Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
MIDEA GROUP CO., LTD.
INTERIM REPORT FOR THE THIRD
QUARTER 2017
October 2017
1
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Section I Important Statements
1. The Board of Directors, the Supervisory Committee as well as all the
directors, supervisors and senior management staff of Midea Group Co., Ltd.
(hereinafter referred to as the “Company”) have warranted that this Report
contains no false records, misleading statements or material omissions. 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 Q1 report review board meeting.
3. The financial statements contained in this Report have not been audited by
a certified public auditors (CPAs) firm.
4. Mr. Fang Hongbo, Chairman of the Board and President of the Company,
and Mr. Xiao Mingguang, responsible person for the Company’s financial
affairs, and Ms. Chen Lihong, responsible person for the Company’s
accounting department have represented and warranted that the financial
statements in this Report are factual, accurate and complete.
5. This Report has been prepared in both Chinese and English. Should there
be any discrepancy between the two versions, the Chinese version shall
prevail.
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Section II Company Profile
1. Key Accounting Data and Financial Indicators
Indicate by tick mark whether the Company needs to retrospectively restate any of its accounting data.
□ Yes √ No
Sep. 30, 2017 Dec. 31, 2016 Change
Total assets (RMB’000) 242,183,276 170,600,711 41.96%
Net assets attributable to
shareholders of the Company 71,217,588 61,126,923 16.51%
(RMB’000)
July-September January-Septemb
YoY change YoY change
2017 er 2017
Operating revenues (RMB’000) 62,498,801 60.85% 186,948,866 60.64%
Net profits attributable to
shareholders of the Company 4,186,853 26.43% 14,998,175 17.10%
(RMB’000)
Net profits attributable to
shareholders of the Company before
4,078,172 30.22% 13,969,938 14.21%
non-recurringprofits and losses
(RMB’000)
Net cash flows from operating
-- -- 20,067,642 5.41%
activities (RMB’000)
Basic earnings per share
0.64 25.49% 2.31 15.50%
(RMB/share)
Diluted earnings per share
0.64 25.49% 2.30 15.58%
(RMB/share)
Weighted average return on equity
6.09% 0.27% 22.61% -1.15%
(%)
Notes: During the period from January to September 2017, Midea Group, exclusive of its recently acquired subsidiaries,
achieved operating revenues of RMB156,389,246,000, up 39% compared to the same period of last year; and achieved
consolidated net profitsattributable to shareholders of the Company of RMB15,725,201,000, representing a 23%
year-on-year increase. According to a professional international evaluation agency and China’s accounting standards for
business enterprises, the amortization of the M&A expenses for the period from January to September 2017 was
recognized at RMB1,851,780,000.
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
During the period from January to September 2017, the newly acquired KUKA achieved operating revenue of
RMB19,837,513,000, representing a 27% YoY increase. And the net profit has a 26% YoY increase, indicating continued
business growth.
Total shares outstanding of the Company as of the last trading session before the disclosure of this
Report:
Number of total shares outstanding of the Company as of last
6,548,526,448
trading session before disclosure of this Report (share)
Fully diluted earnings per share based on latest number of
2.29
total shares outstanding above (RMB/share)
Non-recurringprofits and losses:
√ Applicable □ Not applicable
Unit: RMB’000
Item January-September 2017 Note
Gains or losses on disposal of non-current assets (including
775,994
offset asset impairment provisions)
Government grants accounted for, in the profit or loss for the
current period (except for the government grants closely
related to the business of the Company and given at a fixed 1,070,631
amount or quantity in accordance with the State's uniform
standards)
Gains or losses on debt restructuring 2,573
Gains/Losses on fair value changes of financial assets and
liabilities held for trading & investment income from disposal
of financial assets and liabilities held for trading as well as
-7,206
financial assets available for sale (exclusive of effective
hedges related to normal business operations of the
Company)
Other non-operating income and expenditure except
-167,908
above-mentioned items
Less: Corporate income tax 545,990
Minority interests (after tax) 99,857
Total 1,028,237 -
Explain the reasons if the Company classifies an item as a non-recurring gain/loss according to the
definition in the , or classifies any non-recurring
gain/loss item mentioned in the said explanatory announcement as a recurring gain/loss item:
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
□ Applicable √ N/A
No such cases for the Reporting Period.
