Financial Performance - Operating revenue for Q3 2022 reached RMB 18,718,596,599.71, representing a year-on-year increase of 6.09%[3] - Net profit attributable to shareholders was RMB 449,622,342.46, up 44.55% compared to the same period last year[3] - Basic earnings per share for the period was RMB 0.33, reflecting a 43.48% increase year-on-year[4] - The company's net profit after deducting non-recurring gains and losses was RMB 347,348,485.85, reflecting a year-on-year increase of 54.52%[3] - The diluted earnings per share for the period was RMB 0.33, with a return on equity of 4.11%[4] - Investment income for the reporting period was RMB 427,460,084.89, an increase of 86.81% year-on-year[9] Assets and Liabilities - Total assets at the end of the reporting period amounted to RMB 55,764,948,014.37, a slight decrease of 0.33% from the previous year[4] - The equity attributable to shareholders of the listed company was RMB 11,163,835,980.94, showing a year-on-year increase of 7.94%[15] - Trading financial assets increased by 32.36% to RMB 7,446,321,415.89 due to the rise in unexpired financial products at the end of the reporting period[20] - Accounts receivable financing rose by 72.42% to RMB 6,327,260,830.08, primarily due to the company's growth in scale[20] Cash Flow - The net cash flow from operating activities for the year-to-date was RMB 4,112,665,147.87, showing a growth of 17.72%[3] - Cash received from tax refunds was RMB 2,329,825,859.86, reflecting a 30.30% increase compared to the previous year[9] - Cash received from investment income increased by 122.76% to RMB 145,424,642.74, due to higher financial product returns during the reporting period[20] - Cash received from borrowings decreased by 65.22% to RMB 1,043,026,866.50, mainly due to reduced bank borrowings by subsidiaries[20] Shareholder Information - The company reported a total of 37,743 common shareholders at the end of the reporting period[6] - The largest shareholder, Qingdao Hisense Air Conditioning Co., Ltd., holds 37.92% of the shares[6] - The total number of ordinary shareholders at the end of the reporting period was 37,743, with the top ten shareholders holding a combined 77.99% of the shares[17] - The top ten shareholders include various entities, with no significant shareholding restrictions noted[18] Expenses and Other Income - The company reported a significant increase in management expenses, totaling RMB 1,353,516,016.13, which is up 55.34% due to the consolidation of three subsidiaries[9] - Other operating income increased by 105.08% to RMB 218,507,475.26, mainly due to the consolidation of three subsidiaries[20] - Non-operating income for the period totaled RMB 102,273,856.61, with a significant portion attributed to government subsidies and asset management gains[5] - The government subsidies recognized in the current period amounted to RMB 46,319,495.72, with a total of RMB 173,323,944.48 from the beginning of the year to the end of the reporting period[16]

Market Performance - The domestic central air conditioning market growth was only 1.7% due to factors like raw material price fluctuations and real estate market adjustments[5]. - Retail sales of household air conditioners decreased by 15.3% year-on-year, with retail volume down by 20.9%[5]. - The refrigerator market saw a retail volume decline of 5.5% and a retail value decline of 3.4% in the first half of 2022[6]. - The washing machine market experienced a retail volume drop of 9.2% and a retail value drop of 10.1%[6]. - Exports of refrigerators, washing machines, and household air conditioners fell by 10.8%, 12.9%, and 2.18% respectively due to various global economic factors[9]. Product Development and Innovation - The average price of household air conditioners increased by 6.5% in the first half of 2022, driven by higher demand for new features[5]. - The high-end refrigerator segment saw a retail value share increase of 4.7 percentage points compared to 2021[6]. - The company is focusing on developing energy-efficient, low-carbon, and smart home appliances to meet evolving consumer demands[6]. - The company launched the "Dual Purification" home central air conditioning under the Hitachi brand, achieving over 15% market share in the home decoration retail market in the first half of 2022[11]. - The company introduced the "Photovoltaic Central Air Conditioning" product line, utilizing photovoltaic energy technology to enhance energy efficiency and reduce carbon emissions[11]. - The Hisense brand's "C200" air conditioner became the top-selling model in the industry for 8 consecutive weeks after its launch[12]. - The Hisense brand's vacuum preservation refrigerator series was recognized as a leading product in the vacuum preservation category in 2022[13]. - The company’s washing machine products received the 2022 German iF Design Award, marking the fifth consecutive win for the company in this prestigious international award[14]. Financial Performance - The company achieved operating revenue of 38.307 billion yuan, a year-on-year increase of 18.15%[10]. - The HVAC business generated main operating revenue of 18.947 billion yuan, up 17.47% year-on-year, while the ice washing business saw a decline of 6.30% to 10.427 billion yuan[10]. - Domestic sales revenue reached 20.654 billion yuan, growing by 12.25%, while international sales revenue surged by 34.57% to 14.322 billion yuan[10]. - The net profit attributable to shareholders was 620 million yuan, reflecting a year-on-year growth of 0.79%[10]. - The net cash flow from operating activities decreased significantly by 65.46%, amounting to RMB 720.03 million compared to RMB 2.08 billion in the previous year[19]. - The company reported a decrease of 5.87% in net profit after deducting non-recurring gains and losses, totaling RMB 428.07 million compared to RMB 454.78 million last year[19]. - The company received government subsidies amounting to RMB 127.00 million, contributing positively to its financial performance[20]. Research and Development - The company established R&D centers in the US, Japan, and Europe, focusing on a unified global platform and standards to enhance product quality and competitiveness[17]. - Research and development expenses increased by 27.71% to RMB 1,067,706,086.41 from RMB 836,068,530.36 in the previous year[24]. - The company adjusted its R&D organizational structure to enhance long-term capabilities and improve global R&D resource collaboration[51]. Cash Flow and Liquidity - Cash and cash equivalents at the end of the reporting period amounted to RMB 7,798,340,633.53, representing 14.02% of total assets, an increase of 1.47% compared to the previous year[35]. - The company's accounts receivable decreased by 31.27% to RMB 156,881,858.82 from RMB 228,252,631.50 at the beginning of the period[24]. - Short-term borrowings decreased by 43.71% to RMB 1,609,308,315.26 from RMB 2,858,984,229.49 at the beginning of the period[24]. - The total cash flow from investing activities increased by 180.24% to RMB 1,516,440,091.45 from RMB 541,119,116.10 in the previous year[26]. Risk Management - The company faces risks from macroeconomic fluctuations that could impact consumer demand for home appliances, as well as rising costs of raw materials and labor affecting profitability[56]. - Trade protectionism and barriers in certain regions may increase operational costs and affect the competitiveness of the company's export business[56]. - The company has implemented internal control measures to enhance foreign exchange risk management capabilities[41]. Corporate Governance and Compliance - The company has complied with the Corporate Governance Code during the reporting period[79]. - The financial report for the half-year period has not been audited[82]. - The company confirmed that all directors have complied with the standard code of conduct during the reporting period[78]. Shareholder Information - The company's share capital structure as of June 30, 2022, included 903,135,562 A shares (66.27%) and 459,589,808 H shares (33.73%), totaling 1,362,725,370 shares[67]. - The top ten shareholders held a total of 1,134,000,000 shares, representing 83.24% of the company's issued share capital as of June 30, 2022[68]. - The board of directors proposed not to distribute an interim dividend for the six months ending June 30, 2022, consistent with the previous year[79]. Taxation - The corporate income tax rate applicable to the group is 25%[184]. - The effective corporate income tax rate for Hisense subsidiaries is 15% for the years 2020, 2021, and 2022 due to high-tech enterprise certification[186].

