Midea Group Co., Ltd.
Interim Report for the First Quarter 2019
April 2019
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Section I Important Reminders
1. The Board of Directors, the Supervisory Committee as well as all the
directors, supervisors and senior management staff of Midea Group Co.,
Ltd. (hereinafter referred to as the “Company”) have warranted that this
Report contains no false record, misleading statement or material
omission. And they shall be jointly and severally liable for the factuality,
accuracy and completeness of the information given in this Report.
2. All the directors have attended the Q1 report review board meeting.
3. The financial statements contained in this Report have not been
audited by a certified public auditors (CPAs) firm.
4. Mr. Fang Hongbo, Chairman of the Board and President of the
Company, and Ms. Zhong Zheng, Director of Finance of the Company,
have represented and warranted that the financial statements in this
Report are factual, accurate and complete.
5. This Report has been prepared in both Chinese and English. Should
there be any discrepancy between the two versions, the Chinese version
shall prevail.
1
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Section II Company Profile
1. Major Accounting Data and Financial Indicators
Does the Company adjust retrospectively or restate accounting data of previous years?
□ Yes √ No
Jan.-Mar. 2019 Jan.-Mar. 2018 YoY Change (%)
Operating revenues (RMB'000) 75,205,780 69,737,528 7.84%
Net profits attributable to shareholders
6,129,026 5,256,231 16.60%
of the Company (RMB'000)
Net profits attributable to shareholders
of the Company before non-recurring 6,084,881 5,077,715 19.84%
profits and losses (RMB'000)
Net cash flows from operating activities
11,842,782 4,429,092 167.39%
(RMB'000)
Basic earnings per share (RMB/share) 0.94 0.80 17.50%
Diluted earnings per share
0.93 0.79 17.72%
(RMB/share)
Weighted average ROE (%) 7.08% 6.87% 0.21%
31 Mar. 2019 31 Dec. 2018 Change (%)
Total assets (RMB'000) 278,910,215 263,701,148 5.77%
Net assets attributable to shareholders
89,610,201 83,072,116 7.87%
of the Company (RMB'000)
Total share capital of the Company on the last trading session before disclosure:
Total share capital of the Company on the last
6,585,838,349
trading session before disclosure (share)
Fully diluted earnings per share based on the
0.93
latest share capital above (RMB/share)
Note: On the last trading session before the disclosure of this report, the Company’s total share capital was
6,603,422,687 shares. Subtracting the repurchased 17,584,338 shares in 2019, the number was 6,585,838,349 shares.
Non-recurring profits and losses
√ Applicable □ N/A
Unit: RMB’000
Item Jan.-Mar. 2019 Note
2
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Profit or loss from disposal of non-current assets -6,368
Except for effectively hedging business related to normal
business operations of the Company, profit or loss arising
from the change in the fair value of held-for-trading financial
-62,512
assets and liabilities, as well as investment profit or loss
produced from the disposal of held-for-trading financial
assets and liabilities and available-for-sale financial assets
Other 140,386
Less: Corporate income tax 22,714
Minority interests (after tax) 4,647
Total 44,145 --
Explain the reasons if the Company classifies an item as a non-recurring profit/loss according to the
definition in the , or classifies any non-recurring
profit/loss item mentioned in the said explanatory announcement as a recurring profit/loss item
□ Applicable √ N/A
No such cases for the Reporting Period.
2. Total number of shareholders and shareholdings of the top ten shareholders at the
period-end
2.1 Total number of common shareholders, preference shareholders with resumed voting rights
and shareholdings of the top ten common shareholders at the period-end
Unit: share
Total number of preference
Total number of common
162,344 shareholders with resumed voting 0
shareholders at the period-end
rights at the period-end (if any)
Top ten shareholders
Pledged or frozen
Sharehol shares
Number of
Nature of ding Number of Status
Name of shareholder restricted
shareholder percenta shares held of Number of
shares held
ge (%) share shares
s
Midea Holding Co., Ltd. Domestic 33.48 2,212,046,613 Pledg 551,000,000
3
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
non-state-owned ed
corporation
Hong Kong Exchanges and Clearing Foreign
16.18 1,069,044,139
Limited corporation
State-owned
China Securities Finance Co., Ltd. 3.00 198,145,134
corporation
Domestic
Fang Hongbo 2.07 136,990,492 102,742,869
individual
Canada Pension Plan Investment Board Foreign
1.82 120,379,067
－ own funds (stock exchange) corporation
Domestic
Huang Jian 1.33 88,023,300
individual
State-owned
Central Huijin Asset Management Ltd. 1.19 78,474,900
corporation
Hillhouse Capital Management Limited Foreign
0.94 61,831,900
－ HCM China Fund corporation
Foreign
GIC Private Limited 0.84 55,535,104
corporation
Domestic
Xiaomi Technology Co., Ltd. non-state-owned 0.81 53,500,000
corporation
Top ten non-restricted common shareholders
Number of non-restricted Type of shares
Name of shareholder common shares held at the
Type Number
period-end
RMB common
Midea Holding Co., Ltd. 2,212,046,613 2,212,046,613
stock
RMB common
Hong Kong Exchanges and Clearing Limited 1,069,044,139 1,069,044,139
stock
RMB common
China Securities Finance Co., Ltd. 198,145,134 198,145,134
stock
Canada Pension Plan Investment Board－ own funds RMB common
120,379,067 120,379,067
(stock exchange) stock
RMB common
Huang Jian 88,023,300 88,023,300
stock
RMB common
Central Huijin Asset Management Ltd. 78,474,900 78,474,900
stock
Hillhouse Capital Management Limited－ HCM China RMB common
61,831,900 61,831,900
Fund stock
4
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
RMB common
GIC Private Limited 55,535,104 55,535,104
stock
RMB common
Xiaomi Technology Co., Ltd. 53,500,000 53,500,000
stock
RMB common
Yuan Liqun 51,994,300 51,994,300
stock
Explanation of related relationship or/and
acting-in-concert parties among the above-mentioned N/A
shareholders
Top ten non-restricted common shareholders taking
N/A
part in securities margin trading (if any)
Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the
Company conduct any promissory repurchase during the Reporting Period
□ Yes √ No
No such cases in the Reporting Period.
