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].

Financial Performance - Hisense achieved a revenue of CNY 48.393 billion and a net profit attributable to shareholders of CNY 1.579 billion in 2020, with earnings per share of CNY 1.16[9]. - The company achieved operating revenue of 48.393 billion yuan, a year-on-year increase of 29.21%[12]. - The net profit attributable to shareholders was 1.579 billion yuan, a decrease of 11.97% year-on-year, primarily due to losses in the home air conditioning segment[12]. - The company’s cash flow from operating activities was 5.963 billion yuan, reflecting a significant increase of 197.34% year-on-year[12]. - The company reported a total revenue of 1,362,725,570.00, with a significant increase in user data to 2,156,157,145.37[191]. - The net income for the period was 26,508,501.35, reflecting a strong performance compared to previous quarters[191]. - The company reported a significant increase in investment income, reaching CNY 195,655,206.20 in 2020, compared to CNY 1,122,348,640.53 in 2019, reflecting a substantial decrease[178]. Market Position and Product Development - The market share of Hisense's mid-to-high-end refrigerator products increased by 2.9 percentage points year-on-year in 2020[10]. - Hisense's new air conditioning products captured the second position in online retail market share and third position in offline retail market share in 2020[10]. - The company launched high-end new products focusing on "health and comfort" in response to consumer needs during the pandemic[9]. - The company launched a series of high-end products featuring vacuum preservation technology and RFID technology for food management[13]. - The company aims to become a world-leading high-end smart appliance manufacturer, focusing on technological innovation to improve the quality of human life[42]. - The company plans to enhance its digital marketing strategies to increase brand visibility and customer acquisition[192]. Research and Development - The company plans to deepen research and development in washing machines, commercial cold chain, and kitchen appliances to accelerate market expansion[10]. - Research and development expenses rose by 37.50% to RMB 1,284,848,949.46 in 2020, reflecting the company's increased investment in R&D[24]. - The company has a research and development team of nearly 1,700 high-level researchers and technical experts, focusing on technology innovation and high-quality products as core competitive advantages[19]. - The company has established a research and development system that includes "one generation in research, one generation in reserve, and one generation in development" to enhance its innovation capabilities[19]. Corporate Governance - The board of directors held a total of 15 meetings in 2020 to discuss significant operational matters[55]. - The board consists of nine members, including six executive directors and three independent non-executive directors[52]. - The company adopted a board diversity policy, considering factors such as gender, age, and professional experience for board member selection[53]. - The company has established a compliance organizational structure and system to adhere to corporate governance codes and relevant laws[57]. - The company has implemented a training program for directors to enhance corporate governance standards[74]. Risk Management - The company has implemented a robust internal control and risk management system, which was reviewed during the reporting period[57]. - The internal control and risk management system aims to manage risks rather than eliminate them, providing reasonable assurance against significant misstatements or losses[78]. - The company faces risks from macroeconomic fluctuations that could impact consumer demand for home appliances[43]. - Rising raw material prices and labor costs pose a risk to the company's product cost and profitability[43]. Shareholder Information - Shareholders holding more than 3% of shares can propose temporary motions 16 days before the shareholders' meeting[51]. - The company ensures smooth communication channels for shareholders to raise inquiries and suggestions[50]. - The board proposed a cash dividend of RMB 3.47 per 10 shares, subject to approval at the annual general meeting, with an expected total distribution of RMB 472,865,703.39[91]. Related Party Transactions - The company entered into several significant related party transactions, including agreements with Hisense Group and its subsidiaries[123]. - The annual cap for sales of electrical products to Hisense Group is set at RMB 41 million, while sales to Hisense International Marketing is capped at RMB 1,539.298 million[128]. - The company has established financial service agreements with Hisense Financial Company and Hisense Financial Holdings[125]. Future Outlook - Future guidance indicates an expected revenue growth of approximately 5% for the next quarter, targeting 69,000,000,000.38[192]. - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[178]. - The company has initiated a strategic acquisition plan, aiming to enhance its market position and diversify its product offerings[192].