Acquisition and Expansion - Hisense completed the acquisition of Sanden Corporation, expanding into automotive air conditioning compressors and thermal management systems[5] - The company completed the acquisition of a leading automotive air conditioning compressor manufacturer, expanding into the automotive air conditioning and thermal management systems market[11] - The company completed the acquisition of SanDian Company on May 31, 2021, which contributed to the consolidated financial statements from June to December 2021[22] Revenue and Profitability - The company achieved a revenue of 67.6 billion CNY in 2021, representing a year-on-year growth of 40%[11] - The revenue from the HVAC business reached 30.4 billion CNY, with a year-on-year increase of 30%[14] - The revenue from the ice and washing machine segment was 23.0 billion CNY, showing a year-on-year growth of 23%[14] - The company’s net profit attributable to shareholders was 0.973 billion CNY, a decrease of 38.4% year-on-year, primarily due to losses in the home air conditioning segment[14] - The company’s overseas sales revenue grew by 58.21% year-on-year, reaching 23.16 billion CNY[14] - The company’s operating revenue for 2021 was RMB 67.56 billion, an increase of 39.61% compared to RMB 48.39 billion in 2020[22] - Net profit attributable to shareholders for 2021 was RMB 972.58 million, a decrease of 38.40% from RMB 1.58 billion in 2020[22] - The company’s basic earnings per share for 2021 was RMB 0.71, a decrease of 38.79% from RMB 1.16 in 2020[22] Market Performance - Hisense's refrigerator exports reached a record high, ranking first in the industry for cumulative export value in 2021[5] - The refrigerator export volume reached a record high, with the company ranking first in the industry for cumulative refrigerator export value in 2021[16] - The company reported a 3.2 percentage point increase in the high-end market share of Ronshen refrigerators year-on-year[5] - The high-end product market share for the company’s refrigerator line increased by 3.2 percentage points year-on-year[11] - The commercial cold chain business saw a revenue increase of 54% year-on-year[11] Research and Development - The company is focusing on technology innovation and ESG development, aligning with the "dual carbon" strategy and enhancing its product competitiveness[12] - The company’s R&D investment amounted to RMB 2.15 billion, representing a 40.27% increase from RMB 1.53 billion in the previous year[32] - The number of R&D personnel increased by 71.02% to 2,892 from 1,691 in the previous year[31] - R&D expenses grew by 55% year-on-year, enhancing product competitiveness and supporting steady revenue growth[43] - The company upgraded its HVAC products to meet national carbon neutrality policies, incorporating 5G wireless communication for smart cloud access[43] Corporate Governance - The company’s board consists of nine members, with the executive directors including Dai Huizhong (Chairman and CEO), Lin Lan, Jia Shaoqian, Fei Licheng, Xia Zhangzhu, and Gao Yuling, while independent non-executive directors include Ma Jinqian, Zhong Gengshen, and Zhang Shijie[59] - The company’s board underwent changes, with Duan Yuebin stepping down as Chairman and CEO on October 28, 2021, and Dai Huizhong assuming the roles[59] - The board has adopted a diversity policy, emphasizing the importance of diverse backgrounds, including gender, age, culture, and professional experience, to enhance performance[60] - The company has established a governance structure to ensure compliance with relevant laws and regulations, including the Corporate Governance Code[64] - The board is tasked with overseeing the preparation of financial statements, ensuring they accurately reflect the company's business status and cash flow[60] Financial Management - The company’s cash cycle improved by 1.82 days year-on-year, indicating better cash management[14] - The company’s financing cash inflow increased significantly to RMB 5.92 billion, a 1,337.6% increase from RMB 411.84 million in the previous year[35] - The company’s total assets and liabilities reflect significant changes due to the consolidation of a subsidiary, impacting various asset categories[37] - The company reported a total asset value of RMB 55.95 billion at the end of 2021, an increase of 33.81% from RMB 41.81 billion at the end of 2020[22] - The company’s total liabilities reached CNY 40,357,298,250.20, compared to CNY 27,405,116,775.00 in 2020, reflecting a growth of 47.0%[180] Environmental and Social Responsibility - The company established a comprehensive environmental management system, achieving ISO14001 certification renewal in December 2021[18] - The company has created four national-level "green factories" and one national-level "green supply chain," actively responding to the national "dual carbon" strategy[19] - The company is committed to developing high-voltage new energy products to meet the growing demand in the new energy vehicle sector[50] Risks and Challenges - The company faces risks from macroeconomic fluctuations, rising costs of raw materials, supply chain disruptions, currency exchange rate volatility, and trade protectionism[51] - The company has identified significant uncertainties regarding its ability to continue as a going concern, which may impact future financial stability[177] Employee Management - The company employed 48,263 staff members, with total employee expenses amounting to RMB 5.34 billion in 2021, up from RMB 4.28 billion in 2020[102] - The company has implemented a three-tier training system, providing over 410,000 training hours to enhance employee skills and capabilities[103] Related Party Transactions - The independent non-executive directors confirmed that the ongoing related transactions are part of the company's daily operations and are conducted under fair and reasonable terms[111] - The auditors did not identify any issues regarding the approval of ongoing related transactions or compliance with pricing policies[112] - The total amount of related party transactions for purchasing finished products from Hisense Group is RMB 193.90 million, accounting for 0.00% of similar transactions[140] Future Outlook - The strategic focus for 2022 includes improving the intelligence level of home appliances and increasing the proportion of connected smart products[49] - The company plans to strengthen its brand strategy and leverage its sponsorship of the 2022 FIFA World Cup to expand its overseas market presence[50]