2.2 Total number of preference shareholders and shareholdings of the top ten preference
shareholders at the period-end
□ Applicable √ N/A
5
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Section III Significant Events
1. Major changes of main items in financial statements and financial indicators
within the Report Period, as well as the reasons for the changes
√ Applicable □ N/A
Unit: RMB’000
31 March 31 December
Financial statement Change
2019/January- 2018/January- Reasons for the changes
items (consolidated) (%)
March 2019 March 2018
Mainly due to the changes in the fair
Derivative financial assets 87,975 220,197 -60.05% value of derivative financial
instruments
Mainly due to the reclassification to
Long-term receivables 16,280 34,815 -53.24% current assets as a result of
business changes
Mainly due to the increased
Short-term borrowings 1,270,263 870,390 45.94%
borrowings
Borrowings from the Central Mainly due to the repayment of
50,996 99,754 -48.88%
Bank borrowings to the Central Bank
Customer deposits and
Mainly due to the changes in the
deposits from banks and 91,638 44,386 106.46%
operation of Midea Group Finance
other financial institutions
Mainly due to the changes in the fair
Derivative financial liabilities 275,822 756,299 -63.53% value of derivative financial
instruments
Mainly due to the payment of
Employee benefits payable 3,979,688 5,788,004 -31.24%
salaries to employees
Mainly due to the retirement of
Treasury stock 1,473,697 4,918,427 -70.04%
treasury stock
Mainly due to the changes in the
Interest income 294,332 549,959 -46.48%
operation of Midea Group Finance
Mainly due to the changes in the
Interest expenses 75,120 150,518 -50.09%
operation of Midea Group Finance
Mainly due to the increased interest
Finance expenses -481,058 95,978 -601.22%
income on deposits
Mainly due to the decreased
Other income 66,516 224,233 -70.34%
governmental subsidies
6
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Mainly due to the decreased gains
Investment income -146,977 317,938 -146.23% on delivered derivative financial
instruments
Mainly due to the changes in the fair
Profit/loss on changes in fair
230,915 -118,467 294.92% value of derivative financial
value
instruments
Profit/loss on disposal of Mainly due to the decreased losses
-6,369 -13,053 51.21%
assets on disposal of non-current assets
Mainly due to the increased cash
Net cash flows from
11,842,782 4,429,092 167.39% received from sales of goods or
operating activities
rendering of services
Net cash flows from Mainly due to the increased cash
-16,811,399 -7,250,092 -131.88%
investing activities paid to acquire investments
Net cash flows from Mainly due to the increased cash
4,139,282 -2,254,205 283.62%
financing activities received from borrowings
2. Progress, influence and solutions of significant events
√ Applicable □ N/A
On 23 October 2018, the Proposal on the Plan of Midea Group Co., Ltd. to Merge with Wuxi Little Swan
Company Limited in a Share Swap via A-share Offering and other relevant proposals were considered
and approved at the 2nd Meeting of the 3rd Board. On 21 November 2018, the Proposal on the Review
of the Report of Midea Group Co., Ltd. on Merging with Wuxi Little Swan Company Limited in a Share
Swap via A-share Offering and the Related Transaction (Draft) and Its Summary, together with other
relevant proposals, were considered and approved at the 4th Meeting of the 3rd Board. On 21
December 2018, the Proposal on the Plan of Midea Group Co., Ltd. to Merge with Wuxi Little Swan
Company Limited in a Share Swap via A-share Offering, together with other relevant proposals, were
considered and approved at the 3rd Special Meeting of Shareholders of 2018. On 12 March 2019, the
Company received the CSRC Reply on the Approval of the Merger of Midea Group Co., Ltd. with Wuxi
Little Swan Company Limited (ZJXK [2019] No. 352). On 24 April 2019, the Company received the Reply
of the Foshan Central Sub-Branch of the State Administration of Foreign Exchange on the Foreign
Exchange Affairs in Midea Group Co., Ltd.’s Merger with Wuxi Little Swan Company Limited in a Share
Swap via A-share Offering. On 26 April 2019, the Company disclosed the Indicative Announcement on
the Distribution and Implementation of Appraisal Right for the Merger with Wuxi Little Swan Company
7
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Limited in a Share Swap via A-share Offering, setting the record date for the appraisal right on 7 May
2019. And trading in the Company’s stock will be suspended from 8 May 2019 for the distribution and
declaration of appraisal right, etc.
