Company Code: 600690.SH, 690D.DE Short Name: Haier Smart Home
Haier Smart Home Co., Ltd.
2024 Interim Report
Haier Smart Home Co., Ltd. Interim Report 2024
Important Notice
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior
management of Haier Smart Home Co., Ltd. (the “Company”) are individually and collectively
responsible for the content set out therein and hereby assure that the content set out in the
interim report is true, accurate and complete, and free from any false record, misleading
representation or material omission.
II. All directors have attended the Board meetings.
III. The interim report is unaudited.
IV. Li Huagang (legal representative of the Company), Gong Wei (chief financial officer of the
Company) and Ying Ke (the person in charge of accounting department) hereby certify that
the financial report set out in the interim report is true, accurate and complete.
V. Proposal of profit distribution or proposal of converting capital reserves into share capital for
this reporting period resolved and passed by the Board
Not Applicable
VI. Disclaimer in respect of forward-looking statements
√ Applicable Not Applicable
Forward-looking statements such as future plans, development strategies as set out in this report do
not constitute our substantial commitment to investors. Investors are advised to pay attention to
investment risks.
VII. Is there any fund occupation by controlling shareholders and other related parties for
non-operational purposes
No
VIII. Is there any provision of external guarantee in violation of prescribed decision-making
procedures
No
IX. Are there more than half of the Directors could not warrant the truthfulness, accuracy and
completeness of the interim report disclosed by the Company
No
X. Important risk warnings
For the possible risks which the Company may encounter, please refer to the relevant information set
out in the section of “MANAGEMENT DISCUSSION AND ANALYSIS” in this report.
Haier Smart Home Co., Ltd. Interim Report 2024 1
Important Notice
XI. Others
Applicable √ Not Applicable
Chairman of the Board: LI Huagang
Haier Smart Home Co., Ltd
27 August 2024
2 Haier Smart Home Co., Ltd. Interim Report 2024
Contents
SECTION I — DEFINITIONS 4
SECTION II — GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS 6
SECTION III — MANAGEMENT DISCUSSION AND ANALYSIS 11
SECTION IV — CORPORATE GOVERNANCE 49
SECTION V — ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES 53
SECTION VI — SIGNIFICANT ISSUES 64
SECTION VII — CHANGES IN SHARES AND INFORMATION ABOUT SHAREHOLDERS 78
SECTION VIII — RELEVANT INFORMATION OF PREFERRED SHARES 85
SECTION IX — RELEVANT INFORMATION OF CORPORATE BONDS 86
SECTION X — FINANCIAL REPORT 87
I. 2024 Interim Report of Haier Smart Home Co., Ltd. with signature of the
legal representative.
II. Financial statements with signatures or seals of the person in charge of the
Documents Available
entity, chief accountant and person in charge of accounting department.
for Inspection
III. All documents publicly disclosed on China Securities Journal, Shanghai
Securities News, Securities Daily, Securities Times and the website of
Shanghai Stock Exchange (www.sse.com.cn) during the reporting period.
Haier Smart Home Co., Ltd. Interim Report 2024 3
Section I Definitions
Unless otherwise stated in context, the following terms should have the following meanings in this report:
DEFINITION OF FREQUENTLY USED TERMS
CSRC China Securities Regulatory Commission
SSE Shanghai Stock Exchange
The Company, Haier Smart Haier Smart Home Co., Ltd, its original name is “Qingdao Haier Co., Ltd.”,
Home and the original short name is “Qingdao Haier”
Four Major Securities China Securities Journal, Shanghai Securities News, Securities Times,
Newspapers Securities Daily
Haier Electronics, 1169 Haier Electronics Group Co., Ltd. (a company originally listed in Hong Kong,
stock code: 01169.HK), a subsidiary as accounted for in the consolidated
statement of the Company. Haier Electronics has been privatized by way of H
shares issuance on 23 December 2020 and became a wholly owned
subsidiary of the Company since then.
GE Appliances Household appliances assets and business of General Electric Group, which
are currently owned by the Company.
FPA Fisher & Paykel Appliances Holdings Limited (Chinese Name: ) was
established in 1934 and is known as the national appliance brand of New
Zealand, the global top-level kitchen appliance brand and the famous luxury
brand of the world. It has products including ventilator, gas stove, oven,
dishwasher, microwave oven, built-in freezer, washing machine, clothes dryer
and etc. Its business covers 50 countries/regions across the world. FPA is
wholly-owned subsidiary of the Company.
Candy Candy Group (Candy S.p.A) is an international professional appliances
manufacturer from Italy. Since its establishment in 1945, it has been
committed to enabling the global users to enjoy a higher quality of life
through innovative technologies and quality services. Candy Group has been
prestigious in the global market with users all over the world via its various
self-owned professional household appliance brands. In January 2019, Candy
became a wholly-owned subsidiary of the Company.
CMM China Market Monitor Co., Ltd., as an authoritative market research institute
in Chinese home appliances area, was established in 1994 and has been
focusing on research of retail sales in China consumption market ever since.
4 Haier Smart Home Co., Ltd. Interim Report 2024
Section I Definitions
Euromonitor Euromonitor, established in 1972, is the leading strategic market information
supplier and has over 40-years of experience in respect of publishing market
report, commercial reference data and on-line database. They create data and
analysis on thousands of products and services around the world.
Gfk Gfk Group, the world’s leading market research company. After a long period
of development and accumulation, Gfk Group’s global market research
business covers consumer durables research, consumer research, media
research, healthcare market research and special studies.
All View Cloud All View Cloud (AVC) is a big data integrated solution provider to the smart
home field, providing enterprises with big data information services, regular
data information services and special data services.
IEC The International Electrotechnical Commission. Founded in 1906, it is the
world’s first organization for the preparation and publication of international
electrotechnical standardization and is responsible for international
standardization for electrical engineering and electronic engineering. The goals
of the commission include: to effectively meet the needs of the global market;
to ensure that the standards and conformity assessment programs are
applied globally in a prioritized manner and to the greatest extent; to assess
and improve the quality of products and services involved in its standards; to
create conditions for the common use of complicated systems; to improve the
effectiveness of the industrialization process; to improve human health and
safety, and to protect the environment.
IEEE The Institute of Electrical and Electronics Engineers, an international
association of electronic technology and information science engineers, is
currently the largest non-profit professional technology society in the world. It
is committed to the development and research of electrical, electronic,
computer engineering and science-related fields, and has now developed into
an international academic organization with great influence in terms of the
fields of space, computer, telecommunications, biomedicine, power and
consumer electronics.
Model of Rendanheyi The concept of “Achieving win-win via Rendanheyi (人 單 合 一)” is the
(人 單 合 一) guarantee of Haier’s sustainable operation and the driving force of the
Company featuring a self-motivated and empowering corporate culture. “Ren”
is an employee who has the spirit of entrepreneurship and innovation; “Dan”
is to create value for users. The “Rendanheyi (人單合一)” management model
encourages employees to create value for users with an entrepreneurial
mindset, and to achieve self-value in line with the those of the Company and
its shareholders.
Haier Smart Home Co., Ltd. Interim Report 2024 5
Section II General Information of the
Company and Key Financial Indicators
I. INFORMATION OF THE COMPANY
Chinese name 海尔智家股份有限公司
Chinese short name 海爾智家
English name Haier Smart Home Co., Ltd.
English short name Haier Smart Home
Legal representative Li Huagang
II. CONTACT PERSON AND CONTACT INFORMATION
Secretary to Representative of Company Secretary
the Board securities affairs (D/H shares) Others
Name Liu Xiaomei Liu Tao Ng Chi Yin, Trevor Global Customer
Service Hotline
Address Department of Department of Rm 1908, 19/F, /
Securities of Haier Securities of Haier Harbour Centre,
Smart Home Co., Smart Home Co., 25 Harbour Road,
Ltd. Haier Science Ltd. Haier Science Wan Chai,
and Technology and Technology Hong Kong
Innovation Innovation
Ecological Park, Ecological Park,
No. 1 Haier Road, No. 1 Haier Road,
Qingdao City Qingdao City
Tel 0532-88931670 0532-88931670 +852 2169 0000 4006 999 999
Fax 0532-88931689 0532-88931689 +852 2169 0880 /
Email finance@haier.com finance@haier.com ir@haier.hk /
6 Haier Smart Home Co., Ltd. Interim Report 2024
Section II General Information of the Company and Key Financial Indicators
III. SUMMARY OF THE CHANGES IN GENERAL INFORMATION
Registered address Haier Park, Laoshan District, Qingdao City
Historical change of the Prior to the Company’s listing in 1993, the registered address of the
registered address Company was No.165 Xiaobaigan Road, Sifang District, Qingdao City,
Shandong Province, and has changed to the current address since
1994, during which the address name was adjusted in line with the
change of name of the industrial park but the actual site remains
unchanged
Business address Haier Science and Technology Innovation Ecological Park,
Laoshan District, Qingdao City
Postal code of the 266101
business address
Website https://smart-home.haier.com/cn/
Email 9999@haier.com
Query index for any Not applicable
changes during the
reporting period
IV. MOVEMENT OF PLACE FOR INFORMATION DISCLOSURE AND
DEPOSIT
Designated newspaper for Shanghai Securities News, Securities Times, China Securities Journal,
information disclosure Securities Daily
Website for publishing www.sse.com.cn
interim report
Other websites for interim https://smart-home.haier.com/cn/, www.xetra.com, www.dgap.de,
report disclosure https://www.hkexnews.hk
Deposit place of interim Department of Securities of Haier Smart Home Co., Ltd.
report Haier Science and Technology Innovation Ecological Park,
No. 1 Haier Road, Qingdao City
Query index for any Not applicable
changes during the
reporting period
V. SUMMARIZED INFORMATION OF SHARES OF THE COMPANY
Stock Short
Stock Exchange of Stock Short Name Before
Type of Shares Shares Listed Name Stock Code Variation
A share Shanghai Stock 600690
Exchange
D share Frankfurt Stock Haier Smart 690D Qingdao Haier
Exchange Home
H Share Hong Kong Stock Haier Smart 6690 /
Exchange Home
Haier Smart Home Co., Ltd. Interim Report 2024 7
Section II General Information of the Company and Key Financial Indicators
VI. OTHER RELATED INFORMATION
Applicable √ Not Applicable
VII. KEY ACCOUNTING DATA AND FINANCIAL INDICATORS OF THE
COMPANY
(I) Key accounting data
Unit and Currency: RMB
The corresponding
period of last year
Increase/
decrease for the
reporting period
compared with
the
For the corresponding
reporting period Before period of last
Key accounting data (January-June) After adjustment adjustment year (%)
Operating revenue 135,622,549,121.01 131,628,595,912.05 131,626,581,506.56 3.03
Net profit attributable to shareholders of the
listed Company 10,420,218,389.22 8,962,851,469.46 8,963,875,999.84 16.26
Net profit after deduction of non-recurring
profit or loss attributable to shareholders
of the listed Company 10,160,504,902.38 8,603,977,764.58 8,603,977,764.58 18.09
Net cash flows from operating activities 7,818,257,937.26 6,790,021,534.62 6,790,530,462.54 15.14
As at the end of reporting
period of last year
Increase/
decrease as at
the end of the
reporting period
As at the end of compared with
the reporting Before that of last year
period After adjustment adjustment (%)
Net assets attributable to shareholders of
the listed Company 105,734,300,351.38 103,514,153,535.04 96,681,175,780.71 2.14
Total assets 262,251,245,011.55 253,379,859,977.97 246,302,105,777.51 3.50
8 Haier Smart Home Co., Ltd. Interim Report 2024
Section II General Information of the Company and Key Financial Indicators
(II) Key financial indicators
The corresponding period
of last year
Increase/
decrease for the
reporting period
compared with
the
For the corresponding
reporting period After Before period of last
Key financial indicators (January-June) adjustment adjustment year (%)
Basic earnings per share (RMB/share) 1.13 0.96 0.97 17.71
Diluted earnings per share (RMB/share) 1.12 0.96 0.96 16.67
Basic earnings per share after deducting non-
recurring profit or loss (RMB/share) 1.10 0.93 0.93 18.28
Weighted average return on net assets (%) 9.67 9.16 9.16 0.51
Weighted average return on net assets after
deducting non-recurring profit or loss (%) 9.43 8.80 8.80 0.63
Explanation of the key accounting data and financial indicators of the Company
Applicable √ Not Applicable
VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND
OVERSEAS ACCOUNTING STANDARDS
√ Applicable Not Applicable
(I) Difference in net profit and net assets attributable to shareholders of the listed
company in financial statements as disclosed in accordance with International
Accounting Standards and Chinese Accounting Standards
Applicable √ Not Applicable
There is no difference between the net profit and net assets attributable to shareholders of the
listed company presented in the consolidated financial statements as disclosed in accordance
with International Accounting Standards and Chinese Accounting Standards by the Company.
