Midea Group Co., Ltd.
Interim Report for the Third Quarter 2018 October 2018
Interim Report for the Third Quarter 2018 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 Q3 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, Mr. Xiao Mingguang, Director of Finance of the Company, and Ms. Chen Lihong, responsible person for theCompany’s accounting department 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 Third Quarter 2018 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
||||||||
|-|-|-|-|-|-|-|
||30 September 2018||31 December 2017||Change (%)||
|Total assets (RMB'000)|256,651,139||248,106,858||3.44%||
|Net assets attributable to|82,864,509||73,737,437||||
|shareholders of the Company|||||12.38%||
|(RMB'000)|||||||
||July-September|||January-|||
|||YoY Change (%)||||YoY Change (%)|
||2018|||September 2018|||
|Operating revenues (RMB'000)|63,132,816|1.01%||205,756,653||10.06%|
|Net profits attributable to|4,963,393|||17,900,239|||
|shareholders of the Company||18.55%||||19.35%|
|(RMB'000)|||||||
|Net profits attributable to|||||||
|shareholders of the Company before|||||||
||4,751,797|16.52%||17,252,050||23.49%|
|non-recurring gains and losses|||||||
|(RMB'000)|||||||
|Net cash flow from operating||||19,589,580|||
||--|--||||-2.38%|
|activities (RMB'000)|||||||
|Basic earnings per share|0.76|||2.72|||
|||18.75%||||17.75%|
|(RMB/share)|||||||
|Diluted earnings per share|0.75|||2.69|||
|||17.19%||||16.96%|
|(RMB/share)|||||||
|Weighted average ROE (%)|6.11%|0.02%||22.65%||0.04%|

 Total share capital of the Company on the last trading session before disclosure:
|||
|-|-|
|Total share capital of the Company on the last||
||6,605,324,151|
|trading session before disclosure (share)||
|Fully diluted earnings per share based on the||
||2.71|
|latest share capital above (RMB/share)||

Note: TheCompany’s total share capital on 30 September 2018 was 6,644,656,857 shares. Minus the
repurchased 39,332,706 shares up to that day, the number was 6,605,324,151 shares.
Non-recurring profits and losses
Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd.√ Applicable□ N/A
Unit:RMB’000
||||
|-|-|-|
|Item|January-September 2018|Note|
|Profit or loss from disposal of non-current assets|287,028||
|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|||
||-770,673||
|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|1,700,109||
|Less: Corporate income tax|406,220||
|Minority interests (after tax)|162,055||
|Total|648,189|--|

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 and shareholdings of the top ten common shareholders at the period-end
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||Total number of preference|||||
|Total number of common shareholders at|||||shareholders with resumed|||||
|||229,782||||||0||
|the period-end|||||voting rights at the period-|||||
||||||end (if any)|||||
|Top ten shareholders||||||||||
||||Share||||Pledged or frozen|||
||||holdin|||Number of|shares|||
||Nature of|||Number of||||||
|Name of shareholder|||g|||restricted|Status|||
||shareholder|||shares held|||||Number of|
||||perce|||shares held|of|||
||||||||||shares|
||||ntage||||share|||

