Stock Code:600690（SH）、690D（FSE） Short Name: Qingdao Haier Bond Code:110049 Bond Name:Haier Convertible Bond Qingdao Haier Co., Ltd.
Summary of 2018 Annual Report
I. Importance Notice
1 The summary of annual report is a simplification of the annual report. To comprehensively understand theCompany’s operating results, financial position and future development plans, investors shall refer to the website of the Shanghai Stock Exchange and other designated media of the China Securities Regulatory Commission to carefully read the full text of the annual report. 2 The Board of Directors, the Board of Supervisors, directors, supervisors and senior management of Qingdao Haier Co., Ltd. (“the Company”) hereby assure that the content set out in the annual 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. 3 Information of Directors absent from the meeting.
|||||
|-|-|-|-|
|Position of director absent|Name of director absent|Reason for the absence of||
||||Name of proxy|
|from the meeting|from the meeting|director from the meeting||
|Director|Liu Haifeng|Personal affair|Wu Changqi|

 4 Shandong Hexin Certified Public Accountants LLP has issued a standard and unqualified audit report for the Company.
5 Proposal of profit distribution and proposal of capitalizing capital reserves for the reporting period examined and reviewed by the Board
Proposal of profit distribution for the reporting period examined and reviewed by the Board: to declare a cash dividend of RMB3.51 per 10 shares (tax inclusive) to all shareholders based on the total number of shares as at the registration date in respect of future proposal for profit distribution.
II. General Information of the Company
1 General Information of the Company
||||||
|-|-|-|-|-|
|Summarized Information of Shares of the Company|||||
|Type of Shares|Stock Exchange of|Stock Short Name|Stock Code|Stock Short Name|
||Shares Listed|||Before Variation|
|A shares|Shanghai StockExchange|Qingdao Haier|600690|/|
|D shares|Frankfurt StockExchange|QINGDAO HAIER|690D|/|

||||||||
|-|-|-|-|-|-|-|
||Contact person|Secretary to the Board||Representative of|||
||and contact|||securities affairs||IR|
||Information||||||
|Name||Ming Guozhen|Liu Tao||Sophie (孙瑶)||
|Address||Department of Securities|Department of||Haier Deutschland GmbH,||

|||||
|-|-|-|-|
||of Qingdao Haier Co.,Ltd. Haier InformationIndustrial Park, No.1Haier Road, QingdaoCity|Securities of QingdaoHaier Co., Ltd. HaierInformation IndustrialPark, No.1 HaierRoad, Qingdao City|Hewlett-Packard-Str. 4,61352 Bad Homburg,Germany|
|Tel|0532-88931670|0532-88931670|+49 160 9469 3601(Germany)|
|Email|finance@haier.com|finance@haier.com|Y.sun@haier.de|

