Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
Stock Code: 600690 Short Name: Qingdao Haier Qingdao Haier Co., Ltd
Third Quarterly Report of 2018 Haier Smart Home
Customized for a Better Life
Note: This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
Contents
I. Important Notice..................................................................................................................................3 II. Company Profile ................................................................................................................................ 3 III. Important Events .............................................................................................................................. 11IV．Appendix ........................................................................................................................................... 21
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
I. Important Notice
1.1 The Board of Directors, the Board of Supervisors and directors, supervisors and senior management of Qingdao Haier Co., Ltd. (the “Company”) hereby assure that the content set out in the quarterly report is true, accurate and complete, and free from any false record, misleading representation or material omission, and are individually and collectively responsible for the content set out therein.
1.2 Information on absent director from meeting
|||||||||
|-|-|-|-|-|-|-|-|
||Name of director absent||Position of director||Reason for the absence||Name of proxy|
||from meeting||absent from meeting||of director from|||
||||||meeting|||
|Tan Lixia||Director||Business trip||Wu Changqi||

1.3 Liang Haishan (legal representative of the Company), Gong Wei (chief financial officer of the Company) and Ying Ke (the person in charge of accounting department) hereby certify that the financial statement set out in the quarterly report is true, accurate and complete.
1.4 This Third Quarterly Report of the Company has not been audited.
II. Company Profile
2.1 Key financial information
Unit and Currency: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||As at the end of last year||||Increase/decrea|
|||||||||se as at the end|
|||||||||of the reporting|
|||As at the end of the|||||||
|||||||||Period|
|||reporting period||After adjustment||Before adjustment|||
|||||||||compared with|
|||||||||the end of last|
|||||||||year(%)|
|Total assets|167,626,386,705.18||157,096,764,347.93||151,463,110,707.63||6.70||
|Net assetsattributable to|35,675,893,674.02||33,299,500,785.12||32,215,515,201.45||7.14||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||||||||
|-|-|-|-|-|-|-|-|-|
|shareholders ofthe listedCompany|||||||||
|||||||||Increase/decrea|
|||From the beginning||||||se compared|
|||||From the beginning of last year to the end|||||
|||of the year to the||||||with the|
|||||of the reporting period of last year (January|||||
|||end of the reporting||||||corresponding|
|||||to September)|||||
|||period (January to||||||period of last|
|||September)||||||year (%)|
|||||After adjustment||Before adjustment|||
|Net cash flowsfrom operatingactivities|11,049,179,807.06||14,538,013,259.52||14,160,052,998.94||-24.00||
|||||||||Increase/decrea|
|||From the beginning||||||se compared|
|||||From the beginning of last year to the end|||||
|||of the year to the||||||with the|
|||||of the reporting period of last year (January|||||
|||end of the reporting||||||corresponding|
|||||to September)|||||
|||period (January to||||||period of last|
|||September)||||||year（%）|
|||||After adjustment||Before adjustment|||
|Operatingrevenue|138,138,774,411.21||122,494,143,062.55||119,189,613,634.20||12.77||
|Net profitattributable toshareholders ofthe listedCompany|6,126,787,121.21||5,602,801,883.86||5,682,361,717.64||9.35||
|Net profit afterdeduction ofnon-recurringprofit or lossattributable toshareholders ofthe listedCompany|5,522,473,377.30||4,695,336,406.07||4,695,336,406.07||17.62||
|Weightedaverage return onnet assets（%）|17.42||18.93||19.51||decreased by1.51percentagepoints||
|Basic earningsper share (RMBper share)|1.005||0.919||0.932||9.36||
|Diluted earningsper share (RMBper share)|0.987||0.919||0.932||7.40||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
Note:
In 2018, the Company focused on the strategic goal of “becoming a leading provider of smart home solutions in the era of Internet of Things”. Driven by the Individual and Goal Combination model, and leveraging on world-class brands cluster and globalized structure, the Company continually promoted retail transformation and global operation, and maintained product leadership, channel deepening and marketing optimization, so as to strengthen the leading advantages in the industry. Facing the opportunities in the era of Internet of Things, the Company will develop new growth points such as ecological income by establishing ecological circles, building up eco-brands, promoting mass customization and iterating the best users experience based on interaction within various communities throughU+ smart life platform, COSMOPlat Smart Manufacturing Industrial Internet Platform and large Shunguang online and offline community interaction platform.
(1) Domestic market: the Company made great efforts in deepening the establishment of the operating system with retail business as the core, implementing the transformation of “from the sale of products to the sale of solutions, from launching to fermentation, from outlets to contact points, from price to value”, and improving structure of product portfolio and structure of brands to achieve growth under unfavorable environment. As to performance of each segment, in the first three quarters, revenue from refrigerator business, washing machine business, air-conditioner business, water heater business and kitchen appliance business increased by15.9%,16.2%,15.7%,14.5% and18.9%, respectively.① During the reporting period, theCompany’s market share across the product portfolio has been increasing. According to the statistics from CMM, the retail sales of Haier refrigerators, washing machines, air conditioners, water heaters, hoods and stoves increased by 4.03,3.87,0.49,1.27,0.67,1.07 percentage points respectively from January to September 2018 as compared with the same period of last year. Retail sales of refrigerators and washing machines maintained the leading position in the industry and the leading edge continued to grow, with the share of retails sales reaching35.17% and33.33%, respectively, which was 3.13 and 1.87 times of that of the runner-up brand.② Despite the increasing downward pressure in the industry in the third quarter, the high-end brand Casarte continued to maintain its high growth, with the revenue increasing by49% during the first three quarters. Products under Casarte maintained an overwhelming advantage in the high-end market. For example, under this brand, the market share of refrigerators priced above RMB10,000 reached36%; the market share of drum washing machines priced above
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
RMB10,000 reached77%; the market share of air conditioners priced above RMB16,000 reached42.7%.
(2) Overseas markets: focusing on localized branding and leadership, continuing to push ahead with the “triple strategy” for manufacturing, marketing andR&D, strengthening competitiveness in end-user market, and achieving the transformation to high-end brands.① In the first three quarters of 2018, the Company maintained rapid growth in the North American market, with revenue denominated in US dollar growing by11.83%, while the accumulated growth of home appliance industry in the U.S. was flat in the first three quarters.②Each region focuses on high-end brand building, while enhancing competitiveness in brands, products and marketing, with the aim of promoting the steady growth of business. The South Asian market recorded a growth in revenue of24%, the European market recorded a growth in revenue of21%, the Latin American market recorded a growth in revenue of55%, and the Japanese market recorded a growth in revenue of10%.③ In the third quarter of 2018, the Company completed the acquisition of the home appliance assets and business of Fisher& Paykel in New Zealand, thus achieving leading market position in Oceania: the dual brands of Fisher& Paykel and Haier ranked No.2 in terms of market share in Australia, and ranked No.1 in terms of that in New Zealand, representing a ratio of over40%; as to brand, on top of Haier, Casarte, AQUA, GE Appliance and Leader, the Company acquired Fisher& Paykel, theworld’s top high-end home appliance brand, and continues to expand its portfolio of global brands; Revenue ofFisher& Paykel (dominated in New Zealand Dollar) increased by7% in the first three quarters of 2018, and12% in the third quarter. In September 2018, the Company announced its intention to acquire100% equity interests in Candy S.p.A, an Italian company. The transaction was intended to strengthen the expansion in the European market, improve the product portfolio and the network of local brands, while consolidating the coverage of different customer groups, and further enhancing the position in the European market. Upon the completion of the acquisition, the market share of the Company in Europe will leap to top 5.