2. Total Number of Shareholders and Shareholdings of Top 10 Shareholders at
Period-End
2.1 Numbers of Common Shareholders and Preference Shareholders with Resumed Voting
Rights, and Shareholdings of Top 10 Shareholders
Unit: share
Total number of preference
Total number of common shareholders at shareholders with resumed
106,209 0
period-end voting rights at period-end
(if any)
Top 10 shareholders
Share Pledged or frozen
holdin Total shares Restricted shares
Nature of
Name of shareholder g held at shares held at
shareholder
perce period-end period-end Status Number
ntage
Domestic
Pledg
Midea Holding Co., Ltd. non-state-owned 33.78 2,212,046,613 0 854,955,000
ed
corporation
Hong Kong Exchanges and Clearing Foreign corporat
8.82 577,323,779 0 - -
Limited ion
State-owned
China Securities Finance Co., Ltd. 3.05 199,439,709 0 - -
corporation
Domestic
Fang Hongbo 2.09 136,990,492 102,742,869 - -
individual
Hillhouse Capital Management Limited Foreign corporat
1.74 113,891,138 0 - -
－HCM China Fund ion
Domestic Pledg
Huang Jian 1.34 87,980,000 0 22,999,900
individual ed
Domestic
Xiaomi Technology Co., Ltd. non-state-owned 1.26 82,500,000 82,500,000 - -
corporation
Central Huijin Asset Management Ltd. State-owned
1.20 78,474,900 0 - -
corporation
Domestic Pledg
Yuan Liqun 1.14 74,365,200 0 20,908,300
individual ed
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Foreign corporat
UBS AG 1.11 72,468,364 0 - -
ion
Top 10 non-restricted shareholders
Non-restricted shares held Type of stock
Name of shareholder
at period-end Type Number
RMB-denominated
Midea Holding Co., Ltd. 2,212,046,613 2,212,046,613
common stock
Hong Kong Exchanges and Clearing Limited 577,323,779 Ditto 577,323,779
China Securities Finance Co., Ltd. 199,439,709 Ditto 199,439,709
Hillhouse Capital Management Limited－HCM China
113,891,138 Ditto 113,891,138
Fund
Huang Jian 87,980,000 Ditto 87,980,000
Central Huijin Asset Management Ltd. 78,474,900 Ditto 78,474,900
Yuan Liqun 74,365,200 Ditto 74,365,200
UBS AG 72,468,364 Ditto 72,468,364
Fu Xuan 68,005,680 Ditto 68,005,680
Li Jianwei 64,144,834 Ditto 64,144,834
Related or acting-in-concert parties among
N/A
shareholders above
Top 10 common shareholders conducting securities
N/A
margin trading (if any)
Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted
common shareholders of the Company conducted any agreed buy-back during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.
2.2 Total Number of Preference Shareholders and Shareholdings of Top 10 of Preference
Shareholdersat Period-End
□ Applicable √ Not applicable
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Section III Significant Events
I Major Changes of Main Items in Financial Statements and Financial Indicators
within the Reporting Period, as well as the Reasons for the Changes
√ Applicable □ Not applicable
Unit: RMB’000
Main reasons for the
Item Sep. 30, 2017 or 9M 2017 Dec. 31, 2016 or 9M 2016 Change
changes
Cash at bank
41,657,437 27,169,118 53.33% Growth in sales
and on hand
Notes receivable 15,518,453 7,427,488 108.93% Growth in sales
Advances to Growth in sales and
2,105,052 1,587,366 32.61%
suppliers consolidation of KUKA
Other
2,099,815 1,140,133 84.17% Consolidation of KUKA
receivables
Inventories 23,752,878 15,626,897 52.00% Consolidation of KUKA
Available-for-sal
1,846,009 5,187,732 -64.42% Consolidation of KUKA
e financial assets
Long-term
377,473 33,868 1,014.54% Consolidation of KUKA
receivables
Construction in Higher investment in
1,020,704 580,729 75.76%
progress ongoing construction
Intangible assets 16,010,089 6,868,538 133.09% Consolidation of KUKA
Goodwill 28,620,233 5,730,995 399.39% Consolidation of KUKA
Other Reduced investment in
non-current 798,322 4,158,530 -80.80% long-term wealth
assets management products
Short-term
4,472,839 3,024,426 47.89% Increase of loans obtained
borrowings
Customer
deposits and
Changes in business
deposits from
158,141 36,708 330.81% operations of Midea Group
banks and other
Finance
financial
institutions
Derivative 146,771 89,838 63.37% Changes in fair value of
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
financial liabilities derivative financial
instruments
Advances from Growth in sales and