 2 General Information of theCompany’s major business during the reporting period
The Company mainly engages in research, development, production and sales of home appliances with product portfolios covering refrigerators/freezers, washing machines, air-conditioners, water heaters, kitchen appliance products, small home appliances, U-home smart home business, etc., offering complete sets of smart home solutions to our consumers through rich portfolio of product and brand to create a better life experience, and the Company's channel integration service business mainly provides customers with full-process services such as distribution, logistic and after-sale of home appliances, household appliances and other products, as well as other value-added services.
Since its establishment, the Company has been upholding the concept of “taking the user as right and ourselves as wrong”, while adhering to the spirit of entrepreneurship and innovation and the strategy of keeping up with new developments. The Company has always adhered to overseas independent brand creation and through its persistent efforts and industry integration, it has successively acquired the white goods business of Sanyo of Japan, the household appliances business of GE, the Fisher& Paykel business in New Zealand, holds a48.41% equity in MABE in Mexico, and acquires Italy-based Candy Company to construct the global competitiveness of the trinity of"R&D, manufacturing and marketing". Through continuous optimization of resource integration capabilities and global strategic synergies, the Company achieves the layout and global operation of the seven world-class brands, including Haier, Casarte, Leader, GE Appliances in the USA, Fisher& Paykel in New Zealand, AQUA in Japan and Italy-based Candy. In 2018, revenue from overseas operation represented42% of the total revenue while near100% of the revenue was generated from self-owned brands.
According to retail sales statistics on the large home appliances published by Euromonitor, theworld’s leading independent provider of strategic market research, in 2018, sales ofHaier’s large home
appliances ranked No. 1 in the world for the 10th consecutive year. Meanwhile, global sales ofHaier’s
refrigerators, washing machines, wine cellars and freezers continued to rank No. 1 in the world. The
sales of Haier Health self-cleaning air-conditioner in 2018 represented a global market share of40.7% and ranked No. 1 in the world.
In face of the opportunities and challenges arising in the Internet of Things (“IoT”) era, the Company, through strategic market moves, has initiated the transformation to the IoT platform and established three leading platforms, includingU+ Smart Life platform, COSMOplat industrial internet cloud platform, and Shunguang social group platform to focus on continuous iterations of the user's best experience. By offering smart homes solutions and introducing full-range smart life experiences to consumers, Haier has satisfied the needs of a better life for its customers.
2018 Industry Summary
In 2018, the global economy maintained its moderate growth, but the momentum of growth slowed down gradually due to the intensification of trade protectionism, the continued interest rate increase of the U.S. Federal Reserve, the intensification of capital outflows from emerging economies and the continuing turbulence of financial markets. Given the complex and severe situation at home and abroad, China's economic growth remained within a reasonable range, and its economic structure was constantly optimized; its new momentum for development was growing rapidly; people's livelihood continued to improve.
(I) Performance of domestic white goods industry:
In 2018, affected by the weakening of economic growth and the reduced growth of real estate sales, the household appliances industry grew slightly, showing a trend of fast growth first and slow growth later in the year, and the pressure of growth increased continuously in the third and fourth quarters. According to the calculation by China Market Monitor Co., Ltd. (CMM), the market size of China's household appliances industry (excluding 3C) in 2018 was RMB948 billion, representing an increase of1.1% yoy; the growth rate of the industry had fallen significantly compared with that in 2017 at14.1%. Domestic market in 2018: (1) White goods industry: Domestic retail sales of each white goods sub-industry grew slightly.① The retail volume and the value of the home-use air-conditioner increased by3.0% and5.6% respectively;② For the refrigerator and washing machine market, replacement demand became the primary driver with weak sales volume growth, while the average prices were
boosted by structural upgrading, resulted in retail sales maintaining a slight growth trend: retail volume in the refrigerator industry decreased by5.9%, but the retail value increased by7.9%; retail volume and retail value of washing machine increased by0.1% and5.4% respectively. (2) Kitchen and bathroom industry:① The water heater industry recorded a decrease of3.2% in retail volume and a growth of0.5% in retail value in 2018;② In the kitchen appliance market, hoods and stoves recorded negative growth of7.9% and7.1% respectively in terms of retail value.
The trend of consumption upgrade continued, and the characteristics of experience economy and community economy appeared.① Brand, quality, design and technology became the major factors influencing the consumption decision. Consumers are willing to pay a premium for "good products", and healthy, smart, artistic products with large capacity are increasingly favored. Innovation in product categories promoted industry upgrading, and the average price continued to rise. High value-added sub-categories such as duplex drum washing machines provided space for price increases. According toCMM’s offline observed data, the average retail price in the refrigerator industry in 2018 was RMB4,167, representing an increase of9.9% yoy; the average retail price in the washing machine industry was RMB2,956, representing an increase of9.93% yoy.② The trend of consumption differentiation was obvious, and there were more and more young users.③ The development of the Internet of Things, Big Data, Artificial Intelligence and other technologies accelerated the intellectualization trend. The interconnection of intelligent household appliances created a brand new, convenient and smart experience. The requirement for household smart solutions has been constantly raised and pushed the transformation of enterprises from manufacturing and marketing to providing a smart life.
With increasing industry concentration, the leadership becomes a core asset. Haier as a leading enterprise focusing onR&D innovation, brand building, and a long-term strategy, increased its market share by relying on comprehensive advantages accumulated in long term market competition. In 2018, new industrial innovation appeared in the household appliances industry, seeking breakthrough opportunities in design, concept and price.
Offline channels showed a negative growth trend, while the proportion of online channels continued to increase but the growth slowed down. The integration of online and offline channels has
progressed. E-commerce platform accelerated the deployment in rural markets. Traditional offline channels were also trying to promote business using e-commerce resources. In this sense, channel ecology has become diversified increasingly.
(II) Performance of overseas white goods industry: Due to the level of economic development and market size in each region, performances differed across markets.① In the U.S. market, the sales of large appliances was basically the same in 2018 as in 2017② In the European market, refrigerators and freezers industries benefited from the increase of the proportion of large-capacity refrigerators including those with open doors and multi-doors; washing products maintained a small single-digit growth due to the increasing proportion of large-capacity washing machines, heat pump dryers and intelligent interconnection products. Sales of cookers and embedded products were basically unchanged compared with 2017.③ The Japanese market recorded a growth of3% in 2018.④ The Australian and New Zealand market experienced a negative growth trend in the household appliances market, impacted by the sustained decline in consumer spending and the weakening of the real estate industry.⑤ In the South Asia markets, affected by inflation, currency depreciation and other factors,Pakistan’s economy fluctuated and the growth of household appliances market slowed down; the Indian market was affected by the depreciation of the rupee, rising costs and weakening demand, so growth was flat and lower than expectation.
2019 Industry Outlook:
Domestic Market: In 2019, it is expected that the national economy will grow steadily at a low rate; the real estate market will continue to grow slowly; and there will be no obvious favorable factors for the external economic environment of the household appliances industry, but industrial restructuring and consumption upgrading will continue. The market of household appliances is dominated by demand of replacement, and the quality and improvement consumption demand will be further released. According toAVC’s prediction, the total retail sales of white goods (refrigerators, washing machines and air conditioners) will reach RMB372.9 billion in 2019, representing a growth of0.4% yoy. The kitchen and bathroom market will still be at a turning point. It is estimated that the retail sales of kitchen appliances and water heaters will reach RMB62.6 billion and RMB64.3 billion, respectively, representing2.4% and1.9% yoy decrease, respectively. Industry concentration will increase, and the
advantages of leading enterprises will be further strengthened. Industrial structure upgrade, experience improvement and intellectualization will continue in the household appliances industry. Enterprises with strong technological innovation ability, quality control ability and comprehensive product lines will continue to benefit from industrial upgrading.
Overseas Markets: According to the WorldBank’s report, 2019 Global Economic Prospects, the global economy will face more severe downside risks in 2019 due to potential escalating trade tensions and fragile international finance markets. Global growth will decrease from3% in 2018 to2.9% in 2019, and the slowdown of economic growth will be reflected in developed, emerging and developing economies at the same time. The macroeconomic slowdown will affect the demand for home appliances. 3 Key accounting data and financial indicators of the Company
3.1 Key accounting data and financial indicators for the last three years
(1) Key accounting data
Unit and Currency: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||2017|||||||
||||||||||yoy change|||
||Key accounting data||2018||||||||2016|
||||||||||(%)|||
||||||After||Before|||||
||||||adjustment||adjustment|||||
|Operating revenue||183,316,560,236.03||163,428,825,488.56||159,254,466,909.46||12.17||119,132,261,662.60||
|Net profit attributable toshareholders of the listedcompany||7,440,228,855.90||6,907,629,188.39||6,925,792,321.27||7.71||5,041,782,280.78||
|Net profit after deduction ofnon-recurring profit or lossattributable to shareholders ofthe listed company||6,601,505,599.79||5,624,061,708.46||5,624,061,708.46||17.38||4,332,453,050.07||
|Net cash flow from operatingactivities||18,934,252,899.16||16,703,785,279.98||16,086,588,028.31||13.35||8,135,878,351.88||
||||As of 31||As of December 31 2017||||||As of|
||||||||||yoy change|||
||||December||||||||December|
||||||After||Before||(%)|||
||||2018||||||||31 2016|
||||||adjustment||adjustment|||||
|Net assets attributable toshareholders of the listedcompany||39,402,350,791.68||33,299,583,555.63||32,215,515,201.45||18.33||26,438,188,226.56||
|Total assets||166,699,544,243.79||157,164,345,812.30||151,463,110,707.63||6.07||131,469,157,348.79||