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||(%)||||s|||
|Midea Holding Co., Ltd.|Domestic non-state-ownedcorporation||33.29|2,212,046,613||0||||
||||||||Pledg|||
||||||||||666,065,000|
||||||||ed|||
|Hong Kong Exchanges and ClearingLimited|Foreigncorporation||13.10|870,683,761||0||||
||||||||-||-|
|China Securities Finance Co., Ltd.|State-ownedcorporation||2.98|198,145,134||0||||
||||||||-||-|
|Fang Hongbo|Domesticindividual||2.06|136,990,492||102,742,869||||
||||||||-||-|
|Hillhouse Capital ManagementLimited－HCM China Fund|Foreigncorporation||1.62|107,658,338||0||||
||||||||-||-|
|Huang Jian|Domesticindividual||1.32|88,005,400||0|Pledg|||
||||||||||22,999,900|
||||||||ed|||
|Xiaomi Technology Co., Ltd.|Domestic non-state-ownedcorporation||1.24|82,500,000||0||||
||||||||-||-|
|Central Huijin Asset ManagementLtd.|State-ownedcorporation||1.18|78,474,900||0||||
||||||||-||-|
|Canada Pension Plan InvestmentBoard|Foreigncorporation||1.09|72,309,875||0||||
||||||||-||-|
|Li Jianwei|Domesticindividual||0.78|51,791,941||0||||
||||||||-||-|
|Top ten non-restricted common shareholders||||||||||
|||Number of non-|||Type of shares|||||
|||restricted common||||||||
|Name of shareholder||||||||||
|||shares held at the|||Type|||Number||
|||period-end||||||||
|Midea Holding Co., Ltd.||2,212,046,613|||RMB common stock|||2,212,046,613||
|Hong Kong Securities Clearing Company Limited||870,683,761|||RMB common stock|||870,683,761||
|China Securities Finance Co., Ltd.||198,145,134|||RMB common stock|||198,145,134||
|Hillhouse Capital Management Limited－HCM ChinaFund||107,658,338||||||||
||||||RMB common stock|||107,658,338||
|Huang Jian||88,005,400|||RMB common stock|||88,005,400||
|Xiaomi Technology Co., Ltd.||82,500,000|||RMB common stock|||82,500,000||
|Central Huijin Asset Management Ltd.||78,474,900|||RMB common stock|||78,474,900||
|Canada Pension Plan Investment Board－ self-owned capital (stock exchange)||72,309,875||||||||
||||||RMB common stock|||72,309,875||
|Li Jianwei||51,791,941|||RMB common stock|||51,791,941||

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd.
|||||
|-|-|-|-|
|Yuan Liqun|48,018,400|RMB common stock|48,018,400|
|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 Third Quarter 2018 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)||30 September||31 December|Change(%)|Reasons for the changes|
|||2018/January-||2017/January-|||
|||September||September|||
|||2018||2017|||
|Advances to suppliers|2,383,097||1,672,248||42.51%|Mainly due to the increased advances tosuppliers of raw materials|
|Long-term receivables|42,652||362,248||-88.23%|Mainly due to the changes in KUKA’sbusiness|
|Construction in progress|1,926,225||879,576||118.99%|Mainly due to the increased investmentsin construction|
|Short-term borrowings|894,952||2,584,102||-65.37%|Mainly due to the repayment ofborrowings|
|Derivative financialliabilities|987,850||90,432||992.37%|Mainly due to the changes in the fairvalue of derivative financial assets|
|Current portion of non-current liabilities|7,002,614||136,605||5,026.18%|Mainly due to the reclassification of long-term borrowings and debentures payableinto this item|
|Debentures payable|0||4,553,054||-100.00%|Mainly due to the reclassification ofdebentures payable into the currentportion of non-current liabilities|
|Other comprehensiveincome|-651,947||-244,692||-166.44%|Mainly due to the changes in thegains/losses on cash flow hedges|
|Interest income|1,647,457||815,565||102.00%|Mainly due to the changes in theoperation of Midea Group Finance|
|Financial expenses|-1,727,756||852,759||-302.61%|Mainly due to the changes in foreignexchange profit/loss|
|Gains on changes in fairvalue|-882,313||-44,156||-1,898.17%|Mainly due to the changes in the fairvalue of derivative financial assets|
|Gains on disposal ofassets|-2,000||743,834||-100.27%|Mainly due to the decreased gains ondisposal of non-current assets|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Non-operatingexpenses|79,098|399,689|-80.21%|Mainly due to the decreased other non-operating expenses|
|Income tax expenses|3,834,166|2,737,940|40.04%|Mainly due to the increased profits|
|Net cash flows fromfinancing activities|-10,826,057|21,987,048|-149.24%|Mainly due to the decreased borrowings|

