Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Midea Group Co., Ltd.
Interim Report for the First Quarter 2017 April 2017
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Section I Important Reminders
1. The Board of Directors, the Supervisory Committee as well as all the directors, supervisors and senior management staff of Midea Group Co., Ltd. (hereinafter referred to as the “Company”) have warranted that this Report contains no false records, misleading statements or material omissions. 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 been audited by a certified public auditors (CPAs) firm.
4. Mr. Fang Hongbo, Chairman of the Board and President of the Company, and Mr. Xiao Mingguang, responsible person for theCompany’s financial affairs, have represented and warranted that the financial statements in this Report are factual, accurate and complete.
5. This Report has been prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail.
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Section II Company Profile
1. Major Accounting Data and Financial Indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to changes in accounting policy or correction of any accounting error?
□ Yes√ No
|||||
|-|-|-|-|
||Jan.-Mar. 2017|Jan.-Mar. 2016|YoY Change (%)|
|Sales revenues (RMB’000)|59,755,914|38,341,624|55.85%|
|Net profit attributable to shareholders of|4,352,587|3,907,252||
||||11.40%|
|the Company (RMB’000)||||
|Net profit attributable to shareholders of||||
||4,263,125|3,745,392|13.82%|
|the Company before non-recurring||||
|gains and losses (RMB’000)||||
|Net cash flows from operating activities|7,008,571|6,595,024||
||||6.27%|
|(RMB’000)||||
|Basic EPS (RMB / share)|0.67|0.61|9.84%|
|Diluted EPS (RMB / share)|0.67|0.61|9.84%|
|Weighted average ROE (%)|6.87%|7.58%|-0.71%|
||31 Mar. 2017|31 Dec. 2016|Change (%)|
|Total assets (RMB’000)|225,914,387|170,600,711|32.42%|
|Net assets attributable to shareholders|65,533,771|61,126,923||
||||7.21%|
|of the Company (RMB’000)||||

Note: KUKA Aktiengesellschaft (KUKA), Toshiba Lifestyle Products& Services Corporation (TLSC) and other acquired entities were included in theCompany’s consolidated financial statements for the first quarter of 2017. Upon the evaluation of these acquired assets by a professional international evaluation agency, the asset premium was amortized as per the accounting standards, and a amortized cost of RMB600,145,400 was recognized for the first quarter of 2017. Excluding the said amortized cost, the consolidated net profit for this quarter increased22% compared with a year earlier. KUKA and TLSC both delivered an excellent performance for the first three months of 2017. To be specific, KUKA achieved sales revenue of RMB5,807,296,560, up26% year on year, and net profit of RMB195,588,490,27% higher than the same period of last year, indicating effective growth in business; while TLSC realized sales revenue of RMB3,777,047,000 and net profit of RMB-187,988,610, better than the first quarter of 2016.
Excluding the acquired entities, the consolidated sales revenue of the first quarter of 2017 grew31% year on year and the
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. consolidated net profit went up22%.
Non-recurring gains and losses
√ Applicable□ N/A
Unit:RMB’000
||||
|-|-|-|
|Item|Jan.-Mar. 2017|Note|
|Gains/losses from the disposal of non-current assets|||
||-7,145||
|(including the offset part of asset impairment provisions)|||
|Government grants recognized in the current period, other|||
|than those closely related to business of the Company and|||
||246,686||
|granted at a fixed amount or quantity in accordance with|||
|certain national standards|||
|Gains/losses arising from changes in fair value of financial|||
|assets and liabilities held for trading, (other than effective|||
|hedging instruments related to the Company’s normal|||
||-260,859||
|operations), as well as investment gains from disposal of|||
|financial assets and liabilities held for trading and financial|||
|assets available for sale|||
|Other non-operating income and expenses except the|||
||75,150||
|above items|||
|Less: Income tax effects|-11,482||
|Minority interests effects (after tax)|-24,148||
|Total|89,462|-|