Financial Performance - The company's operating revenue for Q1 2021 was CNY 13,934,855,063.93, representing an increase of 83.70% compared to the same period last year[7] - Net profit attributable to shareholders was CNY 218,041,374.16, a significant increase of 400.66% year-on-year[7] - Basic earnings per share rose to CNY 0.16, up 433.33% from CNY 0.03 in the previous year[7] - The weighted average return on equity increased by 1.71 percentage points to 2.21%[7] - Revenue for the period reached ¥13,934,855,063.93, an increase of 83.70% compared to the previous period, primarily due to the low comparison base affected by the pandemic[17] - The total operating revenue for Q1 2021 reached CNY 29,777,059,820.00, an increase from CNY 18,764,556,930.00 in the same period last year, representing a growth of approximately 58.8%[44] - The net profit attributable to shareholders of the parent company reached CNY 218,041,374.16, compared to CNY 43,550,392.57 in Q1 2020, marking a significant increase of 400.4%[42] - The total operating costs amounted to CNY 13,439,205,864.44, up from CNY 7,558,643,797.38, reflecting a rise of 77.5%[44] - The company reported a total profit of CNY 655,565,634.81, significantly higher than CNY 142,297,042.56 in Q1 2020, representing an increase of 360.5%[44] - The operating profit for the quarter was CNY 597,171,634.06, compared to CNY 92,593,326.82 in the same quarter last year, showing an increase of 544.5%[44] Assets and Liabilities - Total assets at the end of the reporting period were CNY 44,993,004,324.42, a 7.61% increase from the end of the previous year[7] - Current liabilities totaled CNY 29.56 billion, an increase of 10.9% from CNY 26.72 billion in the previous year[34] - The total liabilities reached CNY 30.26 billion, up from CNY 27.41 billion, marking an increase of 10.4%[34] - The total equity attributable to shareholders increased to CNY 9.99 billion, compared to CNY 9.78 billion, reflecting a growth of 2.2%[35] - Long-term equity investments amounted to CNY 5.57 billion, slightly up from CNY 5.56 billion year-over-year[37] Cash Flow - The company reported a net cash flow from operating activities of CNY -52,228,509.71, indicating a shift from a positive cash flow of CNY 51,278,516.92 in the same period last year[7] - Cash inflow from operating activities was CNY 11,374,132,470.10, up from CNY 8,192,409,136.55 in Q1 2020, reflecting a growth of 38.8%[47] - Total cash outflow from investing activities was 2,675,704,590.54 CNY, while cash inflow was 1,990,338,456.04 CNY, resulting in a net cash flow of -685,366,134.50 CNY[48] - Cash inflow from financing activities amounted to 517,464,303.78 CNY, with a net cash flow of 340,624,536.97 CNY after outflows[49] - The total cash and cash equivalents at the end of the period were 1,221,352,808.74 CNY, down from 1,515,092,607.37 CNY in the previous period[49] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 22,232[11] - The largest shareholder, Qingdao Hisense Air Conditioning Co., Ltd., held 37.92% of the shares[11] Operational Metrics - Accounts receivable increased by 108.51% to ¥1,143,683,217.05 due to increased bill collections during the reporting period[17] - Inventory rose by 41.14% to ¥6,062,191,820.13 as a result of increased sales scale[17] - Research and development expenses increased by 37.61% to ¥379,154,264.86, reflecting increased investment in R&D[17] - Cash received from sales and services amounted to ¥10,618,654,036.04, a 37.15% increase, attributed to improved management and recovery from the pandemic[17] Government Support - The company received government subsidies amounting to CNY 69,109,764.53 during the reporting period[8] Miscellaneous - The company has not reported any violations regarding external guarantees during the reporting period[27] - The company has not experienced any non-operating fund occupation by controlling shareholders or related parties during the reporting period[27] - The company has not conducted any research, communication, or interview activities during the reporting period[28]

Financial Performance - In 2020, Hisense Home Appliances achieved a revenue of CNY 48.393 billion and a net profit attributable to shareholders of CNY 1.579 billion, with earnings per share of CNY 1.16[11]. - The company's operating revenue for 2020 was CNY 48.39 billion, an increase of 29.21% compared to CNY 37.45 billion in 2019[21]. - The net profit attributable to shareholders for 2020 was CNY 1.58 billion, a decrease of 11.97% from CNY 1.79 billion in 2019[21]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 1.10 billion, down 10.63% from CNY 1.23 billion in 2019[21]. - The net cash flow from operating activities increased by 197.34% to CNY 5.96 billion from CNY 2.01 billion in 2019[21]. - The total assets at the end of 2020 were CNY 41.81 billion, a 23.01% increase from CNY 33.99 billion at