2. Progress, influence and solutions of significant events
√ Applicable□ N/A
||||
|-|-|-|
|Summary of the significant event|Date of disclosure|Website for the disclosed information|
|Announcement on the Board’s Reviewof the Asset Restructuring and theTrading Suspension of the Company’sStock|||
||10 September 2018|http://www.cninfo.com.cn/|
|Announcement on the Progress on theTrading Suspension of the Company’sStock|||
||17 September 2018|http://www.cninfo.com.cn/|
|Announcement on the Progress on theTrading Suspension of the Company’sStock|||
||25 September 2018|http://www.cninfo.com.cn/|
|Announcement on the Board’sPostponed Review of the AssetRestructuring and the ContinuedTrading Suspension of the Company’sStock|||
||8 October 2018|http://www.cninfo.com.cn/|
|Announcement on the Resolutions ofthe Second Meeting of the Third Board|||
||24 October 2018|http://www.cninfo.com.cn/|
|Plan of Midea Group Co., Ltd. on theMerge with Wuxi Little Swan CompanyLimited via A-share Issuance for aShare Swap and the Related-PartyTransaction|||
||24 October 2018|http://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
No such cases in the Reporting Period.
Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. 4. Operating result forecast for the Year 2018
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 Reporting Period.
6. Wealth management entrustment
√ Applicable□ N/A
Unit:RMB’0,000
||||||
|-|-|-|-|-|
|Type of wealth|||Outstanding amount||
||Funding source|Principal||Overdue amount|
|management|||before maturity||
|Wealth management|Self-owed capital|1,917,978|724,000|0|
|products purchased|||||
|from banks|||||
|Trust wealth|Self-owed capital|288,374|0|0|
|management|||||
|Entrusted debt|Self-owed capital|3,120|0|0|
|investment|||||
|Total||2,209,472|724,000|0|

 7. Derivatives investment
√ Applicable□ N/A
Unit:RMB’0,000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Rel|Rel||||||Purch||Amou||Closing||
||||||||||Sold|||||
||atio|ated||||||ased||nt||investm|Actual|
||||Type|Initial|||Opening||in the||Closing|||
|Opera|nshi|-||||||in the||provid||ent|gain/loss|
||||of|investme|||investme||Repor||investme|||
|ting|p|part|||Start date|End date||Repor||ed for||amount|in the|
||||deriva|nt|||nt||ting||nt|||
|party|with|y||||||ting||impair||as a|Reporting|
||||tive|amount|||amount||Perio||amount|||
||the|tran||||||Perio||ment||percent|Period|
||||||||||d|||||
||Co|sact||||||d||(if||age of||

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||mpa|ion||||||||any)||the||
||ny|or||||||||||Compa||
|||not||||||||||ny’s||
|||||||||||||closing||
|||||||||||||net||
|||||||||||||assets||
|Futur|||Futur|||||||||||
|||||||31||||||||
|es|||es||1 J a n u a r y|||||||||
||N/A|No||||Decembe||-|-|-|-492.1|-0.01%|-23,247.6|
|comp|||contra|6,588.2|2 018||6,588.2|||||||
|||||||r 2018||||||||
|any|||cts|||||||||||
||||Forwa|||||||||||
||||rd|||||||||||
|||||||31|||||-|||
||||excha||1 J a n u ary|||||||||
|Bank|N/A|No||||Decembe||-|-|-|139,135.|-1.68%|-178,459.9|
||||nge|55,599.5|2 018||55,599.5|||||||
|||||||r 2018|||||7|||
||||contra|||||||||||
||||cts|||||||||||
||||||||||||-|||
|Total||||62,187.7|--|--|62,187.7|-|-|-|139,627.|-1.69%|-201,707.5|
||||||||||||8|||
|Source of derivatives||||||||||||||
|||||All from the Company’s own money||||||||||
|investment funds||||||||||||||
|Lawsuits involved (if||||||||||||||
|||||N/A||||||||||
|applicable)||||||||||||||
|Disclosure date of the||||||||||||||
|announcement about||||||||||||||
|the board’s consent for||||31 March 2018||||||||||
|the derivative||||||||||||||
|investment (if any)||||||||||||||
|Disclosure date of the||||||||||||||
|announcement about||||||||||||||
|the general meeting’s||||||||||||||
|||||24 April 2018||||||||||
|consent for the||||||||||||||
|derivative investment (if||||||||||||||
|any)||||||||||||||
|Risk analysis of||||For the sake of eliminating the cost risk of the Company's bulk purchases of raw materials as a||||||||||
|positions held in||||result of significant fluctuations in raw material prices, the Company not only carried out futures||||||||||
|derivatives during the||||business for some of the materials, but also made use of bank financial instruments and||||||||||
|Reporting Period and||||promoted forex funds business, with the purpose of avoiding the risks of exchange and interest||||||||||
|explanation of control||||rate fluctuation, realizing the preservation and appreciation of forex assets, reducing forex||||||||||
|measures (Including but||||liabilities, as well as achieving locked-in costs. The Company has performed sufficient||||||||||
|not limited to market||||evaluation and control against derivatives investment and position risks, details of which are||||||||||
|risk, liquidity risk, credit||||described as follows:||||||||||
|risk, operational risk,||||1. Legal risk: The Company's futures business and forex funds businesses shall be conducted||||||||||

