Midea Group Co., Ltd.
Interim Report for the First Quarter 2019 April 2019
Interim Report for the First Quarter 2019 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 record, misleading statement or material omission. 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 Ms. Zhong Zheng, Director of Finance of the Company, 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 2019 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?
□ 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|6,129,026|5,256,231||
||||16.60%|
|of the Company (RMB'000)||||
|Net profits attributable to shareholders||||
|of the Company before non-recurring|6,084,881|5,077,715|19.84%|
|profits and losses (RMB'000)||||
|Net cash flows from operating activities|11,842,782|4,429,092||
||||167.39%|
|(RMB'000)||||
|Basic earnings per share (RMB/share)|0.94|0.80|17.50%|
|Diluted earnings per share|0.93|0.79||
||||17.72%|
|(RMB/share)||||
|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||||
||89,610,201|83,072,116|7.87%|
|of the Company (RMB'000)||||

Total share capital of the Company on the last trading session before disclosure:
|||
|-|-|
|Total share capital of the Company on the last||
||6,585,838,349|
|trading session before disclosure (share)||
|Fully diluted earnings per share based on the||
||0.93|
|latest share capital above (RMB/share)||

Note: On the last trading session before the disclosure of this report, theCompany’s total share capital was 6,603,422,687 shares. Subtracting the repurchased 17,584,338 shares in 2019, the number was 6,585,838,349 shares. Non-recurring profits and losses
√ Applicable□ N/A
Unit:RMB’000
||||
|-|-|-|
|Item|Jan.-Mar. 2019|Note|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
||||
|-|-|-|
|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|||
||-62,512||
|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|||
|Other|140,386||
|Less: Corporate income tax|22,714||
|Minority interests (after tax)|4,647||
|Total|44,145|--|

Explain the reasons if the Company classifies an item as a non-recurring profit/loss according to the definition in the<Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-Recurring Profits andLosses>, or classifies any non-recurring profit/loss item mentioned in the said explanatory announcement as a recurring profit/loss item
□ Applicable√ N/A
No such cases for the Reporting Period.
2. Total number of shareholders and shareholdings of the top ten shareholders at the period-end
2.1 Total number of common shareholders, preference shareholders with resumed voting rights and shareholdings of the top ten common shareholders at the period-end
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||Total number of preference||||||
|Total number of common||||||||||
||162,344|||shareholders with resumed voting||||0||
|shareholders at the period-end||||||||||
|||||rights at the period-end (if any)||||||
|Top ten shareholders||||||||||
||||||||Pledged or frozen|||
||||Sharehol||||shares|||
|||||||Number of||||
|||Nature of|ding||Number of||Status|||
|Name of shareholder||||||restricted||||
|||shareholder|percenta||shares held||of||Number of|
|||||||shares held||||
||||ge (%)||||share||shares|
||||||||s|||
|Midea Holding Co., Ltd.||Domestic|33.48||2,212,046,613||Pledg||551,000,000|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||non-state-ownedcorporation|||||ed||
|Hong Kong Exchanges and ClearingLimited|Foreigncorporation||16.18|1,069,044,139||||
|China Securities Finance Co., Ltd.|State-ownedcorporation||3.00|198,145,134||||
|Fang Hongbo|Domesticindividual||2.07|136,990,492|102,742,869|||
|Canada Pension Plan Investment Board－ own funds (stock exchange)|Foreigncorporation||1.82|120,379,067||||
|Huang Jian|Domesticindividual||1.33|88,023,300||||
|Central Huijin Asset Management Ltd.|State-ownedcorporation||1.19|78,474,900||||
|Hillhouse Capital Management Limited－ HCM China Fund|Foreigncorporation||0.94|61,831,900||||
|GIC Private Limited|Foreigncorporation||0.84|55,535,104||||
|Xiaomi Technology Co., Ltd.|Domesticnon-state-ownedcorporation||0.81|53,500,000||||
|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.||2,212,046,613|||RMB common|||
||||||||2,212,046,613|
||||||stock|||
|Hong Kong Exchanges and Clearing Limited||1,069,044,139|||RMB common|||
||||||||1,069,044,139|
||||||stock|||
|China Securities Finance Co., Ltd.||198,145,134|||RMB common|||
||||||||198,145,134|
||||||stock|||
|Canada Pension Plan Investment Board－ own funds(stock exchange)||120,379,067|||RMB common|||
||||||||120,379,067|
||||||stock|||
|Huang Jian||88,023,300|||RMB common|||
||||||||88,023,300|
||||||stock|||
|Central Huijin Asset Management Ltd.||78,474,900|||RMB common|||
||||||||78,474,900|
||||||stock|||
|Hillhouse Capital Management Limited－ HCM ChinaFund||61,831,900|||RMB common|||
||||||||61,831,900|
||||||stock|||

