Report for the Third Quarter of 2014 of Midea Group Co., Ltd. Midea Group Co., Ltd.
Report for the Third Quarter of 2014 October 2014
Report for the Third Quarter of 2014 of Midea Group Co., Ltd. Section I. Important Reminders
1.1 The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior management staff of Midea Group Co., Ltd. (hereinafter referred to as―theCompany‖) warrant that this report is factual, accurate and complete without any false records, misleading statements or material omission. The Company shall be jointly and severally liable for this.
1.2 All directors have attended the Q3 report review board session
1.3 This report has not been audited by a Certified Public Auditor (CPA) firm.
1.4 Mr. Fang Hongbo, Chairman of the Board and President of the Company, and Ms. Yuan Liqun, (Chief Financial Officer) responsible person for theCompany’s financial affairs, have represented and warranted that the financial statements in this report are factual, accurate and complete.
This report has been prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail.
Report for the Third Quarter of 2014 of Midea Group Co., Ltd. Section II. Financial Highlights& Change of Shareholders
I. Major accounting data and financial indexes
Does the Company adjust retrospectively or restate accounting data of previous years due to changes in accounting policy or correction of any accounting error?
□ Yes√ No
||||||||
|-|-|-|-|-|-|-|
||30 Sept. 2014||31 Dec. 2013||Increase/decrease (%)||
|Total assets (RMB’000)|115,822,866.87||96,946,024.77||19.47%||
|Net assets attributable to shareholders|38,088,008.32||32,847,431.04||||
||||||15.95%||
|of the Company (RMB’000)|||||||
|||YoY|||||
|||||||YoY increase/decrease|
||Jul.-Sept. 2014|increase/decrease||Jan.-Sept. 2014|||
|||||||(%)|
|||(%)|||||
|Sales revenues (RMB’000)|31,753,306.09|14.19%||109,084,157.93||16.36%|
|Net profit attributable to shareholders of|2,342,823.51|||8,952,956.27|||
|||70.86%||||122.82%|
|the Company (RMB’000)|||||||
|Net profit attributable to shareholders of|||||||
||1,960,777.55|93.17%||8,628,423.12||174.52%|
|the Company after extraordinary gains|||||||
|and losses (RMB’000)|||||||
|Net cash flows from operating activities||||13,853,704.08|||
||--|--||||155.29%|
|(RMB’000)|||||||
|Basic EPS (RMB Yuan/share)|0.56|24.44%||2.12||42.28%|
|Diluted EPS (RMB Yuan/share)|0.56|24.44%||2.12||42.28%|
|Weighted average ROE (%)|6.35%|0.16%||25.35%||2.81%|

 Notes:
1. Midea Group granted 15 additional shares for every 10 shares using the capital reserve on 30 Apr. 2014. As required, the EPS for the corresponding period of last year is measured on the basis of the share capital after the increment, which was calculated according to 4.216 billion shares after the increment.
2. Midea Group merged with GD Midea Holding through share issuance and share exchange in Sept. 2013. Pursuant to the accounting standards for income statement preparation, net profit for the current period is shown on a post-merger basis whilst the comparable figure for last year, which is used to calculate the YoY increase/decrease, is on pre-merger basis. In order to help investors compare and analyze the overall business
performance of Midea Group on a comparable basis, the following pro-forma income statement shows the
relevant items adjusted as if the merger of Midea Group and GD Midea Holding had taken place on 1 Jan. 2013:
Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||Jan.-Sept. 2014|||Jul.-Sept. 2014|||
||||YoY|||YoY|
||Jan. –Sept. 2014|Jan. –Sept. 2013|increase/decreas|Jul. - Sept. 2014|Jul. - Sept. 2013|increase/decreas|
||||e (%)|||e (%)|
|Net profit attributable toshareholders of theCompany (RMB’000)|8,952,956.27|6,000,088.32|||||
||||49.21%|2,342,823.51|1,821,136.55|28.65%|
|Minority interestincome (RMB'000)|886,514.94|754,658.98|||||
||||17.47%|279,019.63|191,769.80|45.50%|
|EPS (RMB Yuan/share)|2.12|1.42|49.30%|0.56|0.43|30.23%|

 Items and amounts of extraordinary gains and losses
√Applicable□Inapplicable
Unit: RMB Ten Thousand Yuan
||||
|-|-|-|
|Item|Amount as of Jan.-Sept. 2014|Note|
|Gains/losses on the disposal of non-current assets (including the offset part of|||
|asset impairment provisions)|-129,824.96||
|Government grants recognized in the current period, except for those|||
|acquired in the ordinary course of business or granted at certain quotas or|||
|amounts according to the country’s unified standards|532,787.73||
|Gain/loss on entrusting others with investments or asset management|519,020.14||
|Gain/loss on debt restructuring|1,688.20||
|Gains and losses on change in fair value from tradable financial assets and|||
|tradable financial liabilities, as well as investment income from disposal of|||
|tradable financial assets and tradable financial liabilities and financial assets|-405,864.35||
|available for sale, except for effective hedging related to the normal|||
|businesses of the Company|||
|Reversal of impairment provisions for the accounts receivable on which|||
|impairment tests were carried out separately|5,548.24||
|Non-operating income and expenses other than the above|52,992.03||
|Other gain/loss items that meet the definition of an extraordinary gain/loss|-150,549.03||
|Less: Income tax effects|89,861.92||
|Minority interests effects (after tax)|11,402.93||
|Total|324,533.15||

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item
Report for the Third Quarter of 2014 of Midea Group Co., Ltd.□ Applicable√ Inapplicable
II. Total number of shareholders and shareholdings of the top ten shareholders at the period-end
1. Total number of common shareholders and shareholdings of the top ten common shareholders at the period-end
Unit: share
|||||||||
|-|-|-|-|-|-|-|-|
|Total number of common shareholders at the||||||||
||114,907|||||||
|period-end||||||||
|Shareholdings of the top ten common shareholders||||||||
|||||||Pledged or frozen||
||||Shareholdin||Number of|||
|||Nature of||Number of the||shares||
|Name of shareholder|||g percentage||restricted shares|||
|||shareholder||shares held||Status of|Number|
||||(%)||held|||
|||||||shares|of shares|
|Midea Holding Co., Ltd.||Domesticnon-state-ownedcorporation|35.49%|1,496,250,000|1,496,250,000|||
|Rongrui Equity Investment (Zhuhai)Partnership (limited partnership)||Domesticnon-state-ownedcorporation|7.22%|304,500,000|0|||
|Fang Hongbo||Domesticindividual|2.17%|91,326,995|90,995,247|||
|Tianjin CDH Jiatai Equity InvestmentPartnership (limited partnership)||Domesticnon-state-ownedcorporation|1.85%|78,000,000|0|||
|Huang Jian||Domesticindividual|1.80%|75,700,000|75,000,000|||
|Ningbo Meisheng Equity InvestmentPartnership (limited partnership)||Domesticnon-state-ownedcorporation|1.78%|75,000,000|75,000,000|||
|Yuan Liqun||Domestic|1.44%|60,500,000|60,375,000|||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||individual||||||
|CDH M-Tech (HK) Co., Ltd.|Overseascorporation|1.42%|60,000,000|0|||
|CDH Spark (HK) Co., Ltd.|Overseascorporation|1.36%|57,500,000|0|||
|Huang Xiaoming|Domesticindividual|1.24%|52,213,366|52,213,366|||
|Shareholdings of the top ten non-restricted common shareholders|||||||
|||Number of non-restricted|||Type of shares||
|Name of shareholder||common shares held at the|||||
||||||Type|Number|
|||period-end|||||
|Rongrui Equity Investment (Zhuhai) Partnership (limitedpartnership)||304,500,000|||RMB ordinary||
|||||||304,500,000|
||||||shares||
|Tianjin CDH Jiatai Equity Investment Partnership (limitedpartnership)||78,000,000|||RMB ordinary||
|||||||78,000,000|
||||||shares||
|CDH M-Tech (HK) Co., Ltd.||60,000,000|||RMB ordinary||
|||||||60,000,000|
||||||shares||
|CDH Spark (HK) Co., Ltd.||57,500,000|||RMB ordinary||
|||||||57,500,000|
||||||shares||
|National Social Security Fund 104 Portfolio||50,988,858|||RMB ordinary||
|||||||50,988,858|
||||||shares||
|Ningbo Kailian Industrial Development Co., Ltd.||48,451,743|||RMB ordinary||
|||||||48,451,743|
||||||shares||
|MERRILL LYNCH INTERNATIONAL||41,045,576|||RMB ordinary||
|||||||41,045,576|
||||||shares||
|National Social Security Fund 103 Portfolio||37,531,918|||RMB ordinary||
|||||||37,531,918|
||||||shares||
|China Construction Bank- Bosera Thematic Sectors securitiesinvestment funds||31,064,455|||RMB ordinary||
|||||||31,064,455|
||||||shares||
|China Construction Bank- Penghua Value Advantage Stock-based||30,481,463|||RMB ordinary|30,481,463|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||
|-|-|-|
|Securities Investment Fund||shares|
||Two natural person shareholders, Mr. Fang Hongbo and Ms. Yuan||
||Liqun, serve as director and senior executive. CDH Jiatai, CDH||
||M-Tech and CDH Spark hold 4.63% shares of Midea Group have an||
||associated relationship and are shareholders acting-in-concert. Ningbo||
||Kailian Industrial Development Co., Ltd. acts-in-concert with Midea||
|Explanation of the associated relationship or/and persons|||
|acting-in-concert among the above-mentioned shareholders|Holding Co., Ltd. The company has not confirmed if any associated||
||relationship exists among other shareholders of tradable shares and||
||whether other shareholders of tradable shares belong to persons||
||acting-in-concert specified in the "Management of Information||
||Disclosure for Shareholding Alteration in a Listed Company".||
|Top ten non-restricted common shareholders taking part in margin|||
||Inapplicable||
|financing and securities lending (if any)|||

Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company carry out any agreed buy-back in the reporting period?