Explain the reasons if the Company classifies an item as a non-recurring gain/loss according to the definition in the<Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-Recurring Gains andLosses>, or classifies any non-recurring gain/loss item mentioned in the said explanatory announcement as a recurring gain/loss item
□ Applicable√ N/A
No such cases in the Report Period.
2. Total number of shareholders and shareholdings of the top ten shareholders at the period-end
2.1 Total number of common shareholders and shareholdings of the top ten common shareholders at the period-end
Unit: share
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||Total number of preference|||||||
|Total number of common shareholders|||||shareholders with resumed|||||||
||118,808||||||||0|||
|at the period-end|||||voting rights at the|||||||
||||||period-end (if any)|||||||
|Top ten shareholders||||||||||||
|||||||||||Pledged or frozen||
|||||||||||shares||
|||||Shareholding||||Number of||||
|||Nature of||||Number of||||Status||
|Name of shareholder||||percentage||||restricted||||
|||shareholder||||shares held||||of|Number of|
|||||(%)||||shares held||||
|||||||||||share|shares|
|||||||||||s||
|Midea Holding Co., Ltd.||Domesticnon-state-ownedcorporation||34.71||2,244,375,000||||||
|||||||||||Pledg||
||||||||||||854,955,000|
|||||||||||ed||
|China Securities Finance Co., Ltd.||State-ownedcorporation||2.18||140,695,026||||||
|Hong Kong Exchanges and ClearingLimited||Foreigncorporation||2.12||136,994,785||||||
|Fang Hongbo||Domesticindividual||2.12||136,990,492||102,742,869||||
|Hillhouse Capital Management Limited－HCM China Fund||Foreigncorporation||1.76||113,891,138||||||
|Huang Jian||Domesticindividual||1.36||88,000,000||||Pledg||
||||||||||||22,999,900|
|||||||||||ed||
|Xiaomi Technology Co., Ltd||Domesticnon-state-ownedcorporation||1.28||82,500,000||82,500,000||||
|Yuan Liqun||Domesticindividual||1.24||79,915,900||||Pledg||
||||||||||||9,304,000|
|||||||||||ed||
|Central Huijin Asset Management Co.,Ltd.||State-ownedcorporation||1.21||78,474,900||||||
|He Xiangjian||Domesticindividual||1.20||77,334,548||||||
|Top ten non-restricted common shareholders||||||||||||
||||Number of non-restricted||||Type of shares|||||
|Name of shareholder|||common shares held at the|||||||||
||||||||Type|||Number||
||||period-end|||||||||
|Midea Holding Co., Ltd.|||2,244,375,000||||RMB ordinary shares|||2,244,375,000||

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd.
|||||
|-|-|-|-|
|China Securities Finance Co., Ltd.|140,695,026|RMB ordinary shares|140,695,026|
|Hong Kong Exchanges and Clearing Limited|136,994,785|RMB ordinary shares|136,994,785|
|Hillhouse Capital Management Limited－HCM China Fund|113,891,138|||
|||RMB ordinary shares|113,891,138|
|Huang Jian|88,000,000|RMB ordinary shares|88,000,000|
|Yuan Liqun|79,915,900|RMB ordinary shares|79,915,900|
|Central Huijin Asset Management Co., Ltd.|78,474,900|RMB ordinary shares|78,474,900|
|He Xiangjian|77,334,548|RMB ordinary shares|77,334,548|
|Li Jianwei|73,977,047|RMB ordinary shares|73,977,047|
|Guotai Junan – Construction Bank -Shanghai HSBC|69,426,617|||
|||RMB ordinary shares|69,426,617|
|Explanation of connected relationship or/and||||
||The controlling shareholder of Midea Holding Co., Ltd is Mr. He Xiangjian,|||
|acting-in-concert parties among the||||
||which makes them acting-in-concert parties.|||
|above-mentioned shareholders||||
|Top ten non-restricted common shareholders||||
||N/A|||
|taking part in securities margin trading (if any)||||

Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company carry out any agreed buy-back in the Report Period?
□ Yes√ No
No such cases in the Report Period.
2.2 Total number of preference shareholders and shareholdings of the top ten preference shareholders at the period-end
□ Applicable√ N/A
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Section III Significant Events
1. Major changes of main items in financial statements and financial indicators within the Report Period, as well as the reasons for the changes
√ Applicable□ N/A
Unit:RMB’000
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Balance sheet|||||||||
||||31 March||31 December|||||
||items||||||Change (%)||Main reasons for the changes|
||||2017||2016|||||
||(consolidated)|||||||||
|Derivative financialassets||280,926||412,813||-31.95%||Mainly due to changes in the fair value ofderivative financial assets||
|Accounts receivable||18,026,613||13,454,511||33.98%||Mainly due to the increased sales and theconsolidation of KUKA and TLSC||
|Inventories||21,977,297||15,626,897||40.64%||Mainly due to the consolidation of KUKA||
|Available-for-salefinancial assets||1,773,706||5,187,732||-65.81%||Mainly due to the consolidation of KUKA||
|Long-term accountsreceivable||459,520||33,868||1,256.80%||Mainly due to the consolidation of KUKA||
|Construction inprogress||809,709||580,729||39.43%||Mainly due to the increased inputs toconstruction||
|Intangible assets||16,655,839||6,868,538||142.49%||Mainly due to the consolidation of KUKA||
|Goodwill||27,314,731||5,730,995||376.61%||Mainly due to the consolidation of KUKA||
|Short-termborrowings||32,139,135||3,024,426||962.65%||Mainly due to the increased borrowings||
|Customer depositsand deposits frombanks and otherfinancial institutions||70,836||36,708||92.97%||Mainly due to the changes in the operation ofMidea Group Finance||
|Derivative financialliabilities||156,403||89,838||74.09%||Mainly due to changes in the fair value ofderivative financial assets||
|Taxes payable||3,571,091||2,364,446||51.03%||Mainly due to the increased profit, theincreased income tax and the consolidationof KUKA||
|Interest payable||97,110||21,343||355.00%||Mainly due to the increased borrowings||
|Dividends payable||14,443||105,641||-86.33%||Mainly due to the payout of last year’sdividends in the current year||