Haier Smart Home Co., Ltd. Interim Report 2024 9
Section II General Information of the Company and Key Financial Indicators
(II) Difference in net profit and net assets attributable to shareholders of the listed
company in financial statements as disclosed in accordance with overseas
accounting standards and Chinese Accounting Standards
Applicable √ Not Applicable
Apart from the financial statements prepared in accordance with International Accounting
Standards, the Company has not prepared financial statements in accordance with other
overseas accounting standards.
(III) Explanation on difference in domestic and overseas accounting standards.
Applicable √ Not Applicable
IX. NON-RECURRING PROFIT OR LOSS ITEMS AND AMOUNT
√ Applicable Not Applicable
Unit and Currency: RMB
Non-recurring profit and loss items Amount
Profit or loss from disposal of non-current assets, including the write-off of
provision for asset impairment -24,802,715.11
Government subsidies included in current profit or loss, except for government
subsidies that are closely related to the Company’s normal business operations,
conformed to requirements of state policies and granted according to specific
criteria, and have a sustained impact on the Company’s profit or loss 373,800,184.84
Profit or loss arising from changes in fair value of financial assets and financial
liabilities held by non-financial entities, and profit or loss arising from disposal
of financial assets and financial liabilities, except for effective hedging activities
related to the Company’s normal business operations -29,489,597.82
Other non-operating income and expenses except the aforementioned items -3,829,918.04
Less: Effect of income tax 46,231,142.38
Effect of minority equity interest (After Tax) 9,733,324.65
Total 259,713,486.84
For the Company’s recognition of items that are not listed in the “Explanatory Announcement on
Information Disclosure for Companies Offering Their Securities to the Public No.1 — Non-recurring
Profit or Loss” as non-recurring profit or loss items and the amount of which is significant, and for
non-recurring profit or loss items as illustrated in the “Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public No.1 — Non-recurring Profit or Loss”
designated as recurring profit or loss items, reasons shall be specified.
Applicable √ Not Applicable
X. OTHERS
Applicable √ Not Applicable
10 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and
Analysis
I. INTRODUCTION OF THE INDUSTRY WHERE THE COMPANY OPERATES
AND ITS MAJOR BUSINESS DURING THE REPORTING PERIOD
Founded in 1984, the Company is committed to being an enterprise of the times. Through relentless
innovation and iterations, we seize opportunities in the industry by continuously launching innovative
products that steer market development. After more than 30 years, the Company has become a global
leader in the major home appliance industry, as well as a pioneer in global smart home solutions.
Global leader of the major home appliance industry: According to data from Euromonitor — an
authoritative market researcher, the Company ranked first in terms of sales volume in global
major appliance market for 15 consecutive years. The Company has a global portfolio of brands,
including Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. From 2008 to
2023, Haier brand refrigerators and washing machines ranked first among global major home
appliance brands in sales volume for 16 and 15 consecutive years respectively.
Pioneer of global smart home solutions: Capitalizing on our full-range home appliances products,
the Company is recognized by Euromonitor as one of the first in the industry to introduce smart
home solutions. San Yi Niao remained committed to the mission of “providing smart home
experience for a better home”, by enhancing three major capabilities in respect of customisation
capability, delivery capability and intelligence capability, we have been dedicated to providing
customised and specialised smart home appliance solutions for users.
Over the years, the Company has established a business layout that includes smart solutions for food
storage and cooking, laundry, air and water, the Overseas Home Appliance and Smart Home
Business, and Other Business.
Haier Smart Home Co., Ltd. Interim Report 2024 11
Section III Management Discussion and Analysis
The Company provides a full range of home appliance products and value-added services in global
market through Haier Smart Home APP and San Yi Niao APP, supplemented by our offline experience
centres, to cater for users’ needs for different lifestyle scenarios. Smart Home Business comprises
Household Food Storage and Cooking Solutions, Household Laundry Management Solutions, Air
Solutions (Internet of Air), and Household Water Solutions (Internet of Water).
Household Food Storage and Cooking Solutions: Through selling products such as refrigerators,
freezers, kitchen appliances in global market, as well as providing one-stop smart kitchen
scenario solutions and ecosystem solutions including smart cooking and nutrition planning, the
Company fully addresses users’ need for convenient, healthy and tasteful gourmet experiences.
Household Laundry Management Solutions: Haier’s washing machine focuses on applying original
technologies to directly solve users’ pain points in home living scenarios and create new
experiences and value for users. With a product lineup of washing machines, tumble dryers, all
in-one laundry machines, garment care machines, and heated drying racks, the Company has
evolved from selling individual products to providing scenario-based solutions and offering end
to-end laundry care services. For example, the Zhongzihemei ( ) three-in-one washer
combines washing, drying, and fabric care functions into a single unit, and the Essence Wash
washing machine reduces washing time and improves cleaning effectiveness by producing a
highly concentrated detergent solution that can quickly soak into clothes through detergent pre
mixing and high pressure spraying.
Air Solutions (Internet of Air):
Home air conditioners: Through worldwide sales, the Company provides products such as home
air-conditioners and fresh air systems, as well as a comprehensive range of full-cycle solutions
including coordination of multiple air-conditioners and purifiers, adaptive air flow, air quality
monitoring and air disinfection, thereby delivering a healthy and comfortable experience at home
and during commute that caters to the user needs in terms of air temperature, humidity and
quality.
Smart buildings: The Company is committed to becoming a leader in efficient, sustainable and
smart building solutions based on the state’s “carbon peaking and carbon neutrality” strategy.
Focusing on the business areas of smart control, environment, energy and system integration of
buildings, the Company provides green and smart building solutions integrating “technology +
experience + space” for government and commercial buildings, railways, schools, and hospitals.
Household Water Solutions (Internet of Water): Through providing worldwide users with electric
water heaters, gas water heaters, solar water heaters, air energy heat pump water heaters, POE
water purifiers, POU water purifiers, water softening equipment, the Company offers smart water
solutions including interactions between water heaters and purifiers, and between heating
appliances and water heaters, so as to comprehensively cater to users’ needs for water
purification, softening and heating.
12 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
The Company manufactures and sells a comprehensive portfolio of home appliance products and
provides value-added services in more than 200 countries and regions, including North America,
Europe, South Asia and Southeast Asia, Australia and New Zealand, Japan, Middle East and Africa.
In the overseas markets, the Company has been manufacturing and selling proprietary appliance
products catering for local users’ demands for more than 20 years. During the time, a number of
acquisitions contributed to our growth including acquisition of Haier Group Corporation’s overseas
white goods business (Sanyo Electric Co., Ltd.’s white goods business in Japan and Southeast Asia)
in 2015, home appliances of GE in the US in 2016, Fisher&Paykel in 2018, and Candy in 2019. The
development of the Company’s overseas businesses has been fuelled by synergies among our
self-developed business and our acquired businesses.
At present, the overseas business of the Company has entered a stage of promising growth, having
achieved a multi-brand, cross-product and cross-regional presence on a global basis. According to
Euromonitor, the Company’s share of the global market (retail volume) for major home appliances in
key regions market share in 2023 is as follows: ranked first in Asia in terms of retail volume, with a
market share of 26%; ranked second in America, with a market share of 15.8%; ranked first in
Australia and New Zealand, with a market share of 14.6%. The Company ranked fourth in Europe with
a market share of 8.8%.
Other Businesses
Building on our established smart home businesses, the Company has also developed small home
appliances, cleaning robots, channel distribution and other businesses. In particular, the small home
appliance business primarily involves small home appliances designed by the Company, produced by
outsourced third-party manufacturers and sold under the Company’s brands, which serve to enrich our
smart home solutions product mix. The channel distribution business primarily offers distribution
services for products such as televisions and user electronics for the Haier Group or third-party
brands, which leverages the Company’s sales network.
During the reporting period, the Company was once again listed among the Top 500 World’s
Companies and named again as the 2024 World’s Most Admired Companies by the Fortune Magazine.
We are the only company being selected in Europe and Asia in the home appliances industry and are
the only selected company incorporated outside the US. Meanwhile, the Company is also the world’s
only Internet-of-Things (IoT) ecosystem brand being named again as BrandZTM Top 100 Most Valuable
Global Brands in 2024. At the same time, the Company was named again among Fortune’s China
ESG Impact list. The Company’s ESG effort has also been recognized by external rating agencies,
receiving an MSCI ESG rating of A, which is at leading levels within home appliance sector in China.
Haier Smart Home was selected into the three major ESG indices of the Hang Seng Index, including
the HSI ESG Enhanced Index, the HSI ESG Enhanced Select Index and the HSCEI ESG Enhanced
Index.
Haier Smart Home Co., Ltd. Interim Report 2024 13
Section III Management Discussion and Analysis
II. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTING
PERIOD
√ Applicable Not Applicable
The Company has established a solid strategic presence and competitive advantage in global market.
In China’s major home appliance market, the Company has long maintained a leading position across
all product categories. According to CMM’s report, the Company has established a continued leading
market position in key major home appliance categories during the reporting period. In overseas
markets, the Company has adhered to its high-end brand creation strategy, building capacity to create
leading sustainable growth, which has continuously improved its market share. Building on this
foundation, the Company will further consolidate its leadership position in the industry by leveraging
integrated synergies of its global unified platforms, through efficiency transformation driven by
digitalization, and by leveraging its technological strength and innovative capabilities. As cornerstone for
sustainable development, our “Rendanheyi ( )” Model also provided management guidance to
the Company and enabled us to replicate successful experiences. It is believed that the following
advantages will help the Company to continue to strengthen its leading position:
(i) Building up excellent high-end brand operation capabilities and creating a well-recognized
high-end brand through forward-looking layout and long-term investment in the global
market to achieve a leading market position.
To better meet the need of consumers in pursuit of quality life, the Company has started to
develop the high-end brand Casarte in the Chinese market more than 10 years ago. The creation
of high-end brands requires not only focus, experience and patience, but also continuous
innovation of technological standards and differentiated service capabilities to fulfil user demand
for high-quality experiences. The Casarte brand combined the Company’s global technological
strengths, product development capabilities and manufacturing craftsmanship, as well as privilege
marketing and differentiation services, which has won the trust of users in China’s high-end
market. According to data from CMM, the Casarte brand has assumed a definitive leading
position in China’s high-end major home appliance market in the first half of 2024, ranking first
in the retail sales of refrigerator, washing machine and air conditioner categories in the high-end
segment. Specifically, in terms of offline retail sales, shares of the Casarte brand of air
conditioners reached 32% in the market with product priced above RMB15,000 in China, while its
share of refrigerators and drum washing machines priced above RMB10,000 in the China’s
market reached 39.5% and 82.3% respectively.
In the North American market, the Company owns high-end brands such as Monogram, Café,
and GE Profile. In collaboration with the Qingdao headquarters, we enhanced our high-end brand
profile through launching leading products including Combo washers and dryers. Through the
creation of luxurious, customizable and smart technology-enabled user experience, our high-end
brands Monogram, Café and GE Profile have grown rapidly.
14 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
(ii) Providing users with specialised and customised smart household solutions through the
San Yi Niao brand with cross-household design focusing on scenario-based experience
to carry out the mission of “providing smart home experience for a better home”.
As users continued to demand for higher living quality, with its focus on the mission of
“providing smart home experience for a better home”, San Yi Niao has been dedicated to
providing customised and specialised smart home appliance solutions for users, strengthening its
leadership around “customisation capabilities, delivery capabilities and intelligence capabilities”. In
terms of customisation capabilities, San Yi Niao promotes one-stop customisation of the whole
process through the digital middle platform to meet the personalized needs of users; in terms of
delivery capabilities, San Yi Niao has established mature whole-process delivery standards, which
can improve user experience through integrated delivery tools for smart home appliances. In
terms of smart capabilities, San Yi Niao relies on Haier Smart Home’s main platform to achieve
deep interconnection of the whole household, providing more boundless interaction and more
active services.
(iii) Extensive and solid global presence with localized operational capability
In respect of overseas markets, the Company seeks overseas expansion of its own brands as
well as synergies with acquired brands to develop overseas markets. Such business strategy has
guided the Company to establish R&D, manufacturing and marketing three-in-one structure
across multiple brands, products and regions, as well as the model of self-development,
interconnection and synergized operation.
The Company’s extensive global presence depends on its localized business teams as well as its
flexible and autonomous management mechanisms established in various overseas markets,
which have enabled the Company to gain rapid insights and respond swiftly to local user
demands. The Company also proactively integrates into local markets and cultures and has
established a corporate image that is recognized by local communities in the overseas regions
where the Company operates.
At present, the Company established 10+N innovative ecosystems, 122 manufacturing centres,
and 108 marketing centres around the world, and achieved a coverage of nearly 230,000 points
of sales in global markets.
