Company Code: 600690.SH, 690D.DE

Short Name: Haier Smart Home

Haier Smart Home Co., Ltd.
2024 Interim Report

Haier Smart Home Co., Ltd. Interim Report 2024

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 and collectively
responsible for the content set out therein and hereby assure that the content set out in theinterim report is true, accurate and complete, and free from any false record, misleading
representation or material omission.

II.

All directors have attended the Board meetings.

III.

The interim report is unaudited.

IV.

Li Huagang (legal representative of the Company), Gong Wei (chief financial officer of theCompany) and Ying Ke (the person in charge of accounting department) hereby certify thatthe financial report set out in the interim report is true, accurate and complete.

V.

Proposal of profit distribution or proposal of converting capital reserves into share capital forthis reporting period resolved and passed by the Board
Not Applicable

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 other related parties for
non-operational purposes
No

VIII. Is there any provision of external guarantee in violation of prescribed decision-making
procedures
No
IX.

Are there more than half of the Directors could not warrant the truthfulness, accuracy andcompleteness of the interim report disclosed by the Company
No

X.

Important risk warnings
For the possible risks which the Company may encounter, please refer to the relevant information set
out in the section of “MANAGEMENT DISCUSSION AND ANALYSIS” in this report.

Haier Smart Home Co., Ltd. Interim Report 20241

Important Notice

XI.

Others□ Applicable√ Not Applicable

Chairman of the Board: LI Huagang
Haier Smart Home Co., Ltd
27 August 2024

2

Haier Smart Home Co., Ltd. Interim Report 2024

Contents

SECTION I — DEFINITIONS

4SECTION II — GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS6SECTION III — MANAGEMENT DISCUSSION AND ANALYSIS

11

SECTION IV — CORPORATE GOVERNANCE

49

SECTION V — ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES53

SECTION VI — SIGNIFICANT ISSUES64

SECTION VII — CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS78

SECTION VIII — RELEVANT INFORMATION OF PREFERRED SHARES

85

SECTION IX — RELEVANT INFORMATION OF CORPORATE BONDS

86

SECTION X — FINANCIAL REPORT87

SECTION XI — RESPONSIBILITY STATEMENT

264

Documents Available
for InspectionI.

2024 Interim Report of Haier Smart Home Co., Ltd. with signature of thelegal representative.

II.

Financial statements with signatures or seals of the person in charge of theentity, 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 the website ofShanghai Stock Exchange (www.sse.com.cn) during the reporting period.

Haier Smart Home Co., Ltd. Interim Report 2024

3

Section I Definitions

Unless otherwise stated in context, the following terms should have the following meanings in this report:

DEFINITION OF FREQUENTLY USED TERMS

4

CSRC

China Securities Regulatory Commission

SSE

Shanghai Stock Exchange

The Company, Haier Smart
Home

Haier Smart Home Co., Ltd, its original name is “Qingdao Haier Co., Ltd.”,
and the original short name is “Qingdao Haier”

Four Major Securities
Newspapers

China Securities Journal, Shanghai Securities News, Securities Times,
Securities Daily

Haier Electronics, 1169

Haier Electronics Group Co., Ltd. (a company originally listed in Hong Kong,stock code: 01169.HK), a subsidiary as accounted for in the consolidated
statement of the Company. Haier Electronics has been privatized by way of H
shares issuance on 23 December 2020 and became a wholly owned
subsidiary of the Company since then.

GE AppliancesHousehold appliances assets and business of General Electric Group, which
are currently owned by the Company.

FPA

Fisher & Paykel Appliances Holdings Limited (Chinese Name: 斐 雪 派 克) wasestablished 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, built-in freezer, washing machine, clothes dryer
and etc. Its business covers 50 countries/regions across the world. FPA iswholly-owned subsidiary of the Company.

Candy

Candy Group (Candy S.p.A) is an international professional appliances
manufacturer from Italy. Since its establishment in 1945, it has beencommitted to enabling the global users to enjoy a higher quality of life
through innovative technologies and quality services. Candy Group has beenprestigious in the global market with users all over the world via its various
self-owned professional household appliance brands. In January 2019, Candy
became a wholly-owned subsidiary of the Company.

CMM

China Market Monitor Co., Ltd., as an authoritative market research institutein Chinese home appliances area, was established in 1994 and has been
focusing on research of retail sales in China consumption market ever since.

Haier Smart Home Co., Ltd. Interim Report 2024

Section I Definitions

Euromonitor

Euromonitor, established in 1972, is the leading strategic market information
supplier and has over 40-years of experience in respect of publishing market
report, commercial reference data and on-line database. They create data andanalysis on thousands of products and services around the world.

Gfk

Gfk Group, the world’s leading market research company. After a long period
of development and accumulation, Gfk Group’s global market researchbusiness covers consumer durables research, consumer research, media
research, healthcare market research and special studies.

All View Cloud

All View Cloud (AVC) is a big data integrated solution provider to the smart
home field, providing enterprises with big data information services, regular
data information services and special data services.

IEC

The International Electrotechnical Commission. Founded in 1906, it is theworld’s first organization for the preparation and publication of international
electrotechnical standardization and is responsible for international
standardization for electrical engineering and electronic engineering. The goalsof the commission include: to effectively meet the needs of the global market;
to ensure that the standards and conformity assessment programs areapplied globally in a prioritized manner and to the greatest extent; to assess
and improve the quality of products and services involved in its standards; tocreate conditions for the common use of complicated systems; to improve theeffectiveness of the industrialization process; to improve human health andsafety, and to protect the environment.

IEEE

The Institute of Electrical and Electronics Engineers, an international
association of electronic technology and information science engineers, iscurrently the largest non-profit professional technology society in the world. It
is committed to the development and research of electrical, electronic,
computer engineering and science-related fields, and has now developed into
an international academic organization with great influence in terms of the
fields of space, computer, telecommunications, biomedicine, power andconsumer electronics.

Model of Rendanheyi(人 單 合 一)

The concept of “Achieving win-win via Rendanheyi (人 單 合 一)” is theguarantee of Haier’s sustainable operation and the driving force of theCompany featuring a self-motivated and empowering corporate culture. “Ren”
is an employee who has the spirit of entrepreneurship and innovation; “Dan”
is to create value for users. The “Rendanheyi (人單合一)” management model
encourages employees to create value for users with an entrepreneurial
mindset, and to achieve self-value in line with the those of the Company andits shareholders.

Haier Smart Home Co., Ltd. Interim Report 2024

5

Section II General Information of theCompany and Key Financial IndicatorsI.

INFORMATION OF THE COMPANY
Chinese name
Chinese short nameEnglish nameEnglish short name
Legal representativeII.

6

海尔智家股份有限公司
海爾智家
Haier Smart Home Co., Ltd.
Haier Smart Home
Li Huagang

CONTACT PERSON AND CONTACT INFORMATION
Secretary to
the Board

Representative ofsecurities affairs

Company Secretary(D/H shares)
OthersName

Liu Xiaomei

Liu Tao

Ng Chi Yin, Trevor

Global Customer
Service Hotline

Address

Department ofSecurities of Haier
Smart Home Co.,
Ltd. Haier Scienceand Technology
Innovation
Ecological Park,No. 1 Haier Road,
Qingdao City

Department ofSecurities of Haier
Smart Home Co.,
Ltd. Haier Scienceand Technology
Innovation
Ecological Park,No. 1 Haier Road,
Qingdao CityRm 1908, 19/F,
Harbour Centre,
25 Harbour Road,
Wan Chai,Hong Kong/Tel0532-88931670

0532-88931670+852 2169 0000

4006 999 999

Fax

0532-88931689

0532-88931689+852 2169 0880

/

Email

finance@haier.com

finance@haier.com

ir@haier.hk/

Haier Smart Home Co., Ltd. Interim Report 2024

Section II General Information of the Company and Key Financial Indicators

III. SUMMARY OF THE CHANGES IN GENERAL INFORMATION
Registered address
Historical change of theregistered address

Business address
Postal code of thebusiness address
WebsiteEmailQuery index for any
changes during thereporting period

Haier Park, Laoshan District, Qingdao City
Prior to the Company’s listing in 1993, the registered address of theCompany was No.165 Xiaobaigan Road, Sifang District, Qingdao City,
Shandong Province, and has changed to the current address since
1994, during which the address name was adjusted in line with thechange of name of the industrial park but the actual site remains
unchanged
Haier Science and Technology Innovation Ecological Park,
Laoshan District, Qingdao City
266101
https://smart-home.haier.com/cn/
9999@haier.com
Not applicable

IV. MOVEMENT OF PLACE FOR INFORMATION DISCLOSURE ANDDEPOSIT
Designated newspaper for
information disclosure
Website for publishinginterim report
Other websites for interim
report disclosure
Deposit place of interim
reportQuery index for any
changes during thereporting period

V.

Shanghai Securities News, Securities Times, China Securities Journal,
Securities Dailywww.sse.com.cn
https://smart-home.haier.com/cn/, www.xetra.com, www.dgap.de,https://www.hkexnews.hk
Department of Securities of Haier Smart Home Co., Ltd.
Haier Science and Technology Innovation Ecological Park,No. 1 Haier Road, Qingdao City
Not applicable

SUMMARIZED INFORMATION OF SHARES OF THE COMPANY
Stock Exchange ofShares Listed

Stock Short
Name

Stock Code

Stock Short
Name Before
Variation

A shareShanghai Stock
Exchange海尔智家600690青島海尔

D shareFrankfurt Stock
Exchange

Haier Smart
Home

690D

Qingdao Haier

H ShareHong Kong Stock
Exchange

Haier Smart
Home

6690

/

Type of Shares

Haier Smart Home Co., Ltd. Interim Report 2024

7

Section II General Information of the Company and Key Financial Indicators

VI. OTHER RELATED INFORMATION□ Applicable√ Not ApplicableVII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS OF THE
COMPANY(I)

Key accounting data
Unit and Currency: RMB
The corresponding
period of last year

Key accounting data

For thereporting period(January-June)

After adjustment

Beforeadjustment

Operating revenue
135,622,549,121.01 131,628,595,912.05 131,626,581,506.56
Net profit attributable to shareholders of thelisted Company
10,420,218,389.22
8,962,851,469.46
8,963,875,999.84
Net profit after deduction of non-recurring
profit or loss attributable to shareholdersof the listed Company
10,160,504,902.38
8,603,977,764.58
8,603,977,764.58
Net cash flows from operating activities
7,818,257,937.26
6,790,021,534.62
6,790,530,462.54

Increase/decrease for thereporting period
compared withthecorresponding
period of lastyear (%)
3.03
16.26

18.09
15.14

As at the end of reporting
period of last year

Beforeadjustment

Increase/decrease as at
the end of thereporting period
compared withthat of last year(%)

105,734,300,351.38 103,514,153,535.04 96,681,175,780.71
262,251,245,011.55 253,379,859,977.97 246,302,105,777.51

2.14
3.50

As at the end of
the reporting
periodNet assets attributable to shareholders of
the listed Company
Total assets

8

Haier Smart Home Co., Ltd. Interim Report 2024

After adjustment

Section II General Information of the Company and Key Financial Indicators(II)Key financial indicators
The corresponding periodof last year

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

Increase/decrease for thereporting period
compared withthecorresponding
Beforeperiod of last
adjustment
year (%)

For thereporting period(January-June)Afteradjustment

1.13
1.12

0.96
0.96

0.97
0.96

17.71
16.67

1.10
9.67

0.93
9.16

0.93
9.16

18.28
0.51

9.43

8.80

8.80

0.63

Explanation of the key accounting data and financial indicators of the Company□ Applicable√ Not Applicable

VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC ANDOVERSEAS ACCOUNTING STANDARDS√ Applicable(I)□ Not Applicable

Difference in net profit and net assets attributable to shareholders of the listedcompany in financial statements as disclosed in accordance with International
Accounting Standards and Chinese Accounting Standards□ Applicable√ Not Applicable

There is no difference between the net profit and net assets attributable to shareholders of thelisted company presented in the consolidated financial statements as disclosed in accordancewith International Accounting Standards and Chinese Accounting Standards by the Company.

Haier Smart Home Co., Ltd. Interim Report 2024

9

Section II General Information of the Company and Key Financial Indicators(II)

Difference in net profit and net assets attributable to shareholders of the listedcompany in financial statements as disclosed in accordance with overseas
accounting standards and Chinese Accounting Standards□ Applicable√ Not Applicable

Apart from the financial statements prepared in accordance with International AccountingStandards, the Company has not prepared financial statements in accordance with otheroverseas accounting standards.

(III) Explanation on difference in domestic and overseas accounting standards.
□ Applicable√ Not Applicable

IX. NON-RECURRING PROFIT OR LOSS ITEMS AND AMOUNT√ Applicable□ Not Applicable
Unit and Currency: RMB

Non-recurring profit and loss items

AmountProfit or loss from disposal of non-current assets, including the write-off ofprovision for asset impairment-24,802,715.11
Government subsidies included in current profit or loss, except for government
subsidies that are closely related to the Company’s normal business operations,conformed to requirements of state policies and granted according to specificcriteria, and have a sustained impact on the Company’s profit or loss
373,800,184.84
Profit or loss arising from changes in fair value of financial assets and financial
liabilities held by non-financial entities, and profit or loss arising from disposalof financial assets and financial liabilities, except for effective hedging activities
related to the Company’s normal business operations-29,489,597.82
Other non-operating income and expenses except the aforementioned items-3,829,918.04
Less: Effect of income tax
46,231,142.38
Effect of minority equity interest (After Tax)
9,733,324.65
Total

259,713,486.84

For the Company’s recognition of items that are not listed in the “Explanatory Announcement on
Information Disclosure for Companies Offering Their Securities to the Public No.1 — Non-recurring
Profit or Loss” as non-recurring profit or loss items and the amount of which is significant, and for
non-recurring profit or loss items as illustrated in the “Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public No.1 — Non-recurring Profit or Loss”
designated as recurring profit or loss items, reasons shall be specified.
□ ApplicableX.

OTHERS□ Applicable10√ Not Applicable√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion andAnalysisI.

INTRODUCTION OF THE INDUSTRY WHERE THE COMPANY OPERATESAND ITS MAJOR BUSINESS DURING THE REPORTING PERIODFounded in 1984, the Company is committed to being an enterprise of the times. Through relentless
innovation and iterations, we seize opportunities in the industry by continuously launching innovative
products that steer market development. After more than 30 years, the Company has become a global
leader in the major home appliance industry, as well as a pioneer in global smart home solutions.
•Global leader of the major home appliance industry: According to data from Euromonitor — anauthoritative market researcher, the Company ranked first in terms of sales volume in global
major appliance market for 15 consecutive years. The Company has a global portfolio of brands,
including Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. From 2008 to
2023, Haier brand refrigerators and washing machines ranked first among global major home
appliance brands in sales volume for 16 and 15 consecutive years respectively.

•

Pioneer of global smart home solutions: Capitalizing on our full-range home appliances products,
the Company is recognized by Euromonitor as one of the first in the industry to introduce smart
home solutions. San Yi Niao remained committed to the mission of “providing smart home
experience for a better home”, by enhancing three major capabilities in respect of customisation
capability, delivery capability and intelligence capability, we have been dedicated to providing
customised and specialised smart home appliance solutions for users.

Over the years, the Company has established a business layout that includes smart solutions for foodstorage and cooking, laundry, air and water, the Overseas Home Appliance and Smart Home
Business, and Other Business.

Haier Smart Home Co., Ltd. Interim Report 2024

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Section III Management Discussion and Analysis

The Company provides a full range of home appliance products and value-added services in global
market through Haier Smart Home APP and San Yi Niao APP, supplemented by our offline experiencecentres, to cater for users’ needs for different lifestyle scenarios. Smart Home Business comprises
Household Food Storage and Cooking Solutions, Household Laundry Management Solutions, Air
Solutions (Internet of Air), and Household Water Solutions (Internet of Water).
•Household Food Storage and Cooking Solutions: Through selling products such as refrigerators,
freezers, kitchen appliances in global market, as well as providing one-stop smart kitchen
scenario solutions and ecosystem solutions including smart cooking and nutrition planning, theCompany fully addresses users’ need for convenient, healthy and tasteful gourmet experiences.

•

Household Laundry Management Solutions: Haier’s washing machine focuses on applying originaltechnologies to directly solve users’ pain points in home living scenarios and create newexperiences and value for users. With a product lineup of washing machines, tumble dryers, allin-one laundry machines, garment care machines, and heated drying racks, the Company has
evolved from selling individual products to providing scenario-based solutions and offering end
to-end laundry care services. For example, the Zhongzihemei (中 子 和 美) three-in-one washer
combines washing, drying, and fabric care functions into a single unit, and the Essence Wash
washing machine reduces washing time and improves cleaning effectiveness by producing ahighly concentrated detergent solution that can quickly soak into clothes through detergent pre
mixing and high pressure spraying.

•

Air Solutions (Internet of Air):
Home air conditioners: Through worldwide sales, the Company provides products such as home
air-conditioners and fresh air systems, as well as a comprehensive range of full-cycle solutions
including coordination of multiple air-conditioners and purifiers, adaptive air flow, air quality
monitoring and air disinfection, thereby delivering a healthy and comfortable experience at homeand during commute that caters to the user needs in terms of air temperature, humidity andquality.
Smart buildings: The Company is committed to becoming a leader in efficient, sustainable andsmart building solutions based on the state’s “carbon peaking and carbon neutrality” strategy.
Focusing on the business areas of smart control, environment, energy and system integration ofbuildings, the Company provides green and smart building solutions integrating “technology +experience + space” for government and commercial buildings, railways, schools, and hospitals.

•

12

Household Water Solutions (Internet of Water): Through providing worldwide users with electricwater heaters, gas water heaters, solar water heaters, air energy heat pump water heaters, POE
water purifiers, POU water purifiers, water softening equipment, the Company offers smart water
solutions including interactions between water heaters and purifiers, and between heating
appliances and water heaters, so as to comprehensively cater to users’ needs for water
purification, softening and heating.

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis

The Company manufactures and sells a comprehensive portfolio of home appliance products andprovides value-added services in more than 200 countries and regions, including North America,
Europe, South Asia and Southeast Asia, Australia and New Zealand, Japan, Middle East and Africa.
In the overseas markets, the Company has been manufacturing and selling proprietary applianceproducts catering for local users’ demands for more than 20 years. During the time, a number ofacquisitions contributed to our growth including acquisition of Haier Group Corporation’s overseas
white goods business (Sanyo Electric Co., Ltd.’s white goods business in Japan and Southeast Asia)
in 2015, home appliances of GE in the US in 2016, Fisher&Paykel in 2018, and Candy in 2019. The
development of the Company’s overseas businesses has been fuelled by synergies among ourself-developed business and our acquired businesses.
At present, the overseas business of the Company has entered a stage of promising growth, having
achieved a multi-brand, cross-product and cross-regional presence on a global basis. According toEuromonitor, the Company’s share of the global market (retail volume) for major home appliances in
key regions market share in 2023 is as follows: ranked first in Asia in terms of retail volume, with amarket share of 26%; ranked second in America, with a market share of 15.8%; ranked first inAustralia and New Zealand, with a market share of 14.6%. The Company ranked fourth in Europe witha market share of 8.8%.

Other Businesses
Building on our established smart home businesses, the Company has also developed small home
appliances, cleaning robots, channel distribution and other businesses. In particular, the small home
appliance business primarily involves small home appliances designed by the Company, produced byoutsourced third-party manufacturers and sold under the Company’s brands, which serve to enrich oursmart home solutions product mix. The channel distribution business primarily offers distribution
services for products such as televisions and user electronics for the Haier Group or third-party
brands, which leverages the Company’s sales network.
During the reporting period, the Company was once again listed among the Top 500 World’s
Companies and named again as the 2024 World’s Most Admired Companies by the Fortune Magazine.
We are the only company being selected in Europe and Asia in the home appliances industry and are
the only selected company incorporated outside the US. Meanwhile, the Company is also the world’s
only Internet-of-Things (IoT) ecosystem brand being named again as BrandZTM Top 100 Most Valuable
Global Brands in 2024. At the same time, the Company was named again among Fortune’s China
ESG Impact list. The Company’s ESG effort has also been recognized by external rating agencies,
receiving an MSCI ESG rating of A, which is at leading levels within home appliance sector in China.
Haier Smart Home was selected into the three major ESG indices of the Hang Seng Index, including
the HSI ESG Enhanced Index, the HSI ESG Enhanced Select Index and the HSCEI ESG Enhanced
Index.

Haier Smart Home Co., Ltd. Interim Report 2024

13

Section III Management Discussion and Analysis

II.

ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTING
PERIOD√ Applicable□ Not Applicable

The Company has established a solid strategic presence and competitive advantage in global market.
In China’s major home appliance market, the Company has long maintained a leading position acrossall product categories. According to CMM’s report, the Company has established a continued leading
market position in key major home appliance categories during the reporting period. In overseas
markets, the Company has adhered to its high-end brand creation strategy, building capacity to create
leading sustainable growth, which has continuously improved its market share. Building on thisfoundation, the Company will further consolidate its leadership position in the industry by leveraging
integrated synergies of its global unified platforms, through efficiency transformation driven bydigitalization, and by leveraging its technological strength and innovative capabilities. As cornerstone forsustainable development, our “Rendanheyi (人 單 合 一)” Model also provided management guidance to
the Company and enabled us to replicate successful experiences. It is believed that the following
advantages will help the Company to continue to strengthen its leading position:(i)

Building up excellent high-end brand operation capabilities and creating a well-recognizedhigh-end brand through forward-looking layout and long-term investment in the global
market to achieve a leading market position.
To better meet the need of consumers in pursuit of quality life, the Company has started todevelop the high-end brand Casarte in the Chinese market more than 10 years ago. The creationof high-end brands requires not only focus, experience and patience, but also continuous
innovation of technological standards and differentiated service capabilities to fulfil user demandfor high-quality experiences. The Casarte brand combined the Company’s global technologicalstrengths, product development capabilities and manufacturing craftsmanship, as well as privilege
marketing and differentiation services, which has won the trust of users in China’s high-end
market. According to data from CMM, the Casarte brand has assumed a definitive leading
position in China’s high-end major home appliance market in the first half of 2024, ranking firstin the retail sales of refrigerator, washing machine and air conditioner categories in the high-end
segment. Specifically, in terms of offline retail sales, shares of the Casarte brand of air
conditioners reached 32% in the market with product priced above RMB15,000 in China, while its
share of refrigerators and drum washing machines priced above RMB10,000 in the China’s
market reached 39.5% and 82.3% respectively.
In the North American market, the Company owns high-end brands such as Monogram, Café,and GE Profile. In collaboration with the Qingdao headquarters, we enhanced our high-end brandprofile through launching leading products including Combo washers and dryers. Through thecreation of luxurious, customizable and smart technology-enabled user experience, our high-end
brands Monogram, Café and GE Profile have grown rapidly.

14

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis(ii)

Providing users with specialised and customised smart household solutions through the
San Yi Niao brand with cross-household design focusing on scenario-based experienceto carry out the mission of “providing smart home experience for a better home”.
As users continued to demand for higher living quality, with its focus on the mission of“providing smart home experience for a better home”, San Yi Niao has been dedicated toproviding customised and specialised smart home appliance solutions for users, strengthening its
leadership around “customisation capabilities, delivery capabilities and intelligence capabilities”. In
terms of customisation capabilities, San Yi Niao promotes one-stop customisation of the wholeprocess through the digital middle platform to meet the personalized needs of users; in terms ofdelivery capabilities, San Yi Niao has established mature whole-process delivery standards, which
can improve user experience through integrated delivery tools for smart home appliances. In
terms of smart capabilities, San Yi Niao relies on Haier Smart Home’s main platform to achieve
deep interconnection of the whole household, providing more boundless interaction and more
active services.

(iii)

Extensive and solid global presence with localized operational capability
In respect of overseas markets, the Company seeks overseas expansion of its own brands aswell as synergies with acquired brands to develop overseas markets. Such business strategy has
guided the Company to establish R&D, manufacturing and marketing three-in-one structure
across multiple brands, products and regions, as well as the model of self-development,interconnection and synergized operation.
The Company’s extensive global presence depends on its localized business teams as well as its
flexible and autonomous management mechanisms established in various overseas markets,
which have enabled the Company to gain rapid insights and respond swiftly to local user
demands. The Company also proactively integrates into local markets and cultures and has
established a corporate image that is recognized by local communities in the overseas regions
where the Company operates.
At present, the Company established 10+N innovative ecosystems, 122 manufacturing centres,and 108 marketing centres around the world, and achieved a coverage of nearly 230,000 points
of sales in global markets.

(iv)

A comprehensive portfolio of proprietary brands recognised by users of all tiers
Through organic growth and acquisitions, the Company has formed seven brand clusters,
including Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. To address
the needs of users from different tiers in various markets around the world, the Company has
adopted a differentiated multi-brand strategy in different regions that centred around users, toachieve an extensive and in-depth user coverage. For example, in the Chinese market: the threebrands of Casarte, Haier and Leader achieved the coverage of high-end, mainstream and nichemarket groups respectively; in the U.S. market, the six major brands such as Monogram, Café,
GE Profile, GE, Haier, Hotpoint comprehensively covered all segments of high-end, mid-range
and low-end markets, thereby meeting the preferences and needs of different types of users.

Haier Smart Home Co., Ltd. Interim Report 2024

15

Section III Management Discussion and Analysis(v)

Cross-border acquisition and synergy realisation capabilities
The Company has an excellent track record of acquisition and integration. The Company has
acquired Haier Group Corporation’s overseas white goods business, including Sanyo Electric Co.,
Ltd.’s white goods businesses in Japan and Southeast Asia in 2015, the home appliancebusiness of General Electric in the US in 2016, the New Zealand company Fisher&Paykel (which
has been entrusted by the Haier Group since 2015) in 2018, and the Italian company Candy in
2019. The Company’s capability to perform acquisition and integration is reflected in thefollowing: First of all, the Company implements the “Rendanheyi (人 單 合 一)” Model in theacquired companies, which is a value-added sharing mechanism for the whole-process teamunder a common goal. Such model can motivate the acquired companies and their employees
and enable them to generate more value. Secondly, the Company made use of its global
platform to empower the acquired companies in terms of strategic planning, R&D andprocurement in order to enhance their competitiveness. Thirdly, the Company’s open andinclusive corporate culture can support the acquired companies in establishing a flexible andautonomous management mechanism, which can easily earn recognition from the acquiredcompanies and is conducive to the promotion of integration.

(vi)

Comprehensive and in-depth global collaborations and empowerment
The Company has made full use of its global collaborative platform, as well as its integratedfunctions of R&D, product development, procurement, supply chain, sales and brand marketing.
It was able to share and expand development experience to various markets around the world.
By strengthening the synergies among its global businesses, the Company has created a strong
driving force for its future development.

16•

Global collaborative R&D: The Company has a global collaborative R&D system and has
established global technology R&D mechanisms to share common modules, utilize common
technologies, and share patents within the scope of compliance. For example, theCompany’s R&D team in China joined hands with FPA’s and CANDY’s R&D teams todevelop the H20 spray technology, which has been applied to freestanding and built-in
dishwashers of Haier, Fisher&Paykel, CANDY and HOOVER, hence strengthening theCompany’s product leadership.

•

Global collaborative product development: The Company has established a global productdevelopment mechanism to facilitate regional collaboration and supplementation acrossproduct categories. For example, the R&D teams in South Asia and China embarked on a
10-month collaboration, breaking away from the traditional product development model byinnovating on team organisation, quality control, product testing and cost control leveraging
complementary local resources, in order to develop the HRT-683 refrigerator which has
become a mainstream high-end product in the local market.

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Section III Management Discussion and Analysis•

Global collaborative procurement: The Company has established a global procurement
committee to coordinate procurement activities. The committee has built a digital sourcing
platform that brought together partners across industries and regions to develop an
autonomous and controlled global supply chain ecosystem. The committee also created a
global database of preferred suppliers and materials to achieve cost reduction by
aggregating resources at the Company level. By unifying procurement rules and processes,
the Company established a standardised operating system with differentiated procurement
strategies to enhance efficiency while lowering risks. We have also developed a Company
level digital procurement platform to enhance shared capabilities through connecting“materials, businesses, people and mechanisms” to the platform, thereby improving theresilience of our global supply chain.

•

Global collaborative supply chain: The Company has built an end-to-end digital management
system for the global supply chain that spanned from marketing to suppliers to production
and logistics. Using intelligent algorithms, the system enabled real-time flexible deploymentof production capacity, and factories across the globe could share and develop smart
manufacturing technologies to boost competitiveness.

•

Global collaborative marketing and brand promotion: The Company operates a multi-level
brand portfolio with collaborative brand promotions. The Company also promotes andintroduces successful marketing strategies among regional markets. For example, theCompany successfully replicated its sales and marketing model of China’s third and fourthtier markets to markets such as India, Pakistan, and Thailand, strengthening the company’s
brand image and regional market competitiveness.

(vii) Industry-leading R&D and technological capabilities
Haier Smart Home delves into technological innovation to expedite the development ofinnovation-driven productivity that aims for high-end, smart and green upgrade. Leveraging on
our industry-leading and comprehensive R&D presence, we constantly provide global users withhome appliances that meet their needs and customise their smart and convenient way of living,thus enriching users’ life experience as well as cementing our leading position in high-end
brands, scenario brands and ecosystem brands.

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Section III Management Discussion and Analysis•

Leadership in original technologies:
In 2024, Haier Smart Home continued to innovate with a user-oriented approach and has
produced a series of scientific and technological innovations. It developed the
low-temperature intelligent unmanned retail technology, promoted the market-oriented
operation and management of frozen products, led the intelligent unmanned retail industry,and promoted the comprehensive application of refrigerated intelligent unmanned retailequipment. In view of the problems of elution and drying, such as unclean rinsing, highnoise of dehydration vibration, and accumulation of linen scraps in the air duct, we haveachieved breakthroughs in the research on elution and drying performance, with rinsing
capacity increasing by 7% and developing low vibration and low noise washing machines,
so as to achieve the effect of maintaining efficient drying for a long time. The industry’s firstthermal comfort control technology based on sleep staging has established the thermal
comfort equation (SPMV equation) based on sleep process to establish the relationshipbetween sleep and environmental parameters, filling the gap in the industry where there is
only the thermal sensation of the waking state but a lack of thermal comfort environmental
parameters in the sleep process.

•Certification from authorities:
For the first half of 2024, the Company received a total of 17 State Science andTechnology Progress Award, more than any other company in the industry. The Company
won the Disruptive Technology Innovation Competition of the Ministry of Science andTechnology for two consecutive years, the highest accolade in the industry.

•

Leadership in patent quality:
For the first half of 2024, Haier Smart Home has accumulated more than 109,000 patents
applications globally, including more than 70,000 invention patents. The Company also
accumulated 12 state patent gold awards, ranking first in the domestic market.
In the ‘Global Smart Home Invention Patent Ranking’ in the first half of 2024, Haier Smart
Home ranked first in the world for the eleventh consecutive times with 3,109 publishedpatent applications.

18•

Leadership in international standards:
For the first half of 2024, Haier Smart Home has cumulatively led and participated in thedrafting of 100 international standards and 708 state/industrial standards. We are the only
company in the industry to have participated in smart home standards from internationalorganizations including the IEC, ISO, IEEE, OCF and Matter. We are also the only
enterprise in the world to serve on both the IEC Board and the IEC Market Strategy Board,which have enabled the Company to stay actively involved in the formulation of international
standards.

•

Leadership in experience design:
Haier won over 600 accolades, including international design awards such as the German
IF Design Award and the Red Dot Design Award. The Company won six international
design gold awards and won 3 China Excellent Industrial Design Gold Awards from the
Ministry of Industry and Information Technology, which is the only enterprise in China thathave earned three consecutive gold awards.

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Section III Management Discussion and Analysis(viii) Sustainability

(ix)

①

Global ESG governance structure: Haier Smart Home has established a global ESG
governance structure, including the ESG Committee of the Board of Directors, the ESG
Global Executive Office, and the Global ESG Executive Working Group, which provides
organisational support for the in-depth practice of ESG.

②

Green development and low-carbon operation: Haier Smart Home has formulated the “6Green” strategy of green management throughout the entire life cycle, which includes“green design, green manufacturing, green marketing, green recycling, green disposal, andgreen procurement”, and promotes green actions throughout the entire life cycle. Haier
Smart Home has integrated low-carbon, recycling, energy saving and emission reduction
into its daily operations to promote green upgrading of the industry.

③

Social responsibility and charity work: Haier Smart Home actively participates in public welfare
projects such as the Hope Project, rural revitalisation, and emergency relief on a global
scale, and continues to give back to society through donations and volunteer services.

④

Leading ESG rating: Haier Smart Home has the leading rating among its peers in China in
respect of the ESG ratings issued by three major organizations, namely CSI, MSCI andWind, which demonstrates its excellent performance in environmental, social responsibility
and corporate governance.

Staying committed to the principle of ‘value of people comes first’‘Value of people comes first’ has always been a guiding principle for Haier’s development. From
the autonomous operation team at the start of the venture to the current “Rendanheyi (人 單 合一)” model, Haier encourages every employee to maximize their own values while creating values
for users. In Haier’s “Rendanheyi (人單合一)” model, ‘Ren’ refers to creators; ‘Dan’ refers to user
value; ‘Heyi’ refers to the integration of values realized by employees and the values created forusers. ‘Value of people comes first’ is the highest purpose of the “Rendanheyi (人 單 合 一)”
model.
Haier Smart Home adheres to the values of recognizing users’ demand as priority and denying
our own perceptions and is committed to the ‘two creative spirits’ of entrepreneurship andinnovation. We turned employees into creators, implementers into entrepreneurs, and transformed
enterprises into open ecosystem platforms, which have supported the Company to become a
global leader of smart home in the Internet of Things era.

III. DISCUSSION AND ANALYSIS ON OPERATIONSPart 1: Discussion and analysis on overall operations
During the reporting period, in response to changing environment, the Company advanced end-to-end
digital transformation, improved user experience and operational efficiency, to improve profitability.

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Section III Management Discussion and Analysis

In the first half of 2024, the Company recorded sales revenue of RMB135.623 billion, a 3.0% increase
compared to the same period in 2023. The following factors are contributing to revenue changes.
In domestic markets, despite weak momentum in the white goods sector, particularly against a 14.5%
drop in air conditioner retail sales, the Company managed to grew revenue by 2.3% in the first half
this year, leveraging multi-brand product lineup and innovative new media marketing strategies.
The Company’s revenue from overseas markets grew by 3.7% in the first half of the year. In
developed markets like the U.S. and Europe, where inflation suppressed demand, the Company
increased market share by launching high-end products, optimizing supply chain, and improving
operational efficiency. In rapidly growing South Asia, Southeast Asia, and the Middle East & Africa, theCompany strengthened supply chain and distribution network, enhanced high-end product lineup andincreased price indices to achieve 9.9% revenues growth in South Asia, 12.4% in Southeast Asia and26.8% in Middle East & Africa in the first half this year.
In the first half of 2024, the net profit attributable to the shareholders of the parent company was
RMB10.42 billion, representing a 16.3% increase from the same period in 2023. The net profit
attributable to the shareholders of the parent company after deducting non-recurring profit or loss
amounted to RMB10.161 billion, representing a growth of 18.1% compared to the same period in2023.
In the first half of 2024, the Company’s gross profit margin was 30.6%, up 0.2 percentage points
compared to the same period in 2023, leveraging digitalizing procurement, R&D, and manufacturing tocoordinate production and sales management systems in domestic market; while we improved costcompetitiveness with digital procurement platform and enhanced utilization through global supply chain
collaboration.
The selling expense ratio in the first half of 2024 was 13.8%, an improvement of 0.5 percentage points
compared to the same period in 2023, leveraging digitally enhanced efficiency in marketing resource
allocation, logistics network and warehouse management.
The administrative expense ratio in the first half of 2024 was 3.8%, an improvement of 0.3 percentage
points compared to the same period in 2023, leveraging streamlining business processes, andenhancing organizational efficiency.
The financial expense ratio in the first half of 2024 was 0.04% (“+” as expenses, “ — ” as income), an
increase of 0.05 percentage points compared to the same period in 2023 as higher interest income
from improved capital management could not offset the increase in interest payment.
The Company’s net cash flow from operating activities in the first half of 2024 was RMB7.818 billion,
an increase of RMB1.028 billion year-on-year, achieved from increased operating profit and enhanced
operational efficiency during the period.

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Section III Management Discussion and Analysis

I.

Household Food Storage and Cooking Solutions(I)
Refrigeration businessIn the first half of 2024, the Company maintained technological leadership and accelerated
overseas high-end brand transformation to improve product competitiveness and market
share. During the reporting period, the Company’s global refrigerator revenue reached
RMB41.128 billion, a year-on-year increase of 1.8%.
According to Gfk, the Company consolidated leadership with offline retail share of 44.1%,
and an online retail share of 39% in China; the Company’s retail volume share also went up
by 0.4 percentage points reaching 22.9% overseas.

R&D
The Company leveraged global technology platforms to accelerate development in integrated
appliances & furniture solutions, freshness preservation, and ice-making. MSA oxygen control
preservation was also made available on more products, to offer user better value for theirpurchase. In response to users’ needs for integrated home appliances and furnishings Casartelaunched built-in Ultra-realm (致 境) 600/601 refrigerator which contributed 98% growth insales volume of seamless built-in units during the first half of the year.
Domestic market
The Company focused on creating optimal user experiences by leveraging multi-brandportfolio of Haier, Casarte and Leader, catering to specific user needs with distinct value
propositions. Haier refrigerators concentrated on full-space freshness preservation
technology and smart features, introduced the world’s first full-space smart preservationcompartment. This innovation combined freshness preservation technology with smart
interaction for superior food storage and management. Casarte refrigerators pioneered
high-end integration of home appliances and furnishings by expanding its built-in range.
Leader attracted trendy users through performance and aesthetic design, new launches in
the first half including Little European style (小 歐 包) series, featuring light green colour,
rounded exterior and drawer-style door design.
Overseas markets
The Company remained committed to premium building by introducing high-end products
tailored to local demands overseas. In Western European market, the Company
strengthened leading position in multi-door, large-capacity units and while making
breakthrough in side-by-side refrigerators, helping Haier brand price index increase to 147.
In South Asian market, the Company tailored high-end products to meet local needs,
achieving a year-on-year volume growth of 50%. In the Australia, Fisher & Paykel
concentrated on ultra-high-end home appliances integrated with home furnishings, with abrand price index reaching 200, while Haier brand targeted mid to high-end mainstream
market, to maintain leadership while elevating its price index to 108.

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Section III Management Discussion and Analysis(II)

Kitchen appliance businessIn the first half of 2024, the kitchen appliance business focused on iterating productplatforms, expanding product lineup, and enhancing presence in home improvement
channels to achieve a global revenue of RMB20.275 billion, a year-on-year increase of
0.3%.
According to Gfk, in China, the Company’s ranked the third in the offline market with 8.6%
retail share, up 0.2 percentage points year-on-year while online retail share went up by 0.7
percentage reaching 5.1%. Casarte ovens ranked first in the price segment above
RMB11,000. In the North America, built-in and microwave products continued to gain
market share against headwind. In Europe, Haier continued to grow and ranked amongst
Top 4 despite industry downtown.

Domestic market
The Company further expanded the kitchen appliance lineup and upgraded productcompetitiveness: Casarte launched a seamless built-in smart lift range hood, an ultra-thinbuilt-in gas stove, and a steam oven featuring waterless fresh steam and moisture-control
roasting technology, all of which contributed to the brand’s 0.8 percentage points sharegain in high-end market.
The Company enhanced presence in home improvement channels by developing
partnerships with cabinet manufacturers and interior designing firms. The Company
managed to grow domestic revenue despite challenging market environment by promoting
content marketing and highlighting local renovations projects to stimulate replacement
demand and capture opportunities from kitchen remodelling projects.

Overseas markets
In North American market, the Company successfully launched a new generation of
dishwashers featuring stainless steel interiors, which ensured durability, high efficiency, withexcellent cleaning and drainage performance. Café’s new-generation stainless steel
dishwasher earned the “2024 Great Design Awards” by the renowned Architectural Digest
for its exceptional flexibility and customization options. The Company launched a newmodel of freestanding ovens and committed USD 118 million to upgrade production line of
new SKUs.
II.

22

Household Laundry Solutions
In the first half of 2024, the washing machine business implemented innovation R&D,
omni-channel marketing, and overall cost optimization to achieve a global revenue of RMB29.737
billion, representing a 5.0% increase year-on-year. According to Gfk, in China, the Company
continued to lead the industry with 46.5% offline retail share and 38.1% online retail share. The
Company remained dominant in the high-end market, with a share of 83% in the price segment
above RMB10,000. According to Euromonitor, the Company achieved top market share in 10
countries, including Australia, New Zealand, and Vietnam.

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Section III Management Discussion and Analysis

Domestic market
The Company consistently delivered high-quality laundry experiences to consumers. The
Company solidify market leadership by introducing leading products such as the Casarte
Ultra-realm (致境) series Utilizing advanced technologies like 3D drying assessment, wet cleaning,and quadruple filtration. The Company also increased average ticket price by offering integrated
laundry solutions while improving user engagement leveraging air wash and wet cleaning in-store
demonstration.
In response to changing consumption trends, the Company adjusted Leader brand strategy,
launching products that resonated with younger users to achieve rapid growth; in addition toenhancing retail capabilities offline, the Company also bolstered marketing efforts on new media
including Douyin and Xiaohongshu to amplify brand influence and create a comprehensive user
service experience, successfully captured young consumers, enhanced brand awareness andimproved user recognition.

Overseas markets
The Company launched highly differentiated and competitive products, with effective retailchannel management strategies, resulting in continued market share growth. In the North
American market, heat pump COMBO washer-dryers remained best-sellers and increased
high-end share. In Europe, the Company launched the X11 Fresh Air series washing machines,
which could replace the air inside the drum every two minutes, effectively preventing bacterial
growth. Their energy efficiency also surpassed the European A-class energy rating by 50%. In
India, the Company maintained high-end product strategy, actively expanded into premium
distribution channels and improved retail traffic conversion to achieve over 30% revenue growth.
III.

Air Solutions
During the reporting period, the Company’s air solution business realized revenue of RMB29.235
billion, up 3.8% year-on-year.

(I)

Home air conditioner businessIn the first half of 2024, the home air conditioner business actively expanded new HVAC
product lines while enhancing competitiveness in products, marketing and supply chains, toachieve global revenue growth.
According to Gfk, the Company’s offline and online retail share of standing andwall-mounted units reached 17.95% and 10.4% respectively in China and ranked first in
Pakistan and Malaysia.

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Section III Management Discussion and Analysis

R&D
The Company expanded ducted air conditioners, fresh air systems, and residential central
air conditioners, while increasing investment in energy-saving air conditioning systems andsmart IoT technologies. The Company also enhanced product quality and costcompetitiveness leveraging digital transformation and product platform strategies. In the firsthalf of the year, average individual model output increased by 10%, and component
standardization improved by 5%. At the same time, the Company accelerated verticalsupply chain integration by commencing production at Zhengzhou compressor joint venture
in April this year as well as increasing in-house component production in Hefei to improve
efficiency and cost competitiveness.
Domestic market
The Company accelerated retail transformation by integrating online and offline channels,
strengthening franchised stores and improving network coverage in rural areas. The
Company implemented omnichannel marketing strategy to enhance user acquisition andconversion by promoting in-store product demonstration and creating bestsellers online. In
addition, revenue from Leader brand grew over 40% in the first half of the year byaccelerating development online to capture younger users.
Overseas markets
Benefited from long-term strategic investments in product iteration, professional channel
development, and localized supply chains across South Asia and Southeast Asia, theCompany seized opportunities from growing emerging countries and product upgrade
demand in developed markets. In the first half of the year, overseas revenue maintained
rapid growth. During the reporting period, the Company strengthened presence in the
Middle East, Africa, and Japan by upgrading variable frequency portable systems, RV air
conditioners, and Japanese split units.
(II)

24

Smart building business
The smart building business gained share in both domestic and export market byadvancing core compressor technologies, maintaining a leading edge in air and magnetic
levitation, boosting in-house manufacturing of key components, and strengthening
professional solutions and services. According to China IOL, the Company’s domestic
market share increased by 1.2 percentage points year-on-year to 10.5%, while export
market share rose by 2.8 percentage points year-on-year to 12.5%.

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Section III Management Discussion and Analysis

R&D
The Company continuously iterated product platform through technology breakthroughs,
leading the industry in energy saving, carbon reduction, and smart control trends. We
developed a 500–1,200 cooling ton air-suspended, oil-free centrifugal chiller, which
completed large-capacity chiller lineup and enhanced market competitiveness.
Breakthroughs in scroll compressors and large standard centrifugal compressors
strengthened cost-competitiveness. Our new-generation IoT multi-split system provided
energy-efficient and smart solutions throughout its lifecycle, the increased domestic share ofmulti-split products in the first half of the year has boosted profitability. In the European
market, the Company addressed demand for energy-efficient buildings with heat pumpproducts using eco-friendly refrigerant R290, which featured a heating COP of up to 5.5
with multiple anti-freezing functions.
Domestic market
The Company unlocked growth opportunities by strengthening county-level presence,eliminated coverage gaps and expanding network coverage. Targeting diverse application
scenarios, such as real estate and underground transportation systems, we categorized
strategic user groups to improve client acquisition, scenario-based solution implementation,and maintenance services, facilitating a shift from standalone HVAC products to integrated
building solutions. During the reporting period, the Company secured a RMB200 million
contract with Shanghai Metro, positioning us as a leader in the rail transit industry.
Overseas markets
The Company capitalized on our leading position in wireless multi-split and air & magnetic
levitation products. By offering comprehensive solutions featuring our light commercial,
multi-split, water chiller, point-of-use, heat pump, and smart control series, we catered todiverse regional, and scenario needs while establishing a professional brand image inoverseas markets. We advanced the development of integrated sales centres thatcombined user experience, product display, employee training, and sales operations toenhance our professional capabilities in design, installation, and services, and boost our
industry reputation. In the rapidly growing global data centre sector, the Company won adata centre project in Malaysia with a scale exceeding 12,000 refrigeration tons, providing
professional air-cooled magnetic levitation solutions for the facility.
IV.

Household Water Solutions
During the reporting period, the household water solution business achieved a global revenue of
RMB8.106 billion, up 6.6% year-on-year.
In China, the Company launched innovative products including Casarte crystal tank series withskin-care features; while 20,000 units of brand new dual-tank heaters have been soldstrengthening Casarte’s market leadership in water heater unit priced RMB5,000- 8,000. Haier
Little Magic box with filtration, anti-bacteria, lime scale and chlorine reduction functions helped
the Company become number one in units priced over RMB3,000.

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Section III Management Discussion and Analysis

Product upgrade also contributed to over 20% overseas revenue growth. In Malaysia, over
10,000 units of instant hot water units were sold, almost five times the volume sold last year. In
Europe, introduction of dual-tank electrical water heaters addressed the weakness in the heatpump market. The Company also made breakthrough in developing new markets in Algeria.
On 17 July 2024, the Company entered the transaction with Electrolux Group in Sweden toacquire 100% equity interest in Electrolux South Africa Proprietary Limited (“ESA”), its subsidiaryengaging in water heater business in South Africa. The acquisition is a crucial step in thestrategic development in African market. Leveraging Kwikot’s extensive HVAC channel andservice coverage, Haier will realize synergies in product and supply chain management to expand
water heater lineups and unlock potentials in solar water heaters and water purifiers.
V.

China Operation
During the reporting period, the Company capitalized on growth opportunities among young
consumers, replacement buyers, and pre-installation customers through continuous innovation in
China.

Network Expansion offline
Enhancing competitiveness in offline channels
By strengthening San Yi Niao’s capability in scenario planning, integrated cabinet and appliancedesign, and scenario implementation, the Company improved “scenario → design → delivery →service” experience, meeting the growing demand for kitchen and bathroom renovations.
The Company enhanced presence in shopping malls to create hubs for brand promotion, image
showcase, solution experience, member engagement, ecosystem co-creation, and trafficmonetization, effectively improving user traffic acquisition and conversion.
The Company also made use of digital mapping tools to identify network gaps, enhanced
coverage and retail competitiveness by empowering local micro enterprises, optimizing resource
allocation and accelerating mechanism reforms.

Model innovation online
By implementing strategies POP store cloud-based warehouse integration and lean user
management, the Company was able to expand product portfolio, facilitate inventory sharing,enhance warehouse and logistics capabilities and promote precise user marketing to improve
efficiency in user management and product turnover, all of which contributed to 17% GMV
growth online during 618 Festival with retail share reaching 22.3%, up 1.8 percentage points
year-on-year.
Multi-Brand Strategy
The Company accelerated iterations of original technologies to expand Casarte’s leading
advantages and achieve revenue growth against the headwind. By enhancing product suite
offerings and spearheading the integration of home appliances with furnishings leveraging Nebula(星 雲) and Ultra-realm (致 境) series, the Company increased user value and brand recognition
while suite sales revenue surged 145% year-on-year in the first half of 2024. The Company also
launched product series online featuring natural aesthetics in appearance and industrial design, toattract younger users and expand brand recognition.

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Section III Management Discussion and Analysis

The Company addressed the needs of young consumers and achieved a retail sales growth of
31% from Leader brand in the first half of the year by launching popular products such as the
Vitality (元 氣) air conditioner and Cloud (雲 朵) washing machine. The Company also introduced“fun small appliances” for trendy travel and camping experiences. On the other hand, theCompany renovated marketing strategies to enhance presence on Douyin and Kuaishou andintegrated in-store livestreaming to achieve a growth of 402%. Additionally, the Company
strengthened partnership with JD and Tmall Campus channel to target young audiences andexpand user base.
VI.

Overseas markets
In the first half of 2024, the Company’s overseas revenue amounted to RMB70.824 billion, up
3.7% compared to the same period in 2023.
The revenue growth stemmed from commitment to strategic positioning, leveraging global R&D
resources and maintaining technological leadership. In response to diverse market demands, theCompany expanded product lineup by enriching mid-range and entry-level offerings alongsidehigh-end products. Building on strengths in traditional categories, the Company enhanced HVAC
and small appliance offerings. Meanwhile, the Company expedited network coverage in emerging
markets, enhanced brand image in mainstream channels, improved conversion rates,
strengthened localized social media presence to increase brand awareness, implementedorganizational reform and accelerated supply chain deployment in Belt and Road countries tocapitalize on growth opportunities.

1.

North America
In the first half of 2024, despite weakness in the U.S. home appliance market, theCompany achieved revenue of RMB39.079 billion, and outperformed the U.S. home
appliance market with core appliance market share growing across all product categories.
The Company continued to enhance leadership in high-end products, successfullylaunching a new generation of oven range series with easy-to-clean baking trays, Café/Profile’s new stainless-steel interior dishwasher series, and innovative products such as theProfile 2.0 chewable ice maker. Profile’s smart indoor smoker, the industry’s first and only
indoor smoker appliance, offered consumers a novel and convenient way to experiencesmoked cooking and earned the Best of CES Award in 2024.
The Company continued to expand into new channels and invest in accelerating new
industry development. At the 2024 AHR Expo, our Air and Water Solutions introduced the
new RealMAX gas water heater and the new-generation dual heat pump, dual heatrecovery system VRF MRV-5H, providing high efficiency and superior comfort for multi-roomcommercial spaces.
During the reporting period, we maintained leading position in construction channels.
Despite weak consumer momentum and competitive pressures, the Company outperformed
the industry by capitalizing on key sales events and became the top performer at the
BrandSource and Nationwide spring sales exhibitions.

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Section III Management Discussion and Analysis

For the 6th consecutive year, the Company was named “Smart Appliance Company of theYear” by IoT Breakthrough. The Company innovatively launched the Eco Balance smart
energy management solution, jointly developed with multiple ecosystem partners, providing
optimal whole-house energy management solutions for net-zero homes in the U.S. The
Company received the Great Place to Work certification for the third time, indicating ourposition among top-tier enterprises in providing an excellent work environment for
employees.

2.

EuropeIn Europe, the Company recorded revenue of RMB14.505 billion, up 9.2% year-on-year,
and market share increased by 0.1 percentage points.
During the reporting period, the Company continued to accelerate strategic upgrade andlaunched several new product platforms that are expected to contribute to long term
growth. Almost 150 new products covering Haier, New Candy and Hoover brands areplanned for the premium kitchen appliance platform to provide comprehensive kitchensolutions. The first batch of new products have been launched in over 150 stores in Spain,
France, Italy, and Poland. The Company also introduced 905 French Door refrigerator series
with class A energy efficiency and New Candy series were launched in 489 stores.
Industry leading front-loading washing machine entered the entire Darty store network in
France, significantly contributing to profit growth. High-end OLED series, mini M95/C900
series were also launched in Spain to capture specific demand for playing games andwatching sports programmes.
On the manufacturing front, the new kitchen appliances factory in Turkey continued to ramp
up its production capacity leveraging coordinated R&D, production platforms and ordermanagement.

3.

Australia & New Zealand
In Australia and New Zealand, the Company recorded revenue of RMB3.225 billion, up
9.3% year-on-year. Connected products grew by 76% and led the market with 2.8
percentage points volume share gain and 2.9 percentage points revenue share gain in
Australia. In New Zealand, Haier and Fisher & Paykel brand outperformed the industry with
0.6 percentage points market share gain.
The Company remained dedicated to meeting consumer demand with cutting-edge
technology and innovative products such as Haier’s 8-star energy efficiency refrigerator,
which directly contributed to 7.4 percentage points market share gain in bottom-mounted
refrigerators; Haier’s ultra-thin tumble dryer integrated heat pump technology to achieve
7-star energy efficiency; Fisher & Paykel also introduced self-cleansing 48 inch oven andinduction cooktop, as well as series 7 and 9 dishwasher with leading energy efficiency
performance.
On the other hand, the Company enhanced presence in mainstream channels such as
Winnings with Fisher & Paykel’s popular built-in refrigerator range and made effort toimprove in-store display of Haier’s kitchen appliances in New Zealand.

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Section III Management Discussion and Analysis

4.

South Asia
During the period, revenue from South Asian market grew 9.9% year-on-year to RMB6.542
billion.
In India, sales revenue grew by over 25% year-on-year, attributable to long-term investment
across the value chain, including products, distribution channels, and after-sales thatsuccessfully built a highly localized operational platform with well-established brandrecognition.
The Company leveraged global-leading R&D capabilities and local insights to launchinnovative products such as the side-by-side refrigerator with seamless welding technology,
significantly improved product lifespan and gained popularity with local consumers,
capturing over 20% market share. Meanwhile, Haier enhanced cost competitiveness byincreasing in-house production of injection moulding parts.
The Company adhered to value-sharing with channel partners, focusing on expanding
network and refining retail operations to ensure strong brand visibility online and offline.
Haier’s physical retail network covered 61% of premium areas and successfully expanded
into 52% of towns and villages. The Company also expanded presence online to capture
growth opportunities.
Haier recognized the importance of serin enhancing user experience and ensuring productquality. Currently, Haier has established an after-sales service team of over 5,000
employees in India, ensuring exceptional customer support and boosting the brand’s
reputation.
In Pakistan, the Company maintained growth momentum by enhancing distribution
channels, expanding local manufacturing, upgrading franchised store network whiledeveloping partnerships with Coca-Cola and Unilever. The Company also focused onbuilding local supply chain, the second phase of the refrigerator factory is expected toapproaching complete soon with 300,000 units annual capacity. Kitchen applianceproduction was also localized with an annual capacity of 100,000 units.

