Midea Group Co., Ltd.Interim Report for the Third Quarter 2018
October 2018
Section I Important Reminders
1. The Board of Directors, the Supervisory Committee as well as all thedirectors, supervisors and senior management staff of Midea Group Co.,Ltd. (hereinafter referred to as the “Company”) have warranted that thisReport contains no false record, misleading statement or materialomission. And they shall be jointly and severally liable for the factuality,accuracy and completeness of the information given in this Report.2. All the directors have attended the Q3 report review board meeting.3. The financial statements contained in this Report have not beenaudited by a certified public auditors (CPAs) firm.4. Mr. Fang Hongbo, Chairman of the Board and President of theCompany, Mr. Xiao Mingguang, Director of Finance of the Company, andMs. Chen Lihong, responsible person for the Company’s accountingdepartment have represented and warranted that the financial statementsin this Report are factual, accurate and complete.5. This Report has been prepared in both Chinese and English. Shouldthere be any discrepancy between the two versions, the Chinese versionshall prevail.
Section II Company Profile
1. Major Accounting Data and Financial Indicators
Does the Company adjust retrospectively or restate accounting data of previous years?□ Yes √ No
| 30 September 2018 | 31 December 2017 | Change (%) | ||||
| Total assets (RMB'000) | 256,651,139 | 248,106,858 | 3.44% | |||
| Net assets attributable to shareholders of the Company (RMB'000) | 82,864,509 | 73,737,437 | 12.38% | |||
| July-September 2018 | YoY Change (%) | January-September 2018 | YoY Change (%) | |||
| Operating revenues (RMB'000) | 63,132,816 | 1.01% | 205,756,653 | 10.06% | ||
| Net profits attributable to shareholders of the Company (RMB'000) | 4,963,393 | 18.55% | 17,900,239 | 19.35% | ||
| Net profits attributable to shareholders of the Company before non-recurring gains and losses (RMB'000) | 4,751,797 | 16.52% | 17,252,050 | 23.49% | ||
| Net cash flow from operating activities (RMB'000) | -- | -- | 19,589,580 | -2.38% | ||
| Basic earnings per share (RMB/share) | 0.76 | 18.75% | 2.72 | 17.75% | ||
| Diluted earnings per share (RMB/share) | 0.75 | 17.19% | 2.69 | 16.96% | ||
| Weighted average ROE (%) | 6.11% | 0.02% | 22.65% | 0.04% | ||
| Total share capital of the Company on the last trading session before disclosure (share) | 6,605,324,151 |
| Fully diluted earnings per share based on the latest share capital above (RMB/share) | 2.71 |
√ Applicable □ N/A
Unit: RMB’000
| Item | January-September 2018 | Note |
| Profit or loss from disposal of non-current assets | 287,028 | |
| Except for effectively hedging business related to normal business operations of the Company, profit or loss arising from the change in the fair value of held-for-trading financial assets and liabilities, as well as investment profit or loss produced from the disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets | -770,673 | |
| Other | 1,700,109 | |
| Less: Corporate income tax | 406,220 | |
| Minority interests (after tax) | 162,055 | |
| Total | 648,189 | -- |
| Total number of common shareholders at the period-end | 229,782 | Total number of preference shareholders with resumed voting rights at the period-end (if any) | 0 | ||||||
| Top ten shareholders | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Number of shares held | Number of restricted shares held | Pledged or frozen shares | ||||
| Status of share | Number of shares | ||||||||
| (%) | s | ||||||||
| Midea Holding Co., Ltd. | Domestic non-state-owned corporation | 33.29 | 2,212,046,613 | 0 | Pledged | 666,065,000 | |||
| Hong Kong Exchanges and Clearing Limited | Foreign corporation | 13.10 | 870,683,761 | 0 | - | - | |||
| China Securities Finance Co., Ltd. | State-owned corporation | 2.98 | 198,145,134 | 0 | - | - | |||
| Fang Hongbo | Domestic individual | 2.06 | 136,990,492 | 102,742,869 | - | - | |||
| Hillhouse Capital Management Limited－HCM China Fund | Foreign corporation | 1.62 | 107,658,338 | 0 | - | - | |||
| Huang Jian | Domestic individual | 1.32 | 88,005,400 | 0 | Pledged | 22,999,900 | |||
| Xiaomi Technology Co., Ltd. | Domestic non-state-owned corporation | 1.24 | 82,500,000 | 0 | - | - | |||
| Central Huijin Asset Management Ltd. | State-owned corporation | 1.18 | 78,474,900 | 0 | - | - | |||
| Canada Pension Plan Investment Board | Foreign corporation | 1.09 | 72,309,875 | 0 | - | - | |||
| Li Jianwei | Domestic individual | 0.78 | 51,791,941 | 0 | - | - | |||
| Top ten non-restricted common shareholders | |||||||||
| Name of shareholder | Number of non-restricted common shares held at the period-end | Type of shares | |||||||
| Type | Number | ||||||||
