海尔智家：海尔智家股份有限公司2023年第三季度报告（英文版）

Haier Smart Home Co., Ltd.2023 Third Quarter Report 1 Stock Code: 600690 Short Name: Haier Smart Home Haier Smart Home Co., Ltd. 2023 Third Quarter Report The Board of Directors (the “Board”) and the Directors of Haier Smart Home Co., Ltd. (the “Company”) hereby assure that this announcement is free from any false record, misleading representation or material omission and are legally responsible for the trueness, accuracy and completeness of the content set out herein. Important Notice: The board of directors (the “Board”), the board of supervisors, directors, supervisors, and senior management of the Company hereby assure that the content set out in the quarterly report is true, accurate and complete, and free from any false record, misleading representation or material omission, and are individually and collectively responsible for the content set out therein. The legal representative of the Company, chief financial officer of the Company and person in charge of accounting department hereby certify that the financial information set out in the quarterly report is true, accurate and complete. Whether the third quarterly report has been audited or not □Yes √No Haier Smart Home Co., Ltd.2023 Third Quarter Report 2 I. Key Financial Information (I) Major accounting data and financial indicators Unit and Currency: RMB Items During the Reporting Period For the corresponding period of last year Year-on-year increase/decrease during the Reporting Period (%) From the beginning of the year to the end of the Reporting Period For the corresponding period of last year Year-on-year increase/decrease from the beginning of the year to the end of the Reporting Period (%) Before adjustment After adjustment After adjustment Before adjustment After adjustment After adjustment Operating revenue 67,030,721,048.16 62,891,243,547.88 63,165,662,381.11 6.12198,657,302,554.72 184,748,766,010.1 0 184,805,729,760.4 6 7.50 Net profit attributable to shareholders of the listed Company 4,185,343,372.78 3,716,522,018.5 9 3,706,330,074.3 1 12.9213,149,219,372.6211,665,606,491.2911,666,014,116.9612.71 Net profit after deduction of non-recurring profit or loss attributable to shareholders of the listed Company 4,116,766,925.02 3,730,558,477.2 5 3,730,558,477.2 5 10.3512,720,744,689.6011,221,252,182.6311,221,252,182.6313.36 Net cash flow from operating activities N/AN/AN/AN/A 13,203,115,800.7911,205,073,837.7711,251,205,835.7217.35 Basic earnings per share (RMB per share) 0.440.400.4010.001.411.251.2512.80 Diluted earnings per share (RMB per share) 0.450.390.3915.381.411.241.2413.71 Weighted average return on net assets (%) 4.163.913.91 increased 0.25 percentage point 13.3213.1513.14 increased 0.18 percentage point At the end of the Reporting Period At the end of last year Increase/decrease at the end of the Reporting Period compared to the end of last year (%) Before adjustment After adjustment After adjustment Total assets 245,891,519,568.64235,842,254,826.77235,938,042,474.574.22 Owner equity attributable to shareholders of the listed Company 100,316,122,311.7693,422,647,664.4393,454,454,213.677.34 Note: “Reporting Period” refers to the three-month period commencing from the beginning of this quarter to the end of this quarter. Haier Smart Home Co., Ltd.2023 Third Quarter Report 3 Reasons for retrospective adjustment or restatement: In the first quarter of 2023, the Company completed the acquisition of the equity in Shanghai Haier Smart Technology Co., Limited (上海海爾智能科技有限公司). The transaction was accounted for as a business combination under common control in accordance with relevant accounting standards in the consolidated financial statements and accordingly, the comparative figures for the corresponding period were adjusted and restated. During the reporting period, the Company leveraged its diverse range of brands to capitalize on growth opportunities across various market segments. It gained market share in overseas markets through its high-end brand strategy and the expansion of distribution networks. The Company prioritized end-to-end digitalization to enhance operational efficiency. During the reporting period, the Company’s revenue steadily increased, and profitability continued to improve. Key Performance Indicators I. Revenue and profit In the first three quarters of 2023, the Company achieved revenue of RMB 198.657 billion, net profit attributable to the owners of the parent company of RMB 13.149 billion, and net profit attributable to owners of the parent company after deduction of non-recurring profit or loss of RMB 12.721 billion, representing growth of 7.5%,12.7% and 13.4% respectively as compared to the corresponding period of 2022. In the third quarter alone, the Company realized revenue of RMB 67.030 billion, net profit attributable to the owners of the parent company of RMB 4.185 billion, and net profit attributable to owners of the parent company after deduction of non-recurring profit or loss of RMB 4.117 billion, representing an increase of 6.1%,12.9% and 10.4% respectively as compared to the corresponding period of 2022. (I) Smart Home Business in China In the third quarter, the Company continues to grow market share in refrigerators, washing machines and water heater & purifier, while maintaining solid performance in air conditioners, smart buildings, and kitchen appliances. The refrigerator business led the industry in the integration of home appliance with furnishing by launching F+ and 550L series of flat built-in refrigerators, along with the seamless 603 built-in series, all of which helped grow high-end sales revenue. The washing machine business accelerated retail transformation to boost operation efficiency. Casarte's Zhongzi (中子) F2 washer-dryer combo and Gemini T5 (T5双子分区洗) washer were introduced to create innovative laundry experience with flat built-in designs. Water heater and purifier business developed leading product platform with cutting-edge technologies such as electric crystal tanks, hybrid gas heating, and zinc-strontium mineral water purification. It also implemented digital management across the entire product life cycle to increase the output of individual model. The kitchen appliance business launched Nebula (星雲) and Tranquility (致境) set to enhance Casarte's product lineup. It also developed partnerships from cabinet and home improvement industries, and accelerated e-commerce revenue growth by expanding offerings online. The residential air conditioning business underwent transformations in R&D, distribution network, retail capability, supply chain cost management and organizational efficiency