Financial Performance - The company's operating revenue for Q1 2022 was RMB 18,303,785,340.27, representing a 31.35% increase compared to RMB 13,934,855,063.93 in the same period last year[4] - Net profit attributable to shareholders was RMB 266,233,233.32, up 22.10% from RMB 218,041,374.16 year-on-year[4] - The net profit after deducting non-recurring gains and losses was RMB 186,128,675.02, reflecting a 39.46% increase from RMB 133,465,991.53 in the previous year[4] - Basic and diluted earnings per share were both RMB 0.20, a 25.00% increase from RMB 0.16 in the same period last year[5] - The weighted average return on net assets is 2.54%, up 0.33 percentage points from 2.21% in the previous year[16] Assets and Liabilities - The total assets at the end of the reporting period were RMB 54,995,101,447.47, a decrease of 1.70% from RMB 55,948,549,486.98 at the end of the previous year[5] - Net assets attributable to shareholders of the listed company are RMB 10,596,107,827.23, reflecting a 2.45% increase from RMB 10,342,355,185.33 at the end of the previous year[16] - Total assets due within one year increased by 32.22% to RMB 2,923,372,666.66, mainly due to an increase in time deposits[18] Cash Flow - The company's cash flow from operating activities showed a net outflow of RMB 202,583,768.60, compared to a net outflow of RMB 52,228,509.71 in the same period last year[4] - The net cash flow from operating activities is negative at RMB -202,583,768.60, compared to RMB -52,228,509.71 in the same period last year[15] Research and Development - Research and development expenses increased by 35.66% to RMB 514,377,492.05 from RMB 379,154,264.86 year-on-year[8] - Research and development expenses increased by 35.66% year-on-year to RMB 514,377,492.05, reflecting higher R&D investments[19] Investment and Income - The company reported a significant increase in investment income, which rose by 321.35% to RMB 142,873,766.63 from RMB 33,908,652.85 in the previous year[8] - Non-operating income totaled RMB 80,104,558.30 after tax effects and minority interests[17] Sales and Revenue - Cash received from sales of goods and services was RMB 14,742,829,243.10, a 38.84% increase from RMB 10,618,654,036.04 in the same period last year[8] - Operating revenue increased by 31.35% year-on-year to RMB 18,303,785,340.27, driven by company growth and consolidation of San Dian Co., Ltd.[18] - Cash received from sales and services increased by 38.84% year-on-year to RMB 14,742,829,243.10, attributed to company growth and consolidation of San Dian Co., Ltd.[19] Operating Costs - Operating costs rose by 35.00% year-on-year to RMB 14,912,770,352.34, primarily due to company expansion and consolidation of San Dian Co., Ltd.[18] - Cash paid for purchasing goods and services rose by 48.10% year-on-year to RMB 11,766,765,713.43, reflecting company expansion[19] Contract Liabilities - The company's contract liabilities increased by 34.12% to RMB 1,538,519,406.67 from RMB 1,147,112,513.32 year-on-year, indicating growth in business scale[7] - Contract liabilities grew by 34.12% to RMB 1,538,519,406.67, driven by company scale growth[18] Shareholder Information - The company has a significant shareholder structure, with Qingdao Hisense Air Conditioning Co., Ltd. holding 37.92% of the shares[10] - The top shareholder, Qingdao Hisense Air Conditioning Co., Ltd., holds 37.92% of the total issued shares[20]

Financial Performance - The company's operating revenue for Q3 2021 was CNY 17,643,390,799.61, representing a year-on-year increase of 28.04%[1] - The net profit attributable to shareholders for Q3 2021 was CNY 311,058,053.59, a decrease of 37.66% compared to the same period last year[1] - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 224,793,618.33, down 48.02% year-on-year[1] - Revenue for the period reached CNY 50.07 billion, an increase of 43.60% compared to CNY 34.87 billion in the previous period[5] - Operating costs amounted to CNY 39.46 billion, reflecting a 48.27% increase from CNY 26.61 billion year-on-year[5] - Net profit for the period was CNY 2,035,420,304.43, up from CNY 1,822,142,928.50, indicating a growth of approximately 11.7%[13] - The company reported a total profit of CNY 2,507,000,572.38, compared to CNY 2,243,724,984.44 in the previous period, which is an increase of approximately 11.7%[13] - The total comprehensive income for the period was CNY 2,049,685,773.39, compared to CNY 1,826,235,884.01 in the prior period, reflecting an increase of about 12.2%[13] Assets and Liabilities - The total assets at the end of the reporting period were CNY 54,814,699,856.18, an increase of 31.10% compared to the end of the previous year[2] - As of September 30, 2021, total assets reached RMB 54.81 billion, an increase from RMB 41.81 billion at the end of 2020, representing a growth of approximately 30.96%[10] - Total current liabilities were RMB 37.63 billion, up from RMB 26.72 billion, which is an increase of approximately 40.73%[11] - The total liabilities and owners' equity amounted to RMB 54.81 billion, consistent with the total assets, indicating a balanced financial position[11] Cash Flow - The net cash flow from operating activities for the year-to-date was CNY 3,493,522,034.65, down 14.96% year-on-year[1] - Cash received from sales and services was CNY 38.11 billion, a 35.01% increase from CNY 28.23 billion in the prior period[6] - Cash inflow from operating activities totaled CNY 40.72 billion, up from CNY 29.96 billion in the previous period, representing a 36% increase[14] - Net cash flow from operating activities was CNY 3.49 billion, down from CNY 4.11 billion, indicating a decrease of approximately 15%[14] - Cash outflow from investing activities was CNY 15.43 billion, compared