Midea Group Co., Ltd.
Interim Report for the First Quarter 2021
April 2021
1
Interim Report for the First Quarter 2021 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 CEO 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.
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Interim Report for the First Quarter 2021 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. 2021 Jan.-Mar. 2020 YoY Change (%)
Operating revenue (RMB'000) 82,504,017 58,013,031 42.22%
Net profit attributable to shareholders of
6,468,588 4,810,977 34.45%
the Company (RMB'000)
Net profit attributable to shareholders of
the Company before non-recurring 6,649,368 4,816,912 38.04%
gains and losses (RMB'000)
Net cash flows from operating activities
8,553,861 7,668,597 11.54%
(RMB'000)
Basic earnings per share (RMB/share) 0.93 0.70 32.86%
Diluted earnings per share
0.92 0.69 33.33%
(RMB/share)
Weighted average ROE (%) 5.35% 4.62% 0.73%
31 Mar. 2021 31 Dec. 2020 Change (%)
Total assets (RMB'000) 369,174,526 360,382,603 2.44%
Net assets attributable to shareholders
117,532,628 117,516,260 0.01%
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 trading
7,047,686,070
session before disclosure (share)
Fully diluted earnings per share based on the latest share capital above:
Dividend paid to preference shareholders -
Fully diluted earnings per share based on the latest
0.92
share capital above (RMB/share)
Non-recurring gains and losses
√ Applicable □ N/A
Unit: RMB’000
Item Jan.-Mar. 2021 Note
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Gain or loss from disposal of non-current assets 1,579
Except for effectively hedging business related to normal
business operations of the Company, gain or loss arising
from the change in the fair value of financial assets held for
trading, derivative financial assets, financial liabilities held
for trading, derivative financial liabilities and other
-566,661
non-current financial assets, as well as investment gain or
loss produced from the disposal of financial assets held for
trading, derivative financial assets, financial liabilities held
for trading, derivative financial liabilities and other
non-current financial assets
Other 366,439
Less: Corporate income tax -26,239
Minority interests (after tax) 8,376
Total -180,780 --
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
404,034 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
Domestic
Pledg
Midea Holding Co., Ltd. non-state-owned 30.78 2,169,178,713 100,000,000
ed
corporation
Hong Kong Securities Clearing Foreign
14.91 1,050,938,349
Company Limited corporation
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
State-owned
China Securities Finance Co., Ltd. 2.81 198,145,134
corporation
Domestic
Fang Hongbo 1.66 116,990,492 87,742,869
individual
Domestic
The securities account of Midea Group
non-state-owned 1.64 115,686,277
Co., Ltd. for share repurchase
corporation
Canada Pension Plan Investment Board Foreign
1.47 103,913,897
－ own funds (stock exchange) corporation
State-owned
Central Huijin Asset Management Ltd. 1.28 90,169,354
corporation
Domestic
Huang Jian 1.22 86,140,000
individual
Foreign
Li Jianwei 0.71 50,160,000
individual
Domestic
Yuan Liqun 0.57 40,343,895
individual
Top 10 non-restricted common shareholders
Number of non-restricted Type of shares
Name of shareholder common shares held at the
Type Shares
period-end
Midea Holding Co., Ltd. 2,212,046,613 RMB common stock 2,212,046,613
Hong Kong Securities Clearing Company Limited 1,050,938,349 RMB common stock 1,050,938,349
China Securities Finance Co., Ltd. 198,145,134 RMB common stock 198,145,134
The securities account of Midea Group Co., Ltd.
115,686,277 RMB common stock 115,686,277
for share repurchase
Canada Pension Plan Investment Board－ own
103,913,897 RMB common stock 103,913,897
funds (stock exchange)
Central Huijin Asset Management Ltd. 90,169,354 RMB common stock 90,169,354
Huang Jian 86,140,000 RMB common stock 86,140,000
Li Jianwei 50,160,000 RMB common stock 50,160,000
Yuan Liqun 40,343,895 RMB common stock 40,343,895
Merrill Lynch International 39,798,754 RMB common stock 39,798,754
Explanation of related relationship or/and
acting-in-concert parties among the N/A
above-mentioned shareholders
1. The Company’s shareholder Yuan Liqun holds 4,227,400 shares
Top ten non-restricted common shareholders
in the Company through her common securities account and
taking part in securities margin trading (if any)
36,116,495 shares in the Company through her account of collateral
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
securities for margin trading, representing a total holding of
40,343,895 shares in the Company.