to improve users’ and distributors’ recognition and realized solid growth. Leveraging advantages in Heating Ventilation and Air Conditioning(HVAC) industry, the smart building business developed growth opportunities in heat pump and smart building management. In order to develop its one-stop low-carbon energy solutions business, the Company completed the acquisition of Tongfang Energy Technology Development Company in September 2023, whose technical expertise and experience in heat supply solutions could enhance the Company's integrated heating and cooling services, clean energy and waste heat recovery solutions. SANYINIAO focused on improving its design and delivery capabilities. By providing online design tools for home appliance product suites and introducing "Delivery on Wings" scenario delivery tool, it improved user experience during Haier Smart Home Co., Ltd.2023 Third Quarter Report 4 transaction, interaction, design, and delivery process, which drove the sales of home appliance product suites with enhanced user value. (II) Overseas home appliances and smart home businesses During the reporting period, the Company strengthened its high-end brand strategy and achieved steady growth through enhancing brand images, launching best-selling products, and pursuing opportunities in new categories. In the North American region, the Company continues to expand its innovation leadership by launching new, high-end products such as a multi-door refrigerator with an internal water dispenser and the next-generation stainless steel dishwasher with Microban Antimicrobial Technology and Smart Assist features. The Company also introduced ClearViewTMSmart Ultra Quiet window air conditioner, RV air conditioner, ducted units, and a variety of commercial air conditioners, expanding the AIR and Water unit to unlock new business opportunities. At the same time, cross-functional teams continue to collaborate and aspire to be best in class on order-to-cash processes and operation efficiencies, which in return could better serve our customers and consumers. The company's innovative vitality earned it a spot in Fortune Magazine's "Best Places to Work in Manufacturing and Production" and Fast Company's "Best Places to Work for Innovators" during the reporting period. In the European market, the Company continued to pursue brand premiumization: Haier brand launched new range of high-end built-in products and raise its price index to 115. The Company also unveiled New Candy series at IFABerlin in September 2023. This lineup featured high-end products including Fresco smart refrigerator and Rapidò dishwasher, both with class A energy efficiency grade, along with a new range of smart ovens. The Company also made efforts to raise its profile by becoming the official partner of the prestigious Roland-Garros Tournament and the ATP (Association of Tennis Professionals)Tour. II. Gross Profit Margin The gross profit margin in the first three quarters of 2023 reached 30.7%, up 0.2 percentage points compared to the same period in 2022. Of which, the domestic market recorded a year-on-year increase in gross profit margin, driven by lower commodity prices, digitalization in procurement and R&D, a digitalized production and sales coordination system, and an increased proportion of in-house manufacturing. In overseas markets, while ongoing product mix optimization and increased production capacity utilization had positive impacts on gross margins, they were offset by intensified competition in major regional markets. Overseas gross profit margin in the first three quarters declined year-on-year as a result, but as high-cost inventory was being cleared, the gross profit margin for the third quarter has shown a year-on-year increase. III. Operating Expenses Ratio 1. The selling expense ratio in the first three quarters of 2023 was 14.7%, an improvement of 0.2 percentage points compared to the same period in 2022. In the domestic market, the implementation of digitalization improved efficiency in marketing resource allocation, logistics distribution, and warehousing operations, resulting in a year-on-year improvement in the selling expense ratio. On the other hand, overseas markets experienced intensified competition, which demanded increased spending on expanding retail channels, promoting new product launches, and enhancing store appearance, resulting in a higher selling expense ratio year-on-year. 2. The administrative expense ratio in the first three quarters of 2023 was 4.1%, representing an improvement of 0.1 percentage points compared to the same period in 2022. In particular, the domestic market reduced the expense ratio year-on-year through adopting digital tools to streamline business processes and enhance organizational efficiency, whereas the overseas market increased investment in information technology, leading to a rise in its expense ratio year-on-year. 3. The research and development expense ratio in the first three quarters of 2023 was 4.1%, largely unchanged compared to the same period in 2022. The research and development expense was primarily dedicated for strengthening the Haier Smart Home Co., Ltd.2023 Third Quarter Report 5 Company’s core capabilities in smart home technologies, driving product innovation across various industries, and advancing the digital platforms of the SANYINIAO scenario brand. 4. The financial expense ratio in the first three quarters of 2023 was -0.1% (“+” as expenses, “-” as income), representing a deterioration of 0.3 percentage points compared to the same period in 2022. The deterioration was mainly due to the additional interest expenses incurred overseas as a result of interest rate hikes, which offset the Company's higher interest income achieved through improved capital management efficiency. IV. Working Capital 1. Trade and bill receivable turnover days The trade and bill receivable turnover days for the first three quarters of 2023 was 40 days, a decrease of 0.1 days compared to the end of 2022, hence remained largely unchanged. 2. Inventory turnover days The inventory turnover for the first three quarters of 2023 was 84.2 days, a decrease of 4.6 days compared to the end of 2022. The improvement was mainly due to effective inventory management and optimized stock levels. 3. Trade and bill payable turnover days The trade and bill payable turnover days for the first three quarters of 2023 was 142 days, a decrease of 3 days compared to the end of 2022. V. Cash Flow Analysis 1. Net cash inflow from operating activities in the first three quarters of 2023 amounted to RMB 13.203 billion, an increase of RMB 1.952 billion compared to the corresponding period in 2022. The growth was mainly driven by increased operating profit and enhanced operational efficiency in the current period. 