Qingdao Haier Co., Ltd 2018 Interim Report
Stock Code: 600690 Short Name: Qingdao Haier
Qingdao Haier Co., Ltd
2018 Interim Report
1 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Important Notice
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior management
of Qingdao Haier Co., Ltd. (“the Company”) hereby assure that the content set out in the interim
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.
II. All directors of the Company have attended the Board meeting.
III. The interim report is unaudited.
IV. Liang Haishan (legal representative of the Company), Gong Wei (chief financial officer of the
Company) and Ying Ke (the person in charge of accounting department) hereby certify that the
financial report set out in the interim report is true, accurate and complete.
V. Proposal of profit distribution and proposal of capitalizing capital reserves for the reporting
period examined and reviewed by the Board
Not Applicable
VI. Disclaimer in respect of forward-looking statements
√Applicable □Not Applicable
Forward-looking statements such as future plans, development strategies as set out in this report do
not constitute our substantial commitment to investors. Investors are advised to pay attention to
investment risks.
VII. Is there any fund occupation by controlling shareholders and their related parties for
non-operational purposes?
No
VIII. Is there any provision of external guarantee in violation of prescribed decision-making
procedures?
No
IX. Important Risk Warnings
For the possible risks which the Company may encounter, please refer to the relevant information
set out in the section of “DISCUSSION AND ANALYSIS ON OPERATIONS” in this report.
X. Others
□Applicable √Not Applicable
2 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Chairman: Liang Haishan
Qingdao Haier Co., Ltd
30 August 2018
Note: This Report and its abstract have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese version shall
prevail.
”
3 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Contents
SECTION I DEFINITIONS ....................................................................................................................5
SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL
INDICATORS 7
SECTION III SUMMARY OF THE COMPANY’S BUSINESS .............................................................10
SECTION IV DISCUSSION AND ANALYSIS ON OPERATIONS .......................................................15
SECTION V SIGNIFICANT EVENTS ....................................................................................................38
SECTION VI CHANGES IN ORDINARY SHARES AND INFORMATION ABOUT
SHAREHOLDERS ...................................................................................................................................59
SECTION VII THE RELEVANT INFORMATION OF PREFERRED SHARES ...................................62
SECTION VIII DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT .........................................63
SECTION IX RELEVANT INFORMATION ON CORPORATE BONDS.....................................64
SECTION X FINANCIAL REPORT ........................................................................................................65
SECTION XI SECTION XIDOCUMENTS AVAILABLE FOR INSPECTION ..................................204
4 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION I DEFINITIONS
Unless otherwise stated in context, the following terms should have the following meanings in this
report:
CSRC China Securities Regulatory Commission
MOFCOM Ministry of Commerce of the People's Republic of China
SSE Shanghai Stock Exchange
The Company,
Qingdao Haier Co., Ltd.
Qingdao Haier
Four Major Securities China Securities Journal, Shanghai Securities News, Securities Times,
Newspapers Securities Daily
Haier Electronics Group Co., Ltd. (a company listed in Hong Kong, stock
Haier Electrics, 1169
code: 01169.HK)
GEA GE Appliances，household appliances assets and business of General Electric
Fisher & Paykel Appliances Holdings Limited (Chinese Name:斐雪派克)
was established in 1934 and is known as the national appliance brand of New
Zealand, the global top-level kitchen appliance brand and the famous luxury
brand of the world. It has products including ventilator, gas stove, oven,
dishwasher, microwave oven, freezer, washing machine, clothes dryer and
FPA etc. Its business covers over 50 countries across of the world. The Company
convened Board meeting and General meeting in April and May 2018，
respectively, to approve relevant resolutions of the transfer of 100% equity
interest in Haier New Zealand Investment Holding Company Limited, upon
the completion of the transfer, FPA became a wholly-owned subsidiary of the
company.
China Market Monitor Co., Ltd., established in 1994, has been focusing on
CMM research on retail sales in China consumption market for a long term and is
the nationally recognized market research institute in terms of appliance area.
Euromonitor, established in 1972, is the leading strategic market information
supplier and owns over 40-years of experience in respect of publishing market
Euromonitor
report, commercial reference data and on-line database. They create data and
analysis on thousands of products and services around the world.
Based in Kentucky, the U.S., the firm is an institution specializing in market
survey, research and analysis. The market research and analysis business of
The Stevenson the Company started in 1995. Its “TraQline” product is a world-famous
Company survey and research report on market share. The “TraQline” product offers
customers with analysis based on global market share and consumer
behaviors and supports the decision-making of various businesses.
The International Electrotechnical Commission. Founded in 1906, it is the
world’s first organization for the preparation and publication of international
standards and is responsible for international standardization for electrical
engineering and electronic engineering. The goals of the commission include:
to ensure that the standards and conformity assessment programs are applied
IEC
globally in a prioritized manner and to the greatest extent; to assess and
improve the quality of products and services involved in its standards; to
create conditions for the common use of complicated systems; to improve the
effectiveness of the industrialization process; to improve human health and
safety, and to protect the environment.
Shenyang Refrigerator Interconnected Factory, Foshan Front-Loading
Washing Machine Interconnected Factory, Zhengzhou Air-conditioner
10 Interconnected Interconnected Factory, Qingdao Mold Interconnected Factory, Qingdao
Factories Water Heater Interconnected Factory, Qingdao FPA Electrical Machine
Interconnected Factory, Jiaozhou Air-Conditioner Interconnected Factory,
Huangdao Central Air-Conditioner Interconnected Factory, Huangdao Smart
5 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Kitchen Appliance Range Hood Interconnected Factory, Huangdao Smart
Kitchen Appliance Stove Interconnected Factory
“4” refers to four physical spaces continuously and iteratively upgraded by
Haier, including smart living room, smart kitchen, smart bathroom and smart
bedroom. “7” represents seven whole-house solutions as whole-house air,
“4+7+N” smart
whole-house water supply, whole-house cleaning, whole-house security,
full-scene customized
whole-house audio, whole-house health and whole-house information. N as a
full set program
variable represents that users are free to customize smart living scenarios
according to tier living habits, thus achieving possibilities with infinite
changes.
“Individual” means staff; “goal” means the need of users, rather than the
The mode combining “orders” in narrow sense. The mode “Combining individual and goal”
individual and goal encourages the integration of staff with users, and “win-win” means to realize
every employees value while creating value for users.
The Institute of Electrical and Electronics Engineers, an international
association of electronic technology and information science engineers, is
currently the largest non-profit professional technology society in the world.
It committed to the development and research of electrical, electronic,
IEEE
computer engineering and science-related fields, it has now developed into an
international academic organization with high influence in terms of the fields
of space, computer, telecommunications, biomedicine, power and consumer
electronics.
6 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION II GENERAL INFORMATION OF THE COMPANY AND
KEY FINANCIAL INDICATORS
I. Information of the Company
Chinese Name 青岛海尔股份有限公司
Chinese Short Name 青岛海尔
English Name QINGDAO HAIER CO.,LTD.
English Short Name HAIER
Legal representative 梁海山
II. Contact Person and Contact Information
Secretary to the Board Representative of securities affairs
Name Ming Guozhen Liu Tao
Department of Securities of Qingdao Haier Department of Securities of Qingdao Haier
Co., Ltd. Co., Ltd.
Address
Haier Information Industrial Park, No.1 Haier Information Industrial Park, No.1 Haier
Haier Road, Qingdao City Road, Qingdao City
Tel 0532-88931670 0532-88931670
Fax 0532-88931689 0532-88931689
Email finance@haier.com finance@haier.com
III. Summary of the changes in general information
Registered address Haier Industrial Park, Laoshan District, Qingdao City
Postal code 266101
Business address Haier Information Industrial Park, Laoshan District, Qingdao City
Postal cod of Business address 266101
Website http://www.haier.net/cn/
Email 9999@haier.com
IV. Movement of Place for Information Disclosure and Deposit
Designated newspaper for Shanghai Securities News, Securities Times, China Securities
information disclosure Journal, Securities Daily
Website for publishing interim
www.sse.com.cn
report as designated by the CSRC
Department of Securities of Qingdao Haier Co., Ltd.
Deposit place of interim report
Haier Information Industrial Park, No.1 Haier Road, Qingdao City
V. Summarized Information of Shares of the Company
Stock Exchange of Stock Short Name
Type of Shares Stock Short Name Stock Code
Shares Listed Before Variation
Shanghai Stock
A shares Qingdao Haier 600690 ／
Exchange
VI. Other Related Information
□Applicable √Not Applicable
7 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
VII. Key Accounting Data and Financial Indicators of the Company
(I) Key accounting data
Unit and Currency: RMB
The corresponding period of last year Increase/decr
(January - June) ease for the
reporting
For the reporting period
Key accounting data period compared
(January - June) After adjustment Before adjustment with the
corresponding
period of last
year (%)
Operating revenue 88,591,626,626.07 77,585,007,913.93 77,575,749,980.10 14.19
Net profit attributable
to shareholders of the 4,858,795,529.42 4,416,867,240.37 4,427,068,404.51 10.01
Listed company
Net profit after
deduction of
non-recurring profit
4,475,991,565.27 3,777,339,454.95 3,777,339,454.95 18.5
or loss attributable to
shareholders of the
Listed company
Net cash flows from
5,368,385,954.02 8,434,402,658.46 8,393,200,906.18 -36.35
operating activities
Increase/decr
As at the end of last year ease as at the
end of the
As at the end of reporting
the reporting period
period After adjustment Before adjustment compared
with the end
of last year
(%)
Net assets attributable
to shareholders of the 35,267,251,452.26 32,215,515,201.45 32,215,515,201.45 9.47
Listed company
Total assets 157,465,352,921.4 151,463,110,707.6 151,463,110,707.6
3.96
6 3 3
(II) Key financial indicators
The corresponding period
Increase/decrease for the
For the reporting of last year
Key financial reporting period compared
period (January - June)
indicators with the corresponding
(January - June) After Before
period of last year (%)
adjustment adjustment
Basic earnings per
share (RMB per 0.797 0.724 0.726 10.08
share)
Diluted earnings per
share (RMB per 0.786 0.724 0.726 8.56
share)
Basic earnings per
0.734 0.619 0.619 18.58
share after deducting
8 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
non-recurring profit
or loss (RMB per
share)
Weighted average
Decreased by 1.3 percentage
return on net assets 14.10 15.40 15.47
points
(%)
Weighted average
return on net assets
Decreased by 0.21
after deducting 12.99 13.20 13.20
percentage points
non-recurring profit
or loss (%)
Explanation of the key accounting data and financial indicators of the Company
√Applicable □Not Applicable
Note: The income from January to June 2018 is RMB 88.592 billion, increased by 14.19% year-on-year;
at prevailing exchange rates, while the income under constant exchange rates increased by 17.3%
year-on-year. Due to lock exchange business, the net impact profit of two periods recognition fair value
income was approximately RMB300 million, and after the restoration, the increase of net profit
attributable to owners of the Parent company was 18.82%.
VIII. Differences in accounting data under domestic and overseas accounting standards
□Applicable √Not Applicable
IX. Non-recurring Profit or Loss Items and Amount
√Applicable □Not Applicable
Unit and Currency: RMB
Non-recurring profit or loss items Amount
Profit or loss from disposal of non-current assets 23,934,860.63
Government grants included in current profit or loss, except that closely
related to the normal operating business, complied with requirements of
137,147,498.76
the national policies, continued to be granted with the amount and quantity
determined under certain standards
In addition to the effective hedging business related to the normal
operations of the Company, profit or loss of changes in fair value arising
from holding of trading financial assets and trading financial liabilities, as 193,260,601.21
well as investment gain realized from disposal of trading financial assets,
trading financial liabilities and financial assets available for sale
Trust fee income from entrusted business 943,396.22
Other non-operating income and expenses except the aforementioned items 169,865,362.68
Effect of minority equity interests -91,861,955.96
Effect of income tax -50,485,799.39
Total 382,803,964.15
X. Others
□Applicable √Not Applicable
9 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION III SUMMARY OF THE COMPANY’S BUSINESS
I. Introduction of Major Business, Operating Mode and Industry Background
In the first half of 2018, the global economy continued its growth since 2017, but trade frictions,
geopolitics and normalization of monetary policies in major economies have increased the uncertainty of
the global economy and financial markets. In the first half of 2018, China's economy maintained steady
growth, structural adjustments were further advanced and the economy performed at a good level.
(I) Domestic market of the Industry: In the first half of 2018, the retail sales of each sub-industry
of white goods in the domestic market maintained a growth trend, but the performance was
differentiated. According to the calculation of China Market Monitor Co., Ltd (CMM), ① the
home-use air-conditioner industry grew rapidly with the retail volume increased by 16.6% and the retail
value increased by 19.8%; ② in the refrigerator and washing machine market, replacement demand
became the primary demand with weak sales growth, but the average prices were boosted by structural
upgrading: retail volume in the refrigerator industry decreased by 1.7%, but the retail value increased by
7.9%; retail volume and retail value in the washing machine industry increased by 4.7% and 10.5%
respectively.
With the continuous tightening of real estate control policies, the kitchen and bathroom industry is
facing certain growth pressure. ①In the first half of 2018, the water heater industry recorded a negative
growth of 0.4% in its retail volume and a growth of 4.8% in its retail value; ②the kitchen appliance
market recorded a negative growth in its retail value, representing a decrease of 1% as compared with
the corresponding period of last year, of which range hoods and stoves (two major sub-industries)
recorded a decrease of 3.8% and 1.6% respectively in their retail value.
The trend of consumption upgrade continued, and brand, quality, design and technology became
the major factors influencing the decision-making of consumers. Consumers are willing to pay a
premium for "good products", and health, smart, artistic products with large capacity are increasingly
favored. It has become the consensus of industry companies to promote the structural upgrading and
increase the added value. According to the statistics of CMM, the share of retail sales of offline
multi-door refrigerators in the first half of 2018 increased by 4.5 percentage points year-on-year to
28.3%.
Online channels maintained rapid growth with retail sales of refrigerators, washing machines, air
conditioners, water heaters and kitchen appliances increasing by 29.2%, 36.3%, 54.8%, 36%, and 18.6%,
respectively. The competition pattern was that the strong became stronger, the concentration of the
leading brands was further strengthened, and the industry competition was intensified. Take the
refrigerator industry as an example, the share of retail value of TOP5 brands reached 76.8% in the first
half of 2018, representing an increase of 4.3 percentage points.
10 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(II) Overseas markets of the Industry: Due to the level of economic development and market
size in each region, the performance varies by market. ① US appliances industry declined by 1.1% in
the first half of 2018, due to soft demand for large household appliances. ② In the major European
markets, the UK and France markets recorded a flat growth, the German market fell by approximately
3% year-on-year, the Italian market fell by approximately 4% year-on-year, and the Russian market
grew by approximately 6%. ③ The Japanese market recorded a slight growth with 3.4% for washing
machines and approximately 2% for refrigerators & freezers. ④ The Australian market experienced a
growth of 1.9%. ⑤ In the South Asia markets, the Pakistani market grew by 11% and the Indian
market by 5%.
The rapid development of technologies such as the Internet of Things, big data, cloud computing
and artificial intelligence has enhanced the connection between people and equipment, equipment and
equipment, and equipment and ecological resources, and gradually changed our consumption habits of
customers. The consumption trend reflected the characteristics of experience economy, community
economy and sharing economy. Rapid product iteration and changes in industrial ecology has turned the
focus of competition from pure product competition to user value and experience competition, forced
enterprise transformation and business model reconstruction, and accelerated the transformation from
selling products to selling services.
II. Explanation on significant change on major assets of the Company during the reporting
period
□Applicable √ Not Applicable
The overseas assets amounted to RMB 70,795.3591 million, representing 44.96% of the total
assets.
III.Analysis on core competitiveness during the reporting period
√Applicable □ Not Applicable
Since its foundation in 1984, the Company has always adhered to the principle of driving the
sustainable and healthy development with innovation system focusing on the needs of users, and it has
successfully turned itself from a debt-burdened collective small factory which was on the verge of
shutdown into one of the largest home appliances manufacturers in the world. The Company is
committed to realizing sustainable development across different cycles through continued innovations
on development strategy and management mode, brand, research and development, intelligent
manufacturing, construction of foreign and domestic market to achieve competitiveness adaptive to
ever-changing conditions.
(I) World-renowned brand competitiveness and comprehensive brand layout
According to the data published by Euromonitor, Haier has been ranked No. 1 among global large
home appliances brands for 9 consecutive years. In segments of refrigerators, washing machines, wine
11 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
cellars, freezers, the Company continues to be No. 1 in the world. To meet the personalized and
diversified needs of users, we have broken down the global technical barriers in the household
appliances industry and promoted the healthy development of the industry through the global strategic
synergy among six brands of household appliances, namely Haier, GE Appliances in the U.S., Fisher &
Paykel in New Zealand, AQUA in Japan, Casarte and Leader. Haier has built the largest household
appliances industry cluster in the world, which covers global market and communities.
The share of high-end brand is far ahead. In the first half of 2018, the market share of Casarte air
conditioners above RMB16,000 is 45%, the market share of Casarte drum washing machines above
RMB10,000 is 73.8% and the market share of Casarte refrigerators above RMB10,000 is 36%; in 2017,
the market share of MONOGRAM, the high-end household appliance brand of GEA, reached 20% in
the US high-end market; the market share of Fisher & Paykel, the world's top household appliance brand,
reached 36% in New Zealand's high-end market.
(II) Industry-leading R&D and technological competitiveness
1. Layout of R&D resources around the world: Relying on the world's top 10 R&D centers and N
innovation centers that are connected in parallel according to the user's pain points, Haier has built a
“10+N”open innovation system to form a global network of resources and users, and attracted
world-class resources to participate in R&D with its “cooperation, win-win and sharing” mechanism,
thus playing a leading role in the development of products and technologies in the industry, truly
realizing the " where is the user needs and innovation resources where is the R&D" and providing
excellent experience for its users.
2. Leadership in industrial standards. With its sustained innovation capacity, Haier has become a
leader in the household appliances industry in China and worldwide. As of December 2017, Haier held a
total of 66 expert seats in IEC and ISO. Haier also held 28 expert seats in UL standardization
organization. Haier has participated in the preparation and revision of 56 international standards and has
submitted 90 international standard revision proposals in the process of participation, is the household
appliance enterprise with the most proposals for international standard revision in China. At the same
time, Haier is also the household appliance enterprise leading the most industry standards in China, has
led and participated in 445 national/industry standards revisions in total, of which 391 have been
released and won 11 national standards innovation contribution awards. In terms of participation in
international organizations, Haier is the only household appliance enterprise in China to enter the
International Electrotechnical Commission's Market Strategy Bureau (IEC/MSB). It undertakes the work
of the IEC/SC59A International Dishwasher Subcommittee Secretariat and is the only household
appliance enterprise in China that undertakes the International Standards Technical Subcommittee; Haier
took the lead in setting up the IEC TC59/SC59M WG4 Refrigerator Preservation International Standard
Working Group, led the development of new international standards for refrigerator preservation and
achieved international breakthroughs in the field of household appliances.
3. Up to the end of 2017, Haier has applied for more than 25,000 patents in total, including more
than 15,000 invention patents, covering 25 countries and regions, which is the household appliance
12 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
enterprise with the most overseas invention patents in China. In 2017, Haier applied for more than 7,000
patents, the proportion of invention patents was higher than 60% and the quality of patents led the
industry. In the 19th China Patent Awards in December 2017, Haier won the only patent gold award and
2 design gold awards in the household appliance industry, and won 5 patent excellence awards at the
same time. In the previous China Patent Awards, Haier has won 5 gold awards in total and the total
number of gold awards was the highest in the industry; Haier became the only household appliance
enterprise that won the China Patent Gold Award 2 times in 29 years and created the highest record of
winning three at a time. Haier has won 14 National Prize for Progress in Science and Technology,
accounting for 2/3 of the industry.
4. Innovating the R&D mechanism through the HOPE platform. Through “HOPE”, its online open
innovation platform, Haier has been facilitating the matching of resources from the source of innovation
to the realization of innovation, producing cross-border and disruptive innovation continuously. As the
leading open innovation platform, currently the platform can reach 3.8 million world-leading resources,
more than 400,000 registered users, and offers over 6,000 creative ideas on average per year, thus
supporting the maintenance of our leading position in products/technologies.
(III) Competitiveness of smart manufacturing that leads to change
1. The core competitiveness of Haier’s smart manufacturing lies in its commitment to long-term
value for users through its user-oriented approach and the transition from large-scale manufacturing to
large-scale customization. In practical operation, Haier has established 10 global-leading sample
interconnected factories, as well as the interconnected capabilities and ecological system covering the
whole process. Such businesses cover refrigerators, washing machines, air-conditioners, water heaters,
kitchen appliances, electric motors, molds and other fields, meeting our user's need for perfect
experience in high-end personalized products and services. Such initiatives have produced notable
effects: the orders from mass customization in which users are involved in the whole process accounted
for up to 16% of the total, and the orders from mass customization in which customers are involved
accounted for up to 52% of the total, achieving a breakthrough, which eliminated or shortened the period
of the products in the warehouses. In addition, operational efficiency throughout the process has been
enhanced (such as the R&D cycle of new products has been reduced by more than 50%).
2. COSMOPlat - China’s first and global-leading industrial Internet platform with independent
intellectual property rights was developed from interconnected factories, as well as best practices in
digitalization and product formation. This platform, combined with existing capabilities such as smart
equipment, smart control, mold and Smart Research Institute, has been in collaboration with relevant
companies in seven major industries, and will be able to offer comprehensive solutions and value-added
services featured by the union of software and hardware as well as the mix of virtual and real factors for
the transformation and upgrading of smart manufacturing.
(IV) The layout of efficient and in-depth channel network and logistics network
1. Through our diversified channel system, we have achieved full coverage of the first, second,
third and fourth-tier-domestic market and provided convenient shopping experience anywhere, anytime.
13 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
We have also maintained strong strategic cooperation relationship with professional chains for
household appliances, such as Gome and Suning, as well as e-commerce platforms, such as Tmall and
JD. In respect of our own channels, Haier has established more than 8,000 county-level stores, and more
than 30,000 stores within town level network. In our comprehensive store channel, we have established a
number of clubs, such as V58 and V140 Clubs, and maintained close cooperation with major enterprises
engaging in regional distribution of household appliances. Relying on the advantage that the company's
product line is complete, we will build a smart and full set of scene experience stores to realize the full
set of market terminal displays, design, sales and services, and improve the channel stickiness.
2. The network of the warehouses of Gooday Logistics covers more than 100 cities and regions in
China, with a total storage area of 3.60 million square meters, and 90,000 motor vehicles for deployment.
Gooday Logistics offers around-the-clock service combining delivery and installation, and is dedicated
to providing users with comprehensive, timely and care-free services.
(V) Excellent global operational capability
Focusing on “building our own brand independently”, the Company has completed its layout of
trinity network comprising R&D, manufacturing and marketing in the major overseas market through
organic growth and mergers and acquisitions, which can quickly understand and meet local consumers’
demand, thus succeeding in transforming from a single-brand globalization to a multi-brand
cross-industry cross-regional globalization, and has achieved a leap from "going out, going in" to "going
up" through the integration and synergy of global resources. At the end of 2017, the Company's overseas
production capacity (Americas, Europe, South Asia and other regions) has exceeded 20 million; the
proportion of overseas revenue in the first half of 2018 is over 40% and nearly 100% from its own
brands.
(VI) Integrity of corporate culture and the win-win management mode of Individual and Goal
Combination
Credibility culture based on quality and service is the core driver of Haier’s growth, and is also the
essential source of constant success of Haier. Leveraging on credibility culture of “user-oriented” and
“persistent honesty”, Haier has turned itself from a small collective factory which was on the verge of
shutdown into one of the largest white goods manufacturers in the world, while keeping a leading
position in world-wide innovation in the internet era. Haier upholds the concept of “always take the
users as right and ourselves as wrong”. This concept stimulates the spirit of innovation, revolution and
entrepreneurship of Haier and motivates it to follow the times and continuously improve and challenge
itself, so as to seize development opportunities. The win-win model of combining individual and goal is
the assurance of sustainable operation of Haier. In exploring the “Individual and Goal Combination 2.0,
Co-create and Win-win ecosystem”, Haier endeavors to build a win-win ecosystem based on user value
interaction in new stage of e-commerce era to make every employee his/her own CEO and realize their
own value while creating value for users, so as to achieve win-win situation which is critical to parties in
system.
14 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION IV DISCUSSION AND ANALYSIS ON OPERATIONS
I.Discussion and Analysis on Operations
In the first half of 2018, the Company focused on the strategic goal of “becoming a leading
provider of smart home solutions in the era of Internet of Things”. Driven by the Individual and Goal
Combination model, the Company provided diverse complete smart household appliance solutions for
consumers through continuous product leadership, retail transformation and global operation, and
realized high growth, high market share and high value in household appliances industry. Facing the
opportunities in the era of Internet of Things, we will promote the creation of eco-brands in the era of
Internet of Things, create and iterate the best experiences of users through interaction with users, achieve
win-win value-added with stakeholders in the ecosystem and create new growth points such as
ecological revenue.
In the first half of 2018, the Company recorded revenue of RMB88.592 billion, representing an
increase of 14.19%. If the impact of exchange rate is taken into consideration, the revenue increased by
17.3% under constant exchange rate as compared with the corresponding period of last year. The
overseas revenue of the Company was 35.8 billion, which accounted for 40.4%. The Company achieved
net profit attributable to owners of the Parent company of 4.859 billion, a year-on-year growth of
10.01% and achieved net profit non-attributable to owners of the Parent company of 4.476 billion, a
year-on-year growth of 18.50%. In the first half of the year, the overall gross profit margin of the
Company was 28.97%, which decreased by 1.2 percentage points year-on-year, and the reason for the
decrease was the reclassification of certain logistics freight in accordance with the new income criteria.
In the absence of such criteria, the gross profit margin increased by 1.3 percentage points year-on-year.
The household appliance businesses of the Company realized a significant increase, thus expanding
its leadership. ① Revenue of refrigerator business, air conditioner business, washing machine business,
water heater business and kitchen appliance business in the household appliance industry (excluding
GEA) increased by 17%, 25%, 20%, 21% and 30% respectively. ② In the first half of 2018, GEA’s
sales in USD grew by 11%. Given the impact from RMB exchange rate, the corresponding sales in RMB
grew by 3.4%
In terms of market share, ①in the China market, the business for refrigerators, washing machines
and water heaters further expanded their leading, and the share of domestic retail value from January to
June increased by 4.6, 4, and 1.3 percentage points, respectively. The share of retail sales of refrigerator
and washing machine reached 34.88% and 32.94% respectively, being 3.1 times and 1.9 times of that of
the second brand, thus further expanding the leadership and the share of retail sales of Haier water heater
reached 17.84%; ② key growth businesses such as home-use air conditioners, range hoods and stoves
further consolidated their development foundations, resulting in an increase of 0.5, 0.8, 0.8 percentage
points in the share of retail sales respectively. ② Per data from The Stevenson Company, GEA share
increased in the first half of the year. Strong sales were boosted by continued growth in the kitchen and
15 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
laundry categories as well as an increased presence with national accounts for GEA room air
conditioning products.
I. The Company’s open innovation system of global 10+N layout constantly applies global
first-class resources to enhance its strong product innovation capacity, so as to provide good life
solutions for users and to lead the development trend in the industry.
1. Refrigerator/freezer business.
Based on consumers’ demands for high-quality life on fresh-keeping, nutrition, health and safety of
foods that are increasingly concerned about, the Company constantly improved its product solutions. ①
The full-space fresh-keeping refrigerator includes world-leading air duct refrigeration technology to
enable the refrigerating chamber to provide air supply on demand, together with precise cooling,
humidity and oxygen control. The freezing chamber has a barrier against defrosting hot air, which
achieves that refrigerated or frozen food does not face dehydration and achieves better preservation; ②
The world's original MSA oxygen-control preservation technology reduces the oxygen concentration, so
that the food reaches a low-oxygen dormancy state, maximizing the preservation time and nutrition of
the food. The preservation effect is extended by more than 8 times through this technology.
The Company made innovations in industry categories, optimized structure and targets upward
growth. ① The Company launched the new F+ refrigerator, a first in the industry. Casarte F+ free
embedded refrigerator integrates the benefits of a super-large space French refrigerator and sorted
storage of a T-door refrigerator. It realizes food preservation from temperature, humidity, speed,
cleanliness and oxygen concentration, and its exclusive free embedded design achieves the integration of
home furnishing and household appliance. The high-end market share has been promoted since the
introduction of F+. In the first half of 2018, the Company's share in the ultra-high-end RMB15,000 price
segment was 41.5%, increased by 22.2 percentage points year-on-year, of which the share in the
multi-door refrigerator category reached 57%. ② Haier’s full-space fresh-keeping series completed the
layout of multi-door, side-by-side and T-type, and sales volume increased by 243% in the first half of
2018. The T-type “Feast (飨宴)” full-space fresh-keeping series separating dry and wet at a value of
more than RMB10,000 was ranked on the list of best-selling models of CMM within three weeks upon
its introduction. With world-class industrial design, the Casarte free embedded four-door French-style
refrigerator BCD-633WICTU1, Casarte F+ multi-door refrigerator BCD-520WICTU1 and Haier T-type
four-door refrigerator BCD-608WDPGUI were ranked on the winner list of the Germany IF Design
Award released in March 2018. The Company ranked first in the global refrigerator industry in terms of
its awards.
2. Home-use air conditioner business.
Based on the purpose of creating a user environment for healthy air respiration and ecological
respiration, the Company enhanced its structure and brand recognition by emphasizing its technical
innovation and continuous improvement. The Company continuously introduces intelligent, efficient and
healthy products. In the first half of 2018, the share of high-end home-use air conditioners increased
16 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
significantly: the share of hanging air conditioners above RMB4,100 increased by 4 percentage points to
11.8%; the share of hanging air conditioners above RMB10,100 increased by 3 percentage points to
15.7%, of which the share of hanging air conditioners above RMB16,000 is 45%, ranking first in the
industry and 2.5 times that of the second. According to the statistics of CMM, benefiting from the
continuous optimization of product structure, our home-use air conditioner increased by 8.1% in offline
average price and 11.4% in online average price, ranking top among mainstream brands in the first half
of 2018.
The Company introduced Casarte TX air conditioners and Fresh Air cabinets in 2018. (1) Casarte
TX air conditioners were equipped with various innovative technologies to intelligently identify the best
apparent temperature of different users in the same room, realize partitioned and exclusive air supply for
different demands. ① Temperature perception technology was used to measure and calculate the
subjective comfort based on ambient temperature, body surface temperature, body convection radiation
temperature and spatial distance. ② Multiple-temperature zone air supply technology: two independent
fans with five air supply directions in a wide horizontal angle of 120°were equipped to supply air based
on the region, location and comfort of human bodies, so as to make us comfortable by adjusting the air
speed and temperature. ③ Dual-circulation soft air technology: the original twin vortex pressurization
system realizes double circulation of soft air, with air supply smoother and less noise while air volume
was increased by 10%. (2) Fresh Air cabinets include double-power constant-temperature technology of
fresh air purification and dynamic dual-drive technology of balanced air supply to adjust indoor air
environment to make us comfortable, and a smart App management was added to provide users with
comfortable and healthy air experience and intelligent and convenient manipulation experience.
3. Central air conditioner business.
Based on the needs of users in different market segments, we launched a series of energy-saving,
smart and healthy products, and seized market opportunities through personalized solutions to further
enhance the brand reputation. According to industrial online statistics, in the first half of 2018, the share
of Haier's central air-conditioning increased by 1.1% year-on-year, with a growth rate of 2.5 times the
industry According to the data of the central air-conditioning market, the share of Haier's magnetic
levitation air conditioners which are widely used in medical, rail transit, integrated construction, data
centers, hotels and other industries has doubled on top of ranking first in the industry.
In the first half of the year, we adhered to the product innovation strategy and focused on the needs
of market segment users and iterative innovation. ① In response to the market demand for
environmental products, we launched energy-saving and environmental air heaters with first-class
energy-efficiency, which still had powerful heating capacity under the low-temperature environment
25℃ to fulfill the heating task in winter. ② In response to the demand of high-end residential product
upgrades, we introduced Casarte’s household central air conditioner. The pioneered breeze panel
technology achieves an accurate adjustment of indoor temperature, humidity, cleanliness, quietness,
oxygen content and airflow distribution, and the brand-new industrial design created a new era
17 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
integrating art and industry, which further enhanced the user’s experience. ③ At large industrial sites,
we launched industry-leading VTT magnetic water machines of large cooling capacity with the
maximum single cooling capacity up to 4,500 RT. ④ We introduced the E+ cloud service platform in
the industry, to provide our clients with systematic comprehensive solutions integrating energy saving,
efficiency enhancement and energy management. Such platform uploaded central air-conditioning
equipment to the cloud to provide trouble-free operation monitoring and intelligent maintenance services.
It can provide life-time energy-saving customized solutions for all users, save energy and reduce
consumption during the whole life cycle to improve industrial efficiency.
4. Washing machine business.
Focusing on demands for washers for health, intelligence, comfort and energy conservation, the
Company expanded its industry leading advantages through upgrading of technologies and modules
including air wash, Internet of Things and direct drive motor. ① The difficulty that washing and drying
of high-end clothing may cause chemical residues which damage the skin and clothes, we innovatively
launched the air wash technology to wash and medical clothes, cashmere, silk and down clothes, and
obtained a good market response through the shop laundry demonstration. ② The study and application
of clothing recognition technologies including speech recognition and RFID automatic recognition
helped washing machines to automatically recommend the best washing and caring procedure by
clothing type, material and color, thus optimizing both laundry experience and laundry effect.
① Casarte Shuangziyunchang ( 卡 萨 帝 双 子 云 裳 ) platform launched the Casarte
Shuangziyunchang Washing Machine, a partitioned washing machine with the largest capacity in the
world (17kg) to meet the double demands of high-end users on both partitioned washing and caring and
ultra-large capacity. The 17kg capacity achieves one-time washing for large clothes, which also shortens
the washing and caring time; variable frequency motors using FPA direct drive technology and the
Shuangzixingzhi (双子星智) balanced system achieves a silent washing with double barrels, and WiFi
remote control provides real time understanding of the washing process. ② To solve the three problems
of general ripple washing machines caused by high speed, i.e., vibration, riveted inner barrel fracture and
abnormal flange wearing sound, the Company introduced the Vision Series ripple washing machine,
which adopted a direct drive variable frequency and double-power cleaning-free technology with a
speed of 1,000 rpm, representing an increase of 40% as compared to general ripple washing machines,
realizing faster washing, cleaner rinsing and drier spinning. With a unique rain curtain feeding mode,
centrifugal force technology, and 350 rpm low-speed dehydration technology, such washing machine
preserved clothing fibers and was used to wash precious cashmere and high-end clothes in a professional
manner.
In the first half of 2018, we continuously expanded our leadership in the domestic washing machine
market with a market share of 1.8 times that of the second brand. We continue to lead the share in the
high-end market. Casarte's share in the price segment of RMB8,000-10,000 is 45.8%, increased by 4.6
18 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
percentage points year-on-year and the Casarte drum washing machine share in the price segment above
RMB10,000 is 73.8%, increased by more than 6 percentage points.
5. Water heater business.
Based on customer demands on safety, health and intelligence of bath, the Company introduced a
brand-new generation of water solution including “safety gas water heater, instant heating electricity
guard water heater and the future whole-house integrated smart water solution”.
Gas water heater. Casarte self-purification combustion series gas water heater realized triple
purification through safety technology of actively eliminating carbon monoxide; precisely-controlled
constant temperature technology realized a 10s top speed constant temperature which doubled the
constant temperature speed. In the first half of 2018, the share of gas water heaters increased by 1.6
percentage points to 9.2%.
Electric water heater. The Company expanded its leading advantages through variable frequency
instant heating washing technology and clean water washing 3.0 technology. ① Jingxiang（净享）
PLUS9 series products adopts a unique dual drive submersible heating tube, 3D instant heating energy
focusing ring, patented advection thermal power system and variable frequency technology to solve the
difficulty of long waiting time. Scale, residual chlorine, impurities and bacteria in water affecting water
quality were addressed through double-effect scale inhibition and level-III purification technology, thus
providing bathing with clean water, where the scale-inhibition rate was 83.4% and the largest residual
chlorine removal rate was 99.5%. ② Aiming at the difficulty of purchasing a complete set of water
household appliances and lack of standard size, the Casarte Tianmu（天沐）products were launched,
including a self-embedded electric water heater, hot water purifier and bacteriostatic water softener. In
the first half of 2018, high-end electric water heaters resulted in a significant increase of 62% in the
RMB4000+ segment.
Air energy water heater. ① Aiming at household users, we launched “intelligent control
technology for full condition（全工况智能控制技术）”, where the best frequency was matched
automatically according to the ambient temperature to achieve the best operation status. Hot water
outflow quantity of Haier Tianmu POWER with such technology increased by 60% compared to the
general heat pump, thus satisfying the water use demands in large-sized apartment. ② Aiming at the
fact that it was difficult to satisfy the industrial demand of high-temperature water use and large water
yield because the heating water temperature of commercial heat pump water heaters usually ranges from
60℃ to 70℃, the Company introduced Haier Tianchi (海尔天炽) series products, which achieve an
industry leading 90℃ high-temperature for effluent water and could be used even if the air temperature
is lowered to -25℃, and its coefficient of performance (COP) in -20℃ is still as high as 2.1. According
to online data, both overall sales volume and value of Haier air energy household heat pumps ranked 1st
in the industry in the first half of 2018, being 7 times the industry growth.
19 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Solar water heater: Traditional flat solar water heaters have low efficiency on cloudy and rainy
days and only electric auxiliary water heater with low-efficiency heating can be used at night. Therefore
the Company introduced an all-round fast heating technology, which can comprehensively absorb
energy from sunshine, air or rain without being affected by weather, and achieves a heating speed of 2.5
times that of traditional products. The COP reaches 4.8, saving 80% power compared to the traditional
heater. In this way, the Company provided users with a more energy-saving 24h hot water solution.
6. Kitchen appliance business.
We integrated FPA and GEA global leading technology platforms to accelerate the launch process
of leading products and promote innovation of each product platform and to achieve a high-end
complete intelligent kitchen solution for users. In the first half of 2018, under the negative growth of the
kitchen appliance industry, we realized a revenue growth of 30% (excluding GEA) compared with the
corresponding period of last year, while Casarte kitchen appliances recorded an increase of 215% as
compared with the corresponding period of last year.
Gas stoves. ① To solve a safety problem that may be caused by pot burnout while forgetting to
turn off the gas, the Company introduced dry burning-resistant gas stoves. The product turned off the gas
after pot bottom burnout for 1 minute through intelligent NTC active heat source tracing technology;
double-head 188-minute timing function and oil temperature control technology helped users to easily
control cooking time and temperature. ② Because of China’s new two child policy, the Company
introduced special cooking utensils for baby food and line-styled three-head cooking utensils, to solve
the problem that there was no stove available for baby food.
Ovens. Casarte steam energy oven launched with three core technologies including Vacuum Vent
FPA cloud humidity control technology, Active Heat variable frequency and uniform temperature
technology, and steam energy surrounding system to realize ±1℃ accurate temperature control and
improve preservation of food flavor and moisture.
Range hoods. To address lampblack diffusion, the Company introduced an air curtain 8°range
hood. Such product formed an air curtain isolation between people and the range hood through rotary
lampblack capture system to avoid lampblack diffusion; by integrating FPA resources, a direct drive
motor system was matched and designed to realize operation with low noise and low energy
consumption; to address the Chinese cooking environment, a DC variable frequency control system was
optimized to realize 720 Pa air pressure and satisfy the demands of users in high-rise buildings.
Disinfection cabinets. Addressing the demands of infant & mom users, the Company developed
the light-wave Pasteur infant & mom disinfection cabinet to disinfect tableware such as feeding bottle
and nipple used by infants, thus enabling healthy eating for children. Such product became the only
disinfection cabinet passing the infant & mom evaluation by CHEARI in the industry.
20 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
II. China: Focusing on the front-line channel competitiveness, the Company deepened the
retail-oriented reform and enhanced its leading advantages over brand, network and mode.
The Company made significant achievements in its implementation “from product selling to
scheme selling, from contact to conversion, from branch to contact, from price to value”. The Company
maintained an increase of 20% for seven consecutive quarters since the fourth quarter of 2016 and its
market share of whole line products kept increasing and ranked top in the industry. Revenue of
refrigerators, washing machines, air conditioners, water heaters and kitchen appliances in the domestic
market in the first half of the year increased by 18.3%, 21.5%, 27.2%, 18.2% and 22.4% year-on-year,
respectively.
Transformation from product selling to scheme selling. The Company accelerated the
implementation of smart integrated household experience store in front-end channels including home
decoration materials and tooling works, and created a complete set of “one-stop, all-scenes, customized”
smart home solution through complete design, sales and service offerings. In the first half of 2018, over
2,000 stores were constructed in the whole network. ① Complete design: Haier cloud design platform
has the capability to design customized solutions for more than 20,000 model rooms with one click, and
the on-site 3D/VR experience made it possible for users to visualize the design. ② Complete sales:
transformation from single product selling to complete solution continues and traditional products
displays were transformed into complete scene experience and traditional single product shopping guide
was replaced with a complete household appliance consultant. ③ Complete service: network system
and human resource system with complete service were established, and the service capability of
pre-sale design + post-design installation was constructed to realize integrated service from design,
delivery, commissioning, to the extension of warranty and replacement.
Transformation from branch to contact, and from transaction to interaction. Confronted with
the daily integration of online and offline and the diversification of retail contacts, the Company
expanded retail contacts through various channels, and planed different product combinations and
adopted different training modes. This has increased the quantity of contacts and expanded product
visibility. The continuous communication between contacts and users achieves a stronger interaction.
The Company mastered feedback on products in a continuous and dynamic manner, and accelerated
product iteration to realize the transformation from users to lifetime users. For example, by introducing
the value of contact, social community and integrity platform and taking ‘1 brand, 1 website, and 1
ecology platform’ as breakthrough point, Shunguang Platform (顺 逛 平 台 ) cumulatively achieved
1.25 million network contacts from household appliance to home decoration to home ecosystem in the
first half year of 2018, of which 20,000 were offline O+O experience stores, 240,000 smart cloud shops
to community and to village, and 1 million were WeChat shops. The Company introduced 41 products
for the first time. In the first half of 2018, the large Shunguang platform realized a trading value of RMB
6.87 billion, representing an increase of 66.5% as compared to the corresponding period of last year.
21 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Enhancement of quality of contacts through various measures: ① KA channel: the super store
model was built, channel experience was upgraded, and high-end structure ratio was enhanced; ②
Exclusive store channel: the Company accelerated the network construction of blank counties and
enhanced the competitiveness of weak counties. The competitiveness of village and town network was
enhanced by conveying the objectives, resources and services to towns through Jushanghui (巨 商 汇 )
and Yilihuo (易 理 货 ) to open up retail outlets. ③ Comprehensive store channel: the Company
enhanced customer profitability by maintaining the top position, the largest share and the construction of
a special Casarte hall. ④ E-commerce channel: the Company improved its operation capability and
enhanced proportion of high-end products through differentiated new products. In the first half of 2018,
E-commerce revenue recorded an increase of over 40%.
Transformation from contact to conversion. The Company achieved enhanced use interaction
through activities at stores including free air wash of high-end clothes and half-cutting foods in
refrigerators, creating a buying atmosphere that involved emotions in a social community and achieving
positive feedback.
Transformation from price to value. Market competitiveness was improved through
differentiated products and technologies. For example, Casarte was gradually recognized by the market
and accelerated its high growth by constantly launching high-end classic products and strengthening
services for the high-end community. Our revenue increased by 52% in the first half of 2018, with an
increase of 54% in the second quarter. Our market share in the high-end market in China was far ahead,
accounting for 39.2% of RMB10,000 share for refrigerators and 74% of RMB10,000 share for washing
machines. Thus, our position in the industry was consolidated as Top1 high-end household appliance
brand in China.
III. Overseas market: With the goal of localized branding and leadership, we continued to push
ahead with the ‘triple strategy’ of “manufacturing, marketing and R&D”. We focused on
competitiveness in channels, and promoted the transformation to high-end brands.
1. North America Market: Continued implementation of Individual and Goal Combination
Management system, and delivered strong growth in a soft industry.
US home appliance shipments remained flat in the first half of 2018, and declined 5% in the second
quarter. With 11% growth in USD sales in 1H2018, GEA achieved exceptional performance and far
outpaced the industry growth.
Per data from The Stevenson Company, a third-party institution, GEA has grown its share in
1H2018.
During the reporting period, GEA continued to implement the Individual and Goal Combination
business model, establish end-to-end collaboration operating system, adhere to the goal of becoming
industry leader, improve response time to customers and be recognized. It also increased interaction with
users and customers, promoted national marketing campaigns as well as customer-specific or
22 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
region-specific marketing campaigns to improve GEA brand awareness. Launch of leading products
helped close product gaps, including brand new 27-inch Top Load Laundry, Front Control
Free-Standing range, Door-in-Door Refrigerator, and Value French Door Refrigerator.
Continued efforts to promote global synergies: ① Procurement Synergy. Building global big data
system, focused on exploration and execution of 16 design optimization and synergy opportunities with
high priority. ② Supply Chain Synergy. Promoted best practice sharing of leading technologies and
processes across the world through the global supply chain manufacturing platform, and utilizing Haier’s
global scale, industry experience and organizational talent. ③ Product Synergy. Filled product gaps in
GEA’s portfolio, and achieved sustained leading position, by utilizing Haier’s leading product platform
and integrating resources to develop products that meet US consumer needs. ④ Sales Synergy.
Enriched product offerings to GEA China business: 60+ SKUs within 5 series had passed GEA safety
review and qualified for China 3C Certification; 20+ SKUs were newly planned to strengthen product
portfolio of contract channel. In total, 11 GEA branded experience stores were opened in China.
2. European market: Laid the foundation for continuous business growth through the launch of
leading products, marketing and expansion of channels, as well as localization of supply chain. A
growth of 22% was recorded in the first half of 2018.
(1) A leader in the launch of products. ① Launched Cube series refrigerator, 60 wide series
drawer-type refrigerator to meet the demand of users for exquisite fashion appearance and large freezer
space; full space fresh-keeping refrigerator providing users with scientific storage solutions for storing
dried fruits and frozen meat. ② On the European market, the Hercules air-cooled magnetic levitation
water machine unit made its debut, while products were upgraded to internet appliances for
interconnection through the E+ cloud service platform, the first of its kind in the industry.
(2) Marketing and expansion of channels. Cooperated with core customers to invest in marketing
resources to promote Haier’s transformation to a high-end brand, and enhanced the harmony of in-store
display: invested in construction of model stores, built a system of direct sales staff, and enhanced
display image. For example, cooperation with the largest household appliance channel in the UK to
achieve store training of multi-door refrigerators; made breakthrough in the D channel cooperation in the
French market, making Haier the only brand equipped with direct sales staff in the D channel. Through
the launch of highly-recognized channels, such as the Shanghai Home Expo, the Italian MCE Show and
other official press conferences, the interaction with high-end customers was enhanced, providing
opportunity for gaining deeper insight into the global industrial layout and capability of innovative
products of Haier.
(3) Construction of localized supply chain. The Russian refrigerator factory was running at full
capacity in the first half of 2018. The factory delivered an output of 100,000 units, an increase of 46%
over the same period of last year, with production efficiency increasing by 25%. The factory took an
23 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
active approach to promote the localization of materials and reduce the exchange rate risk of the ruble
while improving the gross profit. By the first half of the year, 68% of the materials had been procured
locally. On May 28, the groundbreaking ceremony for the Haier Russian Industrial Park and washing
machine factory was held in Cherne, Republic of Tatarstan, Russia. The Haier washing machine factory
was the first European factory established by a player in the washing machine industry from China,
promoting localization of Haier’s “trinity” model in Russia to a new stage. Through such initiative,
Haier will be capable of providing consumers in Russia and Europe with products based on local design
and local manufacturing to improve the response speed of the local market.
3. South Asian market: Overall income in the first half of 2018 increased by 28% and leading the
industry.
(1) Pakistan. The overall share of Haier brand reached 28%, ranking first in the industry, which
was 1.5 times of the runner-up. ① Leading Products: We launched a full range of portfolio covering a
number of efficient, healthy, intelligent and fashionable products, such as cleaning-free air-conditioner,
UPS uninterrupted refrigeration series air-conditioner, “ONE TOUCH” automatic washing machine to
drive the industrial growth. As a result, revenue from air conditioners increased by 43% and revenue
from washing machines increased by 27.5%. ② Branding leadership: Promoted online and offline
interaction to create a high-end brand image. In the online channel, intelligent leadership was used as a
communication point, while the standardization of one thousand stores in one hundred cities was
promoted through the offline channel. Standardized display, image and user shopping experience was
created and made breakthrough in the establishment of high-end image stores, and opened 5 high-end
flagship stores. ③ Creation of channels: transformed the policy-oriented commodity-stocking system
to retail mechanism based on the iterative upgrading of user experience. Differentiated various type of
networks and ensured a balanced development based on the Company’s strategy and product line
resources; strengthened the construction of channels, and changed the mode from paid by customers to
paid by users, with a view to promote the transformation of retail business in a comprehensive manner.
(2) India. ① Leading Products: promoted the growth of mid- and high-end products and achieved
leading position in the industry with top products, such as BM refrigerator, kitchen appliances and
refrigerator, partitioned washing & variable frequency direct drive washing machine and intelligent
air-conditioner. ② Market network: promoted retail transformation, regulated channel resources, while
realizing horizontal expansion of network and vertical strengthening of stickiness through second sales
and service. Focused on follow-up retail and display and enhanced competitiveness of terminals through
training of direct sales staff and standardization of terminal display. Strengthened and standardized the
intensity of regular training and the scheduling of training for regional marketing staff and direct sales
staff, while enhancing the participation of the product lines, and conducted real-time assessment and
publication. ③ Branding and marketing: Secured the relay baton of the India and Sri Lanka cricket tour
for significantly enhanced brand awareness; leveraging the unique feature of differentiated products, we
24 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
had established a differentiated high-end product image by securing the TVC of BM&SCT during the
IPL (Indian Premier League) event consecutively in April - May. ④ After-sales: We further expanded
the direct and franchise service network, with over 450 full service networks; carried out training and
certification of service engineers, ensured service capability in terms of breadth and depth as well as
special work such as optimization and upgrading of internal standard system. A work order audit will be
carried out to improve the service system and cost optimization. ⑤ Supply chain: Pune Industrial Park
achieved the goal of production and sales budget in the first half of the year. For refrigerator products, a
total of 850,000 units were produced and delivered in the first half of the year, representing a
year-on-year growth of 200%. For air-conditioners and washing machines, the budgeted production set
at the beginning of the year was achieved. The gradual improvement of the supply chain system has
realized the order production basing on the market budget target, ensuring the timeliness and response
speed of the terminal sales.