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd.
|||
|-|-|
|legal risk, etc.)|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||
||1. Loss from futures contracts during the Reporting Period was RMB-232,476,000.|
|derivative products||
||2. Loss from forward forex contracts during the Reporting Period was RMB-1,784,599,000, and|
|during the Reporting||
||exchange gains on financial expenses were RMB1,056,386,000.|
|Period, specific||
||3. Public quotations in futures market or forward forex quotations announced by the Bank of|
|methods used and||
||China are used in the analysis of derivatives fair value.|
|relevant assumption||
|and parameter settings||

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd.
|||
|-|-|
|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|N/A|
|Company's derivatives||
|for the Reporting Period||
|as compared to the||
|previous Reporting||
|Period||
||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 management|
|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.|

8. Visits received during the Reporting Period
√ Applicable□ N/A
|||||
|-|-|-|-|
|Date|Type of visit|Type of visitor|Discussions|
||||Please refer to Investor Relations Activities|
|11-12 July 2018|Field research|Institution|from 11 July 2018 to 12 July 2018 on the|
||||website of www.cninfo.com.cn|
||||Please refer to Investor Relations Activities|
|16-23 July 2018|Field research|Institution|from 16 July 2018 to 23 July 2018 on the|
||||website of www.cninfo.com.cn|
||||Please refer to Investor Relations Activities|
|2-5 September 2018|Field research|Institution|from 2 September 2018 to 5 September|
||||2018 on the website of www.cninfo.com.cn|
||||Please refer to Investor Relations Activities|
|20-21 September 2018|Field research|Institution|from 20 September 2018 to 21 September|
||||2018 on the website of www.cninfo.com.cn|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. 9. Irregular provision of guarantees
□Applicable√ N/A
No such cases in the Reporting Period.
10. 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 Third Quarter 2018 of Midea Group Co., Ltd. Section IV Financial Statements
1. Financial statements
Balance Sheet
Prepared by Midea Group Co., Ltd. 30 September 2018 Unit:RMB’000
||||||
|-|-|-|-|-|
|ASSETS|30September2018|31 December2017|30September2018|31 December2017|
||Consolidated|Consolidated|Company|Company|
|Current assets:|||||
|Cash at bank and on hand|42,488,845|48,274,200|32,153,760|29,349,926|
|Derivative financial assets|376,900|353,327|-|-|
|Notes and accounts receivable|32,647,254|28,382,943|-|-|
|Including: Notes receivable|13,545,455|10,854,226|-|-|
|Accounts receivable|19,101,799|17,528,717|-|-|
|Advances to suppliers|2,383,097|1,672,248|115,944|23,877|
|Loans and advances|10,930,216|12,178,953|-|-|
|Other receivables|2,700,042|2,809,998|11,034,838|9,318,704|
|Inventories|24,424,935|29,444,166|-|-|
|Including: completed but unsettled|5,024,376|4,023,467|-|-|
|Other current assets|59,563,341|46,694,841|46,281,751|27,293,364|
|Total current assets|175,514,630|169,810,676|89,586,293|65,985,871|
|Non-current assets:|||||
|Available-for-sale financial assets|2,175,051|1,831,051|61,586|56,868|
|Long-term receivables|42,652|362,248|-|-|
|Long-term equity investments|2,859,348|2,633,698|27,513,843|24,540,601|
|Investment properties|398,476|420,802|561,474|597,200|
|Fixed assets|22,292,839|22,600,724|1,110,104|1,245,998|
|Construction in progress|1,926,225|879,576|61,749|36,313|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Intangible assets 15,589,465 15,167,036 226,083 231,154
||||||
|-|-|-|-|-|
|Goodwill|29,622,253|28,903,785|-|-|
|Long-term prepaid expenses|981,447|859,106|177,411|121,452|
|Deferred tax assets|4,638,795|4,023,334|75,834|152,069|
|Other non-current assets|609,958|614,822|12,109|9,700|
|Total non-current assets|81,136,509|78,296,182|29,800,193|26,991,355|
|TOTAL ASSETS|256,651,139|248,106,858|119,386,486|92,977,226|