to CNY 11.21 billion in the previous period, reflecting an increase of 38%[14] - Cash inflow from financing activities was CNY 3.88 billion, significantly higher than CNY 0.36 billion in the previous period[15] - The ending balance of cash and cash equivalents was CNY 3.11 billion, up from CNY 1.46 billion in the previous period, representing a 113% increase[15] Research and Development - R&D expenses increased by 53% year-on-year in the first three quarters of 2021, enhancing product competitiveness[2] - R&D expenses increased by 52.97% to CNY 1.37 billion, up from CNY 895 million, indicating a significant investment in innovation[5] - Research and development expenses increased to CNY 1,369,191,737.97 from CNY 895,047,090.83, marking a rise of about 53.0%[13] Investments and Acquisitions - The company completed the acquisition of Sanden Holdings Corporation, which has been included in the consolidated financial statements since May 31, 2021[2] - The company's investment income increased by 84.05% to CNY 228.82 million, up from CNY 124.33 million[5] - The company reported an increase in investment income to CNY 228,821,902.16 from CNY 124,325,574.32, representing a growth of approximately 83.9%[13] - The company's long-term equity investments surged to RMB 1.64 billion from RMB 523.75 million, representing a growth of about 213.56%[10] Market and Future Outlook - Export revenue for the first three quarters of 2021 grew by 58.6% year-on-year, supported by the company's sponsorship of the 2022 FIFA World Cup[2] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[10] - The company’s management highlighted ongoing efforts in market expansion and new product development as key strategies for future growth[12] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 29,091, with the largest shareholder holding 37.92%[7] - The company paid CNY 1.34 billion in dividends, compared to CNY 0.97 billion in the previous period, indicating a 38% increase[15] Miscellaneous - The overall gross profit margin improved by 1.74 percentage points compared to Q2 2021, despite rising raw material costs[2] - The weighted average return on net assets was 3.08%, a decrease of 2.40 percentage points compared to the same period last year[1] - The company did not undergo an audit for the third quarter report[16]

Company Information [Company Profile](index=3&type=section&id=Company%20Profile) Hisense Home Appliances Group specializes in R&D, manufacturing, and marketing of various home appliances, expanding into automotive AC compressors via Sanden Holdings acquisition - The company's main business involves the R&D, manufacturing, and marketing of home appliance products, including refrigerators, air conditioners, and washing machines[3](index=3&type=chunk) - During the reporting period, the company completed the acquisition of Sanden Holdings, expanding its business into automotive air conditioning compressors and automotive air conditioning industries[3](index=3&type=chunk) Management Discussion and Analysis [Industry Overview](index=4&type=section&id=I.%20Industry%20Overview) In H1 2021, central AC market grew over 35% YoY, while household AC sales declined; refrigerator market saw weak overall growth but strong high-end demand; new energy vehicles drove automotive AC and thermal management market growth - In H1 2021, the domestic central air conditioning market's overall capacity grew by over **35%** year-on-year, with multi-split units increasing by **46.3%**[5](index=5&type=chunk) - The domestic household air conditioning market showed weak growth, with retail volume decreasing by **5.7%** year-on-year and retail sales increasing by **3.3%** in H1 2021[5](index=5&type=chunk) - Domestic refrigerator retail volume grew by **5.9%** and retail sales by **20.4%** year-on-year, though overall scale growth remained weak. High-end refrigerators (over CNY 10,000) saw their retail sales market share increase by **6.5 percentage points** year-on-year[6](index=6&type=chunk) - Global automotive production increased by **36%** year-on-year, with new energy vehicle production growing by over **90%**, driving the growth of automotive air conditioning compressors and integrated thermal management markets[7](index=7&type=chunk) [Company Operations Analysis](index=4&type=section&id=II.%20Company%20Operations%20Analysis) The company achieved **CNY 32.42 billion** in revenue (+53.76% YoY) and **CNY 615 million** in net profit (+22.27% YoY), driven by strong HVAC and refrigeration/washing growth, market consolidation, and entry into new energy vehicle thermal management via acquisition H1 2021 Revenue Overview by Business/Region | Category | Main Business Revenue (CNY 100 million) | Year-on-Year Growth | | :--- | :--- | :--- | | **By Product** | | | | HVAC | 161.30 | +43.92% | | Refrigeration & Washing | 111.28 | +53.14% | | **By Region** | | | | Domestic Sales | 184.01 | +47.30% | | Export Sales | 106.42 | +59.26% | - HVAC Business: The company capitalized on the 'Dual Carbon Strategy' opportunity, launched high-efficiency and energy-saving products, and enhanced brand awareness through Euro 2020 sports marketing[9](index=9&type=chunk) - Refrigeration & Washing Business: Adhered to the Hisense and Ronshen dual-brand strategy, focusing on core technologies like vacuum preservation and steam washing, continuously increasing market share in mid-to-high-end products[10](index=10&type=chunk) - Automotive Air Conditioning Compressor and Integrated Thermal Management Business: The newly acquired Sanden Holdings focuses on the new energy vehicle sector, developing high-voltage series products and next-generation thermal management systems[11](index=11&type=chunk) [Key Financial Analysis](index=6&type=section&id=III.