□ Yes√ No
No shareholder of the Company carried out any agreed buy-back in the reporting period.
2. Total number of preferred share holders and shareholdings of the top ten preferred share holders at the period-end
□ Applicable√ Inapplicable
Report for the Third Quarter of 2014 of Midea Group Co., Ltd. Section III. Significant Events
I. Major changes in main accounting statement items and financial indicators within the reporting period, as well as reasons for the changes
√ Applicable□ Inapplicable
Unit:RMB’000
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||Increase/|||
||||30 Sept.||31 Dec.||||Main reason for the|
||Balance Sheet items||||||decrease|||
||||2014||2013||||change|
||||||||(%)|||
|Due from the Central Bank||1,337,565.99||923,632.22||44.82%||Operational changes of thefinance subsidiary||
|Due from banks and other financialinstitutions||372,984.83||1,746,284.24||-78.64%||Operational changes of thefinance subsidiary||
|Financial assets measured at fair value andof which the changes are recorded intocurrent gains and losses||226,091.63||759,565.22||-70.23%||Fair value changes of derivativefinancial instruments||
|Accounts receivable||10,471,852.19||7,928,438.25||32.08%||Sales increased||
|Dividends receivable||51,018.44||25,863.84||97.26%||Dividends from associates||
|Other current assets||22,802,244.49||463,107.71||4823.75%||Bank wealth managementproducts increased||
|Deferred income tax assets||3,533,606.95||2,567,204.45||37.64%||The deductible temporarydifference increased||
|Financial liabilities measured at fair valueand of which the changes are recorded intocurrent gains and losses||73,347.19||11,260.18||551.39%||Fair value changes of derivativefinancial instruments||
|Taxes payable||2,387,089.94||1,028,015.10||132.20%||Sales increased and income taxand VAT increased accordingly||
|Dividends payable||256,657.70||94,046.21||172.91%||Profit allocation in the currentperiod||
|Non-current liabilities due within 1 year||698,552.22||1,617,370.17||-56.81%||Non-current liabilities duewithin 1 year were repaid||
|Other current liabilities||21,804,593.33||12,608,380.03||72.94%||Sales increased and rebate andinstallation expenditureincreased accordingly||
|Long-term borrowings||22,913.44||711,464.64||-96.78%||Long-term borrowings becamedue within 1 year||
|Specific payables||856,341.10||52,073.96||1544.47%||An alteration and relocationamount was received in the||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||||||current period||
||||||||Increase/|||
||||Jan.-Sept.||Jan.-Sept.||||Main reason for the|
||Income statement items (Jan.-Sept.)||||||Decrease|||
||||2014||2013||||change|
||||||||(%)|||
|Interest income||503,212.87||173,853.18||189.45%||The business of the financesubsidiary expanded||
|Interest expenses||243,027.70||140,859.52||72.53%||The business of the financesubsidiary expanded||
|Financial expenses||-11,698.64||631,080.06||-101.85%||Interest expenses and exchangelosses decreased||
|Gains on fair value changes||-598,637.76||397,072.61||-250.76%||Fair value changes of thederivative financial instruments||
|Investment gains||839,388.23||635,272.83||32.13%||Wealth management gainsincreased||
|Income tax expenses||2,035,610.94||1,417,018.12||43.65%||Profits increased||
||||||||Increase/|||
||Cash flow statement item||Jan.-Sept.||Jan.-Sept.||||Main reason for the|
||||||||decrease|||
||(Jan.-Sept.)||2014||2013||||change|
||||||||(%)|||
|Net cash flows from operating activities||13,853,704.08||5,426,595.05||155.29%||Operating profits increased andcapital management wasenhanced||
|Net cash flows from investing activities||-24,179,641.66||-453,029.52||5237.32%||Wealth management investmentincreased||
|Net cash flows from financing activities||-1,314,530.93||-1,079,902.44||21.73%||Changes in borrowings||

 According to the<Notice of the Ministry of Finance on Making Arrangements for Financial Information Disclosure Concerning the Newly Promulgated or Amended AccountingStandards>, we restated the long-term equity investments formerly measured at the cost method as available-for-sale financial assets, and adjusted the year-beginning data accordingly.
II. Progress and influence of significant events, as well as the analysis and explanation on solutions
√ Applicable□ Inapplicable
On 7 Jun. 2014, we released the<Suggestive Announcement on Making a Partial Tender Offer to All Shareholders of Wuxi Little Swan Co.,Ltd.>. As mentioned in the announcement, we intended to, with TITONI (a
wholly-funded overseas subsidiary) as the acting-in-concert party, make a partial tender offer to Little Swan
shareholders for 126,497,553 shares, which accounted for20% of the total shares of Little Swan. The tender offer
Report for the Third Quarter of 2014 of Midea Group Co., Ltd. was approved by CSRC with no dissent on the
27th
of the same month. The tender offer would last for 30 natural days from 3 Jul. 2014 to 1 Aug. 2014. The final tender offer price was RMB 10.45/share for Little Swan A-shares and HKD 10.05 for Little Swan B-shares.
As of 1 Aug. 2014 when the tender offer expired, we had accepted 16,286,546 Little Swan A-shares and 63,353,228 Little Swan B-shares, with the combined number accounting for12.59% of the total shares of Little Swan. The ownership transfer formalities were completed, marking the completion of the tender offer. After the transfer, we directly and indirectly held 333,153,059 shares of Little Swan, representing a stake of52.67% in it. This would further promote business collaboration between us and Little Swan, and enhance the core competitiveness of our washing machine business.