 Legal representative: Person in charge of accounting function: Person in charge of accounting department: Fang Hongbo Xiao Mingguang Chen Lihong
Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd. 30 September 2018 Unit:RMB’000
||||||
|-|-|-|-|-|
|LIABILITIES AND SHAREHOLDERS' EQUITY|30September2018|31 December2017|30September2018|31 December2017|
||Consolidated|Consolidated|Company|Company|
|Current liabilities:|||||
|Short-term borrowings|894,952|2,584,102|1,140,000|-|
|Borrowings from the central bank|17,458|-|-|-|
|Customer deposits and deposits from banksand other financial institutions|127,750|108,926|-|-|
|Derivative financial liabilities|987,850|90,432|-|-|
|Notes and accounts payable|55,822,651|60,352,562|-|-|
|Advances from customers|13,210,019|17,409,063|-|-|
|Including: Settled but not completed|2,138,979|1,670,855|-||
|Employee benefits payable|4,542,534|5,247,500|125,460|427,806|
|Taxes payable|4,227,368|3,544,154|292,966|45,179|
|Other payables|4,032,813|3,360,523|80,503,359|58,014,048|
|Current portion of non-current liabilities|7,002,614|136,605|-|-|
|Other current liabilities|32,454,539|26,257,990|27,338|40,830|
|Total current liabilities|123,320,548|119,091,857|82,089,123|58,527,863|
|Non-current liabilities:|||||
|Long-term borrowings|32,692,841|32,986,325|-|-|
|Debentures payable|-|4,553,054|-|-|
|Long-term payables|296,725|250,536|-|-|
|Provisions|266,721|330,736|-|-|
|Deferred revenue|568,855|536,443|-|-|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Long-term employee benefits payable 2,397,344 2,465,854 - -
||||||
|-|-|-|-|-|
|Deferred tax liabilities|4,087,228|3,972,823|-|-|
|Other non-current liabilities|1,037,605|994,059|-|-|
|Total non-current liabilities|41,347,319|46,089,830|-|-|
|Total liabilities|164,667,867|165,181,687|82,089,123|58,527,863|
|Shareholders' equity:|||||
|Share capital|6,644,657|6,561,053|6,644,657|6,561,053|
|Capital surplus|17,712,099|15,911,504|10,103,547|7,726,237|
|Less: Treasury stock|(2,718,168)|(366,842)|(2,718,168)|(366,842)|
|Other comprehensive income|(651,947)|(244,692)|165,884|33,459|
|Surplus reserve|3,882,232|3,882,232|3,882,232|3,882,232|
|General reserve|366,947|366,947|-|-|
|Undistributed profits|57,628,689|47,627,235|19,219,211|16,613,224|
|Total equity attributable to shareholders of theCompany|82,864,509|73,737,437|37,297,363|34,449,363|
|Minority interests|9,118,763|9,187,734|-|-|
|Total shareholders' equity|91,983,272|82,925,171|37,297,363|34,449,363|
|TOTAL LIABILITIES AND SHAREHOLDERS'EQUITY|256,651,139|248,106,858|119,386,486|92,977,226|

