HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
1
HEFEI MEILING CO., LTD.
THE THIRD QUARTERLY REPORT FOR 2010
(THE FULL-TEXT)
§1. Important Notes
1.1 The Board of Directors and the Supervisory Committee of Hefei Meiling Co., Ltd. (hereinafter
referred to as the Company), along with all its directors, supervisors and senior executives hereby
confirm that there are no any important omissions, fictitious statements or serious misleading
information carried in this report, and shall take all responsibilities, individual and/or joint, for the
reality, accuracy and completion of the whole contents.
1.2 The Third Quarterly Financial Report 2010 of the Company has not been audited by CPAs.
1.3 Principal of the Company Mr. Zhao Yong, Person in Charge of Accounting Works Mr. Yu
Wanchun and Person in Charge of Accounting Organ (Accounting Officer) Mr. Liu Bimin hereby
confirm that the Financial Report of the Third Quarterly Report is true and complete.
§2. Company Profile
2.1 Main accounting highlights and financial indexes:
Unit: RMB
2010.9.30 2009.12.31 Increase/decrease scope
(%)
Total assets (RMB) 6,039,005,504.50 4,786,934,109.38 26.16%
Owners’ equities attributable to the
shareholders of listed company
(RMB)
1,503,205,723.93 1,324,427,907.57 13.50%
Share capital (Share) 413,642,949.00 413,642,949.00 0.00%
Net assets per share attributable to
the shareholders of listed company
(RMB/Share)
3.63 3.20 13.44%
July-Sep.2010
Increase/decrease
over the same
period of the last
year (%)
Jan.-Sep. 2010
Increase/decrease
over the same
period of the last
year (%)
Total operating income (RMB) 2,322,525,072.79 25.52% 6,898,284,879.75 31.56%
Net profit attributable to the
shareholders of listed company
(RMB)
79,144,209.52 -47.45% 297,760,905.90 59.35%
Net cash flow arising from operating
activities (RMB)
129889461.60 -160.57% -34,101,760.41 86.61%
Net cash flow arising from operating
activities per share (RMB/Share)
0.3140 -160.57% -0.0824 86.61%
Basic earnings per share
(RMB/Share) 0.1914 -47.43% 0.7199 59.38%
Diluted earnings per share
(RMB/Share) 0.1914 -47.43% 0.7199 59.38%
Weighted average return on equity
(%) 5.39% -6.93% 21.06% 7.36%
Weighted average return on equity
after deducting non-recurring gains
and losses (%)
5.11% 0.38% 11.18% 5.14%HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
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Items of non-recurring gains and losses Amount from year begin to
the end of report period Remarks
Gains and losses from the disposal of non-current asset 1,741,475.74
Governmental subsidy calculated into current gains and
losses, while closely related with the business of the
Company, excluding the fixed-amount or fixed-proportion
governmental subsidy according to the unified national
standard
20,587,313.37
Held transaction financial asset, gains/losses of changes of
fair values from transaction financial liabilities, and
investment gains from disposal of transaction financial asset,
transaction financial liabilities and financial asset available
for sales, exclude the effective hedging business relevant
with normal operations of the Company
116,973,865.41
Other non-operating income and expenditure beside for the
aforementioned items 599,930.06
Amount of impact on minority shareholders’ interest. -167,954.26
Total 139,734,630.32 -
2.2 Total number of shareholders at the end of the report period and shares held by the top
ten shareholders with unrestricted conditions
Unit: Share
Total number of shareholders
at the end of report period 68,488
Particulars about the shares held by the top ten shareholders with unrestricted conditions
Full name of shareholder Unrestricted shares
held at period-end Type of shares
Sichuan Changhong Electric Co., Ltd. 45,641,449 RMB common share
Hefei Xingtai Holding Group Co., Ltd. 32,709,726 RMB common share
Changhong (Hong Kong) Trade Co., Ltd. 17,150,815 Domestically listed foreign share
CAO SHENGCHUN 7,646,069 Domestically listed foreign share
Zhongrong International Trust Co., Ltd. – Zhongrong
Construction Bank of China Fortune No.4-001 2,178,499 RMB common share
LONG QIN FANG 2,101,766 Domestically listed foreign share
CHEN YI QING 1,644,639 Domestically listed foreign share
GUOTAI JUNAN SECURITIES(HONGKONG)
LIMITED 1,376,286 Domestically listed foreign share
China Cinda Asset Management Co., Ltd. 1,302,533 RMB common share
DBS VICKERS (HONG KONG) LTD A/C CLIENTS 1,291,000 Domestically listed foreign share
§3. Significant events
3.1 Particulars about material changes in items of main accounting statement and financial
index, and explanations of reasons
√Applicable □Inapplicable
Unit: RMB
3.1.1 Particulars about changes in items of balance sheet and explanations of reasons
Items Amount at
period-end
Amount at
year-begin
Changed
rate Major causes
Note receivable 1,859,262,891.90 892,748,372.08 108.26% The sales scale enlarged in this period, and
the note of account-returned for sellingHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
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increased.
Account
receivable 447,567,249.24 317,114,097.62 41.14%
The sales scale enlarged in this period.
Account receivable for good undue
increased.
Other account
receivable 79,932,379.69 18,325,650.19 336.18%
The export tax rebate of Zhongshan
Changhong-subsidiary of the Company that
un-received increased and the determine
subsidy of air-conditioner’s energy-saving
& people-benefiting that un-received
increased.
Financial assets
available for sale - 134,011,570.00 -100.00% All shares of iFLYTEK have been disposed
in this period.
Long-term
equity
investment
17,557,289.77 37,028,371.63 -52.58%
Indirectly held the whole equity of Hefei
Meiling Packing Product Co., Ltd. by
purchasing Meiling Group, the Meiling
Packing added into the consolidated rage
that balanced out the items of investment of
minority equity held.