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
|||||
|-|-|-|-|
|GIC Private Limited|55,535,104|RMB common||
||||55,535,104|
|||stock||
|Xiaomi Technology Co., Ltd.|53,500,000|RMB common||
||||53,500,000|
|||stock||
|Yuan Liqun|51,994,300|RMB common||
||||51,994,300|
|||stock||
|Explanation of related relationship or/and||||
|acting-in-concert parties among the above-mentioned|N/A|||
|shareholders||||
|Top ten non-restricted common shareholders taking||||
||N/A|||
|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 conduct any promissory repurchase during the Reporting Period
□ Yes√ No
No such cases in the Reporting 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 2019 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
||||||||
|-|-|-|-|-|-|-|
|Financial statementitems (consolidated)||31 March||31 December|Change(%)|Reasons for the changes|
|||2019/January-||2018/January-|||
|||March 2019||March 2018|||
|Derivative financial assets|87,975||220,197||-60.05%|Mainly due to the changes in the fairvalue of derivative financialinstruments|
|Long-term receivables|16,280||34,815||-53.24%|Mainly due to the reclassification tocurrent assets as a result ofbusiness changes|
|Short-term borrowings|1,270,263||870,390||45.94%|Mainly due to the increasedborrowings|
|Borrowings from the CentralBank|50,996||99,754||-48.88%|Mainly due to the repayment ofborrowings to the Central Bank|
|Customer deposits anddeposits from banks andother financial institutions|91,638||44,386||106.46%|Mainly due to the changes in theoperation of Midea Group Finance|
|Derivative financial liabilities|275,822||756,299||-63.53%|Mainly due to the changes in the fairvalue of derivative financialinstruments|
|Employee benefits payable|3,979,688||5,788,004||-31.24%|Mainly due to the payment ofsalaries to employees|
|Treasury stock|1,473,697||4,918,427||-70.04%|Mainly due to the retirement oftreasury stock|
|Interest income|294,332||549,959||-46.48%|Mainly due to the changes in theoperation of Midea Group Finance|
|Interest expenses|75,120||150,518||-50.09%|Mainly due to the changes in theoperation of Midea Group Finance|
|Finance expenses|-481,058||95,978||-601.22%|Mainly due to the increased interestincome on deposits|
|Other income|66,516||224,233||-70.34%|Mainly due to the decreasedgovernmental subsidies|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Investment income|-146,977|317,938|-146.23%|Mainly due to the decreased gainson delivered derivative financialinstruments|
|Profit/loss on changes in fairvalue|230,915|-118,467|294.92%|Mainly due to the changes in the fairvalue of derivative financialinstruments|
|Profit/loss on disposal ofassets|-6,369|-13,053|51.21%|Mainly due to the decreased losseson disposal of non-current assets|
|Net cash flows fromoperating activities|11,842,782|4,429,092|167.39%|Mainly due to the increased cashreceived from sales of goods orrendering of services|
|Net cash flows frominvesting activities|-16,811,399|-7,250,092|-131.88%|Mainly due to the increased cashpaid to acquire investments|
|Net cash flows fromfinancing activities|4,139,282|-2,254,205|283.62%|Mainly due to the increased cashreceived from borrowings|

