Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 MIDEA GROUP CO., LTD.
INTERIM REPORT FOR THE THIRD
QUARTER 2017
October 2017
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Section I Important Statements
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, 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.
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Section II Company Profile
1. Key Accounting Data and Financial Indicators
Indicate by tick mark whether the Company needs to retrospectively restate any of its accounting data.□ Yes√ No
||||||||
|-|-|-|-|-|-|-|
||Sep. 30, 2017||Dec. 31, 2016||Change||
|Total assets (RMB’000)|242,183,276||170,600,711||41.96%||
|Net assets attributable to|71,217,588||61,126,923||||
|shareholders of the Company|||||16.51%||
|(RMB’000)|||||||
||July-September|||January-Septemb|||
|||YoY change||||YoY change|
||2017|||er 2017|||
|Operating revenues (RMB’000)|62,498,801|60.85%||186,948,866||60.64%|
|Net profits attributable to|4,186,853|||14,998,175|||
|shareholders of the Company||26.43%||||17.10%|
|(RMB’000)|||||||
|Net profits attributable to|||||||
|shareholders of the Company before|||||||
||4,078,172|30.22%||13,969,938||14.21%|
|non-recurringprofits and losses|||||||
|(RMB’000)|||||||
|Net cash flows from operating||||20,067,642|||
||--|--||||5.41%|
|activities (RMB’000)|||||||
|Basic earnings per share|0.64|||2.31|||
|||25.49%||||15.50%|
|(RMB/share)|||||||
|Diluted earnings per share|0.64|||2.30|||
|||25.49%||||15.58%|
|(RMB/share)|||||||
|Weighted average return on equity|||||||
||6.09%|0.27%||22.61%||-1.15%|
|(%)|||||||

Notes: During the period from January to September 2017, Midea Group, exclusive of its recently acquired subsidiaries, achieved operating revenues of RMB156,389,246,000, up39% compared to the same period of last year; and achieved consolidated net profitsattributable to shareholders of the Company of RMB15,725,201,000, representing a23% year-on-year increase. According to a professional international evaluation agency andChina’s accounting standards for
business enterprises, the amortization of theM&A expenses for the period from January to September 2017 was
recognized at RMB1,851,780,000.
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 During the period from January to September 2017, the newly acquired KUKA achieved operating revenue of RMB19,837,513,000, representing a27% YoY increase. And the net profit has a26% YoY increase, indicating continued business growth.
Total shares outstanding of the Company as of the last trading session before the disclosure of this Report:
|||
|-|-|
|Number of total shares outstanding of the Company as of las|t6,548,526,448|
|trading session before disclosure of this Report (share)||
|Fully diluted earnings per share based on latest number o|f2.29|
|total shares outstanding above (RMB/share)||

Non-recurringprofits and losses:
√ Applicable□ Not applicable
Unit:RMB’000
||||
|-|-|-|
|Item|January-September 2017|Note|
|Gains or losses on disposal of non-current assets (including|||
||775,994||
|offset asset impairment provisions)|||
|Government grants accounted for, in the profit or loss for the|||
|current period (except for the government grants closely|||
|related to the business of the Company and given at a fixed|1,070,631||
|amount or quantity in accordance with the State's uniform|||
|standards)|||
|Gains or losses on debt restructuring|2,573||
|Gains/Losses on fair value changes of financial assets and|||
|liabilities held for trading & investment income from disposal|||
|of financial assets and liabilities held for trading as well as|||
||-7,206||
|financial assets available for sale (exclusive of effective|||
|hedges related to normal business operations of the|||
|Company)|||
|Other non-operating income and expenditure except|||
||-167,908||
|above-mentioned items|||
|Less: Corporate income tax|545,990||
|Minority interests (after tax)|99,857||
|Total|1,028,237|-|

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:
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017□ Applicable√ N/A
No such cases for the Reporting Period.