Construction in
progress 55,434,677.25 8,930,438.02 520.74% The under-process projects as ice cuber still
in construction without capital return.
Goodwill 10,753,394.12 - -
The differences from equity-purchased
amount of Meiling Group larger than its
book value of net assets.
Long-term
deferred
expenses
1,311,972.38 600,000.00 118.66%
Deferred mould expenses increased by
consolidation after purchasing Meiling
Group in end of the July 2010.
Deferred income
tax assets 44,949,032.87 31,965,504.19 40.62%
Accrual of the provision for assets
impairment and the predicted expenses of
“ten-year free maintenance” of
countryside-oriented home appliance, the
recognized deferred income tax assets
increased.
Short-term loans 333,360,000.00 184,000,000.00 81.17% Loans increased newly in the end of report
period.
Note payable 936,515,244.27 404,691,072.19 131.41% The un-paid note that undue increased.
Dividend
payable 738,695.30 1,217,175.42 -39.31% Dividend payable of previously year has
been paid in this period.
Other current
liabilities - 20,172,100.00 -100.00%
The governmental rewards received in
advance last year has been cashed into
income this period and partially have been
returned to government.
Non-current
liabilities due
within one year
- 3,000,000.00 -100.00% Returned the due bank loans.
Tax payable 127,974,780.93 65,662,600.35 94.90% The moratorium of payable VAT and
enterprise income tax.
Predicted
liabilities 178,666,622.51 90,868,730.51 96.62%
Accrual the expenses of “ten-year free
maintenance”of countryside-oriented home
appliance increased in this period.
Deferred income - 19,037,964.60 -100.00% The financial assets that measured by fairHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
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tax liabilities value decreased for the disposal of
iFLYTEK in this period.
Retained profit 300,307,893.19 -34,609,778.15 967.70% Net profit increased in this period.
Minority equity 17,255,931.67 25,138,891.79 -31.36%
The 10% minority equity of Zhongshan
Air-conditioner held by China Minmetals
has been purchased.
3.1.2 Particulars about changes in items of profit statement and explanations of reasons
Item Amount in this
period
Amount in same
period of last year
Changed
rate Major causes
Total operating
income 6,898,284,879.75 5,243,601,241.39 31.56%
Under the promotion of relevant national
policies, the Company perfected the
products structure, upgrades marketing
ability and enlarged the sale scale which
correspondingly increased the operating
income.
Operating cost 5,209,668,623.39 3,874,797,126.25 34.45%
Increased of sale volume in this period and
the cost of raw material of bulk materials
increased.
Sales
expenditure 1,428,272,370.27 1,081,374,440.26 32.08%
Sale scale enlarged in this period and the
predicted of charge for “ten-year free
maintenance” of refrigerator for
countryside-oriented increased.
Financial
expenditure -11,227,370.55 13,443,452.19 -183.52%
Decreased of interest expenses and
discounts for pre-payment for goods
received from partial suppliers increased.
Losses of assets
impairment 20,971,054.65 11,967,083.29 75.24%
Bad debt provision and inventory
depreciation provision that withdrawal
according to accounting policy in this
period increased.
Non-operating
income 128,002,073.65 7,919,100.36 1516.37%
The subsidy of Changhong Air-conditioner
for energy-saving & people-benefiting
increased.
Total profit 351,513,948.48 221,382,399.27 58.78%
Operating profit increased and the increase
of investment profit from disposing partial
financial assets available for sale.
Income tax
expense 54,249,149.90 35,714,820.02 51.90% Total taxable profit increased.
Net profit 297,264,798.58 185,667,579.25 60.11%
Operating profit increased and the increase
of investment profit from disposing partial
financial assets available for sale.
Net profit
attributable to
owners of the
parent company
296,706,124.38 186,855,278.46 58.79%
Operating profit increased and the increase
of investment profit from disposing partial
financial assets available for sale.
Basic earnings
per share 0.72 0.45 60.00%
Operating profit increased and the increase
of investment profit from disposing partial
financial assets available for sale.
Diluted earnings
per share 0.72 0.45 60.00% Operating profit increased and the increase
of investment profit from disposing partialHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
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financial assets available for sale.
Other
consolidated
income
-107,555,556.24 39,658,805.45 -371.20%
The financial assets that measured by fair
value decreased for the disposal of
iFLYTEK in this period.
3.1.3 Particulars about changes in items of cash flow statement and explanations of reasons
Items Amount in this
period
Amount in same
period of last year
Changed
rate Major causes
Other cash
received
concerning
operating
activities
82,448,095.83 58,833,148.81 40.14%
The subsidy of energy-saving &
people-benefiting obtained by Changhong
Air-conditioned increased.
Other cash paid
concerning
operating
activities
813,424,303.36 435,901,847.69 86.61% Cash paid for advertisement and promotion
increased in this period.
Cash paid for
purchasing fixed
assets, intangible
assets and other
long-term assets
53,273,584.72 23,737,195.51 124.43% The construction fund for ice cube
construction increased.
cash paid for
debt repayment 208,000,000.00 334,313,486.31 -37.78% The repayable bank loans repaid in this
period decreased.
Cash paid for
dividend and
profit
distributing or
interest paying
8,690,844.35 13,979,675.13 -37.83% The payable bank interest paid in this period
decreased.
3.2 Progress of significant events, their influences, and analysis and explanation of their
solutions
3.2.1 Qualified opinion
□Applicable √Inapplicable
3.2.2 Particular about fund offers to controlling shareholders or associated parties and
external guarantee that against the regulation.
□Applicable √Inapplicable
3.2.3 Particular about signing and implementation on significant contracts of ordinary
management.
