | - | - | Net decrease in customer deposits and | - | (27,278) | - | - |
deposits from banks and other financial institutions | | | | | Net increase in deposits with the Central Bank | - | (1,422,269) | - | - | Net decrease in borrowings from the Central Bank | (48,758) | - | - | - | Cash paid for interest, fee and commission | (79,055) | (151,332) | - | - | Cash paid to and on behalf of employees | (8,147,054) | (7,569,431) | (11,503) | (43,024) | Payments of taxes and surcharges | (3,835,224) | (2,826,238) | (49,908) | (13,485) | Cash paid relating to other operating activities | (6,900,321) | (7,318,691) | (322,665) | (43,781) | Sub-total of cash outflows | (53,028,218) | (54,522,712) | (384,076) | (100,290) | Net cash flows from operating activities | 11,842,782 | 4,429,092 | 11,669,334 | 5,954,011 | 2. Cash flows from investing activities: | | | | | Cash received from disposal of investments | 10,793,208 | 11,755,659 | 3,406,557 | 6,507,371 | Cash received from returns on investments | 233,728 | 470,848 | 198,723 | 834,942 | Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 64,509 | 23,595 | - | - | Net cash received from disposal of subsidiaries and other business units | - | - | - | - | Cash received relating to other investing activities | - | - | - | - | Sub-total of cash inflows | 11,091,445 | 12,250,102 | 3,605,280 | 7,342,313 | Cash paid to acquire fixed assets, intangible assets and other long-term assets | (1,143,943) | (927,703) | (40,220) | (112,978) | Cash paid to acquire investments | (26,581,092) | (18,424,204) | (25,408,375) | (2,302,699) | Net cash paid to acquire subsidiaries and other business units | (177,809) | (148,287) | - | - | Cash paid relating to other investing activities | - | - | - | - | Sub-total of cash outflows | (27,902,844) | (19,500,194) | (25,448,595) | (2,415,677) | Net cash flows from investing activities | (16,811,399) | (7,250,092) | (21,843,315) | 4,926,636 | 3. Cash flows from financing activities: | | | | | Cash received from capital contributions | 777,348 | 1,013,304 | 698,761 | 491,953 | Including: Cash received from capital contributions by minority shareholders of subsidiaries | 78,587 | 521,351 | - | - | Cash received from borrowings | 5,122,321 | 978,979 | 5,727,000 | - |
Cash received from issuing short-term financing bonds | - | - | - | - | Cash received relating to other financing activities | - | - | - | - | Sub-total of cash inflows | 5,899,669 | 1,992,283 | 6,425,761 | 491,953 | Cash repayments of borrowings | (663,249) | (2,138,653) | (993,000) | - | Cash payments for short-term financing bonds | - | - | - | - | Cash payments for interest expenses and distribution of dividends or profits | (262,635) | (325,629) | (195,585) | (74,404) | Including: Cash payments for dividends or profit to minority shareholders of subsidiaries | - | (80,657) | - | - | Cash payments relating to other financing activities | (834,503) | (1,782,206) | (691,717) | - | Sub-total of cash outflows | (1,760,387) | (4,246,488) | (1,880,302) | (74,404) | Net cash flows from financing activities | 4,139,282 | (2,254,205) | 4,545,459 | 417,549 | 4. Effect of foreign exchange rate changes on cash and cash equivalents | (160,965) | (357,924) | - | - | 5. Net increase in cash and cash equivalents | (990,300) | (5,433,129) | (5,628,522) | 11,298,196 | Add: Cash and cash equivalents at the beginning of the period | 17,952,282 | 21,831,653 | 10,181,934 | 25,978,543 | 6. Cash and cash equivalents at the end of the period | 16,961,982 | 16,398,524 | 4,553,412 | 37,276,739 | | | | | | Legal representative: Principal in charge of accounting: Head of accounting department: Fang Hongbo Zhong Zheng Chen Lihong |
ASSETS | Consolidated | Company | 31 December 2018 | 1 January 2019 | Adjustment | 31 December 2018 | 1 January 2019 | Adjustment | Current assets: | | | | | | | Cash at bank and on hand | 27,888,280 | 27,888,280 | - | 15,361,626 | 15,361,626 | - | Trading financial assets | N/A | 2,654,045 | 2,654,045 | N/A | 1,521,007 | 1,521,007 | Derivative financial assets | 220,197 | 220,197 | - | - | - | - | Notes and accounts receivable | 31,946,468 | 31,946,468 | - | - | - | - | Advances to suppliers | 2,215,888 | 2,215,888 | - | 55,069 | 55,069 | - | Loans and advances | 11,328,392 | 11,328,392 | - | - | - | - | Other receivables | 2,971,368 | 2,960,939 | (10,429) | 11,593,020 | 11,593,020 | - | Inventories | 29,645,018 | 29,645,018 | - | - | - | - | Other current assets | 76,473,827 | 74,952,820 | (1,521,007) | 55,052,256 | 53,531,249 | (1,521,007) | Total current assets | 182,689,438 | 183,812,047 | 1,122,609 | 82,061,971 | 82,061,971 | - | Non-current assets: | | | | | | | Available-for-sale financial assets | 1,906,878 | N/A | (1,906,878) | 56,579 | N/A | (56,579) | Long-term receivables | 34,815 | 34,815 | - | - | - | - | Long-term equity investments | 2,713,316 | 2,713,316 | - | 28,236,295 | 28,236,295 | - | Other non-current financial assets | N/A | 784,269 | 784,269 | N/A | 56,579 | 56,579 | Investment properties | 391,765 | 391,765 | - | 560,954 | 560,954 | - | Fixed assets | 22,437,212 | 22,437,212 | - | 1,056,790 | 1,056,790 | - | Construction in progress | 2,077,621 | 2,077,621 | - | 51,872 | 51,872 | - | Intangible assets | 16,186,675 | 16,186,675 | - | 712,454 | 712,454 | - | Goodwill | 29,100,390 | 29,100,390 | - | - | - | - | Long-term prepaid | 1,191,373 | 1,191,373 | - | 174,684 | 174,684 | - |
expenses | | | | | | | Deferred tax assets | 4,421,313 | 4,421,313 | - | 202,703 | 202,703 | - | Other non-current assets | 550,352 | 550,352 | - | 4,576 | 4,576 | - | Total non-current assets | 81,011,710 | 79,889,101 | (1,122,609) | 31,056,907 | 31,056,907 | - | TOTAL ASSETS | 263,701,148 | 263,701,148 | - | 113,118,878 | 113,118,878 | - |
Balance Sheet (Continued) | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | Consolidated | Company | | | | | | | 31 December 2018 | 1 January 2019 | Adjustment | 31 December 2018 | 1 January 2019 | Adjustment | Current liabilities: | | | | | | | Short-term borrowings | 870,390 | 870,390 | - | 575,000 | 575,000 | - | Borrowings from the Central Bank | 99,754.00 | 99,754 | - | - | - | - | Customer deposits and deposits from banks and other financial institutions | 44,386 | 44,386 | - | - | - | - | Derivative financial liabilities | 756,299 | 756,299 | - | - | - | - | Notes and accounts payable | 60,226,741 | 60,226,741 | - | - | - | - | Advances from customers | 16,781,666 | 16,781,666 | - | - | - | - | Employee benefits payable | 5,788,004 | 5,788,004 | - | 573,632 | 573,632 | - | Taxes payable | 3,875,298 | 3,875,298 | - | 280,499 | 280,499 | - | Other payables | 3,346,129 | 3,346,129 | - | 74,714,012 | 74,714,012 | - | Current portion of non-current liabilities | 7,122,712 | 7,122,712 | - | - | - | - | Other current liabilities | 31,319,709 | 31,319,709 | - | 44,414 | 44,414 | - | Total current liabilities | 130,231,088 | 130,231,088 | - | 76,187,557 | 76,187,557 | - | Non-current liabilities: | | | | | | |
Long-term borrowings | 32,091,439 | 32,091,439 | - | - | - | - | Long-term payables | 88,890 | 88,890 | - | - | - | - | Provisions | 268,887 | 268,887 | - | - | - | - | Deferred income | 647,583 | 647,583 | - | - | - | - | Long-term employee benefits payable | 2,480,318 | 2,480,318 | - | - | - | - | Deferred tax liabilities | 4,422,074 | 4,422,074 | - | - | - | - | Other non-current liabilities | 1,016,352 | 1,016,352 | - | - | - | - | Total non-current liabilities | 41,015,543 | 41,015,543 | - | - | - | - | Total liabilities | 171,246,631 | 171,246,631 | - | 76,187,557 | 76,187,557 | - | Shareholders' equity: | | | | | | | Share capital | 6,663,031 | 6,663,031 | - | 6,663,031 | 6,663,031 | - | Capital surplus | 18,451,307 | 18,451,307 | - | 10,615,389 | 10,615,389 | - | Less: Treasury stock | (4,918,427) | (4,918,427) | - | (4,918,427) | (4,918,427) | - | Other comprehensive income | (1,332,153) | -1,332,153 | - | 6,020 | 6,020 | - | General risk reserve | 366,947 | 366,947 | - | - | - | - | Surplus reserve | 5,079,096 | 5,079,096 | - | 5,079,096 | 5,079,096 | - | Undistributed profits | 58,762,315 | 58,762,315 | - | 19,486,212 | 19,486,212 | - | Total equity attributable to shareholders of the Company | 83,072,116 | 83,072,116 | - | 36,931,321 | 36,931,321 | - | Minority interests | 9,382,401 | 9,382,401 | - | - | - | - | Total shareholders' equity | 92,454,517 | 92,454,517 | - | 36,931,321 | 36,931,321 | - | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 263,701,148 | 263,701,148 | - | 113,118,878 | 113,118,878 | - |
2.2 Retrospective Restatement of Comparative Data due to the First Execution of any NewStandards Governing Financial Instruments or Leases√ Applicable □ N/AThe Company adopts the new accounting standard governing financial instruments starting from 1January 2019 and adjusts the format of its financial statements according to the Notice of the Ministry ofFinance on Revising and Issuing the Format of Financial Statements of General Enterprises 2018. Andthe affected financial statement items and amounts are shown in the two financial statements above. 3. Auditor’s report Is this Report audited by a CPAs firm?□ Yes √ NoThis Report is un-audited by a CPAs firm. Midea Group Co., Ltd.Legal Representative: Fang Hongbo 30 April 2019
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