2. Net cash outflow from investing activities in the first three quarters of 2023 amounted to RMB 8.820 billion, an increase of RMB 1.558 billion compared to the corresponding period in 2022. This was mainly due to an increase in cash payments for the purchase of long-term fixed deposits, acquisition of fixed assets, intangible assets, and other long-term assets during the current period. 3. Net cash outflow from financing activities in the first three quarters of 2023 amounted to RMB 6.778 billion, an increase of RMB 3.582 billion compared to the corresponding period in 2022. This was mainly due to the decrease in net new borrowings and the increase in cash payments for dividend distribution, profits, or interest payments during the current period. VI. Capital Expenditure The Company assesses its capital expenditure and investments in each segment in China and overseas from time to time. The capital expenditure in the first three quarters of 2023 amounted to RMB 6.077 billion, of which RMB 2.773 billion and RMB 3.304 billion were used in China and overseas respectively, primarily for plants and equipment construction and digital infrastructure. VII. Asset-liability Ratio At the end of the third quarter in 2023, the Company’s asset-liability ratio was 58.7%, down 1.1 percentage points compared to the end of 2022, which was mainly due to the growth in net profits which increased total assets. (II) Non-recurring profit or loss items and amounts Unit and Currency: RMB Haier Smart Home Co., Ltd.2023 Third Quarter Report 6 Items Amounts in the Reporting Period Amounts from the beginning of the year to the end of the Reporting Period Profit or loss from disposal of non-current assets -37,360,907.54 -59,247,886.50 Government grants included in current profit or loss, except that closely related to the normal operating business, complied with requirements of the national policies, continued to be granted with the amount and quantity determined under certain standards 101,958,624.64511,822,015.11 Profit or loss on the changes in fair value generated from financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and the investment income received from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investment, other than the effective hedging business relating to the ordinary operating business of the Company 12,856,545.7544,128,108.10 Other non-operating income and expenses other than the above items 3,124,957.8533,786,152.11 Less: amount of effect on income tax 8,638,212.1886,301,377.20 Amount of effect on minority interests (after tax) 3,364,560.7615,712,328.60 Total 68,576,447.76428,474,683.02 Description on categorizing the non-recurring profit or loss items listed in the Interpretative Announcement No.1 of the Information Disclosure of the Companies Public Offering Securities — Non-recurring Profit or Loss (公開發行證券的公司信息披露解釋性公告第1號—非經常性損益) as recurring profit or loss item □Applicable √Not Applicable (III) Changes in major accounting data and financial indicators and reasons □Applicable √Not Applicable Haier Smart Home Co., Ltd.2023 Third Quarter Report 7 VIII. PARTICULARSOFSHAREHOLDERS (I) Total number of ordinary shareholders and the number of preferential shareholders with restored voting rights and the shareholdings of the top 10 shareholders Unit: share Total number of ordinary shareholders as of the end of the Reporting Period 137,875 Total number of preferential shareholders with restored voting rights as of the end of the Reporting Period (if any) N/A Shareholdings of the top 10 shareholders Name of shareholders Nature of shareholders Number of shares held Percentage of shareholdings (%) Number of shares held subject to trading moratorium Pledged, marked or frozen Status Number HKSCCNOMINEESLIMITED (Note) Unknown 2,230,824,13423.64 Unknown Haier COSMOCo., Ltd. Domestic non-state-owned legal entity 1,258,684,82413.34 Nil Haier Group Corporation Domestic non-state-owned legal entity 1,072,610,76411.36 Nil Hong Kong Securities Clearing Company Limited Unknown 643,247,1926.82 Nil HCH (HK) INVESTMENT MANAGEMENTCO., LIMITED Foreign legal entity 538,560,0005.71 Nil China Securities Finance Corporation Limited Unknown 182,592,6541.93 Nil Qingdao Haier Venture & Investment Information Co., Ltd. Domestic non-state-owned legal entity 172,252,5601.83 Nil Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) Domestic non-state-owned legal entity 133,791,0581.42 Nil ALIBABAINVESTMENT LIMITEDUnknown 83,823,9930.89 Unknown National Social Security Fund Portfolio 113 Unknown 61,298,1390.65 Nil Shareholdings of the top 10 shareholders not subject to trading moratorium Name of shareholders Number of listed shares not subject to trading moratorium held Class and number of shares Class Number HKSCCNOMINEESLIMITED 2,230,824,134 Overseas listed foreign shares 2,230,824,134 Haier COSMOCo., Ltd. 1,258,684,824 RMB ordinary shares 1,258,684,824 Haier Group Corporation 1,072,610,764 RMB ordinary shares 1,072,610,764 Hong Kong Securities Clearing Company Limited 643,247,192 RMB ordinary shares 643,247,192 HCH (HK) INVESTMENT MANAGEMENTCO., LIMITED 538,560,000 Overseas listed foreign shares 538,560,000 China Securities Finance Corporation Limited 182,592,654 RMB ordinary shares 182,592,654 Qingdao Haier Venture & Investment Information Co., Ltd.172,252,560 RMB ordinary shares 172,252,560 Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) 133,791,058 RMB ordinary shares 133,791,058 Haier Smart Home Co., Ltd.2023 Third Quarter Report 8 ALIBABAINVESTMENT LIMITED 83,823,993 Overseas listed foreign shares 83,823,993 National Social Security Fund Portfolio 11361,298,139 RMB ordinary shares 61,298,139 Explanation of associations or actions in concert among the above shareholders (1) Haier COSMOCo., Ltd. is a holding subsidiary of Haier Group Corporation. Haier Group Corporation holds 51.20% of its equity. Each of Qingdao Haier Venture & Investment Information Co., Ltd., HCH (HK) INVESTMENTMANAGEMENTCO., LIMITED and Qingdao Haichuangzhi Management Consulting Enterprise (Limited Partnership) is a party acting in concert with Haier Group Corporation; (2) The Company is not aware of the existence of any associations of other shareholders. Explanation of the top 10 shareholders and the top 10 shareholders not subject to trading moratorium engaging in the margin trading and short selling and refinancing business (if any) None Note: (1) HKSCCNOMINEESLIMITED is the collective nominee account for the shareholders of H