2020 Interim Report

Haier Smart Home Co., Ltd.

Company Code: 600690

Short Name: Haier Smart Home

Haier Smart Home Co., Ltd.
2020 Interim Report

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2020 Interim Report

Haier Smart Home Co., Ltd.

Important NoticeI.

The Board of Directors, the Board of Supervisors, directors, supervisors and senior
management of Haier Smart Home Co., Ltd. (the “Company”) are individually andcollectively responsible for the content set out therein and hereby assure that the content
set out in the interim report is true, accurate and complete, and free from any false
record, misleading representation or material omission.

II. All directors attend the Board of Directors.
III. The interim report is unaudited.
IV. Liang Haishan (legal representative of the Company), Gong Wei (chief financial officer of

the Company) and Ying Ke (the person in charge of accounting department) hereby
certify that the financial report set out in the interim report is true, accurate andcomplete.

V.

Proposal of profit distribution or proposal of converting capital reserves into sharecapital for the reporting period examined and reviewed by the Board

No
VI. Disclaimer in respect of forward-looking statements√Applicable Not Applicable
Forward-looking statements such as future plans, development strategies as set out in this report do
not constitute our substantial commitment to investors. Investors are advised to pay attention toinvestment risks.
VII. Is there any fund occupation by controlling shareholders and their related parties for

non-operational purposes
No
VIII.

Is there any provision of external guarantee in violation of prescribeddecision-making procedures?
No
IX. Important risk warnings

For the possible risks which the Company may encounter, please refer to the relevant information
set out in the section of “DISCUSSION AND ANALYSIS ON OPERATIONS” in this report.
X.

Others Applicable √Not Applicable

Chairman of the Board: Liang Haishan
Haier Smart Home Co., Ltd.
28 August 2020
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Contents
SECTION I DEFINITIONS.......................................................................................................................4
SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL
INDICATORS..............................................................................................................................................6
SECTION III SUMMARY OF THE COMPANY'S BUSINESS.........................................................10
SECTION IV DISCUSSION AND ANALYSIS ON OPERATIONS.................................................. 17
SECTION V SIGNIFICANT EVENTS.................................................................................................. 40
SECTION VI

CHANGESIN ORDINARY SHARES AND

INFORMATIONABOUTSHAREHOLDERS....................................................................................................................................59
SECTION VII RELEVANT INFORMATION OF PREFERRED SHARES.................................... 63
SECTION VIII DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT.................................. 64
SECTION IX RELEVANT INFORMATION OF CORPORATE BONDS.......................................65
SECTION X RESPONSIBILITY STATEMENT..................................................................................66
SECTION XI FINANCIAL REPORT.................................................................................................... 67
SECTION XII DOCUMENTS AVAILABLE FOR INSPECTION..................................................251

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SECTION I DEFINITIONS
Unless otherwise stated in context, the following terms should have the following meanings in thisreport:Definition of frequently used terms
CSRC
SSE
The Company, Haier Smart Home
Four Major Securities Newspapers
Haier Electrics, 1169

GEA
FPA

Candy

CMM

Euromonitor

All View CloudIEC

China Securities Regulatory Commission
Shanghai Stock Exchange
Haier Smart Home Co., Ltd, its original name is “Qingdao HaierCo., Ltd.”, and the original short name is “Qingdao Haier”
China Securities Journal, Shanghai Securities News, Securities
Times, Securities Daily
Haier Electronics Group Co., Ltd. (a company listed in Hong
Kong, stock code: 01169.HK), a subsidiary as accounted for in the
consolidated statement of the Company as to a total of 45.68% of
its equity as of 30 June 2020.
GE Appliances, namely household appliances assets and businessof General Electric Group, has currently been acquired by theCompany.
Fisher & Paykel Appliances Holdings Limited (Chinese Name: 斐
雪 派 克 ) was established in 1934 and is known as the national
appliance brand of New Zealand, the global top-level kitchen
appliance brand and the famous luxury brand of the world. It has
products including ventilator, gas stove, oven, dishwasher,
microwave oven, freezer, washing machine, clothes dryer and etc.
Its business covers over 50 countries/regions across the world.
FPA is wholly-owned subsidiary of the Company.
Candy Group (Candy S.p.A) is an international professional
appliances manufacturer from Italy. Since its establishment in1945, it has been committed to enabling the global users to enjoy ahigher quality of life through innovative technologies and quality
services. Candy Group has been prestigious in the global market
with users all over the world via its ten self-owned professional
household appliance brands. In January 2019, Candy officiallybecame a wholly-owned subsidiary of the Company.
China Market Monitor Co., Ltd., as an authoritative market
research institute in Chinese home appliances area, was establishedin 1994 and has been focusing on research of retail sales in China
consumption market ever since.
Euromonitor, established in 1972, is the leading strategic market
information supplier and owns over 40-years of experience inrespect of publishing market report, commercial reference data andon-line database. They create data and analysis on thousands ofproducts and services around the world.
All View Cloud (AVC) is a big data integrated solution provider
perpendicular to the smart home field, providing enterprises with
big data information services, regular data information services
and special data services.
The International Electrotechnical Commission. Founded in 1906,
it is the world's first organization for the preparation andpublication of international electrotechnical standardization and is
responsible for international standardization for electricalengineering and electronic engineering. The goals of thecommission include: to effectively meet the needs of the global
market; to ensure that the standards and conformity assessment
programs are applied globally in a prioritized manner and to thegreatest extent; to assess and improve the quality of products andservices involved in its standards; to create conditions for the
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2020 Interim ReportIEEE

Model of RenDanHeYi

Haier Smart Home Co., Ltd.

common use of complicated systems; to improve the effectivenessof the industrialization process; to improve human health andsafety, and to protect the environment.
The Institute of Electrical and Electronics Engineers, aninternational association of electronic technology and information
science engineers, is currently the largest non-profit professional
technology society in the world. It is committed to thedevelopment and research of electrical, electronic, computerengineering and science-related fields, and has now developed into
an international academic organization with great influence interms of the fields of space, computer, telecommunications,biomedicine, power and consumer electronics.
“Ren” is an employee who has the spirit of two creations(entrepreneurship, innovation); “Dan” is the value of users. Each
employee creates value for the user in a different self-employedbusiness, thereby realizing his own value, and the corporate value
and shareholder value are naturally reflected.

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SECTION II GENERAL INFORMATION OF THE COMPANY AND
KEY FINANCIAL INDICATORS
I.

Information of the Company

Chinese name
Chinese short nameEnglish nameEnglish short name
Legal representativeII.

Contact person and contact Information
Secretary to the Board
Representative ofsecurities affairs

Name

Address

Tel
Fax
Email

海尔智家股份有限公司
海尔智家
Haier Smart Home Co., Ltd.
Haier Smart Home
Liang Haishan

Ming Guozhen

Liu TaoIR

OthersSophie (孙瑶)GlobalCustomer
Service
HotlineDepartment of Securities Department of Securities
Haier Deutschlandof Haier Smart Homeof Haier Smart Home
GmbH,
Co., Ltd. HaierCo., Ltd. Haier
Hewlett-Packard-Str.
Information Industrial Information Industrial
4,61352 Bad Homburg,
Park, No. 1 Haier Road, Park, No. 1 Haier Road,
Germany
Qingdao City
Qingdao City+49 160 9469 3601
0532-88931670
0532-88931670(Germany)
0532-88931689
0532-88931689/
finance@haier.com
finance@haier.com
Y.sun@haier.de/

4006 999 999//

III. Summary of the changes in general information
Registered address
Haier Industrial Park, Laoshan District, Qingdao City
Postal code of the registered
266101address
Business address
Haier Information Industrial Park, Laoshan District, Qingdao City
Postal code of the business266101address
Websitehttp://www.haier.net/cn/
Email9999@haier.com
Query index for any changes
Not applicableduring the reporting period
IV. Movement of place for information disclosure and deposit
Designatednewspaperfor Shanghai Securities News, Securities Times, China Securities
information disclosure
Journal, Securities Daily
Website for publishing interim reportwww.sse.com.cn
as designated by the CSRC
Website for publishing annual reportwww.xetra.com, www.dgap.deby other websites
Department of Securities of Haier Smart Home Co., Ltd.
Deposit place of interim report
Haier Information Industrial Park, No. 1 Haier Road, Qingdao
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City
Query index for any changes during
Not applicable
the reporting period
V.

Summarized information of shares of the Company
Stock Exchange ofType of Shares
Stock Short Name
Shares Listed
Shanghai Stock
A shareHaier Smart Home
ExchangeFrankfurt Stock
D shareHaier Smart Home
Exchange

Stock Code

Stock Short Name
Before Variation

600690

Qingdao Haier

690D

Qingdao Haier

VI. Other related information
 Applicable √Not ApplicableVII. Key accounting data and financial indicators of the Company(I) Key accounting data

Key accounting
data

OperatingrevenueNet
profitattributable toshareholders ofthelistedCompany
Net profit after
deductionofnon-recurring
profit or loss
attributable toshareholders ofthelistedCompany
Net cash flows
from operating
activities

For the reporting
period(January-June)

Unit and Currency: RMB
Increase/decr
ease for thereporting
The corresponding period of last year
periodcomparedwith thecorrespondin
After adjustment
Before adjustment
g period oflast year (%)

95,728,097,106.65

100,023,464,237.90

98,979,793,121.16-4.29

2,780,800,712.72

5,058,082,964.47

5,150,869,558.02-45.022,569,440,497.59

4,593,356,231.54

4,703,180,815.00-44.06-542,919,257.40

3,619,808,314.60

3,633,833,497.74-115.00

As at the end of last year
As at the end of thereporting period
After adjustment
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Before adjustment

Increase/decr
ease as at theend of thereportingperiodcomparedwith the endof last year(%)

2020 Interim ReportNet
assetsattributable toshareholders ofthelistedCompany
Total assets

48,330,401,679.39

198,042,777,870.24

Haier Smart Home Co., Ltd.

47,888,319,765.92

47,888,319,765.92

0.92

187,454,236,283.17

187,454,236,283.17

5.65(II) Key financial indicators
For the reporting
period(January-June)

Key financial
indicators
Basic earnings per
share (RMB / share)
Diluted earnings per
share (RMB / share)
Basic earnings per
share after deducting
non-recurring profit orloss (RMB / share)
Weighted average
return on net assets (%)
Weighted average
return on net assets
after deducting
non-recurring profit orloss (%)

The corresponding periodof last year

Increase/decrease for thereporting period comparedwith the corresponding
period of last year (%)

Afteradjustment

Beforeadjustment

0.423

0.794

0.809

-46.73

0.413

0.764

0.778

-45.94

0.391

0.739

0.739

-47.09

5.68

11.99

12.29

5.25

11.22

11.22

Decreased by 6.31 percent
pointsDecreased by 5.97 percent
pointsExplanation of the key accounting data and financial indicators of the Company
 Applicable √Not Applicable
VIII. Differences in accounting data under domestic and overseas accounting standards
 Applicable √Not Applicable
IX. Non-recurring profit or loss items and amount√Applicable Not ApplicableNon-recurring profit or loss items

Unit and Currency: RMB
AmountProfit or loss from disposal of non-current assets-11,377,076.09

Government subsidies through the profit and loss, except for government
subsidies that are closely related to the Company's normal business operations,comply with national policies and regulations, and continue to be enjoyed in a
fixed amount or fixed quantity according to certain standards

390,801,680.26

Profit and loss of changes in fair value arising from holding of financial assets
held for trading, derivative financial assets, financial liabilities held for trading
and derivative financial liabilities except for valid hedging business relevant
to normal business of the company, as well as investment gain realized from
disposal of financial assets held for trading, derivative financial assets, financial
liabilities held for trading, derivative financial liabilities and other debt
investments
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Other non-operating income and expenses except the aforementioned items
Disposal gains of long-term equity investment-199,825.65-130,081,198.31

Effect of minority equity interests
Effect of income tax

10,350,602.15-32,107,937.74
211,360,215.13

Total

X.
Others Applicable √Not Applicable

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SECTION III SUMMARY OF THE COMPANY'S BUSINESSI.

Introduction of major business, operating model of the Company and industry background
during the reporting period

The Company mainly engages in research, development, production and sales of home appliances
covering refrigerators/freezers, washing machines, air-conditioners, water heaters, kitchen applianceproducts, small home appliances and other smart home business, as well as offering smart home scenario
solutions. Through rich portfolios of product, brand and solution, the Company aims to create afull-scene smart life experience and satisfy the needs of users to customize a better life.
Since its establishment, the Company has been upholding the operation philosophy of “taking
users as right and seeing ourselves as wrong” and adhering to the corporation value of “from zero to one
with people first (人是目的、有生于无)”, while keeping the spirit of entrepreneurship and innovation, tofirmly keep up with developments of each era. In overseas markets, the Company has always adhered tothe strategy of proprietary brand management and through its persistent efforts as well as merger andacquisition integration, it has successively acquired Sanyo in Japan of its white goods business, thehome appliances sector of GE, Fisher & Paykel company in New Zealand, Candy company in Italy, andholds 48.41% equity interest of MABE in Mexico, to construct local market competitiveness byintensifying the three in one “R&D, manufacturing and marketing”. Through continuous optimization of
resource integration and platform sharing as well as global strategic synergies, the Company achieves
global operation of seven world-class brands, including Haier, Casarte, Leader, GE Appliances, Fisher &Paykel, AQUA and Candy. In the first half of 2020, revenue from overseas operation represented 49%of the total revenue while near 100% of it was generated from self-managed brands. Oversea businesscovers five continents, namely Asia, Europe, America, Australia and Africa, providing comprehensive
home appliance products and home scenario solutions for hundreds of millions of users worldwide.
In the era of IoT, the Company actively promotes the transformation, upgrade and implementationof the “1+N” smart home scenario solution across the world, and devotes itself to providing users with afull-process solution of “designing a home, building a home and servicing a home”. (1) Based on
advanced and efficient R&D system and manufacturing capacity, the Company leads the development of
the industry and the upgrade of consumption with its original technologies and high-end smart offerings
solutions. For instance, Casarte brand has a share of 40.2% in the market of high-end refrigerators priced
above RMB10,000, a share of 75.5% in the market of high-end washing machines and its share in themarket of high-end air-conditioners priced above RMB15,000 is as high as 42.3%. (2) In terms ofmarket construction, internally, digital transformation is made to improve operational efficiency, andexternally, smart home scenarios are applied to improve user experience. Based on the Smart Home
Experience Cloud Platform, we will build differentiated competitiveness through six platforms ofnamely “products, marketing, users, customer, logistics and services”, establish an ability system toreach users efficiently, and accelerate business model transformation. In the market of county andtownship, the Company fully pursues the integration of four networks of “marketing, logistics,
after-sales and information” and the business mode of unified distribution by a single central warehouseto enhance market terminal competitiveness.
According to retail sales statistics on the global large home appliances published by Euromonitor,
the world’s leading independent provider of strategic market research, in 2019, sales of Haier’s large
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home appliances ranked No. 1 in the world for the 11th 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 and interconnected air-conditioner in 2019represented a global market share of 43.4% and 29.4% respectively and ranked No. 1 in the world.
Industry Summary for the First Half of 2020
(I)

Macro environment

In the first half of the year, the COVID-19 epidemic hit the domestic and global economy. The
domestic market and consumer demand were greatly impacted by the epidemic in the first quarter, andthe domestic epidemic was effectively controlled in the second quarter. According to the National
Bureau of Statistics, the GDP of China decreased by 1.6% year-on-year in the first half of the year, of
which the GDP of the second quarter turned positive, achieving a year-on-year growth of 3.2%. In
addition, the total amount of social retail goods increased month by month, domestic demand gradually
recovered, and the enterprises' expectation of production and operation activities also gradually became
higher. All indicators show that China’s economy is gradually returning to normal. However, thegradually worsening and frequently repeated overseas epidemic since the end of the first quarter, and themore complicated international political situation increases the uncertainties of international trade andglobal industrial chain operation.
(II)

Domestic home appliances market

In the first half of the year, the insufficient effective consumer demand and lack of consumer
confidence caused by severe restriction on economic and social activities during the epidemic period andthe decrease in both average actual income level and expected income level of residents, as well as theimpact of the epidemic on completion, decoration and delivery of real estate led to the slacking market
demand for white goods. Under greater shipping pressure, market price competition is becoming
increasingly fierce, in particular, the average prices of all categories of online home appliances show adownward trend. According to the report of China Market Monitor, in the first half of 2020, the retailrevenue of main categories of white goods market (refrigerators and freezers, washing machines, airconditioners, water heaters, range hoods and gas stoves) was RMB436.5 billion, decreasing by 23.1%
compared to the same period of last year; the sales volume was 79.64 million units, decreasing by 9.0%
compared to the same period of last year. Among them, retail sales of refrigerators, freezers, washingmachines, household air conditioners, water heaters, range hoods and gas stoves decreased by 11.1%,
13.5%, 16.0%, 26.0%, 16.7% and 17.4% respectively compared to the same period of last year.
With the impact of consumption upgrading trend and the epidemic this year, people’s demand on
high-end and healthy home appliance is still booming, a trend of high quality, health and high-end was
obvious. High-end product experience was improved by the application of smart, IoT, voice control andother technologies, and competition expanded from a single hardware to full range products combining
hardware and software, interconnected platform and integrated ecosystem. The demand for complete setof scenarios has increased significantly. For example, during the online shopping festival of Suning on
18 June, the proportion of packaged purchase users of Haier refrigerators, washing machines, and water
heaters increased as high as 30%; the packaged purchase trend is conducive to higher customer unit
prices, smart home scenarios creation and drainage between strong and weak categories to meet theneeds of coordination and unification of home appliances and home decoration styles. Therefore,
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enterprises must accelerate the transformation from selling single item to providing
comprehensive smart homes solutions.
In terms of competition structure: (1) concentration in the industry: the market landscapecommence further consolidation during the epidemic period, the share of leading players continued torise in refrigerator, washing machine, air conditioner and water heater, according to the data of All View
Cloud, the total market share of the TOP5 of them goes over 75% both online and offline; (2) industry
average price performance: according to the data of CMM, the trend of online and offline average pricesof refrigerator and washing machine industry were similar, with the online average price going down
and the offline average price going up; while air conditioner, water heater and kitchen appliance all
experienced downturn in both online/offline average price.

In terms of channel:  Part of rigid demand shifted to online and the online sales growth speeds up
and the proportion is significantly improved because of the restriction of going out caused by the
epidemic and offline store closures. According to All View Cloud, the online retail sales amount andvolume of refrigerator increases 12.2% and 14.1%, respectively, and the retail sales amount and volume
of washing machine increases 4.3% and 9.9%, respectively;  The sales of physical stores is impacted
by the epidemic, but the e-commercial live streaming develops rapidly, and the live stream selling
becomes one of the important sales channel in home appliance industry.
(III) Overseas home appliances market
During the reporting period, the performance of overseas home appliances demand was impacted
by epidemic and varied due to different level of economic development, appliances penetration andinfrastructure. Specifically:(1) American Market: The US appliances industry declined by 5.4% in the first half of 2020.
(2) European market: Affected by the epidemic, the European home appliance industry has
declined significantly. All household appliances, except for refrigerators, declined year-on-year.
Among them, refrigeration has fallen by 12%, washing machines by 12%, kitchen appliancesby 15%, dishwashers by 12%, and microwave ovens by 10%.
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(3) South Asian market: ① Affected by the epidemic and city lockdown, sales in India havebasically stagnated. The market began to be gradually unblocked in late May, but core cities
and stores were still unable to resume normal operations. In June, the industry as a whole only
recovered to about 70% of the same period. ②Affected by the epidemic, personal mobility in
Pakistan has declined, with rising cost living, and the market capacity of various products has
been greatly reduced.
(4) Southeast Asian market: ①In Thailand, under the influence of the epidemic, terminal price cut
for promotions, retail prices dropped sharply, while the share of low-end products increased;② Commercial activities were restricted, and retail sales and retail volumes declined in themarkets of other regions affected by government control. Retail in terminals in May and June
began to recover gradually.
(5) Japanese market: In the Japanese market, affected by the epidemic, the overall sales ofrefrigerators, air conditioners, and washing machines white electrical appliance industry fell by
1.8% year-on-year, but sales increased 1.8% year-on-year. Residents were restricted fromgoing out, and the proportion of online sales has increased.
(6) Australia and New Zealand market: ①

In Australia, affected by the epidemic and the

lockdown measures to cope with the epidemic, the offline retail industry was impacted and theretail industry declined; ② The market demand for home appliances in New Zealand dropped
sharply, becoming the bottom three products demanded for ordinary households. At the sametime, consumers’ demand for cost-effective products has increased and they were moresensitive to prices.
(IV) Industry outlook for the second half of the year
(1) Domestic market: Since the second quarter, there have been obvious signs of improvement indomestic terminal demand. From the perspective of monthly sales, demand that has not been released
due to the impact of the epidemic is constantly released, and the market is gradually recovered.
Specifically, factors such as real estate completion support and the release of early-stage demandcompensation have driven sales to stabilize and pick up. The market growth rate in the second half of theyear will be significantly better than that in the first half of the year. And with the further improvementof industry concentration, industry price competition is expected to gradually slow down.
(2) Overseas market: On the whole, the delayed purchase demand caused by the epidemic is
expected to be gradually released. If the epidemic in the local market is controlled, market capacity
growth will gradually resume. The proportion of online channels will further increase.
II. Explanation on significant change on major assets of the Company during the reporting
period□Applicable √Not Applicable
III. Analysis on core competitiveness during the reporting period√Applicable □Not Applicable
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Since incorporation in 1984, the Company has always adhered to the principle of grasping thedevelopment trend of the industry and driving the sustainable and healthy development with innovation
system focusing on the satisfaction of users’ demand for a better life, and it has successfully turned itself
from a collectively owned small factory which was on the verge of bankruptcy into one of the largest
home appliances manufacturers in the world. The Company is committed to realizing sustainable
development across different cycles through continued innovations in strategy, management model,
brand building, R&D, smart manufacturing, and expansion in domestic and foreign markets.
(I) World-renowned brand reputation and global leading position in smart home solutions
Based on the all-round deployment of brand, research and development, intellectual manufacturing,
channel, service, ecosystem and smart home platform, Haier has built one of the world’s leading white
goods, kitchen and bathroom production portfolio, offering refrigerators and freezers, washing machines,
air conditioners, water heaters, water purifiers and kitchen appliances, and it provides consumers with
“Full set, Customized, Iterative” “1+N” smart full set solutions to realize active services. “Full set” is a
one-stop solution to solve users’ demands of whole-house appliances through a full set service that
integrates smart home product solutions and home appliances. “Customized” enables users to freely
customize smart home scenario based on the advantages of Haier's entire industry. “Iterative” refers to
upgrade and iterate smart home technology, performance and experience by user’s habits and scene
requirements, and constantly adapt to user’s need by collecting and analyzing product use data withsmart home cloud brain.
According to data released by Euromonitor on 9 January 2020, Haier has been ranked global No. 1
large home appliances brands for 11 consecutive years. In category of refrigerators, washing machines,
wine cellars, and freezers, the Company continues to be No. 1 in the world. Facing the continuous
iteration of user needs, the Company has achieved full coverage of user groups around the world,
leveraging on the global synergy, promoted the healthy development and technological progress of theindustry through the global strategic synergy among seven brands, namely Haier, Casarte, Leader, GE
Appliances, Fisher & Paykel, AQUA and Candy.
Leveraging on outstanding brand, R&D and innovation, the Company could achieved continuous
satisfaction and leading in appliance trend consumption, promoted continuous development, thus
directly facilitate its leadership in high-end market. In the first half year of 2020, Casarte’s market shareof home refrigerator and washing machine’s price above RMB10,000 and air conditioner’s price above
RMB15,000 reached 40.2%, 75.5% and 42.3%, respectively; the market share of Fisher & Paykel, theworld’s top home appliance brand, is No. 1 in New Zealand.

(II) Industry-leading R&D and technological competitiveness1. Global R&D network: Under the premise of being independent and controllable, the Company
has established a global innovation ecosystem featuring "original technology + open innovation", built auser-centric "10+N" open innovation ecosystem, and built an open innovation platform HOPE. 10
represents 10 R&D centers across the world (eight are overseas), N represents N innovation centers that
focus on changing users’ demand and an innovative community to form a global network of partners andusers, and realize the goal that “R&D goes wherever users demand and innovation resources are” toprovide excellent experience for its users.
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2. Leadership in the development of international standards and technology patents: As of the firsthalf of 2020, Haier has participated in preparation and revision of dozens of international standards, andmore than 500 national/industrial standards revisions cumulatively, and applied for more than 53,000
patents in the global cumulatively.
3. Innovative R&D through HOPE (Haier Open Partnership Ecosystem) platform: In parallel toin-house innovation, Haier opened up its global resources, to attract world-class resources to participate
in research and development with the open mechanism of "co-creation, win-win, and sharing", leading
the development direction of industry products and technologies, breaking through the barriers between
users and resources and to incorporate users, enterprises and resources into the same interactive
ecosystem. In addition, Haier continued to make cross-border and revolutionary innovation througheffective collaboration and zero-distance interaction of different stakeholders within the community. In
the first half of the year, the global R&D center team, global community experts, innovative ecologicalresources and other co-creation teams have conducted TechLink antibacterial and antivirus technology
live broadcasts and program interactions in response to the epidemic, and iterating and upgrading
products to constantly improve the antibacterial and antivirus experience.
(III) Competitiveness of leading smart manufacturing and mass manufacturing
The core competitiveness of Haier’s smart manufacturing lies in its connected factories and thetransition from large-scale manufacturing to large-scale customization to achieve the entire enterpriseprocess, entire life cycle and entire value chain system. Haier has established 22 global-leading smart
factories as examples for the industry and continuously updated the abilities of interconnection, digital
insight and intelligent optimization of the whole ecosystem. The business of these factories covers
various fields such as refrigerators, washing machines, air-conditioners, water heaters, kitchen
appliances to fulfill users with quality experiences. As of 30 June 2020, the non-warehousing rate ofproduct reached 77%, showing a significant effect on value embodiment.
(IV) The layout of efficient and in-depth distribution network
1. Through an Omni-channel distribution system, the Company has established coverage of first,
second, third and fourth-tier domestic markets and provided convenient shopping experience. The
Company also maintained strong cooperation with specialized chain for home appliances including
Gome and Suning, as well as e-commerce platforms including Tmall and JD.com. For distribution
network, the Company has established sophisticate and comprehensive franchise stores, touch point
network and a sophisticate operation system; for comprehensive distribution network, the Company alsoestablished V58 and V140 clubs, etc., maintained close relationship with major regional distributors. In
addition, the Company has accelerated the expansion of network construction in home improvement
channels such as building materials and decoration market. Relying on the advantage of multi-brand andcomplete-sets product, the Company will build smart and full-scene experience stores to provide
comprehensive displays, design, sales and services in the end-market.
2. The company has established entire process information system. The Company has constructed“Jushanghui”( 巨 商 汇 ) platform to provide the order management for customers of distributors todigitized procurement, sales and settlement and reduce the management cost. “Yilihuo” ( 易 理 货 )platform covers inventory and sales management and membership management of township customers,
and realizes services to towns, products to towns, resources to towns, goals to towns, incentives to towns,
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and trainings to towns. The Company provides direct logistics to the town through cloud-based
warehouse system, while comprehensively integrating the network of each respect including logistics,
information, services and sales to improve efficiency.
(V) Excellent global operational capability
Focusing on “building proprietary brand portfolio”, the Company has completed its 3-in-1 network
comprising R&D, manufacturing and marketing in major overseas markets through organic growth andacquisitions, in order to identify and meet local consumers’ demand. The Company’s global sales
network covers more than 160 countries, with 54 wholly/partially owned factories overseas.
During the Report Period, the Company deepened the 3-in-1 global implementation by focusing on
creating brand and accelerating high-end transformation, and continued to strengthen leadership in smart
home solution in the IoT era overseas. In the first half of 2020, revenue from overseas operation
amounted to RMB47 billion, representing 49% of the total revenue while near 100% of the revenue was
generated from self-managed brands. The Company has successfully transformed from a single-brandoperation to a multi-brand and cross-regional global business. The Company targets a leap from “goingout, going in” to “going up” through integration of global resources, and gradually entering themainstream market. The Company’s market shares in Pakistan, the US and India ranked No. 1, No. 2
and No. 4; and it is No. 5 in Europe and No. 2 in Australia.
(VI) Integrity of corporate culture and the win-win under RenDanHeYi management
Integrity based on quality and service is vital to Haier’s development and success. With
“user-oriented” and “persistent honesty” values, Haier has turned itself from a collectively owned small
factory which was on the verge of bankruptcy into the largest white goods manufacturers in the world,
while keeping a leading position in world-wide innovation in the Internet era. Haier upholds theoperation value of “taking the user as right and ourselves as wrong”, which stimulated the spirit ofinnovation, revolution and entrepreneurship, and encourages the Company to step into the beat of thetimes and constantly challenge and improve itself. The value of “win-win under RenDanHeYi” isfundamental to sustainable development of Haier. Haier belongs to all stakeholders, including
employees, users, shareholders, business partners and the community. In the era of network, Haier hasformed a network of suppliers and partners with shared interests to create value which contributes tolong term sustainability. Only if all stakeholders continue to achieve a win-win situation, can Haierachieve sustainable operations. In order to achieve this goal, Haier continues to carry out business,develop and refine the win-win model under RenDanHeYi where “Ren” refers to employees who havethe spirit of entrepreneurship and innovation, and “Dan” refers to value creation for users. Every
employee creates value for users in his/her business unit, thereby realizing their own value, during thisprocess, maximizing shareholders’ and enterprise value.

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SECTION IV DISCUSSION AND ANALYSIS ON OPERATIONS
I. Discussion and analysis on operations

The outbreak of 2020 COVID-19 epidemic impacted the Company's overall operations, withthe domestic business affected by the epidemic in the first quarter and the good momentum of theoverseas business tempered by the spread of the epidemic around the world in the second quarter. In
the first half of 2020, revenue of the Company amounted to RMB95.728 billion, representing a
year-on-year decrease of 4%; and net profit attributable to owners of the Parent Company amounted
to RMB2.78 billion, representing a year-on-year decrease of 45%. Revenue from overseas market
achieved RMB47 billion, representing a year-on-year increase of 0.6%. Performances in main areas
are better than that in the industry. The profit ratio of overseas operation increased from 2.3% in thefirst quarter to 3.8% in the second quarter. Faced with the challenges of the epidemic, multiple
measures taken by the Company gradually came into effect, in which case the business trend
improved month by month in the second quarter and achieved dual-increase of revenue and profit in
June.
The Company maintained its focus on the IoT smart home eco brand strategy, and accelerated
digital transformation, conducted the construction of smart home Experiential Cloud platform with
AI+IOT technology, launched Smart Home APP through the EMC self-driven mechanism under
RenDanHeYi model, to promote online interaction and sales and maintain high-end brandleadership, launched scenario solutions such as complete sets of balcony and kitchen and promoted
transformation of replacing products with scenarios and incorporating all industries into theecosystem. Besides, the Company promoted digital transformation, optimized efficiency andincreased share through the four reconstructions of “goals, processes, organizations andmechanisms”, and six platforms for “products, marketing, users, customers, logistics, and services”,
and the business trend improved month by month in the second quarter and achieved dual-digit
growth of revenue and profit in June.

1. Domestic market share of all products continued to rise with the continuous expansionof the scale of high-end brands
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① According to China Market Monitor Co., Ltd (CMM), in the first half of 2020, theCompany's offline and online retail sales market share of refrigerators, washing machines,
household air conditioners, water heaters and kitchen appliances continued to grow upward trend.
Refrigerators and washing machines continued to expand our advantages as an industry leader, andthe offline market share of refrigerators and washing machines is 2.98 and 1.52 times that of No. 2
player while the online market share is 2.2 and 1.26 times that of No. 2 player. According to
ChinaIOL, the market share of central air conditioners in the first half year was 11%, representing a
year-on-year increase of 1.25 percentage points. ② Casarte recorded a net income of RMB3.5
billion in the first half year, representing a year-on-year increase of 7%, and revenue in the second
quarter increased by 21%, and continued to expand its competitive advantage in the high-end
market.

2. Overseas markets: In the face of adverse impacts brought by the epidemic, theCompany took the domestic epidemic prevention and production and sales resumption of theCompany as reference, made swift adjustments, responded proactively, continuously
optimized the operating system and continued to expand the competitive advantages. Overseas
market revenue reached RMB47 billion, representing a year-on-year increase of 0.6%, and overseas
revenue accounted for 49% of the Company’s revenue, representing an increase of 2 percentage
points. The Company outperformed its counterparts in the local industry in major regions, such as
the United States with revenue growth of 6.5%, Japan with revenue growth of 16.3%, and Southeast
Asia with revenue growth of 7%.
3. Fully promote smart home scenarios solution to continuously develop ecosystemcapabilities.
Based on the ever-growing demand for scenario experience brought about by theinterconnected smart appliances, the Company focused on “Enjoying Smart Life at Haier Smart
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Home” and promoted the scenario-based brand building of Haier Smart Home by centering on users’
personalized scenario experience: replacing products with scenarios, and transforming from selling
single item to providing full-suite smart homes solutions. Based on global billions of accumulateduser resources, continuously increase in the number of intelligent interacted home appliances,complete set of the home compliances of the Company and enriched smart home solutions, theCompany accurately understood the needs through the Haier Smart Home Experiential Cloud
Platform by the images of users, linked into more than one thousand ecological resources andprovided solutions ranging from a smart home appliance to a full scenario of smart home toachieved the best experiences for users. In the promotion of sets of scenario solution, the Company
incubated several ecological sub-platforms such as Internet of Clothing, Internet of Food andInternet of Air to achieve “co-creation and mutual benefits”..
4. Honors of the Company.
On 9 January 2020, Euromonitor, the world’s leading market research agency, published 2019global retail sales of large home appliance brands survey, naming Haier No. 1 for the eleventh time;on 21 January 2020 (US Eastern Time), Fortune released the lists of “World’s Most Admired
Companies 2020”, and Haier Smart Home was listed again, making it the only one from home
appliance industry outside US. In June 2020, Haier was selected as the only “IoT Ecology” brand in
the “BrandZ™ Top 100 Most Valuable Global Brands in 2020” list for two consecutive years. In
July 2020, Haier ranked first in the industry in the “BrandZ™ China Top 50 Global Brands in 2020”
list. In August 2020, the Company was again listed in 2020 Fortune 500 with ranking ascended by
13 places.
5. Major works of the Company during the reporting period:(I) Continue to strengthen original technology innovation to lead technology
transformation and industry development
The Company continuously promoted the collaboration between global R&D and innovation
centers, and maintained its leading position in various aspects such as modularization, technology,
products and R&D resources, focus on users’ updated demand in real time, tracked consumption
hotspots and changing tendency to ensure its brand leadership on the market in various regions allover the world, provide global users with quality-ensured home appliance product packages andsmart home solutions with leading performance.
1. Refrigerator/freezer business
As the global leader in refrigerator industry, the Company is committed to providing users
with healthy, smart and artistic high-quality food preservation solutions through sustained
technological and product upgrade, thus leading technology transformation and industry
development.
(1) Fully upgrade the healthy fresh-keeping technology. With the first revolutionary
technologies, the Company provided overall solutions for high-end food preservation and
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home integration. Focusing on providing high-end users with food and nutrient preservation
solutions, the Company improved the quality of healthy life of high-end users. ① The Company
continued to upgrade its MSA oxygen-controlling and fresh-keeping technology to reduce oxygen
contents in oxygen-controlling drawers and effectively mitigate the aerobic respiration of fruits andvegetables, which achieved preservation of fruits and vegetables for a time 8 times longer and madefruits and vegetables as fresh, tasty and nutritive as before; ② With the first three major
revolutionary technologies, built-in refrigerators achieved real 0cm boundless parallel embedding
and could fit cabinets without any gap, which effectively met users’ demand for home integration,broke the visual and service restrictions, released more spaces, perfectly included kitchen design inthe overall home aesthetics and granting more artistic beauty to overall living spaces.
(2) Give full play to the advantages of multiple brands and expand leadership in theindustry. ① To fully popularize the MSA oxygen-controlling and fresh-keeping technology,
Casarte refrigerator created products in vogue online, launched phenomenal products T-typerefrigerators with functions catering to mothers and infants under F+ series and ignited high-end
market with the newly released amethyst violet series. As a result, the market shares of Casarte
refrigerator’s price above RMB10,000 reached 40.2% in the first half of the year, continuing to
expand brand power. ② Leader refrigerator focused on intelligent interconnection upgrading
based on the strategy of fashionable fresh-keeping products and meeting users’ demand forbeautiful, intelligent and cost-effective scenarios. Its iCase intelligent series took the lead in theindustry, with the annual cumulative sales volume of intelligent network appliance amounting to
74,921, representing a year-on-year increase of 159%.
2. Washing machine businessAs a global leader in the washing industry, Haier Washing Machine is committed to providing
users with an excellent laundry experience. Through continuous product innovation andtechnological iteration, it continued to lead the industry to upgrade.
In response to the prolonged stay at home and rapidly growing demand for healthy laundry
during the epidemic, the Company studied cloud washing procedures with high-temperature
disinfection based on factors such as temperature and time. It only took 3 days from the creation of
an idea to the product launch, changing a total of 116 models and 3 million washing machines toclothes disinfection machines within 3 days, and achieved 7 times of iterations within 2 weeks. The
high-temperature disinfection cloud procedures meet the epidemic prevention needs of consumers
for the health and sterilization of clothing, greatly improving the reputation of care products, anddriving the sales of smart appliances. At the same time, in response to the non-contact service for
epidemic prevention, engineers developed self-installation videos and provided remote guidance
through live classrooms and other methods, thereby quickly solving the problem of contactless
installation. With respect to after-sales problems, the Company developed remote diagnosis live
broadcasts to quickly solve product after-sales problems without on-site visit, making users feel real
convenience, comfort and relief.

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Products: ① It was the first in the washing machine industry to create a cartridge-based smart
front loading washing machine, which can be intelligently proportioned, automatically add laundry
detergent, builder liquid, and color protection liquid, and greatly protect the color and fiber of theclothes while improving the decontamination effect. ② In terms of top loading washing machines,
it pioneered self-powered sterilization and disinfection technology. During the washing process, themodule cuts the magnetic induction line to generate induced electromotive force, thereby driving
the UVC-LED lamp bead to emit deep ultraviolet light, realizing automatic sterilization during thewashing process with no additional power consumption and greatly meeting the needs of users fordisinfection and sterilization in laundry care of clothes. ③ The high-end brand Casarte focuses oncomplex and diversified user needs. After many iterations and upgrades, it has been upgraded fromthe initial variable temperature steam air washing to a combination of sterilization, wrinkle removal,
odor removal, moisture removal, and fluffiness. Accurately customized air washing programs
according to fabrics and different needs bring superior washing and care services to high-end
fabrics such as silk, wool, down jackets, and mink fur. In the first half of 2020, Casarte's share ofwashing machine markets at RMB10,000 or above reached 75.5%, maintaining an absolute leadingedge.
3. Household air conditioner business
Focusing on changes in market demand, the Company kept advancing technology innovationand product upgrade, provided users with air solutions with leading quality, functions andintelligence and created user awareness of “Healthy Air Conditioners Goes to Haier”. At the sametime, the Company actively promoted the construction of touch point in communities fortransformation, implemented retail transformation in thousands of towns, villages, districts andregions and achieved more than 200,000 village and district groups coverage, reduced SKU models
to improve efficiency, and accelerated Casarte Air Conditioner to achieve high-end breakthroughs
to accelerate business development. In the second quarter, domestic revenue increased by 20% in asingle quarter, and Casarte Air Conditioner’s revenue in the first half of the year increased by morethan 70%. Its shares in high-end market continued to increase: Casarte’s share in the high-end air
conditioner market reached 12.6%, a year-on-year increase of 8.5 percentage points; in 1.5W+
cabinets, its share continued to rank first, reaching 42.3%, a year-on-year increase of 6.1 percentage
points.
Haier Air Conditioner kept focusing on provision of better healthy air solutions to users. In theface of severe challenges brought by the epidemic, Haier Air Conditioner first released the 56 ℃
sterilization and self-cleaning air conditioners which achieved self-clean by stripping bacteria anddusts through top-speed cooling to frosting on the surface of an evaporator while removing 99% ofdusts and bacteria by raising the temperature in the evaporator to over 56 ℃ throughinverse-balance dry sterilization technology based on high temperature, which brought “healthy air”
to users and was recognized by users.
Casarte Air Conditioner innovatively researched and developed the soft wind technology,
overturning the technology and theory of refrigeration and air distribution of air conditioners having
existed for a hundred of years, based on which it created extremely comfortable Yunding air
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conditioners with wind of suitable temperature. It created the exclusively comfortable Tianxi air
conditioners with area-based air distribution and Zhihuijia air conditioners with AI air steward by
upgrading the body perception function. In addition, Tianjing air conditioners featuring UVC
sterilization of Casarte was even recognized by medical institutions and users after the COVID-19
outbreak and was put into use and favored by experts during the operation of Wuhan Raytheon
Mountain Hospital.
Since 1 July 2020, after the new energy efficiency standards for air conditioners were formally
implemented, Haier actively participated in the formulation and implementation of the new energy
efficiency standards. It upgraded its enterprise standards half a year in advance, thereby obtaining
the Enterprise Standards “Front-runner” Certificate. Through advanced research and developmentof energy-efficient and eco-friendly products meeting the new energy efficiency standards, theCompany has taken the lead in switching to air conditioning products meeting the new energy
efficiency standards, and will continue to promote the research and development of innovativetechnologies and products with proprietary intellectual property rights to improve the selfdevelopment ability of technologies in the industry.
4. Central air conditioner business
During the reporting period, through accelerating product innovation and core technology
development, and launched a series of smart IoT, energy-saving and healthy products to enhancemarket share and realized customization in eight industries and 26 kinds of solutions, ranked firstfor retail growth in the industry as a main brand in the first half of the year: ① In response to the
spread of COVID-19 across the globe, the Company developed healthy air conditioners integrating
UV disinfection lamp, Nanomist sterilization module and nano water ionizer for global marketing,which were highly recognized by customers. ② In home use scenario, the Company developed
and launched Casarte household single-fan outdoor units and Haier household kitchen & bathroom
air conditioners, filling the gap in the use of kitchen air conditioners. ③ For use in large-scale
projects, inverter modules introduced by the Company greatly improved the cost performance andmet the needs of large-scale projects.  The IoT magnetic levitation air conditioner achieved
electric saving of 50%, with domestic market share exceeding 50%.
In respect of new technology research and development, ① the Company introduced IoT
identification technology enabling users to scan the unique identification code of multi-networked
products to enter the Haier IoT platform and conduct smart management in respect of product use
and maintenance data and other data, and besides, the voice air steward enabled smart control of
air-conditioning equipment. ② The Company developed remote online upgrading technology
enabling real-time storage and upgrade of computer board information.
5. Water heater and water purifier business
Focusing on the development trend toward healthy and smart home appliances, the Company
continuously optimized product structure, innovated product functions and increased productvariety to provide users with safe, intelligent and comfortable whole-house water solutions.
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Electric water heater: The Company developed the fourth-generation