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
(3) The Company has been committed to creating a smart home community in the era of Internet of Things to create an ecological platform.① Strengthening the experience of the4+7+N smart home solutions (note), iteratively integrating online and offline delivery system, while creating a global interconnecting platform, and continuing to upgrade the application in AI artificial intelligence scenarios. From January to September 2018, the amount of activation of theCompany’s smart home appliances increased by85% YoY, the sales of the comprehensive household appliance solutions increased by134% YoY, and the number of smart home users increased by23% YoY. The revenue from its IoT ecological systems amounted to RMB2.095 billion, representing a year-on-year growth of over200%. In terms of the creation of ecological circle, based on the life scenes of users,Haier’s Internet of Clothing offer Internet of Things solutions for the whole life-cycle covering washing, care, storage, dressing and purchase, while integrating ecological cooperation resources of clothing associations and home textile associations, quickly gathering clothing resources and rapidly copying the innovative model factories, stores and homes; it also played a leading role in drafting theworld’s first IEEE international standard for the Internet of Clothing; the platform has gathered over 2,400 clothing resources, and the Internet of Clothing achieved an YoY increase of 10 times in ecological revenue in the first three quarters of 2018. Building on the leading position in terms of market share, the Internet of Food provided users with Internet of Things health solutions in smart kitchen scenes by way of integrating safe ingredients, health resources and intelligent hardware resources; the international standards for the Internet of Food, which were submitted to the IEEE, have been approved for further development, and technologies for the Internet of Food will enter the stage of developing international standards.② Continue to promote the construction of the industrial Internet platform of COSMOPlat, and implement the model of mass customization, with participation of users throughout the process. IEEE, ISO, and IEC, three major international standards-developing bodies, designated the Company to lead the development of international standards for the model of mass customization and industrial Internet platforms. From January to September 2018, COSMOPlat recorded a revenue of RMB4.7 billion.
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
(4) On 24 October 2018 (Frankfurt time), the Company engaged the initial public offering of shares on the D share market of China Europe International Exchange, and passed the admittance of and obtained permission to list on Frankfurt Stock Exchange. The listing structured theCompany’s“A+D” capital market platform home and abroad, and is going to enhance theCompany’s brand presence worldwide, as well as support the landing and further development of theCompany’s global business, especially the business in Europe. Note: Among the word “4+7+N smart home solutions”, “4” refers to the four physical spaces that Haier continues to upgrade iteratively, namely smart living room, smart kitchen, smart bathroom and smart bedroom; “7” refers to seven comprehensive household appliance solutions, i.e. household ventilation, household water usage, household washing& cleaning, household security, household voice appliance, household health and household information; while “N” is a variable, which represents that the user is able to customize smart living scenarios in accordance with their life style, achieving infinite diversified possibilities.
Non-recurring Profit or Loss Items and Amount
√Applicable□Not Applicable
Unit and Currency: RMB
|||||||
|-|-|-|-|-|-|
||||||Amount from the|
||||Amount for the current||beginning of the year to|
||Items||period||the end of the reporting|
||||(July-September)||period|
||||||(January-September)|
|Profit or loss from disposal of non-current assets||250,930,248.51||274,865,109.14||
|Government grants included in current profit orloss, except those closely related to the normaloperating business, complying with requirementsof the national policies, and continuing to begranted with the amount and quantity determinedunder certain standards||212,838,368.85||349,985,867.61||
|Current net profit or loss of the subsidiaries fromthe consolidation of enterprises under commoncontrol from the beginning of the period to thedate of the mergers||29,734,856.98||-43,718,860.91||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|Profit and loss of changes in fair value arisingfrom holding of trading financial assets andtrading financial liabilities except for validstraddle business relevant to normal business ofthe company, as well as investment gain realizedfrom disposal of trading financial assets, tradingfinancial liabilities and financial assets availablefor sale|-160,450,980.50|32,809,620.71|
|Trustee fee income from entrusted operations||943,396.22|
|Other non-operating income and expenses exceptfor the above mentioned|64,170,893.06|234,036,255.74|
|Effect of minority equity interests, net of tax|-34,696,702.01|-126,558,657.97|
|Income tax effect|-67,563,187.24|-118,048,986.63|
|Total|294,963,497.65|604,313,743.91|

 2.2 Total number of shareholders, top 10 shareholders and top 10 shareholders holding circulating shares (or shareholders not subject to selling restrictions) as of the end of the reporting period
Unit: share
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Total number of shareholders|||||175,161|||||||
||Shareholdings of top ten shareholders||||||||||||
||||||||Number of||Status of shares||||
||||Number of||||shares||pledged or frozen||||
||||||Percent||||||||
||Name of Shareholder||shares held at||||held with|||||Nature of|
||||||age||||||||
||(full name)||the end of the||||selling|||Num||shareholder|
||||||(%)||||Status||||
||||period||||restriction|||ber|||
||||||||s||||||
|Haier ElectricAppliancesInternational Co., Ltd.||1,258,684,824||20.64||||Nil|||Domesticnon-state-owned legal entity||
|Haier GroupCorporation||1,072,610,764||17.59||||Nil|||Domesticnon-state-owned legal entity||
|Hong Kong SecuritiesClearing Co., Ltd.||444,311,732||7.29||||Unknown|||Unknown||
|GIC PRIVATELIMITED||269,673,927||4.42||||Unknown|||Foreign legalentity||
|China SecuritiesFinance CorporationLimited||182,312,697||2.99||||Unknown|||Unknown||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Qingdao HaierVenture &InvestmentInformation Co.,Ltd.(青岛海尔创业投资咨询有限公司)||172,252,560|2.83|||Nil||Domesticnon-state-owned legal entity||
|KKR HOMEINVESTMENT S.AR.L.||161,116,436|2.64|||Unknown||Foreign legalentity||
|National socialsecurity fund,Portfolio 104||101,188,812|1.66|||Unknown||Unknown||
|Central Huijin AssetManagement Ltd.||69,539,900|1.14|||Unknown||Unknown||
|National socialsecurity fund,Portfolio 103||60,604,872|0.99|||Unknown||Unknown||
||Shareholdings of top ten shareholders without selling restrictions|||||||||
||||||Number of||Class and number of shares|||
||||||tradable shares|||||
||Name of shareholder|||||||||
||||||held without||Class||Number|
||||||selling restrictions|||||
|Haier Electric Appliances InternationalCo., Ltd.||||1,258,684,824||RMB ordinary||1,258,684,824||
|Haier Group Corporation||||1,072,610,764||RMB ordinary||1,072,610,764||
|Hong Kong Securities Clearing Co., Ltd.||||444,311,732||RMB ordinary||444,311,732||
|GIC PRIVATE LIMITED||||269,673,927||RMB ordinary||269,673,927||
|China Securities Finance CorporationLimited||||182,312,697||RMB ordinary||182,312,697||
|Qingdao Haier Venture & InvestmentInformation Co., Ltd.(青岛海尔创业投资咨询有限公司)||||172,252,560||RMB ordinary||172,252,560||
|KKR HOME INVESTMENT S.A R.L.||||161,116,436||RMB ordinary||161,116,436||
|National social security fund, Portfolio104||||101,188,812||RMB ordinary||101,188,812||
|Central Huijin Asset Management Ltd.||||69,539,900||RMB ordinary||69,539,900||
|National social security fund, Portfolio103||||60,604,872||RMB ordinary||60,604,872||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
|||
|-|-|
||（1）Both Haier Electric Appliances InternationalCo., Ltd. and Qingdao Haier Venture &Investment Information Co., Ltd.(青岛海尔创业投资咨询有限公司) are holding subsidiaries ofHaier Group Corporation;(2) The Company is not aware of the existence ofany connections of other shareholders.|
|Related parties or parties acting in concert among||
|the aforesaid shareholders||
|Explanation of preferential shareholders with|N/A|
|restoration of voting rights and their shareholdings||

2.3 Total number of preferential shareholders, top ten preferential shareholders and top ten holders of preference shares not subject to selling restrictions as of the end of the reporting period