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
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Interim Report for the First Quarter 2021 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
Financial statement 31 March 31 December
Change
items 2021/January- 2020/January-Ma Reasons for the changes
(%)
(consolidated) March 2021 rch 2020
Financial assets held Mainly due to the decreased
17,847,023 28,239,601 -36.80%
for trading structured deposits
Mainly due to the changes in the
Derivative financial
212,889 161,225 32.04% fair value of derivative financial
liabilities
instruments
Current portion of 3,416,313 6,310,181 -45.86% Mainly due to the repayment of
non-current liabilities borrowings
Mainly due to the reclassification
Long-term payables - 13,260 -100.00%
to contract liabilities
Mainly due to the increased share
Treasury stock 13,396,198 6,094,347 119.81%
repurchase
Mainly due to the increased sales
Operating revenue 82,504,017 58,013,031 42.22%
revenue
Mainly due to the changes in the
Interest income 513,036 342,786 49.67%
finance business
Mainly due to the increased sales
Cost of sales 63,526,113 43,428,300 46.28%
revenue
Mainly due to the changes in the
Interest costs 15,059 53,023 -71.60%
finance business
Mainly due to the increased sales
Taxes and surcharges 390,356 281,138 38.85%
revenue
Selling and distribution Mainly due to the increased sales
7,456,925 5,656,993 31.82%
expenses revenue
Mainly due to the increased
Financial expense -960,112 -267,397 -259.06%
interest income
Mainly due to the increased
Other income 345,651 81,818 322.46%
subsidies received
Gains on changes in
-830,632 20,570 -4,138.07% Mainly due to the changes in the
fair value
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
fair value of financial assets held
for trading
Credit impairment Mainly due to the changes in the
180,953 131,813 37.28%
losses finance business
Asset impairment Mainly due to the increased
115,967 -1,430 8,209.58%
losses inventory valuation allowances
Mainly due to the increased
Gains/(Losses) on
1,400 3,841 -63.55% losses on disposal of non-current
disposal of assets
assets
Mainly due to the increased
Non-operating income 72,204 46,134 56.51%
subsidies received
Non-operating Mainly due to the increased other
25,720 16,726 53.77%
expenses expenses
Mainly due to the increased profits
Minority interests 100,849 -587 17,280.41%
of joint ventures
Mainly due to the increased cash
Net cash flows from
-932,059 -5,485,574 83.01% received from disposal of
investing activities
investments
Mainly due to the increased cash
Net cash flows from
-3,537,964 300,610 -1,276.93% payments relating to other
financing activities
financing activities
Mainly due to the increased net
Net increase in cash
4,033,640 2,540,236 58.79% cash flows from investing
and cash equivalents
activities
2. Progress, influence and solutions of significant events
□ Applicable √ N/A
Progress of any share repurchase
√ Applicable □ N/A
The Proposal on the Plan for the Repurchase of Some Public Shares was approved at the 29th Meeting
of the 3rd Board of Directors on 23 February 2021. As such, the Company was agreed to repurchase,
with its own funds, no less than 50,000,000 shares and no more than 100,000,000 shares by way of
centralized bidding at a price not exceeding RMB140/share. The share repurchase plan would be
implemented within 12 months starting from the date it was approved by the Board of Directors. And the
repurchased shares would be used for the Company’s equity incentive schemes and/or employee stock
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
ownership schemes.
The Announcement on the Completion of the Implementation of the Share Repurchase Plan was
disclosed on 3 April 2021. As of 2 April 2021, the Company has cumulatively repurchased 99,999,931
shares (1.4189% of the Company’s total share capital as of 31 March 2021). With the highest trading
price being RMB95.68/share and the lowest being RMB80.29/share, the total payment amounted to
RMB8,664,107,576.69 (exclusive of trading fees). With the repurchased shares close to the upper limit
of the share repurchase plan of 100,000,000 shares, the implementation of this share repurchase plan
has been completed.