17,782,778 10,252,375 73.45%
customers consolidation of KUKA
Payroll payable 4,181,519 3,154,387 32.56% Consolidation of KUKA
Interest payable 66,170 21,343 210.03% Increase of loans obtained
Dividends Increase of dividends
176,000 105,641 66.60%
payable declared by subsidiary
Other payables 2,668,054 1,571,422 69.79% Consolidation of KUKA
Long-term
33,075,133 2,254,348 1,367.17% Increase of loans obtained
borrowings
Provisions for possible
Provisions 645,287 325,217 98.42% losses on pending legal
matters
Long-term
2,325,670 1,449,954 60.40% Consolidation of KUKA
payroll payable
Rise in assessed asset
Deferred income
4,381,425 1,831,973 139.16% value due to consolidation
tax liabilities
of KUKA
Other
comprehensive 19,749 13,125 50.47% Consolidation of KUKA
income
Operating Growth in sales and
186,948,866 116,378,417 60.64%
revenue consolidation of KUKA
Fee and Changes in business
commission 4 7,773 -99.95% operations of Midea Group
income Finance
Growth in sales and
Cost of sales 139,559,489 83,828,027 66.48%
consolidation of KUKA
Changes in business
Interest
215,904 384,002 -43.78% operations of Midea Group
expenses
Finance
Taxes and Reclassification of stamp
1,076,026 662,794 62.35%
surtaxes duty and property tax
Selling and
Growth in sales and
distribution 19,954,150 12,341,424 61.68%
consolidation of KUKA
expenses
General and Growth in sales and
10,430,157 5,981,080 74.39%
administrative consolidation of KUKA
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
expenses
Finance Changes in foreign
852,759 -913,165 193.38%
expenses exchange gains/losses
Gains/losses on Changes in fair value of
changes in fair -44,156 -488,089 90.95% derivative financial
value instruments
Investment
1,792,009 1,183,473 51.42% Consolidation of KUKA
income
Provisions for possible
Non-operating
492,928 193,914 154.20% losses on pending legal
expenses
matters
Net cash flows
from financing 21,987,048 1,992,708 1,003.38% Increase of loans obtained
activities
2. Progress, Influence and Solutions Associated with Significant Events
□ Applicable √ Not applicable
3. Commitments that the Company’s Actual Controller, Shareholders, Related
Parties and Acquirers, as well as the Company and Other Commitment Makers,
Failed to Fulfill on Time during Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Forecast of 2017 Annual Operating Results
Warning of possible loss or considerable YoY change of the accumulated net profit made during the
period-start until the end of the next Reporting Period according to predictions as well as any
explanations for these reasons:
□ Applicable √ Not applicable
5. Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
6. Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: RMB’000
Ratio of
investm
ent
Amou amount
Rel Investme nt to the
Investme Actual
Rel ated nt provid Compa
Initial Purch nt gain or
Opera ated tran Invest Commen amount Sold ed for ny’s
investme Terminati ased amount loss
ting part sact ment cement at in the impair consoli
nt on date in the at end of amount
party y or ion type date beginning period ment dated
amount period the during the
not or of the (if net
period period
not period applic assets
able) at end
of the
period
(%)
Futur Futur
es es 01/01/20 12/31/20
Not Not -120 -120 - - - 8,960 0.01% 16,380
comp contra 17 17
any cts
Forwa
rd
01/01/20 12/31/20
Bank Not Not forex 328,180 328,180 - - - 392,180 0.55% 540,760
17 17
contra
cts
Total 328,060 -- -- 328,060 - - - 401,140 0.56% 557,140
Source of derivatives
All from the Company's own funds
investment funds
Legal matters involved
N/A
(if applicable)
Disclosure date of
board announcement
03/31/2017
approving derivative
investment (if any)
Disclosure date of
shareholders’ meeting
04/22/2017
announcement
approving derivative
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
investment (if any)
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
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.
Risk analysis of 2. Operational risk: Imperfect internal process, staff, systems and external issues may cause
positions held in the Company to suffer from loss during the course of its futures business and forex funds
derivatives during business.