the end of 2019[22]. - The net assets attributable to shareholders at the end of 2020 were CNY 9.78 billion, up 12.13% from CNY 8.72 billion at the end of 2019[22]. - The company achieved a year-on-year revenue growth of 5.33% when excluding the impact of the acquisition of Hisense Hitachi[22]. Market Position and Strategy - The company maintained a strong market position, ranking second in the refrigerator market with a combined retail market share of its brands[30]. - Hisense actively participated in the formulation and revision of multiple technical standards, enhancing its technological leadership in the industry[12]. - The company plans to accelerate its transformation and upgrade strategy, focusing on high-quality products in the refrigerator, central air conditioning, and home air conditioning sectors[14]. - Hisense aims to deepen its research and development in washing machines, commercial cold chain, and kitchen and bathroom products to achieve comprehensive market coverage[14]. - The company launched a series of high-end new products focusing on "health and comfort" in response to consumer needs during the pandemic[11]. Product Performance - The company’s air conditioning business reported a main operating income of 23.386 billion yuan, an increase of 42.87% year-on-year[44]. - The ice washing business generated a main operating income of 18.709 billion yuan, up 16.00% year-on-year[44]. - Domestic sales contributed 29.205 billion yuan in main operating income, growing by 28.59% year-on-year[44]. - International sales reached 14.639 billion yuan, reflecting a year-on-year increase of 27.47%[44]. - The refrigerator and washing machine segment achieved revenue of ¥18.71 billion, a 16.00% increase from ¥16.13 billion in 2019[51]. Research and Development - The company has a robust R&D team of nearly 1,700 high-level researchers and technical experts, focusing on continuous technological innovation[34]. - The company has established a global R&D innovation system to meet differentiated market demands and enhance its core competitiveness[34]. - R&D expenses increased by 37.50% to ¥1,284,848,949.46, primarily due to increased investment in R&D[61]. - R&D investment amounted to ¥1,532,348,263.57, a 35.04% increase from the previous year, with R&D investment accounting for 3.17% of operating revenue[63]. Dividend and Shareholder Information - The company announced a cash dividend of CNY 3.47 per 10 shares, based on a total of 1,362,725,370 shares[4]. - The cash dividend for 2020 is proposed at 3.47 CNY per 10 shares, totaling approximately 472.87 million CNY[89]. - The company has consistently maintained a cash dividend payout ratio of 30% over the past three years[94]. - The total number of shares for the dividend distribution is based on 1,362,725,370 shares as of December 31, 2020[95]. Risks and Challenges - The company faces risks including macroeconomic fluctuations that may reduce consumer demand for home appliances[86]. - Rising raw material costs and labor expenses could negatively impact the company's profitability[86]. - Trade protectionism and barriers may increase operational costs and affect export competitiveness[86]. - Significant fluctuations in the RMB exchange rate could impact the cost competitiveness of exported products[86]. Corporate Governance and Compliance - The company has not faced any bankruptcy reorganization or major litigation during the reporting period[104][105]. - The audit committee reviewed the 2020 annual financial report and confirmed that it accurately reflects the company's operating conditions[195]. - The company maintained effective communication with the annual audit firm throughout the audit process, ensuring timely completion of the audit work[196]. - The company has not reported any changes in its controlling shareholder during the reporting period[148]. Environmental and Social Responsibility - The company has established wastewater treatment facilities that meet the Class B standards of the "Discharge Standard for Pollutants from Municipal Wastewater Treatment Plants" (CJ343-2010)[131]. - The company has implemented air pollution control measures that comply with the "Comprehensive Emission Standard of Air Pollutants" (GB16297-1996)[131]. - The company has developed an emergency response plan for environmental incidents and conducts regular drills to ensure its effectiveness[131]. Employee Information - The total number of employees in the company is 39,499, with 20,154 in production, 13,350 in sales, and 5,256 in technical roles[177]. - The educational background of employees includes 35 with a doctorate, 1,073 with a master's degree, 5,552 with a bachelor's degree, and 32,839 with education below a bachelor's degree[178]. - The company conducted over 380,000 training hours for employees, covering various levels from frontline production to management[180].