5.

Southeast Asia
During the period, the Company realized revenue of RMB3.492 billion in Southeast Asia, up
12.4% year-on-year.
In Southeast Asia, the Company increased market share through product mix upgrade,
improved offline channel efficiency, social media brand promotion, and local supply chain
deployment. In Thailand, we upgraded the self-cleaning feature of air conditioners with UVsterilization technology, addressing the market demand for healthy living and achieving a
28% growth in air conditioner sales. In Vietnam, we launched AQUA refrigerators featuring
ABT dynamic sterilization and HCS moisture lock compartments. The Company also
introduced smart Color AI washing machines driving AQUA’s market share reach 20%.

Haier Smart Home Co., Ltd. Interim Report 2024

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Section III Management Discussion and Analysis

Regarding distribution channels, the Company effectively improved retail ticket prices andcompetitiveness leveraging store development and product upgrade. We established 86
new AQUA store in Indonesia and secured prime space in CANDI Bali, Indonesia’s second
largest retail channel to enhance premium brand image. The Company implemented auser-centric approach to enhance experience using measures including promoting online/
offline integration, providing personalized marketing and establishing a presence on local
search engines and content platforms in Vietnam. The Company also strengthened local
supply chain deployment. Construction of a new air conditioner factory commenced in
Thailand in April, refrigerator factory in Vietnam has been upgraded to secure production
capacity for both local and neighbouring markets.

6.

Japan
During the period, revenue amounted to RMB1.827 billion in Japan, down 6.2%
year-on-year, a growth of 2.4% in local currency.
In Japan, the Company implemented a dual-brand strategy with AQUA and Haier,enhancing retail competitiveness through product upgrades, channel expansion, andmarketing innovation. The Company captured demands for high-efficiency and smart
appliances with AQUA’s compact, large-capacity heat pump front-load series and theupgraded TX multi-door/TZ ultra-thin large refrigerator to achieve over 30% year-on-year
growth in AQUA’s 500L+ extra-large refrigerators and a 125% growth in heat pumpfront-load washers. Haier’s ultra-slim three-door refrigerators and variable-frequency
washers both grew over 30%. The Company entered air conditioner sector and accelerated
online expansion in response to user trends, creating new growth opportunities. Throughinnovative activities and omni-channel promotion, the Company increased visibility and userconversion rates, maintaining leading market share for refrigerator and freezer products inJapan.

7.

Middle East & Africa
During the period, revenue from the Middle East and Africa grew 26.8% year-on-year to
RMB1.475 billion.
During the reporting period, the Company drove rapid growth through localized
manufacturing, operation upgrades and business acquisitions. During the reporting period,
the first phase of Egypt eco-park in Egypt commenced production, localizing the
manufacturing of air conditioners and washing machines, reducing operational costs, toaccelerate development in Egypt and surrounding markets. The Company strengthened
operation and retail capabilities by focusing on brand and product mix upgrades to improveuser experience across different countries and promote mid-to-high-end products. The
Company announced the acquisition of Electrolux’s water heater business in South Africa.
This acquisition will support the development of solar water heaters and water purifiers inlocal market, while leveraging Kwikot’s channel advantages to promote Haier’s refrigerators,
washing machines amongst others in South Africa and surrounding markets.

30

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis

VII.

Digital transformation
During the reporting period, the Company continued to advance digital transformation along theentire value chain, enhancing competitiveness in user management, R&D, cost management andorder fulfilment. In the first half of the year, the Company’s selling and administrative expense
ratio optimized by 0.8 percentage points.

Enhancing User Management Competitiveness
The Company adopted AI-generated content (AIGC) to improve the quality and efficiency ofmarketing content, while utilizing digital platforms to manage media placement costs andimproved effectiveness through data-driven strategy optimization. During the reporting period,
traffic acquisition costs in the domestic market were optimized by 28%.
The Company carried out digital upgrade of marketing strategies through operating a matrix of
new media accounts and integrating Douyin platform resources to improve traffic acquisition andconversion. In the first half of the year, the proportion of digital retail increased by 25.7%.

Improving Product R&D and Cost Competitiveness
The Company focused on full product lifecycle management, enhancing capabilities in user
insights, product launch and exit strategies, R&D engineering, and cross-functional integration,effectively shortened R&D cycles and enhanced user experience. In the first half of the year,
average model output in the domestic market increased by 7%.
The Company also integrated AI and OCR technologies to automatically identify cost factors andbuild cost models, enabling one-click procurement price comparisons. Cost comparison models
have been established for over 100 types of materials while common component ratio increased
by 13%.
The Company achieved precise pre-production planning and efficient in-process operations
through smart management of labour, machinery, materials, methods, and environment, toimprove order execution accuracy. In the first half of the year, manufacturing (manufacturing andlogistics in factories) cost was optimized by 0.3%, and production efficiency increased by 8%.

Increasing Order Fulfilment Efficiency
The Company achieved real-time responsiveness to customer needs through sharing data insales, supply, production, and logistics, expediting lead time by 12% in the domestic market.
Furthermore, the Company upgraded smart order platform to optimize allocation based on cost
efficiency and reduce cost.

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Section III Management Discussion and Analysis

PART 2. REVIEW OF THE INDUSTRY WHERE THE COMPANY OPERATES DURING
THE REPORTING PERIOD
Industry overview for the first half of 2024
1.
Domestic market
In the first half of 2024, sluggish real estate sector and weak consumer confidence suppressed
demand and put pressure on the white goods sector. According to AVC, retail sales of white
goods and kitchen & bathroom products fell 6.2% year-on-year to RMB290.5 billion in the firsthalf of 2024, while retail volume decreased 2.4% to 113.93 million units. The performance ofmajor sub-sectors was as follows:(1)

Home air conditioning industry
In the first half of 2024, persistent rainfall in eastern and southern China dampened market
demand. The industry’s earlier shipment in the first quarter of 2024, coupled with pressure
on end-user demand, led to elevated inventory levels and intensified competition. According
to AVC, in the first half of 2024, the air conditioner market’s total sales volume dropped
11.0% year-on-year to 33.15 million units across all channels, while sales revenue
decreased 14.5% year-on-year to RMB111.4 billion. The proportion of low-priced models
increased: according to AVC, online sales of 1.5 HP wall-mounted units priced below
RMB2,000 accounted for 22.8% of total sales volume, a year-on-year increase of 6.1
percentage points; whereas the offline product mix ratio of 1.5 HP wall-mounted units
priced above RMB3,500 dropped from 49.6% to 41.9% year-on-year.
As consumers’ increasing attention to air quality and preference towards integration ofhome appliances and furnishings is driving structural upgrades as the industry shifts fromstanding and wall-mounted products to integrated HVAC solutions.

(2)

32

Refrigerator industry
Overall market remained replacement-driven. According to AVC, in the first half of 2024,
China’s refrigerator market achieved a total retail value of RMB65.2 billion across allchannels, a year-on-year increase of 0.4%, while retail volume reached 19.36 million units,
up 0.8% year-on-year. Consumers’ increasing focus on healthy diet and home aesthetics,
are driving the industry towards food freshness preservation and integration of applianceswith furnishings. Built-in refrigerators continued to outperform in the first half of 2024 with
online retail volume accounting for 12.4%, a year-on-year increase of 7.1%, while offline
retail volume accounted for 37.8%, a rise of 19.5% year-on-year.

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis(3)

Washing machine industry
As living standards continue to rise, washer-dryer combos have become industry growth
driver. According to AVC, in the first half of 2024, the washing machine industry achieved
retail sales of RMB49.4 billion, a year-on-year increase of 3.6%, and retail volume reached20.29 million units, up 6.2% year-on-year. Online retail sales of washer-dryer combos
totalled RMB4.34 billion, a year-on-year increase of 43.6%, and retail volume amounted to541,000 units, up 64.1% year-on-year. As home appliances and furnishings become more
integrated, washing machines are gradually upgrading to ultra-thin models to create
enhanced home aesthetic experience.

(4)

Kitchen appliance industry
Traditional kitchen appliances such as range hoods and stoves remained stable,
dishwashers continued to grow and integrated stoves experienced a decline. According to
AVC, in the first half of 2024, range hood retail sales decreased 0.2% year-on-year to
RMB14.9 billion; retail volume dropped 3.3% year-on-year to 8.68 million units. Gas stoveretail sales rose 2.7% year-on-year to RMB8.4 billion, and retail volume increased 4.8% to
10.47 million units. Dishwasher retail sales reached RMB5.8 billion in the first half of 2024,
up 5.0% year-on-year. Retail volume reached 990,000 units, a 3.4% year-on-year increase.
Retail sales of integrated stoves totalled RMB11.1 billion, a year-on-year decline of 18.20%,
and retail volume decreased 15.2% to 1.14 million units. As consumers increasingly pursue
high-quality lifestyles, their demands for quality and design in kitchen appliances continue torise. The industry is trending towards appliance-furnishing integration, smart features,
energy saving, and healthy cooking.

(5)

Water heater industry
Industry demand has stabilized. According to AVC, in the first half of 2024, electric water
heaters recorded retail sales of RMB10.7 billion, down 0.8% year-on-year; retail volume
stood at 8.26 million units, up 1.6% year-on-year. Gas water heaters recorded retail salesof RMB12.8 billion, down 1.0% year-on-year; retail volume totalled 6 million units, up 1.2%
year-on-year. Consumer focus has shifted from safety considerations to design, rapid
heating and comfort, thus popular models include ultra-thin electric water heaters withdual-tank, rapid heating and smart constant-temperature gas units.

(6)

Water purifier industry
The water purification industry maintained steady growth as consumer awareness of healthy
drinking water continued to grow. According to AVC, in the first half of 2024, retail sales ofhousehold water appliances increased 2.3% year-on-year to RMB12.6 billion; retail volume
grew 4.3% year-on-year to 10.1 million units.
Currently, anticipated reduction in income has led to more cautious purchasing decisions.
Value for money has become key considerations in home appliance consumption. Unlike
their parents, consumers in their 20s and 30s utilize new media to gather productinformation when making purchasing decisions, which requires appliance manufacturers tocontinually adapt their branding, marketing, and product development strategies to capture
growth opportunities.

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33

Section III Management Discussion and Analysis

The white goods industry has become primarily upgrades and replacement-driven. The proportionof first-time buyers is gradually declining, while demand for replacements due to homerenovations is on the rise. Consumers are increasingly seeking to enhance their quality of life
through kitchen and bathroom upgrades. As a result, comprehensive capabilities in scenario
design, installation, and maintenance services have become crucial for acquiring uses.
In the first half of 2024, there was a significant price increase in copper, aluminium, andrefrigerants, which had a significant impact on the profitability of the industry, particularly in the
air conditioner sector.

2.

Overseas markets
In the first half of 2024, overseas market demand exhibited mixed trends. Core home appliancemarkets in developed regions (Europe, U.S., Japan) remained under macroeconomic pressure.
However, emerging markets, including Southeast Asia, South Asia, the Middle East, and Africa,
maintained robust growth.
In the U.S, industry demand declined due to a downturn in both existing and new home sales.
According to AHAM, core appliance shipments in the first half of 2024 decreased by 2% involume and 6% in value year-on-year while competition remained fierce.
In Europe, persistent high inflation and interest rates continued to dampen consumer sentiment;
the home appliance industry remained sluggish. Demand was shifting towards value-for-money
products. GfK data reported a 0.3% decline in sales volume and a 1.3% decrease in sales value
for white goods across 21 European countries. However, green and low-carbon trends, as wellas energy price pressure created increasing demand for energy-efficient products and unlock
opportunities in HVAC sector with ongoing consolidation across the industry.
Benefiting from macroeconomic growth in India, the home appliance industry grew by 7–8%. The
refrigerator and washing machine sector increased by 5–6%, while the air conditioner sector,
boosted by hot temperatures in the north, saw over 30% retail growth. Driven by economic
growth and rising per capita income in Pakistan, the home appliance industry sustained growthin the first half of the year.
According to Gfk, Thailand’s market grew by approximately 3%, driven by recoveries in foreign
investment and tourism. Air conditioner sales volume surged over 20% due to hot temperatures.
Vietnam experienced double-digit growth in the home appliance sector, bolstered by increased
foreign investment. Indonesia’s stable political and economic environment, coupled with risinghousehold disposable income, contributed to a 6% growth in the home appliance industry.

34

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis

Due to high interest rates and inflation, consumers increasingly sought value-for-money productsin Australia and New Zealand. According to data from major Australian home appliance retailchannels, sales volume grew by 4.6% year-on-year in the first half of 2024, while sales value
increased by 1.7%.
The refrigerator, freezer, and washing machine sectors declines in volume, price, and revenue inJapan because of inflation, currency depreciation, declining disposable income, longer
replacement cycles and ongoing price competition. Consumers have become more interested inseeking added-value in products with large capacity, compact size, energy efficiency, and smart
features.
Industry Outlook for 2H2024
Domestic market
The Chinese home appliance industry has entered replacements and upgrades phase. According to
China Household Electric Appliance Research Institute, the penetration of air conditioners, refrigerators,
and washing machines across the country in 2022 amounted to 780 million, 580 million, and 550
million units respectively. A massive replacement market has already emerged.
The industry showed a clear trend towards lower-end products because of cautious income growth
expectations and weakened consumer confidence. On 15 July 2024, the National Development andReform Commission and the Ministry of Finance jointly issued “Measures to Support Large-scale
Equipment Renewal and Trade-in of Consumer Goods”. The implementation of these measures is
expected to stimulate consumer demand for upgrades, boost consumer confidence, and promoteindustry development.

Overseas markets
In the second half of 2024, interest rate cut is expected in the developed countries, where pent-up
demand can be released to gradually revitalize the real estate market. Price competition is expected toease due to home appliance manufacturers’ focus on operational quality and high commodity prices.
The industry is poised for steady growth in the emerging markets where continued urbanization is
expected to drive appliance penetration and home appliance manufacturers are also accelerating the
localization of their supply chains.

Haier Smart Home Co., Ltd. Interim Report 2024

35

Section III Management Discussion and Analysis

PART 3. DEVELOPMENT PLAN FOR THE SECOND HALF OF THE YEAR
In the second half of 2024, amid dynamic changes in demand and an increasingly competitiveenvironment, the Company will continue to focus on iteratively optimizing user experience andimproving operational efficiency. We aim to enhance profitability by leveraging advantages intechnology, scale and service, while accelerating innovation and transformation to achieve long-termsustainable growth.
Product Innovation
We will continue to uphold our value-oriented approach by integrating global R&D and planningresources, accelerating technology sharing, and promoting the rapid implementation of leading
technologies and innovations across a wider range of products, to better meet the ever-changing
needs of our users.
Domestic market
In the second half of 2024, we will align with the national trade-in policy and achieve sustainablegrowth through innovative marketing and channel strategies. We will leverage the Company’s
advantages in product lineup, scenario-based solutions, and franchised store network to capitalize on
trade-in subsidy opportunities, meeting users’ upgrade needs and driving retail growth. We will adapt
our marketing content and communication strategies to changing consumer decision-making processes
while adding on to brand value by improving go-to-market strategy and increase conversion efficiency
through new media. We will deepen our user-centric transformation by establishing efficient systems fororder forecasting, distribution and response, thereby enhancing user experience and customer
satisfaction.
Overseas markets
We will focus on improving profitability by expanding value chain through continuous productupgrades, accelerating supply chain localization, implementing end-to-end digital transformation anddeepening global collaborations, to enhance profitability and achieve growth targets.
In the U.S., Australia, and New Zealand, we will strengthen profitability by improving supply chain
efficiency and iterating product platforms. In Europe, we will enhance competitiveness by optimizingorganizational structure, streamlining business processes, and promoting brand transformation. We willcontinue localization along the Belt and Road Initiative in South Asia, Southeast Asia, Middle East andAfrica, to capitalize on population growth and penetration increases, thus become a leading brand inthese regions.
Platform transformation
We will advance the digital transformation in production, procurement, and quality systems to enhancelean management capabilities across design, procurement, and production stages, while optimizing
end-to-end cost competitiveness.
Significant changes in the Company’s operating conditions during the reporting period, and mattersoccurring during the reporting period that have and expected to have a significant impact on the
Company’s operating conditions□ Applicable36√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis

IV. MAJOR OPERATIONS DURING THE REPORTING PERIOD(I)

Analysis of principal business1

Table of movement analysis on the related items in financial statements
Unit and Currency: RMB

Items

Current period

Corresponding
period oflast year

Operating revenue
135,622,549,121.01 131,628,595,912.05
Operating cost
94,106,431,686.66 91,557,518,745.02
Selling expenses
18,687,502,154.89 18,768,944,057.44
Administrative expenses
5,186,349,563.44
5,461,681,481.50–9,349,269.09
Financial expenses
58,919,168.65
R&D expenses
5,088,901,166.88
5,025,786,116.64
Net cash flow generated fromoperating activities
7,818,257,937.26
6,790,021,534.62
Net cash flow generated from
–7,334,174,927.57 –4,333,325,021.19
investing activities
Net cash flow generated from
–191,176,728.11 –1,267,997,912.18
financing activities
Gains or losses on changes in–29,565,597.82
fair value
31,271,562.35–58,013,951.73–165,968,929.36
Credit impairment loss
–2,583,904.37–20,647,304.64
Losses on disposal of assets
Non-operating expenses
84,518,604.74
32,299,513.21
Profits or losses attributable tominority shareholders
187,104,752.91
80,831,283.76

Change (%)
3.03
2.78
-0.43
-5.04
N/A
1.26
15.14
N/A
N/A
-194.54
N/A
N/A
161.67131.48Haier Smart Home Co., Ltd. Interim Report 2024

37

Section III Management Discussion and Analysis

Reasons for significant changes in certain indicators:

2

1)

Reasons for the changes in financial expenses: the increase of 730.20% in financial
expenses over the corresponding period was mainly due to the additional interest
expenses incurred overseas as a result of higher interest rates on borrowings due tointerest rate hikes during the current period;

2)

Reasons for the changes in the gains or losses on changes in fair value: the decreaseof 194.54% in profits or losses of changes in fair value (being losses during thecurrent period) over the corresponding period was mainly due to the decrease in fairvalue of equity investments during the current period;

3)

Reasons for changes in credit impairment loss: the decrease of 65.05% in credit
impairment loss over the corresponding period was mainly due to the decrease in theprovision for bad debts of receivables during the current period;

4)

Reasons for changes in losses on disposal of assets: the decrease of 87.49% in losses
on disposal of assets over the corresponding period was mainly due to the decreasein non-current asset disposal operations during the current period;

5)

Reasons for changes in non-operating expenses: the increase of 161.67% in nonoperating expenses over the corresponding period was mainly due to the year-onyear increase in expenses incurred during the current period that were not directly
related to the Company’s ordinary operation;

6)

Reasons for changes in profits or losses attributable to minority shareholders: theincrease of 131.48% in profits or losses attributable to minority shareholders over thecorresponding period was mainly due to the increase in shareholding of minority
shareholders in certain subsidiaries during the current period;

7)

Reasons for changes in net cash flow from investing activities: the increase of 69.25%
in net cash flow from investing activities over the corresponding period was mainly
due to the increase in cash paid for investment during the current period;

8)

Reasons for changes in net cash flow from financing activities: the decrease of 84.92%
in net cash outflow from financing activities over the corresponding period was mainly
due to the increase in cash inflow from financing activities as a result of higher
borrowing, and the decrease in cash outflow from financing activities attributable tothe decrease in repurchased shares during the current period.

Detailed explanation on significant changes in the operation types and thecomponents of profit or sources of profit of the Company during the period□ Applicable38√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis(II)

Explanations on the major changes in profits caused by non-principal businesses□ Applicable√ Not Applicable(III) Analysis of assets and liabilities√ Applicable1.

□ Not Applicable

Assets and liabilities
Unit: RMB
Percentage ofPercentage ofchange in amountamount at the end from the end of thePercentage of Amount at the end
amount at the end
Amount at the end of current period toof theof thecorresponding

corresponding

period of last year

corresponding

period of last year

to current period

Name of itemof current period

total assets (%)

period of last year

to total assets (%)(%)

Debt investments

14,477,621,780.97

5.52

8,841,233,078.66

3.49

63.75

Description

Mainly due to theincrease inlong-term time
deposits during
the current period

Contract liabilities

3,256,026,994.75

1.24

7,731,916,491.54

3.05-57.89Mainly due to thedecrease inadvance payment
with performanceobligations

Other payables

27,248,243,510.90

10.39

19,181,569,184.83

7.57

42.05

Mainly due to theincrease individends
payableNon-current liabilities due

5,327,717,384.22

2.03

3,732,550,549.23

1.47

42.74

within one year

Mainly due to theincrease inlong-term
borrowings due
within one year

Other current liabilities

1,095,321,670.22

0.42

1,651,239,151.52

0.65-33.67

Mainly due to thedecrease in
Value-added tax
amount to be
written off

Haier Smart Home Co., Ltd. Interim Report 2024

39

Section III Management Discussion and Analysis

2.

Overseas Assets√ Applicable□ Not Applicable(1)

Scope of assets
Among the assets, overseas assets amounted to 12,413,782 (unit and currency:
RMB0,000), representing 47.3% of the total assets.

(2)

Explanation of high percentage of overseas assets√ Applicable□ Not Applicable
Unit and Currency: RMB

Name of overseas asset

Reason for formation

Operating mode

Overseas Home Appliance andSmart Home Business

Overseas mergers &acquisitions and theCompany’s own
development

Localized Operations with the
integration of R&D,
manufacturing and marketing

Operating revenue
during the reporting
periodNet profit of thereporting period

70,824,200,424

4,081,094,577

Note: Net profit stated in the above table represents operating profit.

3.

Restrictions on major assets as of the end of reporting period□ Applicable4.

√ Not Applicable

Other Explanations□ Applicable√ Not Applicable(IV) Analysis of investment
1.

Overall analysis on external equity investment□ Applicable(1).

√ Not Applicable

Significant equity investment□ Applicable(2).

Significant non-equity investment□ Applicable40√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

√ Not ApplicableSection III Management Discussion and Analysis(3).

Financial items measured at fair value□ Not Applicable√ Applicable

Unit and Currency: RMB

Asset type

Profits or losses
Cumulativeof changes in fair changes in fair
Provision forvalue during the value included in impairment of Purchases during
Opening balance
periodequity during the period
the period

Wealth management products
Investment in other equity instruments
Investment in trading equity instruments
Investment funds
Derivative instruments

487,936,101.81
6,403,694,954.77
243,224,439.64
222,803,002.38–101,059,175.53–54,049,574.20
22,787,943.83
11,289,463.13–10,992,021.14

Total

7,256,599,323.07–12,105,998.41–150,616,395.49

7,866,168.83

907,048,190.63
2,390,644.03–139,624,374.35

Sold/redeemedamount during
the period

Other changes Closing balance

797,001,032.70

31,168,225.04

172,919.49
8,709,245.29

940,607,059.70

805,883,197.48

605,849,428.57
15,353,142.08 6,281,814,366.53
189,001,945.95
3,668,458.53 271,718,384.49–4,276,205.97 –105,037,939.51
14,745,394.64 7,243,346,186.03

Investment in securities□ Not Applicable√ Applicable

Unit and Currency: RMB

Sourcesof funding

Profit and loss
Carrying arising fromamount at the changes in fair
beginning of value during
the period
the period

Accumulated
fair valuechanges
included inequityPurchases
during theperiodDisposals
during theperiodInvestment
Carrying
profit or loss amount at theduring theend of theperiodperiodType ofsecurities

Securities
code

Securities abbreviation

Initialinvestment
cost

Stock
Stock
Stock
Stock

601328600827300183688455

Bank of Communications
Bailian Group
Neusoft Carrier
KENGIC

1,803,769.50
154,770.00
18,713,562.84
29,450,000.00

Self-funding
Self-funding
Self-funding
Self-funding

7,819,326.48
373,792.12
11,795,641.74
146,788,044.20 –54,049,574.20

883,760.12

8,703,086.60
373,792.12
11,795,641.74
92,738,470.00

Investments in other equity instruments
Investments in other equity instruments
Investments in other equity instruments
Financial assets held for trading

Total

/

/

50,122,102.34/

166,776,804.54 –54,049,574.20

883,760.12

113,610,990.46/

Accounting items

Explanation of investment in securities□ Applicable√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

41

Section III Management Discussion and Analysis

Private equity investment√ Applicable□ Not Applicable

By the end of the reporting period, the Company has historically invested in private
equity funds as follows: the Company invested 63.13% share in Qingdao Haier SAIF
Smart Home Industry Investment Center (Limited Partnership); Qingdao RRS Huitong
Investment Management Co., Ltd. (青 島 日 日 順 匯 通 投 資 管 理 有 限 公 司), a subsidiaryof the Company, invested 49% share in Guangzhou Heying Investment Partnership(Limited Partnership); Qingdao Haishang Chuangzhi Investment Co., Ltd. (青島海尚創
智 投 資 有 限 公 司), a subsidiary of the Company, invested 30% share in
Huizhixiangshun Equity Investment Fund (Qingdao) Partnership (Limited Partnership), a
private equity fund, and 50% equity of Qingdao Ririshun Huizhi Investment Co., Ltd.,a managing partner of funds; Qingdao Haier Technology Investment Co., Ltd. (青島海爾科技投資有限公司), a subsidiary of the Company, invested in private equity funds:
1.265% share in Beijing-Tianjin-Hebei Industrial Coordinated Development Investment
Fund (Limited Partnership) (京津冀產業協同發展投資基金（有限合伙）), 14.85% sharein Shenzhen TopoScend Capital Phase I Fund (Limited Partnership) (深 圳 市 投 控 東 海
一 期 基 金（有 限 合 伙）), 24% share in Qingdao Haimu Smart Home Investment
Partnership (Limited Partnership), and invested in fund management companies:
5.01% equity of CMG-SDIC Capital Co., Ltd. (國 投 招 商 投 資 管 理 有 限 公 司), 15%equity of Shenzhen TopoScend Capital Co., Ltd. (深圳市投控東海投資有限公司), 49%
equity of Qingdao Haimu Investment Management Co., Ltd.

42

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis

Derivative investment√ Applicable(1).

□ Not Applicable

Derivatives investments for hedging purposes during the reporting period√ Applicable□ Not Applicable
Unit and Currency: RMB0’000

Type ofderivatives
investment
Forward foreignexchange
contracts
Forwardcommodity
contracts
Total

Carrying amount
Initial at the beginninginvestmentof theamount current period

Proportion ofcarrying amountto net assets ofGains or losses
Accumulative
Amountthe Company at
on fair value changes in fairpurchased
Amount sold Carrying amount the end of thechanges for the value included induring theduring the at the end of the reporting period
current period
equity reporting period reporting period
Period(%)

1,178,657

1,178,657

1,272–2,195

1,024,425

9.69

11,00911,009

–143

1,096

4,081

0.04

1,189,666

1,189,666

1,129–1,099

1,028,506

9.73

Explanation on any significant
changes in the accounting policies
and specific accounting andauditing principles for the hedging
business during the reporting period
as compared to the last reporting
periodExplanation on actual profit or loss
during the reporting period
Explanation on the effect ofhedging
Source of funds for derivative
investments

Accounting principles are based on the Accounting Standards for Business Enterprises. The Company carried out the accounting
treatment for its business in accordance with the relevant regulations of “Accounting Standards for Business Enterprises No. 22— Recognition and Measurement of Financial Instruments”, “Accounting Standards for Business Enterprises No. 24 — Hedge
Accounting”, “Accounting Standards for Business Enterprises No. 37 — Presentation of Financial Instruments” and “AccountingStandards for Business Enterprises No. 39 — Fair Value Measurement” published by the Ministry of Finance and its guidance, toreflect the relevant items in the balance sheet and the statement of profit or loss, which are consistent with those of the previous
reporting period.
The actual profit and loss for the reporting period amounted to RMB42.5669 million.
Under the premise of ensuring normal production and operation, the Company carried out hedging business to reduce the impact
of exchange rate fluctuations on the Company’s production and operation and to realize the Company’s long-term stabledevelopment.
Self-owned funds

Haier Smart Home Co., Ltd. Interim Report 2024

43

Section III Management Discussion and Analysis

Risk analysis and explanations onrisk control measures for positions
in derivatives during the reporting
period (including but not limited tomarket risk, liquidity risk, credit risk,
operational risk, legal risk, etc.)

I.

Foreign exchange hedging business

1.

Risk Analysis

The Company and its holding subsidiaries conduct foreign exchange derivatives business in accordance with the principle ofstability, and do not conduct the foreign exchange transaction for speculative purposes. All foreign exchange funds businesses
are based on normal production and operation and rely on specific business operations to avoid and prevent exchange rate risks.
However, there are also certain risks in conducting foreign exchange funds business:(1) Market risk: Forward settlement of foreign exchange: the Company will determine whether to sign a forward contract basedon the cost of the product (basically consisting of RMB) and market risk. Signing the contract equals to fixing the price of
currency exchange. It is effective to resist market fluctuation risk and ensure a reasonable and stable profit level of theCompany through forward settlement of foreign exchange. Forward purchase of foreign exchange: according to the importcontract entered with the customer and exchange rate risk, the future currency exchange cost will be fixed through theunilateral forward purchase of foreign exchange. Although there is a certain risk of loss, the forward purchase of foreignexchange will effectively reduce the market fluctuation risk and fix procurement costs. Other NDF and options businesses aremainly carried out when failed to sign the ordinary forward settlement/purchase of foreign exchange or the costs are too
high, only serving as the supplement of the above businesses. Exchange rate fluctuation risk in currency swap business isavoided by adjusting the currency of assets and liabilities in order to match the currency of the assets with the currency of
liabilities. Interest rate fluctuation risk in interest rate swap business is avoided by transfer the floating-rate business to fix-ratebusiness or transfer the fixed-rate business to floating-rate business when the rate is going downward to reduce the costs.
All of the above businesses have a real business background and there is no speculation.
(2) Exchange rate fluctuation risk: After the Company fixing the forward exchange rate according to the foreign exchange
management strategy, if the actual trend of the foreign exchange rate deviates significantly from the direction of theCompany’s fixed exchange rate fluctuation, the cost of the Company after fixing the exchange rate expenditure may exceeds
the cost of not fixing the exchange rate, thus forming a loss of the Company. When the foreign exchange rate changes
greatly, if the fluctuating direction of the Company’s fixed foreign exchange hedging contract is inconsistent with that of theforeign exchange rate, the foreign exchange loss will be formed; if the exchange rate does not fluctuate in the future, thevast deviation from the foreign exchange hedging contract will also form a foreign exchange loss.
(3) Internal control risk: The foreign exchange derivatives business is highly specialized and complex so it may cause risks due
to imperfect internal control systems.
(4) Transaction default risk: In the event of a default in the counterparty of foreign exchange derivative transaction, the Company
would not be able to obtain hedging profits as agreed to hedge the Company’s actual exchange losses, resulting in a loss of
the Company.
(5) Customer default risk: The overdue of customer’s accounts receivable and the customer’s order adjustment will make theactual payment inconsistent with the expected payment, which may result in the actual cash flow could not match the carriedout foreign exchange derivative business term or amount completely, leading to a loss of the Company.
2. Risk Control Measures Taken by the Company(1) The Company may not engage in any foreign exchange derivative transactions except those carried out for the purpose of
avoiding exchange rate risks, and only for foreign exchange operations related to the Company’s import and export businessand overseas asset/liability management.
(2) The Company implemented approval process in strict compliance with the Foreign Exchange Risk Management Policy and theForeign Exchange Derivatives Transaction Management Rules. The general meeting of shareholders of the Company and theBoard of Directors delegate the President/President Office to take responsibility for the operation and management of theforeign exchange derivatives business, the Treasury Department shall act as the handling department, and financedepartment shall act as the daily review department.
(3) The Company conducts foreign exchange derivatives business with financial institutions such as large banks with legal
qualifications. The financial department timely tracks the changes in the transaction and strictly controls the occurrence ofclosing default risk.

44

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis(4) The Company conducts foreign exchange derivatives business must base on the Company’s cautious forecast on the foreign
currency receipts and payments and actual business exposure. The delivery date of the foreign exchange derivatives
business must match with the Company’s predicted receipt time, deposit time or payment time of the foreign currency, ormatch with the corresponding redemption term of the foreign currency bank borrowing.
II. Bulk Hedging Business
1.

Risk Analysis(1) Market risk: The futures and derivatives market itself has certain systematic risks, while hedging requires certain level of pricetrend prediction. If the price prediction is directionally incorrect, it may cause losses to the Company.
(2) Policy risk: Significant changes in laws and regulations of the futures and derivatives markets may cause market fluctuations
or make trading impossible, which may result in risks.
(3) Funding risk: Due to the strict margin system and daily mark-to-market system in the futures market, there may be corresponding
funding floating loss risks. The Company will reasonably allocate its own funds for hedging business, control the scale offunds, and conduct funding projections while formulating trading plans to ensure sufficient funds. In the process of business
operations, the Company will plan and utilize margins reasonably, and adjust funds appropriately to avoid risks.
(4) Operational risk: There may be cases in which suppliers violate their agreements and cancel or delay deliveries, resulting in amismatch between the actual hedging quantity and period, causing losses to the Company.
(5) Internal control risk: Futures and derivatives transactions are more specialized and complex, which may give rise to risks caused
by inadequate internal control systems or human errors in operations. The Company has formulated the Management
Measures for Hedging Business of Bulk Raw Materials, which contains clear provisions on the authorization scope, approval
procedures, risk management and other aspects of hedging transactions. The Company shall strengthen internal control
management and improve professionalism, implement risk prevention measures and improve the management standard ofhedging business.
2. Risk control measures adopted by the Company(1) Matching hedging business with the Company’s production and operation to maximize hedging against the risk of market
fluctuations.
(2) Strictly control the scale of hedging funds and reasonably plan and use margins. The Company will reasonably allocate its own
funds for hedging business, and will not use raised funds directly or indirectly for hedging.
(3) The Company has formulated the Management Measures for Hedging Business of Bulk Raw Materials, which contains clear
provisions on the organizational structure and its responsibilities, business processes, risk management, file management, etc.
The Company will strictly follow the provisions of the internal control system to control all aspects of the business, and will
implement the Management Measures in accordance with the established regulations.
(4) The Company will strengthen the training of relevant personnel to enhance their professionalism and overall quality; strengthen
research on the futures and derivatives market to grasp market changes and design specific operational plans for tradingbusiness.
(5) The internal audit department of the Company will conduct regular and irregular inspections of hedging trading business,supervise hedging trading business personnel in the implementation of the risk management system and risk management
procedures, and prevent operational risks in the business in a timely manner.

Haier Smart Home Co., Ltd. Interim Report 2024

45

Section III Management Discussion and Analysis

Changes in market price or fairvalue of invested derivatives during
the reporting period, where specificmethodology used and the settingsof relevant assumptions andparameters should be disclosed in
the fair value analysis of derivatives
Litigation case (if applicable)
Disclosure date of announcement inrelation to the consideration andapproval of derivatives investmentby the Board (if any)
Disclosure date of announcement inrelation to the consideration and theapproval of derivatives investment
by shareholders’ general meeting (ifany)

In respect of changes in market prices or fair value of products, gains or losses actually realized from the invested derivatives
amounted to RMB42.5669 million during the reporting period. As for the specific methodology used and the related assumptions
and parameter settings: Foreign exchange and interest rate swap forward quotations from financial institutions were used.

N/A
28 March 2024

21 June 2024

(2).

Derivatives investments for investment purposes during the reporting period□ Applicable(V)√ Not Applicable

Sale of material assets and equity□ Applicable√ Not Applicable(VI) Analysis on major subsidiaries and Investees√ Applicable□ Not Applicable

For details, please refer to the relevant contents of “(2) Explanation of high percentage ofoverseas assets” under “(III) Analysis of assets and liabilities” in this section.

(VII) Structured entities controlled by the Company□ ApplicableV.

OTHER DISCLOSURES(I)

Potential risks√ Applicable1.

46√ Not Applicable□ Not Applicable

Risk of decreasing market demand due to macroeconomic slowdown. Sales of white goods
as durable consumer appliances are subject to users’ income levels and their expectationsof future income growth which will have a certain impact on their willingness to purchaseproducts. A slowdown in macroeconomic growth causing a decline in users’ purchasing
power will have a negative impact on industry growth. In addition, a slowdown in realestate market will also have a negative impact on market demand, which will indirectly
affect end-user demand for home appliances.

Haier Smart Home Co., Ltd. Interim Report 2024

Section III Management Discussion and Analysis

2.

Risk of price war caused by intensified industry competitions. The white goods industry ishighly competitive with a high degree of product homogeneity, and the industry
concentration has continued to increase in recent years. However, the increase in industry
inventory capacity in individual sub-sectors due to the demand-supply imbalance may leadto risks such as price wars. Furthermore, rapid technological advancements, scarce talentsin the industry, shortened product life cycles and ease of imitation are making it
increasingly difficult to profit. Although new products, services and technologies are often
associated with higher selling prices, it has become necessary for the Company to invest
more in R&D. The Company will actively invest in R&D to attract more users throughcontinuous innovation in products and services, to build a lasting brand awareness.

3.

Risk of fluctuations in raw material prices. The Company’s products and core components
use metal raw materials such as steel, aluminium, and copper, as well as commodities
such as plastics and foam. If the prices of raw materials continue to surge, it will put
certain pressure on the Company’s production and operations. In addition, the Company
relies on third party manufacturers and suppliers for key raw materials, components, andmanufacturing equipment, as well as OEM suppliers, and any disruption in supply or
significant price increases by these suppliers will have a negative impact on the Company’sbusiness. As a leader in the industry, the Company will take measures including volume &price adjustment mechanism as well as hedging to reduce the risk of raw material
fluctuations on its operations.

4.

Operational risks in overseas business. The Company has steadily developed its global
business and has established production bases, R&D centres, and marketing centres inmany parts of the world, with the proportion of overseas revenue increasing year by year.
Overseas markets are subject to local political and economic situations (including events
such as military conflicts and wars), legal systems and regulatory regimes of thosecountries and regions. Significant changes in these factors will pose certain risks to theCompany’s local operations in these markets. The Company has taken various measures tomitigate the relevant impacts, including collaborating with suppliers and distributors,
improving production efficiency to offset the impact on the overall cost of sales, potentiallyexpanding the Company’s supply resources to other countries, and adopting safetymeasures to protect its people and assets.

5.

Risk of exchange rate fluctuations. As the Company expands its global footprint, the importand export of the Company’s products involve the exchange of foreign currencies such as
the U.S. dollar, the Euro, and the Japanese yen. If the exchange rates of the relevant
currencies fluctuate, it will have a certain impact on the Company’s financial position andincrease its financial costs. In addition, the Company’s consolidated financial statements aredenominated in Renminbi, while the financial statements of its subsidiaries are measured
and reported in the currency of their primary economic environment in which the entity
operates and are therefore subject to currency exchange risk. In this regard, the Company
uses hedging instruments to reduce its exposure to exchange rate fluctuations.

Haier Smart Home Co., Ltd. Interim Report 2024

47

Section III Management Discussion and Analysis

(II)

6.

Risk of policy changes. The home appliance industry is closely related to the consumer
market and the real estate market. Changes in macroeconomic policies, consumption
investment policies, real estate policies and relevant laws and regulations will affect productdemand from distributors, which in turn will affect product sales of the Company. The
Company will closely monitor changes in the relevant policies, laws, and regulations, andmake forecasts of market changes, in order to ensure further development of theCompany.

7.

Credit risk. There is possibility that the Company will be unable to collect all trade receivablesfrom its distributors, or distributors are not able to settle the Company’s trade receivables
in a timely manner, in which the Company’s business, financial status, and operation
performance may be affected. In relation to this risk, the Company will maintain flexibility byoffering credit period of 30 to 90 days to certain distributors based on their credit history
and transaction amount.

8.

Inventory risk. Excess inventory might occur as the Company cannot always accurately predict
trends and events and maintain appropriate inventory levels; thus, the Company may beforced to offer discounts or promotions to manage the slow-moving inventory. On the other
hand, a shortage of inventory may lead to loss of sales opportunities for the Company.
However, the Company will manage its inventory and adjust according to market situation
and will conduct regular impairment assessment of its inventory.

Other disclosures□ Applicable48√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section IV Corporate GovernanceI.

INTRODUCTION TO THE GENERAL MEETINGS OF SHAREHOLDERS
Date ofdisclosure forQuery index of websites designated for

publishing

MeetingDatepublishing resolutions

resolutions

Resolutions approved2023 Annual General

20 June 2024

For details, please refer to the

21 June 2024

Considered and approved theMeetingAnnouncement on Resolutions passed at

resolutions related to annual

the 2023 Annual General Meeting, 2024

report, internal control audit

First A Shares Class Meeting, 2024 First

report, profit distribution

D Shares Class Meeting and 2024 First

proposal, re-appointment of

H Shares Class Meeting of Haier Smart

auditor, external guarantees,

2024 First D SharesHome Co., Ltd. (L2024-022) publishedgeneral mandate to issue

Class Meetingby the Company on the website ofadditional shares /Shanghai Stock Exchange

repurchase shares and(www.sse.com.cn) and the four major

employee stock ownershipsecurities newspapers

plan, etc.

2024 First A Shares Class
Meeting2024 First H Shares Class
Meeting

Considered and approved theresolutions for generalmandate to repurchaseshares, etc.

Preferred shareholders whose voting rights have been restored requested an
extraordinary general meeting□ Applicable√ Not Applicable

Explanation of Shareholders’ general meeting√ Applicable□ Not Applicable

The 2023 Annual General Meeting and the 2024 First A/D/H Shares Class Meetings of theCompany was held in successive order by way of on-site voting, off-site voting and network voting bypoll at Room B101, Haier Rendanheyi Research Center, Haier Science and Technology Innovation
Ecological Park, No.1 Haier Road, Qingdao, the PRC, in the afternoon on 20 June 2024, considering
the annual report and other relevant resolutions. The total number of the shares of the Company
carrying voting right amounted to 9,292,876,856 shares (of which 6,163,314,617 shares were A
shares, 271,013,973 shares were D shares and 2,858,548,266 shares were H shares). 602
shareholders and proxies, representing 6,427,260,204 shares or 69.16% of the total number of theshares of the Company carrying voting right, were present at the 2023 Annual General Meeting. 545
shareholders and proxies, representing 4,144,199,609 shares or 67.24% of the total number of A
shares of the Company carrying voting rights, were present at the 2024 First A Shares Class Meeting;
51 shareholders and proxies, representing 167,459,817 shares or 61.79% of the total number of D
shares of the Company carrying voting rights, were present at the 2024 First D Shares Class Meeting;
6 shareholders and proxies, representing 2,111,641,413 shares or 73.87% of the total number of H
shares of the Company carrying voting rights, were present at the 2024 First H Shares Class Meeting.
The Directors, supervisors, and senior management of the Company as well as the lawyers engaged
by the Company also attended the abovementioned four meetings. The abovementioned meetings wereconvened by the Board of the Company and Chairman Mr. Li Huagang presided over the meetings.

Haier Smart Home Co., Ltd. Interim Report 2024

49

Section IV Corporate Governance

The Company had 9 Directors, of whom 9 Directors attended the meetings; the Company had 3
supervisors, of whom 3 supervisors attended the meeting. The secretary to the Board of the Company
attended the abovementioned meetings and other members of senior management of the Company
were invited to attend the abovementioned meetings.

II.

CHANGES IN DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
OF THE COMPANY√ Applicable□ Not Applicable

Name

Position Held

Description of Change

Ma Yingjie
Liu Yongfei

Supervisor
Supervisor

Departed
ElectedExplanation of changes in Directors, Supervisors and senior management of the Company√ Applicable□ Not Applicable

Ma Yingjie, a Supervisor of the Company, has retired and hence intends to resign as a Supervisor
upon a new Supervisor has been elected at the general meeting. On 20 June 2024, pursuant to theelection results of the 2023 Annual General Meeting, Liu Yongfei was elected as a new Supervisor of
the Company. Accordingly, there was a change in the Supervisors of the Company during thereporting period.

III. PROPOSAL OF PROFIT DISTRIBUTION OR CAPITALIZATION OF
CAPITAL RESERVE
Proposal for interim profit distribution and proposal for reverse conversion into sharecapitalWhether distributed or converted

50

Haier Smart Home Co., Ltd. Interim Report 2024

NoSection IV Corporate Governance

IV. EQUITY INCENTIVE PLAN, EMPLOYEE STOCK OWNERSHIP PLAN OR
OTHER EMPLOYEE INCENTIVES AND EFFECTS THEREOF(I)

Relevant incentive events disclosed in provisional announcements but without
subsequent development or changes during implementation√ Applicable□ Not Applicable

Summary of Matters

Query Index

Cancellation of certain 2021 and 2022 equity
incentive options: In view of the fact that the third
exercise period of the first/reserved grant portion of
the 2021 A Share Option Incentive Scheme and thesecond exercise period of the 2022 A Share Option
Incentive Scheme of the Company did not meet theexercise conditions, and due to the resignation ofsome of the incentive recipients, the Company
cancelled the corresponding 11,164,621 shareoptions and 28,011,543 share options that had been
granted but had not yet been exercised.

For details, please refer to theAnnouncement of Haier Smart
Home Co., Ltd on theCancellation of Certain Share
Options in the 2021 A Share
Option Incentive Scheme, the2022 A Share Option Incentive
Scheme disclosed by theCompany on 30 April 2024, theAnnouncement of Haier Smart
Home Co., Ltd on the
Completion of Cancellation of
Certain Share Options in the2021 A Share Option Incentive
Scheme, the 2022 A Share
Option Incentive Scheme andrelevant contents disclosed by
the Company on 28 May 2024.

Introduction of New Phase of A Share and H Share
Employee Stock Ownership Plan: In order tofurther improve the governance mechanism of theCompany, create shareholder value and promote thecomprehensive implementation of the Company’s IoT
smart home ecological brand strategy, the Company
considered and introduced the 2024 H Share Core
Employee Stock Ownership Plan of Haier Smart
Home Co., Ltd (Draft) and the 2024 A Share Core
Employee Stock Ownership Plan of Haier Smart
Home Co., Ltd (Draft) at the 10th meeting of the
11th session of the Board of Directors held by theCompany on 29 April 2024 and the 2023 Annual
General Meeting held by the Company on 20 June
2024. During the reporting period, the Company
promoted the opening of accounts and other related
works for the 2023 A Share and H Share Employee
Stock Ownership Plan.

For details, please refer to the2024 A Share Core Employee
Stock Ownership Plan of Haier
Smart Home Co., Ltd (Draft),the 2024 H Share Core
Employee Stock Ownership Planof Haier Smart Home Co., Ltd(Draft) disclosed by theCompany on 30 April 2024 andthe Announcement of
Resolutions at the General
Meeting and relevant contents
disclosed by the Company on
21 June 2024.

Haier Smart Home Co., Ltd. Interim Report 2024

51

Section IV Corporate Governance(II)

Incentive events not disclosed in provisional announcements or with subsequentdevelopment
Equity incentive□ Applicable√ Not Applicable

Other explanations□ Applicable√ Not Applicable

Employee stock ownership plan
□ Applicable√ Not Applicable

Other incentives□ Applicable52√ Not applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section V Environmental and Social
Responsibilities

I.

ENVIRONMENTAL INFORMATION(I)

Explanation of the environmental protection status of companies and theirimportant subsidiaries that are key emission units announced by theenvironmental protection department√ Applicable □ Not Applicable
1.

Information on pollutant discharge√ Applicable □ Not Applicable
The Company’s direct/indirect non-wholly owned subsidiaries Hefei Haier Refrigerator Co.,
Ltd. (“Hefei Refrigerator”), Qingdao Haier Special Refrigerator Co., Ltd. (“Qingdao Special
Refrigerator”), Wuhan Haier Water Heater Co., Ltd. (“Wuhan Water Heater”), Wuhan Haier
Freezer Co., Ltd (“Wuhan Freezer”), Wuhan Haier Electronics Holding Co., Ltd. (“Wuhan
Air-Conditioning”), Zhengzhou Haier Air-conditioning Co., Ltd. (“Zhengzhou
Air-Conditioning”), Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited (“Jiaozhou
Air-Conditioning”), are among the key emission units announced by the local environmental
protection department. The main information on pollutant discharge is as follows:(1)

Hefei Refrigerator①
Main pollutants:
Wastewater
According to the Integrated Wastewater Discharge Standard (GB8978–1996),
Hefei Refrigerator should apply for a pollutant discharge permit and detect 8
types of pollutants (including specific pollutants), namely, total nitrogen (as N),
total phosphorus (as P), suspended solids, PH, chemical oxygen demand(COD), ammonia nitrogen (NH3-N), five-day biochemical oxygen demand (BOD5),and animal and vegetable oils.
Exhaust gas. According to Emission Standard of Pollutants for Synthetic Resin
Industry (GB 31572–2015), Hefei Refrigerator should apply for a pollutant
discharge permit and detect pollutants. Main types of atmospheric pollutants:
particle matter, non-methane hydrocarbon, styrene, toluene, ethylbenzene②

Way of discharge: continuous discharge③

Number and distribution of discharge outlets: one for sewage, at the northentrance of the Refrigerator Park; 20 for exhaust gas, at the Refrigerator Block
A (nine), Block B (eight) and Phase III Factory (three)

Haier Smart Home Co., Ltd. Interim Report 2024

53

Section V Environmental and Social Responsibilities④

Concentration of discharge and discharge standard:
According to the discharge permit, the concentration and total amount ofpollutant discharge subject to approval for the total amount (data for
January-June 2024) are as follows:

No.

Name of pollutant

Concentrationof discharge

1
2
3
4
5
6
7
8
9
10
11
12
13

COD
Ammonia nitrogen
Total nitrogen
Total phosphorus
Suspended solids
BOD5pH
Animal and vegetable oils
Non-methane hydrocarbon
Particle matter
TolueneEthylbenzene
Styrene93.31 mg/L
12.78 mg/L
25.05 mg/L
2.01 mg/L
43 mg/L
56.75 mg/m³
7.38
4.65 mg/L
3.62 mg/m³
2.08 mg/m³
0.09 mg/m³
0.017 mg/m³
0.048 mg/m³(2)

Total amountof discharge
16.1 tons
2.73 tons
5.07 tons
0.41 tons
8.63 tons
11.5 tons/
0.94 tons
4.33 tons
0.26 tons
0.0081 tons
0.0017 tons
0.0042 tons

Approved
total amountof discharge

Whether it isexcessivedischarge

General outfalls are
not subject toapproval for the
total discharge
amount according
to the discharge
permit.

No
No
No
No
No
No
No
No
No
No
No
No
No

Qingdao Special Refrigerator①
Main Pollutants:
Exhaust gas. In June 2024, according to the Administrative Measures for
Pollutant Discharge Licensing (for Trial Implementation) (HJ 978–2018), Qingdao
Special Refrigerator should re-apply for a pollutant discharge permit with the
management category of simplified management and detect the primary type ofpollutant in the atmosphere, namely non-methane hydrocarbon (VOCs), with the
maximum concentration of discharge not exceeding 60mg/m³. Online detection
facilities are installed and networked with the Ecology and Environment Bureau
for exhaust gas emission. Meanwhile, a qualified third-party testing unit iscommissioned to conduct organic exhaust gas concentration manual testing andissue a report on a quarterly basis.
Wastewater: There is no wastewater generated by the business department, andthe domestic wastewater is discharged into the municipal sewage network
through the sewage pipes in Haier Industrial Park.
②

54

Way of discharge: continuous emission

Haier Smart Home Co., Ltd. Interim Report 2024

Section V Environmental and Social Responsibilities③

Number and distribution of discharge outlets: two in total, one for absorption
exhaust port at the west side of the Special Refrigerator plant roof, which theexhaust gas treatment facilities were updated, installed and put into use in July
2023, with the upgrading and adoption of activated carbon adsorption anddesorption + regenerative combustion process; and one for foam exhaust port
at the west side of the Special Refrigerator plant roof.

④

Concentration and total amount of discharge and approved total amount ofdischarge:
According to the discharge permit, the concentration and total amount ofpollutant discharge subject to approval for the total amount are as follows:

No.

Name of Pollutant

Concentrationof discharge

1

Non-methane hydrocarbon

1.13 mg/m³

Total amountof discharge
0.108 tons

Approved
total amountof discharge

Whether it isexcessivedischarge

No control regarding
the total amount ofdischarge

No

⑤

(3)

Pollutant discharge standards implemented: Volatile Organic Compounds
Discharge Standards Part 7: Other Industries in Shandong Province(DB37/2801.7–2019)
Wuhan Water Heater① Main Pollutant:
Wastewater. According to the Technical Specification for Application andIssuance of Pollutant Permit — Wastewater Treatment (for Trial) (HJ 978–2018),
Wuhan Water Heater should apply for a pollutant discharge permit and detect 9
types of pollutants (including specific pollutants), namely, COD, total zinc,suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygen
demand (BOD5), PH, anionic surface active agent, total phosphorus, and animaland vegetable oils.
②

Way of discharge: indirect discharge③

Number and distribution of discharge outlets: one, on the southwest of thewastewater treatment plant, pipeline discharge

Haier Smart Home Co., Ltd. Interim Report 2024

55

Section V Environmental and Social Responsibilities④

No.

Name of Pollutant

Concentrationof discharge

1
2
3

COD
Ammonia nitrogen
Total phosphorus

13.74 mg/L
0.07 mg/L
0.09mg/L

⑤

(4)

56

Concentration and total amount of discharge and approved total amount ofdischarge:
According to the discharge permit, the concentration and total amount ofpollutant discharge subject to approval for the total amount are as follows:

Total amountof discharge

Approved
total amountof discharge

Whether it isexcessivedischarge

2.05 tons
0.0104 tons
0.0134 tons

9.075 tons
0.9075 tons
/

No
No
No

Pollutant discharge standards implemented: Wastewater Quality Standards for
Discharge to Municipal Sewers (GBT 31962–2015)

Wuhan Freezer①
Main pollutants:
Organic exhaust gas. Exhaust gas pollutant discharge refers to the Integrated
Emission Standard of Air Pollutants, and the primary type of pollutant in theatmosphere detected are namely non-methane hydrocarbon (VOC), with the
maximum concentration of discharge not exceeding 120 mg/m³. A qualified
third-party testing unit is commissioned to conduct organic exhaust gas
concentration testing and issue a report on a half-yearly basis.
②

Way of discharge: continuous discharge③

Number and distribution of discharge outlets: two in total, one exhaust port fordoor at the south-west side of the plant, one exhaust port for curing at thesouth-west side of the plant.