%20Key%20Financial%20Analysis%20within%20the%20Reporting%20Period) During the reporting period, the company's total revenue increased by **53.76%** year-on-year, and net profit attributable to the parent company grew by **22.27%**; excluding Sanden Holdings' consolidation, revenue increased by **49.99%** and net profit by **33.53%** year-on-year [Key Accounting Data and Financial Indicators](index=6&type=section&id=(I)%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In H1 2021, the company achieved **CNY 32.42 billion** in operating revenue (+53.76% YoY) and **CNY 615 million** in net profit attributable to parent (+22.27% YoY), with total assets reaching **CNY 55.39 billion**, up **32.47%** from year-end, and basic earnings per share at **CNY 0.45**, an increase of **21.62%** H1 2021 Key Financial Indicators | Item | Current Period | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 32,423,814,710.47 | 21,086,699,809.27 | 53.76% | | Net Profit Attributable to Shareholders of Listed Company (CNY) | 615,375,091.80 | 503,307,515.41 | 22.27% | | Net Cash Flow from Operating Activities (CNY) | 2,084,626,939.89 | 2,540,816,943.34 | -17.95% | | Basic Earnings Per Share (CNY/share) | 0.45 | 0.37 | 21.62% | | Weighted Average Return on Net Assets (%) | 6.15% | 5.67% | Increased by 0.48 percentage points | | **Item** | **End of Current Period** | **End of Prior Year** | **YoY Change (%)** | | Total Assets (CNY) | 55,387,217,509.54 | 41,811,635,813.53 | 32.47% | [Non-recurring Gains and Losses and Amounts](index=7&type=section&id=(III)%20Non-recurring%20Gains%20and%20Losses%20and%20Amounts) During the reporting period, total non-recurring gains and losses amounted to **CNY 161 million**, primarily from government grants (**CNY 190 million**) and gains/losses from entrusted investments or asset management (**CNY 46 million**) H1 2021 Non-recurring Gains and Losses Items | Item | Amount (CNY) | | :--- | :--- | | Government grants included in current profit/loss | 190,399,407.23 | | Gains/losses from entrusted investments or asset management | 46,272,447.53 | | Other non-operating income/expenses and defined profit/loss items | -22,936,387.89 | | **Total** | **160,590,651.02** | [Main Business Analysis](index=8&type=section&id=(IV)%20Main%20Business%20Analysis) HVAC and refrigeration/washing businesses are the two core components of main business revenue, accounting for **49.75%** and **34.32%** of total revenue, respectively; domestic revenue constituted **56.75%** and international revenue **32.82%**; gross profit margins across all business segments declined due to factors like rising raw material prices, with refrigeration/washing business GPM down **3.02 percentage points** and international business GPM down **2.40 percentage points** H1 2021 Operating Revenue Composition | Category | Revenue (CNY) | Proportion of Operating Revenue (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | | **By Product** | | | | | HVAC | 16,129,562,897.28 | 49.75 | 43.92 | | Refrigeration & Washing | 11,128,016,621.13 | 34.32 | 53.14 | | Other Main Businesses | 1,785,215,835.42 | 5.50 | 155.16 | | **By Region** | | | | | Domestic | 18,400,504,662.25 | 56.75 | 47.30 | | International | 10,642,290,691.58 | 32.82 | 59.26 | H1 2021 Main Business Gross Profit Margin Analysis | Category | Gross Profit Margin (%) | Change in Gross Profit Margin from Prior Year Period (percentage points) | | :--- | :--- | :--- | | **By Product** | | | | HVAC | 26.44 | -0.20 | | Refrigeration & Washing | 19.00 | -3.02 | | Other Main Businesses | 13.33 | -6.73 | | **By Region** | | | | Domestic | 31.99 | -0.89 | | International | 6.86 | -2.40 | [Analysis of Assets and Liabilities](index=12&type=section&id=IV.%20Analysis%20of%20Assets%20and%20Liabilities) As of the end of the reporting period, the company's total assets were **CNY 55.39 billion**, a **32.47%** increase from the end of the previous year; the significant increase in assets and liabilities primarily resulted from the consolidation of Sanden Holdings' financial statements, leading to substantial increases in short-term borrowings (**11,136.94%**), long-term equity investments (**201.66%**), and investment properties (**645.96%**) Major Balance Sheet Item Changes | Item | End of Current Period (CNY) | End of Prior Year (CNY) | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Long-term Equity Investments | 1,579,955,822.57 | 523,754,399.78 | 201.66 | Primarily due to consolidation of Sanden Holdings | | Investment Properties | 273,382,761.03 | 36,648,535.29 | 645.96 | Primarily due to consolidation of Sanden Holdings | | Construction in Progress | 607,394,754.34 | 228,887,385.20 | 165.37 | Primarily due to consolidation of Sanden Holdings and increased technical renovation investments | | Short-term Borrowings | 2,475,084,884.96 | 22,026,317.50 | 11,136.94 | Primarily due to consolidation of Sanden Holdings | | Lease Liabilities | 437,952,417.73 | 28,356,873.04 | 1,444.43 | Primarily due to consolidation of Sanden Holdings | [Investment Analysis](index=14&type=section&id=V.%20Investment%20Analysis) The most significant investment activity during the reporting period was subscribing to Sanden Holdings' private placement shares, with a total investment of **JPY 21.41 billion**, achieving a **74.88%** stake, successfully consolidating it and entering the automotive air conditioning system sector; additionally, the company engaged in derivative investments like forward foreign exchange contracts to hedge against exchange rate risks Significant Equity Investment Details | Investee Company | Main Business | Investment Method | Investment Amount | Shareholding Ratio | Source of Funds | | :--- | :--- | :--- | :--- | :--- | :--- | | Sanden Holdings | Automotive compressors, automotive air conditioning systems, etc. | Subscription of private placement | 21,408,512,000 JPY | 74.88% | Own funds | - The company's derivative business primarily involves forward foreign exchange contracts to hedge against exchange rate fluctuation risks of foreign currency receivables, achieving a hedging effect[34](index=34&type=chunk) [Significant Contracts and Their Performance](index=17&type=section&id=VI.