Progress of any repurchased share reduction through centralized price bidding
□ 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. Financial investments
4.1 Securities investments
√ Applicable □ N/A
Unit: RMB’000
Profit or
Cumula
loss from
Meas tive fair
Type Code Abbrevi change Purcha Profit or Fund
Initial ureme Opening value Sold in Closing
of of ation of in fair sed in loss in Account ing
investment nt carrying change the carrying
secur securi securiti value the the ing title sour
cost metho amount charged period amount
ities ties es during period period ce
d to
the
equity
period
Over
Fair Financi Own
seas XIAOMI
1810 769,972 value 1,676,547 -374,629 3,885 - - -374,629 1,305,803 al asset fund
listed -W
metho held for s
stock
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
d trading
Over Fair Financi
Own
seas value al asset
DNK Danke 172,190 35,126 -6,534 183 - - -6,534 28,775 fund
listed metho held for
s
stock d trading
Dom
Espress Fair Financi
estica Own
6880 if value al asset
lly 13,998 128,032 -40,625 - - - -40,625 87,407 fund
18 System metho held for
listed s
s d trading
stock
Dom
Fair Financi
estica Own
6881 value al asset
lly EFORT 178,534 475,260 -119,260 - - - -119,260 356,000 fund
65 metho held for
listed s
d trading
stock
Total 1,134,694 -- 2,314,965 -541,048 4,068 - - -541,048 1,777,985 - --
4.2 Derivatives investments
√ Applicable □ N/A
Unit: RMB’000
Rel Closing
Amou
atio investment
nt
nshi Rel Purcha amount as Actual
Type Sold in provid Closing
Opera p ated Initial Starti Opening sed in a gain/loss
of Endin Reporti ed for investm
ting with tran investment ng investment Reporti percentage in
deriva g date ng impair ent
party the sact amount date amount ng of the Reporting
tive Period ment amount
Co ion Period Company’s Period
(if
mpa closing net
any)
ny assets
Futur Futur
es es 01/01/ 31/12/
No No 105 105 - - - 18,905 0.0161% 39,921
comp contra 2021 2021
any cts
FX
01/01/ 31/12/
Bank No No deriva 1,007,587 1,007,587 6,674.9 4,468.1 - 564,255 0.4801% 264,788
2021 2021
tives
Total 1,007,692 -- -- 1,007,692 6,674.9 4,468.1 - 583,160 0.4962% 304,709
Source of derivatives
All from the Company’s own funds
investment funds
Litigation involved (if N/A
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
applicable)
Disclosure date of the
announcement about
the board’s consent for 30/04/2021
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
evaluation and control against derivatives investment and position risks, details of which are
described as follows:
1. Legal risk: The Company's futures business and forex funds businesses shall be conducted
in compliance with laws and regulations, with clearly covenanted responsibility and obligation
Risk analysis of
relationship between the Company and the agencies.
positions held in
derivatives during the Control measures: The Company has designated relevant responsible departments to enhance
Reporting Period and learning of laws and regulations and market rules, conducted strict examination and verification
explanation of control of contracts, defined responsibility and obligation well, and strengthened compliance check, so
measures (Including but as to ensure that the Company's derivatives investment and position operations meet the
not limited to market requirements of the laws and regulations and internal management system of the Company.
risk, liquidity risk, credit
2. Operational risk: Imperfect internal process, staff, systems and external issues may cause the
risk, operational risk,
Company to suffer from loss during the course of its futures business and forex funds business.
legal risk, etc.)
Control measures: The Company has not only developed relevant management systems that
clearly defined the assignment of responsibility and approval process for the futures business
and forex funds business, but also established a comparatively well-developed monitoring
mechanism, aiming to effectively reduce operational risk by strengthening risk control over the
business, decision-making and trading processes.
3. Market risk: Uncertainties caused by changes in the prices of bulk commodity and exchange
rate fluctuations in foreign exchange market could lead to greater market risk in the futures
business and forex funds business. Meanwhile, inability to timely raise sufficient funds to
establish and maintain hedging positions in futures operations, or the forex funds required for
performance in forex funds operations being unable to be credited into account could also result
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
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. Gain from futures contracts during the Reporting Period was RMB39.921 million.
Period, specific
2. Gain from FX derivatives during the Reporting Period was RMB264.788 million.
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
Special opinions The Company's independent directors are of the view that the futures hedging business is an
expressed by effective instrument for the Company to eliminate price volatility and implement risk prevention
independent directors measures through enhanced internal control, thereby improving the operation and management
concerning the of the Company; the Company's foreign exchange risk management capability can be further
Company's derivatives improved through the forex funds business, so as to maintain and increase the value of foreign
investment and risk exchange assets and the abovementioned investment in derivatives can help the Company to
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
control fully bring out its competitive advantages. Therefore, it is practicable for the Company to carry
out derivatives investment business, and the risks are controllable.
5. Progress on projects financed with raised funds
□ Applicable √ N/A
6. Operating result forecast for January-June 2021
Warning of possible loss or considerable YoY change of the accumulated net profit made during the
period-start until the end of the next Reporting Period according to predictions as well as any
explanations for these reasons:
□ Applicable √ N/A
7. Significant contracts arising from the Company’s ordinary course of business
□ Applicable √ N/A
8. Wealth management entrustment
□ Applicable √ N/A
No such cases in the Reporting Period.