shares of the Company, which is the original data provided by China Hong Kong securities registration agency to the Company after consolidation of figures according to local market practices and technical settings, not representing the ultimate shareholder; (2)As of the end of the reporting period, the Company’s repurchase account held a total of 102,298,195 shares. IX. Miscellaneous Other significant information regarding the Company’s operations during the Reporting Period should be brought to the attention of investors √ Applicable □Not Applicable (1) External guarantees: As at the end of the Reporting Period, the external guarantees provided by the Company and its subsidiaries were guarantees between the Company and its subsidiaries, the total balance of which amounted to RMB13.427 billion, accounting for 13.4% of the Company’s latest net assets and 5.5% of the latest total assets. (2) Foreign exchange derivative: As at the end of the Reporting Period, the aggregate balance of the Company’s foreign exchange derivative transaction amounted to approximately US$1.363 billion. (3) Entrusted wealth management: As at the end of the Reporting Period, the balance of the Company’s entrusted wealth management amounted to RMB1.429 billion, including two parts: ①Temporary-idle funds wealth management by certain subsidiaries of the Company: Under the premise of ensuring sufficient capital for the principal operating activities and daily operations, some subsidiaries of the Company purchased some short-term principal-guaranteed wealth management products and structured deposits from major commercial banks to improve the yield of temporarily-idle funds and the return for shareholders within the authority of the general manager’s office meeting and under the condition of ensuring fund safety. As at the end of the Reporting Period, the balance of the entrusted wealth management amounted to RMB1.414 billion; ②Idle funds in the asset management account of the Employee Stock Ownership Plans: the asset management institution purchased cash products such as money funds according to the liquidity of the products with some idle funds in the asset Haier Smart Home Co., Ltd.2023 Third Quarter Report 9 management accounts of the Employee Stock Ownership Plans of the Company. The balance of cash assets amounted to RMB15 million. (4) Employee Stock Ownership Plans and Share Option Incentive Scheme: A. Progress of Employee Stock Ownership Plans: ① Completion of shares pool building of the A-share and H-share Employee Stock Ownership Plans (2023): The Company introduced the H-share Core Employee Stock Ownership Plan of Haier Smart Home Co., Ltd. for year 2023 (Draft) (“2023 H-share ESOP”), A-share Core Employee Stock Ownership Plan of Haier Smart Home Co., Ltd. for year 2023 (Draft) (“2023 A-share ESOP”) upon the approval by the 2022 Annual General Meeting convened on 26 June 2023. During the Reporting Period, the Company completed opening of accounts, and shares pool building and other related work of the A-share and H-share ESOPs for year 2023. For details, please refer to the Announcement of Haier Smart Home Co., Ltd. on the Completion of the Non-trading Transfer of Shares for the 2023 A-share Core Employee Stock Ownership Plan and Announcement of Haier Smart Home Co., Ltd. on the Completion of Share Purchase under the 2023 H-share Core Employee Stock Ownership Plan disclosed on 19 July 2023 and 26 July 2023 respectively. ② Vesting of the 2021/2022 A-share/H-share ESOPs: According to relevant arrangement of the 2021 Plan under the A-share Core Employee Stock Ownership Plan of Haier Smart Home Co., Ltd. (2021-2025) (Draft) (“2021 A-share ESOP”), the 2021 Plan under the H-share Core Employee Stock Ownership Plan of Haier Smart Home Co., Ltd. (2021-2025) (Draft) (“2021 H-share ESOP”),2022 A-share Core Employee Stock Ownership Plan of Haier Smart Home Co., Ltd. (Draft) And Its Summary(“2022 A-share ESOP”) and 2022 H-share Core Employee Stock Ownership Plan of Haier Smart Home Co., Ltd. (Draft) And Its Summary ( ‘‘2022 H-share ESOP’’), during the Reporting Period, the Company has completed relevant vesting of interests in the abovementioned Employee Stock Ownership Plans: 1) 1,417 participants under the 2021 A-share ESOP vested 8,572,937 shares (and the dividends received in respect of corresponding shares) in accordance with the 2022 annual results and the results of their individual appraisals. The Company has processed the transfer of the relevant shares at the China Securities Depository and Clearing Corporation Limited Shanghai Branch on 28 July 2023 in accordance with the abovementioned resolution; and 27 participants under the 2021 H-share ESOP vested 834,283 shares in accordance with the 2022 annual results and the results of their individual appraisals. The Industrial Securities Asset Management Co., Ltd., the asset management authority, will dispose of H shares held by the Industrial Securities Asset Management Xinzhong Haier Smart Home No.6 Employee Stock Ownership Single Asset Management Plan in due course based on the aforesaid resolution, and allocate cash to the participants after taking into account the dividends received in respect of H-share Stock Ownership Plan. 2) 2,122 participants under the 2022 A-share ESOP vested 6,281,446 shares (and the dividends received in respect of corresponding shares) in accordance with the 2022 annual results and the results of their individual Haier Smart Home Co., Ltd.2023 Third Quarter Report 10 appraisals. The Company has processed the transfer of the relevant shares at the China Securities Depository and Clearing Corporation Limited Shanghai Branch on 28 July 2023 in accordance with the resolution; and 31 participants under the 2022 H-share ESOP vested 635,116 shares in accordance with the 2022 annual results and the results of their individual appraisals. The Industrial Securities Asset Management Co., Ltd., the asset management authority, will dispose of H shares held by the Industrial Securities Asset Management Xinzhong Haier Smart Home No.8 Employee Stock Ownership Single Asset Management Plan in due course based on the aforesaid resolution, and allocate cash to the participants after taking into account the dividends received in respect of 2022 H-share ESOP. Please refer to the announcement on Vesting of Interests in Core Employee Stock Ownership Plans of Haier Smart Home Co., Ltd. disclosed by the Company on 1 August 2023 for details. B. Progress of Share Option Incentive Scheme: During the Reporting Period, since there was no suitable exercise window period during the exercise period, the Company cancelled