4. Japanese market.
Community washing has achieved a win-win situation in the eco-sphere, cross-border cooperation
and overseas model replication continues to expand. ① Branding: Actively implemented
multi-dimensional dual marketing activities online and offline to enhance brand awareness. ② Product
strategy: We continued to transform high-end products and increase the proportion of large-volume and
high-value products. The launch of the SV series of AQUA refrigerators with brand-new VBL
appearance and the import of new products into residential washing machines continued to expand the
portfolio of high-end products, such as machines integrating washing and drying functions and models
with large capacity. ③ Channel strategy: focused on the development of mass merchandiser channels,
and particularly strengthened cooperation with KS and BIC; for AQUA commercial washing,
cross-industry cooperation was promoted, and cooperation with the Family Mart was progressing
smoothly; developed introduction plan for Thailand and South Korea for the commercial washing
platform of Internet of Things.
5. Southeast Asian market.
With the continued implementation of branding leadership strategy and Individual and Goal
Combination business model, the Thailand and Malaysia market delivered outstanding performance,
recording growth of 26% and 70%, respectively. ① Product strategy: We pushed ahead with the
parallel combination of small and micro segments with headquarter resources, while introducing the full
range of high-end differentiated products, thus realizing the simultaneous launch of leading product
platforms and implementing high-end differentiated transformation. ② Channel strategy: We promoted
the transformation of channel retail and increased the layout of networks. In the stores, we enhanced the
retail performance by improving product image and sample materialization, strengthening training on
knowledge of products, and by enhancing the channel experience, improving the efficiency of network
and enhancing brand image; besides, we actively promoted in-depth cooperation with large channels of
25 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
chain stores. ③ Supply chain: The Thailand factory promoted product iteration and produced new
refrigerator products with new glass door appearance; average cost reduction of 3% for key models was
achieved; single-hour production of the refrigerator factory increased by 17%.
6. Latin American market.
To strengthen competitiveness of products and service through the Individual and Goal
Combination model and small & micro-mechanism. ① R&D collaboration: We promoted collaboration
with MABE, complete the development work of new products to over 200 which includes refrigerator,
freezer, wash machine and air-conditioner, and realized the first shipment of more than 100 models for
the first order. ② Market synergy: A new MABE product portfolio to be launched in the Latin
American market in the year 2019.
7. Middle East and African market.
Facing the negative impact of changes in the political and economic environment of the market, we
took a proactive approach to cope with the situation through the adjustment to products, as well as
expansion of new business and new channels. In terms of products: In Saudi Arabia, we continued to
promote high-end products such as door open/T-door refrigerators, large-capacity washing machines,
and variable-frequency intelligent air-conditioners; in Israel, the T-door series refrigerators achieved
rapid growth and maintained third place in terms of share of the channel market; in Nigeria, we
promoted the transformation of high-end products.
IV. Smart home life platform: iterative platform technology solution with a focus on application
for AI artificial intelligence scenes; Focusing on Haier’s competitiveness in smart home market to
create the “4+7+N” full scene solution.
To empower the ecology with platform, drive innovation with technologies. We released a
strategy for upgrading of the U+ smart life platform to U+ smart life platform X.0 and promoted the
implementation of "1+2+3N", namely a smart home operating system UHomeOS and "IOT+AI" dual
engine to serve the three customizations, which are "customized interaction, scenarios and services ".
During the reporting period, UHomeOS has passed the first phase of expert reviews as the only smart
home operating system included in the 13th Five-Year Project for Core, High and Fundamental
Technologies of the Ministry of Industry and Information Technology, which consolidated and
compacted the advantages of IoT capability and product interconnection experience, network binding
experience, and scene interaction experience.
To emphasize the way users interact and the value of solution delivered through the portal.
With the insight into the trend of smart home human-computer interaction, completed the layout for
distributed multi-modal user interaction portal, and form a variety of user interaction portals such as
APP, voice and screen network. In the scenes of natural voice interaction, especially the smart home
vertical scene, completed the deployment for key interaction technology of voice and semantics, thus
providing strong support for future products and solutions. With the continued growth of data related to
26 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
user interaction behaviors, which amounted to more than 500 billion, the value of big data began to
materialize in various applications, such as food recommendation, water heater energy saving, energy
management for air-conditioners.
As part of its efforts in promoting smart homes on a large scale, the Company released the
“4+7+N” full-scene solution, which provides a customizable one-stop packaged solution, covering the
four physical areas of living, i.e. living room, kitchen, bedroom and bathroom, and seven major
solutions including food, water, air, washing and care, security, entertainment, etc., and provides support
for personalized scene-based customization. Smart home experience store provides users with offline
channels for the experience and sales of products; meanwhile, greater efforts were made to expand the
front-end installation market, including major customers from real estate industry, major customers from
hotel industry, etc., thus extending our competitiveness from product to the channel as a whole; We have
established the capabilities for delivery of a packaged solution – “packaged experience, design, sales and
services”. Through these initiatives, we have promoted the implementation of smart home solutions for
the user side in an effective manner. In the first half of the year, The activation rate of smart appliance
increased by 32.8%, packaged solution increased by 134% year-on -year, the revenue of Internet of
Things amounted to RMB1.26 billion, representing a increase of 13 times, the number of smart homes
users increased by 30.4% year-on -year.
Promote the construction of ecological circles such as the Internet of Clothes and the Internet of
Food. For example, Haier’s Internet of Clothing met the needs of users throughout the process of
washing, purchasing, wearing, care and changing and formed the Internet of Clothing ecological circle
based on the RFID chip technology for Internet of Things and by leveraging on the medium of clothing,
as well as building parallel collaboration with other resources such as clothing brands, clothing
associations and detergent brands. Users share with ecological partners through the cloud platform as
they purchase products with the help of RFID smart solutions and by using the smart home appliances
such as Haier washing machines and clothing care cabinets to share the data with the eco-partners
through the cloud platform, while the enterprises in the eco-sphere providing solutions based on the
dynamic needs of users. The Internet of Clothing ecology has attracted various manufacturers including
Blue Moon, HLA, Mercury Household Textiles, WENSLI and EP with more than 1,800 ecological
resources on the platform. In terms of the establishment of standards, in May 2018, GS1 China selected
Haier’s Internet of Clothing Alliance to jointly develop national standards for clothing commodity
coding rules, and jointly promoted the application of the standard in the apparel industry. The
application for the clothing association standard submitted by the Company was also accepted by IEEE,
the authoritative international standardization organization. Actively promote the globalization of the
Internet of Clothing brand, from China to Japan, the United States, South Korea, Thailand and other
countries. In the first half of the year, the ecological income of the Internet of Clothing increased by 15
times year-on-year.
The Internet of Food takes smart refrigerator, smart oven and smart ventilator and stove as the
interaction portals to combine such data as eating habits, content of preferences, and habits generated
27 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
during the interactive process of smart kitchen scenes with the individual exercise data and health data
in order to provide users with value-added services, including physical examination surveillance ,smart
cooking, safe food purchases, monitoring pesticide residues in food ingredients, smart storage, and
nutrition program formulation. The company took the lead in establishing the Internet of Food Alliance
and setting up relevant standards, market share of the Company’s smart refrigerator is
47.33%,representing 2.04 times of the runer-up; the Internet of Food collect seven modules with
resources coming from 400 parties, the ecological income increased by 20 times year-on-year.
V. COSMOPlat Industrial Internet Platform empowers enterprises to transform from mass
manufacturing to mass customization through reshaping the industrial value chain and ecological
chain and building the new win-win industrial ecosystem engaging enterprises, users and
resources.
Guided by the principle of “becoming a globally leading world-class branded platform in the
industrial IOT ecosystem”, COSMOPlat is dedicated to enhance the production system. In the first half
of 2018, it became the “Demonstration Platform for Integration Application of Industrial Internet-based
Intelligent Manufacturing” and was shortlisted for the “Industrial Internet-based Innovation and
Development Project 2018”. International standard organizations IEEE/ISO approved Haier to lead the
development of international standards for the model of mass customization. This was the first time that
a Chinese company took a leading role in developing international standards in relation to models of
manufacturing. In the first half of the year, COSMOPlat recorded revenue of RMB 2.783 billion.
To date, 10 interconnected factories have been built within the Company. Iteration of product and
user experience and the upgrade of users to lifetime users were achieved through the participation of
users, R&D and supplier resources in the full life cycle of products. The non-stock rate of products
reached 71%.
In terms of external services, COSMOPlat provided interconnection and interoperability with seven
modules through the ecosystem, offering the IoT ecology in 15 industries such as ,the the Internet of
Clothing , Internet of Food, agriculture, and RV, so as to provide customized social services of
large-scale and promote enterprise transformation and upgrading. For example, the agricultural
sub-platform, the model of Jinxiang garlic was created, realizing one-click customization of a healthy
lifestyle online, while meeting the needs of users for iconic agricultural products from the place of origin
through the offline channel; For the automobile platform, the first intelligent manufacturing
interconnection plant in the auto industry was built for Compaks （康派斯）, with a view to solving the
problem of fragmentation of parts procurement in the RV industry. In addition, the platform also
provides value-added services to other companies by taking advantage of its centralized procurement
system.
28 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
VI. Logistics service business.
In the first half of 2018, Gooday Logistics' business revenue maintained steady growth.
We continued to deepen the cooperation with major e-commerce platforms to provide high-quality
regional distribution and last-mile service for large-sized household appliances of Tmall and Jingdong
platforms. The share of Haier brand's Tmall order has maintained a high growth rate of 50%
year-on-year, while the public praise (DSR) reached 4.93, much higher than the industrial average of
4.86 and that of peers. During the 618 E-commerce Shopping Festival, the punctuality rate of Gooday
Logistics was as high as 99%, higher than the 97.5% level of the industry.
We continue to address the household market, and strive to provide Omni-channel logistics services
for household customers. Relying on good reputation and advantages in the field of large-sized
household appliances, the overall income of the household business increased by 11%. By further
deepening cooperation with the Green hand, an income of 18 million was achieved. At the same time,
we have further consolidated cooperation with major customers such as SLEEMON, DeRUCCI,
MANWAH and YALAN.
Gooday Logistics continuously strengthened the platform network and actively deployed intelligent
and automated warehouses to set a benchmark for the logistics industry of large-scale packages. At
present, the total warehouse area is 3.57 million square meters, of which 1.22 million square meters are
self-built warehouses and the proportion of self-built warehouses reaches 30%. In Hangzhou, the
intelligent unmanned warehouse for small and medium-sized packages is deployed to realize intelligent
management and the integration of warehouse and goods. Besides, the full scene visualization
management in the warehouse is realized through the panoramic scanning and visual and monitoring
equipment to accumulate experience for large-scale replication in the future. Smart warehouses are
expected to improve the efficiency of goods storage, sorting and delivery, reduce labor costs and
enhance the competitiveness of logistics in the field of intelligent warehouse management.
II. Development Plan for the Second Half of the Year
(I) Industry outlook
Domestic market: In the short-term, the demand for the refrigerator and washing machine industry
is relatively stable and the unit price increase brought by the product upgrading is the main growth
driver. The air-conditioning industry is facing a comparison with the high base in the second half of
2017. The impact of real estate control policies on real estate sales has suppressed the sales of front-end
products such as kitchen appliances, water heaters and air conditioners. In the long run, the quality
upgrade brought by consumers' longing for a better lifestyle will continue to promote the development of
the industry.
Global market: Uncertainty of global economic growth was exacerbated with the looming global
trade war. In particular, the accelerating decline in the export of emerging economies, depressed the
29 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
economic outlook. With US interest hikes, we may see increased instability of the global financial
markets, which may have adverse impacts on the global economy.
(II) Development plan for the second half of the year
In response to the challenges brought by the external environment, the Company will adhere to its
strategy of product leadership, retail transformation and globalized operations, and continue to enhance
our competitiveness, expand leadership in the refrigerator, washing machines and water heater industries,
while accelerating the pace of development of the air-conditioner industry and kitchen appliance
industry, and to realize growth in our household appliances business against the economic backdrop;
focus on the smart home business, continue to promote the business transformation of the Internet of
Things, while promoting the formation of ecological circles, the creation of ecological brands, and the
cultivation of ecological revenue.
Domestic market: (1) Improve the competitiveness of the network of contact points: ①
Continuously promote the number of contact points to ensure that all users’ needs are met and full
coverage of blank/weak areas is achieved; ② In terms of the quality of the contact points, the stores
were continued to upgrade through the upgrade certain stores to specialty stores. For small towns, from
wholesale-to-town to service-to-town, we achieved the goal-to-town, market stability, price transparency
and efficient operation of information tools. (2) Promote the rapid growth of the full set smart families:
we continued to improve the portfolio, promoted the sales and service of the full set of products and
targeted the front-end home improvement users through the construction of building materials and
household channel stores, thus changed from selling products to selling solutions.
Overseas market: Continue Haier’s focus on globalization for many years, adhering to the
advantages accumulated through its own brand and strategy of localization, while speeding up the
transformation of terminals across different regions, and increasing the proportion of high-end products
while enhancing profitability. With the guarantee of the mechanism of parallel betting and open system,
we will continue to promote the localization of Individual and Goal Combination model.
Smart Home Platform: We focused on the continuous improvement of market competitiveness
and user experience of Haier Smart Home Solutions and effectively promoted the orderly
implementation of U+ Smart Life X.0 strategy. Promoting the construction of the platform of Internet of
Things (IoT) integrating Internet of Food and the Internet of Clothing to realize the globalization of
eco-brands, internationalization of standards and the regionalization of ecological services, and
achieving the full platform of services from solutions to ecological services, while building up users,
data and capabilities of platform service.
COSMOPlat platform: Focusing on building an industrial ecosystem, we aim to drive the
construction of the platform's universal capability system through the construction of an industry-level
industrial Internet platform. ① Promote the output of relevant international standards; ② Internally,
we enhanced the ability of interconnection in the entire process and opened the ecosystem to promote
the replication of interconnected factories in global manufacturing bases; ③ Externally, gradually
30 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
addressing five industrial ecosystems such as clothing, RV, agriculture, molds and machinery promote
the transformation and upgrading of enterprises in the economy and creating a new industrial ecology.
(I) Analysis of principal business
1 Table of movement analysis on the related items in financial statement
Unit and Currency: RMB
Corresponding Change
Items Current period
period of last year (%)
Operating revenue 88,591,626,626.07 77,585,007,913.93 14.19
Operating cost 62,924,743,807.78 54,161,628,234.79 16.18
Sales expense 13,106,599,051.97 12,180,499,014.03 7.60
Administration expenses 5,951,531,296.20 5,393,556,967.87 10.35
Financial expenses 424,983,265.35 611,674,697.24 -30.52
Net cash flows generating from
5,368,385,954.02 8,434,402,658.46 -36.35
operating activities
Net cash flows generating from
-2,849,012,025.94 -2,377,591,031.60 -19.83
investing activities
Net cash flows generating from
-4,684,467,409.14 -503,568,975.15 -830.25
financing activities
Development expenses 431,905,938.29 966,051,333.81 -55.29
Interests of changes on fair value 36,661,921.50 412,063,845.15 -91.10
Investment income 867,458,988.96 653,842,714.35 32.67
Income from disposal of assets 5,668,073.53 -7,148,339.24 179.29
Other income 224,292,412.02 134,742,567.52 66.46
Non-operating income expense 48,392,538.09 77,391,457.25 -37.47
Analysis of the reasons for the changes in the cash flow statement indicators with large changes:
(1) The net cash flow from operating activities decreased by 36.4% as compared with the corresponding
period of last year, mainly due to the higher net cash flow and the larger base from operating activities
during the same period of last year; the net cash flow from operating activities in the current period
matches the profitability and achieves the goal;
(2) The net cash flow from financing activities decreased by 830.3% as compared with the
corresponding period of last year, mainly due to the decrease in new external borrowings in the current
period as compared with the corresponding period of last year.
2 Others
(1) Detailed explanation on the material changes in the composition of profit or resources of
profit of the Company
√ Applicable □ Not Applicable
Analysis of the reasons for the changes in the profit statement indicators with large changes:
(1) The financial expenses decreased by 30.5% as compared with the corresponding period of last year,
which was mainly attributable to the decrease in exchange losses during the current period as
compared with the corresponding period of last year;
(2) The income of changes in fair value decreased by 91.1% as compared with the corresponding period
of last year, which was mainly attributable to the influence of change in fair value of derivative financial
instruments such as future exchange;
(3) Investment income increased by 32.7% as compared with the corresponding period of last year,
which was mainly attributable to the increase in investment income from the disposal of financial assets
at fair value through profit or loss for the current period;
31 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(4) The profit and loss of asset disposal increased by 179.3% as compared with the corresponding period
of last year, which was mainly attributable to the higher disposal expenses of daily assets during the
corresponding period of last year;
(5) Other income increased by 66.5% as compared with the corresponding period of last year, which was
mainly due to the increase in government grants related to daily operations and included in current profit
or loss;
(6) Non-operating expenses decreased by 37.5% as compared with the corresponding period of last year,
which was mainly due to the scrapping of some fixed assets in the corresponding period of last year and
fewer occurrences for the period.
(2) Others
√ Applicable □ Not Applicable
Principle operating activities by products and regions
Unit and Currency: RMB0’000
Principle operating activities by products
Gross
Operating Operating
Gross profit
revenue cost
Operating Operating profit margin
By product increased/ increased/
revenue cost margin increased/
decreased decreased
(%) decreased
yoy (%) yoy (%)
yoy (%)
Air-conditioners 1,919,372.56 1,336,251.27 30.38 17.56 20.11 -1.48
Refrigerators 2,544,276.92 1,756,113.43 30.98 11.87 13.90 -1.23
Kitchen appliances 1,047,278.63 683,567.26 34.73 5.12 6.13 -0.62
Water heater 387,178.67 219,184.34 43.39 21.04 20.02 0.48
Washing machines 1,628,231.52 1,086,960.26 33.24 17.60 19.94 -1.30
Equipment
124,808.42 108,921.32 12.73 -16.50 -13.66 -2.88
components
Channel integrated
services business 1,182,019.42 1,086,269.36 8.10 22.11 21.19 0.69
and others
Principle operating activities by regions
Operating Operating Gross profit
Gross
revenue cost margin
Operating Operating profit
By region increased/de increased/ increased/dec
revenue cost margin
creased yoy decreased reased yoy
(%)
(%) yoy (%) (%)
Mainland China 5,272,148.08 3,589,477.61 31.92 24.46 23.22 0.68
Other
3,561,018.06 2,687,789.62 24.52 2.06 7.65 -3.92
countries/regions
Note: Due to the reclassification of certain logistics freight according to the new income standard, the
gross profit margin of the Company's refrigerators, washing machines, air conditioners and kitchen
32 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
appliances decreased year-on-year. After the restoration: ① The refrigerator (excluding GEA, the same
below) increased by 1 percentage point, washing machine increased by 1 percentage point, air
conditioning decreased by 1 percentage point, kitchen appliances increased by 0.3 percentage points,
water heater increased by 0.5 percentage points; ② the gross profit margin of GEA business increased
by 1.2 percentage points.
(II) Explanation of non-operating business leading to significant changes in profit
□Applicable √Not Applicable
(III) Analysis of assets and liabilities
√Applicable □Not Applicable
1. Assets and liabilities
Unit and Currency: RMB
Percentage
Percentage
of change in
Percentage of amount
amount from
of amount at at the end
the end of
Amount as at the the end of the Amount as at the of the
Items previous
end of the period period over end of last period previous
period to
total assets period over
current
(%) total assets
period
(%)
(%)
Derivative
40,947,728.30 0.03 20,681,695.50 0.01 97.99
financial assets
Accounts
16,906,190,691.77 10.74 12,448,004,833.06 8.22 35.81
receivables
Assets held for
1,233,866,625.56 0.78 0.00 100.00
sale
Construction
2,582,745,338.39 1.64 1,530,390,130.25 1.01 68.76
in progress
Development
431,905,938.29 0.27 966,051,333.81 0.64 -55.29
expenses
Derivative
financial 4,440,154.26 0.00 2,524,569.45 0.00 75.88
liabilities
Receipts in
3,485,578,719.92 2.21 5,833,552,815.05 3.85 -40.25
advance
Dividends
529,822,661.11 0.34 153,756,315.64 0.10 244.59
payable
Liabilities held
296,505,653.77 0.19 0.00 100.00
for sale
Deferred
income tax 162,602,680.85 0.10 279,114,620.35 0.18 -41.74
liabilities
Other
comprehensive 270,306,171.37 0.17 -36,363,809.96 -0.02 843.34
income
Other explanations
Analysis of the reasons for the changes in the balance sheet indicators with large changes:
33 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(1) Derivative financial assets increased by 98.0% as compared with the beginning of the year, which
was mainly due to the impact of changes in fair value of derivative financial instruments such as foreign
exchange contracts during the period;
(2) Accounts receivables increased by 35.8% as compared with the beginning of the year, which was
mainly due to the growth of business;
(3) Assets held for sale/ liabilities held for sale increased by 100% as compared with the beginning of
the year, which was mainly due to the Company plans to dispose 58.08% of the equity of Shengfeng
Logistics Group Co., Ltd. for business planning considerations;
(4) Construction in progress increased by 68.8% as compared with the beginning of the year, which was
mainly due to the Company expanded its industrial lines’ production capacity and upgraded its industrial
lines such as smart kitchens, air conditioners and refrigerators during the period;
(5) Development expenses increased by 55.3% as compared with the beginning of the year, which was
mainly due to the relevant development transferred to the intangible assets when it reaches the scheduled
usable status in the current period;
(6) Derivative financial liabilities increased by 75.9% as compared with the beginning of the year, which
was mainly due to the impact of changes in fair value of derivative financial instruments such as foreign
exchange contracts during the period;
(7) Advances from customers decreased by 40.3% as compared with the beginning of the year, which
was mainly due to the centralized take delivery of goods by customers during the middle of the year;
(8) Dividends payable increased by 244.6% as compared with the beginning of the year, which was
mainly due to the dividends payable by the Company's subsidiaries to minority shareholders;
(9) Deferred income tax liabilities decreased by 41.7% as compared with the beginning of the year,
which was mainly due to the decrease in the reserve of income tax of foreign companies due to the
actual overseas dividends distributed by the subsidiaries of the Company;
(10) Other comprehensive income increased by 843.3% as compared with the beginning of the year,
which was mainly due to the increase in the share of other comprehensive income that will be
reclassified into profit or loss and the change in foreign currency translation differences.
2. Restrictions on major assets at the end of reporting period
□Applicable √Not Applicable
(IV) Analysis on investment
1、 Overall analysis on external equity investment
√Applicable □ Not Applicable
During the reporting period, the external significant equity investment of the Company amounted to
RMB 1.906 billion.
Percentage Amount of
Investment
Major of the investmen
Name of Amount
operating equity Remark t
investees (RMB 100
activities interest of (RMB 100
million)
investees million)
34 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(%)
For details, please refer to the
Haier New Announcement on the Transfer of the
Zealand 100% Equity of Haier New Zealand
investment
Investment Investment Holding Company Limited by
holding, 100 19.06 0
Holding etc. Qingdao Haier Co., Ltd. and Connected
Company Transaction disclosed on 26 April 2018 as
Limited well as relevant announcement of the
Board.
Note: As of the date of disclosure of this periodic report, the above equity transfer has been completed.
(1) Significant equity investment
√Applicable □ Not Applicable
Please refer to the content in “1.Overall analysis on external equity investment” as set out above..
(2) Significant non-equity investment
□Applicable √Not Applicable
(3) Financial assets measured at fair value
√Applicable □ Not Applicable
Changes in
Current Investment
fair value
Abbreviation of Initial cost of Sources of purchase / sale income during
during
security investment funds during the the reporting
the reporting
reporting period period period
Bank of Communications
1,803,769.50 Own funds -544,219.66
(601328)
BAILIAN (600827) 154,770.00 Own funds -110,148.54
Eastsoft (300183) 18,713,562.84 Own funds -2,558,067.44
Others 1,284,739,184.31 Own funds -10,334.91 75,454,104.49 153,067,058.21
Forward foreign exchange
156,598,679.71 17,520,754.03
contract (Note)
Total 1,305,411,286.65 -10,334.91 232,052,784.20 167,375,376.60
Note: As of 30 June 2018, the aggregate balance of foreign exchange derivative transaction
amounted to approximately US$3.6 billion.
(V) Material Assets and Equity Disposal
√Applicable □ Not Applicable
During the reporting period, the Company transferred its 22% of equity interests in Haier Medical
and Laboratory Products Co., Ltd. to Haier BioMedical Holdings Co., Ltd.(青岛海尔生物医疗控股有
限公司) with a consideration of RMB505 million. For details, please refer to the Announcement on the
35 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Transfer of the 22% Equity of Haier Medical and Laboratory Products Co., Ltd.(青岛海尔特种电器有
限公司) by Qingdao Haier Co., Ltd. and Connected Transaction disclosed on 22 June 2018 (No.
L2018-037).
(VI) Analysis on Major Controlling Companies
√Applicable □ Not Applicable
Unit: RMB0’000
Total Net
Name of company Scope of business Net Profit
assets assets
Production and
Haier Electronics
sale of household 4,390,206 2,436,017 179,361
Group Co., Ltd.
appliances
Note: The financial data of Haier Electronics Group Co., Ltd. is determined in accordance with the
accounting standards in the PRC and the accounting policies of the Company.
(VII) Information on the Main Structure Controlled by the Company
□Applicable √Not Applicable
II.Other disclosures
(I) Warning and explanation for any prediction of accumulated net loss from the beginning of the
year to the end of the next reporting period or substantial change in accumulated net profit as
compare to the same period last year
□Applicable √Not Applicable
(II) Potential risks
√Applicable □ Not Applicable
1. Risk of soft demand due to a slowdown in macro-economic growth. As white home appliance
products fall into the category of durable consumer electronic products, the income level and expectation
on future income growth will have an effect on the purchase of white goods. In the event of a slowdown
in the macro economic growth, which will decrease the purchasing power of consumers, growth of the
industry will be adversely affected. In addition, uncertainties from the real estate market will have some
negative effect on market demand, which will in turn have some indirect effect on demand for home
appliance products.
2. Price war risk caused by intensifying industry competition. In a long run, the market
concentration of white home appliance industry continues to rise, but in short-term, due to the imbalance
between supply and demand caused by high capacity generated from industry expansion and decreasing
of industry demand in recent years, the industry inventory amount rises. Under the background of
product homogeneity, price war will become a short term approach to increase its market share.
36 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
3. Risk of rise in cost. Bulk raw materials such as copper, aluminum, steel plate, and oil-related
plastic particles and foam materials account for a large proportion in the cost of white goods production.
The Company will endure more cost pressure if price of raw material continues to rise.
4. Operating risk in oversea market. The Company has set up a dozen of production base, research
and development center and marketing center in a number of countries around the world, leading to the
continuous rise of oversea business. As the oversea market is more subject to the impact of local
political and economic situation, legal system and supervisory system, significant changes of such
factors would pose risks to the Company’s operation locally.
5. Risk of fluctuation in foreign currency exchange rate. Significant fluctuations in exchange rates
may not only have an adverse impact on the Company's exports, but may also result in an exchange loss
and an increase financial costs.
(III) Other disclosures
□Applicable √Not Applicable
37 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION V SIGNIFICANT EVENTS
I. Introduction to the General Meeting of shareholders
Index for details of websites designated for Date of
Meeting Date
publishing resolutions disclosure
For details, please refer to the Announcement
on Resolutions Passed at the 2018 First
First Extraordinary Extraordinary General Meeting of Qingdao
General Meeting 27 April 2018 Haier Co., Ltd. (L2018-023) published by the 28 April 2018
in 2018 Company on the website of Shanghai Stock
Exchange and the four major securities
newspapers.
For details, please refer to the Announcement
on Resolutions Passed at the 2017 Annual
2017 Annual General Meeting of Qingdao Haier Co., Ltd.
18 May 2018 19 May 2018
General Meeting (L2018-028) published by the Company on the
website of Shanghai Stock Exchange and the
four major securities newspapers.
Explanation of Shareholders’ general meeting
√Applicable □Not Applicable
（1）The 2018 First Extraordinary General Meeting of the Company (the “2018 first EGM”) was
held by way of on-site voting and network voting by poll at Room A108, Haier University, Haier
Information Park, No.1 Haier Road, Qingdao, the PRC, in the afternoon on 27 April 2018. The
Company’s share capital in aggregate amounted to 6,097,402,727 shares. 96 shareholders and proxies
attended the meeting, holding a total of 3,502,250,459 shares, representing 57.44% of the total number
of shares of the Company with voting rights. The Directors, supervisors and senior management of the
Company as well as the lawyers engaged by the Company also attended the meeting. The 2018 first
EGM was convened by the Board of the Company. Vice Chairman Ms. Tan Lixia, presided over the
2018 first EGM. The Company had 9 Directors, of whom 2 Director attended the 2018 first EGM
(Directors Liang Haishan , Wu Changqi, Peng Jianfeng, Zhou Hongbo, Liu Haifeng David, Wu Cheng
and Dai Deming were unable to attend the 2018 first EGM due to personal engagement); the Company
had 3 supervisors, 2 of whom attended the 2018 first EGM (supervisor Wang Yuqing was unable to
attend the 2018 first EGM due to personal engagement). The secretary to the Board of the Company
attended the 2018 first EGM and other members of senior management of the Company were invited to
attend the 2018 first EGM.
（2）The 2017 Annual General Meeting of the Company (the “2017 AGM”) was held by way of
on-site voting and network voting by poll at Room A108, Haier University, Haier Information Park,
No.1 Haier Road, Qingdao, the PRC, in the afternoon on 18 May 2018. The Company’s share capital in
aggregate amounted to 6,097,630,727 shares. 73 shareholders and proxies attended the meeting, holding
a total of 3,485,550,588 shares, representing 57.16% of the total number of shares of the Company with
voting rights. The Directors, supervisors and senior management of the Company as well as the lawyers
engaged by the Company also attended the meeting. The 2017 AGM was convened by the Board of the
38 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Company. Chairman Mr. Liang Haishan, presided over the 2017 AGM. The Company had 9 Directors,
of whom 2 Director attended the 2017 AGM (Directors Tan Lixia , Wu Changqi, Peng Jianfeng, Zhou
Hongbo, Liu Haifeng David, Wu Cheng and Shi Tiantao were unable to attend the 2017 AGM due to
personal engagement); the Company had 3 supervisors, all of whom attended the 2017 AGM. The
secretary to the Board of the Company attended the 2017 AGM and other members of senior
management of the Company were invited to attend the 2017 AGM.
II. Proposal of Profit Distribution or Capitalization of Capital Reserve
(I) Proposal for Interim Profit Distribution and proposal for Capitalization of Capital Reserve
Whether distributed or converted No
39 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
III.Performance on Undertakings
(I) The undertakings made by the ultimate controller, shareholders, related parties, purchasers and the Company and others during or up to the
reporting period
√Applicable □Not applicable
Wheth Whether
er it it is
has a performe
Backgrou Covenante Time and
Type Content deadlin d in a
nd r term
e for timely
perfor and strict
mance way
During the period from September 2006 to May 2007, the Company issued shares to Haier
Group Corporation (“Haier Group”) to purchase the controlling equity in its four subsidiaries,
namely Qingdao Haier Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电子有限公司),
Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司）, Wuhan Haier
Undertaki Eliminate Electronics Co., Ltd. (武汉海尔电器股份有限公司), Guizhou Haier Electronics Co., Ltd. (贵
ng the right Haier 州海尔电器有限公司). With regard to the land and property required in the operation of 27
related to defects in Group Qingdao Haier Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电子有限公司) , Hefei September YES YES
significant land Corporatio Haier Air-conditioning Co., Limited (合肥海尔空调器有限公司), Wuhan Haier Electronics 2006, long term
reorganiza property n Co., Ltd. (武汉海尔电器股份有限公司) (the “Covenantees”), Haier Group made an
tion and etc. undertaking (the “2006 Undertaking”). According to the content of 2006 Undertaking and
current condition of each Covenantee, Haier Group will constantly assure that Covenantees
will lease the land and property owned by Haier Group for free. Haier Group will make
compensation in the event that the Covenantees suffer loss due to the unavailability of such
land and property.
Haier Group Corporation undertakes that it will assure Qingdao Haier and its
subsidiaries of the constant, stable and unobstructed use of the leased property. In
Eliminate the event that Qingdao Haier or any of its subsidiaries suffers any economic loss
Undertaki
the right Haier due to the fact that leased property has no relevant ownership certificate, Haier
ng related
defects in Group Group Corporation will make compensation to impaired party in a timely and 24 December
to YES YES
land Corporatio sufficient way and take all reasonable and practicable measures to support the 2013, long term
refinancin
property n impaired party to recover to normal operation before the occurrence of loss.
g
and ect Upon the expiration of relevant leasing period, Haier Group Corporation will
grant or take practicable measures to assure Qingdao Haier and its subsidiaries of
priority to continue to lease the property at a price not higher than the rent in
40 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
comparable market at that time. Haier Group Corporation will assure Qingdao
Haier and its subsidiaries of the constant, stable, free and unobstructed use of
self-built property and land of the Group. In the event that Qingdao Haier or any
of its subsidiaries fails to continue to use self-built property according to its own
will or in original way due to the fact that self-built property has no relevant
ownership certificate, Haier Group Corporation will take all reasonable and
practicable measures to eliminate obstruction and impact, or will support
Qingdao Haier or its affected subsidiary to obtain alternative property as soon as
possible, if Haier Group Corporation anticipates it is unable to cope with or
eliminate the external obstruction and impact with its reasonable effort. For
details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the
Formation, Current Situation of the Defective Property, the Influence on
Operation of Issuer Caused by Uncertainty of Ownership, Solution for the Defect
and Guarantee Measures (L 2014-005) published by the Company on the four
major securities newspapers and the website of Shanghai Stock Exchange on 29
March 2014.
The Company undertakes that it will eliminate the property defects of the
Company and main subsidiaries within five years with reasonable business effort
Eliminate
since 24 December 2013, so as to achieve the legality and compliance of the
the right 24
Qingdao Company and main subsidiaries in terms of land and property. For details, please
defects in December
Haier Co., refer to the Announcement of Qingdao Haier Co., Ltd. on the Formation, Current YES YES
land 2013, five
Ltd. Situation of the Defective Property, the Influence on Operation of Issuer Caused
property years
by Uncertainty of Ownership, Solution for the Defect and Guarantee Measures (L
and etc.
2014-005) published by the Company on the four major securities newspapers
and the website of Shanghai Stock Exchange on 29 March 2014.
Inject the assets of Fisher & Paykel to the Company or dispose such assets
Haier through other ways according to the requirements of the domestic supervision
Other
Group before June 2020. For more details, please refer to the Announcement of Qingdao May 2015-June
undertakin Asset YES YES
Corporatio Haier Co., Ltd. on the Changes of Funding Commitment (L 2015-015) published 2020
gs
n on the four major securities newspapers and the website of Shanghai Stock
Exchange on 26 May 2015.
Haier Inject the assets of Haier Photoelectric to the Company or dispose such assets
Other December
Group through other ways according to the requirements of the domestic supervision
undertakin injection 2015-June YES YES
Corporatio before June 2020. For more details, please refer to the Announcement of Qingdao
gs 2020
n Haier Co., Ltd. on the Changes of Funding Commitment of Haier Group
41 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Corporation (L 2015-063) published on the four major securities newspapers and
the website of Shanghai Stock Exchange on 23 December 2015.
In December 2015 and January 2016, the meeting of the Board of Directors and
general meeting of the shareholders considered and approved the matters in
relation to the acquisition of minority equity interest of Mitsubishi Heavy
Industries Haier and Carrier Refrigeration Equipment held by Haier Group. The
Profit Haier Company signed the Profit Compensation Agreement with Haier Group to
Other December
forecast and Group forecast the profits achieved by the aforementioned two companies in 2015 -
undertakin 2015- YES YES
compensati Corporatio 2018. If the profits are not reached during the commitment period, the difference
gs December 2018
on n part will be made up to the Company by Haier Group in cash. For more details,
please refer to the Announcement of Qingdao Haier Co., Ltd. on the Acquisition
of Equity in Sino-foreign Joint Venture Held by Haier Group Corporation and
Related-party Transaction (L 2015-062) published on the four major securities
newspapers and the website of Shanghai Stock Exchange on 23 December 2015
42 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
IV. Appointment and Dismissal of Accounting Firm
Information on Appointment and Dismissal of Accounting Firm
√Applicable □Not Applicable
During the reporting period, the Company considered and approved the resolution on the
re-appointment of accounting firm on the 2017 annual general meeting: in order to ensure the smooth
implementation of the financial and internal auditing and the continuity of the auditing work in 2018, the
Company re-appointed Shandong Hexin Certified Public Accountants (LLP) as the audit institution of
the financial report and internal control of 2018, and the audit fees amounted to RMB9.60 million (of
which, financial report of RMB7.15 million, internal report of RMB2.45 million).
Explanation of change of accounting firm during the auditing period
□ Applicable √Not Applicable
Description of the Company on the “non-standard audit report” issued by the accounting firm
□ Applicable √Not Applicable
Description of the Company on the “non-standard audit report” issued by the accounting firm in respect
of the financial report in the annual report last year
□ Applicable √Not Applicable
V. Matters relating to bankruptcy and restructuring
□ Applicable √Not Applicable
VI. Material litigation and arbitration matters
□Material litigation and arbitration matters during the reporting period
√ No material litigation and arbitration matters in the reporting period
VII.Penalties to the Listed Company and its Directors, Supervisors, Senior Management,
Controlling Shareholders, Ultimate Controller, Acquirer and the Status of Rectification
□ Applicable √Not Applicable
VIII. Explanation of the integrity status of the Company and its controlling shareholders and
actual controllers during the reporting period
□ Applicable √Not Applicable
43 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
IX. The Company’s equity incentive plan, employees stock ownership plan or other employee
incentive measures and its influence
(I) Matters disclosed in temporary announcement and without any subsequent progress or
change
□ Applicable √Not Applicable
(II) Share incentives not disclosed in temporary announcements or with subsequent progress
Share Option Incentive
□ Applicable √Not Applicable
Other explanations
□ Applicable √Not Applicable
Employees stock ownership plan
√Applicable □ Not Applicable
（1）The Phase III Employees Stock Ownership Scheme launched and completed the share
purchase: On 24 April 2018, the Company considered and approved relevant resolutions such as the
Phase III Stock Ownership Scheme of Core Employees Stock Ownership Scheme of Qingdao Haier Co.,
Ltd. (Draft) (《青岛海尔股份有限公司核心员工持股计划之第三期持股计划（草案）及摘要》) and
it’s Summary at the 13th meeting of the 9th session of the Board of Directors. The 635 staffs who
participated into the Stock Ownership Scheme are the directors (excluding independent directors),
supervisors, senior management of the Company and regular employees who serve at the Company and
its subsidiaries and sign employment contracts with the Company or its subsidiaries and receive
remuneration from them, together holding RMB271.30 million in the fund. On 23 May 2018, the
Company disclosed the Announcement on the Completion of Share Purchase by the Phase III Stock
Ownership Scheme of Core Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd. (《青岛海
尔股份有限公司核心员工持股计划之第三期持股计划完成股票购买的公告》), and the Employees
Stock Ownership Scheme has been entrusted to Industrial Securities Assets Management Co., Ltd.(兴证
证券资产管理有限公司), who will establish a directional asset management plan for the Phase III
Stock Ownership Scheme of Core Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd.
(“Assets Management Plan”) for the management. As of 22 May 2018, the Assets Management Plan has
purchased an aggregate of 16,063,800 shares of the Company, representing 0.26% of the total share
capitals of the Company through the block trade in secondary market at an average trading price of
RMB16.72 per share with a trading volume of RMB268,586,736.00. The Phase III Stock Ownership
Scheme of Core Employees Stock Ownership Scheme has completed the purchase of shares of the
Company. Those shares purchased aforesaid will be locked in accordance with requirement, and the
locking period will be 12 months from the date of the disclosure of this announcement, being 23 May
2018 to 22 March 2019.
44 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
（2）Allocation of the employee stock ownership plan (ESOP): During the reporting period, the
lock-up period of the Company's Phase II ESOPs (Draft) and Summary under Key Employee Stock
Ownership Plan of Qingdao Haier Co., Ltd. (《青岛海尔股份有限公司核心员工持股计划之第二期持
股计划（草案）及摘要》) (referred to as “Phase II ESOPs”) has expired. According to the Audit Report
of Qingdao Haier Co., Ltd. (《青岛海尔股份有限公司审计报告》) (HXS Zi. [2018] No.000267) issued
by Shandong Hexin Certified Public Accountant LLP, the annual net profits vested in parent company
shareholders with allowance for non-recurring gains and losses in 2017 increased by 29.81% than 2016.
Upon examination by the Management Committee, the assessment results of 556 holders of Phase II
ESOPs were satisfactory. 19 holders had unsatisfactory assessment results or resigned before
determination of the equity for the year 2017 under Phase II ESOPs.
On May 2, 2018, upon consideration by ESOP Management Committee, 556 holders of Phase II
ESOPs were determined according to performances for the year 2017 to be allocated with 8,717,600
shares. The shares of the said 19 holders with unsatisfactory assessment or who resigned were suspended
for allocation or adjusted for their shares.
There are 7 directors, supervisors and senior executives of the Company. A total of 1,617,300
shares can be allocated for Phase II ESOPs. Upon application by Mr. Gong Wei as CFO and Deputy
General Manager, 121,325 shares he applied for not being allocated in December 2017 when shares of
the first phase ESOPs were allocated (for the relevant announcement, refer to the Notice of Qingdao
Haier Co., Ltd. on Quota Distribution and Equity Allocation of the First Phase Key Employee Stock
Ownership Plans disclosed by the Company on December 7, 2017, No.: L 2017-046) are allocated at this
time. In summary, the number of shares held by directors, supervisors and senior executives actually
allocated this time is 1,738,700 shares. Any change of the shares they hold must be subject to provisions
of the Rules Governing the Holding of Shares in the Company by Directors, Supervisors and Senior
Management of Listed Companies and Changes Thereof.
In summary, according to the aforementioned resolution, the Company has completed the transfer
of relevant stocks at China Securities Depository and Clearing Corporation Shanghai Branch on May 10,
2018, with a total of 8,838,900 shares.
Other incentives
□ Applicable √Not Applicable
X. Significant Related-Party Transactions
(I) Related-Party Transaction from Routine Operation
1. Matter disclosed in temporary announcement and with no subsequent progress or change
□ Applicable √Not Applicable
2. Matter disclosed in temporary announcement and with subsequent progress or change
√Applicable □ Not Applicable
The Company made a forecast on the related-party transaction matters of the Company for the year
45 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
of 2018 at the 13th meeting of the 9th session of Board Meeting held on 24 April 2018. For details,
please refer to the Announcement of Qingdao Haier Co., Ltd. regarding the Anticipation on the Renewal
of Daily Related-party Transactions Agreement and the Daily Related-party Transactions for 2018 and
relevant announcement on the resolutions of the Board disclosed on 26 April 2018.
For the actual implementation of the Related-party transaction of January to June 2018, please refer
to “Note12 –Related Parties and Related-party Transactions” under section X - Financial and
Accounting Report set out in this regular report.
3. Matter not disclosed in temporary announcement
□ Applicable √Not Applicable
(II) Related-party Transactions Regarding Acquisition or Disposal of Assets or Equity
1、 Matters disclosed in temporary announcement without any subsequent progress or change
√Applicable □ Not Applicable
Summary Index for details
Refer to the Notice of Qingdao Haier
Acquisition of FPA shares: The Company passed the Co., Ltd. on Accepting the Transfer
acceptance of transfer of 100% shares of Haier New Zealand of 100% Shares of Haier New
Investment Holding Company Limited held by the overseas Zealand Investment Holding
subsidiary Haier (Singapore) Management Holding Co. Pte. Company Limited and Related
Limited under Haier Group Corporation by Haier Singapore Transactions (L 2018-020) (《青岛海
Investment Holding Pte. Ltd. (“Haier Singapore Investment”) 尔 股 份 有 限 公 司 关 于 受 让 Haier
who should accept the principal and interests of shareholder
New Zealand Investment Holding
borrowings payable by the Target Company to Haier Singapore
Management. Haier Singapore Investment, an overseas Company Limited 之 100%股权暨关
subsidiary of the Company, intends to pay US$303,040,997.28 联交易的公告》（临 2018-020）)
(equivalent to RMB1,905,552,095.01) to Haier Singapore disclosed by the Company on April
Management for accepting the transfer of the underlying shares. 26, 2018 and relevant notices for
more information.
Refer to the Notice of Qingdao Haier
Co., Ltd. on Transferring 22% Shares
Transfer shares of Qingdao Haier Special Electrical of Qingdao Haier Special Electrical
Appliance Co., Ltd.: As the shareholder of Qingdao Haier Appliance Co., Ltd. and Related
Special Electrical Appliance Co., Ltd. (“QHSPA”), the Transactions (L 2018-037) (《青岛海
Company transferred 62% of QHSPA shares to Qingdao Haier
尔股份有限公司关于转让青岛海尔
Biomedical Holdings Co., Ltd. at the consideration of
RMB505,129,750 for the transaction. Upon completion of the 特种电器有限公司 22%股权暨关联
share transfer, the Company no longer holds any share of 交 易 的 公 告 》 （ 临 2018-037 ） )
QHSPA. disclosed by the Company on June
26, 2018 and relevant notices for
more information.
2、 Matters disclosed in temporary announcement and with subsequent progress or change
□ Applicable √Not Applicable
3、 Matter not disclosed in temporary announcement
□ Applicable √Not Applicable
4、 If performance agreement is involved, the performance achieved during the reporting
period shall disclosed
□ Applicable √Not Applicable
46 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(III) Significant related-party transactions of joint external investment
1、 Matters disclosed in temporary announcement and without any subsequent progress or
change
□ Applicable √Not Applicable
2、 Matters disclosed in temporary announcement and with subsequent progress or change
□ Applicable √Not Applicable
3、 Matter not disclosed in temporary announcement
□ Applicable √Not Applicable
(IV) Amounts due to or from related parties
1、 Matters disclosed in temporary announcement and without any subsequent progress or
change
□ Applicable √Not Applicable
2、 Matters disclosed in temporary announcement and with subsequent progress or change
□ Applicable √Not Applicable
3、 Matter not disclosed in temporary announcement
□ Applicable √Not Applicable
(V) Other significant related-party transactions
□ Applicable √Not Applicable
(VI) Others
□ Applicable √Not Applicable
XI. Significant Contracts and Their Execution
1 Trusteeship, contracting and leasing
√Applicable □ Not Applicable
(1) Trusteeship
□ Applicable √Not Applicable
There was no material custody of the Company during the reporting period. As at the date hereof,
the following matters related to entrusted assets as passed on relevant meetings (such as the general
meetings of the Company) are within the term thereof:
According to the Haier Group's commitment in 2011 to further support the development of Qingdao
Haier and resolve intra-industry competition to reduce related-party transactions, and given the fact that
the Company’s purchase of the color TV business from Haier Group, Qingdao Haier Photoelectric Co.,
Ltd. and its subsidiaries are still in the transformation and consolidation period and its financial
47 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
performance fails to reach the expectation of the Company. Therefore, Haier Group is unable to
complete the transfer before the above commitment period. Haier Group intends to entrust the Company
with the operation and management of assets under custody and will pay RMB1 million custodian fee to
the Company each year during the period of custody.
(2) Contracting
□ Applicable √Not Applicable
(3) Leasing
□ Applicable √Not Applicable
2 Guarantee
√Applicable □ Not Applicable
Unit and Currency: RMB0’000
External guarantees provided by the Company (excluding guarantees for subsidiaries)
Date
Relati
of
onship
occurr Wheth Wheth
betwee Wheth Overdu Wheth
ence Startin Expirat er the er
n the Amou Type er the e er there Rel
of the g date ion guarant related
Guara guaran Secure nt of of guarant amount is a atio
guaran of date of ee has party
ntor tor and d party guaran guara ee is of the counter nshi
tee guarant guarant been guarant
the tee ntee overdu guarant -guaran p
(date ee ee fulfille ee or
listed e ee tee
of d not
compa
agree
ny
ment)
Total amount of guarantee occurred during the
reporting period (excluding guarantees for
subsidiaries)
Total balance of guarantee at the end of the
reporting period (A) (excluding guarantees for
subsidiaries)
Guarantees provided by the Company for subsidiaries
Total amount of guarantees for subsidiaries
3,167,618
occurred during the reporting period
Total balance of guarantees for subsidiaries at
2,994,380
the end of the reporting period (B)
Total amount of guarantees provided by the Company (including guarantees for subsidiaries)
Total guarantee (A + B) 2,994,380
Ratio of total amount of guarantees to net
84.9
assets of the Company (%)
Among which:
Amount of guarantees for shareholders,
ultimate controllers and their related parties 0
(C)
Amount of debt guarantees provided directly
or indirectly for the secured party with 1,242,549
asset-liability ratio exceeding 70% (D)
48 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
The amount of total amount of guarantee in
1,231,017
excess of 50% of net assets (E)
Total amount of the above three guarantees (C
2,473,566
+ D + E)
Explanation of possibly bearing related
discharge duty for premature guarantees
1. In the year of 2016, the Company acquired the assets of
GEA at a total consideration of US$5.61 billion, which was
sourced from self-owned funds and loan for merger, of
which, the loan for merger in the amount of US$3.3 billion
was applied for by Haier US Appliance Solutions, Inc., a
wholly-owned subsidiary of the Company, to China
Development Bank Co., Ltd. The loan was fully secured by
the Company and Haier Group Corporation, and the amount
of which was equivalent to approximately RMB10.752
billion as at the end of the reporting period. The balance
guaranteed amounted to approximately RMB10.075 billion
as at the end of the reporting period. The provision of
Explanation of guarantee status
security had been reviewed and approved by the Board and
the general meeting of shareholders of the Company;
2、In May 2018, the resolution on the security provided to
subsidiaries in the year 2018 was passed on the 2017 Annual
General Meeting of the Company, according to which, the
Company had provided security in respect of the application
for comprehensive facility made by certain subsidiaries to
financial institutions. During the reporting period, the
accumulated amount of guarantee offered by the Company to
subsidiaries was approximately RMB20.924 billion. As at the
end of the reporting period, the balance guaranteed was
RMB19.869 billion.