Index to the related
Summary of the significant event Disclosure date
announcement
The Proposal on the Plan of Midea Group Co., Ltd. to
Merge with Wuxi Little Swan Company Limited in a
Announcement No. 2018-087
Share Swap via A-share Offering and other relevant 24 October 2018
on www.cninfo.com.cn
proposals were considered and approved at the 2nd
Meeting of the 3rd Board.
The Proposal on the Review of the Report of Midea
Group Co., Ltd. on Merging with Wuxi Little Swan
Company Limited in a Share Swap via A-share
Announcement No. 2018-095
Offering and the Related Transaction (Draft) and Its 22 November 2018
on www.cninfo.com.cn
Summary, together with other relevant proposals,
were considered and approved at the 4th Meeting of
the 3rd Board.
The Proposal on the Plan of Midea Group Co., Ltd. to
Merge with Wuxi Little Swan Company Limited in a
Announcement No. 2018-105
Share Swap via A-share Offering, together with other 22 December 2018
on www.cninfo.com.cn
relevant proposals, were considered and approved at
the 3rd Special Meeting of Shareholders of 2018.
The Company received the CSRC Reply on the
Approval of the Merger of Midea Group Co., Ltd. with Announcement No. 2019-032
13 March 2019
Wuxi Little Swan Company Limited (ZJXK [2019] No. on www.cninfo.com.cn
352).
The Company received the Reply of the Foshan
Central Sub-Branch of the State Administration of
Foreign Exchange on the Foreign Exchange Affairs in Announcement No. 2019-049
24 April 2019
Midea Group Co., Ltd.’s Merger with Wuxi Little Swan on www.cninfo.com.cn
Company Limited in a Share Swap via A-share
Offering (FHF [2019] No. 1).
The Company disclosed the Indicative Announcement
on the Distribution and Implementation of Appraisal
Right for the Merger with Wuxi Little Swan Company
Limited in a Share Swap via A-share Offering, setting Announcement No. 2019-052
26 April 2019
the record date for the appraisal right on 7 May 2019. on www.cninfo.com.cn
And trading in the Company’s stock will be suspended
from 8 May 2019 for the distribution and declaration of
appraisal right, etc.
Progress of any share repurchase
8
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
√Applicable □N/A
The Proposal on the Plan for the Repurchase of Some Public Shares was approved at the 7th Meeting
of the 3rd Board of Directors on 22 February 2019. As such, the Company was agreed to repurchase,
with its own funds, no less than 60,000,000 shares and no more than 120,000,000 shares through
bidding at the stock exchange at a price not exceeding RMB55/share. The Report on the Repurchase of
Some Public Shares was disclosed on 28 February 2019.
As per the Measures on the Administration of Listed Companies’ Buying back Shares Held by the Public
(Trial), the Supplementary Provisions on the Share Repurchase by Listed Companies by Means of
Centralized Bidding, the Specific Implementation Rules of the Shenzhen Stock Exchange for the Share
Repurchase by Listed Companies, and other applicable rules, the Company shall disclose the share
repurchase progress in its periodic reports. Therefore, the Company hereby discloses its share
repurchase progress up to the end of April 2019 as follows:
Up to 29 April 2019, the Company has repurchased a total of 17,584,338 shares (0.2663% of the
Company’s total share capital) in its securities account for repurchase through bidding at the stock
exchange, with a total payment of RMB855,786,862.34 (exclusive of transaction charges). The highest
repurchase price was RMB54.90/share and the lowest was RMB45.62/share. The repurchase is in
compliance with the applicable laws and regulations, as well as the Company’s repurchase plan.
Progress of any repurchased share reduction through bidding at the stock exchange
□ Applicable √ N/A
3. Overdue commitments of the Company’s actual controller, shareholders, related
parties and acquirer, as well as the Company and other commitment makers in the
Report Period or ongoing at the period-end
□ Applicable √ N/A
No such cases in the Reporting Period.