④

Concentration and total amount of discharge and approved total amount ofdischarge: No control regarding the total amount of discharge of organic
exhaust gas

No.

Name of Pollutant

Concentrationof discharge

1VOC

5.42 mg/m3

Haier Smart Home Co., Ltd. Interim Report 2024

Total amountof discharge
0.16368 tons

Approved
total amountof discharge

Whether it isexcessivedischarge

No control regarding
the total amount ofdischarge

NoSection V Environmental and Social Responsibilities(5)

Wuhan Air-Conditioning①
Main Pollutants:
Organic exhaust gas. Exhaust gas pollutant discharge refers to the Integrated
Emission Standard of Air Pollutants, and the primary type of pollutant in theatmosphere detected are namely non-methane hydrocarbon (VOC), with the
maximum concentration of discharge not exceeding 120 mg/m³. A qualified
third-party testing unit is commissioned to conduct organic exhaust gas
concentration testing and issue a report on a half-yearly basis.
②

Way of discharge: continuous discharge③

Number and distribution of discharge outlets: five in total, one degreasing exhaust
port at the south side of the plant roof, and three stamping exhaust ports at thesouth side of the plant roof and one spraying exhaust port at the north side of
the spraying workshop roof.

④

Concentration and total amount of discharge and approved total amount ofdischarge: No control regarding the amount of discharge of organic exhaust gas
and particulate matter

No.

Name of Pollutant

Concentrationof discharge

1VOC

0.698 mg/m³(6)Total amountof discharge
0.03523 tons

Approved
total amountof discharge

Whether it isexcessivedischarge

No control regarding
the total amount ofdischarge

No

Zhengzhou Air-Conditioning①
Main Pollutant:
Wastewater. According to the Technical Specification for Application andIssuance of Pollutant Permit — Wastewater Treatment (for Trial) (HJ 978–2018),
Zhengzhou Air-Conditioning should apply for a pollutant discharge permit anddetect 9 types of pollutants (including specific pollutants), namely, COD, total
zinc, suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygen
demand (BOD5), PH, total phosphorus, and animal and vegetable oils.
②

Way of discharge: indirect discharge③

Number and distribution of discharge outlets: one, on the north side of the
air-conditioning wastewater treatment plant, pipeline discharge

Haier Smart Home Co., Ltd. Interim Report 2024

57

Section V Environmental and Social Responsibilities④

No.

Name of pollutant

Concentrationof discharge

1
2

COD
Ammonia nitrogen29.62 mg/L
5.79 mg/L(7)

Total amountof discharge

Approved
total amountof discharge

Whether it isexcessivedischarge

1.1 tons
0.035 tons

/
/

No
No

Jiaozhou Air-Conditioning①
Main pollutants:
Hazardous waste. According to the national directory, 8 types of hazardous
waste detected are namely: waste oil, sludge, activated carbon, cotton filters,
lightning tubes, soldering flux buckets, paint buckets and forklift battery.
②

Way of discharge: Hazardous waste is transferred to a qualified hazardous waste
disposal unit for disposal③

Total amount of discharge and approved total amount of discharge:

No.

Name of hazardous waste

Total amountof transfer(tons)

Total amountof managed plan
(tons)

Whether it isexcessive discharge

1
2
3
4
5
6
7
8

Cotton filters
Waste oil
Soldering flux buckets
Forklift battery
SludgePaint buckets
Activated carbon
Lightning tubes

0.42
20.22
1.06
16.3
21.08
0.9
2.18
0.06

2
30
1.5
20
50
5
6
0.5

No
No
No
No
No
No
No
No

④

58

Concentration and total amount of discharge and approved total amount ofdischarge:
According to the discharge permit, the concentration and total amount ofpollutant discharge subject to approval for the total amount are as follows:

Pollutant discharge standards implemented: Directory of National Hazardous
Wastes (Version 2021), Law of the People’s Republic of China on thePrevention and Control of Environmental Pollution by Solid Waste.

Haier Smart Home Co., Ltd. Interim Report 2024

Section V Environmental and Social Responsibilities

2.

Construction and operation of pollution prevention and treatment facilities√ Applicable □ Not Applicable
Jiaozhou Air-conditioning, Zhengzhou Air-conditioning, Wuhan Freezer, Wuhan Water
Heater, have one, one, one and two wastewater treatment plants with a designed
treatment capacity of 300 tons/day, 550 tons/day, 360 tons/day, 300 tons/day and 260
tons/day, respectively. The construction, maintenance and daily operation of all wastewater
treatment facilities are conducted in accordance with the requirements of national and local
environmental laws and regulations. Information on all wastewater discharge is subject to24-hour online monitoring and such monitored information is transmitted to environmental
authorities in a real-time manner. All equipment is operating normally, and the discharge of
wastewater is steady and in compliance with standards. In addition, the Company fully
promotes all plants to install exhaust treatment facilities and VOCs online monitoring
facilities. All equipment is operating normally and exhaust produced is treated by theprevention and treatment facilities before compliant release and is monitored.

3.

Environmental impact assessment of construction projects and other environmental
protection administrative permits√ Applicable □ Not Applicable
The Company and its subsidiaries execute construction project implementation andproduction in accordance with the requirements of laws and regulations and strictly comply
with the three simultaneous requirements of environmental protection for construction
projects in the process of environmental impact assessment, and have passed
environmental assessment acceptance and are not involved in any environmental illegal
conducts such as construction before approval.

4.

Emergency plans for environmental incidents√ Applicable □ Not Applicable
The Company and its subsidiaries have formulated Emergency Plans for Environmental
Incidents in accordance with the requirements of laws and regulations and organized drills,
and continue to improve and upgrade the plans based on drill results.

Haier Smart Home Co., Ltd. Interim Report 2024

59

Section V Environmental and Social Responsibilities

5.

Self-monitoring environmental programs√ Applicable □ Not Applicable
All pollutants of the Company are tested regularly, of which the discharge complies withnational and local environmental standard requirements. Wastewater collected is subject tostandard treatment and is released in a compliant manner. It is under real-time monitoring
through the automatic online wastewater monitoring system, which shares its information
with Haier Smart Energy System. In March 2017, the Company passed the upgradedcertification in relation to ISO14001 environment management system; In May 2021, aprofessional certification firm was appointed to conduct a review and audit on the operationof ISO14001 system in 2020, where satisfactory results were obtained to demonstrate its
good operating condition; In May 2022, a review and audit was conducted on theoperation of system in 2021; In May 2023, a recertification audit was conducted on theoperation of system in 2022. In May 2024, a first review and audit was conducted on theoperation of system in 2023.

6.

Administrative penalty due to environmental issues during the Reporting Period□ Applicable √ Not Applicable

7.

Other environmental information that should be disclosed□ Applicable √ Not Applicable(II)

Explanation on environmental protection of companies other than major pollutant
emission units√ Applicable □ Not Applicable
1.

Administrative penalty due to environmental issues□ Applicable √ Not Applicable60

Haier Smart Home Co., Ltd. Interim Report 2024

Section V Environmental and Social Responsibilities

2.

Other environmental information disclosure with reference to major pollutant
emission units√ Applicable □ Not Applicable
All divisions of the Company execute construction project implementation and production inaccordance with the requirements of laws and regulations and strictly comply with the threesimultaneous requirements of environmental protection for construction projects in theprocess of environmental impact assessment, and have passed environmental assessment
acceptance and are not involved in any environmental illegal conducts such as construction
before approval.
Through Haier Smart Energy Center, an energy big data analysis system, the Company
implements centralized dynamic monitoring and digitalized management in respect of majorenergy consumption, such as water, electricity and gas, of plants in the China region by
utilizing automatized and informationalized technology and an integrated management
model. It collects precise information on energy resources and completes prediction andanalysis of energy consumption information to optimize energy adjustment, reduce energy
consumption per unit production to achieve low-carbon production.

3.

Reasons for failure to disclose other environmental information□ Applicable √ Not Applicable(III) Explanation of the subsequent progress or changes in the disclosure ofenvironmental information content during the Reporting Period√ Applicable □ Not Applicable
The Company will continue to maintain and improve existing results and strictly comply withexisting environmental protection and emission standards to achieve compliant emission.

(IV) Relevant information favorable to ecological protection, pollution prevention andcontrol and environmental responsibility fulfillment□ Applicable √ Not Applicable

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61

Section V Environmental and Social Responsibilities(V)

Measures taken during the Reporting Period to reduce its carbon emission andtheir effectiveness√ Applicable □ Not Applicable
During the reporting period, the Company’s air-conditioning products pursued green andlow-carbon transformation and achieved significant results, with its carbon management capability
being recognized by industry authorities: Qingdao Haier Air-Conditioner Co., Ltd., a subsidiary of
the Company, was awarded the Carbon Management System Certification issued by the China
Quality Certification Center (CQC), making it the first enterprise in the industry to receive thiscertification. Based on the concept of green, low-carbon and sustainable development, Haier
Air-Conditioner establishes and improves its carbon management system in accordance with therequirements of the carbon management system standard to evaluate the current state of thecompany’s carbon management, identify the main sources of greenhouse gas emissions within
the organization, and formulate emission reduction measures to provide a “basis for carbon
management”. The measures include opening up new revenue sources for green carbon
development through high-standard laboratory performance and testing capabilities, etc.; therealization of carbon emission reduction by vigorously launching research on low-carbon
technologies and promoting their application; and the establishment of a green recycling systemthrough recycling to realize the reuse of resources and to lay a new track of “carbon reductionand emission control”. In the future, Haier Air-Conditioner will, based on the current state of its
carbon management, make sustainable improvements and optimizations for greenhouse gas
emission reduction, and implement emission reduction plans in a targeted and planned manner interms of laboratory renovation, promotion and application of energy and technology, etc., so as
to enhance its own capabilities while helping the industry in green transformation and upgrading.

II.

PARTICULARS ON THE EFFORTS TO CONSOLIDATE AND EXPAND ITSACHIEVEMENTS IN POVERTY ALLEVIATION AND RURAL AREA
INVIGORATION√ Applicable □ Not Applicable
The Company attaches importance to the work of poverty alleviation and rural revitalization. In
accordance with the series of national planning and filing requirements and within the scope of
authorization of the shareholders’ general meeting on donations and other matters, the Company has
provided targeted support to support rural revitalization. In the first half of 2024, the Company’s capital
expenditure on targeted poverty alleviation amounted to approximately RMB3,870,000, which was
mainly used for educational poverty alleviation, etc. The Company has actively responded to the call of
the government to fulfill its social responsibilities.

62

Haier Smart Home Co., Ltd. Interim Report 2024

Section V Environmental and Social Responsibilities

During the reporting period, Haier Hope Primary School in Bahrain Left Banner held a ceremony for the“Haier Little Scientists Program”. As another important achievement of Haier’s “Smart Campus
Upgrade Program”, smart scenarios such as smart laundry rooms have been deeply integrated into
school life, bringing children a new smart and healthy campus life experience. In addition to the smart
laundry room, Haier has also built energy utilization scenarios for smart pantry room and green energyhut, which have comprehensively improved the learning environment of Hope Primary School, and havealso made the development of rural education come to fruition through technology. At present, thenational education digitization strategy has made positive progress, and the construction of campus
informatization is moving towards a new stage of smart campus with application, integration andinnovation. The Company is actively exploring the construction of smart campus, using technology togive children a new experience of growth, and effectively enhance the sense of achievement andhappiness of teachers and students by adding wings of “intelligence” for the high quality developmentof public welfare undertakings in education.

Haier Smart Home Co., Ltd. Interim Report 2024

63

Section VI Significant Issues

I.

FULFILLMENT STATUS OF 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 thereporting period√ Applicable

Background ofundertakings

Type ofundertakings□ Not ApplicableAnydeadline for
performance

Term ofundertakings

Whether
performed ina timely andstrict way

During the period from September 2006 to 27 September
May 2007, the Company issued shares to
2006
Haier Group Corporation (“Haier Group”)
to purchase the controlling equity in its
four subsidiaries, namely Qingdao Haier
Air-Conditioner Electronics Co., Ltd. (青島海爾空調電子有限公司), Hefei Haier
Air-conditioning Co., Limited (合肥海爾空調器有限公司), Wuhan Haier Electronics
Co., Ltd. (武漢海爾電器股份有限公司),
Guizhou Haier Electronics Co., Ltd. (貴州海爾電器有限公司). With regard to theland and property required in theoperation of Qingdao Haier AirConditioner Electronics Co., Ltd. (青島海爾空調電子有限公司), Hefei Haier
Air-conditioning Co., Limited (合肥海爾空調器有限公司), Wuhan Haier Electronics
Co., Ltd. (武漢海爾電器股份有限公司)(the “Covenantees”), Haier Group made anundertaking (the “2006 Undertaking”).
According to the content of 2006
Undertaking and then condition of each
Covenantee, Haier Group will constantly
assure that Covenantees will lease theland and property owned by Haier Groupfor free. Haier Group will makecompensation in the event that theCovenantees suffer loss due to theunavailability of such land and property.
(Note)

Yes

Long-term

Yes

Haier Smart Home Prior to the Transaction (hereinafter “the31 July 2020
Co., Ltd.
Transaction” refers to the transaction in
relation to the privatisation of Haier
Electronics by Haier Smart Home), Haier
Electric was a controlling subsidiary of theCompany and did not compete with theCompany; after the completion of theTransaction, Haier Electric became awholly-owned or controlling subsidiary of
the Company and no new competition
with the Company existed or will arise.
There is no new peer competition or
potential competition between the
Company and other related parties
controlled by the controlling shareholders
or the de facto controllers of theCompany.

YesLong-term

Yes

Covenanter

Undertaking related Eliminate theHaier Groupto significant
property right
Corporation
reorganization of
defects in land
assetsetc.

Address peercompetition

64

Contents of undertakings

Haier Smart Home Co., Ltd. Interim Report 2024

Date ofundertakings

Section VI Significant Issues

Background ofundertakings

Type ofundertakings

Covenanter

Address connected Haier Grouptransactions
Corporation

Contents of undertakings

Date ofundertakings

1. The Transaction constitutes a connected 29 July 2020
transaction and the connected transaction
procedures performed under the Transaction
are in compliance with the relevant
regulations. The pricing of the connectedtransaction is fair and there are no
circumstances under which the interests of
the listed company and the non-connectedshareholders are prejudiced. 2. Uponcompletion of the Transaction, the Company
and its affiliates will take lawful and effective
measures to minimize and regulate theconnected transactions with the listedcompany, take the initiative to safeguard theinterests of the listed company and allshareholders, and refrain from taking
advantages of connected transactions for
improper benefits. 3. Provided that there is noconflict with laws and regulations, if
connected transactions between the Company
and its affiliates and the listed company occur
or exist which cannot be avoided or for which
there are reasonable reasons, the Company
and its affiliates will legally enter into atransaction agreement with the listedcompany to ensure strict compliance with theprocedures of connected transactions
required by the laws, regulations, regulatory
documents and the articles of association of
the Company, conduct transactions inaccordance with the principles ofmarketability and fair prices to ensure thefairness and compliance of connectedtransactions, and refrain from taking
advantages of such connected transactions toengage in any acts that are detrimental to theinterests of the listed company or its minority
shareholders, and at the same time, comply
with the information disclosure obligations inaccordance with relevant regulations.

Anydeadline for
performance

Term ofundertakings

Whether
performed ina timely andstrict way

Yes

Long-term

Yes

Haier Smart Home Co., Ltd. Interim Report 2024

65

Section VI Significant Issues

Background ofundertakings

66

Type ofundertakings

Covenanter

Contents of undertakings

Address peercompetition

Haier Group
Corporation

1. The Company and its controlling
29 July 2020
subsidiary, Haier COSMO Co., Ltd., wereprincipally engaged in investment businessduring the reporting period, and the Company
and its controlling subsidiary, Haier COSMO
Co., Ltd. (including its subsidiaries andentities with more than 30% shareholding),
have no real or potential competition with
Haier Smart Home; 2. the domestic andoverseas white goods businesses and assets
held by the Company (including theCompany’s subsidiaries and entities withmore than 30% shareholding) have been
injected into Haier Smart Home through asset
consolidation and equity transfer inaccordance with the commitments made by
the Company in January 2011 and therequirements for adjusting such commitments
as considered and approved by Haier Smart
Home at its 2014 annual general meeting; 3,
Since the acquisition of 100% of Haier New
Zealand Investment Holding Company Limited(which holds 100% of the shares in Fisher &Paykel Appliances Holdings Limited) by Haier
Smart Home’s offshore subsidiary, Haier
Singapore Investment Holding Co., Ltd.,
following the completion in July 2018, theCompany (including the Company’s
subsidiaries and entities with more than 30%
shareholding) and Haier Smart Home do nothave any competing relationship in any
business areas both within and outside the
PRC. During the reporting period, theCompany (including the Company’s
subsidiaries and entities with more than 30%
shareholding) did not have any new peercompetition with Haier Smart Home; 4. Uponcompletion of the Transaction, the Company(including the Company’s subsidiaries andentities with more than 30% shareholding)and its affiliates do not have any new or
potential peer competition with Haier Smart
Home; 5. During the period when the
Company is the controlling shareholder ofHaier Smart Home and the shares of Haier
Smart Home are listed on the Hong Kong
Stock Exchange, the Company and its othersubsidiaries and entities with more than 30%
shareholding will not operate any businessthat competes with the business engaged by
Haier Smart Home and will not engage in realor potential competition with Haier Smart
Home.

Haier Smart Home Co., Ltd. Interim Report 2024

Date ofundertakingsAnydeadline for
performance

Term ofundertakings

Whether
performed ina timely andstrict way

Yes

Long-term

YesSection VI Significant Issues

Background ofundertakings

Type ofundertakings
OthersDate ofundertakings

Covenanter

Contents of undertakings

Haier Group
Corporation

Upon completion of the Transaction, the29 July 2020
Company will strictly comply with theCompany Law, the Securities Law, therelevant regulations of the China Securities
Regulatory Commission, the Shanghai
Stock Exchange and the articles ofassociation of Haier Smart Home, etc.,
fairly exercise shareholders’ rights andfulfill shareholders’ obligations, refrain fromtaking advantage of its shareholding
position for improper benefits, ensure thelisted company will continue to becompletely separate from the Company
and other enterprises on which theCompany exercises control and exerts
significant influence in terms ofmanagement, personnel, assets, finance,
organization and business operations, andmaintain the continued independence ofthe listed company in terms ofmanagement, personnel, assets, finance,
organization and business operations.
Upon completion of the Transaction, theCompany will comply with the provisionsof the Notice on Several Issues
concerning Regulating Fund Transactions
between Listed Companies and Their
Affiliates and the External Guarantee of
Listed Companies and the Circular of
China Securities Regulatory Commission
and China Banking Regulatory
Commission on Regulating the External
Guaranties Provided by Listed Companies
to regulate the external guarantees bylisted companies and their subsidiaries,
and will not misappropriate the funds ofthe listed company and their subsidiaries.
The Company undertakes to strictly fulfill
the above commitments. In the event thatthe interests of the listed company aredamaged as a result of any breach of theabove commitments by the Company andother enterprises on which the Company
exercises control and exerts significant
influence, the Company will legally bear
the corresponding liability for damage.

Anydeadline for
performance

Term ofundertakings

Whether
performed ina timely andstrict way

Yes

Long-term

Yes

Haier Smart Home Co., Ltd. Interim Report 2024

67

Section VI Significant Issues

Background ofundertakings

Type ofundertakings

Covenanter

Contents of undertakings

Date ofundertakings

Address connected HCH (HK)
1. The Transaction constitutes a connected 29 July 2020
transactions
INVESTMENT transaction and the connected transaction
MANAGEMENT procedures performed under the Transaction
CO., LIMITED are in compliance with the relevant
regulations. The pricing of the connectedtransaction is fair and there are no
circumstances under which the interests of
the listed company and the non-connectedshareholders are prejudiced. 2. Uponcompletion of the Transaction, the Company
and other enterprises on which the Company
exercises control will take lawful and effective
measures to minimize and regulate theconnected transactions with the listedcompany, take the initiative to safeguard theinterests of the listed company and allshareholders, and refrain from taking
advantages of connected transactions for
improper benefits. 3. Provided that there is noconflict with laws and regulations, if
connected transactions between the Company
and other enterprises on which the Company
exercise control and the listed company occur
or exist which cannot be avoided or for which
there are reasonable reasons, the Company
and other enterprises on which the Company
exercises control will legally enter into atransaction agreement with the listedcompany to ensure strict compliance with theprocedures of connected transactions
required by the laws, regulations, regulatory
documents and the articles of association of
the Company, conduct transactions inaccordance with the principles ofmarketability and fair prices, and refrain fromtaking advantages of such connectedtransactions to engage in any acts that are
detrimental to the interests of the listedcompany or its minority shareholders, and at
the same time, comply with the information
disclosure obligations in accordance with
relevant regulations. 4. Any covenants andarrangements between the Company andother enterprises on which the Company
exercise control and the listed company inrelation to connected transactions shall notprevent the other party from conducting
business or dealing with any third party for its
own benefit and on equal competitive terms
in the market.

68

Haier Smart Home Co., Ltd. Interim Report 2024

Any
deadline for
performance

Term ofundertakings

Whether
performed ina timely andstrict way

Yes

Long-term

YesSection VI Significant Issues

Background ofundertakings

Type ofundertakings

Covenanter

Undertaking related Eliminate theHaier Groupto refinancing
property right
Corporation
defects in landetc.

Contents of undertakings

Date ofundertakingsAnydeadline for
performance

Haier Group Corporation undertakes that it 24 December 2013 Yes
will assure Haier Smart Home and its
subsidiaries of the constant, stable andunobstructed use of 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 ownershipcertificate, Haier Group Corporation will
make compensation to impaired party in atimely and sufficient way and take allreasonable and practicable measures tosupport the impaired party to recover tonormal operation before the occurrence ofloss. 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 therent in comparable market at that time.
Haier Group Corporation will assure Haier
Smart Home and its subsidiaries of theconstant, stable, free and unobstructed
use of self-built property and land of theGroup. In the event 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, HaierGroup Corporation will take all reasonable
and practicable measures to eliminate
obstruction and impact, or will support
Haier Smart Home or its affectedsubsidiary to obtain alternative property assoon as possible, if Haier Group
Corporation anticipates it is unable tocope with or eliminate the external
obstruction and impact with its
reasonable effort. For details, please referto the Announcement of Qingdao HaierCo., Ltd. on the Formation, Current
Situation of the Defective Property, theInfluence 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.

Term ofundertakings

Whether
performed ina timely andstrict way

Long-term

Yes

Haier Smart Home Co., Ltd. Interim Report 2024

69

Section VI Significant Issues

Background ofundertakings

Type ofundertakings

Covenanter

Contents of undertakings

Date ofundertakingsAnydeadline for
performance

Term ofundertakings

Whether
performed ina timely andstrict way

Undertakings related Others
to equity
incentive

Haier Smart Home The Company will not provide loans or any 15 September
Co., Ltdother forms of financial assistance,
2021/28 June
including guaranteeing their loans, to any
2022
incentive recipient for acquiring relevant
stock options under this incentive plan.

Yes

The completion of Yes
equity incentive
implementation

Other undertakings Asset injection

Haier Group
Corporation

Yes

June 2025

Inject the assets of Haier Photoelectric to the December 2015
Company or dispose such assets throughother ways according to the requirementsof the domestic supervision before June
2025. For more details, please refer to theAnnouncement of Haier Smart Home Co.,
Ltd. on the Changes of Some
Commitments on Asset Injection(L2020-024) published on the four major
securities newspapers and the website ofShanghai Stock Exchange on 30 April
2020.

Yes

Note: During the reporting period, the undertaking was fulfilled since all Covenantees of the undertaking has obtained the real property
ownership certificates.

70

Haier Smart Home Co., Ltd. Interim Report 2024

Section VI Significant Issues

II.

NON-OPERATING UTILIZATION OF FUNDS BY CONTROLLINGSHAREHOLDERS AND OTHER RELATED PARTIES DURING THE
REPORTING PERIOD.
□ Applicable√ Not Applicable

III. INFORMATION ON NON-COMPLIANCE GUARANTEES□ Applicable√ Not Applicable

IV. INFORMATION ON INTERIM AUDIT□ ApplicableV.

√ Not Applicable

CHANGES IN MATTERS COVERED BY THE NON-STANDARD AUDITOPINION ON THE PREVIOUS YEAR’S ANNUAL REPORT AND ITS
HANDLING□ Applicable√ Not Applicable

VI. MATTERS RELATING TO BANKRUPTCY AND RESTRUCTURING□ Applicable√ Not ApplicableVII. MATERIAL LITIGATION AND ARBITRATION MATTERS□ Material litigation and arbitration matter during the reporting period√ No material litigation and arbitration matters during the reporting period

VIII. PUNISHMENT AND CORRECTION ON THE LISTED COMPANY AND ITS
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLINGSHAREHOLDERS AND ULTIMATE CONTROLLERS DUE TO SUSPECT
OF LAW VIOLATIONS AND THE ISSUE OF RECTIFICATION□ Applicable√ Not applicable

IX. EXPLANATION OF THE INTEGRITY STATUS OF THE COMPANY ANDITS CONTROLLING SHAREHOLDERS AND ULTIMATE CONTROLLER
DURING THE REPORTING PERIOD□ Applicable√ Not applicable

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71

Section VI Significant Issues

X.

SIGNIFICANT RELATED-PARTY TRANSACTIONS(I)

Related-party transactions relating to daily operation
1.

Matters that have been disclosed in temporary announcements and with nosubsequent progress or change□ Applicable

2.

Matters that have been disclosed in temporary announcements and with subsequent
progress or change□ Applicable3.

√ Not applicable

Related-party transactions regarding acquisition or disposal of assets/equity
1.

Matters disclosed in temporary announcements and with no subsequent progressor change□ Applicable2.

3.

√ Not applicable

Matters not disclosed in temporary announcements□ Applicable4.

√ Not applicable

Matters that have been disclosed in temporary announcements and with subsequent
progress or change□ Applicable√ Not applicableIf performance agreement is involved, the performance achieved during the reporting
period shall be disclosed□ Applicable72√ Not applicable

Matters not disclosed in temporary announcements□ Applicable(II)√ Not applicable√ Not applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section VI Significant Issues(III) Significant related-party transactions of joint external investment
1.

Matters that have been disclosed in temporary announcements and with nosubsequent progress or change□ Applicable

2.

Matters that have been disclosed in temporary announcements and with subsequent
progress or change□ Applicable3.

√ Not applicable√ Not applicable

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 nosubsequent progress or change□ Applicable

2.

Matters that have been disclosed in temporary announcement and with subsequent
progress or change□ Applicable3.

√ Not applicable√ Not applicable

Matters not disclosed in temporary announcements□ Applicable√ Not applicable

Haier Smart Home Co., Ltd. Interim Report 2024

73

Section VI Significant Issues(V)

Financial business between the Company and the finance company with which
it has a related relationship, the company’s controlling finance company andrelated parties√ Applicable1.

□ Not applicable

Deposit business√ Applicable□ Not applicable
Unit and Currency: RMB

2.

Related party

Relationship

Haier Finance Co.,Ltd.

Subsidiary of Haier
Group

Total

/

Maximum daily
deposit limit

Range of depositinterest

Opening balance

Changes of the period
Total amount
Total amountdeposited during withdrawn during
the period
the period

34 billion

0.00012%to 3.5%

33,654,242,534.50

285,540,013,292.96 285,309,670,757.96

33,884,585,069.50//

33,654,242,534.50

285,540,013,292.96 285,309,670,757.96

33,884,585,069.50

ClosingbalanceLending business√ Applicable□ Not applicable
Unit and Currency: RMB

74

Changes of the period
Total Total amountamount lent
repaidduring theduring theperiodperiodRelated party

Relationship

Loan limit

Range of loaninterest

Openingbalance

Haier FinanceCo., Ltd.

Subsidiary ofHaier Group

10 billion

/

0

0

0

0

Total

/

/

/

0

0

0

0

Haier Smart Home Co., Ltd. Interim Report 2024

ClosingbalanceSection VI Significant Issues

3.

Trustee business or other finance businesses√ Applicable□ Not applicable
Unit and Currency: RMB

4.

Related party

RelationshipType of businessTotal amount

Actual number ofoccurrence

Haier Finance Co.,Ltd.

Subsidiary of HaierGroup

5.5 billion

213,576,000.00

Haier Finance Co.,Ltd.

Subsidiary of HaierGroup

Foreign exchange
derivatives
products
Service charge

80 million

4,425,427.95

Other explanations□ Applicable√ Not applicable(VI) Other material related transactions□ Applicable√ Not applicable(VII) Others□ Applicable√ Not applicable

Haier Smart Home Co., Ltd. Interim Report 2024

75

Section VI Significant Issues

XI. SIGNIFICANT CONTRACTS AND THEIR EXECUTION
1

Trusteeship, contracting and leasing□ Applicable√ Not applicable

During the reporting period, the Company had no material escrow matters. Up to now, thefollowing entrusted assets that have been approved by the Company’s shareholders’ meeting arestill in effect:
According to Haier Group’s commitment in 2011 on further supporting the development of
Qingdao Haier and resolving peer competition to reduce connected transactions, based on thefact that Qingdao Haier Optoelectronics Co., Ltd. (青 島 海 爾 光 電 有 限 公 司) and its subsidiaries,
the main body of Haier Group engaging in the color television business, are still in a period oftransformation and integration, and their financial performance has not yet met the Company’s
expectations, Haier Group is unable to complete the transfer before the aforesaid commitment
period. Haier Group intends to entrust the Company with the operation and management of theescrow assets and pay the Company an annual escrow fee of RMB1 million during the escrowperiod.

2

Significant guarantees performed and outstanding during the reporting period□ Not Applicable√ Applicable

Unit and Currency: RMB0’000

Guarantor

Relationshipbetween theguarantor andthe listedcompany

Securedparty

Amount ofguarantee

External guarantees provided by the Company (excluding guarantees for subsidiaries)
Date ofoccurrenceof theWhether theguarantee
Status ofguarantee Whether the(date of Commencement Expiry date
Type ofprinciple Collateral
has been guarantee isagreement) date of guarantee of guarantee guarantee
liabilities(if any)
fulfilled
overdue

Overdueamount oftheguarantee

Whether
there is acounterguarantee

Whether
relatedparty
guarantee
or notRelationshipTotal amount of guarantee occurred during the reporting period (excluding guarantees for subsidiaries)
Total balance of guarantee at the end of the reporting period (A) (excluding guarantees for subsidiaries)
Guarantees provided by the Company for subsidiaries
Total amount of guarantees for subsidiaries occurred during the reporting period
Total balance of guarantees for subsidiaries 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)
Ratio of total amount of guarantees to net assets of the Company (%)
Including:Amount of guarantees for shareholders, ultimate controllers and their related parties (C)Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio exceeding 70% (D)The amount of total amount of guarantee in excess of 50% of net assets (E)Total amount of the above three guarantees (C + D + E)
Explanation of possibly bearing related discharge duty for premature guarantees
Explanation of guarantee status

3

76

1,296,712

0
782,927
0782,927
Nil
Nil

Other major contracts□ Applicable

1,404,017
1,296,712√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section VI Significant Issues

XII. EXPLANATION OF PROGRESS IN USE OF PROCEEDS□ Applicable√ Not Applicable

XIII. EXPLANATION OF OTHER SIGNIFICANT EVENTS√ Applicable □ Not Applicable
Entrusted wealth management: By the end of the reporting period, the balance of the Company’s
entrusted wealth management amounted to RMB2.145 billion. Under the premise of ensuring sufficient
capital required by the principal operating activities and daily operations, the Company and some of its
subsidiaries purchased some low-risk wealth management products and structured deposits from majorcommercial banks to improve the yield of temporarily-idle funds and the return for shareholders within
the authority of the president’s office meeting and under the condition of ensuring fund safety.

Haier Smart Home Co., Ltd. Interim Report 2024

77

Section VII Changes in Shares andInformation About Shareholders

I.

CHANGES IN SHARE CAPITAL(I)

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 sharecapital 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 shareand net assets per share (if any) after the reporting period to the disclosure dateof interim report□ Applicable √ Not Applicable

4.

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
Total number of preferential shareholders with restoration of voting rights
by the end of the reporting period

78

Haier Smart Home Co., Ltd. Interim Report 2024

112,985
N/ASection VII Changes in Shares and Information About Shareholders(II)

Table of shareholdings of top ten shareholders, top ten shareholders of tradable
shares (or shareholders without selling restrictions) by the end of the reporting
periodUnit: share
Shareholdings of top ten shareholders (excluding shares lent out under refinancing)

Name of shareholder(full name)

Increase/decrease
Number ofduring the shares heldreporting at the end of
periodthe period

Percentage(%)

2,314,600,081
1,258,684,824

24.52
13.34

UnknownNone

1,072,610,764

11.36

None

665,064,574

7.05

None

Unknown
Domestic non-stateowned legal entity
Domestic non-stateowned legal entity
Unknown

538,560,000

5.71

None

Foreign legal entity

182,592,654

1.93

None

Unknown

172,252,560

1.83

None

Domestic non-stateowned legal entity

133,791,058

1.42

None

Domestic non-stateowned legal entity

60,753,458

0.64

None

Unknown

58,352,268

0.62

None

Unknown

HKSCC NOMINEES LIMITED
Haier COSMO Co., Ltd.
(海爾卡奧斯股份有限公司)
Haier Group Corporation
Hong Kong Securities Clearing
Co., Ltd.
HCH (HK) INVESTMENTMANAGEMENT CO., LIMITED
China Securities FinanceCorporation Limited
Qingdao Haier Venture &Investment Information Co.,
Ltd. (青島海爾創業投資咨詢有限公司)
Qingdao Haichuangzhi
Management Consulting
Enterprise (Limited
Partnership) (青島海創智管理
咨詢企業（有限合伙）)
Industrial and Commercial Bankof China -SSE 50 Exchange
Traded Open-End Index
Securities Investment Fund
Clearstream Banking S.A.

71,261,645

14,617,100

Number ofshares heldwith selling
restrictions

Status of shares pledged,
marked or frozen
Status ofsharesNumberNature ofshareholder

Haier Smart Home Co., Ltd. Interim Report 2024

79

Section VII Changes in Shares and Information About Shareholders

Shareholdings of top ten shareholders without selling restrictions (excluding shares lentout under refinancing

Name of shareholder

HKSCC NOMINEESLIMITED
Haier COSMO Co., Ltd.
(海爾卡奧斯股份有限公 司)
Haier Group
Corporation
Hong Kong Securities
Clearing Co., Ltd.
HCH (HK) INVESTMENTMANAGEMENT CO.,LIMITED
China Securities FinanceCorporation Limited
Qingdao Haier Venture &Investment
Information Co., Ltd.
(青島海爾創業投資咨詢 有 限 公 司)
Qingdao Haichuangzhi
Management
Consulting Enterprise(Limited Partnership)(青島海創智管理咨詢企 業（有 限 合 伙）)Industrial andCommercial Bank of
China -SSE 50
Exchange Traded
Open-End Index
Securities Investment
Fund
Clearstream Banking
S.A.

80

Haier Smart Home Co., Ltd. Interim Report 2024

Number of
tradable shares
held without
selling
restrictions

2,314,600,081

Class and number of shares
Class
Number2,314,600,081

1,258,684,824

Overseas listed foreign
sharesRMB ordinary

1,072,610,764

RMB ordinary

1,072,610,764

665,064,574

RMB ordinary

665,064,574

538,560,000

Overseas listed foreign
shares538,560,000

182,592,654

RMB ordinary

182,592,654

172,252,560

RMB ordinary

172,252,560

133,791,058

RMB ordinary

133,791,058

60,753,458

RMB ordinary

60,753,458

58,352,268

Overseas listed foreign
shares58,352,268

1,258,684,824

Section VII Changes in Shares and Information About Shareholders

Name of shareholder

Number of
tradable shares
held without
selling
restrictions
Class

Class and number of shares
NumberExplanation of
repurchase account of
top ten shareholders
Explanation of delegatedvoting rights,
entrusted voting
rights, abstained
voting rights of theabove shareholders
Explanation of relatedparties or parties
acting in concert
among the aforesaid
shareholders

The repurchase accounts of the Company held a total of
145,238,037 shares.

Explanation ofpreferential
shareholders withrestoration of voting
rights and theirshareholdings

Not applicable

Nil(1) Haier COSMO Co., Ltd. (海 爾 卡 奥 斯 股 份 有 限 公 司) is a
subsidiary of Haier Group Corporation. Haier Group
Corporation holds 51.20% of its equity. Qingdao Haier
Venture & Investment Information Co., Ltd. (青 島 海 爾 創 業 投
資 咨 詢 有 限 公 司), HCH (HK) INVESTMENT MANAGEMENT
CO., LIMITED and Qingdao Haichuangzhi Management
Consulting Enterprise (Limited Partnership) (青島海創智管理咨詢 企 業（有 限 合 伙）) are parties acting in concert with HaierGroup Corporation; (2) The Company is not aware of theexistence of any connections of other shareholders.

Shareholders holding more than 5% of the shares, top ten shareholders and top ten holders ofoutstanding shares without selling restrictions participating in the lending of shares under therefinancing business□ Applicable√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

81

Section VII Changes in Shares and Information About Shareholders

Changes in top ten shareholders and top ten holders of outstanding shares without selling
restrictions due to lending/returning under refinancing as compared to the previous period□ Applicable√ Not Applicable

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. DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT(I)

Changes of shareholding of current and retired directors, supervisors and senior
management during the reporting period□ Applicable√ Not Applicable

Other explanations□ Applicable82√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section VII Changes in Shares and Information About Shareholders(II)

Incentive share option granted to directors, supervisors and senior management
during the reporting period√ Applicable□ Not Applicable
Unit: 0’000 shares
Number of
Number of stock options
stock options newly granted
held at theduring the
beginning ofreportingthe period
periodExercisable Shares fromshares stock options
Number ofoptions
exercised stock options
during theduring theheld at thereportingreportingend of theperiodperiodperiodName

Position

Li Huagang
Gong Wei
Xie Juzhi
Li PanSong Yujun
Zhao Yanfeng
Huang Xiaowu
Wu Yong
Li Yang
Guan Jiangyong
Liu Xiaomei

Director
Director
Senior management
Senior management
Senior management
Senior management
Senior management
Senior management
Senior management
Senior management
Senior management

54.83
27.42
54.83
27.42
18.72
28.09
27.42
13.71
27.42
13.71
8.74

–18.28–9.14–18.28
–9.14
–6.24
–9.36
–9.14
–4.57
–9.14
–4.57
–2.91

36.56
18.28
36.56
18.28
12.49
18.73
18.28
9.14
18.28
9.14
5.82

Total

/

302.32–100.77201.55Haier Smart Home Co., Ltd. Interim Report 2024

83

Section VII Changes in Shares and Information About Shareholders(III) Other explanations□ Applicable√ Not Applicable

IV. CHANGES IN CONTROLLING SHAREHOLDER AND THE ULTIMATECONTROLLER□ Applicable84√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section VIII Relevant Information ofPreferred Shares□ Applicable√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

85

Section IX Relevant Information of
Corporate Bonds

I.

CORPORATE BOND (INCLUDING ENTERPRISE BOND) AND
NON-FINANCIAL CORPORATE DEBT FINANCING INSTRUMENTS□ Applicable

II.

CONVERTIBLE CORPORATE BOND
□ Applicable86√ Not Applicable√ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial ReportI.

AUDIT REPORT□ ApplicableII.

√ Not Applicable

FINANCIAL STATEMENTS
Consolidated Balance Sheet
30 June 2024
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items
Current assets:
Monetary funds
Provision of settlement fundFunds lent
Financial assets held for trading
Derivative financial assets
Bills receivable
Accounts receivable
Financing receivables
Prepayments
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other receivables
Including: Interest receivables
Dividends receivables
Financial assets purchased under resaleagreements
Inventories
Including: Data resources
Contract assets
Assets held for saleNon-current assets due within one year
Other current assets
Total current assets
Non-current assets:
Loans and advances granted
Debt investments
Other debt investments
Long-term receivables

Notes

30 June 2024 31 December 2023

VII.1

54,705,626,157.44

54,486,452,841.14

VII.2
VII.3
VII.4
VII.5
VII.6

1,066,569,759.01
86,713,582.93
7,147,471,192.39
23,517,845,844.84
1,035,015,815.14

953,963,543.83
67,565,829.44
8,621,434,831.39
20,268,099,436.43
1,238,294,930.51

VII.7

2,731,270,164.67
676,041,225.16

2,649,558,985.05
748,496,020.24

VII.8

39,453,614,462.10

39,524,006,616.33

VII.9

300,808,605.96

260,939,408.73

VII.104,472,061,327.09
4,550,167,668.68
134,516,996,911.57 132,620,484,091.53

VII.11

14,477,621,780.97

8,841,233,078.66

351,899,806.17

350,409,496.85

Haier Smart Home Co., Ltd. Interim Report 2024

87

Section X Financial Report

88

Items

Notes

Long-term equity investments
Investments in other equity instruments
Other non-current financial assets
Investment properties
Fixed assets
Construction in progress
Biological assets for production
Oil and gas assets
Right-of-use assets
Intangible assets
Including: Data resources
Development cost
Including: Data resources
Goodwill
Long-term prepaid expenses
Deferred income tax assets
Other non-current assets
Total non-current assets
Total assets
Current liabilities:
Short-term borrowings
Borrowings from central bankFunds borrowed
Financial liabilities held for trading
Derivative financial liabilities
Bills payable
Accounts payables
Receipts in advanceContract liabilities
Disposal of repurchased financial assets
Absorbing deposit and deposit in interbank market
Customer deposits for trading in securities
Amounts due to issuer for securities
underwriting
Payables for staff’s remuneration
Taxes payable
Other payables
Including: Interest payables
Dividends payables
Fees and commissions payable
Reinsurance Accounts payables
Liabilities held for saleNon-current liabilities due within one year

VII.12
VII.13

26,038,301,146.49
6,281,814,366.53

25,546,793,450.20
6,403,694,954.77

VII.14
VII.15
VII.1680,227,845.94
29,686,001,800.40
5,787,636,237.75

98,631,080.77
29,603,936,822.78
5,403,469,596.76

VII.17
VII.184,815,237,702.43
10,814,254,709.75

4,367,081,679.74
11,006,230,700.93

284,998,053.97

266,490,235.10

Haier Smart Home Co., Ltd. Interim Report 2024

30 June 2024 31 December 2023

VII.19VII.20VII.21
VII.22

24,341,834,392.35 24,289,726,694.80
628,084,750.01
741,745,517.64
1,782,173,574.04
1,805,945,632.16
2,364,161,933.18
2,033,986,945.28
127,734,248,099.98 120,759,375,886.44
262,251,245,011.55 253,379,859,977.97

VII.23

10,333,169,856.54

10,318,351,841.88

VII.24
VII.25
VII.26

191,751,522.44
23,389,001,752.35
47,200,496,446.93

168,625,004.97
22,215,726,721.62
47,061,789,173.62

VII.273,256,026,994.75

7,731,916,491.54

VII.28VII.29VII.303,896,760,934.55
3,677,057,061.93
27,248,243,510.90

5,077,517,828.50
2,841,215,524.73
19,181,569,184.83

7,515,895,607.63

1,880,719.69

5,327,717,384.22

3,732,550,549.23

VII.31Section X Financial Report

Items

Notes

30 June 2024 31 December 2023

Other current liabilities
Total current liabilities
Non-current liabilities:
Deposits for insurance contracts
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payables for staff’s
remuneration
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Owners’ equity(or shareholders’ equity):
Paid-in capital (or share capital)
Other equity instruments
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 to owners(or shareholders) of the Parent Company
Minority shareholders’ interests
Total owners’ equity(or shareholders’ equity)
Total liabilities and owners’ equity(or shareholders’ equity)

VII.32

1,095,321,670.22
1,651,239,151.52
125,615,547,134.83 119,980,501,472.44

VII.33

18,123,651,118.19

17,936,302,925.77

VII.34
VII.35

3,724,630,519.72
51,160,960.16

3,286,801,426.17
57,113,422.78

VII.36
VII.37
VII.38VII.21

1,055,014,630.92
1,085,454,839.18
2,005,235,110.36
1,935,014,042.24
1,027,202,647.44
1,050,319,606.44
1,968,954,413.50
2,028,390,554.20
95,069,810.18
108,218,339.24
28,050,919,210.47 27,487,615,156.02
153,666,466,345.30 147,468,116,628.46

VII.399,438,114,893.00

9,438,114,893.00

VII.40VII.41
VII.42

23,906,949,506.86
5,500,665,317.85
1,635,545,031.02

23,762,354,684.05
5,034,065,107.42
1,969,724,027.01

VII.43

4,842,338,543.80

4,842,338,543.80

VII.44

71,412,017,694.55

68,535,686,494.60

105,734,300,351.38 103,514,153,535.04
2,850,478,314.87
2,397,589,814.47
108,584,778,666.25 105,911,743,349.51
262,251,245,011.55 253,379,859,977.97

Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Haier Smart Home Co., Ltd. Interim Report 2024

89

Section X Financial Report

Balance Sheet of the Parent Company
30 June 2024
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items
Current Assets:
Monetary funds
Financial assets held for trading
Derivative financial assets
Bills receivable
Accounts receivable
Financing receivables
Prepayments
Other receivables
Including: Interest receivables
Dividends receivables
Inventories
Including: Data resources
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 investments
Investments in other equity instruments
Other non-current financial assets
Investment properties
Fixed assets
Construction in progress
Biological assets for production
Oil and gas assets
Right-of-use assets
Intangible assets
Including: Data resources
Development cost
Including: Data resources
Goodwill

90

Haier Smart Home Co., Ltd. Interim Report 2024

Notes

XIX.1

XIX.2

XIX.3

30 June 2024 31 December 2023

11,222,371,826.58

7,579,640,524.79

1,859,987,722.13

1,625,777,099.03

3,115,793.21
21,890,675,172.49
141,536,597.40
872,819,744.23
6,163,640.83

3,212,938.83
23,649,977,816.57
117,439,655.79
570,000,000.00
5,400,498.27

1,553,369,952.40
36,535,684,107.64

1,530,274,566.66
34,394,283,444.15

7,723,497,912.20

2,884,204,032.25

56,433,082,587.82
1,619,260,874.04

55,828,696,006.06
1,619,260,874.04

141,983,596.38
3,614,971.91

154,588,551.47
6,054.40

38,255,002.98

41,307,540.86

Section X Financial Report

Items
Long-term prepaid expenses
Deferred income tax assets
Other non-current assets
Total non-current assets
Total assets
Current liabilities:
Short-term borrowings
Financial liabilities held for trading
Derivative financial liabilities
Bills payable
Accounts payables
Receipts in advanceContract liabilities
Payables for staff’s remuneration
Taxes payable
Other payables
Including: Interest payable
Dividends payable
Liabilities held for saleNon-current liabilities due within one year
Other current liabilities
Total current liabilities
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities
Long-term payable
Long-term payables for staff’s
remuneration
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Owners’ equity(or Shareholders’ equity):
Paid-in capital (or share capital)
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve
Less: treasury stock

Notes

30 June 2024 31 December 2023
3,508,130.34

3,777,722.63

1,498,818,858.08
67,462,021,933.75
103,997,706,041.39

1,501,734,455.48
62,033,575,237.19
96,427,858,681.34

1,326,647,081.32

1,120,671,258.40

22,930,469.11
8,273,623.07
973,985.01
58,922,007,427.98

22,930,469.11
28,602,784.57
5,590,668.41
45,012,683,942.96

7,513,967,094.69
1,601,000,000.00
17,257,623.40
61,899,090,209.89

134,000,000.00
12,486,915.31
46,336,966,038.76

3,238,500,000.00

3,779,500,000.00

58,624.38

12,973,300.00
420,053,312.58

12,973,300.00
420,053,312.58

3,671,585,236.96
65,570,675,446.85

4,212,526,612.58
50,549,492,651.34

9,438,114,893.00

9,438,114,893.00

27,446,396,776.65
3,641,894,152.79

27,263,651,777.44
3,175,293,942.36

Haier Smart Home Co., Ltd. Interim Report 2024

91

Section X Financial Report

Items

Notes

Other comprehensive income
Special reserve
Surplus reserve
Undistributed profits
Total owners’ equity(or shareholders’ equity)
Total liabilities and owners’ equity(or shareholders’ equity)
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

92

Haier Smart Home Co., Ltd. Interim Report 2024

30 June 2024 31 December 2023
669,143,133.11

630,674,691.95

4,237,192,318.35
278,077,626.22

4,237,192,318.35
7,484,026,291.62

38,427,030,594.54

45,878,366,030.00

103,997,706,041.39

96,427,858,681.34

Section X Financial Report

Consolidated Profit Statement
January-June 2024
Unit and Currency: RMB
Items
I. Total operating revenue
Including: Operating revenue
Interest income
Insurance premiums earned
Fee and commission income
II. Total cost of operations
Including: Operating cost
Interest expenses
Fee and commission expenses
Insurance withdrawal payment
Net payment from indemnity
Net provisions withdrew for
insurance contract liability
Insurance policy dividend paid
Reinsurance cost
Taxes and surcharges
Selling expenses
Administrative expenses
R&D expenses
Financial expenses
Including: Interest expenses
Interest income
Add: Other income
Investment income(losses are represented by ‘-’)Including: investment income ofassociates 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 value(losses are represented by ‘-’)Loss on credit impairment(losses are represented by ‘-’)Notes

2024 Interim2023 Interim

VII.45

135,622,549,121.01 131,628,595,912.05
135,622,549,121.01 131,628,595,912.05

VII.45

123,666,371,198.78 121,337,680,704.03
94,106,431,686.66 91,557,518,745.02

VII.46
VII.47
VII.48VII.49VII.50VII.51

538,267,458.26
18,687,502,154.89
5,186,349,563.44
5,088,901,166.88
58,919,168.65
1,226,384,743.58
912,438,277.44
555,087,752.52

533,099,572.52
18,768,944,057.44
5,461,681,481.50
5,025,786,116.64–9,349,269.09
875,078,615.27
614,901,995.27
601,375,268.80

VII.52

1,039,614,193.70

1,129,768,360.36

1,021,852,565.42

1,078,905,972.36

VII.53–29,565,597.82

31,271,562.35

VII.54–58,013,951.73–165,968,929.36

Haier Smart Home Co., Ltd. Interim Report 2024

93

Section X Financial Report

Items
Loss on assets impairment(losses are represented by ‘-’)Gain from disposal of assets(losses are represented by ‘-’)III. Operating profit(losses are represented by ‘-’)Add: non-operating income
Less: non-operating expenses
IV. Total profit(total losses are represented by ‘-’)Less: income tax expense
V. Net profit(net losses are represented by ‘-’)(1) 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 ‘-’)(2) Classification by ownership ofthe equity
1. Net profit attributable to shareholdersof the Parent Company (net losses
are represented by ‘-’)2. Profit or loss attributable to minority
shareholders (net losses are
represented by ‘-’)VI. Other comprehensive income, net of tax(I) Other comprehensive income
attributable to owners of the Parent
Company, net of tax
1. Other comprehensive income thatcannot be reclassified into the
profit or loss
(1) Changes arising fromre-measurement ofdefined benefit plans(2) Other comprehensive incomethat cannot be transferred into
profit or loss under equity
method(3) Changes in fair value ofinvestments in other equity
instruments

94

Haier Smart Home Co., Ltd. Interim Report 2024

Notes

2024 Interim2023 Interim

VII.55–710,556,264.52–779,748,575.44

VII.56–2,583,904.37–20,647,304.64

VII.57
VII.5812,750,160,150.01
73,423,091.34
84,518,604.74

11,086,965,590.09
58,784,451.89
32,299,513.21

VII.5912,739,064,636.61
2,131,741,494.48

11,113,450,528.77
2,069,767,775.55

10,607,323,142.13

9,043,682,753.22

10,607,323,142.13

9,043,682,753.22

10,420,218,389.22

8,962,851,469.46

187,104,752.91–334,806,467.13

80,831,283.76
136,824,101.13–335,021,596.15

155,051,059.64–128,316,608.25

36,663,726.03–2,491,664.07

32,438,331.87–125,824,944.18

4,225,394.16

VII.60Section X Financial Report

Items(4) Changes in fair value of credit
risks of the enterprise
2. Other comprehensive income to bereclassified into the profit or loss
(1) Other comprehensive incomethat can be transferred into
profit or loss under equity
method(2) Changes in fair value of otherdebt Investments(3) Reclassified financial assets thatare 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 inforeign currencies(7) Others(II) Other comprehensive income
attributable to minority shareholders,
net of tax
VII. Total comprehensive income(I) Total comprehensive income
attributable to the owners of
Parent Company(II) Total comprehensive income
attributable to the minority
shareholders
VIII. Earnings per share:(I) Basic earnings per share (RMB/share)(II) Diluted earnings per share(RMB/share)

Notes

2024 Interim2023 Interim–206,704,987.90

118,387,333.61

23,160,537.38–15,508,344.88–30,039,858.31–193,755,242.84–199,825,666.97

327,650,921.33

215,129.02
10,272,516,675.00–18,226,958.51
9,180,506,854.35

10,085,196,793.07

9,117,902,529.10

187,319,881.93

62,604,325.25

XXI.1

1.13

0.96

XXI.1

1.12

0.96

For business combination under common control occurring in the current period, the net profit of theacquiree before the combination was RMB0, and the net profit of the acquiree for the previous period
was RMB –1,024,530.38.
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Haier Smart Home Co., Ltd. Interim Report 2024

95

Section X Financial Report

Profit Statement of the Parent Company
January-June 2024
Unit and Currency: RMB

96

Items

Notes

2024 Interim2023 Interim

I. Operating income
Less: operating cost
Taxes and surcharges
Selling expenses
Administration expenses
R&D expenses
Financial expenses
Including: interest expenses
Interest income
Add: other income
Investment income (losses are
represented by ‘-’)Including: investment income ofassociates and joint ventures
Derecognition income on
financial assets
measured at amortizedcost (losses are
represented by ‘-’)Gains on net exposure hedges(losses are represented by ‘-’)Income from change in fair value(losses are represented by ‘-’)Loss on credit impairment (losses
are represented by ‘-’)Loss on assets impairment(losses are represented by ‘-’)Gain from disposal of assets(losses are represented by ‘-’)II. Operating profit(losses are represented by ‘-’)Add: non-operating income
Less: non-operating expenses
III. Total profit(total losses are represented by ‘-’)Less: income tax expenses
IV. Net profit(net losses are represented by ‘-’)

XIX.4
XIX.4

251,601,614.76
223,444,233.50
2,634,526.12
21,861,602.21
379,191,355.33
7,802,548.59–179,030,129.87
52,482,308.39
233,381,967.37
4,280,121.77