(iv) A comprehensive portfolio of proprietary brands recognised by users of all tiers
Through organic growth and acquisitions, the Company has formed seven brand clusters,
including Haier, Casarte, Leader, GE Appliances, Candy, Fisher&Paykel and AQUA. To address
the needs of users from different tiers in various markets around the world, the Company has
adopted a differentiated multi-brand strategy in different regions that centred around users, to
achieve an extensive and in-depth user coverage. For example, in the Chinese market: the three
brands of Casarte, Haier and Leader achieved the coverage of high-end, mainstream and niche
market groups respectively; in the U.S. market, the six major brands such as Monogram, Café,
GE Profile, GE, Haier, Hotpoint comprehensively covered all segments of high-end, mid-range
and low-end markets, thereby meeting the preferences and needs of different types of users.
Haier Smart Home Co., Ltd. Interim Report 2024 15
Section III Management Discussion and Analysis
(v) Cross-border acquisition and synergy realisation capabilities
The Company has an excellent track record of acquisition and integration. The Company has
acquired Haier Group Corporation’s overseas white goods business, including Sanyo Electric Co.,
Ltd.’s white goods businesses in Japan and Southeast Asia in 2015, the home appliance
business of General Electric in the US in 2016, the New Zealand company Fisher&Paykel (which
has been entrusted by the Haier Group since 2015) in 2018, and the Italian company Candy in
2019. The Company’s capability to perform acquisition and integration is reflected in the
following: First of all, the Company implements the “Rendanheyi ( )” Model in the
acquired companies, which is a value-added sharing mechanism for the whole-process team
under a common goal. Such model can motivate the acquired companies and their employees
and enable them to generate more value. Secondly, the Company made use of its global
platform to empower the acquired companies in terms of strategic planning, R&D and
procurement in order to enhance their competitiveness. Thirdly, the Company’s open and
inclusive corporate culture can support the acquired companies in establishing a flexible and
autonomous management mechanism, which can easily earn recognition from the acquired
companies and is conducive to the promotion of integration.
(vi) Comprehensive and in-depth global collaborations and empowerment
The Company has made full use of its global collaborative platform, as well as its integrated
functions of R&D, product development, procurement, supply chain, sales and brand marketing.
It was able to share and expand development experience to various markets around the world.
By strengthening the synergies among its global businesses, the Company has created a strong
driving force for its future development.
Global collaborative R&D: The Company has a global collaborative R&D system and has
established global technology R&D mechanisms to share common modules, utilize common
technologies, and share patents within the scope of compliance. For example, the
Company’s R&D team in China joined hands with FPA’s and CANDY’s R&D teams to
develop the H20 spray technology, which has been applied to freestanding and built-in
dishwashers of Haier, Fisher&Paykel, CANDY and HOOVER, hence strengthening the
Company’s product leadership.
Global collaborative product development: The Company has established a global product
development mechanism to facilitate regional collaboration and supplementation across
product categories. For example, the R&D teams in South Asia and China embarked on a
10-month collaboration, breaking away from the traditional product development model by
innovating on team organisation, quality control, product testing and cost control leveraging
complementary local resources, in order to develop the HRT-683 refrigerator which has
become a mainstream high-end product in the local market.
16 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
Global collaborative procurement: The Company has established a global procurement
committee to coordinate procurement activities. The committee has built a digital sourcing
platform that brought together partners across industries and regions to develop an
autonomous and controlled global supply chain ecosystem. The committee also created a
global database of preferred suppliers and materials to achieve cost reduction by
aggregating resources at the Company level. By unifying procurement rules and processes,
the Company established a standardised operating system with differentiated procurement
strategies to enhance efficiency while lowering risks. We have also developed a Company
level digital procurement platform to enhance shared capabilities through connecting
“materials, businesses, people and mechanisms” to the platform, thereby improving the
resilience of our global supply chain.
Global collaborative supply chain: The Company has built an end-to-end digital management
system for the global supply chain that spanned from marketing to suppliers to production
and logistics. Using intelligent algorithms, the system enabled real-time flexible deployment
of production capacity, and factories across the globe could share and develop smart
manufacturing technologies to boost competitiveness.
Global collaborative marketing and brand promotion: The Company operates a multi-level
brand portfolio with collaborative brand promotions. The Company also promotes and
introduces successful marketing strategies among regional markets. For example, the
Company successfully replicated its sales and marketing model of China’s third and fourth
tier markets to markets such as India, Pakistan, and Thailand, strengthening the company’s
brand image and regional market competitiveness.
(vii) Industry-leading R&D and technological capabilities
Haier Smart Home delves into technological innovation to expedite the development of
innovation-driven productivity that aims for high-end, smart and green upgrade. Leveraging on
our industry-leading and comprehensive R&D presence, we constantly provide global users with
home appliances that meet their needs and customise their smart and convenient way of living,
thus enriching users’ life experience as well as cementing our leading position in high-end
brands, scenario brands and ecosystem brands.
Haier Smart Home Co., Ltd. Interim Report 2024 17
Section III Management Discussion and Analysis
Leadership in original technologies:
In 2024, Haier Smart Home continued to innovate with a user-oriented approach and has
produced a series of scientific and technological innovations. It developed the
low-temperature intelligent unmanned retail technology, promoted the market-oriented
operation and management of frozen products, led the intelligent unmanned retail industry,
and promoted the comprehensive application of refrigerated intelligent unmanned retail
equipment. In view of the problems of elution and drying, such as unclean rinsing, high
noise of dehydration vibration, and accumulation of linen scraps in the air duct, we have
achieved breakthroughs in the research on elution and drying performance, with rinsing
capacity increasing by 7% and developing low vibration and low noise washing machines,
so as to achieve the effect of maintaining efficient drying for a long time. The industry’s first
thermal comfort control technology based on sleep staging has established the thermal
comfort equation (SPMV equation) based on sleep process to establish the relationship
between sleep and environmental parameters, filling the gap in the industry where there is
only the thermal sensation of the waking state but a lack of thermal comfort environmental
parameters in the sleep process.
Certification from authorities:
For the first half of 2024, the Company received a total of 17 State Science and
Technology Progress Award, more than any other company in the industry. The Company
won the Disruptive Technology Innovation Competition of the Ministry of Science and
Technology for two consecutive years, the highest accolade in the industry.
Leadership in patent quality:
For the first half of 2024, Haier Smart Home has accumulated more than 109,000 patents
applications globally, including more than 70,000 invention patents. The Company also
accumulated 12 state patent gold awards, ranking first in the domestic market.
In the ‘Global Smart Home Invention Patent Ranking’ in the first half of 2024, Haier Smart
Home ranked first in the world for the eleventh consecutive times with 3,109 published
patent applications.
Leadership in international standards:
For the first half of 2024, Haier Smart Home has cumulatively led and participated in the
drafting of 100 international standards and 708 state/industrial standards. We are the only
company in the industry to have participated in smart home standards from international
organizations including the IEC, ISO, IEEE, OCF and Matter. We are also the only
enterprise in the world to serve on both the IEC Board and the IEC Market Strategy Board,
which have enabled the Company to stay actively involved in the formulation of international
standards.
Leadership in experience design:
Haier won over 600 accolades, including international design awards such as the German
IF Design Award and the Red Dot Design Award. The Company won six international
design gold awards and won 3 China Excellent Industrial Design Gold Awards from the
Ministry of Industry and Information Technology, which is the only enterprise in China that
have earned three consecutive gold awards.
18 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
(viii) Sustainability
Global ESG governance structure: Haier Smart Home has established a global ESG
governance structure, including the ESG Committee of the Board of Directors, the ESG
Global Executive Office, and the Global ESG Executive Working Group, which provides
organisational support for the in-depth practice of ESG.
Green development and low-carbon operation: Haier Smart Home has formulated the “6
Green” strategy of green management throughout the entire life cycle, which includes
“green design, green manufacturing, green marketing, green recycling, green disposal, and
green procurement”, and promotes green actions throughout the entire life cycle. Haier
Smart Home has integrated low-carbon, recycling, energy saving and emission reduction
into its daily operations to promote green upgrading of the industry.
Social responsibility and charity work: Haier Smart Home actively participates in public welfare
projects such as the Hope Project, rural revitalisation, and emergency relief on a global
scale, and continues to give back to society through donations and volunteer services.
Leading ESG rating: Haier Smart Home has the leading rating among its peers in China in
respect of the ESG ratings issued by three major organizations, namely CSI, MSCI and
Wind, which demonstrates its excellent performance in environmental, social responsibility
and corporate governance.
(ix) Staying committed to the principle of ‘value of people comes first’
‘Value of people comes first’ has always been a guiding principle for Haier’s development. From
the autonomous operation team at the start of the venture to the current “Rendanheyi (
)” model, Haier encourages every employee to maximize their own values while creating values
for users. In Haier’s “Rendanheyi ( )” model, ‘Ren’ refers to creators; ‘Dan’ refers to user
value; ‘Heyi’ refers to the integration of values realized by employees and the values created for
users. ‘Value of people comes first’ is the highest purpose of the “Rendanheyi ( )”
model.
Haier Smart Home adheres to the values of recognizing users’ demand as priority and denying
our own perceptions and is committed to the ‘two creative spirits’ of entrepreneurship and
innovation. We turned employees into creators, implementers into entrepreneurs, and transformed
enterprises into open ecosystem platforms, which have supported the Company to become a
global leader of smart home in the Internet of Things era.
III. DISCUSSION AND ANALYSIS ON OPERATIONS
Part 1: Discussion and analysis on overall operations
During the reporting period, in response to changing environment, the Company advanced end-to-end
digital transformation, improved user experience and operational efficiency, to improve profitability.
Haier Smart Home Co., Ltd. Interim Report 2024 19
Section III Management Discussion and Analysis
In the first half of 2024, the Company recorded sales revenue of RMB135.623 billion, a 3.0% increase
compared to the same period in 2023. The following factors are contributing to revenue changes.
In domestic markets, despite weak momentum in the white goods sector, particularly against a 14.5%
drop in air conditioner retail sales, the Company managed to grew revenue by 2.3% in the first half
this year, leveraging multi-brand product lineup and innovative new media marketing strategies.
The Company’s revenue from overseas markets grew by 3.7% in the first half of the year. In
developed markets like the U.S. and Europe, where inflation suppressed demand, the Company
increased market share by launching high-end products, optimizing supply chain, and improving
operational efficiency. In rapidly growing South Asia, Southeast Asia, and the Middle East & Africa, the
Company strengthened supply chain and distribution network, enhanced high-end product lineup and
increased price indices to achieve 9.9% revenues growth in South Asia, 12.4% in Southeast Asia and
26.8% in Middle East & Africa in the first half this year.
In the first half of 2024, the net profit attributable to the shareholders of the parent company was
RMB10.42 billion, representing a 16.3% increase from the same period in 2023. The net profit
attributable to the shareholders of the parent company after deducting non-recurring profit or loss
amounted to RMB10.161 billion, representing a growth of 18.1% compared to the same period in
2023.
In the first half of 2024, the Company’s gross profit margin was 30.6%, up 0.2 percentage points
compared to the same period in 2023, leveraging digitalizing procurement, R&D, and manufacturing to
coordinate production and sales management systems in domestic market; while we improved cost
competitiveness with digital procurement platform and enhanced utilization through global supply chain
collaboration.
The selling expense ratio in the first half of 2024 was 13.8%, an improvement of 0.5 percentage points
compared to the same period in 2023, leveraging digitally enhanced efficiency in marketing resource
allocation, logistics network and warehouse management.
The administrative expense ratio in the first half of 2024 was 3.8%, an improvement of 0.3 percentage
points compared to the same period in 2023, leveraging streamlining business processes, and
enhancing organizational efficiency.
The financial expense ratio in the first half of 2024 was 0.04% (“+” as expenses, “ — ” as income), an
increase of 0.05 percentage points compared to the same period in 2023 as higher interest income
from improved capital management could not offset the increase in interest payment.
The Company’s net cash flow from operating activities in the first half of 2024 was RMB7.818 billion,
an increase of RMB1.028 billion year-on-year, achieved from increased operating profit and enhanced
operational efficiency during the period.
20 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
I. Household Food Storage and Cooking Solutions
(I) Refrigeration business
In the first half of 2024, the Company maintained technological leadership and accelerated
overseas high-end brand transformation to improve product competitiveness and market
share. During the reporting period, the Company’s global refrigerator revenue reached
RMB41.128 billion, a year-on-year increase of 1.8%.
According to Gfk, the Company consolidated leadership with offline retail share of 44.1%,
and an online retail share of 39% in China; the Company’s retail volume share also went up
by 0.4 percentage points reaching 22.9% overseas.
R&D
The Company leveraged global technology platforms to accelerate development in integrated
appliances & furniture solutions, freshness preservation, and ice-making. MSA oxygen control
preservation was also made available on more products, to offer user better value for their
purchase. In response to users’ needs for integrated home appliances and furnishings Casarte
launched built-in Ultra-realm ( ) 600/601 refrigerator which contributed 98% growth in
sales volume of seamless built-in units during the first half of the year.