(2) Key financial indicators
Unit and Currency: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||2017|||||||
||Key financial indicators||2018|Afteradjustment||Before||yoy change (%)||2016|
|||||||adjustment|||||
|Basic earnings per share(RMB per share)||1.210||1.133|1.136||6.80||0.827||
|Diluted earnings per share(RMB per share)||1.182||1.085|1.088||8.94||0.824||
|Basic earnings per share afterdeducting non-recurring profitor loss (RMB per share)||1.074||0.922|0.922||16.49||0.71||
|Weighted average return onnet assets (%)||21.00||22.89|23.59||Decreased by1.89 percent point||20.38||
|Weighted average return onnet assets after deductingnon-recurring profit or loss(%)||18.63||19.15|19.15||Decreased by0.52 percent point||17.56||

3.2 Key financial data of 2018 by quarters
Unit and Currency: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Q1(January-March)|Q2(April-June)||Q3||Q4|
||||||(July-September)||(October-December)|
|Operating revenue|43,609,601,739||46,946,801,849|47,582,370,823||45,177,785,825||
|Net profit attributableto shareholders oflisted company|1,952,610,308||2,832,731,503|1,341,445,310||1,313,441,735||
|Net profit afterdeduction ofnon-recurring profitor loss attributable toshareholders of listedcompany|1,761,919,418||2,714,072,148|1,046,481,812||1,079,032,222||
|Net cash flow fromoperating activities|2,170,214,541.28||3,378,067,727.60|5,500,897,538.18||7,885,073,092.10||