Legal representative: Person in charge of accounting function: Person in charge of accounting department: Fang Hongbo Xiao Mingguang Chen Lihong
Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Income Statement
Prepared by Midea Group Co., Ltd. January-September 2018 Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|January-September2018|January-September2017|January-September2018|January-September2017|
||Consolidated|Consolidated|Company|Company|
|1.Total revenue|207,404,713|187,764,435|1,302,617|1,116,610|
|Including: Operating revenue|205,756,653|186,948,866|1,302,617|1,116,610|
|Interest income|1,647,457|815,565|-|-|
|Fee and commission income|603|4|-|-|
|2.Total Cost|(185,957,302)|(172,344,718)|487,202|(545,033)|
|Including: Cost of sales|(149,664,730)|(139,559,489)|(32,561)|(29,054)|
|Interest expenses|(180,410)|(215,904)|-|-|
|Fee and commission expenses|(2,259)|(2,140)|-|-|
|Taxes and surcharges|(1,223,984)|(1,076,026)|(23,006)|(11,267)|
|Selling and distribution expenses|(24,397,272)|(19,954,150)|-|-|
|General and administrative expenses|(5,629,888)|(4,819,384)|(281,257)|(206,857)|
|R&D expenses|(6,349,429)|(5,610,773)|-|-|
|Financial expenses|1,727,756|(852,759)|823,775|(298,404)|
|Including: Interest expenses|(511,687)|(678,235)|(499,991)|(565,181)|
|Interest income|1,262,815|725,515|1,091,446|250,472|
|Asset impairment losses|(237,086)|(254,093)|251|549|
|Add: Other income|936,954|1,075,500|184,227|-|
|Investment income|1,276,499|1,792,009|8,753,457|9,543,492|
|Including: Share of profit ofassociates and joint ventures|276,367|390,089|185,410|288,285|
|Gains on changes in fair value|(882,313)|(44,156)|-|-|
|Gains on disposal of assets|(2,000)|743,834|45,627|(95)|
|3.Operating profit|22,776,551|18,986,904|10,773,130|10,114,974|
|Add: Non-operating income|226,964|252,125|5,325|1,481|
|Less: Non-operating expenses|(79,098)|(399,689)|(4,038)|(1,349)|
|4.Total profit|22,924,417|18,839,340|10,774,417|10,115,106|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Less: Income tax expenses (3,834,166) (2,737,940) (269,645) 90,336
||||||
|-|-|-|-|-|
|5.Net profit|19,090,251|16,101,400|10,504,772|10,205,442|
|(1) Classified by continuity of operations|||||
|Net profit from continuing operations|19,090,251|16,101,400|10,504,772|10,205,442|
|Net profit from discontinued operations|-|-|-|-|
|(2) Classified by ownership of the equity|||||
|Attributable to shareholders of theCompany|17,900,239|14,998,175|10,504,772|10,205,442|
|Minority interests|1,190,012|1,103,225|-|-|
|6.Other comprehensive income, net of tax|(590,795)|13,190|132,425|(7,859)|
|Attributable to shareholders of the Company|(407,255)|6,624|132,425|(7,859)|
|(1) Other comprehensive income items whichwill not be reclassified subsequently to profit orloss|45,455|37,472|-|-|
|1) Changes arising from remeasurement ofnet liability or net asset of defined benefit plan|45,455|37,472|-|-|
|2) Share of other comprehensive incomeof the investee accounted for using equity methodthat will not be subsequently reclassified to profitor loss|-|-|-|-|
|(2) Other comprehensive income items whichwill be reclassified subsequently to profit or loss|(452,710)|(30,848)|132,425|(7,859)|
|1) Share of the other comprehensiveincome of the investee accounted for using equitymethod which will be reclassified subsequently toprofit and loss|69,613|(9,831)|47,245|(7,859)|
|2)Change in fair value of available-for-salefinancial assets|(102,449)|(288,537)|78,935|-|
|3) Losses or profits arising from thereclassification of held-to-maturity investmentsinto available-for-sale financial assets|-|-|-|-|
|4) Effective portion of cash flow hedginggains or losses|(1,000,918)|140,809|6,245|-|
|5)Translation of foreign currency financialstatements|581,044|126,711|-|-|
|Minority interests|(183,540)|6,566|-|-|
|7.Total comprehensive income|18,499,456|16,114,590|10,637,197|10,197,583|
|Attributable to shareholders of the Company|17,492,984|15,004,799|10,637,197|10,197,583|
|Minority interests|1,006,472|1,109,791|-|-|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. 8.Earnings per share
||||||
|-|-|-|-|-|
|(1) Basic earnings per share|2.72|2.31|N/A|N/A|
|(2) Diluted earnings per share|2.69|2.30|N/A|N/A|