2. Progress, influence and solutions of significant events
√ Applicable□ N/A
On 23 October 2018, 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. On 21 November 2018, 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. On 21 December 2018, 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. On 12 March 2019, 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). On 24 April 2019, 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. On 26 April 2019, the Company disclosed the Indicative Announcement on
the Distribution and Implementation of Appraisal Right for the Merger with Wuxi Little Swan Company
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd. Limited in a Share Swap via A-share Offering, setting the record date for the appraisal right on 7 May 2019. And trading in theCompany’s stock will be suspended from 8 May 2019 for the distribution and declaration of appraisal right, etc.
||||
|-|-|-|
|||Index to the related|
|Summary of the significant event|Disclosure date||
|||announcement|
|The Proposal on the Plan of Midea Group Co., Ltd. toMerge with Wuxi Little Swan Company Limited in aShare Swap via A-share Offering and other relevantproposals were considered and approved at the 2ndMeeting of the 3rd Board.|||
|||Announcement No. 2018-087|
||24 October 2018||
|||on www.cninfo.com.cn|
|The Proposal on the Review of the Report of MideaGroup Co., Ltd. on Merging with Wuxi Little SwanCompany Limited in a Share Swap via A-shareOffering and the Related Transaction (Draft) and ItsSummary, together with other relevant proposals,were considered and approved at the 4th Meeting ofthe 3rd Board.|||
|||Announcement No. 2018-095|
||22 November 2018||
|||on www.cninfo.com.cn|
|The Proposal on the Plan of Midea Group Co., Ltd. toMerge with Wuxi Little Swan Company Limited in aShare Swap via A-share Offering, together with otherrelevant proposals, were considered and approved atthe 3rd Special Meeting of Shareholders of 2018.|||
|||Announcement No. 2018-105|
||22 December 2018||
|||on www.cninfo.com.cn|
|The Company received the CSRC Reply on theApproval of the Merger of Midea Group Co., Ltd. withWuxi Little Swan Company Limited (ZJXK [2019] No.352).|||
|||Announcement No. 2019-032|
||13 March 2019||
|||on www.cninfo.com.cn|
|The Company received the Reply of the FoshanCentral Sub-Branch of the State Administration ofForeign Exchange on the Foreign Exchange Affairs inMidea Group Co., Ltd.’s Merger with Wuxi Little SwanCompany Limited in a Share Swap via A-shareOffering (FHF [2019] No. 1).|||
|||Announcement No. 2019-049|
||24 April 2019||
|||on www.cninfo.com.cn|
|The Company disclosed the Indicative Announcementon the Distribution and Implementation of AppraisalRight for the Merger with Wuxi Little Swan CompanyLimited in a Share Swap via A-share Offering, settingthe record date for the appraisal right on 7 May 2019.And trading in the Company’s stock will be suspendedfrom 8 May 2019 for the distribution and declaration ofappraisal right, etc.|||
|||Announcement No. 2019-052|
||26 April 2019||
|||on www.cninfo.com.cn|

Progress of any share repurchase
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.√Applicable□N/A
The Proposal on the Plan for the Repurchase of Some Public Shares was approved at the 7th Meeting of 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 through bidding at the stock exchange at a price not exceeding RMB55/share. The Report on the Repurchase of Some Public Shares was disclosed on 28 February 2019.
As per the Measures on the Administration of ListedCompanies’ Buying back Shares Held by the Public (Trial), the Supplementary Provisions on the Share Repurchase by Listed Companies by Means of Centralized Bidding, the Specific Implementation Rules of the Shenzhen Stock Exchange for the Share Repurchase by Listed Companies, and other applicable rules, the Company shall disclose the share repurchase progress in its periodic reports. Therefore, the Company hereby discloses its share repurchase 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 stock exchange, with a total payment of RMB855,786,862.34 (exclusive of transaction charges). The highest repurchase price was RMB54.90/share and the lowest was RMB45.62/share. The repurchase is in compliance with the applicable laws and regulations, as well as theCompany’s repurchase plan. Progress of any repurchased share reduction through bidding at the stock exchange
□ Applicable√ N/A
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
No 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 the period-start until the end of the next Report Period according to predictions as well as any explanations for these reasons:
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.□ Applicable√ N/A
5. Securities investment
√Applicable□N/A
Unit:RMB’000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Abb||||Profit or|Cumula|||||||
||Cod|revi||Meas||loss from|tive fair|||Profit||||
|Type||||||||Purcha|||||Fund|
||e of|atio|Initial|ureme|Opening|change in|value||Sold in|or|Closing|||
|of||||||||sed in||||Account|ing|
||sec|n of|investment|nt|carrying|fair value|change||the|loss in|carrying|||
|secur||||||||the||||ing title|sour|
||uriti|sec|cost|metho|amount|during|charged||period|the|amount|||
|ities||||||||period|||||ce|
||es|uriti||d||the|to|||period||||
|||es||||period|equity|||||||
|Dom||||||||||||||
|||||||||||||Financi||
|estica||||||||||||||
|||||Fair||||||||al||
|lly/Ov||XIA|||||||||||Own|
||181|||value||||||||assets||
|ersea||OMI|1,272,584||1,122,609|-130,555|-24,030|-|-|-|968,024||Fund|
||0|||metho||||||||availabl||
|s||-W|||||||||||s|
|||||d||||||||e for||
|listed||||||||||||||
|||||||||||||sale||
|stock||||||||||||||
|Total|||1,272,584|--|1,122,609|-130,555|-24,030|-|-|-|968,024|-|--|