Reasons for difference between quarterly data and disclosed regular reporting data
√Applicable□Not Applicable
The difference between the quarterly data and the disclosed regular reporting data was due to the Company's business combination under common control during the reporting period, which resulted in retrospective adjustment to the data.
4 Share capital and shareholders
4.1 Number of ordinary shareholders and preferential shareholders with restoration of voting rights and
table of shareholdings of top ten shareholders
Unit: share
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Total number of ordinary shareholders up to the end of the reportingperiod||||||||173,027|||||
|Total number of ordinary shareholders as at the end of the last monthprior to the disclosure day of the annual report||||||||172,948|||||
||Shareholdings of top ten shareholders||||||||||||
||||||||Number||Status of||||
||||||||of||shares||||
|||Change|||||||||||
|||||Number of|||shares||pledged or||||
|||during||||Perce|||||||
||Name of shareholder|||shares held at|||held||frozen|||Nature of|
|||the||||ntage|||||||
||(full name)|||the end of the|||with|||||shareholder|
|||reportin||||(%)|||||||
|||||period|||selling|||Num|||
|||g period|||||||Status||||
||||||||restricti|||ber|||
||||||||ons||||||
|Haier ElectricAppliances InternationalCo., Ltd.|||1,258,684,824||19.76|||Nil|||Domesticnon-state-owned legalentity||
|Haier GroupCorporation|||1,072,610,764||16.84|||Nil|||Domesticnon-state-owned legalentity||
|Hong Kong SecuritiesClearing Co., Ltd.|||496,233,305||7.79|||Unknown|||Unknown||
|GIC PRIVATELIMITED|||263,406,745||4.14|||Unknown|||Foreignlegal entity||
|Deutsche BankAktiengesellschaft(note)|||209,115,801||3.28|||Unknown|||Foreignlegal entity||
|China SecuritiesFinance CorporationLimited|||182,592,697||2.87|||Unknown|||Unknown||
|Qingdao Haier Venture& InvestmentInformation Co.,Ltd.(青岛海尔创业投资咨询有限公司)|||172,252,560||2.70|||Nil|||Domesticnon-state-owned legalentity||
|KKR HOMEINVESTMENT S.AR.L.|||161,116,436||2.53|||Unknown|||Foreignlegal entity||
|National social securityfund, Portfolio 104|||102,211,900||1.60|||Unknown|||Unknown||
|Central Huijin AssetManagement Ltd.|||69,539,900||1.09|||Unknown|||Unknown||

|||
|-|-|
|Related-parties or parties acting inconcert among the aforesaidshareholders|(1) Haier Electric Appliances International Co., Ltd. is aholding subsidiary of Haier Group Corporation. Haier GroupCorporation holds 51.20% of its equity. Qingdao Haier Venture &Investment Information Co., Ltd.(青岛海尔创业投资咨询有限公司) is a party acting in concert with Haier Group Corporation;(2) The Company is not aware of the existence of any connectionsof other shareholders.|
|Explanation of preferentialshareholders with restoration ofvoting rights and theirshareholdings|N/A|

4.2 Framework of the ownership and controlling relationship between the Company and its controlling shareholder
√Applicable□Not Applicable
4.3 Framework of ownership and controlling relationship between the Company and the actual controllers
√Applicable□Not Applicable
4.4 Total number of preferential shareholders and the top ten shareholders of the Company as at the end of the reporting period
□Applicable√Not Applicable
5 Corporate bonds
√Applicable□Not Applicable
5.1 Overview of corporate bonds
Unit and Currency:RMB0’000
|||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||||||Metho|||
||||||||||||||||d of|||
||||||||||||Balanc||||capital||Places of|
||Name of||Abbrevia||||Issuing||Date of|||||||||
||||||Code||||||e of||Interest rate||repaym||transacti|
||bonds||tion||||date||expiry|||||||||
||||||||||||bonds||||ent||on|
||||||||||||||||with|||
||||||||||||||||interest|||
|ConvertibleCorporate BondsofQingdaoHaierCo., Ltd.||HaierConvertibleBonds||110049||18December 2018||17December 2024||300,749||Interestrates for thefirst year tosixth yearare 0.2, 0.5,1.0, 1.5, 1.8,2.0 ,respectively||On anannualbasis||ShanghaiStockExchange||