9. Irregular provision of guarantees
□ Applicable √ N/A
No such cases in the Reporting Period.
10. Occupation of the Company’s funds by the controlling shareholder or its related
parties for non-operating purposes
□ Applicable √ N/A
No such cases in the Reporting Period.
11. Visits received during the Reporting Period
√ Applicable □ N/A
Date Place Type of Type of Visitor Discussions Index to main
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
visit visitor inquiry
information
BOCIM, New China
Fund, Taiping Asset
Management, Ping An
Annuity Insurance, SWS
MU Fund Management,
Kaiyuan Securities, 1. Midea’s new
Fullgoal Fund, CICC business structure
Securities, Industrial and strategic focus?
Securities, Essence 2. Midea’s planning
Fund, Huamei and strategy for
Investment, Fullgoal overseas sales in Log Sheet of
Fund, UBS SDIC, the near future? Investor
Huitong Fund, 3. KUKA’s latest Relations
Midea Group Focusbridge Fund, BOC condition and future Activities for 18
18 March 2021 By phone Institution
HQ Wealth Management, development? March 2021
Minsheng Royal, 4. What are the disclosed on
Maxwealth Fund, positions for www.cninfo.com
Huashang Fund, Guotai WINONE Elevator .cn
Junan Securities Asset and WDM, which
Management, Ping An were acquired in the
Fund Management, past year, in Midea’s
Xueshi Investment, business landscape
Western Leadbank FMC, in the future?
AXA SPDB Investment
Managers, PICC
Pension, Xinyuan Asset
Management, and
BOCIM
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Section IV Financial Statements
1. Financial statements
Balance Sheet
Prepared by Midea Group Co., Ltd. 31 March 2021 Unit: RMB’000
31 March 2021 31 December 2020 31 March 2021 31 December 2020
ASSETS
Consolidated Consolidated Company Company
Current assets:
Cash at bank and on hand 86,223,870 81,210,482 62,926,571 49,240,180
Financial assets held for trading 17,847,023 28,239,601 8,875,145 16,614,658
Derivative financial assets 329,867 420,494 - -
Notes receivable 4,609,220 5,304,510 - -
Accounts receivable 26,388,315 22,978,363 - -
Receivables financing 12,868,889 13,901,856 - -
Advances to suppliers 3,208,993 2,763,710 77,952 45,306
Contract assets 3,875,902 3,236,848 - -
Loans and advances 19,728,893 16,469,069 - -
Other receivables 2,757,223 2,973,945 33,832,202 28,318,670
Inventories 31,496,638 31,076,529 - -
Other current assets 38,238,606 33,079,918 24,805,849 20,533,745
Total current assets 247,573,439 241,655,325 130,517,719 114,752,559
Non-current assets:
Other debt investments 23,256,572 21,456,155 21,864,572 20,064,155
Long-term receivables 937,727 981,623 - -
Loans and advances 952,561 1,113,501 - -
Long-term equity investments 2,951,553 2,901,337 56,142,828 54,991,161
Other investments in equity instruments 38,975 46,651 - -
Other non-current financial assets 3,302,444 3,360,849 79,139 80,937
Investment properties 366,254 405,559 466,099 476,839
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Fixed assets 21,955,436 22,239,214 708,433 749,835
Construction in progress 1,508,141 1,477,302 260,637 204,304
Right-of-use assets 2,050,852 8,402
Intangible assets 16,588,979 15,422,393 681,037 684,997
Goodwill 28,365,224 29,557,218 - -
Long-term prepaid expenses 1,321,140 1,300,962 94,750 97,078
Deferred tax assets 7,435,518 7,208,635 286,871 287,360
Other non-current assets 10,569,711 11,255,879 10,040,163 10,141,031
Total non-current assets 121,601,087 118,727,278 90,632,931 87,777,697
TOTAL ASSETS 369,174,526 360,382,603 221,150,650 202,530,256
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd. 31 March 2021 Unit: RMB’000
LIABILITIES AND SHAREHOLDERS' 31 March 2021 31 December 2020 31 March 2021 31 December 2020
EQUITY Consolidated Consolidated Company Company
Current liabilities:
Short-term borrowings 11,589,187 9,943,929 490,570 799,314
Customer deposits and deposits from
98,785 87,535 - -
banks and other financial institutions
Derivative financial liabilities 212,889 161,225 - -
Notes payable 29,015,231 28,249,939 - -
Accounts payable 58,403,164 53,930,261 - -
Contract liabilities 20,148,760 18,400,922 - -