||||
|-|-|-|
|||Index to the relevant|
|Overview of the significant event|Date of disclosure|announcement disclosed on the|
|||website|
|Suggestive Announcement on Making a Partial TenderOffer to All Shareholders of Wuxi Little Swan Co., Ltd.|||
||7 Jun. 2014|www.cninfo.com.cn|
|Suggestive Announcement on CSRC Approving andUnveiling the Tender Offer Report|||
||30 Jun. 2014|www.cninfo.com.cn|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd. III. Commitments made by the Company or any shareholder holding over5% of theCompany’s shares in the reporting period or such commitments carried down into the reporting period
√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
||Party/Parties|||||
||||Date of|||
|Undertaking|involved in the|Details of undertaking||Term|Particulars on the performance|
||||Undertaking|||
||undertaking|||||
|||1.Undertaking of Midea Holding Ltd. (hereinafter referred to as "Midea||Apart from the|1. There has been no violation of|
|||Holding"), and He Xiangjian, respectively the controlling shareholder and actual||first item of|commitments.|
|||controller of Midea Group Co., Ltd., in relation to a Lock-Up Share Agreement.||commitments||
|Undertaking||He Xiangjian and Midea Holding have given an undertaken as follows: Neither party||whose legal||
|made in the||will transfer or entrust others to manage their directly and indirectly held Midea||duration covers||
||Controlling|||||
|offering||Group shares issued prior to this issuance, nor sell them to Midea Group within 36||36 months from||
||shareholders|||||
|documents or||months of the listing date of Midea Group's stocks,. If they break the above|28 March. 2013|the date of Midea||
||Actual|||||
|shareholding||undertaking, they will assume all liabilities arising therefrom.||Group’s listing||
||controller|||||
|alteration||2. Undertaking of Midea Holding and the actual controller He Xiangjian towards||(18 Sept. 2013 to|2. There has been no violation of these|
|documents||the maintenance of the independence of Midea Group.||18 September,|commitments.|
|||He Xiangjian and Midea Holding have undertaken as follows: He Xiangjian, Midea||2016 inclusive),||
|||Holding and their controlled enterprises will remain independent from Midea Group||all other items are||
|||in respect of personnel, finance, assets, business and institutions, etc. in accordance||indefinite||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
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|-|-|
|with relevant laws and regulations and regulatory documents. They will faithfully||
|fulfill the above undertaking, and assume the corresponding legal liability. If they fail||
|to fulfill their obligations and responsibilities conferred by the undertaking, they will||
|bear the corresponding legal liabilities according to relevant laws, rules, regulations||
|and regulatory documents.|3. There has been no violation of these|
|3. Undertaking of Midea Holding and the actual controller He Xiangjian towards|commitments.|
|avoiding competition within the industry.||
|In order to avoid possible competition within the industry between Midea Group,||
|Midea Holding and its controlled enterprises as well as He Xiangjian, his immediate||
|family and his controlled companies, He Xiangjian and Midea Holding have||
|undertaken as follows:||
|(1). None of the entities or individuals mentioned above, is or will be engaged in||
|identical or similar business areas as the existing main business of Midea Group and||
|its controlled companies. They are not or will not be engaged or are not currently||
|participating in any such business areas that is competitive to the existing main||
|business area of Midea Group and its controlled companies, by controlling other||
|economic entities, institutions or economic organizations;||
|(2). If Midea Group and its controlled companies expand their business scope within||
|existing areas to those where the above mentioned related entities or individuals have||
|already commenced production and operation, as long as He Xiangjian is still the||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
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|-|-|
|actual controller of Midea Group, and Midea Holding the controlling shareholder,||
|they will agree on solving the problem of competition within the industry arising||
|therefrom, within a reasonable period;||
|(3). If Midea Group and its controlled companies expand their business scope within||
|existing areas to those where the above mentioned related parties have not yet||
|commenced production or operation, as long as He Xiangjian is still the actual||
|controller of Midea Group, and Midea Holding the controlling shareholder, they||
|would undertake as not to engage in any competitive business contrary to the any new||
|business area of Midea Group and its controlled companies;||
|(4). In accordance with effective laws, regulations or other regulatory documents of||
|People's Republic of China, as long as He Xiangjian is identified as the actual||
|controller of Midea Group, and Midea Holding the controlling shareholder, they will||
|not change or terminate this undertaking.||
|(5). He Xiangjian and Midea Holding shall faithfully fulfill the above undertaking,||
|and assume any corresponding legal responsibilities. If they fail to fulfill their||
|obligations and responsibilities conferred by the undertaking, they would bear the||
|corresponding legal responsibilities according to relevant laws, rules, regulations and||
|regulatory documents.||
|4. Undertaking of Midea Holding and the actual controller He Xiangjian towards|4. There has been no violation of these|
|the regulation of related-party transactions.|commitments.|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
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|-|
|In order to regulate matters of related-party transactions that may occur in the future|
|between Midea Group and Midea Holding and its controlled companies as well as He|
|Xiangjian, his immediate family and his controlled companies, He Xiangjian and|
|Midea Holding have undertaken as follows:|
|(1) They will regulate related-party transactions with Midea Group and its controlled|
|companies using their utmost efforts to minimize them. For unavoidable related-party|
|transactions with Midea Group and its controlled companies, including but not limited|
|to commodity trading, providing services to each other or as an agent, they will sign|
|legal normative agreements with Midea Group, and go through approval procedures in|
|accordance with related laws, regulations, rules, other regulatory documents, and|
|relevant provisions of the Articles of Association of Midea Group. They guarantee to|
|offer fair prices for related-party transactions, and fulfill all information disclosure|
|obligations in respect of the related-party transactions according to related laws,|
|regulations, rules, other regulatory documents, and relevant provisions of the Articles|
|of Association of Midea Group. They also guarantee not to illegally transfer funds or|
|profits from Midea Group, or damage the interests of its shareholders for their own|
|advantage during these related-party transactions.|
|(2) They shall fulfill the obligation of withdrawing from all voting that involves the|
|above mentioned related-party transactions at general meetings of Midea Group;|
|(3) The related parties mentioned above shall not require Midea Group to offer more|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
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|-|-|
|favorable conditions than those offered to any independent third party in any fair||
|market transactions.||
|(4) In accordance with effective laws, regulations or other regulatory documents of||
|People's Republic of China, as long as He Xiangjian is identified as the actual||
|controller of Midea Group, and Midea Holding the controlling shareholder, they shall||
|not change or terminate this undertaking.||
|(5) He Xiangjian and Midea Holding will faithfully fulfill the above undertaking and||
|assume the corresponding legal liabilities. If they fail to fulfill their obligations and||
|responsibilities conferred by the undertaking, they will bear the corresponding legal||
|responsibilities according to relevant laws, rules, regulations and regulatory||
|documents.||
|5. Related undertaking by He Xiangjian, the actual controller of Midea Group,||
||5. So far, this shareholding transfer has not|
|on Midea Trade Union Committee transferring its limited equity of Midea||
||brought about any loss caused by any|
|Group.||
||dispute or potential disputes. There has been|
|On 4 January 2001, Midea Trade Union Committee signed the "Equity Transfer||
||no violation of commitments.|
|Contract" with five people, namely He Xiangjian, Chen Dajiang, Feng Jingmei, Chen||
|Kangning and Liang Jieyin, where it would transfer all of its limited equity of Midea||
|Group (22.85%) respectively to those five people. According to the confirmation letter||
|issued by members of the Midea Trade Union Committee at that time, the equity||
|transfer price was determined after mutual discussion on the basis of their true||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
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|-|-|
|opinions, therefore there was no dispute or any potential future dispute.||
|On 28 June. 2013, Foshan Shunde Beijiao General Union, superior department of||
|Midea Trade Union Committee, issued a confirmation letter supporting the fact that||
|the Midea Trade Union Committee funded the establishment of Midea Group Co.,||
|Ltd. Furthermore, this letter also confirmed that the council of Midea Trade Union||
|Committee is entitled to dispose of all the property of the committee, and that this||
|property disposal does not need agreement from all staff committee members.||
|(1). Midea Holding and He Xiangjian, the controlling shareholder and actual||
|controller of Midea Group Co., Ltd., respectively have undertaken as follows: For any||
|loss incurred by Midea Group, caused by any dispute or potential dispute arising from||
|any matters of equity transfer mentioned above, they are willing to assume full||
|liability for such loss.||
|6. Commitments on Issues about Payment of Staff Social Insurance and Housing|6. So far, the payment of Staff Social|
|Provident Fund involved in Midea Group's Overall Listing|Insurance and Housing Provident Fund has|
|Midea Holding and He Xiangjian have both undertaken to be liable for|not brought about any controversy or|
|(1) paying such expenses and related expenses on time based on the requirements of|potential disputes. There has been no|
|relevant state departments. However Midea Group is liable for the payment of staff|violation of commitments.|
|social insurance and the housing provident fund and the payment required by relevant||
|state authorities before this merger, (2) paying corresponding compensation for all||
|direct and indirect losses of Midea Group and its subsidiaries due to this merger, (3)||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
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|-|-|
|indemnifying and including a holding-harmless clause absolving Midea Group and its||
|subsidiaries from any such expenses where Midea Group and its subsidiaries are||
|required to pay them in advance.||
|7. Commitments on issues about asset modifications, asset damages and property|7.1 The Process of Property Ownership|
|leasing of Midea Group and its subsidiaries|Certificate:|
|Midea Holding and He Xiangjian have undertaken as follows:|The "Report" discloses that our company owns|
|(1) Midea Holding will do its utmost to assist and urge Midea Group (including its|177 properties, which cover an area of|
|subsidiaries) to complete renaming procedures of related assets, such as land, house,|2,148,485.65 square meters (m2). Property|
|trademark, patent and stock rights declared in the related files of this merger. Midea|Ownership Certificates are being processed for|