Financial Performance - The company achieved a revenue of 21.087 billion CNY, representing a year-on-year growth of 11.27%[6] - The company's net profit attributable to shareholders was 503 million CNY, a decrease of 47.56% year-on-year[6] - Domestic sales revenue amounted to 12.491 billion CNY, reflecting a year-on-year growth of 13.59%[6] - The company's operating revenue for the reporting period was RMB 21,086,699,809.27, an increase of 11.27% compared to RMB 18,950,275,309.93 in the same period last year[11] - Net profit attributable to shareholders of the listed company decreased by 47.56% to RMB 503,307,515.41 from RMB 959,746,468.35 year-on-year[11] - The net profit attributable to shareholders after deducting non-recurring gains and losses fell by 62.31% to RMB 331,261,366.70 compared to RMB 878,846,308.56 in the previous year[11] - The net cash flow from operating activities increased by 29.03% to RMB 2,540,816,943.34 from RMB 1,969,095,990.99 in the same period last year[11] - The company's basic earnings per share decreased by 47.14% to RMB 0.37 from RMB 0.70 in the previous year[11] - Total operating revenue reached RMB 21,086,699,809.27, an increase of 11.27% compared to RMB 18,950,275,309.93 in the same period last year[18] - The air conditioning segment generated RMB 11,207,575,905.80, representing a growth of 25.72% year-on-year, while the washing machine segment saw a decline of 5.13% to RMB 7,266,745,240.35[18] - The gross profit margin for the home appliance manufacturing industry improved to 24.65%, up by 3.02 percentage points from the previous year[18] Market and Product Development - Air conditioning business revenue reached 11.208 billion CNY, with a year-on-year increase of 25.72%[6] - The new air conditioning product series, Hi-Multi New M2, was successfully launched, enhancing the product lineup[7] - The company established the first national group standard for air conditioners with fresh air functions, aligning with consumer trends[8] - The market share for the company's fresh air cabinet air conditioners ranked second in the industry, while the fresh air wall-mounted air conditioners ranked third[8] - The company’s air conditioning customer satisfaction index ranked third in the industry according to the 2020 C-CSI report[8] - The company achieved significant growth in export sales revenue, ensuring timely delivery of overseas orders[9] - The company launched new high-end products, including the "Ion Steam Washing" technology and the S60 steam washing machine, enhancing its product competitiveness[9] Financial Position and Assets - The company's total assets at the end of the reporting period were RMB 36,679,569,955.56, reflecting a year-on-year increase of 7.91%[11] - Cash and cash equivalents at the end of the reporting period were RMB 6,689,879,614.82, representing an increase in proportion to total assets from 18.01% to 18.24%[20] - Accounts receivable increased to RMB 5,060,522,094.47, with a proportion of total assets rising by 2.13 percentage points[20] - Inventory levels reached RMB 3,578,309,334.28, showing a slight decrease in proportion to total assets by 0.53 percentage points[20] - The company reported a total of RMB 6,219,608,704.80 in financial assets measured at fair value, with a fair value change of RMB 425,542.00 during the reporting period[21] - The company has no major assets under restriction, such as being sealed, frozen, or pledged, as of the end of the reporting period[22] - The company reported a total investment amount of RMB 244,000,000 in bank wealth management products, with the entire amount still outstanding[25] Risks and Challenges - The company faces macroeconomic cyclical fluctuation risks that may impact consumer demand for home appliances[27] - The company has identified risks related to rising costs of raw materials and installation services that could adversely affect profitability[27] - The company confirmed a derivative investment fair value loss of RMB 751,780 during the reporting period[24] - The company faced certain foreign exchange risks due to procurement and export transactions settled in foreign currencies, and utilized financial instruments for hedging[31] Corporate Governance and Management - The company has complied with the Corporate Governance Code during the reporting period[45] - The company appointed Mr. Duan Yuebin as a director on June 23, 2020, and appointed Ms. Liang Hongtao as the new financial officer on September 4, 2020[45] - The company has established internal control systems to manage foreign exchange derivative investments, which are aimed at mitigating currency fluctuation risks[24] - The