 6. Investments in financial derivatives
√ Applicable□ N/A
Unit: RMB'000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Closing||
||Rel|||||||||||investme||
|||||||||||Amou||||
||atio|||||||Purch||||nt||
||||||||||Sold|nt||||
||nshi|Rel||||||ased||||amount||
||||Type|Initial|||Opening||in|provid|Closing||Actual|
|Opera|p|ated||||||in||||as a||
||||of|investme|Starting|Ending|investme||Repor|ed for|investme||gain/loss in|
|ting|with|tran||||||Repor||||percenta||
||||deriva|nt|date|date|nt||ting|impair|nt||Reporting|
|party|the|sact||||||ting||||ge of the||
||||tive|amount|||amount||Perio|ment|amount||Period|
||Co|ion||||||Perio||||Company||
||||||||||d|(if||||
||mpa|||||||d||||’s closing||
|||||||||||any)||||
||ny|||||||||||net||
|||||||||||||assets||
|Futur|||Futur|||31||||||||
|es|||es||1 January|Decem||||||||
||No|No||276|||276|-|-|-|6 5 9|0.001%|2,893|
|comp|||contra||2019|ber||||||||
|any|||cts|||2019||||||||

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||Forwa|||||||||||
|||||||31||||||||
||||rd|||||||||||
||||||1 January|Decem||||||||
|Bank|No|No|forex|-644,052||||-|-|-|- 4 8 , 9 3 3|-0.055%|246,936|
||||||2019|ber|-644,052|||||||
||||contra|||||||||||
|||||||2019||||||||
||||cts|||||||||||
|Total||||-643,776|--|--|-643,776|-|-|-|-48,274|-0.054%|249,829|
|Source of derivatives||||||||||||||
|||||All from the Company’s own funds||||||||||
|investment funds||||||||||||||
|Litigation involved (if||||||||||||||
|||||N/A||||||||||
|applicable)||||||||||||||
|Disclosure date of the||||||||||||||
|announcement about||||||||||||||
|the board’s consent for||||18 April 2019||||||||||
|the derivative||||||||||||||
|investment (if any)||||||||||||||
|Disclosure date of the||||||||||||||
|announcement about||||||||||||||
|the general meeting’s||||||||||||||
|||||-||||||||||
|consent for the||||||||||||||
|derivative investment (if||||||||||||||
|any)||||||||||||||
|||||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||||||||||
|Risk analysis of||||evaluation and control against derivatives investment and position risks, details of which are||||||||||
|positions held in||||described as follows:||||||||||
|derivatives during the||||1. Legal risk: The Company's futures business and forex funds businesses shall be conducted||||||||||
|Reporting Period and||||in compliance with laws and regulations, with clearly covenanted responsibility and obligation||||||||||
|explanation of control||||relationship between the Company and the agencies.||||||||||
|measures (Including but||||Control measures: The Company has designated relevant responsible departments to enhance||||||||||
|not limited to market||||learning of laws and regulations and market rules, conducted strict examination and verification||||||||||
|risk, liquidity risk, credit||||of contracts, defined responsibility and obligation well, and strengthened compliance check, so||||||||||
|risk, operational risk,||||as to ensure that the Company's derivatives investment and position operations meet the||||||||||
|legal risk, etc.)||||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||||||||||