|Holding will also be liable for all compensation for losses to Midea Group caused by|properties 65 (m2) in size. So far, 46|
|any issues regarding the renaming procedures of related assets set out above.|applications have been approved covering an|
|(2) Midea Holding shall do its utmost to assist Midea Group (including its|area of 1,531, 504.83 (m2), which accounts for|
|subsidiaries) in applying for ownership certificates of land and buildings declared in|71.28% of the total area; 17 applications are|
|any related files of this merger.|under process, which covers an area of|
|(3) Midea Holding shall assist Midea Group (including its subsidiaries) in re-applying|556,819.28 (m2) accounting for 25.92% of the|
|for corresponding construction procedures and uncompleted property ownership|total area. Those properties under process of|
|certificates due to historical reasons. If the competent authorities require Midea Group|ownership certificates have not brought about|
|to dismantle any properties that are not successful in their re-application for real estate|any controversy or dispute. The remaining 115|
|registration procedures, Midea Holding shall do its utmost to provide assistance and|properties, an area of which covers 60161.54|
|will also be liable for any related expenses used in the dismantling of such buildings|(m2), accounts for 2.8% of the total area. These|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
|||
|-|-|
|by Midea Group (including its subsidiaries).|properties are all small auxiliary facilities such|
|(4) If under any circumstances Midea Group suffers any loss through no longer using|as: security booths, transformer rooms, power|
|or in the present way using the land or property above caused by failing to obtain or|rooms, pump rooms, gas stations for which|
|collect in time the ownership certificates of the land or property above or loss caused|property ownership certificates cannot be|
|by other reasons, Midea Holding shall compensate any loss for these reasons in time|applied for. As yet these 115 properties have|
|and fully. Midea Holding shall compensate any actual loss Midea Group suffers from|not been required to be dismantled by|
|where the circumstances above result in punishments by competent authorities or|competent departments so these buildings are|
|claims by any third party.|still in regular use. No controversies or any|
|(5) Based on issues of defective property leasing declared in the related files of this|company losses caused by disputes have been|
|merger, Midea Holding shall provide sufficient compensation for all economic losses|incurred. There has been no violation of|
|to Midea Group (including its subsidiaries) where the leasehold relations above have|commitments.|
|either become invalid or where other disputes occur, (a 3rd party rights claim or an|7.2 The Use of Rental Houses of This|
|administrative department exercises a right or option) and therefore results in any|Company|
|economic loss caused by the necessary rental of other property through penalties|The "Report" discloses that as of 31 December|
|subjected to by competent government departments or through recourse of related|2012, our company had 113 leasing houses in|
|parties.|use, of which 100 were unable to get the|
|(6) Based on issues of defective land leasing declared in the related files of this|property certificate from the leasing party. So|
|merger where leasehold relations become invalid due to defective land leasing or|far, the contracts of 60 of the 113 rental houses|
|other disputes occur resulting in economic losses to Midea Group (including its|have not signed an extension to the leasehold.|
|subsidiaries) or through penalties subjected to by competent government departments.|Of the remaining 53 properties 6 have received|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
|||
|-|-|
|Additionally if the lessor cannot compensate any losses caused by defective leasing,|the property certificate while the other 47|
|Midea Holding shall compensate Midea Group any for losses caused by such|certificates have yet to be obtained. These 53|
|defective land leasing|rental properties have not rendered any|
|Midea Holding will compensate Midea Group where any losses are incurred due to a|economic loss or penalty caused by defective|
|violation of guarantees and commitments as noted above or such guarantees and|property rights to the company, which results in|
|commitments are inconsistent in reality.|the relocation to other rental properties.|
||7.3 Land Use Rights of Leasing Use|
||The "Report" discloses that as of 31 December,|
||2012, our company has had one rental property|
||issue (Total Area 57,506.95 m2).The lessor of|
||the rental land mentioned above has not|
||provided any ownership files pertaining to the|
||ownership of this land. So far this rental land|
||has not rendered any controversies to our|
||company or these disputes caused any losses.|
||There has been no violation of commitments.|
||7.4 The Procedures for Renaming Land|
||Ownership Under Process Caused by the|
||Alteration of the Company's Name|
||The "Report" discloses that there are still 10|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|||||renaming land ownership cases under process|
|||||caused by changing the company name of our|
|||||company and its subsidiaries. So far, five cases|
|||||have been approved and the other five cases are|
|||||still under process, which have not rendered|
|||||any loss to our company. There has been no|
|||||violation of commitments.|
|||||7.5 Processing the Renaming Procedures of|
|||||Some Trademarks|
|||||So far, of the 62 trademarks involved in the|
|||||"Report" 8 cases are currently in the process of|
|||||being cancelled by their owners and will no|
|||||longer be in use. The company will not apply|
|||||for the renaming procedures for those|
|||||trademarks. The renaming procedures of the|
|||||remaining 54 cases have been processed and|
|||||this commitment has been fulfilled. There has|
|||||been no violation of commitments.|
||1. Shareholders of Midea Group, Ningbo Meisheng, Fang Hongbo, Huang Jian, Cai|28 Mar. 2013|Apart from the|1. There has been no violation of|
|Other|||||
|shareholders|Qiwu, Yuan Liqun, Huang Xiaoming, Li Jianwei, Zheng Weikang, promise that since||first item of|commitments.|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||
|-|-|-|
|Midea Group has been listed on the Shenzhen Stock Exchange Center, the transferal|commitments|2-4. The execution of these commitments has|
|or delegation of others to manage these shares issued before this time to members that|whose legal|been completed and there have been no|
|have either direct or indirect ownership of Midea Group is prohibited for a period of|duration covers|violation of commitments.|
|36 months. Midea Group is also not allowed to buy back those shares.|36 months from||
|2. Zhuhai Rongrui and Jiazhao Holding are in a relation of persons acting-in-concert.|the date of Midea||
|They jointly hold 7.9% shares of Midea Group and have made commitments to|Group’s listing||
|lock-up these shares. CDH Jiatai, CDH M-Tech and CDH Spark are in a relation of|(18 Sept. 2013 to||
|persons acting-in-concert. They jointly hold 4.63% shares of Midea Group and have|18 September,||
|made commitments on these locked-up shares. Since Midea Group was listed on the|2016 inclusive),||
|Shenzhen Stock Exchange Center, the transfer of shares issued before this time to|all other items are||
|members with direct or indirect ownership of Midea Group is forbidden for a period|indefinite||
|of 12 months. In addition the delegation and management of said shares issued before|||
|this time to members with direct or indirect ownership of Midea Group is also|||
|forbidden for a period of 12 months. Midea Group is also not allowed to buy back|||
|those shares.|||
|3. A former Midea Group Supervisor, Liao Wenjian, holds 7,000 shares of Midea|||
|Electrical Appliances (6,033 after a stock-for-stock swop and transfers) and promises|||
|that since Midea Group was listed on the Shenzhen Stock Exchange Center, the|||
|transfer of shares issued before this time to members with direct or indirect ownership|||
|of Midea Group is forbidden for a period of 12 months. In addition the delegation and|||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||
|-|-|-|
|||management of said shares issued before this time to members with direct or indirect|
|||ownership of Midea Group is also forbidden for a period of 12 months. Midea Group|
|||is also not allowed to buy back those shares.|
|||4. The mother of Midea Group Secretary of the Board- Jiang Peng, Huang Lazhen,|
|||holds 7,100 shares of Midea Electric Appliances (6,117 after a stock-for-stock swop|
|||and transfer) and promises that since Midea Group was listed on the Shenzhen Stock|
|||Exchange Center, the transfer of shares issued before this time to members with direct|
|||or indirect ownership of Midea Group is forbidden for a period of 12 months. In|
|||addition the delegation and management of said shares issued before this time to|
|||members with direct or indirect ownership of Midea Group is also forbidden for a|
|||period of 12 months. Midea Group is also not allowed to buy back those shares.|
|Whether to|||
|fulfill the|||
||Yes||
|commitment in|||
|time|||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd. IV. Predicting the operating results of 2014
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-start until the end of the next reporting period according to predictions as well as any explanations for these reasons:√ Applicable□ Inapplicable
Performance prediction: Sharp year-on-year rise
Performance data type: Interval number
Statement of 2014 Business Performance Forecast (based on income statement)
||||||||||
|-|-|-|-|-|-|-|-|-|
||From the beginning of the||||||||
|||||Same period in|||||
||year to the end of the next||||Increase/decrease (%)||||
|||||the last year|||||
||reporting period||||||||
|Estimated amount of|||||||||
|aggregate net profit (RMB|100|--|110|53.17||88%|--|107%|
||||||YoY increase||||
|100 million)|||||||||
|Basic earnings per share|||||||||
||2.37|--|2.61|1.26||88%|--|107%|
|(RMB Yuan/share)|||||YoY increase||||
||In Sept. 2013, Midea Group merged with GD Midea Holding through a share exchange. The income||||||||
||statement has been compiled based on accounting standards. The net profit for the period resulted||||||||
||from the data generated following the merger, while the figure in the same period of the previous||||||||
|Explanations for business|year was calculated based on 41. 17% shares held by Midea Group in GD Midea Holding before the||||||||
|performance forecast|merger and the figure after the merger should be calculated based on 100%.||||||||
||On 30 Apr. 2014, Midea Group accomplished the capitalization of capital reserve, resulting in 10||||||||
||shares converted to 15 shares. According to related rules, the basic earnings per share as at the same||||||||
||period of last year shall be calculated by share capital after adjustment.||||||||

To facilitate contrastive analysis dependent on the same statistical standards for investors,based on the pro-forma profit statement (the merger of GD Midea Holding is deemed as to have been completed on 1 Jan. 2013), the Company's business performance is expected to improve in 2014 as follows:
Statement of 2014 Business Performance Forecast (based on pro-forma profit statement)
||||||||||
|-|-|-|-|-|-|-|-|-|
||From the beginning of the||||||||
|||||Same period in|||||
||year to the end of the next||||Increase/decrease||||
|||||the last year|||||
||reporting period||||||||
|Estimated amount of|||||||||
|aggregate net profit (RMB|100|--|110|73|YoY increase|37%|--|51%|
|100 million)|||||||||
|Basic earnings per share|2.37|--|2.61|1.73|YoY increase|37%|--|51%|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||
|-|
|(RMB Yuan/share)|

V. Securities investment
□ Applicable√ Inapplicable
The Company was not involved in any securities investment during the reporting period.