| Midea Holding Co., Ltd. | 2,212,046,613 | RMB common stock | 2,212,046,613 | ||||||
| Hong Kong Securities Clearing Company Limited | 870,683,761 | RMB common stock | 870,683,761 | ||||||
| China Securities Finance Co., Ltd. | 198,145,134 | RMB common stock | 198,145,134 | ||||||
| Hillhouse Capital Management Limited－HCM China Fund | 107,658,338 | RMB common stock | 107,658,338 | ||||||
| Huang Jian | 88,005,400 | RMB common stock | 88,005,400 | ||||||
| Xiaomi Technology Co., Ltd. | 82,500,000 | RMB common stock | 82,500,000 | ||||||
| Central Huijin Asset Management Ltd. | 78,474,900 | RMB common stock | 78,474,900 | ||||||
| Canada Pension Plan Investment Board－ self-owned capital (stock exchange) | 72,309,875 | RMB common stock | 72,309,875 | ||||||
| Li Jianwei | 51,791,941 | RMB common stock | 51,791,941 | ||||||
| Yuan Liqun | 48,018,400 | RMB common stock | 48,018,400 |
| Explanation of related relationship or/and acting-in-concert parties among the above-mentioned shareholders | N/A | ||
| Top ten non-restricted common shareholders taking part in securities margin trading (if any) | N/A | ||
Section III Significant Events
1. Major changes of main items in financial statements and financial indicators withinthe Report Period, as well as the reasons for the changes
√ Applicable □ N/A
Unit: RMB’000
| Financial statement items (consolidated) | 30 September 2018/January- September 2018 | 31 December 2017/January- September 2017 | Change (%) | Reasons for the changes |
| Advances to suppliers | 2,383,097 | 1,672,248 | 42.51% | Mainly due to the increased advances to suppliers of raw materials |
| Long-term receivables | 42,652 | 362,248 | -88.23% | Mainly due to the changes in KUKA’s business |
| Construction in progress | 1,926,225 | 879,576 | 118.99% | Mainly due to the increased investments in construction |
| Short-term borrowings | 894,952 | 2,584,102 | -65.37% | Mainly due to the repayment of borrowings |
| Derivative financial liabilities | 987,850 | 90,432 | 992.37% | Mainly due to the changes in the fair value of derivative financial assets |
| Current portion of non-current liabilities | 7,002,614 | 136,605 | 5,026.18% | Mainly due to the reclassification of long-term borrowings and debentures payable into this item |
| Debentures payable | 0 | 4,553,054 | -100.00% | Mainly due to the reclassification of debentures payable into the current portion of non-current liabilities |
| Other comprehensive income | -651,947 | -244,692 | -166.44% | Mainly due to the changes in the gains/losses on cash flow hedges |
| Interest income | 1,647,457 | 815,565 | 102.00% | Mainly due to the changes in the operation of Midea Group Finance |
| Financial expenses | -1,727,756 | 852,759 | -302.61% | Mainly due to the changes in foreign exchange profit/loss |
| Gains on changes in fair value | -882,313 | -44,156 | -1,898.17% | Mainly due to the changes in the fair value of derivative financial assets |
| Gains on disposal of assets | -2,000 | 743,834 | -100.27% | Mainly due to the decreased gains on disposal of non-current assets |
| Non-operating expenses | 79,098 | 399,689 | -80.21% | Mainly due to the decreased other non-operating expenses |
| Income tax expenses | 3,834,166 | 2,737,940 | 40.04% | Mainly due to the increased profits |
| Net cash flows from financing activities | -10,826,057 | 21,987,048 | -149.24% | Mainly due to the decreased borrowings |
| Summary of the significant event | Date of disclosure | Website for the disclosed information |
| Announcement on the Board’s Review of the Asset Restructuring and the Trading Suspension of the Company’s Stock | 10 September 2018 | http://www.cninfo.com.cn/ |
| Announcement on the Progress on the Trading Suspension of the Company’s Stock | 17 September 2018 | http://www.cninfo.com.cn/ |
| Announcement on the Progress on the Trading Suspension of the Company’s Stock | 25 September 2018 | http://www.cninfo.com.cn/ |
| Announcement on the Board’s Postponed Review of the Asset Restructuring and the Continued Trading Suspension of the Company’s Stock | 8 October 2018 | http://www.cninfo.com.cn/ |
| Announcement on the Resolutions of the Second Meeting of the Third Board | 24 October 2018 | http://www.cninfo.com.cn/ |
| Plan of Midea Group Co., Ltd. on the Merge with Wuxi Little Swan Company Limited via A-share Issuance for a Share Swap and the Related-Party Transaction | 24 October 2018 | http://www.cninfo.com.cn/ |
4. Operating result forecast for the Year 2018
Warning of possible loss or considerable YoY change of the accumulated net profit made during theperiod-start until the end of the next Report Period according to predictions as well as any explanationsfor these reasons:
□ Applicable √ N/A
5. Securities investment
□ Applicable √ N/ANo such cases in the Reporting Period.