5.2 Interest payment and repayment of corporate bonds
□Applicable√Not Applicable
5.3 Introduction of corporate bonds rating
√Applicable□Not Applicable
The convertible corporate bonds have been rated by the United Credit Ratings Co., Ltd., which issued the Credit Rating Report Regarding Public Issuance of A Shares Convertible Corporate Bonds of Qingdao Haier Co., Ltd.. According to this rating report, the main credit rating of Qingdao Haier is AAA and the credit rating of convertible corporate bonds is AAA. During the period of convertible corporate bonds, the United Credit Ratings Co., Ltd. will perform regular follow-up rating on an annual basis. 5.4 Key accounting data and financial indicators of the Company for the last two years
√Applicable□Not Applicable
|||||||||
|-|-|-|-|-|-|-|-|
||||||||yoy change|
||Key indicators||2018||2017|||
||||||||(%)|
|Debt to assets ratio (%)||66.90||69.55||-2.65||
|Total liabilities ratio ofEBITDA||0.2073||0.1986||0.87||
|Interest coverage ratio||8.94||8.34||7.20||

 III. Discussion and analysis on operations
1 Principle operating conditions during the reporting period
Please refer to the related statement in “I. Discussion and analysis on operations” of this section. 2 Reasons of listing suspension
□Applicable√Not Applicable
3 Circumstances and reasons for listing termination
□Applicable√Not Applicable
4 Explanation of theCompany’s analysis on reasons and effects of changes in accounting policies and accounting estimates
√Applicable□Not Applicable
Ministry of Finance promulgated Accounting Standard for Business Enterprises No. 22—
Recognition and Measurement of Financial Instruments, Accounting Standard for Business Enterprises No. 23— Transfer of Financial Assets and Accounting Standard for Business Enterprises No. 37— Presentation of Financial Instruments, etc., (collectively the “New Financial Instrument Standards”) as well as Accounting Standard for Business Enterprises No. 14— Income, respectively in 2017, and promulgated the Notice of the Ministry of Finance on Revising and Issuing the Format of Financial Statements of General Enterprises for 2018(《财政部关于修订印发2018年度一般企业财务报表格式的通知》) (Cai Kuai[2018] No.15) in 2018. the Company and its subsidiaries have started to implement the above amendments to the Accounting Standards for Business Enterprises and the Notice since 1 January 2018, and adjusted the relevant contents of accounting policies and financial statements accordingly.
The Company and its subsidiaries implemented the New Financial Instrument Standards and income standard initially for the current period. According to the requirements under the Interpretation of Issues Relating to the Format of the Financial Statements of GeneralEnterprises（《关于一般企业财务报表格式有关问题的解读》）issued by the Accounting Bureau of the Ministry of Finance, the above changes in accounting policies cause influence on the opening amounts of the consolidated balance sheet are as follows:
|||||||
|-|-|-|-|-|-|
||Book value on|Adjustment||||
||||Adjustment|||
||31 December|influence of|||Book value on 1|
||||influence of|||
|Items|2017|financial||Items|January 2018|
||||income|||
||(Before|instrument|||(After changing)|
||||standards|||
||changing)|standards||||

Financial assets
measured at fair
value and changes
20,681,695.50 -20,681,695.50 Not Applicable
of which included
in current profit and
loss
Financial assets
Not Applicable 20,681,695.50 20,681,695.50 held for trading
Available-for-sale
1,415,354,307.82 -1,415,354,307.82 Not Applicable
financial assets
Financial assets
Not Applicable 6,556,627.26 6,556,627.26 held for trading
Investment in
Not Applicable 1,408,797,680.56 other equity 1,408,797,680.56
instruments
Financial liabilities
measured at fair
value and changes
2,524,569.45 -2,524,569.45 Not Applicable
of which included
in current profit and
loss
Financial
Not Applicable 2,524,569.45 liabilities held 2,524,569.45 for trading
Accounts Accounts
12,891,199,940.00 138,793,125.19 13,029,993,065.19 receivable receivable
Other
Other receivables 984,129,285.50 19,750,854.12 1,003,880,139.62 receivables
Deferred
Deferred income
2,076,635,630.12 -58,846,528.69 16,849,858.75 income tax 2,034,638,960.18 tax assets
assets
Long-term
Long-term equity
12,987,255,645.28 -31,654,957.77 equity 12,955,600,687.51 investments
investments
Inventories 22,537,617,217.87 -187,935,341.47 Inventories 22,349,681,876.40 Not Applicable 427,848,311.65 Contract assets 427,848,311.65 Contract
Not Applicable 239,912,970.18 239,912,970.18 liabilities
Receipts in adva
Receipts in advance 5,861,949,182.62 -5,824,511,466.48 37,437,716.14 nce
Contract
Not Applicable 5,824,511,466.48 5,824,511,466.48 liabilities
Other current
Other current assets 4,425,579,572.68 120,603,680.27 4,546,183,252.95 assets
Other
Other non-current
1,254,064,181.76 1,140,535.90 non-current 1,255,204,717.66 assets
assets
Other current Other current
42,961,121.03 301,420,575.54 344,381,696.57 liabilities liabilities
Estimated
estimated liabilities 2,660,788,654.43 -73,446,879.39 2,587,341,775.04 liabilities
Other Other
comprehensive 4,424,024.90 40,604,722.79 comprehensive 45,028,747.69 income income
Undistributed Undistributed
22,350,952,230.17 -10,028,324.57 -44,877,259.88 22,296,046,645.72 profits profits
Minority equity Minority equity
The impact on the opening balance of the balance sheet of the Parent Company is as follows:
|||||
|-|-|-|-|
|Book value on31 December2017(Beforechanging)|Adjustmentinfluence offinancialinstrumentstandards|Adjustmentinfluence ofincomestandards|Items|
|5,818,587.80288,499,726.0715,895,048.43106,347,777.992,128,502,328.762,465,908,721.32-43,234,737.7723,581,254,928.08|-5,818,587.805,818,587.8013,278,745.63708,860.00-2,098,140.84-16,428,564.0015,117,117.89-13,200,910.90|-2,465,908,721.322,465,908,721.32|Not ApplicableInvestment inother equityinstrumentsBills receivableand accountsreceivableOtherreceivablesDeferredincome taxassetsUndistributedprofitsReceipts in advanceContractliabilitiesOthercomprehensiveincomeLong-termequityinvestments|