2. Total Number of Shareholders and Shareholdings of Top 10 Shareholders at Period-End
2.1 Numbers of Common Shareholders and Preference Shareholders with Resumed Voting Rights, and Shareholdings of Top 10 Shareholders
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||Total number of preference|||||
|Total number of common shareholders at|||||shareholders with resumed|||||
|||106,209||||||0||
|period-end|||||voting rights at period-end|||||
||||||(if any)|||||
|Top 10 shareholders||||||||||
||||Share||||Pledged or frozen|||
||||holdin|Total shares||Restricted|shares|||
||Nature of|||||||||
|Name of shareholder|||g|held at||shares held at||||
||shareholder|||||||||
||||perce|period-end||period-end|Status||Number|
||||ntage|||||||
|Midea Holding Co., Ltd.|Domesticnon-state-ownedcorporation||33.78|2,212,046,613||0||||
||||||||Pledg|||
||||||||||854,955,000|
||||||||ed|||
|Hong Kong Exchanges and ClearingLimited|Foreign corporation||8.82|577,323,779||0||||
||||||||-||-|
|China Securities Finance Co., Ltd.|State-ownedcorporation||3.05|199,439,709||0||||
||||||||-||-|
|Fang Hongbo|Domesticindividual||2.09|136,990,492||102,742,869||||
||||||||-||-|
|Hillhouse Capital Management Limited－HCM China Fund|Foreign corporation||1.74|113,891,138||0||||
||||||||-||-|
|Huang Jian|Domesticindividual||1.34|87,980,000||0|Pledg|||
||||||||||22,999,900|
||||||||ed|||
|Xiaomi Technology Co., Ltd.|Domesticnon-state-ownedcorporation||1.26|82,500,000||82,500,000||||
||||||||-||-|
|Central Huijin Asset Management Ltd.|State-ownedcorporation||1.20|78,474,900||0||||
||||||||-||-|
|Yuan Liqun|Domesticindividual||1.14|74,365,200||0|Pledg|||
||||||||||20,908,300|
||||||||ed|||

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|UBS AG|Foreign corporation||1.11|72,468,364|0|||||
||||||||-||-|
|Top 10 non-restricted shareholders||||||||||
|||Non-restricted shares held||||Type of stock||||
|Name of shareholder||||||||||
|||at period-end||||Type||Number||
|Midea Holding Co., Ltd.||2,212,046,613||||RMB-denominated||||
|||||||||2,212,046,613||
|||||||common stock||||
|Hong Kong Exchanges and Clearing Limited||577,323,779||||Ditto||577,323,779||
|China Securities Finance Co., Ltd.||199,439,709||||Ditto||199,439,709||
|Hillhouse Capital Management Limited－HCM ChinaFund||113,891,138||||||||
|||||||Ditto||113,891,138||
|Huang Jian||87,980,000||||Ditto||87,980,000||
|Central Huijin Asset Management Ltd.||78,474,900||||Ditto||78,474,900||
|Yuan Liqun||74,365,200||||Ditto||74,365,200||
|UBS AG||72,468,364||||Ditto||72,468,364||
|Fu Xuan||68,005,680||||Ditto||68,005,680||
|Li Jianwei||64,144,834||||Ditto||64,144,834||
|Related or acting-in-concert parties among||||||||||
|||N/A||||||||
|shareholders above||||||||||
|Top 10 common shareholders conducting securities||||||||||
|||N/A||||||||
|margin trading (if any)||||||||||

Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company conducted any agreed buy-back during the Reporting Period.□ Yea√ No
No such cases in the Reporting Period.
2.2 Total Number of Preference Shareholders and Shareholdings of Top 10 of Preference Shareholdersat Period-End
□ Applicable√ Not applicable
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Section III Significant Events
I Major Changes of Main Items in Financial Statements and Financial Indicators within the Reporting Period, as well as the Reasons for the Changes
√ Applicable□ Not applicable
Unit:RMB’000
|||||||
|-|-|-|-|-|-|
|Item|Sep. 30, 2017 or 9M 2017|Dec. 31, 2016 or 9M 2016|Change||Main reasons for the|
||||||changes|
|Cash at bankand on hand|41,657,437|27,169,118|53.33%|Growth in sales||
|Notes receivable|15,518,453|7,427,488|108.93%|Growth in sales||
|Advances tosuppliers|2,105,052|1,587,366|32.61%|Growth in sales andconsolidation of KUKA||
|Otherreceivables|2,099,815|1,140,133|84.17%|Consolidation of KUKA||
|Inventories|23,752,878|15,626,897|52.00%|Consolidation of KUKA||
|Available-for-sale financial assets|1,846,009|5,187,732|-64.42%|Consolidation of KUKA||
|Long-termreceivables|377,473|33,868|1,014.54%|Consolidation of KUKA||
|Construction inprogress|1,020,704|580,729|75.76%|Higher investment inongoing construction||
|Intangible assets|16,010,089|6,868,538|133.09%|Consolidation of KUKA||
|Goodwill|28,620,233|5,730,995|399.39%|Consolidation of KUKA||
|Othernon-currentassets|798,322|4,158,530|-80.80%|Reduced investment inlong-term wealthmanagement products||
|Short-termborrowings|4,472,839|3,024,426|47.89%|Increase of loans obtained||
|Customerdeposits anddeposits frombanks and otherfinancialinstitutions|158,141|36,708|330.81%|Changes in businessoperations of Midea GroupFinance||
|Derivative|146,771|89,838|63.37%|Changes in fair value of||

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 financial liabilities derivative financial instruments
||||||
|-|-|-|-|-|
|Advances fromcustomers|17,782,778|10,252,375|73.45%|Growth in sales andconsolidation of KUKA|
|Payroll payable|4,181,519|3,154,387|32.56%|Consolidation of KUKA|
|Interest payable|66,170|21,343|210.03%|Increase of loans obtained|