the 9,047,052 share options granted but not yet exercised for the First Exercise Period of the 2021 AShare Option Incentive Scheme. For details, please refer to the announcement on Cancellation of Certain Share Options Granted under The First Grant of the 2021 AShare Option Incentive Scheme of Haier Smart Home Co., Ltd. disclosed by the Company on 31 August 2023. (5) A-share repurchases: On 27 April 2023, the Company convened the 5th meeting of the 11th session of the Board, which considered and approved the Resolution in Relation to the Repurchase Plan of a Portion of Public AShares of Haier Smart Home Co., Ltd. It allowed the Company to use its own funds to repurchase a portion of A shares of the Company by way of centralised bidding. The repurchase price is no more than RMB32 per share and the proposed total repurchase amount is no more than RMB3.0 billion and no less than RMB1.5 billion. The period of this repurchase is within 12 months from the date the Board considered and approved the resolution of repurchase of shares. As at the end of the Reporting Period, the Company had repurchased a total of 40,409,552 shares cumulatively. The highest price purchased was RMB 24.50 per share and the lowest price was RMB 21.20 per share, and the amount paid was RMB 921,834,098.71. For details, please refer to the relevant announcements on monthly progress. X. Quarterly Financial Statements (I) Type of Audit Opinion □Applicable √Not Applicable Haier Smart Home Co., Ltd.2023 Third Quarter Report 11 (II) Financial Statements CONSOLIDATEDBALANCESHEET 30 September 2023 Prepared by: Haier Smart Home Co., Ltd. Unit and Currency: RMB Type of Audit: Unaudited Items 30 September 202331 December 2022 Current assets: Cash at bank and on hand 52,149,043,095.5854,161,702,227.39 Provision of settlement fund Funds lent Financial assets held for trading 655,399,475.14519,912,880.91 Derivative financial assets 118,921,442.40183,185,160.51 Bills receivable 9,872,653,157.839,624,191,838.15 Accounts receivable 20,988,684,344.6615,886,628,623.99 Financing receivables Prepayments 1,356,608,238.791,109,114,343.41 Premiums receivable Reinsurance accounts receivable Reinsurance contract reserves receivable Other receivables 2,692,399,503.202,401,113,902.55 Including: Interest receivable 703,024,332.29513,320,376.79 Dividend receivable Financial assets purchased under resale agreements Inventories 39,848,256,203.8541,587,786,307.53 Contract assets 383,331,581.77309,930,359.25 Assets held for sale Non-current assets due in one year Other current assets 3,983,623,386.994,692,946,083.94 Total current assets 132,048,920,430.21130,476,511,727.63 Non-current assets: Loans and advances granted Debt investments 5,392,907,777.791,034,222,222.22 Other debt investments Long-term receivables 296,049,530.76305,070,001.45 Long-term equity investments 25,573,733,032.0224,527,800,290.84 Investments in other equity instruments 5,895,406,084.845,851,882,930.20 Other non-current financial assets Investment properties 25,072,877.4925,678,492.57 Fixed assets 27,187,829,964.5727,158,348,424.28 Construction in progress 5,328,977,842.974,094,684,500.49 Biological assets for production Oil and gas assets Right-of-use assets 4,186,902,136.313,795,225,353.89 Intangible assets 10,425,557,357.9210,505,881,377.21 Development cost 323,254,440.21154,480,515.67 Goodwill 24,411,547,397.1623,643,595,643.87 Long-term prepaid expenses 816,573,998.81759,883,174.20 Deferred income tax assets 1,348,605,293.511,724,040,928.42 Other non-current assets 2,630,181,404.071,880,736,891.63 Total non-current assets 113,842,599,138.43105,461,530,746.94 Total assets 245,891,519,568.64235,938,042,474.57 Current liabilities: Short-term borrowings 10,763,160,153.289,672,223,522.36 Borrowings from central bank Due to banks and other financial institutions Haier Smart Home Co., Ltd.2023 Third Quarter Report 12 Financial liabilities held for trading Derivative financial liabilities 241,973,628.07104,594,040.66 Bills payable 21,858,644,885.7925,098,557,730.06 Accounts payable 48,467,998,901.3141,878,607,182.94 Receipts in advance Contract liabilities 5,631,230,489.759,352,719,895.49 Disposal of repurchased financial assets Absorbing deposit and deposit in inter-bank market Customer deposits for trading in securities Amounts due to issuer for securities underwriting Payables for staff's remuneration 3,951,282,865.274,050,464,754.37 Taxes payable 3,399,449,039.452,876,221,892.91 Other payables 18,555,303,917.9117,517,838,565.99 Including: Interest payable Dividend payable 2,570,182.191,246,573.35 Fees and commissions payable Reinsurance Accounts payables Liabilities held for sale Non-current liabilities due within one year 5,186,064,220.466,294,750,667.08 Other current liabilities 1,334,441,892.791,850,426,115.79 Total current liabilities 119,389,549,994.08118,696,404,367.65 Non-current liabilities: Deposits for insurance contracts Long-term borrowings 15,749,290,256.5313,590,866,873.43 Bonds payable Including: Preference shares Perpetual bonds Lease liabilities 3,149,065,414.342,824,477,670.61 Long-term payables 42,943,227.9844,240,087.94 Long-term payables for staff’s remuneration 1,077,284,824.011,010,547,202.34 Estimated liabilities 1,726,118,732.861,611,029,220.17 Deferred income 996,528,379.72948,935,134.05 Deferred income tax liabilities 2,035,893,506.322,358,860,559.19 Other non-current liabilities 75,575,357.70107,332,101.07 Total non-current liabilities 24,852,699,699.4622,496,288,848.80 Total liabilities 144,242,249,693.54141,192,693,216.45 Owners' equity (or shareholders' equity): Paid-in capital (or share capital) 9,438,114,893.009,446,598,493.00 Other equity instruments Including: Preference shares Perpetual bonds Capital reserve 23,562,143,231.6623,877,037,324.76 Less: treasury stock 4,553,720,965.583,857,807,196.38 Other comprehensive income 1,951,545,285.981,990,683,498.45 Special reserve Surplus reserve 4,014,190,623.244,014,190,623.24 General risk provisions Undistributed profits 65,903,849,243.4657,983,751,470.60 Total equity attributable to owners (or shareholders) of the Parent Company 100,316,122,311.7693,454,454,213.67 Minority shareholders' interests 1,333,147,563.341,290,895,044.45 Total owners' equity (or shareholders' equity) 101,649,269,875.1094,745,349,258.12 Total liabilities and owners' equity (or shareholders' equity) 245,891,519,568.64235,938,042,474.57 Person in charge of the Company: Li Huagang Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke Haier Smart Home Co., Ltd.2023 Third Quarter Report 13 CONSOLIDATEDPROFITSTATEMENT January-September 2023 Prepared by: Haier Smart Home Co., Ltd. Unit