4. Operating result forecast for January-June 2019
Warning of possible loss or considerable YoY change of the accumulated net profit made during the
period-start until the end of the next Report Period according to predictions as well as any explanations
for these reasons:
9
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
□ Applicable √ N/A
5. Securities investment
√Applicable □N/A
Unit: RMB’000
Abb Profit or Cumula
Cod revi Meas loss from tive fair Profit
Type Purcha Fund
e of atio Initial ureme Opening change in value Sold in or Closing
of sed in Account ing
sec n of investment nt carrying fair value change the loss in carrying
secur the ing title sour
uriti sec cost metho amount during charged period the amount
ities period ce
es uriti d the to period
es period equity
Dom
Financi
estica
Fair al
lly/Ov XIA Own
181 value assets
ersea OMI 1,272,584 1,122,609 -130,555 -24,030 - - - 968,024 Fund
0 metho availabl
s -W s
d e for
listed
sale
stock
Total 1,272,584 -- 1,122,609 -130,555 -24,030 - - - 968,024 - --
6. Investments in financial derivatives
√ Applicable □ N/A
Unit: RMB'000
Closing
Rel investme
Amou
atio Purch nt
Sold nt
nshi Rel ased amount
Type Initial Opening in provid Closing Actual
Opera p ated in as a
of investme Starting Ending investme Repor ed for investme gain/loss in
ting with tran Repor percenta
deriva nt date date nt ting impair nt Reporting
party the sact ting ge of the
tive amount amount Perio ment amount Period
Co ion Perio Company
d (if
mpa d ’s closing
any)
ny net
assets
Futur Futur 31
es es 1 January Decem
No No 276 276 - - - 659 0.001% 2,893
comp contra 2019 ber
any cts 2019
10
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Forwa
31
rd
1 January Decem
Bank No No forex -644,052 - - - -48,933 -0.055% 246,936
2019 ber -644,052
contra
2019
cts
Total -643,776 -- -- -643,776 - - - -48,274 -0.054% 249,829
Source of derivatives
All from the Company’s own funds
investment funds
Litigation involved (if
N/A
applicable)
Disclosure date of the
announcement about
the board’s consent for 18 April 2019
the derivative
investment (if any)
Disclosure date of the
announcement about
the general meeting’s
-
consent for the
derivative investment (if
any)
For the sake of eliminating the cost risk of the Company's bulk purchases of raw materials as a
result of significant fluctuations in raw material prices, the Company not only carried out futures
business for some of the materials, but also made use of bank financial instruments and
promoted forex funds business, with the purpose of avoiding the risks of exchange and interest
rate fluctuation, realizing the preservation and appreciation of forex assets, reducing forex
liabilities, as well as achieving locked-in costs. The Company has performed sufficient
Risk analysis of evaluation and control against derivatives investment and position risks, details of which are
positions held in described as follows:
derivatives during the 1. Legal risk: The Company's futures business and forex funds businesses shall be conducted
Reporting Period and in compliance with laws and regulations, with clearly covenanted responsibility and obligation
explanation of control relationship between the Company and the agencies.
measures (Including but Control measures: The Company has designated relevant responsible departments to enhance
not limited to market learning of laws and regulations and market rules, conducted strict examination and verification
risk, liquidity risk, credit of contracts, defined responsibility and obligation well, and strengthened compliance check, so
risk, operational risk, as to ensure that the Company's derivatives investment and position operations meet the
legal risk, etc.) requirements of the laws and regulations and internal management system of the Company.
2. Operational risk: Imperfect internal process, staff, systems and external issues may cause the
Company to suffer from loss during the course of its futures business and forex funds business.
Control measures: The Company has not only developed relevant management systems that
clearly defined the assignment of responsibility and approval process for the futures business
and forex funds business, but also established a comparatively well-developed monitoring
mechanism, aiming to effectively reduce operational risk by strengthening risk control over the
11
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
business, decision-making and trading processes.
3. Market risk: Uncertainties caused by changes in the prices of bulk commodity and exchange
rate fluctuations in foreign exchange market could lead to greater market risk in the futures
business and forex funds business. Meanwhile, inability to timely raise sufficient funds to
establish and maintain hedging positions in futures operations, or the forex funds required for
performance in forex funds operations being unable to be credited into account could also result
in loss and default risks.
Control measures: The futures business and forex funds business of the Company shall always
be conducted by adhering to prudent operation principles. For futures business, the futures
transaction volume and application have been determined strictly according to the requirements
of production & operations, and the stop-loss mechanism has been implemented. Besides, to
determine the prepared margin amount which may be required to be supplemented, the futures
risk measuring system has been established to measure and calculate the margin amount
occupied, floating gains and losses, margin amount available and margin amount required for
intended positions. As for forex funds business, a hierarchical management mechanism has
been implemented, whereby the operating unit which has submitted application for funds
business should conduct risk analysis on the conditions and environment affecting operating
profit and loss, evaluate the possible greatest revenue and loss, and report the greatest
acceptable margin ratio or total margin amount, so that the Company can update operating
status of the funds business on a timely basis to ensure proper funds arrangement before the
expiry dates.
Changes in market
prices or fair value of
derivative products
during the Reporting
1. Profit/loss from futures contracts during the Reporting Period was RMB2,893,000.
Period, specific
2. Profit/loss from forward forex contracts during the Reporting Period was RMB246,936,000.
methods used and
3. Public quotations in futures market or forward forex quotations announced by the Bank of
relevant assumption
China are used in the analysis of derivatives fair value.
and parameter settings
shall be disclosed for
analysis of fair value of
derivatives
Explanation of
significant changes in
accounting policies and
specific financial
accounting principles in
respect of the No change
Company's derivatives
for the Reporting Period
as compared to the
previous Reporting
Period
12
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
The Company's independent directors are of the view that the futures hedging business is an
Special opinions
effective instrument for the Company to eliminate price volatility and implement risk prevention
expressed by
measures through enhanced internal control, thereby improving the operation and management
independent directors
of the Company; the Company's foreign exchange risk management capability can be further
concerning the
improved through the forex funds business, so as to maintain and increase the value of foreign
Company's derivatives
exchange assets and the abovementioned investment in derivatives can help the Company to
investment and risk
fully bring out its competitive advantages. Therefore, it is practicable for the Company to carry
control
out derivatives investment business, and the risks are controllable.