|Dividendspayable|176,000|105,641|66.60%|Increase of dividendsdeclared by subsidiary|
|Other payables|2,668,054|1,571,422|69.79%|Consolidation of KUKA|
|Long-termborrowings|33,075,133|2,254,348|1,367.17%|Increase of loans obtained|
|Provisions|645,287|325,217|98.42%|Provisions for possiblelosses on pending legalmatters|
|Long-termpayroll payable|2,325,670|1,449,954|60.40%|Consolidation of KUKA|
|Deferred incometax liabilities|4,381,425|1,831,973|139.16%|Rise in assessed assetvalue due to consolidationof KUKA|
|Othercomprehensiveincome|19,749|13,125|50.47%|Consolidation of KUKA|
|Operatingrevenue|186,948,866|116,378,417|60.64%|Growth in sales andconsolidation of KUKA|
|Fee andcommissionincome|4|7,773|-99.95%|Changes in businessoperations of Midea GroupFinance|
|Cost of sales|139,559,489|83,828,027|66.48%|Growth in sales andconsolidation of KUKA|
|Interestexpenses|215,904|384,002|-43.78%|Changes in businessoperations of Midea GroupFinance|
|Taxes andsurtaxes|1,076,026|662,794|62.35%|Reclassification of stampduty and property tax|
|Selling anddistributionexpenses|19,954,150|12,341,424|61.68%|Growth in sales andconsolidation of KUKA|
|General andadministrative|10,430,157|5,981,080|74.39%|Growth in sales andconsolidation of KUKA|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
||||||
|-|-|-|-|-|
|expenses|||||
|Financeexpenses|852,759|-913,165|193.38%|Changes in foreignexchange gains/losses|
|Gains/losses onchanges in fairvalue|-44,156|-488,089|90.95%|Changes in fair value ofderivative financialinstruments|
|Investmentincome|1,792,009|1,183,473|51.42%|Consolidation of KUKA|
|Non-operatingexpenses|492,928|193,914|154.20%|Provisions for possiblelosses on pending legalmatters|
|Net cash flowsfrom financingactivities|21,987,048|1,992,708|1,003.38%|Increase of loans obtained|

2. Progress, Influence and Solutions Associated with Significant Events
□ Applicable√ Not applicable
3. Commitments that theCompany’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company and Other Commitment Makers, Failed to Fulfill on Time during Reporting Period
□ Applicable√ Not applicable
No such cases in the Reporting Period.
4. Forecast of 2017 Annual Operating Results
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-start until the end of the next Reporting Period according to predictions as well as any explanations for these reasons:
□ Applicable√ Not applicable
5. Securities Investments
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 6. Investments in Derivative Financial Instruments
√ Applicable□ Not applicable
Unit:RMB’000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Ratio of||
|||||||||||||investm||
|||||||||||||ent||
|||||||||||Amou||amount||
|||Rel|||||Investme|||nt||to the||
||||||||||||Investme||Actual|
||Rel|ated|||||nt|||provid||Compa||
|||||Initial||||Purch|||nt||gain or|
|Opera|ated|tran|Invest||Commen||amount||Sold|ed for||ny’s||
|||||investme||Terminati||ased|||amount||loss|
|ting|part|sact|ment||cement||at||in the|impair||consoli||
|||||nt||on date||in the|||at end of||amount|
|party|y or|ion|type||date||beginning||period|ment||dated||
|||||amount||||period|||the||during the|
||not|or|||||of the|||(if||net||
||||||||||||period||period|
|||not|||||period|||applic||assets||
|||||||||||able)||at end||
|||||||||||||of the||
|||||||||||||period||
|||||||||||||(%)||
|Futur|||Futur|||||||||||
|es|||es||01/01/20|12/31/20||||||||
||Not|Not||-120|||-120|-|-|-|8,960|0.01%|16,380|
|comp|||contra||17|17||||||||
|any|||cts|||||||||||
||||Forwa|||||||||||
||||rd|||||||||||
||||||01/01/20|12/31/20||||||||
|Bank|Not|Not|forex|328,180|||328,180|-|-|-|392,180|0.55%|540,760|
||||||17|17||||||||
||||contra|||||||||||
||||cts|||||||||||
|Total||||328,060|--|--|328,060|-|-|-|401,140|0.56%|557,140|
|Source of derivatives||||||||||||||
|||||All from the Company's own funds||||||||||
|investment funds||||||||||||||
|Legal matters involved||||||||||||||
|||||N/A||||||||||
|(if applicable)||||||||||||||
|Disclosure date of||||||||||||||
|board announcement||||||||||||||
|||||03/31/2017||||||||||
|approving derivative||||||||||||||
|investment (if any)||||||||||||||
|Disclosure date of||||||||||||||
|shareholders’ meeting||||||||||||||
|||||04/22/2017||||||||||
|announcement||||||||||||||
|approving derivative||||||||||||||

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
|||
|-|-|
|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|
||evaluation and control against derivatives investment and position risks, details of which are|
||described as follows:|
||1. Legal risk: The Company's futures business and forex funds businesses shall be conducted|
||in compliance with laws and regulations, with clearly covenanted responsibility and obligation|
||relationship between the Company and the agencies.|
||Control measures: The Company has designated relevant responsible departments to enhance|
||learning of laws and regulations and market rules, conducted strict examination and verification|
||of contracts, defined responsibility and obligation well, and strengthened compliance check, so|