purified water washing technology and frequency conversion instantaneous-heat black technology,
formulated seven-star bathing standards, and launched new products integrating water-revitalizing,
no-cleaning, and antibacterial functions to meet users’ needs for healthy, clean, andinstantaneous-heat water. In particular, equipped with 70L high-capacity inner pot and backed bydual-drive quad-core instantaneous-heat technology and 85°C high water temperature technology,
Casarte Tianmu SPA series truly realized unlimited bathing. Haier's excellence in productinnovation and stylish and simple design has won international recognition, and the Casarte
Tianquan SPA electric water heaters won the AWE Award-Excellent Product Award. ② Gas water
heater: While NOCO safety technology and four-stage fine-control micro-fire combustion
technology are adopted to ensure safety and stability, no cold water technology and waterfall
washing with large flow capacity are added to create the ultimate comfortable experience.
Water purifier: In response to the more stringent requirements for water quality fromconsumers in the water purification process, the water purification industry, following the productstrategy of “health upgrade, experience upgrade and smart upgrade”, realized sterilization andbacteriostasis in the whole process from water production to water draining by upgrading the UV
bacteriostasis and terminal sterilization functions of the water purification tank; the adoption of no
stored water and mineralized water technologies realized the transition from providing “safe water”
to “healthy water”; the entire product line was upgraded toward smart product line, and thefront-put-out product design facilitated users’ self-replacement of the filter cartridge and also helped
solve the pain point of door-to-door service during the COVID-19 epidemic period. On 10 March
2020, Haier water purifiers won the “First Prize Award of Science and Technology Progress” ofChina National Light Industry Council, becoming the only award-winning brand in the water
purifier industry.
6. Kitchen appliance
The Company integrated global leading platforms of FPA, GEA and Candy to accelerate
product restructuring and provide users with high-end smart kitchen solution packages; focusing on
the layout of Casarte and Haier kitchen appliances, the Company enhanced its competitiveness inhigh-end market. Revenue from Casarte brand grew by more than 30% year-on-year.
Range hoods: By using constant air volume technology jointly developed with FPA, theCompany launched 12-m2 Smart Air series, which can solve the problem of poor smoke removal
facing users and achieve highly-efficient smoke discharge under constant optimal effective air
volume output in different installation environments, with the smoke-discharge andsmoke-removing effects leading the industry.
Gas stove: The Company returned to the essence of kitchen cooking. Focusing on the needs of“convenience, health, safety and active service”, the Company provided users with convenient andhealthy cooking scenarios and smart scenarios enabling active service. Based on different
ingredients and cooking requirements, the new generation of Casarte smart triple-head stove
features accurate fire control and intelligent cooking with electrodeless electronic proportional
valve for accurate fire control and fourth-generation real-time temperature monitoring technology.
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Disinfection cabinets: In response to the needs of specialized users, the Company launched
Haier tableware disinfection cabinets, which are the only cabinets that reach the medical
disinfection level in the industry. The upper chamber uses light wave disinfection + moderatetemperature cleaning technology and kills enteric pathogenic bacteria and viruses through UV-C
light and pasteurization temperature (60 ℃ ~95 ℃ ). Such cabinets have lower temperature, better
disinfection effect and are safer as compared with traditional high-temperature disinfection cabinets;
The lower chamber adopts 120 ℃ high temperature under infrared ray + light wave disinfection
technology, with a bacterial eliminating rate of 99.99%. The Company took the lead in setting thegroup standards of the Tableware Disinfection Cabinets at the Same Disinfection Level asHousehold and Similar Medical Instruments, which are approved by the China Association forStandardization and are currently the first tableware disinfection standards that reach thedisinfection level of medical instruments in the industry.
Ovens: The Company promoted product innovation based on expertise from GEA and FPA
and platform. ① The interconnected ovens are equipped with built-in cameras through which theusers can monitor the real-time dynamics in the ovens on their mobile equipment. Therefore, users
may control the cooking functions and choose recipes and different users can exchange their baking
experience. ② The high-temperature self-cleaning ovens based on hot air technology can
decompose oil into carbide at 420 ℃ , so as to realize self-cleaning; RF ovens have a totally new
heating mode aiming at accurate heating of different food quickly and conveniently. ③ The
Company has taken the initiative to adopt auto-door technology and wireless probe technology for
Casarte Commander series in the industry and designed for Chinese consumers multi-menu leading
recipes in three life scenarios, that is, Enjoy life, Fast Life, Roast/Steam at Your Will. Allowing awide temperature range of 30 ℃ － 120 ℃ , the embedded steam and roast integrator can meetdemands for multiple materials and simplifies cooking via a three-level adjustable steam-assistedfunction, so as to produce delicious and tender cuisines.
(II) Chinese distribution network: focusing on digital reformation to improve speed andefficiency
During the reporting period, the Company improved operating efficiency through digitaltransformation internally, and improved user experience through the smart home scenario solution
externally. Based on the Smart Home Experiential Cloud platform, the Company built differentiatedcompetitiveness by incorporating products, marketing, customers, users, logistics and services into
the digital platform, established a competence system to reach users efficiently, and accelerated
business model transformation. In the first half of 2020, the home appliance business revenue in
China decreased by 9%, of which the second quarter revenue increased by 14% year-on-year. The
market share increased in all lines, and the overall performance was better than peers in theindustry.
The Company started with digital and improved the efficiency of the whole process
through the application of digital hand tools on the client, user and employee terminals. (1)Continuing to expand the coverage of the unified warehousing and distribution system, continuing
to deepen the integration of marketing network, logistics network, service network and information
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network, and comprehensively improving the efficiency of the platform. (2) Realizing live
streaming of home appliance sales scenarios through Haier Smart APP, helping offline customers
open up online sales channels, empowering offline stores, and achieving integrated online andoffline operations. (3) Through the reverse customization of order of popular goods and the Skynet
cloud TOC model, SKU focus was realized, and product efficiency, supply chain efficiency, andstorage efficiency were improved. In the first half of the year, the proportion of numbers ofeffectively operated models and total models for SKU efficiency was increased from 40% to 97%,
the timely rate of logistics distribution was increased to 99.5%, the efficiency of the process systemutilization was increased to 83%, and the defective product rate was decreased by 94%.
Promoting the integration of online and offline contacts, and improving the quality of thecontact network. (1) Franchised stores: through the two-dimensional transformation of retail anddistribution, the Company reshaped the direct channel operation system. The Company also
initiated the transformation of Haier franchised stores to HSH experience stores, and enhanced thefive major capabilities of franchised stores customers in Casarte sales, interconnected appliancesales, scenario sales, online and offline integration, and in-home services to attract users by
optimizing store layout, integrating online and offline, smart home ecological referral traffic, andunified brand display. In county and district market, the Company improved the user traffic in the
districts and counties by “tens of thousands of households” activity; and in the township market, theCompany improved the user traffic in towns and villages by the “tens of thousands of towns andvillages” activity. (2) E-commerce channels: the Company increased attention and brand influenceand eventually translated into sales by adjusting the layout of online product planning, innovating
online marketing approaches, and leveraging social media mass broadcast and other online
marketing methods. In the first half of the year, the e-commerce channel achieved a year-on-year
revenue growth of over 40%. (3) The smart home channel centered on the integration of
full-scenario smart solutions and “1+N” service capabilities with the focusing on introducing four
new types of customers, including home improvement, HVAC, home furnishing, and whole-houseintelligence, covering 180 core cities across the country. Through the creation of a brand-new store
image, improvement of experience on solutions, design and installation and other full-processcapabilities, the Company made the users truly experience the smart home and the future home. The
Company’s Shanghai 001 Experience Center realized integrated sales of partial decorationaccording to “solution, scenario and ecology” through the creation of a new online-offline OTO
experience model. The average price per user of smart home appliances scenarios was
RMB241,000, and it was selected as the excellent consumption experience hall of “2020 Best
Experience in Shanghai" and 2020 Shanghai "First-store Economy Model". (4) The engineeringchannel maintained rapid growth by building the business capabilities of the headquarters and microcommunity, with revenue increasing by 22%. At the headquarters level, the Company improved theefficiency of engineering projects and customer experience through the construction of theengineering digital platform and engineering Experiential Cloud. At the regional level, theCompany improved the abilities of design, installation services, funds and other aspects in theend-market through the establishment of customer-engineering alliances and opening gridengineering resources. Started with strategy of the real estate industry and the Xiongan Service
Center and other major projects to establish industry benchmarks, the Company won the bids forreal estate user projects such as Evergrande, Country Garden, Poly, Sunac, and Longfor.
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Casarte: Continuously expanding high-end advantages. (1) In the first half of 2020,
Casarte’s white goods & kitchen and bathroom products achieved revenue of RMB3.5 billion, a
year-on-year increase of 7%, of which, the revenue in the second quarter increased year-on-year by
21%, and the monthly revenue increased by 30% in May and June, maintaining the absoluteleadership in the high-end market share. For example, the market share of Casarte refrigerator atabove RMB10,000 was 40.2%; the share of Casarte cylinder washing machine at above
RMB10,000 was 75.5%. (2) Promoting store upgrade: nationwide use of a new generation ofterminal display standard, turning stores into a smart home experience centre, and increasing the
network coverage of the market above the county level from 85% to 95%. (3) Increasing customer
unit price through sales of complete set, improving personnel’s sales capabilities of complete set
through complete training. (4) Service upgrade: Casarte’s seven-star service focuses on the service
concept of “designing a home, building a home, and serving a home” for users, and upgrades theseven-star service to a seven-star scenario ecological service. It provides scenario customized
services such as balcony, kitchen, bathroom for users needing new decoration; provides partial
renovation services for users needing renewal, such as demolition and replacement, cabinet
renovation, balcony renovation and other value-added services.
Initiate Experiential Cloud Mass Broadcast model to promote marketingtransformation. (1) The Company actively seeks for users, subverting the sales method of waiting
for customers through full live broadcast covering employees and customers; the Company
continuously serves users through community fission, WeChat red envelopes, small programs,
Yunjibao ( 云 吉 报 ) and other online tools. (2) The Company establishes four major community
content chain groups, forming a massive content matrix, and constantly interacting and fermenting
online on the new media community platform, realizing the transformation “from launching tobeing a circle to attract fans, from operating products to operating people, and from selling goods
thinking to creating community and flow”. (3) The Company initiates Experiential Cloud Mass
Broadcast model, based on the smart home scenes and taking the life needs of users at home as themain line, then attracts customers, users, and ecological stakeholders to participate in co-creation on
the platform, so as to accumulate users and create a live broadcast experience of the scenes. In thefirst half of the year, the Company has carried out 5 large-scale broadcasts, and realized thedetonation and leadership from multiple dimensions, such as user interaction, transactions andplatform daily activities, and the scene content is continuously upgraded. For example, on 1 August,the broadcasting day, the platform’s GMV (Gross Merchandise Volume) was RMB134 million andthe number of user views reached 1.89 million, an increase of 283% and 64% respectively from 31
March.
(III) Overseas Market: “Three to One” localization operation promote dual-circulation
and achieved development with high quality
In the first half of 2020, the Company recorded RMB47 billion in its overseas revenue,
representing a year-on-year growth of 0.6%, accounting for 49% of the Company’s total revenue.
Given grim market challenges and the impact of COVID-19 in the second quarter, overseas
businesses were developed based on local brand creation and local operation. On one hand, theCompany rapidly duplicated the domestic epidemic prevention experience to protect the health of
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overseas employees and ensure resumption of productivity of the supply chain to the greatest extent.
On the other hand, the Company adjusted the product structure, channel and marketing strategies ina timely manner and explored and practised new online marketing models. Against the backdrop of
overall industry decline, the Company’s overseas business realized growth in many countries
against the trend. The year-on-year revenue growth of April, May, and June in the second quarter
was respectively -22%, -12% and 20%. The revenue of overseas household air conditioner invarious markets exceeds that in the whole year of 2019.
1. High-end products leadership. The Company persisted in the development direction ofhigh-end, intelligent, and healthy products. In line with changes in consumers' demand during theepidemic to increase the stickiness of users, the Company launched a series of differentiated leading
health-targeted products and solutions. Meanwhile, the Company intensified efforts for promotionof all-category healthy products in various markets. Refrigerators put the focus on “sterilization andhealth”, and washing machines had their focus on “ABT bacteriostasis, double spray sterilizationand steam washing sterilization”, and air conditioners featuring “full health and self-cleaning” werelaunched. In the first half of 2020, the Company recorded revenue of USD430 million from healthy
products in overseas market, with a year-on-year growth of 21%.
2. Channel transformation. Based on their own market characteristics, each region has
comprehensively optimized channel structure and increased network coverage through measures
such as expanding mainstream channels, building its own network, developing e-commercechannels, and strengthening front-end channel distribution. Under the impact of the epidemic, theonline channels became a development focus of the industry. In overseas business, the Company
enhanced building of brand flagship stores on e-commerce platform and user interaction experienceto drive transformation to efficient online sales. In the first half of 2020, the sales of the overseas
e-commerce channels increased 32.4% year on year.
3. Zero-distance marketing experience. Around the concept of “zero distance to customers”
and based on users’ needs, the Company converted the benefit of scientific and technologicaldevelopment into benefit for consumers in using home appliances, and improved reputation in users
through intelligent healthy network appliances plus non-contact installation services, etc.. During
the reporting period, based on the changes in and opportunities from social actions of global
consumers under the impact of the epidemic, quickly promoted transformation to digital marketing
online, and through live streaming on e-commerce platforms, Vlog short video marketing andExperiential Cloud crowdcasting, the Company gained followers and built public praise of thebrand, and truly realized global linkage, global advertising and global priming. At the online Canton
Fair held in June, Haier launched the 10*24-hour interactive Experiential Cloud crowdcasting incooperation with makers, users and ecology circle of 12 countries, to make Haier’s charm known tohundreds of millions of users in the world. As of the end of June, the Company recorded tens of
millions of overseas fans on Facebook, with a year-on-year increase of 51% in interaction volume.
4. The performances of major global markets were summarized as follows:(1) In the North America market: In the first half of 2020, the sales revenue was RMB29.5
billion, representing a year-on-year increase of 6.5%; the market share of GEA’s core home
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appliances increased by 2.5 percentage points and the market share of all core home appliances
realized growth.
① In terms of epidemic prevention and control, the Company, attaching great importance toepidemic prevention in the factory, established a business continuity team to overall plan epidemic
prevention and safeguard employees’ health; At the same time, GEA actively fulfilled its corporatesocial responsibility, donated home appliances to front-line personnel in need, maintained close
contracts with the community, actively donated PPE materials, and continued to support charity
organizations. ② In terms of brand, GEA adhered to the high-end transformation strategy, andfocused on high-end brand construction and awareness enhancement: its high-end brands Café andProfile maintained a year-on-year growth of 30% and 11% respectively; ③ In terms of the supply
chain, GEA continued to build smart factories and storage systems to deepen the extent of
automation and optimize manufacturing and warehousing efficiency; ④ In terms of channel, toaddress the inconvenience for offline shopping due to adjusting business hours, increasing social
distance and restricting the flow of people, GEA enabled offline shopping experience through suchmeans of safe shopping such as pick-up outside the store, self-purchase and self-pick-up; online,
GEA enhanced interaction with consumers through live broadcast, short video and other tools; forexample, it launched Chibo - a global interactive live cooking platform to create a stronglyinteractive and collaborative cooking experience by means of live broadcast. ⑤ The international
authoritative market research organization IoT Breakthrough awarded GE Appliances the “Internetof Things Breakthrough Annual Award” for two consecutive years; GEA was identified by UL as
the first home appliance brand with a gold level of IoT safety.
(2) In the European market: the revenue amounted to RMB6.7 billion, representing adecrease of 6.6%, within which, the revenue of Haier Brand in Germany and Italy experienced ayear-on-year increase of 61% and 52%, respectively. In terms of market share: ① In the first halfof 2020, the market share in terms of sales volume of dual-brand (Haier + Candy) washingmachines in major countries of the EU reached 14%, ranking Top 2; and the market share in termsof sales amount reached 12.6%, ranking Top 3; ② The overall market share in terms of sales
amount of refrigerators in major four countries of the Europe (France, the UK, Italy and Russia)
reached 8.8%, ranking Top 5. The price indix of Haier washing machines and refrigerators was 112
and 117, respectively.
① At the beginning of the epidemic outbreak, the team in Europe actively communicated withthe headquarters in China and well informed about the developments of the epidemic and the sales
in China, especially changes in sales online and offline. By drawing on relevant experience fromdomestic companies, the team quickly realized a shift from offline sales to online sales, and madeactive efforts in promoting online sales through social networking and media to increase interaction
with users; ② Regarding products, in response to epidemic prevention, new products were timely
launched to bring more comfort and convenience to consumers, including large-capacity andfull-space fresh-keeping refrigerators, steam sterilization washing machines, large-capacity freezers,
a full range of intelligent and interconnected kitchenware, and 56℃ air-conditioning product series;③ In relation to production and supply chain, the factory in Europe made preparations in advance
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and implemented epidemic prevention measures in strict compliance with the requirements of local
government, making itself a local model enterprise in this regard; meanwhile, drawing on theexperience in epidemic prevention from the headquarters in China, the factory ensured safe andcontinuous production to meet the needs from multiple market orders; ④ Haier Europe proactively
assumed its social responsibilities as a local enterprise. It donated protective suits, masks and otherepidemic prevention supplies to hospitals in Lombardia and Veneto, Italy, two regions mostaffected by the epidemic; in other European countries, Haier Europe also donated epidemic
prevention supplies to hospitals and communities in need, which has won widespread praises.
(3) In the South Asia market: the revenue amounted to RMB2.7 billion, representing adecrease of 36%.
In Indian market: the Company maintained solid growth in January and February, but the
epidemic led to the national lockdown in March, which was not lifted gradually until mid-May,
causing stagnation of the Company's sales. With the gradual re-opening of the market, the Company
ensured the orderly resumption of production by implementing the epidemic prevention program,and met the market demand by following government guidelines to prevent epidemic while
continuing production.
In Pakistan market: many measures were taken to minimize such impact such as internal
operations, efficiency improvement and fee reduction, strict risk control, and opening of newchannels. As a result, sales (domestic currency) of the same caliber fell by 10%, much lower than
the rate of reduction in market capacity in the industry. ① Products: the diversity of refrigerators
and air conditioners was increased and customized products were provided. Among them,electronic inverter refrigerator series and anti-corrosion air-conditioners designed for Karachi
received good feedback from the market. At the same time, the proportion of high-end and smart
products sold was climbing and the unit prices of refrigerators, washing machines and air
conditioners have all been increased; ② Channels: the number of Haier sales outlets has been
gradually increasing; 20 new outlets were set up in the first half of the year, with an increasing
penetration rate in third- and fourth-tier cities; sales from e-commerce channels also witnessed a
sharp year-on-year increase of 500%.
(4) In the Australia and New Zealand markets: the revenue amounted to RMB2.5 billion,
representing a year-on-year decrease of 1.5%. FPA core home appliances revenue realized a growthof 3% in NZ Dollars; the Australia market showed great development momentum, with ayear-on-year growth of 17% in the first half of the year and double-digit growth in dual-brandproducts.① Online terminal transformation was speeded up and scenario-based brand stores werebuilt to replace single product display, which contributed to doubling of online sales and asubstantial increase in the proportion of online sales; ② Breakthroughs were constantly made insales of products for commercial use; sales of products for commercial use increased by 12%; ③
In relation to products, new products were updated and launched at a faster pace. In the month when
Haier’s 565 T-door refrigerators were launched, the total sales of T-door refrigerators increased by
280%, greatly optimizing the product portfolio; FPA ultra-high-end Collumn refrigerators and TFT
touch-screen ovens won two prizes under the “Red Dot Awards”.
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(5) In the Japanese market: the revenue amounted to RMB1.8 billion, representing an
increase of 16.3% against the trend. ① The Company launched the AQUA full-box Delie series
refrigerators to expand the line-up of ultra-large and large products, achieving an increase of 24.3%
against the trend in sales volume of and 48.5% in sales amount of ultra-large refrigerators in thefirst half of 2020; ② Regarding users’ demand for preservation of large-capacity cold products
during the epidemic, the Company promptly put on the market new high-end products including the280L largest capacity vertical freezers in the industry and variable temperature series refrigerators,
upgrading user experience in a timely manner; ③ The dual-brand “Haier+AQUA” has covered
about 90% of the mainstream channels in the market. In the first half of 2020, the Company
achieved cooperation with two new chain supermarket channels and took an active part in planningand building its own online channels.
(6) In the Southeast Asia market: the revenue amounted to RMB2.1 billion, representing a
year-on-year increase of 7%; in response to the changing market demand, the Company focused on
the theme of health, continued to deepen the main product models, and promoted the sales ofhealthy products, such as the new Magic Cooling series of refrigerators, and further upgradedfunctions such as temperature change, sterilization, and freshness preservation, highlighting the
product sterilization and freshness preservation monitoring function; the cylinder washing machine
focused on 525 large cylinder diameter and healthy washing. UV sterilization, high temperature
washing, and antibacterial window mats brought more convenient, healthy and quiet washingexperience to users under the epidemic. The online transformation of marketing innovation and theuse of social media live broadcasting to promote medium and high-end products accelerated thedevelopment of e-commerce business. In terms of localized supply chain construction, theCompany introduced global general suppliers to quickly optimize suppliers and reduce procurement
costs.
(IV) Building the Haier Smart Home Experiential Cloud platform to create an IoT
ecosystem
Haier Smart Home Experiential Cloud built a constantly-evolving platform connecting
hundreds of millions of families and creating a win-win situation among users, enterprises and theecology by upgrading traditional home appliances to smart network devices, and building acomplete set of scenario solutions including smart kitchen and smart balcony based on theinterconnection of smart network devices to achieve the transformation of “Replacing Products with
Scenarios and Incorporating All Industries into the Ecosystem”, and provide users with a full
ecological service experience including clothing, food, housing and entertainment.
In the first half of 2020, the Company’s sales of smart home appliances increased by 20% year
on year; network appliance binding volume increased by 111%; set sales increased by 55% and set
sale accounts for 29.64%, representing a year-on-year increase of 4.8 percentage points; set sales
increased year-on-year by 107%, and the single user value of set increased by 89%; 627,000 sets of
scenario-based solutions were sold, representing an increase of 65.75%; IoT ecological income
amounted to RMB3.77 billion, representing a year-on-year increase of 96%. As of July 2020, thepeak daily active users of Haier Smart Home APP reached 522,000, representing an increase of
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Haier Smart Home Co., Ltd.

132% compared to April 2020; the active resource providers were 9,289, representing an increaseof 194% compared to April 2020.
1. Keeping strengthening the “AI+IoT” capabilities to achieve smart home whole-processactive services. Integrating the three capabilities of IoT, big data and AI and based on users’ home
appliance status and habits, the Company built customized intelligent sensing decision-making
scenarios to provide users with the most reasonable responses and the most intimate interactive
experience. ① The Company built the first smart home appliances-specific data empowerment
platform in the industry–active service skill management platform, and worked out the first Active
Service Standards Based on Big Data in the industry to unify the standards for functional
requirements and evaluation methods of smart home appliances in providing users withpersonalized services such as active reminders, intelligent recommendations and self-feedback on
faults under different user habits and different home environments. ② Focusing on the valueinteraction of “designing a home, building a home, serving a home and experiencing a home”, theSmart Home APP built smart home full-scenario immersive interactive experience covering users'
clothing, food, housing, entertainment, health, etc. In addition, the one-stop after-sales service
experience also went live on a full scale, which could provide online full-scenario after-sales
services from delivery, installation and maintenance to cleaning, repair, relocation, etc., achieving
whole-process visibility.
2. Actively promoting the transformation, upgrade and implementation of the “1+N”
smart home scenario solution. ① Promoting the construction of “1+N” service system andgrasping users’ demands and needs: “1” refers to the project managers, the service housekeepers ofusers providing one-on-one all-inclusive services for users; “N” refers to the relevant resource
providers, including all home appliance service personnel, complete-set service providers,
distributors, cabinet vendors, home decoration companies, etc., The service housekeepers contact
the resource providers with respect to provision of home appliances and decoration integration
services for users; ② Creating a new online and offline OTO experience mode. Since the opening
on 6 September 2019, 001 Experience Center in Shanghai realized the integrated sales of local
decoration with “solution, scenario and ecology”, recorded average transaction price per customerof RMB241,000, and attracted a total of 25,000 visitors, realizing the value guidance of smart
scenario solutions. It was selected as the excellent consumption experience hall of “2020 Shanghai
Experience” and the “Model of First Store Economy” of 2020 Shanghai. In the first half of the year,
225 new Haier Smart Home 001 stores were established; ③ Live broadcasting of new ecology forthe smart home scenario: Experiential Cloud crowdcasting. From live broadcasting to Experiential
Cloud crowdcasting, the Company created a differentiation model in the industry, focusing on
intelligent control, multi-screen interaction, active service, and massive health. Hot scenarios suchas intelligent air washing, mother-baby scenario, and 56°C sterilization air conditioner haveemerged.
3. Building eco brands such as the Internet of Clothing, the Internet of Food and theInternet of Air, to explore smart new ecology business model. (1) The Internet of Clothing ofHaier and the head resource brand in the laundry detergent market jointly created the firstink-cartridge washing machine of Haier. The ink-cartridge washing ecological protection scheme
31 / 2512020 Interim Report

Haier Smart Home Co., Ltd.

has been recognized by users for its leading technology and convenient service experience, such as
super stain removal power, accurate self-delivery and intelligent reminder of laundry detergent, andone-button purchase. In addition, the Company, through cooperation with shoe & boot cleaning
service resources, sports goods chain brands and shoe & boot brands, created a full-scenario
experience of washing, care, storage and customization of shoes & boots. In April 2020, theCompany drew up and issued the standards of the Shoe Cabinet with Disinfection and Networking
Functions upon authorization of the China Association for Standardization. During the COVID-19
outbreak, the home full-scenario epidemic prevention solution of the Internet of Clothing provided
users with a one-stop health protection solution from returning home → staying at home →traveling scenario. The Internet of Clothing covered 15 industries, involved more than 5,300
resource parties, including more than 2,100 parties of clothing, more than 1,000 parties of home
textile, over 70 parties of shoes, over 50 parties of wash supplies, reached a year-on-year increase in
IoT ecosystem revenue of 57%. (2) Haier’s Internet of Food provided users with a service
experience of “eating in smart home”. Together with nearly 1,000 resource providers in 12
categories (food, logistics, kitchen appliance, cooking utensils, cabinets, kitchen peripherals, homedecoration, association, education training, audio and video entertainment, IT technology, media,etc.), the Company built a management platform of ecological recipes via the Internet of Food torealize the creation, query and accuracy tagging of smart recipes and graphic recipes, and constantly
improved the logic of recipe recommendation algorithm, so as to provide users with thewhole-process scenario experience in the smart kitchen. (3) According to people’s activity traces,
the Internet of Air of Haier created three ecosystems, namely smart home ecology, campus ecology
and travel ecology, from family to campus or to public space, covering 12 industries, including
home furnishing, furniture, sterilization, hotel, mobile travel, finance, education and apartment, tojointly build the Internet of Things air eco brand. During the COVID-19 outbreak, through cloud
upgrading, the Company created hot scenarios such as smart sterilization, air sterilization, andcomfortable sleep, and led the release of the Technical Specification for Evaluation of Smart Home
Service Platform Based on Big Data - Smart Bedroom, to fill in the industry gap.
(V) Smart manufacturing: Smart factory continue to lead the transition from mass
manufacturing to mass customization through IOT and AI technologies
During the reporting period, the Company continued to promote the transformation andupgrading from mass manufacturing to mass customization in a use-oriented way and, throughbuilding the smart factory and “lighthouse factory”, achieved the interconnection and intelligent
optimization of its ecosystem. As of June 2020, the Company has built 22 smart factories, withlarge-scale customization system centered on users in the IoT era, and forming the world’s leading
benchmark of high-end manufacturing.
Through data-based simulation modeling verification, efficient production collaboration andprecise quality control, more scenario-based and intelligent IoT products, intelligent combination
solutions and AI technology applications, the Company’s intelligent 5G smart factory effectively
optimized the productivity in production efficiency, manufacturing cost and non-warehousing rate
and to achieve the “self-perception” of full-process information, “self-decision” of full-factor events
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and “self-iteration” of full-cycle scenarios, and strengthen the competitiveness of smart
manufacturing.
The exploration and practice of intelligent manufacturing of the Company has beenrecognized by domestic and foreign authorities. ① In January 2020, Haier Shenyang
Refrigerator Smart Factory was named a lighthouse factory by the World Economic Forum by
deploying an extensible digital platform to realize end-to-end connection between enterprises anduser resources and supplier resources. Since the first lighthouses were announced in 2018, five
Chinese companies have been selected, including Haier, which has contributed two lighthousefactories to the world. ② In May 2020, Haier Sino-German Drum Washing Machine Smart
Factory was selected as one of the first Chinese benchmark smart factories, which is the largest andmost flexible eco-mass customization demonstration base of the Internet of Clothing in the world.
(VI) Sticking to RenDanHeYi Model and promoting organizational reform underecosystem micro-community (EMC) self-driven mechanism
The EMC self-driven mechanism is the ability of the enterprise’s production and marketing
nodes to continuously meet the changes of user’s need and to survive by realizing interconnection,synergy and iteration in a highly networked society with constantly changing supply and demand. It
is the basic organizational mechanism guarantee for the Company to keep abreast of times andcreate a world-class Internet of Things model. EMC organization is an integration of“experience-oriented EMC” and “solution-oriented EMC”. The “experience-oriented EMC” is acommunity and touch point that directly interacts with users. It constantly interacts with users to
obtain user needs in real time. The “solution-oriented EMC” refers to research, development andother nodes, which provides continuously iterative scenario solutions by connecting the resources ofall parties. Under the same goal, the “experience-oriented EMC” and “solution-oriented EMC”
merge and compromise each other to form a self-driven ecosystem that jointly meets the user’s
needs. EMC organizations can achieve self-sustainability based on the continuous segmentation ofuser groups and can also spontaneously emerge based on new market opportunities. It undertakes
market-leading goals to ensure continuous iteration of user experience. This self-organization andself-driven of EMC can realize the self-adaptation that can meet the needs of different users. Suchself-adaptive non-linear network enables zero-distance integration between the EMC and users andcontinuously improves transaction efficiency.
II. Major operations during the reporting period(I) Analysis of principal business
Table of movement analysis on the related items in financial statement
Unit and Currency: RMB
Items
Corresponding
Current period
Change (%)
period of last year
Operating revenue
95,728,097,106.65 100,023,464,237.90-4.29
Operating cost
68,934,592,121.68
70,999,483,630.77-2.91
Selling expenses
14,526,912,493.29
14,777,899,222.91-1.70
Administrative expenses
4,608,308,707.03
4,536,101,362.72
1.59
Financial expenses
701,520,565.00
504,775,596.12
38.98
133 / 2512020 Interim Report

R&D expenses
Net cash flow generated fromoperating activities
Net cash flow generated frominvesting activities
Net cash flow generated fromfinancing activities
Taxes and surcharges
Gains from change in fair value
Loss on credit impairment
Loss on assets impairment
Gains from disposal of assets
Non-operating income
Non-operating expenses
Income tax expense

Haier Smart Home Co., Ltd.

2,939,733,549.14

2,797,067,620.86

5.10-542,919,257.40

3,619,808,314.60-115.00-2,061,783,383.42-7,858,425,144.60

73.76

10,579,538,929.35

888,769,226.44

1,090.36

275,190,778.54-30,987,103.15-108,905,504.07-609,748,132.69-14,442,406.46
68,886,689.07
55,470,756.55
661,226,873.34

406,052,828.55
57,409,956.80
37,775,605.39-257,747,905.20
12,706,682.87
272,606,469.33
114,506,708.29
1,056,104,931.20-32.23-153.98-388.30-136.57-213.66-74.73-51.56-37.39Reasons analysis of changes in indicators that change significantly:
1)

Taxes and surcharges decreased by 32.23% compared to the corresponding period, which mainly
resulted from the change in VAT rate, which has been reduced from 16% to 13% since 1 April
2019;

2)

Financial expenses increased by 38.98% compared to the corresponding period, which mainly
resulted from an increase in exchange loss due to the fluctuation in foreign exchange rate in thecurrent period;

3)

Gains and losses from change in fair value decreased by 153.98% compared to the corresponding
period, which mainly resulted from a decrease in fair value of the forward foreign exchange tradingin the current period compared to the corresponding period;

4)

Loss on credit impairment increased by 388.30% compared to the corresponding period, whichmainly resulted from an increase in the bad debt losses of receivables in the current period;

5)

Loss on assets impairment increased by 136.57% compared to the corresponding period, whichmainly resulted from an increase in the losses of provision for impairment of inventory in thecurrent period;

6)

Gains from disposal of assets decreased by 213.66% compared to the corresponding period, whichmainly resulted from the recognised non-current asset disposal loss in the current period;

7)

Non-operating income decreased by 74.73% compared to the corresponding period, which mainly
resulted from a decrease in penalty income in the current period compared to the corresponding
period;8)Non-operating expenses decreased by 51.56% compared to the corresponding period, which mainly
resulted from a decrease in recognised one-off expenses in the current period;

9)

Income tax expenses decreased by 37.39% compared to the corresponding period, which mainly
resulted from a decrease in taxable income compared to the corresponding period;10) Net cash flow generated from operating activities decreased by 115% compared to thecorresponding period, which mainly resulted from a decrease in collections due to the epidemic;11) Net cash flow generated from investing activities increased by 73.76% compared to thecorresponding period, which mainly resulted from the expenses on acquisition of Candy and thepurchase of wealth management products;
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Haier Smart Home Co., Ltd.

12) Net cash flow generated from financing activities increased by 1,090.36% compared to thecorresponding period, which mainly resulted from the new borrowings due to the epidemic.
2

Others

Detailed explanation on significant changes in the components of profit or sources of profit of
the Company
Applicable √Not Applicable
OthersApplicable √Not Applicable(II) Explanations on the major changes in profits caused by non-principle businesses Applicable √ Not Applicable(III) Analysis of assets and liabilities√Applicable Not Applicable
1.

Assets and liabilities

Items

Amount as attheend of theperiodPercentage
of amountatthe end oftheperiodovertotal assets(%)

Amount as attheend of thecorresponding
period of lastyear

Percentage
of amountat the endof thecorresponding periodof last year
over
total assets(%)

Percentage
of change inamountfromthe end of
thecorresponding period oflast year tocurrent
period(%)

Financialassets held for
trading

2,400,484,812

1.21

308,135,007.1

0.16

679.04

Derivative
financialassets

66,466,125.17

0.03

19,158,132.45

0.01

246.93

Accounts
receivable

17,000,438,42
3

8.58

11,015,871,06
0

5.88

54.33

35 / 251

Unit: RMB

Explanations

Mainly due toan increase in
short-term
wealthmanagement
products
Mainly due toan increase inforwardforeignexchange
trading
contracts inthecurrent
periodMainly due totheprolongationof payment
termsofstrategic
partners and adecrease in2020 Interim Report

Haier Smart Home Co., Ltd.

Prepayments

1,720,348,361

0.87

1,272,921,547

0.68

35.15

Other current
assets3,498,969,606

1.77

6,985,966,115

3.73-49.91Other
non-current
financialassets72,739,420.26

0.04

294,547,364.4
7

0.16-75.30

Short-termborrowings

17,223,889,73
7

8.70

8,585,049,237

4.58

100.63Financialliabilities
held for sale

17,825,470.87

0.01

42,799,173.35

0.02-58.35Derivative
financialliabilities

164,280,435.1
0

0.08

99,548,853.97

0.05

65.02

2.

Restrictions on major assets as of the end of reporting period

 Applicable √Not Applicable
3.

Other explanations

 Applicable √Not Applicable(IV) Analysis of investment
I.

Overall analysis on external equity investment
Applicable √Not Applicable
36 / 251

factoring inthecurrent
periodMainly due toan increase inprepaymentsofbulkmaterials
Mainly due toa decrease in
wealthmanagement
products
measured atamortised
cost
Mainly due tothereclassification of wealthmanagement
to financial
assetsheld
for trading
Mainly due tothesupplement
totheCompany’s
working
capitalMainly due tothe expiry of
forwardlock-exchange instruments
Mainly due toan increase in
cash
flow
hedging-interest rate swap
agreements

2020 Interim Report

Haier Smart Home Co., Ltd.

(1) Significant equity investment
Applicable √Not Applicable(2) Significant non-equity investment
 Applicable √Not Applicable(3) Financial assets measured at fair value√ Applicable Not Applicable

Items

Bank ofCommunications(601328)
BAILIAN(600827)
Eastsoft (300183)
Wealthmanagement
products
Interest rate swap
agreement
ForwardCommodity
contract
Forward foreign
Exchange contract
Others
Total

Current
purchase /saleduring thereportingperiodInvestment
incomeduringthe reporting
periodChanges infair value
duringthe reporting
periodInitialinvestment
cost

Source offunds

1,803,769.50

Self-owned-681,126.00

154,770.00

Self-owned

215,452.36

18,713,562.84

Self-owned

2,386,230,789.60

Self-owned

1,911,500,000.00

38,862,584.39

2,809,431.16

Self-owned
Self-owned

1,797,308.30

Self-owned
1,440,211,738.79
3,847,114,630.73

Self-owned

10,790,331.50
1,922,290,331.50

17,271,384.79-15,054,736.65

14,526,208.93
70,660,178.11-135,836,558.75-146,750,229.58

Note: As of 30 June 2020, the aggregate balance of foreign exchange derivative transaction amounted toapproximately US$1.526 billion.
(V) Sale of material assets and equity
 Applicable √Not Applicable(VI) Analysis on major subsidiaries and Investees√ Applicable □Not Applicable
Name of the company
Scope of business
Haier Electronics
Production and sale of home
Group Co., Ltd.
appliances
Haier
US
APPLIANCE
Investment holding
SOLUTIONS,INC.

Unit and currency: RMB 0’000
Total assets Net assets
Net profit
4,794,276

2,915,765

140,7445,285,194

2,406,548

107,230

Remark: The financial data of Haier Electronics Group Co., Ltd. is determined in accordance with the
Chinese Accounting Standards and the accounting policies of the Company.
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Haier Smart Home Co., Ltd.

(VII)
Structured entities controlled by the Company□ Applicable √Not Applicable
III. Other disclosures(I) Warning and explanation for any prediction of accumulated net loss from the beginning of theyear to the end of the next reporting period or substantial change in accumulated net profit ascompare to the same period last year
□Applicable √Not Applicable(II) Potential risks√Applicable □ Not Applicable

1. Risk of soft demand due to a slowdown in macro-economic growth. As white home
appliance products fall into the category of durable consumer electronic products, the income
level and expectation on future income growth will have an effect on the purchase of white home
appliance. In the event of a slowdown in the macro economic growth, which will decrease thepurchasing power of consumers, growth of the industry will be adversely affected. In addition,slow-down in the growth of the real estate market will have some negative effect on market
demand, which will in turn have some indirect effect on terminal demands for home applianceproducts.
2. Price war risk caused by intensifying industry competition. The industry of white
goods products has intense competition with a high homogeneity of products. In recent years, theindustry has shown a trend of increasing concentration. In addition, the increase of industry
inventory caused by imbalance between supply and demand in individual sub-industries may leadto price wars and other risks.
3. Risk of price fluctuation of raw materials. The Company’s products and corecomponents are mainly made of metal raw materials such as steel, aluminum and copper, as well
as plastics, foaming materials and other bulk raw materials. The potential increase of prices ofraw materials may pose a certain pressure on the Company’s production and operation.
4. Operating risk in overseas market. With the stable development of businessglobalization, the Company has set up several production bases, research and development
centers and marketing centers in a number of countries around the world, leading to thecontinuous rise of overseas business. As the overseas market is subject to the impact of local
political and economic situation, legal system and supervisory system, significant changes ofsuch factors would pose risks to the Company’s operation locally. Under the influence of global
trade protectionism, the emergence of a series of problems, such as superpower games, trade
frictions, tariff barriers, foreign exchange fluctuations, together with the complexity of global
politics and economy, will increase the international trade cost, labor cost and foreign exchangetransaction cost, as well as the uncertainty of the Company’s overseas operations.
5. Risk of fluctuation in foreign currency exchange rate. With the deepening of theCompany’s global layout, the import and export of the Company’s products involve theexchange of foreign currencies such as US dollars, Euro and Japanese yen. If the exchange rateof relevant currencies fluctuates, the Company’s financial situation may be influenced to someextent and its financial costs may increase.
6. Risk of policy changes. The industry of home appliances is closely related to theconsumer goods market and real estate market. The changes in macroeconomic policy,
38 / 2512020 Interim Report

Haier Smart Home Co., Ltd.

consumption investment policy, real estate policy and other relevant laws and regulations will
influence distributor demands of products, and may influence sales of the Company’s products.
7. Risk of the epidemic. The new novel coronavirus epidemic starting from late 2019 hasbrought impact on consumer demand and consumer demand for home appliances, which in turnwill affect the Company’s product sales.
(III) Other disclosures□Applicable √Not Applicable

39 / 2512020 Interim Report
Haier Smart Home Co., Ltd.

SECTION V SIGNIFICANT EVENTSI.

Introduction to the general meeting of shareholders
Meeting2020 First
Extraordinary
GeneralMeeting2019 Annual
GeneralMeeting

Date

Index for details of websites designated for
publishing resolutions

Date ofdisclosure

31
March
2020

For details, please refer to the Announcement on
Resolutions Passed at the 2020 First Extraordinary
General Meeting of Haier Smart Home Co., Ltd.
(L2020-010) published by the Company on thewebsiteofShanghaiStock
Exchange(www.sse.com.cn) and the four major securities
newspapers

1 April2020

3 June2020

For details, please refer to the Announcement on
Resolutions Passed at the 2019 Annual General
Meeting of Haier Smart Home Co., Ltd.
(L2020-029) published by the Company on thewebsiteofShanghaiStock
Exchange(www.sse.com.cn) and the four major securities
newspapers

4 June 2020

Explanation of Shareholders' general meeting√Applicable □Not Applicable(1) The 2020 First Extraordinary General Meeting of the Company was held by way of on-site
voting and network voting by poll at Room A108, Haier University, Haier Information Park, No.1
Haier Road, Qingdao, the PRC, in the afternoon on 31 March 2020, considering the amendment ofarticles of association of the Company and other relevant resolutions. The Company’s share capitalin aggregate amounted to 6,579,566,627 shares. 314 shareholders and proxies attended the meeting,holding a total of 3,718,197,212 shares, representing 56.51% of the total number of shares of theCompany with voting rights. The Directors, supervisors and senior management of the Company aswell as the lawyers engaged by the Company also attended the meeting. The 2020 First
Extraordinary General Meeting was convened by the Board of the Company and Chairman Mr.
Liang Haishan, presided over the meeting. The Company had 9 Directors, of whom 1 Director
attended the meeting (Directors Tan Lixia, Li Huagang, Wu Changqi, Yan Yan, Lin Sui, Qian Daqun,
Dai Deming and Shi Tiantao were unable to attend the meeting due to personal engagement); theCompany had 3 supervisors, all of whom attended the meeting. The secretary to the Board of theCompany attended the meeting and other members of senior management of the Company wereinvited to attend the meeting.
(2) The 2019 Annual General Meeting of the Company was held by way of on-site voting andnetwork voting by poll at Room B101, Haier University, Haier Information Park, No.1 Haier Road,
Qingdao, the PRC, in the afternoon on 3 June 2020, considering the annual report of the Company
and other relevant resolutions. The Company’s share capital in aggregate amounted to6,579,566,627 shares. 517 shareholders and proxies attended the meeting, holding a total of
4,144,404,424 shares, representing 62.99% of the total number of shares of the Company withvoting rights. The Directors, supervisors and senior management of the Company as well as thelawyers engaged by the Company also attended the meeting. The General Meeting was convened
40 / 2512020 Interim Report
Haier Smart Home Co., Ltd.

by the Board of the Company and Chairman Mr. Liang Haishan, presided over the meeting. The
Company had 9 Directors, of whom 4 Directors attended the meeting (Directors Shi Tiantao, Qian
Daqun, Wu Changqi, Lin Sui and Yan Yan were unable to attend the meeting due to personal
engagement); the Company had 3 supervisors, all of whom attended the meeting. The secretary to
the Board of the Company attended the meeting and other members of senior management of theCompany were invited to attend the meeting.
II. Proposal of profit distribution or capitalization of capital reserve(I) Proposal for interim profit distribution and proposal for reverse conversion into sharecapitalWhether distributed or converted

No41 / 2512020 Interim Report
Haier Smart Home Co., Ltd.

III. Performance on undertakings(I)

The undertakings made by the ultimate controllers, shareholders, related parties, acquirer as well as the Company and other relevant parties
during or up to the reporting period√Applicable □Not Applicable
Whether

Backgroundofundertakings

Type ofundertakings

Covenanter

Contents of undertakings

Date andAny

performed in aterm ofdeadlinetimelyundertakings

forperformanceandstrictway

Undertaking
related tosignificant
reorganizati
onEliminate
the right
defects inlandproperty
etc.

Haier
Group
CorporationDuring the period from September 2006 to May 2007, the Company
issued shares to Haier Group Corporation (“Haier Group”) topurchase the controlling equity in its four subsidiaries, namely
Qingdao Haier Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电子有限公司), Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司), Wuhan Haier Electronics Co., Ltd. (武汉海尔电器股份有限公司), Guizhou Haier Electronics Co., Ltd. (贵州海尔电器有限公司). With regard to the land and property required in theoperation of Qingdao Haier Air-Conditioner Electronics Co., Ltd. (青岛 海 尔 空 调 电 子 有 限 公 司 ), Hefei Haier Air-conditioning Co.,
Limited (合肥海尔空调器有限公司), Wuhan Haier Electronics Co.,
Ltd. ( 武 汉 海 尔 电 器 股 份 有 限 公 司 ) (the “Covenantees”), HaierGroup made an undertaking (the “2006 Undertaking”). According to
the content of 2006 Undertaking and current condition of each
Covenantee, Haier Group will constantly assure that Covenantees willlease the land and property owned by Haier Group for free. HaierGroup will make compensation in the event that the Covenantees
42 / 25127
September
2006,
long-term

Yes

Yes

2020 Interim Report
Haier Smart Home Co., Ltd.

suffer loss due to the unavailability of such land and property.

Eliminate
Undertaking
related torefinancing

the right

Haier

defects in

Group

land

Corporationpropertyand etc.

Haier Group Corporation undertakes that it will assure Haier Smart
Home and its subsidiaries of the constant, stable and unobstructed useof the leased property. In the event that Haier Smart Home or any of
its subsidiaries suffers any economic loss due to the fact that leased
property has no relevant ownership certificate, Haier Group
Corporation will make compensation to impaired party in a timely
and sufficient way and take all reasonable and practicable measures tosupport the impaired party to recover to normal operation before theoccurrence of loss. Upon the expiration of relevant leasing period,
Haier Group Corporation will grant or take practicable measures toassure Haier Smart Home and its subsidiaries of priority to continue
to lease the property at a price not higher than the rent in comparable
market at that time. Haier Group Corporation will assure Haier Smart
Home and its subsidiaries of the constant, stable, free andunobstructed use of self-built property and land of the Group. In theevent that Haier Smart Home or any of its subsidiaries fails tocontinue to use self-built property according to its own will or in
original way due to the fact that self-built property has no relevant
ownership certificate, Haier Group Corporation will take allreasonable and practicable measures to eliminate obstruction andimpact, or will support Haier Smart Home or its affected subsidiary toobtain alternative property as soon as possible, if Haier Group
Corporation anticipates it is unable to cope with or eliminate theexternal obstruction and impact with its reasonable effort. For details,
please refer to the Announcement of Qingdao Haier Co., Ltd. on theFormation, Current Situation of the Defective Property, the Influence
on Operation of Issuer Caused by Uncertainty of Ownership, Solution
for the Defect and Guarantee Measures (L2014-005) published by theCompany on the four major securities newspapers and the website ofShanghai Stock Exchange on 29 March 2014.

43 / 251

24
December
2013,
long-term

Yes

Yes

2020 Interim Report
Haier Smart Home Co., Ltd.

Other

Eliminate
the right
defects inlandproperty
etc.

Haier
Smart
Home Co.,
Ltd.

Asset

Haier

The Company undertakes that it will eliminate the property defects of
the Company and main subsidiaries within five years with reasonablebusiness effort since 24 December 2013, to achieve the legality andcompliance of the Company and main subsidiaries in terms of landand property. For details, please refer to the Announcement of
Qingdao Haier Co., Ltd. on the Formation, Current Situation of the
Defective Property, the Influence on Operation of Issuer Caused by
Uncertainty of Ownership, Solution for the Defect and Guarantee
Measures (L2014-005) published by the Company on the four major
securities newspapers and the website of Shanghai Stock Exchange
on 29 March 2014. During the aforesaid period, the Company has
formulated relevant performance guarantee measures, including the
re-application by the Company and its main subsidiaries to thecompetent government department for the property ownership24
certificate and to procure Haier Group Corporation to make guarantee
Decemberundertakings in respect of the defective property owned by it and its
2013, eightsubsidiaries. As of the expiration date, the Company has resolved theyears
property defects of itself and its eight major subsidiaries, while that of
the other remaining five major subsidiaries is in process. The
Company will make reasonable business efforts to resolve theproperty defects of these five major subsidiaries. Because of historicalissues and other reasons, the approval procedure involved in solving
some defective property problems is complicated, including that ofmultiple government departments, and it takes a long time to handle
and coordinate related matters. Due to the above external factors, theCompany was unable to complete the above undertakings within theoriginal undertaking period. Therefore, after the approval of the board
meeting held by the Company on 5 November 2018 and the general
meeting held on 21 December 2018, the term of the above
undertakings was extended for three years based on the original
deadline.

Yes

Yes

Inject the assets of Haier Photoelectric to the Company or disposesuch assets through other ways according to the requirements of the

Yes

Yes

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December2015 to2020 Interim Report
Haier Smart Home Co., Ltd.

undertakings

Other
undertakings

injection

Profitforecast
andcompensat
ion

Group
Corporationdomestic supervision before June 2025. For more details, please referto the Announcement of Haier Smart Home Co., Ltd. on the Changesof Some Commitments on Asset Injection (L2020-024) published on
the four major securities newspapers and the website of Shanghai
Stock Exchange on 30 April 2020.

Haier
Electric
AppliancesInternation
al Co., Ltd.

In August 2018, Guanmei (Shanghai) Enterprise Management
Company Limited ( 贯 美 ( 上 海 ) 企 业 管 理 有 限 公 司 ) (hereinafterreferred to as “Guanmei”), an indirect holding subsidiary of theCompany replaced the 55% equity interests of Bingji (Shanghai)Enterprise Management Company Limited (冰戟(上海)企业管理有
限 公 司 ) held by it with the 51% equity interests of Qingdao HSW
Water Appliance Co., Ltd. (hereinafter referred to as “Water
Appliance”) held by Haier Electric Appliances International Co., Ltd.
(hereinafter referred to as “Haier International”). In this regard, Haier
International promises that the cumulative actual net profit recordedby the Water Appliance in the three accounting years during the profit
compensation period shall not be less than its cumulative forecasted
net profit in the corresponding year, otherwise Haier International
shall compensate Guanmei’s results according to the Assets
Replacement Agreement. Details are set out in the Announcement on
the Equity Replacement and Related-Party Transactions to Be
Conducted by the Holding Subsidiary of Qingdao Haier Co., Ltd. andHaier Electronics International Co., Ltd. (L2018-047) published by
the Company on the four major securities newspapers and the website
of Shanghai Stock Exchange on 31 August 2018.

45 / 251

June 2025

As of 30
April 2021

Yes

Yes

2020 Interim Report
Haier Smart Home Co., Ltd.

IV. Appointment and dismissal of accounting firm
Explanation of appointment and dismissal of accounting firm□Applicable √Not Applicable
Explanation of change of accounting firm during the auditing period□Applicable √Not Applicable
Explanation of the Company on the “non-standard audit report” issued by the accounting firm□Applicable √Not Applicable
Explanation of the Company on the “non-standard audit report” issued by the certified public
accountants as set out in the financial report in the annual report last year
□Applicable √Not Applicable
V.

Matters relating to bankruptcy and restructuring□Applicable √Not Applicable

VI. Material litigation and arbitration matters□Material litigation and arbitration matter during the reporting period √No material
litigation and arbitration matters during the reporting period
VII. Punishment and correction on the listed company and its directors, supervisors,senior management, controlling shareholders, ultimate controllers and acquirers
and the issue of rectification□ Applicable √ Not applicable
VIII.
Explanation of the integrity status of the Company and its controllingshareholders and ultimate controller during the reporting period□ Applicable √ Not applicable

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Haier Smart Home Co., Ltd.

IX. The Company's share option incentive scheme, employee shareholding scheme orother employee incentive measures and its influence(I)

Matters that have been disclosed in temporary announcements and without any
subsequent progress or change□ Applicable √ Not applicable(II)

Share incentives not disclosed in temporary announcements or with subsequent
progress

Share Option Incentive□ Applicable √ Not applicable
Other explanations□ Applicable √ Not applicable
Employee stock ownership plan (ESOP)√ Applicable □ Not applicable
Extension of the Phase II ESOPs: As some shares under the Phase II ESOPs of
Qingdao Haier Co., Ltd. (Draft) (hereinafter referred to as “Phase II ESOPs”) remain
unallocated, there are still 1,854,568 shares in the asset management account of the Phase II
ESOPs. According to the original arrangement, the Phase II ESOPs would expire on 27
March 2020. Under the Phase II ESOPs, the validity period of the Phase ESOPs may be
extended upon consideration by a Board meeting after expiry of the validity period. Therefore,
with the confidence in the future continuous development of the Company and the judgmenton the Company’s stock value, Haier Smart Home convened the 6th meeting of the Tenthsession of the Board of Directors on 14 February 2020, which resolved to extend the validity
period (from registration of underlying shares to the Phase II ESOPs (28 March 2017)) of
Phase II ESOPs from “not more than 36 months” to “not more than 60 months”. After thechange of the validity period, no lock-up period would be reset on the Phase II ESOPs. The
meeting of the Board of Supervisors held on the same day also considered and passed theabove matters, at which independent directors provided affirmative independent opinions.
Other incentive measures□ Applicable √ Not applicable

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Haier Smart Home Co., Ltd.

X.

Significant related-party transactions(I) Related-party transactions from daily operation
1. Matters that have been disclosed in temporary announcements and with no subsequent
progress or change□ Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcements and with subsequent
progress or change√ Applicable □ Not applicable
The Company made a forecast on the related-party transaction matters of the Company for theyear of 2020 at the 7th meeting of the Tenth session of the Board of Directors held on 29 April
2020. For details, please refer to the Announcement of Haier Smart Home Co., Ltd. regarding the
Anticipation on the Daily Related-party Transactions for 2020 and relevant announcement on the
resolutions of the Board disclosed on 30 April 2020.
For the actual implementation of the Company’s related-party transaction in the first half of2020, please refer to “XII. Related parties and related-party transactions under section X Financial and Accounting Report” set out in this regular report.
3.

Matters not disclosed in temporary announcements□ Applicable √ Not applicable(II) Related-party transactions regarding acquisition or disposal of assets/equity
1.

Matters disclosed in temporary announcements and with no subsequent progress orchange□ Applicable √ Not applicable

2.

Matters that have been disclosed in temporary announcements and with subsequent
progress or change□ Applicable √ Not applicable

3.

Matters not disclosed in temporary announcements□ Applicable √ Not applicable

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Haier Smart Home Co., Ltd.

4.

If performance agreement is involved, the performance achieved during the reporting
period shall be disclosed□ Applicable √ Not applicable(III) Significant related-party transactions of joint external investment
1.

Matters that have been disclosed in temporary announcements and with no subsequent
progress or change□ Applicable √ Not applicable

2.

Matters that have been disclosed in temporary announcements and with subsequent
progress or change□ Applicable √ Not applicable

3.

Matters not disclosed in temporary announcements□ Applicable √ Not applicable(IV) Amounts due to or from related parties
1.

Matters that have been disclosed in temporary announcements and with no subsequent
progress or change□ Applicable √ Not applicable

2.

Matters that have been disclosed in temporary announcement and with subsequent
progress or change□ Applicable √ Not applicable

3.

Matters not disclosed in temporary announcements□ Applicable √ Not applicable(V) Other significant related-party transactions□ Applicable √ Not applicable(VI) Others□ Applicable √ Not applicable
49 / 2512020 Interim Report
Haier Smart Home Co., Ltd.

XI. Significant contracts and their execution
1

Trusteeship, contracting and leasing□ Applicable √ Not applicable2

Guarantee√Applicable □Not Applicable
Unit and Currency: RMB
External guarantees provided by the Company (excluding guarantees for subsidiaries)
Date

Relationsofhipoccurrenbetween
Guarantor

theguarantor
andSecuredparty

ce

CommenExpiryof thecementdateguarantee

date

of

(date

of

guarantee

ofguarantee

Amountofguarantee

thelistedWhetherTypeofguarantee

theguarantee
hasbeen
fulfilled

Whethertheguarantee
isoverdue

Overdueamountof theguarantee

Whether Whether
there

Related-

is a

party

counter-g guarantee
uarantee

Relationshipor notagreemencompanyt)

Total amount of guarantee occurred during the reporting period(excluding guarantees for subsidiaries)
Total balance of guarantee at the end of thereporting period (A) (excluding guarantees
for subsidiaries)
Guarantees provided by the Company for subsidiaries
Total amount of guarantees for subsidiaries

4,309,759

occurred during the reporting period
Total balance of guarantees for subsidiaries

3,634,867

at the end of the reporting period (B)Total amount of guarantees provided by the Company (including guarantees for subsidiaries)
Total amount of guarantee (A + B)

3,634,867

Ratio of total amount of guarantees to net assets of the Company (%)

75.21

Including:Amount of guarantees for shareholders,ultimate controllers and their related parties

0(C)
Amount of debt guarantees provided directly or indirectly for the
50 / 251

2,369,621

2020 Interim Report
Haier Smart Home Co., Ltd.
secured party with asset-liability ratio exceeding 70% (D)The amount of total amount of guarantee in

1,218,346

excess of 50% of net assets (E)Total amount of the above three guarantees

3,587,967(C + D + E)
Explanation of possibly bearing related discharge duty for premature

None

guarantees
The total amount of the aforementioned guarantees consists of two parts:
1. In 2016, the Company acquired the assets of GEA at a total considerationof USD 5.61 billion, which was sourced from self-owned funds and loan formerger, of which, the loan for merger in the amount of USD 3.3 billion wasapplied for by Haier US Appliance Solutions, Inc., a wholly-owned
subsidiary of the Company, to China Development Bank Co., Ltd. The loan
was fully secured by the Company and Haier Group Corporation. Thebalance of the guarantee amounted to approximately RMB4.984 billion as at
the end of the reporting period. The provision of guarantee had been
Explanation of guarantee statusconsidered and approved by the Board and the general meeting ofshareholders of the Company;
2. In June 2020, the resolution on the Expected Provision of Guarantee forsubsidiaries in 2020 was reviewed and passed on the 2019 Annual General
Meeting of the Company, according to which, the Company had provided
guarantee in respect of the application for comprehensive facility made bycertain subsidiaries to financial institutions. During the reporting period, theaccumulated amount of guarantee offered by the Company to subsidiaries
was approximately RMB33.775 billion. As of the end of the reporting period,
the balance guaranteed was RMB31.364 billion.

3

Other major contracts□Applicable √Not Applicable

XII. Information on poverty alleviation of the listed companies√Applicable □Not Applicable1.

Targeted measures in poverty alleviation plan
√Applicable □Not Applicable

In accordance with the national plan for targeted measures in poverty alleviation and therequirements set out in relevant documents, the Company places great emphasis on poverty
alleviation, and carries out initiatives of targeted measures in poverty alleviation within the scope
as authorized by the general meetings on related matters (such as donation).
51 / 2512020 Interim Report
Haier Smart Home Co., Ltd.

Since the outbreak of the COVID-19, the Company has taken immediate action in active
response to the front-line fight against the epidemic. Capitalizing on its global layout, theCompany has continuously made multiple donations in funds, medical equipment, epidemic
prevention materials, IoT appliances and green logistics channels, etc. to actively andcomprehensively support the epidemic areas in fighting the epidemic.
In addition, over the years, the Company has been devoted to education undertakings andmaking significant contributions, with a view to targeting the weakest area of education and toblocking the transmission of poverty between generations through focused efforts in raising thebasic cultural quality in poverty and the skill levels of labor force from poor families. Up to now,
the Company and the Haier Group Corporation (its ultimate controller) and its subsidiaries(referred to as the “Haier Group”) have accumulatively built over 300 hope primary schools andhope middle schools, covering 26 provinces, municipalities directly under the central government
and autonomous regions in China, and continuously provided the above-mentioned schools withsupport in materials and other respects in each year. These initiatives have effectively enhanced
the basic educational capabilities in poverty-stricken areas and improved the quality of education;at the same time, the Company has continued to provide partner assistance in poverty alleviation
through agricultural development, poverty alleviation through improvement of the health offarmers and other aspects in support of rural construction, contributing to the construction of
beautiful villages. During the reporting period, the Company provided financial and other support
to Qiongkuerkeshilake Village and Xiaheyadi Village in Xinjiang.
2.

Summary of targeted measures in poverty alleviation during the reporting period√Applicable □Not Applicable

In the first half of 2020, the Company's expenditures on targeted measures in poverty
alleviation was approximately RMB23.45 million, which was mainly utilized in supporting
disaster areas to fight against the epidemic as well as poverty alleviation through agriculturaldevelopment, and poverty alleviation through improvement of the health of farmers, as part of its
initiatives in response to the government and the performance of its social responsibilities.
3.

Results of targeted measures in poverty alleviation√Applicable □Not Applicable
Unit and Currency: RMB0'000
Indicator

I.

Amount and the status

General information

Including: 1. FundII.

2,344.61

Breakdown of the use of funds

1.Poverty alleviation through education
Including: 1.1 Amount invested in helping
52 / 2511.1

2020 Interim Report
Haier Smart Home Co., Ltd.

poor students
2.Poverty alleviation through health enhancement
Including: 2.1 Amount invested in medical
and health resources in poverty areas

18.5

3.Basic guarantees
3.1 Amount invested in helping people withdisabilities who are living in poverty

7.1

4. Poverty alleviation in the society
4.1 Contributed amount in targeted poverty
alleviation works
4.2 Charity funds for poverty alleviation

4.

4.0
2,299.9

Phased progress in performing social responsibilities of targeted poverty alleviation√Applicable □Not Applicable

In the first half of 2020, the Company’s poverty alleviation work was focused on promoting
anti-epidemic work in the society and the Company. After the outbreak of COVID-19, theCompany took prompt actions to help the disaster areas tide over difficulties. The Company
donated RMB13 million in cash to support Hubei and other badly stricken areas in building
hospitals and purchasing emergency medical supplies, as well as home appliances and epidemic
prevention supplies worth over RMB ten million. The Company urged branches in the US, Japan,
Russia, France, India, Thailand, Malaysia, Indonesia, Nigeria and other countries to pool anddonate epidemic prevention materials to relieve the epidemic areas from shortage of epidemic
prevention materials. Meanwhile, Haier Wuhan Branch immediately set up an “Anti-epidemic
Task Force” to deliver materials and install home appliances such as air-conditioners and water
heaters for Wuhan Huoshenshan Hospital, Leishenshan Hospital, Tongji Hospital and Union
Hospital, so as to support the anti-epidemic frontline.
5.

Subsequent targeted measures in poverty alleviation plans√Applicable □Not Applicable

In the second half of the year, the Company will make concerted efforts with Haier Groupand continue to implement the proposition of the documents issued by the central government inrespect of poverty alleviation, consolidate its achievements in fight against the epidemic, andcontinue to provide materials and services for the epidemic areas, contributing to the nationwide
campaign against the epidemic; and continue to dedicate to improve the education inpoverty-stricken areas, promote the revitalization of rural talents, show care for children’s physicaland mental health and other initiatives, and will perform our social responsibilities in a proactive
manner.

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Haier Smart Home Co., Ltd.

XIII.

Convertible corporation bonds□Applicable √Not Applicable

XIV.Environmental Information(I) Explanation of the environmental protection status of companies and their important
subsidiaries that are key emission units announced by the environmental protection
department√Applicable □Not Applicable
Innovation drive and green development are the development goals of modern manufacturing.
The Company continues to promote green development, actively promote green consumption,enhance the application of energy-saving technologies, and integrate low carbon, cycling, energy
saving and emission reduction into all aspects of enterprise development. Besides, the Company
also continues to promote technological innovation, research and develop the products integrating
smart IoT and green development to strive to increase the green of products at full life span,
extend the green supply chain, lead innovation, green, interaction and win-win of the industry, andcontribute to the national green development.
1.