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Long-term borrowings 4,040,286 2,254,348 79.22% Mainly due to the consolidation of KUKA
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Long-term employeebenefits payable||2,426,373||1,449,954||67.34%||Mainly due to the consolidation of KUKA||
|Deferred income taxliabilities||4,608,469||1,831,973||151.56%||Mainly due to the asset revaluation gainsresulted from the consolidation of KUKA||
|Other comprehensiveincome||-177,571||13,125||-1,452.92%||Mainly due to the consolidation of KUKA||
||Income statement|||||||||
||||January-March||January-March||YoY|||
||items||||||||Main reasons for the changes|
||||2017||2016||Change (%)|||
||(consolidated)|||||||||
|Sales revenue||59,755,914||38,341,624||55.85%||Mainly due to the increased sales and theconsolidation of KUKA and TLSC||
|Fee and commissionincome||1||2,805||-99.96%||Mainly due to the changes in the operation ofMidea Group Finance||
|Cost of sales||44,782,859||26,906,188||66.44%||Mainly due to the increased sales and theconsolidation of KUKA and TLSC||
|Interest expenses||93,334||132,167||-29.38%||Mainly due to the changes in the operation ofMidea Group Finance||
|Taxes and surtaxes||361,767||276,519||30.83%||Mainly due to the reclassification of thestamp tax and the property tax||
|Selling anddistribution expenses||6,820,223||4,977,071||37.03%||Mainly due to the increased sales and theconsolidation of KUKA and TLSC||
|General andadministrativeexpenses||3,178,001||1,662,776||91.13%||Mainly due to the increased sales and theconsolidation of KUKA and TLSC||
|Finance cost||-183,364||-282,083||-35.00%||Mainly due to the increased interestexpenses||
|Investment income||726,487||253,713||186.34%||Mainly due to the consolidation of KUKA andthe increased gains on bank’s wealthmanagement products||
|Non-operatingincome||387,856||292,676||32.52%||Mainly due to the increased governmentsubsidies||
|Non-operatingexpenses||63,474||21,506||195.15%||Mainly due to the increased donations||
||Cash flow|||||||||
||||January-March||January-March||YoY|||
||statement items||||||||Main reasons for the changes|
||||2017||2016||Change (%)|||
||(consolidated)|||||||||
|Net cash flows frominvesting activities||-26,909,489||-9,560,260||181.47%||Mainly due to the acquisition of KUKA||

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Net cash flows fromfinancing activities|28,551,856|4,802,468|494.52%|Mainly due to the increased borrowings|

2. Progress, influence and solutions of significant events
√ Applicable□ N/A
The acquisition of KUKA through tender offer has been formally completed on 6 January 2017 following the execution of all required decision-making and approval procedures. The 32,233,536 shares of KUKA have been all transferred to MECCA International (BVI) Limited (MECCA), for which MECCA has paid EUR3,706,856,640.
As such, Midea Group holds, via its wholly-owned foreign subsidiary MECCA, altogether 37,605,732 shares in KUKA, accounting for approximately94.55% ofKUKA’s outstanding shares.
||||
|-|-|-|
|Overview of the significant event|Date of disclosure|Website for disclosure|
|Announcement on Consummation of Acquisition of KUKAAktiengesellschaft through Tender Offer|7 January 2017|www.cninfo.com.cn|
|Report of Midea Group Co., Ltd. on Acquisition of KUKAAktiengesellschaft through Tender Offer|12 January 2017|www.cninfo.com.cn|