6. Wealth management entrustment
√ Applicable □ N/A
Unit: RMB’0,000
| Type of wealth management | Funding source | Principal | Outstanding amount before maturity | Overdue amount |
| Wealth management products purchased from banks | Self-owed capital | 1,917,978 | 724,000 | 0 |
| Trust wealth management | Self-owed capital | 288,374 | 0 | 0 |
| Entrusted debt investment | Self-owed capital | 3,120 | 0 | 0 |
| Total | 2,209,472 | 724,000 | 0 | |
| Operating party | Relationship with the Co | Related-party transact | Type of derivative | Initial investment amount | Start date | End date | Opening investment amount | Purchased in the Reporting Period | Sold in the Reporting Period | Amount provided for impairment (if | Closing investment amount | Closing investment amount as a percentage of | Actual gain/loss in the Reporting Period |
| mpany | ion or not | any) | the Company’s closing net assets | ||||||||||
| Futures company | N/A | No | Futures contracts | 6,588.2 | 1 January 2018 | 31 December 2018 | 6,588.2 | - | - | - | -492.1 | -0.01% | -23,247.6 |
| Bank | N/A | No | Forward exchange contracts | 55,599.5 | 1 January 2018 | 31 December 2018 | 55,599.5 | - | - | - | -139,135.7 | -1.68% | -178,459.9 |
| Total | 62,187.7 | -- | -- | 62,187.7 | - | - | - | -139,627.8 | -1.69% | -201,707.5 | |||
| Source of derivatives investment funds | All from the Company’s own money | ||||||||||||
| Lawsuits involved (if applicable) | N/A | ||||||||||||
| Disclosure date of the announcement about the board’s consent for the derivative investment (if any) | 31 March 2018 | ||||||||||||
| Disclosure date of the announcement about the general meeting’s consent for the derivative investment (if any) | 24 April 2018 | ||||||||||||
| Risk analysis of positions held in derivatives during the Reporting Period and explanation of control measures (Including but not limited to market risk, liquidity risk, credit risk, operational risk, | For the sake of eliminating the cost risk of the Company's bulk purchases of raw materials as a result of significant fluctuations in raw material prices, the Company not only carried out futures business for some of the materials, but also made use of bank financial instruments and promoted forex funds business, with the purpose of avoiding the risks of exchange and interest rate fluctuation, realizing the preservation and appreciation of forex assets, reducing forex liabilities, as well as achieving locked-in costs. The Company has performed sufficient evaluation and control against derivatives investment and position risks, details of which are described as follows: 1. Legal risk: The Company's futures business and forex funds businesses shall be conducted | ||||||||||||
| legal risk, etc.) | in compliance with laws and regulations, with clearly covenanted responsibility and obligation relationship between the Company and the agencies. Control measures: The Company has designated relevant responsible departments to enhance learning of laws and regulations and market rules, conducted strict examination and verification of contracts, defined responsibility and obligation well, and strengthened compliance check, so as to ensure that the Company's derivatives investment and position operations meet the requirements of the laws and regulations and internal management system of the Company. 2. Operational risk: Imperfect internal process, staff, systems and external issues may cause the Company to suffer from loss during the course of its futures business and forex funds business. Control measures: The Company has not only developed relevant management systems that clearly defined the assignment of responsibility and approval process for the futures business and forex funds business, but also established a comparatively well-developed monitoring mechanism, aiming to effectively reduce operational risk by strengthening risk control over the business, decision-making and trading processes. 