□Applicable√ Not Applicable
III. Important Events
3.1 The major changes and reasons for the items of accounting statement and financial indicators
√Applicable□Not Applicable
1) Derivative financial assets increased by66.80% as compared with the beginning of the year, which was mainly due to the impact of changes in fair value of derivative financial instruments such as foreign exchange contracts during the period;
2) Assets held for sale increased by4,530.91% as compared with the beginning of the year, which was mainly due to Haier Electronics, a subsidiary of the Company listed in Hong Kong, plans to dispose58.08% of the equity interests of Shengfeng Logistics Group Co., Ltd. (herein after referred to as “Shengfeng Logistics”) for business planning considerations;
3) Other current assets increased by31.12% as compared with the beginning of the year, which was mainly due to the increase in the wealth management of Haier Electronics, a subsidiary of the Company;
4) Construction in progress increased by116.50% as compared with the beginning of the
year, which was mainly due to the Company expanded its industriallines’ production
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
capacity and upgraded its industrial lines such as smart kitchens and air conditioners during the period;
5) Development expenses decreased by49.40% as compared with the beginning of the year, which was mainly due to the relevant development transferred to the intangible assets when it reached the scheduled usable status during the period;
6) Other non-current assets increased by72.00% as compared with the beginning of the year, which was mainly due to the amounts prepaid for equipment procurement as a result of the Company expanded its industriallines’ production capacity and upgraded its industrial lines such as smart kitchens and air conditioners during the period;
7) Derivative financial liabilities increased by4,503.98% as compared with the beginning of the year, which was mainly due to the impact of changes in fair value of derivative financial instruments such as foreign exchange contracts during the period;
8) Advances from customers decreased by36.90% as compared with the beginning of the year, which was mainly due to the centralized delivery taking of goods by customers; 9) Liabilities held for sale increased by100% as compared with the beginning of the year, which was mainly due to the Company plans to dispose58.08% of the equity interests of Shengfeng Logistics for business planning considerations;
10) Non-current liabilities due within one year decreased by54.21% as compared with the beginning of the year, which was mainly due to the repayment of long-term liabilities due within one year;
11) Deferred revenue increased by30.83% as compared with the beginning of the year, which was mainly due to the increase in asset-related government grants during the year;
12) Other non-current liabilities increased by31.80% as compared with the beginning of the year, which was mainly due to the increase in repurchase obligations for minority equity interests;
13) Capital reserve decreased by64.31% as compared with the beginning of the year, which was mainly due to the acquisition at a premium of Enterprise combinations under common control is partially written down to the capital reserve;
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
14) Other comprehensive income increased by19,756.96% as compared with the beginning of the year, which was mainly due to the increase in the share of other comprehensive income that will be reclassified into profit or loss and the change in foreign currency translation differences;
15) The financial expenses decreased by33.66% as compared with the corresponding period of last year, which was mainly due to the decrease in exchange losses during the period as compared with the corresponding period of last year;
16) Investment income increased by36.21% as compared with the corresponding period of last year, which was mainly due to the increase in investment income from disposal of long-term equity investments and derivative financial assets;
17) The income from changes in fair value decreased by116.83% as compared with the corresponding period of last year, which was mainly due to the influence of change in fair value of derivative financial instruments such as forward exchange;
18) The profit or loss from asset disposal increased by690.35% as compared with the corresponding period of last year, which was mainly due to the disposal of assets during the period;
19) Non-operating income decreased by35.70% as compared with the corresponding period of last year, which was mainly due to the decrease in non-operating income of GEA, a subsidiary of the Company;
20) Non-operating expenses decreased by37.84% as compared with the corresponding period of last year, which was mainly due to the scrapping of some fixed assets in the corresponding period of last year and fewer occurrences for the period.
21) Other comprehensive income, net of tax increased by409.45% as compared with the corresponding period of last year, which was mainly due to the increase in the share of other comprehensive income that will be reclassified into profit or loss and the change in foreign currency translation differences;
22) Net cash flows from investing activities decreased by140.16% as compared with the corresponding period of last year, which was mainly due to the acquisition of assets of FPA for the period and the increase in expenses on wealth management.
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
3.2 Analysis on the progress of significant events and their impacts and solutions
√ Applicable□Not Applicable
（1）ExternalGuarantees：As of the end of the reporting period, the external guarantees of the Company and its subsidiaries are all guarantees among the Company and its subsidiaries, and the balance of the external guarantees amounted to RMB22.089 billion in total, representing61.9% of the net assets of the Company for the latest period, and13.2% of the total assets for the latest period.
（2）Foreign ExchangeDerivatives：As of the end of the reporting period, the balance of theCompany’s Foreign Exchange Derivatives amounted to approximatelyUS$3.54 billion in total.
（3）Entrusted WealthManagement：As of the end of the reporting period, the balance of the company's entrusted wealth management amounted to RMB4.65 billion , which is all conducted by Haier Electronics Group Co., Ltd. (hereinafter referred to as "Haier Electronics", stock code: 01169.HK) ,an holding subsidiary of the Company, Haier Electronics, as an company listed in Hong Kong and operating independently, purchased some short-term guaranteed wealth management products and structured deposits from large commercial banks according to its management authority and on the premise of securing the safety of funds, with an aim to improve the utilizing efficiency of idle funds. In the process of conducting the purchases, all necessary procedures such as reporting to the board and review of each transaction by the management have been fulfilled in accordance with the laws and regulations in respect of listed companies in Hong Kong, so as to increase the return of the shareholders on condition that the capital required for the daily operation of the main business is adequate.
（4）Progress on the Acquisition of MajorAsset：the Board meeting and General meeting of the Company has reviewed and passed the “Proposal of Qingdao Haier Co., Ltd. on Acceptance of the Transfer of100% equity interests of Haier New Zealand Investment Holding Company Limited and the Related Transactions”(《青岛海尔股份有限公司关于受让Haier New Zealand Investment Holding Company Limited之100%股权暨关联交易的议案》) in April and June 2018, respectively. The Company intends to settle the acceptance of the transfer of100% equity interests of aforementioned company held by
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
Haier Group Corporation through an overseas subsidiary in cash payment. As of the end of the reporting period, the transaction has been completed and the Company completed the consolidation of the aforementioned company.
（5）Progress on the issuance of CB by the Company: As of the end of the reporting period, the application of public offer of Convertible Bonds ( “CB” ) by the Company has been approved by the the Issuance Examination Commission of CSRC.
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
3.3 The undertakings that have been past due and not been performed during the reporting period
□Applicable√Not applicable
During the reporting period, the Company has no undertakings that have past due but not performed.