Reporting Period and Control measures: The Company has not only developed relevant management systems that
explanation of control clearly defined the assignment of responsibility and approval process for the futures business
measures (including but and forex funds business, but also established a comparatively well-developed monitoring
not limited to market mechanism, aiming to effectively reduce operational risk by strengthening risk control over the
risk, liquidity risk, credit business, decision-making and trading processes.
risk, operational risk
3. Market risk: Uncertainties caused by changes in the prices of bulk commodity and exchange
and legal risk)
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
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
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
price or fair value of
derivatives product
invested during 1. Gains/losses on futures hedging contracts incurred during the Reporting Period were
Reporting Period: RMB16.38 million.
specific methods used 2. Gains/losses on forward forex contracts incurred during the Reporting Period were
and relevant RMB540.76 million.
assumption and 3. Public quotations in futures market or forward forex quotations announced by the Bank of
parameter settings shall China are used in the analysis of derivatives fair value.
be disclosed for
analysis of fair value of
derivatives
Explanation of
significant changes in
accounting policies and
specific financial
accounting principles in
No change
respect of the
Company's derivatives
for Reporting Period
compared to last
reporting period
The Company's independent directors are of the view that the futures hedging business is an
Special opinions
effective instrument for the Company to eliminate price volatility and implement risk prevention
expressed by
measures through enhanced internal control, thereby improving the operation and
independent directors
management of the Company; the Company's foreign exchange risk management capability
concerning the
can be further improved through the forex funds business, so as to maintain and increase the
Company's derivatives
value of foreign exchange assets and the abovementioned investment in derivatives can help
investment and risk
the Company to fully bring out its competitive advantages. Therefore, it is practicable for the
control
Company to carry out derivatives investment business, and the risks are controllable.
7. Visits Paid to the Company for Purposes of Research, Communication, Interview,
etc. during Reporting Period
√ Applicable □ Not applicable
Date of visit Way of visit Type of visitor About
See Investor Relations Activities Log Sheet
08/31/2017-09/01/2017 Field research Institution during Period 31 August through 1 September
2017 on the website of www.cninfo.com.cn
09/08/2017 Field research Institution See Investor Relations Activities Log Sheet
12
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
during 8 September 2017 on the website of
www.cninfo.com.cn
8. Irregularities Arising from Provision of Guarantees for Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
9. Occupation of the Company’s Funds by Its Controlling Shareholder or Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
10. Targeted Measures Taken to Help People Lift Themselves out of Poverty
10.1 Overview of Targeted Poverty Alleviation Actions Taken in Q3 2017
Midea has faithfully followed TheDecision of the State Council and the CPC Central Committee on
Winning the Fight against Poverty by attaching great importance to helping those in need as a way to
fulfill their social responsibilities and reward the society. In the first three quarters of 2017, Midea Group
donated a total of RMB20 million, of which RMB10 million was earmarked for poverty alleviation. The
Guangdong Poverty Alleviation and Development Office co-ordinated the project to help alleviate
poverty in more than 2,000 relatively poor villages in Guangdong Province, and the other half was given
toBeijiao Charity Foundation to support the education, pension, medical treatment, infrastructure
construction and housing in the town. At the same time, the government of Foshan actively supported
Liangshan poverty alleviation work in Sichuan, and donated 1,100 sets of small household appliances
worth 500,000 yuan to people in Liangshan in Sichuan in July this year.
10.2 Poverty Alleviation Plans for Coming Future
Midea will continue to follow the Guangdong government’s guidance and make plans to help reduce
poverty as a way to meet its social responsibility as a private company.
Midea will work closely with the Guangdong government’s office for poverty alleviation and development
to help those most in need with what they really need by targeted identification and planning. The
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
poverty alleviation will focus on development or improvement of the poor’s abilities to increase their
income on their own, building of a longlasting poverty alleviation mechanism and optimization of
donation projects. In the meantime, it will be fair, transparent and open for public supervision.