3. Market risk: Uncertainties caused by changes in the prices of bulk commodity and exchange rate fluctuations in foreign exchange market could lead to greater market risk in the futures business and forex funds business. Meanwhile, inability to timely raise sufficient funds to establish and maintain hedging positions in futures operations, or the forex funds required for performance in forex funds operations being unable to be credited into account could also result in loss and default risks. Control measures: The futures business and forex funds business of the Company shall always be conducted by adhering to prudent operation principles. For futures business, the futures transaction volume and application have been determined strictly according to the requirements of production & operations, and the stop-loss mechanism has been implemented. Besides, to determine the prepared margin amount which may be required to be supplemented, the futures risk measuring system has been established to measure and calculate the margin amount occupied, floating gains and losses, margin amount available and margin amount required for intended positions. As for forex funds business, a hierarchical management mechanism has been implemented, whereby the operating unit which has submitted application for funds business should conduct risk analysis on the conditions and environment affecting operating profit and loss, evaluate the possible greatest revenue and loss, and report the greatest acceptable margin ratio or total margin amount, so that the Company can update operating status of the funds business on a timely basis to ensure proper funds arrangement before the expiry dates. |
| Changes in market prices or fair value of derivative products during the Reporting Period, specific methods used and relevant assumption and parameter settings | 1. Loss from futures contracts during the Reporting Period was RMB-232,476,000. 2. Loss from forward forex contracts during the Reporting Period was RMB-1,784,599,000, and exchange gains on financial expenses were RMB1,056,386,000. 3. Public quotations in futures market or forward forex quotations announced by the Bank of China are used in the analysis of derivatives fair value. |
| shall be disclosed for analysis of fair value of derivatives | |
| Explanation of significant changes in accounting policies and specific financial accounting principles in respect of the Company's derivatives for the Reporting Period as compared to the previous Reporting Period | N/A |
| Special opinions expressed by independent directors concerning the Company's derivatives investment and risk control | The Company's independent directors are of the view that the futures hedging business is an effective instrument for the Company to eliminate price volatility and implement risk prevention measures through enhanced internal control, thereby improving the operation and management of the Company; the Company's foreign exchange risk management capability can be further improved through the forex funds business, so as to maintain and increase the value of foreign exchange assets and the abovementioned investment in derivatives can help the Company to fully bring out its competitive advantages. Therefore, it is practicable for the Company to carry out derivatives investment business, and the risks are controllable. |
| Date | Type of visit | Type of visitor | Discussions |
| 11-12 July 2018 | Field research | Institution | Please refer to Investor Relations Activities from 11 July 2018 to 12 July 2018 on the website of www.cninfo.com.cn |
| 16-23 July 2018 | Field research | Institution | Please refer to Investor Relations Activities from 16 July 2018 to 23 July 2018 on the website of www.cninfo.com.cn |
| 2-5 September 2018 | Field research | Institution | Please refer to Investor Relations Activities from 2 September 2018 to 5 September 2018 on the website of www.cninfo.com.cn |
| 20-21 September 2018 | Field research | Institution | Please refer to Investor Relations Activities from 20 September 2018 to 21 September 2018 on the website of www.cninfo.com.cn |
9.Irregular provision of guarantees
□Applicable √ N/ANo such cases in the Reporting Period.
10.Occupation of the Company’s funds by the controlling shareholder or its related
parties for non-operating purposes
□Applicable √ N/ANo such cases in the Reporting Period.
Section IV Financial Statements
1.Financial statements
Balance Sheet
Prepared by Midea Group Co., Ltd. 30 September 2018 Unit:
RMB’000
Prepared by Midea Group Co., Ltd. 30 September 2018 Unit:
RMB’000
ASSETS
| ASSETS | 30 September 2018 | 31 December 2017 | 30 September 2018 | 31 December 2017 |
| Consolidated | Consolidated | Company | Company | |
| Current assets: | ||||
| Cash at bank and on hand | 42,488,845 | 48,274,200 | 32,153,760 | 29,349,926 |
| Derivative financial assets | 376,900 | 353,327 |
-
-
| Notes and accounts receivable | 32,647,254 | 28,382,943 |
- -
| Including: Notes receivable | 13,545,455 | 10,854,226 |
- -
| Accounts receivable | 19,101,799 | 17,528,717 |