VI. Investments in derivatives
√ Applicable□ Inapplicable
Unit: RMB Ten Thousand Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Proportion of the||
|||Related-party|Type of|Initial|||Opening||Closing|closing investment|Actual gain/loss|
|||||||||Impairment||||
|Operator|Relation|transaction or|derivative|investment|Start date|End date|investment||investment|amount in the|in reporting|
|||||||||provision (if any)||||
|||not|investment|amount|||amount||amount|Company’s closing|period|
|||||||||||net assets||
||||Futures|||||||||
|Futures||||||||||||
||No|No|hedging|0.00|01/01/14|31/12/14|0.00|0.00|170.19|0.00|28.37|
|company||||||||||||
||||contracts|||||||||
||||Forward|||||||||
|Bank|No|No|exchange|80,370.80|01/01/14|31/12/14|80,370.80|0.00|-1,052.53|0.00|-64,904.65|
||||contract|||||||||
|Total||||80,370.80|||80,370.80|0.00|-882.34|0.00|-64,876.28|
|Capital source for derivative investment||||All self-owned funds||||||||
|Disclosure date of the board announcement||||||||||||
|||||29 Mar 2014||||||||
|approving the derivative investment (if any)||||||||||||
|Disclosure date of the general meeting||||||||||||
|announcement approving the derivative||||22 Apr 2014||||||||
|investment (if any)||||||||||||
|||||In order to reduce the price risk of the Company's bulk purchases of raw materials as a result of||||||||
|||||significant fluctuations in raw material prices, the Company not only carried out futures business for||||||||
|||||some of the materials, but also made use of bank financial instruments and promoted forex funds||||||||
|Analysis of risks and control measures of||||business, with the purpose of reducing the risks associated with exchange and interest rate||||||||
|derivative products held in the reporting||||fluctuations, realizing the preservation and appreciation of forex assets, reducing forex liabilities,||||||||
|period (including but not limited to market||||and achieving locked-in costs. The Company has undertaken extensive evaluation and risk control||||||||
|risk, liquidity risk, credit risk, operational||||with regard to derivative investment positions, details of which are as follows:||||||||
|risk, legal risk, etc.)||||1. Legal risk: The Company's futures business and forex funds businesses are conducted in||||||||
|||||compliance with laws and regulations, with clearly defined responsibilities and obligations between||||||||
|||||the Company and agencies.||||||||
|||||Control measures: The Company has designated relevant departments with the responsibility for||||||||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
|||
|-|-|
||enhancing expertise in laws, regulations and market rules, conducting strict examination and|
||verification of contracts, defining responsibility and obligations, and strengthening compliance|
||checks, so as to ensure that the Company's derivatives investment and position operations meet the|
||requirements of the laws and regulations and internal management system of the Company.|
||2. Operational risk: Risks caused by imperfect internal processes, staff, systems and external issues|
||may cause the Company to incur losses during the course of its futures business and forex funds|
||business.|
||Control measures: The Company has not only developed relevant management systems that clearly|
||define the assignment of responsibility and approval process for the futures business and forex|
||funds businesses, but has also established a well-developed monitoring mechanism, aimed at|
||effectively reducing operational risk by strengthening its risk control over the business,|
||decision-making and trading processes.|
||3. Market risk: Uncertainties caused by changes in the prices of bulk commodities and exchange|
||rate fluctuations in foreign exchange markets could lead to greater market risk in the futures|
||business and forex funds business. Meanwhile, the inability to raise sufficient funds in a timely|
||manner in order to establish and maintain hedging positions in futures operations, or forex funds|
||required for performance in forex funds operations that are unable to be credited into account|
||could also result in loss and default risks.|
||Control measures: The futures business and forex funds business of the Company are always|
||conducted by adhering to prudent operation principles. For futures business, futures transaction|
||volumes and applications have been strictly determined according to the requirements for|
||production and operations, and a stop-loss mechanism has been implemented. Furthermore, to|
||determine the prepared margin amount which may be required to be supplemented, a futures risk|
||measuring system has been established to measure and calculate the margin amount already in use,|
||floating gains and losses, margin amount available and margin amount required for intended|
||positions. As for forex funds business, a hierarchical management mechanism has been|
||implemented, whereby the operating unit which has submitted applications for funds business|
||should conduct a risk analysis on the conditions and environment that could affect the operating|
||profit and loss, evaluate the possible greatest revenue and loss, and report the greatest acceptable|
||margin ratio or total margin amount, so that the Company can update the operating status of the|
||funds business on a timely basis thus ensuring the arrangement of proper funds before expiry dates.|
|Changes in market prices or fair values of|1. Profit/loss from futures hedging contracts incurred during the Reporting Period was RMB|
|the invested derivatives during the reporting|283,700;|
|period. Analysis of the derivative’s fair value|2. Profit/loss from forward forex contracts incurred during the Reporting Period was RMB|
|should include the specific methods of use|-649,046,500;|
|and the relevant assumptions and|3. Public quotations in futures market or forward forex quotations announced by Bank of China are|
|parameters.|used in the analysis of the derivatives fair value.|
|Whether significant changes occurred to the||
|Company’s accounting policy and specific||
|accounting principles of derivatives in the|No change|
|reporting period compared to the previous||
|reporting period||
|Specific opinion from independent directors|The Company's independent directors are of the view that: the futures hedging business is an|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
|||
|-|-|
|on the Company’s derivatives investment|effective instrument for the Company to eliminate price volatility and implement risk prevention|
|and risk control|measures through enhanced internal controls, thereby improving the operation and management of|
||the Company; the Company's foreign exchange risk management capability can be further improved|
||through the forex funds business, so as to maintain and increase the value of foreign exchange|
||assets; the abovementioned investment in derivatives can help the Company to fully realize its|
||competitive advantages. Therefore, it is practical for the Company to carry out derivatives|
||investment business when the risks are controllable.|

VII. Research, visits and interviews conducted during the reporting period
√Applicable□Inapplicable
||||||||
|-|-|-|-|-|-|-|
|||||||Main discussion and|
|||Way of|Visitor||||
|Time|Place|||Visitor||materials provided by the|
|||reception|type||||
|||||||Company|
|||||Fidelity Investments, Allianz Dresdner Asset|||
|||||Management, Och-Ziff Capital Management Group ,|||
|8 Jul. 2014|Hong Kong|Road Show|Institution|Blackrock, Keywise Capital, AMP Capital Investors,|||
|||||Principal Global Investors, Value Partners, Eton Park|||
|||||Capital, AllianceBernstein|||
|||||Yiheng Capital, China International Alternative|||
|||||Yiheng Capital|China International Alternative||
|10 Jul. 2014|Hong Kong|Road Show|Institution|Association, AP Asset、Doric Capital, Samsung||The main contents of the|
|||||Investment, Value Partners||Company’s reception of|
|||||||investors included:|
||The||||||
|17 Jul. 2014||Field Research|Institution|Han Lun Investment|||
|||||||(1) Industry status and|
||Company||||||
|||||||development condition;|
||The|||Essence Securities, Wellington Management|||
|18 Jul. 2014||Field Research|Institution|||(2) The Company's|
||Company|||Company|||
|||||||business situation and|
||The|Telephone|||||