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Section IV Financial Statements
1. Financial Statements
Balance Sheet
Prepared by Midea Group Co., Ltd.As of Sep. 30, 2017 Unit: RMB’000
Sep. 30, 2017 Dec. 31, 2016 Sep. 30, 2017 Dec. 31, 2016
Assets
Consolidated Consolidated Company Company
Current assets:
Cash at bank and on hand 41,657,437 27,169,118 26,136,798 17,135,480
Derivative financial assets 392,267 412,813
- -
Notes receivable 15,518,453 7,427,488
- -
Accounts receivable 17,360,462 13,454,511
- -
Advances to suppliers 2,105,052 1,587,366 35,167 8,252
Loans and advances to
10,918,457 10,273,397
customers - -
Dividends receivable 285,916
- - 737,585
Other receivables 2,099,815 1,140,133 11,724,056 12,644,592
Inventories 23,752,878 15,626,897
- -
Including: Amount due from
5,557,738
customer for finished products - - -
Other current assets 49,545,111 43,529,597 29,543,341 24,165,141
Total current assets 163,349,932 120,621,320 68,176,947 54,239,381
Non-current assets:
Available-for-sale financial
1,846,009 5,187,732 56,868 28,931
assets
Long-term receivables 377,473 33,868
- -
Long-term equity investments 2,821,345 2,211,732 24,359,050 23,058,980
Investment properties 474,159 494,122 578,450 604,881
Fixed assets 22,348,578 21,056,791 882,217 984,666
Construction in progress 1,020,704 580,729 516,948 467,053
Intangible assets 16,010,089 6,868,538 232,771 236,083
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Goodwill 28,620,233 5,730,995
- -
Long-term prepaid expenses 702,846 625,971 39,427 46,090
Deferred income tax assets 3,813,586 3,030,383 136,769 62,711
Other non-current assets 798,322 4,158,530 12,277 3,342,000
Total non-current assets 78,833,344 49,979,391 26,814,777 28,831,395
TOTAL ASSETS 242,183,276 170,600,711 94,991,724 83,070,776
Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang
Person in charge of accounting department: Chen Lihong
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd.As of Sep. 30, 2017 Unit: RMB’000
Sep. 30, 2017 Dec. 31, 2016 Sep. 30, 2017 Dec. 31, 2016
Liabilities and Shareholders' Equity
Consolidated Consolidated Company Company
Current liabilities:
Short-term borrowings
4,472,839 3,024,426
- -
Customer deposits and deposits from
158,141 36,708
banks and other financial institutions - -
Derivative financial liabilities
146,771 89,838
- -
Notes payable
23,029,466 18,484,939
- -
Accounts payable
32,588,743 25,356,960
- -
Advances from customers
17,782,778 10,252,375
- -
Including: Prepayments by
1,838,709
customers for unfinished products
Payroll payable 4,181,519 3,154,387 97,092 199,842
Taxes payable 2,813,129 2,364,446 8,368 103,848
Interest payable 66,170 21,343 136,203 76,776
Dividends payable
176,000 105,641
- -
Other payables 2,668,054 1,571,422 61,386,959 54,461,578
Current portion of non-current
111,062 158,545
liabilities - -
Other current liabilities 26,723,821 24,562,970 7,768 140,264
Total current liabilities 114,918,493 89,184,000 61,636,390 54,982,308
Non-current liabilities:
Long-term borrowings
33,075,133 2,254,348
- -
Debentures payable
4,621,102 4,818,769
- -
Long-term payables
456,162 366,881
- -
Payables for specific projects
2,500 2,405
- -
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Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Provisions
645,287 325,217
- -
Deferred revenue 647,849 502,316
- -
Long-term payroll payable
2,325,670 1,449,954
- -
Deferred income tax liabilities
4,381,425 1,831,973
- -
Other non-current liabilities
855,926 888,152
- -
Total non-current liabilities
47,011,054 12,440,015
- -
Total liabilities 161,929,547 101,624,015 61,636,390 54,982,308
Shareholders' equity:
Share capital 6,548,163 6,458,767 6,548,163 6,458,767
Capital surplus 15,425,561 13,596,569 7,267,676 5,455,268
Less: Treasury stock
366,842 - 366,842 -
Other comprehensive income 19,749 13,125 (16,928) (9,069)
Surplus reserve 2,804,469 2,804,469 2,804,469 2,804,469
General reserve
148,602 148,602
- -
Undistributed profits 46,637,886 38,105,391 17,118,796 13,379,033
Total equity attributable to
71,217,588 61,126,923 33,355,334 28,088,468