3 Other Major Contracts
□ Applicable √Not Applicable
XII.Information on poverty alleviation of the Company
√Applicable □ Not Applicable
1. Targeted measures in poverty alleviation plan
√Applicable □ Not Applicable
In accordance with the national plan for targeted measures in poverty alleviation and the
requirements set out in relevant documents, the Company places great emphasis on poverty alleviation,
and carries out initiatives of targeted measures in poverty alleviation within the scope as authorized by
the general meetings on related matters (such as donation). Over the years, the Company has been
devoted to education undertakings and making significant contributions, with a view to targeting the
weakest area of education and to blocking the transmission of poverty between generations through
focused efforts in raising the basic cultural quality in poverty and the skill levels of labor force from
poor families. As at the end of the reporting period, the Company and the Haier Group Corporation (its
actual controller) and its subsidiaries (referred to as the “Haier Group”) has built nearly 300 hope
schools, covering 26 provinces, municipalities directly under the central government and autonomous
49 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
regions in China, and continuously provide the above-mentioned schools support in materials and other
respects in each year including the reporting period. These initiatives have effectively enhanced the
basic educational capabilities in poverty-stricken areas and improved the quality of education.
2. Summary of targeted measures in poverty alleviation during the reporting period
√Applicable □ Not Applicable
In the first half of 2018, the Company’s expenditures on targeted measures in poverty alleviation
was approximately RMB9.11 million, which was mainly utilized in the education improvement, physical
and mental health development of adolescents and children. At the same time, as part of its initiatives in
response to the government and the performance of its social responsibilities, Haier Group has also made
investments in many aspects, such as poverty alleviation through agricultural development, poverty
alleviation through improvement of the health of farmers.
3. Results of targeted measures in poverty alleviation
√Applicable □ Not Applicable
Unit and Currency: RMB0’000
Indicators Amount and the status
I. General information 911.29
Among which：1. Funds 889.94
2.Cash converted from materials 21.35
II. Breakdown of the use of funds
1. Poverty elimination through education 911.29
1.1 Amount of investment for the purpose of
improving the resources of education in poverty-stricken 911.29
areas
4. Phased progress in performing social responsibilities of targeted poverty alleviation
√Applicable □ Not Applicable
In addition to material input in children’s education improvement, physical and mental health
development, etc., the Company also explores feasible methods in agricultural poverty alleviation. For
example, for rural entrepreneurs, Haier customizes skills improvement solutions for them, such as
Xiaoshun Business School jointly established by RRS Health and Haier University. A multi-level
training system has been developed by centering on rural talent revitalization to enhance farmers'
entrepreneurial skills. By providing local platforms and employment opportunities, we have built a
benign ecological system that fosters, performs well and retains talents. In addition, the Company has
customized the entrepreneurial poverty alleviation model for the economic conditions in different rural
areas, with programs, platforms, networks and results made, and it is replicable. The national targeted
poverty alleviation strategy is implemented to fully advance rural poverty alleviation.
5. Subsequent targeted measures in poverty alleviation plans
√Applicable □ Not Applicable
50 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
In the second half of 2018, the Company will make concerted efforts with Haier Group and
continue to implement the proposition of the documents issued by the central government in respect of
poverty alleviation, dedicate to improve the education in poverty-stricken areas, promote the
revitalization of rural talents and other initiatives, and will perform our social responsibilities in a
proactive manner.
XIII. Convertible corporation bonds
□ Applicable √Not Applicable
XIV. Environmental information
(I) Statement on environmental protection of companies and their key subsidiaries as key
pollution discharge units published by the environmental protection authority
√Applicable □Not Applicable
1. Pollution discharge information
√Applicable □Not Applicable
The Company and its subsidiaries including Qingdao Haier Refrigerator Co., Ltd. (“Haier
Refrigerator”), Haier Electronics Co., Ltd., Guizhou (“Guizhou Haier”), and its former subsidiary Haier
Research and Develop Special Type of Steel Plate Co.,LTD. (currently renamed to “Hefei HBIS New
Material Technology Co., Ltd.. The Company has completed the transfer of the shares in 2015. The
company is no longer a subsidiary of the Company) are key pollution discharge units published by the
environmental protection authority.
The polluted industrial wastewater of the Company is mainly domestic water (water for toilets and
bathrooms) to be discharged to municipal pipelines through sewer pipes. The exhaust gas is mainly
assembly welding fume, and is exhausted out of the workshop with the high-power exhaust fans. After
collection and filtering through the collection hood, the workshop welding fume is exhausted to the
outside of the workshop through the exhaust pipe. The foamed injection exhaust gas is discharged to the
outside of the workshop with high-power exhaust fans and through the special fan stack pipes and the
exhaust funnel in an organized way.
The major pollutants and emission standards are as shown in the figure below:
Reaching
Monitoring Monitoring
Pollutant Standard Value Measured Value Standard or
Plant Point Index
not
1# Welding Emission
Exhaus Particulate 120mg/m 2.68mg/m
of Assembly density Yes
t gas matter
A Emission rate 3.5 (15m in height) 0.042kg/h
51 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
kg/h
Emission
Carbonic / ＜0.3mg/m
density
oxide
Emission rate / /
Emission
120mg/m 3.92mg/m
Particulate density
2# Welding matter 3.5 (15m in height)
Emission rate 0.044kg/h
of Assembly kg/h Yes
B Emission
Carbonic / ＜0.3mg/m
density
oxide
Emission rate / /
Emission
120mg/m /
Particulate density
matter 3.5 (15m in height)
Emission rate /
kg/h
Emission
12mg/m ＜5.0×10-4mg/m
density
Benzene
0.9 (20m in height)
Emission rate /
kg/h
Emission
40mg/m 0.197mg/m
density
3# Fan Toluene
5.2 (20m in height)
Stack of Emission rate 8.2×10-4kg/h
kg/h Yes
Foam
Emission
Station A 70mg/m 4.75mg/m
density
Xylene
1.7 (20m in height)
Emission rate 0.020kg/h
kg/h
Non-methan Emission
120mg/m 1.12mg/m
e density
Hydrocarbo 17 (20m in height)
Emission rate 0.005kg/h
n kg/h
Emission
Carbonic / /
density
oxide
Emission rate / /
Emission
120mg/m /
Particulate density
matter 3.5 (15m in height)
Emission rate /
kg/h
Emission
12mg/m ＜5.0×10-4mg/m
density
Benzene
0.9 (20m in height)
Emission rate /
kg/h
Emission
40mg/m 0.059mg/m
density
4# Fan Toluene
5.2 (20m in height)
Stack of Emission rate 2.5×10-4kg/h
kg/h Yes
Foam Emission
Station B 70mg/m 4.13mg/m
density
Xylene
1.7 (20m in height)
Emission rate 0.017kg/h
kg/h
Non-methan Emission
120mg/m 1.21mg/m
e density
Hydrocarbo 17 (20m in height)
Emission rate 0.005kg/h
n kg/h
Emission
Carbonic / /
density
oxide
Emission rate / /
Hood 5# Emission 2.0mg/m 1.81mg/m Yes
52 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
density
Emission rate / /
Emission
2.0mg/m 0.33mg/m
6# density
Emission rate / /
The polluted industrial wastewater of Haier Refrigerator is also mainly domestic water (water for
toilet, bathroom) to be discharged to the municipal pipelines through sewer pipes. The production
exhaust gas mainly includes welding fume, foaming exhaust gas and canteen oil fume, all of which are
collected by the gas collecting hood and discharged to high altitude through the exhaust funnel in an
organized way.
The major pollutants and emission standards are as shown in the figure below:
Reaching
Monitoring Monitoring
Item Pollutant Standard Value Measured Value Standard or
Point Index
not
Emission
Particulate 120mg/m 4.21mg/m
density
Exhaust matter
Stack at 1# Emission rate 5.9kg/h 0.029kg/h
Yes
Welding of Emission
Carbonic / ＜0.3mg/m
Assembly A density
oxide
Emission rate / /
Emission
Particulate 120 mg/m 4.46 mg/m
density
Exhaust matter
Stack at 2# Emission rate 5.9 kg/h 0.046 kg/h
Yes
Welding of Emission
Carbonic / ＜0.3 mg/m
Assembly B density
oxide
Emission rate / /
Non-methan Emission
120 mg/m 3.10 mg/m
e density
Hydrocarbon Emission rate 17kg/h 0.026 kg/h
Emission
Exhaus 12 mg/m <5.0*10-4 mg/m
Benzene density
t gas
Emission rate 0.90 kg/h /
Pre-mixer 3# Yes
Emission
40 mg/m <5.0*10-4 mg/m
Toluene density
Emission rate 5.2 kg/h /
Emission
70 mg/m <5.0*10-4 mg/m
Xylene density
Emission rate 1.7 kg/h /
Non-methan Emission
120 mg/m 3.49 mg/m
e density
Hydrocarbon Emission rate 17 kg/h 0.028 kg/h
No. 1
Exhaust Emission
12 mg/m <5.0*10-4 mg/m
Stack of 4# Benzene density Yes
Foaming Emission rate 0.90 kg/h /
Station Emission
40 mg/m <5.0*10-4 mg/m
Toluene density
Emission rate 5.2 kg/h /
53 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Emission
Xylene 70 mg/m <5.0*10-4 mg/m
density
Emission rate 1.7 kg/h /
Non-methan Emission
120 mg/m 3.96 mg/m
e density
Hydrocarbon Emission rate 17 kg/h 0.032 kg/h
Emission
No. 2 12 mg/m <5.0*10-4 mg/m
Benzene density
Exhaust
Emission rate 0.90 kg/h /
Stack of 5# Yes
Foaming Emission -4
40 mg/m <5.0*10 mg/m
Station Toluene density
Emission rate 5.2 kg/h /
Emission
70 mg/m <5.0*10-4 mg/m
Xylene density
Emission rate 1.7 kg/h /
Emission
6# 2.0 mg/m 1.47 mg/m
density
Hood Yes
Emission
7# 2.0 mg/m 0.20 mg/m
density
Pollutants of Guizhou Haier mainly involve noise and foaming exhaust gas. For noise, plant
barriers, greening for sound absorption and attenuation over distance, etc. The foaming exhaust gas is
discharged to high altitude through the exhaust funnel in an organized way.
The major pollutants and emission standards are as shown in the figure below:
Reaching
Monitoring Monitoring Standard Measured
Item Pollutant Standard
Point Index Value Value
or not
Diurnal noise
60 dB 48.7 dB Yes
value
1# Plant Gate
Night noise
50 dB 41.5 dB Yes
value
Diurnal noise
2# Air 60 dB 48.9 dB Yes
value
Noise Compression Noise
Night noise
Station 50 dB 42.5 dB Yes
value
Diurnal noise
60 dB 55.6 dB Yes
value
3# EMR
Night noise
50 dB 47.6 dB Yes
value
Volatil Upwind
e direction of
Emission
organic unauthorized 4.0 mg/m 0.13mg/m Yes
density
compo exhaust gas at Non-metha
und boundary ne
Downwind Hydrocarb
direction of on
Emission
unauthorized 4.0 mg/m 0.28mg/m Yes
density
Inspect exhaust gas at
ion of boundary
organic Upwind
matter direction of
Emission
unauthorized Benzene 0.40mg/m 1.8*10-3 mg/m Yes
density
exhaust gas at
boundary
54 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Downwind
direction of
Emission
unauthorized 0.40mg/m 2.0*10-3mg/m Yes
density
exhaust gas at
boundary
Upwind
direction of
Emission
unauthorized 2.4 mg/m ND Yes
density
exhaust gas at
boundary
Toluene
Downwind
direction of
Emission
unauthorized 2.4 mg/m 2.8*10-3mg/m Yes
density
exhaust gas at
boundary
Upwind
direction of
Emission
unauthorized 1.2 mg/m 5.6*10-3 mg/m Yes
density
exhaust gas at
boundary
Xylene
Downwind
direction of
Emission
unauthorized 1.2 mg/m 1.12mg/m Yes
density
exhaust gas at
boundary
Upwind
direction of
Emission
unauthorized 0.080 mg/m 0.005 mg/m Yes
density
exhaust gas at
boundary
Phenols
Downwind
direction of
Emission
unauthorized 0.080mg/m 0.008mg/m Yes
density
exhaust gas at
boundary
Upwind
direction of
Emission
unauthorized 0.40 mg/m 0.09 mg/m Yes
density
exhaust gas at
boundary
Anilines
Downwind
direction of
Emission
unauthorized 0.40mg/m 0.10mg/m Yes
density
exhaust gas at
boundary
2. Construction and operation of pollution control facility
√Applicable □Not Applicable
The Company and Haier Refrigerator have provided activated carbon filtration equipment for the
treatment of the exhaust gas from assembly welding absorbed by the foaming door. Replacement is on a
three-month basis, with records made. Waste activated carbon is stored in the hazardous waste storage.
The canteen is provided with electric ion fume decomposition devices. The exhaust gas treatment
equipment is controlled by specially assigned persons to ensure the normal operation of the equipment.
The management of the operation of pollution control facilities for exhaust gas generation is
55 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
strengthened. We have ensured efficient operation of pollution control facilities. Exhaust gas is tested
under delegation on an annual basis. The fan stacks are cleaned and inspected on a weekly, monthly and
quarterly basis. Spot inspection records are kept. Fan stack cleaning records are archived. All these are
to ensure normal operation of the exhaust facilities and normal exhaust gas emission. The exhaust pipes
are inspected periodically for presence of foreign matters and looseness or falling. Preparations for
emergency response are also made.
As a response to the state call for energy conservation and emission reduction, Guizhou Haier
invested more than RMB30 million at the end of 2013 to improve the spraying production process.
U-shell program was technologically improved. Phosphating coating procedure, preparation line,
powder spraying equipment, drying furnace, curing furnace and etc. are cancelled. There is no industrial
wastewater discharge with the coating equipment removal. Relevant sewage treatment plants have been
closed for zero sewage discharge.
3. Evaluation of the effect of construction projects on the environment and other environmental
administration license
√Applicable □Not Applicable
The Company and its subsidiaries perform the implementation and production of construction
projects according to the requirements of laws and regulations. We complete environmental impact
evaluation procedures in strict accordance with the Three Simultaneous system for environmental
protection of construction projects. They have been approved in the environmental impact assessment.
There are no environmental violations such as construction without approval.
4. Emergency plan for environmental emergencies
√Applicable □Not Applicable
The Emergency Plan for Environmental Emergencies is developed according to the laws and
regulations by the Company and its subsidiaries. Drills have been organized. The Plan is continuously
optimized and upgraded according to the drill results.
5. Environmental self-monitoring plan
√Applicable □Not Applicable
All pollutant discharges of the Company comply with national and local environmental standards.
The sewage is discharged after being collected and treated, and is monitored in real time through the
automatic online sewage monitoring system. The data is connected to Haier Smart Energy System. In
March 2017, the Company received and passed the certification of version change of ISO14001
environmental management system. In March 2018, the professional certification body conducted the
first supervision and audit of the operation of 2017 ISO14001 system after version change. The
operation was approved with smooth functioning.
56 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
6. Other environmental information to be disclosed
√Applicable □Not Applicable
In 2017, the Company promoted energy-saving and emission reduction projects such as liquefied
gas to natural gas, aerial lighting renovation and provision of filtration devices with compressed gas.
Haier Refrigerator made remarkable results in energy-saving and emission reduction by promoting
energy-saving and emission reduction projects such as cooling oil to water for adsorption machines,
lighting renovation and etc. in 2017.
(II) Statement on environmental protection of companies other than key pollution discharge
units
√Applicable □Not Applicable
All units of the Company perform the implementation and production of construction projects
according to the requirements of laws and regulations. We complete environmental impact evaluation
procedures in strict accordance with the Three Simultaneous system for environmental protection of
construction projects. They have been approved in the environmental impact assessment. There are no
environmental violations such as construction without approval.
The Company has established Haier Smart Energy Center, an industry-leading energy big data
analysis system. It uses automation, information technology and centralized management mode to
implement centralized dynamic monitoring and digital management of main energy consumption such as
water, electricity and gas in all factories across the country; automatically and accurately collects energy
data, and completes the prediction and analysis of energy consumption data, optimizes energy
deployment and reduce the energy consumption of single product production, thus truly achieving
low-carbon production.
(III) Statement on reasons for non-disclosure of environmental information by companies
other than key pollution discharge units
□Applicable √Not Applicable
(IV) Statement on subsequent development or changes of environmental information contents
disclosed in the reporting period
√Applicable □Not Applicable
The Company will continue to maintain and keep optimizing existing results and allows
up-to-standard discharge in strict accordance with existing environmental discharge and emission
standards.
57 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
XV. Other explanations on significant events
(I) Information, reason and effect of change in accounting policies, accounting estimates and
accounting methods as compared with the last accounting period
□ Applicable √Not Applicable
(II) Information of material accounting error correction that need the retroactive
restatement during the reporting period, the correct amount, reason and its effect
□ Applicable √Not Applicable
(III) Others
□ Applicable √Not Applicable
58 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION VI CHANGES IN ORDINARY SHARES AND
INFORMATION ABOUT SHAREHOLDERS
I. CHANGES IN SHARES
(I) Table of Changes in Shares
1、 Table of Changes in Shares
During the Reporting period, there is no change on the aggregate amount of shares and the share
capital structure.
2、 Statement on the changes in shares
□ Applicable √Not Applicable
3、 Effects of changes in shares occurred during the period after the Reporting period to the
semi-annual report period on financial indicators such as earnings per share and net assets per
share(if any)
□ Applicable √Not Applicable
4、 Other disclosure deemed necessary by the Company or required by securities regulatory
authorities
□ Applicable √Not Applicable
(II) Changes in shares with selling restrictions
□ Applicable √Not Applicable
II. Information on shareholders
(I) Total number of shareholders:
Total number of ordinary shareholders by the end of the
160,035
reporting period
Total numbers of preferential shareholders with
restoration of voting rights by the end of the reporting 0
period
(II) Table of shareholdings of top ten shareholders, top ten common shareholders (or the
shareholders without selling restrictions) by the end of the reporting period
Unit: share
59 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Shareholdings of top ten shareholders
Increasing Status of
/ Number of Number of shares
Perce Nature
Name of shareholder (full decreasing shares held shares held pledged
ntage of
name) during the at the end of with selling or frozen
(%) shareholder
reporting the period restrictions Stat Num
period us ber
Domestic
Haier Electric Appliances non-state-o
1,258,684,824 20.64 Nil
International Co., Ltd. wned legal
entity
Domestic
non-state-o
Haier Group Corporation 1,072,610,764 17.59 Nil
wned legal
entity
Hong Kong Securities
482,951,912 7.92 Nil Unknown
Clearing Co., Ltd.
China Securities Finance
298,731,988 4.90 Nil Unknown
Corporation Limited
Foreign
GIC PRIVATE
273,498,349 4.49 Nil legal
LIMITED
entity
Foreign
KKR HOME
179,168,050 2.94 Nil legal
INVESTMENT S.A R.L.
entity
Qingdao Haier Venture & Domestic
Investment Information non-state-o
172,252,560 2.83 Nil
Co., Ltd.(青岛海尔创业 wned legal
投资咨询有限公司) entity
National social security
96,188,780 1.58 Nil Unknown
fund, Portfolio 104
Central Huijin Asset
69,539,900 1.14 Nil Unknown
Management Ltd.
UBS AG 39,626,276 0.65 Nil Unknown
Shareholdings of top ten shareholders without selling restrictions
Number of tradable Class and number of shares
Name of shareholder shares held without
Class Number
selling restrictions
Haier Electric Appliances International Co., Ltd. 1,258,684,824 RMB ordinary 1,258,684,824
Haier Group Corporation 1,072,610,764 RMB ordinary 1,072,610,764
Hong Kong Securities Clearing Co., Ltd. 482,951,912 RMB ordinary 482,951,912
China Securities Finance Corporation Limited 298,731,988 RMB ordinary 298,731,988
GIC PRIVATE LIMITED 273,498,349 RMB ordinary 273,498,349
KKR HOME INVESTMENT S.A R.L. 179,168,050 RMB ordinary 179,168,050
Qingdao Haier Venture & Investment
Information Co., Ltd.(青岛海尔创业投资 172,252,560 RMB ordinary 172,252,560
咨询有限公司)
National social security fund, Portfolio 104 96,188,780 RMB ordinary 96,188,780
Central Huijin Asset Management Ltd. 69,539,900 RMB ordinary 69,539,900
UBS AG 39,626,276 RMB ordinary 39,626,276
60 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(1) Haier Electric Appliances International Co., Ltd. is a
holding subsidiary of Haier Group Corporation. Haier
Group Corporation holds 51.20% of its equity. Qingdao
Related-parties or parties acting in concert among Haier Venture & Investment Information Co., Ltd.(青岛
the aforesaid shareholders 海 尔 创业 投资 咨 询有 限公 司 ) is a party acting in
concert with Haier Group Corporation;
(2) The Company is not aware of the existence of any
connections of other shareholders.
Explanation of preferential shareholders with
N/A
restoration of voting rights and their shareholdings
Number of shares held by top ten shareholders with selling restrictions and the selling restrictions
□ Applicable √Not Applicable
(III) Strategic investors or general legal persons who became the top ten shareholders due to
placing of new shares
□ Applicable √Not Applicable
III. Changes in controlling shareholder and the ultimate controller
□ Applicable √Not Applicable
61 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION VII THE RELEVANT INFORMATION OF PREFERRED
SHARES
□Applicable √Not Applicable
62 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION VIII DIRECTORS, SUPERVISORS, SENIOR
MANAGEMENT
I、Changes of Shareholding
(I) Changes of shareholding of current and retired directors, supervisors and senior
management during the reporting period
√Applicable □Not applicable
Unit: share
Increase/
Shareholdings at Shareholdings decrease in Reason for
Name Title the beginning of at the end of the shares during increase/
the period period the reporting decrease
period
Liang Haishan Director 10,904,065 11,684,483 780,418
Tan Li xia Director 5,272,740 5,897,074 624,334
Wang Peihua Supervisor 27,004 52,732 25,728 Vesting of
Ming Guoqing Supervisor 17,612 34,421 16,809 Employees
Wang Yuqing Supervisor 2,231 4,186 1,955 Stock
Senior Ownership
Gong Wei 1,050,000 1,277,668 227,668 Plan
management
Senior
Ming Guozhen 944,446 1,006,193 61,747
management
Other explanations
√Applicable □Not Applicable
During the reporting period, except for the directors, supervisors and senior management listed in
the above table, the number of shares held by the other directors, supervisors and senior management
was unchanged compared to the beginning of the reporting period.
(II) Incentive share option granted to directors, supervisors and senior management during
the reporting period
□Applicable √ Not Applicable
II、Changes in Directors, Supervisors and Senior Management of the Company
□Applicable √ Not Applicable
Explanation on the Changes in directors, supervisors and senior management of the Company
□Applicable √ Not Applicable
III、Other explanations
□Applicable √ Not Applicable
63 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION IX RELEVANT INFORMATION ON CORPORATE BONDS
□Applicable √ Not Applicable
64 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION X FINANCIAL REPORT
I、 Auditors’ Report
□Applicable √ Not Applicable
II、Financial Statements
Consolidated Balance Sheet
30 June 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB
Items Notes Closing balance Opening balance
Current Assets:
Monetary Capital Ⅶ.1 33,467,936,834.26 35,177,276,903.91
Clearing settlement funds
Placements with banks
Financial assets measured at fair
value and changes of which included in
current profit and loss
Derivative financial assets Ⅶ.2 40,947,728.30 20,681,695.50
Notes receivables Ⅶ.3 12,208,138,565.32 13,033,083,520.99
Accounts receivables Ⅶ.4 16,906,190,691.77 12,448,004,833.06
Prepayments Ⅶ.5 662,900,260.21 590,693,658.21
Premiums receivables
Reinsurance accounts receivables
Reinsurance contract reserves
receivables
Interests receivables Ⅶ.6 241,911,436.27 203,637,543.83
Dividends receivables 4,660,849.89 4,524,472.84
Other receivables Ⅶ.7 865,582,766.96 961,263,981.87
Financial assets purchased under
resale agreements
Inventories Ⅶ.8 22,506,295,717.51 21,503,524,800.18
Assets held for sale Ⅶ.9 1,233,866,625.56
Non-current assets due within one
year
Other current assets Ⅶ.10 4,689,319,508.59 4,389,760,018.83
Total current assets 92,827,750,984.64 88,332,451,429.22
Non-current assets:
Loans and advances granted
Available-for-sale financial assets Ⅶ.11 1,558,455,723.48 1,415,354,307.82
Held-to-maturity investments
Long-term receivables
Long-term equity investments Ⅶ.12 13,424,669,075.65 12,992,767,394.28
Investment properties Ⅶ.13 30,957,475.27 31,214,015.99
Fixed assets Ⅶ.14 15,428,882,880.56 16,017,523,376.11
Construction in progress Ⅶ.15 2,582,745,338.39 1,530,390,130.25
Construction materials
Disposals of fixed assets Ⅶ.16 55,864,669.30 55,808,808.81
65 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Biological assets for production
Fuel assets
Intangible assets Ⅶ.17 7,880,106,466.16 7,005,186,296.28
Development expenses Ⅶ.18 431,905,938.29 966,051,333.81
Goodwill Ⅶ.19 19,765,740,009.59 19,843,317,357.30
Long-term deferred expenses Ⅶ.20 138,323,193.86 123,768,671.33
Deferred income tax assets Ⅶ.21 1,835,322,019.19 1,895,213,404.67
Other non-current assets Ⅶ.22 1,504,629,147.08 1,254,064,181.76
Total non-current assets 64,637,601,936.82 63,130,659,278.41
Total assets 157,465,352,921.46 151,463,110,707.63
Current liabilities:
Short-term borrowings Ⅶ.23 11,804,553,521.32 10,878,580,275.18
Borrowings from central bank
Absorbing deposit and deposit in
inter-bank market
Placements from banks
Financial liabilities measured at fair
value and changes of which included in
current profit and loss
Derivative financial liabilities Ⅶ.24 4,440,154.26 2,524,569.45
Notes payable Ⅶ.25 19,372,741,431.66 16,378,699,659.77
Accounts payables Ⅶ.26 28,204,519,194.31 25,654,013,649.96
Receipts in advance Ⅶ.27 3,485,578,719.92 5,833,552,815.05
Disposal of repurchased financial
assets
Handling charges and commissions
payable
Payables for staff’s remuneration Ⅶ.28 1,934,538,690.28 2,349,189,122.90
Taxes payable Ⅶ.29 1,770,431,545.54 1,909,260,527.42
Interests payable Ⅶ.30 69,033,152.51 57,656,458.79
Dividends payable Ⅶ.31 529,822,661.11 153,756,315.64
Other payables Ⅶ.32 11,077,488,012.51 10,805,162,943.62
Reinsurance accounts payable
Deposits for insurance contracts
Consumer deposits for trading in
securities
Amounts due to issuer for securities
underwriting
Liabilities held for sale Ⅶ.9 296,505,653.77
Non-current liabilities due within one Ⅶ.33 3,108,306,051.60 2,850,325,000.00
year
Other current liabilities 23,474,888.62 21,729,198.70
Total current liabilities 81,681,433,677.41 76,894,450,536.48
Non-current liabilities:
Long-term borrowings Ⅶ.34 12,958,392,344.11 16,036,492,809.81
Debentures payable Ⅶ.35 6,348,069,093.79 6,211,088,362.68
Including: preference shares
Perpetual bonds
Long-term payable Ⅶ.36 100,337,376.67 106,020,029.74
Long-term payables for staff’s Ⅶ.37 955,081,888.14 898,160,742.53
remuneration
Special payable
66 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Estimated liabilities Ⅶ.38 2,879,629,562.43 2,619,699,551.41
Deferred income Ⅶ.39 544,151,421.91 497,141,088.72
Deferred income tax liabilities Ⅶ.21 162,602,680.85 279,114,620.35
Other non-current liabilities Ⅶ.40 1,228,485,262.18 1,170,936,828.55
Total non-current liabilities 25,176,749,630.08 27,818,654,033.79
Total liabilities 106,858,183,307.49 104,713,104,570.27
Owners’ equity
Share capital Ⅶ.41 6,097,402,727.00 6,097,402,727.00
Other equity instruments Ⅶ.42 431,424,524.07 431,424,524.07
Including: preference shares
Perpetual bonds
Capital reserve Ⅶ.43 873,883,441.43 826,883,093.84
Less: Treasury stock
Other comprehensive income Ⅶ.44 270,306,171.37 -36,363,809.96
Special reserve
Surplus reserve Ⅶ.45 2,103,057,782.41 2,103,057,782.41
General risk provisions
Undistributed profits Ⅶ.46 25,491,176,805.98 22,793,110,884.09
Total equity attributable to owners of
35,267,251,452.26 32,215,515,201.45
the Parent company
Minority equity interests 15,339,918,161.71 14,534,490,935.91
Total owners’ equity 50,607,169,613.97 46,750,006,137.36
Total liabilities and owners’
157,465,352,921.46 151,463,110,707.63
equities
Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Balance Sheet of the Parent Company
30 June 2018
Prepared by: Qingdao Haier Co., Ltd.
Unit and Currency: RMB
Items Notes Closing balance Opening balance
Current Assets:
Monetary Capital 1,785,793,566.41 2,070,527,802.97
Financial assets measured at fair value
and changes of which included in
current profit and loss
Derivative financial assets
Notes receivables
Accounts receivables XⅧ.1 309,470,832.66 288,499,726.07
Prepayments 23,119,823.77 20,000,000.00
Interests receivables 283,463,990.41 220,157,282.75
Dividends receivables 99,477,568.56 970,851,045.94
Other receivables XⅧ.2 1,822,932,745.96 15,895,048.43
Inventories 77,184,947.24 89,650,514.91
Assets held for sale
Non-current assets due within one
year
67 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Other current assets 271,541,009.97 87,165,597.70
Total current assets 4,672,984,484.98 3,762,747,018.77
Non-current assets:
Available-for-sale financial assets 5,288,839.52 5,818,587.80
Held-to-maturity investments
Long-term receivables 8,600,000,000.00 8,600,000,000.00
Long-term equity investments XⅧ.3 23,698,231,647.52 23,581,254,928.08
Investment properties
Fixed assets 115,045,273.03 118,553,830.32
Construction in progress 28,048,838.62 13,594,976.50
Construction materials
Disposals of fixed assets
Biological assets for production
Fuel assets
Intangible assets 7,356,456.57 14,601,582.38
Development expenses
Goodwill
Long-term deferred expenses 5,453,171.70
Deferred income tax assets 121,829,534.01 106,347,777.99
Other non-current assets 2,321,251.36
Total non-current assets 32,583,575,012.33 32,440,171,683.07
Total assets 37,256,559,497.31 36,202,918,701.84
Current liabilities:
Short-term borrowings 1,500,000,000.00
Financial liabilities measured at fair
value and changes of which included in
current profit and loss
Derivative financial liabilities
Notes payable
Accounts payables 221,198,720.89 310,387,267.67
Receipts in advance 2,673,252,010.26 2,465,908,721.32
Payables for staff’s remuneration 31,301,052.64 51,533,384.22
Taxes payable 26,192,674.33 62,255,803.87
Interests payable 126,112,976.64 156,447,167.63
Dividends payable
Other payables 22,529,346,801.59 21,112,143,360.73
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities 16,045,131.53 12,498,265.43
Total current liabilities 27,123,449,367.88 24,171,173,970.87
Non-current liabilities:
Long-term borrowings
Debentures payable
Including: preference shares
Perpetual bonds
Long-term payable 20,000,000.00 20,000,000.00
Long-term payables for staff’s
remuneration
Special payables
Estimated liabilities
Deferred income 37,700,000.00 37,700,000.00
Deferred income tax liabilities 37,783,379.99 36,152,815.34
Other non-current liabilities
68 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Total non-current liabilities 95,483,379.99 93,852,815.34
Total liabilities 27,218,932,747.87 24,265,026,786.21
Owners’ equity:
Share capital 6,097,402,727.00 6,097,402,727.00
Other equity instruments
Including: preference shares
Perpetual bonds
Capital reserve 2,318,161,831.23 2,317,907,947.71
Less: Treasury stock
Other comprehensive income -13,478,890.15 -43,234,737.77
Special reserve
Surplus reserve 1,437,313,649.93 1,437,313,649.93
Undistributed profits 198,227,431.43 2,128,502,328.76
Total owners’ equity 10,037,626,749.44 11,937,891,915.63
Total liabilities and owners’
37,256,559,497.31 36,202,918,701.84
equities
Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Income Statement
January-June 2018
Unit and Currency: RMB
Items Notes Current period Previous period
Ⅰ.Total operating revenue 88,591,626,626.07 77,585,007,913.93
Including: operating revenue Ⅶ.47 88,591,626,626.07 77,585,007,913.93
Interest income
Insurance premiums earned
Fee and commission income
Ⅱ. Total cost of operations 82,990,516,025.15 72,915,466,587.55
Including: operating cost Ⅶ.47 62,924,743,807.78 54,161,628,234.79
Interest expenses
Fee and commission expenses
Insurance withdrawal payment
Net payment from indemnity
Net provisions for insurance contract
Insurance policy dividend paid
Reinsurance cost
Taxes and surcharge Ⅶ.48 404,415,631.92 345,530,712.80
Selling expenses Ⅶ.49 13,106,599,051.97 12,180,499,014.03
Administrative expenses Ⅶ.50 5,951,531,296.20 5,393,556,967.87
Financial expenses Ⅶ.51 424,983,265.35 611,674,697.24
Loss in assets impairment Ⅶ.52 178,242,971.93 222,576,960.82
Add: income from change in fair value Ⅶ.53 36,661,921.50 412,063,845.15
(losses are represented by “-”)
Investment income (losses are Ⅶ.54 867,458,988.96 653,842,714.35
represented by “-”)
Including: investment income of
associates and joint ventures
69 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Gain from disposal of assets (losses Ⅶ.55 5,668,073.53 -7,148,339.24
are represented by “-”)
Exchange gain (losses are represented
by “-”)
Other income Ⅶ.56 224,292,412.02 134,742,567.52
Ⅲ. Operating profit (losses are represented by
6,735,191,996.93 5,863,042,114.16
“-”)
Add: non-operating income Ⅶ.57 218,257,900.77 246,964,120.48
Less: non-operating expenses Ⅶ.58 48,392,538.09 77,391,457.25
Ⅳ. Total profit (total losses are represented
6,905,057,359.61 6,032,614,777.39
by “-”)
Less: income tax expense Ⅶ.59 966,639,681.13 758,022,158.23
Ⅴ. Net profit (net losses are represented by
5,938,417,678.48 5,274,592,619.16
“-”)
(I) Classification by continuous
operation
1.Net profit from continuous
5,938,417,678.48 5,274,592,619.16
operation (net losses are represented by “-”)
2. Net profit from discontinuous
operation (net losses are represented by “-”)
(II)Classification by ownership of the
equity
1. Net profit attributable to owners of
4,858,795,529.42 4,416,867,240.37
the Parent company
2. Profit or loss attributable to
1,079,622,149.06 857,725,378.79
minority shareholders
VI. Other comprehensive income, net of tax Ⅶ.60 390,531,904.15 -194,096,720.26
Other comprehensive income attributable to
266,441,870.74 -161,578,679.72
owners of the Parent company, net of tax
(I) Other comprehensive income that
will not be reclassified subsequently to profit -6,952,267.73
or loss
1. Changes in net liabilities or net
assets arising from re-measurement of defined -6,952,267.73
benefit plans
2. Share of other comprehensive
income of investees that cannot be reclassified
to profit or loss under equity method
(II) Other comprehensive income to be
273,394,138.47 -161,578,679.72
reclassified subsequently to profit or loss
1. Share of other comprehensive
income of investees that will be reclassified
86,716,737.89 -122,040,176.25
subsequently to profit or loss under equity
method
2. Gain or loss from change in fair
47,583,273.64 -2,347,023.98
value of available-for-sale financial assets
3. Gain or loss arising from
reclassification from held-to-maturity
investments to available-for-sale financial
assets
4. Effective portion of gain or loss
22,583,059.17 37,469.92
arising from cash flow hedging instruments
5. Exchange differences on translation
116,511,067.77 -37,228,949.41
of financial statements denominated in
70 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
foreign currencies
6. Other
Other comprehensive income attributable to
124,090,033.41 -32,518,040.54
minority shareholders, net of tax
Ⅶ. Total comprehensive income 6,328,949,582.63 5,080,495,898.90
Total comprehensive income attributable to
5,125,237,400.16 4,255,288,560.65
the owners of Parent company
Total comprehensive income attributable to
1,203,712,182.47 825,207,338.25
the minority shareholders
Ⅷ . Earnings per share:
(I) Basic earnings per share (RMB/share) XX.1 0.797 0.724
(II) Diluted earnings per share XX.1
0.786 0.724
(RMB/share)
Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Income Statement of the Parent Company
January-June 2018
Unit and Currency: RMB
Items Notes Current period Previous period
Ⅰ. Operating revenue XⅧ.4 1,624,154,028.46 1,543,112,325.65
Less: Operation cost XⅧ.4 1,120,062,552.26 1,125,099,741.07
Taxes and surcharge 9,974,166.62 9,124,152.47
Selling expenses 125,040,887.94 84,535,020.01
Administrative expenses 287,700,603.90 291,801,719.89
Financial expenses 61,816,257.99 45,432,212.79
Loss in assets impairment 96,210,989.68 49,240,545.55
Add: income from change in fair value
(losses are represented by “-”)
Investment income (losses are XⅧ.5 219,520,069.85 151,893,767.73
represented by “-”)
Including: investment income of
associates and joint ventures
Income from disposal of assets (losses
are represented by “-”)
Other income 9,510,192.91 34,750,026.00
Ⅱ. Operating profit (losses are represented by
152,378,832.83 124,522,727.60
“-”)
Add: non-operating income 27,747,401.83 18,075,928.68
Less: non-operating expenses 253,114.54 9,413.67
Ⅲ. Total Profit (total losses are represented
179,873,120.12 142,589,242.61
by “-”)
Less: income tax expense -3,481,743.97 -10,390,190.96
Ⅳ. Net Profit (net losses are represented by
183,354,864.09 152,979,433.57
“-”)
1.Net profit from continuous operations
183,354,864.09 152,979,433.57
(net losses are represented by “-”)
71 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
2.Net profit from discontinuous
operations (net losses are represented by “-”)
V. Other comprehensive income, net of tax 14,666,831.86 -13,603,497.91
(I) Other comprehensive income will not be
reclassified subsequently to profit or loss
1. Changes in net liabilities or net assets
arising from re-measurement of defined
benefit plans
2. Share of other comprehensive income
of investees that cannot be reclassified to
profit or loss under equity method
(II) Other comprehensive income to be
14,666,831.86 -13,603,497.91
reclassified subsequently to profit or loss
1. Share of other comprehensive income
of investees that will be reclassified
15,117,117.89 -13,949,016.48
subsequently to profit or loss under equity
method
2. Gain or loss from change in fair value
-450,286.03 345,518.57
of available-for-sale financial assets
3. Gain or loss arising from
reclassification from held-to-maturity
investments to available-for-sale financial
assets
4. Effective portion of gain or loss
arising from cash flow hedging instruments
5. Exchange differences on translation of
financial statements denominated in foreign
currency
6. Others
VI. Total comprehensive income 198,021,695.95 139,375,935.66
VII. Earnings per share:
(I) Basic earnings per share (RMB/
share)
(II) Diluted earnings per share
(RMB/share)
Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Cash Flow Statement
January-June 2018
Unit and Currency: RMB
Items Notes Current period Previous period
Ⅰ. Cash flows from operating
activities:
Cash received from the sale of goods
88,990,747,210.36 74,935,403,117.83
and rendering of services
Net increase in consumer and
interbank deposits
Net increase in borrowing from
PBOC
Net cash increase in borrowing from
72 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
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
Net increase from the disposal of
financial assets measured at fair value
and changes of which included in
current profit and loss
Cash received for interest, bank
charges and commissions
Net increase in cash borrowed
Net increase in cash received from
repurchase operation
Refunds of taxes 512,976,383.25 485,662,098.22
Cash received from other related Ⅶ.61 506,972,932.99 459,333,039.95
operating activities
Sub-total of cash inflows from
90,010,696,526.60 75,880,398,256.00
operating activities
Cash paid on purchase of goods and
63,858,636,542.27 51,699,049,058.50
services
Net increase in loans and advances
Net increase in deposits in PBOC and
interbank
Cash paid for compensation payments
under original insurance contract
Cash paid for interest, bank charges
and commissions
Cash paid for insurance policy
dividend
Cash paid to and on behalf of
9,237,917,423.80 7,150,233,117.84
employees
Cash paid for all types of taxes 4,590,954,706.19 3,532,926,832.74
Cash paid to other operation related Ⅶ.62 6,954,801,900.32 5,063,786,588.46
activities
Sub-total of cash outflows from
84,642,310,572.58 67,445,995,597.54
operating activities
Net cash flows from operating Ⅶ.67 5,368,385,954.02 8,434,402,658.46
activities
Ⅱ. Cash flows from investing
activities:
Cash received from disposal of
2,089,760,985.51 13,500,000.00
investments
Cash received from return on
243,774,322.52 111,755,467.37
investments
Net cash received from the disposal
of fixed assets, intangible assets and 66,472,237.59 38,490,006.64
other long term assets
Net cash received from disposal of
5,916,992.24
subsidiaries and other operating entities
Cash received from other Ⅶ.63 102,448,074.88
investment related activities
Sub-total of cash inflows from 2,502,455,620.50 169,662,466.25
73 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
investing activities
Cash paid on purchase of fixed
assets, intangible assets and other long 2,737,429,642.03 1,690,179,598.23
term assets
Cash paid for investments 2,541,755,500.75 802,287,173.10
Net increase in secured loans
Net cash paid on acquisition of
54,786,726.52
subsidiaries and other operating entities
Cash paid on other investment Ⅶ.64 72,282,503.66
related activities
Sub-total of cash outflows from
5,351,467,646.44 2,547,253,497.85
investing activities
Net cash flows from investing
-2,849,012,025.94 -2,377,591,031.60
activities
Ⅲ. Cash flows from financing
activities:
Cash received from investment 80,422,640.20 403,277,599.87
Including: cash received by
subsidiaries from minority shareholders’
investment
Cash received from borrowings 4,509,988,283.98 12,542,711,276.95
Cash received from issuing bonds
Cash received from other financing
75,828.87
related activities
Sub-total of cash inflows from
4,590,410,924.18 12,946,064,705.69
financing activities
Cash paid on repayment of
6,528,030,681.51 13,232,929,731.76
borrowings
Cash paid on distribution of
2,233,319,529.73 130,616,690.52
dividends, profits, or interest expenses
Including: dividend, profit paid to
minority shareholders by subsidiaries
Cash paid on other financing Ⅶ.65 513,528,122.08 86,087,258.56
activities
Sub-total of cash outflows from
9,274,878,333.32 13,449,633,680.84
financing activities
Net cash flows from financing
-4,684,467,409.14 -503,568,975.15
activities
Ⅳ. Effect of fluctuations in exchange
10,109,446.43 -74,862,962.90
rates on cash and cash equivalents
Ⅴ. Net increase in cash and cash
-2,154,984,034.63 5,478,379,688.81
equivalents
Add: balance of cash and cash Ⅶ.67
equivalents at the beginning of the 34,340,013,574.22 23,295,239,445.05
period
Ⅵ. Balance of cash and cash Ⅶ.67
32,185,029,539.59 28,773,619,133.86
equivalents at the end of the period
Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
74 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Cash Flow Statement of the Parent Company
January-June 2018
Unit and Currency: RMB
Items Notes Current period Previous period
Ⅰ. Cash flows from operating
activities:
Cash received from the sale of
1,026,490,616.31 139,120,441.24
goods and rendering of services
Refunds of taxes 11,759,645.04
Cash received from other related
150,663,743.56 50,673,786.01
operating activities
Sub-total of cash inflows from
1,188,914,004.91 189,794,227.25
operating activities
Cash paid on purchase of goods
334,977,272.61 817,622,677.26
and services
Cash paid to and on behalf of
519,466,890.74 460,813,118.91
employees
Cash paid for all types of taxes 114,511,009.96 95,721,014.98
Cash paid to other operation related
213,818,898.29 201,399,325.56
activities
Sub-total of cash outflows from
1,182,774,071.60 1,575,556,136.71
operating activities
Net cash flows from operating
6,139,933.31 -1,385,761,909.46
activities
Ⅱ. Cash flows from investing
activities:
Cash received from disposal of
78,325.00
investments
Cash received from return on
1,053,181,844.07 279,713,897.32
investments
Net cash received from the disposal
of fixed assets, intangible assets and
other long term assets
Net cash received from disposal of
subsidiaries and other operating entities
Cash received from other
investment related activities
Sub-total of cash inflows from
1,053,260,169.07 279,713,897.32
investing activities
Cash paid on purchase of fixed
assets, intangible assets and other long 14,341,911.75 1,791,373.41
term assets
Cash paid for investments 65,722,235.00 220,659,237.50
Net cash paid on acquisition of
subsidiaries and other operating entities
Cash paid on other investment
related activities
Sub-total of cash outflows from
80,064,146.75 222,450,610.91
investing activities
Net cash flows from investing
973,196,022.32 57,263,286.41
activities
Ⅲ. Cash flows from financing
activities:
75 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Cash received from investment
Cash received from borrowings 1,500,000,000.00
Cash received from issuing bonds
Cash received from other financing
698,132,975.25
related activities
Sub-total of cash inflows from financing
1,500,000,000.00 698,132,975.25
activities
Cash paid on repayment of borrowings
Cash paid on distribution of dividends,
2,089,308,295.14
profits, or interest expenses
Cash paid on other financing activities 674,762,474.59
Sub-total of cash outflows from
2,764,070,769.73
financing activities
Net cash flows from financing activities -1,264,070,769.73 698,132,975.25
Ⅳ. Effect of fluctuations in exchange
577.54 -1,138.42
rates on cash and cash equivalents
Ⅴ. Net increase in cash and cash
-284,734,236.56 -630,366,786.22
equivalents
Add: balance of cash and cash
equivalents at the beginning of the 2,070,527,802.97 3,888,623,400.28
period
Ⅵ. Balance of cash and cash
1,785,793,566.41 3,258,256,614.06
equivalents at the end of the period
Legal representative: Liang Haishan Chief accountant: Gong Wei
Person in charge of accounting department: Ying Ke
76 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Consolidated Statement of Changes in Owner’s Equity
January-June 2018
Unit and Currency: RMB
Current period
Equity attributable to owners of the parent company
Other equity Total
Items Other General Minority
instruments Less: Undistri owners’
Share Capital compreh Special Surplus risk equity
Preferenc Perpetua Treasury buted equity
capital reserve ensive reserve reserve provisio
e l Others stock profits
income ns
share bonds
Ⅰ. Closing balance for the 6,097,40 431,424 826,883, -36,363, 2,103,05 22,793,1 14,534,490, 46,750,006,
previous year 2,727.00 ,524.07 093.84 809.96 7,782.41 10,884.0 935.91 137.36
9
Add: changes in accounting
policies
Correction of previous
errors
The consolidation of
enterprises under common
control
Others
Ⅱ. Opening balance for the 6,097,40 431,424 826,883, -36,363, 2,103,05 22,793,1 14,534,490, 46,750,006,
current year 2,727.00 ,524.07 093.84 809.96 7,782.41 10,884.0 935.91 137.36
9
Ⅲ. Increase/decrease and 47,000,3 306,669, 2,698,06 805,427,22 3,857,163,4
change of amount for the 47.59 981.33 5,921.89 5.80 76.61
current period (decrease is
represented by “-”)
(I) Total comprehensive 266,441, 4,858,79 1,203,712,1 6,328,949,5
income 870.74 5,529.42 82.47 82.63
(II) Capital injection and 47,000,3 -4,389.9 3,281,460.8 50,277,418.
reduction by owners 47.59 6 4 47
1. Ordinary shares invested 3,281,460.8 3,281,460.8
by shareholders 4 4
2. Capital injected by
holders of other equity
77 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
instruments
3. Amount of shares
payment credited to owner’s
equity
4.Others 47,000,3 -4,389.9 46,995,957.