Domestic market
The Company focused on creating optimal user experiences by leveraging multi-brand
portfolio of Haier, Casarte and Leader, catering to specific user needs with distinct value
propositions. Haier refrigerators concentrated on full-space freshness preservation
technology and smart features, introduced the world’s first full-space smart preservation
compartment. This innovation combined freshness preservation technology with smart
interaction for superior food storage and management. Casarte refrigerators pioneered
high-end integration of home appliances and furnishings by expanding its built-in range.
Leader attracted trendy users through performance and aesthetic design, new launches in
the first half including Little European style ( ) series, featuring light green colour,
rounded exterior and drawer-style door design.
Overseas markets
The Company remained committed to premium building by introducing high-end products
tailored to local demands overseas. In Western European market, the Company
strengthened leading position in multi-door, large-capacity units and while making
breakthrough in side-by-side refrigerators, helping Haier brand price index increase to 147.
In South Asian market, the Company tailored high-end products to meet local needs,
achieving a year-on-year volume growth of 50%. In the Australia, Fisher & Paykel
concentrated on ultra-high-end home appliances integrated with home furnishings, with a
brand price index reaching 200, while Haier brand targeted mid to high-end mainstream
market, to maintain leadership while elevating its price index to 108.
Haier Smart Home Co., Ltd. Interim Report 2024 21
Section III Management Discussion and Analysis
(II) Kitchen appliance business
In the first half of 2024, the kitchen appliance business focused on iterating product
platforms, expanding product lineup, and enhancing presence in home improvement
channels to achieve a global revenue of RMB20.275 billion, a year-on-year increase of
0.3%.
According to Gfk, in China, the Company’s ranked the third in the offline market with 8.6%
retail share, up 0.2 percentage points year-on-year while online retail share went up by 0.7
percentage reaching 5.1%. Casarte ovens ranked first in the price segment above
RMB11,000. In the North America, built-in and microwave products continued to gain
market share against headwind. In Europe, Haier continued to grow and ranked amongst
Top 4 despite industry downtown.
Domestic market
The Company further expanded the kitchen appliance lineup and upgraded product
competitiveness: Casarte launched a seamless built-in smart lift range hood, an ultra-thin
built-in gas stove, and a steam oven featuring waterless fresh steam and moisture-control
roasting technology, all of which contributed to the brand’s 0.8 percentage points share
gain in high-end market.
The Company enhanced presence in home improvement channels by developing
partnerships with cabinet manufacturers and interior designing firms. The Company
managed to grow domestic revenue despite challenging market environment by promoting
content marketing and highlighting local renovations projects to stimulate replacement
demand and capture opportunities from kitchen remodelling projects.
Overseas markets
In North American market, the Company successfully launched a new generation of
dishwashers featuring stainless steel interiors, which ensured durability, high efficiency, with
excellent cleaning and drainage performance. Café’s new-generation stainless steel
dishwasher earned the “2024 Great Design Awards” by the renowned Architectural Digest
for its exceptional flexibility and customization options. The Company launched a new
model of freestanding ovens and committed USD 118 million to upgrade production line of
new SKUs.
II. Household Laundry Solutions
In the first half of 2024, the washing machine business implemented innovation R&D,
omni-channel marketing, and overall cost optimization to achieve a global revenue of RMB29.737
billion, representing a 5.0% increase year-on-year. According to Gfk, in China, the Company
continued to lead the industry with 46.5% offline retail share and 38.1% online retail share. The
Company remained dominant in the high-end market, with a share of 83% in the price segment
above RMB10,000. According to Euromonitor, the Company achieved top market share in 10
countries, including Australia, New Zealand, and Vietnam.
22 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
Domestic market
The Company consistently delivered high-quality laundry experiences to consumers. The
Company solidify market leadership by introducing leading products such as the Casarte
Ultra-realm ( ) series Utilizing advanced technologies like 3D drying assessment, wet cleaning,
and quadruple filtration. The Company also increased average ticket price by offering integrated
laundry solutions while improving user engagement leveraging air wash and wet cleaning in-store
demonstration.
In response to changing consumption trends, the Company adjusted Leader brand strategy,
launching products that resonated with younger users to achieve rapid growth; in addition to
enhancing retail capabilities offline, the Company also bolstered marketing efforts on new media
including Douyin and Xiaohongshu to amplify brand influence and create a comprehensive user
service experience, successfully captured young consumers, enhanced brand awareness and
improved user recognition.
Overseas markets
The Company launched highly differentiated and competitive products, with effective retail
channel management strategies, resulting in continued market share growth. In the North
American market, heat pump COMBO washer-dryers remained best-sellers and increased
high-end share. In Europe, the Company launched the X11 Fresh Air series washing machines,
which could replace the air inside the drum every two minutes, effectively preventing bacterial
growth. Their energy efficiency also surpassed the European A-class energy rating by 50%. In
India, the Company maintained high-end product strategy, actively expanded into premium
distribution channels and improved retail traffic conversion to achieve over 30% revenue growth.
III. Air Solutions
During the reporting period, the Company’s air solution business realized revenue of RMB29.235
billion, up 3.8% year-on-year.
(I) Home air conditioner business
In the first half of 2024, the home air conditioner business actively expanded new HVAC
product lines while enhancing competitiveness in products, marketing and supply chains, to
achieve global revenue growth.
According to Gfk, the Company’s offline and online retail share of standing and
wall-mounted units reached 17.95% and 10.4% respectively in China and ranked first in
Pakistan and Malaysia.
Haier Smart Home Co., Ltd. Interim Report 2024 23
Section III Management Discussion and Analysis
R&D
The Company expanded ducted air conditioners, fresh air systems, and residential central
air conditioners, while increasing investment in energy-saving air conditioning systems and
smart IoT technologies. The Company also enhanced product quality and cost
competitiveness leveraging digital transformation and product platform strategies. In the first
half of the year, average individual model output increased by 10%, and component
standardization improved by 5%. At the same time, the Company accelerated vertical
supply chain integration by commencing production at Zhengzhou compressor joint venture
in April this year as well as increasing in-house component production in Hefei to improve
efficiency and cost competitiveness.
Domestic market
The Company accelerated retail transformation by integrating online and offline channels,
strengthening franchised stores and improving network coverage in rural areas. The
Company implemented omnichannel marketing strategy to enhance user acquisition and
conversion by promoting in-store product demonstration and creating bestsellers online. In
addition, revenue from Leader brand grew over 40% in the first half of the year by
accelerating development online to capture younger users.
Overseas markets
Benefited from long-term strategic investments in product iteration, professional channel
development, and localized supply chains across South Asia and Southeast Asia, the
Company seized opportunities from growing emerging countries and product upgrade
demand in developed markets. In the first half of the year, overseas revenue maintained
rapid growth. During the reporting period, the Company strengthened presence in the
Middle East, Africa, and Japan by upgrading variable frequency portable systems, RV air
conditioners, and Japanese split units.
(II) Smart building business
The smart building business gained share in both domestic and export market by
advancing core compressor technologies, maintaining a leading edge in air and magnetic
levitation, boosting in-house manufacturing of key components, and strengthening
professional solutions and services. According to China IOL, the Company’s domestic
market share increased by 1.2 percentage points year-on-year to 10.5%, while export
market share rose by 2.8 percentage points year-on-year to 12.5%.
24 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
R&D
The Company continuously iterated product platform through technology breakthroughs,
leading the industry in energy saving, carbon reduction, and smart control trends. We
developed a 500–1,200 cooling ton air-suspended, oil-free centrifugal chiller, which
completed large-capacity chiller lineup and enhanced market competitiveness.
Breakthroughs in scroll compressors and large standard centrifugal compressors
strengthened cost-competitiveness. Our new-generation IoT multi-split system provided
energy-efficient and smart solutions throughout its lifecycle, the increased domestic share of
multi-split products in the first half of the year has boosted profitability. In the European
market, the Company addressed demand for energy-efficient buildings with heat pump
products using eco-friendly refrigerant R290, which featured a heating COP of up to 5.5
with multiple anti-freezing functions.
Domestic market
The Company unlocked growth opportunities by strengthening county-level presence,
eliminated coverage gaps and expanding network coverage. Targeting diverse application
scenarios, such as real estate and underground transportation systems, we categorized
strategic user groups to improve client acquisition, scenario-based solution implementation,
and maintenance services, facilitating a shift from standalone HVAC products to integrated
building solutions. During the reporting period, the Company secured a RMB200 million
contract with Shanghai Metro, positioning us as a leader in the rail transit industry.
Overseas markets
The Company capitalized on our leading position in wireless multi-split and air & magnetic
levitation products. By offering comprehensive solutions featuring our light commercial,
multi-split, water chiller, point-of-use, heat pump, and smart control series, we catered to
diverse regional, and scenario needs while establishing a professional brand image in
overseas markets. We advanced the development of integrated sales centres that
combined user experience, product display, employee training, and sales operations to
enhance our professional capabilities in design, installation, and services, and boost our
industry reputation. In the rapidly growing global data centre sector, the Company won a
data centre project in Malaysia with a scale exceeding 12,000 refrigeration tons, providing
professional air-cooled magnetic levitation solutions for the facility.
IV. Household Water Solutions
During the reporting period, the household water solution business achieved a global revenue of
RMB8.106 billion, up 6.6% year-on-year.
In China, the Company launched innovative products including Casarte crystal tank series with
skin-care features; while 20,000 units of brand new dual-tank heaters have been sold
strengthening Casarte’s market leadership in water heater unit priced RMB5,000- 8,000. Haier
Little Magic box with filtration, anti-bacteria, lime scale and chlorine reduction functions helped
the Company become number one in units priced over RMB3,000.
Haier Smart Home Co., Ltd. Interim Report 2024 25
Section III Management Discussion and Analysis
Product upgrade also contributed to over 20% overseas revenue growth. In Malaysia, over
10,000 units of instant hot water units were sold, almost five times the volume sold last year. In
Europe, introduction of dual-tank electrical water heaters addressed the weakness in the heat
pump market. The Company also made breakthrough in developing new markets in Algeria.
On 17 July 2024, the Company entered the transaction with Electrolux Group in Sweden to
acquire 100% equity interest in Electrolux South Africa Proprietary Limited (“ESA”), its subsidiary
engaging in water heater business in South Africa. The acquisition is a crucial step in the
strategic development in African market. Leveraging Kwikot’s extensive HVAC channel and
service coverage, Haier will realize synergies in product and supply chain management to expand
water heater lineups and unlock potentials in solar water heaters and water purifiers.
V. China Operation
During the reporting period, the Company capitalized on growth opportunities among young
consumers, replacement buyers, and pre-installation customers through continuous innovation in
China.
Network Expansion offline
Enhancing competitiveness in offline channels
By strengthening San Yi Niao’s capability in scenario planning, integrated cabinet and appliance
design, and scenario implementation, the Company improved “scenario design delivery
service” experience, meeting the growing demand for kitchen and bathroom renovations.
The Company enhanced presence in shopping malls to create hubs for brand promotion, image
showcase, solution experience, member engagement, ecosystem co-creation, and traffic
monetization, effectively improving user traffic acquisition and conversion.
The Company also made use of digital mapping tools to identify network gaps, enhanced
coverage and retail competitiveness by empowering local micro enterprises, optimizing resource
allocation and accelerating mechanism reforms.
Model innovation online
By implementing strategies POP store cloud-based warehouse integration and lean user
management, the Company was able to expand product portfolio, facilitate inventory sharing,
enhance warehouse and logistics capabilities and promote precise user marketing to improve
efficiency in user management and product turnover, all of which contributed to 17% GMV
growth online during 618 Festival with retail share reaching 22.3%, up 1.8 percentage points
year-on-year.
Multi-Brand Strategy
The Company accelerated iterations of original technologies to expand Casarte’s leading
advantages and achieve revenue growth against the headwind. By enhancing product suite
offerings and spearheading the integration of home appliances with furnishings leveraging Nebula
( ) and Ultra-realm ( ) series, the Company increased user value and brand recognition
while suite sales revenue surged 145% year-on-year in the first half of 2024. The Company also
launched product series online featuring natural aesthetics in appearance and industrial design, to
attract younger users and expand brand recognition.
26 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
The Company addressed the needs of young consumers and achieved a retail sales growth of
31% from Leader brand in the first half of the year by launching popular products such as the
Vitality ( ) air conditioner and Cloud ( ) washing machine. The Company also introduced
“fun small appliances” for trendy travel and camping experiences. On the other hand, the
Company renovated marketing strategies to enhance presence on Douyin and Kuaishou and
integrated in-store livestreaming to achieve a growth of 402%. Additionally, the Company
strengthened partnership with JD and Tmall Campus channel to target young audiences and
expand user base.