shareholders of the Company
Minority interests
9,036,141 7,849,773
- -
Total shareholders' equity 80,253,729 68,976,696 33,355,334 28,088,468
TOTAL LIABILITIES AND
242,183,276 170,600,711 94,991,724 83,070,776
SHAREHOLDERS' EQUITY
Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang
Person in charge of accounting department: Chen Lihong
18
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Income Statement
Prepared by Midea Group Co., Ltd. January-September 2017 Unit: RMB’000
January-Septe January-Septe January-Septe January-Septe
Item mber 2017 mber 2016 mber 2017 mber 2016
Consolidated Consolidated Company Company
1. Total revenue 187,764,435 117,077,949 1,116,610 851,892
Including: Operating revenue 186,948,866 116,378,417 1,116,610 851,892
Interest income
815,565 691,759
- -
Fee and commission income
4 7,773
- -
2. Total Cost (172,344,718) (102,498,007) (545,033) (1,006,971)
Including: Cost of sales (139,559,489) (83,828,027) (29,054) (14,829)
Interest expenses
(215,904) (384,002)
- -
Fee and commission expenses
(2,140) (2,012)
- -
Taxes and surtaxes (1,076,026) (662,794) (11,267) (7,988)
Selling and distribution expenses
(19,954,150) (12,341,424)
- -
General and administrative expenses (10,430,157) (5,981,080) (206,857) (276,093)
Finance costs (852,759) 913,165 (298,404) (708,030)
Asset impairment (loss)/reversal (254,093) (211,833) 549 (31)
Add: Gains/(losses) on changes in fair
(44,156) (488,089) 22,673
value -
Investment income 1,792,009 1,183,473 9,543,492 9,491,666
Including: Share of profit of associates
390,089 295,082 288,285 201,015
and joint ventures
Other income 1,075,500
3. Operating profit 18,243,070 15,275,326 10,115,069 9,359,260
Add: Non-operating income 1,089,198 1,258,778 1,505 44,954
Including: Gains on disposal of
837,073 10,933
non-current assets 24 -
Less: Non-operating expenses (492,928) (193,914) (1,468) (3,681)
Including: Losses on disposal of
(93,239) (73,136) (119) (1,562)
non-current assets
4. Total profit 18,839,340 16,340,190 10,115,106 9,400,533
19
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Less: Income tax expenses (2,737,940) (2,588,202) 90,336 (17,685)
5. Net profit 16,101,400 13,751,988 10,205,442 9,382,848
Including: Net profit of consolidated
subsidiaries before consolidation - - - -
Attributable to shareholders of the
14,998,175 12,807,993 10,205,442 9,382,848
Company
Attributable to minority shareholders
1,103,225 943,995
- -
6. Other comprehensive income, net of tax 13,190 538,964 (7,859) (1,902)
Attributable to shareholders of the
6,624 465,254 (7,859) (1,902)
Company
(1) Other comprehensive income items
which will not be reclassified subsequently to 37,472
- - -
profit or loss
(2) Other comprehensive income items
which will be reclassified subsequently to (30,848) 465,254 (7,859) (1,902)
profit or loss
1) Share of the other comprehensive
income of the investee accounted for using
(9,831) (56,537) (7,859) (1,902)
equity method which will be reclassified
subsequently to profit and loss
2) Changes in fair value of
(288,537) 358,607
available-for-sale financial assets - -
3) Gains/Losses on reclassification of
held-to-maturity investments as
- - - -
available-for-sale financial assets
4) Effective portion of cash flow
174,794
hedging gains or losses 140,809 - -
5) Foreign-currency financial statement
126,711 (11,610)
translation differences - -
Attributable to minority shareholders
6,566 73,710
- -
7. Total comprehensive income 16,114,590 14,290,952 10,197,583 9,380,946
Attributable to shareholders of the
15,004,799 13,273,247 10,197,583 9,380,946
Company
Attributable to minority shareholders
1,109,791 1,017,705
- -
8. Earnings per share
Basic earnings per share (RMB/share) 2.31 2.00 N/A N/A
20
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Diluted earnings per share (RMB/share) 2.30 1.99 N/A N/A
Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang
Person in charge of accounting department: Chen Lihong
21
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Income Statement
Prepared by Midea Group Co., Ltd. July-September 2017 Unit: RMB’000