Information on pollutant discharge√Applicable □Not Applicable

Qingdao Economy and Technology Development Zone Haier Energy & Power Co., Ltd.
(hereinafter referred to as “Development Zone Energy”), a subsidiary indirectly held by theCompany, is one of the critical pollutant dischargers announced by the environmental protection
department.
The Development Zone Energy, a non-production unit, is mainly responsible for unified
wastewater treatment for all the production units in the Development Zone. The main information
on pollutant discharge is as follows:① Main pollutants:
Wastewater. According to the Technical Specification for Application and Issuance of
Pollutant Permit - Wastewater Treatment (for Trial) (HJ 978-2018), Development Zone Energy
should apply for a pollutant discharge permit and detect 17 types of pollutants (including specificpollutants) , namely, total cadmium, total chromium, total mercury, total lead, total arsenic,
hexavalent chromium, COD, ammonia nitrogen, total phosphorus, total nitrogen, PH, suspended
solids, chroma, petroleum, BOD, rate of flow and temperature.
② Way of discharge: indirect discharge
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Haier Smart Home Co., Ltd.

③ Number and distribution of discharge outlets: one, on the southeast of the wastewater
treatment plant, pipeline discharge④ Concentration and total amount of discharge and approved total amount of discharge:
According to the discharge permit, the concentration and total amount of pollutant discharge
subject to approval for the total amount are as follows:

No.

Name ofpollutant

Concentrationof discharge

Total amountof discharge

Approved
total amountof discharge

Whether it isexcessivedischarge

1

COD

36.58 mg/L

9.62 tons

159.83 tonsNo

2Ammonia
nitrogen5.34 mg/L

1.37 tons

14.38 tons

No

3

Total
phosphorus

0.18mg/L

0.04 ton

2.55 tons

No4

Total nitrogen

7.98 mg/L

1.99 tons

22.37 tons

No

⑤ Pollutant discharge standards implemented: Wastewater Quality Standards for Discharge
to Municipal Sewers (GBT 31962-2015)
2.

Construction and operation of pollution control facility√Applicable □Not Applicable

The Development Zone Energy has a wastewater treatment station with a designed
processing capacity of 1,200 tons each day. The construction, maintenance and daily operations of
the wastewater treatment facilities are performed in accordance with national and local
environmental laws and regulations. All discharged wastewater data are monitored online during
24 hours. The monitoring data is transmitted in real time with the environmental protection
department and all equipment works well.
3.

Evaluation of the effect of construction projects on the environment and otherenvironmental administration license√Applicable □Not Applicable

The Company and its subsidiaries perform the implementation and production of
construction projects according to the laws and regulations. The Company performs
environmental impact evaluation procedures in strict accordance with the Three Simultaneous
system for environmental protection of construction projects which have been approved in theenvironmental impact assessment. There are no environmental violations such as having
constructions without approval.
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Haier Smart Home Co., Ltd.

4.

Emergency plan for environmental emergencies√Applicable □Not Applicable

The Emergency Plan for Environmental Emergencies is developed according to the laws andregulations by the Company and its subsidiaries. Drills have been organized. The Plan iscontinuously optimized and upgraded according to the drill results.
5.

Environmental self-monitoring plan
√Applicable □Not Applicable

All pollutant discharges of the Company comply with national and local environmental
standards. The sewage is discharged after being collected and treated, and is monitored in realtime through the automatic online sewage monitoring system. The data is connected to the Haier
Smart Energy System. In May 2020, the Company entrusted a professional third-party
certification body to carry out audit on renewal of ISO14001 environmental management system
certification and passed it successfully.
6.

Other environmental information to be disclosed□Applicable √Not Applicable(II) Statement on environmental protection information of the companies not on the list ofcritical pollutant dischargers√Applicable □Not Applicable
All units of the Company perform the implementation and production of construction projects
according to the requirements of laws and regulations. We complete environmental impact
evaluation procedures in strict accordance with the Three Simultaneous system for environmental
protection of construction projects. They have been approved in the environmental impact
assessment. There are no environmental violations such as construction without approval.
The Company has established Haier Smart Energy Center, an industry-leading energy big data
analysis system. It uses automation, information technology and centralized management mode to
implement centralized dynamic monitoring and digital management of main energy consumption
such as water, electricity and gas in all factories across the country; automatically and accurately
collects energy data, and completes the prediction and analysis of energy consumption data,
optimizes energy deployment and reduce the energy consumption of single product production,
thus truly achieving low-carbon production.

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Haier Smart Home Co., Ltd.

(III) Statement on reasons for non-disclosure of environmental information by thecompanies not on the list of critical pollutant dischargers□Applicable √Not Applicable(IV) Statement on subsequent progress or changes in the environmental information
disclosed during the reporting period√Applicable □Not Applicable
The Company will continue to maintain and keep optimizing existing results and allows
up-to-standard discharge in strict accordance with existing environmental discharge and emission
standards.
XV. Statement on Other Significant Events(I) Comparing with the last accounting period, information and reasons for the changes inaccounting policies, accounting estimation and accounting method, and their impacts□Applicable √Not Applicable(II) Information, the corrected amount, reasons and impacts for retrospective restatement tocorrect major accounting errors during the reporting period□Applicable √Not Applicable(III) Others√Applicable □Not Applicable(1) Entrusted wealth management: By the end of the reporting period, the balance of theCompany’s entrusted wealth management amounted to RMB2.985 billion, including three parts:① Temporarily-idle fundraising wealth management: at the end of December 2018, theCompany’s proceeds for the issuance of convertible corporate bonds were fully landed. In order toimprove the yield of temporarily-idle funds, the Company intended to carry out cash managementwith the amounts not exceeding RMB700 million after being approved by the Board of Directors.
By the end of the reporting period, the balance of the entrusted wealth management amounted to
RMB583 million; ② Wealth management of the Company’s Hong Kong listed subsidiary:Haier Electronics Group Co., Ltd. (hereinafter referred to as “HEG”, stock code: 01169.HK), theholding subsidiary of the Company, has purchased some short-term principal-protected wealthmanagement and structural deposits from large commercial banks as an independently operating
Hong Kong listed company in order to increase the efficiency of the use of idle funds within theauthorities of the management and on the premise of safeguarding funds security. In the purchaseprocess, all the necessary board reports were subject to the procedures such as filling and
57 / 2512020 Interim Report
Haier Smart Home Co., Ltd.

management’s review according to the regulations and requirements for Hong Kong listedcompany, so as to ensure sufficient funds for the day-to-day operations of the main business andimprove the shareholders’ returns. By the end of the reporting period, the balance of the entrusted
wealth management amounted to RMB2.389 billion. ③ Temporarily-idle funds wealthmanagement by certain subsidiaries of the Company: In order to improve the yield of
temporarily-idle funds, some subsidiaries of the Company use temporarily-idle funds for cash
management within the authority of the general manager’s office meeting. By the end of thereporting period, the balance of the entrusted wealth management amounted to RMB13 million.
(4) The progress of privatisation of HEG: On 12 December 2019, the Company announced
the preliminary discussion on the implementation of H-share listing and privatisation of HEG. On
30 July 2020, the Board of Directors of the Company approved related proposals and disclosed theReport on Acquisition of Material Assets and Related-Party Transaction of Haier Smart Home Co.,
Ltd. (Draft) and relevant documents. Up to now, the Company has been continuing to pushforward the progress of relating matters and will continue to disclose related advances inaccordance with related requirements.

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Haier Smart Home Co., Ltd.

SECTION VI CHANGES IN ORDINARY SHARES AND INFORMATION ABOUT SHAREHOLDERS
I.
(I)

Changes in share capital
Table of Changes in shares

1. Table of Changes in shares
During the reporting period, there was no change in the total number of shares and shareholding structure of the Company.
2.

Statement on the changes in shares□Applicable√Not Applicable

3. Effect of changes in shares on the financial indicators such as earnings per share and net assets per share (if any) after the reporting period to thedisclosure date of interim report□Applicable
4.

√Not Applicable

Other disclosure deemed necessary by the Company or required by securities regulatory authorities□Applicable√Not Applicable(II) Changes in shares with selling restrictions□Applicable√Not Applicable

II. Information on shareholders(I)

Total number of shareholders:

Total number of ordinary shareholders by the end of the reporting period

161,351

Total numbers of preferential shareholders with restoration of voting rights by the end of thereporting period
59 / 25102020 Interim Report
Haier Smart Home Co., Ltd.

(II) Table of shareholdings of top ten shareholders, top ten shareholders of tradable shares (or shares without selling restrictions) by the end of thereporting period
Unit: share

Name of shareholder (fullname)
Haier Electric AppliancesInternational Co., Ltd.
Haier Group Corporation
Hong Kong Securities
Clearing Co., Ltd.
China Securities FinanceCorporation Limited
Qingdao Haier Venture &Investment
Information
Co., Ltd. (青岛海尔创业投
资咨询有限公司)
GIC PRIVATE LIMITED
CLEARSTREAMBANKING S.A. (Note)
National social security
fund, Portfolio 113
Qingdao
Haichuangzhi
Management
Consulting
Enterprise(Limited
Partnership)

Increase/decreaseduring thereportingperiodShareholdings of top ten shareholders
Number ofshares heldat the end of
the period

Percentage(%)

Number ofshares heldwith selling
restrictions

Status ofsharespledgedor frozen
StatusNumber1,258,684,824

19.13

Nil

1,072,610,764

16.30

Nil

706,010,686

10.73

Unknown

182,592,697

2.78

Unknown

172,252,560

2.62

Nil

130,035,316

1.98

Unknown

91,211,350

1.39

Unknown

82,917,383

1.26

Unknown

73,011,000

1.11

60 / 251

Nil

Natureofshareholder
Domestic
non-state-owned
legal entity
Domestic
non-state-owned
legal entity
Foreign legal entity
State-owned legal
entityDomestic
non-state-owned
legal entity
Foreign legal entity
Foreign legal entity
Unknown
Domestic
non-state-owned
legal entity

2020 Interim Report
Haier Smart Home Co., Ltd.

CentralHuijinManagement Ltd.

Asset

69,539,900

1.06

Unknown

State-owned legal
entityShareholdings of top ten shareholders without selling restrictions
Number of tradable
Class and number of shares
Name of shareholder
shares held without
Class
Numberselling restrictions
Haier Electric Appliances International Co., Ltd.
1,258,684,824
RMB ordinary
1,258,684,824
Haier Group Corporation
1,072,610,764
RMB ordinary
1,072,610,764
Hong Kong Securities Clearing Co., Ltd.
706,010,686
RMB ordinary
706,010,686
China Securities Finance Corporation Limited
Qingdao
Haier Venture &Investment
Information Co., Ltd.(青岛海尔创业投资咨询有限公司)
GIC PRIVATE LIMITED
CLEARSTREAM BANKING S.A. (Note)

182,592,697

RMB ordinary

182,592,697

172,252,560

RMB ordinary

172,252,560

130,035,316

130,035,316

National social security fund, Portfolio 113
Qingdao Haichuangzhi Management Consulting
Enterprise (Limited Partnership)
Central Huijin Asset Management Ltd.

82,917,383

RMB ordinary
Overseas listed
foreignsharesRMB ordinary

73,011,000

RMB ordinary

73,011,000

91,211,350

91,211,350
82,917,383

69,539,900
RMB ordinary
69,539,900(1) Haier Electric Appliances International Co., Ltd. is a holding subsidiary of Haier Group Corporation. HaierGroup Corporation holds 51.20% of its equity. Qingdao Haier Venture & Investment Information Co., Ltd.(青岛Related parties or parties acting in concert among海 尔 创 业 投 资 咨 询 有 限 公 司 ) and Qingdao Haichuangzhi Management Consulting Enterprise (Limited
the aforesaid shareholders
Partnership) is a party acting in concert with Haier Group Corporation;(2) The Company is not aware of the existence of any connections of other shareholders.
Explanation of preferential shareholders with Not applicable
restoration of voting rights and theirshareholdings
Note: (1) This account is the Deutsche Bank collection account for the Company's D shares, which is the original data provided by the Clearstream Bank
Collection Account to the Company after the merger according to local market practices and technical settings, not representing the ultimate shareholder. (2)61 / 2512020 Interim Report
Haier Smart Home Co., Ltd.

57,142,857 shares in this account are held by Haier International Co., Limited, the concerted actor of the Company’s ultimate controller Haier Group Corporation,accounting for 0.87% of the Company’s total share capital.
Number of shares held by top ten shareholders with selling restrictions and the selling restrictions
 Applicable √Not Applicable(III) Strategic investors or general legal persons who became the top ten shareholders due to placing of new shares Applicable √Not Applicable
III. Changes in controlling shareholder and the ultimate controller Applicable √Not Applicable

62 / 251

Haier Smart Home Co., Ltd

Notes to the financial statements January-December 2020

SECTION VII RELEVANT INFORMATION OF PREFERREDSHARES Applicable √Not Applicable

63 / 251

Haier Smart Home Co., Ltd

Notes to the financial statements January-December 2020

SECTION VIII DIRECTORS, SUPERVISORS, SENIORMANAGEMENT
I. Changes of Shareholding(I) Changes of shareholding of current and retired directors, supervisors and senior
management during the reporting period
Applicable √Not Applicable
Other explanations
 Applicable √Not Applicable(II)
Incentive share option granted to directors, supervisors and senior management
during the reporting period
 Applicable √Not Applicable
II. Changes in directors, supervisors and senior management of the Company√Applicable Not ApplicableName
Shi Tiantao
Wang Keqin

PositionIndependent director
Independent director

Changes
Designation upon expiration
Election

Explanations on the change in directors, supervisors and senior management of the Company√ Applicable Not Applicable
During the reporting period, Mr. Shi Tiantao, an independent director of the Company, left his
post upon expiration of his term of office. After deliberation and approval by the general meeting,
Mr. Wang Keqin was nominated as the new independent director of the Company, and his term ofoffice was the same as that of the Tenth session of Board of Directors of the Company.
III. Other explanations
 Applicable √Not Applicable

64 / 251

Haier Smart Home Co., Ltd

Notes to the financial statements January-December 2020

SECTION IX RELEVANT INFORMATION OF CORPORATEBONDS Applicable √Not Applicable

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Haier Smart Home Co., Ltd

SECTION X RESPONSIBILITY STATEMENT‘As the executive director of the Board of Haier Smart Home Co., Ltd, we hereby confirms to thebest of our knowledge, and in accordance with the applicable reporting principles, that thefinancial statements give a true and fair view of the assets, liabilities, financial position and profit
or loss of the company; and the management report includes a fair review of the development andperformance of the business including the results and the position of the company, together with adescription of the principal opportunities and risks associated with the expected development of
the company.’

Qingdao, 29 Aug 2020
The Board of Haier Smart Home Co., Ltd

Liang Haishan

Tan Lixia

Li Huagang

Wu Changqi

Lin Sui

Yan Yan

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Haier Smart Home Co., Ltd

SECTION XI FINANCIAL REPORT
I. Audit report□ Applicable √ Not Applicable
II. Financial statements
Consolidated Balance Sheet
30 June 2020
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items

Notes

30 June 2020

31 December 2019

Current assets:
Monetary fundsVII. 1

44,112,940,130.82

36,178,815,683.25

Financial assets held for trading

VII. 22,400,484,812.34

308,135,007.05

Derivative financial assets

VII. 3

66,466,125.17

19,158,132.45

Bills receivable

VII. 4

13,176,349,200.41

13,951,419,893.96

Accounts receivable

VII. 517,000,438,423.14

11,015,871,060.09

VII. 6

1,720,348,360.69

1,272,921,546.72

VII. 7

1,933,305,471.43

2,163,517,802.50

Inventories

VII. 825,281,752,105.06

28,228,600,971.61

Contract assets

VII. 9470,929,672.21

422,738,398.42

VII. 10

3,498,969,605.83

6,985,966,115.46

109,661,983,907.10

100,547,144,611.51

Provision of settlement fundFunds lent

Financing receivables
Prepayments
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
Other receivables
Financial assets purchased underresale agreements

Assets held for saleNon-current assets due in one
year
Other current assets
Total current assets
Non-current assets:
67 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Loans and advances granted
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments
Investments in other equity
instruments
OtherassetsVII. 11VII. 12317,806,792.51

307,588,203.00

20,934,594,095.74

20,460,763,915.68

1,270,543,648.96

1,395,959,878.92

72,739,420.26

294,547,364.47

non-current

financial VII. 13

Investment properties

VII. 1430,844,577.15

29,402,691.38

Fixed assets

VII. 15

21,419,374,116.74

21,180,057,212.01

Construction in progress

VII. 16

2,938,851,804.25

2,391,364,659.97

Right-of-use assets

VII. 17

2,975,445,961.32

2,755,066,601.59

Intangible assets

VII. 18

10,743,483,352.82

10,687,071,783.07

Development costVII. 19

216,254,816.09

193,285,777.10

GoodwillVII. 20

24,140,784,341.49

23,351,729,813.35

Long-term prepaid expenses

VII. 21426,073,900.57

437,586,912.58

Deferred income tax assets

VII. 22

1,432,333,930.84

1,578,901,892.73

Other non-current assets

VII. 23

1,461,663,204.40

1,843,764,965.81

88,380,793,963.14

86,907,091,671.66

198,042,777,870.24

187,454,236,283.17

17,223,889,737.38

8,585,049,237.18

17,825,470.87

42,799,173.35

Biological assets for production
Oil and gas assets

Total non-current assets
Total assets
Current liabilities:
Short-term borrowings

VII. 24

Borrowings from central bank
Due to banks and other financial
institutions
Financial liabilities held for
tradingVII. 25

Derivative financial liabilities

VII. 26

164,280,435.09

99,548,853.97

Bills payable

VII. 27

19,522,193,515.67

19,308,538,776.92

Accounts payable

VII. 28

29,649,104,954.11

33,750,567,046.28

VII. 29

4,756,461,007.77

5,583,008,412.49

Receipts in advanceContract liabilities
Disposal of repurchased
financial assets
Absorbing deposit and deposit ininter-bank market
Customer deposits for trading insecurities
Amounts due to issuer for
68 / 2512020 Interim Report
Haier Smart Home Co., Ltd

securities underwriting
Payables for staff's remuneration

VII. 30

2,837,357,250.92

3,155,572,417.30

Taxes payable

VII. 31

1,917,747,901.27

2,117,056,381.04

Other payablesVII. 32

18,154,358,442.12

15,156,392,521.82

7,925,773,776.64

7,317,138,918.02

515,944,989.04

494,065,707.54

102,684,937,480.88

95,609,737,445.91

Fees and commissions payable
Reinsurance Accounts payables
Liabilities held for saleNon-current liabilities due
within one year

VII. 33

Other current liabilities

VII. 34

Total current liabilities
Non-current liabilities:
Deposits for insurance contracts
Long-term borrowings

VII. 35

14,716,070,114.06

13,276,452,935.56

Bonds payable

VII. 36

7,232,228,799.85

7,004,585,761.43

Lease liabilities

VII. 37

2,215,066,141.93

1,980,271,767.35

Long-term payablesVII. 38

116,033,371.58

142,342,718.45

1,120,685,891.42

1,122,350,237.36

Including: Preference shares
Perpetual bonds

Long-term payables for staff’s
remuneration

VII. 39

Estimated liabilities

VII. 40

1,411,653,965.45

1,398,877,746.33

Deferred income

VII. 41

747,708,893.63

705,272,617.10

Deferred income tax liabilities

VII. 22

1,212,570,950.74

1,154,413,295.72

Other non-current liabilities

VII. 42

78,081,950.87

70,071,490.03

28,850,100,079.53

26,854,638,569.33

131,535,037,560.41

122,464,376,015.24

Total non-current liabilities
Total liabilities
Owners' equity (or shareholders'equity):Paid-in capital (or share capital)VII. 43

6,579,566,627.00

6,579,566,627.00

Other equity instruments

VII. 44

431,424,524.07

431,424,524.07

VII. 45

4,787,092,806.14

4,435,890,845.47

VII. 46

1,105,978,659.19

1,317,988,619.66

VII. 47

2,655,327,405.46

2,655,327,405.46

VII. 48

32,771,011,657.53

32,468,121,744.26

48,330,401,679.39

47,888,319,765.92

Including: Preference shares
Perpetual bonds
Capital reserve
Less: treasury stock
Other comprehensive income
Special reserve
Surplus reserve
General risk provisions
Undistributed profits
Total equity attributable toowners (or shareholders) of the
69 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Parent Company
Minority shareholders' interests
Total owners'
shareholders' equity)

equity(orTotal liabilities and owners'
equity (or shareholders' equity)

18,177,338,630.44

17,101,540,502.01

66,507,740,309.83

64,989,860,267.93

198,042,777,870.24

187,454,236,283.17

Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Balance Sheet of the Parent Company
30 June 2020
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items

Notes

30 June 2020

31 December 2019

Current Assets:
Monetary funds

4,609,290,702.92

5,624,406,816.79

Financial assets held for
trading
Derivative financial assets
Bills receivable
Accounts receivable

5,000,000.00
XVIII. 1

5,604,386,498.20

1,182,234,481.49

1,509,874,027.01

30,749,459.11

3,134,888,436.32

5,885,752,905.74

182,081,306.41

233,688,207.38

604,638,054.45

705,958,670.28

15,650,159,025.31

13,662,790,540.79

36,526,235,885.10

35,566,480,370.20

Financing receivables
Prepayments
Other receivables

XVIII. 2

Inventories
Contract assets
Assets held for saleNon-current assets due within
one year
Other current assets
Total current assets
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity

XVIII. 3
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Haier Smart Home Co., Ltd

investments
Investments in other equity
instruments

4,936,879.64

5,147,131.28

Fixed assets

167,481,627.77

180,807,176.98

Construction in progress

82,422,580.69

65,367,920.02

Other non-current financial
assetsInvestment properties

Biological assets for
production
Oil and gas assets
Right-of-use assets

2,485,673.81

Intangible assets

14,769,047.21

15,779,108.14

Long-term prepaid expenses

4,633,466.62

5,405,209.80

Deferred income tax assets

102,602,840.34

97,384,845.46

Other non-current assets

16,402,236.00

3,792,624.04

36,921,970,237.18

35,940,164,385.92

52,572,129,262.49

49,602,954,926.71

Development cost
Goodwill

Total non-current assets
Total assets
Current liabilities:
Short-term borrowings

4,500,000,000.00

Financial liabilities held for
trading
Derivative financial liabilities
Bills payable
Accounts payables

166,869,308.63

3,412,291,778.06

Contract liabilities

14,218,302.12

16,562,259.31

Payables for staff's
remuneration

49,020,254.00

76,513,196.33

Taxes payable

49,009,819.22

86,856,453.32

Other payables

30,766,612,619.71

26,900,844,668.74

Receipts in advance

Including: Interest payable
Dividends payable
Liabilities held for saleNon-current liabilities due
within one year

814,925.37

Other current liabilities

3,205,084.56

2,149,745.37

Total current liabilities

35,549,750,313.61

30,495,218,101.13

Non-current liabilities:
Long-term borrowings
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Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities

851,678.50

Long-term payable

20,000,000.00

20,000,000.00

56,050,000.00

59,820,000.00

44,874,977.96

43,325,120.18

121,776,656.46

123,145,120.18

35,671,526,970.07

30,618,363,221.31

6,579,566,627.00

6,579,566,627.00

7,036,531,178.83

7,036,531,178.83

3,961,350.45

11,077,477.45

Surplus reserve

2,050,181,180.01

2,050,181,180.01

Undistributed profits

1,230,361,956.13

3,307,235,242.11

Total owners' equity (orshareholders' equity)

16,900,602,292.42

18,984,591,705.40

Total liabilities and owners’
equity (or shareholders' equity)

52,572,129,262.49

49,602,954,926.71

Long-term payables forstaff's remuneration
Estimated liabilities
Deferred income
Deferred
liabilities

incometax

Other non-current liabilities
Total non-current liabilities
Total liabilities
Owners' equity (orShareholders' equity):
Paid-in capital (or sharecapital)Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve
Less: treasury stock
Other comprehensive income
Special reserve

Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Consolidated Profit Statement
January-June 2020

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Unit and Currency: RMB
Items

Notes

Ⅰ. Total operating revenue

VII. 49

Including: Operating revenue

2020 Interim

2019 Interim

95,728,097,106.65

100,023,464,237.90

95,728,097,106.65

100,023,464,237.90

Interest income
Insurance premiums earned
Feeandincomecommission

Ⅱ. Total cost of operations

91,986,258,214.68

94,021,380,261.93

VII. 49

68,934,592,121.68

70,999,483,630.77

Taxes and surcharges

VII. 50

275,190,778.54

406,052,828.55

Selling expenses

VII. 51

14,526,912,493.29

14,777,899,222.91

Administrative expenses

VII. 52

4,608,308,707.03

4,536,101,362.72

R&D expenses

VII. 53

2,939,733,549.14

2,797,067,620.86

Financial expenses

VII. 54

701,520,565.00

504,775,596.12

719,257,090.03

886,299,299.68

219,622,316.65

258,697,380.60

525,289,255.43

473,929,407.12

756,782,922.79

756,762,139.19-30,987,103.15

57,409,956.80

Including: Operating cost
Interest expenses
Fee and commission expenses
Insurance withdrawal
payment
Net payment from indemnity
Net provisions withdrew for
insurance liability
Insurance

policydividend

paid
Reinsurance cost

Including: Interest expenses
Interest income
Add: other income
investment income (losses are
represented by “-”)VII. 55
VII. 56

Including: Investment incomeof associates and joint ventures
Income generated from thederecognition of financial assets
measured at amortized cost (losses
are represented by “-”)Exchange gain (losses are
represented by “-”)Gains on net exposure hedges(losses are represented by “-”)
Income from change in fair VII. 57
73 / 2512020 Interim Report
Haier Smart Home Co., Ltdvalue (losses are represented by “-”)Loss on credit impairment(losses are represented by “-”)VII. 58

Loss on assets impairment VII. 59(losses are represented by “-”)Gain from disposal of assets(losses are represented by “-”)VII. 60

Ⅲ. Operating profit (losses are
represented by “-”)

-108,905,504.07

37,775,605.39- 609,748,132.69- 257,747,905.20-14,442,406.46

12,706,682.87

4,259,827,923.82

7,082,919,862.14

Add: non-operating income

VII. 61

68,886,689.07

272,606,469.33

Less: non-operating expenses

VII. 62

55,470,756.55

114,506,708.29

4,273,243,856.34

7,241,019,623.18

661,226,873.34

1,056,104,931.20

3,612,016,983.00

6,184,914,691.98

3,612,016,983.00

6,034,408,639.45

Ⅳ. Total profit (total losses are
represented by “-”)Less: income tax expense
Ⅴ. Net profit (netrepresented by “-”)lossesVII. 63
are(I) Classification by continuous operation
1.Net profit from continuous
operation (net losses are represented
by “-”)
2. Net profit from discontinued
operation (net losses are represented
by “-”)

150,506,052.53(II) Classification by ownership of the equity
1. Net profit attributable toshareholders of the Parent
Company (net losses are represented
by “-”)

2,780,800,712.72

5,058,082,964.47

2. Profit or loss attributable tominority shareholders (net losses are
represented by “-”)

831,216,270.28

1,126,831,727.51-261,463,495.41

206,080,907.09(I) Other comprehensive income
attributable to owners of the Parent
Company, net of tax-220,001,490.33

233,624,267.18

1. Other comprehensive incomethat cannot be reclassified into the
profit or loss

-56,383,682.14-12,242,959.12

12,218.39- 400,317.18

VI. Other comprehensive income, netof taxVII. 64(1) Changes arising fromre-measurement of defined benefit
plans
74 / 2512020 Interim Report
Haier Smart Home Co., Ltd(2) Other comprehensive incomethat cannot be transferred into profit
or loss under equity method(3) Changes in fair value ofinvestments in other equity
instruments-56,395,900.53-11,842,641.94

2. Other comprehensive
income to be reclassified into the
profit or loss

-163,617,808.19

245,867,226.30(1) Other comprehensive incomethat can be transferred into profit orloss under equity method

29,046,113.28

19,829,612.65-85,267,888.94-25,398,943.78-107,396,032.53

251,436,557.43-41,462,005.08-27,543,360.09

Ⅶ. Total comprehensive income

3,350,553,487.59

6,390,995,599.07(I) Total comprehensive income
attributable to the owners of Parent
Company

2,560,799,222.39

5,291,707,231.65(II) Total comprehensive income
attributable to the minority
shareholders

789,754,265.20

1,099,288,367.42

0.423

0.794

0.413

0.764

(4) Changes in fair value of credit
risks of the enterprise(2) Changes in fair value of otherdebt investments(3) Reclassified financial assetsthat are credited to othercomprehensive income(4) Credit impairment provision forother debt investments(5) Reserve for cash flow hedging(6) Exchange differences ontranslation of financial statements
denominated in foreign currencies(7) Others(II) Other comprehensive income
attributable to minority shareholders,
net of tax

Ⅷ. Earnings per share:(I) Basic earnings per share(RMB/share)

XX. 1(II) Diluted earnings per share(RMB/share)

XX. 1

75 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Profit Statement of the Parent Company
January-June 2020
Unit and Currency: RMB
Items

Notes

2020 Interim

2019 Interim

XVIII. 4

5,042,717,099.68

1,330,869,374.63

XVIII. 4

4,398,410,781.55

950,382,533.32

Taxes and surcharges

11,343,686.85

8,794,240.92

Selling expenses

217,962,272.62

126,957,909.17

Administration expenses

132,288,406.83

141,039,328.01

R&D expenses

142,656,643.01

101,983,328.38

Financial expenses

28,978,469.77

99,436,940.80

Including: Interest expenses

46,159,222.22

113,544,460.15

Interest income

16,084,909.36

17,707,954.88

33,262,133.10

52,472,509.25

245,974,740.37

245,568,113.58

Loss on credit impairment(losses are represented by “-”)

284,032.12

987,137.94

Loss on assets impairment(losses are represented by “-”)

-1,306,612.25

I. Operating income
Less: operating cost

Add: other income
investment income (losses are XVIII. 5
represented by “-”)Including: Investment incomeof associates and joint ventures
Derecognition income
on financial assets measured atamortized cost (losses are represented
by “-”)
Gains on net exposure hedges(losses are represented by “-”)
Income from change in fairvalue (losses are represented by “-”)Gain from disposal of assets(losses are represented by “-”)
II. Operating profit
represented by “-”)(losses

51,118.46

areAdd: non-operating income
76 / 251

389,291,132.39

201,353,973.26

36,554.33

9,412,803.30

2020 Interim Report
Haier Smart Home Co., Ltd

Less: non-operating expenses

319,495.89

1,963,024.43

III. Total profit (total losses are
represented by “-”)

389,008,190.83

208,803,752.13

Less: income tax expenses-1,456,008.32-17,287,593.90

390,464,199.15

226,091,346.03

390,464,199.15

226,091,346.03

V. Other comprehensive income, netof tax-7,116,127.00-751,246.37(I) Other comprehensive incomethat cannot be reclassified into the
profit or loss

-178,713.89

67,243.43-178,713.89

67,243.43

(II)
Other
comprehensive
income to be reclassified into the
profit or loss

-6,937,413.11-818,489.80

1. Other comprehensive incomethat can be transferred into profit orloss under equity method-6,937,413.11-818,489.80

IV. Net profit (netrepresented by “-”)
(I)

(II)

lossesareNet
profitfromcontinuous operations (netlosses are represented by“-”)Net
profitfromdiscontinued operations(net losses are represented
by “-”)

1. Changes arising fromre-measurement of defined benefit
plans
2. Other comprehensive incomethat cannot be transferred into profit
or loss under equity method
3. Changes in fair value ofinvestmentsinotherequityinstruments
4. Changes in fair value of credit
risks of the enterprise

2. Changes in fair value of otherdebt investments
3. Reclassified financial assetsthatarecreditedtoothercomprehensive income
4. Credit impairment provision
for other debt investments
77 / 2512020 Interim Report
Haier Smart Home Co., Ltd

5. Reserve for cash flow hedging
6. Exchange differences ontranslation of financial statements
denominated in foreign currencies
7. Others
VI. Total comprehensive income

383,348,072.15

225,340,099.66

VII. Earnings per share:(I) Basic earnings per share(RMB/share)(II)Diluted earnings per share(RMB/share)
Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Consolidated Cash Flow Statement
January-June 2020
Unit and Currency: RMB
Items

Notes

2020 Interim

2019 Interim

89,745,966,042.83

97,600,282,926.70

I. Cash flow from operating
activities:
Cash received from the sale ofgoods and rendering services
Net increase in customer andinter-bank deposits
Net increase in borrowing
from the central bank
Net cash increase in borrowing
from other financial institutes
Cash received from premiums
under original insurance contract
Net cash received
reinsurance businessfrom

Net increase in deposits ofpolicy holders and investment
Cash received from interest,
fee and commissions
Net increase in placement from78 / 2512020 Interim Report
Haier Smart Home Co., Ltd

banks andinstitutions

otherfinancial

Net increase in cash received
from repurchase operation
Net cash received from
customer deposits for trading insecurities
Refunds of taxes

469,784,953.90

639,545,403.73

Cash received from otherrelated operating activities

727,414,944.47

662,922,398.18

Sub-total of cash inflows
from operating activities

90,943,165,941.20

98,902,750,728.61

Cash paid on purchase ofgoods and services

68,204,573,941.90

70,605,383,751.62

Cash paid to and on behalf of
employees

11,031,460,042.03

11,146,189,101.38

Cash paid for all types of taxes

3,466,925,924.16

4,878,000,921.22

8,783,125,290.51

8,653,368,639.79

91,486,085,198.60

95,282,942,414.01-542,919,257.40

3,619,808,314.60

Cash received from recovery
of investments

1,912,295,416.73

181,007,285.39

Cash received from return on
investments

223,367,236.11

244,119,719.32

Net cash received from thedisposalof
fixed
assets,49,585,896.20

200,884,406.40

Net increase in loans andadvances of customers
Net increase in deposits in the
PBOC and inter-bank
Cash paid for compensation
payments
underoriginal
insurance contract
Net increase in cash lent
Cash paid for interest, bankcharges and commissions
Cash paid for insurance policy
dividend

Cash paid to other operation
related activities

VII. 66

Sub-total of cash outflows
from operating activities
Net cashoperating activities

flow

from

VII. 69

II. Cash flow from investing
activities:

79 / 2512020 Interim Report
Haier Smart Home Co., Ltd

intangible assets
long-term assets

and

other

Net cash received from
disposal of subsidiaries and otheroperating entities
Other cash received
investment activities

from43,202,970.66

Sub-total of cash inflows
from investing activities

2,185,248,549.04

669,214,381.77

Cash paid on purchase of fixed
assets, intangible assets and otherlong-term assets

3,105,838,460.63

3,589,722,216.30

Cash paid for investments

799,380,076.93

2,234,331,826.58

338,445,082.28

2,693,234,416.95

3,368,312.62

10,351,066.54

Sub-total of cash outflows
from investing activities

4,247,031,932.46

8,527,639,526.37

Net cash
investing activities- 2,061,783,383.42- 7,858,425,144.60

1,116,431,069.68

13,662,307.27

15,878,143,451.50

9,176,456,625.95

Sub-total of cash inflows
from financing activities

16,994,574,521.18

9,190,118,933.22

Cash paid on repayment ofloans

5,448,817,686.75

6,691,975,437.27

Cash paid on distribution ofdividends, profits or repayment
of interest expenses

568,142,953.79

265,193,682.03

Net increase in secured loans
Net cash paid on acquisition ofsubsidiaries and other operating
entities
Other cash paid on investment
activities

flow

VII. 67

fromIII. Cash flow from financing
activities:
Cash received from capital
contributions
Including: Cash received from
capital contributions by minority
shareholders of subsidiaries
Cashborrowings

received

Other cash received
financing activities

from
from

Including: Dividend and profit
paid to minority shareholders by
80 / 2512020 Interim Report
Haier Smart Home Co., Ltd

subsidiaries
Other cash paid to financing VII. 68
activities

398,074,951.29

1,344,180,587.48

Sub-total of cash outflows
from financing activities

6,415,035,591.83

8,301,349,706.78

Net cashfinancing activities

10,579,538,929.35

888,769,226.44

IV. Effect of fluctuations in
exchange rates on cash and cash
equivalents

84,027,232.22

115,227,948.70

V. Net increase in cash and cash
equivalents

8,058,863,520.75-3,234,619,654.86

Add: balance of cash and cash VII. 70
equivalents at the beginning of
the period

34,962,947,399.85

36,553,047,466.15

VI. Balance of cash and cash VII. 70
equivalents at the end of theperiod43,021,810,920.60

33,318,427,811.29

flow

from

Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Cash Flow Statement of the Parent Company
January-June 2020
Unit and Currency: RMB
Items

Notes

2020 Interim

2019 Interim

1,201,820,635.00

918,342,631.75

7,969,641.49

25,567,202.83

Other cash received fromoperating activities

44,874,440.51

110,143,217.54

Sub-total of cash inflows
from operating activities

1,254,664,717.00

1,054,053,052.12

Cash paid on purchase ofgoods and services

9,839,119,707.06

189,337,944.61

Cash paid to and on behalf of299,326,532.30

567,010,992.25

I. Cash flow from operating
activities:
Cash received from the sale ofgoods and rendering of services
Refunds of taxes

81 / 2512020 Interim Report
Haier Smart Home Co., Ltd

employees
Cash paid for all types oftaxes

139,592,241.79

95,735,060.62

Other cash paid to operation
activities

114,847,819.51

93,648,702.91

Sub-total of cash outflows
from operating activities

10,392,886,300.66

945,732,700.39

Net cash flow from operating
activities-9,138,221,583.66

108,320,351.73

II. Cash flow from investing
activities:
Cash received from recovery
of investments

312,000,000.00

Cash received from return on
investments

3,840,802,526.75

1,233,656,109.64

Net cash received from thedisposalof
fixed
assets,intangible assets and otherlong-term assets
Net cash received from
disposal of subsidiaries andother operating entities
Other cash received frominvestment activities

136,551,000.00

Sub-total of cash inflows
from investing activities

4,152,802,526.75

1,370,207,109.64

Cash paid on purchase of
fixed assets, intangible assets
and other long-term assets

68,733,039.41

25,031,303.67

Cash paid for investments

1,159,400,000.00

2,201,212,503.09

Other cash paid on investment
activities

79,000,000.00

183,351,121.00

Sub-total of cash outflows
from investing activities

1,307,133,039.41

2,409,594,927.76

Net cash flow
investing activities

2,845,669,487.34-1,039,387,818.12

Net cash paid on acquisitionof subsidiaries and otheroperating entities

fromIII. Cash flow from financing
activities:
Cash received from capital
contributions
82 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Cashreceivedborrowings

from

4,500,000,000.00

Other cash received fromfinancing activities

818,187,321.17

Sub-total of cash inflows
from financing activities

5,318,187,321.17

Cash paid on repayment ofborrowings

1,500,000,000.00

Cash paid on distribution ofdividends, profits or repayment
of interest expenses

39,865,388.89

27,105,937.50

Other cash paid on financing
activities

978,120.00

669,109,443.77

Sub-total of cash outflows
from financing activities

40,843,508.89

2,196,215,381.27

5,277,343,812.28-2,196,215,381.27

IV. Effect of fluctuations in
exchange rates on cash and cash
equivalents

92,170.17-537,110.94

V. Net increase in cash and cash
equivalents-1,015,116,113.87-3,127,819,958.60

Add: balance of cash and cash
equivalents at the beginning of
the period

5,624,406,816.79

7,068,899,574.96

4,609,290,702.92

3,941,079,616.36

Net cash flow
financing activities

from

VI. Balance of cash and cash
equivalents at the end of theperiodLegal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

83 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Consolidated Statement of Changes in Owner's Equity
January-June 2020
Unit and Currency: RMB
2020 Interim
Equity attributable to owners of the Parent Company
Items

Paid-in
capital(or share
capital)I. Closingbalance for 6,579,566,627
the previous
.00
year
Add:
changes inaccounting
policies
Error
correction
for
prior
periodBusiness
combination
undercommoncontrol
OthersII. Opening 6,579,566,627
balance for.00

Other equity
instruments
prefere perpetnceual
Othersshares
bonds

Less:
treas
ury
stock

Capitalreserve

431,424,524. 4,435,890,845.

Othercomprehensiveincome

Spec
ial
reser
ve

Surplusreserve

Gener
al
risk
provision

Undistribu
ted
profits

1,317,988,619

2,655,327,405

32,468,121,74

47

.66

.46

4.26

431,424,524. 4,435,890,845.

1,317,988,619

2,655,327,405

32,468,121,74

.66

.46

4.26

07

07

47

84 / 251

Others

Sub-total

Minorityequity47,888,319,765 17,101,540,50
.92

Total
owners'equity64,989,860,26

2.01

7.93

47,888,319,765 17,101,540,50

64,989,860,26

.92

2.01

7.93

2020 Interim Report
Haier Smart Home Co., Ltd

the current
year
III.
Increase/dec
rease for thecurrent
period(decrease isrepresented
by “-”)(I)
Total
comprehensi
ve income(II) Capital
injection
andreduction by
owners
1. Ordinary
sharesinvested byowners
2. Capital
contribution
by holdersof
other
equityinstruments
3.
Share-based
payment
included inowners'equity4. Others

351,201,960.67-212,009,960.

302,889,913.2

477-220,001,490.

2,780,800,71

33

2.72

359,193,490.53

359,193,490.53

85 / 251

1,075,798,12

1,517,880,04

8.43

1.90

2,560,799,222. 789,754,265.

3,350,553,48

442,081,913.47

39

20

7.59

359,193,49

965,639,084.

1,324,832,57

0.53

88

5.41

359,193,49

965,639,084.

1,324,832,57

0.53

88

5.41

2020 Interim Report
Haier Smart Home Co., Ltd(III) Profit
distribution
1.
Withdrawalof surplus
reserves
2． Withdra
walofprovisions
for generalrisks
3.
Distribution
to owners(orshareholders)
4. Others(IV) Internaltransfer ofowner'sequity1. Transfer
of capitalreserves into
capital (orsharecapital)2. Transferof surplus
reserves into
capital (orsharecapital)
3. Surplus-2,467,337,4
85.13-2,467,337,4
85.13

86 / 251-2,467,337,485. -679,595,221
13-3,146,932,7

.65

06.78

-2,467,337,485. -679,595,221-3,146,932,7

13

.65

06.78

2020 Interim Report
Haier Smart Home Co., Ltd

reservesusedforremedyingloss
4. Changes
in defined
benefitplans
carriedforward toretainedearnings
5.
Othercomprehensi
ve incomecarriedforward toretainedearnings
6. Others(V) Special
reserve
1．Withdraw
al for theperiod2.
Utilization
fortheperiod(VI) Others-7,991,529.
86

Ⅳ. Closing
6,579,566,627
balance for.00
the period

7,991,529.86-10,573,314.

-10,573,314-10,573,314.

32

.32

32

431,424,524.

4,787,092,8

1,105,978,659.1

2,655,327,4

32,771,011,6

07

06.14

9

05.46

57.53

87 / 251

48,330,401,679 18,177,338,6
.39

30.44

66,507,740,3
09.83

2020 Interim Report
Haier Smart Home Co., Ltd2019 Interim
Equity attributable to owners of the Parent Company
Items

Paid-in
capital (orsharecapital)I. Closingbalance for 6,368,416,70
the previous
0.00
year
Add:
changes inaccounting
policies
Error
correction
for
prior
periodBusiness
combination
undercommoncontrol
OthersII. Opening
balance for 6,368,416,70
the current
0.00
year
III.
Increase/dec
48,856.00
rease for thecurrent

Other equity
instruments
Prefere Perpetnceual
Otherssharesbonds

Capitalreserve

904,485,78 2,208,773,47
8.71
4.57

Less:
treas
ury
stock

Other
comprehensiveincome

Spec
ial
reser
ve

772,632,347.
35

Surplusreserve

2,288,301,31
7.10

242,893,583.
08

Gener
al
risk
provision

Undistribu
ted
profits

Others

Sub-total

MinorityequityTotal
owners'equity26,859,741,1
63.95

39,402,350,7 15,727,928,1 55,130,278,93
91.68
45.82
7.50

97,501,518.6
6340,395,101. 337,173,479. 677,568,581.4
74
67
1

0.00
904,485,78 2,451,667,05
8.71
7.65

772,632,347.
35-315,515,639.53

233,624,267.
18-111,993.60

88 / 251

2,288,301,31
7.10

26,957,242,6
82.61

39,742,745,8 16,065,101,6 55,807,847,51
93.42
25.49
8.91

2,763,882,96
5.59

2,681,928,45 201,485,612. 2,883,414,06
5.64
52
8.16

2020 Interim Report
Haier Smart Home Co., Ltd

period(decrease isrepresented
by “-”)(I)
Total
comprehens
ive income(II) Capital
injection
andreduction by
owners
1. Ordinary
sharesinvested byowners
2. Capital
contribution
by holdersof
other
equityinstruments
3.
Share-based
payment
included inowners'equity4. Others

233,624,267.
18

5,058,082,96
4.47

5,291,707,23 1,099,288,36 6,390,995,59
1.65
7.42
9.07

48,856.00-111,993.60-315,515,639.53-315,578,777. -349,305,402.
13
58-664,884,17
9.71

48,856.00-111,993.60-226,635,104.87-226,698,242. -349,305,402.
47
58-576,003,64
5.05-88,880,534.
66-88,880,534.6-88,880,534.
6
66-2,235,331,41 -534,534,085. -2,769,865,4
0.16
77
95.93

(III) Profit
distribution
1.
Withdrawalof surplus-2,235,331,41
0.16

89 / 2512020 Interim Report
Haier Smart Home Co., Ltd

reserves
2． Withdra
walofprovisions
for generalrisks
3.
Distribution
to owners(orshareholders)4. Others(IV)
Internaltransfer ofowner'sequity1. Transfer
of capitalreserves
into capital
(or
share
capital)2. Transferof surplus
reserves
into capital
(or
share
capital)
3. Surplus
reservesusedforremedyingloss-2,235,331,41
0.16

90 / 251-2,235,331,41 -534,534,085. -2,769,865,4
0.16
77
95.93

2020 Interim Report
Haier Smart Home Co., Ltd

4. Changes
in defined
benefitplans
carriedforward toretainedearnings
5.
Othercomprehens
ive income
carriedforward toretainedearnings
6. Others(V) Special
reserve
1．Withdraw
al for theperiod2.
Utilization
fortheperiod(VI) Others
Ⅳ. Closing
6,368,465,55
balance for
6.00
the period

Legal representative: Liang Haishan

904,373,79 2,136,151,41
5.11
8.12

1,006,256,61
4.53

2,288,301,31
7.10

Person in charge of accounting function: Gong Wei

91 / 251-58,868,588.7
2-58,868,588.7 -13,963,266.5 -72,831,855.
2
5
27

29,721,125,6
48.20

42,424,674,3 16,266,587,2 58,691,261,58
49.06
38.01
7.07

Person in charge of accounting department: Ying Ke2020 Interim Report
Haier Smart Home Co., Ltd

Statement of Changes in Owners' Equity of the Parent Company
January-June 2020
Unit and Currency: RMB

Items

Ⅰ. Closingbalance for theprevious year
Add: changes
inaccounting
policies
Error
correction
for
prior
periodOthersⅡ. Opening
balance for thecurrent year
III.
Increase/decreas
e for the current
period (decrease
is represented
by “-”)(I)
Total
comprehensive
income(II)
CapitalPaid-in capital(or share
capital)Preference shares

Other equity
instruments
Perpetual bonds

Capitalreserve
Others2020 Interim
Less:
Other
treasur comprehensiv
y
e
stock
incomeSpecialreserve

Surplusreserve

Undistributed
profits

Total
owners'equity6,579,566,627.0
07,036,531,178.8
311,077,477.45

2,050,181,180.0
3,307,235,242.11 18,984,591,705.40
16,579,566,627.0
07,036,531,178.8
311,077,477.45

2,050,181,180.0
3,307,235,242.11 18,984,591,705.40
1-7,116,127.00-2,076,873,285.9-2,083,989,412.98
8-7,116,127.00

390,464,199.15

92 / 251

383,348,072.15

2020 Interim Report
Haier Smart Home Co., Ltd

injection
andreductionbyowners1.
Ordinaryshares invested
by owners
2.
Capitalcontribution byholders of other
equityinstruments
3. Share-based
payment
includedinowners' equity
4. Others(III)
Profitdistribution
1. Withdrawalofsurplusreserves
2 ． Distribution
to owners (orshareholders)
3．Others(IV)
Internaltransferofowner's equity
1. Transfer ofcapital reserves
into capital (orshare capital)
2. Transfer ofsurplus reserves
into capital (or-2,467,337,485.1 -2,467,337,485.1
3
3-2,467,337,485.1 -2,467,337,485.1
3
3

93 / 2512020 Interim Report
Haier Smart Home Co., Ltd

share capital)
3.
Surplusreserves
usedfor remedyingloss
4. Changes indefined benefit
plans
carriedforwardtoretainedearnings
5.
Othercomprehensive
income carriedforwardtoretainedearnings
6. Others(V)
Specialreserve
1 ． Withdrawal
for the period
2. Utilization forthe period(VI) Others
Ⅳ.
Closingbalance for theperiodItems

6,579,566,627.00Paid-in capital(or share capital)

7,036,531,178.8
3

Other equity
instruments

Capitalreserve

3,961,350.45

2019 Interim
Less:
Other
treasury comprehensive
94 / 251

Specialreserve

2,050,181,180.0
1

Surplusreserve

1,230,361,956
16,900,602,292.42.13

Undistributed
profits

Total
owners'2020 Interim Report
Haier Smart Home Co., Ltd

Preference
sharesⅠ.
Closingbalance for theprevious year
Add:changesinaccounting
policies
Error
correction
for
prior
periodOthersⅡ.
Openingbalance for thecurrent year
III.
Increase/decrease
for thecurrent
period(decreaseisrepresented by
“-”)
(I)
Total
comprehensive
income(II)
Capitalinjection
andreductionbyowners1.
Ordinaryshares invested
by owners
2.
CapitalPerpetual
bonds

Othersstock

incomeequity6,368,416,700.00

473,061,264.64

4,182,825,672.98

7,791,344.47

1,683,155,091.65 2,239,335,007.65

14,954,585,081.39

6,368,416,700.00

473,061,264.64

4,182,825,672.98

7,791,344.47

1,683,155,091.65 2,239,335,007.65

14,954,585,081.39

48,856.00-111,993.60-10,644,884.53-751,246.37-751,246.37-2,009,240,064.13 -2,020,699,332.63

226,091,346.03

225,340,099.66

48,856.00-111,993.60-10,644,884.53-10,708,022.13

48,856.00-111,993.60

669,546.35

606,408.75

95 / 2512020 Interim Report
Haier Smart Home Co., Ltd

contribution byholders of other
equityinstruments
3. Share-based
payment
includedinowners' equity
4. Others(III)
Profitdistribution
1. Withdrawal of
surplus reserves
2．Distribution toowners (orshareholders)
3．Others(IV)
Internaltransferofowner's equity
1. Transfer ofcapital reserves
into capital (orshare capital)
2. Transfer ofsurplus reserves
into capital (orshare capital)
3.
Surplusreserves used for
remedying loss
4. Changes indefined benefit
plans
carriedforwardto-11,314,430.88-11,314,430.88-2,235,331,410.16 -2,235,331,410.16-2,235,331,410.16 -2,235,331,410.16

96 / 2512020 Interim Report
Haier Smart Home Co., Ltdretained earnings
5.
Othercomprehensive
income carriedforwardtoretained earnings
6. Others(V)
Specialreserve
1 ． Withdrawal
for the period
2. Utilization forthe period(VI) Others
Ⅳ.
Closingbalance for theperiod6,368,465,556.00

Legal representative: Liang Haishan

472,949,
271.04

4,172,180,788.45

7,040,098.10

Person in charge of accounting function: Gong Wei

97 / 251

1,683,155,091.65

230,094,943.52

12,933,885,748.76

Person in charge of accounting department: Ying Ke2020 Interim Report
Haier Smart Home Co., Ltd

III. General Information of the Company
1. Overview of the Company√ Applicable □ Not Applicable
The predecessor of Haier Smart Home Co., Ltd. (herein after referred to as the Company) was
Qingdao Refrigerator Factory, which was established in 1984. As permitted to offering by People's Bankof China, Qingdao Branch on 16 December 1989, and approved by Qing Ti Gai [1989] No.3 on 24
March 1989, based on the reconstruction of the original Qingdao Refrigerator Factory, a limited
company was set up by directional fund raising of RMB150 million. In March and September 1993, asapproved by the document of Qing Gu Ling Zi [1993] No. 2 and No. 9 issued by the pilot leading teamof Qingdao joint stock company, the Company was converted from a directional offering company to a
public subscription company and issued additional 50 million shares to the public and listed with tradingon Shanghai Stock Exchange in November 1993.
The Company's registered office is located at the Haier Industrial Park of Laoshan District,
Qingdao, Shandong Province, and the headquarter is located at the Haier Industrial Park of Laoshan
District, Qingdao, Shandong Province.
The Company is mainly engaged in manufacturing and trading as well as R&D of refrigerator,
air-conditioner, freezer, washing machine, water heater, dishwashers, gas stove and relevant products
and commercial circulation business.
The ultimate holding company of the Company is Haier Group Corporation.
These financial statements have been approved for publication by the Board of the Company on 28
August 2020.
2. Scope of consolidated statements√ Applicable □ Not Applicable
For details of changes in the scope of consolidated financial statements for the current period,
please refer to “VIII. Changes in Consolidation Scope” and “IX. Interest in Other Entities” of this note.

IV. Basis of Preparation of the Financial Statements
1. Basis of Preparation
The financial statements of the Company were prepared on the going concern basis according to thetransactions and matters actually occurred, in accordance with the Accounting Standards for BusinessEnterprises – Basic Standards published by the Ministry of Finance, specific accounting standards, andguidance on application of accounting standards for business enterprises, interpretations to accounting
98 / 2512020 Interim Report
Haier Smart Home Co., Ltd

standards for business enterprises and other relevant requirements (herein after collectively referred to as
the “Accounting Standards for Business Enterprises”) which issued subsequently, and in combination
with the disclosure provisions of the Rules for the Information Disclosure and Compilation ofCompanies Publicly Issuing Securities No.15: General Provisions for Financial Report (Revised in 2014)of CSRC as well as the following significant accounting policies and accounting estimation.