The undertakings made by the actual controlling shareholders, shareholders, related parties, purchasers, the Company and others underlying parties during or up to the reporting period are as follows:
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||||Whether it|
||||||||||||Whether||is|
||||||||||||it has a||performed|
||||||||||Time and|||||
||Background||Type||Covenanter||Content||||term for||in a|
||||||||||term|||||
||||||||||||performa||Timely|
||||||||||||nce||and strict|
||||||||||||||manner|
|Undertaking related tosignificantassetsreorganization||Eliminate theproperty rightdefectsin landandetc.||HaierGroupCorporation||During the period from September 2006 to May 2007, the Company issued shares toHaier Group Corporation (“Haier Group”) to purchase the controlling equity in its foursubsidiaries, namely Qingdao Haier Air-Conditioner Electronics Co., Ltd. ( 青岛海尔空调电子有限公司), Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司), Wuhan Haier Electronics Co., Ltd. ( 武汉海尔电器股份有限公司),Guizhou Haier Electronics Co., Ltd. (贵州海尔电器有限公司). With regard to theland and property required in the operation of Qingdao Haier Air-ConditionerElectronics Co., Ltd. (青岛海尔空调电子有限公司) , Hefei Haier Air-conditioningCo., Limited (合肥海尔空调器有限公司), Wuhan Haier Electronics Co., Ltd. (武汉海尔电器股份有限公司) (the “Covenantees”), Haier Group made an undertaking (the“2006 Undertaking”). According to the content of 2006 Undertaking and currentcondition of each Covenantee,Haier Group will constantly assure that Covenanteeswill lease the land and property owned by Haier Group for free. Haier Group willmake compensation in the event that the Covenantees suffer loss due to theunavailability of such land and property.||27September 2006,long term||YES||YES||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||||||
|-|-|-|-|-|-|-|
|Undertaking related torefinancing|Eliminate theproperty rightdefectsin landandetc.|HaierGroupCorporation|Haier Group Corporation undertakes that it will assure Qingdao Haier and itssubsidiaries of the constant, stable and unobstructed use of the leased property. In theevent that Qingdao Haier or any of its subsidiaries suffers any economic loss due to thefact that leased property has no relevant ownership certificate, Haier GroupCorporation will make compensation to impaired party in a timely and sufficient wayand take all reasonable and practicable measures to support the impaired party torecover to normal operation before the occurrence of loss. Upon the expiration ofrelevant leasing period, Haier Group Corporation will grant or take practicablemeasures to assure Qingdao Haier and its subsidiaries of priority to continue to leasethe property at a price not higher than the rent in comparable market at that time. HaierGroup Corporation will assure Qingdao Haier and its subsidiaries of the constant,stable, free and unobstructed use of self-built property and land of the Group. In theevent that Qingdao Haier or any of its subsidiaries fails to continue to use self-builtproperty according to its own will or in original way due to the fact that self-builtproperty has no relevant ownership certificate, Haier Group Corporation will take allreasonable and practicable measures to eliminate obstruction and impact, or willsupport Qingdao Haier or its affected subsidiary to obtain alternative property as soonas possible, if Haier Group Corporation anticipates it is unable to cope with oreliminate the external obstruction and impact with its reasonable effort. For details,please refer to the Announcement of Qingdao Haier Co., Ltd. on the Formation,Current Situation of the Defective Property, the Influence on Operation of IssuerCaused by Uncertainty of Ownership, Solution for the Defect and Guarantee Measures(L 2014-005) published by the Company on the four major securities newspapers andthe website of Shanghai Stock Exchange on 29 March 2014.|24December 2013,long term|YES|YES|
||Eliminate thepropert|QingdaoHaier Co.,Ltd.|The Company undertakes that it will eliminate the property defects of the Companyand main subsidiaries within five years with reasonable business effort since 24December 2013, so as to achieve the legality and compliance of the Company and|24December 2013,|YES|YES|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||||||
|-|-|-|-|-|-|-|
||y rightdefectsin landandetc.||main subsidiaries in terms of land and property. For details, please refer to theAnnouncement of Qingdao Haier Co., Ltd. on the Formation, Current Situation of theDefective Property, the Influence on Operation of Issuer Caused by Uncertainty ofOwnership, Solution for the Defect and Guarantee Measures (L2014-005) published bythe Company on the four major securities newspapers and the website of ShanghaiStock Exchange on 29 March 2014.|five years|||
|Otherundertakings made tothe mediumandminorityshareholders|Assetinjection|HaierGroupCorporation|Inject the underlying assets of Haier Photoelectric to the Company or dispose suchassets through other ways according to the requirements of the domestic supervisionbefore June 2020. For details, please refer to the Announcement of Qingdao Haier Co.,Ltd. on the Changes of Funding Commitment of Haier Group Corporation (L2015-063) published by the Company on the four major securities newspapers and thewebsite of Shanghai Stock Exchange on 23 December 2015.|December2015-June 2020|YES|YES|
||Profitforecast andcompensation|HaierGroupCorporation|In December 2015 and January 2016, the Board Meeting and General Meeting of theCompany considered and passed the matters in relation to the acquisition of minorityequity interest of Mitsubishi Heavy Industries Haier and Carrier RefrigerationEquipment held by Haier Group. The Company signed the Profit CompensationAgreement with Haier Group to forecast the profits to be achieved by theaforementioned two companies in 2015 - 2018. If the profits are not reached during thecommitment period, the difference part will be made up to the Company by HaierGroup in cash. For details, please refer to Announcement of Qingdao Haier Co., Ltd.On the Acquisition of Equity in Sino-foreign Joint Venture Held by Haier GroupCorporation and Related Transactions (L 2015-062) published by the Company on thefour major securities newspapers and the website of Shanghai Stock Exchange on 23December 2015.|December 2015-December 2018|YES|YES|
||Others|HaierGroupCorporation|In order to prevent and control the Company's fund risks in an effective and timelymanner and ensure the security of the Company's funds, Haier Group hereby (onbehalf of itself and other companies held by it or under its actual control) made the|30 March2018,long term|YES|YES|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||
|-|
|Undertaking of the Haier Group Corporation on the Funds Security of Qingdao HaierCo., Ltd.(《海尔集团公司关于青岛海尔股份有限公司资金安全的承诺》) , pursuantto which it made undertakings on not occupying Qingdao Haier's funds in disguisedform and to secure Qingdao Haier's Funds in Financial Companies, etc. For details,please refer to the Announcement of Qingdao Haier Co., Ltd. on the UndertakingsMade by the Actual Controlling Shareholders (L 2018-059) published by the Companyon the four major securities newspapers and the website of Shanghai Stock Exchangeon 9 October, 2018.|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