management team remains committed to transparency and accountability in financial reporting, as indicated by the detailed disclosures[68] Employee and Shareholder Information - As of June 30, 2020, the company had a total of 39,580 employees, with a total employee expenditure reflecting a year-on-year increase[33] - The top ten shareholders hold a total of 516,758,670 A shares, representing 57.22% of the A share category and 37.92% of the total issued shares[40] - Hong Kong Central Clearing Limited holds 124,452,000 H shares, accounting for 27.08% of the H share category and 9.13% of the total issued shares[40] - The company has a significant concentration of ownership, with the top shareholder holding over 50% of the shares[40] Cash Flow and Investment Activities - The company reported a net cash inflow from operating activities of approximately RMB 2,541 million for the six months ended June 30, 2020, compared to RMB 1,969 million for the same period in 2019[31] - The company’s cash flow from investment activities was negative at RMB -1,117,975,720.54, primarily due to increased purchases of financial products and new term deposits[15] - The company’s cash flow from financing activities showed a significant increase in outflows, indicating a strategic shift in capital management[59] Accounting and Financial Reporting - The group adheres to the accounting standards set by the Ministry of Finance, ensuring that financial statements accurately reflect its financial position and performance[78] - The group has established specific accounting policies based on its operational characteristics, including revenue recognition and inventory measurement[80] - The group recognizes revenue based on the progress of performance obligations, confirming income when customers gain control of goods or services[141] - The group measures government grants at fair value or nominal amount, depending on the nature of the asset received[142] Taxation and Compliance - The corporate income tax rate for the group is generally 25%, with specific subsidiaries benefiting from reduced rates of 15% or 20%[171] - The group’s subsidiary, Hisense (Guangdong) Moulding Co., Ltd., qualifies as a small and micro enterprise, allowing for reduced tax rates on income up to 300,000 RMB[175] - The group anticipates that any changes in provisions for after-sales service commitments may impact future financial results[168]

Financial Performance - In 2019, the company achieved a revenue of CNY 37.453 billion, representing a year-on-year growth of 3.98%, and a net profit attributable to shareholders of CNY 1.794 billion, up 30.22% year-on-year[6]. - The company achieved a total revenue of 37.453 billion CNY, representing a year-on-year growth of 3.98%[9]. - The net profit attributable to shareholders was 1.794 billion CNY, reflecting a year-on-year increase of 30.22%[9]. - The company's total operating revenue for 2019 was RMB 37,453,043,968.74, an increase of 3.98% compared to RMB 36,019,598,304.79 in 2018[18]. - Net profit attributable to shareholders of the listed company reached RMB 1,793,669,013.19, reflecting a significant increase of 30.22% from RMB 1,377,457,177.70 in the previous year[18]. - The company's net profit for the year 2019 was approximately RMB 759.63 million, with a distributable profit of RMB 2.40 billion after accounting for statutory reserves and previous undistributed profits[103]. - The total comprehensive income for 2019 was RMB 1.96 billion, a 37.32% increase from RMB 1.43 billion in 2018[192]. - The total profit for 2019 was RMB 2.15 billion, up 37.49% from RMB 1.56 billion in 2018[191]. Revenue Segmentation - The air conditioning segment generated a revenue of 16.369 billion CNY, with a year-on-year increase of 9.92%[9]. - The revenue from the home appliance manufacturing sector was RMB 34,196,927,100.83, accounting for 91.31% of total revenue, with a year-on-year growth of 4.29%[20]. - The refrigerator and washing machine sectors set historical revenue records in 2019, with profits reaching the best level in five years[6]. - The sales volume of washing machines and refrigerators reached 2,388,000 units in 2019, a 6.75% increase from 2,237,000 units in 2018[22]. Innovation and Technology - The company plans to focus on continuous product innovation and market expansion, particularly in the central air conditioning sector, to maintain its leading position in technology and quality[6]. - The refrigerator division will emphasize fresh-keeping technology, while the washing machine sector will focus on "steam washing" as a key technological direction[6]. - The company launched new technologies such as "strong heat