327,406,706.84
286,220,868.43
3,754,801.82
4,603,666.69
377,868,026.53
6,617,045.16–92,308,439.54
32,509,056.33
115,693,759.65
1,361,535.00

XIX.5

508,175,341.20

400,717,692.54

180,476,867.12

144,556,606.76

Haier Smart Home Co., Ltd. Interim Report 2024

47,441.31

308,152,941.85
134,512.56

142,777,406.60
97,965.97
78,702.83

308,018,429.29

142,796,669.74
1,205.40

308,018,429.29

142,795,464.34

Section X Financial Report

Items

Notes

(I) Net profit from continuous operations(net losses are represented by ‘-’)(II) Net profit from discontinued operations(net losses are represented by ‘-’)V. Other comprehensive income, net of tax(I) Other comprehensive income thatcannot be reclassified into the profit orloss
1. Changes arising from remeasurement of defined benefit
plans
2. Other comprehensive income thatcannot be transferred into profit orloss under equity method
3. Changes in fair value of investments
in other equity instruments
4. Changes in fair value of credit risksof the enterprise(II) Other comprehensive income to bereclassified into the profit or loss
1. Other comprehensive income thatcan be transferred into profit or loss
under equity method
2. Changes in fair value of other debt
investments
3. Reclassified financial assets that are
credited to other comprehensive
income4. Credit impairment provision for otherdebt investments
5. Reserve for cash flow hedging
6. Exchange differences on translationof financial statements denominatedin foreign currencies
7. Others
VI. Total comprehensive income
VII. Earnings per share:(I) Basic earnings per share (RMB/share)(II) Diluted earnings per share(RMB/share)

2024 Interim2023 Interim

308,018,429.29

142,795,464.34

38,468,441.16

38,468,441.16

38,468,441.16

346,486,870.45

142,795,464.34

Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

Haier Smart Home Co., Ltd. Interim Report 2024

97

Section X Financial Report

Consolidated Cash Flow Statement
January-June 2024
Unit and Currency: RMB
Items
I. Cash flow from operating activities:
Cash received from the sale of goods
and rendering services
Net increase in distributor and inter-bankdeposits
Net increase in borrowing from thecentral bank
Net cash increase in borrowing fromother financial institutes
Cash received from premiums under
original insurance contract
Net cash received from reinsurance
business
Net increase in deposits of policy holders
and investment
Cash received from interest, fee andcommissions
Net increase in cash borrowed
Net increase in cash received fromrepurchase operation
Net cash received from customer
deposits for trading in securities
Refunds of taxes
Cash received from other related
operating activities
Sub-total of cash inflows from operating
activities
Cash paid on purchase of goods andservices
Net increase in loans and advances of
distributors
Net increase in deposits in the PBOC andinter bank
Cash paid for compensation payments
under original insurance contact
Net increase in cash lent
Cash paid for interest, bank charges andcommissions
Cash paid for insurance policy dividend98

Haier Smart Home Co., Ltd. Interim Report 2024

Notes

2024 Interim2023 Interim

137,770,272,988.69 131,288,880,461.26

VII.61

1,058,338,202.23

1,055,963,172.82

1,273,666,446.36

1,004,688,596.01

140,102,277,637.28 133,349,532,230.09
94,771,705,644.29

90,340,588,373.14

Section X Financial Report

Items
Cash paid to and on behalf of
employees
Cash paid for all types of taxes
Cash paid to other operation related
activities
Sub-total of cash outflows from operating
activities
Net cash flow from operating activities
II. Cash flow from investing activities:
Cash received from recovery ofinvestments
Cash received from return on
investments
Net cash received from the disposal of
fixed assets, intangible assets andother long-term assets
Net cash received from disposal ofsubsidiaries and other operating
entities
Other cash received from investment
activities
Sub-total of cash inflows from investing
activities
Cash paid on purchase of fixed assets,intangible assets and other long-term
assetsCash paid for investments
Net increase in secured loans
Net cash paid on acquisition ofsubsidiaries and other operating
entities
Other cash paid on investment activities
Sub-total of cash outflows from investing
activities
Net cash flow from investing activities

Notes

2024 Interim2023 Interim

16,148,989,199.64
7,567,174,632.61

14,745,533,991.16
7,628,260,419.66

VII.61

13,796,150,223.48

13,845,127,911.51

VII.62132,284,019,700.02 126,559,510,695.47
7,818,257,937.26
6,790,021,534.62

9,680,782,079.51

5,129,042,704.70

480,478,081.96

484,178,075.61

7,717,184.08

74,087,510.81

2,000,000.00
15,362,098.03
10,168,977,345.55

5,704,670,389.15

3,891,922,126.47
13,611,230,146.65

3,727,907,256.47
6,303,165,775.56

6,922,378.31
17,503,152,273.12–7,334,174,927.57

10,037,995,410.34–4,333,325,021.19

Haier Smart Home Co., Ltd. Interim Report 2024

99

Section X Financial Report

Items
III. Cash flow from financing activities:
Cash received from capital contributions
Including: cash received from capital
contributions by minority shareholdersof subsidiaries
Cash received from borrowings
Other cash received from financing
activities
Sub-total of cash inflows from financing
activities
Cash paid on repayment of loans
Cash paid on distribution of dividends,
profits or repayment of interest
expenses
Including: dividend and profit paid tominority shareholders by subsidiaries
Other cash paid to financing activities
Sub-total of cash outflows fromfinancing activities
Net cash flow from financing activities
IV. Effect of fluctuations in exchange
rates on cash and cash
equivalents
V. Net increase in cash andcash equivalents
Add: balance of cash and cash
equivalents at the beginning of theperiodVI. Balance of cash and cash equivalents
at the end of the period

Notes

Haier Smart Home Co., Ltd. Interim Report 2024

2023 Interim

268,874,731.22

5,931,538,006.65

11,553,402,031.97

6,200,412,737.87
4,150,675,947.75

11,553,402,031.97
10,428,924,467.65

1,174,174,474.78

817,299,422.27

1,066,739,043.45

1,575,176,054.23

6,391,589,465.98–191,176,728.11

12,821,399,944.15–1,267,997,912.18–42,182,129.41

482,296,933.74

250,724,152.17

1,670,995,534.99

VII.62

53,977,310,651.03

53,392,209,857.41

VII.6254,228,034,803.20

55,063,205,392.40

VII.61

Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

1002024 Interim

Section X Financial Report

Cash Flow Statement of the Parent Company
January-June 2024
Unit and Currency: RMB
Items
I. Cash flow from operating activities:
Cash received from the sale of goods andrendering of services
Refunds of taxes
Other cash received from operating
activities
Sub-total of cash inflows from operating
activities
Cash paid on purchase of goods andservices
Cash paid to and on behalf of employees
Cash paid for all types of taxes
Other cash paid to operation activities
Sub-total of cash outflows fromoperating activities
Net cash flow from operating
activities
II. Cash flow from investing activities:
Cash received from recovery ofinvestments
Cash received from return on
investments
Net cash received from the disposal of
fixed assets, intangible assets andother long-term assets
Net cash received from disposal ofsubsidiaries and other operating
entities
Other cash received from investment
activities
Sub-total of cash inflows from investing
activities
Cash paid on purchase of fixed assets,intangible assets and other long-term
assetsCash paid for investments
Net cash paid on acquisition ofsubsidiaries and other operating
entities

Notes

2024 Interim2023 Interim

219,993,729.62
38,214.96

33,292,958.65

164,614,625.43

65,817,539.47

384,646,570.01

99,110,498.12

27,649,816.71
11,299,372.62
104,532,697.84

80,721,248.11
27,717,542.52
16,713,598.66
27,993,348.41

143,481,887.17

153,145,737.70

241,164,682.84–54,035,239.58

7,222,000,000.00

4,623,000,000.00

88,433,946.88

81,202,353.24

389,573,294.54
7,700,007,241.42

4,704,202,353.24

2,692,652.09
12,422,000,000.00

4,137,180.77
6,647,572,258.00

Haier Smart Home Co., Ltd. Interim Report 2024

101

Section X Financial Report

Items

Notes

Other cash paid on investment activities
Sub-total of cash outflows frominvesting activities
Net cash flow from investing
activities
III. Cash flow from financing activities:
Cash received from capital injections
Cash received from borrowings
Other cash received from financing
activities
Sub-total of cash inflows from financing
activities
Cash paid on repayment of borrowings
Cash paid on distribution of dividends,
profits or repayment of interest
expenses
Other cash paid on financing activities
Sub-total of cash outflows fromfinancing activities
Net cash flow from financing
activities
IV. Effect of fluctuations in exchange
rates on cash and cash equivalents
V. Net increase in cash and cash
equivalents
Add: balance of cash and cash
equivalents at the beginning of theperiodVI. Balance of cash and cash
equivalents at the end of the period
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

102

Haier Smart Home Co., Ltd. Interim Report 2024

2024 Interim2023 Interim
1,057,569,045.00

12,424,692,652.09

7,709,278,483.77–4,724,685,410.67–3,005,076,130.53

940,000,000.00

1,110,000,000.00

7,717,935,238.95

4,223,807,260.09

8,657,935,238.95
14,000,000.00

5,333,807,260.09
7,000,000.00

50,962,018.77
466,600,210.43

32,820,559.74
780,445,507.58

531,562,229.20

820,266,067.32

8,126,373,009.75

4,513,541,192.77–120,980.13

7,043,266.53

3,642,731,301.79

1,461,473,089.19

7,579,640,524.79

5,747,356,591.19

11,222,371,826.58

7,208,829,680.38

I. Closing balance for the previous period
Add: changes in accounting policies
Error correction for prior period
OthersII. Opening balance for the current year
III. Increase/decrease for the current period(decrease is represented by ‘-’)(I) Total comprehensive income(II) Capital injection and reduction by
owners
1. Ordinary shares invested by owners
2. Capital contribution by holders ofother equity instruments
3. Share-based payment included inowners’ equity
4. Others(III) Profit distribution
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provision
3. Distribution to owners (orshareholders)
4. Others(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into
capital (or share capital)
2. Transfer of surplus reserves into
capital (or share capital)
3. Surplus reserves used for
remedying loss
4. Changes in defined benefit plans
carried forward to retained
earnings
5. Other comprehensive income
carried forward to retained
earnings
6. Others(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period(VI) Others
IV. Closing balance for the period

Items

466,600,210.43

201,405,574.94–55,968,151.97

5,500,665,317.85

466,600,210.43

145,437,422.97–842,600.16
23,906,949,506.86

466,600,210.43

144,594,822.81

9,438,114,893.00

5,034,065,107.42

23,762,354,684.05

5,034,065,107.42

Less: treasurystock

9,438,114,893.00

OthersCapitalreserve
23,762,354,684.05

Perpetual
bonds

Other equity instruments

Preference
shares842,600.16
1,635,545,031.02–334,178,995.99–335,021,596.15

1,969,724,027.01

1,969,724,027.01

Othercomprehensive
incomeSpecial reserve2024 Interim
Equity attributable to owners of the Parent Company

9,438,114,893.00

Paid-in capital(or share capital)

January-June 2024

Consolidated Statement of Changes in Owner’s Equity

4,842,338,543.80

4,842,338,543.80

4,842,338,543.80

Surplus reserve

General risk
provision

Total owners’
equity–13,819,692.29 –7,527,786,786.98

201,405,574.94–522,568,362.40–13,819,692.29 –7,527,786,786.98–29,920,094.58–29,920,094.58
105,734,300,351.38 2,850,478,314.87 108,584,778,666.25–7,513,967,094.69–41,774,476.70
279,388,310.76–321,162,787.46

279,388,310.76
279,388,310.76

452,888,500.40 2,673,035,316.74
187,319,881.93 10,272,516,675.00

2,220,146,816.34
10,085,196,793.07

103,514,153,535.04 2,397,589,814.47 105,911,743,349.51–7,513,967,094.69–29,920,094.58
71,412,017,694.55

Minorityshareholders’interests

103,514,153,535.04 2,397,589,814.47 105,911,743,349.51

Sub-total

201,405,574.94–522,568,362.40–7,513,967,094.69

Others–7,513,967,094.69

2,876,331,199.95
10,420,218,389.22

68,535,686,494.60

68,535,686,494.60

Undistributed
profits

Unit and Currency: RMB

Section X Financial Report

Haier Smart Home Co., Ltd. Interim Report 2024

103

104

Haier Smart Home Co., Ltd. Interim Report 2024
714,828,075.38

714,828,075.38

116,689,608.57

116,689,608.57

390,681,368.30–273,991,759.73

23,998,726,933.33–8,483,600.00–8,483,600.00–8,483,600.00

9,438,114,893.00

2,145,734,558.09

155,051,059.64
155,051,059.64

1,990,683,498.45

1,990,683,498.45

Othercomprehensive
incomeSpecial reserve

4,014,190,623.24

4,014,190,623.24

4,014,190,623.24

Surplus reserve

Person in charge of accounting function: Gong Wei

4,572,635,271.76

714,828,075.38

3,857,807,196.38

5,000,000.00
23,882,037,324.76

9,446,598,493.00

Less: treasurystock
3,857,807,196.38

Capitalreserve
23,877,037,324.76

Others9,446,598,493.00

Perpetual
bonds

Other equity instruments

Preference
sharesLegal representative of the Company: Li Huagang

I. Closing balance for the previous period
Add: changes in accounting policies
Error correction for prior period
OthersII. Opening balance for the current year
III. Increase/decrease for the current period(decrease is represented by ‘-’)(I) Total comprehensive income(II) Capital injection and reduction by
owners
1. Ordinary shares invested by owners
2. Capital contribution by holders ofother equity instruments
3. Share-based payment included inowners’ equity
4. Others(III) Profit distribution
1. Withdrawal of surplus reserves
2. Withdrawal of general risk
provision
3. Distribution to owners (orshareholders)
4. Others(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into
capital (or share capital)
2. Transfer of surplus reserves into
capital (or share capital)
3. Surplus reserves used for
remedying loss
4. Changes in defined benefit plans
carried forward to retained
earnings
5. Other comprehensive income
carried forward to retained
earnings
6. Others(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period(VI) Others
IV. Closing balance for the period

Items

Paid-in capital(or share capital)

2023 Interim
Equity attributable to owners of the Parent Company–5,297,529,553.10

11,946,127.47
96,685,134,639.10–5,297,529,553.10–5,297,529,553.10

11,946,127.47
61,661,002,903.20–606,622,066.81

3,225,697,036.66
9,117,902,529.10

390,681,368.30–997,303,435.11–5,297,529,553.10

3,677,268,043.83
8,962,851,469.46

4,983,388.77
93,459,437,602.44–16,611.23
57,983,734,859.37

Sub-total
93,454,454,213.67

Others57,983,751,470.60

Undistributed
profits

Total owners’
equity–638,519,042.93–31,896,976.12

3,248,130,263.91
9,180,506,854.35

11,946,127.47
1,313,328,271.70 97,998,462,910.80–8,274,121.88 –5,305,803,674.98

390,681,368.30–997,303,435.11–8,274,121.88 –5,305,803,674.98–31,896,976.12–31,896,976.12

22,433,227.25
62,604,325.25

4,983,388.77
1,290,895,044.45 94,750,332,646.89

1,290,895,044.45 94,745,349,258.12

Minorityshareholders’interests

Person in charge of accounting department: Ying Ke

General risk
provision

Section X Financial Report

I. Closing balance for the previous period
Add: changes in accounting policies
Error correction for prior period
OthersII. Opening balance for the current year
III. Increase/decrease for the current period (decrease isrepresented by ‘-’)(I) Total comprehensive income(II) Capital injection and reduction by owners
1. Ordinary shares invested by owners
2. Capital contribution by holders of other equity
instruments
3. Share-based payment included in owners’ equity
4. Others(III) Profit distribution
1. Withdrawal of surplus reserves
2. Distribution to owners (or shareholders)
3. Others(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into capital(or share capital)
2. Transfer of surplus reserves into capital(or share capital)
3. Surplus reserves used for remedying loss
4. Changes in defined benefit plans carried forward
to retained earnings
5. Other comprehensive income carried forward toretained earnings
6. Others(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period(VI) Others
IV. Closing balance for the period

Items

January-June 2024

9,438,114,893.00

466,600,210.43

182,744,999.21

27,446,396,776.65

3,641,894,152.79

466,600,210.43

466,600,210.43

182,744,999.21

182,744,999.21

3,175,293,942.36

3,175,293,942.36

27,263,651,777.44

OthersLess: treasurystock

9,438,114,893.00

Perpetual bonds

Capitalreserve
27,263,651,777.44

Preference
shares2024 Interim

9,438,114,893.00

Paid-in capital (orshare capital)

Other equity instruments

Statement of Changes in Owners’ Equity of the Parent Company

669,143,133.11

38,468,441.16
38,468,441.16

630,674,691.95

630,674,691.95

Othercomprehensive
incomeSpecial reserve

4,237,192,318.35

4,237,192,318.35

4,237,192,318.35

Surplusreserve

Total owners’
equity278,077,626.22 38,427,030,594.54–7,513,967,094.69 –7,513,967,094.69

182,744,999.21–466,600,210.43–7,513,967,094.69 –7,513,967,094.69–7,205,948,665.40 –7,451,335,435.46
308,018,429.29
346,486,870.45–283,855,211.22

7,484,026,291.62 45,878,366,030.00

7,484,026,291.62 45,878,366,030.00

Undistributed
profits

Unit and Currency: RMB

Section X Financial Report

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106

Haier Smart Home Co., Ltd. Interim Report 2024
597,964,898.92

597,964,898.92

186,863,532.59
186,863,532.59

360,860,541.25–173,997,008.66

27,487,762,552.35–8,483,600.00–8,483,600.00–8,483,600.00

9,438,114,893.00

2,906,103,457.34

597,964,898.92

2,308,138,558.42

27,300,899,019.76

2,308,138,558.42

9,446,598,493.00

OthersLess: treasurystock

27,300,899,019.76

Perpetual bonds

Capitalreserve2023 Interim

9,446,598,493.00

Preference
sharesLegal representative of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke

I. Closing balance for the previous period
Add: changes in accounting policies
Error correction for prior period
OthersII. Opening balance for the current year
III. Increase/decrease for the current period (decrease isrepresented by ‘-’)(I) Total comprehensive income(II) Capital injection and reduction by owners
1. Ordinary shares invested by owners
2. Capital contribution by holders of other equity
instruments
3. Share-based payment included in owners’ equity
4. Others(III) Profit distribution
1. Withdrawal of surplus reserves
2. Distribution to owners (or shareholders)
3. Others(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into capital (or sharecapital)2. Transfer of surplus reserves into capital (or sharecapital)
3. Surplus reserves used for remedying loss
4. Changes in defined benefit plans carried forward
to retained earnings
5. Other comprehensive income carried forward toretained earnings
6. Others(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period(VI) Others
IV. Closing balance for the period

Items

Paid-in capital (orshare capital)

Other equity instruments

602,091,349.74

602,091,349.74

602,091,349.74

Other
comprehensive
incomeSpecial reserve

3,409,044,397.79

3,409,044,397.79

3,409,044,397.79

Surplusreserve

Total owners’
equity173,577,710.86 38,204,487,446.40–5,297,529,553.10 –5,297,529,553.10

360,860,541.25–780,445,507.58–5,297,529,553.10 –5,297,529,553.10–5,154,734,088.76 –5,574,319,055.09
142,795,464.34
142,795,464.34–419,584,966.33

5,328,311,799.62 43,778,806,501.49

5,328,311,799.62 43,778,806,501.49

Undistributed
profits

Section X Financial ReportSection X Financial Report

III. GENERAL INFORMATION OF THE COMPANY
1.

Overview of the Company√ Applicable □ Not Applicable
The predecessor of Haier Smart Home Co., Ltd (hereinafter referred to as the Company) was
Qingdao Refrigerator Factory, which was established in 1984. As permitted to offering by
People’s Bank of China, Qingdao Branch on 16 December 1989, with the document of Qing Ti
Gai [1989] No. 3 issued 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, as approved by the document of Qing Gu Ling Zi [1993] No. 2
and No. 9 issued by the pilot leading team of Qingdao joint stock company, the Company wasconverted from a directional offering company to a public subscription company and issued
additional 50 million shares to the public and listed with trading on Shanghai Stock Exchange inNovember 1993. In October 2018, D-shares in issue of the Company were listed on the China
Europe International Exchange AG. In December 2020, H-shares in issue of the Company werelisted on the Stock Exchange of Hong Kong Limited by way of introduction.
The Company’s registered office is located at the Haier Science and Technology Innovation
Ecological Park of Laoshan District, Qingdao, Shandong Province, and the headquarters is
located at the Haier Science and Technology Innovation Ecological Park of Laoshan District,
Qingdao, Shandong Province.
The Company is mainly engaged in research and development, manufacturing and sales of home
appliances including refrigerators/freezers, kitchen appliances, air-conditioners, laundry appliances
and water appliances, and other smart home business, as well as providing smart homepackaged solutions.
The ultimate controlling parent company of the Company is Haier Group Corporation.
These financial statements have been approved for publication by the Board of the Company on
27 August 2024.

2.

Scope of consolidated statements
For details of changes in the scope of consolidated financial statements for the current period,
please refer to “IX. Changes in Consolidation Scope” and “X. Interest in Other Entities” of thisnote.

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Section X Financial Report

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
the transactions and matters actually occurred, in accordance with the Accounting Standards forEnterprises — Basic Standards published by the Ministry of Finance, specific accounting
standards, and guidance on application of accounting standards for enterprises, interpretations toaccounting standards for enterprises and other relevant requirements (hereinafter collectively
referred to as the “Accounting Standards for Enterprises”) which issued subsequently, and incombination with the disclosure provisions of the Rules for the Information Disclosure andCompilation of Companies Publicly Issuing Securities No. 15: General Provisions for Financial
Report (Revised in 2023) of CSRC as well as the following significant accounting policies andaccounting 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 ESTIMATES
Specific accounting policies and accounting estimates:√ Applicable □ Not Applicable
According to the characteristics of its production and operation, the Company formulated a series of
specific accounting policies and accounting estimates, including the provisions for impairment foraccounts receivable (Note V.11); the measurement of inventories (Note V.12); the depreciation andamortization of the investment properties (Note V.15); the depreciation of fixed assets (Note V.16), theamortization of intangible assets (Note V.19), the criterion for determining of long-term assets
impairment (Note V.20); and the date of revenue recognition (Note V.26), etc.

1.

Statement of compliance with Accounting Standards for Enterprises
The financial statements prepared by the Company meet the requirements of the AccountingStandards for Enterprises, which accurately and completely reflected information relating to thefinancial position, results of operations, changes in shareholders’ equity and cash flows of theCompany.

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.

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Section X Financial Report3.

Operating period√ Applicable □ Not Applicable
The Company takes the period from the acquisition of assets for processing to the ultimate
realization of cash or cash equivalents as a normal operating cycle. The Company takes 12months as an operating period, which is also the classification basis for the liquidity of its assets
and liabilities.

4.

Recording currency
Renminbi is the recording currency of the Company

5.

Materiality criteria determination method and selection basis√ Applicable □ Not Applicable
Case

Materiality criteria

Material receivables for which
bad debt provision is
individually assessed

The amount of provision on an individual basis accounts
for more than 10% of the total bad debt provisions forvarious types of receivables and is greater than
RMB100 million
The amount of recovery or reversal on an individual basis
accounts for more than 10% of the total amount ofvarious types of receivables and is greater than
RMB100 million
The amount of write-off on an individual basis accounts
for more than 10% of the total bad debt provisions ofvarious types of receivables and is greater than
RMB100 million
Prepayment aged more than 1 year on an individual basis
accounts for more than 10% of the total prepayments
and is greater than RMB100 million
The ending balance of a project on an individual basis is
greater than RMB50 million

Material receivables and bad
debt provisions which arerecovered or reversed
Actual write-off of material
accounts receivable

Material prepayments aged morethan one year
Material projects underconstruction
Material capitalized R&D
projects

Material accounts payable andother payables aged morethan one year
Material contract liabilities aged
more than one year

The ending balance of a project on an individual basis
accounts for more than 10% of the ending balance ofdevelopment expenditure and is greater than RMB100
millionAccounts payable/other payables with aged more than 1
year on an individual basis account for more than 10%of the total accounts payable/other payables and are
greater than RMB100 million
Contract liabilities aged more than 1 year on an individual
basis account for more than 10% of the total contract
liabilities and are greater than RMB100 million

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Section X Financial Report

Case

Materiality criteria

Material non-wholly owned
subsidiaries

The net assets of the subsidiaries account for more than
5% of the Company’s net assets or the net profits andlosses of the subsidiaries account for more than 10%of the Company’s consolidated net profit.
The book value of long-term equity investment in an
individual invested unit accounts for more than 5% of
the Company’s net assets or the investment profits andlosses under the long-term equity investment equity
method account for more than 10% of the Company’s
consolidated net profit.

Material joint ventures or
associates

6.

Accounting methods of business combinations under common control and notunder common 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
under common 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 of
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, the party that obtains the control over the other parties on the
combination date is the acquirer, and other parties 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.
For business combination under common control, the transferor’s assets and liabilities
obtained by the Company (as the acquirer) in a business combination are accounted for at
the carrying amount of the transferor in the ultimate controller’s consolidated financial
statements as at the date of combination, except for adjustments due to differences inaccounting policies. The difference between the carrying amount of the combinationconsideration paid by the Company (or the aggregate nominal value of shares issued) andthe carrying amount of net assets obtained in a business combination shall be adjusted tocapital reserve, in case the capital reserve is insufficient for the elimination, the retained
earnings shall be adjusted.

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Section X Financial Report

Intermediary fees (such as audit, legal services and valuation consultancy) and otherrelevant management fees incurred in the business combination by the Company (as theacquirer) are credited in profit or loss in the 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 the capitalreserve (share premium) is insufficient, and to surplus reserves and undistributed profits inorder. Trading expenses in direct relation to the issuance of debt instrument as theconsideration for the combination is included in the initial recognition amount of the debt
instrument.
(2)

Business combinations involving entities not under common control
A business combination not under common control is a business combination in which allof 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, theparty that obtains the control of the other parties at the combination date is the acquirer;
other parties 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 involving entities not under common control, the cost of
combination of the Company (as the acquirer) shall be the sum of the assets paid,
obligations incurred or assumed and the fair value of the equity securities issued by theCompany 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 Company 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 Company as combination consideration is included in theinitial 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 theacquisition date and makes it necessary to adjust the contingent consideration on theacquisition date, the goodwill arising from the business combination shall be amended
accordingly.
The cost of combination and identifiable net assets obtained by the Company (as theacquirer) in a business combination involving entities not under common control aremeasured 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, thedifference is recognized as goodwill; where the cost of combination is lower than theacquirer’s interest in the fair value of the transferor’s identifiable net assets, the difference
is initially recognized in profit or loss for the current year after the Company conducted areview 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 fairvalue of the identifiable net assets of the transferor obtained during the course of
combination, then the difference is recorded in the profit and loss.

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Section X Financial Report

7.

Judgement Criteria for Control and Preparation of Consolidated Financial
Statements√ Applicable □ Not Applicable
Judgement Criteria for Control:
The scope of consolidation of consolidated financial statements is on the basis of control. Control
means that the Company has the power over the investee, enjoys variable returns byparticipating in relevant activities of the investee, and has the ability to use its power over theinvestee to influence the amount of its return. Control refers to the Company’s right over theinvestee to enjoy variable returns through involvement in the investee and have the ability to exert
the right to affect those returns The Company will reassess when changes in relevant facts andcircumstances result in changes in the relevant elements involved in the definition of control.
Preparation method of consolidated statements(1) Scope of consolidated financial statements
The Company incorporated all subsidiaries under its control (including the separate entities
controlled by the Company) into the scope of consolidation financial statements, including
the enterprises under the Company’s control, divisible part in the investees and structured
entities. Control refers to the Company having power over the investee and is entitled tovariable returns from its involvement with the investee and has the ability to use its powerover the investee to affect the amount of those return.
(2)

112

To unify the accounting policies, balance sheets date and accounting periods of theCompany and subsidiaries
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.

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report(3)

Offset matters in the consolidated financial statements
The consolidated financial statements shall be prepared by the Company on the basis of
the financial statements of the Company and subsidiaries and based on other relevant
information. In preparing the consolidated financial statements, all significant balances,transactions and unrealized profits between the Company and subsidiaries and amongsubsidiaries are eliminated. In preparing the consolidated financial statements, the Company
treats the entire enterprise group as one accounting entity and reflects the overall financial
position, operating results and cash flows of the Group in accordance with therequirements for recognition, measurement and presentation of relevant accounting
standards for enterprises and consistent accounting policies. The owner’s equity of thesubsidiaries not attributable to the Company shall be presented separately as “minority
equity” under the owner’s equity item in the consolidated balance sheet. The minority equity
attributable to net profit or loss of subsidiaries in the current period shall be presented as“minority interest” under the “net profit” item in the consolidated profit statement. Where theamount of loss of a subsidiary attributable to the minority shareholders exceeds their shareof the opening balance of owner’s equity of the subsidiary, the excess shall be allocatedagainst minority equity. The long-term equity investment of the Company held by thesubsidiaries, deemed as treasury stock of the corporate group as well as the reduction ofowners’ equity, shall be presented as “Less: Treasury stock” under the owner’s equity itemin the consolidated balance sheet.

(4)

Accounting treatment of subsidiaries acquired from combination
For subsidiaries acquired from business combination under common control of theCompany, the opening amount of the consolidated balance sheet is adjusted, as if thebusiness combination has taken place since the ultimate controller began its control. The
income, expenses and profits of subsidiaries or business combinations from the beginningof the current period to the end of the reporting period are included in the consolidated
profit statement. The cash flows from the beginning of the current period to the end of thereporting period of a subsidiary or business combination are included in the consolidated
cash flow statement, and the related items in the comparative statements are adjusted
Where control can be exercised over the investee under the same control due to additional
investment and other reasons, the Company shall deem the parties participating in thebusiness combination to have made adjustments in their current status when the ultimate
controller began its control. Equity investments held by the Company before control of thetransferor are recognised for profit or loss, other comprehensive income and other changes
in net assets between the later of the date on which the original equity interest is acquired
and the date on which the Company and the transferor are under the same control and thedate of combination, which are offset against the opening retained earnings or current profit
or loss, respectively, in the period of the comparative statements.

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Section X Financial Report

For subsidiaries acquired from business combination under non-common control, theopening amount of the consolidated balance sheet is not adjusted. The income, expenses
and profits of the subsidiary or business from the date of purchase to the end of thereporting period are included in the consolidated profit statement. The cash flows of thesubsidiary or business from the date of purchase to the end of the reporting period areincluded in the consolidated statement of cash flows. Where control can be exercised overan investee that is not under the same control due to additional investment or otherreasons, the Company remeasures the equity interest of the investee held before thepurchase date based on the fair value of the equity interest at the purchase date, and thedifference between the fair value and its carrying amount is included in the current
investment income. Where the equity interest in the transferor held before the purchasedate relates to other comprehensive income under the equity method and other changes inowner’s equity other than net profit or loss, other comprehensive income and profit
distribution, other comprehensive income and other changes in owner’s equity relating
thereto are transferred to investment income of the current period as at the purchase date,
except for other comprehensive income arising from the remeasurement of net liabilities orchanges in net assets of defined benefit plans by the investee.
(5)

Dispose of equity interests in subsidiaries achieved in stages until losing control①
General treatment
During the reporting period, when the Company disposes of a subsidiary or business,the income, expenses and profits of that subsidiary or business from the beginning of
the period to the date of disposal are included in the consolidated income statementof the Company; The cash flows from the beginning of the period to the disposal
date of the subsidiary or operation are included in the consolidated statement of cash
flows of the Company.
When control over the investee is lost due to the disposal of part of the equity
investment or other reasons, the Company remeasures the remaining equity
investment after disposal at its fair value at the date when control is lost. The
difference between the sum of the consideration obtained on disposal of the equity
interest and the fair value of the remaining equity interest, less the sum of the shareof the net assets of the original subsidiary calculated by the Company based on theoriginal shareholding ratio and goodwill calculated on a continuing basis from the dateof purchase or consolidation, is included in investment income in the period in which
control is lost and goodwill is written off. The Company converts other comprehensive
income relating to the equity investment in the original subsidiary, etc. to investment
income in the current period when control is lost.

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Section X Financial Report②

Disposal of subsidiaries step by step
Where the Company disposed of equity investment in a subsidiary step by step
through multiple transactions until control is lost, for example, the terms, conditions
and economic impact of each transaction that disposes of the equity investment in a
subsidiary meet one or more of the following conditions, the Company accounts for
multiple transactions as a single transaction:i.

The transactions were entered into simultaneously or with mutual influence in
mind;

ii.

The transactions as a whole are capable of achieving a complete commercial
outcome;iii.

The occurrence of one transaction depends on the occurrence of at least one
other transaction;

iv.

The transaction is uneconomical by itself but economic when considered inconjunction with other transactions.

Where each transaction that disposes of an equity investment in a subsidiary until
control is lost is a blanket transaction, the Company accounts for each transaction asa transaction that disposes of the subsidiary and loses control; However, theCompany recognises the difference between each disposal price before the loss ofcontrol and the share of net assets of the subsidiary corresponding to the disposal of
the investment as other comprehensive income in the consolidated financial
statements and is transferred to profit or loss in the period in which control is lostwhen control is lost.
Where each transaction that disposes of an equity investment in a subsidiary until theloss of control is not a blanket transaction, the relevant policy for partial disposal ofan equity investment in a subsidiary without loss of control is accounted for before
the loss of control by the Company; When control is lost, accounting is performed in
the same manner as would be done for a disposal subsidiary.
(6)

Purchase of minority interests in subsidiaries
The difference between the Company’s costs of newly acquired long-term equity
investment resulting from the purchase of minority interests and the share of net assets
attributable to the subsidiary calculated on an ongoing basis from the date of purchase (orthe date of combination) based on the newly increased shareholding ratio, the equity
premium in the capital reserve in the consolidated balance sheet is adjusted, and if theequity premium in the capital reserve is insufficient to offset, the retained earnings isadjusted.

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Section X Financial Report

(7)

8.

Partial disposal of equity investments in subsidiaries without loss of control
The Company adjusts the equity premium in the capital reserve in the consolidated balance
sheet for the difference between the disposal price obtained from the partial disposal of thelong-term equity investment in the subsidiary without loss of control and the share of the
net assets of the subsidiary that would continue to be calculated from the purchase date or
the combination date corresponding to the disposal of the long-term equity investment, or
adjust the retained earnings if the equity premium in the capital reserve is insufficient tooffset.

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.
(1)

Joint operations
Joint operations refer to a joint arrangement in which the Company is a party and isentitled 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 businessenterprises: ① recognize the assets held solely by the Company, and recognize assets
held jointly by the Company in appropriation to the share of the Company; ② recognize theobligations assumed solely by the Company, and recognize obligations assumed jointly by
the Company in appropriation to the share of 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 the Company; ⑤recognize fees solely occurred by the Company and recognize fees from joint operations inappropriation to the share of the Company.
When the Company, as a joint venture, invests or sells assets to or purchase assets (theassets do not constitute a business, the same below) from joint operations, the Company
shall only recognize the part of profit or lost from this transaction attributable to otherparties of joint operations before these assets are sold to a third party. In case of an
impairment loss incurred on these assets which meets the requirements 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.

(2)

116

Joint ventures
Joint ventures refer to a joint arrangement during which the Company only is entitled to net
assets of this arrangement. Investment in joint venture is accounted for using the equity
method according to the accounting policies referred to under “14. Long-term equity
investment” of Note V.

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Section X Financial Report

9.

Recognition standard for cash and cash equivalents
Cash recognized in the cash flow statements represents the cash on hand and deposits available
for payment 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 andwhich are subject to an insignificant risk on change in value.

10. 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 by applying the exchange rate at the transaction date.
Monetary items denominated in foreign currencies are translated by the Company intofunctional currencies at the rates of exchange ruling at the balance sheet date. All foreignexchange difference are credited in the profit or loss of the current period, except thosearising from the funds denominated in foreign currency specially borrowed for theestablishment of the qualifying assets are treated based on the principal of capitalization ofborrowing costs.
Non-monetary items in foreign currency measured at historical cost are translated by theCompany using the spot exchange rate prevailing on the date when transaction occurredand its functional currency shall remain unchanged. Non-monetary items denominated inforeign currencies that are measured at fair value are translated using the foreign exchange
rate at the date the fair value is determined; the exchange differences between thetranslated and original amounts of functional currencies are recognized in the statement 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 theCompany, their financial statements denominated in foreign currencies shall be translated toperform accounting and prepare the consolidated financial statements.
The assets and liabilities of the foreign currency balance sheet of the Company aretranslated using the spot exchange rate at the balance sheet date; all items except for“undistributed profits” of the owner’s equity are translated at the spot exchange rate on thetransaction date. The revenue and expenses in the foreign currency income statement of
the Company are translated using the approximate rate of the spot exchange rate on thetransaction date. Exchange differences on translation of financial statements denominated inforeign currencies are presented as the “other comprehensive income” in the owner’s
equity of the balance sheet.

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Section X Financial Report

Foreign currency cash flow and cash flows of a foreign subsidiary of the Company istranslated using the approximate rate of the spot exchange rate on the date of the cash
flows. The impact of exchange rate changes on cash amount is regarded as areconciliation item and reflected separately in the cash flow.
When disposing overseas operations, the translation difference in the foreign currency
financial statements as shown in the owner’s equity of the balance sheet and related to theoverseas operation shall be transferred from owner’s equity to profit or loss in the current
period of disposal. If part of the overseas operations is disposed of, the translationdifference in the foreign currency financial statements of the disposal part shall becalculated based on the proportion of the disposal and transferred to profit or loss in thecurrent period of disposal.

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

Classification, recognition and measurement of financial assets
On initial recognition of a financial asset, according to the business model for managing
financial assets and the contractual cash flow characteristics of financial assets, theCompany classifies financial assets into: Financial assets measured at amortized cost;financial assets measured at fair value through other comprehensive income; 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 at fair value through profit and loss of the current period, related transaction
costs are directly included in profit and loss of the current period; for other types offinancial assets, related transaction costs are included in their initial recognized amounts.
For the accounts receivable or bills receivable arising from the sale of products or theprovision of labor services that do not contain or consider the significant financing
components, etc., the Company shall take the consideration amount entitled to be received
as the initial recognized amount.

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Section X Financial Report

1)

The debt instruments held by the Company:①

Financial assets measured at amortized cost
The Company’s business model for managing such financial assets is: With theaim of obtaining contractual cash flow, the contractual cash flow characteristics
of such financial assets shall be consistent 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 accordancewith the effective interest method. Such financial assets are subsequently
measured at amortised cost. The gains or losses arising from amortisation or
impairment are recognised in profit or loss of the current period. Such financial
assets of the Company mainly include cash and cash equivalents, bills
receivable, 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 the balance
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.

②

Financial assets measured at fair value through other comprehensive
incomeThe Company’s business mode for managing such financial assets is: With theaim of obtaining contractual cash flow and selling the financial assets, thecontractual cash flow characteristics of such financial assets shall be consistent
with the basic lending arrangements. Such financial assets are measured at fairvalue 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. Suchfinancial assets of the Company mainly include financing receivables and othercreditor’s rights investments. The Company lists other creditor’s rights
investments matured within one year (inclusive) from the balance sheet date as
non-current assets matured within one year; other creditor’s rights investments
matured within one year (inclusive) when being obtained are listed as othercurrent assets.

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Section X Financial Report③2)

Financial assets measured at fair value through profit or loss of thecurrent period
The Company classifies financial assets other than those above measured atamortized cost and those measured at fair value through other comprehensive
income as financial assets measured at fair value through profit or loss of thecurrent period. In addition, at the time of initial recognition, in order to eliminate
or significantly reduce accounting mismatch, the Company designated somefinancial assets as financial assets measured at fair value through profit or lossof the current period. Such financial assets are subsequently measured at fairvalue and changes in fair value are included in profit or loss of the current
period. Such financial assets 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.

Equity instrument investments of the Company:
The Company classifies equity instrument investments that have no control, joint
control and significant influence on itself as financial assets measured at fair value
through profit or loss of the current 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 othercomprehensive income, which are listed as other equity instrument investments. Suchdesignation cannot be revoked once made. The Company includes the relevant
dividends and interest income of such financial assets in profit and loss of the current
period, and changes in fair value are included in other comprehensive income. Whenthe financial asset is derecognised, the Company transfers the cumulative gain or loss
previously included in other comprehensive income directly to retained earnings and is
not included in profit or loss of the current period.

(2)

Classification, recognition and measurement of financial liabilities
On initial recognition, financial instruments or their components issued by the Company areclassified into financial liabilities or equity instruments based on the contractual terms of thefinancial instruments and the economic nature, rather than solely on its legal form, together
with the definition of financial liability and equity instruments.
The Company classifies financial liabilities as financial liabilities at fair value through profit
and loss of the current period and other financial liabilities at initial recognition.
Financial liabilities at fair value through profit and loss of the current period aresubsequently measured at fair value. Any gains or losses arising from changes in the fairvalue and any interest expenses related to the financial liabilities are recognized in profit orloss of the current period. The financial liabilities at fair value through profit and loss of thecurrent period of the Company mainly consist of financial liabilities held for trading.

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Section X Financial Report

Other financial liabilities are subsequently measured at amortized costs using effective
interest method. Other financial liabilities of the Company are financial liabilities measured atamortized cost, including bills payable, accounts payable, other payables, borrowings,
bonds payable, etc. Such financial liabilities are recognized initially at fair value lesstransaction costs and subsequently measured using the effective 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 (inclusive) fromthe balance sheet date are listed as non-current liabilities due within one year; the rest arepresented as non-current liabilities.
(3)

Classification and treatment of financial liabilities and equity instruments
The Company classifies financial liabilities and equity instruments on the following
principles: (1) Where the Company is unable to unconditionally avoid delivering cash or
another financial asset to fulfil a contractual obligation, the contractual obligation meets thedefinition of a financial liability. Although some financial instruments do not explicitly include
the terms and conditions imposing the contractual obligation to deliver cash or anotherfinancial asset, they may indirectly give rise to the contractual obligation through otherterms and conditions. (2) Where a financial instrument shall or may be settled in the
Company’s own equity instrument, consideration shall be given to whether the Company’s
own equity instrument as used to settle the instrument is a substitute of cash or anotherfinancial asset or the residual interest in the assets of the Company after deducting all of its
liabilities. In the former case, the instrument shall be the Company’s financial liability; in thelatter case, the instrument shall be the equity instrument of the Company. Under certain
circumstances whereby a financial instrument contract stipulates that the Company shall or
may use its own equity instrument to settle the financial instrument, and the amount of thecontractual right or obligation equal to the number of its own equity instruments to bereceived or delivered multiplied by their fair value at the time of settlement, the contract
shall be classified as a financial liability, regardless of whether the amount of thecontractual right or obligation is fixed, or fluctuates in full or in partly in response tochanges in a variable other than the market price of the Company’s own equity instruments(for example an interest rate, a commodity price or a financial instrument price).
When classifying a financial instrument (or a component thereof) in consolidated financial
statements, the Company shall consider all terms and conditions agreed between membersof the Group and the holders of the financial instrument. If the Group as a whole has an
obligation in respect of the instrument to settle it by delivering cash or another financial
asset or in such a way that it would be a financial liability, such instrument shall beclassified as a financial liability.
If the financial instrument or its component is attributable to the financial liability, therelevant interests, dividends, gains or losses, and gains or losses arising from redemption
or refinancing, shall be recorded in the profit or loss of the current period.

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Section X Financial Report

If the financial instrument or its component is attributable to equity instrument, theCompany treats it as change in equity when it is issued (including refinanced), repurchased,sold or cancelled. Changes in fair value of equity instrument is not recognized by theCompany. Transaction costs related to equity transactions are deducted from equity. The
Company recognizes the distribution to holders of the equity instruments as distribution of
profits, and dividends paid do not affect total amount of shareholders’ equity.
(4)

Recognition and measurement on transfer of financial assets
A financial asset shall be de-recognized when one of the following conditions is met: ① thecontractual right for receiving cash flows from the financial asset is terminated; ②thefinancial asset is transferred, and the risk and rewards of ownership of the financial asset
have been substantially transferred to the transferee; and ③ the financial asset istransferred; the Company neither transfers nor retains substantially all the risks and rewardsof ownership of the financial asset, but ceases the control over the financial asset. If theCompany neither transfers nor retains substantially all the risks and rewards of ownership ofthe financial asset, and the control over the financial asset is not ceased, the financial asset
and the related financial liabilities should be recognized based on the degree of continuing
involvement. The degree of continuing involvement means the level of risks borne by theCompany resulting from the change in value of the financial asset.
On de-recognition of other equity instruments investment, the difference between the
carrying amount and the sum of the consideration received and the cumulative changes infair value that had been recognized directly in other comprehensive income is recognized in
the retained earnings. On de-recognition of other financial assets, the difference between
the carrying amount and the sum of the consideration received and the cumulative changes
in fair value that had been recognized directly in other comprehensive income is recognizedin current profit or loss.
For financial assets that are sold with recourse or endorsement, the Company needs todetermine whether the risk and rewards of ownership of the financial asset have been
substantially transferred. If the risk and rewards of ownership of the financial asset havebeen substantially transferred, the financial asset shall be derecognized. If the risk andrewards of ownership of the financial asset have been substantially retained, the financial
asset shall not be de-recognized. If the Company neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset, the Company shall assess
whether the control over the financial asset is retained, and the financial assets shall be
accounted for according to the above paragraphs.

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Section X Financial Report(5)

Derecognition of financial liabilities
If the current obligation of a financial liability (or part of it) has been discharged, theCompany derecognizes the financial liability (or part of the financial liability). The Company(borrower) enters into an agreement with the lender to replace the original financial liability
in the form of a new financial liability, and if the new financial liability is substantiallydifferent from the original financial liability, the original financial liability is derecognized andthe new financial liability is recognized. If the Company makes substantial changes to thecontractual terms of the original financial liability (or a part thereof), the original financial
liability is derecognized and the new financial liability is recognized in accordance with therevised terms.
If the financial liability (or a part thereof) is derecognized, the difference between the
carrying amount and the consideration paid (including the transferred non-cash assets or
liabilities assumed) is recognized in current profit or loss.

(6)

Offsetting financial assets and financial liabilities
When the Company has the legal right to offset recognized financial assets and financial
liabilities, and the legal right can be executed at present, and the Company has a plan tosettle the financial assets and financial liabilities at the same time or at net amount, thefinancial assets and financial liabilities can be presented in the balance sheet at net amountafter offsetting. Except for the above circumstances, financial assets and financial liabilities
cannot be offset and shall be presented separately in the balance sheet.

(7)

Determination of fair value of financial assets and financial liabilities
Fair value is the amount at which an asset could be sold or a liability could be transferred
between willing parties in an orderly transaction on a measurement date. The fair value of afinancial instrument that is traded in an active market is determined at the quoted price inthe active market. Quoted price in the active market represents quoted price which can beeasily obtained periodically from exchange market, brokers, industry associations or pricing
services agency, etc., which is the transactions amount in arm’s length transactions. The
fair value of a financial instrument that is not traded in an active market is determined byusing a valuation technique. Valuation techniques include using prices of recent market
transactions between knowledgeable and willing parties, reference to the current fair valueof another financial asset that is substantially the same with this instrument, discounted
cash flow analysis and option pricing models, etc. During the valuation, the Company
adopts an applicable valuation technique under current conditions and there are enoughavailable data and other information to support. Those inputs should be consistent with the
inputs a market participant would use when pricing 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.
In summary, the Company categorizes inputs for fair value measurement into three levels
and uses the inputs by the order of Level 1, Level 2 and Level 3. Level 1: quoted prices(unadjusted) in active markets for identical assets or liabilities at the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable for theasset or liability, either directly or indirectly. Level 3: unobservable inputs for the asset or
liability.

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123Section X Financial Report(8)

Impairment of financial assets
For financial assets measured at amortized cost and debt instrument investments measured
at fair value through other comprehensive income, contract assets and financial guarantee
contracts, the Company 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 aweight, and calculates the probability-weighted amount of the present value of thedifference between the cash flow receivable and the 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 offinancial instruments in different phases. If the credit risk has not increased significantly
since the initial recognition, the financial instruments are in the first phase. The Company
measures the loss provision according to the expected credit losses in the next 12 months;
if credit risk has increased significantly but credit impairment has not yet occurred since theinitial 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, thefinancial instruments are in the third phase. The Company measures the loss provisionaccording 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
measures the 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 bookbalance before the deduction of provisions and effective interest rate. For financial
instruments in the third phase, the Company calculates interest income based on theiramortized cost after the impairment provision has been deducted from the book balanceand effective interest rate.
For bills receivable, accounts receivable and contract assets, whether there exist significant
financing components, the Company measures loss provision based on expected credit
loss over the entire 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 expectedcredit losses rate over the entire duration to calculate the expected credit losses by taking
into account the historical credit losses experience, the existing conditions and forecast of
future economic conditions.

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Section X Financial Report

For each group of accounts receivable, the Company makes the comparison of expectedcredit losses rates of accounts receivable in overdue days and over the entire duration to
calculate the expected credit losses by taking into account the historical credit losses
experience, the existing conditions and forecast of future economic conditions.
For each group of other accounts receivable, the Company applies exposure at default andexpected credit 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 forecast of future economic conditions.
The Company recognizes the loss impairment provision or reversed in profit or loss of thecurrent 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 other comprehensive income at the same time.

12. Inventory√ Applicable □ Not Applicable(1)

Classification of inventory
Inventory refers to finished products and commodities held by the Company in daily
activities for sale, products in progress, materials and supplies consumed in the process of
production or provision of labour services, including mainly raw materials, turnovermaterials, materials for commissioned processing work, packaging materials, products inprogress, semi-finished products through in-house manufacturing, finished products(products in stock) and project construction, among others.

(2)

Pricing of dispatch of inventory
The actual cost of inventories upon delivery is calculated using the weighted averagemethod.

(3)

Impairment provision for inventory
At the balance sheet date, inventory is measured at the lower of cost and net realisablevalue.
The net realisable value of inventories that can be directly put to sale, including finishedproducts, commodities and materials for sale is determined as the estimated selling price ofsuch inventory less estimated selling expenses and related tax expenses; the net realisablevalue of or inventories held for production, is determined as the estimated selling price offinished products manufactured less estimated cost incurred upon completion, estimatedselling expenses and related tax expenses; the net realisable value of inventory held for the
execution of sales contract or labour contract is computed on the basis of the contract
price. If the quantity of inventories held by the Company is more than the quantity ordered
under a sales contract, the net realisable value of the inventories in excess is computed on
the basis of the general selling price.

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Section X Financial Report

Inventory impairment provision is made on the basis of individual inventory items, provided
that if certain inventories are related to a series of products manufactured and sold in thesame region with identical or similar end uses or purposes and are difficult to measureseparately with other items, their cost and net realisable value may be measured on an
aggregate basis. Inventories The cost and net realizable value of inventories in large
quantity with low unit prices are measured according to inventory types.
At the balance sheet date, if the cost of inventory of the Company is higher than its net
realisable value, impairment provision is made and charged to current profit or loss. If thefactor causing the write-down of inventory value has been removed, the amount ofwrite-down should be reversed and transferred out of the previous inventory impairment
provision amount. The reversed amount is included in current profit or loss.
(4)

Inventory system
The Company adopts the perpetual inventory system as its inventory system.

(5)

Amortisation of low-value consumables and packaging materials
The Company adopts one-off amortisation of its low-value consumables and packaging
materials.

13. Contract assets√ Applicable □ Not Applicable
The Company presents the right of the Company to charge consideration from the customer
unconditionally (i.e. only depends on the passage of time) as a receivable, while theconsideration that the Company has the right (and this right depends on factors other thanpassage of time) to receive for goods transferred to customers is presented as a contract
assets. If the Company sells two clearly distinguishable goods to the customer, and it has theright to receive payment because one of the goods has been delivered, but the receipt of suchpayment is conditioned on the delivery of another goods, the Company shall recognise such rightto receive payment as contract asset.
For the determination and accounting treatment methods of the expected credit loss of contract
assets, please see Note V.11 “Impairment of financial assets”.

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Section X Financial Report

14. Long-term equity investments√ Applicable □ Not Applicable
Long-term equity investments hereunder refer long-term equity investments in which theCompany exercises control, joint control or significant influence over the investee.
(1)

Determination of initial investment cost①
The initial cost of long-term equity investments acquired through business combination
involving parties under common control should be recognised as the share of thecarrying value of the owner’s equity of the acquired party; the initial cost of long-term
equity investments acquired through business combination involving parties not undercommon control should be recognised as the combination costs determined at thedate of acquisition;②(2)

The Company invested in other equity investment other than long-term equity
investments acquired through combination, the initial investment cost of long-term
equity investments acquired with cash payment is the acquisition price actually paid;
the initial investment cost of long-term equity investments acquired with the issuanceof equity- based securities is represented by the fair value of equity-based securities;
the initial investment cost of long-term equity investments acquired through debt
restructuring is determined in accordance with relevant provisions under AccountingStandards for Business Enterprises No.12 — Debt Restructuring; the initial investment
cost acquired in exchange for non-monetary assets shall be determined inaccordance with relevant provisions of the standard.

Subsequent measurement and recognition of profit or loss①
Cost method
Long-term equity investments in which the Company is able to exercise control overthe investee is accounted for using the cost method. Under the cost method, thecarrying value of long-term equity investments, other than additional investment or
recouped investment, shall remain constant. The Company declared the distribution of
profit or cash dividend to the investee and calculated the portion of entitlement,
which is recognised as investment income.

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Section X Financial Report②

Equity method
The equity method is used by the Company to account for long-term equity
investments in associates and joint ventures. Under the equity method, the initialinvestment cost is not adjusted for any excess of the initial investment cost over theshare of the net fair value of the investee’s identifiable assets. When the initialinvestment cost is less than the share of the fair value of the investment’s identifiable
net assets, the difference is recognised in current profit or loss and the cost of
long-term equity investment is adjusted accordingly.
Under the equity method, share of net profit or losses and other comprehensive
income of the investee are recognised by the Company as investment income andother comprehensive income, respectively, and the carrying amount of the long-term
equity investment is adjusted accordingly. Share of profit or cash dividend declaredby the investee is charged against the carrying value of the long-term equity
investment; changes in owners’ equity of the investee other than net profit or loss,
other comprehensive income and profit distribution are adjusted against the carrying
value of long-term equity investment and included in capital reserve. Share of net
profit or loss of the investee is recognised by the Company on the basis of the fairvalue of the identifiable assets of the investee when the investment is acquired andadjusted against the net profit of the investee. If the accounting policy andaccounting period of the investee are inconsistent with those of the Company, thefinancial statements of the investee is adjusted to align with the accounting policy andaccounting period of the Company, and investment income and other comprehensive
income is recognised accordingly.
Net losses of the investee is recognised by the Company by deducting the carrying
value of the long-term equity investment together with long-term equity that insubstance forms part of the net investment in the investee until it reaches zero.
Moreover, if the Company has incurred obligations to assume additional losses of theinvestee, estimated liabilities are recognised according to the obligation expected to
be assumed and charged to current investment loss. If the investee records net profit
in future periods, the Company shall recognise its share of gains after applying suchshare of gains to make up for the unrecognised share of loss.