||as to ensure that the Company's derivatives investment and position operations meet the|
||requirements of the laws and regulations and internal management system of the Company.|
|Risk analysis of|2. Operational risk: Imperfect internal process, staff, systems and external issues may cause|
|positions held in|the Company to suffer from loss during the course of its futures business and forex funds|
|derivatives during|business.|
|Reporting Period and|Control measures: The Company has not only developed relevant management systems that|
|explanation of control|clearly defined the assignment of responsibility and approval process for the futures business|
|measures (including but|and forex funds business, but also established a comparatively well-developed monitoring|
|not limited to market|mechanism, aiming to effectively reduce operational risk by strengthening risk control over the|
|risk, liquidity risk, credit|business, decision-making and trading processes.|
|risk, operational risk||
||3. Market risk: Uncertainties caused by changes in the prices of bulk commodity and exchange|
|and legal risk)||
||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|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
|||
|-|-|
||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||
|price or fair value of||
|derivatives product||
||1. Gains/losses on futures hedging contracts incurred during the Reporting Period were|
|invested during||
|Reporting Period:|RMB16.38 million.|
|specific methods used|2. Gains/losses on forward forex contracts incurred during the Reporting Period were|
|and relevant|RMB540.76 million.|
|assumption and|3. Public quotations in futures market or forward forex quotations announced by the Bank of|
|parameter settings shall|China are used in the analysis of derivatives fair value.|
|be disclosed for||
|analysis of fair value of||
|derivatives||
|Explanation of||
|significant changes in||
|accounting policies and||
|specific financial||
|accounting principles in||
||No change|
|respect of the||
|Company's derivatives||
|for Reporting Period||
|compared to last||
|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|
|independent directors||
||management of the Company; the Company's foreign exchange risk management capability|
|concerning the||
||can be further improved through the forex funds business, so as to maintain and increase the|
|Company's derivatives||
||value of foreign exchange assets and the abovementioned investment in derivatives can help|
|investment and risk||
||the Company to fully bring out its competitive advantages. Therefore, it is practicable for the|
|control||
||Company to carry out derivatives investment business, and the risks are controllable.|

7. Visits Paid to the Company for Purposes of Research, Communication, Interview, etc. during Reporting Period
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|Date of visit|Way of visit|Type of visitor|About|
||||See Investor Relations Activities Log Sheet|
|08/31/2017-09/01/2017|Field research|Institution|during Period 31 August through 1 September|
||||2017 on the website of www.cninfo.com.cn|
|09/08/2017|Field research|Institution|See Investor Relations Activities Log Sheet|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
||
|-|
|during 8 September 2017 on the website of|
|www.cninfo.com.cn|

8. Irregularities Arising from Provision of Guarantees for Third Parties
□ Applicable√ Not applicable
No such cases in the Reporting Period.
9. Occupation of theCompany’s Funds by Its Controlling Shareholder or Related Parties for Non-Operating Purposes
□ Applicable√ Not applicable
No such cases in the Reporting Period.
10. Targeted Measures Taken to Help People Lift Themselves out of Poverty
10.1 Overview of Targeted Poverty Alleviation Actions Taken in Q3 2017
Midea has faithfully followed TheDecision of the State Council and the CPC Central Committee on Winning the Fight against Poverty by attaching great importance to helping those in need as a way to fulfill their social responsibilities and reward the society. In the first three quarters of 2017, Midea Group donated a total of RMB20 million, of which RMB10 million was earmarked for poverty alleviation. The Guangdong Poverty Alleviation and Development Office co-ordinated the project to help alleviate poverty in more than 2,000 relatively poor villages in Guangdong Province, and the other half was given toBeijiao Charity Foundation to support the education, pension, medical treatment, infrastructure construction and housing in the town. At the same time, the government of Foshan actively supported Liangshan poverty alleviation work in Sichuan, and donated 1,100 sets of small household appliances worth 500,000 yuan to people in Liangshan in Sichuan in July this year.
10.2 Poverty Alleviation Plans for Coming Future
Midea will continue to follow the Guangdonggovernment’s guidance and make plans to help reduce poverty as a way to meet its social responsibility as a private company.