VI. Overseas markets
In the first half of 2024, the Company’s overseas revenue amounted to RMB70.824 billion, up
3.7% compared to the same period in 2023.
The revenue growth stemmed from commitment to strategic positioning, leveraging global R&D
resources and maintaining technological leadership. In response to diverse market demands, the
Company expanded product lineup by enriching mid-range and entry-level offerings alongside
high-end products. Building on strengths in traditional categories, the Company enhanced HVAC
and small appliance offerings. Meanwhile, the Company expedited network coverage in emerging
markets, enhanced brand image in mainstream channels, improved conversion rates,
strengthened localized social media presence to increase brand awareness, implemented
organizational reform and accelerated supply chain deployment in Belt and Road countries to
capitalize on growth opportunities.
1. North America
In the first half of 2024, despite weakness in the U.S. home appliance market, the
Company achieved revenue of RMB39.079 billion, and outperformed the U.S. home
appliance market with core appliance market share growing across all product categories.
The Company continued to enhance leadership in high-end products, successfully
launching a new generation of oven range series with easy-to-clean baking trays, Café/
Profile’s new stainless-steel interior dishwasher series, and innovative products such as the
Profile 2.0 chewable ice maker. Profile’s smart indoor smoker, the industry’s first and only
indoor smoker appliance, offered consumers a novel and convenient way to experience
smoked cooking and earned the Best of CES Award in 2024.
The Company continued to expand into new channels and invest in accelerating new
industry development. At the 2024 AHR Expo, our Air and Water Solutions introduced the
new RealMAX gas water heater and the new-generation dual heat pump, dual heat
recovery system VRF MRV-5H, providing high efficiency and superior comfort for multi-room
commercial spaces.
During the reporting period, we maintained leading position in construction channels.
Despite weak consumer momentum and competitive pressures, the Company outperformed
the industry by capitalizing on key sales events and became the top performer at the
BrandSource and Nationwide spring sales exhibitions.
Haier Smart Home Co., Ltd. Interim Report 2024 27
Section III Management Discussion and Analysis
For the 6th consecutive year, the Company was named “Smart Appliance Company of the
Year” by IoT Breakthrough. The Company innovatively launched the Eco Balance smart
energy management solution, jointly developed with multiple ecosystem partners, providing
optimal whole-house energy management solutions for net-zero homes in the U.S. The
Company received the Great Place to Work certification for the third time, indicating our
position among top-tier enterprises in providing an excellent work environment for
employees.
2. Europe
In Europe, the Company recorded revenue of RMB14.505 billion, up 9.2% year-on-year,
and market share increased by 0.1 percentage points.
During the reporting period, the Company continued to accelerate strategic upgrade and
launched several new product platforms that are expected to contribute to long term
growth. Almost 150 new products covering Haier, New Candy and Hoover brands are
planned for the premium kitchen appliance platform to provide comprehensive kitchen
solutions. The first batch of new products have been launched in over 150 stores in Spain,
France, Italy, and Poland. The Company also introduced 905 French Door refrigerator series
with class A energy efficiency and New Candy series were launched in 489 stores.
Industry leading front-loading washing machine entered the entire Darty store network in
France, significantly contributing to profit growth. High-end OLED series, mini M95/C900
series were also launched in Spain to capture specific demand for playing games and
watching sports programmes.
On the manufacturing front, the new kitchen appliances factory in Turkey continued to ramp
up its production capacity leveraging coordinated R&D, production platforms and order
management.
3. Australia & New Zealand
In Australia and New Zealand, the Company recorded revenue of RMB3.225 billion, up
9.3% year-on-year. Connected products grew by 76% and led the market with 2.8
percentage points volume share gain and 2.9 percentage points revenue share gain in
Australia. In New Zealand, Haier and Fisher & Paykel brand outperformed the industry with
0.6 percentage points market share gain.
The Company remained dedicated to meeting consumer demand with cutting-edge
technology and innovative products such as Haier’s 8-star energy efficiency refrigerator,
which directly contributed to 7.4 percentage points market share gain in bottom-mounted
refrigerators; Haier’s ultra-thin tumble dryer integrated heat pump technology to achieve
7-star energy efficiency; Fisher & Paykel also introduced self-cleansing 48 inch oven and
induction cooktop, as well as series 7 and 9 dishwasher with leading energy efficiency
performance.
On the other hand, the Company enhanced presence in mainstream channels such as
Winnings with Fisher & Paykel’s popular built-in refrigerator range and made effort to
improve in-store display of Haier’s kitchen appliances in New Zealand.
28 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
4. South Asia
During the period, revenue from South Asian market grew 9.9% year-on-year to RMB6.542
billion.
In India, sales revenue grew by over 25% year-on-year, attributable to long-term investment
across the value chain, including products, distribution channels, and after-sales that
successfully built a highly localized operational platform with well-established brand
recognition.
The Company leveraged global-leading R&D capabilities and local insights to launch
innovative products such as the side-by-side refrigerator with seamless welding technology,
significantly improved product lifespan and gained popularity with local consumers,
capturing over 20% market share. Meanwhile, Haier enhanced cost competitiveness by
increasing in-house production of injection moulding parts.
The Company adhered to value-sharing with channel partners, focusing on expanding
network and refining retail operations to ensure strong brand visibility online and offline.
Haier’s physical retail network covered 61% of premium areas and successfully expanded
into 52% of towns and villages. The Company also expanded presence online to capture
growth opportunities.
Haier recognized the importance of serin enhancing user experience and ensuring product
quality. Currently, Haier has established an after-sales service team of over 5,000
employees in India, ensuring exceptional customer support and boosting the brand’s
reputation.
In Pakistan, the Company maintained growth momentum by enhancing distribution
channels, expanding local manufacturing, upgrading franchised store network while
developing partnerships with Coca-Cola and Unilever. The Company also focused on
building local supply chain, the second phase of the refrigerator factory is expected to
approaching complete soon with 300,000 units annual capacity. Kitchen appliance
production was also localized with an annual capacity of 100,000 units.
5. Southeast Asia
During the period, the Company realized revenue of RMB3.492 billion in Southeast Asia, up
12.4% year-on-year.
In Southeast Asia, the Company increased market share through product mix upgrade,
improved offline channel efficiency, social media brand promotion, and local supply chain
deployment. In Thailand, we upgraded the self-cleaning feature of air conditioners with UV
sterilization technology, addressing the market demand for healthy living and achieving a
28% growth in air conditioner sales. In Vietnam, we launched AQUA refrigerators featuring
ABT dynamic sterilization and HCS moisture lock compartments. The Company also
introduced smart Color AI washing machines driving AQUA’s market share reach 20%.
Haier Smart Home Co., Ltd. Interim Report 2024 29
Section III Management Discussion and Analysis
Regarding distribution channels, the Company effectively improved retail ticket prices and
competitiveness leveraging store development and product upgrade. We established 86
new AQUA store in Indonesia and secured prime space in CANDI Bali, Indonesia’s second
largest retail channel to enhance premium brand image. The Company implemented a
user-centric approach to enhance experience using measures including promoting online/
offline integration, providing personalized marketing and establishing a presence on local
search engines and content platforms in Vietnam. The Company also strengthened local
supply chain deployment. Construction of a new air conditioner factory commenced in
Thailand in April, refrigerator factory in Vietnam has been upgraded to secure production
capacity for both local and neighbouring markets.
6. Japan
During the period, revenue amounted to RMB1.827 billion in Japan, down 6.2%
year-on-year, a growth of 2.4% in local currency.
In Japan, the Company implemented a dual-brand strategy with AQUA and Haier,
enhancing retail competitiveness through product upgrades, channel expansion, and
marketing innovation. The Company captured demands for high-efficiency and smart
appliances with AQUA’s compact, large-capacity heat pump front-load series and the
upgraded TX multi-door/TZ ultra-thin large refrigerator to achieve over 30% year-on-year
growth in AQUA’s 500L+ extra-large refrigerators and a 125% growth in heat pump
front-load washers. Haier’s ultra-slim three-door refrigerators and variable-frequency
washers both grew over 30%. The Company entered air conditioner sector and accelerated
online expansion in response to user trends, creating new growth opportunities. Through
innovative activities and omni-channel promotion, the Company increased visibility and user
conversion rates, maintaining leading market share for refrigerator and freezer products in
Japan.
7. Middle East & Africa
During the period, revenue from the Middle East and Africa grew 26.8% year-on-year to
RMB1.475 billion.
During the reporting period, the Company drove rapid growth through localized
manufacturing, operation upgrades and business acquisitions. During the reporting period,
the first phase of Egypt eco-park in Egypt commenced production, localizing the
manufacturing of air conditioners and washing machines, reducing operational costs, to
accelerate development in Egypt and surrounding markets. The Company strengthened
operation and retail capabilities by focusing on brand and product mix upgrades to improve
user experience across different countries and promote mid-to-high-end products. The
Company announced the acquisition of Electrolux’s water heater business in South Africa.
This acquisition will support the development of solar water heaters and water purifiers in
local market, while leveraging Kwikot’s channel advantages to promote Haier’s refrigerators,
washing machines amongst others in South Africa and surrounding markets.
30 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
VII. Digital transformation
During the reporting period, the Company continued to advance digital transformation along the
entire value chain, enhancing competitiveness in user management, R&D, cost management and
order fulfilment. In the first half of the year, the Company’s selling and administrative expense
ratio optimized by 0.8 percentage points.
Enhancing User Management Competitiveness
The Company adopted AI-generated content (AIGC) to improve the quality and efficiency of
marketing content, while utilizing digital platforms to manage media placement costs and
improved effectiveness through data-driven strategy optimization. During the reporting period,
traffic acquisition costs in the domestic market were optimized by 28%.
The Company carried out digital upgrade of marketing strategies through operating a matrix of
new media accounts and integrating Douyin platform resources to improve traffic acquisition and
conversion. In the first half of the year, the proportion of digital retail increased by 25.7%.
Improving Product R&D and Cost Competitiveness
The Company focused on full product lifecycle management, enhancing capabilities in user
insights, product launch and exit strategies, R&D engineering, and cross-functional integration,
effectively shortened R&D cycles and enhanced user experience. In the first half of the year,
average model output in the domestic market increased by 7%.
The Company also integrated AI and OCR technologies to automatically identify cost factors and
build cost models, enabling one-click procurement price comparisons. Cost comparison models
have been established for over 100 types of materials while common component ratio increased
by 13%.
The Company achieved precise pre-production planning and efficient in-process operations
through smart management of labour, machinery, materials, methods, and environment, to
improve order execution accuracy. In the first half of the year, manufacturing (manufacturing and
logistics in factories) cost was optimized by 0.3%, and production efficiency increased by 8%.
Increasing Order Fulfilment Efficiency
The Company achieved real-time responsiveness to customer needs through sharing data in
sales, supply, production, and logistics, expediting lead time by 12% in the domestic market.
Furthermore, the Company upgraded smart order platform to optimize allocation based on cost
efficiency and reduce cost.
Haier Smart Home Co., Ltd. Interim Report 2024 31
Section III Management Discussion and Analysis
PART 2. REVIEW OF THE INDUSTRY WHERE THE COMPANY OPERATES DURING
THE REPORTING PERIOD
Industry overview for the first half of 2024
1. Domestic market
In the first half of 2024, sluggish real estate sector and weak consumer confidence suppressed
demand and put pressure on the white goods sector. According to AVC, retail sales of white
goods and kitchen & bathroom products fell 6.2% year-on-year to RMB290.5 billion in the first
half of 2024, while retail volume decreased 2.4% to 113.93 million units. The performance of
major sub-sectors was as follows:
(1) Home air conditioning industry
In the first half of 2024, persistent rainfall in eastern and southern China dampened market
demand. The industry’s earlier shipment in the first quarter of 2024, coupled with pressure
on end-user demand, led to elevated inventory levels and intensified competition. According
to AVC, in the first half of 2024, the air conditioner market’s total sales volume dropped
11.0% year-on-year to 33.15 million units across all channels, while sales revenue
decreased 14.5% year-on-year to RMB111.4 billion. The proportion of low-priced models
increased: according to AVC, online sales of 1.5 HP wall-mounted units priced below
RMB2,000 accounted for 22.8% of total sales volume, a year-on-year increase of 6.1
percentage points; whereas the offline product mix ratio of 1.5 HP wall-mounted units
priced above RMB3,500 dropped from 49.6% to 41.9% year-on-year.
As consumers’ increasing attention to air quality and preference towards integration of
home appliances and furnishings is driving structural upgrades as the industry shifts from
standing and wall-mounted products to integrated HVAC solutions.
(2) Refrigerator industry
Overall market remained replacement-driven. According to AVC, in the first half of 2024,
China’s refrigerator market achieved a total retail value of RMB65.2 billion across all
channels, a year-on-year increase of 0.4%, while retail volume reached 19.36 million units,
up 0.8% year-on-year. Consumers’ increasing focus on healthy diet and home aesthetics,
are driving the industry towards food freshness preservation and integration of appliances
with furnishings. Built-in refrigerators continued to outperform in the first half of 2024 with
online retail volume accounting for 12.4%, a year-on-year increase of 7.1%, while offline
retail volume accounted for 37.8%, a rise of 19.5% year-on-year.