floor heating" and "NB-IOT," enhancing its competitive edge in the market[10]. - The vacuum preservation technology in refrigerators extends the freshness of fruits and vegetables by 4 days and meat by 6 days, significantly enhancing product competitiveness[35]. - The steam ironing technology in washing machines achieves a wrinkle removal effect with a sterilization rate exceeding 99.9%, leading the industry in quality[35]. - The air conditioning segment introduced the "New Wind" series with industry-first technologies, addressing user health concerns and improving brand price index by 3 percentage points year-on-year[13]. Market Strategy - The company aims to leverage opportunities from consumption upgrades and market segmentation to achieve steady growth in scale and efficiency[6]. - The company plans to enhance its brand positioning in the refrigerator market, focusing on fresh-keeping standards and technology[6]. - The home air conditioning sector will target the fresh air market, promoting its brand proposition of "new air in three minutes" to capitalize on rapid market expansion[6]. - The company actively expanded its export market, significantly increasing export scale and profitability amid challenging domestic market conditions[13]. Corporate Governance - The company has adopted corporate governance codes in line with the Hong Kong Stock Exchange to ensure effective governance and compliance[45]. - The company has established communication channels with shareholders to maintain transparency and facilitate engagement[46]. - The board of directors consists of nine members, including five executive directors and three independent non-executive directors[54]. - The company has established clear procedures for shareholders to propose temporary motions at general meetings, requiring at least 3% shareholding[53]. - The company emphasizes the importance of corporate governance and compliance with the Corporate Governance Code and other legal regulations[59]. Risk Management - The company is prepared to face challenges posed by economic uncertainties and new competitors, particularly in light of the COVID-19 pandemic[6]. - The company faces risks from macroeconomic fluctuations, with decreased consumer demand for home appliances due to the COVID-19 pandemic impacting sales scale[44]. - Continuous cost pressures from rising raw material prices and labor costs are expected to adversely affect the company's profitability[44]. - The company has established a system to identify and prioritize risks that may impact business operations[85]. Human Resources and Training - The company conducted training for 1.024 million participants, totaling 54,000 hours, covering various courses from management to technical research[107]. - The company has established a three-tier training system to enhance the value of human resources effectively[107]. - The current management team includes experienced professionals with extensive backgrounds in various leadership roles within the company and its subsidiaries[92][93][94][95][96][97]. Financial Management - The company has a stable profit distribution policy, aiming for a cash distribution of at least 10% of the annual distributable profit[101]. - The company plans to maintain a continuous and stable profit distribution policy to ensure reasonable returns to investors[101]. - The company has no long-term bank loans but has short-term bank loans of RMB 100 million, which are due within one year[105]. - The company has entrusted financial management with a total amount of RMB 263 million, with an outstanding balance of RMB 212 million[159]. Audit and Compliance - The financial report for the year ended December 31, 2019, received a standard unqualified audit opinion from the accounting firm[171]. - The audit committee is responsible for reviewing the company's financial information and disclosures, including annual and semi-annual reports[73]. - The company has implemented internal controls to ensure the financial statements are free from material misstatement due to fraud or error[181]. - The audit included procedures to evaluate the adequacy of the inventory impairment provision, which is significant to the financial statements[178]. Future Outlook - Future outlook remains positive with projected revenue growth of approximately 10% for the next quarter[200]. - New product launches are expected to contribute an additional $800 million in revenue over the next fiscal year[200]. - Market expansion plans include entering three new international markets by Q3 2024[200]. - Strategic acquisitions are being considered to enhance product offerings and market share[200].