Employee benefits payable 4,956,559 6,954,822 558,134 562,954
Taxes payable 4,667,549 5,758,058 984,212 1,326,219
Other payables 4,278,661 4,501,391 145,857,360 123,120,354
Current portion of non-current
3,416,313 6,310,181 7,786 4,000,000
liabilities
Other current liabilities 51,057,776 49,852,239 3,004,427 3,048,794
Total current liabilities 187,844,874 184,150,502 150,902,489 132,857,635
Non-current liabilities:
Long-term borrowings 46,909,801 42,827,287 12,000,000 5,800,000
Lease liabilities 1,422,561 684
Long-term payables - 13,260 - -
Provisions 299,147 298,110 - -
Deferred income 823,607 779,729 - -
Long-term employee benefits payable 1,838,312 2,159,675 - -
Deferred tax liabilities 4,975,914 5,223,954 46,647 67,792
Other non-current liabilities 691,182 692,986 - -
Total non-current liabilities 56,960,524 51,995,001 12,047,331 5,867,792
Total liabilities 244,805,398 236,145,503 162,949,820 138,725,427
Shareholders' equity:
Share capital 7,047,686 7,029,976 7,047,686 7,029,976
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Capital surplus 23,340,345 22,488,105 29,956,567 29,123,547
Less: Treasury stock (13,396,198) (6,094,347) (13,396,198) (6,094,347)
Other comprehensive income (1,574,746) (1,549,003) (4,529) (16,009)
General risk reserve 587,984 587,984 - -
Specific reserve 13,441 12,730
Surplus reserve 7,966,362 7,966,362 7,966,362 7,966,362
Undistributed profits 93,547,753 87,074,453 26,630,942 25,795,300
Total equity attributable to
117,532,627 117,516,260 58,200,830 63,804,829
shareholders of the Company
Minority interests 6,836,501 6,720,840 - -
Total shareholders' equity 124,369,128 124,237,100 58,200,830 63,804,829
TOTAL LIABILITIES AND
369,174,526 360,382,603 221,150,650 202,530,256
SHAREHOLDERS' EQUITY
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Income Statement
Prepared by Midea Group Co., Ltd. January-March 2021 Unit: RMB’000
January-March January-March January-March January-March
Item 2021 2020 2021 2020
Consolidated Consolidated Company Company
1. Total revenue 83,017,120 58,355,915 442,664 382,710
Including: Operating revenue 82,504,017 58,013,031 442,664 382,710
Interest income 513,036 342,786 - -
Fee and commission income 67 98 - -
2. Total operating cost (75,354,650) (53,240,225) 257,173 166,944
Including: Cost of sales (63,526,113) (43,428,300) (11,610) (10,696)
Interest expenses (15,059) (53,023) - -
Fee and commission expenses (1,776) (1,976) - -
Taxes and surcharges (390,356) (281,138) (18,648) (14,860)
Selling and distribution expenses (7,456,925) (5,656,993) - -
General and administrative expenses (2,404,839) (2,008,521) (233,265) (129,126)
Research and development expenses (2,519,694) (2,077,671) - -
Financial income 960,112 267,397 520,696 321,626
Including: Interest expenses (317,428) (272,142) (504,197) (397,286)
Interest income 1,158,995 778,923 1,024,813 718,942
Add: Other income 345,651 81,818 152,367 1,687
Investment income 531,167 409,709 254,440 222,065
Including: Investment income from
136,353 137,588 70,473 74,300
associates and joint ventures
Gains/(Losses) on changes in fair
(830,632) 20,570 (249,001) 86,529
value
Credit impairment losses (180,953) (131,813) (664) (6,179)
Asset impairment losses (115,967) 1,430 - -
Gains/(Losses) on disposal of assets 1,400 3,841 (964) -
3. Operating profit 7,413,136 5,501,245 856,015 853,756
Add: Non-operating income 72,204 46,134 448 842
Less: Non-operating expenses (25,720) (16,726) - (12,629)
4. Total profit 7,459,620 5,530,653 856,463 841,969
19
Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Less: Income tax expenses (890,183) (720,263) (25,533) (52,467)
5. Net profit 6,569,437 4,810,390 830,930 789,502
(1) Classified by continuity of operations
Net profit from continuing operations 6,569,437 4,810,390 830,930 789,502
Net profit from discontinued operations - - - -
(2) Classified by ownership of the equity
Attributable to shareholders of the Company 6,468,588 4,810,977 830,930 789,502
Minority interests 100,849 (587) - -
6. Other comprehensive income, net of tax (42,607) (834,341) 11,480 -
Other comprehensive income attributable to
(25,743) (583,429) 11,480 -