32 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
(3) Washing machine industry
As living standards continue to rise, washer-dryer combos have become industry growth
driver. According to AVC, in the first half of 2024, the washing machine industry achieved
retail sales of RMB49.4 billion, a year-on-year increase of 3.6%, and retail volume reached
20.29 million units, up 6.2% year-on-year. Online retail sales of washer-dryer combos
totalled RMB4.34 billion, a year-on-year increase of 43.6%, and retail volume amounted to
541,000 units, up 64.1% year-on-year. As home appliances and furnishings become more
integrated, washing machines are gradually upgrading to ultra-thin models to create
enhanced home aesthetic experience.
(4) Kitchen appliance industry
Traditional kitchen appliances such as range hoods and stoves remained stable,
dishwashers continued to grow and integrated stoves experienced a decline. According to
AVC, in the first half of 2024, range hood retail sales decreased 0.2% year-on-year to
RMB14.9 billion; retail volume dropped 3.3% year-on-year to 8.68 million units. Gas stove
retail sales rose 2.7% year-on-year to RMB8.4 billion, and retail volume increased 4.8% to
10.47 million units. Dishwasher retail sales reached RMB5.8 billion in the first half of 2024,
up 5.0% year-on-year. Retail volume reached 990,000 units, a 3.4% year-on-year increase.
Retail sales of integrated stoves totalled RMB11.1 billion, a year-on-year decline of 18.20%,
and retail volume decreased 15.2% to 1.14 million units. As consumers increasingly pursue
high-quality lifestyles, their demands for quality and design in kitchen appliances continue to
rise. The industry is trending towards appliance-furnishing integration, smart features,
energy saving, and healthy cooking.
(5) Water heater industry
Industry demand has stabilized. According to AVC, in the first half of 2024, electric water
heaters recorded retail sales of RMB10.7 billion, down 0.8% year-on-year; retail volume
stood at 8.26 million units, up 1.6% year-on-year. Gas water heaters recorded retail sales
of RMB12.8 billion, down 1.0% year-on-year; retail volume totalled 6 million units, up 1.2%
year-on-year. Consumer focus has shifted from safety considerations to design, rapid
heating and comfort, thus popular models include ultra-thin electric water heaters with
dual-tank, rapid heating and smart constant-temperature gas units.
(6) Water purifier industry
The water purification industry maintained steady growth as consumer awareness of healthy
drinking water continued to grow. According to AVC, in the first half of 2024, retail sales of
household water appliances increased 2.3% year-on-year to RMB12.6 billion; retail volume
grew 4.3% year-on-year to 10.1 million units.
Currently, anticipated reduction in income has led to more cautious purchasing decisions.
Value for money has become key considerations in home appliance consumption. Unlike
their parents, consumers in their 20s and 30s utilize new media to gather product
information when making purchasing decisions, which requires appliance manufacturers to
continually adapt their branding, marketing, and product development strategies to capture
growth opportunities.
Haier Smart Home Co., Ltd. Interim Report 2024 33
Section III Management Discussion and Analysis
The white goods industry has become primarily upgrades and replacement-driven. The proportion
of first-time buyers is gradually declining, while demand for replacements due to home
renovations is on the rise. Consumers are increasingly seeking to enhance their quality of life
through kitchen and bathroom upgrades. As a result, comprehensive capabilities in scenario
design, installation, and maintenance services have become crucial for acquiring uses.
In the first half of 2024, there was a significant price increase in copper, aluminium, and
refrigerants, which had a significant impact on the profitability of the industry, particularly in the
air conditioner sector.
2. Overseas markets
In the first half of 2024, overseas market demand exhibited mixed trends. Core home appliance
markets in developed regions (Europe, U.S., Japan) remained under macroeconomic pressure.
However, emerging markets, including Southeast Asia, South Asia, the Middle East, and Africa,
maintained robust growth.
In the U.S, industry demand declined due to a downturn in both existing and new home sales.
According to AHAM, core appliance shipments in the first half of 2024 decreased by 2% in
volume and 6% in value year-on-year while competition remained fierce.
In Europe, persistent high inflation and interest rates continued to dampen consumer sentiment;
the home appliance industry remained sluggish. Demand was shifting towards value-for-money
products. GfK data reported a 0.3% decline in sales volume and a 1.3% decrease in sales value
for white goods across 21 European countries. However, green and low-carbon trends, as well
as energy price pressure created increasing demand for energy-efficient products and unlock
opportunities in HVAC sector with ongoing consolidation across the industry.
Benefiting from macroeconomic growth in India, the home appliance industry grew by 7–8%. The
refrigerator and washing machine sector increased by 5–6%, while the air conditioner sector,
boosted by hot temperatures in the north, saw over 30% retail growth. Driven by economic
growth and rising per capita income in Pakistan, the home appliance industry sustained growth
in the first half of the year.
According to Gfk, Thailand’s market grew by approximately 3%, driven by recoveries in foreign
investment and tourism. Air conditioner sales volume surged over 20% due to hot temperatures.
Vietnam experienced double-digit growth in the home appliance sector, bolstered by increased
foreign investment. Indonesia’s stable political and economic environment, coupled with rising
household disposable income, contributed to a 6% growth in the home appliance industry.
34 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
Due to high interest rates and inflation, consumers increasingly sought value-for-money products
in Australia and New Zealand. According to data from major Australian home appliance retail
channels, sales volume grew by 4.6% year-on-year in the first half of 2024, while sales value
increased by 1.7%.
The refrigerator, freezer, and washing machine sectors declines in volume, price, and revenue in
Japan because of inflation, currency depreciation, declining disposable income, longer
replacement cycles and ongoing price competition. Consumers have become more interested in
seeking added-value in products with large capacity, compact size, energy efficiency, and smart
features.
Industry Outlook for 2H2024
Domestic market
The Chinese home appliance industry has entered replacements and upgrades phase. According to
China Household Electric Appliance Research Institute, the penetration of air conditioners, refrigerators,
and washing machines across the country in 2022 amounted to 780 million, 580 million, and 550
million units respectively. A massive replacement market has already emerged.
The industry showed a clear trend towards lower-end products because of cautious income growth
expectations and weakened consumer confidence. On 15 July 2024, the National Development and
Reform Commission and the Ministry of Finance jointly issued “Measures to Support Large-scale
Equipment Renewal and Trade-in of Consumer Goods”. The implementation of these measures is
expected to stimulate consumer demand for upgrades, boost consumer confidence, and promote
industry development.
Overseas markets
In the second half of 2024, interest rate cut is expected in the developed countries, where pent-up
demand can be released to gradually revitalize the real estate market. Price competition is expected to
ease due to home appliance manufacturers’ focus on operational quality and high commodity prices.
The industry is poised for steady growth in the emerging markets where continued urbanization is
expected to drive appliance penetration and home appliance manufacturers are also accelerating the
localization of their supply chains.
Haier Smart Home Co., Ltd. Interim Report 2024 35
Section III Management Discussion and Analysis
PART 3. DEVELOPMENT PLAN FOR THE SECOND HALF OF THE YEAR
In the second half of 2024, amid dynamic changes in demand and an increasingly competitive
environment, the Company will continue to focus on iteratively optimizing user experience and
improving operational efficiency. We aim to enhance profitability by leveraging advantages in
technology, scale and service, while accelerating innovation and transformation to achieve long-term
sustainable growth.
Product Innovation
We will continue to uphold our value-oriented approach by integrating global R&D and planning
resources, accelerating technology sharing, and promoting the rapid implementation of leading
technologies and innovations across a wider range of products, to better meet the ever-changing
needs of our users.
Domestic market
In the second half of 2024, we will align with the national trade-in policy and achieve sustainable
growth through innovative marketing and channel strategies. We will leverage the Company’s
advantages in product lineup, scenario-based solutions, and franchised store network to capitalize on
trade-in subsidy opportunities, meeting users’ upgrade needs and driving retail growth. We will adapt
our marketing content and communication strategies to changing consumer decision-making processes
while adding on to brand value by improving go-to-market strategy and increase conversion efficiency
through new media. We will deepen our user-centric transformation by establishing efficient systems for
order forecasting, distribution and response, thereby enhancing user experience and customer
satisfaction.
Overseas markets
We will focus on improving profitability by expanding value chain through continuous product
upgrades, accelerating supply chain localization, implementing end-to-end digital transformation and
deepening global collaborations, to enhance profitability and achieve growth targets.
In the U.S., Australia, and New Zealand, we will strengthen profitability by improving supply chain
efficiency and iterating product platforms. In Europe, we will enhance competitiveness by optimizing
organizational structure, streamlining business processes, and promoting brand transformation. We will
continue localization along the Belt and Road Initiative in South Asia, Southeast Asia, Middle East and
Africa, to capitalize on population growth and penetration increases, thus become a leading brand in
these regions.
Platform transformation
We will advance the digital transformation in production, procurement, and quality systems to enhance
lean management capabilities across design, procurement, and production stages, while optimizing
end-to-end cost competitiveness.
Significant changes in the Company’s operating conditions during the reporting period, and matters
occurring during the reporting period that have and expected to have a significant impact on the
Company’s operating conditions
Applicable √ Not Applicable
36 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
IV. MAJOR OPERATIONS DURING THE REPORTING PERIOD
(I) Analysis of principal business
1 Table of movement analysis on the related items in financial statements
Unit and Currency: RMB
Corresponding
period of
Items Current period last year Change (%)
Operating revenue 135,622,549,121.01 131,628,595,912.05 3.03
Operating cost 94,106,431,686.66 91,557,518,745.02 2.78
Selling expenses 18,687,502,154.89 18,768,944,057.44 -0.43
Administrative expenses 5,186,349,563.44 5,461,681,481.50 -5.04
Financial expenses 58,919,168.65 –9,349,269.09 N/A
R&D expenses 5,088,901,166.88 5,025,786,116.64 1.26
Net cash flow generated from
operating activities 7,818,257,937.26 6,790,021,534.62 15.14
Net cash flow generated from
investing activities –7,334,174,927.57 –4,333,325,021.19 N/A
Net cash flow generated from
financing activities –191,176,728.11 –1,267,997,912.18 N/A
Gains or losses on changes in
fair value –29,565,597.82 31,271,562.35 -194.54
Credit impairment loss –58,013,951.73 –165,968,929.36 N/A
Losses on disposal of assets –2,583,904.37 –20,647,304.64 N/A
Non-operating expenses 84,518,604.74 32,299,513.21 161.67
Profits or losses attributable to
minority shareholders 187,104,752.91 80,831,283.76 131.48
Haier Smart Home Co., Ltd. Interim Report 2024 37
Section III Management Discussion and Analysis
Reasons for significant changes in certain indicators:
1) Reasons for the changes in financial expenses: the increase of 730.20% in financial
expenses over the corresponding period was mainly due to the additional interest
expenses incurred overseas as a result of higher interest rates on borrowings due to
interest rate hikes during the current period;
2) Reasons for the changes in the gains or losses on changes in fair value: the decrease
of 194.54% in profits or losses of changes in fair value (being losses during the
current period) over the corresponding period was mainly due to the decrease in fair
value of equity investments during the current period;
3) Reasons for changes in credit impairment loss: the decrease of 65.05% in credit
impairment loss over the corresponding period was mainly due to the decrease in the
provision for bad debts of receivables during the current period;
4) Reasons for changes in losses on disposal of assets: the decrease of 87.49% in losses
on disposal of assets over the corresponding period was mainly due to the decrease
in non-current asset disposal operations during the current period;
5) Reasons for changes in non-operating expenses: the increase of 161.67% in non-
operating expenses over the corresponding period was mainly due to the year-on-
year increase in expenses incurred during the current period that were not directly
related to the Company’s ordinary operation;
6) Reasons for changes in profits or losses attributable to minority shareholders: the
increase of 131.48% in profits or losses attributable to minority shareholders over the
corresponding period was mainly due to the increase in shareholding of minority
shareholders in certain subsidiaries during the current period;
7) Reasons for changes in net cash flow from investing activities: the increase of 69.25%
in net cash flow from investing activities over the corresponding period was mainly
due to the increase in cash paid for investment during the current period;
8) Reasons for changes in net cash flow from financing activities: the decrease of 84.92%
in net cash outflow from financing activities over the corresponding period was mainly
due to the increase in cash inflow from financing activities as a result of higher
borrowing, and the decrease in cash outflow from financing activities attributable to
the decrease in repurchased shares during the current period.