2. Going Concern√ Applicable □ Not Applicable
The Company has ability to continue its operation for at least 12 months since the end of thereporting period and there are no significant events affecting its ability to continue as a going concern.

V. Significant accounting policies and accounting estimatesSpecific accounting policies and accounting estimates:√ Applicable □ Not Applicable
According to the characteristics of its production and operation, the Company formulated a seriesof specific accounting policies and accounting estimates, including the provisions for impairment foraccounts receivable (Note V.10); the measurement of inventories (Note V.11); the depreciation andamortization of the investment properties (Note V.13); the depreciation of fixed assets (Note V.14); theamortization of intangible assets (Note V.18); the criterion for determining of long-term assets
impairment (Note V.19); and the date of revenue recognition (Note V.25), etc.
1.

Statement of compliance with Accounting Standards for Business Enterprises

The financial statements prepared by the Company meet the requirements of the AccountingStandards for Business Enterprises, which accurately and completely reflected information relating to
the financial condition as at 30 June 2020, the operating results and cash flow from January to June 2020of the Company.
2.

Accounting period

The accounting year of the Company is from 1 January each year to 31 December of the same year
in solar calendar.
3.

Operating cycle√ Applicable □ Not Applicable

The Company takes 12 months as an operating cycle, which is also the classification basis for theliquidity of its assets and liabilities.
99 / 2512020 Interim Report
Haier Smart Home Co., Ltd

4.

Recording currency
Renminbi is the recording currency of the Company.

5.

Accounting methods of business combinations under common control and not undercommon control√ Applicable □ Not Applicable

A business combination is a transaction or event that brings together two or more separate entities
into one reporting entity. Business combinations are classified into business combinations undercommon control and business combinations not under common control.
(1) Business combinations under common control
A business combination under common control is a business combination in which all the
combining entities are ultimately controlled by the same party or parties both before and after the
combination, and that control is not transitory. For business combination under common control, theparty that obtains the control over the other parties on the combination date is the acquirer, and otherparties involving in the business combination are the transferors. The combination date is the date on
which the acquiring party effectively obtains the control over the party being acquired.
In case the consideration for long-term equity investments formed in business combination undercommon control is paid by ways of cash, transfer of non-cash assets or assumption of debts, theCompany will regard the share of carrying amounts of the net assets of the transferor in the ultimate
controller's consolidated financial statements obtained as the initial investment cost of long-term equity
investments as at the date of combination. For carrying value of net assets of the transferor is negative asat the date of combination, investment cost of long-term equity investment is calculated as zero. In casethe transferor is controlled by the ultimate controller by the business combination not under common
control before combination, the initial investment cost of the long-term equity investment of the acquirer
includes relevant goodwill. The Company should adjust the capital reserve (capital premium or sharepremium) in accordance with the differences between initial investment cost of the long-term equity
investment and the cash paid, the non-cash assets transferred and the carrying value of liability assumed;in case the balance of the capital reserve (capital premium or share premium) is insufficient for theelimination, the surplus reserves and undistributed profits shall be used to dilute such expenses in order.
In case the consideration for the combination is paid by issuance of equity instruments, the aggregate
nominal value of shares issued will be deemed as the share capital. The difference between the initialinvestment cost of long-term equity investments and aggregate nominal value of shares issued shall be
adjusted to capital reserve (capital premium or share premium); in case the capital reserve (capital
premium or share premium) is insufficient for the elimination, the surplus reserves and undistributed
profits shall be used to dilute such expenses in order.
Intermediary fees (such as audit, legal services and valuation consultancy) and other relevant
management fees incurred in the business combination by the acquirer are credited in profit or loss in the
100 / 2512020 Interim Report
Haier Smart Home Co., Ltd

period when they occurred. Trading expenses in direct relation to the issuance of equity instrument as
the consideration for the combination is written down to the capital reserve (share premium), where thecapital reserve (share premium) is insufficient, and to surplus reserves and undistributed profits in order.
Trading expenses in direct relation to the issuance of debt instrument as the consideration for the
combination is included in the initial recognition amount of the debt instrument.
For business combination under common control realized through several transactions step by step,in case of a package transaction, each transaction is accounted as one transaction that has acquired thecontrol; in case of not a package transaction, in the financial statement of parent company the capitalreserve ( share premium) is adjusted by the difference between the initial investment cost and the sum of
the carrying value of the original long-term equity investment and the book value of the new payment
consideration for further acquisition of shares with the share of acquirer's owner's equity on the date ofcombination in case calculated on the proportion of shareholding on the date of combination as its initialinvestment cost; where the capital reserve is insufficient, the retained earnings will be used to offset such
expenses.
In the consolidated financial statements, the long-term equity investment held by the combining
party before the date of acquiring control of the combined parties, and relevant profit and loss, the othercomprehensive income and changes in the other owners' equity recognized during the period between
the later of the date of acquisition and the date when the combining and the combined parties are under
the common control of the same party and the date of combination, are written down to the retained
earnings or profit or loss at the beginning of the comparative reporting period, respectively.
(2) Business combinations not under common control
A business combination not under common control is a business combination in which all of the
combining entities are not ultimately controlled by the same party or parties both before and after the
combination. For business combination not under common control, the party that obtains the control of
the other parties involving in the business combination at the combination date is the acquirer; otherparties involving in the business combination are the transferors. The combination date is the date on
which the acquirer effectively obtains control of the transferors.
In business combination not under common control, the cost of combination shall be the sum of theassets paid, obligations incurred or assumed and the fair value of the equity securities issued by theacquirer for obtaining control of the transferor at the date of acquisition. Intermediary fees (such as audit,
legal services and valuation consultancy) and other relevant management fees incurred by the acquirer
for the purpose of business combination are credited in profit or loss in the period when they occurred.
Transaction fees for the equity instruments or debt instruments issued by the acquirer as combinationconsideration is included in the initial recognition amount of such equity instruments or debt instruments.
Contingent consideration involved shall be recorded as the combination cost based on its fair value on
the acquisition date. Should any new or further evidence arise within 12 months after the acquisition
date and makes it necessary to adjust the contingent consideration on the acquisition date, the goodwill
arising from the business combination shall be amended accordingly.
101 / 2512020 Interim Report
Haier Smart Home Co., Ltd

The cost of combination and identifiable net assets obtained by the acquirer in a businesscombination are measured at fair value on the acquisition date. Where the cost of the combination
exceeds the acquirer's interest in the fair value of the transferor's identifiable net assets obtained on theacquisition date, the difference is recognized as goodwill; where the cost of combination is lower than
the acquirer's interest in the fair value of the transferor's identifiable net assets, the difference is initiallyrecognized in profit or loss for the current year after a review of computation for the identifiable assets,
liabilities or fair value of contingent liabilities and combination cost, and where the combination cost is
still lower than the acquirer's interest in the fair value of the identifiable net assets of the transferor
obtained during the course of combination, then the difference is recorded in the profit and loss.
In business combination not under common control that is realized in phases through multiple
exchange transactions, in the Company individual financial statements, the sum of the book value of theequity investment of the transferor held before the date of acquisition and the cost of new investment on
the date of acquisition are recognized as the initial investment cost of such investment.
In the consolidated financial statement, the equity of the transferor held before the date ofacquisition is re-measured at the fair value on the date of acquisition, and the difference between the fairvalue and book value is included in current investment income; where the equity of the transferor held
before the date of acquisition involves the other comprehensive income, such equity and relevant othercomprehensive income are transferred to current investment income on the date of acquisition, otherthan the other comprehensive income that cannot be reclassified in the profit or loss.
The fair value on the acquisition date of equity interest in the transferor prior to the acquisition date
and the fair value of the considerations paid for the acquisition of the new equity on the acquisition date
are regarded as the combination costs of the Company, comparing with acquirer's share of the fair valueon the acquisition date of the transferor's net identifiable assets on the proportion of the shareholding on
the acquisition date to confirm the goodwill that required to be recognized on the acquisition date or theamount that shall be included in the profit or loss.
6.

Preparation method of consolidated accounting statements√ Applicable □ Not Applicable(1) Scope of consolidated financial statements

The Company incorporated all of its subsidiaries (including the separate entities controlled by theCompany) into the scope of consolidation financial statements, including the enterprises under theCompany's control, divisible part in the investees and structured entities.
(2) To unify the accounting policies, balance sheets date and accounting periods of the Company
and subsidiaries

102 / 2512020 Interim Report
Haier Smart Home Co., Ltd

When preparing consolidated financial statements, adjustments are made if subsidiaries' accounting
policies or accounting periods are different from that of the Company, in accordance with the Company's
accounting policies and accounting periods.
(3) Offset matters in the consolidated financial statements
The consolidated financial statements shall be prepared on the basis of the balance sheets of theCompany and subsidiaries, which offset the internal transactions incurred between the Company andsubsidiaries and among subsidiaries. The owner's equity of the subsidiaries not attributable to theCompany shall be presented as “minority interests” under the owner's equity item in the consolidatedbalance sheet.
The long-term equity investment of the Company held by the subsidiaries, deemed as treasury stockof the corporate group as well as the reduction of owners' equity, shall be presented as “Less: Treasury
stock” under the owner's equity item in the consolidated balance sheet.
(4) Accounting treatment of subsidiaries acquired from combination
For subsidiaries acquired from business combination under common control, the assets, liabilities,
operating results and cash flow of the subsidiaries are included in the consolidated financial statementsfrom the beginning of the period in which the combination took place, as if the combination has taken
since the ultimate controller began its control. When preparing the consolidated financial statements, forthe subsidiaries acquired from business combination not under common control, separate financial
statement will be adjusted on the basis of their fair values of the identifiable net assets on the date ofacquisition.
7.

Classification of joint arrangement and accounting methods of joint operations√ Applicable □ Not Applicable

A joint arrangement refers to an arrangement jointly controlled by two or more parties. In
accordance with the Company's rights and obligations under a joint arrangement, the Company classifies
joint arrangements into joint operations and joint ventures.
Joint operations refer to a joint arrangement in which the Company is a party and is entitled to
relevant assets and obligations of this arrangement. The Company recognizes the following items in
relation to its interest in a joint operation, and accounts the same in accordance with relevant accounting
standards for business enterprises:(1) recognize the assets held solely by the Company, and recognize assets held jointly by theCompany in appropriation to the share of the Company; (2) recognize the obligations assumed solely by
the Company, and recognize obligations assumed jointly by the Company in appropriation to the shareof the Company; (3) recognize revenue from disposal of joint operations in appropriation to the share of
the Company; (4) recognize revenue from disposal of joint operations in appropriation to the share of theCompany; (5) recognize fees solely occurred by the Company and recognize fees from joint operationsin appropriation to the share of the Company.
103 / 2512020 Interim Report
Haier Smart Home Co., Ltd

When the Company, as a joint venture, invests or sells assets to or purchase assets (the assets do notconstitute a business, the same below) from joint operations, the Company shall only recognize the partof profit or lost from this transaction attributable to other parties of joint operations before these assets
are sold to a third party. In case of an impairment loss incurred on these assets which meets therequirements as set out in “Accounting Standards for Business Enterprises No. 8 – Asset Impairment”,
the Company shall full recognize the amount of this loss in relation to its investment in or sale of assets
to joint operations or recognize the loss according to the Company's share of commitment in relation to
the its purchase of assets from joint operations.
Joint ventures refer to a joint arrangement during which the Company only is entitled to net assetsof this arrangement. Investment in joint venture is accounted for using the equity method according to
the accounting policies referred to under “12 Long-term equity investment” of Note V.
8.

Recognition standard for cash and cash equivalents

Cash recognized in the cash flow statements represents the cash on hand and deposits available forpayment of the Company at any time.
Cash equivalents recognized in the cash flow statements refer to short-term, highly liquid
investments held by the Company that are readily convertible to known amounts of cash and which are
subject to an insignificant risk on change in value.
9.

Foreign currency businesses and translation of foreign currency statements√ Applicable □ Not Applicable(1) Foreign currency transactions

If foreign currency transactions occur, they are translated into the amount of functional currency byapplying the spot exchange rate at the transaction date.
Monetary items denominated in foreign currencies are translated into functional currencies at therates of exchange ruling at the balance sheet date. All foreign exchange difference are credited in the
profit or loss, except ① those arising from the funds denominated in foreign currency speciallyborrowed for the establishment of the qualifying assets are treated based on the principal of
capitalization of borrowing costs; ② those arising from the other changes in the balance other thanamortized cost of available-for-sale monetary items denominated in foreign currency are recognized in
the other comprehensive income.
Non-monetary items in foreign currency measured at historical cost are translated using the spot
exchange rate prevailing on the date when transaction occurred and its functional currency shall remainunchanged. Non-monetary items denominated in foreign currencies that are measured at fair value aretranslated using the foreign exchange rate at the date the fair value is determined; the exchange
differences between the translated and original amounts of functional currencies are recognized in thestatement of profit or loss or other comprehensive income as changes in fair value (including changes inexchange rate).
(2) Translation of foreign currency financial statements
If the functional currencies used as the bookkeeping base currency by the subsidiaries, joint
ventures and associates under the control of the Company are different from that of the Company, their
104 / 2512020 Interim Report
Haier Smart Home Co., Ltd

financial statements denominated in foreign currencies shall be translated to perform accounting andprepare the consolidated financial statements.
The assets and liabilities of the balance sheet are translated using the spot exchange rate at thebalance sheet date; all items except for “undistributed profits” of the owner's equity are translated at the
spot exchange rate on the transaction date. The revenue and expenses in the income statement aretranslated using the approximate rate of the spot exchange rate on the transaction date. Differences
arising from the translation of foreign currency financial statements are presented as the “othercomprehensive income” in the owner's equity of the balance sheet.
Foreign currency cash flow is translated using the approximate rate of the spot exchange rate on thetransaction date. The impact of exchange rate changes on cash amount is reflected separately in the cash
flow.
When disposing overseas operations, converted difference in foreign currency statements related tothe overseas operation shall be transferred together or as the percentage of disposing the overseas
operation to profit or loss in the current period of disposal.
10.

Financial instruments√ Applicable □ Not Applicable
A financial instrument refers to any contract that gives rise to a financial asset of one entity and afinancial liability or equity instrument of another entity. A financial asset or financial liability isrecognized when the Company becomes a party to the contract of a financial instrument.
(1) Financial assets
1

Classification and measurement

According to the business model for managing financial assets and the contractual cash flow
characteristics of financial assets, the Company classifies financial assets into: (1) Financial assets
measured at amortized cost; (2) financial assets measured at fair value through other comprehensive
income; (3) financial assets measured at fair value through profit or loss of the current period.
Financial assets are measured at fair value upon initial recognition. For financial assets measured atfair value through profit or loss of the current period, related transaction costs are directly included in
profit and loss of the current period; for other types of financial assets, related transaction costs areincluded in their initial recognized amounts. For the accounts receivable or bills receivable arising fromthe sale of products or the provision of labor services that do not contain or consider the significant
financing components, the Company shall take the consideration amount entitled to be received as theinitial recognized amount.
a. Debt instrument

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Haier Smart Home Co., Ltd

The debt instruments held by the Company refer to the tools that are in conformity with thedefinition of financial liability from the perspective of the issuing party, which are measured in thefollowing three ways, respectively:(a) Measured at amortized cost:
The Company's business model for managing such financial assets is: with the aim of obtaining
contractual cash flow, the contractual cash flow characteristics of such financial assets shall beconsistent with the basic lending arrangements, that is, the cash flow generated on a specific date is only
the payment for the principal and the interest based on the outstanding principal amount. For suchfinancial assets, the Company recognizes the interest income in accordance with the effective interest
method. Such financial assets mainly include cash and cash equivalents, bills receivable and accounts
receivable, other receivables, creditor's right investment and long-term receivables. The Company lists
the creditor's rights investments and long-term receivables matured within one year (inclusive) from thebalance sheet date as non-current assets matured within one year; the creditor's rights investments
matured within one year (inclusive) when being obtained are listed as other current assets.
(b) Measured at fair value through other comprehensive income:
The Company's business mode for managing such financial assets is: with the aim of obtaining
contractual cash flow and selling the financial assets, the contractual cash flow characteristics of suchfinancial assets shall be consistent with the basic lending arrangements. Such financial assets aremeasured at fair value through other comprehensive income, but impairment gains and losses, exchange
gains and losses, and interest income calculated by the effective interest method are included in profit
and loss of the current period. Such financial assets are listed as other creditor's rights investments. Other
creditor's rights investments matured within one year (inclusive) from the balance sheet date are listed as
non-current assets matured within one year; other creditor's rights investments matured within one year(inclusive) when being obtained are listed as other current assets.
(c) Measured at fair value through profit or loss of the current period:
The Company lists its held debt instruments that are neither measured at amortized cost nor at fairvalue through other comprehensive income as financial assets held for trading measured at fair value
through profit or loss of the current period. At the time of initial recognition, in order to eliminate orsignificantly reduce accounting mismatch, the Company designated some financial assets as financial
assets measured at fair value through profit or loss of the current period. Investments that are matured
more than one year and are expected to be held for more than one year from the balance sheet date arelisted as other non-current financial assets.
b. Equity instruments
The Company lists equity instrument investments that have no control, joint control and significant
influence on itself as financial assets held for trading measured at fair value through profit or loss of thecurrent period; investments that are expected to be held for more than one year from the balance sheet
date are listed as other non-current financial assets.
In addition, the Company designated some non-trading equity instrument investments as financial
assets measured at fair value through other comprehensive income, which are listed as other equity
instrument investments. The relevant dividends and interest income of such financial assets are included
in profit and loss of the current period.
106 / 2512020 Interim Report
Haier Smart Home Co., Ltd②Impairment
For financial assets measured at amortized cost and debt instrument investments measured at fairvalue through other comprehensive income, contract assets and financial guarantee contracts, theCompany recognizes the loss provision based on the expected credit losses.
The Company considers reasonable and reliable information about past events, current conditions
and forecasts of future economic conditions, and takes the risk of default as a weight, and calculates theprobability-weighted amount of the present value of the difference between the cash flow receivable andthe cash flow expected to be received of the contract to confirm the expected credit losses.
On each balance sheet date, the Company measures the expected credit losses of financial
instruments in different phases. If the credit risk has not increased significantly since the initialrecognition, the financial instruments are in the first phase. The Company measures the loss provisionaccording to the expected credit losses in the next 12 months; if credit risk has increased significantly
but credit impairment has not yet occurred since the initial recognition, the financial instruments are in
the second phase. The Company measures the loss provision according to the expected credit losses of
the instruments during the entire duration; if credit impairment has occurred since the initial recognition,
the financial instruments are in the third phase. The Company measures the loss provision according to
the expected credit losses of the instruments during the entire duration.
For financial instruments with lower credit risk on the balance sheet date, the Company measuresthe loss provision according to the expected credit losses in the next 12 months, assuming that its credit
risk has not increased significantly since the initial recognition.
For financial instruments in the first phase and second phase and financial instruments withrelatively lower credit risk, the Company calculates interest income based on their book balance before
the deduction of impairment provisions and effective interest rate. For financial instruments in the third
phase, the Company calculates interest income based on their amortized cost after the impairment
provision has been deducted from the book balance and effective interest rate.
For bills receivable, accounts receivable and contractual assets, whether there exist significant
financing components, the Company measures loss provision based on expected credit loss over theentire duration.
The Company classifies accounts receivable into groups on the basis of shared credit risk
characteristics, and calculates the expected credit losses on groups, the bases of group determination are
as follows:
For each group of bills receivable, the Company applies exposure at default and expected credit
losses rate over the entire duration to calculate the expected credit losses on the historical credit losses
experience, the existing conditions and forecast of future economic conditions.
For each group of accounts receivable, the Company makes the comparison of expected credit
losses rates of accounts receivable in overdue days and over the entire duration to calculate the expectedcredit losses by taking into account the historical credit losses experience, the existing conditions andforecast of future economic conditions.
For each group of other accounts receivable, the Company applies exposure at default and expectedcredit losses rate within the next 12 months or over the entire duration to calculate the expected credit
losses by taking into account the historical credit losses experience, the existing conditions and forecastof future economic conditions.
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The Company recognizes the loss impairment provision or reversed in profit or loss of the current
period. For held debt instruments at fair value through other comprehensive income, the Company
recognizes loss/gain on impairment in profit or loss of the current period, and adjusts othercomprehensive income at the same time.
③ Derecognition
A financial asset is derecognized when any of the below criteria is met: a. the contractual rights toreceive the cash flow from the financial asset have been terminated; b. the financial asset has beentransferred and the Company transfers substantially all the risks and rewards of ownership of thefinancial asset to the transferee; c. the financial asset has been transferred and the Company has notretained control of the financial asset, although the Company neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset.
On de-recognition of other equity instruments investment, the difference between the book balance
and the sum of the consideration received and any cumulative profit or loss of fair value that had beenrecognized in other comprehensive income is recognized in the retained earnings. On de-recognition ofother financial assets, the difference between the book balance and the sum of the consideration received
and any cumulative profit or loss of fair value that had been recognized in other comprehensive income
is recognized in the profit and loss of the current period.
(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at amortized cost and financial
liabilities at fair value through profit or loss of the current period at initial recognition.
The financial liabilities of the Company are financial liabilities measured at amortized cost,
including bills payable, accounts payable, other payables, borrowings, bonds payable, etc. Such financial
liabilities are recognized initially at fair value less transaction costs and subsequently measured using theeffective interest method. Financial liabilities with a maturity of less than one year (inclusive) are listed
as current liabilities: those with maturity of more than one year but are mature within one year from thebalance sheet date (inclusive) are listed as non-current liabilities due within one year; the rest arepresented as non-current liabilities.
When all or partial current obligations of financial liabilities have been discharged, such financial
liabilities or the part with obligations discharged are derecognized by the Company. The difference
between the carrying amount of a financial liability de-recognized and the consideration paid isrecognized in the profit and loss of the current period.
(3) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the quoted
price in the active market. The fair value of a financial instrument that is not traded in an active market isdetermined by using a valuation technique. During the valuation, the Company adopts an applicablevaluation technique under current conditions and there are enough available data and other information
to support. Those inputs should be consistent with the inputs a market participant would use when
trading the asset or liability, and the Company should maximize the use of relevant observable inputs.
When related observable inputs can't be acquired or are not feasible to be acquired, then use
unobservable inputs.
(4) Significant accounting estimates and judgments①Significant accounting estimates and key assumptions
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Measurement of expected credit loss
The Company applies exposure at default and expected credit loss rate to calculate expected credit
loss, and determines expected credit loss rate based on probability of default and loss given default. For
the determination of expected credit loss rate, the Company applies data including internal historicalcredit losses experience, and adjusts historical data taking account current conditions andforward-looking information. Regarding forward-looking information, indicators used by the Company
include economic downturn risk, growth in expected unemployment rate, changes in external market
environment, technology environment and customer status. The Company monitors and reviews
assumptions related to the calculation of expected credit loss on a regular basis. No major change
occurred in the above-mentioned estimate techniques and key assumptions in this year.
2

Critical judgments on application of accounting policiesa.

Classification of financial assets

On classification of financial assets, critical judgments considered by the Company include thebusiness mode, an analysis of contractual cash flow characteristics and others.
From the dimension of financial asset portfolio, the Company determines the business mode offinancial asset management. Considerations cover assessments, reporting methods of financial asset
performance to key management personnel, risks impacting financial asset performance and relevant
management methods, as well as methods of relevant business management personnel receiving
remuneration.
In assessing the consistency between contractual cash flow of financial assets and the basic lending
arrangements, the Company makes the following major judgments: whether the time distribution oramount of the principal changes during the duration of the financial assets due to prepayment, etc.; andwhether the interest includes considerations for the currency time value, credit risk, as well as otherbasic borrowing risks, costs and profits. For example, whether the prepayment amount merely reflects
the principal unpaid and interest incurred by the principal unpaid, as well as reasonable compensation
paid due to premature termination of contracts.
b. Judgment that credit risk increases significantly
The main standards for the Company to judge significant increase in credit risk are that overduedays are more than 30 days, or that significant changes occur in one or more of the following indicators:
business environment of debtors, internal and external credit rating, the significant change of actual or
expected business performance, value of collaterals or significant drop in credit rating of guarantors.
The main standards for the Company to judge incurred credit impairment are that overdue days are
more than 90 days (i.e. default occurred), or that one or more of the following conditions are met: adebtor is under significant financial difficulty; other ongoing debt restructuring or high possibility ofbankruptcy.
11.

Inventories√ Applicable □ Not Applicable(1) Classification of inventories

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Inventories refer to the finished goods or commodities held for sale in daily activities, goods inprogress in the production process, consumed materials and supplies in the production process orproviding services of the Company, which mainly include raw materials, revolving materials, entrusted
processed materials, wrap page, goods in progress, self-made semi-finished goods, finished goods(merchandise inventory) and engineering construction, etc.
(2) Measurement of inventories transferred out
At delivery, inventories are accounted using the weighted average method.
(3) Provision for inventory impairment
At balance sheet date, inventories are measured at the lower of cost or net realizable value.
The net realizable value of inventories (including finished products, merchandize and materials forsale) that can be sold directly is determined based on the estimated selling price of such inventory
deducted by the estimated selling expenses and relevant taxes. The net realizable value of materials held
for production is determined based on the estimated selling price of the finished product deducted by theestimated cost to be incurred upon completion, estimated selling expenses and relevant taxes. The net
realizable value of inventory held for performance of sales contract or labor service contract isdetermined based on the contractual price; in case the amount of inventory held by the enterprise
exceeds the contractual amount, the net realizable value of the excess portion of inventory is calculated
based on the general selling price.
Provision for impairment of inventories is made for individual inventory. For items of inventories
that is produced and marketed in the same geographical area and with the same or similar end uses or
purposes, which cannot be practicable evaluated separately from other items, cost and net realizablevalue of inventories may be determined on an aggregate basis. For large quantity and low value items
of inventories, cost and net realizable value of inventories may be determined on types of inventories.
Provision for inventory impairment is made and recognized as profit or loss when the cost is higher
than the net realizable value on the balance sheet date. If the factors that give rise to the provision inprior years are not in effect in current year, provision would be reversed within the amount of provision
for inventory impairment originally recognized, and the reversed amount shall be recognized in the
profit or loss.
(4) Inventory system
The Company adopts perpetual inventory system.
(5) Amortization of low-value consumables and packaging
Low-value consumables and packages of the Company are amortized by one-time write-off.
12.

Long-term equity investments√ Applicable □ Not Applicable
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Long-term equity investments in this section refer to equity investments held by the Company thatgive it control, joint control or significant influence over the investee. Long-term equity investments
where the Company does not exercise control, joint control or significant influence over the investee areaccounted for as available-for-sale financial assets.
(1) Recognition of initial cost of investment①For long-term equity investment obtained from business consolidation under common control, theinitial cost is measured at the combining party's share of the carrying amount of the equity of the
combined party; for a long-term equity investment obtained from business consolidation not undercommon control, the initial cost is the consolidation cost at the date of acquisition;② For the long-term equity investment acquired in a manner other than business combination: theinitial investment cost of the long-term equity investment acquired by payment in cash shall be thepurchase price actually paid; the initial investment cost of the long-term equity investment acquired byissuing equity securities shall be the fair value of the equity securities issued; for long-term equity
investment acquired by debt restructuring, the initial investment cost shall be determined in accordancewith the relevant requirements under Accounting Standards for Enterprises No. 12 - Debt Restructuring;for long-term equity investment acquired by the exchange of non-monetary assets, the initial investment
cost shall be determined in accordance with relevant requirements under the Rules.
(2) Subsequent measurement and profit or loss recognition①Cost method
Where the investor has a control over the investee, long-term equity investments are measured
using cost method. For long-term equity investments using cost method, unless increasing or recovering
the investment, the carrying value is generally unchanged. The profit distributions or cash dividends
declared by the investee attributable to the Company are recognized as investment income.
②Equity method
Investor's long-term equity investments in associates and joint ventures are measured using equity
method. Where part of the equity investments of an investor in its associates are held indirectly throughventure investment institutions, common fund, trust companies or other similar entities including
investment linked insurance funds, such part of equity investments indirectly held by the investor shallbe measured at fair value through profit or loss according to relevant requirements of AccountingStandards for Business Enterprises No.22—Recognition and measurement of Financial Instruments
regardless whether the above entities have significant influence on such part of equity investments,
while the remaining part shall be measured using equity method.
Under the equity method, where the initial investment cost of a long-term equity investment
exceeds the Company's share of the fair value of the investee's identifiable net assets at the time ofacquisition, no adjustment is made to the initial investment cost. Where the initial investment cost is lessthan the Company's share of the fair value of the investee's identifiable net assets at the time ofacquisition, the difference is recognized in profit or loss for the period, and the cost of the long-term
equity investment is adjusted accordingly.
For long-term equity investments accounted for using the equity method, the Company recognizes
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the investment income and other comprehensive income according to its share of net profit or loss andother comprehensive income of the investee, and the carrying amount of the long-term equity
investments shall be adjusted accordingly; the carrying amount of the investment is reduced by theCompany's share of the profit distribution or cash dividends declared by an investee; for changes inowner's equity of the investee other than those arising from its net profit or loss, other comprehensive
income and profit distribution, the carrying amount of the long-term equity investment shall be adjusted
and recognized to capital reserve. When recognizing attributable share of the net profit and losses of theinvestee, the net profit of the investee shall be recognized after adjustment on the ground of the fairvalue of all identifiable assets of the investee when it obtains the investment. If the accounting policies
and accounting periods adopted by the investee are different from those adopted by the Company, anadjustment shall be made to the financial statements of the investee in accordance with the accounting
policies and accounting periods of the Company and recognize the investment incomes and othercomprehensive income.
The Company's share of net losses of the investee shall be recognized to the extent that the carrying
amount of the long-term equity investment together with any long-term interests that in substance form
part of the investor's net investment in the investee are reduced to zero. If the Company has to assume
additional obligations, the estimated obligation assumed shall be provided for and charged to the profit
or loss as investment loss for the period. Where the investee is making net profits in subsequent periods,
the Company shall resume recognizing its share of profits after setting off against the share of
unrecognized losses.
(3) Change of the accounting methods for long-term equity investments① Change of measurement at fair value to accounting under equity method: where the equity
investment originally held have no control, joint control or significant impact on the investee, and thatare accounted according to the Standards for Recognition and Measurement of Financial Instruments
and can impose common control or place significant impact on the investee due to addition of
investment which resulted in the increase of shareholding, the investee shall take the fair value of theequity investment originally held determined in accordance with the Standards for Recognition andMeasurement of Financial Instruments plus the fair value of the consideration payable for new
investment as the initial investment cost accounted after the equity method is adopted.
② Change of measurement at fair value or accounting under equity method to cost method: theequity investment originally held by the investor with no control, joint control or significant impact on
the investee and accounted according to the Standards for Recognition and Measurement of Financial
Instruments, or the long-term equity investment originally held in associates or joint ventures that can
impose control over the investee due to addition of investment, shall be accounted as long-term equity
investment formed by combination of relevant enterprises.
③ Change of accounting under equity method to measurement at fair value: for the long-term
equity investment originally held with common control or significant impact on the investee that can nolonger impose common control or significant impact on the investee due to a decrease of shareholding asa result of factors such as partial disposal, the remaining equity investment shall be accounted inaccordance with Standards for Recognition and Measurement of Financial Instruments, and thedifference between the fair value on the date when the common control or significant impact no longer
exists and the book value is included in profit or loss.
④ Change of cost method to equity method: where control on the investee changes to significant
impact or common control on the investee with other investors due to factors such as disposal ofinvestment, the long-term equity investment cost that ceased to be recognized shall first be carriedforward on the proportion of the investment disposed. Then the Company compares the cost of theremaining long-term equity investment with the attributable fair value of the identifiable net assets
which are entitled to the investee at the time of original investment and are calculated based on the
proportion of the remaining stake; where the former is larger than the later, it belongs to the goodwill as
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showed in deciding the investment price and the carrying amount of the long-term equity investment
will not be adjusted; where the former is less than the later, the retained earnings will be adjusted alongwith the adjustment of the cost of long-term equity investment.
(4) Basis of conclusion for common control and significant impact over the investee①Joint control over an investee means that activities which have a significant impact on the returnof a certain arrangement could be decided only by mutual consent of the investing parties sharing theright of control, which includes the sales and purchase of goods or services, management of financial
assets, acquisition and disposal of assets, research and development activities and financing activities,etc.
②Significant impact on the investee exists when the investing parties hold more than 20% but lessthan 50% of the shares with voting rights in the investee or, if the investing parties hold less than 20%
shares in the investee, they:1) have representatives in the board of directors or similar governing body of the investee;2) participate in the investee's policy formulation;3) assign management personnel to the investee;4) provide technology or technical information that the investor is dependent on;5) have major transactions with the investee.
(5) methods of impairment test and provision for impairment
At the balance sheet date, the Company reviews whether there are signs for the impairment oflong-term equity investments. If yes, the recoverable amount is determined through impairment test andprovision for impairment is made based on the difference between the recoverable amount and thecarrying value. Impairment loss will not be reversed in subsequent accounting periods once provision ismade for it.
The recoverable amount is the higher of net fair value of long-term equity investments on disposal
and the present value of estimated future cash flow.
(6) Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the considerations actually
received and the carrying value of the disposed investment is recognized in current profit or loss. For
long-term equity investment accounted for using the equity method, the part previously recognized inother comprehensive income is accounted on pro rata basis upon disposal in the same way as therelevant assets or liabilities are disposed of directly by the investee.
13.

Investment properties

Investment properties of the Company include leased land use rights and leased buildings.

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An investment property is initially measured at cost, and cost method is adopted for subsequent
measurement.
The buildings leased out of investment properties of the Company are depreciated over their useful
lives using the straight-line method. The specific measurement policy is the same as that of fixed assets.
For land use rights leased out of investment properties or held for resale after appreciation in value, they
are amortized using the straight-line method. The specific measurement policy is the same as that ofintangible assets.
At the balance sheet date, the Company reviews whether there are signs for impairment ofinvestment properties. If yes, the recoverable amount is recognized through an impairment test andprovision for impairment is made based on the difference between the carrying value and therecoverable amount. Impairment loss will not be reversed in subsequent accounting periods once
provision is made for it.
14.

Fixed assets(1). Recognition criteria of fixed assets√ Applicable □ Not Applicable
Fixed assets are tangible assets that are held for production of goods, provision of labor services,
leasing or operation and management purposes, and have a useful life of more than one fiscal year,
which are recognized when the following conditions are met:
1

economic benefits in relation to the fixed assets are very likely to flow into the enterprise;2

the cost of the fixed assets can be measured reliably.

(2). Depreciation method of fixed assets√ Applicable □ Not Applicable
The fixed assets of the Company can be divided into: houses and buildings, production equipment,
transportation equipment, office equipment, etc. The straight-line method over useful lives is used tomeasure depreciation. The useful lives and the expected net residual value of fixed assets are determinedaccording to the nature and usage of various fixed assets. At the end of each year, the useful lives,
expected net residual value and depreciation method of fixed assets are reviewed, and adjusted if there isvariance with original estimates. The Company has made provisions for all the fixed assets except for
the fixed assets that have been fully depreciated and still in use.
Type

Depreciation life (years)

Residual ratio

Land ownership--

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Houses and buildings

8-40 years

0%-5%Machinery equipment

4-20 years

0%-5%Transportation equipment

5-10 years

0%-5%

Office equipment and others

3-10 years

0%-5%(3). Method of test and provision for impairment of fixed assets
At the balance sheet date, the Company reviews whether there are signs for impairment of the fixed
assets. If yes, the recoverable amount is recognized through an impairment test and provision for
impairment is made based on the difference between the carrying value and the recoverable amount.
Impairment loss will not be reversed in subsequent accounting periods once provision is made for it.
(4). Basis for recognition and method of measurement for fixed assets held under financelease√ Applicable □ Not Applicable
Basis for recognition of fixed assets held under finance lease: leases for which all the risks andrewards related to the ownership of relevant assets are transferred substantially. Fixed assets held underfinance lease are recognized if one or more of the following conditions is/are met: ①upon expiry of thelease term, the ownership of the leased asset is transferred to the lessee; ②the lessee has the option topurchase the leased asset at a price expected to be sufficiently lower than the fair value of the leased
asset when the option is exercised and at the inception of the lease, it is reasonably ascertained that thelessee will exercise such option; ③the lease term approximates the useful life of the leased asset even if
the ownership of the asset is not transferred; ④ at the inception of the lease, the present value of theminimum lease payments of the lessee is substantially equivalent to the fair value of the leased asset; ⑤
the leased assets are of such a specialized nature that only the lessee can use them without major
modification.
Measurement of fixed assets held under finance lease: fixed assets held under finance lease are
initially recognized at the lower of fair value of the leased assets at the inception of lease and the present
value of minimum lease payments.
For subsequent measurement of fixed assets held under finance lease, provision for depreciation andimpairment is made adopting the same depreciation policies for self-owned fixed assets.
15.

Construction in progress√ Applicable □ Not Applicable(1) Types of construction in progress
Construction in progress for the Company is in a self-operated manner.
(2) Standard and timing of transfer from construction in progress to fixed assets

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The construction in progress of the Company is transferred to fixed assets when the project iscompleted and ready for its intended use, which shall satisfy one of the following conditions:① The construction of the fixed assets (including installation) has been completed or substantiallycompleted;②The fixed asset has been used for trial production or operation and it is evidenced that the asset
can operate ordinarily or steadily produce qualified products; or the result of trial operation proves that it
can operate normally or be opened for business;③Further expenditure incurred for construction of the fixed asset is very minimal or remote;④The constructed fixed asset reaches or almost reaches the design or contractual requirements, orcomplies with the design or contractual requirements.
(3) Method of test and provision for impairment of impairment of construction in progress
At the balance sheet date, the Company reviews the construction in progress to check whether there
is any sign of impairment. If yes, the recoverable amount is recognized through an impairment test andprovision for impairment is made based on the difference between the carrying value and therecoverable amount. Impairment loss will not be reversed in subsequent accounting periods once
provision is made for it.
The recoverable amount of construction in progress should base on the higher of net fair value of
asset less disposal expense and the present value of estimated future cash flow of the asset.
16.

Borrowing costs√ Applicable □ Not Applicable(1) Recognition principles for capitalization of borrowing costs
The Company's borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset are capitalized into the cost of relevant assets. Other borrowing costs arerecognized as expenses in current profit or loss based on the amount incurred. Qualifying assets forcapitalization include fixed assets, investment properties and inventories that necessarily take a
substantial period of time for acquisition, construction or production to get ready for their intended use
or for sale.
(2) Computation of capitalized amount
Period of capitalization refers to the period from the commencement to the cessation ofcapitalization timing of borrowing costs, excluding the periods in which capitalization of borrowing
costs is suspended.
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Period of suspended capitalization: Capitalization of borrowing costs is suspended during periods inwhich the acquisition, construction or production of a qualifying asset is suspended abnormally and thesuspension lasts for more than 3 months.
Computation of capitalized amount: ①Specific borrowings will be determined based on the actualinterest expense incurred in the current period of the special borrowings less the interest income fromunutilized borrowings deposited in banks or investment income from temporary investment; ②Normal
borrowings utilized are calculated based on the weighted average of the asset expenses accumulated
exceeding the asset expenses of the portion of special borrowings multiplied by the capitalization ratioof the normal borrowings utilized. Capitalization ratio is calculated based on weighted average interest
rate of normal borrowings; ③For borrowings with discount or premium, the discount or premium whichshould be amortized in each accounting period is determined based on the effective interest rate method
and an adjustment should be made to the amount of interests in each period.
17.

Right-of-use assets√ Applicable □ Not Applicable
Right-of-use assets are the right of the Company as a lessee to use leased assets during the lease
term. On the commencement date of the lease term, the Company as lessee shall recognize theright-of-use assets and lease liabilities for the lease, except for short-term leases and low value assets
leases which are treated with practical expedient. The commencement date of the lease term refers to thestart date when the lessor provides the leased assets to make it available to the lessee.
The Company’s right-of-use assets shall be initially measured at the costs. The costs include:(1) initial measurement amount of the lease liability;(2) a lease payment paid on or before the date of commencement of the lease period, where there
was lease incentive, such incentives shall be deducted;(3) initial direct costs incurred by the Company as lessee;(4) costs expected to be incurred by the Company for demolition and removal of leased assets,
restoration of the premises where the leased assets are located, or restoration of the leased assets tothe conditions of the lease terms.
The Company refers to the relevant depreciation provisions of Accounting Standards for BusinessEnterprises No. 4-Fixed Assets to accrue depreciation for right-of-use assets. If the Company canreasonably determine that the ownership of the leased asset can be acquired at the expiration of the leaseterm, the leased asset shall be depreciated within its remaining useful life. If the Company cannot
reasonably determine that the ownership of the leased asset can be acquired at the expiration of the leaseterm, the leased asset shall be depreciated within the lease term or its remaining useful life (whichever isshorter).
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The Company determines whether the right-of-use assets are impaired in accordance with theprovisions of Accounting Standards for Business Enterprises No. 8 – Asset Impairment and performs
accounting treatment on the identified impairment losses.
When the lease liabilities are remeasured in accordance with the Standards, the Company adjusts thebook value of the right-of-use assets accordingly. If the book value of the right-of-use assets is reduced
to zero, but needs a further reduction in the measurement of the lease liabilities, the Company recognizes
any remaining amount of the remeasurement in current profit or loss.
If the lease change results in a narrower lease or a shorter lease term, the Company reduces thebook value of the right-of-use assets accordingly and recognizes the related gains or losses of thepartially terminated or completely terminated leases into current profit and loss. For other lease changes
which result in the remeasurement of lease liabilities, the Company adjusts the book value of theright-of-use assets accordingly.
18.

Intangible assets

Intangible assets are the identifiable non-monetary assets which have no physical form and arepossessed or controlled by the Company.
(1). Valuation method, service life and impairment test
√ Applicable □ Not Applicable
Intangible assets of the Company are initially recognized at costs. The actual costs of purchased
intangible assets include the consideration and relevant expenses actually paid. For intangible assets
contributed by investors, relevant actual costs are determined based on the value agreed in theinvestment contract or agreement. But if the value agreed in the investment contract or agreement is nota fair value, the actual costs should be determined based on the fair value. The cost of a self-developed
intangible asset is the total expenditure incurred in bringing the asset to its intended use.
Subsequent measurement of intangible assets of the Company: ① Intangible assets with finite
useful lives are amortized on a straight-line basis; their useful lives and amortization methods arereviewed at the end of each year, and adjusted accordingly if there is any variance with the previous
estimates; ② Intangible assets with indefinite useful lives are not amortized and their useful lives arereviewed at the end of each year. If there is an objective evidence that the useful life of an intangible
asset is finite, an estimation should be made on the useful life and the intangible asset should beamortized using the straight-line method.
(2) Criterion of determining indefinite useful life
The useful life of an intangible asset is indefinite if the period in which the asset brings economic
benefits for the Company is unforeseeable, or the useful life could not be ascertained.
Criterion of determining indefinite useful lives: ① the period is derived from contractual rights orother legal rights and there are no explicit years of use stipulated in the contract or laws and regulations;② the period in which the intangible assets generate benefits for the Company still could not be
estimated after considering the industrial practice or relevant expert opinions.
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At the end of each year, the useful lives of the intangible assets with indefinite useful lives arereviewed. The assessment is primarily reviewed by relevant departments that use the intangible assets,using the down-to-top approach, to determine if there are changes to the determination basis of indefinite
useful lives.
(3) Methods of test and provision for impairment of intangible assets
At the balance sheet date, the Company reviews intangible assets to check whether there is any signof impairment. If yes, the recoverable amount is recognized through an impairment test and provision
for impairment is made based on the difference between the carrying value and the recoverable amount.
Impairment loss will not be reversed in subsequent accounting periods once provision is made for it.
The recoverable amount of intangible assets should be based on the higher of the net fair value ofthe assets less the disposal expense and the present value of estimated future cash flow of the assets.

(4) Accounting policies regarding expenditure for internal research and development
projects√ Applicable □ Not ApplicableAs for an internal research and development project, expenditure incurred in the research stage isrecognized in the profit or loss as incurred. Expenses incurred in the development stage are recognized
as intangible assets if all of the following conditions are met: ①the technical feasibility of completing
the intangible assets so that they will be available for use or for sale; ② the intention to complete theintangible assets for use or for sale; ③ how the intangible assets will generate economic benefits,
including there is evidence that the products produced by the intangible assets has a market or theintangible assets themselves have a market; if the intangible assets are for internal use, there is evidence
that there exists usage for the intangible assets; ④ the availability of adequate technical, financial andother resources to complete the development and gain the ability to use or sell the intangible assets; ⑤
the capability to reliably measure the expenditures attributable to the development stage of the intangible
assets.
Specific standards for distinguishing research stage and development stage of an internal researchand development project: research stage refers to the stage of planned investigation and search for
obtaining new technology and knowledge, which features planning and exploration; before commercial
production or other uses, the stage of applying the research achievements and other knowledge in a planor design to produce new or substantially improved materials, equipment and products is regarded as
development stage, which features pertinence and is very likely to form results. All the expenditures
incurred on research and development which cannot be distinguished between research stage anddevelopment stage are recognized in the profit or loss.
19.

Impairment of long-term assets√ Applicable □ Not Applicable
Long-term equity investment, investment properties measured based on cost model, fixed assets,
construction in progress, intangible assets and other long-term assets are tested for impairment if there is
any sign of impairment at the balance sheet date. If the result of the impairment test indicates that the
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recoverable amount of the assets is less than the carrying amount, a provision for impairment will bemade based on the difference and will be recorded in impairment loss. The recoverable amount is thehigher of the net fair value of the assets less the disposal expense and the present value of estimatedfuture cash flow of the assets. Provision for asset impairment is calculated and recognized on theindividual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, therecoverable amount of the asset group to which the asset belongs is determined. An asset group is thesmallest asset portfolio that can generate cash inflows independently.
Goodwill is tested for impairment at least at the end of each year.
In terms of impairment test of the goodwill of the Company, the carrying amount of the goodwill,arising from business combination, shall be allocated to the related asset groups on reasonable basis
since the acquisition date, or to the related asset group portfolios if it is difficult to be allocated to therelated asset groups. When the carrying amount of the goodwill is allocated to the related asset groups or
asset group portfolios, it shall be allocated in the proportion of the fair value of each asset group or asset
group portfolio against the total fair value of related asset groups or asset group portfolios. If it isdifficult to measure the fair value reliably, it shall be allocated in the proportion of the carrying amountof each asset group or asset group portfolio against the total carrying amount of related asset groups or
asset group portfolios.
When impairment test is made to the related asset groups or asset group portfolios including
goodwill, if there is a sign that the related asset groups or asset group portfolios are prone to impair, theCompany shall first conduct impairment test on the asset groups or asset group portfolios excluding
goodwill, calculate the recoverable amount and recognize the corresponding impairment loss bycomparing with its carrying amount. The Company shall then conduct impairment test on the asset
groups or asset group portfolios including goodwill and compare the carrying amount (including thecarrying amount of allocated goodwill) of related asset groups or asset group portfolios with therecoverable amount thereof. Impairment loss on goodwill shall be recognized when the recoverable
amount of the related asset groups or asset group portfolios is lower than the carrying amount thereof.
Once the above impairment loss on assets is recognized, it shall not be reversed in any subsequentaccounting period.
20.

Long-term prepaid expense√ Applicable □ Not Applicable
Long-term prepaid expenses of the Company are expenditures which have incurred but the benefit
period of which is more than one year (exclusive). They are amortized by installments over the benefit
period based on each item under the expenses. If items under the long-term pre-paid expenses are nolonger beneficial to the subsequent accounting periods, the amortized value of such unamortized items isthen fully transferred to the profit or loss.
21.

Staff's remuneration

Staff's remunerations are all forms of compensation and other relevant expenditure given by theCompany in exchange for services rendered by employees, including short-term remunerations,post-employment benefits, termination benefits and other long-term benefits.

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Short-term remunerations include short-term salaries, bonus, allowance, subsidies, employee
welfare, housing provident fund, labor union fee and education fee, medical insurance premiums,
work-related injury insurance premiums, maternity insurance premiums, short-term compensated leave,
short-term profit-sharing plans, etc. During the accounting period when employees render services,
short-term remunerations that actually incurred shall be recognized as liabilities and credited into thecurrent profit or loss or the cost of relevant assets on an accrual basis by the benefit objects.
Post-employment benefits mainly include the basic pension insurance, enterprise annuity, etc., In
accordance with the risks and obligations undertaken by the Company, the post-employment benefits areclassified as defined contribution plans and defined benefit plans. Defined contribution plans: theCompany shall recognize the sinking funds paid on the balance sheet date to individual entities inexchange for services from employees in the accounting period as liabilities, and shall credit such funds
into the profit or loss or the cost of relevant assets in accordance with the benefit objects. Defined
benefit plans: the cost for providing benefits is determined using the expected cumulative welfare unit
method, with actuarial valuations being carried out by independent actuary at the interim and annual
balance sheet date. The costs for staff’s remunerations incurred by the defined benefit plans of the Groupare categorized as follows: (1) service cost, including current period service cost, past service cost andsettlement profit or loss. Specifically, current period service cost means the increase of the present valueof defined benefit obligations resulted from the current period services offered by employees. Past
service cost means the increase or decrease of the present value of defined benefit obligations resulted
from the revision of the defined benefit plans related to the prior period services offered by employees;(2) interest expenses of defined benefit plans; (3) changes caused by the remeasurement of liabilities fordefined benefit plans. Unless other accounting standards require or permit the credit of the costs for
employee welfare into the cost of assets, the Company will credit (1) and (2) above into the profit or loss;
and recognize (3) above as other comprehensive income and will not transfer it back to the profit or loss
in subsequent accounting periods.
Termination benefits: The indemnity proposal provided by the Company for employees for the
purpose of terminating labor relations with employees before expiry of the labor contracts or
encouraging employees to accept downsizing voluntarily. When the following conditions are met, theCompany will recognize and credit into the profit or loss the accrued liabilities arising from theindemnity as a result of terminating labor relations with the employees: the Company has made a formal
plan for termination of labor relations or has made an offer for voluntary redundancy which will be
implemented immediately; and the Company could not unilaterally withdraw the plan for termination oflabor relations or the redundancy offer. Early retirement plans for employees will be handled in theprinciple the same as the termination benefits above. The Company will credit the salaries and social
insurance premiums to be paid to the early retirees during the period from the date of early retirement to
the normal retirement date to the profit or loss when recognition conditions for estimated liabilities are
met.
22.

Lease liabilities√ Applicable □ Not Applicable
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On the commencement date of the lease term, the Company as the lessee shall recognize theright-of-use assets and lease liabilities for the lease. The Company’s lease liabilities are initiallymeasured at the present value of the lease payment that has not been paid on the commencement date of
the lease term.
When calculating the present value of the lease payment, the Company adopts interest rate implicit
in lease as discount rate; if it is impossible to determine the interest rate implicit in lease, the incremental
borrowing rate of the Company (i.e. lessee) shall be adopted as the discount rate.
The interest rate implicit in lease refers to the interest rate that makes the sum of the present value ofthe lessor’s lease receivable amount and the present value of the unguaranteed residual value equal to thesum of the fair value of the leased asset and the initial direct cost of the lessor. The lessee’s incremental
borrowing rate refers to the interest rate that the lessee is required to pay for borrowing funds undersimilar mortgage conditions in a similar economic environment in order to obtain assets close to thevalue of the right-of-use assets during a similar period.
The Company shall calculate the interest expenses of lease liabilities over the lease term at the fixed
periodic interest rate, and include it into current profit or loss or assets cost.
After the commencement date of the lease term, where the assessment results of the renewal of theoption, the termination of the lease option and the purchase option have changed, the Company
re-determines the lease payment and re-measures the lease liabilities in accordance with the present
value of the lease payment after changes and the revised discount rate.
After the commencement date of the lease term, in the event that the future lease payment changes
due to a change in expected payment under a guaranteed remaining value or changes in an index or rateused in determining the lease payments, the Company shall re-measure lease liabilities based on present
value of the lease payment after changes. In such cases, the discount rate adopted by the Company shallremain unchanged; however, if the change in lease payment results from a change in floating interest
rates, the Company shall use a revised discount rate.
23. Estimated liability√ Applicable □ Not Applicable(1) Criterion for determining of estimated liability
If an obligation in relation to contingencies such as external guarantees, discounting ofcommercial acceptance bills, pending litigation or arbitration and product quality assurance is thepresent obligation of the Company and the performance of such obligation is likely to lead to an
outflow of economic interests and its amount can be reliably measured, such obligation shall berecognized as an estimated liability.
(2) Measurement of estimated liability
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The estimated liability shall be initially measured according to the best estimate of thenecessary expenses for the performance of the present obligation. If there is a continuous range forthe necessary expenses and if all the outcomes within this range are equally likely to occur, the best
estimate shall be determined according to the middle estimate within the range.; if there are two or
more items involved, the best estimate should be determined according to all possible outcomes andrelevant probabilities.
At the balance sheet date, the carrying value of estimated liabilities should be reviewed. If
there is objective evidence that the carrying value could not reflect in the current best estimate, thecarrying value shall be adjusted to reflect the current best estimate.
24.