and Currency: RMB Type of Audit: Unaudited Items 2023 First Three Quarters (January-September) 2022 First Three Quarters (January-September) Ⅰ. Total operating revenue 198,657,302,554.72184,805,729,760.46 Including: Operating revenue 198,657,302,554.72184,805,729,760.46 Interest income Insurance premiums earned Fee and commission income Ⅱ. Total cost of operations 183,707,103,344.05171,114,261,138.74 Including: Operating cost 137,641,968,047.96128,460,970,570.71 Interest expenses Fee and commission expenses Insurance withdrawal payment Net payment from indemnity Net provisions withdrew for insurance liability Insurance policy dividend paid Reinsurance cost Taxes and surcharges 790,994,726.49586,687,120.75 Selling expenses 29,162,157,971.2327,496,582,667.90 Administrative expenses 8,173,689,854.927,737,134,814.56 R&D expenses 8,045,226,490.597,457,643,453.87 Financial expenses -106,933,747.14 -624,757,489.05 Including: Interest expenses 1,299,143,491.19611,534,472.31 Interest income 1,016,337,422.83585,980,598.72 Add: other income 957,495,102.11774,183,800.84 Investment income (losses are represented by “-”) 1,509,697,795.341,510,411,067.36 Including: Investment income of associates and joint ventures 1,454,801,107.611,243,888,650.43 Income generated from the derecognition of financial assets measured at amortized cost Exchange gain (losses are represented by “-”) Gains on net exposure hedges (losses are represented by “-”) Income from change in fair value (losses are represented by “-”) 44,128,108.10 -272,599,270.19 Loss on credit impairment (losses are represented by “-”) -234,856,312.60 -328,043,205.17 Loss on assets impairment (losses are represented by “-”) -992,791,090.99 -916,823,397.27 Gain from disposal of assets (losses are represented by “-”) -23,918,221.4436,559,385.16 Ⅲ. Operating profit (losses are represented by “-”) 16,209,954,591.1914,495,157,002.45 Add: non-operating income 94,519,677.46104,517,017.41 Less: non-operating expenses 70,149,764.6797,149,423.40 Ⅳ. Total profit (total losses are represented by “-”) 16,234,324,503.9814,502,524,596.46 Haier Smart Home Co., Ltd.2023 Third Quarter Report 14 Less: income tax expense 2,969,531,548.872,788,552,313.47 Ⅴ. Net profit (net losses are represented by “-”) 13,264,792,955.1111,713,972,282.99 (I) Classification by continuous operation 1. Net profit from continuous operation (net losses are represented by “-”) 13,264,792,955.1111,713,972,282.99 2. Net profit from discontinued operation (net losses are represented by “-”) (II) Classification by ownership of the equity 1. Net profit attributable to shareholders of the Parent Company (net losses are represented by “-”) 13,149,219,372.6211,666,014,116.96 2. Profit or loss attributable to minority shareholders (net losses are represented by “-”) 115,573,582.4947,958,166.03 VI. Other comprehensive income, net of tax -56,511,839.484,664,174,077.37 (I) Other comprehensive income attributable to shareholders of the Parent Company, net of tax -39,138,212.474,665,280,503.20 1. Other comprehensive income that cannot be reclassified into the profit or loss 32,540,115.16 -115,981,350.82 (1) Changes arising from re-measurement of defined benefit plans 29,881,992.249,178,508.68 (2) Other comprehensive income that cannot be transferred into profit or loss under equity method (3) Changes in fair value of investments in other equity instruments 2,658,122.92 -125,159,859.50 (4) Changes in fair value of credit risks of the enterprise 2. Other comprehensive income to be reclassified into the profit or loss -71,678,327.634,781,261,854.02 (1) Other comprehensive income that can be transferred into profit or loss under equity method 37,530,301.28254,600,418.32 (2) Changes in fair value of other debt investments (3) Reclassified financial assets that are credited to other comprehensive income (4) Credit impairment provision for other debt investments (5) Reserve for cash flow hedging -86,059,409.9317,514,162.27 (6) Exchange differences on translation of financial statements denominated in foreign currencies -23,149,218.984,509,147,273.43 (7) Others (II) Other comprehensive income attributable to minority shareholders, net of tax -17,373,627.01 -1,106,425.83 Ⅶ. Total comprehensive income 13,208,281,115.6316,378,146,360.36 Haier Smart Home Co., Ltd.2023 Third Quarter Report 15 (I) Total comprehensive income attributable to the owners of Parent Company 13,110,081,160.1516,331,294,620.16 (II) Total comprehensive income attributable to the minority shareholders 98,199,955.4846,851,740.20 Ⅷ. Earnings per share: (I) Basic earnings per share (RMB/share) 1.411.25 (II) Diluted earnings per share (RMB/share) 1.411.24 For the business combinations under common control in the Period, the net profit of the parties consolidated before consolidation was: RMB0 and the net profit of the parties consolidated in the Previous Period was: RMB2,513,646.83. Person in charge of the Company: Li Huagang Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke Haier Smart Home Co., Ltd.2023 Third Quarter Report 16 CONSOLIDATEDCASHFLOWSTATEMENT January-September 2023 Prepared by: Haier Smart Home Co., Ltd. Unit and Currency: RMB Type of Audit: Unaudited Items 2023 First Three Quarters (January-September) 2022 First Three Quarters (January-September) I. Cash flow from operating activities: Cash received from the sale of goods and rendering services 203,111,682,434.09193,114,786,705.82 Net increase in customer and inter-bank deposits Net increase in borrowing from the central bank Net cash increase in borrowing from other financial institutes Cash received from premiums under original insurance contract Net cash received from reinsurance business Net increase in deposits of policy holders and investment Cash received from interest, fee and commissions Net increase in placement from banks and other financial institutions Net increase in cash received from repurchase operation Net cash received from customer deposits for trading in securities Refunds of taxes 1,592,712,720.251,659,533,532.74 Cash received from other related operating activities 1,947,260,415.661,894,756,160.51 Sub-total of cash inflows from operating activities 206,651,655,570.00196,669,076,399.07 Cash paid on purchase of goods and services 139,220,961,509.89137,907,042,315.68 Net increase in loans and advances of customers Net increase in deposits in the PBOC and inter-bank Cash paid for compensation payments under original insurance contract Net increase in cash lent Cash paid for interest, bank charges and commissions Cash paid for insurance policy dividend Cash paid to and on behalf of employees 22,058,533,655.3620,344,467,172.76 