Midea will work closely with the Guangdonggovernment’s office for poverty alleviation and development
to help those most in need with what they really need by targeted identification and planning. The
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 poverty alleviation will focus on development or improvement of thepoor’s abilities to increase their income on their own, building of a longlasting poverty alleviation mechanism and optimization of donation projects. In the meantime, it will be fair, transparent and open for public supervision.
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Section IV Financial Statements
1. Financial Statements
Balance Sheet
Prepared by Midea Group Co., Ltd.As of Sep. 30, 2017 Unit:RMB’000
||||||
|-|-|-|-|-|
|Assets|Sep. 30, 2017|Dec. 31, 2016|Sep. 30, 2017|Dec. 31, 2016|
||Consolidated|Consolidated|Company|Company|
|Current assets:|||||
|Cash at bank and on hand|41,657,437|27,169,118|26,136,798|17,135,480|
|Derivative financial assets|392,267|412,813|-|-|
|Notes receivable|15,518,453|7,427,488|-|-|
|Accounts receivable|17,360,462|13,454,511|-|-|
|Advances to suppliers|2,105,052|1,587,366|35,167|8,252|
|Loans and advances tocustomers|10,918,457|10,273,397|-|-|
|Dividends receivable|-|-|737,585|285,916|
|Other receivables|2,099,815|1,140,133|11,724,056|12,644,592|
|Inventories|23,752,878|15,626,897|-|-|
|Including: Amount due fromcustomer for finished products|5,557,738|-|-|-|
|Other current assets|49,545,111|43,529,597|29,543,341|24,165,141|
|Total current assets|163,349,932|120,621,320|68,176,947|54,239,381|
|Non-current assets:|||||
|Available-for-sale financialassets|1,846,009|5,187,732|56,868|28,931|
|Long-term receivables|377,473|33,868|-|-|
|Long-term equity investments|2,821,345|2,211,732|24,359,050|23,058,980|
|Investment properties|474,159|494,122|578,450|604,881|
|Fixed assets|22,348,578|21,056,791|882,217|984,666|
|Construction in progress|1,020,704|580,729|516,948|467,053|
|Intangible assets|16,010,089|6,868,538|232,771|236,083|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Goodwill 28,620,233 5,730,995
- -
||||||
|-|-|-|-|-|
|Long-term prepaid expenses|702,846|625,971|39,427|46,090|
|Deferred income tax assets|3,813,586|3,030,383|136,769|62,711|
|Other non-current assets|798,322|4,158,530|12,277|3,342,000|
|Total non-current assets|78,833,344|49,979,391|26,814,777|28,831,395|
|TOTAL ASSETS|242,183,276|170,600,711|94,991,724|83,070,776|

 Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang Person in charge of accounting department: Chen Lihong
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd.As of Sep. 30, 2017 Unit:RMB’000
||||||
|-|-|-|-|-|
|Liabilities and Shareholders' Equity|Sep. 30, 2017|Dec. 31, 2016|Sep. 30, 2017|Dec. 31, 2016|
||Consolidated|Consolidated|Company|Company|
|Current liabilities:|||||
|Short-term borrowings|4,472,839|3,024,426|-|-|
|Customer deposits and deposits frombanks and other financial institutions|158,141|36,708|-|-|
|Derivative financial liabilities|146,771|89,838|-|-|
|Notes payable|23,029,466|18,484,939|-|-|
|Accounts payable|32,588,743|25,356,960|-|-|
|Advances from customers|17,782,778|10,252,375|-|-|
|Including: Prepayments bycustomers for unfinished products|1,838,709||||
|Payroll payable|4,181,519|3,154,387|97,092|199,842|
|Taxes payable|2,813,129|2,364,446|8,368|103,848|
|Interest payable|66,170|21,343|136,203|76,776|
|Dividends payable|176,000|105,641|-|-|
|Other payables|2,668,054|1,571,422|61,386,959|54,461,578|
|Current portion of non-currentliabilities|111,062|158,545|-|-|
|Other current liabilities|26,723,821|24,562,970|7,768|140,264|
|Total current liabilities|114,918,493|89,184,000|61,636,390|54,982,308|
|Non-current liabilities:|||||
|Long-term borrowings|33,075,133|2,254,348|-|-|
|Debentures payable|4,621,102|4,818,769|-|-|
|Long-term payables|456,162|366,881|-|-|
|Payables for specific projects|2,500|2,405|-|-|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Provisions
645,287 325,217
- -
||||||
|-|-|-|-|-|
|Deferred revenue|647,849|502,316|-|-|
|Long-term payroll payable|2,325,670|1,449,954|-|-|
|Deferred income tax liabilities|4,381,425|1,831,973|-|-|
|Other non-current liabilities|855,926|888,152|-|-|
|Total non-current liabilities|47,011,054|12,440,015|-|-|
|Total liabilities|161,929,547|101,624,015|61,636,390|54,982,308|
|Shareholders' equity:|||||