The Company and its subsidiaries prepared the 2018 financial statements in accordance with the financial statements format specified in Cai Kuai[2018] No. 15, and changed the presentation of relevant financial statements using the retrospective adjustment method.
The impact of the related presentation adjustment on the consolidated balance sheet at the beginning of the period is as follows:
||||||
|-|-|-|-|-|
||Book value on 31|||Book value on 1|
|||Presentation impact of|||
|Items|December 2017||Items|January 2018|
|||financial statement|||
||(Before changing)|||(After changing)|

Bills receivable 13,033,083,520.99 -13,033,083,520.99 Not
Applicable
Accounts Not
13,029,993,065.19 -13,029,993,065.19
receivable Applicable
Accounts
receivable and
Not Applicable 26,063,076,586.18 26,063,076,586.18 Bills
receivable
Not
Interest receivable 203,637,543.83 -203,637,543.83
Applicable
Dividend Not
4,524,472.84 -4,524,472.84
receivable Applicable
Other
Other receivables 1,003,880,139.62 208,162,016.67 1,212,042,156.29 receivables
Fixed assets 17,146,390,653.22 55,808,808.81 Fixed assets 17,202,199,462.03 Disposals of fixed Not
55,808,808.81 -55,808,808.81
assets Applicable
Not
Bills payable 16,378,699,659.77 -16,378,699,659.77
Applicable
Not
Accounts payables 26,237,366,204.29 -26,237,366,204.29
Applicable
Accounts
Not Applicable 42,616,065,864.06 payables and 42,616,065,864.06 Bills payable
Not
Interest payable 235,683,220.62 -235,683,220.62
Applicable
Not
Dividends payable 153,756,315.64 -153,756,315.64
Applicable
Other
Other payables 10,920,135,768.52 389,439,536.26 11,309,575,304.78 payables
The impact of the related presentation adjustment on the parent company's opening balance sheet is as follows:
||||||
|-|-|-|-|-|
||Book value on 31 December|||Book value on 1|
|||Presentation impact of|||
|Items|2017||Items|January 2018|
|||financial statement|||
||(Before changing)|||(After changing)|

 Bills Not
receivable Applicable
Accounts Not
301,778,471.70 -301,778,471.70
receivable Applicable
Accounts
Not receivable
301,778,471.70 301,778,471.70
Applicable and Bills
receivable
Interestrecei Not
220,157,282.75 -220,157,282.75
vable Applicable
Dividend Not
970,851,045.94 -970,851,045.94
receivable Applicable
Other Other
16,603,908.43 1,191,008,328.69 1,207,612,237.12 receivables receivables
Bills Not
payable Applicable
Accounts Not
310,387,267.67 -310,387,267.67
payables Applicable
accounts
Not
310,387,267.67 payablesandB 310,387,267.67 Applicable
ills payable
Interest Not
156,447,167.63 -156,447,167.63
payable Applicable
Dividends Not
payable Applicable
Other Other
21,112,143,360.73 156,447,167.63 21,268,590,528.36 payables payables
The effect of the related presentation adjustment on the concurrency of the consolidated income statement is as follows:
|||||||||
|-|-|-|-|-|-|-|-|
|||Amount of 2017(Before||Presentation impact of|||Amount of 2017|
|Items||||||Items||
|||changing)||financial statement|||(After changing)|
||11,953,733,922.64||-4,509,850,773.964,509,850,773.96||Administrative expensesR&Dexpenses|||