Cash paid for all types of taxes 11,353,547,783.407,943,334,456.21 Cash paid to other operation related activities 20,815,496,820.5619,223,026,618.70 Sub-total of cash outflows from operating activities 193,448,539,769.21185,417,870,563.35 Net cash flow from operating activities 13,203,115,800.7911,251,205,835.72 II. Cash flow from investing activities: Cash received from recovery of investments 7,466,623,875.738,170,465,135.63 Cash received from return on investments 544,680,041.95483,988,185.56 Net cash received from the disposal of fixed assets, intangible assets and other long-term assets 138,419,460.35224,933,210.37 Net cash received from disposal of subsidiaries and other operating entities 2,000,000.00 Other cash received from investment activities 15,367,464.03 Sub-total of cash inflows from investing activities 8,167,090,842.068,879,386,531.56 Cash paid on purchase of fixed assets, intangible assets and other long-term assets 6,077,149,145.915,638,070,348.20 Haier Smart Home Co., Ltd.2023 Third Quarter Report 17 Cash paid for investments 10,902,579,532.6610,460,443,361.49 Net increase in secured loans Net cash paid on acquisition of subsidiaries and other operating entities 42,709,125.00 Other cash paid on investment activities 6,922,378.31 Sub-total of cash outflows from investing activities 16,986,651,056.8816,141,222,834.69 Net cash flow from investing activities -8,819,560,214.82 -7,261,836,303.13 III. Cash flow from financing activities: Cash received from capital contributions 60,000.00988,339,004.94 Including: Cash received from capital contributions by minority shareholders of subsidiaries Cash received from borrowings 15,259,427,874.4010,855,224,965.32 Other cash received from financing activities 1,027,793.89 Sub-total of cash inflows from financing activities 15,259,487,874.4011,844,591,764.15 Cash paid on repayment of loans 13,273,710,393.097,596,630,273.11 Cash paid on distribution of dividends, profits or repayment of interest expenses 6,639,753,139.844,922,724,682.05 Including: Dividend and profit paid to minority shareholders by subsidiaries Other cash paid to financing activities 2,123,612,826.132,521,143,250.83 Sub-total of cash outflows from financing activities 22,037,076,359.0615,040,498,205.99 Net cash flow from financing activities -6,777,588,484.66 -3,195,906,441.84 IV. Effect of fluctuations in exchange rates on cash and cash equivalents 586,947,530.02587,737,106.90 V. Net increase in cash and cash equivalents -1,807,085,368.671,381,200,197.65 Add: balance of cash and cash equivalents at the beginning of the period 53,391,699,929.4945,204,217,909.49 VI. Balance of cash and cash equivalents at the end of the period 51,584,614,560.8246,585,418,107.14 Person in charge of the Company: Li Huagang Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke Haier Smart Home Co., Ltd.2023 Third Quarter Report 18 BALANCESHEETOFTHEPARENTCOMPANY 30 September 2023 Prepared by: Haier Smart Home Co., Ltd. Unit and Currency: RMB Type of Audit: Unaudited Items 30 September 202331 December 2022 Current Assets: Monetary funds 10,580,713,772.205,747,356,591.19 Financial assets held for trading Derivative financial assets Bills receivable Accounts receivable 1,464,066,232.59913,643,071.06 Financing receivables Prepayments 3,179,066.463,116,793.21 Other receivables 17,900,235,359.5314,387,031,657.57 Including: Interests receivable 85,714,881.1929,783,516.95 Dividends receivable 1,044,013,185.591,015,840,000.00 Inventories 2,319,281.569,245,507.97 Contract assets Assets held for sale Non-current assets due within one year Other current assets 1,258,146,843.331,642,423,149.85 Total current assets 31,208,660,555.6722,702,816,770.85 Non-current assets: Debt investments 1,366,113,888.901,034,222,222.22 Other debt investments Long-term receivables Long-term equity investments 54,772,801,837.8352,744,139,527.87 Investments in other equity instruments 1,618,513,056.481,618,513,056.48 Other non-current financial assets Investment properties Fixed assets 148,315,852.82167,043,774.16 Construction in progress 11,766,433.972,667,680.62 Biological assets for production Oil and gas assets Right-of-use assets 357,996.03 Intangible assets 43,040,533.7948,239,513.12 Development cost Goodwill Long-term prepaid expenses 3,098,974.933,910,065.39 Deferred income tax assets Other non-current assets 1,498,818,858.081,302,773,743.02 Total non-current assets 59,462,469,436.8056,921,867,578.91 Total assets 90,671,129,992.4779,624,684,349.76 Current liabilities: Short-term borrowings Financial liabilities held for trading Derivative financial liabilities Bills payable Accounts payable 992,785,551.35521,733,555.60 Receipts in advance Contract liabilities 12,597,148.6313,084,442.85 Payables for staff’s remuneration 4,351,311.009,696,654.18 Taxes payable 1,937,831.517,479,878.13 Other payables 47,588,193,578.2732,659,845,830.05 Including: Interests payable Dividends payable Liabilities held for sale Haier Smart Home Co., Ltd.2023 Third Quarter Report 19 Non-current liabilities due within one year Other current liabilities 9,982,815.275,876,886.89 Total current liabilities 48,609,848,236.0333,217,717,247.70 Non-current liabilities: Long-term borrowings 3,753,000,000.002,195,000,000.00 Bonds payable Including: Preference shares Perpetual bonds Lease liabilities Long-term payable Long-term payables for staff’s remuneration Estimated liabilities Deferred income 13,798,300.0012,355,000.00 Deferred income tax liabilities 420,805,600.57420,805,600.57 Other non-current liabilities Total non-current liabilities 4,187,603,900.572,628,160,600.57 Total liabilities 52,797,452,136.6035,845,877,848.27 Owners’ equity (or shareholders’ equity): Paid-in capital (or share capital) 9,438,114,893.009,446,598,493.00 Other equity instruments Including: Preference shares Perpetual bonds Capital reserve 27,033,341,878.3927,300,899,019.76 Less: treasury stock 2,683,947,836.842,308,138,558.42 Other comprehensive income 624,427,389.73602,091,349.74 Special reserve Surplus reserve 3,409,044,397.793,409,044,397.79 Undistributed profits 52,697,133.805,328,311,799.62 Total owners’ equity (or shareholders’ equity) 37,873,677,855.8743,778,806,501.49 Total liabilities and owners’ equity (or shareholders’ equity) 90,671,129,992.4779,624,684,349.76 Person in charge of the Company: Li Huagang Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke Haier Smart Home Co., Ltd.2023 Third Quarter Report 20 PROFITSTATEMENTOFTHEPARENTCOMPANY January-September 2023 Prepared by: Haier Smart Home Co Ltd Unit and Currency: RMBType of Audit: Unaudited Items 2023 First Three Quarters (January-September) 