√Applicable □Inapplicable
1. Agreement of permission of Use of Trademark among Changhong Air Conditioner, Zhongshan Changhong and
Sichuan Changhong
Pursuant to the Company’s business development, upon the approval of 34th of the 6th Session of the Board
Meeting, it was agreed to sign the Contract of Permission of Use of Trademark between the controlling
subsidiary—Sichuan Changhong Air-conditioner Co., Ltd. (“Changhong Air-conditioner” for short), Zhongshan
Changhong Electrical Apparatus Co., Ltd. (“Zhongshan Changhong” for short) respectively and controlling
shareholder –Sichuan Changhong Electrical Apparatus Holding Co., Ltd. (“Sichuan Changhong” for short). It was
stipulated that: under the condition that Sichuan Changhong is the controlling shareholder of Hefei Meiling Co.,HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
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Ltd. and Hefei Meiling Co., Ltd. the controlling shareholder of Changhong Air Conditioner and Zhongshan
Changhong, the owner of the trademark—Sichuan Changhong permitted Changhong Air Conditioner and
Zhongshan Changhong free use of the registered trademark “Changhong” in the air conditioner and air clearer. Till
recently, all parties performed the agreement strictly.
More details can be found in relevant disclosure information in Semi-Annual Report of 2010 of the Company.
2. Patent Licensing Contract between Zhongshan Changhong and Sichuan Changhong
Pursuant to the Company’s business development of air-conditioner business, upon the approval of the 34th of the
6th Session of the Board Meeting. It was agreed to sign the Patent Licensing Contract between the controlling
subsidiary—Zhongshan Changhong Electrical Apparatus Co., Ltd. (“Zhongshan Changhong” for short) and
controlling shareholder — Sichuan Changhong Electrical Apparatus Holding Co., Ltd. (“Sichuan Changhong” for
short). According to the contract: under the premise of being the controlling shareholder of Hefei Meiling Co.,
Ltd.—Sichuan Changhong and being the controlling shareholder of Zhongshan Changhong – Hefei Meiling Co.,
Ltd. The patent owner—Sichuan Changhong authorized four patents in air-conditioner area to Zhongshan
Changhong for free used in the statutory validity of patent. Till recently, all parties performed the agreement strictly.
More details can be found in relevant disclosure information in Semi-Annual Report of 2010 of the Company.
3. Approved by the Board of Directors, the Company and China Citic Bank Hefei Shengli Road Sub-branch entered
into a contract of maximum guarantee on 8 June 2010. The contract amounting to RMB Ten Million Only with
debtor (warrantee) of Zhongke Meiling Hypothermia Technology Co., Ltd.(“Zhongke Meiling” for short). Term of
guarantee is from 8 June 2010 to 8 June 2011. The Company will provided relevant guarantee to Zhongke Meiling
for serials debts arising from credited business (including but not limited to various bank business such as loans,
notes and letter of indemnity) that occurred in the guarantee term. Till recently, the two parties are performed the
agreement strictly.
4. Approved by the Board of Directors, the Company and Huishang Bank Hefei Dadongmen Sub-branch entered
into a guarantee contract of maximum mortgage for bank acceptance on 1 August 2010. The contract amounting to
RMB Eight Million Only with debtor (warrantee) of Zhongke Meiling Hypothermia Technology Co.,
Ltd.(“Zhongke Meiling” for short). Term of guarantee is from 1 August 2010 to 1 August 2011. The Company will
provided relevant guarantee to Zhongke Meiling for serials debts arising from credited business of bank acceptance
that occurred in the guarantee term. Till recently, the two parties are performed the agreement strictly.
5. Approved by the Board of Directors, the Company and Huishang Bank Hefei Dadongmen Sub-branch entered
into a contract of maximum mortgage for RMB loans on 1 August 2010. The contract amounting to RMB Twelve
Million Only with debtor (warrantee) of Zhongke Meiling Hypothermia Technology Co., Ltd.(“Zhongke Meiling”
for short). Term of guarantee is from 1 August 2010 to 1 August 2011. The Company will provided relevant
guarantee to Zhongke Meiling for serials debts arising from loan business that occurred in the guarantee term. Till
recently, the two parties are performed the agreement strictly.
6. Approved by the Board of Directors, the Company and ICBC Mianyang Branch entered into a contract of
maximum guarantee on 1 June 2010. The contract amounting to RMB Eighty Million Only with debtor (warrantee)
of Sichuan Changhong Air-conditioner Co., Ltd. (“Changhong Air-conditioner” for short). Term of guarantee is
from 1 June 2010 to 31 May 2011. The Company will provided relevant guarantee to Sichuan Changhong for
serials debts arising from loan business that occurred in the guarantee term. Till recently, the two parties are
performed the agreement strictly.
7. On 13 September 2010, the Company and Zhongke Meiling Hypothermia Technology Co., Ltd.(“Zhongke
Meiling” for short) entered into a contract of Counter-guarantee suretyship which was un-conditionally, irrevocable
and joint liability with guarantor as the only one beneficiary. Agreement that the Zhongke Meiling, as the guarantor
of counter-guarantee, provided relevant counter-guarantee with its owned assets voluntary to the Company
(guarantor) for RMB Thirty Million Only bank credit guarantee offered. Till recently, the two parties are performed
the agreement strictly.