--
| Advances to suppliers | 2,383,097 | 1,672,248 | 115,944 | 23,877 |
| Loans and advances | 10,930,216 | 12,178,953 |
--
| Other receivables | 2,700,042 | 2,809,998 | 11,034,838 | 9,318,704 |
| Inventories | 24,424,935 | 29,444,166 |
- -
| Including: completed but unsettled | 5,024,376 | 4,023,467 |
--
| Other current assets | 59,563,341 | 46,694,841 | 46,281,751 | 27,293,364 |
| Total current assets | 175,514,630 | 169,810,676 | 89,586,293 | 65,985,871 |
| Non-current assets: | ||||
| Available-for-sale financial assets | 2,175,051 | 1,831,051 | 61,586 | 56,868 |
| Long-term receivables | 42,652 | 362,248 |
--
| Long-term equity investments | 2,859,348 | 2,633,698 | 27,513,843 | 24,540,601 |
| Investment properties | 398,476 | 420,802 | 561,474 | 597,200 |
| Fixed assets | 22,292,839 | 22,600,724 | 1,110,104 | 1,245,998 |
| Construction in progress | 1,926,225 | 879,576 | 61,749 | 36,313 |
| Intangible assets | 15,589,465 | 15,167,036 | 226,083 | 231,154 |
| Goodwill | 29,622,253 | 28,903,785 |
--
| Long-term prepaid expenses | 981,447 | 859,106 | 177,411 | 121,452 |
| Deferred tax assets | 4,638,795 | 4,023,334 | 75,834 | 152,069 |
| Other non-current assets | 609,958 | 614,822 | 12,109 | 9,700 |
| Total non-current assets | 81,136,509 | 78,296,182 | 29,800,193 | 26,991,355 |
| TOTAL ASSETS | 256,651,139 | 248,106,858 | 119,386,486 | 92,977,226 |
Legal representative: Person in charge of accounting function: Person in charge of accounting department:
Fang Hongbo Xiao Mingguang Chen Lihong
Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd. 30 September 2018 Unit:
RMB’000
Prepared by Midea Group Co., Ltd. 30 September 2018 Unit:
RMB’000
LIABILITIES AND SHAREHOLDERS' EQUITY
| LIABILITIES AND SHAREHOLDERS' EQUITY | 30 September 2018 | 31 December 2017 | 30 September 2018 | 31 December 2017 |
| Consolidated | Consolidated | Company | Company | |
| Current liabilities: | ||||
| Short-term borrowings | 894,952 | 2,584,102 | 1,140,000 |
-
| Borrowings from the central bank | 17,458 |
- - -
| Customer deposits and deposits from banks and other financial institutions | 127,750 | 108,926 |
--
| Derivative financial liabilities | 987,850 | 90,432 |
--
| Notes and accounts payable | 55,822,651 | 60,352,562 |
- -
| Advances from customers | 13,210,019 | 17,409,063 |
--
| Including: Settled but not completed | 2,138,979 | 1,670,855 |
-
| Employee benefits payable | 4,542,534 | 5,247,500 | 125,460 | 427,806 |
| Taxes payable | 4,227,368 | 3,544,154 | 292,966 | 45,179 |
| Other payables | 4,032,813 | 3,360,523 | 80,503,359 | 58,014,048 |
| Current portion of non-current liabilities | 7,002,614 | 136,605 |
--
| Other current liabilities | 32,454,539 | 26,257,990 | 27,338 | 40,830 |
| Total current liabilities | 123,320,548 | 119,091,857 | 82,089,123 | 58,527,863 |
| Non-current liabilities: | ||||
| Long-term borrowings | 32,692,841 | 32,986,325 |
-
-
-
| Debentures payable | 4,553,054 |
--
| Long-term payables | 296,725 | 250,536 |
-
-
| Provisions | 266,721 | 330,736 |
--
| Deferred revenue | 568,855 | 536,443 |
--
| Long-term employee benefits payable | 2,397,344 | 2,465,854 |
--
| Deferred tax liabilities | 4,087,228 | 3,972,823 |
--
| Other non-current liabilities | 1,037,605 | 994,059 |
- -
| Total non-current liabilities | 41,347,319 | 46,089,830 |
--
| Total liabilities | 164,667,867 | 165,181,687 | 82,089,123 | 58,527,863 |
| Shareholders' equity: | ||||
| Share capital | 6,644,657 | 6,561,053 | 6,644,657 | 6,561,053 |
| Capital surplus | 17,712,099 | 15,911,504 | 10,103,547 | 7,726,237 |
| Less: Treasury stock | (2,718,168) | (366,842) | (2,718,168) | (366,842) |
| Other comprehensive income | (651,947) | (244,692) | 165,884 | 33,459 |
| Surplus reserve | 3,882,232 | 3,882,232 | 3,882,232 | 3,882,232 |
| General reserve | 366,947 | 366,947 |
--
| Undistributed profits | 57,628,689 | 47,627,235 | 19,219,211 | 16,613,224 |
| Total equity attributable to shareholders of the Company | 82,864,509 | 73,737,437 | 37,297,363 | 34,449,363 |
| Minority interests | 9,118,763 | 9,187,734 |
--
| Total shareholders' equity | 91,983,272 | 82,925,171 | 37,297,363 | 34,449,363 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 256,651,139 | 248,106,858 | 119,386,486 | 92,977,226 |
Legal representative: Person in charge of accounting function: Person in charge of accounting department:
Fang Hongbo Xiao Mingguang Chen Lihong
Income Statement
Prepared by Midea Group Co., Ltd. January-September 2018 Unit:
RMB’000
