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].

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].