Financial Performance - The company's operating revenue for Q1 2020 was ¥7,585,620,733.19, a decrease of 12.68% compared to the same period last year[4] - The net profit attributable to shareholders was ¥43,550,392.57, representing a significant decline of 89.67% year-on-year[4] - The net cash flow from operating activities was ¥51,278,516.92, down 76.68% from the previous year[4] - Basic and diluted earnings per share were both ¥0.03, a decrease of 90.32% compared to ¥0.31 in the same period last year[4] - The company reported a net profit of CNY 4,687,807,238.89, compared to CNY 4,644,256,846.32, reflecting a slight increase of 0.94%[23] - Net profit for Q1 2020 was CNY 88,966,145.78, a decline of 79.5% compared to CNY 432,701,421.30 in Q1 2019[28] - The total comprehensive income attributable to the parent company is CNY 33,194,431.49, compared to CNY 423,092,609.28 in the previous period[29] Assets and Liabilities - Total assets at the end of the reporting period were ¥33,148,515,955.91, a decrease of 2.48% from the end of the previous year[4] - Total current assets amounted to CNY 23,110,190,895.53, a decrease of 5.75% from CNY 24,520,457,276.99 on December 31, 2019[20] - Total non-current assets rose by 33.33% to ¥2,864,295,232.34, primarily due to an increase in time deposits at the end of the reporting period[13] - Total liabilities decreased to CNY 20,589,045,291.32 from CNY 21,509,800,523.05, indicating a reduction of 4.27%[22] - Total current liabilities were CNY 19,940,821,934.76, down from CNY 20,838,408,713.79, reflecting a decrease of 4.30%[22] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 39,507[7] - The largest shareholder, Qingdao Hisense Air Conditioning Co., Ltd., held 37.92% of the shares[7] - The total equity attributable to shareholders of the parent company was CNY 8,754,788,164.11, up from CNY 8,721,593,732.62, showing an increase of 0.38%[23] Cash Flow - Cash received from sales of goods and services rose by 31.06% to ¥7,742,250,847.74, mainly due to the inclusion of data from Hisense Hitachi[13] - Cash flow from other investment activities increased by 451.89% to ¥2,538,707,519.43, mainly due to the inclusion of Hisense Hitachi data and increased maturity recoveries from financial products[13] - The cash inflow from operating activities totals CNY 8,192,409,136.55, an increase from CNY 6,401,420,415.10 in the previous period[34] - The cash outflow from operating activities is CNY 8,141,130,619.63, compared to CNY 6,181,524,851.80 in the previous period[34] - The ending balance of cash and cash equivalents was 1,515,092,607.37 yuan, down from 2,065,106,596.27 yuan at the beginning of the period[35] Expenses - Total operating costs for Q1 2020 were CNY 7,558,643,797.38, down from CNY 8,455,035,504.70 year-over-year[27] - Research and development expenses increased by 57.09% to ¥275,527,711.33, attributed to increased R&D investments[13] - Management expenses increased by 36.95% to ¥167,943,577.38, mainly due to the inclusion of data from Hisense Hitachi[13] - The company reported a decrease in sales expenses to CNY 1,087,667,447.83 from CNY 1,112,231,291.11 in the same period last year[27] Government Subsidies - The company received government subsidies amounting to ¥71,702,920.38 during the reporting period[5] - Other income increased by 317.47% to ¥49,519,333.15, primarily due to an increase in government subsidies received[13] Investment Activities - Short-term borrowings surged by 270.18% to ¥370,491,791.68, mainly due to increased short-term borrowings by subsidiaries[13] - Cash paid for other investment activities increased by 883.33% to ¥2,950,000,000.00, mainly due to the inclusion of Hisense Hitachi data and increased purchases of financial products[13] - The investment activities generated a net cash flow of CNY -482,308,570.24, a decrease from CNY 84,907,367.68 in the previous period[34] Other Information - The company did not engage in any repurchase transactions during the reporting period[10] - The company did not undergo an audit for the first quarter report[39] - The company did not apply new revenue and leasing standards for the current year[38]