3. Overdue commitments of theCompany’s actual controller, shareholders, related parties and acquirer, as well as the Company and other commitment makers in the Report Period or ongoing at the period-end
□ Applicable√ N/A
4. Operating result forecast for January-June 2017
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-start until the end of the next Report Period according to predictions as well as any explanations for these reasons:
□ Applicable√ N/A
5. Securities investment
□ Applicable√ N/A
No such cases in the Report Period.
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. No such cases in the Report Period.
6. Investments in financial derivatives
√ Applicable□ N/A
Unit:RMB’0,000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Proporti||
|||||||||||||on of||
|||Rel||||||||||the||
|||ated||||||Purch||||closing||
||||||||||Sold|||||
|||-par||||||ased||||investm||
||Rel||Type|Initial|||Opening||in|Impair|Closing||Actual|
|||ty||||||in||||ent||
|Opera|atio||of|investme|||investme||Repor|ment|investme||gain/loss|
|||tran|||Start date|End date||Repor||||amount||
|tor|nshi||deriva|nt|||nt||t|provis|nt||in Report|
|||sact||||||t||||in the||
||p||tive|amount|||amount||Perio|ion|amount||Period|
|||ion||||||Perio||||Compa||
||||||||||d|||||
|||or||||||d||||ny’s||
|||not||||||||||closing||
|||||||||||||net||
|||||||||||||assets||
|Futur|||Futur|||||||||||
|||||||31||||||||
|es|||es||1 January|||||||||
||N/A|No||-11.50||Decembe|-11.50|-|-|-|723.76|0.01%|1,240.31|
|comp|||contra||2017|||||||||
|||||||r 2017||||||||
|any|||cts|||||||||||
||||Forwa|||||||||||
||||rd|||||||||||
|||||||31||||||||
||||excha|32,817.6|1 January||32,817.6||||22,329.6|||
|Bank|N/A|No||||Decembe||-|-|-||0.34%|-10,604.61|
||||nge|0|2017||0||||5|||
|||||||r 2017||||||||
||||contra|||||||||||
||||cts|||||||||||
|||||32,806.1|||32,806.1||||23,053.4|||
|Total|||||--|--||-|-|-||0.35%|-9,364.30|
|||||0|||0||||1|||
|Capital source for||||||||||||||
|||||All the Company’s own funds||||||||||
|derivative investment||||||||||||||
|Lawsuits involved (if||||||||||||||
|||||N/A||||||||||
|applicable)||||||||||||||
|Disclosure date of the||||||||||||||
|board announcement||||||||||||||
|||||31 March 2017||||||||||
|approving the derivative||||||||||||||
|investment (if any)||||||||||||||
|Disclosure date of the||||||||||||||
|||||22 April 2017||||||||||
|general meeting||||||||||||||

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd.
|||
|-|-|
|announcement||
|approving the derivative||
|investment (if any)||
||In order to reduce the price 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 reducing the risks associated with|
||exchange and interest rate fluctuations, realizing the preservation and appreciation of forex|
||assets, reducing forex liabilities, and achieving locked-in costs. The Company has undertaken|
||extensive evaluation and risk control with regard to derivative investment positions, details of|
||which are as follows:|
||1. Legal risk: The Company's futures business and forex funds businesses are conducted in|
||compliance with laws and regulations, with clearly defined responsibilities and obligations|
||between the Company and agencies.|
||Control measures: The Company has designated relevant departments with the responsibility|
||for enhancing expertise in laws, regulations and market rules, conducting strict examination|
||and verification of contracts, defining responsibility and obligations, and strengthening|
||compliance checks, so as to ensure that the Company's derivatives investment and position|
||operations meet the requirements of the laws and regulations and internal management|
|Analysis of risks and||
||system of the Company.|
|control measures of||
||2. Operational risk: Risks caused by imperfect internal processes, staff, systems and external|
|derivative products held||
||issues may cause the Company to incur losses during the course of its futures business and|
|in the Report Period||
||forex funds business.|
|(including but not limited||
||Control measures: The Company has not only developed relevant management systems that|
|to market risk, liquidity||
||clearly define the assignment of responsibility and approval process for the futures business|
|risk, credit risk,||
||and forex funds businesses, but has also established a well-developed monitoring mechanism,|
|operational risk, legal||
||aimed at effectively reducing operational risk by strengthening its risk control over the business,|
|risk, etc.)||
||decision-making and trading processes.|
||3. Market risk: Uncertainties caused by changes in the prices of bulk commodities and|
||exchange rate fluctuations in foreign exchange markets could lead to greater market risk in the|
||futures business and forex funds business. Meanwhile, the inability to raise sufficient funds in a|
||timely manner in order to establish and maintain hedging positions in futures operations, or|
||forex funds required for performance in forex funds operations that are 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 are always|
||conducted by adhering to prudent operation principles. For futures business, futures|
||transaction volumes and applications have been strictly determined according to the|
||requirements for production and operations, and a stop-loss mechanism has been|
||implemented. Furthermore, to determine the prepared margin amount which may be required|
||to be supplemented, a futures risk measuring system has been established to measure and|
||calculate the margin amount already in use, 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|