Prepared by Midea Group Co., Ltd. January-September 2018 Unit:
RMB’000
Item
| Item | January-September 2018 | January-September 2017 | January-September 2018 | January-September 2017 |
| Consolidated | Consolidated | Company | Company | |
| 1.Total revenue | 207,404,713 | 187,764,435 | 1,302,617 | 1,116,610 |
| Including: Operating revenue | 205,756,653 | 186,948,866 | 1,302,617 | 1,116,610 |
| Interest income | 1,647,457 | 815,565 |
--
| Fee and commission income | 603 | 4 |
--
| 2.Total Cost | (185,957,302) | (172,344,718) | 487,202 | (545,033) |
| Including: Cost of sales | (149,664,730) | (139,559,489) | (32,561) | (29,054) |
| Interest expenses | (180,410) | (215,904) |
--
| Fee and commission expenses | (2,259) | (2,140) |
--
| Taxes and surcharges | (1,223,984) | (1,076,026) | (23,006) | (11,267) |
| Selling and distribution expenses | (24,397,272) | (19,954,150) |
- -
| General and administrative expenses | (5,629,888) | (4,819,384) | (281,257) | (206,857) |
| R&D expenses | (6,349,429) | (5,610,773) |
--
| Financial expenses | 1,727,756 | (852,759) | 823,775 | (298,404) |
| Including: Interest expenses | (511,687) | (678,235) | (499,991) | (565,181) |
| Interest income | 1,262,815 | 725,515 | 1,091,446 | 250,472 |
| Asset impairment losses | (237,086) | (254,093) | 251 | 549 |
| Add: Other income | 936,954 | 1,075,500 | 184,227 |
-
| Investment income | 1,276,499 | 1,792,009 | 8,753,457 | 9,543,492 |
| Including: Share of profit of associates and joint ventures | 276,367 | 390,089 | 185,410 | 288,285 |
| Gains on changes in fair value | (882,313) | (44,156) |
--
| Gains on disposal of assets | (2,000) | 743,834 | 45,627 | (95) |
| 3.Operating profit | 22,776,551 | 18,986,904 | 10,773,130 | 10,114,974 |
| Add: Non-operating income | 226,964 | 252,125 | 5,325 | 1,481 |
| Less: Non-operating expenses | (79,098) | (399,689) | (4,038) | (1,349) |
| 4.Total profit | 22,924,417 | 18,839,340 | 10,774,417 | 10,115,106 |
| Less: Income tax expenses | (3,834,166) | (2,737,940) | (269,645) | 90,336 |
| 5.Net profit | 19,090,251 | 16,101,400 | 10,504,772 | 10,205,442 |
| (1) Classified by continuity of operations | ||||
| Net profit from continuing operations | 19,090,251 | 16,101,400 | 10,504,772 | 10,205,442 |
| Net profit from discontinued operations |
---
-
| (2) Classified by ownership of the equity | ||||
| Attributable to shareholders of the Company | 17,900,239 | 14,998,175 | 10,504,772 | 10,205,442 |
| Minority interests | 1,190,012 | 1,103,225 |
- -
| 6.Other comprehensive income, net of tax | (590,795) | 13,190 | 132,425 | (7,859) |
| Attributable to shareholders of the Company | (407,255) | 6,624 | 132,425 | (7,859) |
| (1) Other comprehensive income items which will not be reclassified subsequently to profit or loss | 45,455 | 37,472 |
--
| 1) Changes arising from remeasurement ofnet liability or net asset of defined benefit plan | 45,455 | 37,472 |
--
| 2)Share of other comprehensive incomeof the investee accounted for using equity method that will not be subsequently reclassified to profit or loss | - | - | - | - |
| (2) Other comprehensive income items which will be reclassified subsequently to profit or loss | (452,710) | (30,848) | 132,425 | (7,859) |
| 1)Share of the other comprehensiveincome of the investee accounted for using equity method which will be reclassified subsequently to profit and loss | 69,613 | (9,831) | 47,245 | (7,859) |
| 2)Change in fair value of available-for-salefinancial assets | (102,449) | (288,537) | 78,935 |
-
| 3)Losses or profits arising from thereclassification of held-to-maturity investments into available-for-sale financial assets | - | - | - | - |
| 4)Effective portion of cash flow hedginggains or losses | (1,000,918) | 140,809 | 6,245 |
-
| 5)Translation of foreign currency financialstatements | 581,044 | 126,711 |
-
-
| Minority interests | (183,540) | 6,566 |
- -
| 7.Total comprehensive income | 18,499,456 | 16,114,590 | 10,637,197 | 10,197,583 |
| Attributable to shareholders of the Company | 17,492,984 | 15,004,799 | 10,637,197 | 10,197,583 |
| Minority interests | 1,006,472 | 1,109,791 | - | - |
| 8.Earnings per share | ||||
| (1) Basic earnings per share | 2.72 | 2.31 | N/A | N/A |
| (2) Diluted earnings per share | 2.69 | 2.30 | N/A | N/A |
Legal representative: Person in charge of accounting function: Person in charge of accounting department:
Fang Hongbo Xiao Mingguang Chen Lihong
Income Statement
Prepared by Midea Group Co., Ltd. July-September 2018 Unit: RMB’000