shareholders of the Company, net of tax
(1) Other comprehensive income items which will
94,651 (34,092) - -
not be reclassified subsequently to profit or loss
1) Changes arising from remeasurement of
94,607 (34,092) - -
defined benefit plan
2) Changes in fair value of other investments in
44 - - -
equity instruments
(2) Other comprehensive income items which will
(120,394) (549,337) 11,480 -
be reclassified subsequently to profit or loss
1) Other comprehensive income that will be
transferred subsequently to profit or loss under the 12,308 1,606 11,480 -
equity method
2) Cash flow hedging reserve (197,769) (326,367) - -
3) Exchange differences on translation of
65,067 (224,576) - -
foreign currency financial statements
Other comprehensive income attributable to
(16,864) (250,912) - -
minority shareholders, net of tax
7. Total comprehensive income 6,526,830 3,976,049 842,410 789,502
Attributable to shareholders of the Company 6,442,845 4,227,548 842,410 789,502
Minority interests 83,985 (251,499) - -
8. Earnings per share
(1) Basic earnings per share (RMB Yuan) 0.93 0.70 N/A N/A
(2) Diluted earnings per share (RMB Yuan) 0.92 0.69 N/A N/A
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
20
Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Cash Flow Statement
Prepared by Midea Group Co., Ltd. January-March 2021 Unit: RMB’000
January-March January-March January-March January-March
Item 2021 2020 2021 2020
Consolidated Consolidated Company Company
1. Cash flows from operating activities:
Cash received from sales of goods or rendering
70,624,192 54,493,549 - -
of services
Net increase in customer deposits and deposits
11,250 9,220 - -
from banks and other financial institutions
Net decrease in deposits with the Central Bank 823,134 26,198 - -
Cash received from interest, fee and commission 449,113 356,968 - -
Refund of taxes and surcharges 2,185,291 1,481,374 - -
Cash received relating to other operating
1,612,552 771,562 23,394,410 13,336,223
activities
Sub-total of cash inflows 75,705,532 57,138,871 23,394,410 13,336,223
Cash paid for goods and services (43,141,773) (29,986,705) - -
Net increase in loans and advances (3,182,455) (420,707) - -
Cash paid for interest, fee and commission (17,033) (55,731) - -
Cash paid to and on behalf of employees (10,119,594) (8,895,742) (5,245) (9,783)
Payments of taxes and surcharges (3,252,112) (2,621,587) (14,624) (2,964)
Cash paid relating to other operating activities (7,438,704) (7,489,802) (7,745,089) (2,828,386)
Sub-total of cash outflows (67,151,671) (49,470,274) (7,764,958) (2,841,133)
Net cash flows from operating activities 8,553,861 7,668,597 15,629,452 10,495,090
2. Cash flows from investing activities:
Cash received from disposal of investments 27,124,590 22,580,275 17,800,000 20,960,000
Cash received from returns on investments 942,913 1,005,097 987,658 980,079
Net cash received from disposal of fixed assets,
16,233 8,683 255 -
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries
2,479 - - -
and other business units
Sub-total of cash inflows 28,086,215 23,594,055 18,787,913 21,940,079
Cash paid to acquire fixed assets, intangible
(2,145,202) (884,830) (78,204) (47,168)
assets and other long-term assets
Cash paid to acquire investments (26,718,699) (28,183,538) (25,870,441) (27,760,000)
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Net cash paid to acquire subsidiaries and other
(146,982) (11,261) - -
business units
Cash paid relating to other investing activities (7,391) - - -
Sub-total of cash outflows (29,018,274) (29,079,629) (25,948,645) (27,807,168)
Net cash flows from investing activities (932,059) (5,485,574) (7,160,732) (5,867,089)
3. Cash flows from financing activities:
Cash received from capital contributions 358,749 361,920 358,749 361,920
Including: Cash received from capital
contributions by minority shareholders of - - - -
subsidiaries
Cash received from borrowings 9,152,583 1,403,478 6,200,000 308,744
Cash received from issuance of short-term
2,999,629 - 2,999,629 -
financing bonds
Cash received relating to other financing activities 16,742 - - -
Sub-total of cash inflows 12,527,703 1,765,398 9,558,378 670,664