47.59 6 63
(III) Profit distribution -2,085,3 -401,292,44 -2,486,604,
11,732.6 6.68 179.31
3
1. Appropriation to surplus
reserves
2.Provisions for general
risks
3.Distribution to owners (or -2,085,3 -401,292,44 -2,486,604,
shareholders) 11,732.6 6.68 179.31
3
4.Others
(IV) Internal transfer of
owner’s equity
1. Transfer of capital
reserves into capital (or
share capital)
2. Transfer of surplus
reserves into capital (or
share capital)
3. Surplus reserves used for
remedying loss
4.Others
(V) Special reserve
1. Appropriated for the
period
2. Utilized for the period
(VI) Others 40,232,5 -75,417, -273,970.83 -35,459,345
00.55 874.90 .18
Ⅳ. Closing balance for the 6,097,40 431,424 873,883, 270,306, 2,103,05 25,491,1 15,339,918, 50,607,169,
period 2,727.00 ,524.07 441.43 171.37 7,782.41 76,805.9 161.71 613.97
8
78 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Previous period
Equity attributable to owners of the parent company
Other equity Total
Items Other General Minority
instruments Less: Undistri owners’
Share Capital compreh Special Surplus risk equity
Preferen Perpetu Treasury buted equity
capital reserve ensive reserve reserve provisio
ce al Others stock profits
income ns
share bonds
Ⅰ. Closing balance for the 6,097,63 83,383,1 1,041,96 566,238, 2,074,11 17,544,3 11,215,641, 37,580,366,
previous year 0,727.00 94.51 0.00 911.96 8,571.01 95,965.3 001.64 411.47
5
Add: changes in accounting
policies
Correction of previous
errors
The consolidation of 748,523. 2,341,50 70,372,7 26,711,159. 100,173,97
enterprises under common 61 6.77 86.35 52 6.25
control
Others
Ⅱ.Opening balance for the 6,097,63 83,383,1 1,041,96 566,987, 2,076,46 17,614,7 11,242,352, 37,680,540,
current the period 0,727.00 94.51 0.00 435.57 0,077.78 68,751.7 161.16 387.72
0
Ⅲ.Increase/decrease and 232,071, -161,578 2,904,71 1,977,325,3 4,952,529,3
change of amount for the 264.01 ,679.72 1,364.07 59.63 07.99
period (decrease is
represented by “-”)
(I) Total comprehensive -161,578 4,416,86 825,207,33 5,080,495,8
income ,679.72 7,240.37 8.25 98.90
(II) Capital injection and 232,071, 1,401,209,0 1,633,280,2
reduction by owners 264.01 01.28 65.29
1. Ordinary shares invested 231,991, 1,401,208,3 1,633,199,9
by shareholders 591.90 71.06 62.96
2. Capital injected by
holders of other equity
instruments
3. Amount of shares
payment credited to owner’s
equity
79 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
4．Others 79,672.1 630.22 80,302.33
1
(III) Profit distribution -1,512,1 -249,090,9 -1,761,246,
55,876.3 79.90 856.20
0
1. Appropriation to surplus
reserves
2. Provisions for general
risks
3. Distribution to owners (or -1,512,1 -249,090,9 -1,761,246,
shareholders) 55,876.3 79.90 856.20
0
4. Others
(IV) Internal transfer of
owner’s equity
1. Transfer of capital
reserves into capital (or
share capital)
2. Transfer of surplus
reserves into capital (or
share capital)
3. Surplus reserves used for
remedying loss
4.Others
(V) Special reserve
1. Appropriated for the
period
2. Utilized for the period
(VI) Others
Ⅳ. Closing balance for the 6,097,63 315,454, 1,041,96 405,408, 2,076,46 20,519,4 13,219,677, 42,633,069,
period 0,727.00 458.52 0.00 755.85 0,077.78 80,115.7 520.79 695.71
7
Legal representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Ying Ke
80 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Statement of Changes in Owner’s Equity of the Parent Company
January-June 2018
Unit and Currency: RMB
Current period
Other equity Other
instruments Less: Undistribu Total
Items Share Capital comprehen Special Surplus
Treasury ted owners’
capital Preference Perpetual reserve sive reserve reserve equity
Others stock profits
share bonds income
Ⅰ. Closing balance for the 6,097,402,7 2,317,907, -43,234,73 1,437,313, 2,128,502, 11,937,891
previous period 27.00 947.71 7.77 649.93 328.76 ,915.63
Add: changes in accounting
policies
Correction of previous
errors
Others
Ⅱ.Opening balance for the 6,097,402,7 2,317,907, -43,234,73 1,437,313, 2,128,502, 11,937,891
current period 27.00 947.71 7.77 649.93 328.76 ,915.63
Ⅲ.Increase/decrease and 253,883.52 29,755,84 -1,930,274 -1,900,265
change of amount for the 7.62 ,897.33 ,166.19
period (decrease is represented
by “-”)
(I) Total comprehensive 14,666,83 183,354,8 198,021,69
income 1.86 64.09 5.95
(II) Capital injection and 253,883.52 253,883.52
reduction by owners
1. Ordinary shares invested by
shareholders
2. Capital injected by holders
of other equity instruments
3. Amount of shares payment
credited to owner’s equity
4. Others 253,883.52 253,883.52
(III) Profit distribution -2,085,311 -2,085,311
,732.63 ,732.63
1. Appropriation to surplus
reserves
2. Distribution to owners (or -2,085,311 -2,085,311
shareholders) ,732.63 ,732.63
81 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
3. Others
(IV) Internal transfer of
owner’s equity
1. Transfer of capital reserves
into capital (or share capital)
2. Transfer of surplus reserves
into capital (or share capital)
3. Surplus reserves used for
remedying loss
4.Others
(V) Special reserve
1. Appropriated for the period
2. Utilized for the period
(VI) Others 15,089,01 -28,318,02 -13,229,01
5.76 8.79 3.03
IV. Closing balance for the 6,097,402,7 2,318,161, -13,478,89 1,437,313, 198,227,4 10,037,626
period 27.00 831.23 0.15 649.93 31.43 ,749.44
Previous period
Other equity Other
instruments Less: Undistribu Total
Items Share Capital comprehen Special Surplus
Treasury ted owners’
capital Preference Perpetual reserve sive reserve reserve equity
Others stock profits
share bonds income
Ⅰ. Closing balance for the 6,097,630,7 2,061,597, 1,041,960. -10,881,60 1,389,846, 2,258,102, 11,795,253
previous period 27.00 739.78 00 3.15 284.51 166.73 ,354.87
Add: changes in accounting
policies
Correction of previous
errors
Others
Ⅱ. Opening balance for the 6,097,630,7 2,061,597, 1,041,960. -10,881,60 1,389,846, 2,258,102, 11,795,253
current period 27.00 739.78 00 3.15 284.51 166.73 ,354.87
Ⅲ . Increase/decrease and 29,180.39 -13,603,49 -1,359,176 -1,372,750
change of amount for the 7.91 ,442.73 ,760.25
period (decrease is
represented by “-”)
(I) Total -13,603,49 152,979,4 139,375,93
82 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
comprehensive income 7.91 33.57 5.66
(II) Capital injection and 29,180.39 29,180.39
reduction by owners
1. Ordinary shares invested
by shareholders
2. Capital injected by holders
of other equity instruments
3. Amount of shares payment
credited to owner’s equity
4.Others 29,180.39 29,180.39
-1,512,155 -1,512,155
(III) Profit distribution
,876.30 ,876.30
1. Appropriation to surplus
reserves
2.Distribution to owners (or -1,512,155 -1,512,155
shareholders) ,876.30 ,876.30
3.Others
(IV) Internal transfer of
owner’s equity
1. Transfer of capital reserves
into capital (or share capital)
2. Transfer of surplus
reserves into capital (or share
capital)
3. Surplus reserves used for
remedying loss
4.Others
(V) Special reserve
1. Appropriated for the period
2. Utilized for the period
(VI) Others
Ⅳ. Closing balance for the 6,097,630,7 2,061,626, 1,041,960. -24,485,10 1,389,846, 898,925,7 10,422,502
period 27.00 920.17 00 1.06 284.51 24.00 ,594.62
Legal representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Ying Ke
83 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
III. General Information of the Company
1. Overview of the Company
√Applicable □Not Applicable
The predecessor of Qingdao Haier Co., Ltd. (herein after referred to as the “Company”) was
Qingdao Refrigerator Factory, which was established in 1984. As permitted to offering by People's Bank
of China, Qingdao Branch on 16 December 1989, approved by Qing Ti Gai [1989] No.3 on 24 March
1989, based on the reconstruction of the original Qingdao Refrigerator Factory, a limited company was
set up by directional fund raising of RMB150 million. In March and September 1993, as approved by
the document of Qing Gu Ling Zi [1993] No. 2 and No. 9 issued by the pilot leading team of Qingdao
joint stock company, the Company was converted from a directional offering company to a public
subscription company, and issued additional 50 million shares to the public and listed with trading on
SSE in November 1993.
The Company’s registered office is located at the Haier Industrial Park of Laoshan District,
Qingdao, Shandong Province, and the headquarters is located at the Haier Industrial Park of Laoshan
District, Qingdao, Shandong Province.
The Company is mainly engaged in manufacturing and trading as well as R&D of refrigerator,
air-conditioner, freezer, washing machine, water heater, dishwashers, gas stove and relevant products
and commercial circulation business.
The Company’s ultimate holding company is Haier Group Corporation.
These financial statements have been approved for publication by the Board of the Company on 30
August 2018. According to the Article of Association, these financial statements will be provided for
consideration and approval of the general meeting.
2. Scope of consolidated financial statements
√Applicable □Not Applicable
For details of changes in the scope of consolidated financial statements for the period, please refer
to “VIII. Changes in Consolidation Scope” and “Ⅸ. Interests in Other Entities” of this note.
IV. Basis of Preparation of the Financial Statements
1. Basis of Preparation
The financial statements of the Company were prepared on the going concern basis according
to the transactions and matters actually occurred, in accordance with the Accounting Standards for
Enterprises – Basic Standards published by the Ministry of Finance, specific accounting standards,
and guidance on application of accounting standards for enterprises, interpretations to accounting
standards for enterprises and other relevant requirements (hereinafter collectively referred to as the
“Accounting Standards for Enterprises”) which issued subsequently, and in combination with the
disclosure provisions of the Rules for the Information Disclosure and Compilation of Companies
84 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Publicly Issuing Securities No.15: General Provisions for Financial Report (Revised in 2014) of
CSRC as well as the following significant accounting policies and accounting estimation.
2. Continuing Operation
√Applicable □Not Applicable
The Company has ability to continue its operation for at least 12 months since the end of the
reporting period and there is no significant events affecting its ability to continue as a going concern.
V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
Tips of specific accounting policies and accounting estimation:
√Applicable □Not Applicable
According to the characteristics of its production and operation, the Company formulated a series
of specific accounting policies and accounting estimates, including the provisions for impairment for
accounts receivable (Note V.11); the measurement of inventories (Note V.12); the depreciation and
amortization of the investment properties (Note V.14); the depreciation of fixed assets (Note V.15); the
amortization of intangible assets (Note V.18); the criterion for determining of long-term assets
impairment (Note V.19); and the date of revenue recognition (Note V.24), etc..
1. Statement of compliance with enterprise accounting standards
The financial statements prepared by the Company meet the requirements of the enterprise
accounting standards, which accurately and completely reflected information relating to the financial
condition as of 30 June 2018, operation result and cash flow of the Company in January to June 2018.
2. Accounting period
The accounting year of the Company is from 1 January each year to 31 December of the same year
in solar calendar.
3. Operating cycle
√Applicable □Not Applicable
The Company takes 12 months as an operating cycle, which is also the classification basis for the
liquidity of its assets and liabilities.
4. Recording currency
RMB is the recording currency of the Company.
85 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
5. Accounting methods of enterprise combinations involving entities under common control and
entities not under common control
√Applicable □Not Applicable
An enterprise combination is a transaction or event that brings together two or more separate entities
into one reporting entity. Enterprise combinations are classified into enterprise combinations under
common control and enterprise combinations not under common control.
(1) Enterprise combinations under common control
An enterprise combination under common control is an enterprise combination in which all of the
combining entities are ultimately controlled by the same party or parties both before and after the
combination, and that control is not transitory. For enterprise combination under common control, the
party that obtains the control over the other parties on the combination date is the acquirer, and other
parties involving in the enterprise combination are the acquiree. The combination date is the date on
which the acquiring party effectively obtains the control over the party being acquired.
In case the consideration for long-term equity investments formed in enterprise combination under
common control is paid by ways of cash, transfer of non-cash assets or assumption of debts, the
Company will regard the share of carrying amounts of the net assets of the acquiree in the ultimate
controller’s consolidated financial statements obtained as the initial investment cost of long-term equity
investments as at the date of combination. For carrying value of net assets of the acquiree is negative as
at the date of combination, investment cost of long-term equity investment is calculated as zero. In case
the acquiree is controlled by the ultimate controller by the enterprise combination under non-common
control before combination, the initial investment cost of the long-term equity investment of the acquirer
includes relevant goodwill. The Company should adjust the capital reserve (capital premium or share
premium) in accordance with the differences between initial investment cost of the long-term equity
investment and the cash paid, the non-cash assets transferred and the carrying value of liability assumed;
in case the balance of the capital reserve (capital premium or share premium) is insufficient for the
elimination, the surplus reserves and undistributed profits shall be used to dilute such expenses in order.
In case the consideration for the combination is paid by issuance of equity instruments, the aggregate
nominal value of shares issued will be deemed as the share capital. The difference between the initial
investment cost of long-term equity investments and aggregate nominal value of shares issued shall be
86 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
adjusted to capital reserve (capital premium or share premium), in case the capital reserve (capital
premium or share premium) is insufficient for the elimination, the surplus reserves and undistributed
profits shall be used to dilute such expenses in order.
Intermediary fees (such as audit, legal services and valuation consultancy) and other relevant
management fees incurred in the enterprises combination by the acquirer are credited in profit or loss in
the period when they occurred. Trading expenses in direct relation to the issuance of equity instrument
as the consideration for the combination is written down to the capital reserve (share premium), where
the capital reserve (share premium) is insufficient, and to surplus reserves and undistributed profits in
order. Trading expenses in direct relation to the issuance of debt instrument as the consideration for the
combination is included in the initial recognition amount of the debt instrument.
For enterprise combination under common control realized through several transactions step by step,
in case of a package transaction, all the transactions are accounted as one transaction that has acquired
the control; in case of not a package transaction, in the financial statement of parent company the capital
reserve ( share premium) is adjusted by the difference between the initial investment cost and the sum of
the carrying value of the original long-term equity investment and the book value of the new payment
consideration for further acquisition of shares with the share of acquirer's owner's equity on the date of
combination in case calculated on the proportion of shareholding on the date of combination as its initial
investment cost; where the capital reserve is insufficient, the retained earnings will be used to offset such
expenses.
In the consolidated financial statements, the long-term equity investment held by the combining
party before the date of acquiring control of the combined parties, and the profit and loss, the other
comprehensive income and changes in the other owners’ equity recognized during the period between
the later of the date of acquisition and the date when the combining and the combined parties are under
the common control of the same party and the date of combination, are written down to the retained
earnings or current profit or loss at the beginning of the comparative reporting period, respectively.
(2) Enterprise combinations involving entities not under common control
An enterprise combination not under common control is an enterprise combination in which all of
the combining entities are not ultimately controlled by the same party or parties both before and after the
87 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
combination. For enterprise combination not under common control, the party that obtains the control of
the other parties at the combination date is the acquirer; other parties involving in the enterprise
combination are the acquirees. The combination date is the date on which the acquirer effectively
obtains control of the acquirees.
In enterprise combination involving entities not under common control, the cost of combination
shall be the sum of the assets paid, obligations incurred or assumed and the fair value of the equity
securities issued by the acquirer for obtaining control of the acquiree at the date of acquisition.
Intermediary fees (such as audit, legal services and valuation consultancy) and other relevant
management fees incurred by the acquirer for the purpose of enterprise combination are credited in
profit or loss in the period when they occurred. Transaction fees for the equity instruments or debt
instruments issued by the acquirer as combination consideration is included in the initial recognition
amount of such equity instruments or debt instruments. Contingent consideration involved shall be
recorded as the combination cost based on its fair value on the acquisition date. Should any new or
further evidence arises within 12 months after the acquisition date and makes it necessary to adjust the
contingent consideration on the acquisition date, the goodwill arising from the enterprise combination
shall be amended accordingly.
The cost of combination and identifiable net assets obtained by the acquirer in an enterprise
combination are measured at fair value on the acquisition date. Where the cost of the combination
exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is
recognized as goodwill; where the cost of combination is lower than the acquirer’s interest in the fair
value of the acquiree’s identifiable net assets, the difference is initially recognized in profit or loss for
the current year after a review of computation for the identifiable assets, liabilities or fair value of
contingent liabilities and combination cost, and where the combination cost is still lower than the fair
value of the identifiable net assets of the acquiree obtained during the course of combination, then the
difference is recorded in the current profit and loss.
In enterprise combination involving entities not under common control that is realized in phases
through multiple exchange transactions, in the individual financial statements of parent company, the
sum of the book value of the equity investment of the acquiree held before the date of acquisition and
88 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
the cost of new investment on the date of acquisition are recognized as the initial investment cost of such
investment.
In the consolidated financial statement, the equity of the acquiree held before the date of acquisition
is re-measured at the fair value on the date of acquisition, and the difference between the fair value and
book value is included in current investment income; where the equity of the acquiree held before the
date of acquisition involves the other comprehensive income, such equity and relevant other
comprehensive income are transferred to current investment income on the date of acquisition, other
than the other comprehensive income that cannot be reclassified into the current profit or loss.
The fair value on the acquisition date of equity interest in the acquiree prior to the acquisition date
and the fair value of the considerations paid for the acquisition of the new equity on the acquisition date
are regarded as the combination costs of the Company, comparing with aquirer's share of the fair value
on the acquisition date of the acquiree's net identifiable assets on the proportion of the shareholding on
the acquisition date to confirm the goodwill that required to be recognized on the acquisition date or the
amount that shall be included in the current consolidated profit or loss.
6. Preparation method of consolidated financial statements
√Applicable □Not Applicable
(1) Scope of consolidated financial statements
The Company incorporated all of its subsidiaries (including the separate entities controlled by the
Company) into the scope of consolidation financial statements, including the enterprises under the
Company’s control, divisible part in the investees and structured entities.
(2) To unify the accounting policies, balance sheets date and accounting periods of the Company
and subsidiaries
When preparing consolidated financial statements, adjustments are made if subsidiaries’ accounting
policies or accounting periods are different from that of the Company, in accordance with the
Company’s accounting policies and accounting periods.
(3) Offset matters in the consolidated financial statements
The consolidated financial statements shall be prepared on the basis of the balance sheets of the
Company and subsidiaries, which offset the internal transactions incurred between the Company and
89 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
subsidiaries and among subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent
company, as minority equity interests, shall be presented as “minority equity interest” under the owners’
equity item in the consolidated balance sheet.
The long-term equity investment of the Company held by the subsidiaries, deemed as treasury stock
of the corporate group as well as the reduction of owners’ equity, shall be presented as “Less: Treasury
stock” under the owners’ equity item in the consolidated balance sheet.
(4) Accounting treatment of subsidiaries acquired from combination
For subsidiaries acquired from enterprise combination under common control, the assets, liabilities,
operating results and cash flows of the subsidiaries are included in the consolidated financial statements
from the beginning of the period in which the combination took place, as if the combination has taken
since the ultimate controller began its control. When preparing the consolidated financial statements, for
the subsidiaries acquired from enterprise combination under non-common control, separate financial
statement will be adjusted on the basis of their fair values of the identifiable net assets on the date of
acquisition.
7. Classification of joint arrangement and accounting methods of joint operations
√Applicable □Not Applicable
A joint arrangement refers to an arrangement jointly controlled by two or more parties. In
accordance with the Company’s rights and obligations under a joint arrangement, the Company
classifies joint arrangements into: joint operations and joint ventures.
Joint operations refer to a joint arrangement in which the Company is a party and is entitled to
relevant assets and obligations of this arrangement. The Company recognizes the following items in
relation to its interest in a joint operation, and accounts the same in accordance with relevant accounting
standards for business enterprises:
(1) recognize the assets held solely by the Company, and recognize assets held jointly by the
Company in appropriation to the share of the Company; (2) recognize the obligations assumed solely by
the Company, and recognize obligations assumed jointly by the Company in appropriation to the share
of the Company; (3) recognize revenue from disposal of joint operations in appropriation to the share of
the Company; (4) recognize revenue from disposal of joint operations in appropriation to the share of the
90 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Company; (5) recognize fees solely occurred by the Company and recognize fees from joint operations
in appropriation to the share of the Company.
When the Company, as a joint venture, invests or sells assets to or purchase assets (the assets do not
constitute a business, the same below) from joint operations, the Company shall only recognize the part
of profit or lost from this transaction attributable to other parties of joint operations before these assets
are sold to a third party. In case of an impairment loss incurred on these assets which meets the
requirements as set out in “Accounting Standards for Business Enterprises No. 8 – Asset Impairment”,
the Company shall full recognize the amount of this loss in relation to its investment in or sale of assets
to joint operations, or recognize the loss according to the Company’s share of commitment in relation to
the its purchase of assets from joint operations.
Joint ventures refer to a joint arrangement during which the Company only is entitled to net assets
of this arrangement. Investment in joint venture is accounted for using the equity method according to
the accounting policies referred to under “13 Long-term equity investment” of this Note V.
8. Recognition standard for cash and cash equivalents
Cash recognized in the cash flow statements represents the cash on hand and deposits available for
payment of the Company at any time.
Cash equivalents recognized in the cash flow statements refer to short-term, highly liquid
investments held by the Company that are readily convertible to known amounts of cash and which are
subject to an insignificant risk on change in value.
9. Foreign currency businesses and translation of foreign currency statements
√Applicable □Not Applicable
(1) Translation of Foreign currency transactions
If foreign currency transactions occur, they are translated into the amount of functional currency by
applying the spot exchange rate at the transaction date.
Monetary items denominated in foreign currencies are translated into functional currencies at the
rates of exchange ruling at the balance sheet date. All foreign exchange difference are credited into the
current profit or loss, except ① those arising from the funds denominated in foreign currency specially
91 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
borrowed for the establishment of the qualifying assets are treated based on the principal of
capitalization of borrowing costs; ② those arising from the other changes in the balance other than
amortized cost of available-for-sale monetary items denominated in foreign currency are recognized in
the other comprehensive income.
Non-monetary items in foreign currency measured at historical cost are translated using the spot
exchange rate prevailing on the date when transaction occurred and its functional currency shall remain
unchanged. Non-monetary items denominated in foreign currencies that are measured at fair value are
translated using the foreign exchange rate at the date the fair value is determined; the exchange
differences between the translated and original amounts of functional currencies are recognized in the
statement of profit or loss or other comprehensive income as changes in fair value (including changes in
exchange rate).
(2) Translation of foreign currency financial statements
If the functional currencies used as the bookkeeping base currency by the subsidiaries, joint ventures
and associates under the control of the Company are different from that of the Company, their financial
statements denominated in foreign currencies shall be translated to perform accounting and prepare the
consolidated financial statements.
The assets and liabilities of the balance sheet are translated using the spot exchange rate at the
balance sheet date; all items except for “undistributed profits” of the owner’s equity are translated at the
spot exchange rate on the transaction date. The revenue and expenses in the income statement are
translated using the approximate rate of the spot exchange rate on the transaction date. Differences
arising from the translation of foreign currency financial statements are presented as the “other
comprehensive income” in the owner’s equity of the balance sheet.
Foreign currency cash flows are translated using the approximate rate of the spot exchange rate on
the transaction date. The impact of exchange rate changes on cash amount is reflected separately in the
cash flow.
When disposing overseas operations, the translation difference related to the overseas operation
shall be transferred together or as the percentage of disposing the overseas operation to profit or loss for
the period of disposal.
92 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
10. Financial instruments
√Applicable □Not Applicable
(1) Classification, recognition and measurement of financial instruments
A financial asset or a financial liability is recognized when the Company becomes a contractual
party of a financial instrument. Financial assets and financial liabilities are measured at fair value upon
initial recognition. Related transaction costs are recorded directly in current profit or loss for financial
assets and financial liabilities at fair value with its change consolidated in profit/loss, or included in the
amount recognized initially for other types of financial assets and financial liabilities.
Determination of the fair value of financial assets and financial liabilities: Fair value refers to the
price receivable from the exchange of an asset or payable for the settlement of a liability in a fair
transaction between knowledgeable and willing counterparties. The fair value of financial instruments
where there is an active market is determined based on the quoted price in such market, which refers to
the price regularly available from exchanges, brokers, trade associations and pricing service agencies
that represents the price adopted in an arm’s length transaction which actually occurred in the market.
For financial instruments where there is no active market, the fair value is determined using valuation
techniques. Such techniques include reference to prices used in recent market transactions between
knowledgeable and willing counterparties, reference to the current fair value of another instrument
which is substantially the same, discounted cash flow analysis and option pricing models or other
valuation models.
Financial assets are classified into financial assets at fair value with its change consolidated in
profit/loss, held-to-maturity investments, loans and receivables, and available-for-sale financial assets
upon initial recognition. Classification of financial asset other than receivables is based on the purpose
and capability of financial asset held by the Company and its subsidiaries. The financial liabilities are,
on initial recognition, classified into financial liabilities at fair value with its change consolidated in
profit/loss and other financial liabilities.
Financial assets at fair value with its change consolidated in profit/loss include financial assets held
for trading and financial assets designated as at fair value with its change consolidated in profit/loss. All
financial assets at fair value with its change consolidated in profit/loss of the Company are financial
assets held for trading. Financial assets may be classified as financial assets held for trading if one of the
following conditions is met: ① the financial asset is acquired principally for the purpose of sale or
93 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
repurchase in the near term; ② the financial asset is part of a portfolio of identified financial
instruments that are managed together and for which there is an objective evidence of recent pattern of
short-term profit-taking; or ③ the financial asset is a derivative, excluding the derivatives designated as
effective hedging instruments, the derivatives classified as financial guarantee contract, and the
derivatives linked to an equity instrument investment, which has no quoted price in an active market nor
a reliably measured fair value, and required to be settled through delivery of that equity instrument. A
financial asset may be designated as at fair value with its change consolidated in profit/loss upon initial
recognition only when one of the following conditions is satisfied: ① such designation eliminates or
significantly reduces a measurement or recognition inconsistency that would otherwise result from
measuring assets or recognizing the gains or losses on them on different bases; ② the financial asset
forms part of a group of financial assets or a group of financial assets and financial liabilities, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Company’s
documented risk management or investment strategy, and information about the grouping is reported to
key management personnel on that basis; or ③ pursuant to Accounting Standards for Enterprises No.
22 – Recognition and Measurement of Financial Instruments, the financial asset is designated as
combination instrument of financial assets measured at fair value through current profit or loss and
related to embedded derivatives. A financial asset at fair value with its change consolidated in profit/loss,
except for those falling under cash flow hedging, is subsequently measured at fair value. Any gains or
losses arising from changes in the fair value are recognized in profit or loss of changes in the fair value.
Interests or cash dividends received during the period in which such assets are held, are recognized as
investment income; on disposal, the differences between the consideration received and initial
recognized amount are recognized as investment income and the gain or loss from changes in fair value
shall be adjusted accordingly.
Held-to-maturity investments are non-derivative financial assets that have fixed or determinable
payments and fixed maturity and for which the Company has the positive intention and ability to hold to
maturity. Held-to-maturity investments are measured subsequently at amortized cost by using the
effective interest rate method. Gains or losses arising from de-recognition, impairment or amortization
are recognized in the profit or loss in 2016.
The effective interest method is a method of calculating the amortized cost of a financial asset and
of allocating interest income or expense over each period based on the effective interest of a financial
94 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
asset or a financial liability (including a group of financial assets or financial liabilities). The effective
interest rate is the rate that discounts future cash flows from the financial asset or financial liability over
its expected life or (where appropriate) a shorter period to the carrying amount of the financial asset or
financial liability. In calculating the effective interest rate, the Company will estimate the future cash
flows (excluding future credit losses) by taking into account all contract terms relating to the financial
assets or financial liabilities whilst considering various fees, transaction costs and discounts or premiums
which are part of the effective interest rate paid or received between the parties to the financial assets or
financial liabilities contracts.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Financial assets, including Notes receivable, accounts receivable,
other receivables and long-term receivables are classified as loans and receivables by the Company.
Loans and receivables are subsequently measured at amortized cost using the effective interest method.
Gain or loss on derecognition, impairment or amortization is recognized with its change consolidated in
profit/loss for the period.
Available-for-sale financial assets include non-derivative financial assets designated as
available-for-sale at initial recognition, and the financial assets other than financial assets at fair value
with its change consolidated in profit/loss, loans and receivables, and held-to-maturity investments.
Available-for-sale financial assets are subsequently measured at fair value, the gains or losses arising
from changes in fair value, except for impairment losses and exchange difference related to monetary
financial assets and amortized cost which are recognized in profit or loss, are recognized in other
comprehensive income and reclassified to profit or loss when the financial assets are derecognized.
Interests calculated in the effective interest method during the holdings of available-for-sale financial
assets and cash dividends declared by investees are recognized in investment incomes. On disposal, the
differences between the consideration received and the carrying amount of assets after deducting the
accumulated fair value adjustments previously recorded in capital reserves are recorded as investment
income. However, an equity instrument investment which has no quoted price in an active market nor a
reliably measured fair value, and a derivative financial asset (or derivative financial liability) linked to
such equity instrument and required to be settled through delivery of that equity instrument are measured
at cost.
Derivative financial instruments include forward foreign exchange contracts and interest rate swap
95 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
contracts, etc. Derivative financial instruments are initially recognized at fair value at the execution date
of relevant contracts, and subsequently measured at fair value. Expect for the derivative financial
instruments designated as hedging instruments with a highly effective hedging, of which the profit or
loss arising from the changes in fair value will be included in the corresponding profit or loss depending
on the nature of hedging relations and the accounting requirements of hedging tools, the changes in the
fair value of all other derivative financial instruments will be included in the current profit or loss.
For hybrid instruments containing embedded derivatives, an embedded derivative is separated from
the hybrid instrument, where the hybrid instrument is not designated as a financial asset or financial
liability at fair value with its change consolidated in profit/loss, and treated as a stand-alone derivative if
the economic characteristics and risks of the embedded derivative are not closely related to those of the
host contract, and a separate instrument with the same terms as the embedded derivative would be in
compliance with the definition of a derivative. If the Group is unable to measure the embedded
derivative separately either at acquisition or at a subsequent balance sheet date, it will designate the
entire hybrid instrument as a financial asset or financial liability at fair value with its change
consolidated in profit/loss.
Equity instruments refer to the contracts proving the ownership of the remaining equities in the
assets of the Company upon the deduction of all the liabilities. The consideration received from the issue
of the equity instruments increases the shareholders’ equity upon the deduction of the transaction costs.
The allocations made by the Company to the holders of equity instruments (excluding stock dividends)
decrease shareholders’ equity. The Company does not recognize the change in the fair value of equity
instruments.
(2) Recognition and measurement of transfers of financial asset
Financial asset that satisfied any of the following criteria shall be derecognized: ① the contract
right to recover the cash flows of the financial asset has terminated; ② the financial asset, along with
substantially all the risk and return arising from the ownership of the financial asset, has been transferred
to the transferee; or③ the financial asset has been transferred, and the Company has given up the
control on such financial asset, though it does not assign or maintain substantially all the risk and return
arising from the ownership of the financial asset.
When the Company does not either assign or maintain substantially all the risk and rewards of
ownership of the financial asset and does not give up the control on such financial asset, to the extent of
96 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
its continuous involvement in the financial asset, the Company recognizes it as a related financial asset
and recognizes the relevant liability accordingly. The extent of the continuous involvement is the extent
to which the Company exposes to changes in the value of such financial assets.
On derecognition of a financial asset, the difference between the following amounts is recognized
in profit or loss in the period: the carrying amount and the sum of the consideration received and any
accumulated changes in fair value that had been recognized originally and directly in capital reserve. If a
part of the financial assets qualifies for derecognition, the carrying amount of the financial asset is
allocated between the part that continues to be recognized and the part that qualifies for derecognition,
based on the fair values of the respective parts. The difference between the following amounts is
recognized in profit or loss in the period when the carrying amount of the part that qualifies for
derecognition and the sum of the consideration received and any accumulated changes in fair value that
had been recognized originally and directly in capital reserve.
Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is currently an enforceable legal right to offset the recognized financial assets and financial
liabilities and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities
simultaneously. Otherwise, financial assets and financial liabilities are presented separately in the
balance sheet without being offset.
(3) Classification, recognition and measurement of financial liabilities
The Company classifies financial liabilities and equity instruments according to the substance of
the contractual arrangements of the financial instrument and the definitions of a financial liability and an
equity instrument. Financial liabilities are classified as financial liabilities at fair value with its change
consolidated in profit or loss and other financial liabilities at initial recognition.
Financial liabilities at fair value with its change consolidated in profit or loss include financial
liabilities held for trading and financial liabilities designated as at fair value with its change included in
profit or loss.
Financial liabilities may be classified as financial liabilities held for trading if one of the following
conditions is met: ① The financial liability is acquired principally for the purpose of sale or repurchase
in the near term; ② The financial liability is part of a portfolio of identified financial instruments that
are managed together and for which there is an objective evidence of recent pattern of short-term
profit-taking; or ③ The financial liability is a derivative, excluding the derivatives designated as
97 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
effective hedging instruments, the derivatives classified as financial guarantee contract, and the
derivatives linked to an equity instrument investment, which has no quoted price in an active market nor
a reliably measured fair value, and required to be settled through delivery of that equity instrument.
A financial liability may be designated as at fair value with its change consolidated in profit/loss
upon initial recognition only when one of the following conditions is satisfied: ① such designation
eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise
result from measuring liabilities or recognizing the gains or losses on them on different bases; ② the
financial liability forms part of a group of financial liabilities or a group of financial liabilities and
financial liabilities, which is managed and its performance is evaluated on a fair value basis, in
accordance with the Company’s documented risk management or investment strategy, and information
about the grouping is reported to key management personnel on that basis; or ③ pursuant to
Accounting Standards for Enterprises No. 22 – Recognition and Measurement of Financial Instruments,
the financial liability is designated as combination instrument of financial liabilities measured at fair
value through current profit or loss and related to embedded derivatives.
Financial liabilities at fair value with its change consolidated in profit or loss are subsequently
measured at fair value. The gain or loss arising from changes in fair value and dividend and interest
incomes arising from such financial liabilities are recognized in profit or loss in the period.
Other financial liabilities: The derivative financial liabilities linked to and to be settled through
delivery of the equity instruments that are not quoted in an active market and the fair value of which
cannot be reliably measured, such equity instruments are subsequently measured at cost. Other financial
liabilities apart from the financial guarantee contracts are subsequently measured at amortized cost using
the effective interest rate method and the gains or losses arising from de-recognition or amortization are
recognized in profit or loss in the period.
Financial guarantee contracts: Contracts in which the guarantor and the creditor agrees that the
guarantor will settle debts or assume liabilities in accordance with terms therein if the debtor fails to
make payment. Financial guarantee contracts other than those designated as financial liabilities at fair
value with its change consolidated in profit/loss or loan commitments that are not designated at fair
value with its change consolidated in profit/loss and granted at a rate below market rates are initially
recognized at fair value less directly attributable transaction fees, and shall be subsequently measured at
the higher of the following: the amount determined in accordance with Accounting Standard for
98 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Business Enterprises No. 13 “Contingencies” and the amount initially recognized less cumulative
amortization recognized in accordance with the principles set out in Accounting Standard for Business
Enterprises No. 14 “Revenue”.
Derecognition of financial liabilities: A financial liability shall be derecognized or partly
derecognized when the current obligation is discharged or partly discharged. When the Company (debtor)
and the creditor have signed a contract which uses a new financial liability to replace the existing
financial liability, and the contract terms of the new financial liability are substantially different with the
existing financial liability, the existing financial liability shall be derecognized, and the new financial
liability shall be recognized at the same time. If a financial liability is fully or partially derecognized, the
difference between the book value of derecognized portion and the consideration paid (including
non-cash assets transferred out or new financial liability assumed) is recognized in current profit or loss.
(4) Impairment of financial assets
The carrying values of all financial assets except financial assets at fair value with its change
included in profit or loss should be tested for impairment. If impairment is demonstrated by objective
evidences, the provision of impairment should be prepared according to the impairment test.
Objective evidences for recognition of impairment of financial asset include the following
observable matters:
① The issuer or debtor is experiencing significant financial difficulties;
② The debtor breaches the contractual terms, including default or delinquency in interest or
principal payments;
③ The Company, based on economic or legal or other factors, waive the debts;
④ It is highly probable that the debtor will enter bankruptcy or other financial reorganization;
⑤ The issuer is experiencing significant financial difficulties that the corresponding financial
instruments could not be traded in an active market;
⑥ When it is unable to determine whether cash flows of a specific instrument in a group of
financial assets decrease, but the cash flows since initial recognition of that group of financial assets
would decrease and be measurable, or the ability to repay by the debtors in that group of financial asset
deteriorate, or the unemployment rate of the country or region in which the debtors situate increases, or
the price of the underlying collateral decreases significantly in its region, or the industry of the debtors is
diminishing;
99 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
⑦ There are significant adverse changes in the technology, market, economy or legal
environments in issuance place of the equity instrument so that the investor could not recover its
investment costs;
⑧ There is significant or other than temporary decrease in fair value of equity instrument;
⑨ Other objective evidences show that the financial asset is impaired.
The Company shall carry out independent impairment test for financial assets of significant single
amounts. With regard to the financial assets with insignificant single amounts, an independent
impairment test shall be included in a combination of financial assets with similar credit risk
characteristics so as to carry out an impairment test. In the event, upon independent test, the financial
asset (including those financial assets with significant single amounts and those with insignificant
amounts) has not been impaired, it shall be included in a combination of financial assets with similar
characteristics so as to conduct another impairment test. Financial assets that have conducted
independent test as impairment loss shall not be included in a combination of financial assets with
similar risk characteristics so as to conduct another impairment test.
When held-to-maturity investments, loans and accounts receivables have been impaired, the book
value of the financial assets shall be written down to the current value of estimated future cash flow
discounted at the original effective interest rate, and the write-down amount is recorded as impairment
loss and written into profit or loss of the period. When a financial asset based on amortized cost is
impaired, if there are objective evidences showing the value of this financial asset is recovered and it is
objectively related to the matters happened after the impairment loss recognition, the impairment loss
recognized shall be reversed. However, the reversal shall not result in a carrying amount of the financial
asset that exceeds the amortized cost if the impairment had not been recognized at the date when the
impairment is reversed.
If an available-for-sale financial asset is impaired, the cumulative loss arising from decline in fair
value that had been recognized directly in other comprehensive income is reclassified to current profit or
loss. The cumulative loss reclassified is the difference between its acquisition cost (net of any principal
repayment and amortization) and its current fair value, less any impairment loss previously recognized
in profit or loss. If there are objective evidences that the value of that financial asset is recovered and it
can be objectively related to an event occurred after the impairment loss recognition, the impairment loss
recognized shall be reversed, impairment losses recognized for equity instruments classified as
100 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
available-for-sale are reversed through other comprehensive income, while impairment losses
recognized for debt instruments classified as available-for-sale are reversed through current profit or
loss.
If there’s an objective evidence that an investment in equity instrument which has no quoted price
in an active market nor a reliably measured fair value or a derivative financial asset which is linked to
that equity instrument and required to be settled through delivery of that equity instrument is impaired,
the carrying amount shall be written down to the present value discounted at the market rate of return on
future cash flows of the similar financial assets, and the write-down amount shall be recognized as
impairment loss in profit or loss. Such impairment loss once recognized shall no longer be reversed.
For investments in equity instruments, the specific quantitative criterion for the Company to
determine “serious” or “not temporary” decrease in their fair value are set out below:
Specific quantitative criterion on “serious” decrease Decrease in closing fair value relative to the
in their fair value cost has reached or exceeded 50%.
Specific quantitative criterion on “not temporary”
Fall for 12 consecutive months.
decrease in their fair value
11. Receivables
Receivables of the Company include trade receivables and other receivables. Recognition and
provision of bad debts of receivables:
(1) Individually significant receivables for which separate bad-debt provision is made
Individually significant receivables represent the receivables accounting for above 5% of the closing
balance. The Company conducted a separate impairment test for receivables that are individually
significant on the balance sheet date and made provision for its bad debts based on the difference
between the present value of its estimated future cash flows and its carrying amount.
(2) Individually insignificant receivables for which separate bad-debt provision is made
Individual impairment test is made where there is a concrete evidence indicates that there is an
obvious difference in recoverability, and bad debts provision is made based on the difference between
the present value of its estimated future cash flows and its carrying amount.
(3) Trade receivables for which collective bad debt provision is made
101 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Receivables that are individually tested not impairment, is classified by similar credit risks into
several portfolio and then recognize the impairment loss and make bad debts provision of the balance of
the receivables on the balance sheet date.
12. Inventories
√Applicable □Not Applicable
（1）Classification of inventories:
Inventories refer to the finished goods or commodities held for sale in daily activities, goods in
progress in the production process, consumed materials and supplies in the production process or
providing services of the Company, which mainly include raw materials, revolving materials, entrusted
processed materials, wrap page, low-cost consumables, goods in progress, self-made semi-finished
goods, finished goods (merchandise inventory) and engineering construction, etc.
（2）Measurement of inventories transferred out
At delivery, inventories are accounted using the weighted average method for the Company.
（3）Provision for inventory impairment
At balance sheet date, inventories are stated at the lower of cost or net realizable value.
The net realizable value of inventories (including finished products, merchandise and materials for
sale) that can be sold directly is determined using the estimated saleable price of such inventory
deducted by the cost of sales and relevant taxation. The net realizable value of materials in inventory that
are held for production is determined using the estimated saleable price of the finished product deducted
by the cost to completion, estimated cost of sales and relevant taxation. The net realizable value of
inventory held for performance of sales contract or labor service contract is determined based on the
contractual price; in case the amount of inventory held by the enterprise exceeds the contractual amount,
the net realizable value of the excess portion of inventory is calculated using the normal saleable price.
Provision for impairment of inventories is made for individual inventory.
For items of inventories that is produced and marketed in the same geographical area and with the
same or similar end uses or purposes, which cannot be practicable evaluated separately from other items,
cost and net realizable value of inventories may be determined on an aggregate basis. For large quantity
and low value items of inventories, cost and net realizable value of inventories may be determined on
types of inventories.
Provision for impairment of inventories is made and recognized as current profit or loss when the
cost is higher than the net realizable value on the balance sheet date. If the factors that give rise to the
provision in prior years are not in effect in current year, provision would be reversed within the impaired
cost, and recognized in the current profit or loss.
（4）Inventory system
The Company adopts perpetual inventory system.
（5）Amortization of low-value consumables and packaging
102 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Low-value consumables and packages of the Company are amortized by one-time write-off.
13. Long-term equity investments
√Applicable □Not Applicable
Long-term equity investments in this section refer to equity investments held by the Company that
give it control, joint control or significant influence over the investee. Long-term equity investments
where the Company does not exercise control, joint control or significant influence over the investee are
accounted for as available-for-sale financial assets.
（1）Recognition of initial cost of investment
①For long-term equity investment obtained from business consolidation under common control, the
initial cost is measured at the combining party’s share of the carrying amount of the equity of the
combined party; for a long-term equity investment obtained from business consolidation under
non-common control, the initial cost is the consolidation cost at the date of acquisition;
②For the long-term equity investment acquired in a manner other than enterprise combination: the
initial investment cost of the long-term equity investment acquired by payment in cash shall be the total
purchase price; the initial investment cost of the long-term equity investment acquired by issuing equity
securities shall be the fair value of the equity securities issued；For long-term equity investment acquired
by debt restructuring, the initial investment cost shall be recognized in accordance with the requirements
under Accounting Standards for Enterprises No. 12 - Debt Restructuring. For long-term equity
investment acquired by the exchange of non-monetary assets, the initial investment cost shall be
recognized in accordance with relevant requirements under the Rules.
（2）Subsequent measurement and profit or loss recognition
①Cost method
Where the investor has a control over the investee, long-term equity investments are measured
using cost method. For long-term equity investments using cost method, unless increasing or reducing
the investment, the carrying value is unchanged. The Company’s share of the profit distributions or cash
dividends declared by the investee are recognized as investment income.
②Equity method
Investor's long-term equity investments in associates and joint ventures are measured using equity
method. Where part of the equity investments of an investor in its associates are held indirectly through
venture investment institutions, common fund, trust companies or other similar entities including
investment linked insurance funds, such part of equity investments indirectly held by the investor shall
be measured at fair value with its change consolidated in profit/loss according to relevant requirements
of Accounting Standards for Business Enterprises No.22—Recognization and measurement of Financial
Instruments regardless whether the above entities have significant influence on such part of equity
investments, while the remaining part shall be measured using equity method.
Under the equity method, where the initial investment cost of a long-term equity investment
exceeds the Company’s share of the fair value of the investee’s identifiable net assets at the time of
103 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
acquisition, no adjustment is made to the initial investment cost. Where the initial investment cost is less
than the Company’s share of the fair value of the investee’s identifiable net assets at the time of
acquisition, the difference is recognized in profit or loss for the period, and the cost of the long-term
equity investment is adjusted accordingly.
For long-term equity investments accounted for using the equity method, the Company recognizes
the investment income and other comprehensive incomes according to its share of net profit or loss and
other comprehensive incomes of the investee, and the carrying amount of the long-term equity
investments shall be adjusted accordingly; the carrying amount of the investment is reduced by the
Company’s share of the profit distribution or cash dividends declared by an investee; for changes in
owner’s equity of the investee other than those arising from its net profit or loss, other comprehensive
income and profit distribution, the carrying amount of the long-term equity investment shall be adjusted
and recognized to capital reserve. When recognizing attributable share of the net profit and losses of the
investee, the net profit of the investee shall be recognized after adjustment on the ground of the fair
value of all identifiable assets of the investee when it obtains the investment. If the accounting policies
and accounting periods adopted by the investee are different from those adopted by the Company, an
adjustment shall be made to the financial statements of the investee in accordance with the accounting
policies and accounting periods of the Company and recognize the investment incomes and other
comprehensive incomes.
The Company’s share of net losses of the investee shall be recognized to the extent that the carrying
amount of the long-term equity investment together with any long-term interests that in substance form
part of the investor’s net investment in the investee are reduced to zero. If the Company has to assume
additional obligations, the estimated obligation assumed shall be provided for and charged to the profit
or loss as investment loss for the period. Where the investee is making net profits in subsequent periods,
the Company shall resume recognizing its share of profits after setting off against the share of
unrecognized losses.
（3）Change of the accounting methods for long-term equity investments
①Change of measurement at fair value to accounting under equity method: where the equity
investment held have no control, joint control or significant impact on the investee and that are
accounted according to the financial instrument recognition and measurement criteria can carry out
common control or place significant impact due to addition of investment which resulted in the increase
of shareholding, the investee shall plus the fair value of the equity investment originally held determined
in accordance with the Standards for Recognition and Measurement of Financial Instruments and the fair
value of the consideration payable for new investment as the initial investment cost accounted under
equity method when changing the equity method.
②Change of measurement at fair value or accounting under equity method to cost method: the
equity investment of the investee held by the investor with no control, joint control or significant impact
and accounted according to the financial instrument recognition and measurement criteria, or the
long-term equity investment in associates or joint venture originally held that can control the investee
104 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
due to addition of investment, shall be accounted in accordance with the long-term equity investment
formed by combination of enterprises.
③Change of accounting under equity method to measurement at fair value: the long-term equity
investment originally held with common control or significant impact on the investee that cannot
conduct common control or significant impact on the investee due to the decrease of shareholding as a
result of factors such as partial disposal, shall be accounted in accordance with Standards for
Recognition and Measurement of Financial Instruments, and the difference between the fair value on the
date when the common control or significant impact is lost and the book value is included in current
profit or loss.
④Change of cost method to equity method: where control on the investee change to significant
impact or common control with other investors due to factors such as disposal of investment, the
long-term equity investment cost that ceased to be recognized shall first be carried forward on the
proportion of the investment disposed. Then comparing the cost of the remaining long-term equity
investment with the attributable fair value of the identifiable net assets of the investee at the original
investment calculated on proportion of the remaining shareholding, where the former larger than the
later, it belongs to the goodwill as showed in deciding the investment price and will not adjust the
carrying amount of the long-term equity investment; where the former less than the later, the retained
earnings will be adjusted along with the adjustment of the long-term equity investment.
（4）Basis of conclusion for common control and significant influence over the investee
①Joint control over an investee refers to activities which have a significant influence on return of
an arrangement could be decided only by mutual consent of the investing parties sharing the control,
which includes the sales and purchase of goods or services, management of financial assets, acquisition
and disposal of assets, research and development activities and financing activities, etc.
②Significant influence on the investee refers to significant influence over the investee exists when
holding more than 20% but less than 50% of the shares with voting rights or even if the holding is below
20%, there is still significant influence if any of the following conditions satisfied:
1）there is representative in the board of directors or similar governing body of the investee;
2）participating in investee’s policy setting process;
3）assign management to investee;
4）the investee relies on the technology or technical information of the investor;
5）major transactions with the investee.
（5）Impairment test and provision of impairment
At the balance sheet date, the Company reviews whether there is impairment indicator for the
long-term equity investments. When there is impairment indicator, the recoverable amount is determined
through impairment test and impairment is provided based on the difference between the recoverable
amount and the carrying value. Impairment loss is not reversed once provided.
The recoverable amount is the higher of net fair value of long-term equity investments on disposal
105 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
and the present value of estimated future cash flows.
（6）Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the considerations received and
the carrying amount of the disposed investment is recognized in profit or loss. For long-term equity
investment accounted for using the equity method, the part recognized in other comprehensive income is
accounted on pro rata basis upon disposal in the same way as the relevant assets or liabilities are
disposed of directly by the investee.
14. Investment properties
Investment properties of the Company include leased land use rights and leased buildings.
An investment property is initially measured at cost, and cost method is adopted for subsequent
measurement.
The buildings leased out of investment properties of the Company are depreciated over their useful
lives using the straight-line method. The specific measurement policy is the same as fixed assets. For
land use rights leased out or held for resale after appreciation in value, they are amortized over their
useful lives using the straight-line method. The specific measurement policy is the same as that of
intangible assets.
At the balance sheet date, the Company reviews whether there is impairment indicator for
investment properties. When there is impairment indicator, the recoverable amount is recognized
through an impairment test and impairment is provided based on the difference between the carrying
value and the recoverable amount. Impairment is not reversed in subsequent periods.
15. Fixed assets
(1). Recognition criteria
√Applicable □Not Applicable
Fixed assets are tangible assets that are held for production of goods, provision of labor services,
leasing or administrative purposes, and have useful life more than one fiscal year, which are recognized
when the following conditions are met:
① economic benefits in relation to the fixed assets are very likely to flow into the enterprise;
② the cost of the fixed assets can be measured reliably.
（2）Classification and Depreciation method of fixed assets
The fixed assets of the Company can be divided into: buildings and constructions, production
equipment, transportation equipment and office equipment, etc. The straight-line method over useful
lives is used to measure depreciation. The useful lives and the expected net residual value of fixed assets
are determined according to the nature and usage of various fixed assets. At the end of each year, the
useful lives, expected net residual value and depreciation method of fixed assets are reviewed, and
adjusted if there is variance with original policies; The Company have made provisions for all of the
fixed assets except for the fixed assets with full provision and used continuously.
106 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Type of fixed assets Useful lives Expected net residual
Land ownership - value
Houses and buildings 8-40 年 0%-5%
Machinery equipment 4-20 年 0%-5%
Vehicles 5-10 年 0%-5%
Office equipment and others 3-10 年 0%-5%
（3）Test method and provision for impairment of fixed assets
At the balance sheet date, the Company reviews whether there is impairment indicator for the fixed
assets. When there is an impairment indicator, the recoverable amount is estimated and impairment is
provided based on the difference between the carrying value and the recoverable amount once the
impairment of an asset is recognized, it will not be reversed in the subsequent accounting period.
（4）Basis for Recognition, measurement of fixed assets held under finance lease
Basis for recognition of fixed assets held under finance lease: leases that transfer all the risks and
rewards related to the ownership of the relevant assets. The asset is recognized if one or more of the
following criteria is met: ① upon expiry of the lease term, the ownership of the leased asset is
transferred to the lessee; ② the lessee has the option to purchase the leased asset at a price expected to
be sufficiently lower than the fair value of the leased asset when the option is exercised and at the
inception of the lease, it is reasonably certain that the lessee will exercise the option; ③ the lease term
approximates the useful life of the leased asset even if the ownership is not transferred; ④ at the
inception of the lease, the present value of the minimum lease payments is substantially equivalent to the
fair value of the leased asset; ⑤ the leased assets are of such a specialized nature that only the lessee
can use them without major modification.
Measurement of fixed assets held under finance lease: fixed assets held under finance lease are
initially recognized at the lower of fair value of the leased assets at the inception of lease and the present
value of minimum lease payments. Subsequent measurement of fixed assets held under finance lease is
accounted for using the depreciation and impairment policies of owned fixed assets.
16. Construction in progress
√Applicable □Not Applicable
（1）Types of construction in progress
Construction in progress for the Company is self-constructed.