July-Septemb July-Septemb July-Septemb July-Septemb
Item er 2017 er 2016 er 2017 er 2016
Consolidated Consolidated Company Company
1. Total revenue 62,800,819 39,070,433 415,540 263,641
Including: Operating revenue 62,498,801 38,856,130 415,540 263,641
Interest income
302,016 212,183
- -
Fee and commission income
2 2,120
- -
2. Total Cost (58,381,100) (35,679,594) (221,378) (247,382)
Including: Cost of sales (46,508,408) (28,961,867) (9,725) (1,181)
Interest expenses
(50,238) (122,684)
- -
Fee and commission expenses
(479) (625)
- -
Taxes and surtaxes (321,255) (195,032) (7,488) (4,653)
Selling and distribution expenses
(7,549,380) (4,156,246)
- -
General and administrative expenses (3,597,199) (2,291,021) (101,419) 62,445
Finance costs (506,145) 7,904 (103,441) (303,995)
Asset impairment (loss)/reversal 152,004 39,977 695 2
Add: Gains/(losses) on changes in fair
(34,633) 37,000
value - -
Investment income 592,557 469,391 3,418,254 1,932,955
Including: Share of profit of associates
102,955 94,340 73,852 69,904
and joint ventures
Other income 229,274
- - -
3. Operating profit 5,206,917 3,897,230 3,612,416 1,949,214
Add: Non-operating income 98,284 355,506 748 43,117
Including: Gains on disposal of
55,844 7,385 24
non-current assets -
Less: Non-operating expenses (72,985) (90,115) (427) (2,124)
Including: Losses on disposal of
(56,112) (40,987) (15)
non-current assets -
22
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
4. Total profit 5,232,216 4,162,621 3,612,737 1,990,207
Less: Income tax expenses (678,887) (641,531) 98,238 17,216
5. Net profit 4,553,329 3,521,090 3,710,975 2,007,423
Including: Net profit of consolidated
subsidiaries before consolidation - - - -
Attributable to shareholders of the Company 4,186,853 3,311,500 3,710,975 2,007,423
Attributable to minority shareholders
366,476 209,590
- -
6. Other comprehensive income, net of tax (13,132) (808,298) (4,433) 8,675
Attributable to shareholders of the Company (3,058) (811,460) (4,433) 8,675
(1) Other comprehensive income items
which will not be reclassified subsequently to (2,107)
- - -
profit or loss
(2) Other comprehensive income items
which will be reclassified subsequently to (951) (811,460) (4,433) 8,675
profit or loss
1) Share of the other comprehensive
income of the investee accounted for using
(1,762) 9,169 (4,433) 8,675
equity method which will be reclassified
subsequently to profit and loss
2) Changes in fair value of
3,938 (723,900)
available-for-sale financial assets - -
3) Gains/Losses on reclassification of
held-to-maturity investments as
- - - -
available-for-sale financial assets
4) Effective portion of cash flow
(27,907) 29,191
hedging gains or losses - -
5) Foreign-currency financial statement
24,780 (125,920)
translation differences - -
Attributable to minority shareholders
(10,074) 3,162
- -
7. Total comprehensive income 4,540,197 2,712,792 3,706,542 2,016,098
Attributable to shareholders of the Company 4,183,795 2,500,040 3,706,542 2,016,098
Attributable to minority shareholders
356,402 212,752
- -
8. Earnings per share
Basic earnings per share (RMB/share)
0.64 N/A N/A
0.51
Diluted earnings per share (RMB/share) 0.64 N/A N/A
23
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
0.51
Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang
Person in charge of accounting department: Chen Lihong
24
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Cash Flow Statement
Prepared by Midea Group Co., Ltd. January-September 2017 Unit: RMB’000
January-Septe January-Septe January-Septe January-Septe
Item mber 2017 mber 2016 mber 2017 mber 2016
Consolidated Consolidated Company Company
1. Cash flows from operating activities:
Cash received from sales of goods or
148,783,253 112,216,632
rendering of services - -
Net increase in customer deposits and
deposits from banks and other financial 121,433
3,561 - -
institutions
Net decrease in deposits with central bank
126,053
and other financial institutions - - -
Net increase in borrowing from central bank
80,730
- - -
Cash received from Interest, fees and
864,098 700,653
commissions - -