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
|||
|-|-|
||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||
||1. Profit/loss from futures contracts during the Reporting Period was RMB2,893,000.|
|Period, specific||
||2. Profit/loss from forward forex contracts during the Reporting Period was RMB246,936,000.|
|methods used and||
||3. Public quotations in futures market or forward forex quotations announced by the Bank of|
|relevant assumption||
||China are used in the analysis of derivatives fair value.|
|and parameter settings||
|shall be disclosed for||
|analysis of fair value of||
|derivatives||
|Explanation of||
|significant changes in||
|accounting policies and||
|specific financial||
|accounting principles in||
|respect of the|No change|
|Company's derivatives||
|for the Reporting Period||
|as compared to the||
|previous Reporting||
|Period||

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
|||
|-|-|
||The Company's independent directors are of the view that the futures hedging business is an|
|Special opinions||
||effective instrument for the Company to eliminate price volatility and implement risk prevention|
|expressed by||
||measures through enhanced internal control, thereby improving the operation and managemen|
|independent directors||
||of the Company; the Company's foreign exchange risk management capability can be further|
|concerning the||
||improved through the forex funds business, so as to maintain and increase the value of foreign|
|Company's derivatives||
||exchange assets and the abovementioned investment in derivatives can help the Company to|
|investment and risk||
||fully bring out its competitive advantages. Therefore, it is practicable for the Company to carry|
|control||
||out derivatives investment business, and the risks are controllable.|

7. Visits received during the Reporting Period
√ Applicable□ N/A
|||||
|-|-|-|-|
|Date|Type of visit|Type of visitor|Discussions|
||||Please refer to Investor Relations Activities|
|14-15 January 2019|Field research|Institution|from 14 January 2019 to 15 January 2019 on|
||||the website of www.cninfo.com.cn|
||||Please refer to Investor Relations Activities|
|17 January 2019|Field research|Institution|on 17 January 2019 on the website of|
||||www.cninfo.com.cn|
||||Please refer to Investor Relations Activities|
|21-22 February 2019|Field research|Institution|from 21 February 2019 to 22 February 2019|
||||on the website of www.cninfo.com.cn|

 8. Irregular provision of guarantees
□ Applicable√ N/A
No such cases in the Reporting 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 Reporting Period.
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd. 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 accountsreceivable|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 financialassets||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 financialassets|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: P rincipal in charge of accounting: Head of accoun ting department:
Fang Hongbo Zhong Zheng Chen Lihong
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd. Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd. 31 March 2019 Unit:RMB’000
||||||
|-|-|-|-|-|
|LIABILITIES ANDSHAREHOLDERS' 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 CentralBank|50,996|99,754|-|-|
|Customer deposits anddeposits from banks and otherfinancial 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-currentliabilities|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 benefitspayable|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|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Total equity attributable toshareholders 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 ANDSHAREHOLDERS' EQUITY|278,910,215|263,701,148|130,516,977|113,118,878|

Legal representative: P rincipal in charge o f accounting: Head of accoun ting department: Fang Hongbo Zhong Zheng Chen Lihong
Income Statement
Prepared by Midea Group Co., Ltd. January-March 2019 Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|January-March2019|January-March2018|January-March2019|January-March2018|
||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 commissionexpenses|(2,456)|(808)|-|-|
|Taxes and surcharges|(489,405)|(403,126)|(7,116)|(13,485)|
|Selling and distributionexpenses|(9,513,634)|(7,468,456)|-|-|
|General and administrativeexpenses|(1,977,121)|(1,818,424)|(109,198)|(103,980)|
|Research and developmentexpenses|(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|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Including: Investment incomefrom associates and joint ventures|105,865|75,515|66,507|58,704|
|Profit/(loss) on changes in fairvalue|230,915|(118,467)|33,665|-|
|Profit /(loss) on disposal ofassets|(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 ofoperations|||||
|Net profit from continuingoperations|6,541,245|5,645,795|753,953|500,023|
|Net profit from discontinuedoperations|-|-|-|-|
|(2) Classified by ownership of theequity|||||
|Attributable to equity owners of theCompany|6,129,026|5,256,231|753,953|500,023|
|Minority interests|412,219|389,564|-|-|
|6. Other comprehensive income, netof tax|2,436|137,056|3,990|71,838|
|Other comprehensive incomeattributable to shareholders of theCompany, net of tax|40,641|213,386|3,990|71,838|
|(1) Other comprehensive income itemswhich will not be reclassifiedsubsequently to profit or loss|(38,094)|8,985|-|-|
|1) Changes arising fromremeasurement of defined benefit plan|(38,094)|8,985|-|-|
|(2) Other comprehensive income itemswhich will be reclassified subsequently toprofit or loss|78,735|204,401|3,990|71,838|
|1) Other comprehensive income thatwill be transferred subsequently to profitor loss under the equity method|(1,994)|22,831|3,990|17,101|
|2) Changes in fair value ofavailable-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|-|-|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd. financial statements
||||||
|-|-|-|-|-|
|Other comprehensive incomeattributable to minority shareholders, netof tax|(38,205)|(76,330)|-|-|
|7. Total comprehensive income|6,543,681|5,782,851|757,943|571,861|
|Attributable to shareholders of theCompany|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 (RMBYuan)|0.93|0.79|N/A|N/A|