8.Before the agreement on transferring of 100% equity of Hefei Meiling Group Holding Co., Ltd. (“Meiling Group”
for short) from the Company, Meiling Group have been provided totaling RMB 176.85 million guarantee for its
subordinate holding and joint-stock subsidiaries. Among which, RMB 52.8 million guarantee was provided to other
subsidiaries that beyond the assts’ transfer range of this time. Currently, Xingtai Holding Group Co., Ltd. still in theHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
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process of changing procedure for guarantee body. Meiling Group will release the guarantee for this part after
changed. Thereto, RMB 124.05 million guarantees were provided to subsidiaries (that is the indirectly holding
company) that within the assets’ transfer range this time from Meiling Group. Among which, RMB 11 million
guarantee was provided to Hefei Meiling Appliance Industry &Commercial Co., Ltd.; RMB 24 million guarantee
was provided to Meiling Yingkaite Appliance (Hefei) Co., Ltd.; RMB 2 million was provided to Hefei Yingkaite
Electrical Apparatus Co., Ltd.; RMB 48 million was provided to Hefei Packing Products Co., Ltd.; RMB 3 million
was offered to Hefei Meiling Environmental Packing Materials Co., Ltd.; RMB 27.05 million was offered to Hefei
Meiling Nonferrous Metals Products Co., Ltd. and RMB 9 million was offered to Hefei Meiling Fine Tube Industry
Co., Ltd.
3.2.4 Other
√Applicable □Inapplicable
1. Particular about 2010 non-public share offering
Pursuant to the development strategy and operation development, and upon the approval of Board of Directors’
Meeting and Shareholders’ General Meeting, the Company planned to raise funds by non-public offering to specific
objects including the first largest shareholder (Sichuan Changhong) for investment in projects as deluxe refrigerator
production based, capacity extension of energy-saving-and-environment-protection refrigerator and ice cuber and
supplementation to current capital. Net of raised funds in the non-public offering was expected no more than RMB
12 hundred million with no more than ten specific issuing objects including Sichuan Changhong, no less than 50
million shares (50 million shares included) and yet no more than 130 million shares (130 million shares included)
of which Sichuan Changhong was to subscribe for no more than 40 million shares with RMB 4 hundred million in
cash, and offering price no less than RMB10.18 each. In the last 15 days of June 2010, the Company presented the
application material for the non-public offering to CSRC and on 1 July 2010, the CSRC provided the acceptance
advice. More details can be found in relevant disclosure information in Semi-Annual Report of 2010 of the
Company.
2.Particular about assets acquisition
2.1 Changhong Air Conditioner Bidding for 10% Equity in Zhongshan Changhong
Pursuant to the development strategy of white appliance industry, the Company held the Board of Directors
Meeting on 26 January 2010 for approving the Proposal of Changhong Air Conditioner Bidding for 10% Equity in
Zhongshan Changhong, namely agreed the Company’s participation via its wholly-owned subsidiary — Sichuan
Changhong Air Conditioner Company., Ltd. (hereafter referred as Changhong Air Conditioner) in the open selling
of 10% equity in Zhongshan Changhong by China Minmetals. Changhong Air Conditioner transferred partial equity
by agreement with RMB 11.4128 million finally. On 14 May 2010, Zhongshan Changhong have finished the
changing register of Industry and Commercial for transfer 10% equity of Changhong Air Conditioner held by China
Minmetals. More details can be found in relevant disclosure information in Semi-Annual Report of 2010 of the
Company.
2.2 Agreement transfer of 100% state-owned property in Hefei Meiling Co., Ltd.
Pursuant to the Company’s development program and need of uniform maintenance and management of “Meiling”
brand. On 25 March 2010 and on 9 April 2010, the Board of Director’s Meeting and Shareholders’ General Meeting
approved the proposal of Transfer of 100% state-owned property in Hefei Meiling Company Limited. Till recently,
Xingtai Holding has performed the capital-reduction procedure of Meiling Group after partial assets liability
separation. On 28 July 2010, the changing register procedures of Industry and Commercial on the share transferring
of Meiling Group have been finished. After transferred procedure, the Company held 100% equity of the new
Meiling Group that separated partial assets liabilities. More details can be found in relevant disclosure information
in Semi-Annual Report of 2010 of the Company.
3. Investment construction projects
3.1 Production base of Athena deluxe refrigerator project
Pursuant to the development strategy, the Company plans to invest in the project of Athena deluxe refrigerator
production base with the funds that raised from 2010 non-public share offering. Totaling RMB 793.3038
million( circulating capital included) used for investment, and annual productivity of 2 million refrigerator with
220L-300L, tri-doors above 300L, multi-doors and side-by-side will form after completed construction. The project
has been filed by Hefei Development and Reform Commission and has been approved by the Hefei Environmental
Protection Bureau. Till recently, the Company put its self-owned capital into the project for construction firstly and
in the field leveling of the construction-used land recently. The project remains no investment profit for in theHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
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process of construction stage.
3.2 Ice Cuber Capacity Extension
Pursuant to the development strategy, the Company plans to invest in the project of ice cuber capacity extension
with the funds that raised from 2010 non-public share offering. Totaling RMB375.1778 million( circulating capital
included) used for investment, and annual productivity of 0.6 million ice cuber with no more than 300L capacity
and annual productivity of 0.6 million ice cuber with more than 300L capacity will formed after completed
construction. Totaling 1.2 million ice cuber will produce annually. The project has been filed by Hefei Development
and Reform Commission and has been approved by the Hefei Environmental Protection Bureau. Till recently, the
Company put its self-owned capital into the project firstly. Land and buildings construction have been completed
80%, 90% of the inquiring on equipment assets, bidding and purchase have been finished, general progress are
under the procedure of projects, technical equipment is in the process of arrangement recently. The project remains
no investment profit for in the process of construction stage.
3.3 Capacity Extension of Environment Protection and Energy Saving Refrigerator
Pursuant to the development strategy, the Company plans to invest in the project of capacity extension of
environment protection and energy saving refrigerator with the funds that raised from 2010 non-public share
offering. Totaling RMB118.0093 million (circulating capital included) used for investment. The implementation
body including the Company and its subordinate subsidiary Mianyang Meiling Cooling Co., Ltd. (“Mianyang
Meiling” for short). The project construction including the technical reform on production lines of 0.6 million
environmentally energy saving refrigerator of Mianyang Meiling Phase I, formulated a double-shift productivity. At
the same time, constructed a new production line with annual productivity of 0.6 million refrigerator (double-shift)
and finally formed the production base of environmentally energy saving refrigerator with annual productivity of
1.2 million refrigerator (double-shift). The project has been filed by China (Mianyang) Technology Zone
Management Commission Economic Development Bureau and has been approved by the Mianyang Environmental
Protection Bureau. Till recently, the Company put its self-owned capital into the project firstly, inquiring on
equipment assets, bidding and purchase of the phase I project have been finished basically, phase II is in the
process. The project remains no investment profit for in the process of construction stage.