%20Significant%20Contracts%20and%20Their%20Performance) During the reporting period, the company had no significant entrustment, contracting, or leasing matters; major guarantees primarily involved those provided for subsidiaries, particularly joint liability guarantees for the acquisition of Sanden Holdings and its subsequent loans, with a new guarantee limit of **JPY 35.3 billion** for subsidiaries - The company provided a joint liability guarantee of **JPY 35.3 billion** for its subsidiary Hisense Japan Automotive Air Conditioning Systems LLC, for Sanden Holdings' debt restructuring and new loans[40](index=40&type=chunk)[42](index=42&type=chunk) - Aside from guarantees provided for the acquisition of Sanden Holdings, other guarantee matters were pre-existing guarantees of Sanden Holdings before the acquisition, which became the company's guarantees due to consolidation[42](index=42&type=chunk) [Core Competitiveness Analysis](index=20&type=section&id=VII.%20Core%20Competitiveness%20Analysis) The company's core competitiveness lies in technology, brand, and culture; technologically, it adheres to 'technology-driven enterprise,' possessing multiple national-level innovation platforms and a 'pre-research, reserve, develop' R&D system; brand-wise, it boasts a rich portfolio including Hisense, Ronshen, Kelon, Hitachi, York, and Sanden; culturally, it upholds 'honesty, integrity, pragmatism, and innovation' as core values - Technological Advantage: Possesses multiple innovation platforms, including a national-level enterprise technology center, and has established a global R&D system of 'pre-researching one generation, reserving one generation, and developing one generation'[44](index=44&type=chunk) - Brand Advantage: Products cover multiple well-known brands such as Hisense, Ronshen, Kelon, 'HITACHI', 'YORK' (China region), and Sanden, meeting diverse user needs[45](index=45&type=chunk) - Integrity Culture: Adopts 'honesty, integrity, pragmatism, and innovation' as core values, and institutionalizes integrity practices through the 'Integrity Code'[46](index=46&type=chunk) [Risks and Outlook](index=21&type=section&id=VIII.%20Risks%20and%20Outlook%20Faced%20by%20the%20Group) The Group faces key risks including macroeconomic fluctuations, rising raw material and labor costs, trade protectionism, and exchange rate volatility; the company plans to address these by improving efficiency, reducing costs, optimizing sales structure, strengthening cost and financial risk management, and adhering to a high-quality product strategy to ensure sustainable, healthy, and stable development - The company faces key risks including: - Macroeconomic fluctuation risk - Rising cost risk (raw materials, labor, etc.) - Market risk from trade protectionism and trade barriers - Exchange rate fluctuation risk[47](index=47&type=chunk) - Mitigation Strategies: The company will address risks by improving efficiency and reducing costs, optimizing sales structure, strengthening cost and expense control, enhancing financial risk management, and implementing a high-quality product strategy[47](index=47&type=chunk) Other Information [Significant Related Party Transactions](index=22&type=section&id=Significant%20Related%20Party%20Transactions) During the reporting period, the company engaged in daily operating related party transactions with Hisense Group, Hisense Visual Technology, Hisense International Marketing, and others, involving procurement and sales of finished goods and materials, and provision/receipt of services; sales of finished goods to Hisense International Marketing were the largest, reaching **CNY 8.94 billion**, accounting for **27.58%** of similar transactions; the company also held significant deposits and conducted bill business with Hisense Finance Company, a related party - The company has numerous daily operating related party transactions with Hisense Group and its subsidiaries, including procurement, sales, and receipt of services[48](index=48&type=chunk) - As of the end of the reporting period, the company's deposit balance with related party Hisense Finance was **CNY 14.86 billion**, loan balance was **CNY 500 million**, and outstanding electronic bank acceptance bills amounted to **CNY 9.08 billion**[48](index=48&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=24&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2021, the Group's net cash from operating activities was approximately **CNY 2.08 billion**; cash and cash equivalents at period-end were approximately **CNY 9.81 billion**; the Group's asset-liability ratio was **73.80%**, an increase from **66.03%** in the prior year; the company uses financial instruments to hedge exchange rate risks - As of June 30, 2021, the Group's net cash from operating activities was approximately **CNY 2.08 billion**[51](index=51&type=chunk) - As of June 30, 2021, the Group's cash and cash equivalents were approximately **CNY 9.81 billion**, and its asset-liability ratio was **73.80%**[51](index=51&type=chunk)[53](index=53&type=chunk) [Share Capital and Shareholder Information](index=25&type=section&id=Share%20Capital%20Structure) As of June 30, 2021, the company's total share capital was **1.363 billion shares**, with A-shares accounting for **66.27%** and H-shares for **33.73%**; the largest shareholder was Qingdao Hisense Air Conditioning Co., Ltd., holding **37.92%**; institutional investors, including HKSCC Nominees, Gaoyi Asset, and Central Huijin, held a significant proportion among the top ten shareholders Share Capital Structure (As of June 30, 2021) | Share Class | Number of Shares | Percentage of Total Issued Share Capital | | :--- | :--- | :--- | | A Shares | 903,135,562 | 66.27% | | H Shares | 459,589,808 | 33.73% | | **Total** | **1,362,725,370** | **100.00%** | - The largest shareholder is Qingdao Hisense Air Conditioning Co., Ltd., holding **37.92%**. HKSCC Nominees Limited (representing non-registered H-shareholders) holds **33.59%**[57](index=57&type=chunk) Financial Statements (Prepared under China Accounting Standards for Business Enterprises) [Consolidated Balance Sheet](index=34&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2021, the company's total assets were **CNY 55.39 billion**, total liabilities were **CNY 40.88 billion**, and equity attributable to owners of the parent company was **CNY 9.93 billion**; total assets increased by **32.47%** compared to the end of the previous year, primarily due to the