2 Detailed explanation on significant changes in the operation types and the
components of profit or sources of profit of the Company during the period
Applicable √ Not Applicable
38 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
(II) Explanations on the major changes in profits caused by non-principal businesses
Applicable √ Not Applicable
(III) Analysis of assets and liabilities
√ Applicable Not Applicable
1. Assets and liabilities
Unit: RMB
Percentage of
Percentage of change in amount
amount at the end from the end of the
Percentage of Amount at the end of the corresponding
amount at the end of the corresponding period of last year
Amount at the end of current period to corresponding period of last year to current period
Name of item of current period total assets (%) period of last year to total assets (%) (%) Description
Debt investments 14,477,621,780.97 5.52 8,841,233,078.66 3.49 63.75 Mainly due to the
increase in
long-term time
deposits during
the current period
Contract liabilities 3,256,026,994.75 1.24 7,731,916,491.54 3.05 -57.89 Mainly due to the
decrease in
advance payment
with performance
obligations
Other payables 27,248,243,510.90 10.39 19,181,569,184.83 7.57 42.05 Mainly due to the
increase in
dividends
payable
Non-current liabilities due 5,327,717,384.22 2.03 3,732,550,549.23 1.47 42.74 Mainly due to the
within one year increase in
long-term
borrowings due
within one year
Other current liabilities 1,095,321,670.22 0.42 1,651,239,151.52 0.65 -33.67 Mainly due to the
decrease in
Value-added tax
amount to be
written off
Haier Smart Home Co., Ltd. Interim Report 2024 39
Section III Management Discussion and Analysis
2. Overseas Assets
√ Applicable Not Applicable
(1) Scope of assets
Among the assets, overseas assets amounted to 12,413,782 (unit and currency:
RMB0,000), representing 47.3% of the total assets.
(2) Explanation of high percentage of overseas assets
√ Applicable Not Applicable
Unit and Currency: RMB
Operating revenue
during the reporting Net profit of the
Name of overseas asset Reason for formation Operating mode period reporting period
Overseas Home Appliance and Overseas mergers & Localized Operations with the 70,824,200,424 4,081,094,577
Smart Home Business acquisitions and the integration of R&D,
Company’s own manufacturing and marketing
development
Note: Net profit stated in the above table represents operating profit.
3. Restrictions on major assets as of the end of reporting period
Applicable √ Not Applicable
4. Other Explanations
Applicable √ Not Applicable
(IV) Analysis of investment
1. Overall analysis on external equity investment
Applicable √ Not Applicable
(1). Significant equity investment
Applicable √ Not Applicable
(2). Significant non-equity investment
Applicable √ Not Applicable
40 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
(3). Financial items measured at fair value
√ Applicable Not Applicable
Unit and Currency: RMB
Profits or losses Cumulative
of changes in fair changes in fair Provision for Sold/redeemed
value during the value included in impairment of Purchases during amount during
Asset type Opening balance period equity during the period the period the period Other changes Closing balance
Wealth management products 487,936,101.81 7,866,168.83 907,048,190.63 797,001,032.70 605,849,428.57
Investment in other equity instruments 6,403,694,954.77 –139,624,374.35 2,390,644.03 15,353,142.08 6,281,814,366.53
Investment in trading equity instruments 243,224,439.64 –54,049,574.20 172,919.49 189,001,945.95
Investment funds 222,803,002.38 22,787,943.83 31,168,225.04 8,709,245.29 3,668,458.53 271,718,384.49
Derivative instruments –101,059,175.53 11,289,463.13 –10,992,021.14 –4,276,205.97 –105,037,939.51
Total 7,256,599,323.07 –12,105,998.41 –150,616,395.49 940,607,059.70 805,883,197.48 14,745,394.64 7,243,346,186.03
Investment in securities
√ Applicable Not Applicable
Unit and Currency: RMB
Profit and loss Accumulated
Carrying arising from fair value Investment Carrying
Initial amount at the changes in fair changes Purchases Disposals profit or loss amount at the
Type of Securities investment Sources beginning of value during included in during the during the during the end of the
securities code Securities abbreviation cost of funding the period the period equity period period period period Accounting items
Stock 601328 Bank of Communications 1,803,769.50 Self-funding 7,819,326.48 883,760.12 8,703,086.60 Investments in other equity instruments
Stock 600827 Bailian Group 154,770.00 Self-funding 373,792.12 373,792.12 Investments in other equity instruments
Stock 300183 Neusoft Carrier 18,713,562.84 Self-funding 11,795,641.74 11,795,641.74 Investments in other equity instruments
Stock 688455 KENGIC 29,450,000.00 Self-funding 146,788,044.20 –54,049,574.20 92,738,470.00 Financial assets held for trading
Total / / 50,122,102.34 / 166,776,804.54 –54,049,574.20 883,760.12 113,610,990.46 /
Explanation of investment in securities
Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Interim Report 2024 41
Section III Management Discussion and Analysis
Private equity investment
√ Applicable Not Applicable
By the end of the reporting period, the Company has historically invested in private
equity funds as follows: the Company invested 63.13% share in Qingdao Haier SAIF
Smart Home Industry Investment Center (Limited Partnership); Qingdao RRS Huitong
Investment Management Co., Ltd. (青 島 日 日 順 匯 通 投 資 管 理 有 限 公 司), a subsidiary
of the Company, invested 49% share in Guangzhou Heying Investment Partnership
(Limited Partnership); Qingdao Haishang Chuangzhi Investment Co., Ltd. (青島海尚創
智 投 資 有 限 公 司), a subsidiary of the Company, invested 30% share in
Huizhixiangshun Equity Investment Fund (Qingdao) Partnership (Limited Partnership), a
private equity fund, and 50% equity of Qingdao Ririshun Huizhi Investment Co., Ltd.,
a managing partner of funds; Qingdao Haier Technology Investment Co., Ltd. (青島海
爾科技投資有限公司), a subsidiary of the Company, invested in private equity funds:
1.265% share in Beijing-Tianjin-Hebei Industrial Coordinated Development Investment
Fund (Limited Partnership) (京津冀產業協同發展投資基金（有限合伙）), 14.85% share
in Shenzhen TopoScend Capital Phase I Fund (Limited Partnership) (深 圳 市 投 控 東 海
一 期 基 金（有 限 合 伙）), 24% share in Qingdao Haimu Smart Home Investment
Partnership (Limited Partnership), and invested in fund management companies:
5.01% equity of CMG-SDIC Capital Co., Ltd. (國 投 招 商 投 資 管 理 有 限 公 司), 15%
equity of Shenzhen TopoScend Capital Co., Ltd. (深圳市投控東海投資有限公司), 49%
equity of Qingdao Haimu Investment Management Co., Ltd.
42 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
Derivative investment
√ Applicable Not Applicable
(1). Derivatives investments for hedging purposes during the reporting period
√ Applicable Not Applicable
Unit and Currency: RMB0’000
Proportion of
carrying amount
to net assets of
Carrying amount Gains or losses Accumulative Amount the Company at
Type of Initial at the beginning on fair value changes in fair purchased Amount sold Carrying amount the end of the
derivatives investment of the changes for the value included in during the during the at the end of the reporting period
investment amount current period current period equity reporting period reporting period Period (%)
Forward foreign
exchange
contracts 1,178,657 1,178,657 1,272 –2,195 1,024,425 9.69
Forward
commodity
contracts 11,009 11,009 –143 1,096 4,081 0.04
Total 1,189,666 1,189,666 1,129 –1,099 1,028,506 9.73
Explanation on any significant Accounting principles are based on the Accounting Standards for Business Enterprises. The Company carried out the accounting
changes in the accounting policies treatment for its business in accordance with the relevant regulations of “Accounting Standards for Business Enterprises No. 22
and specific accounting and — Recognition and Measurement of Financial Instruments”, “Accounting Standards for Business Enterprises No. 24 — Hedge
auditing principles for the hedging Accounting”, “Accounting Standards for Business Enterprises No. 37 — Presentation of Financial Instruments” and “Accounting
business during the reporting period Standards for Business Enterprises No. 39 — Fair Value Measurement” published by the Ministry of Finance and its guidance, to
as compared to the last reporting reflect the relevant items in the balance sheet and the statement of profit or loss, which are consistent with those of the previous
period reporting period.
Explanation on actual profit or loss The actual profit and loss for the reporting period amounted to RMB42.5669 million.
during the reporting period
Explanation on the effect of Under the premise of ensuring normal production and operation, the Company carried out hedging business to reduce the impact
hedging of exchange rate fluctuations on the Company’s production and operation and to realize the Company’s long-term stable
development.
Source of funds for derivative Self-owned funds
investments
Haier Smart Home Co., Ltd. Interim Report 2024 43
Section III Management Discussion and Analysis
Risk analysis and explanations on I. Foreign exchange hedging business
risk control measures for positions
in derivatives during the reporting 1. Risk Analysis
period (including but not limited to
market risk, liquidity risk, credit risk, The Company and its holding subsidiaries conduct foreign exchange derivatives business in accordance with the principle of
operational risk, legal risk, etc.) stability, and do not conduct the foreign exchange transaction for speculative purposes. All foreign exchange funds businesses
are based on normal production and operation and rely on specific business operations to avoid and prevent exchange rate risks.
However, there are also certain risks in conducting foreign exchange funds business:
(1) Market risk: Forward settlement of foreign exchange: the Company will determine whether to sign a forward contract based
on the cost of the product (basically consisting of RMB) and market risk. Signing the contract equals to fixing the price of
currency exchange. It is effective to resist market fluctuation risk and ensure a reasonable and stable profit level of the
Company through forward settlement of foreign exchange. Forward purchase of foreign exchange: according to the import
contract entered with the customer and exchange rate risk, the future currency exchange cost will be fixed through the
unilateral forward purchase of foreign exchange. Although there is a certain risk of loss, the forward purchase of foreign
exchange will effectively reduce the market fluctuation risk and fix procurement costs. Other NDF and options businesses are
mainly carried out when failed to sign the ordinary forward settlement/purchase of foreign exchange or the costs are too
high, only serving as the supplement of the above businesses. Exchange rate fluctuation risk in currency swap business is
avoided by adjusting the currency of assets and liabilities in order to match the currency of the assets with the currency of
liabilities. Interest rate fluctuation risk in interest rate swap business is avoided by transfer the floating-rate business to fix-rate
business or transfer the fixed-rate business to floating-rate business when the rate is going downward to reduce the costs.
All of the above businesses have a real business background and there is no speculation.
(2) Exchange rate fluctuation risk: After the Company fixing the forward exchange rate according to the foreign exchange
management strategy, if the actual trend of the foreign exchange rate deviates significantly from the direction of the
Company’s fixed exchange rate fluctuation, the cost of the Company after fixing the exchange rate expenditure may exceeds
the cost of not fixing the exchange rate, thus forming a loss of the Company. When the foreign exchange rate changes
greatly, if the fluctuating direction of the Company’s fixed foreign exchange hedging contract is inconsistent with that of the
foreign exchange rate, the foreign exchange loss will be formed; if the exchange rate does not fluctuate in the future, the
vast deviation from the foreign exchange hedging contract will also form a foreign exchange loss.
(3) Internal control risk: The foreign exchange derivatives business is highly specialized and complex so it may cause risks due
to imperfect internal control systems.
(4) Transaction default risk: In the event of a default in the counterparty of foreign exchange derivative transaction, the Company
would not be able to obtain hedging profits as agreed to hedge the Company’s actual exchange losses, resulting in a loss of
the Company.
(5) Customer default risk: The overdue of customer’s accounts receivable and the customer’s order adjustment will make the
actual payment inconsistent with the expected payment, which may result in the actual cash flow could not match the carried
out foreign exchange derivative business term or amount completely, leading to a loss of the Company.
2. Risk Control Measures Taken by the Company
(1) The Company may not engage in any foreign exchange derivative transactions except those carried out for the purpose of
avoiding exchange rate risks, and only for foreign exchange operations related to the Company’s import and export business
and overseas asset/liability management.
(2) The Company implemented approval process in strict compliance with the Foreign Exchange Risk Management Policy and the
Foreign Exchange Derivatives Transaction Management Rules. The general meeting of shareholders of the Company and the
Board of Directors delegate the President/President Office to take responsibility for the operation and management of the
foreign exchange derivatives business, the Treasury Department shall act as the handling department, and finance
department shall act as the daily review department.
(3) The Company conducts foreign exchange derivatives business with financial institutions such as large banks with legal
qualifications. The financial department timely tracks the changes in the transaction and strictly controls the occurrence of
closing default risk.
44 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
(4) The Company conducts foreign exchange derivatives business must base on the Company’s cautious forecast on the foreign
currency receipts and payments and actual business exposure. The delivery date of the foreign exchange derivatives
business must match with the Company’s predicted receipt time, deposit time or payment time of the foreign currency, or
match with the corresponding redemption term of the foreign currency bank borrowing.
II. Bulk Hedging Business
1. Risk Analysis
(1) Market risk: The futures and derivatives market itself has certain systematic risks, while hedging requires certain level of price
trend prediction. If the price prediction is directionally incorrect, it may cause losses to the Company.