7. Visits received during the Reporting Period
√ Applicable □ N/A
Date Type of visit Type of visitor Discussions
Please refer to Investor Relations Activities
14-15 January 2019 Field research Institution from 14 January 2019 to 15 January 2019 on
the website of www.cninfo.com.cn
Please refer to Investor Relations Activities
17 January 2019 Field research Institution on 17 January 2019 on the website of
www.cninfo.com.cn
Please refer to Investor Relations Activities
21-22 February 2019 Field research Institution from 21 February 2019 to 22 February 2019
on the website of www.cninfo.com.cn
8. Irregular provision of guarantees
□ Applicable √ N/A
No such cases in the Reporting Period.
9. Occupation of the Company’s funds by the controlling shareholder or its related
parties for non-operating purposes
□ Applicable √ N/A
No such cases in the Reporting Period.
13
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Section IV Financial Statements
1. Financial statements
Balance Sheet
Prepared by Midea Group Co., Ltd. 31 March 2019 Unit: RMB’000
31 March 2019 31 December 2018 31 March 2019 31 December 2018
ASSETS
Consolidated Consolidated Company Company
Current assets：
Cash at bank and on hand 29,004,072 27,888,280 15,384,459 15,361,626
Trading financial assets 5,170,374 4,189,001
Derivative financial assets 87,975 220,197 - -
Notes and accounts
38,877,726 31,946,468 - -
receivable
Advances to suppliers 2,456,293 2,215,888 33,871 55,069
Loans and advances 12,786,217 11,328,392 - -
Other receivables 3,063,118 2,971,368 11,845,517 11,593,020
Inventories 24,090,062 29,645,018 - -
Other current assets 85,126,533 76,473,827 68,060,974 55,052,256
Total current assets 200,662,370 182,689,438 99,513,822 82,061,971
Non-current assets:
Available-for-sale financial
1,906,878 56,579
assets
Long-term receivables 16,280 34,815 - -
Long-term equity investments 2,723,743 2,713,316 28,271,761 28,236,295
Other non-current financial
861,403 56,579
assets
Investment properties 387,008 391,765 551,306 560,954
Fixed assets 21,974,050 22,437,212 1,018,460 1,056,790
Construction in progress 2,033,026 2,077,621 62,237 51,872
Intangible assets 15,657,203 16,186,675 712,715 712,454
Goodwill 28,178,411 29,100,390 - -
Long-term prepaid expenses 1,167,629 1,191,373 166,648 174,684
Deferred tax assets 4,742,976 4,421,313 162,094 202,703
Other non-current assets 506,116 550,352 1,355 4,576
Total non-current assets 78,247,845 81,011,710 31,003,155 31,056,907
TOTAL ASSETS 278,910,215 263,701,148 130,516,977 113,118,878
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
14
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd. 31 March 2019 Unit: RMB’000
LIABILITIES AND 31 March 2019 31 December 2018 31 March 2019 31 December 2018
SHAREHOLDERS' EQUITY Consolidated Consolidated Company Company
Current liabilities:
Short-term borrowings 1,270,263 870,390 1,309,000 575,000
Borrowings from the Central
50,996 99,754 - -
Bank
Customer deposits and
deposits from banks and other 91,638 44,386 - -
financial institutions
Derivative financial liabilities 275,822 756,299 - -
Notes and accounts payable 65,882,696 60,226,741 - -
Advances from customers 13,144,610 16,781,666 - -
Employee benefits payable 3,979,688 5,788,004 559,160 573,632
Taxes payable 3,694,302 3,875,298 188,579 280,499
Other payables 2,933,143 3,346,129 86,359,825 74,714,012
Current portion of non-current
6,808,447 7,122,712 - -
liabilities
Other current liabilities 37,552,173 31,319,709 33,248 44,414
Total current liabilities 135,683,778 130,231,088 88,449,812 76,187,557
Non-current liabilities:
Long-term borrowings 34,913,366 32,091,439 4,000,000 -
Long-term payables 103,240 88,890 - -
Provisions 276,291 268,887 - -
Deferred income 682,961 647,583 - -
Long-term employee benefits
2,351,078 2,480,318 - -
payable
Deferred tax liabilities 4,420,366 4,422,074 - -
Other non-current liabilities 1,011,153 1,016,352 - -
Total non-current liabilities 43,758,455 41,015,543 4,000,000 -
Total liabilities 179,442,233 171,246,631 92,449,812 76,187,557
Shareholders' equity:
Share capital 6,603,423 6,663,031 6,603,423 6,663,031
Capital surplus 15,432,472 18,451,307 7,606,037 10,615,389
Less: Treasury stock (1,473,697) (4,918,427) (1,473,697) (4,918,427)
Other comprehensive income (1,291,512) (1,332,153) 10,010 6,020
General risk reserve 366,947 366,947 - -
Surplus reserve 5,079,096 5,079,096 5,079,096 5,079,096
Undistributed profits 64,893,472 58,762,315 20,242,296 19,486,212
15