3.4 Warning and explanation on reasons for accumulated net profit for the period from the beginning of the year to the end of the next reporting period to be at a loss or
expected to have material change as compared to that of the corresponding period of last year
□ Applicable√Not Applicable
|||
|-|-|
|Name of company|Qingdao Haier Co., Ltd.|
|Legal representative|Liang Haishan|
|Date|30 October 2018|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
IV．Appendix
4.1 Financial Statements
Consolidated Balance Sheet
30 September 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB Unaudited
|||||||
|-|-|-|-|-|-|
||Items||Closing balance||Opening balance|
|Current Assets:||||||
|Monetary Capital||35,027,149,528.56||35,825,439,039.22||
|Clearing settlement funds||||||
|Lendings to banks and other financialinstitutions||||||
|Financial assets measured at fair valueand changes of which included in currentprofit and loss||||||
|Derivative financial assets||34,498,028.36||20,681,695.50||
|Bills receivables and accounts receivables||31,884,581,587.90||25,924,283,460.99||
|Including: Bills receivables||14,414,860,888.22||13,033,083,520.99||
|Accounts receivables||17,469,720,699.68||12,891,199,940.00||
|Prepayments||671,779,770.85||628,892,321.35||
|Premiums receivables||||||
|Reinsurance accounts receivables||||||
|Reinsurance contract reservesreceivables||||||
|Other receivables||1,481,075,961.81||1,189,441,303.79||
|Including: Interests receivables||307,997,032.28||203,637,543.83||
|Dividends receivables||4,656,550.08||4,524,472.84||
|Financial assets purchased under resaleagreements||||||
|Inventories||20,868,860,503.22||22,537,617,217.87||
|Assets held for sale||1,271,367,067.25||27,453,950.07||
|Non-current assets due within one year||||||
|Other current assets||5,803,001,328.88||4,425,579,572.68||
|Total current assets||97,042,313,776.83||90,579,388,561.47||
|Non-current assets:||||||
|Loans and advances granted||||||
|Available-for-sale financial assets||1,585,956,478.46||1,415,354,307.82||
|Held-to-maturity investments||||||
|Long-term receivables||248,984,502.12||289,785,899.38||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|Long-term equity investments|13,466,290,180.03|12,987,255,645.28|
|Investment properties|31,308,410.93|31,214,015.99|
|Fixed assets|16,875,066,174.37|17,202,199,462.03|
|Construction in progress|3,486,907,261.37|1,610,615,034.68|
|Biological assets for production|||
|Fuel assets|||
|Intangible assets|8,966,361,405.65|8,226,559,783.38|
|Development expenses|488,831,497.42|966,051,333.81|
|Goodwill|21,197,596,096.81|20,344,616,586.99|
|Long-term deferred expenditures|196,158,024.26|177,755,371.21|
|Deferred income tax assets|1,883,601,023.69|2,011,904,164.13|
|Other non-current assets|2,157,011,873.24|1,254,064,181.76|
|Total non-current assets|70,584,072,928.35|66,517,375,786.46|
|Total assets|167,626,386,705.18|157,096,764,347.93|
|Current liabilities:|||
|Short-term borrowings|12,972,750,597.68|10,878,580,275.18|
|Borrowings from central bank|||
|Customer deposits and deposits frombanks|||
|Placements from banks and otherfinancial institutions|||
|Financial liabilities measured at fair valueand changes of which included in currentprofit and loss|||
|Derivative financial liabilities|116,230,558.04|2,524,569.45|
|Bills payable and accounts payable|48,275,805,549.41|42,616,065,864.06|
|Advances from customers|3,698,644,561.45|5,861,949,182.62|
|Disposal of repurchased financial assets|||
|Handling charges and commissionspayable|||
|Payable for staff’s remuneration|2,166,113,420.11|2,480,636,328.53|
|Taxes payable|2,030,887,215.81|1,970,178,186.86|
|Other payable|13,386,539,684.86|11,309,575,306.21|
|Including: Interests payable|185,682,002.49|235,683,220.62|
|Dividends payable|157,746,605.36|153,756,315.64|
|Reinsurance accounts payable|||
|Deposits for insurance contracts|||
|Consumer deposits for trading insecurities|||
|Amounts due to issuer for securitiesunderwriting|||
|Liabilities held for sale|298,842,777.47||
|Non-current liabilities due within one|2,815,877,532.96|6,149,302,981.65|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|year|||
|Other current liabilities|40,146,934.19|42,961,121.03|
|Total current liabilities|85,801,838,831.98|81,311,773,815.59|
|Non-current liabilities:|||
|Long-term borrowings|16,905,702,296.03|16,036,492,809.81|
|Debentures payable|6,667,990,382.62|6,211,088,362.68|
|Including: preference shares|||
|Perpetual bonds|||
|Long-term payable|105,158,826.26|106,020,029.74|
|Long-term payable for staff’sremuneration|||
|Estimated liabilities|2,983,559,606.43|2,660,788,654.43|
|Deferred income|650,407,021.26|497,141,088.72|
|Deferred income tax liabilities|215,966,425.02|279,114,620.35|
|Other non-current liabilities|2,830,963,168.26|2,147,990,857.13|
|Total non-current liabilities|30,359,747,725.88|27,938,636,422.86|
|Total liabilities|116,161,586,557.86|109,250,410,238.45|
|Owners’ equity (or shareholders’ equity)|||
|Pain-in capital (or share capital)|6,097,402,727.00|6,097,402,727.00|
|Other equity instruments|431,424,524.07|431,424,524.07|
|Including: preference shares|||
|Perpetual bonds|||
|Capital reserve|826,883,093.84|2,316,873,282.11|
|Less: Treasury stock|||
|Other comprehensive income|878,476,844.82|4,424,024.90|
|Special reserve|||
|Surplus reserve|2,005,685,056.77|2,103,057,782.41|
|General risk provisions|||
|Undistributed profits|25,436,021,427.52|22,346,318,444.63|
|Total equity attributable to owners of theParent company|35,675,893,674.02|33,299,500,785.12|
|Minority equity interests|15,788,906,473.30|14,546,853,324.36|
|Total owners’ equity (or shareholders’equity)|51,464,800,147.32|47,846,354,109.48|
|Total liabilities and owners’ equities(or shareholders’ equity)|167,626,386,705.18|157,096,764,347.93|

Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
Balance Sheet of the Parent Company
30 September 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB Unaudited
|||||||
|-|-|-|-|-|-|
||Items||Closing balance||Opening balance|
|Current Assets:||||||
|Monetary Capital||3,394,119,013.68||2,070,527,802.97||
|Financial assets measured at fair valueand changes of which included in currentprofit and loss||||||
|Derivative financial assets||||||
|Bill receivables and accounts receivables||200,958,629.82||288,499,726.07||
|Including：Bill receivables||||||
|Accounts receivables||200,958,629.82||288,499,726.07||
|Prepayments||23,687,108.51||20,000,000.00||
|Other receivables||487,464,928.84||1,206,903,377.12||
|Including：Interests receivables||6,870,477.10||220,157,282.75||
|Dividends receivables||18,251,296.42||970,851,045.94||
|Inventories||72,610,924.73||89,650,514.91||
|Assets held for sale||||||
|Non-current assets due within one year||||||
|Other current assets||191,709,409.46||87,165,597.70||
|Total current assets||4,370,550,015.04||3,762,747,018.77||
|Non-current assets:||||||
|Available-for-sale financial assets||5,335,773.96||5,818,587.80||
|Held-to-maturity investments||||||
|Long-term receivables||||8,600,000,000.00||