|21 Jul. 2014|||Institution|Kai Yu Capital||development strategy; (3)|
||Company|Communication|||||
|||||||Related content in regular|
|||||Greenwoods Asset Management, UBS Securities,||reports, and|
|||||Sinolink Securities, Changsheng fund, CICC, Guotai||announcements published|
|||||Junan Securities, Founder Securities, Haitong||by the other companies.|
|||||Securities, Bosera Fund, Upstone, Guosen Securities,||(4)Information provided|
|||||SCB, Eastern bay, ICBC Credit Suisse, Xinhua Asset,||by the Company: regular|
|||The Second|||||
|||||Dongguan Securities, Hongyuan Securities, CITICS,||reports, announcements|
||The|Term of|||||
|30 Jul. 2014|||Institution|Galaxy Securities, Shenyin &Wanguo, Penghua Fund,||and other public data of|
||Company|Investors Open|||||
|||||Changjiang Securities, China Orient Asset||the Company.|
|||Day|||||
|||||Management, Essence Fund, Hua An Fund, Harvest|||
|||||Fund, UBS SDIC, Great Wall Fund, Anbang Asset,|||
|||||ChinaAMC, China Universal Asset Management,|||
|||||CICC Asset Management, E fund, ,Guodu Securities,|||
|||||Paktek Asia, BNP Paribas SA|||
|19 Aug. 2014|Shenzhen|Mid-Term|Institution|CICC, Changjiang Securities, Citic securities,|||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|||Performance||Sinolink Securities, Guotai Junan Securities,|||
|||Presentation||Minsheng Securities, Essence Securities, Shenyin &|||
|||||Wanguo, UBS Securities, Guosen Securities, Founder|||
|||||Securities, Industrial Securities, Bohai Securities,|||
|||||China Merchants Securities, Essence Securities,|||
|||||Dongxing Securities, Telecom Funds, Bosera Funds、|||
|||||Dachang Fund, E fund, ChinaAMC, ABC-CA Fund,|||
|||||Fortune SG Fund, Penghua Fund, China Merchants|||
|||||Fund, Baoying Fund, Everbright Pramerica, Soochow|||
|||||Fund, QHKY Fund, Morgan Stanley Huaxin Fund,|||
|||||Yinhua Fund, Baishan Investment, Huashang Fund,|||
|||||Galaxy Fund, China Life Insurance, CPIC, Yongjin|||
|||||Group, Eastern Bay, Century Securities, Paktek Asia,|||
|||||GF Securities proprietary trading, Bosston Capital,|||
|||||Gaoguan Invesatment, Value Partners, Orient|||
|||||Securities Asset Management, Keywise Investment,|||
|||||Neo-Criterion, Gemboom Investment, Chinalion|||
|||||Securities, Guangzhou Long-term Investment, Qianhe|||
|||||Capital, Huatai Securities, Ping An Asset, Hillview|||
|||||Capital, Hua An Insurance, Ganyuan Capital,|||
|||||Shenzhen Co-power Venture, Pine River|||
|||||CICC, Asia Value Capital, Bespinver Fund、Comgest|||
|||||Investment、East Capital, IBN, J.P. Morgan, NCC|||
|||||Fund, Pramerica Fund, Pichon investment, Bisheng|||
|||||Investment, OFI Asset, HanHua Capital, HSBC asset,|||
|||||Value Partners, BOCOM International Trust, Goal|||
|||||Headspring Capital, Morgan Stanley Huaxin Fund,|||
||The|Telephone|||||
|20 Aug. 2014|||Institution|Samsung Assets, Xingguang Life Insurance, Nomura|||
||Company|Communication|||||
|||||Investment, Pioneer Investments 、 Jupiter Asset|||
|||||Management, Sloane Robinson, Investec Asset|||
|||||Management, Carrhae Capital, Alandsbanken Asset|||
|||||Management, Nordea Investment Management,|||
|||||Hermes Fund, Pictet Asset Management, Robeco|||
|||||Fund|||
|||||Fortune Investment, Mirae Asset, Houde Investment,|||
||The||||||
|21 Aug. 2014||Field Research|Institution|Liuhe Capital, Shenzhen Economic Construction|||
||Company||||||
|||||Investment|||
||The||||||
|22 Aug. 2014||Field Research|Institution|E Fund, Bosera Funds|||
||Company||||||
|||||Fuh Hwa Securities Investment Trust, Xinshou, Hua|||
|26 Aug. 2014|Taiwan|Road Show|Institution|Nan Securities, China RE Insurance,||Shin Kong|
|||||Investment Trust ,|Huamei, Fubon Life Insurance,||
|||||Prudential Investment Trust, FSITC, SinoPac SITC、|||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Cathay Pacific Investment Trust, Value Partners|||||
|||||Concord Investment Trust, Fubon Securities|||||
|||||Investment Trust, Nan Shan Life Insurance,|||||
|||||Mercuries Life Insurance, Cathay United Bank|||||
||The||||||||
|28 Aug. 2014||Field Research|Institution|Youshan Fund|||||
||Company||||||||
|||||First-trust Fund, CathayUnited, Khazanah Nasional|||||
|||Strategy|||||||
|2 Sep. 2014|Suzhou||Institution|Berhad, Orient Assent Management, Sunshine|||||
|||Meeting|||||||
|||||Insurance, CITIC Assent Management|||||
||The|Telephone|||||||
|3 Sep. 2014|||Institution|Capital World Investors|||||
||Company|Communication|||||||
|||||Value Partners, Nomura International, Tiger Pacific|||||
|||||Capital, Happy Dragon Fund, UBS SDIC, Mitsubishi|||||
|||||J-WORKS Investment Services (Hong Kong), The|||||
|||Strategy||Government Of Singapore Investment Consulting,|||||
|3 Sep. 2014|Shanghai||Institution||||||
|||Meeting||Pine River, Schroders, Sumitomo Mitsui Trust, Daiwa|||||
|||||Asset Management, Fullerton investment, South|||||
|||||Korea Investment, Boc Hong Kong Asset|||||
|||||Management, DNB|||||
|||||Boyu Capital, Libang Investment, Credit Suisse,|||||
|||||Taconic Capital,||INDUS|Capital,|Manulife Asset|
|||||Management, PrinceT Asset Management, Ashmore,|||||
|||||Robert Lloyd George investment, Yongrong Asset,|||||
|||||Aberdeen Asset,|Julius Baer, Oriental capital, Pine||||
|||||River, China Everbright, Daiwa Investment Trust|||||
|||||Investment, Credit Suisse, Myriad Asset, Nordea,|||||
|||||Pangu Capital, Allianz Global Investors, QHKY|||||
|||Strategy|||||||
|3 Sep. 2014|Hong Kong||Institution|Fund, JiaFu Asset, China Capital, Wellington Global|||||
|||Meeting|||||||
|||||Investment, Desheng Investment, Value Partners, Pei|||||
|||||Da Investment, OOCL, Eurizon Capital, ChinaRock|||||
|||||Capital, Tianping, Asset Management, IMPAX,|||||
|||||Trilogy, Winnington Capital, COMGEST, Bosston|||||
|||||Capital, Morgan Stanley (Asia), Xiang Ying Capital,|||||
|||||CICC, ChinaAMC, Viking, Xiangjian, Wellington|||||
|||||Global, Heqi Capital, JK Capital, Och-Ziff Capital|||||
|||||Management, Hill House Capital, OWL CREEK|||||
||The||||||||
|4 Sep. 2014||Field Research|Institution|GF Securities|||||
||Company||||||||
|||||Australia JCP Investment, National Australia Bank|||||
||The||||||||
|9 Sep. 2014||Field Research|Institution|Management, MLC, Ibbotson Associates, William|||||
||Company||||||||
|||||Blair|||||
|10 Sep. 2014|The|Field Research|Institution|Credit Suisse|||||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
||Company||||
|||||Aberdeen Asset, Changli Capital, Everest Capital,|
|||||Putman, PINE BRIDGE,UBS, Polunin Capital、Moon|
|||||Capital, Farallon Capital, Smith Tan asset|
|10 Sep. 2014|Singapore|Road Show|Institution||
|||||management, Tahan Capital, New Ideas Investment,|
|||||Broad Peak、GMO、Aberdeen、Lazard、Fidelity|
|||||Investments|
||The|||Merrill Lynch International, International Investment|
|11 Sep. 2014||Field Research|Institution||
||Company|||Trust, Wang San international|
||The|Telephone|||
|12 Sep. 2014|||Institution|Merrill Lynch International,|
||Company|Communication|||
||The||||
|16 Sep. 2014||Field Research|Institution|The National Social Security Fund, Kaiyu Investment|
||Company||||
|||||AMP Capital Investors, BOSVALEN,|
|||||LIGHTHOUSE, Goldhorse Capital, UBS Global,|
|||Strategy||Tree Line, Macquarie Fund, BESTINVER, DNB|
|16 Sep. 2014|Shenzhen||Institution||
|||Meeting||ASSET, Morgan Stanley, Evenstar Advisors, Jianan|
|||||Investment, Libang Investment, Balyasny Asset,|
|||||Leiya Investment, YiHeng Capital|
|||Strategy|||
|24 Sep. 2014|Shanghai||Institution|Mingyu Asset, Huashang Fund|
|||Meeting|||
||The|Telephone|||
|29 Sep. 2014|||Institution|Kai Yu Capital|
||Company|Communication|||
||The|Telephone|||
|30 Sep. 2014|||Institution|Fidelity Investments|
||Company|Communication|||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd. Section IV. Financial Statements
I. Financial statements
Balance Sheet
Prepared by: Midea Group Co., Ltd. Unit:RMB’000
||||||
|-|-|-|-|-|
|Assets|30 Sep. 2014||31 Dec. 2013||
||Consolidated|The Company|Consolidated|The Company|
|Current Assets:|||||
|Monetary funds|8,470,307.05|10,995,040.04|15,573,683.04|14,309,967.73|
|Deposits at central bank|1,337,565.99||923,632.22||
|Deposits at other banks|372,984.83||1,746,284.24||
|Financial assets measured at fairvalue and for which changes arerecorded into current gains andlosses|226,091.63||759,565.22||
|Notes receivable|18,343,120.20|2,463,819.18|14,150,532.20|2,176,916.60|