(3)

128

Change of accounting method for long-term equity investment①
Change from fair value measurement to the equity method: If an equity investment in
the investee not previously affording control, joint control or significant influence andaccounted for in accordance with the standard for recognition and measurement offinancial instruments becomes capable of affording joint control or significant influence
over the investee as a result of increased shareholding following additional
investment, the accounting method should be changed to the equity method, and thefair value of the original equity investment determined according to the standard forrecognition and measurement of financial instruments plus the fair value ofconsideration paid for the acquisition of the new investment shall be changed theinitial investment cost under the equity method.

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Section X Financial Report(4)②Change from fair value measurement or equity method to cost method: if an equity
investment previously held in the investee not previously affording control, joint control
or significant influence and accounted for in accordance with the standard forrecognition and measurement of financial instruments, or a long- term equity
investment previously held in associates or joint ventures becomes capable ofaffording control over the investee, it is accounted for long-term equity investment
formed through business combination.

③

Change from equity method to fair value measurement: if a long-term equity investment
previously held in the investee affording joint control or significant influence ceases toafford joint control or significant influence as a result of decrease in shareholding
percentage following partial disposal, the remaining equity investment is recognised inaccordance with the standard for recognition and measurement of financial
instruments, and the difference between the fair value at the date of loss of joint
control or significant influence and the carrying value is included in current profit or
loss.

④

Change from cost method to equity method or fair value measurement: when preparing
separate financial statements, if the Company losses control over an investee due todisposal of some equity-based investment and other reasons, the Company accounts
for the remaining equity affording joint control or significant influence over an investee
as a result of disposal based on the equity method, and the remaining equity will be
adjusted as if it is accounted for using the equity method from the date ofacquisition; for the remaining equity not affording joint control or significant influence
over an investee as a result of disposal, it is accounted for in accordance with
relevant requirements of Accounting Standards for Business Enterprises No. 22—
Recognition and measurement of financial assets, and the differences between the fairvalue and book value on the date when control is lost are included in profit or loss.
When preparing consolidated financial statements, it shall be accounted for inaccordance with relevant requirements of Accounting Standards for BusinessEnterprises No.33— Consolidated financial statements.

Bases for determining joint control or significant influence over an investee
Joint control is the contractually agreed sharing of control over an arrangement, which
relevant activities of such arrangement must be decided by unanimously agreement fromparties who share control. If all the parties or a group of parties must act in concert todecide on the relevant activities of certain arrangement, it can be considered that all parties
or a group of parties have collective control over the arrangement. When determining if
there is any joint control, it should first be determined if the arrangement is controlledcollectively by all parties or a combination of parties, and then determined whether
decisions about activities related to the arrangement must be made by the unanimous
agreement of those parties who have collective control over the arrangement. If there are
two or more party groups that can collectively control certain arrangement, it does notconstitute joint control. When determining if there is any joint control, the relevant
protection rights will not be taken into account.

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Section X Financial Report

Significant influence is the power of the investor to participate in the decision-making of aninvestee’s financial and operational policies, but neither control nor jointly control theformulation of such policies with other parties. When determining if there is any significant
influence on the investee, the influence of the voting shares of the investee held directly or
indirectly and the potential voting rights held by the Company and other parties which are
exercisable in the current period and converted to the equity of the investee, including thewarrants, stock options and convertible bonds that are issued by the investee and can beconverted in the current period, shall be taken into account by the Company.
When the Company holds directly or indirectly through the subsidiary 20% (inclusive) to
50% of the voting shares of the investee, it is generally considered to have significant
influence on the investee, unless there is concrete evidence to prove that it cannot
participate in the production and operational decisions of the investee and cannot posesignificant influence in this situation.
The Company usually determines whether there is significant influence on the investee
through the following one or several circumstances:①

Representation at the board or similar authority of the investee.

②

Participation in the decision-making process of the investee’s financial and operational
policies.

③

Having important transactions with the investee.

④

Posting of management personnel at the investee.

⑤

Providing key technical data to the investee.

Having one or several of the above circumstances does not mean that the Company musthave significant influence on the investee. The Company needs to comprehensively
consider all the facts and circumstances to make an appropriate judgment.
(5)

130

Methods for impairment test and impairment provision
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of a long-term equity investment. If there are indications of impairment, an
impairment test should be performed to ascertain its recoverable amount, and an
impairment provision equivalent to the margin by which the recoverable amount is lower
than the carrying value should be made. Once recognised, impairment loss will not bereversed in subsequent accounting periods. The recoverable amount is determined as thehigher of net fair value of the long-term equity investment on disposal and present value of
estimated future cash flow.

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Section X Financial Report(6)

Disposal of long-term equity investments
Upon the Company’s disposal of long-term equity investments, the difference between the
carrying value and consideration actually acquired is included in current profit or loss. Upondisposal of long-term equity investment, the portion previously included in othercomprehensive income is accounted for according to the relevant percentage on the same
basis adopted in the direct disposal of the relevant assets or liabilities by the investee.

15. Investment properties(1)

Types and measurement models of investment properties
The Company’s investment properties include the following types: leased land-use rights
and leased buildings.
The Company’s investment properties is initially measured at cost and subsequently on a
cost basis.

(2)

Adoption of cost model as accounting policy
Among the Company’s investment properties, leased buildings are subject to depreciation
on a straight-line basis in accordance with accounting policies identical with accounting
policies for fixed assets. Leased land-use rights and land-use rights held for disposal after
appreciation land- use rights in investment properties are amortised using the straight-line
method in accordance with accounting policies identical with fixed asset accounting
policies for intangible assets.
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of an investment property. If there are indications of impairment, an impairment
test should be performed to ascertain its recoverable amount, and an impairment provisionequivalent to the margin by which the recoverable amount is lower than the carrying value
should be made. Once recognised, impairment loss will not be reversed in subsequentaccounting periods.
Where the investment properties are sold, transferred, retired or damaged, the differencesfrom disposal after deducting the carrying amount and related taxes are recognised in profit
or loss for the current period by the Company. When the Company has evidence indicating
the self-occupied houses and buildings are converted to leasing or leasing out its
properties held for sale under operating leases, the carrying amount of such fixed assets,intangible assets or inventories before the conversion are transferred to investment
properties. When the Company has evidence indicating the property held to earn rentals orfor capital appreciation are converted to self-occupation or the property intended for
operating lease purpose are open for sale, the carrying amount of such properties before
the conversion are transferred to fixed assets, intangible asset or inventories.

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16. Fixed assets(1)

Recognition criteria and measurement of fixed assets
Fixed assets of the Company refer to tangible assets held for the production ofcommodities, provision of labour services, lease or operational management with a usefullife of more than one accounting year. Fixed assets are recognised if all of the following
conditions are met:①

Economic benefits relating to such fixed assets are likely to flow into the Company;②

The cost of the fixed assets can be reliably measured.

Subsequent expenditure incurred for a fixed asset that meets the recognition criteria shallbe included in the cost of the fixed asset, and the carrying amount of the component of
the fixed asset that is replaced shall be derecognised. Otherwise, such expenditure shall berecognised in profit or loss for the period in which it is incurred.
Fixed assets of the Company are initially measured at cost. The purchase cost of a fixed
asset comprises its purchase price, related taxes and any directly attributable expenditure
for bringing the asset to its working condition for its intended use, such as transportation
costs and installation expenses. If the payment for a purchased fixed asset is deferredbeyond the normal credit terms, the cost of the fixed asset shall be determined based on
the present value of the instalment payments. The difference between the actual payment
and the present value of the purchase price is recognised in profit or loss over the credit
period, except for such difference that is capitalised according to Accounting Standard forBusiness Enterprises No. 17 — Borrowing Costs.
(2)

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Classification and depreciation of fixed assets
The Company’s fixed assets are mainly classified into: buildings, machinery equipment,
transportation equipment and office and other equipment; depreciation is conducted on astraight-line basis. The useful life and estimated net residual value of fixed assets are
determined based on the nature and use of the fixed assets. At the end of the year, theuseful life and estimated residual value of and depreciation method for fixed assets arereviewed, and adjustment is made for any difference with the original estimated amount.
Other than fully depreciated fixed assets which remain in use and the land which isseparately priced and recorded, the Company measures depreciation for all fixed assets.

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The type, depreciation method, estimated useful lives, estimated residual values and yearly
depreciation of the Company’s fixed assets are as follows:

Type of assets

Depreciation method

Buildings
Machinery equipment
Transportation equipment
Office and other equipment

Life average method
Life average method
Life average method
Life average method

Estimated
useful lives(years)Estimated
residualvalues, net

8–40
4–20
5–10
3–10

0–5%
0–5%
0–5%
0–5%

(3)

Methods for impairment test and impairment provision for fixed assets
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of fixed assets. If there are indications of impairment, an impairment test shouldbe performed to ascertain its recoverable amount, and an impairment provision equivalent
to the margin by which the recoverable amount is lower than the carrying value should be
made. Once recognised, impairment loss will not be reversed in subsequent accounting
periods.

(4)

Disposal of fixed assets
Fixed assets are derecognised upon disposal, or when no economic benefits are expectedfrom use or disposal. The difference between gains on disposal, transfer, retirement or
damage of fixed assets, net of their book value and related taxes, are included in profit andloss.

17. Construction in progress√ Applicable □ Not Applicable(1)

Measurement of construction in progress
The cost of the Company’s construction in progress is recognised at actual construction
expenses, including all necessary construction expenses incurred during the construction,and borrowing costs capitalized before the work reaches the expected conditions for use
and other related costs.

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(2)

(3)

Criteria for and timing of the transfer of construction in progress to fixed assets
The Company’s construction in progress is transferred to fixed assets when the work iscompleted and reaches the expected conditions for use. The criteria for judgement of
expected conditions for use should meet one of the following:①

The physical construction (including installation) of fixed assets has been completed infull or substantially completed in full;②

Trial production or operation has commenced and the result indicates that the asset
can operate normally or can manufacture compliant products in a consistent manner,or the trial operation indicates that it can operate or conduct business normally;③

The amount of fixed asset expenditure of the construction is minimal or almost certain
not be further incurred;④

Fixed assets acquired have reached design or contractual requirements, or are
essentially consistent with design and contractual requirements.

Methods for impairment test and impairment provision for construction in progress
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of construction in progress. If there are indications of impairment, an
impairment test should be performed to ascertain its recoverable amount, and an
impairment provision equivalent to the margin by which the recoverable amount is lower
than the carrying value should be made. Once recognised, impairment loss will not bereversed in subsequent accounting periods.
The recoverable amount is determined as the higher of net fair value of the asset lessdisposal cost and the present value of estimated future cash flow.

18. Borrowing costs√ Applicable □ Not Applicable
(1)

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Principle for recognition of capitalisation of borrowing cost
Borrowing costs incurred by the Company that can be directly attributed to the acquisitionor production of assets qualified for capitalisation are capitalised and included in relevant
asset costs; other borrowing costs are recognised as cost at the amount incurred at thetime of incurrence and charged to current profit or loss. Assets qualified for capitalisationrefer to fixed assets, investment properties and inventory that require a considerably long
period of acquisition or production activities to reach the expected conditions for use or
sale.

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Section X Financial Report(2)

Computation of capitalised amounts
Capitalisation period: from the point of time at which the capitalisation of borrowing costs
begins to the point of time at which capitalisation ceases. The period of suspension ofcapitalisation of borrowing costs is not included.
Period of suspension of capitalisation: In case of abnormal disruption during the acquisitionor production process for a consecutive period of more than 3 months, the capitalisation
period for borrowing costs should be suspended.
Computation of capitalised amount: ① For specific borrowings, the amount is determined
as interest expense incurred for the period in respect of the specific borrowing less interest
income received through the deposit of unutilised borrowed funds or investment gains
received through provisional investments; ② For general borrowings utilised, the amount isdetermined as the weighted average amount of the portion of cumulative asset expenses inexcess of the asset expense of specific borrowings multiplied by the capitalisation rate forthe general borrowings utilised, where the capitalisation rate is the weighted averageinterest rate of general borrowings; ③ where there is a discount or premium in the
borrowings, the amortisation of such discount or premium for each accounting period isdetermined according to the effective interest rate and the interest amount for each period
is adjusted accordingly.

19. Intangible assets
Intangible assets are the identifiable non-monetary assets which have no physical form and arepossessed or controlled by the Company, and are recognized when the following conditions aremet:①

it is probable that economic benefits attributable to the intangible assets will flow into theCompany;②

the costs of the intangible assets can be measured reliably.

(1)

Measurement of intangible assets
Intangible assets of the Company are initially recognized at costs. The actual costs ofpurchased intangible assets include the consideration and relevant expenses actually paid.
For intangible assets contributed by investors, relevant actual costs are determined basedon the value agreed in the investment contract or agreement. But if the value agreed in theinvestment contract or agreement is not a fair value, the actual costs should be determinedbased 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. Intangible assets acquired ina business combination not under common control that are owned by the acquiree but notrecognised in its financial statements are recognised as intangible assets at fair value on
initial recognition of the acquiree’s assets.

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Subsequent measurement of intangible assets of the Company: ①Intangible assets withfinite useful lives are amortized on a straight-line basis; their useful lives and amortization
methods are reviewed at the end of each year, and adjusted accordingly if there is any
variance with the previous estimates; ②Intangible assets with indefinite useful lives are notamortized and their useful lives are reviewed at the end of each year. If there is anobjective 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 be amortized using the straightline 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 or other 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.
At the end of each year, the Company reviews the useful lives of the intangible assets withindefinite useful lives. The assessment is primarily reviewed by relevant departments that
use the intangible assets, using the down-to-top approach, to determine if there arechanges 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 sign of 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 ismade for it. The recoverable amount of intangible assets should be based on the higher ofthe net fair value of the assets less the disposal expense and the present value of
estimated future cash flow of the assets.

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Section X Financial Report(4)

Basis for research and development phases for internal research and development
project and basis for capitalization of expenditure incurred in development stage
As for an internal research and development project, expenditure incurred in the research
stage is recognized in the profit or loss as incurred. Expenses incurred in the development
stage are capitalized only if all of the following conditions are met: ①the technicalfeasibility of completing the intangible assets so that they will be available for use or for
sale; ②the intention to complete the intangible assets for use or for sale; ③ how theintangible assets will generate economic benefits, including there is evidence that the
products produced by the intangible assets has a market or the intangible 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 and other 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
research and development project: the Company refers to the research stage as the stageof planned investigation and search for obtaining new technology and knowledge, whichfeatures planning and exploration; before commercial production or other uses, theCompany regards the stage of applying the research achievements and other knowledge ina plan or design to produce new or substantially improved materials, equipment andproducts as development stage, which features pertinence and is very likely to form
results.
All the expenditures incurred on research and development which cannot be distinguishedbetween research stage and development stage are recognized in the profit or loss.

20. 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 recoverable amount of the assets is less than the carrying amount, a provision
for impairment will be made based on the difference and will be recorded in impairment loss. The
recoverable amount is the higher of the net fair value of the assets less the disposal expense
and the present value of estimated future cash flow of the assets. Provision for asset impairment
is calculated and recognized on the individual asset basis. If it is not possible to estimate therecoverable amount of an individual asset, the recoverable amount of the asset group to which
the asset belongs is determined. An asset group is the smallest asset portfolio that can generatecash inflows independently.
Goodwill arising from a business combination and an intangible asset with an indefinite useful life
is tested for impairment at least at each year end, irrespective of whether there is any indicationthat the asset may be impaired. Intangible assets that have not been ready for intended use aretested for impairment each year.

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When the Company carries out impairment test of the goodwill, 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 the related asset groups. When the carrying amount of the goodwill isallocated 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 fairvalue of related asset groups or asset group portfolios. If it is difficult to measure the fair value
reliably, it shall be allocated in the proportion of the carrying amount of 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 by the Company 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, the Company shall first conduct impairment test on the asset
groups or asset group portfolios excluding goodwill, calculate the recoverable amount andrecognize the corresponding impairment loss by comparing 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 the carrying amount of allocatedgoodwill) of related asset groups or asset group portfolios with the recoverable amount thereof.
Impairment loss shall be recognized in accordance with the differences when the recoverable
amount of the related asset groups or asset group portfolios is lower than the carrying amountthereof. The amount of the impairment loss is first reduced by the carrying amount of the
goodwill allocated to the asset group or set of asset groups, and then the carrying amount ofother assets (other than the goodwill) within the asset group or set of asset groups, pro rata
based on the carrying amount of each asset.
Once the above impairment loss on assets is recognized, it shall not be reversed by theCompany in any subsequent accounting period.

21. Long-term prepaid expense√ Applicable □ Not Applicable
Long-term prepaid expenses of the Company are expenditures which have incurred but thebenefit period of which is more than one year (exclusive). They are amortized by installments overthe benefit period based on each item under the expenses. If items under the long-term pre-paid
expenses are no longer beneficial to the subsequent accounting periods, the amortized value ofsuch unamortized items is then fully transferred to the profit or loss.

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Section X Financial Report

22. Contract liabilities√ Applicable □ Not Applicable
A contract liability represents the Company’s obligation to transfer goods to a customer forwhich the Company has received consideration (or an amount of consideration is due) from thecustomer. If the customer has already paid the contract consideration before the Company
transfers goods to the customer or the Company has obtained the unconditional collection right,
the Company will recognise such amount received or receivable as contract liabilities at earlier of
the actual payment by the customer or the amount payable becoming due. Contract assets andcontract liabilities under the same contract are presented on a net basis, and contract assets
and contract liabilities under different contracts are not offset.

23. 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.
(1).

Accounting treatment of short-term remunerations√ Applicable □ Not Applicable
Short-term remunerations provided by the Company include short-term salaries, bonus,
allowance, subsidies, employee welfare, housing provident fund, labor union fee andeducation 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, the Company
shall recognize short-term remunerations that actually incurred as liabilities and credited into
the current profit or loss or the cost of relevant assets on an accrual basis by the benefit
objects.

(2).

Accounting treatment of post-employment benefits√ Applicable □ Not Applicable
Post-employment benefits mainly include the basic pension insurance, enterprise annuity,
etc., In accordance with the risks and obligations undertaken by the Company, thepost-employment benefits are classified as defined contribution plans and defined benefit
plans.
Defined contribution plans: the Company shall recognize the sinking funds paid on thebalance sheet date to individual entities in exchange for services from employees in theaccounting period as liabilities, and shall credit such funds into the profit or loss or the costof relevant assets in accordance with the benefit objects.

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Defined benefit plans: the Company determines the cost for providing benefits 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 Group are categorized asfollows: (1) service cost, including current period service cost, past service cost andsettlement profit or loss. Specifically, current period service cost means the increase of thepresent value of defined benefit obligations resulted from the current period services offeredby 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 tothe prior period services offered by employees; (2) interest expenses of defined benefit
plans; (3) changes caused by the remeasurement of liabilities for defined 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 orloss; and recognize (3) above as other comprehensive income and will not transfer it backto the profit or loss in subsequent accounting periods.
(3).

Accounting treatment of termination benefits√ Applicable □ Not Applicable
Termination benefits are 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 Company
could not unilaterally withdraw the termination benefits provided as a result of plan for
termination of labor relations or the redundancy offer, or upon recognition of costs or
expenses related to a restructuring involving the payment of termination benefits, whicheveris earlier, the staff’s remuneration liabilities arising from such termination benefits arerecognized and included in current profit or loss.

24. Estimated liability√ Applicable □ Not Applicable
(1)

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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 the present obligation of the Company and the performance of such obligation is likely tolead to an outflow of economic interests and its amount can be reliably measured, suchobligation shall be recognized as an estimated liability.

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Section X Financial Report(2)

Measurement of estimated liability
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 for the 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 therange.; if there are two or more items involved, the best estimate should be determinedaccording to all possible outcomes and relevant 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, the carrying value shall be adjusted to reflect the current best estimate.
If all or part of the expense necessary for settling the provisions is expected to becompensated by the third party, the amount of compensation is separately recognized as
an asset when it is basically determined to be recoverable, and the recognized amount of
the compensation shall not exceed the carrying amount of the provisions.

25. Share-based payments√ Applicable □ Not Applicable
Share-based payments of the Company are transactions in which equity instruments are granted
to employees in exchange for services rendered by employees or for the assumption of liabilities
based on equity instruments. Share-based payments of the Company are equity-settled
share-based payments and cash-settled share-based payments.
For equity-settled share-based payment transaction in return for services from employees, it shallbe measured at the fair value of equity instruments granted to the employees at the date of
grant by the Company. On each balance sheet date within the vesting period, the Company
makes the best estimation of the number of vested equity instruments based on subsequent
information such as the updated changes in the number of employees who are granted to vest
and the achievement of specified performance conditions. Based on the above results, theservices received in the current period are included in the relevant cost or expenses based on
the fair value on the date of grant, with the increase in the capital reserve accordingly. The
recognized relevant cost or expenses and the total amount of owners’ interest shall no longer be
adjusted after the vesting date. However, equity instruments vested immediately after the date of
grant shall be included in the relevant cost or expenses based on its fair value on the date of
grant, with the increase in the capital reserve accordingly.

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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 fairvalue of the liability assumed by the Company shall, on the date of the grant, be recognized in
relevant costs 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, the services 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 theCompany, and the liabilities shall be adjusted correspondingly. At each balanced sheet date andthe settlement date prior to the settlement of liabilities, the fair value 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 thefair value of equity instruments refer to the difference between the fair values of the equity
instrument on the modified date before or after the modification. If the Company modifies thevesting conditions in such manner conductive to the employees, including the shortening of thevesting period, change or cancellation of the performance conditions (rather than market
conditions), the modified vesting conditions are considered upon the disposal of vesting
conditions. If the modification reduces the total fair value of shares paid or the Company uses
other methods not conductive to employees to modify the terms and conditions of share-based
payment plans, the Company will continue to be accounted for the services obtained in theaccounting treatment, as if the change had not occurred, unless the Company cancelled some or
all of the equity instruments granted.
During the vesting period, if the Company cancel equity instruments granted which will be treatedas 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.

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Section X Financial Report

26. 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
performance obligation in accordance with the relevant proportion of separate selling price ofgoods or services promised by various single performance obligation, and measure revenue inaccordance 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 the amount collected for any third party. The transaction price recognized by theCompany 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 the client is taken as liability of returned goods and is not recordedin 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
performance obligations 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
the Company and its subsidiaries;③

Goods produced by the Company and its subsidiaries during the process of performance
have no alternative use, and the Company and its subsidiaries are entitled to collect theamount for the 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. When the schedule of performance can’t be reasonably recognized, where the costs thathave been incurred by the Company and its subsidiaries are estimated to be compensated,revenue shall be recognized in accordance with the amount of costs that has been incurred until
the schedule of performance can be reasonably confirmed.

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Section X Financial Report

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 orservices. When judging whether the client has obtained control right over goods or services, theCompany 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 tothe client;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 forhaving transferred goods or services to the client (and such right depends on other factors otherthan time lapse) is presented as contract asset, and contract asset is provisioned impairment on
the basis of expected credit losses. The right owned by and unconditionally collected from theclient by the Company and its subsidiaries (only depend on time lapse) shall be presented as
accounts receivable. Obligations that the Company and its subsidiaries have collected or shallcollect consideration from the client and shall transfer goods or services to the client arepresented as contractual obligations.
Specific accounting policies relating to major activities that the Company and its subsidiaries
obtain revenue are described as follows:
(1)

144

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 of taking into account the following factors comprehensively, the Company
recognizes the revenue at the time point of transfer of control right of goods: the right of
instant collection for obtaining goods, transfer of major risks and rewards on ownership ofgoods, transfer of statutory ownership of goods, transfer of assets of material objects ofgoods, the client’s acceptance of such goods.

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Section X Financial Report(2)

Construction contract income
Construction contract between the Company and the client generally includes performanceobligations of construction and installation of commercial air-conditioner and smart home,because the client is able to control goods under construction during the Company’s
performance process, the Company takes them as performance obligations performed
during a certain time horizon, and recognizes revenue in accordance with the schedule ofperformance, and it is an exemption when the schedule of performance can’t bereasonably confirmed. The Company confirms the schedule of performance of services
provided in accordance with the input method. When the schedule of performance can’t bereasonably confirmed, where the costs that have been incurred by the Company are
estimated to be compensated, the revenue will be recognized in accordance with theamount of costs that has been incurred until the schedule of performance can bereasonably 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 inorder 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 client that we also provide a separate service otherthan that the goods sold comply with existing standards, the Company takes it as aseparate performance obligation, and allocates partial transaction price to service-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 right over 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 as whether such quality assurance is understatutory requirements or industrial practices, the term of quality assurance and the natureof the Company’s commitment to perform the tasks.

27. Government grants√ Applicable □ Not Applicable(1)

Types of government grants
Government grants refer to the gratuitous monetary assets or non-monetary assets
obtained by the Company from the government, excluding the capital invested by thegovernment as an owner. The government grants are mainly divided into asset-related
government grants and revenue-related government grants.

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Section X Financial Report(2)

Accounting treatment of government grants
Asset-related government grants shall be recognized as deferred income in current profit orloss on an even basis over the useful life of relevant assets; government grants measured
at nominal amount shall be recognized directly in current profit or loss. Revenue-related
government grants shall be treated as 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 expenses arerecognized; ②those 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 orother project that 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 shallbe reviewed and modified if necessary on each balance sheet date;②

Government grant shall be categorized as revenue-related if its usage is described ingeneral statement and no specific project is specified in the relevant government
document.

(4)

Amortization method and determination of amortization period of deferred revenue
related to government grants
Asset-related government grant received by the Company is recognized as deferred
revenue and is evenly amortized to the profit or loss in the current period over theestimated 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 theperiod when there is clear evidence that the relevant conditions set out in the financial
subsidy policies and regulations are fulfilled and the receipt of such financial subsidy isassured.
Other government grants other than those measured at the account receivable isrecognized upon actual receipt of such subsidies.

146

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Section X Financial Report

28. Deferred tax assets/deferred tax liabilities√ Applicable □ Not Applicable
Deferred income tax assets and deferred income tax liabilities of the Company are calculated andrecognized based on the differences between the tax bases and the carrying amounts of assets
and liabilities (temporary differences).
(1)

Deferred income tax assets are recognized by the Company to the extent that it is probablethat future taxable profits will be available against which the deductible temporary
differences can be utilized. For deductible losses and tax credits that can be carriedforward to future years, deferred income tax assets shall be recognized to the extent that itis probable that taxable profit will be available in the future to offset the deductible losses
and tax credits. Save as the exceptions, deferred income tax liabilities shall be recognized
for the taxable temporary differences.

(2)

Deferred income tax asset of the Company is recognized to the extent that there is enoughtaxable income for the deduction of the deductible temporary difference. At the balance
sheet date, if there is sufficient evidence 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 is recognized. If there is no sufficientevidence that there will be enough taxable income in the future for the deduction of thedeferred income tax asset, the carrying value of the deferred income tax asset is reduced.

(3)

The Company recognizes deferred income tax liability for taxable temporary difference arisingfrom investments in subsidiaries and associated companies, unless the Company could
control the time of reversal of the temporary differences and the temporary differences
would not be probably reversed in the foreseeable future. The Company recognizes
deferred income tax asset for deductible temporary differences arising from investments in
subsidiaries and associated companies, if the temporary difference will be very probably
reversed in the foreseeable future and it is highly probable that taxable income will beavailable in the future to deduct the deductible temporary difference.

(4)

The Company does not recognize deferred income tax liability for a temporary difference
arising from the initial recognition of goodwill. No deferred income tax asset or deferredincome tax liability is recognized for the temporary differences resulting from the initialrecognition of assets or liabilities due to a transaction other than a business combination,
which affects neither accounting profit nor taxable income (or deductible loss). At thebalance sheet date, deferred income tax assets and deferred income tax liabilities of theCompany are measured at the tax rates that apply to the period when the asset is
expected to be recovered or the liability is expected to be settled.

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147

Section X Financial Report(5)

Deferred income tax assets and deferred income tax liabilities are offset when:1)deferred tax assets and deferred tax liabilities relate to income taxes levied by the same
taxation authority on the same taxable entity within the Company;

2)such taxable entity within the Company has a legally enforceable right to settle current
income tax assets and current income tax liabilities on a net basis.

29. Leases√ Applicable □ Not Applicable
Lease is a contract in which the Company transfers or obtains the right of use of an identified
asset or several identified assets under control for the exchange or payment of consideration
within a certain period of time. At inception of a contract, the Company assesses whether acontract is, or contains, a lease.
(1)

The Company as the lessee√ Applicable □ Not Applicable1)

Initial measurement
On the commencement date of the lease term, the Company recognizes its right touse leased assets over the lease term as right-of-use assets and recognizes thepresent value of the lease payments that have not been paid as lease liabilities,
except for short-term leases and low-value leases. The lease payments are
discounted using the implicit interest rate in the lease when calculating the present
value of the lease payments. If that rate cannot be readily determined, the Company
uses its incremental borrowing rate as the discount rate.
Right-of-use assets shall be initially measured at costs. The costs include:

148

a.

initial measurement amount of the lease liabilities;b.

a lease payment paid on or before the date of commencement of the lease term,
where there were lease incentives, such incentives received shall be deducted;

c.

initial direct costs incurred by the lessee;d.

costs expected to be incurred by the Company for demolition and removal ofleased assets, restoration of the premises where the leased assets are located,or restoration of the leased assets to the conditions of the lease terms.

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report

(2)

2)

Subsequent measurement
If the Company accrues depreciation for right-of-use assets by reference to thedepreciation policy for fixed assets (see this Note V.16 “Fixed assets” for details), andcan reasonably determine that the ownership of the leased asset can be acquired at
the expiration of the lease term, the Company shall depreciate the leased asset within
its remaining useful life. If the Company cannot reasonably determine that theownership of the leased asset can be acquired at the expiration of the lease term, theCompany shall depreciate the leased asset within the lease term or its remaining
useful life, whichever is shorter. For lease liabilities, the Company shall calculate theinterest expenses for each period over the lease term at the fixed periodic interest
rate, and recognize it in current profit or loss or the cost of relevant assets. Variable
lease payments that are not included in the measurement of lease liabilities arerecognized in current profit or loss or the cost of relevant assets when they are
actually incurred. After the commencement date of the lease term, in the event that
there is a change in the substantive fixed payments, a change in expected payment
under a guaranteed residual value, a change in an index or rate used in determining
the lease payments, or a change in the evaluation result or actual exercise ofpurchase option, extension option or termination option, the Company remeasures thelease liabilities based on the present value of the lease payments after the change
and adjusts the carrying value of the right-of-use asset accordingly. If the carrying
amount of the right-of-use asset has been reduced to zero, but a further reduction in
the measurement of the lease liabilities is still warranted, the Company recognizes theremaining amount of the remeasurement in current profit or loss.

3)

Short-term leases and leases of low-value assets
For short-term leases (leases with a term of less than 12 months as of the leasecommencement date) and leases of low-value assets, the Company adopts a
simplified approach by not recognizing the right-of-use assets and lease liabilities, andinstead recognizes the cost of relevant assets or current profit or loss on astraight-line basis for each period over the lease term.

The Company as the lessor√ Applicable □ Not Applicable
The Company classifies leases into finance leases and operating leases based on thesubstance of the transaction at the inception date of the lease. A finance lease is a leasethat transfers substantially all the risks and rewards incidental to ownership of the leased
asset. An operating lease is a lease other than a finance lease.

1)

Operating leases
The Company uses the straight-line method to recognize lease receipts underoperating leases as rental income for each period during the lease term. Variable
lease payments relating to operating leases that are not recognized as lease receipts
are recognized in current profit or loss when they are actually incurred.

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149

Section X Financial Report2)

Finance leases
On the commencement date of the lease term, the Company recognizes finance leasereceivables and derecognizes finance lease assets. Finance lease receivables are
initially measured at the net investment in the lease (the sum of the unguaranteed
residual value and the present value of the lease receipts not yet received on thecommencement date of the lease term discounted at the interest rate embedded in
the lease), and interest income is recognized over the lease term calculated at a fixed
periodic interest rate. Variable lease payments acquired by the Company that are notincluded in the measurement of the net investment in the lease are recognized incurrent profit or loss when they are actually incurred.

30. Other significant accounting policies and accounting estimates√ Applicable □ Not Applicable(1)

Asset securitisation
The Company has securitised certain receivables to entrust the assets to specific-purpose
entities which would issue such securities to investors. As asset service provider, theCompany is responsible for the provision of maintenance and daily management of theassets, formulation of annual asset disposal plans, formulation and implementation of asset
disposal plan, signing of relevant asset disposal agreements and preparation asset service
reports on a regular basis.
In applying the accounting policy for the securitisation of financial assets, the Company has
considered the extent to which the risk and reward of the assets have been transferred toother entities, and the extent to which the Company exercises control over the entity:

150①

When the Company has transferred substantially all risk and reward relating to theownership of a financial asset, such financial asset is derecognised;②

When the Company retains substantially all risk and reward relating to the ownershipof a financial asset, the Company continues to recognise such financial asset;③

If the Company neither transfers nor retains substantially all risk and reward relating tothe ownership of a financial asset, the Company considers whether it has control overthe financial asset. If the Company does not retain control, the financial asset isderecognised, and the rights and obligations arising from or retained the transfer are
recognised as assets and liabilities, respectively. If the Company retains control, thefinancial asset is recognised according to the extent of continued involvement in thefinancial assets.

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report(2)

Hedge accounting
Hedge refers, in respect of the risk exposure arising from the company’s management ofspecific risks such as foreign exchange risks, interest rate risks, price risks and credit risks,
to risk management activity of designating financial instruments as hedging instruments
such that the change in the fair value or cash flow of the hedging instruments can be
expected to set off the change in the fair value or cash flow of the hedged item.
The hedged item refers to an item designated for hedge against the risk of change in fairvalue or cash flow that can be reliably measured.
Hedging instruments are financial instruments designated for hedge, the change in fair value
or cash flow of which is expected to set off the change in the fair value or cash flow of thehedged item.
The Company assesses whether the hedge relationship fulfills the requirement for hedge
effectiveness at the inception date of the hedge and continuously in subsequent periods.
The effectiveness of hedge refers to the extent to which the change in the fair value orcash flow of the hedging instruments can offset the change in the fair value or cash flow of
the hedged item caused by the risk against which the hedge is made. The change in thefair value or cash flow of a hedging instrument in excess or shortfall of the change in thefair value or cash flow of the hedging instruments can offset the change in the fair value orcash flow of the hedged item represents the ineffective portion of the hedge.

(3)

Significant accounting estimates
In the course of applying accounting policies, the Company is required to makejudgements, estimations and assumptions on the carrying values of statement items thatcannot be accurately measured owing to uncertainties to which operating activities are
subject. Such judgements, estimations and assumptions are made based on the pastexperience of the management and taking into consideration of other relevant factors. Suchjudgements, estimations and assumptions affect the reported amounts of income,expenses, assets and liabilities and the disclosure of contingent liabilities as at the balance
sheet date. However, the actual outcome resulting from the uncertainty of such estimates
could be different from the current estimates of the management, thereby resulting insignificant adjustments to the carrying value of the future assets or liabilities affected. The
Company regularly reviews such judgements, estimations and assumptions on a going
concern basis. If the change in accounting estimates affects only the current period inwhich the change occurs, the affected amount is recognized for the period in which thechange occurs; if both the current period and future periods are affected, the affectedamount is recognised for the current period and the future periods.

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Section X Financial Report

At the balance sheet date, important aspects in which the Company is required to makejudgements, estimations and assumptions on the amount of items on the financial
statements are as follows:152①

Estimated liabilities
The Company estimates and makes provision for product warranty and estimatedcontract loss according to contract terms, existing knowledge and historicalexperience. When such contingencies have given rise to a present obligation, and theperformance of such present obligation is likely to result in the outflow of economic
benefit from the Company, the Company recognises estimated liabilities for thecontingencies based on the best estimates of expenses required for the performanceof relevant present obligations. The recognition and measurement of estimatedliabilities is dependent to a large extent on management judgement. In the course ofjudgement, the Company is required to assess factors such as risks, uncertainties
and the time value of currency relating to such contingencies. In particular, theCompany recognises estimated liabilities in respect of after-sales undertaking tocustomers for return and replacement, maintenance and installation of goods sold.
The recognition of estimated liabilities has taken into account the maintenanceexperience and data of the Company for recent years, although past experience inmaintenance may not reflect maintenance in the future. Any increase or decrease inthis provision might affect the profit or loss of future years.

②

Provision for ECL
The Company measures ECL through default risk exposure and the ECL rate, which
is determined based on the default probability rate and default loss rate. In
determining the ECL rate, the Company uses data such as internal historic credit loss
experience and adjusts the historic data taking into consideration current conditions
and prospective information. When considering prospective information, indicators
adopted by the Company include the risk of economic downside, expected growth inunemployment rate, and changes in external market conditions, technical conditions
and customer conditions. The Company monitors and reviews the assumptions
relating to ECL computation on a regular basis. There was no significant change toaforesaid estimation technique and key assumptions during the year.

③

Impairment provisions for inventory
The Company makes impairment provisions for inventory of which cost is higher than
net realisable value and obsolete and slow-moving inventory based on the lower ofcost and net realisable value according to its inventory accounting policy. The
impairment of inventory to its net realisable value is based on assessment of thesellability of inventory and its net realisable value. The authentication of inventory
impairment requires the management to obtain conclusive evidence and makejudgment and estimates taking into consideration factors such as the purpose of
inventory and post-balance sheet date events. Any difference between the actual
outcome and the previous estimate will affect the carrying value of inventory and thecharge or reversal of impairment provisions for inventory during the period in which
the estimates are modified.

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report④

Fair value of financial instruments
For financial instruments without an active trading market, the Company determines
its fair value using valuation techniques. Such valuation techniques include discounted
cash flow model analysis and others. During the assessment, the Company isrequired to make estimates on future cashflow, credit risk, market volatility rate andrelevance and select an appropriate discount rate. Such relevant assumptions are
subject to uncertainty, and any change will affect the fair value of financial
instruments.

⑤

Impairment of other equity instrument investments
The Company’s determination of impairment for other equity instrument investments islargely dependent on the management’s judgment and assumptions to determine
whether impairment should be recognised. In the course of making judgments andassumptions, the Company is required to assess the extent and duration of the fairvalue of the investment being lower than cost, as well as the financial conditions andshort-term business prospects of the investee, including industry conditions,
technological revolution, credit rating, default rate and counterparty risks.

⑥

Impairment provision for long-term assets
At the balance sheet date, the Company assesses whether there are indications ofpossible impairment of non-current assets other than financial assets. In addition to
the annual impairment test, intangible assets with indefinite useful life are also tested
for impairment when there are indications of the same. Impairment tests on noncurrent assets other than financial assets are conducted when there are indications
that its carrying value may not be recoverable. An impairment has occurred when the
carrying value of an asset or asset group is higher than the recoverable amount (thehigher of net fair value less disposal cost and the present value of estimated future
cash flow). The net fair value less disposal cost is determined with reference to theagreed selling price of similar assets in a fair transaction or observable market prices
less incremental costs attributable directly to the disposal of such asset. In estimating
the present value of future cashflow, significant judgement is required to be made in
respect of the production volume and selling price of the asset or (asset group),
relevant operating cost and discount rate for the computation of present value. The
Company takes into consideration all available relevant information when making
estimates on the recoverable amount, including forecasts on production volume,
selling price and relevant operating costs based on reasonable and justifiableassumptions. The Company conducts goodwill impairment tests at least annually. Thisrequires estimates on the present value of future cashflow of asset group or portfolioof asset groups to which goodwill has been allocated. When making estimates on thepresent value of future cashflow, the Company is required to make estimates on
cashflow generated from future asset group or portfolio of asset groups, and at thesame time select an appropriate discount rate to determine the present value of
future cashflow.

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153

Section X Financial Report⑦

Depreciation and amortisation
Depreciation and amortisation of investment properties, fixed assets and intangible
assets is charged on a straight-line basis over their useful life after taking theirresidual values into account. The Company reviews the useful life on a regular basis
to determine the amount of depreciation and amortisation charge to be allocated toeach reporting period. The useful life is determined based on past experience relating
to similar assets taking into consideration expected technological upgrades. If there
are significant changes in previous estimates, the depreciation and amortisation
charge for future periods will be adjusted.

⑧

Deferred income tax assets
The Company recognises deferred income tax assets in respect of all unutilised tax
losses, to the extent that it is probable that sufficient taxable profit will be available tooffset the loss. This requires the exercise of significant judgement by the Company’s
management to estimate the timing and amount of future taxable profit, taking into
account its tax planning strategy, to determine the amount of deferred income tax
assets to be recognised.

⑨

Income tax
In the Company’s usual operating activities, the final tax treatment and computationof certain transactions are subject to uncertainty. Whether certain items can bepresented on a pretax basis is subject to approval of the competent taxation
authority. If the final confirmed outcome of such taxation matters is different from theamount of the initial estimates, such difference will affect the current income tax anddeferred income tax for the period of final confirmation.

⑩

Provision for sales rebate
The Company and its subsidiaries adopt a sales rebate policy for sales agent
customers. Based on relevant provisions of the sales agreements, vetting of specifictransactions, market conditions, channel inventory level and past experience withreference to the status of completion of agreed appraisal indicators by sales agent
customers, the Company and its subsidiaries makes estimates on and provision forsales rebate on a regular basis. The provision of sales rebate involves judgment andestimation by the management. In the event of any material change in previous
estimates, the aforesaid difference will affect the sales rebate for the period for which
the estimates are changed.

31. Changes in significant accounting policies and accounting estimates(1).

Changes in significant accounting policies□ Applicable √ Not Applicable(2). Changes in significant accounting estimates□ Applicable √ Not Applicable

154

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Section X Financial Report

VI. TAXATION
1.

Main tax categories and rates√ Applicable □ Not Applicable
Tax types

Basis of taxation

Value-added tax

Taxable revenue from sales of goods
and rendering services
Circulation tax payable

City maintenance andconstruction tax(Local) education surcharge
EIT

2.

Tax rate

Circulation tax payable
Taxable income

6%, 9%, 13%7%1%, 2%, 3%
Statutory tax rateor preferential
rates as follows

Preferential tax√ Applicable □ Not ApplicableCompanies subjected to preferential tax and preferential tax rate:
Company
Qingdao Haier Refrigerator Co., Ltd.
Qingdao Haier Special Refrigerator
Co., Ltd.
Qingdao Haier Dishwasher Co., Ltd.
Qingdao Haier Special Freezer Co.,Ltd.
Qingdao Haier Intelligent Home
Appliance Technology Co., Ltd.
Wuhan Haier Electronics Holding
Co., Ltd.
Wuhan Haier Freezer Co., Ltd.
Hefei Haier Refrigerator Co., Ltd.
Hefei Haier Air-conditioning Co.,
LimitedZhengzhou Haier Air-conditioning
Co., Ltd.
Shenyang Haier Refrigerator Co.,Ltd.

Tax rate Preferential tax
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterpriseHaier Smart Home Co., Ltd. Interim Report 2024

155

Section X Financial ReportCompany
Qingdao Haier Air-Conditioner
Electronics Co., Ltd.
Qingdao Meier Plastic Powder Co.,Ltd.
Qingdao Hai Gao Design and
Manufacture Co., Ltd.
Qingdao Hairi High Technology Co.,Ltd
Qingdao Haier (Jiaozhou) Airconditioning Co., Limited
Qingdao Haier Intelligent Technology
Development Co., Ltd.
Foshan Haier Freezer Co., Ltd.
Qingdao Haier Central Air
Conditioning Co., Ltd.
Haier U+smart Intelligent Technology(Beijing) Co., Ltd.
Qingdao Haier Electronic Plastic
Co., Ltd.
Qingdao Wei Xi Intelligent
Technology Co., Ltd.
Qingdao Haier Special Refrigerating
Appliance Co., Ltd.
Qingdao Haier Smart Kitchen
Appliance Co., Ltd.
Hefei Haier Air Conditioning
Electronics Co., Ltd.
Shanghai Haier Medical Technology
Co., Ltd.
Shanghai Haier Smart Technology
Co., Ltd.
Qingdao Yunshang Yuyi IOT
Technology Co., Ltd.
Haier (Shanghai) Home Appliance
Research and Development
Center Co., Ltd.
Haier (Shenzhen) R&D Co., Ltd.
Laiyang Haier Smart Kitchen
Appliance Co., Ltd.
Guangdong Haier Intelligent
Technology Co. Ltd

156

Haier Smart Home Co., Ltd. Interim Report 2024

Tax rate Preferential tax
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterpriseSection X Financial ReportCompany
Dalian Haier Refrigerator Co., Ltd.
Qingdao Jijia Cloud Intelligent
Technology Co., Ltd.
Hefei Haier Washing Machine Co.,Ltd.
Qingdao Haier Washing MachineCo., Ltd.
Qingdao Jiaonan Haier Washing
Machine Co., Ltd.
Foshan Shunde Haier Electric Co.,Ltd.
Tianjin Haier Cleaning Electrical
Appliances Co., Ltd. (天津海尔洗涤 电 器 有 限 公 司)
Qingdao Economic andTechnological Development Zone
Haier Water Heater Co., Ltd.
Wuhan Haier Water Heater Co., Ltd.
Foshan Haier Drum Washing
Machine Co., Ltd.
Qingdao Haier Strauss Water
Equipment Co., Ltd.
Qingdao Haier Strauss Technology
Co., Ltd.
Qingdao Haier New Energy ElectricAppliance Co., Ltd.
Qingdao Haier Washing ApplianceCo., Ltd.
Qingdao Haier Lexin Cloud
Technology Co., Ltd.
Hefei Haier Drum Washing MachineCo., Ltd.
Qingdao Haier Smart Electrics
Equipment Co. Ltd.
Qingdao Haier Smart Living
Appliance Co. Ltd.
Jiangxi Haier Medical Technology
Co., Ltd.
Chongqing Haier Electrical
Appliance Sales Co., Ltd. andsome Western companies

Tax rate Preferential tax
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC

Haier Smart Home Co., Ltd. Interim Report 2024

157

Section X Financial ReportCompany
Chongqing Haier Air-conditioning
Co., Ltd.
Chongqing Haier Refrigeration
Appliance Co., Ltd.
Chongqing Haier Washing MachineCo., Ltd.
Guizhou Haier Electronics Co., Ltd.

Chongqing Hairishun Home
Appliance Sales Co., Ltd. andsome Western companies
Chongqing Haier Washing MachineCo., Ltd
Chongqing Haier Water Heater Co.,Ltd
Chongqing Haier Drum Washing
Machine Co., Ltd
Qingdao Haier Technology Co., Ltd.

158

Haier Smart Home Co., Ltd. Interim Report 2024

Tax rate Preferential tax
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
10.00% entitled to the preferential taxation
policies as a key software
enterpriseSection X Financial ReportVII. EXPLANATORY NOTES FOR ITEMS IN CONSOLIDATED FINANCIAL
STATEMENTS
Unless otherwise specified, the following closing balances represent the amount as at 30 June 2024
and opening balances represent the amount as at 31 December 2023; amount for the period
represents the amount from 1 January to 30 June 2024 and amount for the previous period
represents the amount from 1 January to 30 June 2023.

1.

Monetary funds√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Cash on hand
Cash in bank
Other cash balances
Total
Include: total amount of overseas deposits
Deposit in Finance Company

937,775.91
53,682,763,402.56
1,021,924,978.97
54,705,626,157.44
16,901,018,141.30
21,057,085,069.50

541,712.70
53,524,177,266.50
961,733,861.94
54,486,452,841.14
15,909,397,682.46
26,276,742,534.50

Other monetary funds mainly included investment fund, deposit on third party payment platforms,
guarantees and other restricted fund, etc.

2.

Financial assets held for trading
Items

Closing balance

Opening balance

Short-term wealth management products
Investments in equity instruments
Investment funds
Total

605,849,428.57
189,001,945.95
271,718,384.49
1,066,569,759.01

487,936,101.81
243,224,439.64
222,803,002.38
953,963,543.83

Haier Smart Home Co., Ltd. Interim Report 2024

159

Section X Financial Report3.

Derivative financial assets√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

79,226,226.47
7,487,356.46
86,713,582.93

67,565,829.44

Items

Closing balance

Opening balanceBank acceptance notes
Commercial acceptance notes
Balance of bills receivable
Allowance for bad debts
Bills receivable, net

6,965,820,228.21
186,322,599.50
7,152,142,827.71
4,671,635.32
7,147,471,192.39

8,466,159,415.18
160,607,051.53
8,626,766,466.71
5,331,635.32
8,621,434,831.39

Forward foreign exchange contracts
Forward commodity contracts
Total

4.

67,565,829.44

Bills receivable
(1)

(2)

Details of bills receivable

Changes in allowance for bad debts of bills receivable in the current period

Items

Allowance for bad debts
Total

Openingbalance

5,331,635.32
5,331,635.32

Increase forthe current period
Provision forthe current
Other
periodmovement

Decrease forthe current period

Reversal
660,000.00
660,000.00

Closingbalance

Write-off/othermovement
4,671,635.32
4,671,635.32

The Company’s bills receivables were mainly generated from daily operation activities suchas sales of commodity, provision of labor, etc., and the allowance for bad debts wasmeasured based on expected credit loss over the entire duration whether there exist
significant financing components.
The bills receivable pledged by the Company at the end of the period was
RMB4,345,741,682.69 (amount at the beginning of the period: RMB4,389,991,243.14).

160

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report5.

Accounts receivable①②

Accounts receivable are disclosed by aging as follows:
Aging

Closing balance

Opening balanceWithin 1 year
1–2 years
2–3 years
Over 3 years
Balance of accounts receivable
Allowance for bad debts
Accounts receivable, net

23,267,651,913.42
584,789,646.99
296,388,145.37
195,221,958.02
24,344,051,663.80
826,205,818.96
23,517,845,844.84

20,004,004,007.43
873,509,449.30
510,375,731.48
288,610,175.85
21,676,499,364.06
1,408,399,927.63
20,268,099,436.43

By method of provision of allowance for bad debts√ Applicable □ Not Applicable

Categories

Account receivables subject toprovision for bad debts on
a separate basis
Account receivables subject toprovision for bad debts on
a collective basis
Total

Book balance

Closing balance
Allowance for bad debts
Percentage ofAmountprovision (%)

Carrying value

AmountPercentage (%)

221,698,047.42

0.91

219,394,075.36

98.96

24,122,353,616.38
24,344,051,663.80

99.09
100.00606,811,743.60
826,205,818.96

2.52 23,515,541,872.78
3.39 23,517,845,844.84

2,303,972.06(continued)

Categories

Account receivables subject toprovision for bad debts on
a separate basis
Account receivables subject toprovision for bad debts on
a collective basis
Total

Book balance
AmountPercentage (%)

866,424,078.12

4.00

20,810,075,285.94
21,676,499,364.06

Opening balance
Allowance for bad debts
Percentage ofAmountprovision (%)

864,112,221.06

96.00
544,287,706.57
100.00 1,408,399,927.63

99.73

Carrying value

2,311,857.06

2.62 20,265,787,579.37
6.50 20,268,099,436.43

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161

Section X Financial Report③

Account receivables subject to provision for bad debts on a separate basis at the end of
the period

NameBook balance

Closing balance
Allowance forbad debts

18 customers in total

221,698,047.42

219,394,075.36

Total

221,698,047.42

219,394,075.36

Reason for provision
Percentage ofprovision (%)
98.96 The obligors were insignificant financial
difficulty
98.96

The account receivables of significant individual amount and subject to provision for bad
debts on a separate basis at the end of the period was RMB194,230,825.82 (amount at the
beginning of the period: RMB726,379,640.82).
④

Account receivables subject to provision for bad debts on a collective basis√ Applicable □ Not Applicable
Aging

Within 1 year
1–2 years
2–3 years
Over 3 years
Total

Book balance

Closing balance
Allowance forbad debts

Percentage ofprovision (%)

23,262,294,162.61
474,702,996.79
205,692,123.90
179,664,333.08
24,122,353,616.38

347,867,075.57
70,523,143.57
67,458,532.08
120,962,992.38
606,811,743.60

1.50
14.86
32.80
67.33
2.52

Book balance

Opening balance
Allowance forbad debts

Percentage ofprovision (%)

19,975,992,567.68
463,149,665.27
193,271,661.47
177,661,391.52
20,810,075,285.94

288,934,773.72
61,273,338.92
72,699,318.58
121,380,275.35
544,287,706.57

1.45
13.23
37.62
68.32
2.62

(continued)
Aging

Within 1 year
1–2 years
2–3 years
Over 3 years
Total

162

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report⑤

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

Items

Allowance for bad debts

Openingbalance

1,408,399,927.63

Increase forthe current period
Provision forthe current
Other
periodmovement
298,811,112.15

Decrease forthe current period

ReversalWrite-off/othermovement

171,528,368.68

709,476,852.14

Closingbalance826,205,818.96⑥

The aggregate amount of the top 5 account receivables and contract assets as at the endof the period was RMB6,877,703,781.22 (amount at the beginning of the period:
RMB5,525,018,986.65), accounting for 27.83% (at the beginning of the period: 25.11%) of
the book balance of account receivables and contract assets, and the amount of provision
for bad debts was RMB99,835,429.46 (amount at the beginning of the period:
RMB604,983,462.26)⑦

Actual write-off of accounts receivable in the current period
The amount of accounts receivable actually written off in the current period was
RMB708,946,193.17 (amount for the corresponding period: RMB22,054,320.92) and theamount of significant bad debt write-off of accounts receivable was RMB532,621,082.38.

⑧

The Company’s accounts receivable that were terminated due to the transfer of financial
assets in the current period
The amount of accounts receivable that the company terminated at the end of the period
due to the transfer of financial assets was RMB6,793,789,373.81 (amount at the beginningof the period: RMB6,411,839,897.28) and the transfer method was outright sale factoring/asset securitization.

⑨

Restricted accounts receivable in the current period
The amount of accounts receivable restricted at the end of the period is RMB0.00 (amountat the beginning of the period: RMB1,255,120.80).

Haier Smart Home Co., Ltd. Interim Report 2024

163

Section X Financial Report6.

Prepayments(1)

Prepayments are presented by aging:√ Applicable □ Not Applicable
Unit and Currency: RMB
Aging

Within 1 year
1 to 2 years
2 to 3 years
Over 3 years
Total

7.