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd.
|||
|-|-|
||submitted applications for funds business should conduct a risk analysis on the conditions and|
||environment that could affect the 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 the operating status of the funds business on a timely basis thus|
||ensuring the arrangement of proper funds before expiry dates.|
|Changes in market||
|prices or fair values of||
|the invested derivatives||
||1. Profit/loss from futures hedging contracts incurred during the Report Period was|
|during the Report||
||RMB12.4031 million;|
|Period. Analysis of the||
||2. Profit/loss from forward forex contracts incurred during the Report Period was|
|derivative’s fair value||
||RMB-106.0461 million;|
|should include the||
||3. Public quotations in futures market or forward forex quotations announced by Bank of China|
|specific methods of use||
||are used in the analysis of the derivatives fair value.|
|and the relevant||
|assumptions and||
|parameters.||
|Whether significant||
|changes occurred to the||
|Company’s accounting||
|policy and specific||
||No change|
|accounting principles of||
|derivatives in the Report||
|Period compared to the||
|previous Report Period||
||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|
|Specific opinion from||
||measures through enhanced internal controls, thereby improving the operation and|
|independent directors||
||management of the Company; the Company's foreign exchange risk management capability|
|on the Company’s||
||can be further improved through the forex funds business, so as to maintain and increase the|
|derivatives investment||
||value of foreign exchange assets; the abovementioned investment in derivatives can help the|
|and risk control||
||Company to fully realize its competitive advantages. Therefore, it is practical for the Company|
||to carry out derivatives investment business when the risks are controllable.|

7. Visits received during the Report Period
√ Applicable□ N/A
|||||
|-|-|-|-|
|Date|Type of visit|Type of visitor|Discussions|
||||Please refer to Investor Relations Activities from|
|4-21 January 2017|Field research|Institution|4 January 2017 to 21 January 2017 on the|
||||website of www.cninfo.com.cn|
||||Please refer to Investor Relations Activities on|
|20 February 2017|Field research|Institution|20 February 2017 on the website of|
||||www.cninfo.com.cn|

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd.
|||||
|-|-|-|-|
||||Please refer to Investor Relations Activities from|
|22-24 February 2017|Field research|Institution|22 February 2017 to 24 February 2017 on the|
||||website of www.cninfo.com.cn|
||||Please refer to Investor Relations Activities on|
|31 March 2017|Field research|Institution|31 March 2017 on the website of|
||||www.cninfo.com.cn|

8. Irregular provision of guarantees
□ Applicable√ N/A
No such cases in the Report Period.
9. Occupation of theCompany’s funds by the controlling shareholder or its related parties for non-operating purposes
□ Applicable√ N/A
No such cases in the Report Period.
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Section IV Financial Statements
1. Financial statements
Balance Sheet
Prepared by Midea Group Co., Ltd. Unit:RMB’000
||||||
|-|-|-|-|-|
|Assets|31-Mar-17|31-Dec-16|31-Mar-17|31-Dec-16|
||Consolidated|Consolidated|The Company|The Company|
|Current assets|||||
|Cash at bank andon hand|35,292,098|27,169,118|21,079,937|17,135,480|
|Derivative financialassets|280,926|412,813|-|-|
|Notes receivable|8,747,847|7,427,488|-|-|
|Accountsreceivable|18,026,613|13,454,511|-|-|
|Advances tosuppliers|2,037,448|1,587,366|26,202|8,252|
|Loans andadvances|10,599,809|10,273,397|-|-|
|Dividendsreceivable|-|-|-|285,916|
|Other receivables|1,392,703|1,140,133|14,907,159|12,644,592|
|Inventories|21,977,297|15,626,897|-|-|
|Other currentassets|47,683,258|43,529,597|26,884,842|24,165,141|
|Total currentassets|146,037,999|120,621,320|62,898,140|54,239,381|
|Non-current assets|||||
|Available-for-salefinancial assets|1,773,706|5,187,732|36,868|28,931|
|Long-term accountsreceivable|459,520|33,868|-|-|
|Long-term equityinvestments|2,266,419|2,211,732|23,572,452|23,058,980|
|Investment|487,468|494,122|597,821|604,881|