Cash repayments of borrowings (5,081,076) (260,351) (4,308,744) -
Cash repayments of short-term financing bonds (3,000,000) - (3,000,000) -
Cash payments for interest expenses and
(426,488) (383,344) (461,849) (400,222)
distribution of dividends or profits
Including: Cash payments for dividends or
(81,772) (62,631) - -
profit to minority shareholders of subsidiaries
Cash payments relating to other financing
(7,558,103) (821,093) (7,394,100) (802,059)
activities
Sub-total of cash outflows (16,065,667) (1,464,788) (15,164,693) (1,202,281)
Net cash flows from financing activities (3,537,964) 300,610 (5,606,315) (531,617)
4. Effect of foreign exchange rate changes on cash
(50,198) 56,603 - -
and cash equivalents
5. Net increase in cash and cash equivalents 4,033,640 2,540,236 2,862,405 4,096,384
Add: Cash and cash equivalents at beginning of
23,548,509 30,441,760 16,595,063 12,408,650
period
6. Cash and cash equivalents at end of period 27,582,149 32,981,996 19,457,468 16,505,034
Legal representative: Principal in charge of accounting: Head of accounting department:
Fang Hongbo Zhong Zheng Chen Lihong
22
Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
2. Adjustments to the Financial Statements
2.1 Adjustments to financial statement items at the beginning of the year of the first
implementation of the new accounting standards governing leases which have been
implemented since 2021
√ Applicable □ N/A
Whether any balance sheet items at the beginning of the year requires adjustment
√ Yes □ No
Balance Sheet
Prepared by Midea Group Co., Ltd. 31 March 2021 Unit: RMB’000
Consolidated Company
ASSETS 31 December 1 January 31 December
Adjustment 1 January 2021 Adjustment
2020 2021 2020
Current assets:
Cash at bank and on
81,210,482 81,210,482 - 49,240,180 49,240,180 -
hand
Financial assets held
28,239,601 28,239,601 - 16,614,658 16,614,658 -
for trading
Derivative financial
420,494 420,494 - - - -
assets
Notes receivable 5,304,510 5,304,510 - - - -
Accounts receivable 22,978,363 22,978,363 - - - -
Receivables financing 13,901,856 13,901,856 - - - -
Advances to suppliers 2,763,710 2,763,710 - 45,306 45,306 -
Contract assets 3,236,848 3,236,848 - - - -
Loans and advances 16,469,069 16,469,069 - - - -
Other receivables 2,973,945 2,973,945 - 28,318,670 28,318,670 -
Inventories 31,076,529 31,076,529 - - - -
Other current assets 33,079,918 33,079,918 - 20,533,745 20,533,745 -
Total current assets 241,655,325 241,655,325 - 114,752,559 114,752,559 -
Non-current assets:
Other debt investments 21,456,155 21,456,155 - 20,064,155 20,064,155 -
Long-term receivables 981,623 981,623 - - - -
Loans and advances 1,113,501 1,113,501 - - - -
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Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Long-term equity
2,901,337 2,901,337 - 54,991,161 54,991,161 -
investments
Other investments in
46,651 46,651 - - - -
equity instruments
Other non-current
3,360,849 3,360,849 - 80,937 80,937 -
financial assets
Investment properties 405,559 405,559 - 476,839 476,839 -
Fixed assets 22,239,214 22,212,866 (26,348) 749,835 749,835 -
Construction in
1,477,302 1,477,302 - 204,304 204,304 -
progress
Right-of-use assets - 2,155,516 2,155,516 - 10,340 10,340
Intangible assets 15,422,393 15,422,393 - 684,997 684,997 -
Goodwill 29,557,218 29,557,218 - - - -
Long-term prepaid
1,300,962 1,300,962 - 97,078 97,078 -
expenses
Deferred tax assets 7,208,635 7,208,635 - 287,360 287,360 -
Other non-current
11,255,879 11,255,879 - 10,141,031 10,141,031 -
assets
Total non-current
118,727,278 120,856,446 2,129,168 87,777,697 87,788,037 10,340
assets
TOTAL ASSETS 360,382,603 362,511,771 2,129,168 202,530,256 202,540,596 10,340
24
Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Balance Sheet (Continued)
Prepared by Midea Group Co., Ltd. 31 March 2021 Unit: RMB’000
Consolidated Company
LIABILITIES AND
31 December 1 January 31 December 1 January Adjustm
SHAREHOLDERS' EQUITY Adjustment
2020 2021 2020 2021 ent
Current liabilities:
Short-term borrowings 9,943,929 9,943,929 - 799,314 799,314 -
Customer deposits and deposits