The effect of the related presentation adjustment on the number of simultaneous periods of the parent company's income statement is as follows:
|||||||||
|-|-|-|-|-|-|-|-|
|||Amount of 2017(Before||Presentation impact of|||Amount of 2017|
|Items||||||Items||
|||changing)||financial statement|||(After changing)|
||715,982,494.02||-247,120,344.03247,120,344.03||Administrative expensesR&Dexpenses|||

5 Explanation of theCompany’s analysis on reasons and effects of correction of significant
accounting errors
Applicable√Not Applicable
6 Compared with the previous annual financial report, the company should make a specific description for the changes in the consolidated scope of financial statements.
√Applicable□Not Applicable
①The consolidation of enterprises under non-common control
（1）The consolidation of enterprises under non-common control occurring in the current period
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||||Acquiree’s||
|||||||Interest||Acqui||Acqu||Recogniti on|||Acquiree’s net|
|||Time of||||||||||||revenue from||
|Acquiree||||||acquired||sition||isitio||basis of|||profit from|
|||acquisiti||Acquisition cost||||||||||acquisition||
|Name||||||(% )||metho||n||Acquisitio n|||acquisition date|
|||on||||||||||||date to the||
|||||||||d||date||dates|||to the year end|
|||||||||||||||year end||
||2018.06||163,144,867.00||60%||Cash||2018.06||shareholdingtransferred||672,279,564.05|||

（2）Acquisition cost and goodwill
|||
|-|-|
|Items|Guizhou Peiji Logistics Co., Ltd.|

------Cash 163,144,867.00 Total acquisition cost
163,144,867.00 Less: fair value of identifiable net assets
2,061,054.55 acquired
Goodwill 161,083,812.45（3）Acquiree’s identifiable assets and liabilities at acquisition date
|||||
|-|-|-|-|
|||Guizhou Peiji Logistics Co., Ltd.||
|Items||||
|||Fair value|Book Value|
||10,699,559.01448,446,035.96408,146.002,063,930.8554,915,966.4030,852,283.6823,063,186.173,537,575.24|||

||
|-|
|15,759.004,956,728.7515,253.012,444,809.32-165,000,000.00-314,992,087.95-18,398,695.99-4,067,745.97-14,970,000.00-1,431,500.02-55,992,118.40-5,669,852.75897,232.31-2,537,858.61|
|3,435,090.92|

②Business combination under common control
（1）Business combination under common control for the current period
|||||||||
|-|-|-|-|-|-|-|-|
|||||Basis for recognition|||Recognition|
|||||as business||Acquisit|basis of|
|Name of acquiree||% interest acquired||||||
|||||combination under||ion date|acquisition|
|||||common control|||dates|
||100%Originally held 24% of theshares and counted asAssociate, it acquired another25% of the shares on 9 July2018, and signed a concertedaction agreement with anothershareholder holding 11%, thusobtaining control.||Ultimately controlledby Haier Groupbefore and after thetransactionultimately controlledby Haier Groupbefore and after thetransaction||2018.72018.7|||

(Continued)
|||||||||
|-|-|-|-|-|-|-|-|
|||Income of the||||||
|||||Net profit of the||||
|||acquiree from the||||Income of the|Net profit of the|
|||||acquiree from the||||
|||beginning of the||||acquiree during|acquiree during|
|Name of acquiree||||beginning of the current||||
|||current consolidation||||the comparison|the comparison|
|||||consolidation period to||||
|||period to the||||period|period|
|||||the consolidation date||||
|||consolidation date||||||
||3,132,068,605.1721,266,455.08||-59,996,214.21203,794.51||5,524,659,014.1716,383,548.22|||

（2）Acquisition cost
|||||
|-|-|-|-|
|||HAIER NEWZEALAND||
||||Qingdao Jushanghui Network|
|Items||INVESTMENT HOLDING||
||||Technology Co., Ltd.|
|||COMPANY LIMITED||
||$303,040,997.28|||

（3）Acquiree’s assets and liabilities
|||||
|-|-|-|-|
|||HAIER NEWZEALAND INVESTMENT HOLDING COMPANYLIMITED||
|Items||||
|||Acquisition date|Opening Balance|
||611,464,970.55813,986,897.4528,465,298.527,005,819.421,235,895,814.00250,766,874.461,306,966,016.81110,802,662.561,148,112,030.96503,495,869.74362,395,277.3699,447,519.13|||

||
|-|
|-1,327,485,225.53-16,402,462.37-95,058,729.98-3,383,613,879.72-285,879,057.51-75,804,646.13-219,538,926.19-31,481,834.051,043,540,289.48|
|1,043,540,289.48|