Refund of taxes and surcharges 4,440,425 4,124,618
- -
Cash received relating to other operating
3,370,638 2,201,828 8,729,382 10,532,437
activities
Sub-total of cash inflows 157,579,847 119,454,075 8,729,382 10,532,437
Cash paid for goods and services
(87,143,944) (63,672,706)
- -
Net decrease in customer deposits and
deposits from banks and other financial
- - - -
institutions
Net increase in loans and advances
(658,156) (5,428,328)
- -
Net increase in deposits with central bank
and deposits from banks and other financial (744,270)
- - -
institutions
Cash paid for interest, fee and commission
(218,046) (387,319)
- -
Cash paid to and on behalf of employees (17,042,705) (8,673,520) (114,654) (27,898)
Payments of taxes and surcharges (9,412,941) (6,828,734) (101,815) (52,312)
Cash paid relating to other operating
(22,292,143) (15,425,973) (227,698) (4,590,393)
activities
25
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
Sub-total of cash outflows (137,512,205) (100,416,580) (444,167) (4,670,603)
Net cash flow from operating activities 20,067,642 19,037,495 8,285,215 5,861,834
2. Cash flows from investing activities:
Cash received from disposal of investments 56,859,505 48,980,669 40,619,980 25,674,850
Cash received from returns on Investment
1,664,387 1,339,590 9,227,047 8,738,751
income
Net cash received from disposal of fixed
assets, intangible assets and other long-term 865,341 170,570 12,049 111
assets
Net cash received from disposal of
2,415 272,899
subsidiaries and other business units - -
Cash received relating toother investing
activities - - - -
Sub-total of cash inflows 59,391,648 50,763,728 49,859,076 34,413,712
Cash paid to acquire fixed assets, intangible
(2,071,492) (1,605,425) (81,158) (247,748)
assets and other long-term assets
Cash paid to acquireinvestments (50,014,698) (65,071,957) (36,731,884) (35,644,352)
Net cash paid to acquire subsidiaries and
(25,633,208) (1,856,787)
other business units - -
Cash used in other investing activities
- - - -
Sub-total of cash outflows (77,719,398) (68,534,169) (36,813,042) (35,892,100)
Net cash from investing activities (18,327,750) (17,770,441) 13,046,034 (1,478,388)
3. Cash flows from financing activities:
Cash received from capital contributions 1,365,855 1,365,855
651,628 635,611
Including: Cash received from capital
contributions by minority shareholders of
- 16,017 - -
subsidiaries
Cash received from borrowings 32,917,986 28,817,816 1,600,000
1,800,000
Cash received fromissuing of short-term
1,999,500
financial bonds - - 1,999,500
Cash received relating to other financing
activities - - - -
Sub-total of cash inflows 34,283,841 31,468,944 2,965,855 4,435,111
Cash repayment of borrowings (4,718,342) (21,748,594) (1,600,000) (3,090,000)
Cash repayment of short-term bonds (1,999,500) (1,999,500)
- -
Cash payments for interest expenses and (7,578,451) (5,728,142) (6,970,870) (6,234,046)
26
Midea Group Co., Ltd. The Interim Report for the Third Quarter of 2017
distribution of dividends or profit
Including: Cash payments for dividends
or profit to minority shareholders of (606,819) (417,287)
- -
subsidiaries
Cash payments relating toother financing
activities - - - -
Sub-total of cash outflows (12,296,793) (29,476,236) (8,570,870) (11,323,546)
Net cash flows from financing activities 21,987,048 1,992,708 (5,605,015) (6,888,435)
4. Effect of foreign exchange rate changes
121,585 101,834
on cash and cash equivalents - -
5. Net decrease in cash and cash
23,848,525 3,361,596 15,726,234 (2,504,989)
equivalents
Add: Cash and cash equivalents at
12,513,730 5,187,317 8,174,915 6,245,008
beginning of the period
6. Cash and cash equivalents at end of the
36,362,255 8,548,913 23,901,149 3,740,019
period
Legal representative: Fang Hongbo Person in charge of accounting function: Xiao Mingguang
Person in charge of accounting department: Chen Lihong
2. Auditor’s Report
Are the Q3 2017 financial statements audited by a CPAs firm?
□Yes √ No
These financial statements are unaudited by a CPAs firm.
Midea Group Co., Ltd.
Legal Representative: Fang Hongbo
Oct. 31, 2017
27