Legal representative: Principal in charge of accou nting: H ead 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-March2019|January-March2018|January-March2019|January-March2018|
||Consolidated|Consolidated|Company|Company|
|1. Cash flows from operating activities:|||||
|Cash received from sales of goods orrendering of services|61,230,159|55,069,088|-|-|
|Net increase in customer deposits anddeposits from banks and other financialinstitutions|47,252|-|-|-|
|Net decrease in loans and advances|-|6,203|-|-|
|Net decrease in deposits with the CentralBank|228,122|-|-|-|
|Cash received for interest, fee andcommission|433,884|465,657|-|-|
|Refund of taxes and surcharges|2,255,964|1,855,685|-|-|
|Cash received relating to other operatingactivities|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)|-|-|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd. deposits from banks and other financial
institutions
||||||
|-|-|-|-|-|
|Net increase in deposits with the CentralBank|-|(1,422,269)|-|-|
|Net decrease in borrowings from theCentral Bank|(48,758)|-|-|-|
|Cash paid for interest, fee andcommission|(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 operatingactivities|(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 ofinvestments|10,793,208|11,755,659|3,406,557|6,507,371|
|Cash received from returns oninvestments|233,728|470,848|198,723|834,942|
|Net cash received from disposal of fixedassets, intangible assets and otherlong-term assets|64,509|23,595|-|-|
|Net cash received from disposal ofsubsidiaries and other business units|-|-|-|-|
|Cash received relating to other investingactivities|-|-|-|-|
|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-termassets|(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 subsidiariesand other business units|(177,809)|(148,287)|-|-|
|Cash paid relating to other investingactivities|-|-|-|-|
|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 capitalcontributions by minority shareholders ofsubsidiaries|78,587|521,351|-|-|
|Cash received from borrowings|5,122,321|978,979|5,727,000|-|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Cash received from issuing short-termfinancing bonds|-|-|-|-|
|Cash received relating to other financingactivities|-|-|-|-|
|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 financingbonds|-|-|-|-|
|Cash payments for interest expensesand distribution of dividends or profits|(262,635)|(325,629)|(195,585)|(74,404)|
|Including: Cash payments for dividendsor profit to minority shareholders ofsubsidiaries|-|(80,657)|-|-|
|Cash payments relating to otherfinancing 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 ratechanges on cash and cash equivalents|(160,965)|(357,924)|-|-|
|5. Net increase in cash and cashequivalents|(990,300)|(5,433,129)|(5,628,522)|11,298,196|
|Add: Cash and cash equivalents at thebeginning of the period|17,952,282|21,831,653|10,181,934|25,978,543|
|6. Cash and cash equivalents at the endof the period|16,961,982|16,398,524|4,553,412|37,276,739|