（2）Standard and date of transfer from construction in progress to fixed assets
The construction in progress of the Company is transferred to fixed assets when the project is
completed and ready for its intended use, which shall satisfy one of the following conditions:
①The construction of the fixed assets (including installation) has been completed or substantially
completed;
107 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
②The fixed asset has been used for trial operation and it is evidenced that the asset can operate
ordinarily or produce steadily qualified products; or the result of trial operation proves that it can operate
normally;
③Further expenditure incurred for construction is very minimal or remote;
④The constructed fixed asset reaches or almost reaches the design or the requirements of contract,
or complies with the design or the requirements of contract.
（3）Impairment test and provision of impairment of construction in progress
At the balance sheet date, the Company reviews the construction in progress to check whether there
is any sign of impairment and an impairment test is needed to recognize the recoverable amount when
there are signs that construction in progress may impair. The impairment loss should be the lower of the
carrying value and recoverable amount and impairment loss cannot be reversed in the following
accounting period if it has been provided.
The recoverable amount of construction in progress should base on the higher value between fair
value of asset less disposal expense and present value of estimated cash flow in the future.
17. Borrowing costs
√Applicable □Not Applicable
（1）Recognition principles for borrowing cost capitalization
The Company’s borrowing costs that are directly attributable to the acquisition or production of a
qualifying asset are capitalized into the cost of relevant assets. Other borrowing costs are recognized as
expenses in profit and loss for the period when incurred. Qualifying assets include fixed assets,
investment properties and inventories that necessarily take a substantial period of time for acquisition,
construction or production to get ready for their intended use or sale.
（2）Computation of capitalized amount of borrowing costs
Capitalization period refers to the period from the commencement to the cessation of capitalization
of borrowing costs, excluding the periods in which capitalization of borrowing costs is suspended.
Capitalization interruption period: Capitalization of borrowing costs is suspended during periods in
which the acquisition or construction of a qualifying asset is interrupted abnormally and the interruption
lasts for more than 3 months.
Computation of capitalized amount of borrowing costs: ① Specific borrowings will be recorded
based on the actual interest expense incurred in the period of special borrowings less the interest income
from unutilized borrowings placed at banks or investment gain from temporary investment; ② Normal
borrowings utilized are calculated based on the weighted average of expenses of the aggregate asset
exceeding the asset expenses of the portion of special borrowings multiplied by the capitalization ratio
of the normal borrowings utilized. Capitalization ratio is calculated based on weighted average interest
rate of normal borrowings; ③ For borrowings with discount or premium, the discount or premium was
amortized over the accounting periods borrowings to adjust the interest in every period using the
effective interest rates.
108 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
18. Intangible assets
Intangible assets are the identifiable non-monetary assets which have no physical shape and are
possessed or controlled by the Company.
（1）Measurement of intangible assets
Intangible assets are initially recognized at costs. The actual costs of purchased intangible assets
include the consideration and relevant expenses paid. For intangible asset contributed by investors, the
value agreed in the investment contract or agreement is the actual cost of the intangible asset. But if the
value agreed in the investment contract or agreement is not a fair value, the fair value of the intangible
asset is regarded as the actual cost. The cost of a self-developed intangible asset is the total expenditure
incurred in bringing the asset to its intended use.
Subsequent measurement of intangible assets of the Company: ① Intangible assets with finite
useful lives are amortized on a straight-line basis; at the end of each year, the useful lives and
amortization policy are reviewed, and adjusted if there is any variance with original policies; ②
Intangible assets with indefinite useful lives are not amortized and the useful lives are reviewed at each
year end date. If there is objective evidence that the useful life of an intangible asset is finite, the
intangible asset is amortized using the straight line method according to the estimated useful life.
（2）Criterion of determining indefinite useful life
The useful life of an intangible asset is indefinite if the period in which the future economic
benefits generated by the intangible asset could not be determined, or the useful life could not be
ascertained.
Criterion of determining intangible assets with indefinite useful lives: ① For intangible assets
derived from contractual rights or other legal rights and there are no explicit years of use stipulated in
the contract or laws and regulations; ② the period in which generating benefits for the Company still
could not be estimated after considering the industrial practice or relevant expert opinion.
At the end of each year, the useful lives of the intangible assets with indefinite useful lives are
reviewed. The assessment is performed by the departments that use the intangible assets, using the
down-to-top approach, to determine if there are changes to the determining basis of indefinite useful
lives.
（3） Methods for impairment test and provision for impairment of intangible assets
As at the balance sheet date, the Company reviews the intangible assets to check whether there is an
indication of impairment and an impairment test is needed to recognize the recoverable amount when
there are signs that intangible assets may impair. The impairment provision should be the lower of the
recoverable amount and carrying value and provision for impairment loss cannot be reversed in the
following accounting periods once it has been provided.
The recoverable amount of intangible assets should be based on the higher value between the net of
fair value of asset less disposal expense and present value of estimated cash flow of assets in the future.
109 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
（4）Basis for research and development stage for internal research and development project and
basis for capitalization of expenditure incurred in development stage
As for an internal research and development project, expenditure incurred in the research stage is
recognized in profit or loss in the period as incurred. Expenses incurred in the development stage are
recognized as intangible assets if all of the following conditions are met: ① the technical feasibility of
completing the intangible asset so that it will be available for use or for sale; ② the intention to
complete the intangible asset for use or for sale; ③ how the intangible asset will generate economic
benefits, including there is evidence that the products produced by the intangible asset has a market or
the intangible asset itself has a market; if the intangible asset is for internal use, there is evidence that
there exists usage for the intangible asset; ④ the availability of adequate technical, financial and other
resources to complete the development and the ability to use or sell the intangible asset; ⑤ the
expenditures attributable to the development of the intangible asset could be reliably measured.
Basis for distinguishing research stage and development stage of an internal research and
development project: research stage is the activities carried out for the planned investigation and search
for obtaining new technology and knowledge, which has the characteristics of planning and exploration;
before commercial production or other uses, the application of achievements and other knowledge
obtained from the research stage in a plan or design to produce new or substantially improved materials,
equipment and products is regarded as development stage, which has the characteristics of pinpointing
and is very likely to form results. All the expenditures on research and development which cannot be
distinguished between research stage and development stage are recognized in the current profit or loss
when incurred.
19. Impairment of long-term assets
√Applicable □Not Applicable
Long-term equity investment, investment properties measured based on cost model, fixed assets,
construction in progress, intangible assets and other long-term assets are tested for impairment if there is
any indication that an asset may be impaired at the balance date. If the result of the impairment test
indicates that the recoverable amount of the asset is less than its carrying amount, a provision for
impairment will be made for the difference will be recorded in impairment loss. The recoverable amount
is the higher of the net of the asset’s fair value less disposal costs and the present value of the future cash
flows expected to be derived from the asset. Provision for asset impairment is determined and
recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of an
individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A
group of assets is the smallest group of assets that is able to generate independent cash inflows.
Goodwill is tested for impairment at least at each year end.
In terms of impairment test of the goodwill, the carrying amount of the goodwill, arising from
enterprise combination, shall be allocated to the related asset groups on reasonable basis since the
acquisition date, or to the related asset group portfolios if it is difficult to be allocated to the related asset
110 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
groups. When the carrying amount of the goodwill is allocated to the related asset groups or asset group
portfolios, it shall be allocated in the proportion of the fair value of each asset group or asset group
portfolio against the total fair value of related asset groups or asset group portfolios. If it is difficult to
measure the fair value reliably, it shall be allocated in the proportion of the carrying amount of each
asset group or asset group portfolio against the total carrying amount of related asset groups or asset
group portfolios.
When impairment test is made to the related asset groups or asset group portfolios including
goodwill, if there is an indication that the related asset groups or asset group portfolios are prone to
impair, the Company shall firstly test for impairment for the asset groups or asset group portfolios
excluding goodwill and calculate the recoverable amount and recognize the impairment loss accordingly
by comparing with its carrying amount. The Company shall then test for impairment for the asset groups
or asset group portfolios including goodwill and compare the carrying amount (including the carrying
amount of allocated goodwill) with its recoverable amount of related asset groups or asset group
portfolios. Provision for impairment loss shall be recognized when the recoverable amount of the related
asset groups or asset group portfolios is lower than its carrying amount.
Once the above impairment loss of assets is recognized, it shall not be reversed in any subsequent
accounting period.
20. Long-term prepayments
√Applicable □Not Applicable
Long-term prepayments are expenditures which have incurred but the benefit period is more than
one year (excluding one year). They are amortized evenly over the benefit period of each item of
expenses. If the long-term prepayments are no longer beneficial to the subsequent accounting periods,
the unamortized balance is then fully transferred to profit or loss for the period.
21. Remuneration of employees
Remuneration of employees are all forms of compensation and other relevant expenditure given by
the Company in exchange for services rendered by employees, including short-term remuneration,
post-employment benefits, termination benefits and other long-term benefits.
Short-term remuneration include short-term salaries, bonus, allowance, subsidies, staff’s welfare,
housing provident fund, union funds and employee education funds, medical insurance fees, injury
insurance fees, maternity insurance fees, short-term paid absence, short-term profit sharing plans, etc..
During the accounting period when employees render services, short-term benefits payable that actually
incurred shall be recognized as liabilities and credited into the current profit and loss or relevant assets
cost on an accrual basis for the benefit objects.
Post-employment benefits mainly includes the basic pension insurance, supplementary pension, etc.,
In accordance with the risks and obligations undertaken by the Company, the post-employment benefits
is classified as defined contribution plans and defined benefit pension plans. Defined contribution plans:
the Company shall recognize the sinking fund paid to individual entity on balance sheet date as a
111 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
liability in exchange of services from the employee in accounting period, and credited into current
profits or losses or related assets costs in accordance with the benefit objects. Defined benefit plans: the
cost of providing benefits is determined using the projected unit credit method, with actuarial valuations
being carried out by independent actuary at the interim and the annual balance sheet date. Staffs' benefit
costs incurred by the defined benefit plan of the Group are categorized as follows: (1) service cost,
include current period service cost, past-service cost and settlement gain or loss. Current period service
cost means the increase of the present value of defined benefit obligation resulted from service offered
by employee for the period. Past-service cost means the increase or decrease of the present value of
defined benefit obligation resulted from the revision of the defined benefit plans related to the prior
period service offered by employee; (2) interest costs of defined benefit plans; (3) changes related to the
remeasurement of defined benefit plans liabilities. Unless other accounting standards require or permit to
charge the employee benefits into assets cost, the Company charges (1) and (2) above into current profit
or loss, and recognized (3) above as other comprehensive income without transferring to profit or loss in
subsequent accounting periods.
Termination benefits: the indemnity proposal provided by the Company for employees for the
purpose of terminating labor relation with the employees before the expiry of the labor contract or
encouraging employees to accept downsizing voluntarily, when the following conditions are met,
recognize and at the same time credited into the current profit or loss the accrued liabilities arising from
the indemnity as a result of terminating labor relation with the employees: the Company has made a
formal plan for termination of employment relationship or has made an offer for voluntary redundancy
which will be implemented immediately; and the Company could not unilaterally withdraw from the
termination plan or the redundancy offer. Early retirement benefits will adopt same principles as the
termination benefit. The Company will credit the salaries and social benefits intend to pay for these early
retirees during the periods from the date of early retirement to the normal retirement date to profit or loss
of the period when recognition conditions for accrued liabilities are met.
22. Estimated liabilities
√Applicable □Not Applicable
（1）Criterion for determining of estimated liability
If an obligation in relation to contingencies such as external guarantees, discounting of commercial
acceptance bills, pending litigation or arbitration and product quality assurance is the present obligation
of the Company and the performance of such obligation is likely to lead to the outflow of economic
benefits and its amount can be reliably measured, such obligation shall be recognized as estimated
liability.
（2）Measurement of estimated liability
The best estimate of the expenditure from the performance of the current obligation is initially
recorded as accrued liability. When the necessary expenditures falls within a range and the probability of
each result in the range are identical, the best estimate is the median of the range; if there are several
items involved, every possible result and relevant probability are taken into account for the best
112 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
estimation.
At the balance sheet date, the carrying value of estimated liabilities is reviewed. If there is objective
evidence that the carrying value could not reflect the current best estimate, the carrying value is adjusted
to the best estimated value.
23. Share-based payments
√Applicable □Not Applicable
For equity-settled share-based payment transaction in return for services from employees, it shall
be measured at the fair value of equity instruments granted to the employees. For the payment of such
fair value that may only be exercised if services are fulfilled during the vesting period or the specified
performance is achieved, the fair value shall, based on the best estimate of the number of exercisable
instruments during the vesting period, be recognized in relevant costs or expenses in straight-line
method with the increase in the capital reserve accordingly.
The cash-settled share-based payment shall be measured at the fair value of liability assumed by the
Company, which is calculated and determined based on the shares or other equity instruments. For the
cash-settled share-based payment that may be exercised immediately after the grant, the fair value of the
liability assumed by the Company shall, on the date of the grant, be recognized in relevant costs or
expenses and the liabilities shall be increased accordingly. For cash-settled share-based payment that
may be exercised if services are fulfilled during the vesting period or the specified performance is
achieved, on each balance sheet date within the vesting period, the services acquired in the period shall,
based on the best estimate of exercise, be recognized in relevant costs or expenses at the fair value of the
liability assumed by the Company, and the liabilities shall be adjusted correspondingly.
At each balance sheet date and the settlement date prior to the settlement of liabilities, the fair value
of the liability is re-measured with its change included in profit or loss.
When there is changes to the Company's share-based payment plans, if the modification increases
the fair value of the equity instruments granted, corresponding recognition of service increase in
accordance with the increase in the fair value of the equity instruments; if the modification increases the
number of equity instruments granted, the increase in fair value of the equity instruments is recognized
as a corresponding increase in service achieved. Increase in the fair value of equity instruments refer to
the difference between the fair values of the equity instrument on the modified date before or after the
modification. If the Company modifies the exercisable conditions in such manner conductive to the
employees, including the shortening of the vesting period, change or cancellation of the performance
conditions (rather than market conditions), the Company shall consider the modified exercisable
conditions upon the disposal of exercisable conditions. If the modification reduces the total fair value of
shares paid or the Company uses other methods not conductive to employees to modify the terms and
conditions of share-based payment plans, it will continue to be accounted for the services obtained in the
accounting treatment, as if the change had not occurred, unless the Company cancelled some or all of the
equity instruments granted.
During the vesting period, if the Company cancel equity instruments granted will be treated as
113 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
accelerating the exercise of rights and the remaining vesting period should be recognized immediately in
the current profit or loss, while at the same time recognize the capital reserve. Employees or other
parties can choose to meet non-vesting conditions, but for those that are not met in the vesting period,
the Company will treat it as cancellation of equity instruments granted.
24. Revenue
√Applicable □Not Applicable
（1）Sale of goods
Revenue from the sale of goods shall be recognized at the amount received or receivable from
buyers based on contractual or agreed prices, when all of the following conditions are satisfied: ① the
significant risks and rewards of ownership of the goods have been passed to the buyer; ② the Company
retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold; ③ the amount of revenue can be measured reliably; ④ it is
probable that the associated economic benefits will flow to the enterprise; ⑤ the associated costs
incurred or to be incurred can be measured reliably.
Recognition process of the Company’s sales revenue: business personnel submit sales application in
the business system according to the consumers’ orders; financial personnel review the remaining credit
of the consumers or whether the payment for goods is made in advance according to the sales
application, and notify the warehouse to handle the delivery formalities if the delivery conditions are met.
The financial department confirms that the major risks of property in the goods and rewards have been
transferred to the buyers upon the receipt of waybill with the consumers’ signature, and then issue sales
invoices to confirm the sales revenue.
（2）Provision of services
At the balance sheet date, when the outcome of a transaction involving the rendering of services can
be estimated reliably, revenue from provision of services shall be recognized using the percentage of
completion method. The Company confirms the completion progress in accordance with the ratio of
actual cost accounting for the total estimated cost. At the balance sheet date, when the outcome of the
transaction involving the rendering of services cannot be estimated reliably, it shall be dealt with in the
following ways: ① if the cost of services incurred is expected to be compensated, the revenue from the
rendering of services is recognized to the extent of actual cost incurred to date, and the relevant cost is
transferred to cost of service; ② if the cost of services incurred is not expected to be compensated, the
cost incurred should be included in current profit or loss, and no revenue from the rendering of services
may be recognized.
（3）Assignment of asset use rights
Revenue from usage fee arising from assignment of intangible assets (such as trademark rights,
patent rights, franchise rights, software and copyright, etc.) and the use right of other assets will be
recognized in accordance with the time and method for charge as required under relevant contract or
114 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
agreement and at the same time satisfy the conditions that the economic benefit in connection with
transaction could flow into the Company and the amount of revenue could be reliably measured.
（4）Construction contracts revenue
Where the outcome of a construction contract can be estimated reliably at the balance sheet date,
revenues and expenses associated are recognized using the percentage of completion method. The term
“percentage of completion method” means a method by which the contractor recognizes its revenues and
costs in the light of the schedule of the contracted project. The Company ascertained the completion
schedule of a contract project according to the proportion of the completed total contract cost against the
expected total contract cost.
25. Government grants
（1）Types of government grants
Government grants refer to the monetary assets or non-monetary assets obtained by the Company
from the government for free, not including the investment made by the government as an owner. The
government grants are mainly divided into asset-related government grants and revenue-related
government grants.
（2）Accounting treatment of government grants
Asset-related government grants shall be recognized as deferred income in profit or loss for the
period on an even basis over the useful life of the asset；government grants measured at nominal amount
shall be recorded directly in profit and loss for the period. Revenue-related government grants shall be
treated as follows: ① those used to compensate relevant expenses or losses to be incurred by the
enterprise in subsequent periods are recognized as deferred income and recorded in profit or loss for the
period when such expenses are recognized; ② those used to compensate relevant expenses or losses
that have been incurred by the enterprise are recorded directly in profit or loss for the period.
（3）Basis for determination of asset-related government grant and revenue-related government
grant
If the government grant received by the Company is used for construction or other project that forms
a long term asset, it is regarded as asset-related government grant.
If the government grant received by the Company is not asset-related, it is regarded as
revenue-related government grant.
Government grant received without clear objective shall be classified as asset-related government
grant or revenue-related government grant by:
① Government grant subject to a certain project shall be separated according to the proportion of
expenditure budget and capitalization budget, and the proportion shall be reviewed and modified if
necessary on the balance sheet date;
② Government grant shall be categorized as related to income if its usage is just subject to general
statement and no specific project in relevant document.
115 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
（4）Amortization method and determination of amortization period of deferred revenue related to
government grants
Asset-related government grant received by the Company is recognized as deferred revenue and is
evenly amortized to the current profit or loss over the estimated useful life of the relevant asset starting
from the date the asset is available for use.
（5）Recognition of government grants
Government grant measured at the amounts receivable is recognized at the end of period when there
is clear evidence that the conditions set out in the financial subsidy policies and regulation are fulfilled
and the receipt of such financial subsidy is assured.
Other government grants other than those measured at the amounts receivables are recognized upon
actual receipt of such subsidies.
26. Deferred income tax assets / deferred income tax liabilities
√Applicable □Not Applicable
Deferred income tax assets and deferred income tax liabilities of the Company are recognized:
(1) Based on the difference between the carrying amount and the tax base amount of an asset or a
liability (items not recognized as assets and liabilities but their tax base is ascertained by the current tax
laws and regulation, the tax base is the difference), deferred income tax asset or deferred income tax
liability is calculated using the applicable tax rate prevailing at the expected time of recovering the
relevant asset or discharging the relevant liability.
(2) Deferred income tax asset is recognized to the extent that there is enough taxable income for
the utilization of the deductible temporary difference. At the balance sheet date, if there is sufficient
evidence that there would be enough taxable benefit for the utilization of the deductible temporary
difference, the deferred income tax asset not previously recognized is recognized in current period. If
there is no sufficient evidence that there would be enough future taxable income for the deduction of the
deferred income tax asset, the carrying value of the deferred income tax asset is reduced.
(3) Deferred income tax liability is recognized for taxable temporary difference arising from
investments in subsidiaries and associated companies, unless the Company could control the reversal of
the temporary differences and the temporary differences would not be probably reversed in the
foreseeable future. For deductible temporary differences arising from investments in subsidiaries and
associated companies, deferred income tax asset is recognized if the temporary difference will be very
probably reversed in foreseeable future and there will be sufficient future taxable profit to deduct the
deductible temporary difference.
(4) No deferred income tax liability is recognized for a temporary difference arising from the
initial recognition of goodwill. No deferred income tax asset or deferred income tax liability is
recognized for the temporary differences resulting from the initial recognition of assets or liabilities due
to a transaction other than a business combination, which affects neither accounting profit nor taxable
profit (or deductible loss). At the balance sheet date, deferred income tax assets and deferred income tax
116 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
liabilities are measured at the tax rates that are estimated to apply to the period when the asset is realized
or the liability is settled.
27. Lease
(1)、Accounting treatment of operating lease
√Applicable □Not Applicable
① Rental payments for asset rented are amortized on a straight-line basis over the lease term
(including rent-free periods), and credited into the current expenses. Initial direct costs that are
attributable to leasing transactions paid by the Company are credited to current expense.
When the lesser of the assets bears the lease related expenses which should be undertaken by the
Company, the Company shall deduct that part of expense from the rent and amortize the net amount over
the lease term and credited to current expense.
② Rental income received from assets rented out is amortized on a straight-line basis over the
lease term (including rent-free periods), and recognized as lease income. Initial direct costs involving
leasing transactions paid by the Company are credited into current expenses, in case the amount is
significant, it will be capitalized, and are credited into current revenue on the same basis as rental
income recognized over the lease term.
When the Company bears the lease related expenses which should be undertaken by the lessee, the
Company shall deduct that part of expense from the total rent income, and allocate the rental payment
over the lease term.
(2)、Accounting treatment of finance lease
√Applicable □Not Applicable
①When the Company is a lessee, the leased asset is recorded at the amounts equal to the lower of
the fair value of the leased asset and the present value of the minimum lease payments on the lease
beginning date and the long-term payables is recorded at the amounts of the minimum lease payments.
The difference between the recorded amount of the leased asset and the minimum lease payments is
accounted for as unrecognized finance charge.
The unrecognized finance charge is amortized using the effective interest method over the period of
the lease and accounted in finance charge. Initial direct costs incurred by the Company are credited in
value of leased assets.
②When the Company is a lessor, the difference between sum of the lease receivables and
unguaranteed residual value and its present value is accounted for as unrealized finance income and is
recognized as rental income over the period of receiving rental. Initial direct costs attributable to lease
transaction incurred by the Company shall be accounted in the initial measurement of finance lease
receivables and reduced the amount of recognized during period of the lease.
28. Other significant accounting policies and accounting estimations
√Applicable □Not Applicable
（1） Share repurchases
When the Company purchases its own shares to decrease its registered capital or reward its staff, it
shall be included in treasury stock against the amount actually paid.
117 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
When the Company awards the purchased shares to its staff under the equity-settled share-based
payment agreement, it shall be included in capital reserve (equity premium) against the difference
between the book balance of awarded treasury stock and the staff-paid cash and capital reserve
recognized upon the granting of equity instruments.
When cancelling the treasury stock, the share capital shall be cancelled against the total face value
of the cancelled treasury stock; the treasury stock shall be eliminated against the book balance of the
cancelled treasury stock; the capital reserve (equity premium) shall be eliminated against the difference;
if the equity premium is insufficient for elimination, the retained earnings shall be adjusted accordingly.
（2） Asset securitization business
Some of the Company’s receivables are securitized. The Company’s underlying assets are trusted to
a special purpose entity which issues senior asset-backed securities to investors. The Company holds
subordinated asset-backed securities which are not transferrable before both the principals and interests
of the senior asset-backed securities are repaid. The Company serves as the asset service supplier,
providing services including asset maintenance and its daily management, formulation of the annual
asset disposal plan, formulation and implementation of the asset disposal plan, signing relevant asset
disposal agreements and periodic preparation of asset service report. Meanwhile, the Company, as the
liquidity support organization, provides liquidity support before the principals of the senior asset-backed
securities are fully repaid to make up the differences of the interests or principals. Trust assets are
prioritized to repay the principals and interests of the senior asset-backed securities after the trust taxes
and relevant fees are paid, and the remaining trust assets upon the full repayment of the principals and
interests will be owned by the Company as returns of the subordinated asset-backed securities. The trust
assets are not derecognized because the Company retains substantially all the risks and rewards. At the
same time, the Company has de facto controls over the special purpose entity which are consolidated
into our financial statements.
The Company evaluates the extent to which it transfers the risks and rewards of ownership of the
assets to the other entities and determines whether it retains control while applying the accounting policy
in respect of asset securitization：
①The financial asset is derecognized when the Company transfers substantially all the risks and
rewards of ownership of the financial asset;
②The financial asset is continued to recognize when the Company retains substantially all the risks
and rewards of ownership of the financial asset;
③When the Company neither transfers nor retains substantially all the risks and rewards of
ownership of the financial asset, the Company evaluates whether it retains control over the financial
asset. If the Company does not retain control, it derecognizes the financial asset and recognizes
separately as assets or liabilities any rights and obligations created or retained in the transfer. If the
Company retains control, it continues to recognize the financial asset to the extent of its continuing
involvement in the financial asset.
（3） Hedge accounting
118 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
①Hedges are classified as:
1) A fair value hedge is a hedge of the exposure to changes in fair value of a recognized asset or
liability or an unrecognized firm commitment (except foreign exchange risk).
2) Cash flow hedges is a hedge of the exposure to variability in cash flows that is either attributable
to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction,
or a foreign currency risk in an unrecognized firm commitment.
3) Hedge of a net investment in a foreign operation is a hedge of the exposure to foreign exchange
risk associated with a net investment in a foreign operation. Net investment in a foreign operation is the
share of interest in the net asset of the foreign operation.
②Designation of the hedge relationship and recognition of the effectiveness of hedging:
At the inception of a hedge relationship, the Company formally designates the hedge relationship
and prepares documents relating to the hedge relationship, the risk management objective and its
strategy for undertaking the hedge. The documentation includes identification of the hedging instrument,
the hedged item or transaction, the nature of the risk being hedged and how the Company will assess the
hedging instrument’s effectiveness.
Hedging instrument’s effectiveness means the degree of the change of fair value and cash flow of
the hedging instrument in offsetting the exposure to changes in the hedged item’s fair value or cash
flows attributable to the hedged risk. The hedge is assessed by the Company for effectiveness on an
ongoing basis and judged whether it has been highly effective throughout the accounting periods for
which the hedging relationship was designated. A hedge is regarded as highly effective if both of the
following conditions are satisfied:
1) at the inception and in subsequent periods, the hedge is expected to be highly effective in
offsetting changes in fair value or cash flows attributable to the hedged risk during the period for which
the hedge is designated;
2) the actual results of offsetting are within a range of 80% to 125%.
③Method of Hedge accounting:
1）Fair value hedges
The change in the fair value of a hedging derivative is recognized in the current profit or loss. The
change in the fair value of the hedged item attributable to the risk hedged is recorded as a part of the
carrying amount of the hedged item and is also recognized in the current profit or loss.
For fair value hedges relating to financial instruments carried at amortized cost, the adjustment to
carrying value of the hedged items is amortized through the current profit or loss over the remaining
term from adjustment to maturity. Amortization based on the effective interest method may begin as
soon as an adjustment is made to the carrying amount and shall not be later than when the hedged item
ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
If the hedged item is derecognized, the unamortized fair value is recognized immediately in the
current profit or loss.
119 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative
change in the fair value of the firm commitment attributable to the hedged risk is recognized as an asset
or liability with a corresponding gain or loss recognized in the current profit or loss. The changes in the
fair value of the hedging instrument are also recognized in the current profit or loss.
2）Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognized directly as capital
reserve (other capital reserve), while the ineffective portion is recognized immediately in the current
profit or loss.
Amounts taken to capital reserve (other capital reserve) are transferred to the current profit or loss
when the hedged transaction affects the current profit or loss, such as when hedged financial income or
financial expense is recognized or when a forecast sale occurs. Where the hedged item is the cost of a
non-financial asset or non-financial liability, the amounts taken to capital reserve (other capital reserve)
are transferred to the initial carrying amount of the non-financial asset or non-financial liability (or the
amounts originally recognized in capital reserve (other capital reserve) will be transferred to the current
profit or loss for in the same period when the profit or loss are affected by the non-financial asset or
non-financial liability).
If the forecast transaction or firm commitment is no longer expected to occur, the accumulated
profit or loss hedging instruments previously recognized in shareholders’ equity are transferred to the
current profit or loss. If the hedging instrument expires or is sold, terminated or exercised without
replacement or rollover, or if its designation as a hedge is revoked, the amounts previously recognized in
other comprehensive income remain in there until the forecast transaction or firm commitment affects
the current profit or loss.
3）Hedge of net investment in foreign operation
A hedge of a net investment in a foreign operation includes the hedge of the currency item as a
portion of net investment, its treatment is similar to cash flow hedge. The portion of the gain or loss on a
hedging instrument that is determined to be an effective hedge is included in other comprehensive
income. The ineffective portion is recognized in the current profit or loss. When deal with foreign
operation, any accumulated profit or loss attributable to shareholders’ equity will be transferred to the
current profit or loss.
（4） Explanations on significant accounting estimates
Judgments, estimates and assumptions shall be made to book value of the financial statements items,
which could not be measured accurately, due to the inherent uncertainties of operating activities, while
applying accounting policy. Such judgments, estimates and assumptions were based on the
management’s historical experience and made after considered other various factors. These judgments,
estimates and assumptions will influence the amount of revenues, expenses, assets and liabilities
presented in financial reports and the disclosure of contingent liabilities on the balance sheet date.
However, the actual results caused by the uncertainties of these estimations may be different from the
current estimates of the management, and thus cause a material adjustment to the carrying amounts of
120 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
assets and liabilities affected in the future. The judgments, estimates and assumptions mentioned above
shall be reviewed on a going concern basis. If the revisions to accounting estimates only affected the
period, relevant adjustment due to the effect shall be recognized in the period; if the revision affects both
the current and future period, the effect shall be recognized in the current and future period.
On the balance sheet date, the significant fields involving judgments, estimates and assumptions
about financial report items are listed as follows:
① Estimated liability
Provision for product quality guarantee, estimated onerous contracts, and other estimates shall be
recognized in accordance with the terms of contract, current knowledge and historical experience. If the
contingent event has formed a practical obligation which probably results in outflow of economic
benefits from the Company, an estimated liability shall be recognized on the basis of the best estimate of
the expenditures to settle relevant practical obligation. Recognition and measurement of the estimated
liability significantly rely on the management’s judgments. In the process of judgment, the Company
takes into consideration the assessment of relevant risks, uncertainties, time value of money and other
factors related to the contingent events. Among them, the Company will undertake estimated liabilities
with respect to the after-sales services provided for the return, maintenance and installation of goods.
When estimating liabilities, the Company has considered the maintenance information in recent years,
but the previous maintenance experiences may fail to reflect the future circumstances. Any increase or
decrease in this provision is likely to affect the profits and losses of the next year.
②Provision for bad debts
The allowance method is adopted for bad debts according to accounting policies of accounts
receivables. Impairment losses for receivables are assessed on the basis of recoverability, as a result of
judgments and estimates of the management. The difference between actual outcome and the previously
estimated outcome will influence the carrying value of receivables and accrual or reversal of provision
for bad debts during the period accounting estimates are changed.
③Provision of impairment of inventories
Inventories are measured by lower of historical cost or net realizable value method according to the
accounting policies of inventories; for obsolete and unsalable inventories or whose costs are higher than
the net realizable, provision for impairment of inventories shall be incurred. The carrying value of
inventory shall be written down to the net realizable value on the basis of the salability of inventories
and the net realizable value. Inventory impairment requires the management’s obtaining of solid
evidence, and their judgment and estimations made after considering the purpose of holding inventories
and the effect of events after the balanced sheet date and etc. The difference between the actual outcome
and the previously estimated outcome will influence the carrying value of inventories and the provision
or reversal of impairment of inventories during the period accounting estimates are changed.
④Fair value of financial instruments
For financial instruments where there is no active market, the Company will determine the fair
value through a variety of valuation methods. Such valuation methods include discounted cash flow
121 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
analysis. In the valuation, the Company shall estimate the future cash flow, credit risk, market volatility
and correlation, and select the appropriate discount rate. Such related assumptions are uncertain, and
their changes may affect the fair value of financial instruments.
⑤Impairment of available-for-sale financial assets
The determination of whether impairment loss shall be recognized in income statement for
available-for-sale financial asset is significantly depends on the judgments and assumptions of the
management. While making judgments and assumptions, it shall be take into consideration that how
much the fair value of the investment is lower than the cost and its continuity, the financial position and
short-term business projection of the investee, including industry conditions, technological innovation,
the credit ratings, probability of violation and counterparts’ risks.
⑥Provision for long-term assets impairment
On the balance sheet date, the Company shall judge whether there is any possible indication of
impairment against non-current assets other than financial assets. The intangible assets with indefinite
useful life must be tested for impairment on an annual basis as well as when there is any indication of
impairment. Other non-current assets other than financial assets shall be tested for impairment when
there is an indication showing that the carrying value is not recoverable. Impairment occurs while the
carrying value of an asset or asset group is higher than the recoverable value, which is the higher of the
net of fair value deducted disposal expenses and the present value of expected future cash flow. The net
of fair value deducted by disposal expenditure is determined with reference to the price in the sale
agreement regarding analogous asset, and observable market price less the increase of cost that directly
attributable to the disposal of assets. Significant judgments regarding the production amount, sales price,
relevant operating costs of the assets (or assets group) and the discount rate used to calculate the present
value shall be made when determining the present value of future cash flows. Recoverable amount shall
be estimated by using all accessible relevant information, including production amount, sales price, and
relevant operating costs predictions made based on reasonable and supportive assumptions. The
Company shall test for goodwill impairment at least every year. This requires the Company to estimate
the present value of future cash flows for such assets groups or asset group portfolios allocated with
goodwill. When estimating the present value of future cash flows, the Company shall not only estimate
the future cash flows generated by such asset groups or asset group portfolios, and select the appropriate
discount rate to determine the present value of such future cash flows.
⑦Depreciation and amortization
Investment properties, fixed assets and intangible assets are depreciated and amortized by a
straight-line approach over their estimated useful life by taking into consideration the residual value.
Useful life shall be periodically reviewed to determine the depreciation and amortization expenses for
each reporting period and be determined on the basis of historical experience regarding analogous assets
and the expected technological innovation. Significant changes to previous accounting estimates will
result in adjustments against depreciation and amortization expenses in the future periods.
⑧Deferred income tax assets
122 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Deferred income tax asset is recognized for all the uncompensated tax losses to the extent that there
is sufficient taxable income for the deduction of loss. In order to determine the amount of deferred tax
assets, the management of the Company needs to predict the timing and the amount of taxable profits in
the future by taking into account a large amount of judgment, as well as the strategy of tax planning.
⑨Income tax
There are certain transactions the tax treatment and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. Whether some items could be
presented before taxation shall be approved by relevant tax authorities. Where the final tax outcome of
these matters is different from the initial estimated amount, such differences will impact the current and
deferred tax in the period of confirmation.
⑩Returned profits from sales
The Company and its subsidiaries adopt the policy of returned profits from sales for all consumers.
According to the relevant conventions in the sales agreement, the review of specific transactions, the
market situation, the pipeline inventory levels and the historical experiences, the Company and its
subsidiaries estimate and make returned profits from sales on a regular basis with reference to the
completion of agreed assessment indexes. Provisions of returned profits from sales involve the judgment
and estimates of the management. In case of any significant changes in the previous estimates, the
difference above will have an impact on the returned profits from sales during the period when
significant changes occur.
29. CHANGES ON SIGNIFICANT ACCOUNTING POLICES AND ACCOUNTING
ESTIMATES
(1)、Changes on Significant Accounting Policies
□Applicable √Not Applicable
(2)、Changes on Significant Accounting Estimates
□Applicable √Not Applicable
VI. Taxation
1. Main tax types and tax rates
Details of main tax types and tax rates
√Applicable □Not Applicable
Tax type Basis of taxation Tax rate
Taxable revenue of goods sales and 5%, 6%, 11%, 16%
Value-added tax
taxable labor services revenue
Urban maintenance and 7%
Turnover tax amount payable
construction tax
Statuary tax rate or preferential
EIT Tax amount payable
rates as follows
(Local) education 1%, 2%, 3%
Turnover tax amount payable
surcharges
Disclosure of tax entities with different EIT rates
□Applicable √Not Applicable
123 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
2. Preferential tax
√Applicable □Not Applicable
Companies enjoying preferential tax and preferential tax rate:
Name of company Tax rate Preferential tax
entitled to the preferential taxation policies
Qingdao Haier Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Refrigerator Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Intelligent Electronics Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Special Refrigerator Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Dishwasher Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Special Freezer Co., Ltd. 15% as a hi-tech enterprise
Qingdao Haier Intelligent Home Appliance Technology entitled to the preferential taxation policies
15%
Co., Ltd as a hi-tech enterprise
entitled to the preferential taxation policies
Wuhan Haier Electronics Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Wuhan Haier Freezer Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Hefei Haier Refrigerator Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Hefei Haier Air-conditioning Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Zhengzhou Haier Air-conditioning Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Shenyang Haier Refrigerator Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Chongqing Haier Air-conditioning Co., Ltd. 15% under the Western Development initiative
entitled to the preferential taxation policies
Chongqing Haier Refrigeration Appliance Co., Ltd. 15%
under the Western Development initiative
entitled to the preferential taxation policies
Guizhou Haier Electronics Co., Ltd. 15% under the Western Development initiative
entitled to the preferential taxation policies
Qingdao Haier Air-Conditioner Electronics Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Moulds Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Meier Plastic Powder Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Chongqing Haier Precision Plastic Co., Ltd. 15%
under the Western Development initiative
entitled to the preferential taxation policies
Chongqing Haier Intelligent Electronics Co., Ltd. 15% under the Western Development initiative
entitled to the preferential taxation policies
Qingdao Haigao Design & Manufacture Co., Ltd. 15% as a hi-tech enterprise
significant software enterprise tax
Qingdao Haier Technology Co., Ltd. 10%
preferential
entitled to the preferential taxation policies
Qingdao Hairi High Technology Molding Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier (Jiaozhou) Air-Comditioner Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Beijing Haier Guangke Digital Technology Co., Ltd. 15% as a hi-tech enterprise
124 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Qingdao Haier Intelligent Technology Development entitled to the preferential taxation policies
Co., Ltd.
15% as a hi-tech enterprise
entitled to the preferential taxation policies
Foshan Haier Freezer Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential policies as a
Wuhan Haier Energy and Power Co., Ltd. 10% small and micro enterprise
Shanghai Haier Zhongzhifang Maker Space entitled to the preferential policies as a
Management Co., Ltd.(上海海尔众智坊创客空间管理
10% small and micro enterprise
有限公司) entitled to the preferential taxation policies
Hefei Haier Washing Machine Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Washing Machine Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Jiaonan Haier Washing Machine Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Drum Washing Machine Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Foshan Shunde Haier Electric Appliance 15%
as a hi-tech enterprise
Qingdao Economy and Technology Development Zone entitled to the preferential taxation policies
Haier Water Heater Co., Ltd.
15% as a hi-tech enterprise
entitled to the preferential taxation policies
Wuhan Haier Water Heater Co., Ltd. 15% as a hi-tech enterprise
entitled to the preferential taxation policies
Foshan Drum Washing Machine Co., Ltd. 15%
as a hi-tech enterprise
entitled to the preferential taxation policies
Qingdao Haier Goodaymart Logistic Co., Ltd. 15% as a hi-tech enterprise
Qingdao Haier New Energy Electric Appliance Co., entitled to the preferential taxation policies
15% as a hi-tech enterprise
Ltd.（青岛海尔新能源电器有限公司）
Shengfeng Supply Chain Co., Ltd. (盛丰供应链有限 entitled to the preferential taxation for
15% enterprises in Pingtan Comprehensive
公司)
ExperimentaltheArea
entitled to preferential taxation policies
Chongqing Goodaymart Electronics Sales Co., Ltd. 15%
under the Western Development initiative
Chongqing Haier Home Appliance Sale Co., Ltd. and entitled to the preferential taxation policies
15%
some branches in western region under the Western Development initiative
Chongqing Goodaymart Electronics Sales Co., Ltd. and entitled to the preferential taxation policies
15%
some branches in western region under the Western Development initiative
entitled to the preferential taxation policies
Chongqing Haier Washing Machine Co., Ltd. 15%
under the Western Development initiative
entitled to the preferential taxation policies
Chongqing Haier Water Heater Co., Ltd. 15%
under the Western Development initiative
Chongqing Haier Drum Washing Machine Co., entitled to the preferential taxation policies
15%
Ltd. under the Western Development initiative
VII. Explanatory Notes for Items in Consolidated Financial Statements
Unless otherwise specified, the following closing balance means the amount as at 30 June 2018;
opening balance means the amount as at 31 December 2017; current period means the amount incurred
from 1 January to 30 June 2018, while the previous period means the amount incurred from 1 January to
30 June 2017.
1. Monetary funds
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Treasury cash 698,625.89 513,781.37
Bank deposit 30,859,017,076.82 32,994,884,486.17
Other monetary funds 2,608,221,131.55 2,181,878,636.37
125 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Total 33,467,936,834.26 35,177,276,903.91
Among which: total of overseas
3,404,026,327.40 7,732,752,678.06
amounts
Other explanatory
An amount of RMB13,939,454,951.97 of the monetary fund was deposited in Haier Group Finance
Co., Ltd. on 30 June 2018, the balance of which including a fixed term bank deposit of
RMB195,000,000.00. The investment fund in the closing balance of other monetary fund was
RMB1,223,917,432.91, the payment of the third party platform was RMB101,396,403.97 and the
amount of deposits was RMB1,282,907,294.67.
2. Derivative financial assets
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Forward foreign exchange sale and
40,947,728.30 20,681,695.50
purchase agreement
Total 40,947,728.30 20,681,695.50
3. Notes receivable
(1). Categories of Notes receivable
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Bank acceptance notes 688,629,971.26 1,946,518,710.06
Commercial acceptance bill 11,519,508,594.06 11,086,564,810.93
Total 12,208,138,565.32 13,033,083,520.99
（ 2 ） The pledged Notes receivable of the Company at the end of the period was RMB
10,672,285,824.52.
4. Accounts receivables
（1）Accounts receivables disclosed by categories:
Closing balance Opening balance
Items
Provision for bad Provision for bad
Book balance Book balance
debts debts
Accounts receivables that are
individually significant and
are subject to provision for
bad debts on individual basis
Accounts receivables that are
subject to provision for bad 17,174,744,274.32 268,553,582.55 12,803,484,274.71 355,479,441.65
debts on portfolio basis
Accounts receivables that are
individually insignificant but
are subject to provision for
113,291,273.51 113,291,273.51 88,400,865.52 88,400,865.52
bad debts on individual basis
Total 17,288,035,547.83 381,844,856.06 12,891,885,140.23 443,880,307.17
√Applicable □Not Applicable
（2）Accounts receivables of which provision for bad debts is made within the group:
126 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Closing balance Opening balance
Aging Provision for bad Provision for bad
Book balance Book balance
debts debts
Within 1
16,853,769,572.70 256,957,057.15 12,477,896,240.89 339,251,644.04
year
1-2
140,519,655.88 5,561,809.25 178,439,139.22 8,870,352.87
years
2-3
130,680,210.93 4,599,469.31 121,898,217.63 6,094,910.89
years
Over 3
49,774,834.81 1,435,246.84 25,250,676.97 1,262,533.85
years
Total 17,174,744,274.32 268,553,582.55 12,803,484,274.71 355,479,441.65
(3)The total amount of the top 5 in the accounts receivables at the end of the period was RMB
6,446,253,513.62, accounting for 37.29% of the book balance of the accounts receivables, and the
amount of provision for bad debts was RMB 62,522,768.63.
(4)Provisions for bad debts made, collected or reversed in the period:
Provisions for bad debts in the amount of RMB 41,168,449.83 were reverted in the period.
(5)Accounts receivable written off in the period:
The bad debts written off in 2017 were RMB 10,804,087.08, and there was no significant accounts
receivable written off in the period.
(6)Restricted trade receivables in the period:
Trade receivables mortgaged and pledged for securing borrowings were RMB 4,027,213,632.11.
5. Prepayments
(1). Aging of prepayments
√Applicable □Not Applicable
Unit and Currency: RMB
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 578,819,699.61 87.32 500,715,555.59 84.77
1-2 years 46,963,726.21 7.08 71,155,092.86 12.05
2-3 years 26,381,077.32 3.98 11,070,761.72 1.87
Over 3 years 10,735,757.07 1.62 7,752,248.04 1.31
Total 662,900,260.21 100.00 590,693,658.21 100.00
（2）The total amount of the top 5 in the prepayments at the end of the period was RMB 142,171,371.23,
accounting for 21.45% of the book balance of the prepayments.
6. Interest receivables
Closing balance Opening balance
Aging
Book balance Proportion Book balance Proportion
Within 1 year 237,294,144.94 98.09% 202,405,171.56 99.39%
1-2 years 4,617,291.33 1.91% 1,232,372.27 0.61%
127 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Total 241,911,436.27 100.00% 203,637,543.83 100.00%
7. Other receivables
（1）Other receivables disclosed by categories:
Closing balance Opening balance
Items Provision for Provision for
Book balance Book balance
bad debts bad debts
Individual significant other
receivables of which
provision for bad debts is
made on an individual basis
Other receivables of which
provision for bad debts is 893,993,897.28 28,411,130.32 989,277,529.42 28,013,547.55
made on a group basis
Individual insignificant
other receivables of which
47,523,424.67 47,523,424.67 48,882,935.05 48,882,935.05
provision for bad debts is
made on an individual basis
Total 941,517,321.95 75,934,554.99 1,038,160,464.47 76,896,482.60
（2）Other receivables of which provision for bad debts is made on portfolio basis:
Closing balance Opening balance
Aging Provision for Provision for
Book balance Book balance
bad debts bad debts
Within one year 750,333,461.50 22,548,649.73 873,640,986.50 22,317,036.56
1-2 years 85,678,706.51 3,472,500.09 60,265,756.01 2,927,971.65
2-3 years 30,718,969.68 1,450,084.92 21,037,477.39 1,051,873.86
Over 3 years 27,262,759.59 939,895.58 34,333,309.52 1,716,665.48
Total 893,993,897.28 28,411,130.32 989,277,529.42 28,013,547.55
(3) At the end of the period, total amount of top five other receivables was RMB 210,498,195.75,
representing 22.36% of the book balance of other receivables, and the amount of provision for bad debts
was RMB 1,750,000.00.
(4) Bad-debt provisions made, collected or reversed in the period:
Provisions for bad debts in the amount of RMB 2,436,120.66 were made in the period.
(5) The other receivables actually written off in the period was RMB 3,343,491.44.
(6) Other receivables mainly include the deposit, the quality retention money, staff borrowing, tax
refunds, and advance money for another, etc.
8. Inventories
（1）Details of inventories
Items Closing balance Opening balance
128 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Impairment Impairment
Book balance Book balance
Provision Provision
Raw materials 2,768,478,339.49 41,202,173.80 3,459,878,187.81 33,888,186.04
Work in progress 115,584,274.92 212,212,549.56
Unsettled
payments of
214,481,301.96 187,935,341.58
completed
projects
Finished goods 20,177,061,361.84 728,107,386.90 18,374,187,900.35 696,800,993.08
Total 23,275,605,278.21 769,309,560.70 22,234,213,979.30 730,689,179.12
（2） Impairment provision of inventories
Increase for the period Decrease for the period
Opening
Items Provisions Other Write-off and Closing balance
balance Reversal
for the period increase others
Raw
33,888,186.04 7,603,733.47 261,558.60 28,187.11 41,202,173.80
materials
Finished
696,800,993.08 204,516,648.95 2,864,501.37 170,345,753.76 728,107,386.90
goods
Total 730,689,179.12 212,120,382.42 3,126,059.97 170,373,940.87 769,309,560.70
（3）Unsettled payments of completed projects from the construction contracts at the end of the
period
Unsettled payments of
Accumulated cost Accumulatively completed projects
Items Settled Amounts
incurred recognized gross profit from the construction
contracts
Amount 1,003,760,368.89 205,449,971.85 994,729,038.78 214,481,301.96
9. Assets held for sale and liabilities held for sale
Items Closing balance Opening balance
Assets held for sale 1,233,866,625.56
Liabilities held for sale 296,505,653.77
Net amount held for sale 937,360,971.79
The Company intends to dispose 58.08% equity of Shengfeng Logistics Group Co., Ltd
(hereinafter referred to as “Shengfeng Logistics”) at a consideration of RMB 0.798 billion in the period
for business planning consideration. After the disposal, the Company will no longer hold any equity
interests of Shengfeng Logistics. The equity disposal agreement provides that change in business
registration and transfer of actual control shall be completed within one year, which includes update of
shareholders’ joint operation agreement; update of Article of Associations; Appointment of directors by
129 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
new shareholders and dismissal of directors by Goodaymart Logistic, etc.
10. Other current assets
（1）Details of other current assets
Closing balance Opening balance
Items Impairment Impairment
Book balance Book balance
Provision Provision
Bank Treasury
deposit 2,231,850,307.37 2,007,051,839.54
Deductable VAT 1,741,330,986.94 7,980,978.65 1,941,860,551.67
Others 724,119,192.93 440,847,627.62
Total 4,697,300,487.24 7,980,978.65 4,389,760,018.83
（2）Impairment provision of other current assets
Increase for the period Decrease for the period
Opening
Items Provisions for Other Write-off and Closing balance
balance Reversal
the period increase others
Deductible
VAT
7,980,978.65 7,980,978.65
Others
Total 7,980,978.65 7,980,978.65
11. Available-for-sale financial assets
（1）Information of available-for-sale financial assets：
Closing balance Opening balance
Provision Provision
Items Carrying Carrying
for Book value for Book value
Balance balance
impairment impairment
Available-for
-sale equity
instrument
At fair value 1,435,064,752.28 1,435,064,752.28 26,931,420.99 26,931,420.99
At cost 153,615,971.20 30,225,000.00 123,390,971.20 1,418,647,886.83 30,225,000.00 1,388,422,886.83
Total 1,588,680,723.48 30,225,000.00 1,558,455,723.48 1,445,579,307.82 30,225,000.00 1,415,354,307.82
（2）Available-for-sale financial assets at fair value at the end of the period：
Categories of available-for-sale financial assets Available-for-sale equity instrument
Cost of equity instrument 1,305,411,286.65
Fair value 1,435,064,752.28
Accumulated fair value changes credited into other
comprehensive income
116,462,955.50
130 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Allowance for impairment
（3）Movement in impairment of available-for-sale financial assets during the reporting period:
Provision for impairment of available-for-sale
Item
equity instrument
Provision balance at the beginning of the period 30,225,000.00
Provision made in 2018
Decrease in 2018
Allowance for impairment amounts at the end of the period 30,225,000.00
12. Long-term equity investments
√Applicable □Not Applicable
Increase╱decrease during the period
Investment Adjustment in
Opening Declaration
Investees income other Other
balance Investments of cash
recognized comprehensive changes in
increased dividends
under equity income equity
or profits
method
Associates:
Haier Group Finance Co., 4,682,887
329,018,613.88 23,160,510.46
Ltd. ,227.73
2,462,624 -77,995,640
Bank of Qingdao co., Ltd. 126,969,897.23 40,527,018.36
,099.78 .00
Haier Medical and
332,230,3
Laboratory Products Co., 18,665,089.87
71.89
Ltd.