 Legal representative: Person in charge of accounting function: Person in charge of accounting department: Fang Hongbo Xiao Mingguang Chen Lihong
Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Income Statement
Prepared by Midea Group Co., Ltd. July-September 2018 Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|July-September2018|July-September2017|July-September2018|July-September2017|
||Consolidated|Consolidated|Company|Company|
|1.Total revenue|63,668,797|62,800,819|436,307|415,540|
|Including: Operating revenue|63,132,816|62,498,801|436,307|415,540|
|Interest income|535,443|302,016|-|-|
|Fee and commission income|538|2|-|-|
|2.Total Cost|(57,615,453)|(58,381,100)|443,843|(221,378)|
|Including: Cost of sales|(45,783,292)|(46,508,408)|(10,607)|(9,725)|
|Interest expenses|(12,175)|(50,238)|-|-|
|Fee and commission expenses|(730)|(479)|-|-|
|Taxes and surcharges|(376,334)|(321,255)|(5,305)|(7,488)|
|Selling and distribution expenses|(7,504,769)|(7,549,380)|-|-|
|General and administrative expenses|(2,294,597)|(1,813,923)|(113,359)|(101,419)|
|R&D expenses|(2,450,200)|(1,783,276)|-|-|
|Financial expenses|743,643|(506,145)|573,149|(103,441)|
|Including: Interest expenses|(206,984)|(210,340)|(222,533)|(168,798)|
|Interest income|505,000|192,298|560,492|61,785|
|Asset impairment losses|63,001|152,004|(35)|695|
|Add: Other income|310,676|229,274|150|-|
|Investment income|363,875|592,557|2,170,005|3,418,254|
|Including: Share of profit ofassociates and joint ventures|89,122|102,955|58,329|73,852|
|Gains on changes in fair value|(268,385)|(34,633)|-|-|
|Gains on disposal of assets|16,759|(268)|45,364|24|
|3.Operating profit|6,476,269|5,206,649|3,095,669|3,612,440|
|Add: Non-operating income|76,164|42,440|907|724|
|Less: Non-operating expenses|(22,589)|(16,873)|-|(427)|
|4.Total profit|6,529,844|5,232,216|3,096,576|3,612,737|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Less: Income tax expenses (1,219,284) (678,887) (261,715) 98,238
||||||
|-|-|-|-|-|
|5.Net profit|5,310,560|4,553,329|2,834,861|3,710,975|
|(1) Classified by continuity of operations|||||
|Net profit from continuing operations|5,310,560|4,553,329|2,834,861|3,710,975|
|Net profit from discontinued operations|-|-|-|-|
|(2) Classified by ownership of the equity|||||
|Attributable to shareholders of theCompany|4,963,393|4,186,853|2,834,861|3,710,975|
|Minority interests|347,167|366,476|-|-|
|6.Other comprehensive income, net of tax|(4,416)|(13,132)|35,511|(4,433)|
|Attributable to shareholders of the Company|(7,368)|(3,058)|35,511|(4,433)|
|(1) Other comprehensive income items whichwill not be reclassified subsequently to profit orloss|27,169|(2,107)|-|-|
|1) Changes arising from remeasurement ofnet liability or net asset of defined benefit plan|27,169|(2,107)|-|-|
|2) Share of other comprehensive incomeof the investee accounted for using equity methodthat will not be subsequently reclassified to profitor loss|-|-|-|-|
|(2) Other comprehensive income items whichwill be reclassified subsequently to profit or loss|(34,537)|(951)|35,511|(4,433)|
|1) Share of the other comprehensiveincome of the investee accounted for using equitymethod which will be reclassified subsequently toprofit and loss|23,639|(1,762)|12,939|(4,433)|
|2)Change in fair value of available-for-salefinancial assets|(117,028)|3,938|16,327|-|
|3) Losses or profits arising from thereclassification of held-to-maturity investmentsinto available-for-sale financial assets|-|-|-|-|
|4) Effective portion of cash flow hedginggains or losses|(366,451)|(27,907)|6,245|-|
|5)Translation of foreign currency financialstatements|425,303|24,780|-|-|
|Minority interests|2,952|(10,074)|-|-|
|7.Total comprehensive income|5,306,144|4,540,197|2,870,372|3,706,542|
|Attributable to shareholders of the Company|4,956,025|4,183,795|2,870,372|3,706,542|
|Minority interests|350,119|356,402|-|-|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. 8.Earnings per share
||||||
|-|-|-|-|-|
|(1) Basic earnings per share|0.76|0.64|N/A|N/A|
|(2) Diluted earnings per share|0.75|0.64|N/A|N/A|