More details can be found in relevant disclosure information in Semi-Annual Report of 2010 of the Company.
3.3 Implementations of commitments by the Company, shareholders and actual controller
√Applicable □Inapplicable
Commitments Promiser Content of
commitments Implementation
Commitments for Share Merger
Reform
Sichuan
Changhong,
Changhong
Group and
Meiling Group
Legal commitments
and additional
consideration
commitment
Had accomplished implementation.
Commitments for share restricted
Sichuan
Changhong,
Changhong
Group and
Meiling Group
Legal commitments
and additional
consideration
commitment Had accomplished implementation.
Commitments made in Acquisition
Report or Reports on Change in
Interests
Sichuan
Changhong
Avoidance of
competition between
same trade
Strictly performed.
Commitments made in assets
acquisition The Company
State-owned property
of Meiling Group
assigning
Strictly performed.
Commitments made in private
share-issuing plan
Sichuan
Changhong
Reduced, avoidance
and regulated
competitions between
same trade and
related transaction;
Strictly performed.HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
9
leasing the land and
building to
Changhong
Air-conditioner for a
long-term and
transfer land and
buildings to
Changhong
Air-conditioner after
finished the Assets
Property Certificate;
supervising the
subsidiary—Minshen
g Logistic for leasing
the land and
buildings to
Mianyang Meiling
for a long-term and
transfer land and
buildings to
Mianyang Meiling
after finished the
Assets Property
Certificate.
Other commitments (including
additional commitments)
Sichuan
Changhong
Property rights of
air-conditioner assets
transfer
Strictly performed.
3.4 Estimation of accumulative net profit from the beginning of the year to the end of next
report period to be loss probably or the warning of its material change compared with the
corresponding period of the last year and explanation of reason
□Applicable √Inapplicable
3.5 Particulars about the other significant events which needed explanations
3.5.1 Particular about security investment
√Applicable □Inapplicable
Unit: RMB
No. Securitie
s kinds Stock code Short form of
the stock
Initial
investment
amount
(RMB)
Amount
held in
period-end
(Share)
Book value at
period-end(RM
B)
Total
investment
proportion
of securities
in
period-end
(%)
Gains and
losses in report
period(RMB)
1 Stock 002230 iFLYTEK 18,960,000.00 0 0.00 0.00% 0.00
Other stock investment held at the end of
report period 0.00 - 0.00 0.00% 0.00
Gain/loss of the sold securities investment
in the report period - - - - 116,973,865.41
Total 18,960,000.00 - 0.00 100% 116,973,865.41
Explanation on securities investment
3.5.2 Activities on receiving research, communication and interview in the report period
Date Place Way The received Contents discussed andHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
10
parties materials supplied
13 January 2010 Conference room of
the Company Spot investigation Everbright
Securities
Situation about production &
operational of the Company
21 January 2010 Conference room of
the Company Spot investigation UBS Securities Situation about production &
operational of the Company
23 March 2010 Conference room of
the Company Spot investigation GF Fund Situation about production &
operational of the Company
25 March 2010 Conference room of
the Company Spot investigation Shenyin &
Wanguo
Situation about production &
operational of the Company
8 April 2010 Conference room of
the Company Spot investigation investor of QFFI
Everest Capital
Situation about production &
operational of the Company
28 April 2010 Conference room of
the Company Spot investigation
Shenyin &
Wanguo,USB
International
Fund and Citic
Securities etc.
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
7 May 2010 Conference room of
the Company Spot investigation
Everbright
Securities and
Haitong
Securities
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
21 May 2010 Conference room of
the Company Spot investigation GUOTAI AMC
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
8 June 2010 Conference room of
the Company Spot investigation
Changsheng Fund
and Guoyuan
Securities
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
18 June 2010 Conference room of
the Company Spot investigation Securities Times
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
15 July 2010 Conference room of
the Company Spot investigation Fullgoal Fund and
Chang Xin Fund
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
4 August 2010 Conference room of
the Company Spot investigation
Shanghai
Rosefinch
Investment Co.,
Ltd.
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
9 August 2010 Conference room of
the Company Spot investigation Changjiang
Securities
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
12 August 2010 Conference room of
the Company Spot investigation Citic Securities
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
19 August 2010 Conference room of
the Company Spot investigation Nanjing Securities
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
20 August 2010 Conference room of
the Company Spot investigation
CICC and Hong
Kong Huili
Consultant Co.,
Ltd.
Situation about production &
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
15 September Conference room of Spot investigation Dongfang Situation about production &HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
11
2010 the Company Securities Asset
Co., Ltd.
operational of the Company and
relevant situation concerning
private share-issuing plan of 2010.