|Accounts receivable|10,471,852.19||7,928,438.25||
|Accounts paid in advance|1,871,967.71|814.94|2,432,420.54|349,358.36|
|Loans and advances|7,433,770.01||5,100,085.71||
|Interest receivable|||||
|Dividends receivable|51,018.44|561,542.04|25,863.84|286,507.04|
|Other accounts receivable|818,157.88|861,551.08|1,025,395.19|3,519,029.46|
|Inventories|10,970,974.88||15,197,723.84||
|Assets held for sale|||||
|Non-current assets due within 1year|||||
|Other current assets|22,802,244.49|20,486,257.36|463,107.71||
|Total current assets|83,170,055.30|35,369,024.64|65,326,732.00|20,641,779.19|
|Non-current assets:|||||
|Available-for-sale financial|844,627.29|895,725.80|844,439.05|895,725.80|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|assets|||||
|Held-to-maturity investments|||||
|Long-term accounts receivable|||||
|Long-term equity investment|930,071.74|16,518,983.98|912,427.64|16,065,073.90|
|Investment property|196,844.56|469,489.16|205,834.70|891,732.65|
|Fixed assets|19,590,976.08|1,436,171.08|19,572,161.32|788,783.72|
|Construction in progress|528,028.24|41,336.74|612,601.28|46,985.28|
|Engineering materials|||||
|Disposal of fixed assets|||||
|Intangible assets|3,469,529.85|263,490.21|3,325,738.40|177,196.73|
|R&D expense|||||
|Goodwill|2,931,003.59||2,931,003.59||
|Long-term deferred expenses|628,123.27|69,538.39|647,882.34|109,960.04|
|Deferred income tax assets|3,533,606.95|10,045.90|2,567,204.45|7,222.31|
|Other non-current assets|||||
|Total of non-current assets|32,652,811.57|19,704,781.26|31,619,292.77|18,982,680.43|
|Total assets|115,822,866.87|55,073,805.90|96,946,024.77|39,624,459.62|

 Legal representative: Person-in-charge of the accounting work: Chief of the accounting division: Balance Sheet (Continued)
Prepared by: Midea Group Co., Ltd. Unit:RMB’000
||||||
|-|-|-|-|-|
|Liabilities and Shareholders’EquityCurrent liabilities:Short-term borrowingsBorrowings from the CentralBankCustomer bank deposits anddue to banks and other financialinstitutionsIntra-group borrowingsFinancial liabilities measured at|30 Sep. 2014||31 Dec. 2013||
||Consolidated|The Company|Consolidated|The Company|
||10,914,688.74||8,872,173.98|140,000.00|
||29,998.40||89,708.03||
||165.31||61.00||
||73,347.19|35,657.94|11,260.18||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|fair value and for whichchanges are recorded intocurrent gains and losses|||||
|Notes payable|6,868,061.43||6,308,478.45||
|Accounts payable|18,330,442.21|2,331.59|17,508,099.66|7,831.48|
|Accounts received in advance|5,816,324.11||4,983,346.26||
|Employees’ compensationpayable|1,601,517.13|3,911.39|1,968,837.73|21,717.74|
|Tax payable|2,387,089.94|59,543.99|1,028,015.10|16,856.22|
|Interest payable|51,788.07|127,940.18|69,823.87|144,847.77|
|Dividends payable|256,657.70||94,046.21||
|Other accounts payable|1,527,675.60|39,212,604.92|1,487,781.02|23,082,573.69|
|Liabilities held for sale|||||
|Non-current liabilities duewithin 1 year|698,552.22||1,617,370.17|999,942.58|
|Other current liabilities|21,804,593.33|875.94|12,608,380.03|875.94|
|Total current liabilities|70,360,901.38|39,442,865.95|56,647,381.69|24,414,645.42|
|Non-current liabilities:|||||
|Long-term borrowings|22,913.44||711,464.64||
|Bonds payable|160,929.09||152,716.59||
|Long-term payables|||||
|Specific payables|856,341.10||52,073.96||
|Estimated liabilities|26,990.29||33,466.19||
|Deferred income tax liabilities|66,306.92||123,797.62||
|Other non-current liabilities|153,664.58||144,561.80||
|Total non-current liabilities|1,287,145.42||1,218,080.80||
|Total liabilities|71,648,046.80|39,442,865.95|57,865,462.49|24,414,645.42|
|Owners’ equity|||||
|Share capital|4,215,808.47|4,215,808.47|1,686,323.39|1,686,323.39|
|Capital reserves|13,005,367.80|5,355,482.75|15,566,756.01|7,880,598.46|
|Less: Treasury stock|||||
|Other comprehensive income|-151,445.70||54,034.77||
|Surplus reserves|569,544.32|569,544.32|569,544.32|569,544.32|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Retained profits|20,885,298.71|5,490,104.41|15,304,989.21|5,073,348.03|
|Foreign exchange differences|-436,565.28||-334,216.66||
|Total equity attributable toowners of the Company|38,088,008.32|15,630,939.95|32,847,431.04|15,209,814.20|
|Minority interests|6,086,811.75||6,233,131.24||
|Total owners’ (orshareholders’) equity|44,174,820.07|15,630,939.95|39,080,562.28|15,209,814.20|
|Total liabilities and owners’(or shareholders’) equity|115,822,866.87|55,073,805.90|96,946,024.77|39,624,459.62|

Legal representative: Person-in-charge of the accounting work: Chief of the accounting division:
Income Statement
Prepared by: Midea Group Co., Ltd. Unit:RMB’000
|||||||
|-|-|-|-|-|-|
|Item|Jul.-Sept. 2014|||Jul.-Sept. 2013||
||Consolidated|The Company|Consolidated||The Company|
|I. Total operating revenues|31,880,719.37|168,600.18|27,873,177.72||16,318.47|
|Including: Sales income|31,753,306.09|168,600.18|27,807,250.53||16,318.47|
|Interest income|126,354.65||65,927.19|||
|Handling charges and commission income|1,058.63|||||
|II. Total operating costs|29,419,094.89|331,256.12|25,923,773.64||72,529.59|
|Including: Cost of sales|24,138,196.09|12,106.43|21,101,081.92|||
|Interest expenses|51,474.27||60,995.29|||
|Handling charges and commission expenses|477.12||222.43|||
|Business taxes and surcharges|174,283.28|5,829.08|142,852.88||168.12|
|Selling and distribution expenses|3,138,092.30||2,930,548.95|||
|Administrative expenses|1,734,117.98|84,042.66|1,606,731.18||25,078.13|
|Financial expenses|276,855.06|230,522.71|49,491.46||44,613.39|
|Asset impairment losses|-94,401.21|-1,244.76|31,849.53||2,669.95|
|Add: Gain from change in fair value|189,715.92|-27,328.82|65,752.73|||
|Income from investment|412,941.14|372,323.97|197,797.21||-87,461.03|
|Including: share of profits in associates and joint ventures|14,212.71|1,170.91|-18,339.96||-4,356.52|
|III. Business profit|3,064,281.54|182,339.21|2,212,954.02||-143,672.15|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Add: non-operating income|153,047.67|5,103.51|286,482.88|530.70|
|Including: gain from non-current asset disposal|12,000.30||14,547.96||
|Less: non-operating expenses|90,590.60|836.98|49,565.12|0.77|
|Including: loss from non-current asset disposal|75,335.81||27,559.52|0.42|
|IV. Total profit|3,126,738.61|186,605.74|2,449,871.78|-143,142.22|
|Less: Income tax expense|504,895.47|50,670.52|436,965.43||
|V. Net profit|2,621,843.14|135,935.22|2,012,906.35|-143,142.22|
|Including: Net profit achieved by combined parties beforethe combinations|||||
|Attributable to owners of the Company|2,342,823.51|135,935.22|1,371,199.78|-143,142.22|
|Minority shareholders’ income|279,019.63||641,706.57||
|VI. The after-tax net income of other comprehensiveincome|52,659.54||-1,436.07||
|(I) Other comprehensive income items that cannot bereclassified as gains and losses|||||
|1. Changes in net liabilities or assets from re-measuringbenefit plans|||||
|2. The share of other comprehensive income under theequity method, in the invested entity, that cannot beclassified into profits and losses|||||
|(II) Other comprehensive incomes will be reclassified intothe profits and losses|52,659.54||-1,436.07||
|1. The share of other comprehensive income, under theequity method, in the invested entity , that will bereclassified into profits and losses|||||
|2. Changes in fair value of available-for-sale financialassets|41.98||-236.67||
|3. Held-to-maturity investments reclassified as gains andlosses on available-for-sale financial assets|||||
|4. Effective part of the gains and losses of cash flowsthrough hedging|193,800.36||21,033.18||
|5. Foreign exchange differences|-141,182.80||-22,232.58||
|VII. Total comprehensive income|2,674,502.68|135,935.22|2,011,470.28|-143,142.22|
|Attributable to owners of the Company|2,459,237.75|135,935.22|1,386,892.79|-143,142.22|
|Attributable to minority shareholders|215,264.93||624,577.49||
|VIII. Earnings per share|||||
|(I) Basic earnings per share|0.56||0.45||
|(II) Diluted earnings per share|0.56||0.45||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd. Legal representative: Person-in-charge of the accounting work: Chief of the accounting division:
Income Statement
Prepared by: Midea Group Co., Ltd. Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|Jan.-Sept. 2014||Jan.-Sept. 2013||
||Consolidated|The Company|Consolidated|The Company|