Wolong Electric
118,897,3
Zhangqiu Haier Motor 1,085,772.63
37.40
Co., Ltd.
Qingdao Haier Software 17,899,33
-30.81
Investment Co., Ltd. 1.07
Qingdao Haier SAIF
Smart Home Industry 270,536,8
Investment Center 81.98
(limited partnership)
Qingdao Haier Special
106,068,8
Steel Plate Research and
03.08
Development Co., Ltd.
Hefei Haier Special Steel
140,494,5
Plate Research and
21.67
Development Co., Ltd.
Mitsubishi Heavy
Industries Haier 529,934,7 -56,772,000
38,033,746.45
(Qingdao) 50.95 .00
Air-conditioners Co., Ltd.
Qingdao Haier Carrier
305,185,1
Refrigeration Equipment 6,006,028.41
37.09
Co., Ltd.
Beijing Mr. Hi Network
3,757,759
Technology Company
.75
Limited
Qingdao Haier 543,768,6 6,102,089.30
131 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Multi-media Co., Ltd. 56.24
Beijing Xiaobei
2,687,341
Technology Co., Ltd. .82
Beijing ASU
27,977,441.33 -12,972,276.93
Tech Co., Ltd.
Qingdao HBIS New
Material Technology Co.
Ltd（青岛河钢新材料科 246,563,324.75 8,181,770.11
技有限公司）
Guangzhou Heying
Investment Partnership
(Limited Partnership)（广 152,047,5
35.44
州合赢投资合伙企业（有
限合伙））
China Shengfeng
Microfinance limited in 80,226,59
203,120.76
Jin’an District of Fuzhou 5.74
City
Fujian ATL-Shengfeng 13,117,74
Logistics Co., Ltd. 8.43
Qingdao Jiavayun
Network Technology Co., 1,755,356
-353,653.58
Ltd. (青岛家哇云网络科 .84
技有限公司)
Qingdao JSH Network 5,511,749
Technology Co. Ltd. .00
Hunan Electronic Co., 64,856,52
1,953,995.60 1,511,839.86 -264,154.48
Ltd. (湖南电机株式会社) 6.75
HNR COMPANY 91,578,22
15,255,570.62 -4,448,841.20
(PRIVATE) LIMITED 7.62
80,588,57
HPZ LIMITED 1,879,469.24 1,066,314.42
0.01
CONTROLADORA 2,985,062
42,484,513.97 24,980,259.95
MABE S.A.deC.V. ,320.58
MiddleEast Air
22,050,54
conditioning Company, -1,580,766.44 232,792.47
3.42
Limited
Total 13,013,76 -135,031,79
274,540,766.08 580,932,950.31 87,029,894.32
7,394.28 4.48
Continued table
Increase/decrease during the period Closing
balance of
Investees The disposal of Closing balance
Others provision for
the investment
impairment
Associates:
Haier Group Finance Co., Ltd. 5,035,066,352.07
Bank of Qingdao Co., Ltd. -35,459,345.18 2,516,666,030.19
Haier Medical and Laboratory Products Co., Ltd. 350,895,461.76
Wolong Electric Zhangqiu Haier Motor Co., Ltd. 119,983,110.03
Qingdao Haier Software Investment Co., Ltd. 17,899,300.26
132 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Qingdao Haier SAIF Smart Home Industry
270,536,881.98
Investment Center (limited partnership)
Qingdao Haier Special Steel Plate Research and
-106,068,803.08
Development Co., Ltd.
Hefei Haier Special Steel Plate Research and
-140,494,521.67
Development Co., Ltd.
Mitsubishi Heavy Industries Haier (Qingdao)
511,196,497.40
Air-conditioners Co., Ltd.
Qingdao Haier Carrier Refrigeration Equipment
311,191,165.50 -21,000,000.00
Co., Ltd.
Beijing Mr. Hi Network Technology Company
3,757,759.75
Limited
Qingdao Haier Multi-media Co., Ltd. 549,870,745.54
Beijing Xiaobei Technology Co., Ltd. 2,687,341.82
Beijing ASU
15,005,164.40
Tech Co., Ltd.
Qingdao HBIS New Material Technology Co. Ltd
254,745,094.86
（青岛河钢新材料科技有限公司）
Guangzhou Heying Investment Partnership
(Limited Partnership)（广州合赢投资合伙企业（有 152,047,535.44
限合伙））
Shengfeng Microfinance limited in Jin’an District
-80,429,716.50
of Fuzhou City
Fujian ATL-Shengfeng Logistics Co., Ltd. -13,117,748.43
Qingdao Jiavayun Network Technology Co., Ltd.
1,401,703.26
(青岛家哇云网络科技有限公司)
Qingdao JSH Network Technology Co. Ltd. 5,511,749.00
Hunan Electronic Co., Ltd. (湖南电机株式会社) 68,058,207.73
HNR COMPANY (PRIVATE) LIMITED 102,384,957.04
HPZ LIMITED 83,534,353.67
CONTROLADORA MABE S.A.deC.V. 3,052,527,094.50
MiddleEast Air conditioning Company Limited 20,702,569.45
Total -35,459,345.18 -340,110,789.68 13,445,669,075.65 -21,000,000.00
13. Investment properties
（1）Increase and decrease of investment property under cost model for the year are set out as
follows:
Items House, buildings Land use rights Total
I. Original value
1.Opening balance 44,408,479.02 2,128,550.51 46,537,029.53
2.Increase for the period
（1）Outsourced
（2）Inventories\fixed
assets\construction in progress 347,500.00 347,500.00
transferred
133 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
（3）Increase in enterprise
combinations
3.Decrease for the period
（1）Disposal
（2）Other transferring out
Impact of fluctuation in exchange rate
311,192.00 311,192.00
for the period
4.Closing balance 45,067,171.02 2,128,550.51 47,195,721.53
II. Accumulated depreciation and
accumulated amortization
1.Opening balance 14,853,338.04 469,675.50 15,323,013.54
2.Increase for the period
（1）provision or amortization 851,057.75 20,118.11 871,175.86
3.Decrease for the period
（1）Disposal
（2）Other transferring out
Impact of fluctuation in exchange rate
44,056.86 44,056.86
for the period
4.Closing balance 15,748,452.65 489,793.61 16,238,246.26
III. Provision
for impairment
1.Opening balance
2.Increase for the period
（1）Provision
3、Decrease for the period
（1）Disposal
（2）Other transferring out
4.Closing balance
IV. Book value
1.Book value at the end of the
29,318,718.37 1,638,756.90 30,957,475.27
period
2.Book value at the beginning of
29,555,140.98 1,658,875.01 31,214,015.99
the period
（2）Depreciated and amortized amount for the current period was RMB 871,175.86 .
（3）No provision for impairment was made as the recoverable amount of investment property was
not less than the book value of the Company at the end of the period.
134 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
14. Fixed assets
Transportation
Projects Houses and buildings Production equipment
equipment
I. Original value
1.Opening balance 8,703,459,923.10 15,481,104,152.38 288,062,860.51
2.Increase amount for the
period
（1）Acquisition 77,341,110.30 120,206,848.18 3,132,410.90
（2）Transfer into construction
77,064,914.36 477,923,850.95 25,535,754.67
in progress
（ 3 ） Increase in enterprise
combinations
3.Decrease for the period
（1）Disposal or Write-off -17,548,341.82 -399,396,221.73 -10,929,865.45
（2）Disposal of subsidiaries
（3）Transfer into held for sale -171,460,105.94 -16,042,322.05 -73,091,329.82
Impact of fluctuation in
exchange rate for the period
14,012,790.41 61,703,290.85 -776,369.88
4.Closing balance 8,682,870,290.41 15,725,499,598.58 231,933,460.93
II. Accumulated
depreciation
1.Opening balance 2,504,185,797.82 6,292,261,294.47 144,327,969.99
2.Increase for the period
（1）Provision 215,088,009.26 880,437,104.10 15,452,707.34
（ 2 ） Increase in enterprise
combinations
3.Decrease for the period
（1）Disposal or Write-off -6,619,572.50 -353,210,658.55 -10,413,738.26
（2）Disposal of subsidiaries
（3）Transfer into held for sale -22,411,152.92 -9,777,327.57 8,335,803.08
Impact of fluctuation in
exchange rate for the period 3,910,590.77 27,917,182.42 -505,368.52
4.Closing balance 2,694,153,672.43 6,837,627,594.87 157,197,373.63
III. Provision
for impairment
1. Opening balance 30,703,168.88 11,490,036.50 2,019.29
2.Increase for the period
（1）Provision
135 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
（ 2 ） Increase in enterprise
combinations
3.Decrease for the period
（1）Disposal or Write-off -110,190.08
Impact of fluctuation in
exchange rate for the period 47,070.80
863,774.00
4.Closing balance 31,566,942.88 11,426,917.22
2,019.29
IV. Book value
1.Book value at the end of the
period
5,957,149,675.10 8,876,445,086.49 74,734,068.01
2.Book value at the
6,168,570,956.40 9,177,352,821.41 143,732,871.23
beginning of the period
Continued table
Items Office equipment Other Total
I. Original value
1.Opening balance 359,368,775.40 687,992,144.77 25,519,987,856.16
2.Increase for the period
（1）Acquisition 19,781,702.09 30,543,129.96 251,005,201.43
（2）Transfer into construction
12,853,719.22 37,310,537.76 630,688,776.96
in progress
（ 3 ） Increase in enterprise
combinations
3.Decrease for the period
（1）Disposal or Write-off -28,445,459.55 -18,157,754.46 -474,477,643.01
（2）Disposal of subsidiaries -22,099.15 -22,099.15
（3）Transfer into held for sale -26,279,861.14 -286,873,618.95
Impact of fluctuation in
exchange rate for the period
-1,497,148.23 -1,538,089.27 71,904,473.88
4.Closing balance 362,061,588.93 709,848,008.47 25,712,212,947.32
II. Accumulated depreciation
1.Opening balance 191,480,416.39 327,884,084.08 9,460,139,562.75
2.Increase for the period
（1）Provision 17,722,512.15 39,844,685.91 1,168,545,018.76
（ 2 ） Increase in enterprise
combinations
3.Decrease for the period
（1）Disposal or Write-off -3,768,795.66 -5,244,383.32 -379,257,148.29
（2）Disposal of subsidiaries -4,986.63 -4,986.63
136 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
（3）Transfer into held for sale -15,605,475.58 -39,458,152.99
Impact of fluctuation in
exchange rate for the period
-716,241.46 -365,962.07 30,240,201.14
4.Closing balance 204,717,891.42 346,507,962.39 10,240,204,494.74
III. Provision
for impairment
1.Opening balance 129,692.63 42,324,917.30
2.Increase for the period
（1）Provision
（ 2 ） Increase in enterprise
combinations
3.Decrease for the period
（1）Disposal or Write-off -110,190.08
Impact of fluctuation in
exchange rate i for the period 910,844.80
4.Closing balance 129,692.63 43,125,572.02
IV. Book value
1.Book value at the end of the
period
157,343,697.51 363,210,353.45 15,428,882,880.56
2.Book value at the beginning
of the period
167,888,359.01 359,978,368.06 16,017,523,376.11
（1）Total fixed asset transferred from construction-in-progress balance for the period amounted to
RMB 630,688,776.96.
（2）The pledged fixed assets were RMB 54,292,507.31 at the end of the period.
15. Construction in progress
(1). General information on Construction in progress
√Applicable □Not Applicable
Unit and currency: RMB
Closing balance Opening balance
Provisio
Provision
n
Projects Carrying for Carrying
Book value for Book value
Balance impairme Balance
impairm
nt
ent
Intelligent
kitchen (智慧厨 170,181,357.33 170,181,357.33 35,666,458.97 35,666,458.97
房项目)
Qingdao medical
refrigeration
appliances (青岛 116,259,304.80 116,259,304.80 166,981.10 166,981.10
特种制冷电器项
目)
137 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Hefei
116,224,367.60 116,224,367.60 25,181,280.17 25,181,280.17
Air-Conditioner
Hefei
98,511,618.08 98,511,618.08 55,478,420.33 55,478,420.33
Refrigerator
Hefei Electrical
77,052,787.74 77,052,787.74
Air-Conditioner
Electrical
53,794,749.16 53,794,749.16 5,193,377.89 5,193,377.89
Air-Conditioner
Shenyang
47,535,209.10 47,535,209.10 50,298,040.73 50,298,040.73
Refrigerator
Jiaozhou
36,710,172.40 36,710,172.40 5,809,318.63 5,809,318.63
air-conditioner
Qingdao
31,201,435.45 31,201,435.45 13,248,362.54 13,248,362.54
Refrigerator
Qingdao Special
28,040,062.89 28,040,062.89 2,148,406.14 2,148,406.14
Freezer
Qingdao washing
205,964,507.6
Appliances(青岛 368,679,854.81 368,679,854.81 205,964,507.66
6
洗涤电器项目)
Tianjing
108,020,326.4
Goodaymart (天 193,315,039.43 193,315,039.43 108,020,326.49
9
津日日新项目)
Jiaozhou
Goodaymart(胶 96,474,077.51 96,474,077.51 68,395,751.19 68,395,751.19
州日日顺项目)
Nanjing
Gooddaymart (南 96,450,984.23 96,450,984.23 54,845,708.25 54,845,708.25
京日日顺项目)
Hefei Washing
machine (合肥洗 67,387,231.96 67,387,231.96 4,916,153.85 4,916,153.85
衣机项目)
Qingdao
64,587,988.72 64,587,988.72 10,584,759.60 10,584,759.60
Front-loading
Foshan
50,817,691.39 50,817,691.39
Front-loading
Jin Zhou logistics 35,243,742.36 35,243,742.36 23,284,812.07 23,284,812.07
Harbin
Goodaymart (哈
25,770,319.83 25,770,319.83 15,254,265.96 15,254,265.96
尔滨日日顺项
目)
US GEA (美国 274,905,675.5
226,759,449.97 226,759,449.97 274,905,675.53
GEA 项目) 3
Mexican project
62,344,304.18 62,344,304.18 58,343,819.44 58,343,819.44
(墨西哥项目)
Others 512,683,703.7
519,403,589.45 519,403,589.45 512,683,703.71
1
2,582,745,338. 1,530,390,130.
Total 2,582,745,338.39 1,530,390,130.25
39 25
（2）Changes in material construction in progress for the period
138 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Impact of
Opening Increase for the Transfer to Other fluctuation in Closing Source
Projects
balance period fixed assets deductions exchange rate balance of fund
for the period
Intelligen
t kitchen 170,181,357. Self-finan
35,666,458.97 134,514,898.36
(智慧厨 33 cing
房项目)
Qingdao
medical
refrigerat
ion
Self-finan
appliance 116,259,304.
166,981.10 116,092,323.70 cing
80
s (青岛
特种制
冷电器
项目)
Hefei
Self-finan
Air-Condit 116,224,367.
25,181,280.17 99,780,496.91 8,737,409.48 cing
60
ioner
Hefei
Self-finan
Refrigerat 98,511,618.0
55,478,420.33 60,229,143.34 17,195,945.59 cing
8
or
Hefei
Electrical Self-finan
77,052,787.7
77,052,787.74 cing
Air-Condit 4
ioner
Electrical
Self-finan
Air-Condit 53,794,749.1
5,193,377.89 52,277,012.32 3,675,641.05 cing
6
ioner
Shenyang
Self-finan
Refrigerat 47,535,209.1
50,298,040.73 2,784,198.48 5,547,030.11 cing
0
or
Jiaozhou
Self-finan
Air-Condit 36,710,172.4
5,809,318.63 35,462,868.60 4,562,014.83 cing
0
ioner
Qingdao
Self-finan
Refrigerat 31,201,435.4
13,248,362.54 24,509,693.00 6,556,620.09 cing
5
or
Qingdao
Self-finan
Special 28,040,062.8
2,148,406.14 27,641,526.31 1,749,869.56 cing
9
Freezer
139 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Qingdao
washing
Applianc 368,679,854. Self-finan
205,964,507.66 163,347,045.27 631,698.12
es(青岛 81 cing
洗涤电
器项目)
Tianjing
Gooday Self-finan
mart (天 193,315,039.
108,020,326.49 85,294,712.94 cing
43
津日日
新项目)
Jiaozhou
Gooday Self-finan
mart(胶 96,474,077.5
68,395,751.19 28,078,326.32 cing
1
州日日
顺项目)
Nanjing
Goodday Self-finan
mart (南 96,450,984.2
54,845,708.25 41,605,275.98 cing
3
京日日
顺项目)
Hefei
Self-finan
Washing 67,387,231.9
4,916,153.85 65,582,538.25 3,111,460.14 cing
6
machine
Qingdao Self-finan
64,587,988.7
Front-loa 10,584,759.60 60,494,218.71 6,490,989.59
2 cing
ding
Foshan Self-finan
50,817,691.3
Front-loa 97,887,279.14 47,069,587.75
9 cing
ding
Jin Zhou Self-finan
35,243,742.3
23,284,812.07 11,958,930.29 cing
logistics 6
Harbin
Gooday
mart (哈 25,770,319.8 Self-finan
15,254,265.96 10,718,276.09 202,222.22
尔滨日 3 cing
日顺项
目)
US GEA
(美国 226,759,449. Self-finan
274,905,675.53 214,197,010.27 241,839,138.39 -20,504,097.44
GEA 项 97 cing
目)
Mexican
project 62,344,304.1 Self-finan
58,343,819.44 3,531,727.16 7,532,211.90
(墨西哥 8 cing
项目)
Self-finan
Others 519,403,589.
512,683,703.71 294,550,994.60 279,787,422.88 9,210,863.23 1,167,177.25 cing
45
Total 2,582,745,33
1,530,390,130.25 1,704,059,556.62 630,688,776.96 9,210,863.23 -11,804,708.29
8.39
No impairment provision has been made for construction in progress at the end of the period, and
140 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
the book balance equals the book value.
16. Disposals of fixed assets
Reasons of
Items Closing balance Opening balance
transfer disposals
International Refrigerator Project 55,808,808.81 55,808,808.81 Demolition
Dalian Refrigerator obsolescence
55,860.49
disposal
Total 55,864,669.30 55,808,808.81
17. Intangible assets
(1). General information on intangible assets
√Applicable □Not Applicable
Technical
Items Concession Land use tights
expertise
I. Original value
1.Opening balance 742,607,859.28 3,698,357,200.00 1,765,843,606.80
2.Increase for the period
(1)Acquisition 349,011,322.09
1,293,275.47
(2)Inner R&D
(3)Increase in enterprise
combinations
3.Decrease for the period
(1)Disposal
(2)Disposal of subsidiaries
(3)Transfer into held for sale -58,219,505.79
Impact of fluctuation in exchange rate
for the period 9,063,065.83 46,638,400.00 -1,589,801.11
4.Closing balance 752,964,200.58 3,744,995,600.00 2,055,045,621.99
II. Accumulated amortization
1.Opening balance 123,656,890.94 148,964,464.68 182,818,222.79
2.Increase for the period
(1)Provision 36,141,130.31 41,880,508.14 17,589,464.35
(2)Increase in enterprise
combinations
3.Decrease for the period
(1)Disposal
(2)Disposal of subsidiaries
141 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(3)Transfer into held for sale -1,267,907.98
Impact of fluctuation in exchange rate
for the period
2,522,653.53 3,241,960.24 -362,317.37
4.Closing balance 162,320,674.78 194,086,933.06 198,777,461.79
III. Provision for impairment
1.Opening balance
2.Increase for the period
(1)Provision
(2)Increase in enterprise
combinations
3.Decrease for the period
(1)Disposal
(2)Disposal of subsidiaries
(3)Transfer into held for sale
Impact of fluctuation in exchange rate
for the period
4.Closing balance
IV.Book value
1.Book value at the end of the period 590,643,525.80 3,550,908,666.94 1,856,268,160.20
2.Book value at the beginning of the
period
618,950,968.34 3,549,392,735.32 1,583,025,384.01
Continued Table
Application
Items Trademark right management Total
software and others
I.Original value
1.Opening balance 620,749,000.00 997,531,221.52 7,825,088,887.60
2.Increase for the period
(1)Acquisition 39,842,045.89 390,146,643.45
(2)Inner R&D 683,268,017.49 683,268,017.49
(3)Increase in enterprise
combinations
3.Decrease for the period
(1)Disposal -6,903,507.31 -6,903,507.31
(2)Disposal of subsidiaries -18,543,829.64 -18,543,829.64
(3)Transfer into held for sale -61,698,676.82
-3,479,171.03
Impact of fluctuation in exchange rate 7,828,000.00 27,956,711.17 89,896,375.89
142 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
for the period
4.Closing balance 628,577,000.00 1,719,671,488.09 8,901,253,910.66
II.Accumulated amortization
1.Opening balance 353,572,422.07 809,012,000.48
2.Increase for the period
(1)Provision 100,501,387.04 196,112,489.84
(2)Increase in enterprise
combinations
3.Decrease for the period
(1)Disposal
(2)Disposal of subsidiaries -692,531.87 -692,531.87
(3)Transfer into held for sale -1,087,102.68 -2,355,010.66
Impact of fluctuation in exchange rate
for the period 3,703,092.33 9,105,388.73
4.Closing balance 455,997,266.89 1,011,182,336.52
III. Provision for impairment
1.Opening balance 10,890,590.84 10,890,590.84
2.Increase for the period
(1)Provision
(2)Increase in enterprise
combinations
3.Decrease for the period
(1)Disposal -928,924.48 -928,924.48
(2)Disposal of subsidiaries
(3)Transfer into held for sale
Impact of fluctuation in exchange rate
for the period 3,441.62 3,441.62
4.Closing balance 9,965,107.98 9,965,107.98
IV.Book value
1.Book value at the end of the period 628,577,000.00 1,253,709,113.22 7,880,106,466.16
2.Book value at the beginning of the
period
620,749,000.00 633,068,208.61 7,005,186,296.28
The intangible assets arising from inner R&D of the Company take up 12.68% of the original
value of intangible assets at the end of the period.
143 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
18. Development expenses
Decrease for the period Impact of
Charged to fluctuation of
Opening Increase for Recognized as Closing
Items profit or exchange
balance the period an balance
loss for the rate for the
intangible asset
period period
91ABD.ERP
952,488,46 117,458,313 669,374,165.2 -5,956,369. 394,616,24
PROGRAM 5.55 .85 8 72 4.40
Others 13,562,868. 37,064,273. 37,289,693.
39,253.78 13,893,852.21 595,658.35
26 27 89
Total 966,051,33 154,522,587 683,268,017.4 -5,360,711. 431,905,93
39,253.78
3.81 .12 9 37 8.29
19. Goodwill
Increase Impact of
amount Decrease for the fluctuation in
Items Opening balance Closing balance
for the period exchange rate
period for the period
GEA 19,658,831,540.3
19,418,454,197.34 240,377,342.98
2
Furniture
after-sales service 6,123,000.00 6,123,000.00
business
Shanghai Grand
Logistics Co., Ltd.
(上海广德 29,079,469.66 29,079,469.66
物流有限公司)
GREEN one TEC
Solarindustrie 3,298,757.75 3,298,757.75
GmbH
Shanghai Boyol
New Brothers
Supply Chain 68,407,241.86 68,407,241.86
Management
Company Limited
Shengfeng
Logistics Group 317,954,690.69 317,954,690.69
Co., Ltd
Total 19,765,740,009.5
19,843,317,357.30 317,954,690.69 240,377,342.98
9
The Company calculates the recoverable amount of the asset groups by estimating the present value
of future cash flows. According to the cash flows in the next five to ten years based on the financial
budget approved by the management, the perpetual growth rate of cash flow in the next years is
144 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
estimated to be 2%-3%, not more than the long-term average growth rate of the asset group business.
The discount rate is within the range of 9.00%-18.50%. The management prepares the financial budget
above based on the past performance and market development forecasts. Pursuant to the result of
impairment test, no goodwill has been impaired by the end of the period.
20. Long-term deferred expenses
Impact of
Increase Amortization
fluctuation in
Opening amount for amount for Other Closing
Types exchange
balance the the deductions balance
rate for the
period period
period
Renovation
fee
7,658,358.06 3,391,834.09 16,644.93 4,249,879.04
Expenditure
for
reconstructi 37,948,667.8 14,505,884.5 19,218,987.2
83,720,074.13 -337,657.34 87,606,212.79
2 5 7
on of leased
plant
Others 19,744,045.1
32,390,239.14 4,454,129.06 1,219,107.96 6,054.79 46,467,102.03
2
Total 123,768,671.3 57,692,712.9 22,351,847.7 20,454,740.1 138,323,193.8
-331,602.55
3 4 0 6 6
21. Deferred income tax assets/ Deferred income tax liabilities
（1）The deferred income tax assets without consideration of the offsetting of balances
Items Closing balance Opening balance
Provision for assets impairment 184,309,780.09 185,051,809.02
Liabilities 1,491,060,824.72 1,514,275,639.33
Internal unrealized profit due to
consolidation
489,050,580.01 418,158,297.39
Others 194,161,861.92 327,972,788.34
Total 2,358,583,046.74 2,445,458,534.08
（2）Deferred income tax liabilities without consideration of the offsetting of balances
Items Closing balance Opening balance
Changes of the fair value 6,469,995.59 5,298,198.09
Disposal of subsidiaries 20,013,800.12 20,938,261.74
Financial assets held for sale 94,421,609.22 81,922,539.71
Reserved foreign enterprise income
tax
37,690,532.32 161,690,532.32
Depreciation and amortization of
assets and the difference of the tax
434,785,781.50 471,732,062.64
145 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
laws
Interest rate swap agreement 21,379,038.65 13,902,650.26
Others 71,102,951.00 73,875,505.00
Total 685,863,708.40 829,359,749.76
（3）The deferred income tax assets and the deferred income tax liabilities offsetted at the end of the
period was RMB 523,261,027.55.
22. Other non-current assets
√Applicable □Not Applicable
Unit and currency: RMB
Items Closing balance Opening balance
Prepayments for equipment and
833,226,998.35 757,518,103.03
land
Forward foreign exchange sale
350,265,114.92 343,283,948.90
and purchase agreement
Others 321,137,033.81 153,262,129.83
Total 1,504,629,147.08 1,254,064,181.76
23. Short-term borrowings
√Applicable □Not Applicable
Unit and currency: RMB
Items Closing balance Opening balance
Pledged borrowings 4,069,979,063.47 3,914,042,669.00
Mortgage borrowings 61,325,808.17 130,394,916.35
Guaranteed borrowings 1,983,070,826.58 2,501,400,000.00
Unsecured borrowings 5,690,177,823.10 4,332,742,689.83
Total 11,804,553,521.32 10,878,580,275.18
24. Derivative financial liabilities
√Applicable □Not Applicable
Unit and currency: RMB
Items Closing balance Opening balance
Forward foreign exchange sale
4,440,154.26 2,524,569.45
and purchase agreement
Total 4,440,154.26 2,524,569.45
25. Notes payable
√Applicable □Not Applicable
Unit and currency: RMB
Categories Closing balance Opening balance
Commercially acceptance
2,844,910,661.63 2,165,982,670.54
bill
Bank acceptance bill 16,527,830,770.03 14,212,716,989.23
Total 19,372,741,431.66 16,378,699,659.77
26. Accounts payables
√Applicable □Not Applicable
Unit and currency: RMB
Items Closing balance Opening balance
Accounts payables 28,204,519,194.31 25,654,013,649.96
146 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Total 28,204,519,194.31 25,654,013,649.96
The book balance at the end of the period was mainly the unpaid expenditures on material,
equipment and labor.
27. Receipts in advance
√Applicable □Not Applicable
Unit and currency: RMB
Items Closing balance Opening balance
Receipts in advance 3,485,578,719.92 5,833,552,815.05
Total 3,485,578,719.92 5,833,552,815.05
The book balance at the end of the period was mainly the prepayment.
28. Payables for staff’s remuneration
(1). Presentation of payables for staff’s remuneration
√Applicable □Not Applicable
Unit and currency: RMB
Opening Increase for Decrease for
Items Closing balance
balance the period the period
Ⅰ. Short-term 2,130,024,644.0 8,086,543,734.5 8,484,942,412.4 1,731,625,966.1
remuneration 1 9 2 8
Ⅱ. Post-employment 44,417,648.82 646,344,436.95 653,971,756.71 36,790,329.06
benefits-defined
contribution plan
Ⅲ. Termination benefits 14,959,967.19 187,362.24 10,941,391.57 4,205,937.86
Ⅳ . Other welfare due 159,786,862.88 2,989,668.67 860,074.37 161,916,457.18
within one year
2,349,189,122.9 8,736,065,202.4 9,150,715,635.0 1,934,538,690.2
Total
0 5 7 8
(2). Presentation of short-term remuneration
Opening Increase for Decrease for Closing
Items
balance the period the period balance
(1) Salaries, bonus, 1,257,065,187.6 5,510,985,821.4 5,850,082,040.4
917,968,968.60
allowance and benefit 1 0 1
(2) Employee welfare 297,270,715.36 140,889,006.31 146,540,689.66 291,619,032.01
(3) Social benefit 147,366,747.95 812,242,114.77 816,289,556.66 143,319,306.06
(4) Housing fund 7,727,158.93 135,473,605.37 134,374,421.77 8,826,342.53
(5) Labor union fee and
2,875,359.31 38,365,968.50 38,640,762.52 2,600,565.29
education fee
(6) Short-term
176,242,872.66 113,125,238.74 108,561,096.13 180,807,015.27
compensated leave
1,335,461,979.5 1,390,453,845.2
(7) Others 241,476,602.19 186,484,736.42
0 7
2,130,024,644.0 8,086,543,734.5 8,484,942,412.4
Total 1,731,625,966.18
1 9 2
(3). Presentation of defined contribution plan
√Applicable □Not Applicable
Unit and currency: RMB
Opening Increase for Decrease for
Items Closing balance
balance the period the period
1. Basic pension insurance 43,103,445.60 634,540,229.45 642,018,465.49 35,625,209.56
147 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
2. Unemployment 765,277.29 11,149,536.79 11,209,557.33 705,256.75
insurance
3. Enterprise annuity 548,925.93 654,670.71 743,733.89 459,862.75
payment
Total 44,417,648.82 646,344,436.95 653,971,756.71 36,790,329.06
(4)Presentation of termination benefits
Items Closing balance Opening balance
Termination compensation 4,205,937.86 14,959,967.19
Total 4,205,937.86 14,959,967.19
29. Taxes payable
√Applicable □Not Applicable
Unit and currency: RMB
Items Closing balance Opening balance
VAT 454,123,894.07 482,237,560.42
Business tax 7,253,589.46 6,482,581.69
Enterprise income tax 1,138,758,726.04 1,246,597,129.08
Individual income tax 26,694,034.04 22,133,761.57
Municipal maintenance tax 13,620,780.60 10,698,089.06
Education surcharge 5,781,675.20 4,651,788.94
The electrical and electronic
78,161,271.50 77,767,756.79
products waste treatment fund
Additional taxes 46,037,574.63 58,691,859.87
Total 1,770,431,545.54 1,909,260,527.42
30. Interests payable
Items Closing balance Opening balance
Interest of long-term borrowings 56,521,386.59 46,938,624.99
Interest of short-term borrowings 12,511,765.92 10,717,833.80
Total 69,033,152.51 57,656,458.79
31. Dividends payable
Company Closing balance Opening balance
BRAVE LION (HK) LIMITED 122,756,874.10 122,756,874.10
Other minority shareholders 407,065,787.01 30,999,441.54
Total 529,822,661.11 153,756,315.64
32. Other payables
Items Closing balance Opening balance
Other payables 11,077,488,012.51 10,805,162,943.62
Total 11,077,488,012.51 10,805,162,943.62
148 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
The book balance at the end of the period mainly included the incurred but unpaid costs.
33. Non-current liabilities due within 1 year
√Applicable □Not Applicable
Unit and currency: RMB
Items Closing balance Opening balance
Long-term borrowings due
3,108,306,051.60 2,850,325,000.00
within one year
Total 3,108,306,051.60 2,850,325,000.00
34. Long-term borrowings
(1). Classification of Long-term borrowings
√Applicable □Not Applicable
Unit and currency: RMB
Items Closing balance Opening balance
Mortgage loan 25,676,073.88 30,542,316.47
Guaranteed borrowings 5,293,279,998.61 5,227,360,000.00
Credit borrowings 298,982,650.05 288,741,397.35
Guaranteed and mortgage
7,340,453,621.57 10,489,849,095.99
borrowings
Total 12,958,392,344.11 16,036,492,809.81
Description on classification of long-term borrowings:
Long-term borrowings – guarantee that the interest rate is the interest rate as provided in the
borrowing agreement plus London inter-bank offered rate.
Long-term borrowings – the interest rate of domestic borrowing in the credit borrowings is the
benchmark loan rate published by the People’s Bank of China.
Long-term borrowings – the interest rate of international borrowings in the credit borrowings is the
interest rate as provided in the borrowing agreement plus London inter-bank offered rate.
Long-term borrowings – pledge that the interest rate is the interest rate as provided in the borrowing
agreement plus London inter-bank offered rate.
35. Bonds payables
On 21 November 2017, Harvest International Company, a wholly owned subsidiary of the Company
issued convertible corporate bonds amounting to HK$8 billion, the term of which is 5 years with nil
coupon rate and an investors’ return of 1%.
Convertible corporate bonds were divided into liability component and equity component upon
initial recognition:
Items Convertible corporate bonds issued in 2017
Initially recognized: 6,731,131,007.13
Including:
Equity component of convertible corporate bonds 431,424,524.07
Liability component of convertible corporate bonds 6,299,706,483.06
Changes in liability component of convertible corporate bonds for the period:
149 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Less:
reclassified
Bond bond
Increase Impact of into due
Opening interests interests Closing
Items for the exchange within one
balance accrued for paid for balance
period rate year for the
the period the
period
period
Convertible
corporate
6,211,08 80,970,718 56,010,012. 6,348,069,0
bonds issued 8,362.68 .36 75 93.79
in 2017
Total 6,211,08 80,970,718 56,010,012. 6,348,069,0
8,362.68 .36 75 93.79
36. Long-term payables
Items Closing balance Opening balance
CDB development fund investment fund 93,000,000.00 93,000,000.00
Lease 7,337,376.67 13,020,029.74
Total 100,337,376.67 106,020,029.74
Under the Investment Contract of China Development Fund executed by the Company and its
subsidiaries including Qingdao Haier Refrigerator Co., Ltd., Qingdao Haier Air Conditioner Gen Corp.,
Ltd., Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited together with China Development Fund
Co. Ltd. in 2015 and 2016, China Development Fund Co. Ltd. invested RMB20 Million in Qingdao
Haier Refrigerator Co., Ltd., and RMB73 Million in Qingdao Haier (Jiaozhou) Air-conditioning Co.,
Limited. China Development Fund Co. Ltd. obtains 1.2% of the earnings every year in dividend or
through call premium. From 2020 to 2027, the Company and its subsidiaries will repurchase the
investments made by China Development Fund Co. Ltd. to the subsidiary of the Company.
37. Long-term payables for staff’s remuneration
√Applicable □Not Applicable
（1）Table of long-term payables for staff’s remuneration
Items Closing balance Opening balance
I. Post-employment benefits: net
568,258,334.25 549,421,555.18
liability of defined benefit plan
II. Termination benefits 197,840,493.92 153,682,943.65
III. Provision for work-related injury
188,983,059.97 195,056,243.70
compensation
IV. Other long-term benefits
Total 955,081,888.14 898,160,742.53
150 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
（2）Defined benefit plan
Some subsidiaries of the Company have set several defined benefit plans for the qualified staff. In
these plans, the employees are entitled to enjoy the retirement benefits agreed in such defined benefit
plans.
These plans are exposed to interest rate risks, changes in life expectancy of the beneficiary and
other risks.
The recent actuarial evaluation of the assets and the present value of defined benefit obligations
under such plans are determined by using the expected cumulative welfare unit method.
①.The defined benefit plan of Haier Asia Co., Ltd. (海尔亚洲株式会社), a subsidiary of the
Company
Actuarial assumption used in the defined benefit plan
Items Percentage
I. Discount rate 0.50%
II. Expected rate of return 2.00%
Present value of defined benefit obligations
Items Amount
I. Opening balance 303,316,065.92
II. Defined benefit cost in current profit or loss
1. Current period service cost
2. Past service cost
3. Settlement profit (loss indicated in“-”)
4. Interest expenses
III. Defined benefit cost in other comprehensive incomes
1. Actuarial loss (gain indicated in “-”)
IV. Other changes 10,477,238.90
1. Consideration paid upon settlement
2. Prepaid benefits
3.Exchange difference 10,477,238.90
V. Closing balance 313,793,304.82
Fair value of plan assets
Items Amount
I. Opening balance 307,323,897.90
II. Defined benefit cost in current profit or loss
151 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
1. Interest income
III. Defined benefit cost in other comprehensive incomes
1. Return on plan assets (except those included in net
interests)
2. Changes in impact of asset cap (except those included in
net interests)
IV. Other changes 10,615,678.69
1. Payments made by the employer
2. Prepaid benefits
3.Exchange difference 10,615,678.69
V. Closing balance 317,939,576.59
Neither the Company's common stocks or bonds, nor the properties occupied by the Company are
included in the plan assets.
Net liability (net asset) of defined benefit plan
Items Amount
I. Opening balance -4,007,831.98
II. Defined benefit cost in current profit or loss
III. Defined benefit cost in other comprehensive incomes
IV. Other changes -138,439.79
V. Closing balance -4,146,271.77
The average term for the defined benefit obligation is 14.70 years at the balance sheet date.
②. The defined benefit plan of Roper Corporation, a subsidiary of the Company
Roper Corporation, a subsidiary of the Company, has set post-employment defined benefit plan of
health care benefits for the qualified staff.
Actuarial assumption used in the defined benefit plan
Items Percentage
I. Discount rate 3.98%
Present value of defined benefit obligations
Items Amount
Ⅰ. Opening balance 145,677,081.28
Ⅱ. Consolidation of enterprises under non-common control
Ⅲ. Defined benefit cost in current profit or loss 16,018,353.15
1. Current period service cost 10,763,690.62
2. Past service cost
152 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
3. Settlement profit (loss indicated in “-”)
4. Interest expenses 5,254,662.53
Ⅳ. Defined benefit cost in other comprehensive incomes
1. Actuarial loss (gain indicated in “-”)
V. Other changes -7,152,930.80
1. Consideration paid upon settlement
2. Paid benefits -9,211,583.30
3. Exchange difference 2,058,652.50
Ⅵ. Closing balance 154,542,503.63
Net liability (net asset) of defined benefit plan
Items Amount
Ⅰ. Opening balance 145,677,081.28
Ⅱ. Consolidation of enterprises under non-common control
Ⅲ. Defined benefit cost in current profit or loss 16,018,353.15
Ⅳ. Defined benefit cost in other comprehensive incomes
V. Other changes -7,152,930.80
Ⅵ. Closing balance 154,542,503.63
The average term for the defined benefit obligation is 12.14 years at the balance sheet date.
③. The defined benefit plan of Haier US APPLIANCE SOLUTIONS, INC. a subsidiary of the
Company.
Haier US APPLIANCE SOLUTIONS, INC., a subsidiary of the Company, has set post-retirement
defined benefit plan of health care benefits for the qualified staff.
Actuarial assumption used in the defined benefit plan
Items Percentage
I. Discount rate 3.68%
Present value of defined benefit obligations
Items Amount
Ⅰ. Opening balance 384,788,210.83
Ⅱ. Consolidation of enterprises under non-common control
Ⅲ. Defined benefit cost in current profit or loss 29,106,878.98
1. Current period service cost 16,850,124.36
2. Past service cost
3. Settlement profit (loss indicated in “－”)
153 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
4. Interest expenses 12,256,754.62
Ⅳ. Defined benefit cost in other comprehensive incomes
1. Actuarial loss (gain indicated in “－”)
V. Other changes -22,633,577.93
1. Consideration paid upon settlement
2. Paid benefits -27,537,079.18
3. Exchange difference 4,903,501.25
Ⅵ. Closing balance 391,261,511.88
Net liability (net asset) of defined benefit plan
Items Amount
Ⅰ. Opening balance 384,788,210.83
Ⅱ.Consolidation of enterprises under non-common control
Ⅲ. Defined benefit cost in current profit or loss 29,106,878.98
Ⅳ. Defined benefit cost in other comprehensive incomes
V. Other changes -22,633,577.93
Ⅵ. Closing balance 391,261,511.88
④. The defined benefit plan of Haier US APPLIANCE SOLUTIONS, INC., a subsidiary of the
Company.
Haier US APPLIANCE SOLUTIONS, INC., a subsidiary of the Company, has set a defined
benefit plan of retirement pension for the qualified staff.
Actuarial assumption used in the defined benefit plan
Items Percentage
I. Discount rate 3.21%
Present value of defined benefit obligations
Items Amount
Ⅰ. Opening balance 333,354,980.83
Ⅱ.Consolidation of enterprises under non-common control
Ⅲ. Defined benefit cost in current profit or loss 17,965,772.49
1. Current period service cost 47,498.61
2. Past service cost -
3. Settlement profit (loss indicated in “－”) -
154 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
4. Interest expenses 17,918,273.88
Ⅳ. Defined benefit cost in other comprehensive incomes 9,339,933.04
1. Actuarial loss (gain indicated in “－”) 9,339,933.04
V. Other changes -47,890,921.01
1. Consideration paid upon settlement -
2. Paid benefits -51,313,200.62
3. Exchange difference 3,422,279.61
Ⅵ. Closing balance 312,769,765.35
Fair value of plan assets
Items Amount
Ⅰ. Opening balance 226,737,778.94
II. Defined benefit cost in current profit or loss 94,562.86
1. Interest income 94,562.86
III. Defined benefit cost in other comprehensive incomes -
1. Return on plan assets (except those included in net
-
interests)
2. Changes in impact of asset cap (except those included in
net interests)
IV. Other changes -25,946,523.34
1. Payments made by the employer 23,412,557.16
2. Paid benefits -51,313,200.62
3. Exchange difference 1,954,120.12
V. Closing balance 200,885,818.46
Net liability (net asset) of defined benefit plan
Items Amount
Ⅰ. Opening balance 106,617,201.89
Ⅱ.Consolidation of enterprises under non-common control
Ⅲ. Defined benefit cost in current profit or loss 17,871,209.63
Ⅳ. Defined benefit cost in other comprehensive incomes 9,339,933.04
V. Other changes -21,944,397.67
Ⅵ. Closing balance 111,883,946.89
（3）Provision for work-related injury compensation
Our subsidiary Haier US APPLIANCE SOLUTIONS, INC. made a provision for the
occupational injury claims filed by the injured due to production accidents starting from 1 January
1991. The provision will be used to pay the claims to the employees injured during the accidents.
The provision accrued was prepared by Beecher Carlson Insurance Services, LLC., adopting the
155 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
actuarial method. The discount rate used in the actuarial method is 3.72%.
Items Amount
Ⅰ. Opening balance 267,182,167.75
Ⅱ. Consolidation of enterprises under non-common control
Ⅲ. Compensation expenses in current profit or loss -11,690,699.39
Ⅳ. Compensation amount actually paid for the period
V. Other changes 2,988,751.96
Ⅵ.Closing balance 258,480,220.32
Classification of the balance of defined benefit plan
Items Closing balance Opening balance
Short-term remuneration 89,429,628.15 87,660,938.82
Long-term remuneration 568,258,334.25 549,421,555.18
Total 657,687,962.40 637,082,494.00
38. Estimated liabilities
Items Closing balance Opening balance
Estimated charges of “three
2,860,993,355.02 2,600,696,051.30
guarantees” and installations
Pending litigation 18,636,207.41 19,003,500.11
Others
Total 2,879,629,562.43 2,619,699,551.41
Significant assumptions and estimates related to the estimated charges of “three guarantees” and
installations: the Company rationally estimates the rate of “three guarantees” and installations according
to the previous actual expenditures and sales data on “three guarantees” and installations, and estimates
the potential charges of ‘three guarantees” and installations based on the policy of “three guarantees”
and installations and the realized sales data.
39. Deferred income
Explanations of deferred income
√Applicable □Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance Closing balance
period period
Governmental
494,192,627.62 99,531,200.00 49,572,405.71 544,151,421.91
subsidy
Leaseback 2,948,461.10 2,948,461.10
Total 497,141,088.72 99,531,200.00 52,520,866.81 544,151,421.91
40. Other non-current liabilities
√Applicable □Not Applicable
Unit and Currency: RMB
156 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Items Closing balance Opening balance
Forward foreign exchange sale
242,658,549.02 242,417,657.63
and purchase contracts
Repurchase obligation for
969,992,212.60 916,938,153.36
minority equity interests
Intangible consideration 5,612,008.70 5,384,860.29
Fair value change on sold-out
6,196,157.27
share options
Long term guarantee deposit 10,222,491.86
Total 1,228,485,262.18 1,170,936,828.55
41. Share capital
Increase for the Decrease for
Class of shares Opening balance Closing balance
period the period
I. Restricted shares
1. State-owned shares
2.Shares held by domestic
non-state-owned
legal entities
3.Shares held by domestic
natural persons
4. Shares held by foreign
non-state-owned legal
entities
Ⅱ. Non-restricted shares 6,097,402,727 6,097,402,727
1.Ordinary shares in
6,097,402,727 6,097,402,727
RMB
2. Domestic listed foreign
shares
3. Overseas listed foreign
shares
4. Others
Ⅲ. Total shares 6,097,402,727 6,097,402,727
42. Other equity instruments
Increase for the Decrease for the
Items Opening balance Closing balance
period period
Equity component of
convertible corporate bonds
431,424,524.07 431,424,524.07
Total 431,424,524.07 431,424,524.07
43. Capital reserve
√Applicable □Not Applicable
Unit and Currency: RMB
Items Opening balance Increase for the period Decrease for the Closing balance
157 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
period
Capital premium
(share capital 47,000,347.59 47,000,347.59
premium)
Other capital
826,883,093.84 826,883,093.84
reserve
Total 826,883,093.84 47,000,347.59 873,883,441.43
Other explanations, including the explanations on increases or decreases for the period and the reasons
thereof:
Movements in share capital premium due to:①an increase of RMB 46,742,074.11 in capital
premium due to the capital contribution to subsidiaries not on the original proportion of equity interest
for the period led to the changes in the shareholdings of the Parent Company; ②an increase in share
capital premium of RMB 258,273.48 due to acquisition of minority equity interests of subsidiaries for
the period.
44. Other comprehensive income
Amounts incurred for the period
Item Opening Closing
The Attributable Attributable
Less:
s balance pre-income to the parent to minority balance
income tax Others
amount for company, net shareholders,
expense
the period of tax net of tax
a 40,228,12
-272,839,961.93 87,029,894.32 86,716,737.89 313,156.43 -145,895,096.34
7.70
b 3,074,994.11 125,566,608.41 12,373,907.34 47,583,273.64 65,609,427.43 -17.11 50,658,250.64
c 39,797,118.61 29,653,932.68 7,070,873.51 22,583,059.17 - 62,380,177.78
d 203,472,980.90 174,678,517.32 116,511,067.77 58,167,449.55 319,984,048.67
e -9,868,941.65 -9,601,565.98 -2,649,298.25 -6,952,267.73 - -16,821,209.38
Total 40,228,11
-36,363,809.96 407,327,386.75 16,795,482.60 266,441,870.74 124,090,033.41 270,306,171.37
0.59
Notes:
(1) Item a, b, c, and d are other comprehensive income that will be reclassified to profit or loss in
the future, including:
Item a represents other comprehensive income of investees accounted for using the equity method,
which will be reclassified subsequently to profit or loss.
Item b represents profit and loss in change in fair value of financial assets available-for-sale.
Item c represents effective portion of gain or loss arising from cash flow hedging instruments
Item d represents exchange differences from translation of foreign currency financial statements.
(2) Item e represents changes arising from remeasurement of net liabilities or assets of defined
benefit plans, which may not be subsequently reclassified to profit or loss.
45. Surplus reserve
√Applicable □Not Applicable
Unit and Currency: RMB
158 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Items Opening balance Increase for the Decrease for the Closing balance
period period
Statutory surplus
2,055,400,980.82 2,055,400,980.82
reserve
Discretionary
26,042,290.48 26,042,290.48
surplus reserve
Reserve fund 11,322,880.64 11,322,880.64
Enterprise
10,291,630.47 10,291,630.47
expansion fund
Others
Total 2,103,057,782.41 2,103,057,782.41
46. Undistributed profits
√Applicable □Not Applicable
Items Amount
Undistributed profits at the end of last year 22,793,110,884.09
Add: correction of accounting errors
Adjustment on implementation of ASBE
Adjustment on business combination under common control
Undistributed profits at the beginning of the year 22,793,110,884.09
Add: net profit attributable to owners of the Parent company 4,858,795,529.42
Profit available for appropriation for the year 27,651,906,413.51
Less: appropriation of statutory surplus reserve
Appropriation of staff incentive and welfare fund
Dividend payable for ordinary shares 2,085,311,732.63
Changes on accounting policies of the Company calculated by equity
method
75,417,874.90
Undistributed profits at the end of the period 25,491,176,805.98
47. Operating income and Operating cost
（1）Operating income
Categories Amount for the current period Amount for the previous period
Principal Business 88,331,661,405.98 77,251,885,539.39
Other Business 259,965,220.09 333,122,374.54
Total 88,591,626,626.07 77,585,007,913.93
（2）Income and cost of principle operations presented by product categories
Amount for the current period Amount for the previous period
Categories Income of Income of Cost of
Cost of principal
principal principal principal
business
business business business
159 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Air conditioner 19,193,725,621.51 13,362,512,685.18 16,327,368,124.73 11,125,241,053.36
Refrigerator 25,442,769,193.45 17,561,134,268.46 22,743,000,584.94 15,418,659,922.43
Kitchen
10,472,786,314.52 6,835,672,573.70 9,963,072,558.48 6,440,792,921.03
appliance
Water Heater 3,871,786,733.03 2,191,843,437.52 3,198,650,838.72 1,826,219,892.11
Washing
16,282,315,159.48 10,869,602,567.57 13,845,106,171.68 9,062,281,717.42
machine
Equipment
1,248,084,170.06 1,089,213,193.13 1,494,754,632.57 1,261,495,445.43
product
Integrated
channel services 11,820,194,213.93 10,862,693,587.38 9,679,932,628.27 8,963,031,315.36
and others
Total 88,331,661,405.98 62,772,672,312.94 77,251,885,539.39 54,097,722,267.14
48. Taxes and surcharge
√Applicable □Not Applicable
Unit and Currency: RMB
Items Amount for the current period Amount for the previous period
City maintenance and
136,407,185.16 120,193,292.32
construction tax
Education surcharge 58,321,187.99 52,303,868.63
Property tax 29,657,440.18 26,032,307.24
Land use tax 20,661,100.58 18,718,053.00
Stamp tax 106,036,603.21 78,858,626.83
Others 53,332,114.80 49,424,564.78
Total 404,415,631.92 345,530,712.80
49. Expenses of sales
√Applicable □Not Applicable
Unit and Currency: RMB
Amount for the current Amount for the previous
Items
period period
Expenses of sales 13,106,599,051.97 12,180,499,014.03
Total 13,106,599,051.97 12,180,499,014.03
Other explanations:
Expenses of sales of the Company mainly include compensation, transportation and warehousing costs,
advertising and sales promotion expenses, after-sale expenses and so on.