3.6 Particulars about derivatives investment
□Applicable √Inapplicable
3.6.1 Particulars about the positions of derivatives investment at the end of report period
□Applicable √Inapplicable
§4 Appendix
4.1 Balance sheet
Prepared by Hefei Meiling Co., Ltd. 30 September 2010 Unit: RMB
Balance at Items Consolidation pePriaorde-netn Cd ompany ConsolBidaaltaionnce at yePara-rbeengt iCn ompany
Current assets:
Monetary funds 660,352,658.70 457,898,642.53 747,572,445.88 579,447,940.41
Settlement provisions
Capital lent
Transaction finance
asset
Notes receivable 1,859,262,891.90 1,751,432,540.30 892,748,372.08 842,917,722.71
Accounts receivable 449,074,079.98 314,281,958.55 317,114,097.62 201,332,264.42
Accounts paid in
advance 139,627,195.62 146,775,193.18 109,721,377.94 134,789,646.12
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Interest receivable
Dividend receivable
Other receivables 79,932,379.69 12,096,122.25 18,325,650.19 13,900,993.24
Purchase restituted
finance asset
Inventories 1,132,849,021.55 799,623,840.02 1,052,702,140.26 806,388,957.97
Non-current asset due
within one year
Other current assets
Total current assets 4,321,098,227.44 3,482,108,296.83 3,138,184,083.97 2,578,777,524.87
Non-current assets:
Granted loans and
advances
Finance asset available
for sales 134,011,570.00 134,011,570.00
Held-to-maturity
investment
Long-term account
receivable 12,647,612.10 12,647,612.10
Long-term equity
investment 17,557,289.77 656,989,796.91 37,028,371.63 557,185,228.79HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
12
Investment real estate 13,919,561.04 9,884,110.96 14,423,395.21 10,136,925.05
Fixed assets 871,494,014.65 570,032,648.88 802,671,721.93 592,203,832.78
Construction in progress 55,434,677.25 63,971,478.86 8,930,438.02 19,652,067.31
Engineering material
Disposal of fixed asset
Productive biological
asset
Oil and gas asset
Intangible assets 673,917,260.16 533,684,121.51 603,705,411.46 550,011,819.36
Expense on Research
and Development 16,148,487.33 15,413,612.97
Goodwill 10,753,394.12
Long-term expenses to
be apportioned 1,311,972.38 600,000.00
Deferred income tax
asset 44,723,008.26 43,052,026.97 31,965,504.19 30,546,536.79
Other non-current asset
Total non-current asset 1,717,907,277.06 1,890,261,796.19 1,648,750,025.41 1,893,747,980.08
Total assets 6,039,005,504.50 5,372,370,093.02 4,786,934,109.38 4,472,525,504.95
Current liabilities:
Short-term loans 333,360,000.00 308,860,000.00 184,000,000.00 184,000,000.00
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial
liabilities
Notes payable 936,515,244.27 626,910,000.00 404,691,072.19 362,864,725.10
Accounts payable 1,501,064,273.21 1,300,078,820.23 1,157,326,858.96 963,182,987.91
Accounts received in
advance 617,852,748.72 552,694,754.99 718,021,736.69 703,731,317.30
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 55,584,832.88 46,384,723.76 70,861,486.07 58,091,040.19
Taxes payable 128,200,805.54 124,938,549.65 65,662,600.35 60,760,397.19
Interest payable
Dividend payable 738,695.30 738,695.30 1,217,175.42 1,217,175.42
Other accounts payable 689,122,442.68 647,324,994.72 624,779,113.24 598,352,508.10
Reinsurance payables
Insurance contract
reserve
Security trading of
agency
Security sales of agency
Non-current liabilities due
within one year 3,000,000.00
Other current liabilities 20,172,100.00 20,172,100.00
Total current liabilities 4,262,439,042.60 3,607,930,538.65 3,249,732,142.92 2,952,372,251.21
Non-current liabilities:HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
13
Long-term loans 15,247,300.00 15,247,300.00 15,247,300.00 15,247,300.00
Bonds payable
Long-term account
payable
Special accounts
payable 33,224,901.49 33,224,901.49 34,223,417.47 34,223,417.47
Projected liabilities 178,666,622.51 178,666,622.51 90,868,730.51 90,868,730.51
Deferred income tax
liabilities 19,037,964.60 19,037,964.60
Other non-current
liabilities 28,965,982.30 28,365,982.30 28,257,754.52 28,257,754.52
Total non-current liabilities 256,104,806.30 255,504,806.30 187,635,167.10 187,635,167.10
Total liabilities 4,518,543,848.90 3,863,435,344.95 3,437,367,310.02 3,140,007,418.31
Owner’s equity (or
shareholders’ equity):
Paid-in capital (or share
capital) 413,642,949.00 413,642,949.00 413,642,949.00 413,642,949.00
Capital public reserve 541,303,932.99 564,641,579.85 660,287,022.53 672,197,136.09
Less: Inventory shares
Reasonable reserve
Surplus public reserve 246,896,167.23 246,678,001.55 285,107,714.19 284,889,548.51
Provision of general risk
Retained profit 301,362,674.71 283,972,217.67 -34,609,778.15 -38,211,546.96
Balance difference of
foreign currency translation
Total owner’s equity
attributable to parent
company
1,503,205,723.93 1,508,934,748.07 1,324,427,907.57 1,332,518,086.64
Minority interests 17,255,931.67 25,138,891.79
Total owner’s equity 1,520,461,655.60 1,508,934,748.07 1,349,566,799.36 1,332,518,086.64
Total liabilities and owner’s
equity 6,039,005,504.50 5,372,370,093.02 4,786,934,109.38 4,472,525,504.95
4.2 Profit statement in the report period
Prepared by Hefei Meiling Co., Ltd. July-Sep. 2010 Unit: RMB
Amount in Items Consolidation thiPsa preenrito Cd o mpany ConsolAidmatoiounn t in lasPta preenrito Cd o mpany
I. Total operating income 2,322,525,072.79 2,012,404,227.74 1,850,351,436.24 1,652,197,274.25
Including: Operating income 2,322,525,072.79 2,012,404,227.74 1,850,351,436.24 1,652,197,274.25