|Long-term equity investments||32,390,142,090.54||23,581,254,928.08||
|Investment properties||||||
|Fixed assets||118,008,248.28||118,553,830.32||
|Construction in progress||38,553,097.58||13,594,976.50||
|Biological assets for production||||||
|Fuel assets||||||
|Intangible assets||7,147,254.17||14,601,582.38||
|Development expenses||||||
|Goodwill||||||
|Long-term deferred expenditures||5,166,162.66||||
|Deferred income tax assets||106,347,777.99||106,347,777.99||
|Other non-current assets||||||
|Total non-current assets||32,670,700,405.18||32,440,171,683.07||
|Total assets||37,041,250,420.22||36,202,918,701.84||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|Current liabilities:|||
|Short-term borrowings|1,500,000,000.00||
|Financial liabilities measured at fair valueand changes of which included in currentprofit and loss|||
|Derivative financial liabilities|||
|Bills payable and accounts payable|235,162,661.28|310,387,267.67|
|Advances from customers|2,418,969,696.50|2,465,908,721.32|
|payable for staff’s remuneration|46,161,578.98|51,533,384.22|
|Taxes payable|14,377,813.15|62,255,803.87|
|Other payable|22,316,065,443.79|21,268,590,528.36|
|Including：interests payable|188,675,107.27|156,447,167.63|
|Dividends payable|||
|Liabilities held for sale|||
|Non-current liabilities due within oneyear|||
|Other current liabilities|18,216,506.32|12,498,265.43|
|Total current liabilities|26,548,953,700.02|24,171,173,970.87|
|Non-current liabilities：|||
|Long-term borrowings|||
|Debentures payable|||
|Including: preference shares|||
|Perpetual bonds|||
|Long-term payable|20,000,000.00|20,000,000.00|
|Long-term payable for staff’sremuneration|||
|Estimated liabilities|||
|Deferred income|91,723,810.10|37,700,000.00|
|Deferred income tax liabilities|37,790,420.16|36,152,815.34|
|Other non-current liabilities|||
|Total non-current liabilities|149,514,230.26|93,852,815.34|
|Total liabilities|26,698,467,930.28|24,265,026,786.21|
|Owners’ equity（or shareholders’ equity）|||
|Pain-in capital（or share capital）|6,097,402,727.00|6,097,402,727.00|
|Other equity instruments|||
|Including: preference shares|||
|Perpetual bonds|||
|Capital reserve|2,318,161,831.23|2,317,907,947.71|
|Less: Treasury stock|||
|Other comprehensive income|-13,438,995.88|-43,234,737.77|
|Special reserve|||
|Surplus reserve|1,437,313,649.93|1,437,313,649.93|
|Undistributed profits|503,343,277.66|2,128,502,328.76|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|Total owners’ equity（or shareholders’equity）|10,342,782,489.94|11,937,891,915.63|
|Total liabilities and owners’equities（or shareholders’ equities）|37,041,250,420.22|36,202,918,701.84|

Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Income Statement
January-September 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB Unaudited
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||Amount from the||Amount from the|
||||||Amount for the||beginning of the||beginning of last|
||||Amount for the|||||||
||||||previous||year to the end of||year to the end of|
||||current|||||||
||Items||||Period||the reporting||the reporting|
||||Period|||||||
||||||(July-Septemb||period||period|
||||(July-September)|||||||
||||||er)||(January-Septem||(January-Septem|
||||||||ber)||ber)|
|Ⅰ. Total operating revenue||47,582,370,823.27||42,676,437,684.91||138,138,774,411.21||122,494,143,062.55||
|Including: operating revenue||47,582,370,823.27||42,676,437,684.91||138,138,774,411.21||122,494,143,062.55||
|Interest income||||||||||
|Insurance premiumsearned||||||||||
|Handling charges andcommission income||||||||||
|Ⅱ. Total cost of operations||46,118,823,532.91||41,579,488,110.86||131,146,255,979.08||116,764,168,447.98||
|Including: operating cost||34,100,161,398.02||30,008,154,883.08||98,174,684,451.42||85,585,233,536.54||
|Interest expenses||||||||||
|Handling charges andcommission expenses||||||||||
|Insurance withdrawalpayment||||||||||
|Net payment fromindemnity||||||||||
|Drawing of provisionsfor insurance contracts, net||||||||||
|Insurance policydividend paid||||||||||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||||
|-|-|-|-|-|
|Reinsurance cost|||||
|Taxes and surcharges|244,364,395.43|269,132,311.99|648,780,027.35|614,663,024.79|
|Selling expenses|7,823,195,188.26|7,889,010,743.94|21,339,457,352.81|20,434,536,178.22|
|Administrative expenses|2,132,814,021.53|1,612,634,066.12|6,236,541,938.43|5,227,336,684.13|
|R&D expenditures|1,447,952,191.68|1,324,940,022.77|3,712,243,059.10|3,517,071,013.44|
|Financial expenses|279,887,087.05|467,291,932.78|765,856,927.10|1,154,426,899.86|
|Including: Interestexpenses|304,546,395.79|349,114,922.55|988,211,900.04|1,061,792,763.50|
|Interestincome|98,827,316.38|94,430,542.09|333,241,702.03|235,611,576.12|
|Loss in assetsimpairment|90,449,250.94|8,324,150.18|268,692,222.87|230,901,111.00|
|Add: Other income|254,478,055.41|259,484,760.43|478,770,467.43|394,227,327.95|
|Investment income(losses are represented by “-”)|458,978,905.04|319,971,426.66|1,326,437,894.00|973,814,141.01|
|Including: investmentincome from associates andjoint ventures|||||
|Income from change infair value (losses arerepresented by “-”)|-125,212,550.50|114,188,419.25|-88,550,629.00|526,252,264.40|
|Income from disposal ofassets (losses are represented by“-”)|113,057,969.10|22,170,316.16|118,726,042.63|15,021,976.92|
|Exchange gain (lossesare represented by “-”)|||||
|Ⅲ. Operating profit (losses arerepresented by “-”)|2,164,849,669.41|1,812,764,496.55|8,827,902,207.19|7,639,290,324.85|
|Add: non-operating income|88,873,125.37|230,651,977.14|307,131,026.14|477,616,097.62|
|Less: non-operating expenses|24,609,630.01|41,884,014.99|74,176,661.32|119,329,951.37|
|Ⅳ.Total Profit (total losses arerepresented by “-”)|2,229,113,164.77|2,001,532,458.70|9,060,856,572.01|7,997,576,471.10|
|Less: income tax expense|263,274,478.27|214,861,802.48|1,230,053,924.92|968,361,199.76|
|V. Net Profit (net losses are|1,965,838,686.|1,786,670,65|7,830,802,647.|7,029,215,271.|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||||
|-|-|-|-|-|
|represented by “-”)|50|6.22|09|34|
|(I) Classification bycontinuous operation|||||
|1.Net profit fromcontinuous operations (netlosses are represented by “-”)|1,965,838,686.50|1,786,670,656.22|7,830,802,647.09|7,029,215,271.34|
|2.Net profit fromdiscontinued operations (netlosses are represented by “-”)|||||
|(II)Classification byownership of the equity|||||
|1. Net profit attributableto owners of the ParentCompany|1,341,445,309.68|1,217,982,647.53|6,126,787,121.21|5,602,801,883.86|
|2. Profit or lossattributable to minorityshareholders|624,393,376.82|568,688,008.69|1,704,015,525.88|1,426,413,387.48|
|VI. Other comprehensiveincome, net of tax|548,134,190.72|-95,904,313.27|1,013,158,337.47|-327,410,413.04|
|Other comprehensive incomeattributable to owners of theParent Company, net of tax|492,890,595.99|-81,928,492.43|833,824,709.33|-280,916,551.66|
|(I) Other comprehensiveincome that will not bereclassified subsequently toprofit or loss|-1,045,223.32||-7,997,491.05||
|1. Changes arising fromre-measurement of defined benefit plans|-1,045,223.32||-7,997,491.05||