 Legal representative: Person in charge of accounting function: Person in charge of accounting department: Fang Hongbo Xiao Mingguang Chen Lihong
Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Cash Flow Statement
Prepared by Midea Group Co., Ltd. January-September 2018 Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|January-September2018|January-September2017|January-September2018|January-September2017|
||Consolidated|Consolidated|Company|Company|
|1.Cash flows from operating activities:|||||
|Cash received from sales of goods orrendering of services|160,376,963|148,783,253|-|-|
|Net increase in customer deposits anddeposits from banks and other financialinstitutions|18,824|121,433|-|-|
|Net decrease in loans and advances|1,267,226|-|-|-|
|Net increase in borrowings from the centralbank|17,458|-|-|-|
|Cash received for interest, fee andcommission|975,800|864,098|-|-|
|Refund of taxes and surcharges|4,903,836|4,440,425|-|-|
|Cash received relating to other operatingactivities|5,073,697|3,370,638|23,765,185|8,729,382|
|Sub-total of cash inflows|172,633,804|157,579,847|23,765,185|8,729,382|
|Cash paid for goods and services|(98,306,306)|(87,143,944)|-|-|
|Net increase in loans and advances|-|(658,156)|-|-|
|Net decrease in customer deposits anddeposits from banks and other financialinstitutions|-|-|-|-|
|Net increase in deposits with the central bank|(1,121,072)|(744,270)|-|-|
|Cash paid for interest, fee and commission|(183,202)|(218,046)|-|-|
|Cash paid to and on behalf of employees|(19,638,796)|(17,042,705)|(326,747)|(114,654)|
|Payments of taxes and surcharges|(11,157,941)|(9,412,941)|(23,009)|(101,815)|
|Cash paid relating to other operating activities|(22,636,907)|(22,292,143)|(2,269,335)|(227,698)|
|Sub-total of cash outflows|(153,044,224)|(137,512,205)|(2,619,091)|(444,167)|
|Net cash flows from operating activities|19,589,580|20,067,642|21,146,094|8,285,215|
|2.Cash flows from investing activities:|||||

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Cash received from disposal of investments 47,800,654 56,859,505 23,444,983 40,619,980
||||||
|-|-|-|-|-|
|Cash received from returns on investments|1,522,671|1,664,387|9,761,421|9,227,047|
|Net cash received from disposal of fixedassets, intangible assets and other long-termassets|69,144|865,341|-|12,049|
|Net cash received from disposal ofsubsidiaries and other business units|24,311|2,415|-|-|
|Cash received relating to other investingactivities|-|-|-|-|
|Sub-total of cash inflows|49,416,780|59,391,648|33,206,404|49,859,076|
|Cash paid to acquire fixed assets, intangibleassets and other long-term assets|(3,659,281)|(2,071,492)|(210,157)|(81,158)|
|Cash paid to acquire investments|(66,565,111)|(50,014,698)|(47,235,579)|(36,731,884)|
|Net cash paid to acquire subsidiaries andother business units|(171,245)|(25,633,208)|-|-|
|Cash paid relating to other investing activities|-|-|-|-|
|Sub-total of cash outflows|(70,395,637)|(77,719,398)|(47,445,736)|(36,813,042)|
|Net cash flows from investing activities|(20,978,857)|(18,327,750)|(14,239,332)|13,046,034|
|3.Cash flows from financing activities:|||||
|Cash received from capital contributions|2,526,025|1,365,855|1,910,933|1,365,855|
|Including: Cash received from capitalcontributions by minority shareholders ofsubsidiaries|615,092|-|-|-|
|Cash received from borrowings|2,344,612|32,917,986|1,140,000|1,600,000|
|Cash received from issuing short-termfinancing bonds|-|-|-|-|
|Cash received relating to other financingactivities|-|-|-|-|
|Sub-total of cash inflows|4,870,637|34,283,841|3,050,933|2,965,855|
|Cash repayments of borrowings|(3,084,621)|(4,718,342)|-|(1,600,000)|
|Cash payment for issuing short-termfinancing bonds|-|-|-|-|
|Cash payments for interest expenses anddistribution of dividends or profits|(8,953,224)|(7,578,451)|(8,209,025)|(6,970,870)|
|Including: Cash payments for dividends orprofit to minority shareholders of subsidiaries|(498,030)|(606,819)|-|-|
|Cash paid relating to other financing activities|(3,658,849)|-|(1,828,808)|-|
|Sub-total of cash outflows|(15,696,694)|(12,296,793)|(10,037,833)|(8,570,870)|

Interim Report for the Third Quarter 2018 of Midea Group Co., Ltd. Net cash flows from financing activities (10,826,057) 21,987,048 (6,986,900) (5,605,015)
||||||
|-|-|-|-|-|
|4. Effect of foreign exchange rate changeson cash and cash equivalents|607,137|121,585|-|-|
|5. Net increase in cash and cash equivalents|(11,608,197)|23,848,525|(80,138)|15,726,234|
|Add: Cash and cash equivalents at beginningof period|21,831,653|12,513,730|25,978,543|8,174,915|
|6. Cash and cash equivalents at end ofperiod|10,223,456|36,362,255|25,898,405|23,901,149|

Legal representative: Person in charge of accounting function: Person in charge of accounting department: Fang Hongbo Xiao Mingguang Chen Lihong
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 31 October 2018