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 2,265,061,123.07 1,924,266,450.23 1,781,602,800.89 1,578,813,302.17
Including: Operating cost 1,761,569,892.57 1,521,842,183.52 1,319,548,478.76 1,169,429,381.82
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense
of compensationHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
14
Net amount of
withdrawal of insurance
contract reserve
Bonus expense of
guarantee slip
Reinsurance expense
Operating tax and extras 10,719,145.91 9,615,512.39 8,255,314.86 7,469,453.08
Sales expenses 441,873,131.43 361,018,674.62 414,804,568.19 370,302,339.99
Administration
expenses 53,766,926.83 31,215,187.99 43,016,011.83 32,622,568.59
Financial expenses -6,802,328.40 -4,544,898.40 1,285,348.31 2,933,235.35
Losses of devaluation of
asset 3,934,354.73 5,119,790.11 -5,306,921.06 -3,943,676.66
Add: Changing income
of fair value(Loss is listed
with “-”)
Investment income
(Loss is listed with “-”) 3,276,460.70 3,042,080.77 107,977,317.95 101,343,198.10
Including: Investment
income on affiliated
company and joint venture
101,146.45 234,935.78
Exchange income (Loss
is listed with “-”)
III. Operating profit (Loss
is listed with “-”) 60,740,410.42 91,179,858.28 176,725,953.30 174,727,170.18
Add: Non-operating
income 33,228,896.14 1,527,237.50 1,994,881.73 1,600,547.88
Less: Non-operating
expense 189,747.84 11,571.65 600,409.54 475,695.43
Including: Disposal loss
of non-current asset 11,571.65 11,571.65 51,102.33 29,731.44
IV. Total Profit (Loss is
listed with “-”) 93,779,558.72 92,695,524.13 178,120,425.49 175,852,022.63
Less: Income tax expense 14,399,804.07 13,612,328.50 27,975,377.22 28,850,649.31
V. Net profit (Net loss is
listed with “-”) 79,379,754.65 79,083,195.63 150,145,048.27 147,001,373.32
Net profit attributable to
owner’s of parent company 79,144,209.52 79,083,195.63 150,600,188.62 147,001,373.32
Minority shareholders’
gains and losses 235,545.13 -455,140.35
VI. Earnings per share:
(I). Basic earnings per share 0.1914 0.1912 0.3641 0.3554
(II). Diluted earnings per
share 0.1914 0.1912 0.3641 0.3554
VII. Other consolidated
income -2,104,418.50 -2,104,418.50 -14,089,542.17 -14,089,542.17
VIII. Total consolidated
income 77,275,336.15 76,978,777.13 136,055,506.10 132,911,831.15
Total consolidated income
attributable to owners of
parent company
77,039,791.02 76,978,777.13 136,510,646.45 132,911,831.15
Total consolidated income
attributable to minority
shareholders
235,545.13 -455,140.35HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
15
4.3 Profit statement from year-begin to the end of report period
Prepared by Hefei Meiling Co., Ltd. Jan.-Sep. 2010 Unit: RMB
Amount i Items Consolidation n thiPsa preenrito Cd ompany ConsolAidmatoiounn t in lasPta preenrito Cd o mpany
I. Total operating income 6,898,284,879.75 5,757,060,765.55 5,243,601,241.39 4,260,573,850.48
Including: Operating income 6,898,284,879.75 5,757,060,765.55 5,243,601,241.39 4,260,573,850.48
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 6,813,465,081.14 5,584,362,863.40 5,147,658,310.64 4,161,689,651.75
Including: Operating cost 5,209,668,623.39 4,244,090,447.13 3,874,797,126.25 3,063,041,501.09
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense
of compensation
Net amount of
withdrawal of insurance
contract reserve
Bonus expense of
guarantee slip
Reinsurance expense
Operating tax and extras 29,161,232.19 26,921,112.52 27,485,915.80 25,853,053.74
Sales expenses 1,428,272,370.27 1,215,466,920.70 1,081,374,440.26 944,476,597.81
Administration
expenses 138,126,001.93 89,487,388.55 138,590,292.85 103,416,672.91
Financial expenses -11,227,370.55 -7,037,974.45 13,443,452.19 14,880,778.32
Losses of devaluation of
asset 19,464,223.91 15,434,968.95 11,967,083.29 10,021,047.88
Add: Changing income
of fair value(Loss is listed
with “-”)
Investment income
(Loss is listed with “-”) 140,917,222.76 140,682,842.83 118,412,775.48 111,778,655.63
Including: Investment
income on affiliated
company and joint venture
-1,637,852.21 -1,504,062.88 146,972.66 146,972.66
Exchange income (Loss
is listed with “-”)
III. Operating profit (Loss
is listed with “-”) 225,737,021.37 313,380,744.98 214,355,706.23 210,662,854.36
Add: Non-operating
income 128,002,073.65 23,037,970.03 7,919,100.36 6,337,360.07
Less: Non-operating
expense 718,315.80 496,808.23 892,407.32 592,248.50
Including: Disposal loss
of non-current asset 525,192.34 496,808.23 183,508.08 127,878.89
IV. Total Profit (Loss is
listed with “-”) 353,020,779.22 335,921,906.78 221,382,399.27 216,407,965.93
Less: Income tax 54,701,199.12 51,949,689.11 35,714,820.02 32,853,873.95HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
16
expense
V. Net profit (Net loss is
listed with “-”) 298,319,580.10 283,972,217.67 185,667,579.25 183,554,091.98
Net profit attributable to
owner’s of parent company 297,760,905.90 283,972,217.67 186,855,278.46 183,554,091.98
Minority shareholders’
gains and losses 558,674.20 -1,187,699.21
VI. Earnings per share:
(I). Basic earnings per share 0.7199 0.6865 0.4517 0.4438
(II). Diluted earnings per
share 0.7199 0.6865 0.4517 0.4438
VII. Other consolidated
income -107,555,556.24 -107,555,556.24 39,658,805.45 39,658,805.45
VIII. Total consolidated
income 190,764,023.86 176,416,661.43 225,326,384.70 223,212,897.43
Total consolidated income
attributable to owners of