acquisition of Sanden Holdings Consolidated Balance Sheet Summary (June 30, 2021) | Item | Amount (CNY) | | :--- | :--- | | **Assets** | | | Total Current Assets | 40,475,624,314.62 | | Total Non-current Assets | 14,911,593,194.92 | | **Total Assets** | **55,387,217,509.54** | | **Liabilities and Owners' Equity** | | | Total Current Liabilities | 38,827,329,924.86 | | Total Non-current Liabilities | 2,048,344,435.01 | | **Total Liabilities** | **40,875,674,359.87** | | Total Equity Attributable to Owners of the Parent Company | 9,932,920,623.83 | | Minority Interests | 4,578,622,525.84 | | **Total Owners' Equity** | **14,511,543,149.67** | | **Total Liabilities and Owners' Equity** | **55,387,217,509.54** | [Consolidated Income Statement](index=41&type=section&id=Consolidated%20Income%20Statement) In H1 2021, the company achieved total operating revenue of **CNY 32.42 billion**, total operating costs of **CNY 31.22 billion**, total profit of **CNY 1.68 billion**, and net profit of **CNY 1.33 billion**; net profit attributable to owners of the parent company was **CNY 615 million** Consolidated Income Statement Summary (H1 2021) | Item | Amount (CNY) | | :--- | :--- | | I. Total Operating Revenue | 32,423,814,710.47 | | II. Total Operating Costs | 31,219,117,116.89 | | III. Operating Profit | 1,607,126,601.36 | | IV. Total Profit | 1,678,177,341.33 | | V. Net Profit | 1,331,261,631.57 | | - Net Profit Attributable to Owners of the Parent Company | 615,375,091.80 | | - Minority Interests | 715,886,539.77 | [Consolidated Cash Flow Statement](index=44&type=section&id=Consolidated%20Cash%20Flow%20Statement) In H1 2021, net cash flow from operating activities was **CNY 2.08 billion**, a decrease from **CNY 2.54 billion** in the prior year; net cash flow from investing activities turned positive at **CNY 541 million**; net cash flow from financing activities was **-CNY 411 million**; cash and cash equivalents at period-end totaled **CNY 3.80 billion** Consolidated Cash Flow Statement Summary (H1 2021) | Item | Amount (CNY) | | :--- | :--- | | Net Cash Flow from Operating Activities | 2,084,626,939.89 | | Net Cash Flow from Investing Activities | 541,119,116.10 | | Net Cash Flow from Financing Activities | -411,038,900.06 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | -29,141,274.80 | | **Net Increase in Cash and Cash Equivalents** | **2,185,565,881.13** | Notes to Financial Statements [Company Overview](index=51&type=section&id=I.%20Company%20Overview) This section outlines the company's historical evolution, from the establishment of Guangdong Shunde Zhujiang Refrigerator Factory in 1984, through various equity changes and name changes, culminating in Hisense Home Appliances Group Co., Ltd.; it also details the company's main business scope, which includes home appliance development, manufacturing, sales, and after-sales services - The company's predecessor was Guangdong Shunde Zhujiang Refrigerator Factory, established in 1984, listed in Hong Kong (H-shares) in 1996, and in Shenzhen (A-shares) in 1999[94](index=94&type=chunk) - In 2006, Qingdao Hisense Air Conditioning Co., Ltd. became the company's largest shareholder. In 2018, the company changed its name to Hisense Home Appliances Group Co., Ltd.[94](index=94&type=chunk)[96](index=96&type=chunk) [Significant Accounting Policies and Estimates](index=53&type=section&id=IV.%20Significant%20Accounting%20Policies%20and%20Estimates) This section details the fundamental accounting standards, accounting period, and functional currency used for financial statement preparation; it also explains significant accounting policies and estimates regarding business combinations, consolidated financial statement preparation, financial instruments, inventories, long-term equity investments, fixed assets, revenue recognition, and government grants - Financial statements are prepared on a going concern basis, in accordance with China Accounting Standards for Business Enterprises and relevant regulations[98](index=98&type=chunk)[100](index=100&type=chunk) - Revenue Recognition Principle: Revenue is recognized when the customer obtains control of the relevant goods or services[166](index=166&type=chunk) - Impairment of Financial Assets: Impairment of financial assets is assessed using the expected credit loss model, considering all reasonable and supportable information, including forward-looking information[122](index=122&type=chunk)[187](index=187&type=chunk) [Changes in Consolidation Scope](index=132&type=section&id=VII.%20Changes%20in%20Consolidation%20Scope) During the reporting period, the company underwent a significant business combination not under common control, namely the acquisition of Sanden Holdings; the equity acquisition cost was **CNY 1.24 billion**, total consolidation cost was **CNY 1.24 billion**, the fair value share of identifiable net assets acquired was **CNY 1.17 billion**, and goodwill recognized was **CNY 74.20 million** Business Combination Not Under Common Control - Sanden Holdings | Item | Amount (CNY) | | :--- | :--- | | Total Consolidation Cost | 1,240,387,776.77 | | Less: Fair Value Share of Identifiable Net Assets Acquired | 1,166,183,864.23 | | **Goodwill** | **74,203,912.54** | - As of the end of the reporting period, the closing audit for Sanden Holdings had not yet been completed, and its unaudited financial statement data was temporarily used as the fair value on the closing date for the reporting period[354](index=354&type=chunk) [Risks Related to Financial Instruments](index=138&type=section&id=IX.%20Risks%20Related%20to%20Financial%20Instruments) The company faces key financial risks including credit risk, liquidity risk, interest rate risk, and currency risk; credit risk is managed through transactions with financially sound customers and strict credit controls; liquidity risk is managed by monitoring cash levels and utilizing bank credit; interest rate risk is minimal as most borrowings are at fixed rates; the company is exposed to exchange rate fluctuations of multiple currencies, including CNY, HKD, USD, JPY, and EUR - Credit risk primarily arises from bank balances and accounts receivable, which the company mitigates through transactions with reputable customers and strict credit control policies[370](index=370&type=chunk) - Liquidity risk is managed by monitoring cash levels and utilizing bank credit, with the Board believing the company has sufficient funds to meet short-term debt and capital expenditure requirements[371](index=371&type=chunk) - Currency risk primarily stems from transactions denominated in CNY, HKD, USD, JPY, and EUR, exposing the company to exchange rate fluctuations among these currencies[378](index=378&type=chunk)