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Total equity attributable to
89,610,201 83,072,116 38,067,165 36,931,321
shareholders of the Company
Minority interests 9,857,781 9,382,401 - -
Total shareholders' equity 99,467,982 92,454,517 38,067,165 36,931,321
TOTAL LIABILITIES AND
278,910,215 263,701,148 130,516,977 113,118,878
SHAREHOLDERS' EQUITY
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
Income Statement
Prepared by Midea Group Co., Ltd. January-March 2019 Unit: RMB’000
January-March January-March January-March January-March
Item 2019 2018 2019 2018
Consolidated Consolidated Company Company
1. Total revenue 75,500,426 70,287,509 467,215 414,674
Including: Operating revenue 75,205,780 69,737,528 467,215 414,674
Interest income 294,332 549,959 - -
Fee and commission income 314 22 - -
2. Total Cost (67,960,739) (63,943,697) 305,333 (55,101)
Including: Cost of sales (53,877,858) (51,869,174) (13,345) (14,077)
Interest expenses (75,120) (150,518) - -
Fee and commission
(2,456) (808) - -
expenses
Taxes and surcharges (489,405) (403,126) (7,116) (13,485)
Selling and distribution
(9,513,634) (7,468,456) - -
expenses
General and administrative
(1,977,121) (1,818,424) (109,198) (103,980)
expenses
Research and development
(2,205,598) (1,938,818) - -
expenses
Finance expenses 481,058 (95,978) 435,139 76,092
Including: Interest expenses (224,786) (190,329) (297,552) (125,483)
Interest income 953,378 299,045 736,263 201,028
Asset impairment losses (12,317) (198,395) - 349
Credit impairment losses (288,288) (147)
Add: Other income 66,516 224,233 - -
Investment income (146,977) 317,938 71,992 117,752
16
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Including: Investment income
105,865 75,515 66,507 58,704
from associates and joint ventures
Profit/(loss) on changes in fair
230,915 (118,467) 33,665 -
value
Profit /(loss) on disposal of
(6,369) (13,053) - 263
assets
3. Operating profit 7,683,772 6,754,463 878,205 477,588
Add: Non-operating income 57,022 60,554 4,372 1,769
Less: Non-operating expenses (21,839) (25,846) (85) (4,003)
4. Total profit 7,718,955 6,789,171 882,492 475,354
Less: Income tax expenses (1,177,710) (1,143,376) (128,539) 24,669
5. Net profit 6,541,245 5,645,795 753,953 500,023
(1) Classified by continuity of
operations
Net profit from continuing
6,541,245 5,645,795 753,953 500,023
operations
Net profit from discontinued
- - - -
operations
(2) Classified by ownership of the
equity
Attributable to equity owners of the
6,129,026 5,256,231 753,953 500,023
Company
Minority interests 412,219 389,564 - -
6. Other comprehensive income, net
2,436 137,056 3,990 71,838
of tax
Other comprehensive income
attributable to shareholders of the 40,641 213,386 3,990 71,838
Company, net of tax
(1) Other comprehensive income items
which will not be reclassified (38,094) 8,985 - -
subsequently to profit or loss
1) Changes arising from
(38,094) 8,985 - -
remeasurement of defined benefit plan
(2) Other comprehensive income items
which will be reclassified subsequently to 78,735 204,401 3,990 71,838
profit or loss
1) Other comprehensive income that
will be transferred subsequently to profit (1,994) 22,831 3,990 17,101
or loss under the equity method
2) Changes in fair value of
- 45,797 - 54,737
available-for-sale financial assets
3) Reserve for cash flow hedges 90,207 33,437 - -
4) Translation of foreign currency (9,478) 102,336 - -
17
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
financial statements
Other comprehensive income
attributable to minority shareholders, net (38,205) (76,330) - -
of tax
7. Total comprehensive income 6,543,681 5,782,851 757,943 571,861
Attributable to shareholders of the
6,169,667 5,469,617 757,943 571,861
Company
Minority interests 374,014 313,234 - -
8. Earnings per share:
Basic earnings per share (RMB Yuan) 0.94 0.80 N/A N/A
Diluted earnings per share (RMB
0.93 0.79 N/A N/A
Yuan)
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
Cash Flow Statement
Prepared by Midea Group Co., Ltd. January-March 2019 Unit: RMB’000
January-March January-March January-March January-March
Item 2019 2018 2019 2018
Consolidated Consolidated Company Company
1. Cash flows from operating activities:
Cash received from sales of goods or
61,230,159 55,069,088 - -
rendering of services
Net increase in customer deposits and
deposits from banks and other financial 47,252 - - -
institutions
Net decrease in loans and advances - 6,203 - -
Net decrease in deposits with the Central
228,122 - - -
Bank
Cash received for interest, fee and