Prepared by Midea Group Co., Ltd. July-September 2018 Unit: RMB’000
Item
| Item | July-September 2018 | July-September 2017 | July-September 2018 | July-September 2017 |
| Consolidated | Consolidated | Company | Company | |
| 1.Total revenue | 63,668,797 | 62,800,819 | 436,307 | 415,540 |
| Including: Operating revenue | 63,132,816 | 62,498,801 | 436,307 | 415,540 |
| Interest income | 535,443 | 302,016 |
- -
| Fee and commission income | 538 | 2 |
--
| 2.Total Cost | (57,615,453) | (58,381,100) | 443,843 | (221,378) |
| Including: Cost of sales | (45,783,292) | (46,508,408) | (10,607) | (9,725) |
| Interest expenses | (12,175) | (50,238) |
- -
| Fee and commission expenses | (730) | (479) |
- -
| Taxes and surcharges | (376,334) | (321,255) | (5,305) | (7,488) |
| Selling and distribution expenses | (7,504,769) | (7,549,380) |
--
| General and administrative expenses | (2,294,597) | (1,813,923) | (113,359) | (101,419) |
| R&D expenses | (2,450,200) | (1,783,276) |
- -
| Financial expenses | 743,643 | (506,145) | 573,149 | (103,441) |
| Including: Interest expenses | (206,984) | (210,340) | (222,533) | (168,798) |
| Interest income | 505,000 | 192,298 | 560,492 | 61,785 |
| Asset impairment losses | 63,001 | 152,004 | (35) | 695 |
| Add: Other income | 310,676 | 229,274 | 150 |
-
| Investment income | 363,875 | 592,557 | 2,170,005 | 3,418,254 |
| Including: Share of profit of associates and joint ventures | 89,122 | 102,955 | 58,329 | 73,852 |
| Gains on changes in fair value | (268,385) | (34,633) |
-
-
| Gains on disposal of assets | 16,759 | (268) | 45,364 | 24 |
| 3.Operating profit | 6,476,269 | 5,206,649 | 3,095,669 | 3,612,440 |
| Add: Non-operating income | 76,164 | 42,440 | 907 | 724 |
| Less: Non-operating expenses | (22,589) | (16,873) | - | (427) |
| 4.Total profit | 6,529,844 | 5,232,216 | 3,096,576 | 3,612,737 |
| Less: Income tax expenses | (1,219,284) | (678,887) | (261,715) | 98,238 |
| 5.Net profit | 5,310,560 | 4,553,329 | 2,834,861 | 3,710,975 |
| (1) Classified by continuity of operations | ||||
| Net profit from continuing operations | 5,310,560 | 4,553,329 | 2,834,861 | 3,710,975 |
| Net profit from discontinued operations |
- ---
| (2) Classified by ownership of the equity | ||||
| Attributable to shareholders of the Company | 4,963,393 | 4,186,853 | 2,834,861 | 3,710,975 |
| Minority interests | 347,167 | 366,476 |
--
| 6.Other comprehensive income, net of tax | (4,416) | (13,132) | 35,511 | (4,433) |
| Attributable to shareholders of the Company | (7,368) | (3,058) | 35,511 | (4,433) |
| (1) Other comprehensive income items which will not be reclassified subsequently to profit or loss | 27,169 | (2,107) |
--
| 1) Changes arising from remeasurement ofnet liability or net asset of defined benefit plan | 27,169 | (2,107) |
- -
| 2)Share of other comprehensive incomeof the investee accounted for using equity method that will not be subsequently reclassified to profit or loss | - | - | - | - |
| (2) Other comprehensive income items which will be reclassified subsequently to profit or loss | (34,537) | (951) | 35,511 | (4,433) |
| 1)Share of the other comprehensiveincome of the investee accounted for using equity method which will be reclassified subsequently to profit and loss | 23,639 | (1,762) | 12,939 | (4,433) |
| 2)Change in fair value of available-for-salefinancial assets | (117,028) | 3,938 | 16,327 | - |
| 3)Losses or profits arising from thereclassification of held-to-maturity investments into available-for-sale financial assets | - | - | - | - |
| 4)Effective portion of cash flow hedginggains or losses | (366,451) | (27,907) | 6,245 | - |
| 5)Translation of foreign currency financialstatements | 425,303 | 24,780 | - | - |
| Minority interests | 2,952 | (10,074) | - | - |
| 7.Total comprehensive income | 5,306,144 | 4,540,197 | 2,870,372 | 3,706,542 |
| Attributable to shareholders of the Company | 4,956,025 | 4,183,795 | 2,870,372 | 3,706,542 |
| Minority interests | 350,119 | 356,402 | - | - |
| 8.Earnings per share | ||||
| (1) Basic earnings per share | 0.76 | 0.64 | N/A | N/A |
| (2) Diluted earnings per share | 0.75 | 0.64 | N/A | N/A |
Legal representative: Person in charge of accounting function: Person in charge of accounting department:
Fang Hongbo Xiao Mingguang Chen Lihong
Cash Flow Statement
Prepared by Midea Group Co., Ltd. January-September 2018 Unit:
RMB’000
Prepared by Midea Group Co., Ltd. January-September 2018 Unit:
RMB’000
Item
| Item | January-September 2018 | January-September 2017 | January-September 2018 | January-September 2017 |