Share-based payments√ Applicable □ Not Applicable

For equity-settled share-based payment transaction in return for services from employees, it
shall be measured at the fair value of equity instruments granted to the employees at the grant date.
For the payment of such fair value that may only be exercised if services are fulfilled during thevesting period or the specified performance condition is achieved, the amount of such fair value
shall, based on the best estimate of the number of exercisable equity instruments during the vesting
period, be recognized in relevant costs or expenses in straight-line method with the increase in thecapital reserve accordingly.
The cash-settled share-based payment shall be measured at the fair value of liability assumed
by the Company, which is determined based on the shares or other equity instruments. For the
cash-settled share-based payment that may be exercised immediately after the grant, the fair valueof the liability assumed by the Company shall, on the date of the grant, be recognized in relevantcosts or expenses and the liabilities shall be increased accordingly. For cash-settled share-based
payment that may be exercised if services are fulfilled during the vesting period or the specified
performance condition is achieved, on each balance sheet date within the vesting period, theservices acquired in the current period shall, based on the best estimate of exercise, be recognized in
relevant costs or expenses at the fair value of the liability assumed by the Company, and theliabilities shall be adjusted correspondingly.
At each balanced sheet date and the settlement date prior to the settlement of liabilities, the fairvalue of the liability is re-measured with its change consolidated in profit/loss.
When there is changes to the Company's share-based payment plans, if the modification
increases the fair value of the equity instruments granted, corresponding recognition of service
increase in accordance with the increase in the fair value of the equity instruments; if themodification increases the number of equity instruments granted, the increase in fair value of theequity instruments is recognized as a corresponding increase in service achieved. Increase in the fairvalue of equity instruments refer to the difference between the fair values of the equity instrumenton the modified date before or after the modification. If the Company modifies the vesting
conditions in such manner conductive to the employees, including the shortening of the vesting
period, change or cancellation of the performance conditions (rather than market conditions), theCompany shall consider the modified vesting conditions upon the disposal of vesting conditions. If
the modification reduces the total fair value of shares paid or the Company uses other methods notconductive to employees to modify the terms and conditions of share-based payment plans, it willcontinue to be accounted for the services obtained in the accounting treatment, as if the change had
not occurred, unless the Company cancelled some or all of the equity instruments granted.
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During the vesting period, if the Company cancel equity instruments granted which will betreated as accelerating the exercise of rights and any amount to be charged over the remaining
vesting period should be recognized immediately in the profit or loss, while at the same time
recognize the capital reserve. Employees or other parties can choose to meet non-vesting conditions,but for those that are not met in the vesting period, the Company will treat it as cancellation ofequity instruments granted.
25.

Revenue

Revenue is the total inflow of economic benefits formed by the Company and its subsidiaries during
day-to-day operations which might lead to increase of shareholders' equity and be irrelevant to capital
invested by shareholders.
The Company and its subsidiaries performed performance obligations stated in the contract, i.e.,
recognized revenue when the client obtains the control right of relevant goods or services.
Where the contract includes two or more performance obligations, during the starting date of thecontract, the Company and its subsidiaries allocate transaction price to various single performanceobligation in accordance with the relevant proportion of separate selling price of goods or services
promised by various single performance obligation, and measure revenue in accordance with transaction
price allocated to various single performance obligation.
Transaction price is the amount of consideration that the Company and its subsidiaries are expected
to be entitled to collect due to transfer of goods and services transferred to the client, excluding theamount collected for any third party. The transaction price recognized by the Company and its
subsidiaries does not exceed the amount of recognized revenue when relevant uncertainties are
eliminated and might not incur material carrying back. The amount that is expected to be returned to theclient is taken as liability of returned goods and is not recorded in transaction price.
When one of the following conditions is met, the Company and its subsidiaries performperformance obligations during a certain time horizon, otherwise, it belongs to fulfilling performanceobligations at a certain time point:
1

The client simultaneously obtains and consumes economic benefits as the Company and its
subsidiaries perform the contract;2

The client is able to control goods under construction during the process of performance of theCompany and its subsidiaries;

3

Goods produced by the Company and its subsidiaries during the process of performance haveno alternative use, and the Company and its subsidiaries are entitled to collect the amount forthe cumulative completed and performed portion to date during the entire contractual period.

For the performance obligations performed during a certain time horizon, the Company and its
subsidiaries recognize revenue in accordance with the schedule of performance during such time horizon.
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When the schedule of performance can't be reasonably recognized, where the costs that have been
incurred by the Company and its subsidiaries are estimated to be compensated, revenue shall berecognized in accordance with the amount of costs that has been incurred until the schedule ofperformance can be reasonably confirmed.
For performance obligations performed at a certain time point, the Company and its subsidiaries
recognize revenue at the time point when the client obtains the control right of relevant goods or services.
When judging whether the client has obtained control right over goods or services, the Company and its
subsidiaries will consider the following signs:① The Company and its subsidiaries enjoy the right of instant collection over such goods andservices;② The Company and its subsidiaries have transferred the material objects of such goods to theclient;③ The Company and its subsidiaries have transferred statutory ownership right of the goods or
major risks and rewards of the ownership to the client;
4

The client has accepted such goods or service.

The right that the Company and its subsidiaries are entitled to collect the consideration for havingtransferred goods or services to the client (and such right depends on other factors other than time lapse)
is presented as contractual asset, and contractual asset is provisioned impairment on the basis of
expected credit losses. The right owned by and unconditionally collected from the client by theCompany and its subsidiaries (only depend on time lapse) shall be presented as accounts receivable.
Obligations that the Company and its subsidiaries have collected or shall collect consideration from theclient and shall transfer goods or services to the client are presented as contractual obligations.
Specific accounting policies relating to major activities that the Company and its subsidiaries obtainrevenue are described as follows:(1) Sale of goods
Generally, contracts for sale of goods between the Company and its clients only include
performance obligation of transferring the whole machine of home appliance. Generally, on the basis oftaking into account the following factors comprehensively, the Company recognizes the revenue at thetime point of transfer of control right of goods: the right of instant collection for obtaining goods,
transfer of major risks and rewards on ownership of goods, transfer of statutory ownership of goods,
transfer of assets of material objects of goods, the client's acceptance of such goods.
(2) Construction contract income

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Construction contract between the Company and the client generally includes performanceobligations of construction and installation of commercial air-conditioner and smart home, because theclient is able to control goods under construction during the Company's performance process, theCompany takes them as performance obligations performed during a certain time horizon, andrecognizes revenue in accordance with the schedule of performance, and it is an exemption when theschedule of performance can't be reasonably confirmed. The Company confirms the schedule ofperformance of services provided in accordance with the input method. When the schedule ofperformance can't be reasonably confirmed, where the costs that have been incurred by the Company are
estimated to be compensated, the revenue will be recognized in accordance with the amount of costs thathas been incurred until the schedule of performance can be reasonably confirmed.
(3) Warranty obligations
According to contractual agreement and regulations of laws, the Company provides quality
assurance for goods sold and project constructed. For guarantee-type quality assurance in order to ensure
the client that goods sold comply with existing standards, the Company conducts accounting treatment
in accordance with estimated liabilities. For service-type quality assurance in order to ensure the clientthat we also provide a separate service other than that the goods sold comply with existing standards, theCompany takes it as a separate performance obligation, and allocates partial transaction price toservice-type quality assurance in accordance with the relevant proportion of separate selling price ofgoods and service-type quality assurance, and recognizes revenue when the client obtains control rightover services. When assessing whether quality assurance provides a separate service other than ensuring
the client that the goods sold comply with existing standards, the Company shall consider factors such aswhether such quality assurance is under statutory requirements or industrial practices, the term of quality
assurance and the nature of the Company's commitment to perform the tasks.
26. Government grants√ Applicable□Not Applicable(1) Types of government grants
Government grants refer to the gratuitous monetary assets or non-monetary assets obtained by theCompany from the government, excluding the capital invested by the government as an owner. The
government grants are mainly divided into asset-related government grants and revenue-related
government grants.
(2) Accounting treatment of government grants
Asset-related government grants shall be recognized as deferred income in current profit or loss onan even basis over the useful life of relevant assets; government grants measured at nominal amountshall be recognized directly in current profit or loss. Revenue-related government grants shall be treatedas follows: ①those used to compensate relevant expenses or losses to be incurred by the enterprise in
subsequent periods are recognized as deferred income and recorded in current profit or loss when such
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expenses are recognized; ② those used to compensate relevant expenses or losses that have been
incurred by the enterprise are recorded directly in current profit or loss.
(3) Basis for determination of asset-related government grant and revenue-related government grant
If the government grant received by the Company is used for purchase, construction or other projectthat forms a long-term asset, it is recognized as asset-related government grant.
If the government grant received by the Company is not asset-related, it is recognized asrevenue-related government grant.
Government grant received without clear objective shall be classified as asset-related government
grant or revenue-related government grant by:① Government grant subject to a certain project shall be separated according to the proportion of
expenditure budget and capitalization budget, and the proportion shall be reviewed and modified if
necessary on each balance sheet date;② Government grant shall be categorized as revenue-related if its usage is described in generalstatement and no specific project is specified in the relevant government document.
(4) Amortization method and determination of amortization period of deferred revenue related togovernment grants
Asset-related government grant received by the Company is recognized as deferred revenue and isevenly amortized to the profit or loss in the current period over the estimated useful life of the relevant
asset starting from the date when the asset is available for use.
(5) Recognition of government grants
Government grant measured at the amounts receivable is recognized at the end of the period when
there is clear evidence that the relevant conditions set out in the financial subsidy policies andregulations are fulfilled and the receipt of such financial subsidy is assured.
Other government grants other than those measured at the account receivable is recognized upon
actual receipt of such subsidies.
27. Deferred income tax assets and deferred income tax liabilities√Applicable□Not Applicable

Deferred income tax assets and deferred income tax liabilities of the Company are recognized:

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Haier Smart Home Co., Ltd(1) Based on the difference between the carrying amount and the tax base amount of an asset or aliability (items not recognized as assets and liabilities but their tax base is ascertained by the tax laws
and regulations, the tax base is the difference), deferred income tax asset or deferred income tax liability
is calculated using the applicable tax rate prevailing at the expected time of recovering the asset ordischarging the liability.
(2) Deferred income tax asset is recognized to the extent that there is enough taxable income for the
deduction of the deductible temporary difference. At the balance sheet date, if there is sufficientevidence that there will be enough taxable income in the future for the deduction of the deductible
temporary difference, the deferred income tax asset not recognized in previous accounting period isrecognized. If there is no sufficient evidence that there will be enough taxable income in the future forthe deduction of the deferred income tax asset, the carrying value of the deferred income tax asset is
reduced.
(3) Deferred income tax liability is recognized for taxable temporary difference arising frominvestments in subsidiaries and associated companies, unless the Company could control the time ofreversal of the temporary differences and the temporary differences would not be probably reversed in
the foreseeable future. For deductible temporary differences arising from investments in subsidiaries andassociated companies, deferred income tax asset is recognized if the temporary difference will be very
probably reversed in the foreseeable future and it is highly probable that taxable income will be available
in the future to deduct the deductible temporary difference.
(4) No deferred income tax liability is recognized for a temporary difference arising from the initialrecognition of goodwill. No deferred income tax asset or deferred income tax liability is recognized forthe temporary differences resulting from the initial recognition of assets or liabilities due to a transaction
other than a business combination, which affects neither accounting profit nor taxable income (ordeductible loss). At the balance sheet date, deferred income tax assets and deferred income tax liabilities
are measured at the tax rates that apply to the period when the asset is expected to be recovered or theliability is expected to be settled.
28. Other significant accounting policies and accounting estimations√Applicable□Not Applicable(1) Asset securitization business
Some of the Company's receivables are securitized. The Company's underlying assets are trusted toa special purpose entity which issues securities to investors. The Company serves as the asset service
supplier, providing services including asset maintenance and its daily management, formulation of theannual asset disposal plan, formulation and implementation of the asset disposal plan, signing relevant
asset disposal agreements and periodic preparation of asset service report.

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The Company has evaluated the extent to which it transfers the risks and rewards of assets to otherentities and the extent it exercises control over such entities while applying the accounting policy inrespect of securitization of financial assets:① The financial asset is derecognized when the Company transfers substantially all the risks andrewards of ownership of the financial asset;② Recognition of the financial asset is continued when the Company retains substantially all therisks and rewards of ownership of the financial asset;③ When the Company neither transfers nor retains substantially all the risks and rewards ofownership of the financial asset, the Company evaluates whether it retains control over the financial
asset. If the Company does not retain control, it derecognizes the financial asset and recognizes
separately as assets or liabilities any rights and obligations created or retained in the transfer. If theCompany retains control, it continues to recognize the financial asset to the extent of its continuing
involvement in the financial asset.
(2) Hedge accounting
Hedge refers to risk management activities that enterprises designate financial instruments as hedge
instruments in order to manage risk exposure caused by specific risks such as foreign exchange risk,interest rate risk, price risk and credit risk, allowing to expect changes in fair value or cash flow of hedge
instruments to offset all or partial changes in fair value or cash flow of hedged items.
Hedged items refer to items which make enterprises face risks of changes in fair value or cash flow
and are designated as hedged objects and can be reliably measured.
A hedging instrument is a financial instrument designated by an enterprise for the purpose ofhedging, whose fair value or cash flow changes are expected to offset the change in the fair value or cash
flow of the hedged items.
The Company continuously conducts assessment over whether hedge relationship complies withrequirements of hedge effectiveness on the starting date of hedge and during follow-on period. Hedge
effectiveness refers to the extent that changes in fair value or cash flow of hedge instruments can offset
that of hedged items caused by the risks of being hedged. The portion that the changes in fair value orcash flow of hedge instruments is greater or less than that of hedged items is the ineffective portion ofhedge.
(3) Explanations on significant accounting estimates
Judgments, estimates and assumptions shall be made to book value of the financial statements items,
which could not be measured accurately, due to the inherent uncertainties of operating activities, while
applying accounting policy. Such judgments, estimates and assumptions were based on the
management's historical experience and made after other various factors are considered. These
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judgments, estimates and assumptions will influence the amount of revenues, expenses, assets andliabilities presented in financial reports and the disclosure of contingent liabilities on the balance sheet
date. However, the actual results caused by the uncertainties of these estimations may be different fromthe current estimates of the management, and thus cause a material adjustment to the carrying amountsof assets and liabilities affected in the future. The judgments, estimates and assumptions mentioned
above shall be reviewed on a going concern basis. If the revisions to accounting estimates only affect thecurrent period, the amount affected shall be recognized in the current period; if the revisions affect boththe current and future periods, the amount affected shall be recognized in both the current and future
periods.
On the balance sheet date, the Company needs to have judgments, estimates and assumptions about
the following items on the financial statements:
1

Estimated liabilities

Provision for product quality guarantee, expected contract losses, and other estimates shall be madein accordance with the terms of contracts, current knowledge and historical experience. If the contingent
event has formed a present obligation the performance of which is very probable to result in outflow of
economic benefits from the Company, an estimated liability shall be recognized by the Company on thebasis of the best estimate of the expenditures to settle relevant present obligation. Recognition andmeasurement of the estimated liability significantly rely to a great extent on the management's
judgments. In the process of judgment, the Company takes into consideration the assessment of relevantrisks, uncertainties, time value of money and other factors related to the contingent events. Among them,
the Company will undertake estimated liabilities with respect to the after-sales services provided for the
return, maintenance and installation of goods. When estimating liabilities, the Company has considered
the empirical data on maintenance in recent years, but the previous maintenance experiences may fail toreflect the future circumstances. Any increase or decrease in this provision is likely to affect the profits
and losses of the next year.
2

Provision of expected credit losses

The Company calculates the expected credit losses in accordance with breach risk exposure andexpected credit loss rate, and confirms expected credit loss rate on the basis of breach possibilities andbreach loss rate. When confirming expected credit loss rate, the Company uses data such as internal
historical credit loss experiences, and conducts adjustments over historical data in combination withcurrent status and forward-looking information. When considering forward-looking information, indexes
used by the Company include risks such as economic downturn, growth of expected unemployment rate,changes in external market environment, technological environment and client conditions. The Company
regularly monitors and reviews relevant assumptions relating to calculation of expected credit losses.
The aforesaid estimation techniques and key assumptions have not changed substantially in this year.
3

Impairment provision of inventories

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Inventories are measured by lower of cost and net realizable value according to the accounting
policies of inventories; for inventories whose costs are higher than the net realizable value or thoseobsolete and unsalable, the impairment provision of inventories shall be made. The carrying value of
inventory shall be written down to the net realizable value on the basis of the evaluation of the salabilityof inventories and the net realizable value thereof. Authenticating inventory impairment requires the
management's obtaining of solid evidence, and their judgments and estimations made after considering
the purpose of holding inventories and the effect of events after the balanced sheet date and etc. The
difference between the actual outcome and the previously estimated outcome will influence the carrying
value of inventories and the provision or reversal of impairment provision of inventories during theperiod when the estimates are changed.
④Fair value of financial instruments
For financial instruments where there is no active market, the Company will determine their fairvalue through a variety of valuation methods. Such valuation methods include discounted cash flow
analysis. In the valuation, the Company shall estimate the future cash flow, credit risk, market volatility
and correlation, and select the appropriate discount rate. Such related assumptions are uncertain, andtheir changes may affect the fair value of financial instruments.
⑤Impairment of investment in other equity instruments
The Company largely relies on judgments and assumptions of the management when determining
whether investments of other equity instruments are impaired to determine whether it is needed torecognize their impairment. During the process of conducting judgments or making assumptions, theCompany shall assess the extent and duration period that the fair value of such investments is below thecost, as well as financial conditions and short-term business prospects of the invested objects, including
industry conditions, technological reform, credit rating, breach rate and risks of counterparties.
⑥Provision of long-term assets impairment
As at the balance sheet date, the Company shall judge whether there is any possible indication of
impairment against non-current assets other than financial assets. The intangible assets with indefinite
useful life must be tested for impairment on an annual basis as well as when there is any indication of
impairment. Other non-current assets other than financial assets shall be tested for impairment when
there is an indication showing that the carrying value is not recoverable. Impairment occurs while thecarrying value of an asset or asset group is higher than the recoverable value, which is the higher of the
net of fair value less disposal expenses and the present value of expected future cash flow. The net offair value less disposal expenses is determined with reference to the price in the sale agreement
regarding analogous asset in fair transactions or the observable market price less the increase of cost thatis directly attributable to the disposal of assets. Significant judgments regarding the output, sales price,
relevant operating costs of the assets (or assets group) and the discount rate used to calculate the present
value shall be made when estimating the present value of future cash flow. Recoverable amount shall be
estimated by the Company using all accessible relevant information, including predictions made on the
output, sales price, and relevant operating costs based on reasonable and supportive assumptions. The
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Company shall test for goodwill impairment at least every year. This requires the Company to estimate
the present value of future cash flow for such assets groups or asset group portfolios allocated withgoodwill. When estimating the present value of future cash flow, the Company shall not only estimate
the future cash flow generated by such asset groups or asset group portfolios, but also select theappropriate discount rate to determine the present value of such future cash flow.
⑦Depreciation and amortization
Investment properties, fixed assets and intangible assets are depreciated and amortized by theCompany with a straight-line approach over their useful life by taking into consideration the residual
value. Useful life shall be periodically reviewed by the Company to determine the amount ofdepreciation and amortization expenses for each reporting period and be determined on the basis ofhistorical experience regarding analogous assets and the expected technological updates. Significant
changes to previous accounting estimates will result in adjustments against depreciation andamortization expenses in the future periods.
⑧Deferred income tax assets
Deferred income tax asset is recognized by the Company for all the uncompensated tax losses to theextent that there is sufficient taxable profit for the deduction of loss. In order to determine the amount ofdeferred income tax assets, the management of the Company needs to predict the timing and the amountof taxable profits in the future by making abundant judgments, as well as through the strategy of tax
planning.
⑨Income tax
In the ordinary course of business of the Company, the ultimate tax treatment and calculations ofsome transactions are uncertain. Whether some items could be presented before taxation shall beapproved by relevant tax authorities. Where there are differences between the final tax outcome of these
items and the initial estimated amount, such differences will impact the current and deferred tax in the
period of final confirmation.
⑩Provisions for sales rebates
The Company and its subsidiaries adopt the policy of sales rebates for consumers. According to therelevant conventions in the sales agreement, the review of specific transactions, the market situation, thepipeline inventory levels and the historical experiences, the Company and its subsidiaries estimate andaccrue sales rebate on a regular basis with reference to the completion of agreed assessment indexes bycustomers. Accrual of sales rebate involves the judgment and estimates of the management. In case ofany significant changes in the previous estimates, the difference above will have an impact on the sales
rebate during the period when relevant changes in estimates occur.
29. Changes in the significant accounting policies and accounting estimates
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Haier Smart Home Co., Ltd(1). Changes in the significant accounting policies□ Applicable √ Not Applicable(2). Changes in the significant accounting estimates□ Applicable √ Not Applicable
VI. Taxation
1. Main tax categories and rates
Main tax categories and rates√Applicable □ Not ApplicableTax categories

Basis of taxation

Tax rate

Value-added tax

Taxable revenue from sales of goods orrendering services

6%, 9%, 13%

City maintenanceand construction tax

Circulation Taxes payable

7%Enterprisetax

Taxable income

income(Local) education
surcharge

Statutory tax rate or preferential
rates as follows

Circulation Taxes payable

1%, 2%, 3%

Disclosure of tax entities with different enterprise income tax rates□ Applicable √ Not Applicable
2. Preferential tax√ Applicable □ Not ApplicableCompanies subjected to preferential tax:
Name of company

Tax rate

Haier Smart Home Co., Ltd.

15%

Qingdao Haier Refrigerator Co., Ltd.

15%

Qingdao Haier Intelligent Electronics Co., Ltd.

15%133 / 251

Preferential tax
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise2020 Interim Report
Haier Smart Home Co., Ltd

Qingdao Haier Special Refrigerator Co., Ltd.

15%

Qingdao Haier Dishwasher Co., Ltd.

15%

Qingdao Haier Special Freezer Co., Ltd.

15%

Qingdao Haier Intelligent Home Appliance Technology
Co., Ltd.

15%

Wuhan Haier Electronics Co., Ltd.

15%

Wuhan Haier Freezer Co., Ltd.

15%

Hefei Haier Refrigerator Co., Ltd.

15%

Hefei Haier Air-conditioning Co., Limited

15%

Zhengzhou Haier Air-conditioning Co., Ltd.

15%

Shenyang Haier Refrigerator Co., Ltd.

15%

Qingdao Haier Air-Conditioner Electronics Co., Ltd.

15%

Qingdao Haier Moulds Co., Ltd.

15%

Qingdao Meier Plastic Powder Co., Ltd.

15%

Qingdao Hai Gao Design and Manufacture Co., Ltd.

15%

Qingdao Hairi Hi-Tech Model Co., Ltd.

15%

Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited

15%

Beijing Haier Guangke Digital Technology Co., Ltd.

15%

Qingdao Haier Intelligent Technology Development Co.,Ltd.
Foshan Haier Freezer Co., Ltd.
Qingdao Haier Industry Intelligence Research InstituteCo., Ltd.

15%
15%
15%

Qingdao Haier Central Air Conditioning Co., Ltd.

15%

Qingdao Haier Air Conditioner Gen Corp., Ltd.

15%
134 / 251

entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies as2020 Interim Report
Haier Smart Home Co., Ltda hi-tech enterprise
Beijing ASU Tech Co., Ltd.

15%

Haier U+smart Intelligent Technology (Beijing) Co.,
Ltd.

15%

Beijing Zero Micro Technology Co., Ltd.

15%

Hefei Haier Washing Machine Co., Ltd.

15%

Qingdao Haier Washing Machine Co., Ltd.

15%

Qingdao Jiaonan Haier Washing Machine Co., Ltd.

15%

Foshan Shunde Haier Electric Co., Ltd.

15%

Tianjin Haier Washing Appliance Co., Ltd.

15%

Qingdao Economic and Technological Development

15%

Zone Haier Water Heater Co., Ltd.
Wuhan Haier Water Heater Co., Ltd.

15%

Foshan Drum Washing Machine Co., Ltd.

15%

Qingdao Strauss Water Equipment Co., Ltd.

15%

Qingdao Lejia Electric Appliance Co., Ltd.

15%

Qingdao Haier New Energy Electric Appliance Co., Ltd.

15%

Foshan Shunde Haier Intelligent Electronics Co., Ltd.

15%

Qingdao Haier Washing Appliance Co., Ltd.

15%

Qingdao Ririshun Lexin Cloud Technology Co., Ltd.

15%

Hefei Haier Drum Washing Machine Co., Ltd.

15%

Qingdao Haier Electronic Plastic Co., Ltd.

15%

Qingdao Penghai Software Co., Ltd.

15%

Qingdao Wei Xi Intelligent Technology Co., Ltd.

15%
135 / 251

entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise
entitled to the preferential taxation policies asa hi-tech enterprise2020 Interim Report
Haier Smart Home Co., Ltd

Qingdao Haier Special Refrigerating Appliance Co., Ltd.

15%

Qingdao Haier Technology Co., Ltd.

10%

Wuhan Haier Energy and Power Co., Ltd.

10%

Shenyang Haichen Zhilian Technology Co., Ltd.

5%

Dalian Free Trade Zone Haier Refrigerator Trading Co.,Ltd.
Dalian Haier Energy & Power Co., Ltd.

5%
5%

Qingdao Guochuang Intelligent Household Appliance
Research Institute Co., Ltd.
Qingdao Hailian Rongchuang Technology

5%5%Co., Ltd.
Haier Digital Technology (Nanjing) Co., Ltd.

10%

Jiaxing Penghai Information Technology Co., Ltd.

5%

Qingdao Haimeihui Management Consulting Co., Ltd.

5%GE Appliance (Shanghai) Co., Ltd.

10%

Shanghai Haier Zhongzhi Fang Chuang Ke

5%Management Co., Ltd.
Haier Digital Technology (Tianjin) Co., Ltd.

5%

Chongqing Haier Electronics Sales Co., Ltd. and someWestern branchesa hi-tech enterprisesignificant

softwareenterprisetax

preferential
entitled to the preferential policies as a
microenterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential policies as asmall/micro enterprise
entitled to the preferential taxation policies

15%

under the Western Development initiative of
the PRC

Chongqing Xin Ri Ri Shun Electric Sales Co., Ltd. And
some Western branches

entitled to the preferential taxation policies asentitled to the preferential taxation policies
15%

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Air-conditioning Co., Ltd.

15%

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Refrigeration Appliance Co., Ltd.

15%

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Guizhou Haier Electronics Co., Ltd.

15%

under the Western Development initiative of
the PRC136 / 2512020 Interim Report
Haier Smart Home Co., Ltd
entitled to the preferential taxation policies
Chongqing Haier Precision Plastic Co., Ltd.

15%

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Intelligent Electronics Co., Ltd.

15%

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Washing Machine Co., Ltd

15%

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Water Heater Co., Ltd

15%

under the Western Development initiative of
the PRC
entitled to the preferential taxation policies

Chongqing Haier Drum Washing Machine Co., Ltd

15%

under the Western Development initiative of
the PRC

VII. Explanatory Notes for Items in Consolidated Financial Statements
Unless otherwise specified, the following closing balance refers to the amount as of 30 June 2020.
The opening balance refers to the amount as of 31 December 2019. The amount for the current period
refers to the amount in the period from 1 January to 30 June 2020. The amount of the previous period
refers to the amount of the period from 1 January to 30 June 2019.
1. Monetary funds√ Applicable  Not Applicable
Unit and Currency: RMB
Items

Closing balance

Cash on hand

Opening balance

3,439,833.06

7,556,892.38

Deposit in bank

42,540,524,252.52

34,502,656,877.99

Other monetary funds

1,568,976,045.24

1,668,601,912.88

Total

44,112,940,130.82

36,178,815,683.25

Including: Total amount deposit
overseas

11,074,244,229.27

8,787,573,078.32

Other explanations:
The cash in the monetary funds deposited in Haier Finance Co., Ltd. was RMB19,329,361,440.18 at
the end of the period, the balance of which included time deposit of RMB5,500,507,628.24. The
investment fund in the closing balance of other monetary funds was RMB367,976,424.43, deposit on
third party payment platforms was RMB109,870,410.59 and the security deposit was

137 / 2512020 Interim Report
Haier Smart Home Co., Ltd

RMB1,005,013,116.34, the frozen fund was RMB191,918.23, and the restricted fund was
RMB85,924,175.65.
2. Financial assets held for trading
Items

Closing balance

Opening balance

24,368,892.60

84,934,313.67

Short-term wealth management products

2,341,623,479.22

198,614,361.33

Investment in other equity instruments

34,492,440.52

24,586,332.05

2,400,484,812.34

308,135,007.05

Forward foreign exchange contracts

Total

3. Derivative financial assets√ Applicable  Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Forward foreign exchange trading contracts

62,752,517.52

17,241,833.10

Forward commodity contracts

3,713,607.65

1,916,299.35

Total

66,466,125.17

19,158,132.45

4. Bills receivable(1) Details of bills receivable
Items

Closing balance

605,212,558.20

462,888,721.91

12,585,193,338.81

13,503,587,868.65

13,190,405,897.01

13,966,476,590.56

14,056,696.60

15,056,696.60

13,176,349,200.41

13,951,419,893.96

Bank acceptance notes
Commercially acceptance notes
Balance of bills receivable
Allowance for bad debts
Bills receivable, net

Opening balance(2) Changes in allowance for bad debts of bills receivable in the current period

Items

Opening balance

Increase for the current

Decrease for the current

periodperiodProvision

Other
increases
138 / 251

ReversalWrite-off/otherClosing balance2020 Interim Report
Haier Smart Home Co., Ltd
movement
Allowance
for bad debts
Total

15,056,696.60

1,000,000.00

14,056,696.60

15,056,696.60

1,000,000.00

14,056,696.60

The bills receivable pledged by the Company at the end of the period was RMB9,980,778,418.11.
(1). Disclosure by classification of bad debt provisions□Applicable√Not Applicable

5. Accounts receivable
Accounts receivable are disclosed by aging as follows:

1

Aging

Closing balance

Opening balance

16,816,289,465.42

10,948,682,641.60

1-2 years

367,962,469.63

274,136,141.64

2-3 years

137,615,516.50

98,672,021.59

Over 3 years

168,317,106.24

139,300,727.01

17,490,184,557.79

11,460,791,531.84

489,746,134.65

444,920,471.75

17,000,438,423.14

11,015,871,060.09

Within one year

Accounts receivable, balance
Allowance for bad debts
Accounts receivable, net

2

The total amount of the top 5 accounts receivable at the end of the period is
RMB5,148,884,871.86, accounting for 29.44% of the book balance of accounts receivable.

□Applicable3√Not Applicable

Changes in bad debts of accounts receivable in the current period:
Increase for the period
OpeningItemsbalance

Allowance
for bad444,920,471.
75

Provision

104,092,338
.61

Other
increases

2,109,154.85

Decrease for the period
Reversal

2,003,555.9
6Actual write-off of accounts receivable in the current period

139 / 251

Closingotherbalancemovementdebts
4

Write-off/

59,372,27
4.60

489,746,134.65

2020 Interim Report
Haier Smart Home Co., Ltd

The amount of accounts receivable actually written off in the current period is RMB59,372,274.60,
and there is no important bad debt write-off of accounts receivable.
5

The company's accounts receivable that were terminated due to the transfer of financial assets inthe current period.

In the current period, the amount of accounts receivable that the company terminated due to thetransfer of financial assets was RMB4,336,031,449.56, and the transfer method was selling-type
factoring/asset securitization.
6

Current limited accounts receivable

The amount of accounts receivable pledged at the end of the period is RMB1,280,306,436.00.
6. Prepayments(1) Prepayments are disclosed by aging as follows:
Aging

Closing balance

Opening balance

1,634,749,215.82

1,226,300,431.60

1-2 years

48,134,250.21

14,275,907.31

2-3 years

11,997,337.82

6,036,100.01

Over 3 years

25,467,556.84

26,309,107.80

1,720,348,360.69

1,272,921,546.72

Within one year

Total(2) The amount of the top 5 in the prepayments at the end of the period totals RMB737,779,070.53,
which accounts for 42.89% of the prepayment balance.
7. Other receivables
Items are set out√Applicable□Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Interest receivable

210,808,262.82

273,009,954.80

Dividend receivable

95,417,478.62

4,524,472.84

1,627,079,729.99

1,885,983,374.86

1,933,305,471.43

2,163,517,802.50

Other receivables
Total

Other explanations:
140 / 2512020 Interim Report
Haier Smart Home Co., Ltd□Applicable√Not Applicable(1) Interest receivable
Closing balance

AgingBook value balanceWithin one year

Opening balance

Proportion

Book value balance

209,221,480.99

99.25%

224,873,084.17

82.36%

1,586,781.83

0.75%

26,470,812.60

9.70%

21,666,058.03

7.94%

273,009,954.80

100.00%1-2 years
2-3 years

210,808,262.82

Total

Proportion

100.00%(2) Dividend receivable
Closing balance

AgingBook value balance

Opening balance
Proportion

Book value balance

Proportion

90,893,005.78

95.26%

Over 3 years

4,524,472.84

4.74%

4,524,472.84

100.00%Total

95,417,478.62

100.00%4,524,472.84

100.00%Within one year
1-2 years
2-3 years(3) Other receivables
1

Other receivables are disclosed by aging as follows:
Aging

Closing balance

Opening balance

1,505,760,639.37

1,801,028,378.02

1-2 years

107,424,370.48

65,979,912.86

2-3 years

11,557,659.31

26,319,826.19

Over 3 years

75,596,740.09

64,449,296.31

1,700,339,409.25

1,957,777,413.38

73,259,679.26

71,794,038.52

1,627,079,729.99

1,885,983,374.86

Within one year

Other receivables balance
Allowance for bad debts
Other receivables, net
2

The total amount of the top 5 other receivables at the end of the period is RMB801,299,548.96,
which accounts for 47.13% of the book balance of other receivables.

3

Changes in bad debt provision for other receivables in the current period

Items

Opening

Increase for the period
141 / 251

Decrease for the period

Closing2020 Interim Report
Haier Smart Home Co., Ltdbalance

71,794,038.5
2

Allowanc
e for bad

Provision

Other Increases

Reversal

8,662,065.46

107,745.40

845,344.04

Write-off/ otherbalancemovement

6,458,826.08

73,259,679.
26

debts
4

Other receivables written off during the period

The amount of other receivables actually written off in the current period is RMB6,458,826.08, andno significant other receivables are written off for bad debts.
Other receivables mainly include deposits, quality guarantees, employee loans, tax refunds, andadvance payments, etc.
8. Inventories(1) Details of Inventories
Closing balance
Items

Impairment

Book value balance

provision

3,317,190,269.90

Raw material

Opening balance

140,329,593.27

329,714,177.59

Work in progress

Book value balance

Impairment provision

3,068,331,798.61

115,668,613.58

408,055,609.14

425,020.38

Finished goods

22,528,230,727.83

753,053,476.99

25,720,392,258.54

852,085,060.72

Total

26,175,135,175.32

893,383,070.26

29,196,779,666.29

968,178,694.68(2) Impairment provision of inventories

Opening

Items

Increase for the periodbalance

Provisionmaterial

115,668,613.58

40,252,160.
86

Work in

425,020.38

Raw

Other Increases

Decrease for the period
Reversal

183,192.35

Write-off/ other

Closing balance

movement

15,407,988.82

140,329,593.
27

425,020.38

progress
Finished
goods
Total

852,085,060.72

431,760,554.10

169,936.18

59,504,356.
29

471,457,717.7
2753,053,476.
99

968,178,694.68

472,012,714.96

169,936.18

59,687,548.
64

487,290,726.9
2893,383,070.
26

9. Contract assets(1) Details
Items

Closing balance
142 / 251

Opening balance2020 Interim Report
Haier Smart Home Co., Ltd
Impairment

Book value balance
Relating

toconstruction

Impairment

Book value balance

Provision

Provision

474,583,868.48

3,654,196.27

426,392,594.69

3,654,196.27

474,583,868.48

3,654,196.27

426,392,594.69

3,654,196.27

servicecontract
Total(2) Provision of credit loss

Items

Increase for the period

Opening

Relatingtobalance

Decrease for the period

Other

Provision

movement

Write-off andReversalother movement

Closingbalance

3,654,1
96.27

3,654,196.
27

3,654,1
96.27

3,654,196.
27

construction
servicecontract
Total

10. Other current assets(1) Details
Closing balance
Items

Bank

depositBook value

Impairment

Book value

Impairment

balanceprovisionbalanceprovision

889,536,054.45

forOpening balance

3,981,314,321.50

financial products
Taxes to be deducted

2,320,829,386.20

2,953,191.39

2,578,384,287.03

3,276,161.33

Return cost receivable

389,324,414.91

230,224,779.86

374,052,448.32

218,016,000.42

Others132,457,721.52
3,732,147,577.08

Total

273,507,220.36
233,177,971.25

7,207,258,277.21

221,292,161.75(2) Impairment provision
Increase for the period
Items

Deductible

Openingbalance

Provision

Other
Increases

3,276,161.33

Decrease for the period
Write-off /Reversal

Closing balance

movement

322,969
143 / 251

other2,953,191.39

2020 Interim Report
Haier Smart Home Co., Ltd.94

input tax
Return costreceivables
Total

218,016,000.
42

197,745,936.
31

221,292,161.
75

197,745,936.
31

322,969.94

185,537,156.
87

230,224,779.
86

185,537,156.
87

233,177,971.
25

11. Long-term equity investments√Applicable □ Not Applicable
Increase/decrease for the period
Investment
Openingbalance

Investees

Investment
increase

profitrecognizedunder equity
methodAdjustment
in othercomprehensiv
e income

Otherchanges inequityDeclarationof cashdividends or
profits

Associate:
Haier Group
Finance Co.,

6,010,611,728.26

352,650,151.68

1,562,835.07-126,000,000.00

2,586,957,693.97

132,352,393.34-18,620,015.12-77,995,640.00

123,555,578.44

8,189,589.12

280,063,773.80

8,645,979.45

434,540,103.12-626,240.10

643,056,436.86

34,236,531.91

Ltd.
Bank of
Qingdao Co.,
Ltd.
WolongElectric(Jinan) MotorCo., Ltd.
Qingdao

HegangNew

Material

Technology

Co.,

Ltd.
Qingdao
Haier SAIF
Smart Home
Industry
Investment
Center(Limited
Partnership)
Mitsubishi
Heavy
Industries

144 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Haier(Qingdao)Air-conditioners
Co., Ltd.
Qingdao
Haier Carrier
Refrigeration

395,933,487.26

5,297,623.12

432,386,801.26-42,017,109.03

Equipment
Co., Ltd.
QingdaoHaier
multimedia
Co., Ltd.
Qingdao
Haier
Software

19,636,136.75

Investment
Co., Ltd.
Hefei Feier Smart
Technology Co.,

758,188.30

Ltd.
Qingdao
Xinaohaizhi

25,966,044.95

522,787.67

Energy Co., Ltd.
Qingdao
Zhongzaihaina
Environmental

2,261,258.70

Services Co., Ltd.
Shandong Haibida
Big Data Co., Ltd.

5,332,640.10-340,822.72

Beijing Mr.
Hi Network
Technology

3,757,759.75

Company
LimitedBeijing
XiaobeiTechnology

2,687,341.82

Co., Ltd.
Beijing ASU
Tech Co.,

5,862,115.78-5,264,385.58

Ltd.
Shenzhen

6,914,487.73

145 / 2512020 Interim Report
Haier Smart Home Co., Ltd
GenyuanEnvironment
al Protection
Technology
Co., Ltd.
Qingdao
Haimu
Investment

2,198,276.46

Management
Co., Ltd.
Qingdao
Haimu

Smart

Home
Investment

48,046,197.64

Partnership(Limited
Partnership)
Guangzhou
HeyingInvestment

219,198,634.81

Partnership-11,271,104.09(Limited
Partnership)
Qingdao

Home

Wow

Cloud

Network
Technology

3,168,859.99-58,822.53

894,539,765.00

88,871,603.09

Co.,

Ltd.
Bingji (Shanghai)
Corporate
Management Co.,Ltd.
Youjin (Shanghai)
Corporate
Management Co.,

1,625,617,754.55

Ltd
RRS

(Shanghai)

Investment

Co.,2,954,850,462.82

Ltd.
Haier Best Water
Technology

Co.,

21,725,345.26-1,806,868.15

23,222,136.38-1,733,369.98

Ltd.
Meiling

Candy

Washing Machine

146 / 251879,525.97

2020 Interim Report
Haier Smart Home Co., Ltd
Co., Ltd.
Konan
Electronic

71,196,748.97

1,986,998.58

1,571,603.76-

104,557,145.65

4,116,720.13-0.01

78,149,551.49-2,481,483.12-2,770,007.89

3,497,668,453.45

96,502,250.12

50,082,821.58-20,392,107.51

679,043,527.00

21,435,659.27-224,387,747.51

Co., Ltd.
HNR
Company(Private)
Limited
HPZ LIMITED
Controladora
Mabe S.A.deC.V
MiddleEast

Air

conditioning

19,002,595.66

Company Limited
Total

20,543,423,504.98(Continued)
Increase/decrease for the

Impairment

periodInvestees

Other
movement

Disposal

Closing balanceof theprovision
Closingbalanceinvestment

Associate:
Haier Finance Co., Ltd.

6,238,824,715.01

Bank of Qingdao Co., Ltd.

2,622,694,432.19

Wolong Electric (Jinan) Motor Co., Ltd.

131,745,167.56

Qingdao Hegang New Material Technology Co., Ltd.

288,709,753.25

Qingdao Haier SAIF Smart Home Industry

433,913,863.02

Investment Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao)

677,292,968.77

Air-conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration Equipment

401,231,110.38

21,000,000.00

Qingdao Haier Multimedia Co., Ltd

390,369,692.23

48,300,000.00

Qingdao Haier Software Investment Co., Ltd.

19,636,136.75

Co., Ltd.

Hefei Feier Smart Technology Co., Ltd.

758,188.30

Qingdao Xinaohaizhi Energy Co., Ltd.

26,488,832.62

Qingdao Zhongzaihaina Environmental Services Co., Ltd.

-2,261,258.70

Shandong Haibida Big Data Co., Ltd.

4,991,817.38

Beijing Mr. Hi Network Technology Company

3,757,759.75

Limited147 / 251

3,757,759.75

2020 Interim Report
Haier Smart Home Co., Ltd
Beijing Xiaobei Technology Co., Ltd.

2,687,341.82

Beijing ASU Tech Co., Ltd.

2,687,341.82

597,730.20

Shenzhen Genyuan Environmental Protection

6,914,487.73

Technology Co., Ltd.
Qingdao Haimu Investment Management Co.,

6,914,487.73

2,198,276.46

Ltd.
Qingdao Haimu Zhijia Investment Partnership

48,046,197.64(Limited Partnership)
Guangzhou Heying Investment Partnership

207,927,530.72(Limited Partnership)
Qingdao Home Wow Cloud Network Technology Co.,3,110,037.46

Ltd.
Bingji (Shanghai) Corporate Management Co., Ltd.

983,411,368.09

Youjin (Shanghai) Corporate Management Co., Ltd

1,625,617,754.55

RRS (Shanghai) Investment Co., Ltd.

2,954,850,462.82

Haier Best Water Technology Co., Ltd.

19,918,477.11

Meiling Candy Washing Machine Co., Ltd.

22,368,292.37

Konan Electronic Co., Ltd.

74,755,351.31

HNR Company (Private) Limited

108,673,865.77

HPZ LIMITED

72,898,060.48

Controladora Mabe S.A.deC.V.

3,623,861,417.64

Middle East Airconditioning Company, Limited

19,002,595.66

Total

-

-2,261,258.70

21,017,253,685.04

82,659,589.30

12. Details of investment in other equity instruments(1) Details of investment in other equity instruments at the end of the period:
Items

Closing balance

SINOPEC Fuel Oil Sales Corporation Limited ( 中 国 石化销售股份有限公司)
Others
Total

Opening balance

1,112,101,000.00

1,242,930,000.00

158,442,648.96

153,029,878.92

1,270,543,648.96

1,395,959,878.92(2) Dividends from investment in other equity during the current period:
Items

Amount for the current period

SINOPEC Fuel Oil Sales Corporation Limited

14,252,549.71(中国石化销售股份有限公司)
148 / 2512020 Interim Report
Haier Smart Home Co., Ltd

273,659.22

Others

14,526,208.93

Total

13. Other non-current financial assets√Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balanceLong-term wealth management products
Total

Opening balance

72,739,420.26

294,547,364.47

72,739,420.26

294,547,364.47

14. Investment properties
Measure mode for investment properties(1) The changes in investment properties measured at cost for this year are as follows:
Items

Houses and buildings

Land use rights

Total

I. Original book value
1.Opening balance

46,415,383.99

2,128,550.51

48,543,934.50

2.Increase for the period(1) Outsourced(2) Inventories\fixed
assets\construction in progress

1,971,634.23

1,971,634.23

479,484.30

479,484.30

transferred in(3) Increase in business combinations
3. Decrease for the period(1) Disposal(2) Disposal of subsidiary(3) Other transferring out
4. Converted difference in foreign
currency statements
5. Closing balance

48,866,502.52

2,128,550.51

50,995,053.03

18,591,095.18

550,147.94

19,141,243.12

906,365.24

20,118.10

926,483.34

II. Accumulated depreciation andaccumulated amortization
1.Opening balance
2.Increase for the period(1) Provision or amortization

149 / 2512020 Interim Report
Haier Smart Home Co., Ltd
3. Decrease for the period(1) Disposal(2) Disposal of subsidiary(3) Other transferring out
4. Converted difference in foreign
currency statements

82,749.42

82,749.42

19,580,209.84

570,266.04

20,150,475.88

1. Closing book value

29,286,292.68

1,558,284.47

30,844,577.15

2. Opening book value

27,824,288.81

1,578,402.57

29,402,691.38

5. Closing balance
III. Impairment provision
1.Opening balance
2.Increase for the period(1) Provision
3. Decrease for the period(1) Disposal(2) Disposal of subsidiary(3) Other transferring out
4. Converted difference in foreign
currency statements
5. Closing balance
IV. Book value(2) The depreciation and amortization amount charge for the period is RMB926,483.34.
(3) The recoverable amount of the investment real estate of the Company at the end of the period is
not less than its book value, so no provision for impairment is made.
15. Fixed assets
Presented as√Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

21,398,455,636.12

21,159,138,731.39

Disposals of fixed assets

20,918,480.62

20,918,480.62

Total

21,419,374,116.74

21,180,057,212.01

Fixed assets（1） Fixed assets:
150 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Items

Transportation

Houses and buildings

Production equipment

9,989,544,831.06

24,245,714,440.91

174,044,711.29

112,395,048.87

718,888,652.82

572,389.15

408,861,191.41

540,982,555.81

9,660,945.19

322,355,185.01

755,209.24

18,072,656.50

225,902,133.45

3,570,623.98-23,168,007.04-22,624,253.23-841,528.37

10,469,560,407.80

25,579,414,447.87

180,621,102.52

3,419,949,048.61

11,017,050,073.01

96,937,625.18

248,175,958.11

1,194,443,129.99

10,774,150.77

145,073,532.93

372,442.10

9,400,567.89

147,233,701.45

2,823,282.77

1,670,703.73

1,299,636.52-107,808.65

3,660,395,142.56

12,210,632,671.00

105,153,126.63

34,461,480.76

14,555,443.55

80,617.22

equipment

I. Original book value
1.Opening balance
2.Increase for the period(1) Acquisition(2) Construction in progresstransferred in(3) Increase in businesscombinations
3.Decrease for the period(1) Disposal or Write-off(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference inforeign currency statements
5.Closing balance
II. Accumulated depreciation
1.Opening balance
2.Increase for the period(1) Provision(2) Increase in businesscombinations
3.Decrease for the period(1) Disposal or write-off(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference inforeign currency statements
5.Closing balance
III. Impairment provision
1.Opening balance
2.Increase for the period(1) Provision(2) Increase in business

127,167,231.67

combinations
3.Decrease for the period

10,355,336.24(1) Disposal or Write-off
151 / 2512020 Interim Report
Haier Smart Home Co., Ltd(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference inforeign currency statements
5.Closing balance

635,780.59

13,471.59

402.6635,097,261.35

131,380,810.57

81,019.88

6,774,068,003.89

13,237,400,966.30

6,535,134,301.69

13,214,108,924.35

IV. Book value
1.Closing book value
2.Opening book value

75,386,956.01
77,026,468.89(Continued)
Items

Office furniture

OthersTotal

I. Original book value
1.Opening balance

863,015,378.72

2,266,565,579.67

37,538,884,941.65

11,205,099.32

21,218,488.76

864,279,678.92

70,702,218.79

70,784,971.20

1,100,991,882.40

152,184.27

7,966.39

323,270,544.91

10,590,048.89

92,160,434.42

350,295,897.24-3,249,731.54-12,645,437.75-62,528,957.93

931,235,100.67

2,253,771,133.85

39,414,602,192.71

438,400,670.33

1,346,669,714.51

16,319,007,131.64

59,599,208.61

95,713,632.40

1,608,706,079.88

82,716.75

6,866.74

145,535,558.52

2.Increase for the period(1) Acquisition(2) Construction in progresstransferred in(3) Increase in businesscombinations
3.Decrease for the period(1) Disposal or Write-off(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference inforeign currency statements
5.Closing balance
II. Accumulated depreciation
1.Opening balance
2.Increase for the period(1) Provision(2) Increase in businesscombinations
3.Decrease for the period

152 / 2512020 Interim Report
Haier Smart Home Co., Ltd(1) Disposal or Write-off

8,242,654.10

72,139,869.24

239,840,075.45

286,029.16

1,361,643.57

4,510,204.33

490,125,970.75

1,371,611,987.98

17,837,918,898.92

68,672.62

11,572,864.47

60,739,078.62(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference inforeign currency statements
5.Closing balance
III. Impairment provision
1.Opening balance
2.Increase for the period(1) Provision(2) Increase in business

127,167,231.67

combinations
3.Decrease for the period
10,355,336.24(1) Disposal or Write-off(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference in-1,032.45

28,061.23

676,683.62

67,640.17

11,600,925.70

178,227,657.67

1.Closing book value

441,041,489.75

870,558,220.17

21,398,455,636.12

2.Opening book value

424,546,035.77

908,323,000.69

21,159,138,731.39

foreign currency statements
5.Closing balance
IV. Book Value(2) In the current period, the balance of the construction in progress transferred to the original valueof the fixed assets is total RMB1,100,991,882.40.
(3) The amount of fixed assets mortgage at the end of the period is RMB 55,674,337.91.
(4) Disposals of fixed assets
Reason for
Items

Closing balance

Opening balancetransferring todisposal

Relocation of Qingdao Industrial Park
Total

20,918,480.62

20,918,480.62

20,918,480.62

20,918,480.62

16. Construction in progress
Presented as
153 / 251

Demolition

2020 Interim Report
Haier Smart Home Co., Ltd√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing balance

Construction in progressOpening balance

2,938,851,804.25

2,391,364,659.97

2,938,851,804.25

2,391,364,659.97

Construction materials
Total

Construction in progress(1). Details of construction in progress√Applicable □Not Applicable
Unit and Currency: RMB
Closing balance
Items

Book balance

Zhengzhou

Impairment

Opening balance
Impairment

Book value

Book balance

397,682,156.25

339,598,483.94

275,930,230.87

301,439,928.75

222,046,723.04

222,046,723.04

236,539,836.43

236,539,836.43

164,936,388.09

164,936,388.09

44,645,629.53

44,645,629.53

120,509,363.38

120,509,363.38

17,586,162.11

17,586,162.11

106,483,938.05

106,483,938.05

20,869,021.20

20,869,021.20

100,314,539.32

100,314,539.32

83,150,746.03

83,150,746.03

87,086,179.62

87,086,179.62

32,308,143.64

32,308,143.64

82,422,580.69

82,422,580.69

65,367,920.02

65,367,920.02

77,312,248.54

77,312,248.54

38,432,444.33

38,432,444.33

New

397,682,156.25

GEA

310,496,166.77

provision

provision

Book value
339,598,483.94

Energy Project
America

34,565,935.90

34,061,569.61

267,378,359.14

Project
Qingdao

Smart

Appliance
Equipment Project
EuropeCandy

Project
Smart

Home

Appliance
Technology Project
Dalian Refrigerator
Project
New Zealand
FPA Project
Haier India Project
Haier Smart Home
Project
Jiaonan

Washing

154 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Closing balance
Items

Impairment

Book balance

provision

Opening balanceBook value

Book balance

Impairment

Book value

provision

Machine Project
Haier

Air-

69,535,937.27

69,535,937.27

61,168,160.86

61,168,160.86

63,350,293.33

63,350,293.33

108,566,194.72

108,566,194.72

53,478,214.27

53,478,214.27

32,162,988.77

32,162,988.77

48,245,572.23

48,245,572.23

45,468,458.70

45,468,458.70

45,458,466.33

45,458,466.33

81,387,700.67

81,387,700.67

43,383,570.58

43,383,570.58

3,039,596.13

3,039,596.13

43,359,730.83

43,359,730.83

36,834,016.09

36,834,016.09

36,941,638.55

36,941,638.55

6,389,644.74

6,389,644.74

34,862,632.84

34,862,632.84

20,471,229.32

20,471,229.32

865,511,400.17

865,511,400.17

849,999,923.60

849,999,923.60

2,973,417,740.15

34,565,935.90 2,938,851,804.25 2,425,426,229.58

34,061,569.61 2,391,364,659.97

Conditioning
Electronic Project
Qingdao

Washing

Appliance ProjectHefei Refrigerator
Project
TianjinWashing

Appliance Project
Laiyang
Smart

Kitchen

Project
Chongqing

Water

Heater Project
Qingdao

Haier'sscienceandtechnology Project
RRS Health Project
Zhengzhou
Air-conditioning
Project
OthersTotal(2) Details of significant changes of construction in progress for the period
Converted

Increase
Project nameOpening

for thebalancecurrent

Transfer
to fixed
assetsperiodZhengzhou
Energy Project

New

Other
decreasedifference inforeigncurrency

Closing

Source ofbalancefundstatements

339,598,483.9

58,083,672.3

397,682,156

4

1

.25

155 / 251

Self-funding2020 Interim Report
Haier Smart Home Co., Ltd

America GEA Project
Qingdao

Smart

Appliance Project
Europe Candy

301,439,928.7

245,967,113.

241,413,089

5

83

.40

.77

236,539,836.4

2,982,044.06

17,475,157.

222,046,723

45

.04

3

44,645,629.53

Project
Smart

Home

17,586,162.11

Appliance

4,502,213.59-7,724,415.62

310,496,166

135,665,044.

7,649,870.3

164,936,388

55

7

.09

106,767,645.

3,844,444.4

120,509,363

72

5

.38

87,079,916.8

1,465,000.0

106,483,938

5

0

.05

55,347,552.5

37,793,197.

8

69

67,894,544.9

10,624,830.