2022 First Three Quarters (January-September) I. Operating revenue 546,667,518.11274,409,829.17 Less: operation cost 477,055,075.68237,958,102.39 Taxes and surcharges 4,342,188.601,502,873.54 Selling expenses 7,738,804.478,343,662.82 Administration expenses 361,100,526.73623,648,918.13 R&D expenses 11,595,713.679,536,280.96 Financial expenses -131,322,585.09 -93,676,340.74 Including: Interest expenses 56,849,220.8319,056,720.15 Interest income 201,787,158.84107,726,590.75 Add: other income 1,361,535.0029,030,565.58 Investment income (losses are represented by “-”) 204,416,213.65601,413,493.57 Including: Investment income of associates and joint ventures 138,039,116.54158,290,422.99 Derecognition income on financial assets measured at amortized cost Gains on net exposure hedges (losses are represented by “-”) Income from change in fair value (losses are represented by “-”) Loss on credit impairment (losses are represented by “-”) 47,441.31116,780.20 Loss on assets impairment (losses are represented by “-”) Gain from disposal of assets (losses are represented by “-”) 35,074,022.45 II. Operating profit (losses are represented by “-”) 21,982,984.01152,731,193.87 Add: non-operating income 99,051.41208,515.11 Less: non-operating expenses 78,702.8328,698.02 III. Total profit (total losses are represented by “-”) 22,003,332.59152,911,010.96 Less: income tax expenses 1,205.40 IV. Net profit (net losses are represented by “-”) 22,002,127.19152,911,010.96 (I) Net profit from continuous operation (net losses are represented by “-”) 22,002,127.19152,911,010.96 (II) Net profit from discontinued operation (net losses are represented by “-”) V. Other comprehensive income net of tax 22,336,039.997,369,147.56 (I) Other comprehensive income that cannot be reclassified into the profit or loss 1. Changes arising from re-measurement of defined benefit plans 2. Other comprehensive income that cannot be transferred into profit or loss under equity method 3. Changes in fair value of investments in other equity instruments Haier Smart Home Co., Ltd.2023 Third Quarter Report 21 4. Changes in fair value of credit risks of the enterprise (II) Other comprehensive income to be reclassified into the profit or loss 22,336,039.997,369,147.56 1. Other comprehensive income that can be transferred into profit or loss under equity method 22,336,039.997,369,147.56 2. Changes in fair value of other debt investments 3. Reclassified financial assets that are credited to other comprehensive income 4. Credit impairment provision for other debt investments 5. Reserve for cash flow hedging 6. Exchange differences on translation of financial statements denominated in foreign currencies 7. Others VI. Total comprehensive income 44,338,167.18160,280,158.52 VII. Earnings per share: (I) Basic earnings per share (RMB/share) (II) Diluted earnings per share (RMB/share) Person in charge of the Company: Li Huagang Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke Haier Smart Home Co., Ltd.2023 Third Quarter Report 22 CASHFLOWSTATEMENTOFTHEPARENTCOMPANY January-September 2023 Prepared by: Haier Smart Home Co., Ltd. Unit and Currency: RMBType of Audit: Unaudited Items 2023 First Three Quarters (January-September) 2022 First Three Quarters (January-September) I. Cash flow from operating activities: Cash received from the sale of goods and rendering of services 70,907,378.37364,344,810.90 Refunds of taxes 19,589,497.52 Other cash received from operating activities 121,672,343.93235,437,891.28 Sub-total of cash inflows from operating activities 192,579,722.30619,372,199.70 Cash paid on purchase of goods and services 35,574,640.73189,272,450.16 Cash paid to and on behalf of employees 38,468,265.0433,298,564.72 Cash paid for all types of taxes 21,126,840.06 -16,023,080.78 Other cash paid to operation activities 26,551,687.50244,978,820.70 Sub-total of cash outflows from operating activities 121,721,433.33451,526,754.80 Net cash flow from operating activities 70,858,288.97167,845,444.90 II. Cash flow from investing activities: Cash received from recovery of investments 6,061,000,000.002,529,920,000.00 Cash received from return on investments 91,950,768.58101,858,820.49 Net cash received from the disposal of fixed assets, intangible assets and other long-term assets 35,206,354.85 Net cash received from disposal of subsidiaries and other operating entities Other cash received from investment activities 38,509,682.228,456,180.95 Sub-total of cash inflows from investing activities 6,191,460,450.802,675,441,356.29 Cash paid on purchase of fixed assets intangible assets and other long-term assets 5,176,513.1023,441,195.66 Cash paid for investments 7,896,572,258.004,064,405,507.20 Net cash paid on acquisition of subsidiaries and other operating entities Other cash paid on investment activities 1,178,069,045.001,964,600,000.00 Sub-total of cash outflows from investing activities 9,079,817,816.106,052,446,702.86 Net cash flow from investing activities -2,888,357,365.30 -3,377,005,346.57 III. Cash flow from financing activities: Cash received from capital contributions 940,041,004.94 Cash received from borrowings 1,770,000,000.002,100,000,000.00 Other cash received from financing activities 12,561,769,867.587,841,605,940.88 Sub-total of cash inflows from financing activities 14,331,769,867.5810,881,646,945.82 Cash paid on repayment of borrowings 212,000,000.005,000,000.00 Cash paid on distribution of dividends, profits or interest expenses 5,352,599,524.984,330,409,094.41 Other cash paid on financing activities 1,123,171,217.081,604,643,065.80 Sub-total of cash outflows from financing activities 6,687,770,742.065,940,052,160.21 Net cash flow from financing activities 7,643,999,125.524,941,594,785.61 IV. Effect of fluctuations in exchange rates on cash and cash equivalents 6,857,131.8215,258,635.69 V. Net increase in cash and cash equivalents 4,833,357,181.011,747,693,519.63 Add: balance of cash and cash equivalents at the beginning of the period 5,747,356,591.194,043,535,735.48 Haier Smart Home Co., Ltd.2023 Third Quarter Report 23 VI. Balance of cash and cash equivalents at the end of the period 10,580,713,772.205,791,229,255.11 Person in charge of the Company: Li Huagang Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke The adjustments of the relevant items of the financial statements at the beginning of the year due to the first implementation of new accounting standards or interpretations to accounting standards since 2023 □Applicable √Not Applicable The Board of Haier Smart Home Co., Ltd. 30 October 2023 PROFITSTATEMENTOFTHEPARENTCOMPANY CASHFLOWSTATEMENTOFTHEPARENTCOMPANY January-September 2023