Closing balance
AmountPercentage (%)
977,977,335.64
20,037,401.91
25,969,921.60
11,031,155.99
1,035,015,815.14

94.48
1.94
2.51
1.07
100.00Opening balance
AmountPercentage (%)
1,163,325,306.16
56,449,865.29
7,104,895.06
11,414,864.00
1,238,294,930.51

93.95
4.56
0.57
0.92
100.00(2)

The total amount of the top 5 in the prepayments at the end of the period was
RMB101,422,120.85, accounting for 9.80% of the book balance of prepayment (amount at
the beginning of the period: RMB214,815,987.16, accounting for 17.35%).

(3)

There was no significant prepayment aged over 1 year at the end of the period.

Other receivables√ Applicable □ Not Applicable
Unit and Currency: RMB

164

Items

Closing balance

Opening balance

Interest receivable
Other receivables
Total

676,041,225.16
2,055,228,939.51
2,731,270,164.67

748,496,020.24
1,901,062,964.81
2,649,558,985.05

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report

Interest receivable
Aging

Closing balance

Opening balance

406,049,565.86
233,381,098.21
29,716,476.71
6,894,084.38
676,041,225.16

473,678,991.02
199,801,995.25
70,063,170.96
4,951,863.01
748,496,020.24

Aging

Closing balance

Opening balanceWithin 1 year
1–2 years
2–3 years
Over 3 years
Balance of other receivables
Allowance for bad debts
Other receivables, net

1,438,200,053.99
95,454,743.11
173,417,137.47
360,056,535.77
2,067,128,470.34
11,899,530.83
2,055,228,939.51

1,413,423,130.38
94,189,862.20
204,379,944.75
277,554,421.44
1,989,547,358.77
88,484,393.96
1,901,062,964.81

Within 1 year
1–2 years
2–3 years
Over 3 years
Total

Other receivables①
Other receivables are disclosed by aging as follows:②

Provision of allowance for bad debts based on the general model of expected credit losses
Allowance for bad debts

Opening balance
Provision for the current period
Reversal for the current period
Write-off and others forthe current period
Closing balanceStage 1
Expected credit
losses for the
coming 12 months
86,830,880.96
2,257,848.98
70,866,640.72
7,976,071.39
10,246,017.83

Stage 2Lifetime expectedcredit losses (notcredit-impaired)Stage 3
Lifetime expectedcredit losses(credit-impaired)
1,653,513.00

1,653,513.00

Total

88,484,393.96
2,257,848.98
70,866,640.72
7,976,071.39
11,899,530.83

Haier Smart Home Co., Ltd. Interim Report 2024

165

Section X Financial Report③

Changes in allowance for bad debt provision of other receivables in the current period
Openingbalance

Items

Allowance for bad debts

88,484,393.96

Increase forthe current period
Provision forthe current
Other
periodmovement
2,257,848.98

Decrease forthe current period

Closingbalance

ReversalWrite-off/othermovement

70,866,640.72

7,976,071.39

11,899,530.83④

The total amount of the top 5 other receivables at the end of the period was
RMB792,676,892.42 (amount at the beginning of the period: RMB671,641,747.67),
accounting for 38.35% of the book balance of other receivables (at the beginning of theperiod: 33.76%), and the amount of provision for bad debts was RMB0.00 (amount at the
beginning of the period: RMB3,359,976.38).

⑤

Other receivables written off during the period
The amount of other receivables actually written off in the current period was
RMB8,107,151.46 (amount for the corresponding period: RMB18,910,375.10) and no
significant other receivables were written off for bad debts.

⑥

8.

Other receivables mainly included deposits, quality guarantees, employee loans, tax refunds,
and advance payments, etc.

Inventories(1)

Details of inventories
Items

Book balance
Raw materials
Work in progress
Finished goods
Total

166

Haier Smart Home Co., Ltd. Interim Report 2024

5,329,334,853.31
117,170,940.39
35,456,614,754.56
40,903,120,548.26

Closing Balance
Impairment
provision of
inventories
193,489,094.61
1,256,016,991.55
1,449,506,086.16

Carrying value
5,135,845,758.70
117,170,940.39
34,200,597,763.01
39,453,614,462.10

Section X Financial Report(Continue)
Items

Opening Balance
Impairment
provision of
inventories

Book balance
Raw materials
Work in progress
Finished goods
Total
(2)

208,533,811.42
1,272,711,329.46
1,481,245,140.88

5,665,169,362.11
47,535,985.86
33,811,301,268.36
39,524,006,616.33

Impairment provision of inventories

Items

Raw materials
Work in progress
Finished goods
Total

(3)

5,873,703,173.53
47,535,985.86
35,084,012,597.82
41,005,251,757.21

Carrying value

Openingbalance

Increase forthe current period
Provision forthe current
Other
periodmovement

208,533,811.42

20,952,230.34

1,272,711,329.46
1,481,245,140.88

468,990,442.48
489,942,672.82

Decrease forthe current period

ReversalWrite-off/othermovement
35,996,947.15

57,902,504.89
57,902,504.89

Closingbalance

193,489,094.61

427,782,275.50 1,256,016,991.55
463,779,222.65 1,449,506,086.16

Details of impairment provision of inventories are as follows√ Applicable □ Not Applicable

Items
Raw materials

Finished goods

Specific basis fordetermining net
realizable value

Reason for reversing or
writing off the impairment
provision of inventories

Measurement at the lower Production, use or salesof cost and net realizablevalue
Measurement at the lower salesof cost and net realizable
value

Haier Smart Home Co., Ltd. Interim Report 2024

167

Section X Financial Report

9.

Contract assets(1)

Details
Items
Book balance
Relating to construction
service contract
Total

(2)

366,244,018.29
366,244,018.29

Closing Balance
Impairment
provision Carrying Value

65,435,412.33
65,435,412.33

300,808,605.96
300,808,605.96

Opening Balance
Impairment
Book balance
provision Carrying Value

327,870,850.30
327,870,850.30

66,931,441.57
66,931,441.57

260,939,408.73
260,939,408.73

Classification by method of provision for bad debts
Categories
Book balanceContract assets subject toprovision for bad debts on
a separate basis
Contract assets subject toprovision for bad debts on
a collective basis
Total

Closing balance
Allowance for bad debts
Percentage ofAmountprovision (%)

AmountPercentage (%)

56,845,712.92

15.52

56,845,712.92

100.00309,398,305.37
366,244,018.29

84.48
100.008,589,699.41
65,435,412.33

2.78
17.87

Carrying value

300,808,605.96
300,808,605.96(Continue)
Categories
Book balanceContract assets subject toprovision for bad debts on a
separate basis
Contract assets subject toprovision for bad debts on acollective basis
Total

168

Haier Smart Home Co., Ltd. Interim Report 2024

Opening balance
Allowance for bad debts
Percentage ofAmountprovision (%)

AmountPercentage (%)

58,419,039.53

17.82

58,419,039.53

100.00269,451,810.77
327,870,850.30

82.18
100.008,512,402.04
66,931,441.57

3.16
20.41

Carrying value

260,939,408.73
260,939,408.73

Section X Financial Report

(3)

(4)

Contract assets subject to provision for bad debts on a separate basis at the endof the period

NameBook balance

Closing balance
Allowance forbad debts

23 customers in total

56,845,712.92

56,845,712.92

Total

56,845,712.92

56,845,712.92

Reason for provision
Percentage ofprovision (%)
100.00 The obligors were insignificant financial
difficulty
100.00Contract assets subject to provision for bad debts on a collective basis at the endof the period
Name

Relating to construction
service contract
Total
(5)

Book balance

Closing balance
Allowance forbad debts

Percentage ofprovision (%)

309,398,305.37
309,398,305.37

8,589,699.41
8,589,699.41

2.78
2.78

Provision for bad debts on contract assets during the current period

Items

Relating to construction
service contract
Total

Openingbalance

66,931,441.57
66,931,441.57

Increase forthe current period
Provision forthe current
Other
periodmovement

211,715.92
211,715.92

Decrease forthe current period

Reversal

1,707,745.16
1,707,745.16

Closingbalance

Write-off/othermovement

65,435,412.33
65,435,412.33

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Section X Financial Report

10. Other current assets(1)

Details
Items

Closing Balance
Impairment
provision

Book balanceBank deposit for wealth management
products
Deductible taxes
Returns cost receivables
OthersTotal(2)

1,546,781,584.31
2,606,160,831.54
547,495,494.30
51,635,542.77
4,752,073,452.92

280,012,125.83
280,012,125.83

Opening Balance
Impairment
Book balance
provision

1,530,274,566.66
2,610,660,645.55
670,702,791.81
63,584,720.64
4,875,222,724.66

325,055,055.98

Decrease forthe current period

Closingbalance

325,055,055.98

Impairment provision
Openingbalance

Items

Returns cost receivables
Total

325,055,055.98
325,055,055.98

Increase forthe current period
Provision forthe current
Other
periodmovement
280,012,125.83
280,012,125.83

ReversalWrite-off/othermovement
325,055,055.98
325,055,055.98

280,012,125.83
280,012,125.83

11. Debt investments
Items

Time deposit — long term
Total
Include: time deposit in
Finance Company

170

Haier Smart Home Co., Ltd. Interim Report 2024

Closing balance
Principal

Interest

Opening balance
Principal

Interest

14,127,500,000.00
14,127,500,000.00

350,121,780.97
350,121,780.97

8,677,500,000.00
8,677,500,000.00

163,733,078.66
163,733,078.66

12,827,500,000.00

250,519,003.19

7,377,500,000.00

86,374,745.33

Section X Financial Report

12. Long-term equity investments√ Applicable □ Not Applicable
Investees

Opening balance

Increase/decrease for the current period
Adjustment
Investment income
in otherInvestment recognized undercomprehensive
increaseequity method
incomeDeclaration of
Other changes cash dividends orin equity
profits

Associate：
Haier Group Finance Co., Ltd.

7,910,945,697.72

284,445,655.26

7,236.34–235,200,000.00

Bank of Qingdao Co., Ltd.

3,200,132,708.75

216,344,921.59

97,105,713.92–76,288,947.20

Wolong Electric (Jinan) Motor Co., Ltd.
Qingdao Hegang New Material
Technology Co., Ltd.
Qingdao Haier SAIF Smart Home
Industry Investment Center (Limited
Partnership)
Mitsubishi Heavy Industries Haier(Qingdao) Air-conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration
Equipment Co., Ltd.

177,662,547.04

13,280,662.39

329,713,566.36

9,652,558.36

206,764,442.76–21,738.71

663,804,966.31

67,634,912.51

412,107,471.53

3,970,476.69

Qingdao Haier Multimedia Co., Ltd.
Baoshihua Tong Fang Energy
Technology Co., Ltd. (寶石花同方
能源科技有限公司)
Zhengzhou Highly Electric ApplianceCo., Ltd. (鄭州海立電器有限公司)
Zhejiang Futeng Fluid Technology
Co., Ltd.
Hongtong Environmental Technology(Guangzhou) Co., Ltd. (宏通環境技術（廣州）有限公司)

88,300,000.00

Beijing ASU Tech Co., Ltd.
Qingdao Haimu Investment
Management Co., Ltd.
Qingdao Haimu Smart Home
Investment Partnership (Limited
Partnership)
Haineng Wanjia (Shanghai) Technology
Development Co., Ltd.
Qingdao Guochuang Intelligent Home
Appliance Research Institute Co.,Ltd.
Guangzhou Heying Investment
Partnership (Limited Partnership)
Qingdao Home Wow Cloud Network
Technology Co., Ltd.
Bingji (Shanghai) Corporate
Management Co., Ltd.
Youjin (Shanghai) Corporate
Management Co., Ltd.

7,919,009.51–16,336,866.36

30,326,966.78–967,219.23

98,000,000.00
77,584,161.99

4,265,965.73

3,000,000.00–7,919,009.51

2,609,456.57

57,989,007.18
606,029.71

38,574,227.53
194,416,881.32

509,880.04–31,115,000.00–12,332,141.88

2,192,669.49

589,125.62

1,056,245,062.87

21,313,549.13–4,463,430.14

1,919,627,387.02

38,751,907.50–8,115,327.52

RRS (Shanghai) Investment Co., Ltd.

3,489,413,430.96

70,458,013.65–14,755,140.96

Haier Best Water Technology Co., Ltd.

148,369,638.40

2,411,395.16

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171

Section X Financial Report

Investees

Opening balance
Huizhixiangshun Equity Investment Fund
(Qingdao) Partnership (Limited
Partnership)
Qingdao Ririshun Huizhi Investment Co.,Ltd.
Qingdao Xiaoshuai Intelligent
Technology Co., Ltd
Qingdao Xinshenghui Technology Co.,Ltd.
Ningbo Beilian Intelligent Technology
Co., Ltd. (寧波貝立安智能科技有限公司)

238,175,637.03

Increase/decrease for the current period
Adjustment
Investment income
in otherInvestment recognized undercomprehensive
increaseequity method
income–24,420,938.73

Declaration of
Other changes cash dividends orin equity
profits–12,258,842.15

4,083,482.78
6,107,497.56
10,005,915.15

379,127.39

3,500,000.00–22,296,931.04

OryginLLC

22,296,931.04

Konan Electronic Co., Ltd.

64,378,952.07

481,688.34–7,066,692.84

HNR (Private) Company Limited

111,225,806.51

25,463,571.12–2,367,152.22

3,483,576.50–17,611,035.52

9,801,134.65

Controladora Mabe S.A.de C.V.
Middle East Airconditioning Company,
Limited

5,078,418,321.53

291,024,911.07–63,639,273.43

Total

25,656,939,084.74

HPZ LIMITED7,299,166.60–71,332,869.77–46,540.21

50,373.87

1,026,254,310.20

21,632,498.14–211,500.00–39,311,484.05–78,031,404.17–78,977,524.55–406,068,717.73(Continued)

Investees

Associate：
Haier Group Finance Co., Ltd.
Bank of Qingdao Co., Ltd.
Wolong Electric (Jinan) Motor Co., Ltd.
Qingdao Hegang New Material
Technology Co., Ltd.
Qingdao Haier SAIF Smart Home
Industry Investment Center (Limited
Partnership)
Mitsubishi Heavy Industries Haier(Qingdao) Air-conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration
Equipment Co., Ltd.
Qingdao Haier Multimedia Co., Ltd.
Baoshihua Tong Fang Energy
Technology Co., Ltd. (寶石花同方能源科技有限公司)
Zhengzhou Highly Electric ApplianceCo., Ltd. (鄭州海立電器有限公司)

172

Haier Smart Home Co., Ltd. Interim Report 2024

Increase/decrease for the current period
The disposal of
Other movement
the investment

Closing balance ofClosing balance impairment provision

7,960,198,589.32
3,437,294,397.06
190,943,209.43
339,366,124.72

190,405,837.69
731,439,878.82
416,077,948.22
88,300,000.00

30,326,966.78
97,032,780.77–21,000,000.00–88,300,000.00

Section X Financial Report

Investees

Zhejiang Futeng Fluid Technology
Co., Ltd.
Hongtong Environmental Technology(Guangzhou) Co., Ltd. (宏通環境
技術（廣州）有限公司)
Beijing ASU Tech Co., Ltd.
Qingdao Haimu Investment
Management Co., Ltd.
Qingdao Haimu Smart Home Investment
Partnership (Limited Partnership)
Haineng Wanjia (Shanghai) Technology
Development Co., Ltd.
Qingdao Guochuang Intelligent Home
Appliance Research Institute Co.,Ltd.
Guangzhou Heying Investment
Partnership (Limited Partnership)
Qingdao Home Wow Cloud Network
Technology Co., Ltd.
Bingji (Shanghai) Corporate
Management Co., Ltd.
Youjin (Shanghai) Corporate
Management Co., Ltd.
RRS (Shanghai) Investment Co., Ltd.
Haier Best Water Technology Co., Ltd.
Huizhixiangshun Equity Investment Fund
(Qingdao) Partnership (Limited
Partnership)
Qingdao Ririshun Huizhi Investment Co.,Ltd.
Qingdao Xiaoshuai Intelligent
Technology Co., Ltd
Qingdao Xinshenghui Technology Co.,Ltd.
Ningbo Beilian Intelligent Technology
Co., Ltd. (寧波貝立安智能科技有限公司)
OryginLLC
Konan Electronic Co., Ltd.
HNR (Private) Company Limited
HPZ LIMITED
Controladora Mabe S.A.de C.V.
Middle East Airconditioning Company,
Limited
Total

Increase/decrease for the current period
The disposal of
Other movement
the investment

Closing balance ofClosing balance impairment provision

77,584,161.99

7,265,965.73

2,609,456.57
57,989,007.18
606,029.71

39,084,107.57
150,969,739.44
2,781,795.11
1,073,095,181.86
1,950,263,967.00
3,545,116,303.65
150,781,033.56

201,495,856.15
4,083,482.78
6,107,497.56
10,385,042.54

3,500,000.00
57,582,447.57
134,322,225.41–4,326,324.37
5,188,461,070.95
7,303,000.26
26,148,446,781.03–845,634.54–110,145,634.54

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173

Section X Financial Report

13. Investments in other equity instruments
(1)

(2)

Details of investments in other equity instruments at the end of the period:
Items

Closing balance

Opening balance

SINOPEC Fuel Oil Sales Corporation Limited
Haier COSMO IOT Ecosystem Technology
Co., Ltd.
OthersTotal

1,860,840,776.61

1,986,156,165.17

2,817,408,000.00
1,603,565,589.92
6,281,814,366.53

2,817,408,000.00
1,600,130,789.60
6,403,694,954.77

Dividends from investment in other equity instruments during the current period:

Items

Amount forthe current period

OthersTotal

2,996,902.10
2,996,902.10

14. Investment properties(1)

The changes in investment properties measured at cost this year are as follows:

Items
I. Original book value
1. Opening balance
2. Increase for the current period(1) External acquisition(2) Inventories/fixed assets/
construction in progresstransferred in(3) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Other transferring out
4. Change in foreign exchange rate
and others
5. Closing balance
II. Accumulated depreciation andaccumulated amortization
1. Opening balance
2. Increase for the current period(1) Provision or amortization

174

Haier Smart Home Co., Ltd. Interim Report 2024

Houses andbuildings

Land use rights

Total

93,701,271.11

29,370,397.68

123,071,668.79

24,662,790.64

24,662,790.64

61,273.04
69,099,753.51

29,370,397.68

61,273.04
98,470,151.19

21,095,536.78

3,345,051.24

24,440,588.02

1,792,249.81

292,591.07

2,084,840.88

Section X Financial Report

Items
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Other transferring out
4. Change in foreign exchange rate
and others
5. Closing balance
III. Provision for impairment
1. Opening balance
2. Increase for the current period(1) Provision
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Other transferring out
4. Change in foreign exchange rate
and others
5. Closing balance
IV. Book value
1. Closing book value
2. Opening book value

Houses andbuildings

Land use rights

8,303,139.51

Total

8,303,139.51

20,015.86
14,604,662.94

3,637,642.31

20,015.86
18,242,305.25

54,495,090.57
72,605,734.33

25,732,755.37
26,025,346.44

80,227,845.94
98,631,080.77(2)

The depreciation and amortization amount charge for the period is RMB2,084,840.88 (amountfor the corresponding period: RMB2,321,067.31).

(3)

The recoverable amount of the investment real estate of the Company at the end of theperiod is not less than its book value, so no provision for impairment is made.

Haier Smart Home Co., Ltd. Interim Report 2024

175

Section X Financial Report

15. Fixed assets
Overall presentation√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Fixed assets
Disposals of fixed assets
Total

29,686,001,800.40

29,603,936,822.78

29,686,001,800.40

29,603,936,822.78(1)

Fixed assets:

Items
I. Original book value:
1. Opening balance
2. Increase for the current period(1) Acquisition(2) Construction in progresstransferred in(3) Investment properties
transferred in
3. Decrease for the current period(1) Disposal or write-off(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others
5. Closing balance
II. Accumulated depreciation
1. Opening balance
2. Increase for the current period(1) Provision(2) Investment properties
transferred in
3. Decrease for the current period(1) Disposal or write-off(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others
5. Closing balance

176

Haier Smart Home Co., Ltd. Interim Report 2024

Houses andbuildings

Production
equipment

Transportationequipment

15,782,051,556.42

35,404,871,324.48

207,612,314.20

20,403,115.68

596,411,958.14

6,410,565.37

449,535,662.98

1,231,604,775.63

3,008,176.55

37,840,098.76

340,301,783.30

8,914,483.39–126,847,759.21
16,111,965,267.75–183,858,083.36
36,708,728,191.59

164,929.84
208,281,502.57

5,225,383,605.10

18,211,114,029.39

133,831,896.28

476,420,594.35

1,441,889,998.82

10,372,122.39

12,765,127.66

266,612,990.36

4,041,959.20–106,266,071.42
5,591,076,139.88

24,345,705.71
19,410,736,743.56

225,747.64
140,387,807.11

24,662,790.64

8,303,139.51

Section X Financial Report

Items
III. Provision for impairment
1. Opening balance
2. Increase for the current period(1) Provision(2) Investment properties
transferred in
3. Decrease for the current period(1) Disposal or write-off(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others
5. Closing balance
IV. Book value
1. Closing book value
2. Opening book value

Houses andbuildings

Production
equipment

Transportationequipment

27,599,976.42

17,285,684.25

108,327.40

143,030.07–2,712,441.38
24,887,535.04–809,005.35
16,333,648.83–4,290.81
104,036.59

10,496,001,592.83
10,529,067,974.90

17,281,657,799.20
17,176,471,610.84

67,789,658.87
73,672,090.52

Office furniture

OthersTotal

1,530,251,945.38

3,194,185,544.98

56,118,972,685.46

44,606,780.57

4,262,875.30

672,095,295.06

91,579,726.54

180,305,551.64

1,956,033,893.34(Continue)
Items
I. Original book value:
1. Opening balance
2. Increase for the current period(1) Acquisition(2) Construction in progresstransferred in(3) Investment properties
transferred in
3. Decrease for the current period(1) Disposal or write-off(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others
5. Closing balance
II. Accumulated depreciation
1. Opening Balance
2. Increase for the current period(1) Provision(2) Investment properties
transferred in
3. Decrease for the current period(1) Disposal or write-off(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others
5. Closing Balance

24,662,790.64
20,503,156.91

24,263,971.81

431,823,494.17–521,725.19
1,645,413,570.39–75,030,268.46
3,279,459,731.65–386,092,906.38
57,953,848,263.95

952,669,982.96

1,944,534,313.09

26,467,533,826.82

97,377,419.28

149,210,217.94

2,175,270,352.78
8,303,139.51

14,356,240.56

21,693,376.37

319,469,694.15

3,690,397.44
1,039,381,559.12–29,545,614.14
2,042,505,540.52–107,549,834.77
28,224,087,790.19

Haier Smart Home Co., Ltd. Interim Report 2024

177

Section X Financial Report

Items
III. Provision for impairment
1. Opening balance
2. Increase for the current period(1) Provision(2) Investment properties
transferred in
3. Decrease for the current period(1) Disposal or write-off(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others
5. Closing balance
IV. Book value
1. Closing book value
2. Opening book value

178

Office furniture

OthersTotal

237,957.13

2,270,090.66

47,502,035.86

143,030.07–24,206.02
213,751.11–50,388.87
2,219,701.79–3,600,332.43
43,758,673.36

605,818,260.16
577,344,005.29

1,234,734,489.34
1,247,381,141.23

29,686,001,800.40
29,603,936,822.78(2)

In the current period, the balance of the construction in progress transferred to the originalvalue of the fixed assets in a total of RMB1,956,033,893.34 (amount for the corresponding
period: RMB1,387,520,685.77).

(3)

As at 30 June 2024, the net book value of the buildings for which the Company has not yet
obtained certificates of title was RMB414 million (amount at the beginning of the period
RMB408 million), and the relevant certificates of title were being processed. The Company
can legally and effectively occupy and operate the above-mentioned buildings for which no
certificates of title have been obtained.

(4)

There was no mortgage secured by the fixed assets mortgage at the end of the period, andthere was no mortgage secured by the fixed assets mortgage at the beginning of theperiod.

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report

16. Construction in progress
Overall presentation√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing Balance

Opening Balance

Construction in progress
Construction materials
Total

5,787,636,237.75

5,403,469,596.76

5,787,636,237.75

5,403,469,596.76(1).

Construction in progress√ Applicable □ Not Applicable
Unit and Currency: RMB
Projects
Book balance
Qingdao Refrigeration
Appliance Project
Qingdao Water Ecology
Technology Project
Qingdao HVAC Project
Europe Candy Project
Eastern European Project
America GE Appliances
Project
New Zealand FPA Project
Haier Egypt Project
Zhengzhou New Energy
Project
Haier Thailand Project
Zhengzhou Air
Conditioner Project
Qingdao Air Conditioning
Electronics Project
Qingdao Smart
Appliances Project
Qingdao Air Conditioner
Project
Haier India Project
Qingdao New Energy
Appliance Project
Foshan Freezer Project
Others
Total

Closing Balance
Impairment
Provision

Book Value

Opening Balance
Impairment
Book balance
provision

Book Value

1,144,431,868.01

1,144,431,868.01

914,078,742.21

914,078,742.21

680,458,113.00
583,797,673.00
312,838,404.74
265,757,422.97

680,458,113.00 529,949,339.20
583,797,673.00 530,979,038.43
312,838,404.74 1,092,171,521.23
265,757,422.97 148,106,777.45

529,949,339.20
530,979,038.43
1,092,171,521.23
148,106,777.45

245,382,044.33
196,161,623.39
157,012,758.09

22,763,106.10

222,618,938.23
196,161,623.39
157,012,758.09

343,482,203.73
200,943,871.90
42,756,778.70

22,622,250.04

320,859,953.69
200,943,871.90
42,756,778.70

149,700,260.33
125,633,149.71

149,700,260.33
125,633,149.71

104,122,098.62

104,122,098.62

112,880,240.39

112,880,240.39

66,251,489.90

66,251,489.90

104,836,279.92

104,836,279.92

135,966,703.60

135,966,703.60

96,420,595.82

96,420,595.82

78,218,772.30

78,218,772.30

92,656,794.14
88,690,748.06

92,656,794.14
88,690,748.06

73,270,568.99
44,279,538.79

73,270,568.99
44,279,538.79

71,093,934.21
50,999,381.03
1,332,739,757.41
5,811,491,048.55

71,093,934.21
49,653,130.31
50,999,381.03
67,104,763.68
1,091,704.70 1,331,648,052.71 1,005,853,596.36
23,854,810.80 5,787,636,237.75 5,427,188,935.40

49,653,130.31
67,104,763.68
1,097,088.60 1,004,756,507.76
23,719,338.64 5,403,469,596.76

Haier Smart Home Co., Ltd. Interim Report 2024

179

Section X Financial Report(2).

Details of changes of significant construction in progress for the current period

Project name
Qingdao Refrigeration Appliance Project
Qingdao Water Ecology Technology
Project
Qingdao HVAC Project
Europe Candy Project
Eastern European Project
America GE Appliances Project
New Zealand FPA Project
Haier Egypt Project
Zhengzhou New Energy Project
Haier Thailand Project
Zhengzhou Air Conditioner Project
Qingdao Air Conditioning Electronics
Project
Qingdao Smart Appliances Project
Qingdao Air Conditioner Project
Haier India Project
Qingdao New Energy Appliance Project
Foshan Freezer Project
OthersTotal(3).

Other decrease

914,078,742.21

293,812,998.43

63,459,872.63

1,144,431,868.01 Self-funding

529,949,339.20
530,979,038.43
1,092,171,521.23
148,106,777.45
343,482,203.73
200,943,871.90
42,756,778.70
104,122,098.62

1,829,557.52
888,438,590.06
34,659,368.42
264,885,275.10
96,919,807.86
797,603.15
7,397,137.08

66,251,489.90

152,338,331.32
52,818,634.57
49,276,448.43
142,311,833.75
164,979,590.52
97,832,818.48
153,322,026.59
52,975,298.79
127,306,542.07
56,713,591.86

10,084,841.37

680,458,113.00
583,797,673.00
312,838,404.74
265,757,422.97
245,382,044.33
196,161,623.39
157,012,758.09
149,700,260.33
125,633,149.71
112,880,240.39

Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding

135,966,703.60
78,218,772.30
73,270,568.99
44,279,538.79
49,653,130.31
67,104,763.68
1,005,853,596.36
5,427,188,935.40

12,257,679.98
26,858,128.31
25,611,813.66
71,257,113.39
41,834,327.28
16,064,201.88
783,668,471.30
2,321,239,850.61

43,388,103.66
8,656,304.79
6,225,588.51
28,632,857.91
20,393,523.38
32,169,584.53
448,095,877.37
1,956,033,893.34

104,836,279.92
96,420,595.82
92,656,794.14
88,690,748.06
71,093,934.21
50,999,381.03
1,332,739,757.41
5,811,491,048.55

Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding
Self-funding

59,829,025.14
9,998,180.19
1,805,525.18–5,695,259.13–38,268,444.05–1,673,392.36

1,786,953.79–8,686,432.88
19,096,155.88

Impairment provision of construction in progress

Project nameAmerica GE Appliances Project
Lejia IOT Project
Others
Total

180

Opening Increase for the Transfer to fixedbalancecurrent period
assetsChange inforeignexchange rate
and others Closing balance Source of fund

Haier Smart Home Co., Ltd. Interim Report 2024

Openingbalance
22,622,250.04
837,735.85
259,352.75
23,719,338.64

Increase forthe current
periodTransfer to
fixed assets

Change inforeign
Other exchange rate
decreaseand others
140,856.06–5,383.90
135,472.16

Closingbalance
22,763,106.10
837,735.85
253,968.85
23,854,810.80

Section X Financial Report

17. Right-of-use assets
Items
I. Original book value:
1. Opening balance
2. Increase for the current period(1) Acquisition(2) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries
4. Change in foreign exchange rate andothers
5. Closing balance
II. Accumulated depreciation
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries
4. Change in foreign exchange rate andothers
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 subsidiaries
4. Change in foreign exchange rate andothers
5. Closing balance
IV. Book Value
1. Closing book balance
2. Opening book balanceHouses andbuildings

Production
equipment

Transportationequipment

4,968,907,125.70

299,098,804.72

269,881,858.76

1,030,726,489.27

1,870,863.80

49,265,313.93

284,781,596.25

6,584,068.87

34,576,962.16–20,356,010.46
5,694,496,008.26

6,935,927.93
301,321,527.58–11,299,492.77
273,270,717.76

1,705,273,889.25

37,168,018.05

130,842,447.28

423,442,479.04

2,831,001.42

40,563,978.40

120,395,083.40

6,263,622.69

33,912,771.22–20,567,528.19
1,987,753,756.70

4,153,159.35
37,888,556.13–11,664,110.78
125,829,543.68

3,706,742,251.56
3,263,633,236.45

263,432,971.45
261,930,786.67

147,441,174.08
139,039,411.48

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181

Section X Financial Report(continued)
Items
I. Original book value:
1. Opening balance
2. Increase for the current period(1) Acquisition(2) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries
4. Change in foreign exchange rate andothers
5. Closing balance
II. Accumulated depreciation
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries
4. Change in foreign exchange rate andothers
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 subsidiaries
4. Change in foreign exchange rate andothers
5. Closing balance
IV. Book Value
1. Closing book balance
2. Opening book balance

182

Haier Smart Home Co., Ltd. Interim Report 2024

Office furniture

Other

Total

415,131,711.53

539,051,832.40

6,492,071,333.11

8,817,215.77

18,943,952.38

1,109,623,835.15

2,637,818.98

4,534,722.41

333,115,168.67–1,004,943.21
420,306,165.11

3,373,644.68
556,834,707.05–22,350,873.83
7,246,229,125.76

50,526,926.52

201,178,372.27

2,124,989,653.37

21,366,174.62

52,787,409.89

540,991,043.37

2,637,818.98

4,534,720.74

167,744,017.03–40,560,815.93
28,694,466.23

1,394,039.17
250,825,100.59–67,245,256.38
2,430,991,423.33

391,611,698.88
364,604,785.01

306,009,606.46
337,873,460.13

4,815,237,702.43
4,367,081,679.74

Section X Financial Report

18. Intangible assets√ Applicable □ Not Applicable

Items
I. Original book value
1. Opening balance
2. Increase for the current period(1) Acquisition(2) Internal research and development(3) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate andothers
5. Closing balance
II. Accumulated amortization
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate andothers
5. Closing balance
III. Impairment provision
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate andothers
5. Closing balance
IV. Book Value
1. Closing book balance
2. Opening book balance

Proprietary
technology

Licenses andfranchises

Land use rights

2,212,581,138.65

4,953,866,789.43

2,192,021,758.06

19,663,961.53

37,601,220.15

5,896,312.91

1,176,803.55–30,878,532.49
2,245,090,223.07

9,565,834.00
4,977,200,272.05–8,179,089.63
2,220,267,085.03

1,399,798,673.12

1,201,643,295.60

286,482,786.35

98,191,433.59

93,810,930.59

21,391,716.61–15,211,949.29
1,482,778,157.42–3,958,494.36
1,291,495,731.83–274,736.52
307,599,766.44

63,387,616.91

66,630,354.13

399,642.46
67,029,996.59
762,312,065.65
812,782,465.53

3,618,674,543.63
3,685,593,139.70

1,912,667,318.59
1,905,538,971.71

Haier Smart Home Co., Ltd. Interim Report 2024

183

Section X Financial Report(continued)

Items
I. Original book value
1. Opening balance
2. Increase for the current period(1) Acquisition(2) Internal research and development(3) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate andothers
5. Closing balance
II. Accumulated amortization
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate andothers
5. Closing balance
III. Impairment provision
1. Opening balance
2. Increase for the current period(1) Provision(2) Increase from businesscombinations
3. Decrease for the current period(1) Disposal(2) Disposal of subsidiaries(3) Transfer to hold for sale
4. Change in foreign exchange rate andothers
5. Closing balance
IV. Book Value
1. Closing book balance
2. Opening book balance

Application
management
Trademark rights software and others

2,688,191,056.20–44,897,220.05
2,643,293,836.15

2,643,293,836.15
2,688,191,056.20

Total

6,020,210,159.55

18,066,870,901.89

198,833,390.09
227,451,211.04

256,098,571.77
290,838,827.95

1,813,838.25

8,886,954.71–16,574,133.57
6,428,106,788.86–90,963,141.74
18,513,958,205.16

4,082,441,425.43

6,970,366,180.50

449,211,098.42

662,605,179.21

1,743,506.45

1,743,506.45–2,694,079.93
4,527,214,937.47–22,139,260.10
7,609,088,593.16

23,643,666.33

90,274,020.46

58,760.67

58,760.67

23,584,905.66

399,642.46
90,614,902.25

1,877,306,945.73
1,914,125,067.79

10,814,254,709.75
11,006,230,700.93

At the end of the period, the intangible assets developed through the Company accounted forthe 21.57% of the original value at the end of the period (accounting for 20.52% at the
beginning of the period).

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Section X Financial Report

19. Goodwill

Items

Opening balance

GE Appliances
Candy
OthersTotal

21,046,390,260.10
2,043,391,984.29
1,199,944,450.41
24,289,726,694.80

Increase for thecurrent period

Decrease for thecurrent period

Change in foreignexchange rate
and others

Closing balance

131,779,576.68–61,974,639.90–17,697,239.23
52,107,697.55

21,178,169,836.78
1,981,417,344.39
1,182,247,211.18
24,341,834,392.35

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 the recoverable amount is less than the book value, corresponding difference will berecognized in profit or loss.
The recoverable amount of the asset group (including goodwill) is calculated with discounted
estimated future cash flow method based on a management-approved 5–15 years budget. Future
cash flows beyond the budget period are estimated using the estimated perpetual annual growthrate. The perpetual annual growth rate (mainly 1%–2%) adopted by the management is
consistent with industry forecast data and does not exceed the long-term average growth rate ofeach product. The management determines the compound income growth rate (mainly 2.33%5.32%) and the EBITDA profit margin (mainly 0.99%–12.99%) based on historical experience andmarket development forecasts, and adopts the pre-tax interest rate that can reflect the specificrisks of the relevant asset group as the discount rate (mainly 12.79% –16.25%). The management
analyzes the recoverable amount of each asset group based on these assumptions and believes
that there is no need to make provision for goodwill.

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Section X Financial Report

20. Long-term amortized expenses

Items
Renovation fees
Improvement expenses on leased
plantsOthers
Total

Change inforeignexchange rate
and others Closing balance

Increase for theOpening balance current period

Amortization
for the current
period356,810,041.83

37,345,735.95

184,847,703.89

5,386.49

209,313,460.38

131,110,281.13
253,825,194.68
741,745,517.64

23,114,811.46
60,374,749.22
120,835,296.63

15,900,256.78
33,534,265.36
234,282,226.03

52,401.51–271,626.23–213,838.23

138,377,237.32
280,394,052.31
628,084,750.01

Otherdecrease

21. Deferred income tax assets/deferred income tax liabilities
(1)

(2)

(3)

186

Deferred income tax assets before elimination
Items

Closing balance

Opening balance

Provision for assets impairment
Liabilities
Internal unrealized earnings eliminated due
to combination
Uncovered losses
R&D expenses
OthersTotal

468,620,891.54
2,721,127,075.25

472,765,698.56
2,647,034,061.96

454,487,656.99
229,848,367.84
1,331,535,838.01
333,163,076.13
5,538,782,905.76

707,589,929.59
230,766,537.22
1,171,434,607.38
293,113,791.04
5,522,704,625.75

Deferred income tax liabilities before elimination
Items

Closing balance

Opening balance

Assets amortisation
Remeasurement of fair value of the reaming
equity on the day when the control right
was lost
Changes in fair value of investments in other
equity instruments
OthersTotal

4,104,846,683.63

4,067,663,051.78

878,623,804.46

878,623,804.46

306,500,729.55
435,592,527.58
5,725,563,745.22

306,253,762.39
492,608,929.16
5,745,149,547.79

The deferred income tax assets and the deferred income tax liabilities eliminated at the endof the period was RMB3,756,609,331.72 (amount at the beginning of the period
RMB3,716,758,993.59).

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Section X Financial Report

22. Other non-current assets
Items

Closing balance

Opening balance

Prepayments for equipment and land
OthersTotal

2,082,290,440.87
281,871,492.31
2,364,161,933.18

1,747,355,221.82
286,631,723.46
2,033,986,945.28

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

Closing balance

Opening balance

Borrowings — secured by pledge
Borrowings — secured by credit
Total

10,333,169,856.54
10,333,169,856.54

34,094,566.22
10,284,257,275.66
10,318,351,841.88

24. Derivative financial liabilities√ Applicable □ Not Applicable
Unit and Currency: RMB
Items
Forward foreign exchange contracts
Forward commodity contracts
Total

Closing balance

Opening balance

191,751,522.44

166,573,028.22
2,051,976.75
168,625,004.97

191,751,522.44

25. Bills payable√ Applicable □ Not Applicable
Unit and Currency: RMB
Class

Closing balance

Opening balanceCommercial acceptance notes
Bank acceptance notes
Total

5,957,754,473.51
17,431,247,278.84
23,389,001,752.35

5,234,670,724.72
16,981,055,996.90
22,215,726,721.62

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Section X Financial Report

26. Accounts payables√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Accounts payables
Total

47,200,496,446.93
47,200,496,446.93

47,061,789,173.62
47,061,789,173.62

The book balance at the end of the period was mainly the unpaid expenditures on material andlabour. There were no significant accounts payables aged over 1 year at the end of the period.

27. Contractual liabilities√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balanceContractual liabilities
Total

3,256,026,994.75
3,256,026,994.75

7,731,916,491.54
7,731,916,491.54

The book balance at the end of the period was mainly due to the advance payment that has
been collected and has not yet performed the contractual obligations. There were no significant
contractual liabilities aged over 1 year at the end of the period.

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Section X Financial Report

28. Payables for staff remuneration(1).

Payables for staff remuneration√ Applicable □ Not Applicable
Unit and Currency: RMB

(2).

Items

Opening balance

Increase for the Decrease for thecurrent period
current period

Closing balance

I. Short-term remuneration
II. Post-employment
benefits-defined
contribution plan
III. Termination benefits
IV. Other benefits due within
one year
Total

4,914,688,743.78 14,440,923,916.36 15,625,028,496.57

3,730,584,163.57

24,569,154.56
5,252,101.27

726,835,986.49
31,701,783.64

712,049,518.47
32,210,246.72

39,355,622.58
4,743,638.19

133,007,828.89
789,084.25
11,719,402.93
5,077,517,828.50 15,200,250,770.74 16,381,007,664.69

122,077,510.21
3,896,760,934.55

Short-term remuneration√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Salaries, bonus, allowancesand benefit
II. Employee welfare
III. Social benefit
IV. Housing fundV. Labor union fee andeducation fund
VI. Short-term compensatedleaveVII. Others
Total

Increase for the Decrease for thecurrent period
current period

Closing balance

3,519,406,555.71 10,900,787,570.71 12,065,434,584.24
348,954,492.00
537,060,949.24
549,265,229.59
230,280,822.25
908,912,292.51
924,966,809.00
8,312,994.56
321,719,307.63
276,013,793.56

2,354,759,542.18
336,750,211.65
214,226,305.76
54,018,508.63

Opening balanceI.

5,506,272.84

68,801,586.56

66,749,249.95

7,558,609.45

266,918,130.07
251,214,218.06
254,613,910.65
535,309,476.35 1,452,427,991.65 1,487,984,919.58
4,914,688,743.78 14,440,923,916.36 15,625,028,496.57

263,518,437.48
499,752,548.42
3,730,584,163.57

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Section X Financial Report(3).

Defined contribution plan
√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
1. Basic pension insurance
2. Unemployment insurance
3. Enterprise annuity payment
Total

(4).

Opening balance
23,204,541.21
244,971.49
1,119,641.86
24,569,154.56

Increase for the Decrease for thecurrent period
current period
673,535,986.28
18,465,278.44
34,834,721.77
726,835,986.49

658,689,910.46
18,619,494.84
34,740,113.17
712,049,518.47

Closing balance
38,050,617.03
90,755.09
1,214,250.46
39,355,622.58

Termination benefits
Items
Termination compensation
Total

Closing balance

Opening balance

4,743,638.19
4,743,638.19

5,252,101.27
5,252,101.27

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

190

Items

Closing balance

Opening balance

Value-added tax
Corporate income tax
Individual income tax
City maintenance and construction tax
Education surcharge
The electrical and electronic products waste
treatment fund
Other taxes
Total

1,229,268,479.46
2,221,803,320.38
108,820,681.28
32,744,814.68
13,889,353.19

915,234,725.86
1,555,728,849.24
185,154,739.72
26,230,124.20
9,117,000.14

2,448.00
70,527,964.94
3,677,057,061.93

89,138,721.00
60,611,364.57
2,841,215,524.73

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report

30. Other payables(1).

Items breakdown√ Applicable □ Not Applicable
Unit and Currency: RMB

(2).

(3).

Items

Closing balance

Opening balance

Dividends payable
Other payables
Total

7,515,895,607.63
19,732,347,903.27
27,248,243,510.90

1,880,719.69
19,179,688,465.14
19,181,569,184.83

Items

Closing balance

Opening balance

Haier COSMO Co., Ltd.
Haier Group Corporation
Other public shareholders
Total

1,008,596,736.32
859,493,731.30
5,647,805,140.01
7,515,895,607.63

1,880,719.69
1,880,719.69

Dividends payable√ Applicable □ Not Applicable

Other payables√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Other payables
Total

19,732,347,903.27
19,732,347,903.27

19,179,688,465.14
19,179,688,465.14

The closing balance mainly included the incurred but unpaid costs. There were no
significant other payables aged over 1 year at the end of the period.

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Section X Financial Report

31. Non-current liabilities due within 1 year
√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balanceLong-term borrowings due within 1 year
Long term payables due within 1 year
Lease liabilities due within 1 year
Estimated liabilities due within 1 year
Total

1,610,273,174.78
14,194,548.90
1,072,407,791.17
2,630,841,869.37
5,327,717,384.22

146,867,809.53
14,105,028.65
1,039,704,621.43
2,531,873,089.62
3,732,550,549.23

32. Other current liabilities√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing balance

Opening balance

Payable refund
Tax amount to be transferred to output tax
OthersTotal

578,348,692.50
489,615,722.08
27,357,255.64
1,095,321,670.22

639,149,848.05
990,618,406.97
21,470,896.50
1,651,239,151.52

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

Closing balance

Opening balance

Borrowings — secured by pledge
Borrowings — secured by credit
Total

20,600,000.00
18,103,051,118.19
18,123,651,118.19

17,936,302,925.77
17,936,302,925.77

The interest rates of the Company’s long-term borrowings: 1.60%–7.00%.

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Section X Financial Report

34. Lease liabilities
Items

Closing balance

Opening balance

Lease liabilities
Less: lease liabilities due within one year
Total

4,797,038,310.89
1,072,407,791.17
3,724,630,519.72

4,326,506,047.60
1,039,704,621.43
3,286,801,426.17

Closing balance

Opening balance

36,500,000.00
28,855,509.06
14,194,548.90
51,160,960.16

36,500,000.00
34,718,451.43
14,105,028.65
57,113,422.78

35. Long-term payables
Items
Investment from CDB development fund
OthersLess: long-term payables due within one year
Total

Under the Investment Contract of China Development Fund executed by the Company and its
subsidiaries including 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 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. As of the end of
the period, the subsidiaries of the Company made buyback in amount of RMB36.5 million.

36. Long-term employee benefits payable√ Applicable □ Not Applicable(1)Long-term employee benefits payable√ Applicable □ Not Applicable
Unit and Currency: RMB
Items
I. Post-employment benefits: net liability ofdefined benefit plans
II. Termination benefits
III. Provision for work-related injury
compensation
Total

Closing balance

Opening balance

362,511,797.07
542,788,956.07

364,213,564.08
575,644,959.29

149,713,877.78
1,055,014,630.92

145,596,315.81
1,085,454,839.18

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Section X Financial Report(2)

Defined benefits plans
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 insuch defined benefit plans.
These plans are exposed to interest rate risks, changes in life expectancy of the beneficiaryand other 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., a subsidiary of the Company
Actuarial assumptions used in the defined benefit plan
Items

Rate

Discount rate
Expected rate of return

1.00%
2.00%

Present value of defined benefit obligations
Items
I. Opening balance
II. Defined benefit cost recognized in current profit or loss
1. Current service cost
2. Past service cost
3. Settlement gains (losses are represented by ‘-’)4. Interest costIII. Defined benefit cost recognized in other comprehensive
income1. Actuarial losses (gains are represented by ‘-’)IV. Other changes
1. The consideration paid at the time of settlement
2. Benefit paid
3. Exchange differences
V. Closing balance

194

Haier Smart Home Co., Ltd. Interim Report 2024

Amount218,042,067.90–23,774,327.79–23,774,327.79
194,267,740.11

Section X Financial Report

Fair value of plan assets
Items

AmountI. Opening balance
II. Defined benefit cost recognized in current profit orloss
1. Interest income
III. Defined benefit cost recognized in othercomprehensive income
1. Return on plan assets (except those included in net
interests)
2. Changes in impact of asset cap (except thoseincluded in net interests)
IV. Other changes
1. Employer contributions
2. Benefit paid
3. Exchange differences
V. Closing balance

293,597,902.22–28,866,719.75
620,221.70
2,686,753.23–32,173,694.68
264,731,182.47

Neither the Company’s ordinary shares or bonds, nor the properties occupied by theCompany are included in the plan assets.

Net liability (net asset) of the defined benefit plan
Items

AmountI. Opening balance
II. Defined benefit cost recognized in current profit or loss
III. Defined benefit cost recognized inother comprehensive income
IV. Other changes
V. Closing balance–75,555,834.32

5,092,391.96–70,463,442.36

The average term for the defined benefit obligation is 11.67 years at the balance
sheet date.

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195

Section X Financial Report②

The defined benefit plan of Roper Corporation, a subsidiary of the Company
Roper Corporation, a subsidiary of the Company, has provided post-employment
defined benefit plan of health care benefits to eligible employees.
Actuarial assumptions used in the defined benefit plan
Items

Rate

Discount rate

5.18%

Present value of defined benefit obligations
Items
I. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss
1. Current service cost
2. Past service cost
3. Settlement gains (losses are represented by ‘-’)4. Interest cost
IV. Defined benefit cost recognized in othercomprehensive income
1. Actuarial losses (gains are represented by ‘-’)V. Other changes
1. The consideration paid at the time of settlement
2. Benefit paid
3. Plan amendments
4. Others
5. Exchange differences
VI. Closing balance

196

Haier Smart Home Co., Ltd. Interim Report 2024

Amount
79,911,044.37
2,606,420.93
668,850.77

1,937,570.16–13,856,535.05–5,340,246.23–8,976,054.36
459,765.54
68,660,930.25

Section X Financial Report

Net liability (net asset) of the defined benefit plan
Items

AmountI. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss
IV. Defined benefit cost recognized in othercomprehensive income
V. Other changes
VI. Closing balance

79,911,044.37
2,606,420.93–13,856,535.05
68,660,930.25

The average term for the defined benefit obligation is 1.83 years at the balance sheet
date.

③

The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiaryof the Company
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided
post-retirement defined benefit plan of health care benefits for the eligible employees.
Actuarial assumptions used in the defined benefit plan
Items

Rate

Discount rate

5.19%

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Section X Financial Report

Present value of defined benefit obligations
Items
I. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss
1. Current service cost
2. Past service cost
3. Settlement gains (losses are represented by ‘-’)4. Interest cost
IV. Defined benefit cost recognized in othercomprehensive income
1. Actuarial losses (gains are represented by ‘-’)V. Other changes
1. The consideration paid at the time of settlement
2. Benefit paid
3. Exchange differences
VI. Closing balance

Amount165,901,942.17
1,455,394.92

1,455,394.92–10,720,806.50–11,720,651.90
999,845.40
156,636,530.59

Net liability (net asset) of the defined benefit plan
Items
I. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss
IV. Defined benefit cost recognized in othercomprehensive income
V. Other changes
VI. Closing balance

198

Haier Smart Home Co., Ltd. Interim Report 2024

Amount165,901,942.17
1,455,394.92–10,720,806.50
156,636,530.59

Section X Financial Report④

The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiaryof the Company
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided
defined benefit plan of pension for the eligible employees.
Actuarial assumptions used in the defined benefit plan
Items

Rate

Discount rate

5.21%

Present value of defined benefit obligations
Items

AmountI. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss
1. Current service cost
2. Past service cost
3. Settlement gains (losses are represented by ‘-’)4. Interest cost
IV. Defined benefit cost recognized in othercomprehensive income
1. Actuarial losses (gains are represented by ‘-’)V. Other changes
1. The consideration paid at the time of settlement
2. Benefit paid
3. Exchange differences
VI. Closing balance

108,437,206.49
3,614,005.58
1,172,138.72

2,441,866.86

686,842.49

686,842.49
112,738,054.56

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Section X Financial Report

Fair value of plan assets
Items
I. Opening balance
II. Defined benefit cost recognized in current profit or loss
1. Interest income
III. Defined benefit cost recognized in othercomprehensive income
1. Return on plan assets (except those included in
net interests)
2. Changes in impact of asset cap (except thoseincluded in net interests)
IV. Other changes
1. Employer contributions
2. Benefit paid
3. Exchange differences
V. Closing balance

Amount77,778,096.35
1,289,629.28
1,289,629.28

10,056,079.94
9,536,854.96
519,224.98
89,123,805.57

Net liability (net asset) of the defined benefit plan
Items
I. Opening balance
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss
IV. Defined benefit cost recognized inother comprehensive income
V. Other changes
VI. Closing balance

200

Haier Smart Home Co., Ltd. Interim Report 2024

Amount30,659,110.14
2,324,376.30–9,369,237.45
23,614,248.99

Section X Financial Report(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

AmountI. Opening balance
II. Business combination not under common control
III. Compensation recognized in current profit or loss
IV. Actual compensation paid for the current period
V. Other changes
VI. Closing balance

145,596,315.81
42,800,498.84–39,599,814.24
916,877.37
149,713,877.78

Classification of the balance of defined benefit plans
Items
Short-term Benefit
Long-term Benefit
Total

Closing balance

Opening balance

21,618,766.02
362,511,797.07
384,130,563.09

33,170,713.47
364,213,564.08
397,384,277.55

37. Estimated liabilities√ Applicable □ Not Applicable
Unit and Currency: RMB
Items
Active litigation
OthersEstimation of warranty expenses andinstallation fees
Total

Opening balance

Closing balance

32,259,609.59
315,280,800.19

31,448,932.56
359,408,595.01

1,587,473,632.46
1,935,014,042.24

1,614,377,582.79
2,005,235,110.36

Significant assumption and estimation relating to estimation of warranty expenses and installation
fees: the Company reasonably estimated the warranty expenses and installation fees rate basedon its actual expenses on the warranty expenses and installation fees as well as sales data in thepast. The Company estimated the warranty expenses and installation fees that are likely to be
incurred in the future according to its policies on the warranty expenses and installation fees, aswell as the actual sales data.

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Section X Financial Report

38. Deferred income√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Opening balance

Government grants
Total

1,050,319,606.44
1,050,319,606.44

Increase for the Decrease for thecurrent period
current period
28,730,084.92
28,730,084.92

Closing balance

51,847,043.92
51,847,043.92

1,027,202,647.44
1,027,202,647.44

Increase for the Decrease for thecurrent period
current period

Closing balance

39. Share capital
Share category
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-stateowned legal entities
II. Non-restricted shares
1. Ordinary shares in RMB
2. Domestic listed foreign Shares
3. Offshore listed foreign Shares
4. Others
III. Total shares

Opening balance

9,438,114,893
6,308,552,654

9,438,114,893
6,308,552,654

3,129,562,239

3,129,562,239

9,438,114,893

9,438,114,893

40. Capital reserve√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Opening balance

Capital premium(Share capital premium)
Others capital reserve
Total

21,917,268,456.45
1,845,086,227.60
23,762,354,684.05

Increase for the Decrease for thecurrent period
current period

201,405,574.94
201,405,574.94

Closing balance

20,227,747.10 21,897,040,709.35
36,583,005.03 2,009,908,797.51
56,810,752.13 23,906,949,506.86

The main reasons for the change in other capital reserves: the amortized share-based payment
for the current period included in other capital reserves of RMB201,405,574.94.

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Section X Financial Report

41. Treasury stock√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Opening balance

Treasury stock
Total

5,034,065,107.42
5,034,065,107.42

Increase for the Decrease for thecurrent period
current period
466,600,210.43
466,600,210.43

Closing balance
5,500,665,317.85
5,500,665,317.85

The main reasons for the change in treasury stock: the repurchase of treasury stock for thecurrent period of RMB466,600,210.43.