|Share capital|6,548,163|6,458,767|6,548,163|6,458,767|
|Capital surplus|15,425,561|13,596,569|7,267,676|5,455,268|
|Less: Treasury stock|366,842|-|366,842|-|
|Other comprehensive income|19,749|13,125|(16,928)|(9,069)|
|Surplus reserve|2,804,469|2,804,469|2,804,469|2,804,469|
|General reserve|148,602|148,602|-|-|
|Undistributed profits|46,637,886|38,105,391|17,118,796|13,379,033|
|Total equity attributable toshareholders of the Company|71,217,588|61,126,923|33,355,334|28,088,468|
|Minority interests|9,036,141|7,849,773|-|-|
|Total shareholders' equity|80,253,729|68,976,696|33,355,334|28,088,468|
|TOTAL LIABILITIES ANDSHAREHOLDERS' EQUITY|242,183,276|170,600,711|94,991,724|83,070,776|

Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang Person in charge of accounting department: Chen Lihong
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Income Statement
Prepared by Midea Group Co., Ltd. January-September 2017 Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|January-September 2017|January-September 2016|January-September 2017|January-September 2016|
||Consolidated|Consolidated|Company|Company|
|1. Total revenue|187,764,435|117,077,949|1,116,610|851,892|
|Including: Operating revenue|186,948,866|116,378,417|1,116,610|851,892|
|Interest income|815,565|691,759|-|-|
|Fee and commission income|4|7,773|-|-|
|2. Total Cost|(172,344,718)|(102,498,007)|(545,033)|(1,006,971)|
|Including: Cost of sales|(139,559,489)|(83,828,027)|(29,054)|(14,829)|
|Interest expenses|(215,904)|(384,002)|-|-|
|Fee and commission expenses|(2,140)|(2,012)|-|-|
|Taxes and surtaxes|(1,076,026)|(662,794)|(11,267)|(7,988)|
|Selling and distribution expenses|(19,954,150)|(12,341,424)|-|-|
|General and administrative expenses|(10,430,157)|(5,981,080)|(206,857)|(276,093)|
|Finance costs|(852,759)|913,165|(298,404)|(708,030)|
|Asset impairment (loss)/reversal|(254,093)|(211,833)|549|(31)|
|Add: Gains/(losses) on changes in fairvalue|(44,156)|(488,089)|-|22,673|
|Investment income|1,792,009|1,183,473|9,543,492|9,491,666|
|Including: Share of profit of associatesand joint ventures|390,089|295,082|288,285|201,015|
|Other income|1,075,500||||
|3. Operating profit|18,243,070|15,275,326|10,115,069|9,359,260|
|Add: Non-operating income|1,089,198|1,258,778|1,505|44,954|
|Including: Gains on disposal ofnon-current assets|837,073|10,933|24|-|
|Less: Non-operating expenses|(492,928)|(193,914)|(1,468)|(3,681)|
|Including: Losses on disposal ofnon-current assets|(93,239)|(73,136)|(119)|(1,562)|
|4. Total profit|18,839,340|16,340,190|10,115,106|9,400,533|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Less: Income tax expenses (2,737,940) (2,588,202) 90,336 (17,685)
||||||
|-|-|-|-|-|
|5. Net profit|16,101,400|13,751,988|10,205,442|9,382,848|
|Including: Net profit of consolidatedsubsidiaries before consolidation|-|-|-|-|
|Attributable to shareholders of theCompany|14,998,175|12,807,993|10,205,442|9,382,848|
|Attributable to minority shareholders|1,103,225|943,995|-|-|
|6. Other comprehensive income, net of tax|13,190|538,964|(7,859)|(1,902)|
|Attributable to shareholders of theCompany|6,624|465,254|(7,859)|(1,902)|
|(1) Other comprehensive income itemswhich will not be reclassified subsequently toprofit or loss|37,472|-|-|-|
|(2) Other comprehensive income itemswhich will be reclassified subsequently toprofit or loss|(30,848)|465,254|(7,859)|(1,902)|
|1) Share of the other comprehensiveincome of the investee accounted for usingequity method which will be reclassifiedsubsequently to profit and loss|(9,831)|(56,537)|(7,859)|(1,902)|
|2) Changes in fair value ofavailable-for-sale financial assets|(288,537)|358,607|-|-|
|3) Gains/Losses on reclassification ofheld-to-maturity investments asavailable-for-sale financial assets|-|-|-|-|
|4) Effective portion of cash flowhedging gains or losses|140,809|174,794|-|-|
|5) Foreign-currency financial statementtranslation differences|126,711|(11,610)|-|-|
|Attributable to minority shareholders|6,566|73,710|-|-|
|7. Total comprehensive income|16,114,590|14,290,952|10,197,583|9,380,946|
|Attributable to shareholders of theCompany|15,004,799|13,273,247|10,197,583|9,380,946|
|Attributable to minority shareholders|1,109,791|1,017,705|-|-|
|8. Earnings per share|||||