50. Management expenses
√Applicable □Not Applicable
Unit and Currency: RMB
Amount for the current Amount for the previous
Items
period period
Management expenses 5,951,531,296.20 5,393,556,967.87
Total 5,951,531,296.20 5,393,556,967.87
Other explanations:
Management expenses of the Company mainly include compensation, research and development costs,
administrative expenses, taxes, rental payments and so on.
160 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
51. Financial expenses
Amount for the current Amount for the previous
Items
period period
Interest expenses 595,874,019.79 612,416,699.07
Less: interest income 225,158,944.99 132,915,870.10
Less: cash discount 72,886,733.41 86,520,731.41
Exchange gain or loss 59,249,129.28 172,272,254.88
Others 67,905,794.68 46,422,344.80
Total 424,983,265.35 611,674,697.24
52. Loss in assets impairment
Amount for the current Amount for the previous
Items
period period
Loss on Bad debts (negatives indicate
-38,732,329.17 124,869,464.91
reversal )
Loss from price drop in inventory 208,994,322.45 97,707,495.91
Other impairment losses 7,980,978.65
Total 178,242,971.93 222,576,960.82
53. Profit or loss of changes in fair value
Amount for the current Amount for the previous
Items
period period
Financial instruments measured in fair value
through current profit or loss - derivative 36,661,921.50 412,063,845.15
financial instruments
Total 36,661,921.50 412,063,845.15
54. Investment Income
√Applicable □Not Applicable
Amount for the current Amount for the previous
Items
period period
Long-term equity investments income
580,932,950.31 585,960,632.76
calculated by the equity method
Investment income from disposal of
18,266,787.10 21,438,092.72
long-term equity investments
Investment income from financial assets
available for sale during the holding 75,468,156.04 21,465,578.23
period
Investment income from disposal of
financial assets at fair value and its
156,598,679.71 13,850,304.84
changes recognized in the current profit
and loss
Wealth management products return 36,192,415.80 11,128,105.80
161 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Total 867,458,988.96 653,842,714.35
55. Income on disposal of assets
Amount for the current Amount for the previous
Items
period period
Income on disposal of non-current assets 6,918,487.21 39,226.66
Loss on disposal of non-current assets 1,250,413.68 7,187,565.90
Total 5,668,073.53 -7,148,339.24
56. Other income
Amount for the Amount for the Related to
Items assets/income
current period previous period
Government grants 214,614,016.20 129,003,732.73 Related to income
Government grants 9,678,395.82 5,738,834.79 Related to assets
Total 224,292,412.02 134,742,567.52
57. Non-operating income
Amount for the current Amount for the previous
Items
period period
Income on disposal of non-current assets 1,998,891.62 49,388,374.65
Others 216,259,009.15 197,575,745.83
Total 218,257,900.77 246,964,120.48
58. Non-operating expenses
Amount for the current Amount for the
Items
period previous period
Loss on disposal of non-current assets 23,192,643.17 42,658,864.35
Charitable donation expenses 9,112,854.70 11,183,710.06
Others 16,087,040.22 23,548,882.84
Total 48,392,538.09 77,391,457.25
59. Income tax expense
（1）Table of income tax expense
Amount for the current Amount for the previous
Items
period period
Current income expense 1,017,160,671.22 778,856,781.57
Deferred tax expenses -50,520,990.09 -20,834,623.34
Total 966,639,681.13 758,022,158.23
（2）Adjustment process of accounting profit and income tax expenses for the period
162 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Items Amount
Total accounting profit 6,905,057,359.61
Income tax expenses calculated at statutory tax rate 1,726,264,339.90
Impact from different tax rates applicable to subsidiaries -569,886,234.04
Impact from adjustment to income tax in prior periods -94,046,913.98
Effect from non-taxable income -107,876,434.03
Impact from non-deductible costs, fees and losses 35,131,799.83
Effect on deductible provisional differences or deductible losses of
96,124,044.22
unrecognized deferred tax
Others -119,070,920.77
Total income tax expenses 966,639,681.13
60. Other comprehensive income
√Applicable □Not Applicable
Please refer to item 44 of Note VII. for further details.
61. Cash received from other operation related activities
Items Amount
Margins and securities 57,752,210.91
Government grants 54,441,945.89
Non-operating income excluding government
123,431,292.75
grants
Interest income 176,938,213.17
Others 94,409,270.27
Total 506,972,932.99
62. Cash paid to other operation related activities
Items Amount
Cash paid on operating expenses 4,693,457,442.70
Cash paid on management expenses 2,133,348,610.43
Cash paid on financial expenses 64,096,512.88
Non-operating expenses 41,086,384.22
Others 22,812,950.09
Total 6,954,801,900.32
63. Cash received from other investment related activities
Items Amount
163 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Government subsidies related to assets 8,945,900.00
Income on disposal of fixed exchange rate instrument 93,502,174.88
Total 102,448,074.88
64. Cash paid to other investment related activities
Items Amount
Payment of investment tax 15,071,145.00
Net cash of disposal of subsidiaries 57,211,358.66
Total 72,282,503.66
65. Cash paid to other financing related activities
Items Amount
Bonds Issuance fee 59,211,565.84
cash payment for withdrawal of investments from
minority shareholders
247,350.00
Acquisition of minority equity of subsidiaries 8,425,241.25
Bill margins 445,643,964.99
Total 513,528,122.08
66. Information of net profit adjusted to cash flows of operating activities:
(1) Supplementary information on the statement of cash flow
√Applicable □Not Applicable
Unit and Currency: RMB
Amount for the current Amount for the previous
Supplementary information
period period
1．Net profit adjusted to cash flows
of operating activities
Net profit 5,938,417,678.48 5,274,592,619.16
Add: impairment provision for assets 178,242,971.93 222,576,960.82
Depreciation of fixed assets,
Depletion of gas and oil assets,
1,169,416,194.62 1,156,635,794.09
depreciation of productive biological
assets
Amortization of intangible assets 196,112,489.84 174,140,085.27
Amortization of long term expenses payable 22,351,847.70 9,834,689.02
Loss on disposal of fixed assets,
intangible assets and other long term 15,525,678.02 418,828.94
assets (“-” represents “gains”)
loss on retirement of fixed assets(“-”
represents “gains”)
Gain and loss on change of fair value
(“-” represents “gains”)
-36,661,921.50 -412,063,845.15
Financial expenses (“-” represents “gains”) 555,821,678.49 559,989,195.34
Loss on investments(“-” represents “gains”) -867,458,988.96 -653,842,714.35
Decrease of deferred income tax assets 110,034,637.01 274,672,665.40
164 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(“-” represents “increase”)
Increase of deferred income tax liabilities
(“-” represents “decrease”)
-160,555,627.10 -295,507,288.73
Decrease of inventories (“-” represents
“increase”)
-1,211,765,239.79 -2,039,892,028.23
Decrease of operational account receivables
(“-” represents “increase”)
-4,038,288,227.69 -720,284,772.02
Increase of operational account payables
(“-” represents “decrease”)
3,405,405,176.07 4,678,863,994.24
Others 91,787,606.90 204,268,474.66
Net cash flows generated from operational
activities
5,368,385,954.02 8,434,402,658.46
2．Significant investment and
financing activities not involving
cash inflows and outflows:
Capital transferred from debts
Convertible corporate bonds due within 1
year
Financial leased fixed assets through
financing
3．Net changes of cash and cash
equivalents:
Cash balance at the end of the period 32,185,029,539.59 28,773,619,133.86
Less: cash balance at the beginning of the
period
34,340,013,574.22 23,295,239,445.05
Add: cash equivalents balance at the end of
the period
Less: cash equivalents balance at the
beginning of the period
Net increase of cash and cash equivalents -2,154,984,034.63 5,478,379,688.81
67. Cash and cash equivalents
Items Closing balance Opening balance
I. Cash 32,185,029,539.59 34,340,013,574.22
Including: treasury cash 698,625.89 513,781.37
Bank deposit available for payment at
30,859,017,076.82 32,994,884,486.17
any time
Other monetary capital available for
1,325,313,836.88 1,344,615,306.68
payment at any time
II. Cash equivalents
Including: bond investment due within
three months
Ⅲ. Closing balance of cash and cash
32,185,029,539.59 34,340,013,574.22
equivalents
Including: restricted cash and cash
equivalents used by the parent company
or subsidiaries of the Group
68. Monetary Items in Foreign Currency
Closing balance Opening balance
Items Foreign Exchange Foreign currency Exchange
RMB balance RMB balance
currency rate balance rate
165 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
balance
Monetary capital
Dollar 1,226,265,171.00 6.6166 8,113,706,130.43 1,249,816,041.00 6.5342 8,166,547,975.10
Euro 34,990,910.61 7.6515 267,732,952.52 20,058,292.65 7.8023 156,500,816.74
Yen 4,243,413,546.49 0.059914 254,239,879.22 5,007,949,886.95 0.057883 289,875,163.31
HKD 78,331,649.28 0.8431 66,041,413.51 1,029,213,931.69 0.8359 860,319,925.50
Others 1,061,687,326.27 772,356,596.65
Sub-total 9,763,407,701.95 10,245,600,477.30
Receivables
Dollar 1,403,378,931.47 6.6166 9,285,597,037.96 1,036,244,584.01 6.5342 6,771,029,360.84
Euro 82,169,646.73 7.6515 628,721,051.96 46,516,973.55 7.8023 362,939,382.73
Yen 3,918,000,824.60 0.059914 234,743,101.41 3,875,029,615.17 0.057883 224,298,339.21
Others 2,207,477,333.76 1,744,262,398.17
Sub-total 12,356,538,525.09 9,102,529,480.95
Short-term borrowings
Dollar 1,092,610,120.39 6.6166 7,229,364,122.58 1,048,141,122.69 6.5342 6,848,763,723.88
Euro 19,868,970.27 7.6515 152,027,426.03 11,319,902.42 7.8023 88,321,274.65
Yen 3,042,500,000.00 0.0599 182,245,750.00 740,217,334.97 0.057883 42,846,000.00
HKD
Others 142,232,842.09 296,567,076.35
Sub-total 7,705,870,140.71 7,276,498,074.88
Payables
Dollar 1,150,676,035.35 6.6166 7,613,563,055.50 897,463,561.23 6.5342 5,864,206,401.79
Euro 154,122,289.33 7.6515 1,179,266,696.81 15,125,382.24 7.8023 118,012,769.85
Yen 3,105,923,438.90 0.0599 186,044,813.99 1,215,454,339.45 0.057883 70,354,143.53
Others 2,386,497,594.37 1,010,745,873.14
Sub-total 11,365,372,160.67 7,063,319,188.31
Non-current liabilities due within one year
Dollar 409,319,900.00 6.6166 2,708,306,050.34 375,000,000.00 6.5342 2,450,325,000.00
Sub-total 2,708,306,050.34 2,450,325,000.00
Long-term borrowings
Dollar 1,909,399,634.28 6.6166 12,633,733,620.18 2,449,565,439.28 6.5342 16,005,950,493.34
Yen 4,991,363,106.01 0.0599 298,982,650.05
Euro 3,355,691.55 7.6515 25,676,073.88
Sub-total 12,958,392,344.10 16,005,950,493.34
166 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
VIII. Changes in consolidation scope
1. The consolidation of enterprises under non-common control
□Applicable √Not Applicable
2. The consolidation of enterprises under common control
□Applicable √Not Applicable
3. Disposal of subsidiaries
Single disposal of investments in subsidiaries representing loss of control:
Qingdao
Jiangsu Goodaymart
Haishengda
Sunflower Supply Qingdao Haizhijie
Refrigeration
Chain Management Refrigeration Co.,
Name of subsidiaries Appliances Co.,
Co., Ltd. (江苏日日顺 Ltd. (青岛海智捷
Ltd. (青岛海昇达
向日葵供应链管理有 制冷有限公司)
制冷电器有限公
限公司)
司)
Consideration for disposal of
715,469.69 - -
equity interest
Proportion of equity disposal 51.00% - -
Method of equity disposal Disposal Deregistration Deregistration
Date of loss-of-control 2018/5/30 2018/5/30 2018/5/30
Basis of determination of date of Date of Date of
Date of disposal
loss-of-control deregistration deregistration
Difference between disposal
consideration and its share of net
assets of the subsidiary in the
241,648.70 - -
consolidated financial statements
as respect to the disposal of
investment
Continued,
Hefei Haice
Hefei Hailan Household
Household Applianecs Appliances
Manufacturing Co., Manufacturing Beijing ASU
Name of subsidiaries
Ltd. (合肥海蓝家电制 Co., Ltd. (合肥海 Tech Co., Ltd.
造有限公司) 策家电制造有限公
司)
Consideration for disposal of
- - 30,000,000.00
equity interest
Proportion of equity disposal - - 16.65%
Method of equity disposal Deregistration Deregistration Disposal
Date of loss-of-control 2018/5/30 2018/5/30 2018/1/1
Basis of determination of date of Date of
Date of deregistration Date of disposal
loss-of-control deregistration
Difference between disposal
consideration and its share of net
assets of the subsidiary in the
- - 18,025,138.40
consolidated financial statements
as respect to the disposal of
investment
167 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
4. Changes of consolidation scope for other reasons
Notes for the change of consolidation scope for other reasons (such as establishment of new subsidiaries,
liquidation of subsidiaries, etc.) and the relevant information:
√Applicable □Not Applicable
（1）Qingdao Haier Intelligent Technology Development Co., Ltd.(青岛海尔智能技术研发有限
公司), a subsidiary of the Company, funded the establishment of Haier (Shanghai) Household
Appliances R&D center Co., Ltd. (海尔（上海）家电研发中心有限公司), a wholly-owned subsidiary
for the period.
（2）Haier Industrial Holding Limited(海尔工业控股有限公司), a subsidiary of the Company,
funded the establishment of Haier Digital Technology (Qingdao) Co., Ltd (海尔数字科技（青岛）有限
公司), a wholly-owned subsidiary for the period.
（3）Qingdao Haier Air Conditioner Gen Corp., Ltd(青岛海尔空调器有限总公司), a subsidiary of
the Company, funded the establishment of Guangzhou Haier Air Conditioner Appliances Co., Ltd.(广
州海尔空调器有限公司）, a wholly-owned subsidiary for the period.
IX. Interests in other entities
1. Interests in subsidiaries
（1） Composition of the Group
Principal Acquisiti
Name of Registrati Shareholding Voting share
place of Business nature on
subsidiaries on place Percentage (%) (%)
business method
Direct Indirect
This company is a
group company,
mainly engaging
in investment
holding, the common
Mainland of
Haier Electronics production and control
China and Bermuda 14.01 29.67 55.69
Group Co., Ltd. sale of washing combinat
Hong Kong
machines and ion
water heaters,
distribution
service and
logistics service
Household
The US and
Wonder Global British appliances
other Establish
(BVI) Investment Virgin production 100.00 100.00
overseas ment
Limited Islands distribution
areas
business
Household
Singapore common
Haier Singapore appliances
and other control
Investment Singapore production 100.00 100.00
overseas combinat
Holding Co., Ltd. distribution
areas ion
business
Manufacture common
Qingdao Haier Qingdao Qingdao
and operation control
Air Conditioner High-tech High-tech 100.00 100.00
of household combinat
Gen Corp., Ltd. Zone Zone
air-conditioners ion
Guizhou Haier Huichuan Huichuan common
Manufacture and
Electronics Co., District, District, 59.00 59.00 control
sale of refrigerator
Ltd. Zunyi Zunyi combinat
168 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
City, City, ion
Guizhou Guizhou
Province Province
Hefei common
Hefei Haier Hefei Haier Manufacture and
Haier control
Air-conditioning Industrial sale of 100.00 100.00
Industrial combinat
Co., Limited Park air-conditioners
Park ion
Wuhan Wuhan common
Wuhan Haier Manufacture and
Haier Haier control
Electronics Co., sale of 60.00 60.00
Industrial Industrial combinat
Ltd. air-conditioners
Park Park ion
Qingdao Haier common
Qingdao Qingdao Manufacture and
Air-Conditioner control
Developme Developm sale of 100.00 100.00
Electronics Co., combinat
nt Zone ent Zone air-conditioners
Ltd. ion
Qingdao Haier
common
Information Qingdao Qingdao Manufacture
control
Plastic High-tech High-tech of plastic 100.00 100.00
combinat
Development Co., Zone Zone products
ion
Ltd.
Dalian Dalian Manufacture common
Dalian Haier
Export Export and sale of control
Precision 90.00 90.00
Expressing Expressin precise combinat
Products Co., Ltd.
Zone g Zone plastics ion
Hefei
Hefei
Economic
Economic & common
& Manufacture
Hefei Haier Technologic control
Technolog and sale of 94.12 5.88 100.00
Plastic Co., Ltd. al combinat
ical plastic parts
Developme ion
Developm
nt Area
ent Area
Research and
common
Qingdao Qingdao manufacture
Qingdao Haier control
High-tech High-tech of precise 75.00 25.00 100.00
Moulds Co., Ltd. combinat
Zone Zone mould and
ion
product
Manufacture
of plastic
common
Qingdao Meier Qingdao Qingdao powder,
control
Plastic Powder Developme Developm plastic sheet 40.00 60.00 100.00
combinat
Co., Ltd. nt Zone ent Zone and high
ion
performance
coatings
Jiangbei Jiangbei Plastic
District, District, products, common
Chongqing Haier
Chongqing Chongqin sheet metal control
Precision Plastic 90.00 10.00 100.00
City g City work, combinat
Co., Ltd.
electronics ion
and hardware
Jiangbei Jiangbei Manufacture
District, District, and sale of
Chongqing Haier Chongqing Chongqin electronics common
Intelligent City g City and control
90.00 10.00 100.00
Electronics Co., automatic combinat
Ltd. control ion
system
equipment
Qingdao Qingdao Research,
common
High-tech High-tech development,
Qingdao Haier control
Zone Zone manufacture 50.00 50.00
Robot Co., Ltd. combinat
and sale of
ion
robot
Qingdao Qingdao Manufacture
Qingdao Haier
High-tech High-tech and Establish
Refrigerator Co., 100.00 100.00
Zone Zone production of ment
Ltd.
fluorine-free
169 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
refrigerators
Qingdao Haier Pingdu Pingdu
Manufacture
Refrigerator Developme Developm Establish
and production of 75.00 75.00
(International) nt Zone, ent Zone, ment
refrigerators
Co., Ltd. Qingdao Qingdao
Research and
Qingdao
development
Household
Qingdao Qingdao of home
Appliance Establish
High-tech High-tech appliances 100.00 100.00
Technology and ment
Zone Zone mould and
Equipment
technological
Research Institute
equipment
Research,
development and
Qingdao Haier
Qingdao Qingdao sales of
Whole Set Home Establish
High-tech High-tech health series 98.33 98.33
Appliance ment
Zone Zone of small
Service Co., Ltd.
home
appliance
Design and
development
Qingdao Haier
Qingdao Qingdao of electronics
Intelligent Establish
High-tech High-tech and 100.00 100.00
Electronics Co., ment
Zone Zone automatic
Ltd.
control
system
Qingdao Haier Manufacture
Qingdao Qingdao
Special and sales of Establish
Developme Developm 100.00 100.00
Refrigerator Co., fluorine-free ment
nt Zone ent Zone
Ltd. refrigerators
Manufacture
Qingdao Haier Qingdao Qingdao and production of
Establish
Dishwasher Co., Developme Developm dish washing 100.00 100.00
ment
Ltd. nt Zone ent Zone machine and
gas stove
Research,
manufacture
Qingdao Haier Qingdao Qingdao and sales of
Establish
Special Freezer Developme Developm freezer and 96.06 96.06
ment
Co., Ltd. nt Zone ent Zone other
refrigeration
products
Dalian Dalian Manufacture
Dalian Haier
Export Export and Establish
Air-conditioning 90.00 90.00
Expressing Expressin production of ment
Co., Ltd.
Zone g Zone air-conditioners
Dalian Dalian Manufacture
Dalian Haier
Export Export and Establish
Refrigerator Co., 90.00 90.00
Expressing Expressin production of ment
Ltd.
Zone g Zone refrigerators
Development
, assembling
Qingdao Haier Qingdao Qingdao
and sales of Establish
Electronic Plastic Developme Developm 80.00 80.00
plastics, ment
Co., Ltd. nt Zone ent Zone
electronics
and product
Wuhan
Wuhan
Economic
Economic & Research,
&
Technologic manufacture
Technolog
al and sales of
Wuhan Haier ical Establish
Developme freezer and 95.00 5.00 100.00
Freezer Co., Ltd. Developm ment
nt Zone other
ent Zone
High-tech refrigeration
High-tech
Industrial products
Industrial
Park
Park
170 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Development
, purchase
Qingdao Haidarui Qingdao Qingdao
and sales of Establish
Procurement High-tech High-tech 98.00 2.00 100.00
electrical ment
Service Co., Ltd. Zone Zone
product and
components
Development
and
application
Qingdao Haier
of household
Intelligent Home Qingdao Qingdao
appliances, Establish
Appliance High-tech High-tech 98.91 1.09 100.00
communication, ment
Technology Co., Zone Zone
electronics
Ltd.
and network
engineering
technology
Jiangbei
Jiangbei
Chongqing Haier District, Manufacture
District, Establish
Air-conditioning Chongqing and sales of 76.92 23.08 100.00
Chongqin ment
Co., Ltd. City air conditioners
g City
Development
and
manufacture
Qianwangan Qianwang of precise
Qingdao Haier g ang plastic, metal
Establish
Precision Road, Road, plate, mould 70.00 70.00
ment
Products Co., Ltd. Jiaonan Jiaonan and
City City electronic
products for
household
appliances
Manufacture
Qingdao Haier
Jiaonan Jiaonan of household
Air Conditioning Establish
City, City, appliances 70.00 70.00
Equipment Co., ment
Qingdao Qingdao and
Ltd.
electronics
Dalian Free Trade Dalian Dalian
Zone Haier Export Export Domestic Establish
100.00 100.00
Air-conditioning Expressing Expressin trade ment
Trading Co., Ltd. Zone g Zone
Dalian Free Trade Dalian Dalian
Zone Haier Export Export Domestic Establish
100.00 100.00
Refrigerator Expressing Expressin trade ment
Trading Co., Ltd. Zone g Zone
Qingdao Ding Manufacture and
QingdaoDe QingdaoD
Xin Electronics sale of Establish
velopment evelopme 100.00 100.00
Technology Co., electronic ment
Zone nt Zone
Ltd. Parts.
Jiangbei Jiangbei
Chongqing Haier Household
District, District, Establish
Electronics Sales appliance 95.00 5.00 100.00
Chongqing Chongqin ment
Co., Ltd. sales
City g City
Chongqing Haier Jiangbei Jiangbei
Manufacture and
Refrigeration District, District, Establish
production of 84.95 15.05 100.00
Appliance Co., Chongqing Chongqin ment
refrigerator
Ltd. City g City
Hefei Manufacture
Hefei Haier Hefei Haier
Haier and Establish
Refrigerator Co., Industrial 100.00 100.00
Industrial production of ment
Ltd. Park
Park refrigerator
Wuhan Wuhan
Wuhan Haier
Haier Haier Energy Establish
Energy and 75.00 75.00
Industrial Industrial service ment
Power Co., Ltd.
Park Park
Qingdao Haier Qingdao Qingdao Air-conditioning 100.00 100.00 Establish
171 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
HVAC Developme Developm ment
Engineering Co., nt Zone ent Zone
Ltd
Chongqing Sales of
Jiangbei Jiangbei
Gooddaymart household
District, District, Establish
Electric appliances 51.00 51.00
Chongqing Chongqin ment
Appliance Sale and
City g City
Co., Ltd electronics
Qingdao Haier
Jiaozhou Jiaozhou Manufacture and
(Jiaozhou) Establish
City, City, sale of 100.00 100.00
Air-conditioning ment
Qingdao Qingdao air-conditioners
Co., Limited
Manufacture
and sales of
Qingdao Haier Jiaozhou Jiaozhou
plastic and Establish
Component Co., City, City, 100.00 100.00
precise sheet ment
Ltd. Qingdao Qingdao
metal
products
Haier
Shareholdings Hong Establish
Hong Kong Investment 100.00 100.00
(Hong Kong) Kong ment
Limited
Harvest Cayman Cayman Investment Establish
International Islands Islands 100.00 100.00
ment
Company
Shenbei Shenbei
Shenyang Haier New New Manufacture
Establish
Refrigerator Co., Area, Area, and sales of 100.00 100.00
ment
Ltd. Shenyang Shenyang refrigerator
City City
Shanshui Shanshui
Manufacture
Foshan Haier District, District, Establish
and sales of 100.00 100.00
Freezer Co., Ltd. Foshan Foshan ment
freezer
City City
Zhengzho
Zhengzhou
u
Economic
Economic
and Manufacture
Zhengzhou Haier and
Technologic and sales of Establish
Air-conditioning Technolog 100.00 100.00
al air ment
Co., Ltd. ical
Developme conditioner
Developm
nt
ent
Zone
Zone
Development
Qingdao , purchase
Qingdao Qingdao
Haidayuan and sales of Establish
Developme Developm 100.00 100.00
Procurement electrical ment
nt Zone ent Zone
Service Co., Ltd. product and
components
Qingdao Haier
Development
Intelligent Qingdao Qingdao
and research Establish
Technology High-tech High-tech 100.00 100.00
of household ment
Development Co., Zone Zone
appliances
Ltd.
Design,
common
Qingdao Hai Ri Qingdao Qingdao manufacture
control
High-Tech Model High-tech High-tech and sales of 100.00 100.00
combinat
Co., Ltd. Zone Zone product
ion
model and mould
Qingdao Hai Gao Industrial common
Qingdao Qingdao
Design and design and control
High-tech High-tech 75.00 75.00
Manufacture Co., prototype combinat
Zone Zone
Ltd. production ion
Beijing Haier Development common
Guangke Digital Beijing Beijing , promotion 55.00 55.00 control
Technology Co., and transfer combinat
172 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Ltd. of ion
technology
Shanghai Haier Wholesale
Medical and retail of Establish
Shanghai Shanghai 100.00 100.00
Technology Co., medical ment
Ltd. facility
Development and common
Qingdao Haier
sales of software control
Technology Co., Qingdao Qingdao 100.00 100.00
and information combinat
Ltd.
product ion
Qingdao Haier
Entrepreneurship
Technology Establish
Qingdao Qingdao investment and 100.00 100.00
Investment Co., ment
consulting
Ltd.
Qingdao Casarte Development,
Smart Living production and Establish
Qingdao Qingdao 100.00 100.00
Appliances Co., sales of ment
Ltd. appliances
Qingdao Sales of
Haichuangyuan household Establish
Qingdao Qingdao 100.00 100.00
Appliances Sales appliances and ment
Co., Ltd. digital products
Sales of
Haier Overseas
household
Electric Establish
Qingdao Qingdao appliances, 100.00 100.00
Appliance Co., ment
international
Ltd.
freight forwarding
Haier Group Sales of
common
(Dalian) household
control
Electrical Dalian Dalian appliances, 100.00 100.00
combinat
Appliances international
ion
Industry Co., Ltd. freight forwarding
Production and
Qingdao Haier
sales of air
Central Establish
Qingdao Qingdao conditioners and 100.00 100.00
Air-conditioner ment
refrigeration
Co., Ltd.
equipment
Beijing Haier
Yunchu Technology
Technology Co., development, Establish
Beijing Beijing 90.00 90.00
promoting and ment
Ltd.(北京海尔云
transfer
厨科技有限公司)
Chongqing Haier
Household
Home Appliance Establish
Hefei Hefei appliance 100.00 100.00
Sale Hefei Co., ment
sales
Ltd.
Beijing
Chuangshi Magic
Establish
Mirror Beijing Beijing Smart home 100.00 100.00
ment
Technology Co.,
Ltd.
Beijing Haier
Radio and
Zhongyou Establish
Beijing Beijing television 51.00 51.00
Netmedia Co., ment
program
Ltd.
Qingdao Weixi
Smart Intelligent Establish
Qingdao Qingdao 71.43 71.43
Technology Co., bathroom ment
Ltd.
Haier U+smart
Technology Software Establish
Beijing Beijing 100.00 100.00
(Beijing) Co., development ment
Ltd.
Haier (Shanghai) Sales, research Establish
Shanghai Shanghai 100.00 100.00
Appliance Co., and development ment
173 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Ltd. of household
appliances
Shanghai Haier
Zhongzhifang Corporate
Maker Space management
Management Co., consultation, Establish
Shanghai Shanghai 100.00 100.00
Ltd.(上海海尔众 operation and ment
management of
智坊创客空间管
makers
理有限公司)
Haier Industrial Industrial
Holding investment, R&D Establish
Qingdao Qingdao of robots and 100.00 100.00
Limited(海尔工 ment
业控股有限公司) automation,etc.
Qingdao Mannike
Intelligent R&D and design
Equipment Co., of Internet of Establish
Ltd.（青岛曼尼科 Qingdao Qingdao 100.00 100.00
things, robots and ment
智能装备有限公 automation, etc.
司）
Haier Digital
Technology R&D, promotion
(Shanghai) Co., and transfer of Establish
Ltd.（海尔数字科 Shanghai Shanghai 100.00 100.00
technology, sale ment
技（上海）有限 of materials, etc.
公司）
Qingdao Haier
Smart Kitchen Manufacture
Appliance Co., and sales of Establish
Ltd.（青岛海尔智 Qingdao Qingdao 100.00 100.00
intelligent kitchen ment
慧厨房电器有限 appliances
公司）
Jiyi Appliance
(Shanghai) Co., Sales of
Establish
Shanghai Shanghai household 100.00 100.00
Ltd.（际壹电器 ment
appliances
(上海)有限公司）
Qingdao Haopin
Hairui Development,purc
Information hase and sale of
Technology Co., electronic Establish
Qingdao Qingdao 100.00 100.00
Ltd.(青岛好品海 appliances ment
products and
瑞信息技术有限
components
公司)
FISHER &
Manufacture of common
PAYKEL
New New automatic and control
PRODUCTION 100.00 100.00
Zealand Zealand customized combinat
MACHINERY
special devices ion
LIMITED
Maniiq
(Singapore)
Investment Establish
Intelligent Singapore Singapore 100.00 100.00
management ment
Equipment Co.
Ltd.
Maniiq (HK)
Intelligent Hong Investment Establish
Hong Kong 100.00 100.00
Equipment Co. Kong management ment
Ltd.
Qingdao Haier
Medical
Refrigeration Manufacture and
Appliances Co., Establish
Qingdao Qingdao sales of household 100.00 100.00
Ltd. (青岛海尔特 ment
appliances
种制冷电器有限
公司)
174 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Beijing Lingwei
Technology Co., Development
Establish
Ltd.(北京零微科 Beijing Beijing and promotion of 55.00 55.00
ment
technology
技有限公司)
Laiyang Haier
Smart Kitchen
Appliance Co., Manufacture and
Establish
Ltd.(莱阳海尔智 Laiyang Laiyang sales of household 100.00 100.00
ment
appliances
慧厨房电器有限
公司)
Aituling
(Shanghai)
Information Development
Technology Co., Establish
Shanghai Shanghai and promotion of 72.22 72.22
Ltd.(爱图瓴（上 ment
technology
海）信息科技有
限公司)
Qingdao Hailian
Rongchuang Industrial
Technology Co., Establish
Qingdao Qingdao intelligent 100.00 100.00
ment
Ltd.(青岛海联融 technology
创科技有限公司)
Hefei Haier Air
conditioner Manufacture and
electronic Co., Establish
Hefei Hefei sales of household 100.00 100.00
ment
Ltd (合肥海尔空 appliances
调电子有限公司)
Qingdao
Jiuzhidao
Intelligent
Technology Co., R&D and sales of Establish
Qingdao Qingdao 100.00 100.00
Ltd (青岛酒知道 wine set ment
智能科技有限公
司)
Taizhou Haier
Medical R&D and
technology Co., Establish
Taizhou Taizhou promotion of 100.00 100.00
ment
Ltd. (泰州海尔医 Medical devices
疗科技有限公司)
Haier Digital
Technology Technology
(Qingdao) Co., development,
Establish
Ltd (海尔数字科 Qingdao Qingdao promoting, 100.00 100.00
ment
Transfer, sale
技（青岛）有限
ofmaterials,etc.
公司)
Haier
(Shanghai)House
hold Appliances Development
R&D Center Co., Establish
Shanghai Shanghai and promotion of 100.00 100.00
Ltd (海尔（上海） ment
technology
家电研发中心有
限公司)
Guangzhou Haier
Air Conditioner Manufacture and
Appliances Co., Guangzho Establish
Guangzhou sales of household 100.00 100.00
u ment
Ltd.(广州海尔空 appliances
调器有限公司）
Small companies
such as Qingdao
All over Sales of
Hai Heng Feng All over the Establish
the household
Electrical country ment
country appliances
Appliances Sale
& Service Co.,
175 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Ltd.
Reasons for including subsidiaries which the Company has 50% or less of the equity into the scope
of consolidated financial statements:
At the end of the reporting period, the Company had substantial control over the finance and
operating decision of small companies, such as Haier Electronics Group Co., Ltd., Qingdao Hai Heng
Feng Electrical Appliances Sale & Service Co., Ltd, thus, they were included into the scope of
consolidated financial statements.
Reason for the ratio of voting rights higher than the ratio of shareholding of Haier Electronics
Group Co., Ltd.: on 10 July 2015, HCH (HK) Investment Management Co., Limited (hereinafter
referred to as ―“HCH”) signed a Shareholder Voting Right Entrustment Agreement with the Company.
HCH entrusted the Company to exercise the underlying shareholder voting rights of 336,600,000 shares
of Haier Electronics Group Co., Ltd. Both parties agreed that HCH will not revoke the entrustment and
authorization to the Company unless the Company issues a written notice of revoking trustee to HCH.
（2）Significant non-wholly owned subsidiaries
Percentage
of Profit or loss Dividend Balance of
shareholdi attributed to declared to minority
Name of subsidiaries ng of minority minority equity interest
minority shareholders for shareholders at the end of
shareholde the period for the period the period
rs
Haier Electronics Group Co., Ltd. 14,711,947,220
56.32% 1,049,772,645.21 401,256,639.68
.03
Guizhou Haier Electronics Co.,
41.00% 5,503,276.05 113,903,459.43
Ltd.
Wuhan Haier Electronics Co.,
40.00% 13,982,246.86 237,062,970.80
Ltd.
Qingdao Haier Refrigerator
25.00% 176,283.21 79,897,030.01
(International) Co., Ltd.
（3）Main financial information of significant non-wholly owned subsidiaries
Closing balance
Name of
subsidiaries Current assets Non-current Total assets Current Non-current Total liabilities
assets liabilities liabilities
Haier
Electronics
34,689,849,769.14 9,212,205,564.25 43,902,055,333.39 17,188,789,561.14 2,353,096,063.90 19,541,885,625.04
Group Co.,
Ltd.
Guizhou
Haier
488,002,807.13 33,889,963.41 521,892,770.54 243,906,160.61 173,294.24 244,079,454.85
Electronics
Co., Ltd.
176 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Wuhan
Haier
1,021,283,555.27 135,788,832.62 1,157,072,387.89 564,011,890.81 403,070.08 564,414,960.89
Electronics
Co., Ltd.
Qingdao
Haier
Refrigerator 281,866,791.42 55,808,808.81 337,675,600.23 18,087,480.21 18,087,480.21
(Internation
al) Co., Ltd.
Continued
Opening balance
Name of
subsidiaries Current assets Non-current Total assets Current Non-current Total liabilities
assets liabilities liabilities
Haier
Electronics
34,425,125,631.08 8,943,099,505.92 43,368,225,137.00 18,004,664,972.39 2,334,453,969.47 20,339,118,941.86
Group Co.,
Ltd.
Guizhou
Haier
382,643,646.95 36,428,561.26 419,072,208.21 154,508,222.80 173,294.24 154,681,517.04
Electronics
Co., Ltd.
Wuhan
Haier
978,695,296.94 131,215,185.69 1,109,910,482.63 551,805,602.69 403,070.08 552,208,672.77
Electronics
Co., Ltd.
Qingdao
Haier
Refrigerator 280,498,996.95 55,808,808.81 336,307,805.76 17,424,818.56 17,424,818.56
(Internation
al) Co., Ltd.
Amount for the current period
Name of subsidiaries Total
Cash flows from
Operating income Net profit comprehensive
operating activities
income
Haier Electronics Group Co., Ltd. 42,389,647,175.11 1,793,614,855.39 2,019,002,389.18 1,839,859,233.08
Guizhou Haier Electronics Co., Ltd. 652,944,777.30 13,422,624.52 13,422,624.52 23,036,480.98
Wuhan Haier Electronics Co., Ltd. 1,533,784,050.67 34,955,617.14 34,955,617.14 -89,385,955.23
Qingdao Haier Refrigerator
705,132.82 705,132.82 -226,577.69
(International) Co., Ltd.
Continued
Amount for the previous period
Name of subsidiaries Total
Cash flows from
Operating income Net profit comprehensive
operating activities
income
Haier Electronics Group Co., Ltd. 35,859,899,261.80 1,447,319,410.67 1,391,001,266.18 1,837,812,414.48
Guizhou Haier Electronics Co., Ltd. 530,268,800.91 12,070,830.44 12,070,830.44 -10,146,559.16
Wuhan Haier Electronics Co., Ltd. 1,317,041,564.88 24,571,940.73 24,571,940.73 2,692,599.62
Qingdao Haier Refrigerator
943,417.45 943,417.45 -38,323.32
(International) Co., Ltd.
2. Transactions leading to the change of owners’ equity in subsidiaries but not losing the control
√Applicable □Not Applicable
177 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
(1). Explanation to the change of owners’ equity in subsidiaries:
√Applicable □Not Applicable
Minority shareholders of Haier Electronics Group Co., Ltd., a subsidiary of the Company exercised
their rights leading to changes in shareholding proportion of the Company; capital contribution and
acquisition of minority equity on non-original proportion by the Company let to changes in shareholding
proportion of Beijing ASU Tech Co., Ltd. (北京一数科技有限公司),Qingdao Haier Air Conditioner
Gen Corp., Ltd(青岛海尔空调器有限总公司) and Beijing Haier Yunchu Technology Co., Ltd.(北京
海尔云厨科技有限公司), all of which are subsidiaries of the Company.
（2）Impact of the transactions on the minority equity interest and the equity attributable to owners
of the Parent company:
Haier Electronics Group
Items Others
Co., Ltd.
Total of cost of
acquisition/disposal 31,635,700.00
consideration
Less: share of net
assets of subsidiaries
calculated with reference to 9,357,993.52 69,278,054.07
the proportion of the share
acquired/disposed
The difference -9,357,993.52 -37,642,354.07
Including: adjustment
and increase to capital 9,357,993.52 37,642,354.07
reserve
3. Interests in joint ventures or associates
√Applicable □Not Applicable
（1）Joint ventures
Principa
Registra The accounting
l place Business Shareholding
The name of joint ventures tion percentage (%)
treatment for the
of nature investment
place
business
Wolong Electric Zhangqiu Haier Zhangqi Zhangqi Motor
Motor Co., Ltd. u u Manufac 30.00 Equity method
turing
Haier Medical and Laboratory Qingdao Qingdao Medical
27.37 Equity method
Products Co., Ltd. freezer
Qingdao Hebei Iron & Steel New Qingdao Qingdao Manufact
Material Technology Co. Ltd ure
of steel
25.65 Equity method
plate
Beijing ASU Tech Co., Ltd. Beijing Beijing Developm
ent of
technolog
45.88 Equity method
y
Qingdao Haier SAIF Smart Home Qingdao Qingdao Venture
Industry Investment Center (limited capital
63.00 Equity method
partnership) investme
nt
Mitsubishi Heavy Industries Haier Qingdao Qingdao Manufac
(Qingdao) Air-conditioners Co., ture of 45.00 Equity method
Ltd. househol
178 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
d
applianc
es
Qingdao Haier Carrier Qingdao Qingdao Manufac
Refrigeration Equipment Co., Ltd. ture of
househol
49.00 Equity method
d
applianc
es
Haier Group Finance Co., Ltd. Qingdao Qingdao Financin
42.00 Equity method
g
Qingdao Haier Software Qingdao Qingdao Software
Investment Co., Ltd. develop 25.00 Equity method
ment
Beijing Mr. Hi Network Beijing Beijing Technol
Technology Company Limited ogy
36.00 Equity method
develop
ment
Bank of Qingdao Co., Ltd. Qingdao Qingdao Commer
9.61 Equity method
cial bank
Beijing Xiaobei Technology Co., Beijing Beijing Sales of
Ltd. househol
d 42.75 Equity method
applianc
es
Qingdao Haier Multi-media Co., Ltd. (青 Qingdao Qingdao R&D and
岛海尔多媒体有限公司) sale of 20.20 Equity method
televisions
Guangzhou Heying Investment Guangzho Guangzho Investmen
Partnership (Limited Partnership)(广州合 u u t 50.00 Equity method
赢投资合伙企业（有限合伙）)
Qingdao Java Cloud Network Qingdao Qingdao Online
Technology Co., Ltd. househol 24.93 Equity method
d service
Qingdao JSH Network Technology Qingdao Qingdao E-comm
Co. Ltd. erce 24.02 Equity method
platform
Hunan Electronic Co., Ltd. Hunan Hunan Motor
Manufac 50.00 Equity method
turing
HPZ LIMITED Nigeria Nigeria Manufact
ure of
household
25.01 Equity method
appliances
HNR COMPANY (PRIVATE) Pakistan Pakistan Manufac
LIMITED ture of
househol
31.72 Equity method
d
applianc
es
CONTROLADORA MABE S.A.de Mexico Mexico Manufac
C.V. ture of
househol
48.41 Equity method
d
applianc
es
Middle East Air Conditioning Company Saudi Saudi Sales of
Limited household
49.00 Equity method
179 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Arabia Arabia appliances
（2） Basic information of important associates and financial information
①Basic information of important associates:
a. Haier Group Finance Co., Ltd. (hereinafter referred to as “Finance Company”) is established by
Haier Group Corporation and its three affiliates. Registration place and principal place of business:
Qingdao High-tech Zone Haier Park (青岛市高科技工业园海尔工业园).. The Company’s subsidiaries
hold an aggregate of 42.00% equity interest in Finance Company.
b. General Electric Company has participated in the capital contribution to the establishment of
CONTROLADORA MABE S.A.de C.V. (hereinafter referred to as “MABE”). In June 2016, a
subsidiary of the Company acquired 48.41% of equity interests in MABE held by General Electric
Company. The registered address and principal place of business of MABE is Mexico. The subsidiaries
of the Company hold approximately 48.41% of equity interests in MABE in total.
c. Bank of Qingdao Co., Ltd. (hereinafter referred to as “Qingdao Bank”), one of the first city
commercial banks in China, was established in November 1996. The registered place and principal place
of business of Qingdao Bank is No.68 Hong Kong Middle Road, Shinan District, Qingdao, Shandong
Province. The Company and its subsidiaries hold approximately 9.61% of equity interests in Qingdao
Bank in total at the end of the period.
②Financial information of significant associates:
Opening balance/
Closing balance/ Amount for
Amount for the previous
Items the current period
period
Finance company Finance company
Current assets 59,997,414,241.31 68,438,104,678.89
Non-current assets 9,185,842,122.12 7,913,830,198.85
Total assets 69,183,256,363.43 76,351,934,877.74
Current liabilities 54,955,121,811.93 62,029,645,645.42
Non-current liabilities 2,239,881,332.29 3,172,557,737.73
Total liabilities 57,195,003,144.22 65,202,203,383.15
Minority equity interests
Equity interest attributable to
11,988,253,219.21 11,149,731,494.59
shareholders of the Parent company
Including: share of net assets
calculated based on shareholding 5,035,066,352.07 4,682,887,227.73
percentage
Operating income 1,297,821,635.65 1,248,590,983.58
Net profit 783,377,652.09 695,130,748.49
Other comprehensive income 55,144,072.53 -31,950,742.84
Total comprehensive income 838,521,724.62 663,180,005.65
180 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Dividend received from associates
for the year
Opening balance/
Closing balance/ Amount for
Amount for the previous
Items the current period
period
MABE MABE
Current assets 5,927,756,029.73 5,825,075,945.00
Non-current assets 10,308,505,523.42 10,303,936,800.80
Total assets 16,236,261,553.15 16,129,012,745.80
Current liabilities 7,210,006,859.70 7,048,408,869.00
Non-current liabilities 5,642,997,150.87 5,836,693,752.60
Total liabilities 12,853,004,010.57 12,885,102,621.60
Minority equity interests
Equity interest attributable to
3,383,257,542.58 3,243,910,124.20
shareholders of the Parent company
Including: share of net assets
calculated based on shareholding 1,637,997,372.73 1,570,532,598.81
percentage
Operating income 9,150,137,891.10 9,329,282,700.19
Net profit 87,751,088.45 205,064,142.44
Other comprehensive income 51,596,329.94 -139,395,846.73
Total comprehensive income 139,347,418.39 65,668,295.71
Dividend received from associates
34,405,195.14
for the year
Opening balance/
Closing balance/ Amount for
Amount for the previous
Items the current period
period
Qingdao Bank Qingdao Bank
Current assets 172,319,593,000.00 130,366,445,000.00
Non-current assets 129,839,603,000.00 175,909,647,000.00
Total assets 302,159,196,000.00 306,276,092,000.00
Current liabilities 222,104,215,000.00 203,654,201,000.00
Non-current liabilities 53,361,544,000.00 76,498,682,000.00
Total liabilities 275,465,759,000.00 280,152,883,000.00
Minority equity interests 501,146,000.00 493,355,000.00
Equity interest attributable to
26,192,291,000.00 25,629,854,000.00
shareholders of the Parent company
Including: share of net assets
calculated based on shareholding 2,516,666,030.19 2,462,624,099.78
percentage
Operating income 3,131,390,000.00 2,835,194,000.00
181 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Net profit 1,321,444,000.00 1,278,760,000.00
Other comprehensive income 421,494,000.00 -404,519,000.00
Total comprehensive income 1,742,938,000.00 874,241,000.00
Dividend received from associates
77,995,640.00 76,868,844.93
for the year
（3） Summarized financial information of insignificant joint ventures and associates
investment to associates Closing balance/ Opening balance/
Amount for the Amount for the
current period previous period
Wolong Electric Zhangqiu Haier Motor Co., Ltd. 119,983,110.03 118,897,337.40
Haier Medical and Laboratory Products Co., Ltd. 350,895,461.76 332,230,371.89
Beijing ASU Tech Co., Ltd. 15,005,164.40
Qingdao Hebei Iron & Steel New Material Technology
Co. Ltd
254,745,094.86
Qingdao HBIS Composite New Material Technology Co.,
Ltd.(青岛河钢复合新材料科技有限公司)
106,068,803.08
Hefei HBIS New Material Technology Co., Ltd.(合肥河
140,494,521.67
钢新材料科技有限公司)
Qingdao Haier Multi-media Co., Ltd. 549,870,745.54 543,768,656.24
Qingdao Haier SAIF Smart Home Industry Investment
Center (limited
270,536,881.98 270,536,881.98
Mitsubishi Heavy Industries Haier (Qingdao)
Air-conditioners Co., Ltd.
511,196,497.40 529,934,750.95
Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. 290,191,165.50 284,185,137.09
Qingdao Haier Software Investment Co., Ltd. 17,899,300.26 17,899,331.07
Beijing Mr. Hi Network Technology Company Limited 3,757,759.75 3,757,759.75
Beijing Xiaobei Technology Ltd. 2,687,341.82 2,687,341.82
Guangzhou Heying Investment Partnership (Limited
Partnership)(广州合赢投资合伙企业（有限合伙）)
152,047,535.44 152,047,535.44
China Shengfeng Microfinance limited in Jin’an District
of Fuzhou City
80,226,595.74
Fujian ATL-Shengfeng Logistics Co., Ltd. 13,117,748.43
Qingdao Java Cloud Network Technology Co., Ltd. 1,401,703.26 1,755,356.84
Qingdao JSH Network Technology Co.Ltd. 5,511,749.00 5,511,749.00
Konan Electronic Co., Ltd. 68,058,207.73 64,856,526.75
HPZ LIMITED 102,384,957.04 91,578,227.62
HNR COMPANY (PRIVATE) LIMITED 83,534,353.67 80,588,570.01
MiddleEastAirconditioningCompany,Limited 20,702,569.45 22,050,543.42
Total book value of investment 2,820,409,598.89 2,862,193,746.19
Total amount of the following items of associates’
financial amounts calculated based on
shareholding percentage
--Net profit 82,459,925.23 73,900,402.83
--Other comprehensive income -1,637,894.45 -3,044,759.55
182 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
--Total comprehensive income 80,822,030.78 70,855,643.28
X. Segment Information
The Company principally engaged in manufacture and sales of household appliances and relevant
services business, manufacture of upstream household appliances parts business and distribution of
products of third-party, logistics and after-sale business. The Company has 6 business segments,
including refrigerator segment, air-conditioner segment, washing machine segment, kitchen appliance
segment, equipment components segment, integrated channel services segment and other segment. The
management of the Company assesses operating performance of each segment and allocates resources
according to the division. Sales between segments were mainly based on market price.
Refrigerator segment mainly engaged in manufacture and sales of refrigerator and freezers
products.
Air-conditioner segment mainly engaged in manufacture and sales of household air conditioners
and commercial air conditioners.
Washing machine segment mainly engaged in manufacture and sales of washing machine products.