8

98Technology Project
DalianRefrigerator

20,869,021.20

Project
New

Zealand

FPA

83,150,746.03

Project
32,308,143.64

Haier India Project-390,561.60

100,314,539.32-2,491,678.02

87,086,179.
62

Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-fundi
ng/

fund

raising
Haier Smart Home

65,367,920.02

Project
Jiaonan

Washing

38,432,444.33

Machine Project
Haier

Air-

61,168,160.86

conditioning

18,145,866.7

1,091,206.0

82,422,580.

2

5

69

50,231,042.9

11,351,238.

77,312,248.

5

74

54

22,612,094.8

14,244,318.

69,535,937.

7

46

27

5,604,748.77

50,820,650.

63,350,293.

16

33

31,458,883.5

10,143,658.

53,478,214.

3

03

27

43,227,363.8

40,450,250.

48,245,572.

3

30

23

6,666,856.45

42,596,090.

45,458,466.

79

33

Electronic Project
Qingdao

Washing

Appliance Project
Hefei

Refrigerator

108,566,194.7
232,162,988.77

Project
TianjinWashing

45,468,458.70

Appliance Project
Laiyang
Smart81,387,700.67

Kitchen

Project
Chongqingng
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-fundi
ng/

fund

raising
Water

3,039,596.13

Haier's

40,524,877.0

180,902.58

3

Heater Project
Qingdao

Self-fundi

36,834,016.09

6,912,045.24

43,383,570.
58

386,330.50

156 / 251

43,359,730.

Self-funding
Self-fundi2020 Interim Report
Haier Smart Home Co., Ltdscienceand83

technology Project

ng/

fund

raising
6,389,644.74

30,551,993.8

36,941,638.

1

55

RRS Health Project
Zhengzhou

20,471,229.32

20,705,334.3

6,313,930.8

34,862,632.

8

6

84

Air-conditioning
Project

Self-funding
Self-fundi
ng/

fund

raising
849,999,923.6

625,230,700.

603,147,715

1,971,634.2

0

24

.59

3

Others-4,599,873.85

865,511,400.17

Self-fundi
ng/

fund

raising
Total

2,425,426,229

1,661,659,34

1,100,991,8

1,971,634.2

.58

2.70

82.40

3

-10,704,315.50

2,973,417,7
40.15(3) Impairment provision of construction in progress

Project nameAmerica

GEA

Opening

Increase forTransfer to

Other

Exchange

Closingbalancethe period

fixed assets

decreasedifferencesbalance

34,061,569.61

504,366.29

34,565,935.90

Project

17. Right-of-use assets
Items

Houses and buildings

Production equipment

Transportation equipment

I. Original book value:
1.Opening balance

2,817,150,021.16

30,765,699.60

168,524,791.57

550,503,778.80

2,278,108.14

24,658,892.92

60,893,951.15

67,987.79

10,726,727.37

1,885,919.43-510,552.05-3,166,102.23

3,308,645,768.24

32,465,267.90

179,290,854.89

470,357,728.65

4,559,852.96

54,622,784.52

272,188,683.21

1,764,565.75

26,875,376.44

39,864,806.50

67,987.79

10,477,919.65

2. Increase for the current period(1) Increase
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Converted difference in foreign
currency statements
5. Closing balance
II. Accumulated amortization
1. Opening balance
2. Increase for the current period(1) Provision
3. Decrease for the current period(1) Disposal

157 / 2512020 Interim Report
Haier Smart Home Co., Ltd(2) Disposal of subsidiary
4. Converted difference in foreign

1,787,965.78-420,614.87-335,525.40

704,469,571.14

5,835,816.05

70,684,715.91

1.Closing book value

2,604,176,197.10

26,629,451.85

108,606,138.98

2.Opening book value

2,346,792,292.51

26,205,846.64

113,902,007.05

currency statements
5. Closing balance
III. Impairment provision
1.Opening balance
2.Increase for the current period(1) Provision
3.Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Converted difference in foreign
currency statements
5.Closing balance
IV. Book Value(Continued)
Items

Office furniture

Other

Total

60,995,358.04

309,577,979.06

3,387,013,849.43

7,686,629.57

9,632,580.98

594,759,990.41

836,904.38

3,160,877.47

75,686,448.16

147,833.76

4,633,423.68

2,990,522.59

67,992,916.99

320,683,106.25

3,909,077,914.27

11,686,634.26

90,720,247.45

631,947,247.84

9,055,910.79

43,497,956.90

353,382,493.09

836,904.38

3,160,877.47

54,408,495.79

I. Original book value:
1.Opening balance
2.Increase for the current period(1) Increase
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiary
4. Converted difference in foreign
currency statements
5. Closing balance
II. Accumulated amortization
1.Opening balance
2.Increase for the current period(1) Provision
3.Decrease for the current period(1) Disposal(2) Disposal of subsidiary
158 / 2512020 Interim Report
Haier Smart Home Co., Ltd
4. Converted difference in foreign-14,463.98

1,693,346.28

2,710,707.81

19,891,176.69

132,750,673.16

933,631,952.95

1.Closing book value

48,101,740.30

187,932,433.09

2,975,445,961.32

2.Opening book value

49,308,723.78

218,857,731.61

2,755,066,601.59

currency statements
5.Closing balance
III. Impairment provision
1.Opening balance
2.Increase for the current period(1) Provision
3.Decrease

for

the

current

period(1) Disposal(2) Disposal of subsidiary4.

Converteddifferenceinforeign currency statements
5.Closing balance
IV. Book Value

159 / 2512020 Interim Report
Haier Smart Home Co., Ltd

18. Details of intangible assets(1). Intangible assets√Applicable □Not Applicable
Items

Proprietary technology

Licenses and franchises

Land use rights

I. Original book value
1.Opening balance

1,777,017,298.95

4,211,491,949.66

1,191,959,998.86

7,674,795.05

20,556,973.98

149,562,420.38

2.Increase for the current period(1) Purchase(2) Internal

researchand55,419,760.06

development(3) Increaseinbusiness

combination
3.Decrease for the current period
24,302,311.01(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference in foreign-12,502,430.21

70,878,820.37-1,667,170.25

1,827,609,423.85

4,302,927,744.01

1,315,552,937.98

735,680,465.49

451,771,449.40

145,020,102.09

91,496,129.76

65,066,332.11

11,578,897.19-16,645,748.90

11,660,491.00-565,874.08

810,530,846.35

528,498,272.51

156,033,125.20

currency statements
5.Closing balance
II. Accumulated amortization
1.Opening balance
2.Increase for the current period(1) Provision(2) Increase in businesscombination
3.Decrease for the current period(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference in foreign
currency statements
5.Closing balance
III. Impairment provision
1.Opening balance
2.Increase for the current period
160 / 2512020 Interim Report
Haier Smart Home Co., Ltd(1) Provision(2) Increase in businesscombination
3.Decrease for the current period(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference in foreign
currency statements
5.Closing balance
IV. Book Value
1.Closing book value

1,017,078,577.50

3,774,429,471.50

1,159,519,812.78

2.Opening book value

1,041,336,833.46

3,759,720,500.26

1,046,939,896.77(Continued)

Items

Application

Trademark rights

management

software and others

Total

I. Original book value

2,721,643,301.47

3,604,814,269.91

13,506,926,818.85

50,306,605.68

228,100,795.09

and

93,415,083.79

148,834,843.85

business

46,073,558.74

46,073,558.74

8,404,736.39

32,707,047.40

23,421,549.43

60,607,883.75

140,738,653.09

2,745,064,850.90

3,846,812,665.48

14,037,967,622.22

1,477,417,910.84

2,809,889,927.82

310,068,883.65

478,210,242.71

28,339.27

28,339.27

1.Opening balance
2.Increase in the current period(1) Purchase(2) Internal

researchdevelopment(3) Increaseincombination
3.Decrease for the current period(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference in foreign
currency statements
5.Closing balance
II. Accumulated amortization
1.Opening balance
2.Increase in the current period(1) Provision(2) Increase in businesscombination
161 / 2512020 Interim Report
Haier Smart Home Co., Ltd
3.Decrease for the current period

6,865,274.30

6,865,274.30

8,807,057.92

3,255,925.94

1,789,456,917.38

3,284,519,161.44

9,965,107.96

9,965,107.96

9,965,107.96

9,965,107.96(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference in foreign
currency statements
5.Closing balance
III. Impairment provision
1.Opening balance
2.Increase in the current period(1) Provision(2) Increase in businesscombination
3.Decrease for the current period(1) Disposal(2) Disposal of subsidiary(3) Transfer to hold for sale
4. Converted difference in foreign
currency statements
5.Closing balance
IV. Book value
1.Closing book value

2,745,064,850.90

2,047,390,640.14

10,743,483,352.82

2.Opening book value

2,721,643,301.47

2,117,431,251.11

10,687,071,783.07

At the end of the period, the intangible assets developed through the Company accounted for the
15.95% of the original value.
19. Development cost
Decrease for the period
Items

91ABD.ERP
IT Program
Others
Total

Included incurrent
profit andloss

Converteddifference inforeigncurrency
statements

Closingbalance

1,285,239.51

79,131,900.62
137,122,915.4
7216,254,816.0
9Openingbalance

Increase forthe period

Confirmed as
an intangible
asset

98,811,149.48

51,193,000.36

72,157,488.73

94,474,627.62

201,703,749.3
6
252,896,749.7
2

76,677,355.12

79,351,385.34-3,026,721.05

148,834,843.8
579,351,385.34-1,741,481.54

193,285,777.1
0

20. Goodwill
162 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Impact of
Items

Opening

Increase for

Decrease forfluctuation inbalancethe period

the period

exchange rate

Closing balance

for the period
GEA
Candy
OthersTotal

20,724,937,078.57

303,246,388.12

21,028,183,466.69

2,032,029,984.37

37,829,999.71

2,069,859,984.08

594,762,750.41

463,971,411.23--15,993,270.92

1,042,740,890.72

23,351,729,813.35

463,971,411.23-

325,083,116.91

24,140,784,341.49

In the case of a goodwill impairment test, the Company compares the carrying amount of therelevant asset group or asset group combination (including goodwill) with its recoverable amount. If therecoverable amount is less than the book value, corresponding difference will be recognized in profit orloss.
The recoverable amount of the asset group (including goodwill) is calculated with discounted
estimated future cash flow method based on a management-approved 5-10 years budget. Future cash
flows beyond the budget period are estimated using the estimated perpetual annual growth rate. The
perpetual annual growth rate (mainly 2%) adopted by the management is consistent with industry
forecast data and does not exceed the long-term average growth rate of each product. The management
determines the income growth rate (mainly 2.50%-14.39%) and the EBITDA profit margin (mainly
2.22%-6.21%) based on historical experience and market development forecasts, and adopts the pre-tax
interest rate that can reflect the specific risks of the relevant asset group as the discount rate (mainly
9.83%-11.12%). The management analyzes the recoverable amount of each asset group based on theseassumptions and believes that there is no need to make provision for goodwill.
21. Long-term prepaid expenses√Applicable □Not Applicable
Unit and Currency: RMB

Items

Renovation
ImprovementonConverted

Increase for

Amortization

the current

for the current

periodperiod172,232,866.
44

45,080,298.
24

58,165,998.
75

196,714,339.
49

4,933,597.4
5

14,039,749.
19

184,393.11

187,792,580.
86

68,639,706.6

20,013,563.

9,758,052.6

238,936.54

79,134,153.7

OpeningbalanceOther

difference inClosingdecrease

foreign currency

balancestatements

159,147,165.
93

leasedproperty
Others163 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Total

5

28

9

437,586,912.
58

70,027,458.
97

81,963,800.
638
423,329.65

426,073,900.
57

22.Deferred income tax assets and deferred income tax liabilities(1) Deferred income tax assets before elimination
Items

Closing balance

Opening balance

263,575,303.32

330,149,872.25

1,679,505,927.99

1,638,698,620.85

441,005,035.75

648,447,634.39

Government grants

139,236,881.90

104,843,341.38

Uncovered losses

690,316,680.96

644,817,113.91

Others106,659,910.24

97,140,142.95

3,320,299,740.16

3,464,096,725.73

Provision for assets impairment
Liabilities
Internal unrealized earnings eliminated due
to combination

Total(2) Deferred income tax liabilities before elimination
Item

Closing balance

Disposal of subsidiaries and movement in

Opening balance

752,099,715.18

752,137,954.24

77,190,532.32

77,190,532.32

2,151,892,146.63

2,063,021,233.00

119,354,365.93

147,258,409.16

3,100,536,760.06

3,039,608,128.72

investment in other equity instruments
Withholding

incometaxofoverseas

enterprises
Difference between the tax base of the assets
formed from amortization of mergers andacquisitions
OthersTotal(3) The deferred income tax assets and the deferred income tax liabilities eliminated at the end of
this period was RMB1,887,965,809.32.
23. Other non-current assets
Items

Closing balance

Opening balance

Prepayments for equipment and land

887,397,762.93

1,423,060,146.73

Others574,265,441.47

420,704,819.08

1,461,663,204.40

1,843,764,965.81

Total

164 / 2512020 Interim Report
Haier Smart Home Co., Ltd

24. Short-term borrowings√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Borrowings - secured by pledge

325,590,243.64

172,099,117.93

Borrowings - secured by mortgage

68,214,231.98

68,231,758.92

Borrowings - secured by guarantor

798,084,424.13

3,505,822,164.08

16,032,000,837.63

4,838,896,196.25

Borrowings – unsecured
Total

17,223,889,737.38

8,585,049,237.18

25. Financial liabilities held for trading
Items
Forward foreign exchange trading

Closing balance

Opening balance

17,825,470.87

42,799,173.35

17,825,470.87

42,799,173.35

contracts
Total

26. Derivative financial liabilities√Applicable □Not Applicable
Unit and Currency: RMB
Items
Forward foreign exchange trading

Closing balance

Opening balance

72,492,566.52

85,557,428.14

91,787,868.57

13,991,425.83

164,280,435.09

99,548,853.97

contracts
Interest rate swap agreement
Total

27. Bills payable√Applicable □Not Applicable
Unit and Currency: RMB
Categories

Closing balance

Opening balanceCommercially acceptance notes

2,216,928,340.87

2,237,116,468.45

Bank acceptance notes

17,305,265,174.80

17,071,422,308.47

165 / 2512020 Interim Report
Haier Smart Home Co., Ltd

19,522,193,515.67

Total

19,308,538,776.92

28. Accounts payable√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing balance

Accounts payable
Total

Opening balance

29,649,104,954.11

33,750,567,046.28

29,649,104,954.11

33,750,567,046.28

The book balance at the end of the period was mainly the unpaid expenditures on material,
equipment and labor.
29. Contract liabilities√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing balanceContract liabilities
Total

Opening balance

4,756,461,007.77

5,583,008,412.49

4,756,461,007.77

5,583,008,412.49

The book balance at the end of the period was mainly the receipt in advance.
30. Payables for staff's remuneration(1) Payables for staff's remuneration√Applicable □Not Applicable
Unit and Currency: RMB

Items
I. Short-term remuneration
II. Post-employment

Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

Closingbalance

2,978,630,280.51

9,771,451,412.70

10,073,403,850.89

2,676,677,842.32

27,079,985.45

393,382,772.11

392,097,954.19

28,364,803.37

benefits-defined contributionplan
166 / 2512020 Interim Report
Haier Smart Home Co., Ltd
9,818,188.41

2,718,370.05

2,718,370.05

9,818,188.41

140,043,962.93

2,073,698.75

19,621,244.86

122,496,416.82

3,155,572,417.30

10,169,626,253.61

10,487,841,419.99

2,837,357,250.92

III. Termination benefits
IV. Other benefits due within
one year
Total(2) Short-term remuneration√Applicable □Not Applicable
Unit and Currency: RMB
Openingbalance

Increase for thecurrent period

Decrease for thecurrent period

Closingbalance

1,956,628,751.50

7,006,363,559.42

7,317,095,464.55

1,645,896,846.37

II. Employee welfare

298,793,183.14

430,472,087.18

413,258,792.73

316,006,477.59

III. Social benefit

145,972,223.15

759,775,992.65

755,411,378.85

150,336,836.95

IV. Housing fund

1,739,030.08

201,110,032.22

199,540,859.81

3,308,202.49

V. Labor union fee and1,249,039.97

34,799,963.35

34,915,192.28

1,133,811.04

246,545,110.83

204,045,855.99

168,629,086.08

281,961,880.74

327,702,941.84

1,134,883,921.89

1,184,553,076.59

278,033,787.14

2,978,630,280.51

9,771,451,412.70

10,073,403,850.89

2,676,677,842.32

Items
I. Salaries, bonus, allowanceand benefit

education fee
VI. Short-term compensatedabsences
OthersTotal(3) Defined contribution plan
√Applicable □Not Applicable
Unit and Currency: RMB

Opening balance

Increase for thecurrent period

Decrease forcurrent theperiodClosingbalance

26,540,835.95

383,114,458.54

381,673,378.77

27,981,915.72

II. Unemployment insurance

268,380.08

4,123,809.09

4,191,204.28

200,984.89

III. Enterprise annuity

270,769.42

6,144,504.48

6,233,371.14

181,902.76

27,079,985.45

393,382,772.11

392,097,954.19

28,364,803.37

Items
I. Basic pension insurance

payment
Total(4) Termination benefits
167 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Items

Closing balance

Opening balance

Termination compensation

9,818,188.41

9,818,188.41

Total

9,818,188.41

9,818,188.41

31. Taxes payable√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Value-added tax

663,494,732.60

606,034,986.30

Enterprise income tax

999,227,617.96

1,278,004,157.85

Individual income tax

48,831,948.89

57,716,819.31

City maintenance and construction tax

15,493,800.86

12,703,998.50

Education surcharge

6,374,591.07

5,473,294.35

The electrical and electronic products waste

71,581,165.50

102,288,068.00

112,744,044.39

54,835,056.73

1,917,747,901.27

2,117,056,381.04

treatment fund
Other taxes
Total

32. Other payables
Presented as√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

66,942,018.46

49,395,752.93

Dividends payable

3,299,128,584.79

145,851,115.28

Other payables

14,788,287,838.87

14,961,145,653.61

18,154,358,442.12

15,156,392,521.82

Interests payable

Total(1) Interests payable:
Items

Closing balance
19,149,452.44

Interest of long-term borrowings
168 / 251

Opening balance
22,160,847.23

2020 Interim Report
Haier Smart Home Co., Ltd
Interest of short-term borrowings
Total

47,792,566.02

27,234,905.70

66,942,018.46

49,395,752.93(2) Dividends payable:
Name of company

Closing balance

Brave Lion (HK) limited

122,756,874.10

Haier Electric Appliances International Co.,

472,006,809.00

Opening balance
122,756,874.10

Ltd.

402,229,036.50

Haier Group Corporation
OthersTotal

2,302,135,865.19

23,094,241.18

3,299,128,584.79

145,851,115.28(3) Other payables:
Items

Closing balance

Other payables
Total

Opening balance

14,788,287,838.87

14,961,145,653.61

14,788,287,838.87

14,961,145,653.61

The closing balance at the end of the period mainly included the incurred but unpaid costs.
33. Non-current liabilities due within one year
√Applicable □Not Applicable
Unit and Currency: RMB
Items
Long-term borrowings due within one
year

Closing balance
5,436,859,759.62

Opening balance
4,730,070,447.82

36,500,000.00

Long-term payables due within one year

630,509,455.70

594,930,209.58

Estimated liabilities due within one year

1,821,904,561.32

1,992,138,260.62

Total

7,925,773,776.64

7,317,138,918.02

Lease liabilities due within one year

34. Other current liabilities√Applicable □Not Applicable
Unit and Currency: RMB
169 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Items
Payable refund

Closing balance
506,141,612.19

486,038,304.57

9,012,519.06

6,284,243.87

790,857.79

1,743,159.10

515,944,989.04

494,065,707.54

Tax amount to be written off
Others
Total

Opening balance

35. Long-term borrowings√Applicable □Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

8,942,630.78

Borrowings - secured by mortgage

12,663,597.65
2,343,619,509.01

Borrowings - secured by guarantor
Borrowings - unsecured

14,707,127,483.28

8,877,523,705.58
2,042,646,123.32

Borrowings - secured by guarantor andmortgage
Total

14,716,070,114.06

13,276,452,935.56

Explanation of long-term loan classification:
Interest rate on long-term borrowings – secured by guarantor is the one stipulated in the loan
agreement + LIBOR.
Interest rate on domestic long-term borrowings – unsecured is the benchmark rate published by the
People's Bank of China.
Interest rate on offshore long-term borrowings – unsecured is the one stipulated in the loan
agreement + LIBOR.
Interest rate on long-term borrowings – secured by mortgage is the one stipulated in the loan
agreement + LIBOR.
36. Bonds payable
On 21 November 2017, Harvest International Company, the Company's wholly-owned subsidiary,
issued HK$8 billion five-year exchangeable corporate bonds, with a coupon rate of zero and a rate on
investment of 1%.
The corporate bonds were divided into liabilities and equities on initial recognition:
170 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Items

Exchangeable corporate bonds issued in 2017

6,731,131,007.13

Initial recognition:
Including:
Equity portion of the exchangeable bond

431,424,524.07

Liability portion of the exchangeable bond

6,299,706,483.06

Changes in the liability portion of corporate bonds in the current period:
Less:
Increas
Items

Openingbalancee forthecurrent
periodExchangeable
corporate

Accrued

Bond

bond

interest

Exchange

interest for

paid forrate

the current

theimpactperiodcurrent

Sharesconvertedin thecurrent
periodperiodSharesredeemed in
the current

Closingbalanceperiod7,004,58
5,761.43

89,010,2
55.63

138,632,
782.797,232,228,
799.85

7,004,58
5,761.43

89,010,2
55.63

138,632,
782.797,232,228,
799.85bonds issued
in 2017Total

37. Lease liabilities
Items

Closing balance

Lease liabilities
Less: lease liabilities due within one year
Total

Opening balance

2,845,575,597.63

2,575,201,976.93

630,509,455.70

594,930,209.58

2,215,066,141.93

1,980,271,767.35

38. Long-term payables
Items

Closing balance

Opening balance

Investment from CDB development fund93,000,000.00

93,000,000.00

Others59,533,371.58

49,342,718.45

Less: long-term payables due within one year

36,500,000.00

Total

116,033,371.58
171 / 251

142,342,718.45

2020 Interim Report
Haier Smart Home Co., Ltd

Under the Investment Contract of China Development Fund executed by the Company and its
subsidiaries including Qingdao Haier Refrigerator Co., Ltd., Qingdao Haier Air Conditioner Gen Corp.,
Ltd., Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited together with China Development Fund
Co. Ltd. in 2015 and 2016, China Development Fund Co. Ltd. invested RMB20 million in Qingdao
Haier Refrigerator Co., Ltd., and RMB73 million in Qingdao Haier (Jiaozhou) Air-conditioning Co.,
Limited. China Development Fund Co. Ltd. obtained an annual return of 1.2% by means of dividends or
buyback premium for the above investments. From 2020 to 2027, the Company and its subsidiaries will
repurchase the investments made by China Development Fund Co. Ltd. to the subsidiaries of theCompany.
39. Long-term payables for staff's remuneration√Applicable □Not Applicable(1) The presentation of long-term payables for staff's remuneration
Items

Closing balance

Post-employment benefits- net liability ofdefined benefit plan
Termination benefits

Opening balance581,328,718.69

577,613,222.26

314,814,646.49

324,191,428.30

224,542,526.24

220,545,586.80

1,120,685,891.42

1,122,350,237.36

Provision for work-related injury
compensation
Other long-term benefits
Total(2) Defined benefit plan
Some subsidiaries of the Company have set several defined benefit plans for the qualified staff.
Under these plans, the employees are entitled to the retirement benefits agreed in such defined benefit
plans.
These plans are exposed to interest rate risks, changes in life expectancy of the beneficiary andother risks.
The recent actuarial evaluation of the assets and the present value of defined benefit obligations
under such plans are determined by using the projected unit credit method.
① The defined benefit plan of Haier Asia Co., Ltd. ( 海 尔 亚 洲 株 式 会 社 ), a subsidiary of theCompany.
Actuarial assumption used in the defined benefit plan
Items

Rate
172 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Discount rate

0.50%

Expected rate of return

2.00%

Present value of defined benefit obligations
Items

Amount334,764,594.79

I. Opening balance
II. Defined benefit cost recognized in current profit or loss
1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in “－”)
4. Interest expenses
III. Defined benefit cost recognized in other comprehensive income
1. Actuarial loss (gain indicated in “－”)

8,995,172.62

IV. Other changes
1. The consideration paid at the time of settlement
2. Benefits paid

8,995,172.62

3. Exchange differences

343,759,767.41

V. Closing balance

Fair value of plan assets
Items

Amount368,725,328.67

Ⅰ. Opening balance
II. Defined benefit cost recognized in current profit or loss
1. Interest income
III. Defined benefit cost recognized in other comprehensive income
1. Return on plan assets (except those included in net interests)
2. Changes in impact of asset cap (except those included in net
interests)

9,907,702.40

IV. Other changes
1. Employer contributions
2. Benefits paid

9,907,702.40

3. Exchange differences

378,633,031.07

V. Closing balance

173 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Neither the Company's ordinary shares or bonds, nor the properties occupied by the Company areincluded in the plan assets.
Net liability (net asset) of defined benefit plan
Items

AmountⅠ. Opening balance-33,960,733.88

II. Defined benefit cost recognized in current profit or loss
III. Defined benefit cost recognized in other comprehensive income
IV. Other changes-912,529.78

V. Closing balance-34,873,263.66

The average term for the defined benefit obligation is 12.29 years at the balance sheet date.
2

The defined benefit plan of Roper Corporation, a subsidiary of the Company

Roper Corporation, a subsidiary of the Company, has provided qualified staff with defined
benefit plan for post-retirement health care benefits.
Actuarial assumptions used in defined benefit plans
Item

Rate

Discount rate

3.27%

Present value of defined benefit obligations
Item

Amount138,607,020.37

I. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss

23,207,509.29

1. Current period service cost

18,790,871.82

2. Past service cost
3. Settlement gains ((loss indicated in “－”)

4,416,637.47

4. Interest expenses
IV. Defined benefit cost recognized in other comprehensive income
1. Actuarial loss (gain indicated in “－”)

-6,646,413.67

V. Other changes
1. The consideration paid at the time of settlement
174 / 2512020 Interim Report
Haier Smart Home Co., Ltd
2. Benefits paid

-8,820,919.86

3. Exchange differences

2,174,506.18
155,168,115.98

VI. Closing balance

Net liability (net asset) of defined benefit plan
Items

Amount138,607,020.37

I. Opening balance
II. Business combination not under common control

23,207,509.29

III. Defined benefit cost recognized in current profit or loss
IV. Defined benefit cost recognized in other comprehensive income
V. Other changes-6,646,413.68

VI. Closing balance

155,168,115.98

The average term for the defined benefit obligation is 10.48 years at the balance sheet date.
③ The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company.
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided qualified staff
with defined benefit plan for post-retirement health care benefits.
Actuarial assumptions used in defined benefit plans
Item

Rate

3.06%

Discount rate

Present value of defined benefit obligations
Items

Amount310,036,866.40

I. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss

4,926,993.33

1. Current period service cost

-4,183,217.81

2. Past service cost
3. Settlement gains (loss indicated in “－”)

9,110,211.14

4. Interest expenses
IV. Defined benefit cost recognized in other comprehensive income
1. Actuarial loss (gain indicated in “－”)

-24,349,634.30

V. Other changes
1. The consideration paid at the time of settlement
175 / 2512020 Interim Report
Haier Smart Home Co., Ltd-28,738,438.06

2. Benefits paid

4,388,803.76

3. Exchange differences

290,614,225.43

VI. Closing balance

Net liability (net asset) of defined benefit plan
Items

Amount310,036,866.40

I. Opening balance
II. Business combination not under common control

4,926,993.33

III. Defined benefit cost recognized in current profit or loss
IV. Defined benefit cost recognized in other comprehensive income
V. Other changes-24,349,634.30

VI. Closing balance

290,614,225.43④ The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company.
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided qualified staff
with defined benefit plan for post-retirement pension.
Actuarial assumptions used in defined benefit plans
Item

Rate

2.96%

Discount rate

Present value of defined benefit obligations
Items

Amount257,475,210.72

I. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss

18,932,257.12

1. Current service cost

11,979,824.74

2. Past service cost
3. Settlement gains (loss indicated in “－”)

6,952,432.38

4. Interest expenses
IV. Defined benefit cost recognized in other comprehensive income
1. Actuarial loss (gain indicated in “－”)

-45,215,485.83

V. Other changes
1. The consideration paid at the time of settlement-48,774,803.65

2. Benefits paid
176 / 2512020 Interim Report
Haier Smart Home Co., Ltd

3,559,317.82

3. Exchange differences

231,191,982.01

VI. Closing balance

Fair value of plan assets
Items

Amount184,922,772.57

I. Opening balance
II. Defined benefit cost recognized in current profit or loss

8,003,112.18

1. Interest income

8,003,112.18

III. Defined benefit cost recognized in other comprehensive income
1. Return on plan assets (except those included in net interests)
2. Changes in impact of asset cap (except those included in net
interests)
IV. Other changes-30,699,602.42

1. Employer contributions

15,550,981.96

2. Benefits paid

-48,774,803.65
2,524,219.27

3. Exchange differences

162,226,282.33

V. Closing balance

Net liability (net asset) of defined benefit plan
Items

Amount72,552,438.15

I. Opening balance
II. Business combination not under common control

10,929,144.94

III. Defined benefit cost recognized in current profit or loss
IV. Defined benefit cost recognized in other comprehensive income
V. Other changes-14,515,883.41

VI. Closing balance

68,965,699.68(3) Provision for work-related injury compensation
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, made a provision forwork-related injury claims for the staff injured during the production accidents from 1 January 1991,
which was used to pay for the claim made by the injured staff. The provision was calculated by
Beechercarlson Insurance Services, LLC., based on actuarial method and a discount rate of 3.72%.
Items

Amount220,545,586.80

I. Opening balance
II. Business combination not under common control

44,302,460.73

III. Compensation recognized in current profit and loss
177 / 2512020 Interim Report
Haier Smart Home Co., Ltd
IV. Actual compensation paid in the current period-30,123,892.44

V. Other changes-10,181,628.85

VI. Closing balance

224,542,526.24

Classification of the balance of defined benefit plan
Items

Closing balance

Opening balance

Short-term salary

66,157,847.86

84,527,455.18

Long-term salary

581,328,718.69

577,613,222.26

647,486,566.55

662,140,677.44

Total

40. Estimated liabilities√Applicable □Not Applicable
Unit and Currency: RMB
Items

Opening balance

Closing balance

Pending litigation

19,619,840.35

19,985,099.99

Others

192,441,718.48

216,794,204.60

1,186,816,187.50

1,174,874,660.86

1,398,877,746.33

1,411,653,965.45

Projection of three guarantees and installation fees
Total

Significant assumption and estimation relating to estimation of three guarantees and installation
fees: the Company reasonably estimated the three guarantees and installation fee rate based on its actual
expenses on the three guarantees and installation fees as well as sales data in the past. The Company
estimated the three guarantees and installation fees that are likely to be incurred in the future according
to its policies on the three guarantees and installation fees, as well as the actual sales data.
41. Deferred income
Statement of deferred income√Applicable □Not Applicable
Unit and Currency: RMB
Items
Government grants
Total

Opening balance

Increase for the

Decrease for thecurrent period

current period

Closing balance705,272,617.10

84,191,382.87

41,755,106.34

747,708,893.63

705,272,617.10

84,191,382.87

41,755,106.34

747,708,893.63

42. Other non-current liabilities√Applicable □Not Applicable
Unit and Currency: RMB
178 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Items

Closing balance

Obligation of repurchasing the minority

Opening balance

55,618,608.25

54,598,203.27

22,463,342.62

15,473,286.76

78,081,950.87

70,071,490.03

equity rights
OthersTotal

43. Share capitalCategories of shares

Opening balance

Increase for the

Decrease for thecurrent period

current period

Closing balance

I. Restricted shares
1. State-owned shares
2. Shares held by domestic
non-state-owned legal
entities
3. Shares held by domestic
individuals
4. Shares held by offshore
non-state-owned legal
entities
II. Non-restricted shares

6,579,566,627

6,579,566,627

1. Ordinary shares in RMB

6,308,552,654

6,308,552,654

271,013,973

271,013,973

6,579,566,627

6,579,566,627

2. Domestic listed foreign
Shares
3. Offshore listed foreign
Shares
4. Others
III. Total shares

44. Other equity instruments

Items
Equityportionexchangeable bonds
Total

Opening balanceof

Increase for the

Decrease for thecurrent period

current period

Closing balance

431,424,524.07

431,424,524.07

431,424,524.07

431,424,524.07

45. Capital reserve
179 / 2512020 Interim Report
Haier Smart Home Co., Ltd√Applicable □Not Applicable
Unit and Currency: RMB
Items
Capital premium

Increase for the current Decrease for the current
periodperiodOpening balance

3,636,172,794.06

Other capital reserve799,718,051.41

Total

4,435,890,845.47

356,159,994.82

4,958,034.15

Closing balance

3,987,374,754.73
799,718,051.41

356,159,994.82

4,958,034.15

4,787,092,806.14

Other explanation, including the statement and reason of the changes for the current period:
The main reasons for the change in capital premium: acquisition of minority shareholding fromsubsidiaries in the current period and non-proportional capital injection in subsidiaries in the current
period, increasing the capital of RMB356,159,994.82; reducing the share premium of
RMB4,958,034.15 .
46.Other comprehensive income

Amount for the current period

Items

OpeningbalanceAmountbeforeincome tax in thecurrent period

AmountAmountLess:

attributable

attributable

income tax

to the parent

to minority

expensecompany

shareholders

after tax

after tax

Closing
Othersbalancea17,478,970.09

21,435,659.27

2,817,776.02

29,046,113.28-4,792,677.99-131,777.35

46,393,306.02

b3,180,368.82-118,793,065.63

34,309,668.35-85,267,888.94

784,491.66-219,905.85-82,307,425.97c1,265,319,179.57-78,096,266.33-107,396,032.53

29,299,766.20

8,343,213.06

1,166,266,360.10

d-28,644,680.35-136,302,232.40

13,152,751.06-56,395,900.52-66,753,580.82-85,040,580.87

e60,654,781.53

392,164.85-379,950.60

12,218.38-4.13

60,666,999.91

Total

1,317,988,619.66-311,363,740.24

49,900,244.83-220,001,490.33-41,462,005.08

7,991,529.86

1,105,978,659.19

Notes:(1) Items a, b, and c are other comprehensive income that will be reclassified into profit or loss, thedetails are as follows:
Item a represents other comprehensive income classified into profit and loss under the equity method.
Item b represents cash flow hedge reserves (effective portion of profit or loss generated from cash flow
hedge).
Item c represents the balance arising from translation of foreign currency financial statements.
(2) Items d and e are other comprehensive income that cannot be reclassified into profit or loss. Details
180 / 2512020 Interim Report
Haier Smart Home Co., Ltd

are as follows:
Item d represents the change in fair value of investments in other equity instruments.
Item e represents changes arising from remeasurement of net liabilities or assets of defined benefit plans.
47. Surplus reserve√Applicable □Not Applicable
Unit and Currency: RMB
Increase for the current
periodDecrease for thecurrent period

Items

Opening balance

Statutory
surplusreserve
Discretionary surplus

2,607,670,603.87

2,607,670,603.87

26,042,290.48

26,042,290.48

11,322,880.64

11,322,880.64

10,291,630.47

10,291,630.47

2,655,327,405.46

2,655,327,405.46

reserve
Reserve fundEnterprisedevelopment fundClosing balance

Others
Total

Pursuant to the Company Law of the People's Republic of China and the articles of association, theCompany is required to appropriate 10% of its net profits as statutory surplus reserve.
48. Undistributed profits√Applicable □Not Applicable
Items

Amounts

32,468,121,744.26

Undistributed profits at the end of previous year
Adjustment due to business combination under common control
Undistributed profits at the beginning of the year

32,468,121,744.26

Add: net profit attributable to owners of the parent company

2,780,800,712.72-10,573,314.32

Other transfer in
Adjustment due to implementation of enterprise accounting standard

35,238,349,142.66

Profit available for appropriation for the year
Less: appropriation of statutory surplus reserve
Appropriation of staff incentive and welfare fund
Dividend payable for ordinary shares

2,467,337,485.13

Undistributed profits at the end of period

32,771,011,657.53

49. Operating income and operating cost
181 / 2512020 Interim Report
Haier Smart Home Co., Ltd(1) Operating income
Items

Amount for the current period

Primary business

95,222,506,535.21

99,544,803,143.48

505,590,571.44

478,661,094.42

95,728,097,106.65

100,023,464,237.90

Other business
Total

Amount for the previous period(2) Primary business income and primary business cost by product category
Amount for the current period
Categories

Amount for the previous period

Primary businessPrimary businessPrimary businessPrimary businessincomecost

incomecost

Air conditioner

16,994,714,538.19

12,325,759,112.18

17,949,320,326.04

12,445,279,485.61

Refrigerator

26,737,917,721.21

18,296,498,256.27

28,391,857,610.26

19,344,949,352.58

Kitchen appliance

14,065,148,916.99

9,863,397,560.12

13,935,656,244.43

9,524,496,311.55

Water appliance

4,455,955,349.13

2,567,869,114.74

4,711,519,852.30

2,701,220,546.63

Washing machine

19,706,304,066.77

13,498,929,586.30

20,360,042,986.22

14,029,982,831.27

13,262,465,942.92

12,143,658,318.29

14,196,406,124.23

12,752,908,748.43

95,222,506,535.21

68,696,111,947.90

99,544,803,143.48

70,798,837,276.07

Equipment
product

andintegrated channel
services
Total

50. Taxes and surcharge√Applicable □Not Applicable
Unit and Currency: RMB
Amount for the current period

Items

City
maintenanceconstruction tax

andAmount for the previous period

88,690,704.32

144,597,080.21

Education surcharge

63,314,967.69

102,997,780.28

Property tax

22,487,302.01

33,641,891.03

Land use tax

5,207,509.93

17,075,135.53

Stamp duty

72,199,239.68

85,535,965.97

Others23,291,054.91

22,204,975.53

275,190,778.54

406,052,828.55

Total

51. Selling expenses√Applicable □Not Applicable
Unit and Currency: RMB
182 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Items

Amount for the current period

Selling expenses
Total

Amount for the previous
period14,526,912,493.29

14,777,899,222.91

14,526,912,493.29

14,777,899,222.91

The Company's selling expenses are mainly salary expenses, transportation and storage expenses,
advertising and promotion expenses, and after-sales expenses etc.
52. Administrative expenses√Applicable □Not Applicable
Unit and Currency: RMB
Items

Amount for the current period

Administrative expenses
Total

Amount for the previous
period4,608,308,707.03

4,536,101,362.72

4,608,308,707.03

4,536,101,362.72

The Company's management expenses are mainly salary expenses, administrative office expenses,
depreciation and amortization of assets fees, etc.
53. R&D expenses√Applicable □Not Applicable
Unit and Currency: RMB
ItemAmount for the current period

R&D expenses
Total

Amount for the previous
period2,939,733,549.14

2,797,067,620.86

2,939,733,549.14

2,797,067,620.86

The Company's R&D expenses are mainly salary expenses, R&D equipment expenses, inspection andtesting fees.
54. Financial expenses

Items

Amount for the current period

Amount for the previous
periodInterest expenses

719,257,090.03

886,299,299.68

Less: Interest income

219,622,316.65

258,697,380.60

Less: Cash discount65,843,464.11

87,173,770.76

Exchange gains and losses

216,765,382.01-107,354,539.68

Others50,963,873.72

71,701,987.48

183 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Items

Amount for the previous

Amount for the current period

period701,520,565.00

Total

504,775,596.12

Interest expenditure in lease liabilities in the current period is RMB61,835,788.46.
55. Other income

Items

Amount for the current

Amount for the previous

Related to assets/

periodperiodrevenue

Government grants

497,272,167.38

444,934,593.58

Related to revenue

Government grants

28,017,088.05

28,994,813.54

Related to assets

Total

525,289,255.43

473,929,407.12

56. Investment income (losses are represented by “-”)

Items
Income from long-term equity investment calculated by equity
methodInvestment income from disposal of long-term equity investment

Amount for the current

Amount for the previous

periodperiod679,043,527.00

542,608,907.11-199,825.65

1,089,977.75

Investment income from disposal of other equity instrument-

investments
Investment income from other equity instrument investments
during holding period
Income from wealth management products
Investment income from disposal of financial assets at fair value
through profit or loss
Total

14,526,208.93

18,421,982.06

48,451,938.85

95,852,264.16

14,961,073.66

98,789,008.11

756,782,922.79

756,762,139.19

57. Gains on changes in fair value (losses are represented by “-”)
Items

Amount for the current period

Amount for the previous
period-35,571,335.94

46,068,278.74

2,809,431.16

11,905,128.74

1,774,801.63-563,450.68

Changes in fair value of forward foreignexchange trading contracts
Changes in fair value
management productsofwealthOthers184 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Total-30,987,103.15

57,409,956.80

58. Credit impairment loss (losses are represented by “-”)

Items

Amount for the current period-109,905,504.07

Bad debts losses on accounts receivable

Amount for the previous
period37,775,605.39

Impairment losses on contract assets

1,000,000.00

Impairment losses on bills receivable-108,905,504.07

Total

37,775,605.39

59. Impairment loss on assets (losses are represented by “-”)

Items

Amount for the current period

Amount for the previous
periodImpairment losses on inventory-412,325,166.32-249,884,430.08

Impairment losses on other current assets-197,422,966.37-7,863,475.12-609,748,132.69-257,747,905.20

Impairment losses on fixed assets
Impairment losses on intangible assets
Impairment losses on construction in progress
Impairment

losseson

long-term

equityinvestment
Total

60. Gains on disposal of assets√Applicable □Not Applicable
Unit and Currency: RMB
Items
Gains on disposal
non-current assets

Amount for the current period

Amount for the previous periodof

14,120,787.44

18,889,267.13

Less: losses on disposal of
non-current assets-28,563,193.90-6,182,584.26

Total-14,442,406.46

12,706,682.87

Other explanation:□Applicable √Not Applicable
61. Non-operating income
185 / 2512020 Interim Report
Haier Smart Home Co., Ltd√Applicable □Not Applicable
Items

Amount for the current
periodAmount for the previous period

Gains on disposal of non-current
assets12,240,620.38

7,143,791.10

Quality claims and fines

17,811,610.75

251,941,034.86

Others38,834,457.94

13,521,643.37

68,886,689.07

272,606,469.33

Total
62. Non-operating expenses
Items

Amount for the current
periodAmount for the previous
periodLosses on disposal of non-current assets

9,175,290.01

16,637,393.70

Others46,295,466.54

97,869,314.59

55,470,756.55

114,506,708.29

Total

63. Income tax expenses(1) Statement of income tax expenses√Applicable □Not Applicable
Unit and Currency: RMB
Items

Amount for the current period

Amount for the previous period

Current income tax expenses

432,844,606.93

1,185,812,989.93

Deferred income tax expenses

228,382,266.41-129,708,058.73

661,226,873.34

1,056,104,931.20

Total(2) Current reconciliation between accounting profit and income tax expenses√Applicable □Not Applicable

Unit and Currency: RMBItems

Amount for the current
periodTotal accounting profit

4,273,243,856.34

Income tax expenses calculated pursuant to statutory/applicable tax rate(s)1,068,310,964.01

186 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Impact from different tax rates applicable to subsidiaries-407,798,430.47

Impact from adjustment to income tax in prior periods-161,151,691.96

Impact from non-taxable income-174,134,803.68

Impact from non-deductible cost, expense and loss

85,767,193.68

Impact from deductible provisional differences or deductible losses of
unrecognized deferred tax assets

250,233,641.76

Total income tax expense

661,226,873.34

Other explanation:□Applicable √Not Applicable
64. Other comprehensive income√Applicable □Not Applicable
Please refer to Note Ⅶ. 46 for details.
65. Other cash received from operating activities
Items

AmountDeposits and securities

5,906,876.76

Government grants

392,986,831.27

Non-operating income excluding government grants

35,931,408.66

Interest income

290,942,012.96

Others1,647,814.82
Total

727,414,944.47

66. Other cash paid to operating activities
Items

AmountCash paid on selling expenses

5,614,309,250.88

Cash paid on administrative and R&D expenses

3,030,125,415.61

Cash paid on financial expenses

62,725,109.74

Non-operating expenses

18,068,509.35

Others

57,897,004.93
Total

8,783,125,290.51
187 / 2512020 Interim Report
Haier Smart Home Co., Ltd

67. Other cash paid to investing activities
Items

AmountOthers3,368,312.62
Total

3,368,312.62

68. Other cash paid to financing activities
Items

AmountPayment rom Minority shareholders due to the withdrawal

13,817,500.00

Lease payment in cash

384,257,451.29
Total

398,074,951.29

69. Information of Net profit adjusted to cash flow of operating activities(1) Supplementary information of cash flow statement√Applicable □Not Applicable
Unit and Currency: RMB
Supplementary information

Amount for the current

Amount for the previous

periodperiod

1. Net profit adjusted to cash flow of operating
activities:
Net profit

3,612,016,983.00

6,184,914,691.98

718,653,636.76

219,972,299.81

1,963,015,056.31

1,808,446,184.52

Amortization of intangible assets

478,210,242.71

369,529,224.67

Amortization of long-term prepaid expenses

81,963,800.63

17,998,286.51

11,377,076.09-3,213,080.27

Losses on change of fair value (gains are represented by “-”)

30,987,103.15-57,409,956.80

Financial expenses (gains are represented by “-”)

936,022,472.04

778,944,760.00

Loss on investments (gains are represented by “-”)

-756,782,922.79-756,762,139.19

Decrease in deferred tax assets (increase is represented by “-”)

143,796,985.57

36,353,097.23

Increase of deferred tax liabilities (decrease is represented by

84,585,280.84-166,061,155.96

Add: impairment provision for assets
Losses on credit impairment
Depreciation of fixed assets, oil and gas assets andproduction materials
Amortization of ROU assets

Losses on disposal of fixed assets, intangible assets and otherlong-term assets (gains are represented by “-”)

Losses on retirement of fixed assets (gains are
represented by “-”)188 / 2512020 Interim Report
Haier Smart Home Co., Ltd“-”)

2,543,296,922.45-1,499,604,914.30-5,862,948,537.55-4,917,381,549.69-4,757,655,587.32

1,256,347,755.36

Others230,542,230.71

347,734,810.73

Net cash flow generated from operational activities-542,919,257.40

3,619,808,314.60

Cash balance at the end of the period

43,021,810,920.60

33,318,427,811.29

Less: cash balance at the beginning of the period

34,962,947,399.85

36,553,047,466.15

8,058,863,520.75-3,234,619,654.86

Decrease in inventories (increase is represented by “-”)Decrease of operational account receivables (increase isrepresented by “-”)Increase of operational account payables (decrease isrepresented by “-”)

2. Significant investment and financing activities not
involving cash inflows and outflows:
Capital transferred from debts
Convertible corporate bonds due within one year
Fixed assets under finance lease

3. Net changes of cash and cash equivalents:

Add: cash equivalents balance at the end of the period
Less: cash equivalents balance at the beginning of the period
Net increase of cash and cash equivalents

70. Cash and cash equivalents
Items

Closing balance

I. CashIncluding: cash on handBank deposits
payment

alwaysavailable

for

Other monetary funds always available forpayment

Opening balance

43,021,810,920.60

34,962,947,399.85

3,439,833.06

7,556,892.38

42,540,524,252.52

34,502,656,877.99

477,846,835.02

452,733,629.48

43,021,810,920.60

34,962,947,399.85

II. Cash equivalents
Including: Bond investments due within
three months
III. Closing balance of cash and cash
equivalents
Including: Cash and cash equivalents, theuse of which by the parent or subsidiariesof the Group is restricted
71. Monetary items in foreign currency
Items

Closing Balance

Opening Balance
189 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Balance inforeigncurrency

Exchangerate

Balance in
RMB

Balance inforeigncurrency

Exchangerate

Balance in
RMB

Monetary funds
USD

1,112,828,734.88

7.0795

7,878,271,028.61

730,666,614.19

6.9762

5,097,276,433.90

EUR

102,609,671.37

7.9610816,875,593.74

151,676,201.42

7.8155

1,185,425,352.21

JPY

3,458,117,268.00

0.065808

227,571,781.17

3,356,863,028.27

0.064086

215,127,924.03

HKD

823,031,917.20

0.9134

751,757,353.17

745,289,079.40

0.8958667,629,957.33

Others2,661,458,827.78

2,043,389,309.90

Sub-total

12,335,934,584.47

9,208,848,977.37

Accounts receivable
USD

770,200,080.05

7.07955,452,631,466.75

269,987,662.70

6.9762

1,883,487,932.50

EUR

381,459,702.52

7.96103,036,800,691.75

325,463,066.35

7.81552,543,656,595.07

JPY

4,719,265,155.58

0.065808

310,565,401.36

3,829,608,370.79

0.064086

245,424,282.05

Others4,142,060,327.37

2,931,185,158.50

Sub-total

12,942,057,887.23

7,603,753,968.12

Short-term borrowings
USD

653,432,031.02

7.0795

4,625,972,063.59

521,126,042.56

6.9762

3,635,479,498.10

EUR

401,026,674.98

7.96103,192,573,359.51

320,772,912.41

7.81552,507,000,696.91

JPY

7,078,374,287.70

0.065808

465,813,655.13

6,656,569,078.27

0.064086

426,592,885.95

Others357,673,200.39

66,592,438.54

Sub-total

8,642,032,278.62

6,635,665,519.50

Accounts payable
USD

1,304,104,302.25

7.07959,232,406,407.74

1,219,489,898.22

6.9762

8,507,405,427.96

EUR

344,476,846.44

7.96102,742,380,174.54

421,042,022.97

7.81553,290,653,930.56

JPY

5,255,586,005.08

0.065808

345,859,603.82

5,988,441,245.39

0.064086

383,775,245.65

NZD

132,436,461.05

4.5495602,519,679.56

147,674,519.27

4.6973

693,671,519.36

Others

1,751,708,103.93

1,735,111,878.01

Sub-total

14,674,873,969.59

14,610,618,001.54

Non-current liabilities due within one year
USD

784,018,758.46

7.07955,550,460,800.52

692,201,069.75

6.9762

4,828,933,102.79

EUR

100,417,162.41

7.9610799,421,029.95

104,804,376.00

7.8155

819,098,600.63

JPY

1,840,220,625.06

0.065808

121,101,238.89

1,923,050,313.62

0.064086

123,240,602.40

RUB

224,988,897.55

0.100900

22,701,379.76

183,707,445.72

0.112600

20,685,458.39

Others295,367,620.58

278,535,431.52

Sub-total

6,789,052,069.70

6,070,493,195.73

Long-term borrowings
190 / 2512020 Interim Report
Haier Smart Home Co., Ltd

USD

1,406,945,406.71

7.07959,960,470,006.80

876,451,371.56

6.9762

6,114,300,058.28

EUR

401,516,934.33

7.96103,196,476,314.19

712,443,399.37

7.81555,568,101,387.80

RUB

524,883,500.00

0.100900

52,960,745.15

500,000,010.04

0.112600

56,300,001.13

NZD

319,931,612.94

4.5495

1,455,528,873.07

319,915,612.92

4.6973

1,502,739,608.57

OthersSub-total

41,591,910.14

22,348,282.12

14,707,027,849.35

13,263,789,337.90

VIII. Changes of consolidation scope
1. Business combination not under common control√Applicable □Not applicable(1). Business consolidation not under common control occurring in the current period√Applicable □Not applicable
Unit and Currency: RMB
Acquiree

Time

Name

acquisition cost

PercenEquit

EquityRecognition

Acquiree's

Acquiree's net

oftage ofyacquisibasis ofrevenue fromprofit fromequityequity

acqui

tion

acquisitionacquisitionacquisitionacquisacquirsition

date

dates

date to the

date

ition
Qingdao

JanuarGoodayy 2020Lejia

578,514,747.42

ed

meth

end of current

to the end of

(% )

od

periodcurrent period

79.82

Acqu

Januarshareholding

153,697,292.0

7,376,809.43

isitioy 2020transferred

AcquJanuarshareholding

isitioy 2020transferred

Iot

0

n

Technology
Co., Ltd.
GuangdongJanuarBlacky 202035,493,500.00

Dragon76.72

nIntelligent
Technology
Co. Ltd.

(2). Combination cost and goodwill√Applicable □Not applicable

191 / 251

13,008,769.00-2,006,720.38

2020 Interim Report
Haier Smart Home Co., Ltd

Unit and Currency: RMB
Items

Qingdao Gooday Lejia Iot
Technology Co., Ltd.

Guangdong Black Dragon
Intelligent Technology Co. Ltd.