42. Other comprehensive income
Items

Opening balance
Amount before
current income
tax

a
b
c
d
e
Total

Amounts for the current period
Attributable to
Deduction of Attributable to theminority
impact of income
parent company
shareholders
tax
after tax
after tax

–345,568,801.14–94,630,058.56

21,632,498.14–9,489,873.83

3,064,710.52–20,035,460.40

23,160,537.38–30,039,858.31

1,536,671.28
514,524.08

929,934,173.30
1,332,769,480.78
147,219,232.63
1,969,724,027.01–201,685,894.65–139,624,374.35–3,587,107.42–332,754,752.11–199,825,666.97–125,824,944.18–2,491,664.07–335,021,596.15–1,860,227.68

13,823,606.83
1,095,428.03–2,051,715.02

OthersClosing balance–609,008.33–323,017,272.09–124,669,916.87

24,176.66–15.32

1,451,608.49

215,129.02

842,600.16

730,108,506.33
1,208,396,145.09
144,727,568.56
1,635,545,031.02

Notes:(1)

Item a, b, and c are other comprehensive income that will be reclassified to profit or loss, the details are as follows:
Item a represents other comprehensive income classified to profit and loss under the equity method.
Item b represents cash flow hedge reserves (the effective part of the cash flow hedge profit and loss).
Item c represents exchange differences on translation of financial statements denominated in foreign currencies.

(2)

Item d and e are other comprehensive income that cannot be reclassified into profit or loss. Details 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.

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Section X Financial Report

43. Surplus reserve√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Opening balance

Statutory surplus reserve
Discretionary surplus reserve
Reserve fundEnterprise expansion fundTotal

4,794,681,742.21
26,042,290.48
11,322,880.64
10,291,630.47
4,842,338,543.80

Increase for the Decrease for thecurrent period
current period

Closing balance
4,794,681,742.21
26,042,290.48
11,322,880.64
10,291,630.47
4,842,338,543.80

Pursuant to the Company Law of the People’s Republic of China and the Articles of Association,
the Company is required to appropriate the statutory surplus reserve at 10% of its net profit of
the year.

44. Undistributed profits√ Applicable □ Not Applicable
Items
Undistributed profits at the end of previous year
Change in accounting policy
Combination under common control
Undistributed profits at the beginning of the year
Add: net profit attributable to owners of the parent company
Other transfer in
Adjustment due to implementation of enterprise accounting standard
Profit available for distribution for the year
Less: appropriation of statutory surplus reserve
Dividend payable for ordinary shares
Undistributed profits at the end of the period

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Amounts
68,535,686,494.60

68,535,686,494.60
10,420,218,389.22–29,920,094.58
78,925,984,789.24
7,513,967,094.69
71,412,017,694.55

Section X Financial Report

45. Operating income and operating cost(1)

Operating income
Amount forthe current
periodItems
Primary business
Other Business
Total
(2)

Amount forthe previous
period134,840,839,073.23 130,796,620,039.86
781,710,047.78
831,975,872.19
135,622,549,121.01 131,628,595,912.05

Primary business income and primary business cost by product category
Categories

Amount for the current period
Primary
Primarybusiness income
business cost

Amount for the previous period
Primary
Primarybusiness income
business cost

Air conditioner
Refrigerator
Kitchen appliance
Water appliance
Washing machine
Equipment product andintegrated channel
services
Total

29,010,601,435.70
40,858,797,164.04
20,121,663,515.89
7,891,692,972.94
29,427,102,302.00

20,557,799,077.93
28,298,305,940.21
13,789,690,222.06
4,582,039,373.07
19,746,318,593.29

27,990,491,459.04
40,302,800,944.89
19,700,572,437.04
7,458,185,872.45
28,125,479,757.35

19,980,348,155.19
27,987,308,901.78
13,561,433,684.52
4,356,557,669.16
18,950,800,863.91

7,530,981,682.66
134,840,839,073.23

6,806,340,361.07
7,219,089,569.09
93,780,493,567.63 130,796,620,039.86

6,542,477,793.42
91,378,927,067.98

46. Taxes and surcharge√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
City maintenance and construction tax
Education surcharge
Property tax
Land use tax
Stamp duty
OthersTotal

Amount forthe current
periodAmount forthe previous
period191,604,095.21
109,194,820.89
47,213,971.89
12,543,003.63
150,674,106.29
27,037,460.35
538,267,458.26

211,267,062.08
129,147,500.90
38,175,443.04
11,050,858.77
118,586,969.33
24,871,738.40
533,099,572.52

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Section X Financial Report

47. Selling expenses√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Selling expenses
Total

Amount forthe current
periodAmount forthe previous
period18,687,502,154.89
18,687,502,154.89

18,768,944,057.44
18,768,944,057.44

The Company’s selling expenses are mainly salary expenses, transportation and storage fees,
advertising and promotion fees, and after-sales expenses.

48. Administrative expenses√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Administrative expenses
Total

Amount forthe current
periodAmount forthe previous
period5,186,349,563.44
5,186,349,563.44

5,461,681,481.50
5,461,681,481.50

The Company’s administrative expenses are mainly salary expenses, office fees, depreciation andamortization of assets fees, etc.

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Section X Financial Report

49. R&D expenses√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
R&D expenses
Total

Amount forthe current
periodAmount forthe previous
period5,088,901,166.88
5,088,901,166.88

5,025,786,116.64
5,025,786,116.64

The Company’s R&D expenses are mainly salary expenses, R&D equipment expenses, inspection
and testing fees.

50. Financial expenses

Items
Interest expense
Less: interest income
Less: cash discountExchange gains or losses(gains are represented by ‘-’)OthersTotal

Amount forthe current
periodAmount forthe previous
period1,226,384,743.58
912,438,277.44
62,102,125.84

875,078,615.27
614,901,995.27
59,172,643.28–262,620,221.08–288,204,003.86

69,695,049.43
58,919,168.65

77,850,758.05–9,349,269.09

Interest expenditure in lease liabilities for the current period was RMB86,220,779.23 (amount forthe corresponding period: RMB54,418,808.15).

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Section X Financial Report

51. Other income√ Applicable □ Not Applicable
Unit and Currency: RMBClassification by nature
Government grants related to revenue
Government grants related to assets
Total

Amount forthe current
periodAmount forthe previous
period511,077,524.43
44,010,228.09
555,087,752.52

557,492,414.79
43,882,854.01
601,375,268.80

52. Investment income√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Long-term equity investments income calculatedby the equity method
Investment income from disposal of long-term
equity investments
Dividend income on other equity instrument
investments during the holding period
Income from wealth management products
Investment income from disposal of financial
assets measured at fair value with changes
included in current profit or loss
Total

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Haier Smart Home Co., Ltd. Interim Report 2024

Amount forthe current
periodAmount forthe previous
period

1,021,852,565.42

1,078,905,972.36–14,953,215.38

2,936,581.54

2,996,902.10
29,641,941.56

17,919,209.85
30,006,596.61

76,000.00
1,039,614,193.70

1,129,768,360.36

Section X Financial Report

53. Gains on changes in fair value√ Applicable □ Not Applicable
Unit and Currency: RMB

Source of gains on changes in fair value
Changes in fair value of equity investments
Changes in fair value of fund investments
OthersTotal

Amount forthe current
periodAmount forthe previous
period–54,049,574.20

6,761,392.80
23,806,724.21
703,445.34
31,271,562.35

22,787,943.83
1,696,032.55–29,565,597.82

54. Credit impairment losses√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Bad debts losses on bills receivable
Bad debts losses on accounts receivable
Bad debts losses on other receivables
Total

Amount forthe current
periodAmount forthe previous
period660,000.00–127,282,743.47–175,246,952.66

68,608,791.74–58,013,951.73

9,278,023.30–165,968,929.36

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Section X Financial Report

55. Impairment losses on assets

Items
Impairment losses on inventory
Impairment losses on other current assets
Impairment losses on fixed assets
Impairment losses on construction in progress
Impairment losses on intangible assets
Impairment losses on long-term equity investments
Impairment losses on contract assets
Total

Amount forthe current
periodAmount forthe previous
period–432,040,167.93–280,012,125.83–499,500,903.59–269,894,630.51–6,213,746.83–28,311.57

1,496,029.24–710,556,264.52–4,110,982.94–779,748,575.44

56. Gains on disposal of assets√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Gains on disposal of non-current assets
Losses on disposal of non-current assets
Total

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Amount forthe current
periodAmount forthe previous
period7,721,308.45–10,305,212.82–2,583,904.37

9,697,510.22–30,344,814.86–20,647,304.64

Section X Financial Report

57. Non-operating income√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Total gains on disposal of non-current assets
Quality claims and fines
OthersTotal

Amount forthe current
periodAmount forthe previous
period24,265,721.43
49,157,369.91
73,423,091.34

810,466.84
18,063,839.13
39,910,145.92
58,784,451.89

58. Non-operating expenses√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Total losses on disposal of non-current assets
OthersTotal

Amount forthe current
periodAmount forthe previous
period7,267,905.19
77,250,699.55
84,518,604.74

4,986,722.70
27,312,790.51
32,299,513.21

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Section X Financial Report

59. Income tax expenses(1)

Statement of income tax expenses√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Current income tax expense
Deferred income tax expense
Total
(2)

Amount forthe current
periodAmount forthe previous
period2,199,317,850.43–67,576,355.95
2,131,741,494.48

1,879,159,857.85
190,607,917.70
2,069,767,775.55

Reconciliation between accounting profit and income tax expenses√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Total profit
Income tax expense calculated pursuant to statutory/applicabletax rate
Impact from different tax rates applicable to subsidiaries
Impact from adjustment to income tax in prior periods
Impact from non-taxable income
Impact from non-deductible cost, expense and loss
Impact from deductible provisional differences or deductible
losses of unrecognized income tax assets for the current
periodOthersIncome tax expense

60. Other comprehensive income√ Applicable □ Not Applicable
Please refer to Note VII.42 for details.

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Amount for thecurrent period
12,739,064,636.61
3,184,766,159.15–959,949,025.03–146,905,255.39–130,705,109.51
121,770,556.31

113,686,167.41–50,921,998.46
2,131,741,494.48

Section X Financial Report

61. Cash flow statement items(1).

Cash related to operating activities
Other cash received from operating activities√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Amount for thecurrent period

Deposits and securities
Government grants
Non-operating income excluding government grants
Interest income
OthersTotal

32,807,104.74
243,673,605.71
35,281,847.15
797,887,231.43
164,016,657.33
1,273,666,446.36

Other cash paid to operating activities√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Cash paid on selling expenses
Cash paid on administrative and R&D expenses
Cash paid on financial expenses
Non-operating expenses
OthersTotal

Amount for thecurrent period
10,259,440,644.80
3,389,811,709.63
73,404,062.89
13,948,889.93
59,544,916.23
13,796,150,223.48

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Section X Financial Report(2).

Cash related to investing activities
Other cash received from significant investing activities√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Amount for thecurrent period

Redemption of wealth management products andother financial assets
Total

9,619,248,890.08
9,619,248,890.08

Other cash paid to significant investing activities√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Purchase of wealth management products andother financial assets
Total
(3).

Amount for thecurrent period

13,608,230,146.65
13,608,230,146.65

Cash related to financing activities
Other cash paid to financing activities√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Repurchase of shares
Cash paid to lease
Others
Total

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Haier Smart Home Co., Ltd. Interim Report 2024

Amount forthe current period
466,600,210.43
596,535,515.39
3,603,317.63
1,066,739,043.45

Section X Financial Report

Changes of various liabilities arising from financing activities√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Short-term borrowings
Long-term borrowings(including long-termborrowings due within
one year)Lease liabilities (including
lease liabilities due
within one year)
Total

Openingbalance

Increase forthe current period
Non-cashCash changechangeDecrease forthe current period
Non-cashCash changechangeClosingbalance

10,318,351,841.88 4,170,938,006.65

4,123,128,398.86

32,991,593.13 10,333,169,856.54

18,083,170,735.30 1,760,600,000.00

27,547,548.89

82,298,893.44 19,733,924,292.97

4,326,506,047.60
1,227,262,838.65 596,535,515.39
32,728,028,624.78 5,931,538,006.65 1,227,262,838.65 4,747,211,463.14

160,195,059.97 4,797,038,310.89
275,485,546.54 34,864,132,460.40

62. Supplementary information to the cash flow statement(1)

Supplementary information to the cash flow statement√ Applicable □ Not Applicable
Unit and Currency: RMB

Supplementary information
1. Net profit adjusted to cash flow of
operating activities:
Net profit
Add: impairment provision for assets
Losses from credit impairment
Depreciation of fixed assets, depletion ofoil and gas assets, depreciation of
biological assets for production
Amortization of right-of-use assets
Amortization of intangible assets
Amortization of long-term prepaid
expensesLosses from disposal of fixed assets,intangible assets and other long-term
assets (gains are represented by “-”)
Losses from changes of fair value(gains are represented by “-”)Financial expenses (gains are represented
by “-”)

Amount forthe current
periodAmount forthe previous
period10,607,323,142.13
710,556,264.52
58,013,951.73

9,043,682,753.22
779,748,575.44
165,968,929.36

2,177,355,193.66
540,991,043.37
662,605,179.21

1,939,121,008.62
557,582,081.57
624,592,081.35

234,282,226.03

257,971,298.59

9,851,809.56

24,823,560.50

29,565,597.82–31,271,562.35

777,375,820.19

586,874,611.41

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Section X Financial Report

Supplementary information
Losses from investments (gains are
represented by “-”)Decrease in deferred income tax assets(increase is represented by “-”)Increase of deferred income tax liabilities(decrease is represented by “-”)Decrease in inventories (increase isrepresented by “-”)Decrease of operational accountreceivables (increase is represented by“-”)
Increase of operational account payables(decrease is represented by “-”)
OthersNet cash flow generated from operational
activities
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:
Cash balance at the end of the period
Less: cash balance at the beginning of
the period
Add: cash equivalents balance at the endof the period
Less: cash equivalents balance at the
beginning of the period
Net increase of cash and cash
equivalents

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Haier Smart Home Co., Ltd. Interim Report 2024

Amount forthe current
periodAmount forthe previous
period–1,039,614,193.70–1,129,768,360.36–20,825,542.97

167,338,912.59–46,750,812.97

23,269,005.11–361,648,013.68

2,061,410,773.14–3,544,136,779.13–7,213,172,804.07–3,154,975,564.45–1,471,582,577.11

178,288,615.94

403,433,247.61

7,818,257,937.26

6,790,021,534.62

54,228,034,803.20

55,063,205,392.40

53,977,310,651.03

53,392,209,857.41

250,724,152.17

1,670,995,534.99

Section X Financial Report(2)

Composition of cash and cash equivalents√ Applicable □ Not Applicable
Unit and Currency: RMB

(3)

Items

Closing balance

Opening balance

I. CashIncluding: Cash on handBank deposits always available forpayment
Other monetary funds always available forpayment
II. Cash equivalents
Including: bond investments due within
three months
III. Closing balance of cash and cash
equivalents
Including: restricted cash and cash
equivalents used by the parent
company or subsidiaries of
the Group

54,228,034,803.20
937,775.91

53,977,310,651.03
541,712.70

53,682,763,402.56

53,524,177,266.50

544,333,624.73

452,591,671.83

54,228,034,803.20

53,977,310,651.03

Monetary funds that are not cash and cash equivalents√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Amount for thecurrent period

Amount for theprevious period Reasons

Deposit
Restricted special account deposit
OthersTotal

369,153,135.96
106,101,674.79
2,336,543.49
477,591,354.24

448,374,520.06 Poor marketability, not readily
54,996,888.29
realizable, or not available
5,770,781.76
for payment
509,142,190.11 /Haier Smart Home Co., Ltd. Interim Report 2024

217

Section X Financial Report

63. Monetary items in foreign currency
Items

Closing balance
Balance inforeigncurrency

Monetary funds
USD
EUR
JPY
HKD
OthersSubtotal
Accounts receivables
USD
EUR
JPY
OthersSubtotal
Short-term borrowings
USD
EUR
JPY
HKD
OthersSubtotal
Accounts payables
USD
EUR
JPY
NZD
OthersSubtotal

218

Exchange rate Balance in RMB

Exchange rate

Balance in RMB

1,770,696,255.76
49,922,095.88
5,846,338,259.87
320,549,474.90

7.1268 12,619,398,075.55 1,706,547,575.50
7.6617 382,488,122.03 175,320,608.19
0.044738 261,553,481.07 4,478,977,012.53
0.9127 292,565,505.74 353,808,079.17
4,057,224,804.54
17,613,229,988.93

7.08277.85920.050213
0.9062

12,086,964,513.02
1,377,879,723.86
224,902,872.73
320,620,881.34
2,377,241,597.06
16,387,609,588.01

1,177,948,619.10
471,937,540.49
4,914,241,186.46

7.1268 8,395,004,218.59 1,139,193,238.37
7.6617 3,615,843,853.97 480,196,918.94
0.044738 219,853,322.20 4,914,686,701.05
7,270,396,739.33
19,501,098,134.09

7.08277.85920.050213

8,068,563,949.37
3,773,963,625.34
246,781,163.32
4,873,677,549.96
16,962,986,287.99

541,487,838.95
302,910,481.42

7.1268 3,859,075,530.64 486,876,813.46
7.6617 2,320,809,235.52 250,039,963.32
0.044738
2,017,059,526.42
0.9127 2,373,020,000.00 2,600,000,000.00
1,490,905,824.74
10,043,810,590.90

7.08277.85920.050213
0.9062

3,448,402,406.69
1,965,114,079.70
101,282,610.00
2,356,120,000.00
1,323,813,159.10
9,194,732,255.49

7.1268 14,414,964,209.57 1,909,489,893.66
7.6617 4,510,078,202.12 621,708,354.09
0.044738 293,245,606.11 6,641,786,186.84
4.3690 650,514,448.58 146,250,125.13
3,977,630,399.50
23,846,432,865.88

7.08277.85920.050213
4.4991

13,524,344,069.80
4,886,130,296.44
333,504,009.80
657,993,937.97
3,451,938,860.63
22,853,911,174.64

7.12687.66170.044738
0.0841

987,098,767.78 138,292,003.54
767,662,455.72
97,148,817.20
59,000,907.95 1,027,109,699.08
73,855,588.09 685,662,519.93
363,680,646.29
2,251,298,365.83

7.08277.85920.050213
0.0803

979,480,773.48
763,511,984.14
51,574,259.32
55,058,700.35
361,870,186.58
2,211,495,903.87

7.1268 8,267,108,283.73 1,160,000,000.00
7.6617 4,584,227,466.38 597,689,081.07
1,004,528,830.08
13,855,864,580.19

7.08277.85928,215,932,000.00
4,697,358,025.92
1,034,286,451.77
13,947,576,477.69

2,600,000,000.00

2,022,641,888.30
588,652,414.23
6,554,732,131.74
148,893,213.22

Non-current liabilities due within one year
USD
138,505,187.15
EUR
100,194,794.33
JPY
1,318,809,690.87
RUB
878,187,729.96
OthersSubtotalLong-term borrowings
USD
EUR
OthersSubtotal

Opening balance
Balance inforeigncurrency

1,160,002,846.12
598,330,327.00

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report

64. Leases(1)

As lessee√ Applicable □ Not Applicable
Variable lease payments not included in the measurement of lease liabilities√ Applicable □ Not Applicable
RMB42,756,889.43
Lease expenses of short-term leases or leases of low-value assets which are subject tosimplified treatment√ Applicable □ Not Applicable
RMB143,700,848.84
Total cash outflow for leases RMB782,993,253.66 (Unit and Currency: RMB)
The leased assets leased by the Company include housing and buildings, production
equipment, transportation equipment, office equipment and others used in the course ofoperations. Some of the leases contain renewal options and termination options.

(2)

As lessora.
Lease incomes from operating leases as lessor for the current period:
RMB1,097,174.74, including incomes related to variable lease payments not includedin lease receipts: nil.
b.

Undiscounted lease receipts for the next five years:

Lease receipts

Within 1 year
2 to 5 years
Over 5 years
Total

Undiscounted lease receipts
per year
Closing amountOpening amount
2,191,971.43
304,164.29

4,582,971.43
2,933,400.00

2,496,135.72

7,516,371.43

The leased assets leased out by the Company are mainly housing, buildings and land
use rights. For details of changes of the leased assets, please refer to Note VII.14.

Haier Smart Home Co., Ltd. Interim Report 2024

219

Section X Financial Report

VIII. RESEARCH AND DEVELOPMENT EXPENDITURE(1). By the nature of expenses√ Applicable □ Not Applicable
Unit and Currency: RMB
Amount forthe current
periodAmount forthe previous
period2,403,919,474.56
1,716,711,325.90
772,114,921.04
92,904,546.38
371,941,185.87
5,357,591,453.75

2,442,959,436.11
1,704,332,781.26
756,845,602.42
98,941,998.45
361,790,531.89
5,364,870,350.13

5,088,901,166.88
268,690,286.87

5,025,786,116.64
339,084,233.49

Items
Remuneration for the employees
Design and development expenses
Material input
Depreciation and amortization
Organizational operation and others
Total
Including: expensed research and development
expenditure
Capitalized research and development expenditure(2). Development expenditure on research and development projects eligible forcapitalization
Decrease for the current period

Opening Increase for thebalance current period

Items
Home Appliance Intelligent
Interaction Project
OWNERSHIP EXPERIENCEPROGRAM
Whole House Intelligent Energy
Saving Project
91ABD.ERP IT PROGRAM
OthersTotal

220

97,519,232.72

65,524,861.56

48,780,235.20

17,846,556.39

3,340,845.56
116,849,921.62
266,490,235.10

49,104,390.20
14,626,505.90
121,587,972.82
268,690,286.87

Haier Smart Home Co., Ltd. Interim Report 2024

Recognized as
intangible
asset

Included incurrent profit
and loss

Change inforeignexchange rate
and others

Closingbalance363,238.18

66,990,029.77

67,891.34
40,225,230.43
40,656,359.95

49,104,390.20
17,530,220.70
151,373,413.30
284,998,053.97

163,044,094.28

505,022.10
127,289,711.57
290,838,827.95

Section X Financial Report

IX. CHANGES OF CONSOLIDATION SCOPE
1.

Business combination not under common control□ Applicable2.

Business combination under common control□ Applicable3.

√ Not Applicable√ Not Applicable

Disposal of subsidiary
Whether single disposal of investment in subsidiary will result in losing control power:

Items
Equity disposal price
Proportion of equity disposal
Method of equity disposal
Time of loss-of-control
Basis for determination the time ofloss-of-control
Difference between considerationand its share of net assets of thesubsidiary as respect to thedisposal in the consolidated level

QingdaoBeijing Haier
Beijing
Hairuijiejing Guangke Digital Yunshang Yilian
Electronics
Technology
Technology
Co., Ltd.
Co., Ltd.
Co., Ltd.
(青 島 海 瑞 潔 淨 (北 京 海 爾 廣 科 數(北 京 雲 裳 衣 聯
電 子 有 限 公 司) 字 技 術 有 限 公 司)
科 技 有 限 公 司)
—

—

—

51%
Cancellation
March 2024

55%
Cancellation
February 2024

51%
Cancellation
March 2024

Cancellation

Cancellation

Cancellation–3,697,883.69–941.36

1,286.02

Haier Smart Home Co., Ltd. Interim Report 2024

221

Section X Financial Report

4.

Changes of consolidation scope due to other reasons√ Applicable □ Not Applicable(1)

During the period, Qingdao Haier Dishwasher Co., Ltd., a subsidiary of the Company,
established a wholly-owned subsidiary, Qingdao Haier Smart Dishwasher Co., Ltd. (青島海爾 智 慧 洗 碗 機 有 限 公 司).

(2)During the period, Qingdao Haier Air Conditioner Gen Corp., Ltd., a subsidiary of theCompany, established a wholly-owned subsidiary, Zhongshan Haier HV Equipment Co., Ltd.
(中 山 海 爾 暖 通 設 備 有 限 公 司).

(3)During the period, Qingdao Haier Air Conditioner Gen Corp., Ltd., a subsidiary of theCompany, established a wholly-owned subsidiary, Qingdao Haier HV Equipment Technology
Co., Ltd. (青 島 海 爾 暖 通 設 備 科 技 有 限 公 司).

(4)During the period, Hefei Haier Washing Machine Co., Ltd., a subsidiary of the Company,
established a wholly-owned subsidiary, Qingdao Haier Smart Washing Machine Co., Ltd.
(青 島 海 爾 智 慧 洗 衣 機 有 限 公 司).

X. INTERESTS IN OTHER ENTITIES
1.

Interests in subsidiaries(1)

Composition of the Group√ Applicable □ Not Applicable
Unit and Currency: RMB
Principal place ofbusiness

Place ofregistration

Flourishing Reach
LimitedMainland of China

British Virgin
Islands

Haier Electronics Group
Co., Ltd.

Mainland of China
and Hong Kong

BermudaHaier U.S. Appliance
Solutions, Inc.

the United States

the United States

Name of subsidiary

222

Haier Smart Home Co., Ltd. Interim Report 2024

Nature of business

Shareholding (%)
Direct Indirect

Acquiring method

Group company, whichmainly engage ininvestment holding,the production andsale of washingmachines and water
heaters, distribution
service
Group company, whichmainly engage ininvestment holding,the production andsale of waterequipment,
distribution service
Group company, whichmainly engage inhome appliances
production anddistribution business100.00Establishment

100.00Establishment

100.00Establishment

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistration

Haier Singapore
Investment Holding Co.,Ltd.

Singapore andother overseas
areas

Singapore

Haier New ZealandInvestment Holding
Company Limited

New Zealand

New Zealand

Candy S.p.A

EuropeItaly

Qingdao Haier Air
Conditioner Gen Corp.,
Ltd.

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Guizhou Haier Electronics
Co., Ltd.

Huichuan District,Zunyi City,
Guizhou
Province
Hefei Haier
Industrial Park

Huichuan District,Zunyi City,
Guizhou
Province
Hefei Haier
Industrial Park

Manufacture and saleof refrigerator

59.00

Manufacture and saleof air-conditioners

100.00Wuhan Haier Electronics
Holding Co., Ltd.

Wuhan Haier
Industrial Park

Wuhan Haier
Industrial Park

Manufacture and saleof air-conditioners

59.86

Qingdao Haier
Air-Conditioner
Electronics Co., Ltd.

QingdaoDevelopment
Zone

QingdaoDevelopment
Zone

Manufacture and saleof air-conditioners

97.43

Qingdao Haier
Information Plastic
Development Co., Ltd.

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Manufacturing ofplastic products

100.00Dalian Haier Precision
Products Co., Ltd.

Dalian Export
Expressing Zone

Dalian Export
Expressing Zone

Manufacture and saleof precise plastics

90.00

Hefei Haier Plastic Co.,
Ltd.

Hefei Economic &Technological
Development
Area
QingdaoDevelopment
Zone

Hefei Economic &Technological
Development
Area
QingdaoDevelopment
Zone

Manufacture and saleof plastic parts

95.17

4.83

40.00

60.00

Jiangbei District,
Chongqing City

Jiangbei District,
Chongqing City

Manufacture of plastic
powder, plastic sheet
and highperformancecoatings
Plastic products, sheet
metal work,
electronics andhardware

90.00

10.00

Hefei Haier Airconditioning Co.,
LimitedQingdao Meier Plastic
Powder Co., Ltd.

Chongqing Haier
Precision Plastic Co.,Ltd.

Nature of business

Shareholding (%)
Direct Indirect

Group company, whichmainly engage inhome appliances
production anddistribution businessGroup company, whichmainly engage inhome appliances
production anddistribution businessGroup company, whichmainly engage inhome appliances
production anddistribution business
Manufacture and saleof household
air-conditioners

100.00Business
combination
under common
control

100.00Business
combination
under common
control

100.00Business
combination
not under
commoncontrol
Business
combination
under common
control
Business
combination
under common
control
Business
combination
under common
control
Business
combination
under common
control
Business
combination
under common
control
Business
combination
under common
control
Business
combination
under common
control
Business
combination
under common
control
Business
combination
under common
control

92.37

Acquiring method

Business
combination
under common
control

Haier Smart Home Co., Ltd. Interim Report 2024

223

Section X Financial Report

Name of subsidiary

Principal place ofbusiness

Place ofregistration

Qingdao Haier
Refrigerator Co., Ltd.

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Qingdao Haier
Refrigerator(International) Co., Ltd.
Qingdao Household
Appliance Technology
and Equipment
Research Institute

PingduDevelopment
Zone, Qingdao
Qingdao High-tech
Zone

PingduDevelopment
Zone, Qingdao
Qingdao High-tech
Zone

Qingdao Haier Whole Set
Home Appliance
Service Co., Ltd.

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Qingdao Haier Special
Refrigerator Co., Ltd.

QingdaoDevelopment
Zone
QingdaoDevelopment
Zone
QingdaoDevelopment
Zone

QingdaoDevelopment
Zone
QingdaoDevelopment
Zone
QingdaoDevelopment
Zone

Dalian Haier Airconditioning Co., Ltd.

Dalian Export
Expressing Zone

Dalian Export
Expressing Zone

Dalian Haier Refrigerator
Co., Ltd.

Dalian Export
Expressing Zone

Dalian Export
Expressing Zone

Qingdao Haier Electronic
Plastic Co., Ltd.

QingdaoDevelopment
Zone

QingdaoDevelopment
Zone

Wuhan Haier Freezer Co.,Ltd

Wuhan Economic& Technological
Development
Zone High-tech
Industrial Park
Qingdao High-tech
Zone

Wuhan Economic& Technological
Development
Zone High-tech
Industrial Park
Qingdao High-tech
Zone

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Qingdao Haier
Dishwasher Co., Ltd.
Qingdao Haier Special
Freezer Co., Ltd.

Qingdao Haidarui
Procurement Service
Co., Ltd.
Qingdao Haier Intelligent
Home ApplianceTechnology Co., Ltd.

224

Haier Smart Home Co., Ltd. Interim Report 2024

Nature of business

Manufacture andproduction offluorine-freerefrigerators
Manufacture ofrefrigerators
Research anddevelopment of home
appliances mold andtechnologicalequipment
Research,development andsales of healthrelated small home
appliance
Manufacture and salesof fluorine-freerefrigerators
Manufacture of dishwashing machine andgas stove
Research, manufactureand sales of freezer
and otherrefrigeration
products
Air conditioner
processing andmanufacturing
Refrigerator
processing andmanufacturing
Development,
assembling and salesof plastics,
electronics andproducts
Research, manufactureand sales of freezer
and otherrefrigeration
products
Develop, purchase andsell electrical
products andcomponents
Development andapplication of home
appliances,
communication,
electronics andnetwork engineering
technology

Shareholding (%)
Direct Indirect

Acquiring method

97.91

Establishment

100.00Establishment

100.00Establishment

98.33

Establishment

100.00Establishment

99.59

Establishment

96.78

Establishment

90.00

Establishment

100.00Establishment

100.00Establishment

82.93

4.36

Establishment

98.00

2.00

Establishment

91.46

1.01

Establishment

Section X Financial Report

Principal place ofbusiness

Place ofregistration

Nature of business

Chongqing Haier
Air-conditioning Co.,Ltd.
Qingdao Haier Precision
Products Co., Ltd.

Jiangbei District,
Chongqing City

Jiangbei District,
Chongqing City

Manufacture and salesof air conditioners

Qianwangang
Road, Jiaonan
City

Qianwangang
Road, Jiaonan
City

Qingdao Haier Air
Conditioning Equipment
Co., Ltd.
Dalian Free Trade Zone
Haier Air-conditioning
Trading Co., Ltd.
Dalian Free Trade Zone
Haier Refrigerator
Trading Co., Ltd.
Chongqing Haier
Electronics Sales Co.,Ltd.
Chongqing Haier
Refrigeration ApplianceCo., Ltd.
Hefei Haier Refrigerator
Co., Ltd.

Jiaonan City,
Qingdao

Jiaonan City,
Qingdao

Dalian Export
Expressing Zone

Dalian Export
Expressing Zone

Development andmanufacture of
precise plastic, metal
plate, mold andelectronic products
for home appliances
Manufacture of home
appliances andelectronics
Domestic trade

Dalian Export
Expressing Zone

Dalian Export
Expressing Zone

Domestic trade

Jiangbei District,
Chongqing City

Jiangbei District,
Chongqing City

Sales of home
appliances

Jiangbei District,
Chongqing City

Jiangbei District,
Chongqing City

Hefei Haier
Industrial Park

Hefei Haier
Industrial Park

Qingdao Haier Intelligent
Building Technology
Co., Ltd.
Chongqing Lianmai
Electric Appliance Sales
Co., Ltd.
(重慶聯邁電器銷售有
限公司)
Qingdao Haier (Jiaozhou)
Air-conditioning Co.,
LimitedQingdao Haier
Component Co., Ltd.

QingdaoDevelopment
Zone
Jiangbei District,
Chongqing City

QingdaoDevelopment
Zone
Jiangbei District,
Chongqing City

Processing andmanufacturing ofrefrigerator
Processing andmanufacturing ofrefrigerator
Air-conditioning
engineerJiaozhou City,
QingdaoName of subsidiary

Shareholding (%)
Direct Indirect
76.92

Acquiring method

23.08

Establishment

70.00

Establishment

100.00Establishment

100.00Establishment

100.00Establishment

95.00

5.00

Establishment

84.95

15.05

Establishment

100.00Establishment

100.00Establishment

Sales of home
appliances andelectronics

51.00

Establishment

Jiaozhou City,
Qingdao

Manufacture and saleof air-conditioners

100.00Establishment

Jiaozhou City,
QingdaoJiaozhou City,
Qingdao100.00Establishment

Haier Shareholdings(Hong Kong) Limited
Harvest International
Company
Shenyang Haier
Refrigerator Co., Ltd.
Foshan Haier Freezer
Co., Ltd.

Hong Kong

Hong Kong

Manufacture and salesof plastic and precise
sheet metal products
Investment

Cayman Islands

Cayman Islands

Investment

Shenbei New Area,
Shenyang City
Sanshui District,Foshan City

Shenbei New Area,
Shenyang City S
Sanshui District,Foshan City

Manufacture and salesof refrigerator
Manufacture and salesof refrigerator

100.00Establishment

100.00Establishment

Zhengzhou Haier
Air-conditioning Co.,Ltd.

Zhengzhou
Economic andTechnological
Development
Zone

Zhengzhou
Economic andTechnological
Development
Zone

Manufacture and salesof freezer

100.00Establishment

100.00Establishment
100.00Establishment

Haier Smart Home Co., Ltd. Interim Report 2024

225

Section X Financial Report

226

Name of subsidiary

Principal place ofbusiness

Place ofregistration

Qingdao Haidayuan
Procurement Service
Co., Ltd.

QingdaoDevelopment
Zone

QingdaoDevelopment
Zone

Qingdao Haier Intelligent
Technology
Development Co., Ltd.
Qingdao Hairi HighTechnology Co., Ltd.

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Qingdao Hai Gao Designand Manufacture Co.,Ltd.

Qingdao High-tech
Zone

Qingdao High-tech
Zone

Industrial design andprototype production

75.00

Zhongshan Haier HV
Equipment Co., Ltd.(中山海爾暖通設備有限公司)
Qingdao Haier HV
Equipment Technology
Co., Ltd.(青島海爾暖通設備科技有限公司)
Shanghai Haier Medical
Technology Co., Ltd.
Qingdao Haier
Technology Co., Ltd.

Zhongshan

Zhongshan

Sales of home
appliances

100.00Business
combination
under common
control
Business
combination
under common
control
Establishment

Qingdao

Qingdao

Manufacture and saleof air conditioning
equipment

100.00Establishment

Shanghai

Shanghai

66.87

Establishment

Qingdao

Qingdao

Wholesale and retail of
medical facility
Development and salesof software andinformation product

Qingdao Haier
Technology Investment
Co., Ltd.
Qingdao Casarte Smart
Living Appliances Co.,Ltd.
Qingdao Haichuangyuan
Appliances Sales Co.,Ltd.
Haier Overseas ElectricAppliance Co., Ltd.

Qingdao

Qingdao

Qingdao

Qingdao

Qingdao

Qingdao

Qingdao

Qingdao

Haier Group (Dalian)
Electrical Appliances
Industry Co., Ltd.

DalianDalianQingdao Haier Central Air
Conditioning Co., Ltd.

Qingdao

Qingdao

Chongqing Haier Home
Appliance Sale HefeiCo., Ltd.
Qingdao Weixi Smart
Technology Co., Ltd.

Hefei

Hefei

Qingdao

Qingdao

Haier Smart Home Co., Ltd. Interim Report 2024

Nature of business

Shareholding (%)
Direct Indirect

Acquiring method

Develop, purchase andsell electrical
products andcomponents
Development andresearch of home
appliance products
Design, manufactureand sales of productmodel and mould

100.00Establishment

100.00Establishment

100.00100.00Business
combination
under common
control
Establishment

Entrepreneurshipinvestment andconsulting
Development,
production and salesof appliances
Sales of home
appliances and digitalproducts
Sales of home
appliances,international freight
forwarding

100.00100.00Establishment

Sales of home
appliances,international freight
forwarding
Production and salesof air andrefrigerationequipment
Sales of home
appliances

100.00100.00Business
combination
under common
control
Establishment

100.00Establishment

85.00

Establishment

Intelligent sanitaryware

100.00Establishment

100.00Establishment

Section X Financial Report

Principal place ofbusiness

Place ofregistration

Nature of business

Shareholding (%)
Direct Indirect

Acquiring method

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

Beijing

Beijing

Software development

100.00Establishment

Shanghai

Shanghai

100.00Establishment

Shanghai Haier Zhongzhi
Fang Chuang Ke
Management Co., Ltd.
Qingdao Haier Smart
Kitchen Appliance Co.,Ltd.
GE Appliance (Shanghai)Co., Ltd.
Qingdao Haier Special
Refrigerating ApplianceCo., Ltd.
Shanghai Zhihan
Technology Co., Ltd.
(上海摯瀚科技有限公司)Laiyang Haier Smart
Kitchen Appliance Co.,
Ltd.
Hefei Haier Air
Conditioning Electronics
Co., Ltd.
Haier (Shanghai) Home
Appliance Research andDevelopment Center
Co., Ltd.
Haier (Shenzhen) R&D
Co., Ltd.

Shanghai

Shanghai

100.00Establishment

Qingdao

Qingdao

Shanghai

Shanghai

Qingdao

Qingdao

Sales, research anddevelopment of home
appliances
Business management
consulting, chuangke
management
Production and salesof kitchen smart
home appliances
Sales of home
appliances
Production and salesof home appliances

Beijing

Beijing

Laiyang

Name of subsidiary

85.82

Establishment

100.00Establishment

100.00Establishment

Promotion oftechnologicaldevelopment

100.00Establishment

Laiyang

Production and salesof home appliances

100.00Establishment

Hefei

Hefei

Production and salesof home appliances

100.00Establishment

Shanghai

ShanghaiResearch anddevelopment of home
appliances

100.00Establishment

ShenzhenShenzhenDevelopment, researchand technicalservices of household
and commercial
electrical

100.00Establishment

Guangzhou Haier Air
Conditioner Co., Ltd.

Guangdong

Guangdong

100.00Establishment

Qingdao Yunshang Yuyi
IOT Technology Co.,Ltd.
Qingdao Jijia CloudIntelligent Technology
Co., Ltd.
Qingdao Haimeihui
Management
Consulting Co., Ltd. (青島海美匯管理咨詢有限公司)
Wuxi Yunshang Internetof Clothing Technology
Co., Ltd. (無錫雲裳衣聯網科技有限公司)

Qingdao

Qingdao

60.00

Establishment

Qingdao

Qingdao

Manufacturing ofrefrigeration and air
conditioning
equipment
IoT technology
research anddevelopment
R&D and sales oflighting appliances

80.00

Establishment

Qingdao

Qingdao

Leasing and businessservices

100.00Establishment

Wuxi

Wuxi

Internet of Things
technology R & D

100.00Establishment

Haier Smart Home Co., Ltd. Interim Report 2024

227

Section X Financial Report

Principal place ofbusiness

Place ofregistration

Qingdao Haidacheng
Procurement Service
Co., Ltd.

Qingdao

Qingdao

Guangdong HaierIntelligent Technology
Co. Ltd. (廣東海尔智能科技有限公司)Guangzhou

Guangzhou

Beijing Haixianghui
Technology Co., Ltd.
(北京海享匯科技有限公司)
Haier Smart Home
Experience Cloud
Ecological Technology
Co., Ltd. (海爾智家體驗雲生態科技有限公司)
Haier Smart Home
(Qingdao) Network Co.,
Ltd. (海爾智家（青島）
網絡有限公司)
Haier Smart Home
(Qingdao) Network
Operation Co., Ltd. (海爾智家（青島）網絡運營有限公司)

Beijing

Beijing

Scientific research andtechnology service
sectorQingdao

Qingdao

Qingdao

QingdaoTechnology
development ofsmart home
products, wholefurniture
customization, etc.
Technical services,development,
consulting, transfer,
etc.

Qingdao

Qingdao

Qingdao Internet of Wine
Technology Co., Ltd.
(青島酒聯網物聯科技有限公司)

Qingdao

Qingdao

Qingdao Linghai Air
Conditioning Equipment
Co., Ltd. (青島菱海空調設備有限公司)

Qingdao

Qingdao

Shenzhen Yunshang
Yilian Technology Co.,
Ltd. (深圳雲裳衣聯網科技有限公司)ShenzhenShenzhen

Qingdao Haixiangxue
Human Resources Co.,
Ltd. (青島海享學人力資源有限公司)Qingdao

QingdaoName of subsidiary

228

Haier Smart Home Co., Ltd. Interim Report 2024

Nature of business

Shareholding (%)
Direct Indirect

Acquiring method

Develop, purchase andsell electrical
products andcomponents
Scientific research andtechnology service
sector100.00Establishment

Residential interior
decoration,
professional
construction
operation, special
equipment
installation,
upgrading and repair,etc.
Urban distribution andtransportation
services, import andexport of goods,
technology importand export and foodbusiness, etc.
Manufacture andproduction of air
conditioner andrefrigerationequipment
Import and export
business, Internet,
Internet of things, bigdata, AI, AR andtechnical services
operation
Professional
intermediary
activities

76.72

100.00100.00100.00Business
combination
not under
commoncontrol
Establishment

Establishment

100.00Establishment

100.00Establishment

100.00Establishment

100.00Establishment

100.00Establishment

Establishment

Section X Financial Report

Principal place ofbusiness

Place ofregistration

Jiangxi Haier Medical
Technology Co., Ltd.
Qingdao Haizhi Yunlan
Technology Co., Ltd.
Qingdao Haishengze
Technology Co., Ltd.

Jiangxi

Jiangxi

Qingdao

Qingdao

Qingdao

Qingdao

Qingdao Hailvyuan
Recycling Technology
Co., Ltd.
Qingdao Haier HVAC
Equipment Co., Ltd. (青島海爾暖通空調設備有限公司)
Qingdao Haier Home AI
Industry Innovation
Center Co., Ltd. (青島海爾家庭人工智能產業
創新中心有限公司)
Zhejiang Weixi IoT
Technology Co., Ltd.
(浙江衛璽物聯科技有限公司)
Qingdao Haier Quality
Inspection Co., Ltd. (青島海爾質量檢測有限公司)
Qingdao Haiyongcheng
Certification Service
Co., Ltd. (青島海永成
認證服務有限公司)
Qingdao Zhonghai Borui
Testing Technology
Service Co., Ltd. (青島中海博睿檢測技術服務有限公司)
Qingdao Haier Special
Plastic Development
Co., Ltd.

Qingdao

Qingdao

Qingdao

Qingdao

Qingdao

Qingdao

Zhejiang

Qingdao Haizhiling Air
Conditioning
Engineering Co., Ltd.
(青島海智菱空調工程
有限公司)
Haier Smart Home
(Xiongan, Hebei)
Technology Co., Ltd.
(海爾智家科技（河北雄
安）有限
公司)

Name of subsidiary

Nature of business

Shareholding (%)
Direct Indirect

Wholesale and retail of
medical equipment
Technical service
development
Air conditioning
equipment technicalservices
Electrical andelectronic products
waste treatment
Manufacture and saleof air-conditioners

100.00Establishment

100.00Establishment

100.00Establishment

100.00Establishment

25.00

Establishment

Integrated service of AI
industry application
system100.00Establishment

Zhejiang

IoT application service

100.00Establishment

Qingdao

Qingdao

Inspection and testingof home appliance

Qingdao

Qingdao

Product certification
service100.00

Qingdao

QingdaoHome appliancetesting andtechnology
consulting

100.00Business
combination
under common
controls

Qingdao

Qingdao

Manufacture and saleof refrigerator doors

100.00

Qingdao

Qingdao

Software development
and sale of daily
necessities

100.00Business
combination
under common
controls
Establishment

Qingdao

Qingdao

Promotion ofenergy-saving
technology

100.00Establishment

75.00

100.00Acquiring method

Business
combination
under common
control
Business
combination
under common
control

Haier Smart Home Co., Ltd. Interim Report 2024

229

Section X Financial Report

Name of subsidiary

Qingdao Ruibo Ecological
Environmental
Technology Co., Ltd.
(青島瑞博生態環保科技有限公司)
Qingdao Sanyiniao
Technology Co., Ltd.
(青島三翼鳥科技有限公司)
Qingdao Jingzhi Recycle
Environmental
Technology Co., Ltd.
(青島鯨智再生環保科技有限公司)
Qingdao Yunshang
Jieshen Yilian
Technology Co., Ltd.
(青島雲裳潔神衣聯科技有限公司)
Shanghai Yunshang Yuyi
IoT Technology Co.,
Ltd. (上海雲裳羽衣物聯科技有限公司)
Shijiazhuang Yunshang
Yilian Technology Co.,
Ltd. (石家莊雲裳衣聯科技有限公司)Nanjing Yunshang Yilian
Technology Co., Ltd.
(南京雲裳衣聯科技有限公司)
Shanxi Yunshang Yilian
Technology Co., Ltd.
(山西雲裳衣聯科技有限公司)
Tianjin Yunshang Yilian
Technology Co., Ltd.
(天津雲裳衣聯網科技有限公司)
Chongqing Yunshang
Haihong Yilian
Technology Co., Ltd.
(重慶雲裳海宏衣聯科技有限公司)
Chengdu Yunshang Meier
Yilian Technology Co.,
Ltd. (成都雲裳美爾衣聯科技有限公司)
Qingdao Haier Smart
Dishwasher Co., Ltd.
(青島海爾智慧洗碗機
有限公司)

230

Principal place ofbusiness

Place ofregistration

Qingdao

Qingdao

Environmental and AI
technology
consulting

Qingdao

QingdaoTechnology service
and advertisement
design100.00Establishment

Qingdao

Qingdao

Operation ofdangerous waste

100.00Establishment

Qingdao

Qingdao

Professional cleaningand sale of daily
necessities

51.00

Establishment

Shanghai

Shanghai

Professional cleaningand sale of daily
necessities

100.00Establishment

Shijiazhuang

Shijiazhuang

Professional cleaningand sale of daily
necessities

51.00

Establishment

NanjingNanjing

Professional cleaningand sale of daily
necessities

80.00

Establishment

Shanxi

Shanxi

Professional cleaningand sale of daily
necessities

51.00

Establishment

Tianjin

Tianjin

Professional cleaningand sale of daily
necessities

51.00

Establishment

Chongqing

Chongqing

Professional cleaningand sale of daily
necessities

51.00

Establishment

ChengduChengduProfessional cleaningand sale of daily
necessities

80.00

Establishment

Qingdao

Qingdao

Manufacture, researchand development andsales of home
appliances

100.00Establishment

Haier Smart Home Co., Ltd. Interim Report 2024

Nature of business

Shareholding (%)
Direct Indirect
89.13

Acquiring method

Establishment

Section X Financial Report

Name of subsidiary

Chengdu Yunshang Yilian
Technology Co., Ltd.
(成都雲裳衣聯科技有限公司)
Qingdao HaixiangmianTechnology Co., Ltd.
(青島海享眠科技有限公司)
Qingdao Haier Kitchen
IoT Technology Co.,
Ltd. (青島海爾廚聯網
物聯科技有限公司)
Tibet Haifeng Intelligent
Innovation Technology
Co., Ltd. (西藏海峰智
能創新科技有限公司)
Qingdao Haixiangzhi
Technology Co., Ltd.
(青島海享智科技有限公司)
Qingdao Haier
Refrigeration ApplianceCo., Ltd. (青島海爾製
冷電器有限公司)
Chongqing Haier
Washing Appliance Co.,
Ltd. (重慶海爾洗滌電器有限公司)
Tongfang Energy
Technology
Development Co., Ltd.
(同方能源科技發展有
限公司)
Qingdao Haier Youyang
Technology Co., Ltd.
(青島海爾有養科技有限公司)
Qingdao Haier Yikang
Technology Co., Ltd.
(青島海爾益康科技有限公司)
Microenterprises such as
Qingdao Hai Heng Feng
Electrical Appliances
Sale & Service Co.,
Ltd.

(2)

Principal place ofbusiness

Place ofregistration

ChengduNature of business

Shareholding (%)
Direct Indirect

Acquiring method

ChengduProfessional cleaningand sale of daily
necessities

100.00Establishment

Qingdao

Qingdao

Sale of food and daily
necessities

100.00Establishment

Qingdao

QingdaoTechnology service
and sale of daily
necessities

100.00Establishment

Tibet

Tibet

Development ofsoftware and medical
equipment

100.00Establishment

Qingdao

Qingdao

Manufacturing of home
appliances

100.00Establishment

Qingdao

Qingdao

Manufacturing of home
appliances

100.00Establishment

Chongqing

Chongqing

Manufacturing of home
appliances

100.00Establishment

Beijing

Beijing

Technology
development service

84.32

Qingdao

QingdaoTechnology
development service

51.00

Business
combination
not under
commoncontrol
Establishment

Qingdao

QingdaoTechnology
development service

100.00Establishment

All over thecountry

All over thecountry

Sales of home
appliances

Establishment

Material non-wholly owned subsidiaries for the Company□ Applicable √ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

231

Section X Financial Report

2.

Transactions leading to the change of shareholding in subsidiaries but not losing
the control√ Applicable □ Not Applicable(1)

Description of changes in the share of owners’ equity in subsidiaries√ Applicable □ Not Applicable
Capital contribution by minority shareholders of the subsidiary of the Company leads tochanges in the Company’s shareholding ratio.

(2)

Impact of the transactions on minority interest and the equity attributable toshareholders of the Company:
Items

OthersTotal consideration for acquisition/disposal
Less: share of net assets of subsidiaries in respect to theshareholding proportion acquired/disposed
Difference
Including: adjustment to decrease capital reserve3.

83,668,779.14
64,283,632.20–19,385,146.94–19,385,146.94

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

Joint ventures and associates
Principal place of Place of

Accounting treatment

Name of joint venture and associates

businessregistration

Nature of business

Shareholdingof investment

Haier Group Finance Co., Ltd

Qingdao

QingdaoBank of Qingdao Co., Ltd

Qingdao

Qingdao

Financial services

42.00%

Equity method

Commercial Bank

8.19%

Wolong Electric (Jinan) Motor Co., Ltd.

Jinan

Equity method

Jinan

Motor Manufacturing30.00%

Qingdao Hegang New Material Technology

Equity method

Qingdao

Qingdao

Steel plate manufacturing

23.94%

Equity method

Qingdao

Qingdao

Venture Capital

63.13%

Equity method

Qingdao

Qingdao

Manufacturing of home

45.00%

Equity method

49.00%

Equity method

20.20%

Equity method

49.00%

Equity method

20.00%

Equity method

Co., Ltd. (青島河鋼新材料科技股份有限公司)
Qingdao Haier SAIF Smart Home Industry
Investment Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao)
Air-conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration

appliances
Qingdao

QingdaoEquipment Co., Ltd.
Qingdao Haier Multimedia Co., Ltd.

Manufacturing of home
appliances

Qingdao

Qingdao

R&D and sales of
television

Zhengzhou Highly Electric Appliance Co.,

Zhengzhou

Zhengzhou

Ltd. (鄭州海立電器有限公司)
Baoshihua Tong Fang Energy Technology
Co., Ltd. (寶石花同方能源科技有限公司)

232

Haier Smart Home Co., Ltd. Interim Report 2024

Manufacture and sale ofpress

Beijing

Beijing

Technology service
development

Section X Financial Report

Principal place of Place of

Accounting treatment

Name of joint venture and associates

businessregistration

Nature of business

Zhejiang Futeng Fluid Technology Co., Ltd.

HuzhouHuzhouGas compression

Shareholdingof investment

48.00%

Equity method

15.00%

Equity method32.13%

Equity methodmachinerydevelopment andmanufacturing
Hongtong Environmental Technology

Guangzhou

Guangzhou(Guangzhou) Co., Ltd. (宏通環境技術（廣development and州）有限公司)Qingdao Xiaoshuai Intelligent Technology

Machinery and equipment
manufacturing

Qingdao

QingdaoCo., Ltd. (青島小帥智能科技股份有限Information technology
development

公司)
Qingdao Haimu Investment Management

Qingdao

Qingdao

Investment management

49.00%

Equity method

Qingdao

Qingdao

Investment management

24.00%

Equity method

Shanghai

ShanghaiConstruction

20.00%

Equity method

Qingdao

QingdaoDevelopment of home

35.51%

Equity method

Co., Ltd.
Qingdao Haimu Smart Home Investment
Partnership (Limited Partnership)
Haineng Wanjia (Shanghai) Technology
Development Co., Ltd.
Qingdao Guochuang Intelligent Household
Appliance Research Institute Co., Ltd.

appliances(青島國創智能家電研究院有限公司)
Guangzhou Heying Investment Partnership

Guangzhou

Guangzhou

Investment

49.00%

Equity method

Qingdao

QingdaoHome online service

22.10%

Equity method

Shanghai

Shanghai

Investment management

45.00%

Equity method

Shanghai

Shanghai

Investment management

45.00%

Equity method

Shanghai

Shanghai

Investment management

45.00%

Equity method

Qingdao

Qingdao

Water equipment

49.00%

Equity method(Limited Partnership)
Qingdao Home Wow Cloud Network
Technology Co., Ltd
Bingji (Shanghai) Corporate Management
Co., Ltd.
Youjin (Shanghai) Corporate Management
Co., LtdRRS (Shanghai) Investment Co., Ltd.
(日日順（上海）投資有限公司)
Haier Best Water Technology Co., Ltd.
(倍世海爾飲水科技有限公司)

technology
development service

Huizhixiangshun Equity Investment Fund

Qingdao

Qingdao

Investment management

30.00%

Equity method

Qingdao RRS Huizhi Investment Co., Ltd.

Qingdao

Qingdao

Investment management

50.00%

Equity method

Qingdao Xinshenghui Technology Co., Ltd.

Qingdao

QingdaoTechnology service

20.00%

Equity method

35.00%

Equity method(Qingdao) Partnership (Limited
Partnership)(青島鑫晟匯科技有限公司)
Ningbo Beilian Intelligent Technology Co.,development
NingboNingboLtd. (宁波贝立安智能科技有限公司)

Technology service
development

Konan Electronic Co., Ltd

Japan

Japan

Motor Manufacturing50.00%

Equity method

HPZ LIMITED

Nigeria

Nigeria

Manufacturing of home

25.01%

Equity method

31.72%

Equity method

48.41%

Equity method

49.00%

Equity method

appliance
HNR (Private) Company Limited

Pakistan

Pakistan

Manufacturing of home
appliance

Controladora Mabe S.A.de C.V.