Kitchen appliance segment mainly engaged in manufacture and sales of kitchen appliances
products.
Water heater segment mainly engaged in manufacture and sales of water heater products.
Equipment components segment mainly engaged in procurement, manufacture and sales of
upstream matching accessories for household appliances, manufacture and sales of mould.
COSMO segment mainly engaged in providing intelligent manufacturing ecological service and
integrated solution on transformation and upgrade of intelligent manufacturing for external corporates.
Segment of integrated channel services and others mainly engaged in distribution business, logistics
business, after-sale business, small home appliance business and others.
The Company’s 3rd and 4th tier markets channel business is treated as integrated channel services
and assessed separately with other segments. Accordingly, operating profit from 3rd and 4th tier markets
of refrigerator, air-conditioner, kitchen appliance, water heater, washing machine business segment was
not reflected in operating profit of each segment.
As the centralized management under the headquarters or not being included in the assessment
scope of segment management, the total assets of segment exclude monetary capital, financial assets
held for trading, dividends receivable, other current assets, available-for-sale financial assets, long-term
equity investment, goodwill, deferred income tax assets; the total liabilities of segment exclude
long-term and short-term borrowings, financial liabilities held for trading, dividends payables, tax
payable, bonds payable, deferred income tax liabilities; operating profit of segment exclude profit/loss in
fair value, income from investment, and financial expenses, income on disposal of assets, Non-VAT
183 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
refundable upon imposition component of other income, non-operating incomes and expenses and
income tax.
(1) Information of reportable segments
Segment information for the period
Washing
Segment Air-conditioner Refrigerator Kitchen appliance Water heater
machine
information segment segment segment segment
segment
Segment
19,994,274,671.40 23,347,332,742.58 10,130,626,492.48 3,299,177,229.02 14,409,457,635.26
revenue
Including:
revenue from
6,871,932,961.03 13,285,358,774.66 9,331,150,261.21 720,592,747.71 7,534,958,460.83
external
consumers
Inter-segment
13,122,341,710.37 10,061,973,967.92 799,476,231.27 2,578,584,481.31 6,874,499,174.43
revenue
Total segment
18,813,671,440.21 21,440,213,300.55 9,475,212,757.00 2,947,615,022.72 13,063,184,883.29
operating cost
Segment
1,180,603,231.19 1,907,119,442.03 655,413,735.48 351,562,206.30 1,346,272,751.97
operating profit
Total segment
17,847,705,371.13 15,642,117,029.44 10,997,663,044.17 1,366,025,467.38 13,572,621,044.70
assets
Total segment
8,937,902,636.12 25,373,966,372.29 4,905,637,782.42 1,476,850,517.97 5,861,881,891.56
liabilities
Continued
Equipment Segment of
Segment COSMO integrated Inter-segment
components Total
information segment
segment channel services elimination
and others
Segment revenue 30,397,624,212.00 3,310,521,126.55 52,857,748,036.57 -69,067,990,606.52 88,678,771,539.34
Including:
revenue from
1,377,578,092.60 2,782,907,580.17 46,774,292,661.13 88,678,771,539.34
external
consumers
Inter-segment
29,020,046,119.40 527,613,546.38 6,083,455,375.44 -69,067,990,606.52
revenue
Total segment
30,159,338,365.48 3,309,600,418.34 52,165,398,940.06 -68,808,702,367.85 82,565,532,759.80
operating cost
Segment
238,285,846.52 920,708.21 692,349,096.51 -259,288,238.67 6,113,238,779.54
operating profit
Total segment
32,462,017,888.53 257,810,772.52 36,009,664,222.18 -45,477,323,667.54 82,678,301,172.51
assets
Total segment
34,669,495,063.36 322,611,220.11 30,464,150,224.08 -43,069,415,715.18 68,943,079,992.73
liabilities
Segment information for the corresponding period of last year
Kitchen Washing
Segment Air-conditioner Refrigerator Water heater
Appliance machine
information segment segment segment
segment segment
Segment
16,065,232,785.84 20,664,137,087.68 9,817,927,768.00 2,699,723,615.97 12,223,265,112.69
revenue
Including:
revenue from
5,935,165,349.29 11,674,637,424.70 9,116,143,612.41 554,974,308.80 6,419,268,474.84
external
consumers
184 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Inter-segment
10,130,067,436.55 8,989,499,662.98 701,784,155.59 2,144,749,307.17 5,803,996,637.85
revenue
Total segment
15,051,615,417.92 19,005,739,766.51 9,210,335,248.27 2,394,447,541.46 11,082,170,369.17
operating cost
Segment
operating 1,013,617,367.92 1,658,397,321.17 607,592,519.73 305,276,074.51 1,141,094,743.52
profit
Total segment
14,045,226,564.02 15,092,982,587.34 10,932,907,864.36 1,528,663,785.89 10,774,302,199.29
assets
Total segment
8,164,863,742.03 23,320,161,709.92 4,688,733,103.46 1,779,427,399.65 5,649,976,080.52
liabilities
Continued
Equipment Segment of
Segment Inter-segment
components integrated channel Total
information elimination
segment services and others
Segment revenue 20,111,049,804.31 48,268,853,383.36 -52,192,439,797.88 77,657,749,759.97
Including: revenue
from external 1,535,626,710.80 42,421,933,879.13 77,657,749,759.97
consumers
Inter-segment
18,575,423,093.51 5,846,919,504.23 -52,192,439,797.88
revenue
Total segment
19,938,885,515.00 47,624,071,358.79 -52,003,473,326.81 72,303,791,890.31
operating cost
Segment operating
172,164,289.31 644,782,024.57 -188,966,471.07 5,353,957,869.66
profit
Total segment
26,193,061,725.41 31,818,076,218.88 -34,661,005,792.71 75,724,215,152.48
assets
Total segment
28,088,630,394.16 26,753,925,068.41 -33,224,692,236.96 65,221,025,261.19
liabilities
(2) Geographical information
“Other countries/regions” in this report refers to all other countries/regions (including Hong Kong and
Macau Special Administration Region and Taiwan) other than the mainland China for the purpose of
information disclosure.
External transaction
Amount for the current period Amount for the previous period
income
Mainland China 52,880,695,930.62 42,565,075,285.62
Other countries/regions 35,798,075,608.72 35,092,674,474.35
Including：America 24,722,080,204.20 24,189,346,249.11
South Asia 3,685,609,648.58 2,879,372,340.27
Europe 2,213,871,684.84 1,808,826,381.86
Continued
Total non-current
Closing balance Opening balance
assets
Mainland China 13,466,483,340.65 12,248,609,942.72
Other countries/regions 14,586,931,768.26 14,735,396,871.62
Total 28,053,415,108.91 26,984,006,814.34
The total non-current assets exclude: available-for-sale financial assets, long-term equity investment,
goodwill, deferred income tax assets.
185 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
XI. Disclosure of fair value
1. Fair value of assets and liabilities at fair value at the end of the period
Fair value at the end of the period
Items Level 2 fair
Level 1 fair value
value Total
measurement
measurement
Recurring fair value measurement
I. Financial asset designated to be measured by fair value 1,738,394,432. 1,738,394,432.
and change of which is recorded in current profit and loss 81 81
II. Financial liability designated to be measured by fair
247,098,703.2 247,098,703.2
value and change of which is recorded in current profit and
loss 8 8
III. Financial asset designated to be measured by fair value
and change of which is recorded in other comprehensive 81,409,329.08 81,409,329.08
income
1,414,281,524. 1,435,064,752.
IV. Available-for-sale financial assets 20,783,227.42
86 28
2. Basis for determination of level 1 fair value at recurring fair value measurement: Unadjusted
quoted prices of similar assets or liabilities in active markets as at the measurement date.
3. Basis for determination of level 2 fair value at recurring fair value measurement: Inputs other
than quoted prices included within level 1 that are observable for the assets or liabilities, either directly
or indirectly.
XII. Related parties and Related-party transactions
(Ⅰ) Explanation for basis of identifying related party
According to Accounting Standards for Business Enterprises No. 36 — Related Party Disclosures,
parties are considered to be related if one party has the ability to control or jointly control the other party
or exercise significant influence over the other party. Parties (two or more than two) are also considered
to be related if they are subject to common control, joint control or significant influence.
According to Management Practices for Information Disclosure of The Company (China Securities
Regulatory Commission Order No. 40), in certain occasions, related legal person and natural person will
be identified as related parties.
(II) Relations between related parties
1. Information about the Parent Company and other companies holding shares of the Company
Equity Interest Voting share of
Name of Type of Registere legal Relationsh
Registere of the the
enterprise enterpris d representati ip with the
d capital Company(100 Company(100
s es address ve Company
%) %)
Qingdao
Haier
Collective High-tech
Group 311,180,0 Zhang the Parent
Corporatio
owned Zone
00 Ruimin Company
17.59 17.59
enterprise Haier
n
Park
Haier Qingdao The
Electric Joint-stoc High-tech subsidiary
631,930,6 Zhang
Appliances k Zone
35 Ruimin
of the 20.64 20.64
Internation company Haier parent
al Co., Ltd. Park company
Qingdao The party
Haier Company Qingdao acting in
Venture & with Free 100,000,0 Zhou concert
Investment limited Trade 00 Yunjie with the
2.83 2.83
Informatio liabilities. Zone parent
n Co., Ltd. company
186 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
2. Subsidiaries
Detailed information of subsidiaries is disclosed in item 1 of note IX. interests in subsidiaries.
3.Information about associates and joint ventures
Information about the associates or joint ventures of the Company are set out in item 11 of note VII
and item 3 of Note IX.
4. Related companies without controlling relationship
Relationship with the
Name of enterprises
enterprises
FISHER＆PAYKEL APPLIANCES LIMITED Subsidiary of Haier Group
HAIER INFORMATION APPLIANCES S.R.L. Subsidiary of Haier Group
HAIER INTERNATIONAL (HK) LTD. Subsidiary of Haier Group
HAIER INTERNATIONAL CO., LTD Subsidiary of Haier Group
Feima Electronic (Qingdao) Co., Ltd. Subsidiary of Haier Group
Haier Group Finance Co., Ltd. Subsidiary of Haier Group
Haier Group Electric Appliance Industry Co., Ltd. Subsidiary of Haier Group
Haier Energy Power Co., Ltd. Subsidiary of Haier Group
Haier Brothers Animation Industry Co., Ltd. Subsidiary of Haier Group
Hefei Haier Logistics Co., Limited Subsidiary of Haier Group
Laiyang Haier Electrical Co. Ltd. Subsidiary of Haier Group
Qingdao Haier Whole House Furniture Co., Ltd.(青岛海尔全屋家具有限公司) Subsidiary of Haier Group
Qingdao Haier Tooling Development and Manufacturing Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Travel Agency Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Trading Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Household Integration Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Parts Procurement Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Strauss Water Equipment Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Special Plastic Development Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Communications Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Logistics Consulting Co., Ltd. Subsidiary of Haier Group
Qingdao Haiyongda Property Management Co., Ltd. Subsidiary of Haier Group
BRAVE LION (HK) LIMITED Subsidiary of Haier Group
Chongqing Haier Electrical Appliances Sales Co., Ltd. Subsidiary of Haier Group
Chongqing Haier Logistics Co., Ltd Subsidiary of Haier Group
Qingdao Goodaymart Lejia Logistics Technology Co., Ltd.(青岛日日顺乐家物 Subsidiary of Haier Group
联科技有限公司 )
Suzhou Haixin Information Technology Co., Ltd.(苏州海新信息科技有限公司) Subsidiary of Haier Group
187 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Haier Finance Leasing (China) Co., Ltd. Subsidiary of Haier Group
Qingdao Haier New Material Research and Development Co., Ltd.(青岛海尔新 Joint venture of a subsidiary of
材料研发有限公司) Haier Group
CONTROLADORA MABE S.A.de C.V. Joint venture
HNR Company (Pvt) Limited Joint venture
MiddleEast Airconditioning Company,Limited Joint venture
Qingdao Haier Software Investment Co., Ltd. Joint venture
Hefei HBIS New Material Technology Co., Ltd.(合肥河钢新材料科技有
Subsidiary of a joint venture
限公司)
Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. Joint venture
Haier Medical and Laboratory Products Co., Ltd. Joint venture
Qingdao HBIS Composite New Material Technology Co., Ltd.(青岛河钢复合新
Subsidiary of a joint venture
材料科技有限公司)
Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Co., Ltd. Joint venture
Wolong Electric Zhangqiu Haier Motor Co., Ltd. Joint venture
(III) Information on Related-party transaction
1. The detailed information of the Company procuring goods and services from related-party are as
follows:
Amount for the current Amount for the previous
Name of related parties
period period
CONTROLADORA MABE S.A.de C.V. 3,797,313,988.61 3,524,320,229.06
Qingdao Haier Parts Procurement Co., Ltd. 2,737,668,714.18 4,101,092,652.62
Chongqing Haier Electrical Appliances Sales
Co., Ltd.
2,117,428,201.15 2,215,820,324.20
HNR Company (Pvt) Limited 1,258,923,720.84 919,404,923.83
Chongqing Haier Logistics Co., Ltd. 1,028,328,519.82 983,636,882.26
Hefei Haier Logistics Co., Limited 747,478,902.47 999,455,393.51
Qingdao Haier International Trading Co., Ltd. 683,580,146.91 526,417,908.74
Qingdao Haier Strauss Water Equipment Co.,
Ltd.
405,789,607.19 225,881,787.55
Hefei HBIS New Material Technology
372,624,744.03 324,233,684.39
Co., Ltd.(合肥河钢新材料科技有限公司)
Wolong Electric Zhangqiu Haier Motor Co.,
Ltd.
364,904,854.05 355,699,474.19
Qingdao Haier Special Plastic Development
Co., Ltd.
357,967,509.26 332,029,641.38
Qingdao HBIS Composite New Material
Technology Co., Ltd.(青岛河钢复合新材料科 313,670,642.04 291,804,265.09
技有限公司)
Haier Energy Power Co., Ltd.
211,221,875.25 223,432,383.88
Qingdao Haier Tooling Development and
Manufacturing Co., Ltd.
165,704,463.60 184,193,856.07
Qingdao Haiyongda Property
Management Co., Ltd.(青岛海永达物业 117,606,114.96 91,155,393.46
管理有限公司)
188 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Qingdao Haier Whole House Household
56,987,019.04 104,798,646.07
Co., Ltd.(青岛海尔全屋家居有限公司)
Qingdao Haier Communications
50,908,272.82 286,602,718.51
Co., Ltd.
HAIER INTERNATIONAL CO., LTD 34,081,851.31 48,993,253.14
Mitsubishi Heavy Industries Haier (Qingdao)
Air-conditioners Co., Ltd.
31,785,595.57 26,906,682.16
Qingdao Haier Household Integration Co., Ltd. 27,538,593.82 7,055,871.66
FISHER&PAYKEL AUSTRALIA PTY 4,949,393.94 24,607,963.96
Other related parties 1,033,772,885.49 751,211,974.44
Total 15,920,235,616.35 16,548,755,910.17
2. The detailed information of the Company procuring goods and services from related-party are as
follows:
Amount for the current Amount for the
Name of related parties
period previous period
FISHER&PAYKEL AUSTRALIA PTY
520,944,530.24 453,206,822.74
CONTROLADORA MABE S.A.de C.V.
411,595,719.20 172,940,605.38
Qingdao Haier International Trading Co., Ltd.
365,258,871.55 382,386,502.01
Qingdao Haier Special Plastic Development
338,525,883.67 94,854,275.54
Co., Ltd.
Hefei HBIS New Material Technology Co.,
200,819,911.53 377,550,381.70
Ltd.(合肥河钢新材料科技有限公司)
Qingdao Haier New Material Research and
185,265,679.09 216,055,389.34
Development Co., Ltd.
Wolong Electric Zhangqiu Haier Motor Co.,
174,636,996.00 303,051,955.98
Ltd.
Qingdao HBIS Composite New Material
Technology Co., Ltd.(青岛河钢复合新材料科 119,670,204.88 167,992,052.29
技有限公司)
Qingdao Haier Tooling Development and
Manufacturing Co., Ltd.
93,196,412.80 80,082,974.19
Qingdao Haier International Travel Agency
39,380,799.45 18,529,608.83
Co., Ltd.
Chongqing Haier Electrical Appliances Sales
1,907,239.75 96,889,976.15
Co., Ltd.
Suzhou Haixin Information Technology Co.,
1,175,782.46 52,583,658.53
Ltd.(苏州海新信息科技有限公司)
Other related parties 282,217,115.92 217,869,905.73
Total 2,734,595,146.54 2,633,994,108.41
3. Unsettled amounts of related parties
Items and names of consumers Ending balance Beginning balance
Notes receivables
Other related parties 827,490.67
Dividends receivables:
Qingdao Haier Software Investment Co., Ltd. 4,524,472.84 4,524,472.84
Other related parties 136,377.05
189 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Trade receivables:
Provision for Provision for
Items and names of consumers Book balance Book balance
bad debts bad debts
FISHER＆PAYKEL APPLIANCES LIMITED 345,582,591.6 240,525,663.0
17,279,129.58 12,026,283.15
6 8
CONTROLADORA MABE S.A.deC.V. 174,604,786.1
8,730,239.31 85,868,137.29 4,293,406.86
7
Haier Group Electric Appliance Industry Co., 119,136,930.6 172,889,483.5
5,956,846.53 8,644,474.17
Ltd. 8 0
Haier Finance Leasing (China) Co., Ltd. 107,389,479.6
5,369,473.98 33,979,469.96 1,698,973.50
8
Qingdao Haier International Travel Agency Co.,
41,638,089.61 2,081,904.48 33,535,331.94 1,676,766.60
Ltd.
Qingdao Haier Special Plastic Development Co.,
40,606,062.73 2,030,303.14 30,061,911.52 1,503,095.58
Ltd.
Hefei HBIS New Material Technology Co.,
18,423,413.03 921,170.65 37,553,831.20 1,877,691.56
Ltd.(合肥河钢新材料科技有限公司)
Suzhou Haixin Information Technology Co.,
16,664,234.97 833,211.75 18,580,938.10 929,046.91
Ltd.(苏州海新信息科技有限公司)
Haier Medical and Laboratory Products Co., Ltd. 8,908,758.81 445,437.94 5,293,566.32 264,678.32
Mitsubishi Heavy Industries Haier (Qingdao)
5,252,096.64 262,604.83 2,609,651.81 130,482.59
Air-conditioners Co., Ltd.
Qingdao HBIS Composite New Material
Technology Co., Ltd.(青岛河钢复合新材料科技 3,449,271.12 172,463.56 5,271,174.28 263,558.71
有限公司)
266,296,532.5 239,136,247.9
Other related parties 13,314,826.63 11,956,812.40
4 1
Prepayments:
Qingdao Haier International Trading Co., Ltd. 278,331,689.34 25,694,085.49
Haier Group Electric Appliance Industry Co.,
52,791,945.93 18,666,136.33
Ltd.
Qingdao Haier Parts Procurement Co., Ltd. 46,876,371.70 26,855,446.50
Other related parties 22,656,983.95 57,909,844.51
Interests receivables:
Haier Group Finance Co., Ltd. 7,152,358.68 16,597,598.16
Other receivables:
Provision for Provision for
Items and names of consumers Book balance Book balance
bad debts bad debts
Haier Group Electric Appliance Industry Co.,
647,646.88 32,382.34 5,054,271.27 252,713.56
Ltd.
Other related parties 82,569,992.51 4,128,499.63 43,505,955.80 2,175,297.79
Notes payable:
Wolong Electric Zhangqiu Haier Motor Co., Ltd. 61,412,756.84
Laiyang Haier Electrical Co. Ltd. 10,411,869.81 56,557,892.89
Other related parties 4,553,992.51 6,544,689.10
Accounts payables:
Qingdao Haier Parts Procurement Co., Ltd. 1,451,149,605.13 975,508,354.98
CONTROLADORA MABE S.A.deC.V. 375,635,705.91 359,468,427.60
HNR Company (Pvt) Limited 268,478,148.47 49,389,796.48
190 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Qingdao Haier International Trading Co., Ltd. 161,106,745.95 268,481,130.24
Chongqing Haier Logistics Co., Ltd. 99,263,199.78 304,825,911.96
Qingdao Haier Strauss Water Equipment Co.,
65,396,566.95 61,152,328.59
Ltd.
Chongqing Haier Electrical Appliances Sales
56,957,430.58 90,092,109.31
Co., Ltd.
Qingdao Haier Communications Co., Ltd. 51,061,886.32 4,801,675.32
Qingdao Haier Special Plastic Development Co.,
44,686,429.40 52,784,094.74
Ltd.
Hefei Haier Logistics Co., Limited 31,386,951.96 257,354,153.49
HAIER INTERNATIONAL CO., LTD 26,626,665.50 56,102,305.76
Goodaymart Electronics Co., Ltd. 10,665,808.18 10,665,813.13
Qingdao Haier Whole House Household Co.,
5,920,605.71 33,084,367.38
Ltd.(青岛海尔全屋家居有限公司)
HAIER INTERNATIONAL (HK) LIMITED 5,075,546.70 162,909,377.32
Other related parties 390,069,403.51 410,633,223.32
Receipts in advance:
Hefei Haizhi Real Estate Co., Ltd.(合肥海智房
155,358,260.10 155,000,000.00
地产有限公司)
Haier Group Electric Appliance Industry Co.,
6,720,145.87 5,984,613.13
Ltd.
Other related parties 16,124,629.79 12,369,377.54
Other payable:
Haier Brothers Animation Industry Co., Ltd. 357,387,470.54 384,741,409.54
Chongqing Haier Logistics Co., Ltd. 51,830,739.06 51,830,739.06
Haier Group Electric Appliance Industry Co.,
18,308,757.39 2,413,136.73
Ltd.
Haier Energy Power Co., Ltd. 15,412,788.34 42,485,111.74
Hefei Haier Logistics Co., Limited 8,663,500.00 8,663,500.00
Other related parties 175,837,677.92 159,066,947.95
Interests payables:
Haier Group Finance Co., Ltd. 5,442,616.18 5,953,652.09
Dividends payables:
BRAVE LION (HK) LIMITED 122,756,874.10 122,756,874.10
Other related parties 407,065,787.01 30,999,441.54
4. Other Related-party transactions
(1) One of the Company’s subsidiaries entered into a loan contract with Haier Group Finance Co.,
Ltd.. The borrowed amount as of 30 June 2018 was RMB 3.101 billion and the interest and fees payable
to Haier Group Finance Co., Ltd. for the period was RMB77 million in total.
(2) Information about the guarantor of the Company’s ending guaranteed borrowing who is a
related party:
Borrowers Amounts Guarantees
Hefei Haier Refrigerator Co., Ltd. 300,000,000.00 Haier Group Corporation
191 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Qingdao Haier Special Freezer Co.,
830,000,000.00 Haier Group Corporation
Ltd.
Zhengzhou Haier Air-conditioning
300,000,000.00 Haier Group Corporation
Co., Ltd.
Qingdao Haidayuan Procurement
550,000,000.00 Haier Group Corporation
Service Co., Ltd.
Qingdao Haier (Jiaozhou)
400,000,000.00 Haier Group Corporation
Air-conditioning Co., Limited
HAIER US APPLIANCE
SOLUTIONS,INC
15,342,039,671.91 Haier Group Corporation
Total 17,322,039,671.91
（3）Income on deposit interests received by the Company and its subsidiaries from Haier Group
Finance Co., Ltd. for the period was RMB 36 million.
（4）Balance of interbank borrowing of Haier Pakistan (Private) Limited, a subsidiary of the
Company, to HNR COMPANY (PRIVATE) LIMITED, a joint ventures at the end of the period was
RMB 0.366 billion.
(5) Qingdao Haier Goodaymart Logistic Co., Ltd., a subsidiary of the Company and other
companies provided logistics services to other related companies under Haier Group, the logistics
income for the period was RMB 0.108 billion.
(6) Leasing
Application of leased Lease expense recognized
Lessees Lessors for the period
assets
Qingdao Haier
Subsidiary of the Investment and Production and
10,120,984.12
Company Development Co., Ltd. operation
and its subsidiaries
Subsidiary of the Other companies of Production and
47,305,599.89
Company Haier Group operation
Total 57,426,584.01
(Ⅳ) Pricing policies
1. Connected sales
Following the acquisition of the overseas white household appliances assets, the Company’s
original overseas sales model, being exports through the Group’s exporting platform, was changed. The
trading company under the company holding overseas white household appliances assets was fully
responsible for sales of export-oriented products. Meanwhile, the trading company was also responsible
for the overseas sales of some of the Group’s products (such as brown goods). As such, the Company
entered into a Sales Framework Agreement with Haier Group Corporation. Under which, it was agreed
that the Company and Haier Group Corporation will sell products and provide sales-related services
(including but not limited to agency sales services, after-sales services and technical support ) on a
reciprocal basis for a term of three years.
Connected sales among Haier Electronics Group Co., Ltd. (“Haier Electronics”), a holding
subsidiary of the Company, Qingdao Haier Investment and Development Co., Ltd, Haier Group
Corporation are carried out according to relevant provisions of Goods Export Agreement, After-sales
Service Agreement, Logistics Service Agreement entered into among parties.
2. Connected Procurements
In addition to independent procurement platform, the Company entrusted Haier Group Corporation
and its subsidiaries for procurements of part of raw materials and distribution of goods and materials.
192 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
The business is conducted according to the Purchase and Distribution Contract entered among the
Company, Haier Group Corporation and other parties. The Company, Haier Group Corporation and its
subsidiaries purchase materials from agents. They purchase and distribute goods for production and
non-production use according to the specific material procurement target proposed by the Company. The
price of materials purchased and delivered consist of the actual purchase price and the agency fee, of
which the agency fee was calculated by 1.25% of the actual purchase price, while in principle the price
of materials should not be higher than the price that the Company independently purchased from the
market.
Connected procurements among Haier Electronics, Qingdao Haier Investment and Development
Co., Ltd, Haier Group Corporation are carried out according to relevant provisions of Materials
Procurement Agreement and Production and Experimental Equipment Procurement Agreement entered
among parties.
3. Related-party Transactions of Financial and Logistics Services
Some of the financial services such as deposit and loan service, discounting service and foreign
exchange derivatives needed by the Company are provided by Haier Group Corporation, its subsidiaries
and other companies. According to the Financial Service Agreement entered among the Company, Haier
Group Corporation and other parties, the price of financial services is determined by the principle that is
not less favorable of market value fair. The Company is entitled to decide whether to keep cooperation
relationship with them with the knowledge of the price prevailing on the market and in combination with
its own interests. While performing the agreement, the Company could also require other financial
service institutions to provide related financial services basing on actual situation. In order to meet the
Company’s demands such as the avoidance of foreign exchange fluctuation risk, the Company may
choose Haier Group Finance Co., Ltd. (“Finance Company”) to provide some foreign exchange
derivative service after comparing with comparable companies. The Company will uphold the safe and
sound and appropriately reasonable principle, under which all foreign exchange capital business shall
have a normal and reasonable business background to eliminate speculative operation. At the same time,
the Company has specified the examination and permission rights, management positions and
responsibilities at all levels for its foreign exchange capital business to eradicate the risks of operation by
persons and improved its response speed to risks on the premise that the risks are effectively controlled.
Related-party transactions of financial services among Haier Electronics, Finance Company,
Qingdao Haier Investment and Development Co., Ltd and Haier Group Corporation are carried out
according to relevant provisions of Financial Service Agreement entered into among parties.
In order to further standardize the logistics services provided by the related companies of Haier
Group Corporation, the Company signed the Logistics and Service Agreement with Qingdao Haier
Investment and Development Co., Ltd and Haier Group Corporation, the Company entrusted the
subsidiaries of Haier Group to provide energy and power, basic research and detection, equipment
leasing, house rental and maintenance, landscaping and sanitation, gift purchasing, design, consultation,
all kinds of booking and other services.
In accordance with the Comprehensive Service Agreement, Promotion Agreement, Product
Research and Development Agreement entered into among Haier Electronics, Qingdao Haier Investment
and Development Co., Ltd and Haier Group Corporation, Haier Electronics entrusted subsidiaries of
Haier Group to provide Haier Electronics with hydropower energy and related support; meeting,
accommodation, ticket agent; integrated services such as product certification, software, food and
beverage agent, property decoration, house lease, finance and marketing, product research and
development services.
193 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
4. Others
In order to expand the sales businesses in the third and fourth-tier markets, Haier Electronics
renewed the Products Procurement Agreement and Internal Sales Agreement with Qingdao Haier
Investment and Development Co., Ltd and Haier Group Corporation, according to which, while Haier
Electronics purchases products from contract parties, the purchasing price shall be determined basing on
the prices of which Haier Electronics purchases the same type of product in similar transactions from
independent third parties in the market, and are not less favorable than the terms and conditions provided
by the independent third parties to Haier Electronics; while Haier Electronics sales products to contract
parties for their own use or distributes products through sales network, the selling price shall be
determined basing on the prices of which Haier Electronics sells the same type of product in similar
transactions to independent third parties in the market, and are not less favorable than the terms and
conditions provided by Haier Electronics to independent third parties.
The Company and its subsidiaries entered into a series of contracts, including the Framework
Agreement Regarding the Procurement of Modular Products with Wolong Electric Zhangqiu Haier
Motor Co., Ltd. and other companies. Pursuant to which, they agreed to supply modular products to the
Company at the most favorable price which is no higher than the price it offered to other clients.
The Company and its subsidiaries entered into a series of contracts, including the Contract
Arrangement Regarding the Procurement of Special Steel Plate Products with Qingdao HBIS Composite
New Material Technology Co., Ltd.(青岛河钢复合新材料科技有限公司), Hefei HBIS New Material
Technology Co., Ltd.(合肥河钢新材料科技有限公司). Under which, it is agreed that they shall supply
goods to the Company on terms which are not less favorable than terms offered by other suppliers.
XIII. Share-based payments
1. General information on share-based payments
□Applicable √Not Applicable
2. Share-based payments settled in cash
□Applicable √Not Applicable
XIV.Commitments and contingent events
1. Material commitment
□Applicable √Not Applicable
2. Contingent events
(1). Material contingent events on the balance sheet date
□Applicable √Not Applicable
XV. Events Subsequent to the Balance Sheet date
1. Description on the events subsequent to the balance sheet date
√Applicable □Not Applicable
1. The Company intends to acquire 100% equity of Haier New Zealand Investment Holding
Company Limited(hereinafter referred to as “Haier New Zealand” ) held by Haier (Singapore)
Management Holding Co. Pte. Limited, an oversea subsidiary of Haier Group Corporation (hereinafter
referred to as “Haier Singapore” ) through Haier Singapore Investment Holding Pte. Ltd., another
194 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
oversea subsidiary of the Company in cash. Haier Singapore Investment Holding Pte. Ltd. entered into a
Sale and Purchase Agreement with Hair Singapore on 24 April 2018, pursuant to which Haier Singapore
Investment Holding Pte. Ltd. intended to acquire 100% equity of Haier New Zealand held by Haier
Singapore at a consideration of USD 303,040,997.28 in cash. The transaction was completed on 31 July
2018.
2. Guanmei (Shanghai) Corporate Management Co., Ltd,(贯美（上海）企业管理有限公司) an
indirect subsidiary of the Company, intends to swap its 55% equity in Bingji (Shanghai) Corporate
Management Co., Ltd,(冰戟（上海）企业管理有限公司) with 51% equity of Qingdao HSW Water
Appliance Co., Ltd.(青岛海施水设备有限公司) (hereinafter referred to as “Water Appliance”)held by
Haier Electric Appliances International Co., Ltd.
The connected transaction has been approved and passed in the eighteenth meeting of the ninth
session of the Board meeting held by the Company on 30 August 2018, and is not subject to the approval
of the general meeting.
3. The Company has no material events subsequent to the balance sheet date which need to be
disclosed.
XVI.Financial Instruments Related Risks
The Company’s financial assets include notes receivables, receivables and etc., and the Company’s
financial liabilities include Notes payable, account payable, long- and short- term borrowings and etc.
Please refer to relevant items in Note VII for detailed descriptions of various financial instruments. Risks
relating to these financial instruments and the risk management policies the Company adopts to mitigate
these risks are summarized below. The Company’s management manages and monitors these risk
exposures in order to ensure these risks are well within their respective risk limits.
1. Credit risk
The credit risk the Company exposed to mainly comes from bank deposits, notes receivables,
accounts receivables, interest receivables, other receivables and wealth management products in other
current assets.
（1）TheCompany’s bank deposits and wealth management products are mainly deposited with
Haier Group Finance Co., Ltd., national banks and other large and medium size listed banks. The
interest receivables mainly refer to the accrued interest from time deposits placed with the aforesaid
banks. The Group doesn’t believe there is any significant credit risk due to defaults of its counterparties
which would cause any significant loss.
（2）Accounts receivables and notes receivables: The Company only trades with recognized and
creditworthy third parties. It is the Company’s policy that all consumers who wish to trade on credit
terms are subject to credit verification procedures. The payment terms shall be determined on a
reasonable basis. The Company monitors the balances of accounts receivables on an ongoing basis and
maintains credit insurances for significant accounts receivables due from its credit clients, so as to
ensure the Company will not expose to significant risk of bad debts.
195 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
（3）The Company’s other receivables mainly include export tax rebate receivable, recurrent loans
and advances to its employees. The Company strengthened the management of these receivables and
corresponding business activities based on their historical reasons of occurrence, and continued to
monitor such receivables, so as to ensure that the Company’s significant risk of bad debts are
controllable and to further reduce such risks.
2. Liquidity risk
Liquidity risk is the risk that an enterprise may encounter deficiency of funds in meeting
obligations associated with financial liabilities. In order to control liquidity risk, the Company integrates
the utilization of various financing methods such as settlement with bills and bank loans, to strive for a
sustainable and flexible financing. The Company has secured line of credit with a great number of
commercial banks to satisfy its needs for working capital and capital expenditures.
3. Exchange rate risk
The Company’s businesses are based in mainland China, the US, Japan, Southeast Asia, South Asia,
central and east Africa, Europe, and Australia, etc. and are settled in RMB, US dollar, and other
currencies.
The Company’s overseas assets and liabilities denominated in foreign currencies as well as
transactions settled in foreign currencies in the future expose the Company to fluctuations in exchange
rates. The Company’s finance department is responsible for monitoring the size of transactions in
foreign currencies and assets and liabilities denominated in foreign currencies, so as to reduce its
exposure to fluctuations in exchange rates to the largest extent. The Company avoid its exposure to
fluctuations in exchange rates by entering into forward foreign exchange contracts.
4. Interest rate risk
The Company mainly faces interest rate risk from its long- and short- term bank loans and bonds
payables which are interest-bearing. Financial liabilities with floating interest rates expose the Company
to cash flow interest rate risk, while financial liabilities with fixed interest rates expose the Company to
fair value interest rate risk. The Group determines the percentage of fixed-interest rate and floating
interest rate contracts in light of the prevailing market conditions.
XVII. Other Important Events
1. Proposal on the intended initial public offering and listing of shares by Qingdao Haier Co., Ltd
on CEINEX D-Share Market(《青岛海尔股份有限公司关于公司拟在中欧国际交易所 D 股市场首次
公开发行股票并上市的议案》 was considered and approved at the twelfth meeting of the ninth session
of the Company’s board meeting on 19 April 2018. The Company intends for initial public offering and
listing of the shares on the D-Share Market of the China Europe International Exchange AG (hereinafter
referred to as “the D-Share Market ”) , which will be achieved through admittance of and listing
transactions on Frankfurt Stock Exchange. China Europe International Exchange AG is a joint venture
established by Shanghai Stock Exchange, Deutsche Brse Group, and China Financial Futures Exchange.
196 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Deutsche Brse Groupid the main operating body of Frankfurt Stock Exchange, and the listing rules of
Frankfurt Stock Exchange applies to the D-Share Market. In compliance with regulations such as the
minimum offering proportion on the market where the shares of company are listed, coupled with the
capital requirement for the future development of the Company’s business, the number of proposed
offering of the shares shall not exceed 400 million (prior to the exercise of the over-allotment options),
and the bookrunner may be granted over-allotment options not exceeding 15% of the number of the
aforesaid D shares to be issued. Final offering number are determined by the Board authorized by the
general meeting and the parties authorized by the Board according to the laws, approval of the
regulatory institutions and the market conditions.
2. The first 2017 Extraordinary general meeting of the Company was convened on 23 November
2017, on which Proposal of the plan on public offering of convertible corporate bonds by Qingdao Haier
Co., Ltd(《青岛海尔股份有限公司关于公开发行可转换公司债券方案的议案》) was passed. In the
meantime, according to the grant to the Board by the general meeting, the Company held the seventeenth
meeting of the ninth session of the Board meeting on 24 August 2018 and considered and approved the
proposal on adjustments of the offering plans; according the proposal, the Company will issue
convertible corporate bonds not exceeding RMB3,007,490,000 (including RMB3,007,490,000), with
book value of RMB100 per convertible bonds, and the term of less than 6 years commencing on the date
of issue. The general meeting of the Company authorized the Board to determine the specific scale, term,
coupon rate and the final interest rate of each interest-bearing year of the offering. The public offering of
the convertible corporate bonds of the Company is pending on the approval of CSRC, and there exists
uncertainty on whether the approval can be obtained.
XVIII. Notes to Main Items of Financial Statements of the Parent Company
1. Trade receivables
(1) Disclosure of trade receivables by consumer categories is set out as follows:
Items Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Individual significant trade
receivables of which
provision for bad debts is
made on an individual basis
Trade receivables of
which provision for bad
debts is made on a group
325,758,771.22 16,287,938.56 303,683,922.18 15,184,196.11
basis
Individual insignificant trade
receivables of which
provision for bad debts is
made on an individual basis
Total 325,758,771.22 16,287,938.56 303,683,922.18 15,184,196.11
(2) Trade receivables of which provision for bad debts is made on a group basis:
Aging Closing balance Opening balance
197 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Provision for bad Provision for bad
Book balance Book balance
debts debts
Within one
year
296,299,594.02 14,814,979.70 274,306,287.64 13,715,314.38
One to
two 10,708,925.11 535,446.26 29,377,634.54 1,468,881.73
years
Two to three
years
18,750,252.09 937,512.60
Total 325,758,771.22 16,287,938.56 303,683,922.18 15,184,196.11
(3) The total debt amount of the top 5 debtors in the ending trade receivables amounted to RMB
320,002,571.10, representing 98.23% of the book balance of the trade receivables.
2. Other receivables
(1) Disclosure of other receivables by consumer categories is set out as follows:
Items Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Individual significant other
receivables of which
provision for bad debts is
made on an individual basis
Other receivables of which
provision for bad debts is 1,918,876,574.69 95,943,828.73 16,731,629.93 836,581.50
made on a group basis
Individual insignificant
other receivables of which
provision for bad debts is
made on an individual
basis
Total 1,918,876,574.69 95,943,828.73 16,731,629.93 836,581.50
(2) Other receivables of which provision for bad debts is made on a group basis:
Aging Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Within one year 1,918,876,574.69 95,943,828.73 16,731,629.93 836,581.50
Total 1,918,876,574.69 95,943,828.73 16,731,629.93 836,581.50
(3) The total debt amount of the top 5 debtors in the ending trade receivables amounted to RMB
1,885,933,217.49, representing 98.28% of the book balance of the trade receivables.
3. Long-term equity investments
√Applicable □Not Applicable
(1) Details of long-term equity investments:
Items Closing balance Opening balance
Provision for Provision for
Book balance Book balance
impairment impairment
Long-term equity investments
Including: long-term equity 20,490,178,326 7,100,000.0
investments to subsidiaries
20,548,154,444.94 7,100,000.00
.42 0
198 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Long-term equity 21,000,000.0 3,119,176,601. 21,000,000.
investments to associates
3,178,177,202.58
0 66 00
28,100,000.0 23,609,354,928 28,100,000.
Total 23,726,331,647.52
0 .08 00
(2) Long-term equity investments to subsidiaries
Impairment
Increase or
Opening Closing provision
Name of Investee Companies decrease for the
balance balance closing
period
balance
I. Subsidiaries:
Chongqing Haier Electronics Sales Co.,
9,500,000.00 9,500,000.00
Ltd.
Haier Group (Dalian) Electrical
34,735,489.79 34,735,489.79
Appliances Industry Co., Ltd.
Qingdao Haier Refrigerator Co., Ltd. 402,667,504.64 402,667,504.64
Qingdao Haier Special Refrigerator Co.,
329,832,047.28 329,832,047.28
Ltd.
Qingdao Haier Information Plastic
102,888,407.30 102,888,407.30
Development Co., Ltd.
Dalian Haier Precision Products Co., Ltd. 41,836,159.33 41,836,159.33
Hefei Haier Plastic Co., Ltd. 42,660,583.21 42,660,583.21
Qingdao Haier Technology Co., Ltd. 16,817,162.03 16,817,162.03
Qingdao Haier Moulds Co., Ltd. 273,980,796.30 273,980,796.30
Qingdao Haier Intelligent Electronics Co.,
294,453,513.06 294,453,513.06
Ltd.
Qingdao Household Appliance
Technology and Equipment Research 66,778,810.80 66,778,810.80
Institute
Qingdao Meier Plastic Powder Co., Ltd. 24,327,257.77 24,327,257.77
Chongqing Haier Precision Plastic Co.,
47,811,283.24 47,811,283.24
Ltd.
Chongqing Haier Intelligent Electronics
11,870,511.98 11,870,511.98
Co., Ltd.
Qingdao Haier Electronic Plastic Co., Ltd. 48,000,000.00 48,000,000.00
Dalian Haier Refrigerator Co., Ltd. 99,000,000.00 99,000,000.00
Dalian Haier Air-conditioning Co., Ltd. 99,000,000.00 99,000,000.00
Guizhou Haier Electronics Co., Ltd. 96,904,371.71 96,904,371.71
Hefei Haier Air-conditioning Co., Limited 67,110,323.85 67,110,323.85
Qingdao Haier Refrigerator (International)
158,387,576.48 158,387,576.48
Co., Ltd.
Qingdao Haier Robot Co., Ltd. 3,149,188.69 3,149,188.69
Qingdao Haier Air-Conditioner
1,113,433,044.51 1,113,433,044.51
Electronics Co., Ltd.
Qingdao Haier Air Conditioner Gen Corp.,
218,245,822.50 2,390,483.52 220,636,306.02
Ltd.
Qingdao Haier Special Freezer Co., Ltd. 442,684,262.76 442,684,262.76
Qingdao Haier Dishwasher Co., Ltd. 206,594,292.82 206,594,292.82
Wuhan Haier Freezer Co., Ltd. 47,310,000.00 47,310,000.00
Wuhan Haier Electronics Co., Ltd. 100,715,445.04 100,715,445.04
199 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Chongqing Haier Air-conditioning Co.,
100,000,000.00 100,000,000.00
Ltd.
Hefei Haier Refrigerator Co., Ltd. 49,000,000.00 49,000,000.00
Qingdao Haier Whole Set Home
118,000,000.00 118,000,000.00
Appliance Service Co., Ltd.
Chongqing Haier Refrigeration Appliance
91,750,000.00 91,750,000.00
Co., Ltd.
Qingdao Haier Industry Intelligence
8,000,000.00 -8,000,000.00 -
Research Institute Co., Ltd.
Haier Shareholdings (Hong Kong) Limited 13,561,203,702.07 13,561,203,702.07
Shenyang Haier Refrigerator Co., Ltd. 100,000,000.00 100,000,000.00
Foshan Haier Freezer Co., Ltd. 100,000,000.00 100,000,000.00
Zhengzhou Haier Air-conditioning Co.,
100,000,000.00 100,000,000.00
Ltd.
Qingdao Haidayuan Procurement Service
20,000,000.00 20,000,000.00
Co., Ltd.
Qingdao Haier Intelligent Technology
130,000,000.00 130,000,000.00
Development Co., Ltd.
Qingdao Haier Technology Investment
200,000,000.00 13,585,635.00 213,585,635.00
Co., Ltd.
Qingdao Casarte Smart Living Appliances
10,000,000.00 10,000,000.00
Co., Ltd.
Haier Overseas Electric Appliance Co.,
40,000,000.00 40,000,000.00
Ltd.
Haier (Shanghai) Electronics Co., Ltd. 12,500,000.00 12,500,000.00
Haier U+smart Intelligent Technology
143,000,000.00 143,000,000.00
(Beijing) Co., Ltd.
Haier Electronics Group Co., Ltd. 669,830,769.26 669,830,769.26 7,100,000.00
Qingdao Haidarui Procurement Service
107,800,000.00 107,800,000.00
Co., Ltd.
Shanghai Haier Zhong Zhi Fang Chuang
2,000,000.00 2,000,000.00
Ke Space Management Co., Ltd.
Haier Industries Holdings Limited 100,000,000.00 50,000,000.00 150,000,000.00
Qingdao Haier Medical Refrigeration
Appliance Co., Ltd (青岛海尔特种制冷电 100,000,000.00 100,000,000.00
器有限公司)
Qingdao Haier Intelligent Household
326,400,000.00 326,400,000.00
Appliances Co., Ltd.
Total 20,490,178,326.42 57,976,118.52 20,548,154,444.94 7,100,000.00
(3) Long-term equity investments to associates
Increase or decrease for the Period
Impairmen
Name of Investment t
Opening income Closing
investee Increase or Provision
balance recognized balance
companies decrease for Others Closing
under the balance
the Period
equity
method
QingDao
22,937,226.2 252,852,017.0
Haier-Medical Co., 229,914,790.86
2 8
Ltd
Wolong Electric
Zhangqiu 109,934,500.3
106,957,786.56 2,976,713.78
Haier Motor Co., 4
Ltd.
Qingdao HBIS -106,068,803.
106,068,803.08 -
Composite New 08
200 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Material Technology
Co., Ltd.(青岛河钢
复合新材料科技有
限公司)
Hefei HBIS New
Material Technology
Co., Ltd.(合肥河钢 -109,289,567.
109,289,567.00 -
00
新材料科技有限公
司)
Qingdao Haier SAIF
Smart
Home Industry
270,536,881.9
Investment 270,536,881.98
8
Center (limited
partnership)
Bank of Qingdao 47,306,223.4 937,655,075.2
917,520,227.90 -27,171,376.14
Co., Ltd. 4 0
Mitsubishi Heavy
Industries Haier
38,033,746.4 511,196,497.4
(Qingdao) 529,934,750.95 -56,772,000.00
5 0
Air-conditioners
Co., Ltd.
Qingdao Haier
Carrier 311,191,165.5 21,000,000.
305,185,137.09 6,006,028.41
Refrigeration 0 00
Equipment Co., Ltd.
Qingdao Haier
Multi-media Co., 549,870,745.5
543,768,656.24 6,102,089.30
Ltd. (青岛海尔多媒 4
体有限公司)
Qingdao Hebei Iron
& Steel New 226,758,549.4 234,940,319.5
8,181,770.11
Material 3 4
Technology Co. Ltd
3,119,176,601.6 131,543,797. 3,178,177,202. 21,000,000.
Total 11,400,179.35 -83,943,376.14
6 71 58 00
4. Operation Income and Operation Expense:
√Applicable □Not Applicable
Unit and Currency: RMB
Amount for the current period Amount for the previous period
Items
Revenue Cost Revenue Cost
Principal Business 1,621,944,396.28 1,119,899,681.97 1,541,395,774.74 1,124,839,769.04
Other Business 2,209,632.18 162,870.29 1,716,550.91 259,972.03
Total 1,624,154,028.46 1,120,062,552.26 1,543,112,325.65 1,125,099,741.07
5. Investment Income
Amount for the Amount for the previous
Items
current period period
Long-term equity investments income
calculated 131,543,797.71 93,545,425.01
by the equity method
Long-term equity investments income
calculated 87,976,272.14 58,348,342.72
by cost method
Total 219,520,069.85 151,893,767.73
201 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
XIX.The approval of Financial Statements
The financial statements were approved to be issued by the board of the Company on 30
August 2018.
XX. Supplementary Information
1.Basic earnings per share and diluted earnings per share
√Applicable □Not Applicable
Amount for the current period Amount for the previous period
Earnings per share Earnings per share
(RMB) (RMB)
Weightedaverage Weightedaverage
Items Basic Diluted
return on net return on net Basic Diluted
earnings earnings
assets assets earnings earnings per
per per
per share share
share share
Net profit
attributable
to ordinary
14.10% 0.797 0.786 15.40% 0.724 0.724
shareholders
of the
company
Net profit
attributable
to ordinary
shareholders
of the
12.99% 0.734 0.723 13.20% 0.619 0.619
company
after
deduction of
non-recurring
gain or loss
2、Non-recurring gain or loss
Amount for the
Amount for the
Items previous
current period
period
Net profit attributable to ordinary shareholders of the
Company
4,858,795,529.42 4,416,867,240.37
Less: non-recurring gain or loss 382,803,964.15 639,527,785.42
Net profit attributable to ordinary shareholders of the
Company after deduction of non-recurring gain or loss
4,475,991,565.27 3,777,339,454.95
Breakdown of non-recurring profit or loss for the period
Non-recurring profit or loss items Amount for the period
Profit or loss from disposal of non-current assets 23,934,860.63
Income from disposal of long-term equity investments
Income from disposal of financial assets available for sale -
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
137,147,498.76
determined under certain standards
202 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
Gains accrued for that investment costs made by the corporate for acquisition
of subsidiaries, associate companies and joint ventures were less than fair
value of the investees’ identifiable net assets upon the investments
Corporate reorganization fee, including staff settlement expenses and
consolidation fee, etc.
Profit and loss of changes in fair value arising from holding of trading
financial assets and trading financial liabilities except for valid straddle
business relevant to normal business of the company, as well as investment 193,260,601.21
gain realized from disposal of trading financial assets, trading financial
liabilities and financial assets available for sale
Trustee fee income from entrusted operations 943,396.22
Other non-operating income and expenses except for the above mentioned 169,865,362.68
Effect of minority equity interests -91,861,955.96
Effect of income tax -50,485,799.39
Effect on profit from combination of companies under common control
Total 382,803,964.15
2.Difference on figures by domestic and foreign Accounting Standards
□Applicable √Not Applicable
3.Others
□Applicable √Not Applicable
203 / 204
Qingdao Haier Co., Ltd 2018 Interim Report
SECTION XI SECTION XIDOCUMENTS AVAILABLE FOR
INSPECTION
(I) Interim Report of 2018 of Qingdao Haier Co., Ltd with signatures of the
legal representative.
(II)Financial report with signatures and seals of the legal representative,
Documents
chief accountant and person in charge of accounting department.
Available for
(III) All documents which have been publicly disclosed on the newspaper
Inspection
designated by China Securities Journal, Shanghai Securities News, Securities
Times, Securities and the website of Shanghai Stock Exchange
(www.sse.com.cn) during the reporting period.
Chairman: Liang Haishan
Publish approved by the Board on 30 August 2018
204 / 204