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. properties
||||||
|-|-|-|-|-|
|Fixed assets|22,904,995|21,056,791|946,198|984,666|
|Construction inprogress|809,709|580,729|501,679|467,053|
|Intangible assets|16,655,839|6,868,538|235,968|236,083|
|Goodwill|27,314,731|5,730,995|-|-|
|Long-term prepaidexpenses|640,024|625,971|39,579|46,090|
|Deferred incometax assets|3,639,034|3,030,383|54,655|62,711|
|Other non-currentassets|2,924,943|4,158,530|2,477,000|3,342,000|
|Totalnon-current assets|79,876,388|49,979,391|28,462,220|28,831,395|
|TOTALASSETS|225,914,387|170,600,711|91,360,360|83,070,776|

Legal representative: Fang Hongbo Accounting head for this Report: Xiao Mingguang Head of the accounting division: Chen Lihong
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd. Unit:RMB’000
||||||
|-|-|-|-|-|
|Liabilities and Shareholders'Equity|31-Mar-17|31-Dec-16|31-Mar-17|31-Dec-16|
||Consolidated|Consolidated|The Company|The Company|
|Current liabilities|||||
|Short-term borrowings|32,139,135|3,024,426|1,600,000|-|
|Customer deposits and depositsfrom banks and other financialinstitutions|70,836|36,708|-|-|
|Derivative financial liabilities|156,403|89,838|-|-|
|Notes payable|20,284,017|18,484,939|-|-|
|Accounts payable|32,390,349|25,356,960|-|-|
|Advances from customers|11,831,751|10,252,375|-|-|
|Employee benefits payable|3,351,787|3,154,387|189,115|199,842|
|Taxes payable|3,571,091|2,364,446|129,327|103,848|
|Interest payable|97,110|21,343|106,940|76,776|
|Dividends payable|14,443|105,641|-|-|
|Other payables|1,965,146|1,571,422|60,589,822|54,461,578|
|Current portion of non-currentliabilities|162,893|158,545|-|-|
|Other current liabilities|27,379,037|24,562,970|48,210|140,264|
|Total current liabilities|133,413,998|89,184,000|62,663,414|54,982,308|
|Non-current liabilities|||||
|Long-term borrowings|4,040,286|2,254,348|-|-|
|Debentures payable|4,796,167|4,818,769|-|-|
|Long-term payables|468,993|366,881|-|-|
|Payables for specific projects|2,500|2,405|-|-|
|Provisions|341,296|325,217|-|-|

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Deferred revenue
500,877 502,316
- -
||||||
|-|-|-|-|-|
|Long-term employee benefitspayable|2,426,373|1,449,954|-|-|
|Deferred income tax liabilities|4,608,469|1,831,973|-|-|
|Other non-current liabilities|885,168|888,152|-|-|
|Total non-current liabilities|18,070,129|12,440,015|-|-|
|Total liabilities|151,484,127|101,624,015|62,663,414|54,982,308|
|Shareholders' equity|||||
|Share capital|6,465,677|6,458,767|6,465,677|6,458,767|
|Capital surplus|13,834,616|13,596,569|5,688,522|5,455,268|
|Less: treasury stock|-|-|-|-|
|Other comprehensive income|(177,571)|13,125|(22,054)|(9,069)|
|Surplus reserve|2,804,469|2,804,469|2,804,469|2,804,469|
|General reserve|148,602|148,602|-|-|
|Undistributed profits|42,457,978|38,105,391|13,760,332|13,379,033|
|Total equity attributable toshareholders of the parentcompany|65,533,771|61,126,923|28,696,946|28,088,468|
|Minority interests|8,896,489|7,849,773|-|-|
|Total shareholders' equity|74,430,260|68,976,696|28,696,946|28,088,468|
|TOTAL LIABILITIES ANDSHAREHOLDERS' EQUITY|225,914,387|170,600,711|91,360,360|83,070,776|