|I. Total operating revenues|109,588,937.73|534,175.93|93,920,582.83|45,817.45|
|Including: Sales income|109,084,157.93|534,175.93|93,746,729.65|45,817.45|
|Interest income|503,212.87||173,853.18||
|Handling charges and commission income|1,566.93||||
|II. Total operating costs|98,437,374.16|529,872.11|87,224,993.77|236,421.59|
|Including: Cost of sales|81,481,479.40|20,174.08|71,919,645.67||
|Interest expenses|243,027.70||140,859.52||
|Handling charges and commission expenses|1,204.73||904.70||
|Business taxes and surcharges|621,111.05|10,663.23|487,724.62|7,359.29|
|Selling and distribution expenses|10,761,772.36||9,064,801.58||
|Administrative expenses|5,083,442.38|257,056.21|4,764,709.77|81,599.66|
|Financial expenses|-11,698.64|247,659.87|631,080.06|143,520.48|
|Asset impairment loss|257,035.18|-5,681.28|215,267.85|3,942.16|
|Add: Gain from change in fair value|-598,637.76|-35,657.94|397,072.61||
|Income from investment|839,388.23|3,871,395.51|635,272.83|938,064.63|
|Including: share of profits in associates and joint ventures|49,190.10|1,215.68|7,327.65|559.43|
|III. Business profit|11,392,314.04|3,840,041.39|7,727,934.50|747,460.49|
|Add: non-operating income|706,470.73|13,581.02|641,158.35|35,000.21|
|Including: gain from non-current asset disposal|52,031.73|42.01|38,148.66||
|Less: non-operating expenses|223,702.62|9,707.07|197,327.43|3,500.65|
|Including: loss from non-current asset disposal|175,127.20|8,769.43|112,845.33|3.37|
|IV. Total profit|11,875,082.15|3,843,915.34|8,171,765.42|778,960.05|
|Less: Income tax expense|2,035,610.94|54,512.17|1,417,018.12||
|V. Net profit|9,839,471.21|3,789,403.17|6,754,747.30|778,960.05|
|Including: Net profit achieved by combined partiesbefore the combinations|||||
|Attributable to owners of the Company|8,952,956.27|3,789,403.17|4,018,034.39|778,960.05|

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Minority shareholders’ income|886,514.94||2,736,712.91||
|VI. The after-tax net income of other comprehensiveincome|-338,546.68||-169,887.65||
|(I) Other comprehensive income items that cannot bereclassified as gains and losses|||||
|1. Changes in net liabilities or assets from re-measuringbenefit plans|||||
|2. The share of other comprehensive income under theequity method, in the invested entity, that cannot beclassified into profits and losses|||||
|(II) Other comprehensive income that will be reclassifiedinto profits and losses|-338,546.68||-169,887.65||
|1. The share of other comprehensive income, under theequity method, in the invested entity , that will bereclassified into profits and losses|||||
|2. Changes in fair value of available-for-sale financialassets|-10.00||-274.66||
|3. Held-to-maturity investments reclassified as gains andlosses on available-for-sale financial assets|||||
|4. Effective part of the gains and losses of cash flowsthrough hedging|-205,863.79||-22,717.72||
|5. Foreign exchange differences|-132,672.89||-146,895.27||
|VII. Total comprehensive income|9,500,924.53|3,789,403.17|6,584,859.65|778,960.05|
|Attributable to owners of the Company|8,645,107.20|3,789,403.17|3,984,738.14|778,960.05|
|Attributable to minority shareholders|855,817.33||2,600,121.51||
|VIII. Earnings per share|||||
|(I) Basic earnings per share|2.12||1.49||
|(II) Diluted earnings per share|2.12||1.49||

Legal representative: Person-in-charge of the accounting work: Chief of the accounting division:
Cash Flow Statement
Prepared by: Midea Group Co., Ltd. Unit:RMB’000
||||||
|-|-|-|-|-|
|Item|Jan.-Sept. 2014||Jan.-Sept. 2013||
||Consolidated|The Company|Consolidated|The Company|
|I. Cash flows from operating activities:|||||
|Cash received from sale of commodities and|78,057,006.28||63,042,320.83||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|rendering of service|||||
|Net increase of deposits from customers and duesfrom banks|104.31||||
|Net increase of loans from central bank|-59,709.63||299,999.68||
|Cash received from interest, handling charges andcommissions|504,779.80||173,853.18||
|Tax refunds received|2,909,213.40||2,976,349.07||
|Other cash received relating to operating activities|1,754,268.97|19,292,418.87|2,268,416.28|6,255,985.98|
|Subtotal of cash inflows from operating activities|83,165,663.13|19,292,418.87|68,760,939.04|6,255,985.98|
|Cash paid for goods and services|38,895,396.31||35,561,619.90||
|Net increase of customer lendings and advances|2,362,954.65||3,579,159.30||
|Net increase of funds deposited at central bank andamounts due from banks|417,840.83||308,896.35||
|Cash for paying interest, handling charges andcommissions|245,672.29||141,188.81||
|Cash paid to and for employees|7,876,851.14|29,958.39|6,692,571.59|48,239.38|
|Various taxes paid|6,913,017.12|6,722.99|5,183,832.04|9,894.04|
|Other cash payment relating to operating activities|12,600,226.71|1,632,429.98|11,867,076.00|730,255.64|
|Subtotal of cash outflows from operating activities|69,311,959.05|1,669,111.36|63,334,343.99|788,389.06|
|Net cash flows from operating activities|13,853,704.08|17,623,307.51|5,426,595.05|5,467,596.92|
|II. Cash flows from investing activities:|||||
|Cash received from retraction of investments|5,440,020.00|24,901.98|1,000.00||
|Cash received from return on investments|682,830.12|3,492,060.54|713,005.52|1,025,474.57|
|Net cash received from disposal of fixed assets,intangible assets and other long-term assets|1,299,396.24|36,984.39|545,749.16||
|Net cash received from disposal of subsidiaries orother business units|||106,514.71|20,000.00|
|Other cash received relating to investing activities|||||
|Subtotal of cash inflows from investing activities|7,422,246.36|3,553,946.91|1,366,269.39|1,045,474.57|
|Cash paid to acquire fixed assets, intangible assetsand other long-term assets|1,610,167.83|179,619.71|1,798,517.26|75,716.16|
|Cash paid for investments|29,296,675.30|22,372,749.70|20,781.65|95,781.65|
|Net cash paid to acquire subsidiaries and otherbusiness units|695,044.89||||

Report for the Third Quarter of 2014 of Midea Group Co., Ltd.
||||||
|-|-|-|-|-|
|Other cash payments relating to investing activities|||||
|Subtotal of cash outflows from investing activities|31,601,888.02|22,552,369.41|1,819,298.91|171,497.81|
|Net cash flows from investing activities|-24,179,641.66|-18,998,422.50|-453,029.52|873,976.76|
|III. Cash flows from financing activities:|||||
|Cash received from capital contributions|||11,596.04||
|Including: Cash received from minorityshareholder investments by subsidiaries|||11,596.04||
|Cash received from borrowings|36,914,176.05|2,700,000.00|28,224,100.12|4,600,000.00|
|Cash received from issuance of medium term notes|||||
|Cash received from issuance of short-termfinancing bonds|||||
|Other cash received relating to financing activities|||||
|Subtotal of cash inflows from financing activities|36,914,176.05|2,700,000.00|28,235,696.16|4,600,000.00|
|Cash repayment of borrowings|33,441,969.54|2,840,000.00|23,409,485.87|3,450,000.00|
|Cash for repaying medium term notes|1,000,000.00|1,000,000.00|2,000,000.00|2,000,000.00|
|Cash for repaying short-term financing bonds|||1,000,000.00|1,000,000.00|
|Cash paid for interest expenses and distribution ofdividends or profit|3,786,737.44|3,950,745.81|1,904,912.73|406,409.27|
|Including: dividends or profit paid by subsidiariesto minority shareholders|342,464.38||1,585,032.21||
|Other cash payments relating to financingactivities|||1,001,200.00|1,001,200.00|
|Sub-total of cash outflows from financing activities|38,228,706.98|7,790,745.81|29,315,598.60|7,857,609.27|
|Net cash flows from financing activities|-1,314,530.93|-5,090,745.81|-1,079,902.44|-3,257,609.27|
|IV. Effect of foreign exchange rate changes on cashand cash equivalents|-8,090.92||-14,881.40||
|V. Net increase in cash and cash equivalents|-11,648,559.43|-6,465,860.80|3,878,781.69|3,083,964.41|
|Add: Opening balance of cash and cash equivalents|16,763,873.80|13,809,135.41|12,544,078.77|1,483,866.89|
|VI. Closing balance of cash and cash equivalents|5,115,314.37|7,343,274.61|16,422,860.46|4,567,831.30|

 Legal representative: Person-in-charge of the accounting work: Chief of the accounting division:
II. Audit report
Is this report audited?
□ Yes√ No
Report for the Third Quarter of 2014 of Midea Group Co., Ltd. TheCompany’s report is not audited.
Midea Group Co., Ltd.
Legal Representative: Fang Hongbo 24 October 2014