Legal representative: Principal in charge of accou nting: H ead of accounting department: Fang Hongbo Zhong Zheng Chen Lihong
2. Adjustments to the Financial Statements
2.1 Adjustments to the financial statements at the beginning of the first execution year of any new standards governing financial instruments, revenue or leases
√ Applicable□ N/A
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd. Balance Sheet
Prepared by Midea Group Co., Ltd. 31 March 2019 Unit:RMB’000
||||||||
|-|-|-|-|-|-|-|
|ASSETS|Consolidated|||Company|||
||31 December2018|1 January2019|Adjustment|31 December2018|1 January2019|Adjustment|
|Current assets：|||||||
|Cash at bank andon hand|27,888,280|27,888,280|-|15,361,626|15,361,626|-|
|Trading financialassets|N/A|2,654,045|2,654,045|N/A|1,521,007|1,521,007|
|Derivative financialassets|220,197|220,197|-|-|-|-|
|Notes andaccounts receivable|31,946,468|31,946,468|-|-|-|-|
|Advances tosuppliers|2,215,888|2,215,888|-|55,069|55,069|-|
|Loans andadvances|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 currentassets|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-currentassets:|||||||
|Available-for-salefinancial assets|1,906,878|N/A|(1,906,878)|56,579|N/A|(56,579)|
|Long-termreceivables|34,815|34,815|-|-|-|-|
|Long-term equityinvestments|2,713,316|2,713,316|-|28,236,295|28,236,295|-|
|Other non-currentfinancial assets|N/A|784,269|784,269|N/A|56,579|56,579|
|Investmentproperties|391,765|391,765|-|560,954|560,954|-|
|Fixed assets|22,437,212|22,437,212|-|1,056,790|1,056,790|-|
|Construction inprogress|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|-|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd. expenses
||||||||
|-|-|-|-|-|-|-|
|Deferred tax assets|4,421,313|4,421,313|-|202,703|202,703|-|
|Other non-currentassets|550,352|550,352|-|4,576|4,576|-|
|Total non-currentassets|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)
Prepared by Midea Group Co., Ltd. 31 March 2019 Unit:RMB’000
||||||||
|-|-|-|-|-|-|-|
|LIABILITIES ANDSHAREHOLDERS'EQUITY|Consolidated|||Company|||
||31 December2018|1 January2019|Adjustment|31 December2018|1 January2019|Adjustment|
|Current liabilities:|||||||
|Short-termborrowings|870,390|870,390|-|575,000|575,000|-|
|Borrowings fromthe Central Bank|99,754.00|99,754|-|-|-|-|
|Customer depositsand deposits frombanks and otherfinancial institutions|44,386|44,386|-|-|-|-|
|Derivative financialliabilities|756,299|756,299|-|-|-|-|
|Notes andaccounts payable|60,226,741|60,226,741|-|-|-|-|
|Advances fromcustomers|16,781,666|16,781,666|-|-|-|-|
|Employee benefitspayable|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 ofnon-current liabilities|7,122,712|7,122,712|-|-|-|-|
|Other currentliabilities|31,319,709|31,319,709|-|44,414|44,414|-|
|Total currentliabilities|130,231,088|130,231,088|-|76,187,557|76,187,557|-|
|Non-currentliabilities:|||||||

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|Long-termborrowings|32,091,439|32,091,439|-|-|-|-|
|Long-termpayables|88,890|88,890|-|-|-|-|
|Provisions|268,887|268,887|-|-|-|-|
|Deferred income|647,583|647,583|-|-|-|-|
|Long-termemployee benefitspayable|2,480,318|2,480,318|-|-|-|-|
|Deferred taxliabilities|4,422,074|4,422,074|-|-|-|-|
|Other non-currentliabilities|1,016,352|1,016,352|-|-|-|-|
|Total non-currentliabilities|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: Treasurystock|(4,918,427)|(4,918,427)|-|(4,918,427)|(4,918,427)|-|
|Othercomprehensiveincome|(1,332,153)|-1,332,153|-|6,020|6,020|-|
|General riskreserve|366,947|366,947|-|-|-|-|
|Surplus reserve|5,079,096|5,079,096|-|5,079,096|5,079,096|-|
|Undistributedprofits|58,762,315|58,762,315|-|19,486,212|19,486,212|-|
|Total equityattributable toshareholders of theCompany|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 LIABILITIESANDSHAREHOLDERS'EQUITY|263,701,148|263,701,148|-|113,118,878|113,118,878|-|

Interim Report for the First Quarter 2019 of Midea Group Co., Ltd. 2.2 Retrospective Restatement of Comparative Data due to the First Execution of any New Standards Governing Financial Instruments or Leases
√ Applicable□ N/A
The Company adopts the new accounting standard governing financial instruments starting from 1 January 2019 and adjusts the format of its financial statements according to the Notice of the Ministry of Finance on Revising and Issuing the Format of Financial Statements of General Enterprises 2018. And the 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√ No
This Report is un-audited by a CPAs firm.
Midea Group Co., Ltd. Legal Representative: Fang Hongbo 30 April 2019