parent company
190,205,349.66 176,416,661.43 226,514,083.91 223,212,897.43
Total consolidated income
attributable to minority
shareholders
558,674.20 -1,187,699.21
4.4 Cash flow statement from year-begin to the end of report period
Prepared by Hefei Meiling Co., Ltd. Jan.-Sep. 2010 Unit: RMB
Amount i Items Consolidation n thiPsa preenrito Cd ompany ConsolAidmatoiounn t in lasPta preenrito Cd o mpany
I. Cash flows arising from
operating activities:
Cash received from
selling commodities and
providing labor services
2,992,956,010.95 2,240,808,735.31 2,287,897,925.04 1,708,665,841.74
Net increase of
customer deposit and
interbank deposit
Net increase of loan
from central bank
Net increase of capital
borrowed from other
financial institution
Cash received from
original insurance contract
fee
Net cash received from
reinsurance business
Net increase of insured
savings and investment
Net increase of disposal
of transaction financial asset
Cash received from
interest, commission charge
and commission
Net increase of capital
borrowed
Net increase of returned
business capitalHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
17
Write-back of tax
received 12,350,382.54 3,147,453.85 15,470,692.55 82,579.91
Other cash received
concerning operating
activities
82,448,095.83 11,408,189.52 58,833,148.81 42,225,929.15
Subtotal of cash inflow
arising from operating
activities
3,087,754,489.32 2,255,364,378.68 2,362,201,766.40 1,750,974,350.80
Cash paid for
purchasing commodities and
receiving labor service
1,797,490,929.02 1,316,531,343.95 1,715,189,724.34 1,162,051,735.69
Net increase of
customer loans and advances
Net increase of deposits
in central bank and interbank
Cash paid for original
insurance contract
compensation
Cash paid for interest,
commission charge and
commission
Cash paid for bonus of
guarantee slip
Cash paid to/for staff
and workers 256,125,936.85 154,808,563.05 198,234,092.73 134,237,601.64
Taxes paid 254,815,080.50 231,947,561.89 267,476,089.83 255,455,617.08
Other cash paid
concerning operating
activities
813,424,303.36 623,907,325.26 435,901,847.69 342,425,305.56
Subtotal of cash outflow
arising from operating
activities
3,121,856,249.73 2,327,194,794.15 2,616,801,754.59 1,894,170,259.97
Net cash flows
arising from operating
activities
-34,101,760.41 -71,830,415.47 -254,599,988.19 -143,195,909.17
II. Cash flows arising from
investing activities:
Cash received from
recovering investment 7,356,806.06 7,091,806.06
Cash received from
investment income 142,186,905.71 142,186,905.71 118,265,802.82 118,265,802.82
Net cash received from
disposal of fixed, intangible
and other long-term assets
90,951.53 42,781.00 6,089,446.27 55,740,619.49
Net cash received from
disposal of subsidiaries and
other units
6,391.35 2,018,786.45
Other cash received
concerning investing
activities
10,065,835.63 26,635,332.62 190,139,436.98 2,058,202.74
Subtotal of cash inflow
from investing activities 159,700,498.93 175,956,825.39 314,501,077.42 178,083,411.50
Cash paid for
purchasing fixed, intangible
and other long-term assets
53,273,584.72 57,849,328.94 23,737,195.51 15,191,398.81
Cash paid forHEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
18
investment
Net increase of
mortgaged loans
Net cash received from
subsidiaries and other units 271,597,181.63 313,200,000.00 45,000,000.00
Other cash paid
concerning investing
activities
2,499,344.00
Subtotal of cash outflow
from investing activities 324,870,766.35 373,548,672.94 23,737,195.51 60,191,398.81
Net cash flows arising
from investing activities -165,170,267.42 -197,591,847.55 290,763,881.91 117,892,012.69
III. Cash flows arising from
financing activities
Cash received from
absorbing investment
Including: Cash
received from absorbing
minority shareholders’
investment by subsidiaries
Cash received from
loans 328,860,000.00 328,860,000.00 313,888,346.48 313,888,346.48
Cash received from
issuing bonds
Other cash received
concerning financing
activities
99,000,000.00
Subtotal of cash inflow
from financing activities 328,860,000.00 427,860,000.00 313,888,346.48 313,888,346.48
Cash paid for settling
debts 208,000,000.00 204,000,000.00 334,313,486.31 334,313,486.31
Cash paid for dividend
and profit distributing or
interest paying
8,690,844.35 8,257,017.35 13,979,675.13 13,008,927.63
Including: Dividend and
profit of minority
shareholder paid by
subsidiaries
Other cash paid
concerning financing
activities
67,320,000.00
Subtotal of cash outflow
from financing activities 216,690,844.35 279,577,017.35 348,293,161.44 347,322,413.94
Net cash flows arising
from financing activities 112,169,155.65 148,282,982.65 -34,404,814.96 -33,434,067.46
IV. Influence on cash and
cash equivalents due to
fluctuation in exchange rate
-116,915.00 -410,017.51 -189,739.81 -169,372.23
V. Net increase of cash and
cash equivalents -87,219,787.18 -121,549,297.88 1,569,338.95 -58,907,336.17
Add: Balance of cash
and cash equivalents at the
period -begin
747,572,445.88 579,447,940.41 409,853,966.49 306,127,639.14
VI. Balance of cash and cash
equivalents at the period -end 660,352,658.70 457,898,642.53 411,423,305.44 247,220,302.97HEFEI MEILING CO., LTD. THE THIRD QUARTERLY REPORT FOR 2010(FULL-TEXT)
19
4.5 Auditor’ report
Auditor’s opinions: Un-audited
Legal Representative: Zhao Yong
Board of the Directors of
Hefei Meiling Co., Ltd.
October 22, 2010