|2. Other comprehensiveincome that cannot betransferred to profit and lossunder equity method|||||
|(II) Other comprehensiveincome to be reclassifiedsubsequently to profit or loss|493,935,819.31|-81,928,492.43|841,822,200.38|-280,916,551.66|
|1. Other comprehensiveincome that can be transferredto profit and loss under equitymethod|74,779,420.86|40,693,511.60|161,496,158.75|-81,346,664.65|
|2. Profit or loss fromchange in fair value ofavailable-for-sale financial|-7,181,577.12|1,056,642.38|40,401,696.52|-1,290,381.60|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||||
|-|-|-|-|-|
|assets|||||
|3. Profit or loss arisingfrom reclassification ofheld-to-maturity investments toavailable-for-sale financialassets|||||
|4. Effective portion ofprofit or loss arising from cashflow hedges|-4,888,807.85|15,156,097.14|42,876,348.23|-27,372,354.75|
|5. Exchange differenceson translation of financialstatements denominated inforeign currencies|431,226,783.42|-138,834,743.55|597,047,996.88|-170,907,150.66|
|Other comprehensive incomeattributable to minorityshareholders, net of tax|55,243,594.73|-13,975,820.84|179,333,628.14|-46,493,861.38|
|Ⅶ. Total comprehensiveincome|2,513,972,877.21|1,690,766,342.95|8,843,960,984.56|6,701,804,858.30|
|Total comprehensive incomeattributable to the owners ofParent Company|1,834,335,905.66|1,136,054,155.10|6,960,611,830.54|5,321,885,332.20|
|Total comprehensive incomeattributable to the minorityshareholders|679,636,971.55|554,712,187.85|1,883,349,154.02|1,379,919,526.10|
|VIII. Earnings per share:|||||
|(I) Basic earnings per share(RMB/share)|0.271|0.300|1.005|0.919|
|(II) Diluted earnings per share(RMB/share)|0.264|0.300|0.987|0.919|

For the business combination under common control effected during the period, the net profit realized by the merged party before the combination was RMB -43,718,860.91
Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
Income Statement of the Parent Company
January-September 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB Unaudited
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||Amount from the||Amount from the|
||||Amount for||Amount for the||beginning of the||beginning of last|
||||the current||previous||year to the end of||year to the end of|
||Items|||||||||
||||Period||Period||the reporting||the reporting|
||||(July-Septe||(July-Septembe||period||period|
||||mber)||r)||(January-Septem||(January-Septem|
||||||||ber)||ber)|
|Ⅰ. Operating revenue||792,884,921.23||885,928,248.69||2,417,038,949.69||2,429,040,574.34||
|Less: Operation cost||555,280,503.90||599,578,352.66||1,675,343,056.16||1,724,678,093.73||
|Taxes and surcharges||6,419,524.05||8,873,954.31||16,393,690.67||17,998,106.78||
|Selling expenses||85,400,691.99||65,814,107.53||210,441,579.93||150,349,127.54||
|Administrative expenses||141,647,234.36||131,166,668.97||345,344,601.02||327,764,969.80||
|R&D expenditures||82,497,268.57||74,387,651.32||166,500,505.81||169,591,070.38||
|Financial expenses||45,410,592.26||32,401,366.94||107,226,850.25||77,833,579.73||
|Including: Interestexpenses||80,070,880.63||71,132,206.66||210,180,419.77||187,164,133.92||
|Interest income||28,915,355.12||40,157,833.17||101,898,989.53||111,044,209.34||
|Loss in assets impairment||-86,152,801.78||-67,084,496.59||10,058,187.90||-17,843,951.04||
|Add: Other income||25,076,709.08||-17,583,126.25||34,586,901.99||17,166,899.75||
|Investment income (lossesare represented by “-”)||306,404,376.82||108,081,882.92||525,924,446.67||259,975,650.65||
|Including: investmentincome from associates and jointventures||||||||||
|Income from change in fairvalue (losses are represented by“-”)||||||||||
|Income from disposal ofassets (losses are represented by||25,693.17||||25,693.17||||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||||
|-|-|-|-|-|
|“-”)|||||
|Ⅱ. Operating profit (losses arerepresented by “-”)|293,888,686.95|131,289,400.22|446,267,519.78|255,812,127.82|
|Add: non-operating income|6,536,549.52|41,890,232.67|34,283,951.35|59,966,161.35|
|Less: non-operating expenses|58,667.36|852,535.19|311,781.90|861,948.86|
|Ⅲ. Total Profit (total losses arerepresented by “-”)|300,366,569.11|172,327,097.70|480,239,689.23|314,916,340.31|
|Less: income tax expense|-4,749,277.12|9,633,872.86|-8,231,021.09|-756,318.10|
|Ⅳ. Net Profit (net losses arerepresented by “-”)|305,115,846.23|162,693,224.84|488,470,710.32|315,672,658.41|
|(I)Net profit from continuousoperations (net losses arerepresented by “-”)|305,115,846.23|162,693,224.84|488,470,710.32|315,672,658.41|
|(II)Net profit from discontinuedoperations (net losses arerepresented by “-”)|||||
|V. Other comprehensive income,net of tax|39,894.27|79,633.31|14,706,726.13|-13,523,864.60|
|(I) Other comprehensive incomethat cannot be reclassifiedsubsequently to profit or loss|||||
|1. Changes arising fromre-measurement of defined benefitplans|||||
|2. Other comprehensiveincome that cannot be transferredto profit and loss under equitymethod|||||
|(II) Other comprehensive incometo be reclassified subsequently toprofit or loss|39,894.27|79,633.31|14,706,726.13|-13,523,864.60|
|1. Other comprehensiveincome that can be transferred toprofit and loss under equity method|-|-|15,117,117.89|-13,949,016.48|
|2. Profit or loss from changein fair value of available-for-salefinancial assets|39,894.27|79,633.31|-410,391.76|425,151.88|
|3. Profit or loss arising fromreclassification of held-to-maturityinvestments to available-for-salefinancial assets|||||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||||
|-|-|-|-|-|
|4. Effective portion of profitor loss arising from cash flowhedges|||||
|5. Exchange differences ontranslation of financial statementsdenominated in foreign currencies|||||
|VI. Total comprehensive income|305,155,740.50|162,772,858.15|503,177,436.45|302,148,793.81|
|VII. Earnings per share:|||||
|(I) Basic earnings per share(RMB/share)|||||
|(II) Diluted earnings per share(RMB/share)|||||

Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Cash Flow Statement
January-September 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB Unaudited
|||||||
|-|-|-|-|-|-|
||||Amount from the||Amount from the|
||||beginning of the||beginning of last year|
||Items||year to the end of||to the end of the|
||||the reporting period||reporting period|
||||(January-September)||(January-September)|
|Ⅰ. Cash flows from operatingactivities:||||||
|Cash received from the sale of goods andrendering of services||136,356,353,258.31||142,884,043,530.47||
|Net increase in consumer and inter-bankdeposits||||||
|Net increase in borrowing from central bank||||||
|Net increase in Placements from otherfinancial institutes||||||
|Cash received from premiums underoriginal insurance contract||||||
|Net cash received from reinsurance business||||||
|Net increase in deposits of policy holdersand investment||||||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|Net increase from the disposal of financialassets measured at fair value and changes ofwhich included in current profit and loss|||
|Cash received from interest, handlingcharges and commissions|||
|Net increase in Placements from banks andother financial institutions|||