MexicoMexicoManufacturing of home
appliance

Middle East Air conditioning Company,

Saudi Arabia

Saudi Arabia

Sales of home appliances

LimitedHaier Smart Home Co., Ltd. Interim Report 2024

233

Section X Financial Report(2)

Key financial information of important associates√ Applicable □ Not Applicable
Unit and Currency: RMB

234①

The basic profile of important associates:
Haier Group Finance Co., Ltd. (hereinafter referred to as “Finance company”) wasestablished by Haier Group Corporation and its three affiliates. Registration place andprincipal place of business: No.178–2 Haier Road, Laoshan District, Qingdao City. The
Company’s subsidiaries hold an aggregate of 42.00% equity interest in Finance
Company.

②

Financial information of important associates:
Items

Finance company
Closing balance/ Opening balance/
Amount for theAmount for thecurrent periodprevious period

Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority interests
Equity attributable to shareholders of the parent
company
Including: share of net assets calculated pershareholding percentage
Operating income
Net profit
Other comprehensive income
Total comprehensive income
Dividend received from associates for the year

58,118,246,068.64
16,522,384,591.51
74,640,630,660.15
55,104,446,290.29
583,330,585.96
55,687,776,876.25

58,471,449,425.14
17,215,510,844.97
75,686,960,270.11
56,268,320,103.08
583,055,172.64
56,851,375,275.72

18,952,853,783.90

18,835,584,994.39

7,960,198,589.24
931,067,464.94
677,251,560.13
17,229.38
677,268,789.51
235,200,000.00

7,910,945,697.64
903,641,445.71
753,528,932.20–21,953,251.63
731,575,680.57
235,200,000.00

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report(3)

Summarized financial information of insignificant joint ventures and associates

Investment in associates

Closing balance/ Opening balance/
Amount for theAmount for thecurrent periodprevious period

Bank of Qingdao Co., Ltd.
3,437,294,397.06 3,200,132,708.75
Wolong Electric (Jinan) Motor Co., Ltd.
190,943,209.43
177,662,547.04
Qingdao Hegang New Material Technology Co.,
Ltd. (青 島 河 鋼 新 材 料 科 技 股 份 有 限 公 司)
339,366,124.72
329,713,566.36
Qingdao Haier SAIF Smart Home Industry
Investment Center (Limited Partnership)
190,405,837.69
206,764,442.76
Mitsubishi Heavy Industries Haier (Qingdao)
Airconditioners Co., Ltd.
731,439,878.82
663,804,966.31
Qingdao Haier Carrier Refrigeration Equipment
Co., Ltd.
416,077,948.22
412,107,471.53
Qingdao Haier Multimedia Co., Ltd.
88,300,000.00
88,300,000.00
Baoshihua Tong Fang Energy Technology Co.,
Ltd. (寶 石 花 同 方 能 源 科 技 有 限 公 司)
30,326,966.78
30,326,966.78
Zhengzhou Highly Electric Appliance Co., Ltd.
(鄭 州 海 立 電 器 有 限 公 司)
97,032,780.77
98,000,000.00
Zhejiang Futeng Fluid Technology Co., Ltd.
77,584,161.99
77,584,161.99
Hongtong Environmental Technology (Guangzhou)Co., Ltd. (宏 通 環 境 技 術（廣 州）有 限 公 司)7,265,965.73
4,265,965.73
Beijing ASU Tech Co., Ltd.
7,919,009.51
Qingdao Haimu Investment Management Co., Ltd.
2,609,456.57
2,609,456.57
Qingdao Haimu Smart Home Investment
Partnership (Limited Partnership)
57,989,007.18
57,989,007.18
Haineng Wanjia (Shanghai) Technology
Development Co., Ltd. (海 能 萬 嘉（上 海）科 技
發 展 有 限 公 司)
606,029.71
606,029.71
Qingdao Guochuang Intelligent Household
Appliance Research Institute Co., Ltd.
(青 島 國 創 智 能 家 電 研 究 院 有 限 公 司)
39,084,107.57
38,574,227.53
Guangzhou Heying Investment Partnership(Limited Partnership)
150,969,739.44
194,416,881.32
Qingdao Home Wow Cloud Network Technology
Co., Ltd
2,781,795.11
2,192,669.49
Bingji (Shanghai) Corporate Management Co.,Ltd.
1,073,095,181.86 1,056,245,062.87
Youjin (Shanghai) Corporate Management Co.,Ltd
1,950,263,967.00 1,919,627,387.02

Haier Smart Home Co., Ltd. Interim Report 2024

235

Section X Financial Report

Investment in associates

Closing balance/ Opening balance/
Amount for theAmount for thecurrent periodprevious period

RRS (Shanghai) Investment Co., Ltd.
(日 日 順（上 海）投 資 有 限 公 司)3,545,116,303.65 3,489,413,430.96
Haier Best Water Technology Co., Ltd.
(倍 世 海 爾 飲 水 科 技 有 限 公 司)150,781,033.56
148,369,638.40
Huizhixiangshun Equity Investment Fund
(Qingdao) Partnership (Limited Partnership)
201,495,856.15
238,175,637.03
Qingdao RRS Huizhi Investment Co., Ltd.
4,083,482.78
4,083,482.78
Qingdao Xiaoshuai Intelligent Technology Co., Ltd.
(青 島 小 帥 智 能 科 技 股 份 有 限 公 司)6,107,497.56
Qingdao Xinshenghui Technology Co., Ltd.
(青 島 鑫 晟 匯 科 技 有 限 公 司)10,385,042.54
10,005,915.15
Ningbo Beilian Intelligent Technology Co., Ltd.
(寧 波 貝 立 安 智 能 科 技 有 限 公 司)3,500,000.00
Orygin LLC
22,296,931.04
Konan Electronic Co., Ltd
57,582,447.57
64,378,952.07
HNR (Private) Company Limited
134,322,225.41
111,225,806.51–4,326,324.37
HPZ LIMITED3,483,576.50
Controladora Mabe S.A.de C.V.
5,188,461,070.95 5,078,418,321.53
Middle East Airconditioning Company, Limited
7,303,000.26
7,299,166.60
Total book value of investment
18,188,248,191.71 17,745,993,387.02
Total amount of the following financial data ofassociates calculated based on shareholding
percentage– Net profit
741,808,654.94
775,751,075.57– Other comprehensive income–6,287,979.19
21,625,261.80– Total comprehensive income
763,433,916.74
769,463,096.38

236

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report

XI. SEGMENT REPORT√ Applicable □ Not Applicable
The Company is principally engaged in manufacture and sales of home appliances and relevant
services business, manufacture of upstream home appliances parts, distribution of products of third
party, logistics and after-sale business.
The Company has five business segments: (1) Household Food Storage and Cooking Solutions: mainly
manufacturing and selling refrigerator/freezers and kitchen appliances; (2) Air Solutions: mainly
manufacturing and selling air conditioners; (3) Household Laundry Management Solutions: mainly
manufacturing and selling washing machines and dryers; (4) Household Water Solutions: mainly
manufacturing and selling water home appliances such as water heaters and water purifiers; (5) Other
business: mainly include channel, equipment components, small home appliance business and others.
The management of the Company assesses operating performance of each segment and allocates
resources according to the division. Sales between segments were mainly based on market price.
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, debt investment, long-term accounts receivable, long-term equity investment, other equity
instruments investment, other non-current financial assets, goodwill and deferred income tax assets;
the total liabilities of segments exclude long-term and short-term borrowings, financial liabilities held for
trading, derivative financial liabilities, taxes payable, interests payable, dividends payable, held-for-saleliabilities, bonds payable, deferred income tax liabilities and other non-current liabilities; profits ofsegments exclude financial expenses, profit or loss in fair value changes, income from investment, andincome on disposal of assets, Non-value-added tax refundable upon imposition component of otherincome, non-operating incomes and expenses and income tax.

(1)

Information of reportable segments
Segment information for the periodHousehold Food Storage andCooking Solutions
Household Laundry
Management
Segment information

Refrigerator/freezers

Kitchen appliances

Air Solutions

Solutions

Segment revenue

41,127,956,870.22

20,275,302,895.20

29,234,848,611.97

29,736,595,881.54

Including: external revenue

41,022,856,775.64

20,228,275,282.99

29,074,828,944.30

29,601,746,705.79

105,100,094.58

47,027,612.21

160,019,667.67

134,849,175.75

37,588,892,334.62

18,475,056,113.76

27,541,697,922.16

26,646,494,850.28

Inter-segment revenue
Total segment operating cost
Segment operating profit

3,539,064,535.60

1,800,246,781.44

1,693,150,689.81

3,090,101,031.26

Total segment assets

52,005,694,950.57

22,654,775,328.51

30,996,742,377.94

32,009,317,554.55

Total segment liabilities

69,940,655,493.31

13,848,570,895.00

25,758,512,565.50

17,757,478,070.87

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237

Section X Financial Report(continued)
Household Water
Segment information

Inter-segment

Solutions

Other businesseliminations

Total

Segment revenue

8,106,193,795.05

50,267,171,923.80–43,125,520,856.77

135,622,549,121.01

Including: external revenue

8,011,173,935.80

7,683,667,476.49—

95,019,859.25

42,583,504,447.31–43,125,520,856.77

135,622,549,121.01—

Total segment operating cost

6,910,808,149.22

50,202,231,531.52–43,170,446,222.86

124,194,734,678.70

Segment operating profit

1,195,385,645.83

64,940,392.28

44,925,366.09

11,427,814,442.31

Total segment assets

7,476,419,468.87

74,889,956,696.38–91,386,277,258.29

128,646,629,118.53

Total segment liabilities

5,907,219,158.13

68,163,639,745.66–91,284,540,418.29

110,091,535,510.18

Inter-segment revenue

Segment information for the corresponding period of last year
Household Food Storage andCooking Solutions
Household Laundry
Refrigerator/
Segment information

Management

freezers

Kitchen appliances

Air Solutions

Solutions

Segment revenue

40,411,341,041.10

20,205,647,157.99

28,176,850,151.17

28,314,129,699.92

Including: external revenue

40,327,782,569.05

20,187,056,144.99

28,061,662,346.15

28,248,158,381.79

83,558,472.05

18,591,013.00

115,187,805.02

65,971,318.13

37,449,253,888.22

18,548,446,710.24

26,950,740,655.39

25,757,441,566.16

Inter-segment revenue
Total segment operating cost
Segment operating profit

2,962,087,152.88

1,657,200,447.75

1,226,109,495.78

2,556,688,133.76

Total segment assets

46,386,636,541.89

21,182,487,836.50

23,095,120,351.59

31,083,146,812.59

Total segment liabilities

61,738,020,657.75

12,928,214,554.98

22,560,023,701.22

18,456,071,567.13(continued)
Household Water
Segment information

Other businesseliminations

Total

Segment revenue

7,606,598,837.87

44,868,417,123.51–37,954,388,099.51

131,628,595,912.05

Including: external revenue

7,547,568,985.51

7,256,367,484.56—

59,029,852.36

37,612,049,638.95–37,954,388,099.51

131,628,595,912.05—

Total segment operating cost

6,601,452,862.30

44,823,364,609.07–38,029,454,448.75

122,101,245,842.63

Segment operating profit

1,005,145,975.57

45,052,514.44

75,066,349.24

9,527,350,069.42

Total segment assets

6,974,086,027.37

72,345,944,832.66–74,983,515,615.16

126,083,906,787.44

Total segment liabilities

5,952,269,383.29

67,056,680,238.32–74,838,436,273.16

113,852,843,829.53

Inter-segment revenue

238

Inter-segment

Solutions

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report(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
purpose of information disclosure.
a.

External transaction revenue
Amount for thecurrent period

Amount for theprevious period

64,798,348,696.57
70,824,200,424.44

63,326,144,956.04
68,302,450,956.01

39,079,401,455.27
3,224,852,882.97
6,541,908,201.63
14,504,641,098.47
3,491,588,857.32
1,474,675,819.82
1,826,967,375.51
680,164,733.45
135,622,549,121.01

39,133,384,718.31
2,949,512,878.44
5,954,521,760.73
13,278,015,975.79
3,107,279,065.87
1,162,600,377.18
1,947,027,593.72
770,108,585.97
131,628,595,912.05

Items

Closing balance

Opening balance

Mainland China
Other countries/regions
Total

22,972,510,062.72
31,488,092,970.71
54,460,603,033.43

22,369,511,589.93
31,152,060,989.07
53,521,572,579.00

Items
Mainland China
Other countries/regions
Among which:America
Australia
South Asia
EuropeSoutheast Asia
Middle East and Africa
Japan
OthersTotal
b. Total non-current assets

Total non-current assets exclude: debt investments, long-term receivable, long-term equity
investments, other equity instrument investments, other non-current financial assets,
goodwill and deferred income tax assets.

Haier Smart Home Co., Ltd. Interim Report 2024

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Section X Financial Report

XII. 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 towhich the input value is 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
Items

Continuously measured at fairvalue
Financial assets held for trading
Including: Bank wealth management
products
Investment fundInvestment in equity
instruments
Derivative financial assets
Including: Forward foreign exchange
contract
Forward commodity
contracts
Other equity instruments
Including: Equity instruments measured
at fair value through othercomprehensive income
Derivative financial liabilities
Including: Forward foreign exchange
contract

240

Haier Smart Home Co., Ltd. Interim Report 2024

Input used for fair value measurement
Quotes in an
Important
Importantactive market
observableunobservable(Level 1)
input (Level 2)
input (Level 3)

364,456,854.49

Total

605,849,428.57

96,263,475.95 1,066,569,759.01

605,849,428.57

605,849,428.57
271,718,384.49

271,718,384.49
92,738,470.00
86,713,582.93

96,263,475.95

189,001,945.95
86,713,582.93

79,226,226.47

79,226,226.47

7,487,356.46

7,487,356.46
6,260,941,846.07 6,281,814,366.53

20,872,520.46

20,872,520.46

6,260,941,846.07 6,281,814,366.53
191,751,522.44

191,751,522.44

191,751,522.44

191,751,522.44

Section X Financial Report

At the beginning of the period
Items

Continuously measured at fairvalue
Financial assets held for trading
Including: Bank wealth management
products
Investment fundInvestment in equity
instruments
Derivative financial assets
Including: Forward foreign exchange
contract
Other equity instruments
Including: Equity instruments measured
at fair value through othercomprehensive income
Derivative financial liabilities
Including: Forward foreign exchange
contract
Forward commodity contract

Input used for fair value measurement
Quotes in an
Important
Importantactive market
observableunobservable(Level 1)
input (Level 2)
input (Level 3)369,591,046.58

487,936,101.81

96,436,395.44

487,936,101.81

96,436,395.44
67,565,829.44
67,565,829.44

19,988,760.34

19,988,760.34

953,963,543.83
487,936,101.81
222,803,002.38

222,803,002.38
146,788,044.20

Total

243,224,439.64
67,565,829.44

67,565,829.44
6,383,706,194.43 6,403,694,954.77

168,625,004.97

6,383,706,194.43 6,403,694,954.77
168,625,004.97

166,573,028.22
2,051,976.75

166,573,028.22
2,051,976.75

For financial instruments traded in an active market, the Company determines its fair value basedon its quotes in an active market; for financial instruments not traded in an active market, theCompany uses valuation techniques to determine its fair value.

Haier Smart Home Co., Ltd. Interim Report 2024

241

Section X Financial Report

2.

The basis for determining the fair value of the continual Level 2 fair value
measurement items
Items
Financial assets held for trading
Including: Bank wealth management
products
Derivative financial assets
Including: Forward foreign exchange
contract
Forward commodity contracts
Derivative financial liabilities
Including: Forward foreign exchange
contract

3.

Valuation techniques

605,849,428.57

Discounted cash flow

79,226,226.47

Discounted cash flow

7,487,356.46

Discounted cash flow

191,751,522.44

Discounted cash flow

Continual Level 3 fair value measurement major items, the valuation techniques
adopted and information of important parameters
Items

Fair value at theend of the period

Other equity instruments
Including:
1. COSMO IoT
2,817,408,000.00
Technology
Co., LTD.
(卡奧斯物聯科技股份有限公司)

2. SINOPEC FuelOil Sales
Corporation
Limited (中國石化銷售股份
有限公司)

242

Fair value at theend of the period

1,860,840,776.61

Haier Smart Home Co., Ltd. Interim Report 2024

Significant
Valuation technique unobservable input Range

Sensitivity of fair value tothe input

Market approach

1. Average P/S
multiple of peers
2. Discount for lackof marketability

1. 2.93 to 2.99
2. 27.46% to29.46%

Market approach

1. Average P/E
multiple of peers
2. Discount for lackof marketability

1. 38.24 to
39.01
2. 24.55% to26.55%

1. 1% increase (decrease) inaverage P/S multiple of
the Comparable
Companies would resultin increase (decrease) infair value by RMB21.27
million.
2. 1% increase (decrease) in
the lack of marketability
would result in decrease(increase) in fair value by
RMB29.35 million.
1. 1% increase (decrease) inaverage P/E multiple of
the Comparable
Companies would resultin increase (decrease) infair value by RMB18.6082
million.
2. 1% increase (decrease) in
the lack of marketability
would result in decrease(increase) in fair value by
RMB24.9951 million.

Section X Financial Report

4.

Financial instruments not measured at fair value
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. The difference between the book value and the fair value of financial assets and financial
liabilities not measured at fair value at the end of the period is small.

XIII. RELATED PARTIES AND THEIR CONNECTED TRANSACTIONS(I)Explanation for basis of identifying related party— Related Party
According to Accounting Standards for Business Enterprises No. 36
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 morethan two) are also considered to be related if they are subject to common control, joint control
or significant influence from another party.
According to Management Practices for Information Disclosure of Listed Company (China
Securities Regulatory Commission Order No. 182), related legal entity or individual will beidentified as related parties in certain occasions.

(II)

Relationships between related parties
1.

Information about the parent company and other companies holding shares of theCompany

Name
Haier Group
Corporation
Haier COSMO Co.,
Ltd. (海爾卡奧斯股份有限公司)HCH (HK) Investment
Management Co.,
LimitedQingdao Haier Venture& Investment
Information Co.,Ltd.
Qingdao Haichuangzhi
Management
Consulting
Enterprise (Limited
Partnership)
Haier International
Co., Limited

Type ofenterprise

Registered place

RegisteredcapitalLegal
Relationships
Interest in the
representative with the Company
Company

Voting rights
to theCompany

Collective
ownershipcompany
Joint-stockcompany

Qingdao High-tech
Zone Haier Park

311,180,000

Zhou Yunjie

Parent Company

11.36%

11.36%

Qingdao High-tech
Zone Haier Park

404,500,000

Zhou Yunjie

13.34%

13.34%

Privatecompany

Hong Kong

HKD10,000

/

5.71%

5.71%

Company withlimitedliability

Qingdao Free TradeZone

923,000,000

Zhou Yunjie

1.83%

1.83%

Limitedpartnershipcompany

Qingdao High-tech
Zone Haier Park

1,616,120,000/

Subsidiary of
ParentCompany
Parties acting inconcert ofParentCompany
Parties acting inconcert ofParentCompany
Parties acting inconcert ofParentCompany

1.42%

1.42%

Privatecompany

Hong Kong

HKD 2

/

Parties acting inconcert ofParentCompany

0.62%

0.62%

Haier Smart Home Co., Ltd. Interim Report 2024

243

Section X Financial Report2.

Subsidiaries of the Company√ Applicable □ Not Applicable
The details of the subsidiaries of the Company are detailed in Note X.1. Interests in
subsidiaries.

3.

Joint ventures and associates of the Company√ Applicable □ Not Applicable
The details of important joint ventures and associates of the Company are detailed in Note
VII.12 and Note X.3.

4.

Connected companies with no relationship of control
Name

Relationship with the Company

Chongqing Zhonglian Energy Technology Co.,Ltd.
Chongqing Haier Electrical Appliances Sales Co.,Ltd.
Hongkong Gooday Supply Chain Management
LimitedShanghai Cotai Supply Chain Management Co.,
Ltd.
Gooday Supply Chain Technologies Co., Ltd.
Gooday (Qingdao) International Supply Chain
Service Co., Ltd.
Qingdao Goodaymart Supply Chains Co., Ltd.
Qingdao Manniq Intelligent Technology Co., Ltd.
Qingdao Oasis Technology Co., Ltd.
Qingdao Haironghui Commercial Factoring Co.,Ltd.
(青 島 海 融 匯 商 業 保 理 有 限 公 司)
Qingdao Haier Parts Procurement Co., Ltd.
Qingdao Haier International Trading Co., Ltd.
Qingdao Haier International Travel Agency Co.,Ltd.
Qingdao Haier Industrial Development Co., Ltd
COSMO Moulds (Qingdao) Co., Ltd. (卡 奧 斯 模具（青 島）有 限 公 司)
Hefei Ririshun Logistics Co., Ltd. (合肥日日順物
流 有 限 公 司)
Qingdao Haier New Materials R & D Co., Ltd.

Subsidiary of Haier Group

HPZ Limited
HNR (Private) Company Limited
Wolong Electric (Jinan) Motor Co., Ltd.

244

Haier Smart Home Co., Ltd. Interim Report 2024

Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Subsidiary of Haier Group
Associate of subsidiary of HaierGroup
Associate
Associate
AssociateSection X Financial Report

Name

Relationship with the Company

Mitsubishi Heavy Industry Haier (Qingdao) Air
Conditioner Co., Ltd.
Controladora Mabe S.A.de C.V.
Qingdao HBIS Composite New Material Co.,
Ltd.
Hefei Hegang New Material Technology Co.,
Ltd.

Associate
Associate
Subsidiary of associate
Subsidiary of associate(III) Related-party transactions
1.

Details of the Company’s procurement of goods and services from related parties are as
follows:√ Applicable □ Not Applicable
Unit and Currency: RMB

Related parties
Controladora Mabe, S.A.de C.V.
Qingdao Haier Parts Procurement Co., Ltd.
Gooday Supply Chain Technologies Co., Ltd.
HNR (Private) Company Limited
Chongqing Haier Electrical Appliances Sales
Co., Ltd.
Shanghai Cotai Supply Chain Management
Co., Ltd.
Other related parties
Total
2.

Amount for thecurrent period

Amount for theprevious period

7,687,926,090.90
3,059,386,453.56
1,972,219,635.41
1,729,101,867.08

5,353,771,339.60
3,608,931,862.86
1,635,118,057.32
1,642,887,548.69

847,550,618.71

623,669,202.51

712,737,566.32
3,544,298,655.85
19,553,220,887.83

710,764,662.41
2,837,630,921.90
16,412,773,595.29

Details of the Company’s sales of goods to related parties are as follows:√ Applicable □ Not Applicable
Unit and Currency: RMB

Related parties

Amount for thecurrent period

Amount for theprevious period

Controladora Mabe S.A.de C.V.
HNR (Private) Company Limited
Qingdao Haier International Trading Co., Ltd.
Qingdao Haier Parts Procurement Co., Ltd.
Other related parties
Total

723,506,543.36
331,070,763.13
283,889,750.78
238,417,939.07
371,847,585.92
1,948,732,582.26

641,206,803.16
910,139,552.47
372,641,570.39
278,395,066.75
372,284,369.32
2,574,667,362.09

Haier Smart Home Co., Ltd. Interim Report 2024

245

Section X Financial Report3.

Amount of unsettled items of related parties

Items and name of customers
Bills receivable:
Qingdao Haier Parts Procurement Co., Ltd.
Chongqing Haier Electrical Appliances Sales
Co., Ltd.
Qingdao Haier International Trading Co., Ltd.
Other related parties
Accounts receivable:
HNR (Private) Company Limited
Qingdao Oasis Technology Co., Ltd.
Mitsubishi Heavy Industry Haier (Qingdao) Air
Conditioner Co., Ltd.
HPZ Limited
Qingdao Haier International Trading Co., Ltd
Other related parties
Prepayments:
Qingdao Haier International Trade Co., Ltd.
COSMO Moulds (Qingdao) Co., Ltd. (卡奧斯模具（青 島）有 限 公 司)HNR (Private) Company Limited
Hefei Hegang New Material Technology Co., Ltd.
Qingdao Haier Parts Procurement Co., Ltd.
Qingdao Haier International Travel Agency Co.,Ltd.
Qingdao Haier Industrial Development Co., Ltd
Qingdao HBIS Composite New Material Co., Ltd.
Other related parties
Other receivables:
Qingdao Haier International Trade Co., Ltd.
Qingdao Manniq Intelligent Technology Co., Ltd.
Controladora Mabe, S.A.de C.V.
Wuhan Haizhi Real Estate Development Co., Ltd.
(武 漢 海 智 房 地 產 開 發 有 限 公 司)
Other related parties
Bills payable:
Qingdao Haier New Materials R & D Co., Ltd.
Wolong Electric (Jinan) Motor Co., Ltd.
Qingdao HBIS Composite New Material Co., Ltd.
Hefei Hegang New Material Technology Co., Ltd.

246

Haier Smart Home Co., Ltd. Interim Report 2024

Closing
Balance

Opening
Balance

196,664,472.63
100,520,000.00
19,578,830.33

178,000,000.00
20,640,531.66

680,823,286.60 1,191,001,767.66
98,743,874.06
116,266,117.23
59,317,651.95
41,867,299.41
38,693,364.55
199,631,845.53

5,467,727.75
37,410,646.01
13,320,054.89
365,341,125.71

7,737,990.20

8,594,602.74

6,270,889.38
4,620,420.81
4,471,168.77
2,946,575.37

1,380,353.31

2,224,783.21
1,878,840.25
1,721,562.19
13,908,017.65

3,115,793.21
2,501,673.89
1,443,538.08
14,918,099.11

56,190,891.19
32,561,213.58
20,644,871.11

7,951,101.19
318,694.51
14,824,407.91

5,712,459.00
28,178,485.95

3,200,000.00
15,233,663.55

330,259,945.68
43,179,863.06
21,325,751.06
15,595,879.69

390,891,579.36
30,416,664.00
27,781,266.64
21,795,818.85

6,241,957.96
2,956,547.28

Section X Financial Report

Items and name of customers

Closing
Balance

Opening
Balance

Accounts payable:
Controladora Mabe, S.A.de C.V.
1,472,686,933.56 1,017,676,511.30
Qingdao Haironghui Commercial Factoring
Co., Ltd. (青 島 海 融 匯 商 業 保 理 有 限 公 司)
417,697,006.32
367,964,948.49
Qingdao Haier Parts Procurement Co., Ltd.
252,154,899.21
247,164,539.11
HNR (Private) Company Limited
250,069,188.30
225,492,094.68
Qingdao Haier International Trading Co., Ltd.
212,308,791.23
197,267,091.22
Hong Kong Gooday Supply Chain Technologies
Co., Ltd.
124,801,868.02
74,153,281.02
Other related parties
681,423,587.12
703,667,318.78
Contract liabilities:
Wolong Electric (Jinan) Motor Co., Ltd.
38,652,174.62
50,686,531.85
Chongqing Zhonglian Energy Technology
Co., Ltd.
17,210,127.92
17,217,306.92
Mitsubishi Heavy Industry Haier (Qingdao) Air
Conditioner Co., Ltd.
6,818,411.00
4,119,857.00
Other related parties
10,693,897.68
5,981,325.89
Dividends payable:
Haier COSMO Co., Ltd. (海 爾 卡 奧 斯 股 份 有 限
公 司)
1,008,596,736.32
Haier Group Corporation
859,493,731.30
Qingdao Haier Venture & Investment Information
Co., Ltd. (青 島 海 爾 創 業 投 資 咨 詢 有 限 公 司)
138,027,698.85
Qingdao Haichuangzhi Management Consulting
Enterprise (Limited Partnership) (青 島 海 創 智 管
理 咨 詢 企 業 (有 限 合 伙))107,208,112.69
Other payables:
Gooday Supply Chain Technologies Co., Ltd.
933,977,156.37
897,015,102.10
Shanghai Cotai Supply Chain Management
Co., Ltd.
160,487,139.16
129,653,209.93
Gooday (Qingdao) International Supply Chain
Service Co., Ltd.
96,558,428.97
64,467,694.39
Qingdao Goodaymart Supply Chains Co., Ltd.
50,667,954.58
45,292,270.93
Qingdao Manniq Intelligent Technology
Co., Ltd.
48,555,926.91
14,038,277.93
Other related parties
283,063,012.99
347,492,658.45

Haier Smart Home Co., Ltd. Interim Report 2024

247

Section X Financial Report

4.

Other related-party transactions(1)
On 30 March 2023, Haier Group Corporation and Haier Group Finance Co., Ltd.
(hereafter, the “Finance Company”) renewed the Financial Services Framework
Agreement, and the “resolution on the renewal of the Financial Services Framework
Agreement between Haier Smart Home Co., Ltd. and Haier Group Corporation andthe estimated amount of connected transaction” was considered and passed at thegeneral meeting. The Financial Services Framework Agreement became effective fromthe passing of the resolution.
Various current balances of the Company and the Finance Company are as follows:
Items
Monetary funds deposited at the Finance
Company
Debt investments deposited at the Finance
Company
Interest receivable from the Finance Company
Bills issued
Foreign exchange derivatives of the Finance
Company

Closing Balance

Opening Balance

21,057,085,069.50

26,276,742,534.50

12,827,500,000.00
872,330,240.02
8,548,324,901.06

7,377,500,000.00
688,144,130.70
8,909,470,662.88

2,059,045.00–10,143,691.03

Various balances of the Company and the Finance Company are as follows:

Items
Interest income of the Finance Company
Interest expense of the Finance Company
Service fee of the Finance Company
Spot foreign exchange business (foreignexchange settlement and sale)248

Amount for thecurrent period

Amount for theprevious period

439,523,818.78
4,425,427.95

353,842,566.54
413,964.86
7,917,428.19

2,455,313,888.20

3,287,657,392.00(2)

The lease expense of the Company and its subsidiaries for production and operationleased from related parties for the current period was RMB57 million (amount for thecorresponding period: RMB49 million).

(3)

Haier Group Corporation provided joint liability guarantee for certain bills payable ofthe subsidiaries of the Company with the guaranteed amount of RMB2,316 million at
the end of the period (amount at the beginning of the period: RMB2,639 million).

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report(IV) Pricing Policy
1.

Related-party Sales
Some related parties purchase components through the independent procurement platformof the Company, purchase electrical appliances for sales from the Company, and receive
after-sales services, R&D service, housing rental and other business provided by thecompany due to their business needs. In April 2022, according to the implementation ofconnected transactions in the early stage and the relevant listing requirements in Hong
Kong, the Company and Haier Group Corporation revised and signed the Product andMaterials Sales Framework Agreement, the Service Provision Framework Agreement and theProperty Leasing Framework Agreement on the basis of the original execution contract,which agreed on the financial connected transactions. The pricing principle included thatboth parties should agree on the price which is not less favourable than those provided by
the Company to the Independent Third Parties on arm’s length to ensure the fairness andreasonableness of connected transactions. The valid term of the agreement commenced
from 1 January 2023 to 31 December 2025, which can be renewed for another three years
upon expire.

2.

Related-party Procurement
In addition to independent procurement platform, the Company entrusted Haier Group
Corporation and its subsidiaries for procurements of part of raw materials. Moreover, theCompany entrusted Haier Group Corporation and its subsidiaries to provide the Company
with logistics and distribution, energy and power, basic research and testing, equipment
leasing, house leasing and maintenance, greening and cleaning, gift procurement, design,consulting, various ticket booking and other services. In April 2022, according to theimplementation of connected transactions in the early stage and the relevant listing
requirements in Hong Kong, the Company and Haier Group Corporation revised and signed
the Product and Materials Sales Framework Agreement, the Service Provision Framework
Agreement and the Property Leasing Framework Agreement on the basis of the original
execution contract, which agreed on the financial connected transactions. The pricing
principle included that both parties should agree on the price which is not less favourable
than those provided by the Company to the Independent Third Parties on arm’s length toensure the fairness and reasonableness of connected transactions. The valid term of theagreement commenced from 1 January 2023 to 31 December 2025, which can be
renewed for another three years upon expire.

Haier Smart Home Co., Ltd. Interim Report 2024

249

Section X Financial Report

250

3.

Financial aspect
Some of the financial services such as deposit and loan service, discounting service andforeign exchange derivatives needed by the Company are provided by Haier Group
Corporation, its subsidiaries and other companies. According to the Financial Service
Agreement entered among the Company, Haier Group Corporation and other parties, theprice of financial services is determined by the principle of not less favourable than market
value fair. The Company is entitled to decide whether to keep cooperation relationship withthem 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 otherfinancial service institutions to provide related financial services basing on actual situation.
In order to meet the Company’s demands such as the avoidance of foreign exchange
fluctuation risk, the Company may choose Haier Group Finance Co., Ltd. to provide someforeign exchange derivative business after comparing with comparable companies. The
Company will uphold the safe and sound, appropriate and reasonable principle, underwhich all foreign exchange capital business shall have a normal and reasonable businessbackground 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 of operation by
persons and improved its response speed to risks on the premise that the risks are
effectively controlled. In March 2023, the Company and Haier Group Corporation renewed
the Financial Services Framework Agreement, which agreed on the financial connectedtransactions. The pricing principle included the deposit interest rate not lower than the
maximum interest rate of major banks listed and the loan interest rate not less favourable
than the market price to ensure the fairness and reasonableness of connected transactions.
The valid term of the agreement lasts until 31 December 2026, which can be renewed foranother three years upon expire.

4.

OthersThe Company signed the Intellectual Property Licensing Framework Agreement with HaierGroup Corporation in November 2020. According to the agreement, Haier Group has
agreed to grant or procure its subsidiaries and contact persons to grant the license to theCompany at nil consideration to use all its intellectual property rights, including but notlimited to trademarks, patents, copyrights and logos for the products, packaging, services
and business introduction documents of the Company. The date of the Intellectual Property
Licensing Framework Agreement shall be permanently effective from the listing date. Whensuch specific intellectual property rights expire and are not renewed by Haier Group, ourright to use certain intellectual property rights under the Intellectual Property Licensing
Framework Agreement will terminate.

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report

XIV. SHARE-BASED PAYMENTS
1.

Overall of share-based payments√ Applicable □ Not Applicable
Quantity Unit: shares
Amount Unit and Currency: RMB

Categories of participants

Granted during theExercised during the

Vested during thecurrent period

current period

current period

NumberAmountNumberAmountNumberLapsed during thecurrent period

AmountDirectors and senior management

NumberAmount1,190,523.00

8,352,377.35

Staff

4,258,615.00 108,989,967.14

39,366,889.00 309,703,219.45

Total

4,258,615.00 108,989,967.14

40,557,412.00 318,055,596.80

Outstanding share options or other equity instruments at the end of the period√ Applicable □ Not Applicable
Outstanding share options at the end of the period

Outstanding other equity instruments at the end of the period

The remaining
Categories of participants

Exercise priceThe remaining
Exercise pricecontractual term

2022 Stock Ownership Plan A

N/A

August 2022-August 2024

2022 Stock Ownership Plan H

N/A2023 Stock Ownership Plan A

N/A

August 2022-August 2024
July 2023 — July 2025

2023 Stock Ownership Plan H

N/AJuly 2023 — July 2025

2021 Restricted Shares

N/A

2022 Restricted Shares

N/A

August 2021 — July 2024
July 2022 — June 2025

2023 Restricted Shares

N/A

July 2023— June 2026

2024 Restricted Shares

N/A

June 2024— May 2027

2021 First Option

RMB25.63 per share2021 Second Option

RMB25.63 per share2022 Option

RMB23.86 per sharecontractual term
September 2021 — September
2026
December 2021 — December
2026
June 2022 — June 2026

Haier Smart Home Co., Ltd. Interim Report 2024

251

Section X Financial Report2.

Equity-settled share-based payments√ Applicable □ Not Applicable
Unit and Currency: RMB
Method of determining the fair value of equity
instrument on the date of grant
Important parameters of the fair value ofequity instrument on the date of grantBasis for determining the number of
exercisable equity instruments
Reason for significant differences between
current and prior period estimates
Accumulated amount of equity-settled sharebased payment included in the capitalreserve

3.

Closing price of share on the date of grant,
Black-Scholes Model
Historical volatility rate, risk-free rate, yieldrate
The best estimate of the management
Nil
RMB1.371 billion

Cash-settled share-based payments□ Applicable √ Not Applicable

4.

Share-based payments for the current period√ Applicable □ Not Applicable
Unit and Currency: RMB

5.

Categories of participants

Equity-settled
share-based
payment

Director, Senior management
Staff
Total

30,742,934.79
170,662,640.18
201,405,574.97

Modification and termination of share-based payments□ Applicable √ Not Applicable

252

Haier Smart Home Co., Ltd. Interim Report 2024

Cash-settled
share-based
payment

Section X Financial Report

XV. CONTINGENCIES√ Applicable □ Not Applicable
As of 27 August 2024, the Company has no significant contingencies that need to be disclosed.

XVI. EVENTS AFTER THE BALANCE SHEET DATEAs of 27 August 2024, the Company has no significant events after the balance sheet date that need
to be disclosed.

XVII. RISKS RELATED TO FINANCIAL INSTRUMENTS√ Applicable □ Not Applicable
The book value of various financial instruments on the balance sheet date is as follows:

Financial assets
Items
Financial assets
measured at fairvalue andchanges of which
included incurrent profit andloss
Monetary funds
Financial assets held for trading
Derivative financial assets
Bills receivable
Accounts receivable
Other receivables
Other current assets
Debt investments
Long-term receivables
Other equity instruments

Closing Balance
Financial assets
measured at fairvalue andchanges of which
included in otherMeasured atcomprehensive
amortized costincome54,705,626,157.44

1,066,569,759.01
86,713,582.93
7,147,471,192.39
23,517,845,844.84
2,731,270,164.67
1,546,781,584.31
14,477,621,780.97
351,899,806.17
6,281,814,366.53

Total
54,705,626,157.44
1,066,569,759.01
86,713,582.93
7,147,471,192.39
23,517,845,844.84
2,731,270,164.67
1,546,781,584.31
14,477,621,780.97
351,899,806.17
6,281,814,366.53

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253

Section X Financial Report

Financial assets (continued)
Items
Financial assets
measured at fairvalue andchanges of which
included incurrent profit andloss
Monetary funds
Financial assets held for trading
Derivative financial assets
Bills receivable
Accounts receivable
Other receivables
Other current assets
Debt investments
Long-term receivables
Other equity instruments

Opening Balance
Financial assets
measured at fairvalue andchanges of which
included in otherMeasured atcomprehensive
amortized costincome54,486,452,841.14

953,963,543.83
67,565,829.44
8,621,434,831.39
20,268,099,436.43
2,649,558,985.05
1,530,274,566.66
8,841,233,078.66
350,409,496.85
6,403,694,954.77

Total
54,486,452,841.14
953,963,543.83
67,565,829.44
8,621,434,831.39
20,268,099,436.43
2,649,558,985.05
1,530,274,566.66
8,841,233,078.66
350,409,496.85
6,403,694,954.77

Financial liabilities
Items
Financialliabilities
measured at fairvalue
Short-term borrowings
Derivative financial liabilities
Bills payable
Accounts payable
Other payables
Non-current liabilities due in one year
Long-term borrowings
Long-term payables

254

Haier Smart Home Co., Ltd. Interim Report 2024

Closing Balance
Financialliabilities
measured atamortised cost
10,333,169,856.54

191,751,522.44
23,389,001,752.35
47,200,496,446.93
27,248,243,510.90
1,610,273,174.78
18,123,651,118.19
51,160,960.16

Total
10,333,169,856.54
191,751,522.44
23,389,001,752.35
47,200,496,446.93
27,248,243,510.90
1,610,273,174.78
18,123,651,118.19
51,160,960.16

Section X Financial Report

Financial liabilities (continued)
Items
Financialliabilities
measured at fairvalue
Short-term borrowings
Derivative financial liabilities
Bills payable
Accounts payable
Other payables
Non-current liabilities due in one year
Long-term borrowings
Long-term payables

Opening Balance
Financialliabilities
measured atamortised cost
10,318,351,841.88

168,625,004.97
22,215,726,721.62
47,061,789,173.62
19,181,569,184.83
146,867,809.53
17,936,302,925.77
57,113,422.78

Total
10,318,351,841.88
168,625,004.97
22,215,726,721.62
47,061,789,173.62
19,181,569,184.83
146,867,809.53
17,936,302,925.77
57,113,422.78

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
and monitors 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 inHaier 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 aredeposited 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 with approved andreputable 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 a reasonable basis. The Company monitors the balances of accounts
receivable on an ongoing basis and purchases credit insurance for receivables of largeamount credit customers in order to ensure the Company is free from material bad debts
risks. (3) Other receivables of the Company mainly include export tax refund, borrowingsand 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 be further reduced.

Haier Smart Home Co., Ltd. Interim Report 2024

255

Section X Financial Report2.

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 to satisfy 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, SouthAsia, central and east Africa, Europe, and Australia, etc. and are settled in RMB, USD, and othercurrencies.
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 inforeign currencies and assets and liabilities denominated in foreign currencies to minimize the riskof 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
and bonds 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 fixedinterest rates expose the Company to fair value interest rate risk. The Group determines therelative proportion of fixed-interest rate and floating interest rate contracts in light of theprevailing market conditions.

XVIII. OTHER SIGNIFICANT EVENTS√ Applicable □ Not Applicable
The Company intends to acquire, through its wholly-owned subsidiary, the commercial refrigeration
business of Carrier Global Corporation, a company listed on the New York Stock Exchange of theUnited States of America, at a cash consideration of approximately US$640 million (equivalent toapproximately RMB4,559 million, with the final consideration amount subject to adjustments at
Completion). The transaction has been considered and approved by the President’s Office meeting of
the Company. While it involves an overseas acquisition, it remains conditional to the filing or approval
procedures with relevant domestic and overseas government authorities.
As of 27 August 2024, the Company has no other significant events that need to be disclosed.

256

Haier Smart Home Co., Ltd. Interim Report 2024

Section X Financial Report

XIX. NOTES TO MAIN ITEMS OF FINANCIAL STATEMENTS OF THE PARENT
COMPANY1.

Accounts receivable
Closing
Balance

Aging
Within 1 year
1–2 years
2–3 years
Over 3 years
Accounts receivable balance
Allowance for bad debts
Accounts receivable, net

Opening
Balance629,729,877.07
715,238,098.86
639,447,810.65
378,071,982.79
185,502,552.24
532,467,268.93
405,307,733.72
1,859,987,973.68 1,625,777,350.58
251.55251.55
1,859,987,722.13 1,625,777,099.03

Changes in bad debt provision for accounts receivable in the current period:√ Applicable □ Not Applicable

Items

Allowance for bad
debts

2.

Opening
Balance

Increase for the current
periodProvision forthe current
Other
periodincrease

Decrease for the current
periodWrite-off andother
Reversal
movement

251.55

Closing
Balance251.55

Other receivables√ Applicable □ Not Applicable
Unit and Currency: RMB
Items

Closing Balance

Opening Balance

Interest receivable
Dividend receivable
Other receivables
Total

141,536,597.40
872,819,744.23
20,876,318,830.86
21,890,675,172.49

117,439,655.79
570,000,000.00
22,962,538,160.78
23,649,977,816.57

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257

Section X Financial Report

Interest receivable
Aging

Closing Balance

Opening BalanceWithin 1 year
More than 1 year
Total

141,536,597.40

117,439,655.79

141,536,597.40

117,439,655.79

Aging

Closing Balance

Opening BalanceWithin 1 year
More than 1 year
Total

872,819,744.23

570,000,000.00

872,819,744.23

570,000,000.00

Dividend receivable

Other receivables①
The disclosure of other receivables by aging is as follows:

②

Aging

Closing Balance

Opening BalanceWithin 1 year
More than 1 year
Other receivables balance
Allowance for bad debts
Other receivables, net

10,232,748,179.30
10,646,935,534.45
20,879,683,713.75
3,364,882.89
20,876,318,830.86

13,256,949,623.31
9,708,953,420.36
22,965,903,043.67
3,364,882.89
22,962,538,160.78

Changes in bad debt provision for other receivables in the current period:
Increase for the current
periodProvision for
Opening the current
Other
Balanceperiodincrease

Items
Allowance for bad
debts

258

3,364,882.89

Haier Smart Home Co., Ltd. Interim Report 2024

Decrease for the current
periodWrite-off andother
Reversal
movement

Closing
Balance

3,364,882.89

Section X Financial Report3.

Long-term equity investment√ Applicable □ Not Applicable(1)

Details of long-term equity investments:

Items
Long-term equity investment
Including: Long-term equity investments in
subsidiaries
Long-term equity investments inassociates
Total

(2)

Closing Balance
Provision forBook balance
impairment

Opening Balance
Provision forBook balance
impairment

53,255,723,686.31

7,100,000.00 52,823,723,686.31

7,100,000.00

3,293,758,901.51
56,549,482,587.82

109,300,000.00 3,121,372,319.75
116,400,000.00 55,945,096,006.06

109,300,000.00
116,400,000.00

Long-term equity investments to subsidiaries

Name of investee
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 Development
Co., Ltd.
Dalian Haier Precision Products Co., Ltd.
Hefei Haier Plastic Co., Ltd.
Qingdao Haier Technology Co., Ltd.
Qingdao Household Appliance Technology andEquipment 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-conditioning Co., Ltd.
Hefei Haier Air-conditioning Co., Limited
Qingdao Haier Refrigerator (International) Co.,Ltd.
Qingdao Haier Air-Conditioner Electronics Co.,Ltd.
Qingdao Haier Air Conditioner Gen Corp., Ltd.
Qingdao Haier Special Freezer Co., Ltd.
Qingdao Haier Dishwasher Co., Ltd.
Wuhan Haier Freezer Co., Ltd.
Wuhan Haier Electronics Holding Co., Ltd.

Opening Balance

Increase/decrease forthe current
periodImpairment
provisions at
the end of the
Closing Balance
period9,500,000.00

9,500,000.00

34,735,489.79
402,667,504.64
426,736,418.99

34,735,489.79
402,667,504.64
426,736,418.99

102,888,407.30
41,836,159.33
72,350,283.21
16,817,162.03

102,888,407.30
41,836,159.33
72,350,283.21
16,817,162.03

66,778,810.80
24,327,257.77
47,811,283.24
69,200,000.00
138,600,000.00
99,000,000.00
79,403,123.85

66,778,810.80
24,327,257.77
47,811,283.24
69,200,000.00
138,600,000.00
99,000,000.00
79,403,123.85

238,758,240.85

238,758,240.85

1,131,107,944.51
220,636,306.02
471,530,562.76
206,594,292.82
47,310,000.00
100,715,445.04

1,131,107,944.51
220,636,306.02
471,530,562.76
206,594,292.82
47,310,000.00
100,715,445.04

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259

Section X Financial Report

Name of investee
Chongqing Haier Air-conditioning Co., Ltd
Hefei Haier Refrigerator Co., Ltd.
Qingdao Haier Whole Set Home Appliance
Service Co., Ltd.
Chongqing Haier Refrigeration Appliance Co.,Ltd.
Haier Shanghai Zhongzhi Fang Chuang Ke
Management Co., Ltd.
Qingdao Haier Special Refrigerating ApplianceCo., Ltd.
Haier Shareholdings (Hong Kong) Limited
Shenyang Haier Refrigerator Co., Ltd.
Foshan Haier Freezer Co., Ltd.
Zhengzhou Haier Air-conditioning Co., Ltd.
Qingdao Haidayuan Procurement Service Co.,Ltd.
Qingdao Haier Intelligent Technology
Development Co., Ltd.
Qingdao Haier Technology Investment Co., Ltd.
Qingdao Casarte Smart Living Appliances Co.,Ltd.
Haier Overseas Electric Appliance Co., Ltd.
Haier (Shanghai) Electronics Co., Ltd.
Haier U+smart Intelligent Technology (Beijing)Co., Ltd.
Haier Electronics Group Co., Ltd.
Flourishing Reach Limited (SPVX)
Qingdao Haidarui Procurement Service Co., Ltd.
Qingdao Haier Intelligent Household Appliances
Co., Ltd.
Qingdao Haidacheng Procurement Service Co.,Ltd.
Qingdao Haier Quality Inspection Co., Ltd.
Qingdao Haier Home AI Industry Innovation
Center Co., Ltd.
Haier Zhjia Experience Cloud EcologicalTechnology Co., Ltd.
Qingdao Ruibo Ecological Environmental
Technology Co., Ltd.
Total

260

Haier Smart Home Co., Ltd. Interim Report 2024

Opening Balance

Increase/decrease forthe current
periodImpairment
provisions at
the end of the
Closing Balance
period100,000,000.00
49,000,000.00

100,000,000.00
49,000,000.00

118,000,000.00

118,000,000.00

91,750,000.00

91,750,000.00

2,000,000.00

2,000,000.00

100,000,000.00
29,249,228,284.24 432,000,000.00
100,000,000.00
100,000,000.00
100,000,000.00

100,000,000.00
29,681,228,284.24
100,000,000.00
100,000,000.00
100,000,000.00

20,000,000.00

20,000,000.00

130,000,000.00
410,375,635.00

130,000,000.00
410,375,635.00

10,000,000.00
500,000,000.00
12,500,000.00

10,000,000.00
500,000,000.00
12,500,000.00

143,000,000.00
3,979,407,602.61
12,751,300,336.02
107,800,000.00

143,000,000.00
3,979,407,602.61
12,751,300,336.02
107,800,000.00

326,400,000.00

326,400,000.00

100,000,000.00
18,657,135.49

100,000,000.00
18,657,135.49

100,000,000.00

100,000,000.00

100,000,000.00

100,000,000.00

55,000,000.00
52,823,723,686.31 432,000,000.00

55,000,000.00
53,255,723,686.31

7,100,000.00

7,100,000.00

Section X Financial Report(3)Long-term equity investments to associates
Increase/decrease for the current period

Name of investee

Opening Balance

Increased/

Investment

decreased

incomeImpairment

amount for the recognized underprovisions at thecurrent period

equity method

Others Closing Balance end of the period

Wolong Electric (Jinan)
Motor Co., Ltd.

172,054,149.94

13,535,589.54

185,589,739.48

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

206,764,442.76–21,738.71–16,336,866.36

190,405,837.69

Bank of Qingdao Co., Ltd.

1,267,732,987.42

85,705,068.73

8,246,581.00

1,361,684,637.15

663,804,966.31

67,634,912.51

731,439,878.82

412,107,471.53

3,970,476.69

416,077,948.22

21,000,000.00

88,300,000.00

88,300,000.00

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

88,300,000.00

Qingdao HBIS New Material
Technology Co., Ltd.
Total

4.

310,608,301.79

9,652,558.36

3,121,372,319.75

180,476,867.12

320,260,860.15–8,090,285.36

3,293,758,901.51

109,300,000.00

Operating revenue and operating cost
√ Applicable □ Not Applicable
Unit and Currency: RMB

Items

Amount for the current period Amount for the previous period
Revenue
Cost
Revenue
Cost

Primary Business
Other Business

209,681,355.52
41,920,259.24

183,992,284.05
39,451,949.45

284,845,756.66
42,560,950.18

247,445,754.14
38,775,114.29

Total

251,601,614.76

223,444,233.50

327,406,706.84

286,220,868.43

Haier Smart Home Co., Ltd. Interim Report 2024

261

Section X Financial Report

5.

Investment income√ Applicable □ Not Applicable
Unit and Currency: RMB

Items
Investment income from long-term equity investment
accounted for using cost method
Long-term equity investments income calculated by theequity method
Income from wealth management products
Investment income from investment in other equity
instrument during the holding period
Total

Amount for thecurrent period

Amount for theprevious period

302,819,744.23

228,173,185.59

180,476,867.12
24,878,729.85

144,556,606.76
27,987,900.19

508,175,341.20

400,717,692.54

XX. APPROVAL OF FINANCIAL REPORTThis financial report was approved for publication by the Board of Directors of the Company on 27
August 2024.

XXI. OTHER SUPPLEMENTARY INFORMATION
1.

Basic earnings per share and diluted earnings per shareItems
Net profit attributable to ordinary
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company
after deduction of non-recurring
profit or loss

262

Haier Smart Home Co., Ltd. Interim Report 2024

Amount for the current period
Amount for the previous period
Earnings per share
Earnings per share
(RMB)
(RMB)
Weighted
Weighted
average
Basic
Dilutedaverage
Basic
Dilutedreturn on
earnings
earnings return on
earnings
earnings
net assets per share per share net assets per share per share

9.67%

1.13

1.12

9.16%

0.96

0.96

9.43%

1.10

1.09

8.80%

0.93

0.92

Section X Financial Report2.

Non-recurring profit or loss
Items
Net profit attributable to ordinary shareholders of the Parent
Company
Less: non-recurring profit or loss
Net profit attributable to ordinary shareholders of the Parent
Company after deduction of non-recurring profit or loss

Amount for thecurrent period

Amount for theprevious period

10,420,218,389.22
259,713,486.84

8,962,851,469.46
358,873,704.88

10,160,504,902.38

8,603,977,764.58

Breakdown of non-recurring profit and loss for the current period
Non-recurring profit and loss items

Amounts for the current period

Profit and loss from disposal of non-current assets
Government subsidies included in current profit or loss,
except for government subsidies that are closely related
to the Company’s normal business operations, to beenjoyed in a fixed amount or fixed quantity based on
the national unified standards
Profit from the excess of the fair value of the identifiable
net assets of investee companies on acquisition of theinvestment over the cost of investment in the
Company’s subsidiaries, associates and joint ventures
Profit and loss from fair value changes of financial assets
held for trading, financial liabilities held for trading, as
well as investment gains arising from disposal of
financial assets held for trading, financial liabilities held
for trading and financial assets held for sale, except theeffective hedging related to the normal operations of theCompany
Other non-operating income and expenses except the
aforementioned items
Effect of minority equity interest
Effect of income tax
Effect of profit from business combination under common
control
Total-24,802,715.11

373,800,184.84-29,489,597.82-3,829,918.04-9,733,324.65-46,231,142.38

259,713,486.84

Chairman: LI Huagang
Board approval submission date: 27 August 2024
Information of amendment□Applicable √ Not Applicable

Haier Smart Home Co., Ltd. Interim Report 2024

263

Section XI Responsibility Statement“As the executive directors of the Board of Haier Smart Home Co., Ltd, we hereby confirm to the best of
our knowledge, and in accordance with the applicable reporting principles, that the financial statements givea 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 and performance of the business including theresults and the position of the company, together with a description of the principal opportunities and risks
associated with the expected development of the company.”
Qingdao, 27 August 2024
The Board of Haier Smart Home Co., Ltd
Li Huagang
Gong Wei

264

Haier Smart Home Co., Ltd. Interim Report 2024