| Consolidated | Consolidated | Company | Company | |
| 1.Cash flows from operating activities: | ||||
| Cash received from sales of goods or rendering of services | 160,376,963 | 148,783,253 | - | - |
| Net increase in customer deposits and deposits from banks and other financial institutions | 18,824 |
121,433
| - | - | |||
| Net decrease in loans and advances | 1,267,226 | - | - | - |
| Net increase in borrowings from the central bank | 17,458 | - | - | - |
| Cash received for interest, fee and commission | 975,800 | 864,098 | - | - |
| Refund of taxes and surcharges | 4,903,836 | 4,440,425 | - | - |
| Cash received relating to other operating activities | 5,073,697 | 3,370,638 | 23,765,185 | 8,729,382 |
| Sub-total of cash inflows | 172,633,804 | 157,579,847 | 23,765,185 | 8,729,382 |
| Cash paid for goods and services | (98,306,306) | (87,143,944) | - | - |
| Net increase in loans and advances | - | (658,156) | - | - |
| Net decrease in customer deposits and deposits from banks and other financial institutions | - | - | - | - |
| Net increase in deposits with the central bank | (1,121,072) | (744,270) | - | - |
| Cash paid for interest, fee and commission | (183,202) | (218,046) | - | - |
| Cash paid to and on behalf of employees | (19,638,796) | (17,042,705) | (326,747) | (114,654) |
| Payments of taxes and surcharges | (11,157,941) | (9,412,941) | (23,009) | (101,815) |
| Cash paid relating to other operating activities | (22,636,907) | (22,292,143) | (2,269,335) | (227,698) |
| Sub-total of cash outflows | (153,044,224) | (137,512,205) | (2,619,091) | (444,167) |
| Net cash flows from operating activities | 19,589,580 | 20,067,642 | 21,146,094 | 8,285,215 |
| 2.Cash flows from investing activities: |
| Cash received from disposal of investments | 47,800,654 | 56,859,505 | 23,444,983 | 40,619,980 |
| Cash received from returns on investments | 1,522,671 | 1,664,387 | 9,761,421 | 9,227,047 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 69,144 | 865,341 | - | 12,049 |
| Net cash received from disposal of subsidiaries and other business units | 24,311 |
2,415
| - | - | |||
| Cash received relating to other investing activities | - | - | - | - |
| Sub-total of cash inflows | 49,416,780 | 59,391,648 | 33,206,404 | 49,859,076 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | (3,659,281) | (2,071,492) | (210,157) | (81,158) |
| Cash paid to acquire investments | (66,565,111) | (50,014,698) | (47,235,579) | (36,731,884) |
| Net cash paid to acquire subsidiaries and other business units | (171,245) | (25,633,208) | - | - |
| Cash paid relating to other investing activities | - | - | - | - |
| Sub-total of cash outflows | (70,395,637) | (77,719,398) | (47,445,736) | (36,813,042) |
| Net cash flows from investing activities | (20,978,857) | (18,327,750) | (14,239,332) | 13,046,034 |
| 3.Cash flows from financing activities: | ||||
| Cash received from capital contributions | 2,526,025 |
1,365,855
1,365,855
| 1,910,933 | ||||
| Including: Cash received from capital contributions by minority shareholders of subsidiaries | 615,092 | - | - | - |
| Cash received from borrowings | 2,344,612 | 32,917,986 | 1,140,000 |
1,600,000
| Cash received from issuing short-term financing bonds | - | - | - | - |
| Cash received relating to other financing activities | - | - | - | - |
| Sub-total of cash inflows | 4,870,637 | 34,283,841 | 3,050,933 | 2,965,855 |
| Cash repayments of borrowings | (3,084,621) | (4,718,342) | - | (1,600,000) |
| Cash payment for issuing short-term financing bonds | - | - | - | - |
| Cash payments for interest expenses and distribution of dividends or profits | (8,953,224) | (7,578,451) | (8,209,025) | (6,970,870) |
| Including: Cash payments for dividends or profit to minority shareholders of subsidiaries | (498,030) | (606,819) | - | - |
| Cash paid relating to other financing activities | (3,658,849) | - | (1,828,808) | - |
| Sub-total of cash outflows | (15,696,694) | (12,296,793) | (10,037,833) | (8,570,870) |
| Net cash flows from financing activities | (10,826,057) | 21,987,048 | (6,986,900) | (5,605,015) |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | 607,137 | 121,585 | - | - |
| 5. Net increase in cash and cash equivalents | (11,608,197) | 23,848,525 | (80,138) | 15,726,234 |
| Add: Cash and cash equivalents at beginning of period | 21,831,653 | 12,513,730 | 25,978,543 | 8,174,915 |
| 6. Cash and cash equivalents at end of period | 10,223,456 | 36,362,255 | 25,898,405 | 23,901,149 |