 (Continued)
|||||
|-|-|-|-|
|||Qingdao Jushanghui Network Technology Co., Ltd.||
|Items||||
|||Acquisition date|Opening Balance|
||41,441,583.10615,908.705,637,244.00147,215.0222,792.03270,447.69-27,871.78-173,368.26-33,723.16-23,476,102.8724,424,124.47|||
||24,424,124.47|||

③Disposal of subsidiary
Whether there is a single disposal of the investment in the subsidiary (that is, the loss of control )
|||||
|-|-|-|-|
||Jiangsu Goodaymart||Changle|
||Sunflower Supply|Shengfeng Logistics|Shengfeng|
|Items||||
||Chain Management Co.,|GroupCo., Ltd|Logistics Co.,|
||Ltd.||Ltd.|

|||
|-|-|
|715,469.6951.00%Disposal2018/5/30Disposal241,648.70|692,344,595.0050.37%Disposal2018/11/30Disposal79,836,157.88|

(Continued)
|||||||
|-|-|-|-|-|-|
|||||Shandong||
|||Hunan Goodaymart|||Fujian Goodaymart|
|Items||||Goodaymart||
|||Electric Co., Ltd.|||Electric Co., Ltd.|
|||||Electric Co., Ltd.||
||8,935,689.67100.00%Liquidation2018/10/18Liquidation||17,078,925.1581.00%Disposal2018/12/31Disposal-281,373.03|||

(Continued)
|||||||
|-|-|-|-|-|-|
|||||Hefei Haice||
||||||Beijing Yihao|
|||Hefei Hailan Appliance||Appliance||
|Items|||||Technology Co.,|
|||Manufacturing Co., Ltd.||Manufacturing Co.,||
||||||Ltd.|
|||||Ltd.||
||Liquidation2018/5/30Liquidation||Liquidation2018/5/30Liquidation|||

(Continued)
|||||||
|-|-|-|-|-|-|
|||Qingdao Haishengda||Qingdao Haizhijie|Beijing Creation|
|Items||Refrigeration Electric||Refrigeration Co.,|Mirror Technology|
|||Co., Ltd.||Ltd.|Co., Ltd.|
||Liquidation2018/5/30Liquidation||Liquidation2018/5/30Liquidation|||

④ Changes of consolidation scope due to other reasons
（1）Qingdao Haier Intelligent Technology Development Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Haier (Shanghai) Home Appliance Research and Development Center Co., Ltd. for the period.
（2） A subsidiary of the Company established a wholly-owned subsidiary Haier (Shenzhen)R&D Co., Ltd.for the period with a total shareholding of100% at the end of the period.
（3）Qingdao Haier Air Conditioner Gen Corp., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Guangzhou Haier Air Conditioner Co., Ltd. for the period.
（4）Haier Industrial Holding Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Qingdao Haier Institute of Investment Management Co., Ltd. for the period.
（5）Haier Digital Technology (Qingdao) Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Tianjin Haiyun Chuang Digital Technology Co., Ltd. for the period.
（6）Haier Digital Technology (Qingdao) Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Haier Digital Technology (Nanjing) Co., Ltd. for the period.
（7）Haier Digital Technology (Qingdao) Co., Ltd., a subsidiary of the Company, established a
wholly-owned subsidiary Haier Digital Technology (Wuxi) Co., Ltd. for the period.
（8）Haier Digital Technology (Qingdao) Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Haier Digital Technology (Xi'an) Co., Ltd. for the period.
（9）MANIIQ(SINGAPORE)INTELLIGENTEQUIPMENTCO.LTD., a subsidiary of the Company, established a wholly-owned subsidiary Facteon Intelligent Technology (Qingdao) Co., Ltd. for the period.
（10）Qingdao Haier Technology Investment Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Qingdao Yunshang Yuyi Technology Co., Ltd. for the period with a shareholding of70% at the end of the period.
（11）Qingdao Haier Technology Investment Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Haiyu (Shanghai) Intelligent Technology Co., Ltd. for the period with a shareholding of70% at the end of the period.
（12）Qingdao Haier Intelligent Electronics Co., Ltd.., a subsidiary of the Company, established a wholly-owned subsidiary Tianjin Haier Zhikong Electronics Co., Ltd. for the period.
（13）Qingdao Haier Intelligent Electronics Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Hefei Haier Intelligent Electronics Co., Ltd. for the period.
（14）Qingdao Haier Technology Investment Co., Ltd., a subsidiary of the Company, established a wholly-owned subsidiary Qingdao Haizhi Investment Management Co., Ltd. for the period.