433,884 465,657 - -
commission
Refund of taxes and surcharges 2,255,964 1,855,685 - -
Cash received relating to other operating
675,619 1,555,171 12,053,410 6,054,301
activities
Sub-total of cash inflows 64,871,000 58,951,804 12,053,410 6,054,301
Cash paid for goods and services (32,531,577) (35,207,473) - -
Net increase in loans and advances (1,486,229) - - -
Net decrease in customer deposits and - (27,278) - -
18
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
deposits from banks and other financial
institutions
Net increase in deposits with the Central
- (1,422,269) - -
Bank
Net decrease in borrowings from the
(48,758) - - -
Central Bank
Cash paid for interest, fee and
(79,055) (151,332) - -
commission
Cash paid to and on behalf of employees (8,147,054) (7,569,431) (11,503) (43,024)
Payments of taxes and surcharges (3,835,224) (2,826,238) (49,908) (13,485)
Cash paid relating to other operating
(6,900,321) (7,318,691) (322,665) (43,781)
activities
Sub-total of cash outflows (53,028,218) (54,522,712) (384,076) (100,290)
Net cash flows from operating activities 11,842,782 4,429,092 11,669,334 5,954,011
2. Cash flows from investing activities:
Cash received from disposal of
10,793,208 11,755,659 3,406,557 6,507,371
investments
Cash received from returns on
233,728 470,848 198,723 834,942
investments
Net cash received from disposal of fixed
assets, intangible assets and other 64,509 23,595 - -
long-term assets
Net cash received from disposal of
- - - -
subsidiaries and other business units
Cash received relating to other investing
- - - -
activities
Sub-total of cash inflows 11,091,445 12,250,102 3,605,280 7,342,313
Cash paid to acquire fixed assets,
intangible assets and other long-term (1,143,943) (927,703) (40,220) (112,978)
assets
Cash paid to acquire investments (26,581,092) (18,424,204) (25,408,375) (2,302,699)
Net cash paid to acquire subsidiaries
(177,809) (148,287) - -
and other business units
Cash paid relating to other investing
- - - -
activities
Sub-total of cash outflows (27,902,844) (19,500,194) (25,448,595) (2,415,677)
Net cash flows from investing activities (16,811,399) (7,250,092) (21,843,315) 4,926,636
3. Cash flows from financing activities:
Cash received from capital contributions 777,348 1,013,304 698,761 491,953
Including: Cash received from capital
contributions by minority shareholders of 78,587 521,351 - -
subsidiaries
Cash received from borrowings 5,122,321 978,979 5,727,000 -
19
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Cash received from issuing short-term
- - - -
financing bonds
Cash received relating to other financing
- - - -
activities
Sub-total of cash inflows 5,899,669 1,992,283 6,425,761 491,953
Cash repayments of borrowings (663,249) (2,138,653) (993,000) -
Cash payments for short-term financing
- - - -
bonds
Cash payments for interest expenses
(262,635) (325,629) (195,585) (74,404)
and distribution of dividends or profits
Including: Cash payments for dividends
or profit to minority shareholders of - (80,657) - -
subsidiaries
Cash payments relating to other
(834,503) (1,782,206) (691,717) -
financing activities
Sub-total of cash outflows (1,760,387) (4,246,488) (1,880,302) (74,404)
Net cash flows from financing activities 4,139,282 (2,254,205) 4,545,459 417,549
4. Effect of foreign exchange rate
(160,965) (357,924) - -
changes on cash and cash equivalents
5. Net increase in cash and cash
(990,300) (5,433,129) (5,628,522) 11,298,196
equivalents
Add: Cash and cash equivalents at the
17,952,282 21,831,653 10,181,934 25,978,543
beginning of the period
6. Cash and cash equivalents at the end
16,961,982 16,398,524 4,553,412 37,276,739
of the period
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
2. Adjustments to the Financial Statements
2.1 Adjustments to the financial statements at the beginning of the first execution year of any
new standards governing financial instruments, revenue or leases
√ Applicable □ N/A
20
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Balance Sheet
Prepared by Midea Group Co., Ltd. 31 March 2019 Unit: RMB’000
Consolidated Company
ASSETS 31 December 1 January 31 December 1 January
Adjustment Adjustment
2018 2019 2018 2019
Current assets：
Cash at bank and
27,888,280 27,888,280 - 15,361,626 15,361,626 -
on hand
Trading financial
N/A 2,654,045 2,654,045 N/A 1,521,007 1,521,007
assets
Derivative financial
220,197 220,197 - - - -
assets
Notes and
31,946,468 31,946,468 - - - -
accounts receivable
Advances to