|Net increase in cash received fromrepurchased operation|||
|Refunds of taxes|1,046,920,477.01|928,821,816.67|
|Cash received from other relatedoperating activities|589,436,216.22|659,644,922.87|
|Sub-total of cash inflows from operatingactivities|137,992,709,951.54|144,472,510,270.01|
|Cash paid on purchase of goods andservices|94,027,674,890.45|101,805,650,338.28|
|Net increase in loans and advances fromcustomers|||
|Net increase in deposits in central bank andinter-bank|||
|Cash paid for compensation payments underoriginal insurance contract|||
|Cash paid for interest, bank charges andcommissions|||
|Cash paid for insurance policy dividend|||
|Cash paid to and on behalf of employees|14,351,219,932.92|12,072,394,336.37|
|Cash paid for all types of taxes|6,353,081,563.62|5,751,657,745.83|
|Cash paid to other operation relatedactivities|12,211,553,757.49|10,304,794,590.01|
|Sub-total of cash outflows from operatingactivities|126,943,530,144.48|129,934,497,010.49|
|Net cash flows from operating activities|11,049,179,807.06|14,538,013,259.52|
|Ⅱ. Cash flows from investingactivities:|||
|Cash received from disposal ofinvestments|3,057,186,798.56|41,065,673.58|
|Cash received from return oninvestments|284,197,818.40|240,271,551.96|
|Net cash received from the disposal of fixedassets, intangible assets and other long-termassets|312,264,347.04|61,986,331.26|
|Net cash received from disposal ofsubsidiaries and other operating entities|630,890,842.99|155,037,270.54|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|Cash received from other investment relatedactivities|106,361,571.07||
|Sub-total of cash inflows from investingactivities|4,390,901,378.06|498,360,827.34|
|Cash paid on purchase of fixed assets,intangible assets and other long-term assets|4,448,216,757.39|2,875,638,772.83|
|Cash paid for investment|9,128,017,281.00|2,251,865,388.66|
|Net increase in secured loans|||
|Net cash paid on acquisition of subsidiariesand other operating entities|2,143,193,029.63|88,429,231.46|
|Cash paid on other investment relatedactivities|22,812,827.94|8,992,511.00|
|Sub-total of cash outflows from investingactivities|15,742,239,895.96|5,224,925,903.95|
|Net cash flows from investing activities|-11,351,338,517.90|-4,726,565,076.61|
|Ⅲ. Cash flows from financingactivities:|||
|Cash received from investment|712,560,270.91|1,347,892,085.10|
|Including: cash received bysubsidiaries from minority shareholders’investment|||
|Cash received from borrowings|12,010,235,777.28|16,802,696,722.23|
|Cash received from issuing bonds|||
|Cash received from other financingrelated activities||1,731,609.42|
|Sub-total of cash inflows from financingactivities|12,722,796,048.19|18,152,320,416.75|
|Cash paid on repayment of borrowings|10,654,594,243.08|17,319,127,428.05|
|Cash paid on distribution ofdividends, profits, or interest expenses|2,757,273,989.73|2,010,741,534.99|
|Including: dividend, profit paid tominority shareholders by subsidiaries|||
|Cash paid on other financingactivities|684,267,226.55|60,636,145.07|
|Sub-total of cash outflows from financingactivities|14,096,135,459.36|19,390,505,108.11|
|Net cash flows from financing activities|-1,373,339,411.17|-1,238,184,691.36|
|Ⅳ. Effect of fluctuations in exchangerates on cash and cash equivalents|372,206,915.04|-178,747,785.13|
|Ⅴ. Net increase in cash and cashequivalents|-1,303,291,206.97|8,394,515,706.42|
|Add: balance of cash and cash equivalents atthe beginning of the period|34,988,175,709.53|23,966,288,576.46|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|VI.Balance of cash and cash equivalents atthe end of the period|33,684,884,502.56|32,360,804,282.88|

Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Cash Flow Statement of the Parent Company
January-September 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB Unaudited
|||||||
|-|-|-|-|-|-|
||Items||Amount from the||Amount from the|
||||beginning of the||beginning of last|
||||year to the end of||year to the end|
||||the reporting period||of the reporting|
||||(January-September)||period|
||||||(January-September)|
|Ⅰ. Cash flows from operatingactivities:||||||
|Cash received from the sale of goodsand rendering of services||1,318,190,025.50||427,739,667.35||
|Refunds of taxes||95,543,006.48||55,711,962.27||
|Cash received from other relatedoperating activities||173,528,179.29||54,115,058.79||
|Sub-total of cash inflows fromoperating activities||1,587,261,211.27||537,566,688.41||
|Cash paid on purchase of goods andservices||458,713,553.43||1,452,092,842.51||
|Cash paid to and on behalf ofemployees||647,354,793.69||564,703,136.34||
|Cash paid for all types of taxes||139,250,644.36||137,011,406.78||
|Cash paid to other operation relatedactivities||374,617,434.69||321,211,786.90||
|Sub-total of cash outflows fromoperating activities||1,619,936,426.17||2,475,019,172.53||
|Net cash flows from operatingactivities||-32,675,214.90||-1,937,452,484.12||
|Ⅱ. Cash flows from investingactivities:||||||
|Cash received from disposal ofinvestments||505,207,895.00||||

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|Cash received from return oninvestments|1,153,009,979.01|429,548,610.50|
|Net cash received from the disposalof fixed assets, intangible assets andother long-term assets|||
|Net cash received from disposal ofsubsidiaries and other operating entities|||
|Cash received from other investmentrelated activities|||
|Sub-total of cash inflows frominvesting activities|1,658,217,874.01|429,548,610.50|
|Cash paid on purchase of fixedassets, intangible assets and otherlong-term assets|46,367,088.81|28,348,785.40|
|Cash paid for investments|73,572,235.00|793,311,762.50|
|Net cash paid on acquisition ofsubsidiaries and other operating entities|||
|Cash paid on other investmentrelated activities|||
|Sub-total of cash outflows frominvesting activities|119,939,323.81|821,660,547.90|
|Net cash flows from investing activities|1,538,278,550.20|-392,111,937.40|
|Ⅲ. Cash flows from financingactivities:|||
|Cash received from investment|||
|Cash received from borrowings|1,500,000,000.00||
|Cash received from issuing bonds|||
|Cash received from other financingrelated activities|424,802,503.30|4,517,547,537.12|
|Sub-total of cash inflows fromfinancing activities|1,924,802,503.30|4,517,547,537.12|
|Cash paid on repayment of borrowings|||
|Cash paid on distribution ofdividends, profits, or interest expenses|2,106,817,045.14|1,512,155,876.29|
|Cash paid on other financing activities||1,041,960.00|
|Sub-total of cash outflows fromfinancing activities|2,106,817,045.14|1,513,197,836.29|
|Net cash flows from financingactivities|-182,014,541.84|3,004,349,700.83|
|Ⅳ. Effect of fluctuations in exchangerates on cash and cash equivalents|2,417.25|-2,101.16|
|Ⅴ. Net increase in cash and cashequivalents|1,323,591,210.71|674,783,178.15|

Third Quarterly Report of 2018
Qingdao Haier Co., Ltd
||||
|-|-|-|
|Add: balance of cash and cashequivalents at the beginning of theperiod|2,070,527,802.97|3,888,623,400.28|
|Ⅵ. Balance of cash and cash equivalentsat the end of the period|3,394,119,013.68|4,563,406,578.43|

Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
4.2Auditors’ Report
□Applicable√Not Applicable