海信家电(00921) - 2021 - 中期财报

Company Information Company Profile 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] - 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] Management Discussion and Analysis Industry Overview 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] - 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] - 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] - 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] Company Operations Analysis 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] - 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] - 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] Key Financial Analysis 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 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 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 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 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 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] Significant Contracts and Their Performance 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][42] - 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] Core Competitiveness Analysis 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] - Brand Advantage: Products cover multiple well-known brands such as Hisense, Ronshen, Kelon, 'HITACHI', 'YORK' (China region), and Sanden, meeting diverse user needs[45] - Integrity Culture: Adopts 'honesty, integrity, pragmatism, and innovation' as core values, and institutionalizes integrity practices through the 'Integrity Code'[46] Risks and Outlook 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] - 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] Other Information Significant Related Party Transactions 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] - 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] Liquidity, Financial Resources and Capital Structure 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] - 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][53] Share Capital and Shareholder Information 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] Financial Statements (Prepared under China Accounting Standards for Business Enterprises) Consolidated Balance Sheet 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 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 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 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] - 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][96] Significant Accounting Policies and Estimates 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][100] - Revenue Recognition Principle: Revenue is recognized when the customer obtains control of the relevant goods or services[166] - 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][187] Changes in Consolidation Scope 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] Risks Related to Financial Instruments 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] - 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] - 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]