------ Cash

562,420,000.00

35,493,500.00------ Contingent consideration

16,094,747.42

Total combination cost

578,514,747.42

35,493,500.00

Less: fair value of identifiable net
assets acquired

130,500,584.86

19,536,251.33

Goodwill

448,014,162.56

15,957,248.67(3). Acquiree's identifiable assets and liabilities at acquisition date
√Applicable □Not applicable
Unit and Currency: RMB
Items

Qingdao Gooday Lejia Iot Technology Co., Ltd.
Fair ValueBook Value

Monetary funds

223,974,917.72

223,974,917.72

Accounts receivable

15,398,428.75

15,398,428.75

Other receivables

8,407,600.82

8,407,600.82

Prepayments

20,000.00

20,000.00

Inventories

208,069.03

208,069.03

Fixed assets

49,800,195.00

4,908,266.00

837,735.85

837,735.85

Intangible assets

45,965,425.27

23,584,905.66

Short term borrowing-800,000.00-800,000.00

Accounts payable-78,775,509.26-78,775,509.26-874,611.20-874,611.20

Payables for staff's remuneration-3,916,546.24-3,916,546.24

Other payables-71,177,812.37-71,177,812.37

Contract liabilities-20,468,473.67-20,468,473.67

Deferred income-2,052,083.28-2,052,083.28

Net assets

166,547,336.42

99,274,887.81

Less: Minority equity interests-3,063,051.15-3,063,051.15

Net assets obtained

163,484,285.27

96,211,836.66

Construction in progress

Taxes payable

Items

Guangdong Black Dragon Intelligent Technology Co. Ltd
192 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Fair value

Book Value

Monetary funds

27,557,545.48

27,557,545.48

Bills receivable

200,000.00

200,000.00

Accounts receivable

47,300.87

47,300.87

Prepayments

815,329.43

815,329.43

Other receivables

425,636.25

425,636.25

8,873,825.08

8,873,825.08

Other current assets

19,686.99

19,686.99

Fixed assets

767,559.72

767,559.72

Intangible assets

79,794.20

79,794.20

Long-term prepaid expenses

221,425.59

221,425.59

Accounts payable-1,964,381.05-1,964,381.05

Receipts in advance-10,495,805.40-10,495,805.40

Payables for staff's remuneration-747,591.42-747,591.42

Taxes payable-155,049.94-155,049.94

Other payables-179,924.13-179,924.13

25,465,351.67

25,465,351.67

25,465,351.67

25,465,351.67

Inventories

Net assets
Less: Minority equity interests
Net assets obtained
2. Business combination under common control□Applicable √Not applicable
3. Disposal of subsidiary

Whether single disposal of the investment in a subsidiary has led to the loss of control□Applicable √Not applicable
Other explanations□Applicable √Not applicable
Whether investment in a subsidiary is realized through several transactions step by step and has led to
the loss of control in the current period□Applicable √Not applicable
4. Disclosure of discontinued operation
193 / 2512020 Interim Report
Haier Smart Home Co., Ltd

The disposal of Qingdao Haier Goodaymart Logistic Co., Ltd. by the Company’s subsidiary in theprevious year constitutes discontinued operation. The relevant financial information is disclosed asfollows:(1) Profit or loss from discontinued operation①Net profit from discontinued operation (net losses are represented by ‘-’)Items

For the current period

The corresponding period of theprevious year

Operating income

4,907,810,524.82

Less: cost and others

4,710,367,482.14

Total profit

197,443,042.68

Less: income tax expense

46,936,990.15

Net profit

150,506,052.53②Profit or loss from disposal of discontinued operation

Items

For the current period

The corresponding period of theprevious year

Total profit or loss from disposalof discontinued operation
Less: income tax expense
Net profit or loss from disposal of
discontinued operation(2) Cash flow from discontinued operation

Items

For the current period

The corresponding period of theprevious year

Cash flow of operating activities-160,498,574.34

Cash flow of investing activities

19,567,060.81

Cash flow of financing activities-283,463,745.83(3) Net profit from discontinued operation

Items

For the current period

Net profit from discontinued operation (netThe corresponding periodof the previous year
150,506,052.53

losses are represented by ‘-’)Net profit attributable to40,789,130.33

shareholders of the Parent Company
Net

profitattributabletominority

109,716,922.20

shareholders
194 / 2512020 Interim Report
Haier Smart Home Co., Ltd

5. Changes of consolidation scope due to other reasons√Applicable □Not applicable(1) Qingdao Haier Intelligent Electronics Co., Ltd., a subsidiary of the Company, established awholly-owned subsidiary Qingdao Jiaozhou Haier Zhikong Electronics Co., Ltd (青岛胶州海尔智控电子有限公司).
(2) Haier Digital Technology (Qingdao) Co., Ltd. (海尔数字科技(青岛)有限公司), a subsidiary of
the Company, established a wholly-owned subsidiary Haier Yuncheng Digital Technology (Qingdao)
CO., LTD. (海尔云城数字科技(青岛)有限公司) for the period.
(3) Haier Digital Technology (Qingdao) Co., Ltd. (海尔数字科技(青岛)有限公司), a subsidiary of
the Company, established a wholly-owned subsidiary Haier Digital Technology (Chongqing) Co., Ltd.
(海尔数字科技(重庆)有限公司) for the period.
(4) Haier Digital Technology (Qingdao) Co., Ltd. (海尔数字科技(青岛)有限公司), a subsidiary of
the Company, established a wholly-owned subsidiary Haier Digital Technology (Beijing) Co., Ltd. (海尔数字科技(北京)有限公司) for the period.
(5) The Company established a wholly-owned subsidiary Qingdao Haidacheng Procurement
Services CO., LTD. (青岛海达诚采购服务有限公司) for the period.
(6) Haier Digital Technology (Qingdao) Co., Ltd. (海尔数字科技(青岛)有限公司), a subsidiary of
the Company, established a wholly-owned subsidiary Qingdao Haiyouhe IoT Technology CO., LTD.
(青岛海优禾物联科技有限公司) for the period.
(7) Qingdao Haier Air Conditioner Gen Corp., Ltd., a subsidiary of the Company, established awholly-owned subsidiary Beijing Haixianghui Technology CO., LTD. (北京海享汇科技有限公司) forthe period.

IX. Interests in other entities
1. Interests in subsidiaries（1） Composition of the Group√Applicable □Not applicable
Name of subsidiary

Principal

Placeplace ofofbusinessregistration

Nature of business

Shareholding (%)
DirectIndirect

Proportion

Acquiringof themethodvotingrights (%)

Haier Electronics Group

MainlandCo., Ltd.

of China

BermudaGroup company,
which mainly engages

195 / 251

13.94

31.74

57.63

Business
combinatio

2020 Interim Report
Haier Smart Home Co., Ltd
and Hongin investmentn underKongholding, andcommonproduction, sale,

control

distribution andlogistics of washingmachines and water
heaters
Wonder Global (BVI)The USBritishGroup company,

Investment Limited

and other

Virginwhich mainly engages

overseas

Islands

in household

areas

100.00100.00Establishm
entappliances production
and distribution
business

Haier Singapore Investment

Singapore

Singapore

Group company,

100.00100.00Business

Holding Co., Ltd.

and otherwhich mainly engages

combinatio

overseasin the production and

n

areas

distribution of home

underappliances

commoncontrol

Haier New Zealand

New

New

Group company,

Investment Holding

Zealand

Zealandwhich mainly engages

combinatioin the production andndistribution ofunderhousehold appliances

commonCompany Limited

100.00100.00Business

control
Candy S.p.A

EuropeItaly

Group company,

100.00100.00Businesswhich mainly engages

combinatioin the production andndistribution of

not under

household appliances

commoncontrol

Qingdao Haier Air

Qingdao

Qingdao

Manufacture and100.00100.00Business

Conditioner Gen Corp., Ltd.

High-tech

High-tech

operation of

combinatio

Zone

Zone

householdn

air-conditioners

undercommoncontrol

Guizhou Haier Electronics

Huichuan

Huichuan

Manufacture and sale

59.00

59.00

BusinessCo., Ltd.

District,

District,of refrigerator

Zunyi City,

Zunyi City,n

Guizhou

Guizhou

under

Province

Provincecommoncombinatio

control

196 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Hefei Haier Air-conditioning

Hefei Haier

Hefei Haier

Manufacture and saleCo., Limited

Industrial

Industrialof air-conditioners

Park

Park

99.22

99.22

Business
combinatio
nundercommoncontrolWuhan Haier Electronics

Wuhan

Wuhan

Manufacture and saleCo., Ltd.

Haier

Haier

of air-conditioners

Industrial

Industrial

Park

Park

60.00

60.00

Business
combinatio
nundercommoncontrol

Qingdao Haier
Air-Conditioner Electronics
Co., Ltd.

Qingdao

QingdaoDevelopmen

Developmen

t Zonet ZoneManufacture and sale

100.00100.00Businessofcombinatio

air-conditionersnundercommoncontrol

Qingdao Haier Information

Qingdao

Qingdao

Manufacturing of

Plastic Development Co.,

High-tech

High-techplastic products

Zone

Zone

Ltd.

100.00100.00Business
combinatio
nundercommoncontrol

Dalian Haier Precision

DalianDalianManufacture and sale

Products Co., Ltd.

ExportExportof precise plastics

Expressing

Expressing

Zone

Zone

90.00

90.00

Business
combinatio
nundercommoncontrolHefei Haier Plastic Co., Ltd.

Hefei

Hefei

Manufacture and sale

Business

Economic &Economic &of plastic parts

combinatio

Technologic

Technologicalal

Developmen

Developmen

commont Areat Areacontrol

Qingdao Haier Moulds Co.,

Qingdao

Qingdao

R&D andLtd.

High-tech

High-tech

manufacture of

combinatio

Zone

Zone

precise mold andnproduct

under

77.36

75.00

4.83

25.00

82.19

100.00n
underBusinesscommoncontrol
Qingdao Meier Plastic
Powder Co., Ltd.

Qingdao

QingdaoDevelopmen

Developmen

Manufacture ofplastic powder, plastic

197 / 251

40.00

60.00

100.00Business
combinatio

2020 Interim Report
Haier Smart Home Co., Ltdt Zonet Zonesheet andnhigh-performanceundercoatings

commoncontrolChongqing Haier Precision

Jiangbei

Jiangbei

Plastic products, sheet

90.00

10.00

100.00Business

Plastic Co., Ltd.

District,

District,

metal work,

combinatio

Chongqing

Chongqing

electronics and

n

City

City

hardwareunder
commoncontrolChongqing Haier Intelligent

Jiangbei

Jiangbei

Manufacture and saleElectronics Co., Ltd.

District,

District,of electronics and

90.00

10.00

100.00Business
combinatio

Chongqing

Chongqing

automatic control

n

City

City

systemunderequipment

commoncontrol

Qingdao Haier Robot Co.,

Qingdao

Qingdao

R&D, manufacture

Ltd.

High-tech

High-techand sale of robot

Zone

Zone

100.00100.00Business
combinatio
nundercommoncontrol

Qingdao Haier Refrigerator

Qingdao

Qingdao

Manufacture ofCo., Ltd.

High-tech

High-techfluorine-free

Zone

Zone

refrigerators

PingduPingduManufacture ofDevelopmen

Developmen

refrigerators

t

t

Zone,

Zone,

Qingdao

Qingdao

Qingdao Household

Qingdao

Qingdao

R&D of home

Appliance Technology andHigh-tech

High-techappliances mold and

Zone

Zone

Qingdao Haier Refrigerator(International) Co., Ltd.

Equipment ResearchInstitute

100.00100.00Establishm
ent

100.00100.00Establishm
ent

100.00100.00Establishm
enttechnologicalequipment

Qingdao Haier Whole Set

Qingdao

Qingdao

R&D and sales ofHome Appliance Service

High-tech

High-techhealth-related smallCo., Ltd.

Zone

Zone

home appliance

Qingdao Haier Intelligent

Qingdao

Qingdao

Design andElectronics Co., Ltd.

High-tech

High-techdevelopment of

Zone

Zone

electronics and

98.33

98.33

Establishm
ent

100.00100.00Establishm
entautomatic control
systemQingdao Haier Special

Qingdao

QingdaoRefrigerator Co., Ltd.

Developmen

Developmen

Manufacture andsales of fluorine-free

198 / 251

100.00100.00Establishm
ent2020 Interim Report
Haier Smart Home Co., Ltd

Qingdao Haier Dishwasher
Co., Ltd.

Qingdao Haier Special
Freezer Co., Ltd.

t Zonet Zonerefrigerators

Qingdao

Qingdao

Manufacture of dish

Developmen

Developmen

washing machine andt Zonet Zonegas stove

Qingdao

QingdaoDevelopment,

Developmen

Developmen

manufacture and salest Zonet Zoneof freezer and other100.00100.00Establishm
ent

96.06

96.06

Establishm
ent

refrigeration products
Dalian Haier

DalianDalianManufacture of air

Air-conditioning Co., Ltd.

ExportExportconditioners

Expressing

Expressing

Zone

Zone

Dalian Haier Refrigerator

DalianDalianManufacture ofCo., Ltd.

ExportExportrefrigerators

Expressing

Expressing

Zone

Zone

Qingdao

QingdaoDevelopmen

Developmen

assembling and salest Zonet Zoneof plastics, electronics

Qingdao Haier Electronic
Plastic Co., Ltd.

Development,

90.00

90.00

Establishm
ent

90.00

90.00

Establishm
ent

80.00

80.00

Establishm
ent

and products
Wuhan Haier Freezer Co.,

Wuhan

Wuhan

Economic &Economic &manufacture and sales

Technologic

Technologic

of freezer and otheralalrefrigeration products

Developmen

Developmen

t Zonet ZoneHigh-tech

High-tech

Industrial

Industrial

Park

Park

Qingdao Haidarui

Qingdao

QingdaoDevelopment,

Procurement Service Co.,

High-tech

High-techpurchase and sale of

Zone

Zone

electrical products

Ltd.

Ltd.

R&D,

95.00

5.00

100.00Establishm
ent

98.00

2.00

100.00Establishm
ent

and components
Qingdao Haier Intelligent

Qingdao

QingdaoDevelopment andHome Appliance

High-tech

High-techapplication of

Zone

Zone

Technology Co., Ltd.

98.91

1.09

100.00Establishm
enthouseholdappliances,
communication,
electronics andnetwork engineering
technology

Chongqing Haier

Jiangbei

Jiangbei

Manufacture andAir-conditioning Co., Ltd.

District,

District,

sales of air

199 / 251

76.92

23.08

100.00Establishm
ent2020 Interim Report
Haier Smart Home Co., Ltd

Qingdao Haier Precision
Products Co., Ltd.

Chongqing

Chongqing

conditioners

City

City

Qianwangan

Qianwangan

Development andg Road,g Road,manufacture of

JiaonanJiaonanprecise plastic, metal

City

City

plate, mold and

70.00

70.00

Establishm
entelectronic
products forhouseholdappliances
Qingdao Haier Air

JiaonanJiaonanManufacture of home

Conditioning Equipment

City,

City,

appliances andCo., Ltd.

Qingdao

Qingdao

electronics

Dalian Free Trade Zone

DalianDalianDomestic trade

Haier Air-conditioning

ExportExportExpressing

Expressing

Zone

Zone

Dalian Free Trade Zone

DalianDalianHaier Refrigerator Trading

ExportExportExpressing

Expressing

Zone

Zone

Qingdao

Qingdao

Manufacturing andDevelopmen

Developmen

sales of electronicLtd.

t Zonet Zonecomponents

Chongqing Haier

Jiangbei

Jiangbei

Sales of household
appliances

Trading Co., Ltd.

Co., Ltd.

Qingdao Ding Xin
Electronics Technology Co.,Electronics Sales Co., Ltd.

100.00100.00Establishm
ent

100.00100.00Establishm
ent

Domestic trade

100.00100.00Establishm
ent

District,

District,

Chongqing

Chongqing

City

City

Chongqing Haier

Jiangbei

Jiangbei

Manufacture ofRefrigeration Appliance Co.,

District,

District,refrigerator

Ltd.

Chongqing

Chongqing

City

City

Hefei Haier Refrigerator

Hefei Haier

Hefei Haier

Manufacture ofCo., Ltd.

Industrial

Industrial

refrigerator

Park

Park

Wuhan Haier Energy and

Wuhan

Wuhan

Power Co., Ltd.

Haier

Haier

Industrial

Industrial

Park

Park

Qingdao Haier HVAC

Qingdao

QingdaoEngineering Co., Ltd.

Developmen

Developmen

t Zonet ZoneChongqing Goodaymart

Jiangbei

Jiangbei

Sales of household

Electric Appliance Sale Co.,

District,

District,appliances andEnergy service

100.00100.00Establishm
ent

95.00

5.00

100.00Establishm
ent

84.95

15.05

100.00Establishm
ent

100.00100.00Establishm
ent

75.00

75.00

Establishm
ent

Air-conditioning

100.00100.00engineer

200 / 251

Establishm
ent

51.00

51.00

Establishm
ent2020 Interim Report
Haier Smart Home Co., Ltd
Ltd.

Chongqing

Chongqing

City

City

JiaozhouJiaozhou

Manufacture and sale

City,

City,

of air-conditioners

LimitedQingdao

Qingdao

Qingdao Haier Component

JiaozhouJiaozhou

Manufacture and

City,

City,

sales of plastic and

Qingdao

Qingdaoprecise sheet metal

Qingdao Haier (Jiaozhou)
Air-conditioning Co.,

Co., Ltd.

electronics

100.00100.00Establishm
ent

100.00100.00Establishm
ent

products
Haier Shareholdings (Hong

Hong

Hong

Kong) Limited

Kong

Kong

Harvest International

CaymanCaymanCompanyIslands

Islands

Shenyang Haier Refrigerator

Shenbei

Shenbei

Manufacture andCo., Ltd.

New Area,

New Area,

sales of refrigerator

Shenyang

Shenyang

City

City

Foshan Haier Freezer Co.,

SanshuiSanshui

Manufacture andLtd.

District,

District,

sales of freezer

FoshanFoshanCity

City

Zhengzhou Haier

Zhengzhou

Zhengzhou

Manufacture andAir-conditioning Co., Ltd.

Economic

Economicsales of air

and

and

conditioner

Technologic

Technologicalal

Developmen

Developmen

t

t

Zone

Zone

Qingdao

QingdaoDevelopmen

Developmen

purchase and sale oft Zonet Zoneelectrical products

Qingdao Haidayuan
Procurement Service Co.,
Ltd.

Investment

100.00100.00Establishm
ent

Investment

100.00100.00Establishm
entDevelopment,

100.00100.00Establishm
ent

100.00100.00Establishm
ent

100.00100.00Establishm
ent

100.00100.00Establishm
ent

and components
Qingdao Haier Intelligent

Qingdao

Qingdao

R&D of household

100.00100.00Establishm

Technology Development

High-tech

High-techappliance products

Co., Ltd.

Zone

Zone

Qingdao Hairi Hi-Tech

Qingdao

Qingdao

Design, manufacture

Model Co., Ltd.

High-tech

High-techand sales of productcombinatio

Zone

Zone

model and mouldnent

100.00100.00Businessundercommoncontrol
Qingdao Hai Gao Design

Qingdao

Qingdao

Industrial design andand Manufacture Co., Ltd.

High-tech

High-techprototype production

201 / 251

75.00

75.00

Business
combinatio

2020 Interim Report
Haier Smart Home Co., Ltd
Zone

Zone

n
under
commoncontrolBeijing Haier Guangke

Beijing

Beijing

Digital Technology Co., Ltd.

Technological

55.00

55.00

Businessdevelopment,

combinatio

promotion andntransfer

undercommoncontrol

Shanghai Haier Medical

Shanghai

ShanghaiTechnology Co., Ltd.
Qingdao Haier Technology

Wholesale and retail100.00100.00of medical facility
Qingdao

QingdaoCo., Ltd.

Development andEstablishm
ent

100.00100.00Businesssales of software andcombinatio

information productnundercommoncontrol

Qingdao Haier Technology

Qingdao

Qingdao

Investment Co., Ltd.

Entrepreneurship

100.00100.00investment andEstablishm
ent

consulting
Qingdao Casarte Smart

Qingdao

Qingdao

Living Appliances Co., Ltd.

Development,

100.00100.00production and sales

Establishm
entof appliances
Qingdao Haichuangyuan

Qingdao

Qingdao

Appliances Sales Co., Ltd.

Sales of household

100.00100.00appliances and digital

Establishm
ent

products
Haier Overseas Electric

Qingdao

Qingdao

Appliance Co., Ltd.

Sales of household

100.00100.00appliances,

Establishm
entinternational freight
forwarding
Haier Group (Dalian)

DalianDalianSales of household

100.00100.00Business

Electrical Appliances

appliances,combinatio

Industry Co., Ltd.

international freightnforwarding

undercommoncontrol

Qingdao Haier Central Air

Qingdao

Qingdao

Conditioning Co., Ltd.

Production and sales

100.00100.00of air conditioners

Establishm
ent

and refrigerationequipment
Beijing Haier Yun Kitchen
Technology Co., Ltd.

Beijing

Beijing

Technologicaldevelopment
promotion

202 / 251

95.77

95.77

Establishm
ent2020 Interim Report
Haier Smart Home Co., Ltd
and transfer
Chongqing Haier Home

Hefei

Hefei

Appliance Sale Hefei Co.,

Sales of household

100.00100.00appliances

Establishm
ent

Ltd.
Beijing Haier Zhongyou

Beijing

Beijing

Netmedia Co., Ltd.
Qingdao Weixi Smart

51.00

51.00

program
Qingdao

QingdaoTechnology Co., Ltd.
Haier U+smart Intelligent

Radio and television

entIntelligent sanitary

71.43

71.43

ware
Beijing

Beijing

Technology (Beijing) Co.,

SoftwareEstablishm

Establishm
ent

100.00100.00development

Establishm
ent

Ltd.
Qingdao Haier Industry

Qingdao

Qingdao

Industrial

Intelligence Research

intelligence

Institute Co., Ltd.

technology

Haier (Shanghai)

Shanghai

ShanghaiElectronics Co., Ltd.
Haier Shanghai Zhongzhi

Sales and R&D of

100.00100.00ent

100.00100.00home appliances
Shanghai

ShanghaiBusiness

Fang Chuang Ke

management

Management Co., Ltd.

consulting, chuangke

Establishm

Establishm
ent

100.00100.00Establishm
entmanagement
Haier COSMO IOT

Qingdao

Qingdao

Industrial investment,

Ecosystem Technology

robotics andCo., Ltd.

automation R&D, etc.

Maniiq (Qingdao) Intelligent

Qingdao

QingdaoEquipment Co., Ltd.

Internet of things,

Establishm
67.03

8.23

75.27

ent

100.00100.00Establishm

robot and automation

ent

R&D, design, etc.
Haier digital technology

Shanghai

Shanghai(Shanghai) Co., Ltd.

Technological

100.00100.00development,

Establishm
entpromotion andtransfer, material
sales, etc.
Qingdao Haier Smart

Qingdao

Qingdao

Kitchen Appliance Co., Ltd.

Production and sales

100.00100.00of kitchen smart

Establishm
enthousehold appliances
JIYI Appliance (Shanghai)

Shanghai

ShanghaiCo., Ltd.
Qingdao Hao Pin Hai Rui

Sales of household

100.00100.00appliances
Qingdao

QingdaoDevelopment,

Information Technology Co.,

purchase and sales ofLtd.

electrical products

Establishm
ent

100.00100.00Establishm
ent

and components
Fisher&Paykel Production

New

New

Manufacturing of

Machinery Limited

Zealand

Zealandautomation andcombinatio

customization specialn203 / 251

100.00100.00Business

2020 Interim Report
Haier Smart Home Co., Ltd
equipment

undercommoncontrolManiiq (Singapore)

Singapore

SingaporeIntelligent Equipment Co,.

Investment

100.00100.00management

Establishm
ent

Ltd.
Maniiq (HK) Intelligent

Hong Kong

Hong Kong

Equipment Co,. Ltd.
Qingdao Haier Special

Investment

100.00management
Qingdao

Qingdaoof householdLtd.

appliances
Beijing

Beijing

Technology Co., Ltd.

Establishm
ent

Production and sales

Refrigerating Appliance Co.,

Beijing Zero Micro

100.00100.00100.00Establishm
entTechnological

55.00

55.00

development andEstablishm
entpromotion
Laiyang Haier Smart

Laiyang

Laiyang

Kitchen Appliance Co., Ltd.

Production and sales

100.00100.00of household

Establishm
entappliances
Qingdao Blue Whale

Qingdao

QingdaoTechnology Co., Ltd.
Qingdao Hailian

Industrial intelligence

67.00

67.00

technology
Qingdao

QingdaoRongchuang Technology

Industrial intelligence

Establishm
ent

100.00100.00technology

Establishm
entCo., Ltd.
Hefei Haier Air

Hefei

Hefei

Production and sales

Conditioning Electronics

of householdCo., Ltd.

appliances

Taizhou Haier Medical

Taizhou

Taizhou

Technology Co., Ltd.

Promotion of medical

100.00100.00Establishm
ent

100.00100.00research andEstablishm
entdevelopment
Haier (Shanghai) Home

Shanghai

ShanghaiAppliance Research andR&D of household

100.00100.00appliances

Establishm
entDevelopment Center Co.,Ltd.
Development,
Haier (Shenzhen) R&D Co.,Ltd.

research and technical
ShenzhenShenzhenservices of home and100.00100.00100.00100.00commercial

Establishm
entappliances

Guangzhou Haier Air
Conditioner Co., Ltd.

Guangdong
Guangdong

Manufacturing ofrefrigeration and air
conditioning
equipment

204 / 251

Establishm
ent2020 Interim Report
Haier Smart Home Co., Ltd
Qingdao Haier Institute ofInvestment Management

Qingdao

Qingdao

Tianjin

Tianjin

Qingdao

QingdaoNanjingNanjing

Wuxi

Wuxi

Xi'an

Xi'an

Qingdao

QingdaoCo., Ltd.

Tianjin Haiyun Chuang
Digital Technology Co., Ltd.

Haier Digital Technology(Qingdao) Co., Ltd.

Haier Digital Technology(Nanjing) Co., Ltd.

Haier Digital Technology(Wuxi) Co., Ltd.

Haier Digital Technology(Xi'an) Co., Ltd.

Ficoteng Intelligent
Technology (Qingdao) Co.,Ltd.

Venture Capitalbusiness

R&D of digitaltechnology

R&D of digitaltechnology

R&D of digitaltechnology

R&D of digitaltechnology

R&D of digitaltechnology

Intelligent device
integrated service

70.00

70.00

100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00

70.00

70.00

70.00

70.00

100.00100.00Establishm
ent

Establishm
ent

Establishm
ent

Establishm
ent

Establishm
ent

Establishm
ent

Establishm
ent

IoT technology R&D,
sales of household
appliances, digital
Qingdao Yunshang Yuyi IOT
Technology Co., Ltd.

products and
Qingdao

Qingdao

accessories, clothing
shoes and hats,

Establishm
ent

textiles, daily
necessities, andfurniture.

Haiyu (Shanghai) Intelligent
Technology Co., Ltd.

Rental of apartments,
Shanghai

Shanghaietc.

Establishm
entDevelopment andTianjin Haier Zhikong
TianjinElectronics Co., Ltd.

intelligent equipment,

Tianjinmanufacturing of
automatic control
system205 / 251

Establishm
ent2020 Interim Report
Haier Smart Home Co., Ltd
Development andHefei Haier Intelligent
Hefei

Hefei

Electronics Co., Ltd.

Qingdao Haizhi Investment
Management Co., Ltd.

Qingdao Haiduv HealthTechnology Co., Ltd.

automatic control

100.00100.00100.00100.00

70.0

70.0

80.0

80.0

Qingdao

Qingdao

Asset management,
equity investment

Design and
Qingdao

Qingdaodevelopment ofhousehold appliances

Qingdao

QingdaoLtd.

R&D and sales oflighting appliances

ent

Qingdao

QingdaoCo., Ltd.

ent

Establishm
ent

Establishm
ent

combinatiotransmission,
software andEstablishm

Business

Information
Qingdao Penghai Software

Establishm

systemQingdao Jijia CloudIntelligent Technology Co.,

manufacturing of

60.01

60.01

information
technology services

n

under

commoncontrol

Business
combinatio
Qingdao Haier Energy &Water, electricity,

Power Co., Ltd.

steam heat supply
Qingdao100.00100.00n

undercommonQingdao
control

Haier Digital Technology(Guangzhou) Co., Ltd.

Xiong’an Haier Digital
Technology Co., Ltd.

Qingdao Haopin Haizhi

Guangzhou

Guangzhou

Hebei

Hebei

Qingdao

Qingdao

Scientific researchand technical service

Scientific researchand technical service

technology consulting

Ltd.

services

Qingdao100.00100.00100.00Information

Information Technology Co.,

Qingdao Hainazhi Business100.00

QingdaoManagement Co., Ltd.（青岛Establishm
ent

Establishm
ent

Establishm
100.00100.00100.00100.00ent

Business
combination206 / 251

under2020 Interim Report
Haier Smart Home Co., Ltd
common海纳智商务管理有限公司）

control

Qingdao Haimeihui

Qingdao

QingdaoManagement Consulting

Wuxi Yunshang Internet of
Wuxi

Wuxi

Qingdao

QingdaoLtd.

Qingdao Guochuang

100.00servicesCo., Ltd.

Clothing Technology Co.,

Establishm

Leasing and business100.00ent

Establishm

Internet of Things

100.00technology R&D

100.00ent

Establishm

Intelligent Household

Scientific research

Appliance Research Instituteand technical service

43.32

43.32

60.00

60.00

ent

Co., Ltd.

Shenyang Haichen Zhilian

Shenyang

ShenyangTechnology Co., Ltd.

Hangzhou Gandao
Intelligent Technology Co.,

HangzhouHangzhouLtd.

Haier Digital Technology(Chongqing) Co., Ltd.（海尔Chongqing

Chongqing

数字科技（重庆）有限公司）

Haier Digital Technology(Beijing) Co., Ltd.（海尔数Beijing

Beijing

字科技（北京）有限公司）

Wholesale and retailLTD.（海尔云城数字科技

ent

Establishm

Technology

60.00

development, service

60.00

ent

Establishm

Scientific research

100.00and technical service

100.00ent

Establishm

Scientific research

100.00and technical service

100.00Haier Yuncheng Digital
Technology (Qingdao) CO.,

Establishm

ent

Establishm
Qingdao

Qingdao

Scientific research

100.00and technical service

100.00ent（青岛）有限公司）

Qingdao Jiaozhou Haier
Zhikong Electronics CO.,LTD.（青岛胶州海尔智控Development and
Qingdao

Qingdao

Procurement Services CO.,LTD.（青岛海达诚采购服

manufacturing of

100.00automatic control

100.00ent

system电子有限公司）Qingdao Haidacheng

Establishm

Qingdao

QingdaoDevelopment,purchase and sales ofelectrical products

207 / 251

100.00100.00Establishm
ent2020 Interim Report
Haier Smart Home Co., Ltd
and components

务有限公司）

Business

combinatio

Guangdong Heilong
Intelligent Technology CO.,LTD.（广东黑龙智能科技

Guangzhou

Guangzhoun

Scientific researchand technical service

有限公司）

76.72
76.72

not under
commoncontrol

Qingdao Haiyouhe IoT
Technology CO., LTD.（青岛海优禾物联科技有限公

Establishm
Qingdao

Qingdao

Scientific researchand technical service

100.00100.00ent

司）

Beijing Haixianghui
Technology CO., LTD.（北Scientific research

Establishm

Beijing

Beijing

Qingdao Hai Heng Feng

All over the

All over theSales of household

Establishm

Electrical Appliances Sale &country

country

appliancesent

京海享汇科技有限公司）

and technical service

100.00100.00ent

Microenterprises such as

Service Co., Ltd.

Reasons for including subsidiaries in which the Company has 50% or less of the equity into the scope of
consolidated financial statements:
At the end of the reporting period, the Company had substantial control over the finance andoperation decisions of Haier Electronics Group Co., Ltd., and microenterprises such as Qingdao Hai
Heng Feng Electrical Appliances Sale & Service Co., Ltd, which were included into the scope of
consolidated financial statements.
Reason for the ratio of voting rights higher than the ratio of shareholding of Haier Electronics
Group Co., Ltd.: on 10 July 2015, HCH (HK) Investment Management Co., Limited (hereinafterreferred to as “HCH”) signed a Shareholder Voting Right Entrustment Agreement with the Company.
HCH entrusted the Company to exercise the underlying shareholder voting rights of 336,600,000 sharesof Haier Electronics Group Co., Ltd. Both parties agreed that HCH will not revoke the entrustment andauthorization to the Company unless the Company issues a written notice of revoking the trustor to
HCH.
(2). Material non-wholly owned subsidiaries
208 / 2512020 Interim Report
Haier Smart Home Co., Ltd√Applicable □Not Applicable
Unit and Currency: RMB

Shareholdingof minority
shareholders(%)

Profit or loss
attributable tominorityshareholders in
the current
periodDividends
announced to be
distributed tominorityshareholders in
the current period

Balance ofminority
interests at theend of the period

Haier Electronics Group
Co., Ltd.

54.32

793,105,148.68

679,595,221.65

16,364,398,176.7
0Guizhou Haier
Electronics Co., Ltd.

41.00

5,092,265.40

117,214,827.70

Wuhan Haier Electronics
Co., Ltd.

40.00-8,061,897.55

257,121,346.78

Name of subsidiary

Description of the difference between the ratio of shareholding and the ratio of voting rights of minority
shareholders of subsidiaries:□Applicable √Not Applicable
Other descriptions:□Applicable √Not Applicable(3). Summarized financial information in respect of material non-wholly owned subsidiaries

Name ofsubsidiary

Closing balance
Current
assetsNon-current
AssetsTotal assets

Current
liabilities

Non-current
liabilities

Total
liabilities

Haier
Electronics
Group Co.,Ltd.

33,329,356,
554.25

14,613,405,5
36.09

47,942,762,0
90.34

16,883,445,962.95

1,374,462,9
17.71

18,257,908,
880.66

Guizhou
Haier
Electronics
Co., Ltd.

445,510,306.49

71,386,128.4
5

516,896,434.
94

222,763,242.
91

8,243,368.4
3231,006,611
.34

Wuhan
Haier
Electronics
Co., Ltd.

950,267,357.30

154,268,445.
52

1,104,535,80
2.82

461,732,435.
87(Continued)
209 / 251

461,732,435.87

2020 Interim Report
Haier Smart Home Co., Ltd

Opening balance
Name of
Subsidiary

Current
assetsNon-current
AssetsTotal assets

Current
liabilities

Non-currentliabilities

Total
liabilities

Haier
Electronics
Group Co.,Ltd.

35,532,721,
320.45

14,246,629,4
53.30

49,779,350,7
73.75

19,005,798,2
43.85

1,368,203,2
39.83

20,374,001,
483.68

Guizhou
Haier
Electronics
Co., Ltd.

395,985,056.11

62,937,392.5
9458,922,448.
70

177,929,542.
31

7,523,242.3
0

185,452,784
.61

Wuhan
Haier
Electronics
Co., Ltd.

968,026,486.23

159,403,524.
03

1,127,430,01
0.26

464,471,899.
44464,471,899.44

Amount for the current period
Name ofsubsidiary

Net profit

Total
comprehensive
incomeCash flow fromoperatingactivities

35,076,615,436.
22

1,407,435,438.
11

1,306,711,254.3
3

1,849,474,991.37

Guizhou Haier Electronics
Co., Ltd.

489,594,043.14

12,420,159.51

12,420,159.51-244,989,823.11

Wuhan Haier Electronics
Co., Ltd.

555,927,511.14-20,154,743.8
7-20,154,743.87

28,624,806.30

Operatingrevenue

Haier Electronics Group
Co., Ltd.

(Continued)
Amount for the previous period
Name ofsubsidiary

Net profit

Total
comprehensive
incomeCash flow fromoperatingactivities

41,237,226,098.
73

1,936,902,298.
59

1,905,305,772.7
92,296,625,722.88

Guizhou Haier Electronics
Co., Ltd.

657,983,753.04

14,143,673.23

14,143,673.23

85,092,387.46

Wuhan Haier Electronics
Co., Ltd.

1,097,872,964.2
129,993,585.30

29,993,585.30

263,391,235.42

Operatingrevenue

Haier Electronics Group
Co., Ltd.

210 / 2512020 Interim Report
Haier Smart Home Co., Ltd

2.

Control over subsidiaries’ transactions despite change in owners’ equity in subsidiaries√Applicable □Not Applicable(1). Descriptions of change in owners' equity in subsidiaries√Applicable □Not Applicable
The minority shareholders of Haier Electronics Group Co., Ltd., subsidiary of the Company,
exercised rights for the current period, leading to changes in the Company's shareholding ratio. Capital
contribution not proportional to the original shareholding resulted in changes of shareholding ratio in thesubsidiary. The acquisition of minority shareholding by the Company and its subsidiaries and the capitalincrease by minority shareholders of the Company’s subsidiaries resulted in the change in the
Company’s shareholding ratio.
(2). Impact of the transactions on minority interests and the equity attributable to shareholders of
the Parent Company:
Items

Haier Electronics Group Co., Ltd.

OthersTotal consideration for acquisition/disposal

154,160,683.22

Less: share of net assets of subsidiaries inrespect

totheshareholding

proportion-28,339,099.34-168,759,823.16

Difference

28,339,099.34

322,920,506.38

Including: capital reserve adjustment

28,339,099.34

322,920,506.38

acquired/disposed

3.

Interests in joint ventures or associates√Applicable □Not Applicable(1) Associates

Nature ofbusiness

Shareholding

Accountingtreatmentofinvestment

Qingdao

Financialservices

42.00%

EquitymethodQingdao

Qingdao

Commercial
Bank

8.65%

Equitymethod

Jinan

Jinan

Motor
Manufacturin

30.00%

EquitymethodPrincipal
place ofbusiness

Place ofregistration

Haier Finance Co., Ltd.

QingdaoBank of Qingdao Co., Ltd.
Wolong Electric (Jinan) MotorCo., Ltd.

Name of associates

211 / 2512020 Interim Report
Haier Smart Home Co., Ltdg
Qingdao Hegang New Material
Technology Co., Ltd.

Qingdao

Qingdao

Steel plate
Manufacturing25.65%

EquitymethodQingdao Haier SAIF Smart Home
Industry
Investment
Center(Limited Partnership)

Qingdao

Qingdao

VentureCapital63.13%

EquitymethodQingdao

Manufacturin
g ofhouseholdappliances

45.00%

EquitymethodQingdao

Manufacturin
g ofhouseholdappliances

49.00%

Equitymethod20.20%

EquitymethodMitsubishi Heavy Industries Haier(Qingdao) Air-conditioners Co.,Ltd.
Qingdao Haier Carrier
Refrigeration Equipment Co., Ltd.

Qingdao

Qingdao

Qingdao Haier Multimedia Co.,Ltd.

Qingdao

Qingdao

R&D andsales oftelevisions

Qingdao Haier Software
Investment Co., Ltd.

Qingdao

Qingdao

Softwaredevelopment

25.00%

EquitymethodHefei Feier Smart Technology
Co., Ltd.

Hefei

Hefei

Technology
development

40.00%

EquitymethodQingdao

Production
and sales ofenergy49.00%

Equitymethod40.00%

EquitymethodQingdao Xinaohaizhi Energy Co.,Ltd.

Qingdao

Shandong Haibida Big Data Co.,
Ltd.

Zibo

Zibo

Big Data
Resource
service

Beijing Mr. Hi Network
Technology Company Limited

Beijing

Beijing

Technology
development

29.03%

EquitymethodBeijing

Sales ofhouseholdappliances

42.75%

EquitymethodBeijing

Technical
serviceimport andexportbusiness

42.61%

Equitymethod18.77%

Equitymethod49.00%

EquitymethodBeijing Xiaobei Technology Co.,Ltd.

Beijing ASU Tech Co. Ltd

Beijing

Beijing

Shenzhen Genyuan
Environmental Protection
Technology Co., Ltd.

ShenzhenShenzhenTechnical
advisory
services

Qingdao Haimu Investment
Management Co., Ltd.

Qingdao

Qingdao

Investment
Management

212 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Qingdao Haimu Smart Home
Investment Partnership (Limited
Partnership)

Qingdao

Qingdao

Investment
Management

24.00%

EquitymethodGuangzhou Heying Investment
Partnership (Limited Partnership)

GuangzhouGuangzhou

Investment

50.00%

EquitymethodQingdao Java Cloud Network
Technology Co., Ltd.

Qingdao

QingdaoHome online
service24.93%

EquitymethodBingji (Shanghai) Corporate
Management Co., Ltd.

Shanghai

Shanghai

Investment
management

45.00%

EquitymethodYoujin (Shanghai) Corporate
Management Co., Ltd.

Shanghai

Shanghai

Investment
management

45.00%

EquitymethodRRS (Shanghai) Investment Co.,Ltd.

Shanghai

Shanghai

Investment
management

45.00%

EquitymethodHaier Best Water Technology Co.,Ltd.

Meiling Candy Washing MachineCo., Ltd.
Konan Electronic Co., Ltd.

HPZ LIMITEDHNR Company (Private) Limited

Qingdao

Hefei

Japan

Nigeria

Pakistan

Controladora Mabe S.A.deC.V.

MexicoMiddle East Air conditioning
Company, Limited

Saudi
ArabiaQingdaoWater
equipment
technology
development
service49.00%

Hefei

Manufacturin
g of home
appliances

40.00%

Equitymethod

Japan

Motor
Manufacturing

50.00%

EquitymethodNigeria

Manufacturin
g ofhouseholdappliances

25.01%

EquitymethodPakistan

Manufacturin
g ofhouseholdappliances

31.72%

EquitymethodMexicoManufacturin
g ofhouseholdappliances

48.41%

EquitymethodSaudi Arabia

Sales ofhouseholdappliances

49.00%

Equitymethod(1). Major financial information of significant joint ventures□Applicable √Not Applicable(2). Major financial information of significant associates
213 / 251

Equitymethod2020 Interim Report
Haier Smart Home Co., Ltd√Applicable □Not Applicable①Basic information of significant associates:
a. Haier Finance Co., Ltd. (hereinafter referred to as “Finance Company”) was established by HaierGroup Corporation and its three affiliates via capital contribution. The place of registration andprincipal place of business of the Finance Company is Yulong International Center, No.178-2 Haier
Road, Laoshan District, Qingdao City. The Company's subsidiaries hold an aggregate of 42.00%
equity in the Finance Company.
b. General Electric Company has participated in the capital contribution to the establishment ofControladora Mabe S.A.deC.V. (hereinafter referred to as “MABE”). In June 2016, a subsidiary of theCompany acquired 48.41% equity in MABE held by General Electric Company. The place ofregistration and principal place of business of MABE is Mexico. The Company’s subsidiaries hold an
aggregate of approximately 48.41% equity in MABE.
c. Bank of Qingdao Co., Ltd. (hereinafter referred to as “Qingdao Bank”), one of the first citycommercial banks in China, was established in November 1996. The place of registration and principal
place of business of Qingdao Bank is No. 68 Hong Kong Middle Road, Shinan District, Qingdao,
Shandong Province. The Company and its subsidiaries hold an aggregate of approximately 8.65% equity
in Qingdao Bank at the end of the period.
 Financial Information of significant associates:
Unit and Currency: RMB
Finance company
Items

Closing balance/ Amount forthe current period

Opening balance/
Amount for the previous
periodCurrent assets

59,989,703,072.66

61,570,216,228.62

Non-current assets

8,947,355,078.39

5,905,904,013.65

Total assets

68,937,058,151.05

67,476,120,242.27

Current liabilities

53,909,950,568.34

52,896,669,320.65

172,763,023.35

268,470,616.43

54,082,713,591.69

53,165,139,937.08

14,854,344,559.36

14,310,980,305.19

6,238,824,714.93

6,010,611,728.26

1,116,349,935.66

1,300,482,943.40

Non-current liabilities
Total liabilities
Minority equity interests
Equity interest attributable toshareholders of the Parent Company
Including: share of net assets calculated
based on shareholding percentage
Operating income
214 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Net profit

839,643,218.29

817,752,896.21

Other comprehensive income

3,721,035.88-162,279.20

Total comprehensive income

843,364,254.17

817,590,617.01

126,000,000.00

126,000,000.00

Dividend received from associates
for the year

(Continued)
MABE
Items

Closing balance/ Amount forthe current period

Opening balance/
Amount for the previous
periodCurrent assets

6,404,356,403.00

6,554,356,162.20

Non-current assets

12,175,614,359.50

11,976,635,517.00

Total assets

18,579,970,762.50

18,530,991,679.20

Current liabilities

8,287,170,666.50

8,493,118,880.40

Non-current liabilities

5,729,460,588.50

5,735,182,853.40

Total liabilities

14,016,631,255.00

14,228,301,733.80

4,563,339,507.50

4,302,689,945.40

2,209,331,695.88

2,083,138,731.69

9,121,639,583.17

10,480,026,514.09

Net profit

199,323,864.03

109,678,922.13

Other comprehensive income

103,445,272.07

15,778,276.40

Total comprehensive income

302,769,136.10

125,457,198.53

20,392,107.51

32,367,659.70

Minority equity interests
Equity interest attributable toshareholders of the Parent Company
Including: share of net assets calculated
based on shareholding percentage
Operating income

Dividend received from associates
for the year

(Continued)
Qingdao Bank
Items

Closing balance/ Amount forthe current period

Opening balance/
Amount for the previous
periodCurrent assets

280,411,713,000.00

238,853,193,000.00

Non-current assets

160,110,296,000.00

134,768,957,000.00

Total assets

440,522,009,000.00

373,622,150,000.00

Current liabilities

326,610,243,000.00

264,534,891,000.00

Non-current liabilities

82,986,616,000.00

78,609,341,000.00

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Haier Smart Home Co., Ltd
Total liabilities

409,596,859,000.00

343,144,232,000.00

596,432,000.00

562,458,000.00

30,328,718,000.00

29,915,460,000.00

2,622,694,432.19

2,586,957,693.97

Operating income

5,035,264,000.00

3,725,353,000.00

Net profit

1,530,517,000.00

1,438,462,000.00

Other comprehensive income-215,321,000.00-25,404,000.00

Total comprehensive income

1,315,196,000.00

1,413,058,000.00

77,995,640.00

77,995,640.00

Minority equity interests
Equity interest attributable toshareholders of the Parent Company
Including: share of net assets calculated
based

on

shareholding

percentage

Dividend received from associates
for the year(3). Summarized financial information of insignificant associates

Investment in Associates

Closing balance/AmountOpening

for the current periodbalance/Amount for theprevious period

Wolong Electric (Jinan) Motor Co., Ltd.

131,745,167.56

123,555,578.44

Qingdao Hegang New Material Technology Co., Ltd.

288,709,753.25

280,063,773.80

433,913,863.02

434,540,103.12

677,292,968.77

643,056,436.86

Qingdao Haier Carrier Refrigeration Equipment Co., Ltd.

401,231,110.38

395,933,487.26

Qingdao Haier Multimedia Co., Ltd.

390,369,692.23

432,386,801.26

Qingdao Haier Software Investment Co., Ltd.

19,636,136.75

19,636,136.75

Hefei Feier Smart Technology Co., Ltd.

758,188.30

758,188.30

Qingdao Xinaohaizhi Energy Co., Ltd.

26,488,832.62

25,966,044.95

Qingdao Haier SAIF Smart Home Industry Investment
Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao) Air Conditioner
Co., Ltd.

Qingdao Zhongzaihaina Environmental Services Co., Ltd.

2,261,258.70

Shandong Haibida Big Data Co., Ltd.

4,991,817.38

5,332,640.10

Beijing Mr. Hi Network Technology Company Limited

3,757,759.75

3,757,759.75

Beijing Xiaobei Technology Co., Ltd.

2,687,341.82

2,687,341.82

597,730.20

5,862,115.78

6,914,487.73

6,914,487.73

2,198,276.46

2,198,276.46

Beijing ASU Tech Co., Ltd.
Shenzhen Genyuan Environmental Protection Technology
Co., Ltd.
Qingdao Haimu Investment Management Co., Ltd.
216 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Qingdao Haimu Smart Home Investment Partnership

48,046,197.64

48,046,197.64

207,927,530.72

219,198,634.81

3,110,037.46

3,168,859.99

Bingji (Shanghai) Corporate Management Co., Ltd.

983,411,368.09

894,539,765.00

Youjin (Shanghai) Corporate Management Co., Ltd.

1,625,617,754.55

1,625,617,754.55

RRS (Shanghai) Investment Co., Ltd.

2,954,850,462.82

2,954,850,462.82

Haier Best Water Technology Co., Ltd.

19,918,477.11

21,725,345.26

Meiling Candy Washing Machine Co., Ltd.

22,368,292.37

23,222,136.38

Konan Electronic Co., Ltd.

74,755,351.31

71,196,748.97

HNR Company (Private) Limited

108,673,865.77

104,557,145.65

HPZ LIMITED

72,898,060.48

78,149,551.49

MiddleEast Air conditioning Company, Limited

19,002,595.66

19,002,595.66

Total book value of investment

8,531,873,120.20

8,448,185,629.30--Net profit

97,538,731.86

21,659,978.97--Other comprehensive income-11,589,982.26

14,315,460.92--Total comprehensive income

85,948,749.60

35,975,439.89(Limited Partnership)
Guangzhou

HeyingInvestment

Partnership(Limited

Partnership)
Qingdao Java Cloud Network Technology
Co., Ltd.

Total amount of the following financial data of associates
calculated based on shareholding percentage

X. Segment Report(1). Determining basis and accounting policy of reporting segment√Applicable □Not Applicable
The Company principally engaged in manufacture and sales of household appliances and relevant
services business, manufacture of upstream household appliances parts business and distribution of
products of third-party, logistics and after-sale business. The Company has three business segments: (1)China smart home business segment; (2) Overseas home appliance and smart home business segment; (3)Other business segments. The management of the Company assesses operating performance of eachsegment and allocates resources according to the division. Sales between segments were mainly basedon market price.
(1) China smart home business segment consists of:① Internet of Food solutions: mainly engages in production and sales of refrigerator/freezers and
217 / 2512020 Interim Report
Haier Smart Home Co., Ltd

kitchen appliances.
② Internet of Clothing solutions: mainly engages in production and sales of washing machine
products.
③Air energy solutions: mainly engages in production and sales of air conditioners products.
④Whole house water solutions: mainly engages in production and sales of water home appliancessuch as water heaters and water purification products.
(2) Overseas home appliance and smart home business segment mainly includes overseas businesssegments such as GEA, FPA, Candy, etc.
(3) Other business segments: mainly include channel industrial Internet of Things, equipment
components, small home appliance business and others.
Due to centralized management under the headquarters or exclusion from the assessment scope ofsegment management, the total assets of segments exclude monetary funds, financial assets held for
trading, derivative financial assets, dividends receivable, held-for-sale financial assets, other current
assets, other equity instruments investment, long-term accounts receivable, long-term equity investment,
goodwill and deferred income tax assets; the total liabilities of segments exclude long-term andshort-term borrowings, financial liabilities held for trading, derivative financial liabilities, dividends
payable, taxes payable, held-for-sale liabilities, bonds payable, deferred income tax liabilities and othernon-current liabilities; profits of segments exclude financial expenses, profit or loss in fair value changes,
income from investment, and income on disposal of assets, Non-value-added tax refundable upon
imposition component of other income, non-operating incomes and expenses and income tax.
(1) Information of reportable segments
Segment information for the period
China smart home business
Segment

Air energy

Internet of Food solutions

solutionsinformation
Refrigerator/freezers
Segment
revenue

Kitchenappliances

Air conditioners

Internet ofclothing
solutions

Whole housewater solutions

Washing

Water homemachineappliances

14,683,603,976.09

1,267,093,978.37

13,393,533,030.85

10,412,711,732.81

4,480,940,852.13

13,241,028,063.00

1,136,861,395.44

10,819,622,386.98

8,957,518,846.77

4,405,383,279.52

1,442,575,913.09

130,232,582.93

2,573,910,643.87

1,455,192,886.04

75,557,572.61

Including:external
revenue
Inter-segment

218 / 2512020 Interim Report
Haier Smart Home Co., Ltdrevenue
Total segment
operating cost

13,228,134,258.51

1,257,529,605.79

13,392,894,090.92

9,830,205,497.05

3,950,589,964.96

1,455,469,717.58

9,564,372.58

638,939.93

582,506,235.76

530,350,887.17

13,026,256,793.12

1,537,404,374.74

16,152,797,751.76

9,643,833,688.47

3,256,484,637.11

26,981,522,397.14

1,367,998,481.75

9,083,081,923.93

6,136,730,402.67

3,623,476,540.95

Segment
operatingprofitTotal segment
assetsTotal segment
liabilities(Continued)
Overseas home

Segment

appliance and smart

information

Including:external revenue
Inter-segment
revenuesegment

operating cost
Segment
operating profit
Total

segment

assetsTotal

segment

liabilities

Total

offsetting

home business

Segment revenue

Total

Inter-segment

Other businesses

46,113,430,665.25

41,772,176,557.36-36,395,393,686.21

95,728,097,106.65

45,890,025,774.06

11,277,657,360.88-

95,728,097,106.65

223,404,891.19

30,494,519,196.48-36,395,393,686.21-

44,606,124,147.48

42,001,089,962.02-36,397,663,815.46

91,868,903,711.27

1,507,306,517.77-228,913,404.66

2,270,129.25

3,859,193,395.38

51,144,877,675.60

47,276,851,709.62-42,338,809,142.76

99,699,697,487.66

26,317,965,365.81

49,035,306,671.56-42,309,727,928.23

80,236,353,855.58

Segment information for the corresponding period of last year
China smart home business
Segment
information
Refrigerator/freezers
Segment
revenue

Air energy

Internet ofWhole housesolutions

Clothing solutions

water solutions

Air conditioners

Washing machineInternet of Food solutions
Kitchenappliances

Water home
appliances

16,014,369,082.11

1,309,588,301.27

13,811,298,219.09

10,790,566,310.14

4,694,014,711.94

14,904,667,347.36

1,169,023,520.38

11,646,933,304.59

9,747,570,995.49

4,655,524,031.86

Including:external
revenue
219 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Inter-segment revenue

1,109,701,734.75

140,564,780.89

2,164,364,914.50

1,042,995,314.65

38,490,680.08

14,021,016,300.13

1,199,160,979.26

12,838,615,639.09

9,808,869,510.07

4,144,904,947.31

1,993,352,781.98

110,427,322.01

972,682,580.00

981,696,800.07

549,109,764.63

10,182,685,599.34

1,601,295,526.79

16,080,937,914.13

9,674,956,522.67

3,321,820,888.60

30,598,595,271.84

1,468,196,660.29

8,590,183,771.36

7,447,258,502.94

4,135,690,962.81

Total
segment
operatingcost
Segment
operatingprofitTotal
segment
assetsTotal
segment
liabilities(Continued)
Overseas home

Segment
information
Segment revenue
Including:external revenue
Inter-segment
revenue
Total

segment

operating cost
Segment
operating profit
Total

segment

assetsTotal

segment

liabilities

appliance and smart

Other business

Inter-segment

Total

offsetting

home business
45,860,296,598.71

43,820,299,344.99-36,276,968,330.35

100,023,464,237.90

45,689,299,226.28

12,210,445,811.94-

100,023,464,237.90

170,997,372.43

31,609,853,533.05-36,276,968,330.35-

44,229,726,774.58

43,607,332,867.16-36,306,535,875.03

93,543,091,142.57

1,630,569,824.13

212,966,477.83

29,567,544.68

6,480,373,095.33

45,754,466,477.11

48,931,878,145.26-38,979,895,269.93

96,568,145,803.97

24,233,067,377.15

48,310,739,488.06-39,098,430,484.39

85,685,301,550.06(2) Geographical information“Other countries/regions” in this report refers to all other countries/regions (including Hong Kongand Macau Special Administration Region and Taiwan) other than the mainland China for the purposeof information disclosure.
External transaction revenue
Items

Amount for the current period

220 / 251

Amount for the previous period

2020 Interim Report
Haier Smart Home Co., Ltd
Mainland China

48,729,778,108.08

53,310,745,918.69

Other countries/regions

46,998,318,998.57

46,712,718,319.21

America

29,493,797,283.55

27,693,537,889.15

Australia

2,495,026,782.34

2,534,236,838.15

South Asia

2,710,264,399.09

4,249,663,938.66

Europe6,742,180,009.93

7,221,130,297.04

Southeast Asia

2,108,114,856.79

1,970,496,955.14

725,859,940.76

690,928,785.10

Japan

1,797,904,898.35

1,546,013,513.31

Others925,170,827.76

806,710,102.66

95,728,097,106.65

100,023,464,237.90

Including:Central East and Africa

Total

Total non-current assets
Items

Closing balance

Opening balance

Mainland China

14,847,261,037.58

14,257,835,282.97

Other countries/regions

25,364,730,695.76

25,259,765,320.54

40,211,991,733.34

39,517,600,603.51

Total

The total non-current assets exclude other equity instruments investment, long-term accounts
receivable, long-term equity investment, goodwill, deferred income tax assets and other non-current
financial assets.