Legal representative: Fang Hongbo Accounting head for this Report: Xiao Mingguang Head of the accounting division: Chen Lihong
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Income Statement
Prepared by Midea Group Co., Ltd. Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|January-March2017|January-March2016|January-March2017|January-March2016|
||Consolidated|Consolidated|The Company|The Company|
|1. Total revenue|59,988,619|38,599,501|334,192|295,466|
|Including: Sales revenue|59,755,914|38,341,624|334,192|295,466|
|Interest income|232,704|255,072|-|-|
|Fee and commission income|1|2,805|-|-|
|2. Total Cost|(55,281,140)|(33,884,840)|(161,996)|(131,125)|
|Including: Cost of sales|(44,782,859)|(26,906,188)|(9,683)|(4,792)|
|Interest expenses|(93,334)|(132,167)|-|-|
|Fee and commission expenses|(756)|(666)|-|-|
|Taxes and surtaxes|(361,767)|(276,519)|(1,854)|(956)|
|Selling and distribution expenses|(6,820,223)|(4,977,071)|-|-|
|General and administrative expenses|(3,178,001)|(1,662,776)|(79,016)|(87,582)|
|Financial expenses – net|183,364|282,083|(70,893)|(37,770)|
|Asset impairment (loss)/reversal|(227,564)|(211,536)|(550)|(25)|
|Add: Gains/(losses) on changes in fairvalue|(168,515)|(239,146)|-|22,673|
|Investment income|726,487|253,713|289,640|134,422|
|Including: Share of profit of associatesand a joint venture|87,936|81,800|42,380|55,455|
|3. Operating profit|5,265,451|4,729,228|461,836|321,436|
|Add: Non-operating income|387,856|292,676|337|695|
|Including: Gains on disposal ofnon-current assets|8,743|1,423|-|-|
|Less: Non-operating expenses|(63,474)|(21,506)|(1,008)|(2,076)|
|Including: Losses on disposal ofnon-current assets|(15,889)|(12,537)|(88)|-|
|4. Total profit|5,589,833|5,000,398|461,165|320,055|

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Less: Income tax expenses (903,968) (833,631) (79,866) (66,511)
||||||
|-|-|-|-|-|
|5. Net profit|4,685,865|4,166,767|381,299|253,544|
|Including: Net profit achieved byconsolidated entities beforeconsolidation|-|-|-|-|
|Attributable to shareholders of theparent company|4,352,587|3,907,252|381,299|253,544|
|Minority interests|333,278|259,515|-|-|
|6. Other comprehensive income netof tax|(179,644)|648,965|(12,985)|(100)|
|Attributable to shareholders of theparent company|(190,696)|630,038|(12,985)|(100)|
|(1) Other comprehensive income itemswhich will not be reclassifiedsubsequently to profit or loss|6,365|-|-|-|
|1) Changes in net liabilities or assetswith a defined benefit plan uponre-measurement|6,365|-|-|-|
|2) Shares in other comprehensiveincomes in investees that cannot bereclassified into gains and losses underthe equity method|-|-|-|-|
|(2) Other comprehensive income itemswhich will be reclassified subsequentlyto profit or loss|(197,061)|630,038|(12,985)|(100)|
|1) Share of the other comprehensiveincome of the investee accounted forusing equity method which will bereclassified subsequently to profit andloss|(18,790)|(52,591)|(12,985)|(100)|
|2) Changes in fair value ofavailable-for-sale financial assets|(309,321)|549,616|-|-|
|3) Effective portion of cash flow hedginggains or losses|-|-|-|-|
|4) Translation of foreign currencyfinancial statements|97,869|147,624|-|-|
|5) Foreign-currency financial statementtranslation difference|33,181|(14,611)|-|-|
|Attributable to minority shareholders|11,052|18,927|||

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. - -
||||||
|-|-|-|-|-|
|7. Total comprehensive income|4,506,221|4,815,732|368,314|253,444|
|Attributable to shareholders of theparent company|4,161,891|4,537,290|368,314|253,444|
|Attributable to minority shareholders|344,330|278,442|-|-|
|8. Earnings per share||(Restated)|||
|Basic earnings per share (RMB Yuan)|0.67|0.61|N/A|N/A|
|Diluted earnings per share (RMB Yuan)|0.67|0.61|N/A|N/A|