|Basic earnings per share (RMB/share)|2.31|2.00|N/A|N/A|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Diluted earnings per share (RMB/share) 2.30 1.99 N/A N/A Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang Person in charge of accounting department: Chen Lihong
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Income Statement
Prepared by Midea Group Co., Ltd. July-September 2017 Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|July-September 2017|July-September 2016|July-September 2017|July-September 2016|
||Consolidated|Consolidated|Company|Company|
|1. Total revenue|62,800,819|39,070,433|415,540|263,641|
|Including: Operating revenue|62,498,801|38,856,130|415,540|263,641|
|Interest income|302,016|212,183|-|-|
|Fee and commission income|2|2,120|-|-|
|2. Total Cost|(58,381,100)|(35,679,594)|(221,378)|(247,382)|
|Including: Cost of sales|(46,508,408)|(28,961,867)|(9,725)|(1,181)|
|Interest expenses|(50,238)|(122,684)|-|-|
|Fee and commission expenses|(479)|(625)|-|-|
|Taxes and surtaxes|(321,255)|(195,032)|(7,488)|(4,653)|
|Selling and distribution expenses|(7,549,380)|(4,156,246)|-|-|
|General and administrative expenses|(3,597,199)|(2,291,021)|(101,419)|62,445|
|Finance costs|(506,145)|7,904|(103,441)|(303,995)|
|Asset impairment (loss)/reversal|152,004|39,977|695|2|
|Add: Gains/(losses) on changes in fairvalue|(34,633)|37,000|-|-|
|Investment income|592,557|469,391|3,418,254|1,932,955|
|Including: Share of profit of associatesand joint ventures|102,955|94,340|73,852|69,904|
|Other income|229,274|-|-|-|
|3. Operating profit|5,206,917|3,897,230|3,612,416|1,949,214|
|Add: Non-operating income|98,284|355,506|748|43,117|
|Including: Gains on disposal ofnon-current assets|55,844|7,385|24|-|
|Less: Non-operating expenses|(72,985)|(90,115)|(427)|(2,124)|
|Including: Losses on disposal ofnon-current assets|(56,112)|(40,987)|-|(15)|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 4. Total profit 5,232,216 4,162,621 3,612,737 1,990,207
||||||
|-|-|-|-|-|
|Less: Income tax expenses|(678,887)|(641,531)|98,238|17,216|
|5. Net profit|4,553,329|3,521,090|3,710,975|2,007,423|
|Including: Net profit of consolidatedsubsidiaries before consolidation|-|-|-|-|
|Attributable to shareholders of the Company|4,186,853|3,311,500|3,710,975|2,007,423|
|Attributable to minority shareholders|366,476|209,590|-|-|
|6. Other comprehensive income, net of tax|(13,132)|(808,298)|(4,433)|8,675|
|Attributable to shareholders of the Company|(3,058)|(811,460)|(4,433)|8,675|
|(1) Other comprehensive income itemswhich will not be reclassified subsequently toprofit or loss|(2,107)|-|-|-|
|(2) Other comprehensive income itemswhich will be reclassified subsequently toprofit or loss|(951)|(811,460)|(4,433)|8,675|
|1) Share of the other comprehensiveincome of the investee accounted for usingequity method which will be reclassifiedsubsequently to profit and loss|(1,762)|9,169|(4,433)|8,675|
|2) Changes in fair value ofavailable-for-sale financial assets|3,938|(723,900)|-|-|
|3) Gains/Losses on reclassification ofheld-to-maturity investments asavailable-for-sale financial assets|-|-|-|-|
|4) Effective portion of cash flowhedging gains or losses|(27,907)|29,191|-|-|
|5) Foreign-currency financial statementtranslation differences|24,780|(125,920)|-|-|
|Attributable to minority shareholders|(10,074)|3,162|-|-|
|7. Total comprehensive income|4,540,197|2,712,792|3,706,542|2,016,098|
|Attributable to shareholders of the Company|4,183,795|2,500,040|3,706,542|2,016,098|
|Attributable to minority shareholders|356,402|212,752|-|-|
|8. Earnings per share|||||
|Basic earnings per share (RMB/share)|0.64|0.51|N/A|N/A|
|Diluted earnings per share (RMB/share)|0.64||N /A|N/A|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 0.51
Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang Person in charge of accounting department: Chen Lihong
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Cash Flow Statement
Prepared by Midea Group Co., Ltd. January-September 2017 Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|January-September 2017|January-September 2016|January-September 2017|January-September 2016|
||Consolidated|Consolidated|Company|Company|
|1. Cash flows from operating activities:|||||
|Cash received from sales of goods orrendering of services|148,783,253|112,216,632|-|-|
|Net increase in customer deposits anddeposits from banks and other financialinstitutions|121,433|3,561|-|-|