XI. Disclosure of fair value
1.

Assets and liabilities measured at fair value

The level to which the fair value measurement result belongs is determined by the lowest level of
inputs which are significant to the fair value measurement as a whole:
Level 1: Unadjusted quotes for the same asset or liability in an active market
Level 2: Inputs that are directly or indirectly observable for related assets or liabilities, except forLevel 1 inputs.
Level 3: Unobservable inputs of related assets or liabilities.
At the end of the period
221 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Inputs used for fair value measurement

Quotes in an
active market(Level 1)

Items

Importantobservable input(Level 2)

Importantunobservable
input (Level 3)

Total

Continuously measured
at fair value
Financial assets held for

306,542.35

2,365,992,371.82

34,185,898.17

2,400,484,812.34

trading
Including: Bank wealth2,341,623,479.22

2,341,623,479.22

24,368,892.60

24,368,892.60

management
products
Forward foreignexchange
contract
Equity306,542.35

34,185,898.17

34,492,440.52-

66,466,125.17

instruments
investment
Derivative financial assets
Including:-

Forward66,466,125.17
62,752,517.52

62,752,517.52

3,713,607.65

3,713,607.65

foreignexchange
contract
Forwardcommodity
contract
Other equity instruments

19,001,392.40

1,251,542,256.56

1,270,543,648.96

Including:

19,001,392.40

1,251,542,256.56

1,270,543,648.96

Equityinstruments
measured at
fair

value

throughothercomprehensive income
Other non-current financial

72,739,420.26

72,739,420.26

72,739,420.26

72,739,420.26

Other non-current assets

62,836,363.78

62,836,363.78

Including:

62,836,363.78

62,836,363.78

assetsIncluding: Bank wealthmanagement
products
Othernon-current
financial
222 / 2512020 Interim Report
Haier Smart Home Co., Ltd
assetsFinancial liabilities held

17,825,470.87

17,825,470.87

17,825,470.87

17,825,470.87

164,280,435.09

164,280,435.09

72,492,566.52

72,492,566.52

91,787,868.57

91,787,868.57

for trading
Including:

Forwardforeignexchange
contract

Derivative financial
liabilities
Including:

Forwardexchange
contract
Interest

rate

swap
agreement
Other non-current liabilities
Including:

Obligation

55,618,608.25

55,618,608.25

55,618,608.25

ofrepurchasing
the55,618,608.25

minorityequity rights

At the beginning of the period
Input used for fair value measurement
Items

Quotes in an
active market(Level 1)

Importantobservable input(Level 2)

Importantunobservable
input (Level 3)

Total

Continuously measured atfair value
Financial assets held for
trading

400,433.88

283,548,675.00

24,185,898.17

308,135,007.05

Including: Bank
wealthmanagement

198,614,361.33

198,614,361.33

84,934,313.67

84,934,313.67

products
Forward foreignexchange contract
Investment inequity instruments
Derivative financial
assets400,433.88

24,185,898.17

24,586,332.05

19,158,132.45

19,158,132.45

17,241,833.10

17,241,833.10

Including: Forward
exchange
contract
223 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Forward1,916,299.35

commodity contract
Other equity instruments

1,916,299.35

19,467,066.04

1,376,492,812.88

1,395,959,878.92

19,467,066.04

1,376,492,812.88

1,395,959,878.92

Including: Equity
instruments measured atfair value and changes ofwhich included in othercomprehensive income
Other non-current
financial assets
Including:Bank

294,547,364.47

294,547,364.47

294,547,364.47

294,547,364.47

wealthmanagement
products
Other non-current assets
Including:

62,836,363.78

14,220,964.80

77,057,328.58

62,836,363.78

14,220,964.80

77,057,328.58

Other

non-current

financialassetsFinancial liabilities held for
trading
Including:

42,799,173.35

42,799,173.35

42,799,173.35

42,799,173.35

99,548,853.97

99,548,853.97

85,557,428.14

85,557,428.14

13,991,425.83

13,991,425.83

Forwardforeign exchange
contract
Derivative

financialliabilities
Including:

Forwardforeign exchange
contract
Interest

rate

swap

agreement
Other non-current liabilities

54,598,203.27

54,598,203.27

54,598,203.27

54,598,203.27

Including: Obligation of
repurchasing

theminority equity rights

For financial instruments traded in an active market, the Company determines its fair value based on
its quotes in an active market; for financial instruments not traded in an active market, the Company uses
valuation techniques to determine its fair value.
2．The continual and discontinuous Level 2 fair value measurement items, the valuation techniques
adopted and information of important parameters√Applicable Not Applicable

Items

Closing fair value
224 / 251

Valuation techniques2020 Interim Report
Haier Smart Home Co., Ltd

Financial assets held for trading
Including: Bank wealth management products
Forward exchange contract

2,341,623,479.22

Discounted cash flow

24,368,892.60

Bank quote for similar
products

62,752,517.52

Bank quote for similar
products

Derivative financial assets
Including: Forward exchange contract
Forward commodity contract

3,713,607.65

Futures exchange
quote for similar
products

Other non-current financial assets
Including: Bank wealth management products

72,739,420.26

Discounted cash flow

Other non-current assets
Including: Other non-current financial assets

62,836,363.78

Discounted cash flowmodel

17,825,470.87

Bank quote for similar
products

72,492,566.52

Bank quote for similar
products

91,787,868.57

Bank quote for similar
products

Financial liabilities held for trading
Including: Forward exchange contract
Derivative financial liabilities
Including: Forward exchange contract
Interest rate swap agreement

3 ． Continual and discontinuous Level 3 fair value measurement major items, the valuation
techniques adopted and information of important parameters√Applicable Not Applicable
Items

Fair value atthe end of theperiodValuationtechniqueSignificant
unobservable
input

Range

Sensitivity of
the input tofair value

Valuation
multiples

1. Average P/E
multipleofpeers
2. Discount forlackofmarketability

1. 24.03-24.52
2. 9%-11%

1. 1% increase(decrease) in
multiple would
result inincrease(decrease) infair value by

Other equity
Instruments
Including:
China
PetrochemicalMarketing Co.,Ltd.

1,112,101,000.00

225 / 2512020 Interim Report
Haier Smart Home Co., Ltd

RMB11,121,000.00.
2. 1% increase(decrease) in
the risk-freeinterest ratewould result in
decrease(increase) infair value by
RMB12,356,000.00.

4.

The fair value of financial assets and financial liabilities not measured at fair value√Applicable Not Applicable
Items

Closing book value

Closing fair value

Bonds payable (exchangeable corporate bonds issued in2017)

7,232,228,799.85

7,392,397,948.27

Financial assets and financial liabilities not measured at fair value include: monetary funds, bills
receivable, accounts receivable, other receivables, other current assets, long-term and short-termborrowings, bills payable, accounts payable, other payables, long-term payables, bonds payable, etc.
Except for the difference between the book value and the fair value of bonds payable disclosed above,the difference between the book value and the fair value of financial assets and financial liabilities notmeasured at fair value at the end of the period is small.

XII. Related parties and related party transactions(I) Explanation for basis of identifying related party
According to Accounting Standards for Business Enterprises No. 36 — Related Party Disclosures,
parties are considered to be related if one party has the ability to control or jointly control the other party
or exercise significant influence over the other party. Parties (two or more than two) are also considered
to be related if they are subject to common control, joint control or significant influence from anotherparty.

226 / 2512020 Interim Report
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According to Management Practices for Information Disclosure of Listed Company (China
Securities Regulatory Commission Order No. 40), related legal entity or individual will be identified as
related parties in certain occasions.
(II) Relationships between related parties
1. Information about the parent company and other companies holding shares of the Company
Relations
Name

Type of enterprise

Registered

RegisteredLegal

hips withplace

capitalrepresentative

theCompany

Haier Group
Corporation

High-techownership

Zone

company

311,180,000

Zhang

ParentRuiminCompany

Appliances

Joint-stockHigh-tech

International

company

Zone

Co., Ltd.

631,930,635

Zhang
RuiminHaier Park

Qingdao& Investment
Informationof

Parentwithlimited liability

Company

16.30%

16.30%

19.13%

19.13%

2.62%

2.62%

QingdaoFree Tradeacting923,000,000

Zhou Yunjie

Zone

1.11%

1.11%

0.87%

0.87%

in

concert ofParentCompany

HaichuangzhiEnterpriseCompany

Company

QingdaoConsulting

rights to theSubsidiary

PartiesCo., Ltd.

Management

theHaier Park
Qingdao

Company

VotingQingdaoCollective

Haier Electric

Haier Venture

Interest in

Parties

Qingdao
LimitedHigh-techpartnershipZone

1,053,306,000

Zhang
RuiminHaier Park

(Limited

actinginconcert ofParentCompany

Partnership)
Parties
HaierInternational
Co., Limited

Company

withlimited liability

Hong

10,000 (Hong

Kong

Kong Dollars)

acting/inconcert ofParentCompany

2. Subsidiaries of the Company
The details of the subsidiaries of the Company are detailed in Note IX. 1 the disclosure of interests in
subsidiaries
227 / 2512020 Interim Report
Haier Smart Home Co., Ltd□Applicable √Not Applicable
3. Associates and joint ventures of the Company
The details of important associates or joint ventures of the Company are detailed in Note VII. 12 andNote IX. 3□Applicable √Not Applicable
Other associates or joint ventures that have related party transactions with the Company for thecurrent period or have related party transactions with the Company for the previous period and haveformed balances are as follows□Applicable √Not Applicable
4. Related company with no controlling relationship
Name of company

Relationship with the Company

Haier International Co., Ltd

Subsidiary of Haier Group

Dalian Haier International Trade Co., Ltd.

Subsidiary of Haier Group

Haier Group Finance Co., Ltd.

Subsidiary of Haier Group

Haier Group Electric Appliance Industry Co., Ltd.

Subsidiary of Haier Group

Haier Finance Leasing (China) Co., Ltd.

Subsidiary of Haier Group

Hefei Haier Logistics Co., Limited

Subsidiary of Haier Group

Laiyang Haier Electrical Co. Ltd.

Subsidiary of Haier Group

Qingdao Haier Industry and City Innovation Group Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier International Travel Agency Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier International Trading Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Household Integration Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Parts Procurement Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Special Plastic Development Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Brothers Animation Industry Co., Ltd.

Subsidiary of Haier Group

Qingdao Goodaymart Supply Chains Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Goodaymart Logistic Co., Ltd.

Subsidiary of Haier GroupRRS Internet of Things Co., Ltd.

Subsidiary of Haier Group

Shanghai Cotai Supply Chain Management Co., Ltd.

Subsidiary of Haier Group

Suzhou Hai Xin InfoTech Ltd

Subsidiary of Haier Group

Brave Lion (HK) limited

Subsidiary of Haier Group

Chongqing Haier Electrical Appliances Sales Co., Ltd.

Subsidiary of Haier Group228 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Chongqing Haier Logistics Co., Ltd.

Subsidiary of Haier Group

Qingdao Dingteng Industrial Technology Co., Ltd.

Subsidiary of Haier Group

Qingdao Haier Investment and Development Co., Ltd.

Subsidiary of Haier Group
Associate of Subsidiary of Haier

Qingdao Haier New Materials R & D Co., Ltd.

Group

Controladora Mabe S.A.deC.V.

Associate

HNR Company (Private) Limited

Associate

Qingdao Haier Software Investment Co., Ltd.

Associate

Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Co., Ltd.

Associate

Wolong Electric (Jinan) Motor Co., Ltd.

Associate

Bank of Qingdao Co., Ltd.

Associate

Hefei Hegang New Material Technology Co., Ltd.

Subsidiary of Associate

Qingdao HBIS Composite New Material

Subsidiary of Associate(III) Related-party transactions
1. Details of the goods and services purchased by the Company from the related parties are as
follows:

The Name of Related parties

Amount for the current period

Amount for the previous
periodControladora Mabe S.A.deC.V.

4,864,433,223.10

5,464,515,041.24

Qingdao Haier Parts Procurement Co., Ltd.

2,382,418,704.31

2,837,415,037.84

1,361,963,444.17

1,476,163,477.81

1,142,507,687.58

1,429,096,343.19

Chongqing Haier Electrical Appliances Sales
Co., Ltd.
HNR Company (Private) Limited
Qingdao Haier Goodaymart Logistic Co., Ltd.

949,267,175.72

Hefei Haier Logistics Co., Limited

839,757,307.64

892,337,984.63

Chongqing Haier Logistics Co., Ltd.

838,951,651.12

1,051,553,656.77

Shanghai Cotai Supply Chain Management

535,089,057.35

Co., Ltd.
Qingdao Haier International Trading Co., Ltd.

527,076,966.47

539,532,451.15

413,914,100.88

412,953,069.36

Qingdao HBIS Composite New Material

355,481,832.09

283,067,913.51

Wolong Electric (Jinan) Motor Co., Ltd.

345,676,591.78

293,778,828.75

295,364,122.98

321,899,079.51

Hefei Hegang New Material Technology Co.,Ltd.

Qingdao Haier Special Plastic Development
Co., Ltd.
229 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Qingdao Haier Investment and Development

188,110,164.96

Co., Ltd.

19,898,573.91

Qingdao Goodaymart Supply Chains Co., Ltd.

173,942,768.33

Dalian Haier International Trade Co., Ltd.

122,952,604.28

185,031,961.19

63,556,939.55

88,298,910.21

40,454,392.37

36,567,109.85

33,241,619.88

33,990,109.50

624,953,584.30

1,125,264,035.03

16,099,113,938.86

16,491,363,583.45

Qingdao Haier International Travel Agency
Co., Ltd.
Laiyang Haier Electrical Co. Ltd.
Mitsubishi Heavy Industries Haier (Qingdao)
Air-conditioners Co., Ltd.
Other related parties
Total

2. Details of the Company's sales of goods to the related parties are as follows:
Amount for the current

Amount for the previous

periodperiodQingdao Haier International Trading Co., Ltd.

284,072,456.94

268,434,363.24

Qingdao Haier Special Plastic Development Co., Ltd.

277,812,831.60

287,905,105.77

Qingdao Haier New Materials R & D Co., Ltd.

148,412,255.35

192,841,505.74

Wolong Electric (Jinan) Motor Co., Ltd.

145,337,819.93

146,756,467.18

Controladora Mabe S.A.deC.V.

144,426,966.26

121,852,991.92

Qingdao HBIS Composite New Material

81,567,030.58

87,743,947.93

Qingdao Haier International Travel Agency Co.,Ltd.

55,926,947.01

37,294,684.35

55,018,521.20

65,960,255.44

236,732,885.30

262,209,804.45

1,429,307,714.17

1,470,999,126.02

The Name of Related parties

Hefei Xingang New Material Technology Co.,
Ltd.(合肥河钢新材料科技有限公司)
Other related parties
Total

3. Amount for outstanding items of related parties:
Items and name of distributors

Closing Balance

Opening BalanceBills receivable:
Qingdao Haier New Materials R & D Co., Ltd.

5,000,000.00

17,221,927.54

Other related-party
Dividend receivable:
Bank of Qingdao Co., Ltd.

77,995,640.00
230 / 251

18,658,821.43

2020 Interim Report
Haier Smart Home Co., Ltd
Qingdao Haier Software Investment Co., Ltd.

4,524,472.84

Other related-party

12,897,365.78

4,524,472.84

Accounts receivable:
HNR Company (Private) Limited

492,607,934.19

420,113,418.64

Controladora Mabe S.A.deC.V.

160,726,715.74

86,399,338.60

Qingdao Haier International Travel Agency

108,468,352.39

112,821,150.93

105,295,609.96

96,399,344.74

66,523,545.92

32,485,794.84

45,284,480.33

108,719,296.71

Haier Finance Leasing (China) Co., Ltd.

26,752,954.40

64,250,047.12

Qingdao Haier International Trading Co., Ltd.

22,719,696.91

31,247,321.37

Qingdao Haier Household Integration Co., Ltd.

20,005,683.11

8,092,101.80

Suzhou Hai Xin InfoTech Ltd

10,659,432.30

10,781,192.30

Haier Group Co., Ltd.

6,193,216.66

6,166,666.66

RRS Internet of Things Co., Ltd.

5,388,791.31

35,268,625.02

318,746,516.55

329,064,547.30

Qingdao Haier Parts Procurement Co., Ltd.

298,138,484.89

269,505,987.96

Qingdao Haier International Trading Co., Ltd.

109,539,290.53

23,318,702.14

HNR Company (Private) Limited

85,631,617.45

66,648,390.11

Hefei Haier Logistics Co., Limited

16,469,909.68

45,776,811.08

Chongqing Haier Logistics Co., Ltd.

16,042,377.73

34,842,309.86

Other related-party

95,833,868.92

86,209,477.02

98,462,714.60

49,797,510.75

Haier Group Co., Ltd

225,733,742.40

215,130,000.00

Qingdao Haier International Trading Co., Ltd.

87,570,907.66

1,894,273.76

Qingdao Haier Goodaymart Logistic Co., Ltd

53,549,458.56

3,962,494.53

Haier Group Electric Appliance Industry Co.,

12,576,056.03

11,925,794.18

Co., Ltd.
Haier Group Electric Appliance Industry Co.,Ltd.
Qingdao Haier Special Plastic Development
Co., Ltd.
Chongqing Haier Electrical Appliances Sales
Co., Ltd.

Other related-party
Prepayments:

Interest receivable:
Haier Finance Co., Ltd.
Other receivables:Ltd.

88,640,000.00

Qingdao Haier Industry and City Innovation
Group Co., Ltd.
231 / 2512020 Interim Report
Haier Smart Home Co., Ltd

102,801,759.37

138,099,198.98

21,637,277.43

39,208,909.70

50,578,836.26

28,684,896.03

1,547,113,429.70

1,968,841,996.69

591,047,787.64

1,061,806,342.30

Controladora Mabe S.A.deC.V.

494,597,468.17

230,300,308.48

Qingdao Haier International Trading Co., Ltd.

146,056,483.67

314,990,780.41

Dalian Haier International Trade Co., Ltd.

73,786,270.28

156,594,556.64

Qingdao HBIS Composite New Material

72,110,382.82

29,418,148.41

Hefei Hegang New Material Technology Co.,63,231,433.65

43,160,933.30

60,348,809.72

69,159,088.68

Chongqing Haier Logistics Co., Ltd.

33,077,540.64

132,648,041.70

Haier International Co., Ltd

15,638,736.92

11,823,617.47

Laiyang Haier Electrical Co. Ltd.

14,067,278.01

16,287,220.50

Other related-party

200,317,123.66

241,561,098.62

11,457,935.00

1,848,679.58

5,606,408.75

5,980,624.73

4,728,399.00

4,723,750.00

3,872,966.24

6,373,064.84

4,066.72

15,580,146.24

14,610,372.99

9,977,087.41

Qingdao Goodaymart Logistic Co., Ltd.

484,252,410.26

571,867,437.60

Qingdao Haier Investment and Development

239,908,090.96

10,311,777.96

197,165,604.92

274,526,190.97

Qingdao Goodaymart Supply Chains Co., Ltd.

141,544,554.72

187,341,850.29

Qingdao Haier International Trading Co., Ltd.

77,476,842.23

47,981,351.46

Shanghai Cotai Supply Chain Management

68,665,259.03

103,450,224.91

Other related-party
Bills payable:
Laiyang Haier Electrical Co. Ltd.
Other related-party
Accounts payable:
Qingdao Haier Parts Procurement Co., Ltd.
Chongqing Haier Electrical Appliances Sales
Co., Ltd.

Ltd.
Qingdao Haier Special Plastic Development
Co., Ltd.

Contract liabilities:
Qingdao HBIS Composite New Material
Technology Co., Ltd.
Hefei Hegang New Material Technology Co.,Ltd.
Qingdao Dingteng Industrial Technology Co.,Ltd.
Qingdao Haier New Materials R & D Co., Ltd.
Wolong Electric (Jinan) Motor Co., Ltd.
Other related-party
Other payables:Co., Ltd.
Qingdao Haier Brothers Animation Industry
Co., Ltd.

232 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Co., Ltd.
Qingdao Haier Special Plastic Development

43,054,748.09

43,054,748.09

193,869,326.99

275,584,489.94

7,263,993.16

11,288,860.64

122,756,874.10

122,756,874.10

Co., Ltd.
Other related-party
Interest payable:
Haier Finance Co., Ltd.
Dividends payable:
Brave Lion (HK) limited
Haier Electric Appliances International Co.,

472,006,809.00

Ltd.
Haier Group Corporation

402,229,036.50

Other related-party

255,567,089.87

14,040,737.31

4. Other related party transactions(1) Certain of the Company's subsidiaries entered into loan contracts with Haier Finance Co., Ltd.
The loan balance as of 30 June 2020 was RMB3.400 billion and the aggregate interest expense payable
by the Company to Haier Finance Co., Ltd. for the current period was RMB52 million.
(2) Information of the guarantor (as a related party) of the Company's guaranteed loan at the end of
the period:
Borrower

Loan amountHaier U.S. Appliance Solutions, Inc.
Haier Singapore Investment Holding Co., Ltd.

Guarantor

4,984,181,990.91

Haier Group Corporation

798,084,424.13

Haier Group Corporation

5,782,266,415.04

Total(3) The interest income of deposits received by the Company and subsidiaries from Haier FinanceCo., Ltd. for the current period was RMB71 million.
(4) Haier Electrical Appliances Rus Limited lends an amount of RMB20 million to Haier Russian
Trading Company LLC, a related-party.
(5) Leasing

Lessees
Subsidiaries of theCompany

Lessors

Uses for leased assets

for the period

8,891,910.72

Qingdao Haier Investment
and Development Co., Ltd.

Lease expense recognized

Production and operationand its subsidiaries

Subsidiaries of the

Other companies of Haier

CompanyGroup

Production and operation

61,627,269.54
70,519,180.26

Total
233 / 2512020 Interim Report
Haier Smart Home Co., Ltd(IV) Pricing policy
1. Related-party sales
Following the acquisition of the overseas white goods assets, the Company's original overseas sales
model, being exports through the Group's exporting platform, was changed. The trading company under
the company holding overseas white goods assets was fully responsible for sales of export-oriented
products. Meanwhile, the trading company was also responsible for the overseas sales of some of theGroup's products (such as brown goods). As such, the Company and Haier Group Corporation enteredinto a Sales Framework Agreement, according to which, the Company and Haier Group Corporation willsell products and provide sales-related services (including but not limited to agency sales services,
after-sales services and technical support) on a reciprocal basis for a term of three years.
Related-party sales among Haier Electronics Group Co., Ltd. (hereinafter referred to as “Haier
Electronics”), a holding subsidiary of the Company, Qingdao Haier Investment and Development Co.,
Ltd., and Haier Group Corporation are carried out according to relevant provisions of Goods Export
Agreement, After-sales Service Agreement, and Logistics Service Agreement entered into among theparties.
2. Related-party Procurement
In addition to independent procurement platform, the Company entrusted Haier Group Corporationand its subsidiaries for procurements and delivery of part of raw materials, which is conducted according
to the Purchase and Distribution Contract entered among the Company, Haier Group Corporation andother parties. The Company, Haier Group Corporation and its subsidiaries purchase materials fromagents. They purchase and distribute goods for production and non-production use according to thespecific material procurement target proposed by the Company. After procurement and delivery, thesupply price consists of the actual purchase price and the agency fee, of which the agency fee wascalculated by 1.25% of the actual purchase price, while in principle the supply price should not be higher
than the price for the Company’s independent purchases from the market.
Related-party procurements among Haier Electronics, Qingdao Haier Investment and Development
Co., Ltd., and Haier Group Corporation are carried out according to relevant provisions of Materials
Procurement Agreement and Production and Experimental Equipment Procurement Agreement enteredamong parties.
3. Related-party Transactions on Financial and Logistics Services
Some of the financial services such as deposit and loan service, discounting service and foreignexchange derivatives needed by the Company are provided by Haier Group Corporation and its
subsidiaries. According to the Financial Service Agreement entered into by and among the Company,
Haier Group Corporation and other parties, the price of financial services is determined by the principle
234 / 2512020 Interim Report
Haier Smart Home Co., Ltd

of not being less than market value fair. The Company is entitled to decide whether to keep cooperation
relationship with them with the knowledge of the price prevailing in the market and in combination with
its own interests. While performing the agreement, the Company could also require other financial
service institutions to provide related financial services based on actual situation. In order to meet theCompany's demands such as the avoidance of foreign exchange fluctuation risk, the Company may
choose Haier Finance Co., Ltd. (hereinafter referred to as “Finance Company”) to provide some foreignexchange derivative businesses after comparing with comparable companies. The Company will upholdthe safe and sound, appropriate and reasonable principle, under which all foreign exchange capitalbusiness shall have a normal and reasonable business background to eliminate speculative operation. At
the same time, the Company has specified the examination and permission rights, management positions
and responsibilities at all levels for its foreign exchange capital business to eradicate the risks ofoperation by persons and improved its response speed to risks on the premise that the risks are
effectively controlled.
Related-party transactions of financial services among Haier Electronics, Finance Company,
Qingdao Haier Investment and Development Co., Ltd and Haier Group Corporation are carried out
according to relevant provisions of Financial Service Agreement entered into by and among parties.
In order to further standardize the logistics services provided by the related companies of HaierGroup Corporation, the Company signed the Logistics and Service Agreement with Qingdao Haier
Investment and Development Co., Ltd. and Haier Group Corporation, the Company entrusted thesubsidiaries of Haier Group to provide energy and power, basic research and detection, equipment
leasing, house rental and maintenance, landscaping and sanitation, gift purchasing, design, consultation,
all kinds of ticket booking and other services.
In accordance with the Comprehensive Service Agreement, Promotion Agreement, ProductResearch and Development Agreement entered into among Haier Electronics, Qingdao Haier Investment
and Development Co., Ltd and Haier Group Corporation, Haier Electronics entrusted subsidiaries ofHaier Group to provide Haier Electronics with hydropower energy and related support; meeting,accommodation, ticket agent; integrated services such as product certification, software, food andbeverage agent, property decoration, house lease and finance, marketing, product research anddevelopment and other services.
4. Others
In order to expand the sales businesses in the third and fourth tier markets, Haier Electronics
renewed the Products Procurement Agreement and Internal Sales Agreement with Qingdao Haier
Investment and Development Co., Ltd and Haier Group Corporation, according to which, while Haier
Electronics purchases products from contract parties, the purchasing price shall be determined based on
the prices at which Haier Electronics purchases the same type of products in similar transactions fromindependent third parties in the market and as per the terms and conditions not less favorable than those
provided by the independent third parties to Haier Electronics; while Haier Electronics sells products tocontract parties for their own use or distribution on sales network, the selling price shall be determinedbased on the prices at which Haier Electronics sells the same type of products in similar transactions to
235 / 2512020 Interim Report
Haier Smart Home Co., Ltd

independent third parties in the market and as per the terms and conditions not less favorable than those
provided by Haier Electronics to the independent third parties.
The Company and its subsidiaries entered into a series of contracts, including the Framework
Agreement Regarding the Procurement of Modular Products with Wolong Electric (Jinan) Motor Co.,
Ltd. and other companies, pursuant to which, it is agreed that they shall supply modular products to theCompany at the most favorable price which is not higher than the price it offers to other clients.
The Company and its subsidiaries entered into a series of contracts, including the Contract
Arrangement Regarding the Procurement of Special Steel Plate Products with Qingdao Hegang New
Material Technology Co., Ltd., under which, it is agreed that they shall supply products to the Company
on terms which are not less favorable than those offered by other suppliers.

XIII. Share-based payments
1. Overall of share-base payments□Applicable √Not Applicable

XIV. Contingencies
Contingencies□Applicable √Not Applicable
As of 30 June 2020, the Company has no significant contingencies that need to be disclosed.
Significant commitments□Applicable √Not Applicable

XV. Events subsequent to the balance sheet date
1. Explanations on other events subsequent to the balance sheet date
√Applicable Not Applicable
1. On 16 July 2020, based on the total number of A shares of 6,579,566,627, the Company paid
cash bonus RMB0.375 (including tax) per A share, with cash bonus totaling to RMB2,467,337,485.13.
2. On 29 July 2020, the 9th meeting of the 10th Board of Directors deliberated and approved the
Proposal on the Company's Transfer of 54.50% of the Equity of Haier Kaos Wulian EcologicalTechnology Co., Ltd. and Related Transactions (“《关于公司转让海尔卡奥斯物联生态科技有限公司
54.50%股权暨关联交易的议案》”). The Company intends to transfer 54.50% of the equity held by
236 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Haier Kaos Wulian Ecological Technology Co., Ltd. to Qingdao Haier Ecological Investment Co., Ltd.
( 青 岛 海 尔 生 态 投 资 有 限 公 司 ) with the consideration of RMB4,060,000,000. This transaction
constitutes a related transaction, which still needs to be submitted to the shareholders' meeting forreview.
3. On 30 July 2020, the 10th meeting of the 10th Board of Directors deliberated and approved the
Proposal on the Specific Scheme of this Material Assets Reorganization (“《关于本次重大资产重组具体 方 案 的 议 案 》 ”) on item by item basis. Overview of the Scheme: The Company, as the offeror,
requests the Board of Directors of Haier Electronics Group Co., Ltd. (hereinafter referred to as “Haier
Electronics”), upon satisfaction of the prerequisites, to put forward a proposal on privatizing Haier
Electronics by way of agreement arrangement to all shareholders (hereinafter referred to as “Scheme
Shareholders”) of Haier Electronics other than the Company and its subsidiaries of shares that have been
issued by Haier Electronics or may be issued prior to the record date of the agreement arrangement(hereinafter referred to as "Scheme Shares"). The proposal will be made in accordance with Section 99
of the Bermuda Companies Act in the form of an Agreement Arrangement (hereinafter referred to as"Agreement Arrangement") involving, among other things, the write-off of all the Scheme Shares,
whereby the Scheme Shareholders will receive the newly issued H-shares of the Company and cash
payment from Haier Electronics. The Agreement Arrangement will be specifically implemented throughthe following steps: (1) all Scheme Shares will be cancelled; (2) for each so cancelled Scheme Share,
Scheme Shareholders will receive 1.60 newly issued H Shares of the Company and cash payment of HK$1.95 from Haier Electronics; (3) Haier Electronics will reduce the issued shares by canceling Scheme
Shares, and immediately after the reduction of the share capital, issue new shares to the Company, thenumber of which is equal to the number of Scheme Shares so cancelled, so that the number of issued
shares of Haier Electronics will be increased to that of it before the Scheme Shares were cancelled; and(4) after the Scheme takes effect, the amount equivalent to the cash payment made to cancel the Scheme
Shares will be reduced from Haier Electronics' equity premium and other reserve accounts. Upon thisAgreement Arrangement taking effect: (1) Haier Electronics will be delisted from the Hong Kong Stock
Exchange and become a wholly-owned or controlling subsidiary of the Company (subject to theimplementation of the Exchangeable Bond (EB) to Convertible Bond (CB) Scheme); (2) H shares of theCompany will be listed and traded on the main board of the Hong Kong Stock Exchange by way of
introduction; (3) the Scheme Shareholders will become H-share shareholders of the Company.
The Proposal is subject to be submitted to the General Meeting of Shareholders of the Company forconsideration.
4. On 17 July 2020, the Company issued RMB3 billion of unsecured ultra-short-term financing
bonds with a 180-day period and an annual interest rate of 1.45%. The ultra-short-term financing bonds
have been approved by the National Association of Financial Market Institutional Investors andregistered with the Shanghai Clearing House.
5. The Company has no other significant events subsequent to the balance sheet date that need to bedisclosed.

XVI. Risks Related to Financial Instruments
237 / 2512020 Interim Report
Haier Smart Home Co., Ltd√Applicable □Not Applicable
The book value of various financial instruments on the balance sheet date is as follows:
Financial assets
Closing balance
Financial assets

Financial assets

measured at fairmeasured at fair
Items

value and changes

Measured atof which included

amortized costin current profit

Total

in otherincome44,112,940,130.82

Monetary funds
tradingof which included
comprehensive

and loss

Financial assets held forvalue and changes

44,112,940,130.82

2,400,484,812.34

2,400,484,812.34

Derivative financial

66,466,125.17

assets

66,466,125.17

Bills receivable

13,176,349,200.41

13,176,349,200.41

Accounts receivable

17,000,438,423.14

17,000,438,423.14

Other receivables

1,933,305,471.43

1,933,305,471.43

Other current assets

889,536,054.45

889,536,054.45

Long-term receivables

317,806,792.51

317,806,792.51

Other equity instruments
Other non-current
financial assets
Other non-current assets

1,270,543,648.96

1,270,543,648.96

72,739,420.26

72,739,420.26

62,836,363.78

62,836,363.78

Financial assets (Continued)
Opening balance
Financial assets

Financial assets

measured at fairmeasured at fair
Items

value and changes

Measured atof which included

amortized costin current profit

Financial assets held for
tradingof which included

Total

in othercomprehensive

and loss
Monetary funds

value and changes

income36,178,815,683.25

308,135,007.05

36,178,815,683.25
308,135,007.05

238 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Derivative financial

19,158,132.45

assets19,158,132.45

Bills receivable

13,951,419,893.96

13,951,419,893.96

Accounts receivable

11,015,871,060.09

11,015,871,060.09

Other receivables

2,163,517,802.50

2,163,517,802.50

Other current assets

3,981,314,321.50

3,981,314,321.50

Long-term receivables

307,588,203.00

307,588,203.00

Other equity instruments
Other non-current
financial assets
Other non-current assets

1,395,959,878.92

1,395,959,878.92

294,547,364.47

294,547,364.47

77,057,328.58

77,057,328.58

Financial liabilities
Closing balance
Financial
Financial liabilities
Items

liabilities

measured at fair

Financialmeasured at fairvalue and changes

liabilities

value and changesof which included

measured atof which includedin current profit

amortized costin otherand loss

Total

comprehensive
incomeShort-term borrowings
Financial liabilities held for
trading

17,223,889,737.38

17,223,889,737.38

17,825,470.87

17,825,470.87

Derivative financial

164,280,435.09

liabilities

164,280,435.09

Bills payable

19,522,193,515.67

19,522,193,515.67

Accounts payable

29,649,104,954.11

29,649,104,954.11

Other payables

15,687,020,956.99

15,687,020,956.99

5,473,359,759.62

5,473,359,759.62

Long-term borrowings

14,716,070,114.06

14,716,070,114.06

Bonds payable

7,232,228,799.85

7,232,228,799.85

116,033,371.58

116,033,371.58

Non-current liabilities due
within one year

Long-term payables
Other non-current
liabilities

55,618,608.25

55,618,608.25

Financial liabilities (Continued)
Items

Opening balance
239 / 2512020 Interim Report
Haier Smart Home Co., Ltd

Financialliabilities

measured at fair value

Financialand changes of whichmeasured at amortizedincludedcostincurrent

liabilities

held for trading

fair

which

includedin

8
42,799,173.35
99,548,853.97

Bills payable

19,308,538,776.92

Accounts payable

33,750,567,046.28

Other payables

15,156,392,521.82

Non-current
liabilities due

4,730,070,447.82

within one year
Long-term

13,276,452,935.56

borrowings
Bonds payable

7,004,585,761.43

Long-term payables

Total

8,585,049,237.1

42,799,173.35

liabilities

liabilities

atvalue and changes ofincomeDerivative financial

Other non-current

measured

8,585,049,237.18

borrowings
Financial liabilities

liabilities

other comprehensive

profit and loss
Short-term

Financial

142,342,718.45
54,598,203.27

99,548,853.97
19,308,538,776.
92
33,750,567,046.
28
15,156,392,521.
82
4,730,070,447.8
213,276,452,935.
56
7,004,585,761.4
3
142,342,718.45
54,598,203.27

Please refer to related items in Note VII for details on each of the financial instruments of theCompany. Risks related to these financial instruments and the risk management policies taken by theCompany to mitigate these risks are summarized below. The management of the Company manages andmonitors these risk exposures to ensure the above risks are well under control.
1. Credit risk
The credit risk of the Company mainly arises from bank deposits, bills receivable, accounts
receivable, interest receivable, other receivables and wealth management products.
(1) The Company's bank deposits and wealth management products are mainly deposited in Haier
Finance Co., Ltd., state-owned banks and other large and medium-sized listed banks. The interest
receivables are mainly the accrued interests from fixed deposits which are deposited in the above banks.
The Group does not believe there is any significant credit risk due to defaults of its counterparties which
would cause any significant loss. (2) Accounts receivable and bills receivable: The Company only trades
240 / 2512020 Interim Report
Haier Smart Home Co., Ltdwith approved and reputable third parties. All customers who are traded by credit are subject to credit
assessment according to the policies of the Company, and the payment terms shall be determined on areasonable basis. The Company monitors the balances of accounts receivable on an ongoing basis andpurchases credit insurance for receivables of large-amount credit customers in order to ensure theCompany is free from material bad debts risks. (3) Other receivables of the Company mainly include
export tax refund, borrowings and contingency provision. The Company strengthened its management
and continuous monitoring in respect of these receivables and relevant economic business based on
historical data, so as to ensure that the Company's significant risk of bad debts is controllable and will befurther reduced.
2. Liquidity risk
Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfilling
obligations associated with financial liabilities. To control such risk, the Company utilizes various
financing methods such as notes settlement and bank loans to strive for a balance between sustainable
and flexible financing. It also has obtained bank credit facilities from several commercial banks tosatisfy its needs for working capital and capital expenditures.
3. Exchange rate risk
The Company's businesses are based in mainland China, USA, Japan, Southeast Asia, South Asia,
central and east Africa, Europe, and Australia, etc. and are settled in RMB, USD, and other currencies.
The Company's overseas assets and liabilities denominated in foreign currencies as well astransactions to be settled in foreign currencies expose the Company to fluctuations in exchange rates.
The Company's finance department is responsible for monitoring the size of transactions in foreign
currencies and assets and liabilities denominated in foreign currencies to minimize the risk of exposure
to fluctuation in exchange rate; the Company resorts the way of signing forward foreign exchange
contracts to avoid the risk of exchange fluctuation.
4. Interest rate risk
The Company's interest rate risk arises primarily from its long- and short- term bank loans andbonds payables which are interest-bearing debts. Financial liabilities with floating interest rates expose
the Company to cash flow interest rate risk, while financial liabilities with fixed interest rates expose theCompany to fair value interest rate risk. The Group determines the relative proportion of fixed-interest
rate and floating interest rate contracts in light of the prevailing market conditions.

XVII. Other Significant Events
The Company has no other significant events that need to be disclosed.

XVIII. Notes to Main Items of Financial Statements of the Parent Company
241 / 2512020 Interim Report
Haier Smart Home Co., Ltd

1. Accounts receivable
Aging

Closing balanceWithin 1 year

Opening balance

5,598,528,164.87

1,175,031,729.66

1-2 years

7,798,791.09

2-3 years

6,166,666.66

Over 3 years
Accounts receivable, balance

5,604,694,831.53

1,182,830,520.75

308,333.33

596,039.26

5,604,386,498.20

1,182,234,481.49

Allowance for bad debts
Accounts receivable, net

The total amount of the top 5 accounts receivable at the end of the period was RMB5,600,662,200.35,
accounting for 99.93% of book balance of the accounts receivable.
(1). Classification and disclosure according to method for provision for bad debts□Applicable √Not Applicable(2). Allowance for bad debts√Applicable □Not Applicable
Changes in allowance for bad debts of accounts receivable in the current period:

Increase for the current period
Items

Openingbalance

Provision

Other
increase

Allowance
for bad596,039.26

debts

Decrease for the current
periodWrite-off /Reversal

otherClosingbalancemovement
287,705

308,3

.93

33.33

2. Other receivables
Presented as√Applicable □Not Applicable
Unit and Currency: RMB

242 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Items

Closing balance

Opening balance

Interest receivable

14,606,194.06

16,753,860.49

Dividend receivable

173,411,284.52

3,836,055,151.41

Other receivables

2,946,870,957.74

2,032,943,893.84

3,134,888,436.32

5,885,752,905.74

Total

Other explanation:□Applicable √Not Applicable
Interest receivable
Aging

Closing balanceWithin one year

Opening balance

14,606,194.06

16,753,860.49

14,606,194.06

16,753,860.49

Over 1 year
Total

Dividend receivable
Aging
Within 1 year

Closing balance

Opening balance

173,411,284.52

3,836,055,151.41

173,411,284.52

3,836,055,151.41

Over 1 year
Total

Other receivables○
1 The disclosure of other receivables by aging is as follows:
Aging
Within 1 year

Closing balance

Opening balance

2,946,953,724.13

2,033,022,986.42

2,946,953,724.13

2,033,022,986.42

82,766.39

79,092.58

2,946,870,957.74

2,032,943,893.84

Over 1 year
Other receivables, balance
Allowance for bad debts
Other receivables, net○
2 The total amount of the top 5 other receivables at the end of the period is
RMB1,910,229,807.68, accounting for 64.82% of book balance of other receivables.
○
3 Changes in allowance for bad debt of other receivables in the current period:
Items

Opening

Increase for the period
243 / 251

Decrease for the period

Closing2020 Interim Report
Haier Smart Home Co., Ltdbalance

Other

Provisionincrease

Write-off /Reversalbalanceothermovement

Allowance
for bad79,092.58

82,76

3,673.81

6.39

debts

3. Long-term equity investment√Applicable □Not Applicable(1)

Details of long-term equity investments:
Closing balance

Items

Book balance

Opening balance
Provisionfor impairment

Provision forBook balance

impairment

Long-term equity investments
Including:long-term equity
investments

insubsidiaries
Long-term

equityinvestments

inassociates
Total

(2)

33,299,653,03

7,100,000.

32,396,253,

3.48

00

033.483,302,982,851.

69,300,000

3,246,627,3

69,300,000.0

62

.00

36.72

0

36,602,635,88

76,400,000

35,642,880,

76,400,000.0

5.10

.00

370.2007,100,000.00

Long-term equity investments in subsidiaries
Impairment
Increase

Name of investee

Opening balance/Decrease for theprovisions
Closing balance

periodat the end oftheperiodprovisions
I.

Subsidiaries:

Chongqing Haier Electronics Sales Co., Ltd.
Haier Group (Dalian) Electrical Appliances
Industry Co., Ltd
Qingdao Haier Refrigerator Co., Ltd.
Qingdao Haier Special Refrigerator Co., Ltd.
Qingdao Haier Information Plastic

9,500,000.00
34,735,489.79

9,500,000.
00
34,735,48
9.79

402,667,504.6

402,667,5

4

04.64

329,832,047.2

329,832,0

8

47.28

102,888,407.3

102,888,4

0

07.30

Development Co., Ltd
244 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Dalian Haier Precision Products Co.,
Ltd.
Hefei Haier Plastic Co., Ltd.
Qingdao Haier Technology Co., Ltd.
Qingdao Household Appliance Technology
and Equipment Research Institute
Qingdao Meier Plastic Powder Co., Ltd.
Chongqing Haier Precision Plastic Co., Ltd.
Qingdao Haier Electronic Plastic Co., Ltd.
Dalian Haier Refrigerator Co., Ltd.
Dalian Haier Air Conditioner Co., Ltd.
Guizhou Haier Electronics Co., Ltd.
Hefei Haier Air-conditioning Co.,
LimitedQingdao Haier Refrigerator(International) Co., Ltd.
Qingdao Haier Air-Condition
Electronic Co., Ltd.
Qingdao Haier Air Conditioner General

41,836,159.33
42,660,583.21
16,817,162.03
66,778,810.80
24,327,257.77
47,811,283.24
48,000,000.00
99,000,000.00
99,000,000.00
96,904,371.71
67,110,323.85
238,758,240.85

Wuhan Haier Freezer Co., Ltd.
Wuhan Haier Electronics Co., Ltd.
Chongqing Haier Air Conditioner Co., Ltd.
Hefei Haier Refrigerator Co., Ltd.
Qingdao Haier Whole Set Home

42,660,58
3.21
16,817,16
2.03
66,778,81
0.80
24,327,25
7.77
47,811,28
3.24
48,000,00
0.00
99,000,00
0.00
99,000,00
0.00
96,904,37
1.71
67,110,32
3.85
238,758,240.
85

1,113,433,.51044.51

220,636,306.0

220,636,3

2

06.02

442,684,262.7

442,684,2

6

62.76

206,594,292.8

206,594,2

2

92.82

Ltd.
Qingdao Haier Dishwasher Co., Ltd.

9.33

1,113,433,044

Corp., Ltd.
Qingdao Haier Special Freezer Co.,

41,836,15

47,310,000.00

47,310,00
0.00

100,715,445.0

100,715,4

4

45.04

100,000,000.0

100,000,0

0

00.00

49,000,000.00

49,000,00
0.00

118,000,000.0

118,000,0Appliances Services Co., Ltd.

0

00.00

Chongqing Haier Refrigeration

91,750,000.00

91,750,00

245 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Appliance Co., Ltd.

0.00

Shanghai Haier Zhongzhi Fang Chuang
Ke Space Management Co., Ltd.
Haier

COSMOPlat

IOT

Ecosystem

Technology Co., Ltd.
Qingdao Haier Special Refrigerating

Foshan Haier Freezer Co., Ltd.
Zhengzhou Haier Air Conditioner Co., Ltd.
Qingdao Haidayuan Procurement03

100,000,0

0

00.00

25,076,411,626

578,000,00

25,654,411,

.24

0.00

626.24

100,000,000.0

100,000,0

0

00.00

100,000,000.0

100,000,0

0

00.00

100,000,000.0

100,000,0

0

00.00
20,000,00

20,000,000.00

Service Co., Ltd.
Qingdao Haier Intelligent Technology
Qingdao Haier Technology Investment

130,000,0

0

00.00

302,105,635.0

25,400,000.

327,505,6

0

00

35.00

Co., Ltd.
Qingdao Casarte Smart Living

0.00

130,000,000.0

Development Co., Ltd.

10,000,00

10,000,000.00

Appliances Co., Ltd.
Haier Overseas Electric Appliance Co., Ltd.
Haier (Shanghai) Electronics Co., Ltd.
Haier U+smart Intelligent Technology

40,000,000.00

Haier Electronics Group Co., Ltd.
Qingdao Haidarui Procurement Service

200,000,00

240,000,0

0.00

00.00
12,500,00
0.00

143,000,000.0

143,000,0

0

00.00

669,830,769.2

669,830,7

7,100,0

6

69.26

00.00

107,800,000.0

107,800,0

0

00.00

326,400,000.0

326,400,0

0

00.00

Co., Ltd.
Qingdao Haier Intelligent Household

0.00

12,500,000.00(Beijing) Co., Ltd.

Appliances Co., Ltd.
Qingdao Haidacheng Procurement Service

100,000,00

100,000,0

0.00

00.00

32,396,253,033

903,400,00

33,299,653,

7,100,0.48

0.00

033.4800.00

Co., Ltd.
Total

897,454,010.

100,000,000.0

LimitedShenyang Haier Refrigerator Co., Ltd.

00

897,454,010.03

Appliance Co., Ltd.
Haier Shareholdings (Hong Kong)

2,000,000.

2,000,000.00(3) Long-term equity investments in associates
Name

of

Opening

Increase/decrease for the current period

246 / 251

Closing

Impairment

2020 Interim Report
Haier Smart Home Co., Ltd
investeebalance

WolongElectric(Jinan)Motor Co., Ltd.

Increase/decrease for

Recognized investment income

the current period

under equity method

115,90balance
Othersthe end of
the period
124,358,444,516.27

7,764.18

provisions at

2,280.45

Qingdao
Haier SAIF
Smart
Home Industry
Investment

434,54433,91-626,240.10

0,103.12

3,863.02

Center (Limited
Partnership)
Bank of
Qingdao Co.,Ltd.

963,8449,311,626.39

4,234.82-6,937,41

1,006,2

3.11

18,448.10

Mitsubishi
Heavy Industries
Haier (Qingdao)
Air-conditioners

643,05677,2934,236,531.91

6,436.86

2,968.77

Co., Ltd.
Qingdao
Haier Carrier
Refrigeration
Equipment Co.,395,93

5,297,623.12

3,487.26

401,2321,000,1,110.38

000.00390,3648,300,9,692.22000.00Ltd.
QingdaoHaier

432,38Multimedia Co.,

-42,017,109.03

6,801.25

Ltd.
Qingdao
HBIS New
Material
Technology Co.,

260,95

269,608,645,979.45

8,509.23

4,488.68

Ltd.
Total

3,246,6
27,336.72-

63,292,928.01-6,937,41

3,302,969,300,3.11

82,851.62

000.00

4. Operating revenue and operating cost
√Applicable □Not Applicable
Unit and Currency: RMB

247 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Amount for the current period

Amount for the previous period

Items
RevenuePrimary

4,971,57

business

1,357.13

Other71,145,7

business

42.55
5,042,71

Total

7,099.68

Cost

RevenueCost

4,334,933,560.26

1,243,167,506.32

873,770,520.48

63,477,221.29

87,701,868.31

76,612,012.84

4,398,410,781.55

1,330,869,374.63

950,382,533.32

5. Investment income√Applicable □Not Applicable
Unit and Currency: RMB

Items
Investment income from long-term equity investments
accounted for using cost method
Investment

incomefromlong-term

equityinvestment

accounted for using equity method

Amount for the current

Amount for the previous

periodperiod173,411,284.52

158,604,089.57

63,292,928.01

64,297,967.85

Investment income generated from disposal of long-term
equity investment
Income from wealth management products

9,270,527.84

22,666,056.16

Investment income from investment in other equity instrument
during the holding period
Total

245,974,740.37

245,568,113.58

XIX. Approval of financial report
This financial report was approved by the board of directors of the Company for reporting on 28
August 2020.

XX. Supplementary Information
1. Basic earnings per share and diluted earnings per share
Items

Amount for the current period

248 / 251

Amount for the previous period

2020 Interim Report
Haier Smart Home Co., Ltd
Earnings per share

Weighted
average return
rate

(RMB)

Earnings per share (RMB)

Weighted
average return

Basic

Dilutedearnings

earnings

per shareper share

5.68%

0.423

0.413

11.99%

0.794

0.764

5.25%

0.391

0.380

11.22%

0.739

0.710

on

net

assets

rate

on

net

assets

Basic

Dilutedearnings

earnings perper shareshare

Net profit attributable toordinary shareholders of
the Parent Company
Net profit attributable toordinary shareholders of
the Parent Company after
deduction of non-recurring
profit or loss

2. Non-recurring profit or loss
Items

Amount for the current period

Amount for the previous period

Net profit attributable to ordinary
shareholders of the Parent Company

2,780,800,712.72

5,058,082,964.47

Less: non-recurring profit or loss

211,360,215.13

464,726,732.93

2,569,440,497.59

4,593,356,231.54

Net profit attributable to ordinary
shareholders of the Parent Company
after deduction of non-recurring profit
or loss

Details of non-recurring profit or loss for the current period
Non-recurring profit or loss items
Profit or loss from disposal of non-current assets

Amount for the current period-11,377,076.09

Profit from disposal of long-term equity investments-199,825.65

Government grants included in current profit or loss, except that closely related to
the normal operating business, complied with requirements of the national
policies, continued to be granted with the amount and quantity determined undercertain standards

390,801,680.26

Gains from the costs of investment in the acquisition of subsidiaries, associatedcompanies and joint ventures being lower than the share of the fair value of theinvestee's identifiable net assets
Profit or loss from fair value changes of financial assets/liabilities held for
trading, as well as investment gains arising from disposal of financial
assets/liabilities held for trading and financial assets available-for-sale, except theeffective hedging related to the normal operations of the Company-16,026,029.49

Other non-operating income and expenses except the aforementioned items

10,350,602.15

249 / 2512020 Interim Report
Haier Smart Home Co., Ltd
Impact on minority interest-130,081,198.31

Impact on income tax-32,107,937.74

Impact on profit from business combination under common control
Total

211,360,215.13

1. Difference on figures by domestic and foreign accounting standards□Applicable √Not Applicable

250 / 2512020 Interim Report
Haier Smart Home Co., Ltd

SECTION XII DOCUMENTS AVAILABLE FOR INSPECTION

Documents Available
for Inspection

I. 2020 Interim Report of Haier Smart Home Co., Ltd. with signature of
the legal representative.
II. Financial statements with signatures or seals of the person in chargeof the entity, chief accountant and person in charge of accounting
department.
III. All documents publicly disclosed on China Securities Journal,
Shanghai Securities News, Securities Daily, Securities Times and thewebsite of Shanghai Stock Exchange (www.sse.com.cn) during thereporting period.

Chairman of the Board: Liang Haishan
Date of approval for publication by the Board: 28 August 2020

251 / 251