Financial Performance - The company's operating revenue for the reporting period reached ¥32,423,814,710.47, representing a year-on-year increase of 53.76% compared to ¥21,086,699,809.27 in the same period last year[9]. - The net profit attributable to shareholders of the listed company was ¥615,375,091.80, up 22.27% from ¥503,307,515.41 in the previous year[9]. - The net profit after deducting non-recurring gains and losses was ¥454,784,440.78, reflecting a 37.29% increase from ¥331,261,366.70 in the same period last year[9]. - The basic and diluted earnings per share were both ¥0.45, an increase of 21.62% from ¥0.37 in the previous year[9]. - The weighted average return on equity rose to 6.15%, up 0.48 percentage points from 5.67% in the previous year[9]. - The gross profit margin decreased to 22.79% from 24.65% in the previous year, indicating a decline in profitability despite revenue growth[33]. Assets and Liabilities - Total assets at the end of the reporting period were ¥55,387,217,509.54, a 32.47% increase from ¥41,811,635,813.53 at the end of the previous year[9]. - The net assets attributable to shareholders of the listed company were ¥9,932,920,623.83, a slight increase of 1.57% from ¥9,779,115,580.43 at the end of the previous year[9]. - The company's total liabilities increased significantly, with current liabilities reaching ¥6.84 billion, a 57.53% increase year-on-year[30]. - The company's total liabilities amounted to CNY 40.48 billion, reflecting a significant increase from the previous period[96]. Revenue Breakdown - The HVAC business generated main operating revenue of 16.130 billion CNY, up 43.92% year-on-year[17]. - The refrigerator and washing machine business reported main operating revenue of 11.128 billion CNY, an increase of 53.14% year-on-year[17]. - Domestic sales reached 18.401 billion CNY, growing by 47.30% year-on-year, while overseas sales were 10.642 billion CNY, up 59.26% year-on-year[18]. - The company reported a significant increase in sales from the HVAC segment, generating ¥16.13 billion, which accounted for 49.75% of total revenue[31]. Cash Flow and Investments - The company's cash and cash equivalents increased by 37.94% to approximately ¥9.81 billion, reflecting improved operational cash flow[28]. - The net cash flow from operating activities was ¥2.08 billion, a decrease of 17.95% compared to ¥2.54 billion in the previous year[30]. - The company achieved investment income of CNY 137.23 million, compared to CNY 52.52 million in the previous year, reflecting an increase of approximately 160.5%[102]. Research and Development - Research and development expenses increased by 46.66% to ¥836.07 million, reflecting a commitment to innovation and product development[30]. - The company is focused on developing energy-efficient products in response to national carbon neutrality policies, enhancing product APF values[23]. Acquisitions and Consolidation - The company completed the acquisition approval procedures for SanDian Holdings on May 31, 2021, and included its financial data in the consolidated statements[9]. - The company invested ¥21,408,512,000 in SanDian Holdings, acquiring a 74.88% stake, with the investment completed and no significant disputes reported[39]. - The company completed the acquisition of San Electric Holdings, incorporating it into the consolidated financial statements, which is expected to positively impact future earnings[45]. Shareholder Information - The total number of shares before the change was 1,362,725,370, with no new shares issued or repurchased[81]. - The largest shareholder, Qingdao Hisense Air Conditioning Co., Ltd., holds 37.92% of the shares, totaling 516,758,670 shares[84]. - The total number of common shareholders at the end of the reporting period was 29,284[84]. Environmental and Social Responsibility - The company adheres to environmental regulations and does not have any incidents of exceeding emission standards[53]. - The company has been recognized as a provincial-level green factory in Shandong Province for its commitment to energy conservation and environmental protection[55]. - The company actively engages in social responsibility initiatives, including educational support programs in various provinces[56]. Risk Management - The company faces macroeconomic risks, rising cost risks, trade protectionism, and exchange rate fluctuation risks, which could impact its profitability and operational costs[48]. - The company has implemented risk control measures for foreign exchange derivatives to mitigate currency fluctuation risks, enhancing its foreign exchange risk management capabilities[43]. Accounting Policies - The financial statements are prepared based on the going concern assumption in accordance with the relevant accounting standards[119]. - The company recognizes goodwill when the acquisition cost exceeds the fair value of identifiable net assets acquired in a business combination[123]. - The company classifies joint arrangements into joint operations and joint ventures, recognizing assets and liabilities based on agreements[128]. Related Party Transactions - The total expected amount for related party transactions involving sales and services is 2,018,861,000 CNY (excluding VAT), with actual performance during the reporting period at 952,669,750 CNY (excluding VAT)[63]. - The total expected amount for related party transactions involving procurement and services is 235,228,000 CNY (excluding VAT), with actual performance during the reporting period at 78,805,410 CNY (excluding VAT)[63].