|Net decrease in deposits with central bankand other financial institutions|-|126,053|-|-|
|Net increase in borrowing from central bank|-|80,730|-|-|
|Cash received from Interest, fees andcommissions|864,098|700,653|-|-|
|Refund of taxes and surcharges|4,440,425|4,124,618|-|-|
|Cash received relating to other operatingactivities|3,370,638|2,201,828|8,729,382|10,532,437|
|Sub-total of cash inflows|157,579,847|119,454,075|8,729,382|10,532,437|
|Cash paid for goods and services|(87,143,944)|(63,672,706)|-|-|
|Net decrease in customer deposits anddeposits from banks and other financialinstitutions|-|-|-|-|
|Net increase in loans and advances|(658,156)|(5,428,328)|-|-|
|Net increase in deposits with central bankand deposits from banks and other financialinstitutions|(744,270)|-|-|-|
|Cash paid for interest, fee and commission|(218,046)|(387,319)|-|-|
|Cash paid to and on behalf of employees|(17,042,705)|(8,673,520)|(114,654)|(27,898)|
|Payments of taxes and surcharges|(9,412,941)|(6,828,734)|(101,815)|(52,312)|
|Cash paid relating to other operatingactivities|(22,292,143)|(15,425,973)|(227,698)|(4,590,393)|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 Sub-total of cash outflows (137,512,205) (100,416,580) (444,167) (4,670,603)
||||||
|-|-|-|-|-|
|Net cash flow from operating activities|20,067,642|19,037,495|8,285,215|5,861,834|
|2. Cash flows from investing activities:|||||
|Cash received from disposal of investments|56,859,505|48,980,669|40,619,980|25,674,850|
|Cash received from returns on Investmentincome|1,664,387|1,339,590|9,227,047|8,738,751|
|Net cash received from disposal of fixedassets, intangible assets and other long-termassets|865,341|170,570|12,049|111|
|Net cash received from disposal ofsubsidiaries and other business units|2,415|272,899|-|-|
|Cash received relating toother investingactivities|-|-|-|-|
|Sub-total of cash inflows|59,391,648|50,763,728|49,859,076|34,413,712|
|Cash paid to acquire fixed assets, intangibleassets and other long-term assets|(2,071,492)|(1,605,425)|(81,158)|(247,748)|
|Cash paid to acquireinvestments|(50,014,698)|(65,071,957)|(36,731,884)|(35,644,352)|
|Net cash paid to acquire subsidiaries andother business units|(25,633,208)|(1,856,787)|-|-|
|Cash used in other investing activities|-|-|-|-|
|Sub-total of cash outflows|(77,719,398)|(68,534,169)|(36,813,042)|(35,892,100)|
|Net cash from investing activities|(18,327,750)|(17,770,441)|13,046,034|(1,478,388)|
|3. Cash flows from financing activities:|||||
|Cash received from capital contributions|1,365,855|651,628|1,365,855|635,611|
|Including: Cash received from capitalcontributions by minority shareholders ofsubsidiaries|-|16,017|-|-|
|Cash received from borrowings|32,917,986|28,817,816|1,600,000|1,800,000|
|Cash received fromissuing of short-termfinancial bonds|-|1,999,500|-|1,999,500|
|Cash received relating to other financingactivities|-|-|-|-|
|Sub-total of cash inflows|34,283,841|31,468,944|2,965,855|4,435,111|
|Cash repayment of borrowings|(4,718,342)|(21,748,594)|(1,600,000)|(3,090,000)|
|Cash repayment of short-term bonds|-|(1,999,500)|-|(1,999,500)|
|Cash payments for interest expenses and|(7,578,451)|(5,728,142)|(6,970,870)|(6,234,046)|

Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017 distribution of dividends or profit
||||||
|-|-|-|-|-|
|Including: Cash payments for dividendsor profit to minority shareholders ofsubsidiaries|(606,819)|(417,287)|-|-|
|Cash payments relating toother financingactivities|-|-|-|-|
|Sub-total of cash outflows|(12,296,793)|(29,476,236)|(8,570,870)|(11,323,546)|
|Net cash flows from financing activities|21,987,048|1,992,708|(5,605,015)|(6,888,435)|
|4. Effect of foreign exchange rate changeson cash and cash equivalents|121,585|101,834|-|-|
|5. Net decrease in cash and cashequivalents|23,848,525|3,361,596|15,726,234|(2,504,989)|
|Add: Cash and cash equivalents atbeginning of the period|12,513,730|5,187,317|8,174,915|6,245,008|
|6. Cash and cash equivalents at end of theperiod|36,362,255|8,548,913|23,901,149|3,740,019|

Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang Person in charge of accounting department: Chen Lihong
2.Auditor’s Report
Are the Q3 2017 financial statements audited by a CPAs firm?
□Yes√ No
These financial statements are unaudited by a CPAs firm.
Midea Group Co., Ltd.
Legal Representative: Fang Hongbo Oct. 31, 2017