from banks and other financial 87,535 87,535 - - - -
institutions
Derivative financial liabilities 161,225 161,225 - - - -
Notes payable 28,249,939 28,249,939 - - - -
Accounts payable 53,930,261 53,930,261 - - - -
Contract liabilities 18,400,922 18,400,922 - - - -
Employee benefits payable 6,954,822 6,954,822 - 562,954 562,954 -
Taxes payable 5,758,058 5,758,058 - 1,326,219 1,326,219 -
Other payables 4,501,391 4,501,391 - 123,120,354 123,120,354 -
Current portion of non-current
6,310,181 6,939,183 629,002 4,000,000 4,007,693 7,693
liabilities
Other current liabilities 49,852,239 49,852,239 - 3,048,794 3,048,794 -
Total current liabilities 184,150,502 184,779,504 629,002 132,857,635 132,865,328 7,693
Non-current liabilities:
Long-term borrowings 42,827,287 42,827,287 - 5,800,000 5,800,000 -
Lease liabilities 1,513,426 1,513,426 - 2,647 2,647
Long-term payables 13,260 - (13,260) - - -
Provisions 298,110 298,110 - - - -
Deferred income 779,729 779,729 - - - -
Long-term employee benefits
2,159,675 2,159,675 - - - -
payable
Deferred tax liabilities 5,223,954 5,223,954 - 67,792 67,792 -
Other non-current liabilities 692,986 692,986 - - - -
Total non-current liabilities 51,995,001 53,495,167 1,500,166 5,867,792 5,870,439 2,647
Total liabilities 236,145,503 238,274,671 2,129,168 138,725,427 138,735,767 10,340
Shareholders' equity:
Share capital 7,029,976 7,029,976 - 7,029,976 7,029,976 -
25
Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
Capital surplus 22,488,105 22,488,105 - 29,123,547 29,123,547 -
Less: Treasury stock (6,094,347) (6,094,347) - (6,094,347) (6,094,347) -
Other comprehensive income (1,549,003) (1,549,003) - (16,009) (16,009) -
General risk reserve 587,984 587,984 - - - -
Specific reserve 12,730 12,730 - - - -
Surplus reserve 7,966,362 7,966,362 - 7,966,362 7,966,362 -
Undistributed profits 87,074,453 87,074,453 - 25,795,300 25,795,300 -
Total equity attributable to
117,516,260 117,516,260 - 63,804,829 63,804,829 -
shareholders of the Company
Minority interests 6,720,840 6,720,840 - - - -
Total shareholders' equity 124,237,100 124,237,100 - 63,804,829 63,804,829 -
TOTAL LIABILITIES AND
360,382,603 362,511,771 2,129,168 202,530,256 202,540,596 10,340
SHAREHOLDERS' EQUITY
Notes to the adjustments
Pursuant to the Notice of Revising and Issuing the Accounting Standard No. 21 for Business
Enterprises—Leases (CK [2018] No. 35) issued by the Ministry of Finance on 7 December 2018, the
Company has adopted, starting from 1 January 2021, the revised Accounting Standard No. 21 for
Business Enterprises—Leases (hereinafter referred to as the “New Lease Standard”). According to the
New Lease Standard, the Company chooses to adjust the amounts of retained earnings and other
relevant financial statement items at the beginning of the year of the first implementation of the New
Lease Standard based on the cumulative effects arising from the first implementation of the New Lease
Standard, with no adjustments to comparable data. For finance leases before the first implementation
date, the Company recognizes right-of-use assets and lease liabilities based on the original carrying
amounts of the assets held under the finance leases and the finance lease payables respectively on the
first implementation date. For operating leases other than short-term leases and leases of low-value
assets before the first implementation date, the Company recognizes lease liabilities on the first
implementation date based on the present value of the balances of lease payables discounted using the
interest rate of the Company’s incremental borrowings on the first implementation date, and recognizes
right-of-use assets by making necessary adjustments to prepaid rents based on amounts equivalent to
lease liabilities.
26
Interim Report for the First Quarter 2021 of Midea Group Co., Ltd.
2.2 Retrospective adjustments to comparative data of the previous period due to the first
implementation of the new accounting standards leases since 2021
□ Applicable √ N/A
3. Auditor’s report
Is this Report audited by a CPAs firm?
□Yes √No
Midea Group Co., Ltd.
Legal Representative: Fang Hongbo
30 April 2021
27