 Legal representative: Fang Hongbo Accounting head for this Report: Xiao Mingguang Head of the accounting division: Chen Lihong
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Cash Flow Statement
Prepared by Midea Group Co., Ltd. Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|January-March2017|January-March2016|January-March2017|January-March2016|
||Consolidated|Consolidated|The Company|The Company|
|1. Cash flows from operatingactivities|||||
|Cash received from sales of goods orrendering of services|47,125,873|32,056,847|-|-|
|Net increase in customer deposits anddeposits from banks and otherfinancial institutions|34,128|-|-|-|
|Net decrease in deposits with centralbank|-|270,547|-|-|
|Cash received from interest, fee andcommission|246,210|257,877|-|-|
|Refund of taxes and surtaxes|1,384,056|1,588,785|-|-|
|Cash received relating to otheroperating activities|1,160,334|1,564,570|6,368,959|9,967,594|
|Sub-total of cash inflows|49,950,601|35,738,626|6,368,959|9,967,594|
|Cash paid for goods and services|(26,421,269)|(17,512,729)|-|-|
|Net decrease in customer depositsand deposits from banks and otherfinancial institutions|-|(19,252)|-|-|
|Net increase in loans and advances|(349,405)|(1,779,265)|-|-|
|Net increase in deposits with centralbank|(317,043)|-|-|-|
|Cash paid for interest, fee andcommission|(94,090)|(132,833)|-|-|
|Cash paid to and on behalf ofemployees|(6,338,017)|(3,254,369)|(12,672)|(17,997)|
|Payments of taxes and surtaxes|(2,729,906)|(2,003,485)|(35,399)|(26,836)|
|Cash paid relating to other operatingactivities|(6,692,300)|(4,441,669)|(2,466,800)|(3,830,862)|
|Sub-total of cash outflows|(42,942,030)|(29,143,602)|(2,514,871)|(3,875,695)|

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. Net cash flows from operating
7,008,571 6,595,024 3,854,088 6,091,899 activities
||||||
|-|-|-|-|-|
|2. Cash flows from investingactivities|||||
|Cash received from withdrawal ofinvestments|26,720,523|16,846,496|17,024,406|9,282,040|
|Cash received from returns oninvestments|490,466|406,105|654,204|556,038|
|Net cash received from disposal offixed assets, intangible assets andother long-term assets|13,902|2,987|12,049|-|
|Net cash received from disposal ofsubsidiaries and other business units|-|-|-|-|
|Cash received relating to otherinvesting activities|-|-|-|-|
|Sub-total of cash inflows|27,224,891|17,255,588|17,690,659|9,838,078|
|Cash paid to acquire fixed assets,intangible assets and other long-termassets|(510,405)|(484,331)|(36,702)|(148,301)|
|Cash paid to acquire investments|(28,410,748)|(26,331,517)|(22,291,936)|(14,046,586)|
|Net cash paid to acquire subsidiariesand other business units|(25,213,227)|-|-|-|
|Cash paid to other investmentactivities|-|-|-|-|
|Sub-total of cash outflows|(54,134,380)|(26,815,848)|(22,328,638)|(14,194,887)|
|Net cash flows from investingactivities|(26,909,489)|(9,560,260)|(4,637,979)|(4,356,809)|
|3. Cash flows from financingactivities|||||
|Cash received from capitalcontributions|161,107|19,234|161,107|19,234|
|Including: Cash received from capitalcontributions by minority shareholdersof subsidiaries|-|-|-|-|
|Cash received from borrowings|29,829,202|7,773,335|1,600,000|500,000|
|Cash received from commercial paperissued|-|-|-|-|
|Cash received relating to other|||||

Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. financing activities - - - -
||||||
|-|-|-|-|-|
|Sub-total of cash inflows|29,990,309|7,792,569|1,761,107|519,234|
|Cash repayments of borrowings|(1,153,671)|(2,847,658)|-|(1,290,000)|
|Cash repayments of commercialpaper|-|-|-|-|
|Cash payments for interest expensesand distribution of dividends or profits|(189,407)|(142,443)|(125,351)|(261,178)|
|Including: Cash payments fordividends or profit to minorityshareholders of subsidiaries|(91,200)|(106,543)|-|-|
|Cash payments to other financingactivities|(95,375)|-|-|-|
|Sub-total of cash outflows|(1,438,453)|(2,990,101)|(125,351)|(1,551,178)|
|Net cash flows from financingactivities|28,551,856|4,802,468|1,635,756|(1,031,944)|
|4. Effect of foreign exchange ratechanges on cash and cashequivalents|48,314|(2,347)|-|-|
|5. Net decrease in cash and cashequivalents|8,699,252|1,834,885|851,865|703,146|
|Add: Opening cash and cashequivalents|12,513,730|5,187,317|8,174,915|6,245,008|
|6. Closing cash and cashequivalents|21,212,982|7,022,202|9,026,780|6,948,154|

Legal representative: Fang Hongbo Accounting head for this Report: Xiao Mingguang Head of the accounting division: Chen Lihong
Interim Report for the First Quarter 2017 of Midea Group Co., Ltd. 2.Auditor’s report
Is this Report audited by a CPAs firm?
□ Yes√ No
This Report is un-audited by a CPAs firm.
Midea Group Co., Ltd.
Legal Representative: Fang Hongbo 29 April 2017