2,215,888 2,215,888 - 55,069 55,069 -
suppliers
Loans and
11,328,392 11,328,392 - - - -
advances
Other receivables 2,971,368 2,960,939 (10,429) 11,593,020 11,593,020 -
Inventories 29,645,018 29,645,018 - - - -
Other current
76,473,827 74,952,820 (1,521,007) 55,052,256 53,531,249 (1,521,007)
assets
Total current assets 182,689,438 183,812,047 1,122,609 82,061,971 82,061,971 -
Non-current
assets:
Available-for-sale
1,906,878 N/A (1,906,878) 56,579 N/A (56,579)
financial assets
Long-term
34,815 34,815 - - - -
receivables
Long-term equity
2,713,316 2,713,316 - 28,236,295 28,236,295 -
investments
Other non-current
N/A 784,269 784,269 N/A 56,579 56,579
financial assets
Investment
391,765 391,765 - 560,954 560,954 -
properties
Fixed assets 22,437,212 22,437,212 - 1,056,790 1,056,790 -
Construction in
2,077,621 2,077,621 - 51,872 51,872 -
progress
Intangible assets 16,186,675 16,186,675 - 712,454 712,454 -
Goodwill 29,100,390 29,100,390 - - - -
Long-term prepaid 1,191,373 1,191,373 - 174,684 174,684 -
21
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
expenses
Deferred tax assets 4,421,313 4,421,313 - 202,703 202,703 -
Other non-current
550,352 550,352 - 4,576 4,576 -
assets
Total non-current
81,011,710 79,889,101 (1,122,609) 31,056,907 31,056,907 -
assets
TOTAL ASSETS 263,701,148 263,701,148 - 113,118,878 113,118,878 -
Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd. 31 March 2019 Unit: RMB’000
LIABILITIES AND Consolidated Company
SHAREHOLDERS' 31 December 1 January 31 December 1 January
Adjustment Adjustment
EQUITY 2018 2019 2018 2019
Current liabilities:
Short-term
870,390 870,390 - 575,000 575,000 -
borrowings
Borrowings from
99,754.00 99,754 - - - -
the Central Bank
Customer deposits
and deposits from
44,386 44,386 - - - -
banks and other
financial institutions
Derivative financial
756,299 756,299 - - - -
liabilities
Notes and
60,226,741 60,226,741 - - - -
accounts payable
Advances from
16,781,666 16,781,666 - - - -
customers
Employee benefits
5,788,004 5,788,004 - 573,632 573,632 -
payable
Taxes payable 3,875,298 3,875,298 - 280,499 280,499 -
Other payables 3,346,129 3,346,129 - 74,714,012 74,714,012 -
Current portion of
7,122,712 7,122,712 - - - -
non-current liabilities
Other current
31,319,709 31,319,709 - 44,414 44,414 -
liabilities
Total current
130,231,088 130,231,088 - 76,187,557 76,187,557 -
liabilities
Non-current
liabilities:
22
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
Long-term
32,091,439 32,091,439 - - - -
borrowings
Long-term
88,890 88,890 - - - -
payables
Provisions 268,887 268,887 - - - -
Deferred income 647,583 647,583 - - - -
Long-term
employee benefits 2,480,318 2,480,318 - - - -
payable
Deferred tax
4,422,074 4,422,074 - - - -
liabilities
Other non-current
1,016,352 1,016,352 - - - -
liabilities
Total non-current
41,015,543 41,015,543 - - - -
liabilities
Total liabilities 171,246,631 171,246,631 - 76,187,557 76,187,557 -
Shareholders'
equity:
Share capital 6,663,031 6,663,031 - 6,663,031 6,663,031 -
Capital surplus 18,451,307 18,451,307 - 10,615,389 10,615,389 -
Less: Treasury
(4,918,427) (4,918,427) - (4,918,427) (4,918,427) -
stock
Other
comprehensive (1,332,153) -1,332,153 - 6,020 6,020 -
income
General risk
366,947 366,947 - - - -
reserve
Surplus reserve 5,079,096 5,079,096 - 5,079,096 5,079,096 -
Undistributed
58,762,315 58,762,315 - 19,486,212 19,486,212 -
profits
Total equity
attributable to
83,072,116 83,072,116 - 36,931,321 36,931,321 -
shareholders of the
Company
Minority interests 9,382,401 9,382,401 - - - -
Total shareholders'
92,454,517 92,454,517 - 36,931,321 36,931,321 -
equity
TOTAL LIABILITIES
AND
263,701,148 263,701,148 - 113,118,878 113,118,878 -
SHAREHOLDERS'
EQUITY
23
Interim Report for the First Quarter 2019 of Midea Group Co., Ltd.
2.2 Retrospective Restatement of Comparative Data due to the First Execution of any New
Standards Governing Financial Instruments or Leases
√ Applicable □ N/A
The Company adopts the new accounting standard governing financial instruments starting from 1
January 2019 and adjusts the format of its financial statements according to the Notice of the Ministry of
Finance on Revising and Issuing the Format of Financial Statements of General Enterprises 2018. And
the affected financial statement items and amounts are shown in the two financial statements above.
3. Auditor’s report
Is this Report audited by a CPAs firm?
□ Yes √ No
This Report is un-audited by a CPAs firm.
Midea Group Co., Ltd.
Legal Representative: Fang Hongbo
30 April 2019
24