(2) Policy risk: Significant changes in laws and regulations of the futures and derivatives markets may cause market fluctuations
or make trading impossible, which may result in risks.
(3) Funding risk: Due to the strict margin system and daily mark-to-market system in the futures market, there may be corresponding
funding floating loss risks. The Company will reasonably allocate its own funds for hedging business, control the scale of
funds, and conduct funding projections while formulating trading plans to ensure sufficient funds. In the process of business
operations, the Company will plan and utilize margins reasonably, and adjust funds appropriately to avoid risks.
(4) Operational risk: There may be cases in which suppliers violate their agreements and cancel or delay deliveries, resulting in a
mismatch between the actual hedging quantity and period, causing losses to the Company.
(5) Internal control risk: Futures and derivatives transactions are more specialized and complex, which may give rise to risks caused
by inadequate internal control systems or human errors in operations. The Company has formulated the Management
Measures for Hedging Business of Bulk Raw Materials, which contains clear provisions on the authorization scope, approval
procedures, risk management and other aspects of hedging transactions. The Company shall strengthen internal control
management and improve professionalism, implement risk prevention measures and improve the management standard of
hedging business.
2. Risk control measures adopted by the Company
(1) Matching hedging business with the Company’s production and operation to maximize hedging against the risk of market
fluctuations.
(2) Strictly control the scale of hedging funds and reasonably plan and use margins. The Company will reasonably allocate its own
funds for hedging business, and will not use raised funds directly or indirectly for hedging.
(3) The Company has formulated the Management Measures for Hedging Business of Bulk Raw Materials, which contains clear
provisions on the organizational structure and its responsibilities, business processes, risk management, file management, etc.
The Company will strictly follow the provisions of the internal control system to control all aspects of the business, and will
implement the Management Measures in accordance with the established regulations.
(4) The Company will strengthen the training of relevant personnel to enhance their professionalism and overall quality; strengthen
research on the futures and derivatives market to grasp market changes and design specific operational plans for trading
business.
(5) The internal audit department of the Company will conduct regular and irregular inspections of hedging trading business,
supervise hedging trading business personnel in the implementation of the risk management system and risk management
procedures, and prevent operational risks in the business in a timely manner.
Haier Smart Home Co., Ltd. Interim Report 2024 45
Section III Management Discussion and Analysis
Changes in market price or fair In respect of changes in market prices or fair value of products, gains or losses actually realized from the invested derivatives
value of invested derivatives during amounted to RMB42.5669 million during the reporting period. As for the specific methodology used and the related assumptions
the reporting period, where specific and parameter settings: Foreign exchange and interest rate swap forward quotations from financial institutions were used.
methodology used and the settings
of relevant assumptions and
parameters should be disclosed in
the fair value analysis of derivatives
Litigation case (if applicable) N/A
Disclosure date of announcement in 28 March 2024
relation to the consideration and
approval of derivatives investment
by the Board (if any)
Disclosure date of announcement in 21 June 2024
relation to the consideration and the
approval of derivatives investment
by shareholders’ general meeting (if
any)
(2). Derivatives investments for investment purposes during the reporting period
Applicable √ Not Applicable
(V) Sale of material assets and equity
Applicable √ Not Applicable
(VI) Analysis on major subsidiaries and Investees
√ Applicable Not Applicable
For details, please refer to the relevant contents of “(2) Explanation of high percentage of
overseas assets” under “(III) Analysis of assets and liabilities” in this section.
(VII) Structured entities controlled by the Company
Applicable √ Not Applicable
V. OTHER DISCLOSURES
(I) Potential risks
√ Applicable Not Applicable
1. Risk of decreasing market demand due to macroeconomic slowdown. Sales of white goods
as durable consumer appliances are subject to users’ income levels and their expectations
of future income growth which will have a certain impact on their willingness to purchase
products. A slowdown in macroeconomic growth causing a decline in users’ purchasing
power will have a negative impact on industry growth. In addition, a slowdown in real
estate market will also have a negative impact on market demand, which will indirectly
affect end-user demand for home appliances.
46 Haier Smart Home Co., Ltd. Interim Report 2024
Section III Management Discussion and Analysis
2. Risk of price war caused by intensified industry competitions. The white goods industry is
highly competitive with a high degree of product homogeneity, and the industry
concentration has continued to increase in recent years. However, the increase in industry
inventory capacity in individual sub-sectors due to the demand-supply imbalance may lead
to risks such as price wars. Furthermore, rapid technological advancements, scarce talents
in the industry, shortened product life cycles and ease of imitation are making it
increasingly difficult to profit. Although new products, services and technologies are often
associated with higher selling prices, it has become necessary for the Company to invest
more in R&D. The Company will actively invest in R&D to attract more users through
continuous innovation in products and services, to build a lasting brand awareness.
3. Risk of fluctuations in raw material prices. The Company’s products and core components
use metal raw materials such as steel, aluminium, and copper, as well as commodities
such as plastics and foam. If the prices of raw materials continue to surge, it will put
certain pressure on the Company’s production and operations. In addition, the Company
relies on third party manufacturers and suppliers for key raw materials, components, and
manufacturing equipment, as well as OEM suppliers, and any disruption in supply or
significant price increases by these suppliers will have a negative impact on the Company’s
business. As a leader in the industry, the Company will take measures including volume &
price adjustment mechanism as well as hedging to reduce the risk of raw material
fluctuations on its operations.
4. Operational risks in overseas business. The Company has steadily developed its global
business and has established production bases, R&D centres, and marketing centres in
many parts of the world, with the proportion of overseas revenue increasing year by year.
Overseas markets are subject to local political and economic situations (including events
such as military conflicts and wars), legal systems and regulatory regimes of those
countries and regions. Significant changes in these factors will pose certain risks to the
Company’s local operations in these markets. The Company has taken various measures to
mitigate the relevant impacts, including collaborating with suppliers and distributors,
improving production efficiency to offset the impact on the overall cost of sales, potentially
expanding the Company’s supply resources to other countries, and adopting safety
measures to protect its people and assets.
5. Risk of exchange rate fluctuations. As the Company expands its global footprint, the import
and export of the Company’s products involve the exchange of foreign currencies such as
the U.S. dollar, the Euro, and the Japanese yen. If the exchange rates of the relevant
currencies fluctuate, it will have a certain impact on the Company’s financial position and
increase its financial costs. In addition, the Company’s consolidated financial statements are
denominated in Renminbi, while the financial statements of its subsidiaries are measured
and reported in the currency of their primary economic environment in which the entity
operates and are therefore subject to currency exchange risk. In this regard, the Company
uses hedging instruments to reduce its exposure to exchange rate fluctuations.
Haier Smart Home Co., Ltd. Interim Report 2024 47
Section III Management Discussion and Analysis
6. Risk of policy changes. The home appliance industry is closely related to the consumer
market and the real estate market. Changes in macroeconomic policies, consumption
investment policies, real estate policies and relevant laws and regulations will affect product
demand from distributors, which in turn will affect product sales of the Company. The
Company will closely monitor changes in the relevant policies, laws, and regulations, and
make forecasts of market changes, in order to ensure further development of the
Company.
7. Credit risk. There is possibility that the Company will be unable to collect all trade receivables
from its distributors, or distributors are not able to settle the Company’s trade receivables
in a timely manner, in which the Company’s business, financial status, and operation
performance may be affected. In relation to this risk, the Company will maintain flexibility by
offering credit period of 30 to 90 days to certain distributors based on their credit history
and transaction amount.
8. Inventory risk. Excess inventory might occur as the Company cannot always accurately predict
trends and events and maintain appropriate inventory levels; thus, the Company may be
forced to offer discounts or promotions to manage the slow-moving inventory. On the other
hand, a shortage of inventory may lead to loss of sales opportunities for the Company.
However, the Company will manage its inventory and adjust according to market situation
and will conduct regular impairment assessment of its inventory.
(II) Other disclosures
Applicable √ Not Applicable
48 Haier Smart Home Co., Ltd. Interim Report 2024
Section IV Corporate Governance
I. INTRODUCTION TO THE GENERAL MEETINGS OF SHAREHOLDERS
Date of
disclosure for
Query index of websites designated for publishing
Meeting Date publishing resolutions resolutions Resolutions approved
2023 Annual General 20 June 2024 For details, please refer to the 21 June 2024 Considered and approved the
Meeting Announcement on Resolutions passed at resolutions related to annual
the 2023 Annual General Meeting, 2024 report, internal control audit
2024 First A Shares Class First A Shares Class Meeting, 2024 First report, profit distribution
Meeting D Shares Class Meeting and 2024 First proposal, re-appointment of
H Shares Class Meeting of Haier Smart auditor, external guarantees,
2024 First D Shares Home Co., Ltd. (L2024-022) published general mandate to issue
Class Meeting by the Company on the website of additional shares /
Shanghai Stock Exchange repurchase shares and
2024 First H Shares Class (www.sse.com.cn) and the four major employee stock ownership
Meeting securities newspapers plan, etc.
Considered and approved the
resolutions for general
mandate to repurchase
shares, etc.
Preferred shareholders whose voting rights have been restored requested an
extraordinary general meeting
Applicable √ Not Applicable
Explanation of Shareholders’ general meeting
√ Applicable Not Applicable
The 2023 Annual General Meeting and the 2024 First A/D/H Shares Class Meetings of the
Company was held in successive order by way of on-site voting, off-site voting and network voting by
poll at Room B101, Haier Rendanheyi Research Center, Haier Science and Technology Innovation
Ecological Park, No.1 Haier Road, Qingdao, the PRC, in the afternoon on 20 June 2024, considering
the annual report and other relevant resolutions. The total number of the shares of the Company
carrying voting right amounted to 9,292,876,856 shares (of which 6,163,314,617 shares were A
shares, 271,013,973 shares were D shares and 2,858,548,266 shares were H shares). 602
shareholders and proxies, representing 6,427,260,204 shares or 69.16% of the total number of the
shares of the Company carrying voting right, were present at the 2023 Annual General Meeting. 545
shareholders and proxies, representing 4,144,199,609 shares or 67.24% of the total number of A
shares of the Company carrying voting rights, were present at the 2024 First A Shares Class Meeting;
51 shareholders and proxies, representing 167,459,817 shares or 61.79% of the total number of D
shares of the Company carrying voting rights, were present at the 2024 First D Shares Class Meeting;
6 shareholders and proxies, representing 2,111,641,413 shares or 73.87% of the total number of H
shares of the Company carrying voting rights, were present at the 2024 First H Shares Class Meeting.
The Directors, supervisors, and senior management of the Company as well as the lawyers engaged
by the Company also attended the abovementioned four meetings. The abovementioned meetings were
convened by the Board of the Company and Chairman Mr. Li Huagang presided over the meetings.
Haier Smart Home Co., Ltd. Interim Report 2024 49
Section IV Corporate Governance
The Company had 9 Directors, of whom 9 Directors attended the meetings; the Company had 3
supervisors, of whom 3 supervisors attended the meeting. The secretary to the Board of the Company
attended the abovementioned meetings and other members of senior management of the Company
were invited to attend the abovementioned meetings.
II. CHANGES IN DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
OF THE COMPANY
√ Applicable Not Applicable
Name Position Held Description of Change
Ma Yingjie Supervisor Departed
Liu Yongfei Supervisor Elected
Explanation of changes in Directors, Supervisors and senior management of the Company
√ Applicable Not Applicable
Ma Yingjie, a Supervisor of the Company, has retired and hence intends to resign as a Supervisor
upon a new Supervisor has been elected at the general meeting. On 20 June 2024, pursuant to the
election results of the 2023 Annual General Meeting, Liu Yongfei was elected as a new Supervisor of
the Company. Accordingly, there was a change in the Supervisors of the Company during the
reporting period.
III. PROPOSAL OF PROFIT DISTRIBUTION OR CAPITALIZATION OF
CAPITAL RESERVE
Proposal for interim profit distribution and proposal for reverse conversion into share
capital
Whether distributed or converted No
50 Haier Smart Home Co., Ltd. Interim Report 2024
Section IV Corporate Governance
IV. EQUITY INCENTIVE PLAN, EMPLOYEE STOCK OWNERSHIP PLAN OR
OTHER EMPLOYEE INCENTIVES AND EFFECTS THEREOF
(I) Relevant incentive events disclosed in provisional announcements but without
subsequent development or changes during implementation
√ Applicable Not Applicable
Summary of Matters Query Index
Cancellation of certain 2021 and 2022 equity For details, please refer to the
incentive options: In view of the fact that the third Announcement of Haier Smart
exercise period of the first/reserved grant portion of Home Co., Ltd on the
the 2021 A Share Option Incentive Scheme and the Cancellation of Certain Share
second exercise period of the 2022 A Share Option Options in the 2021 A Share
Incentive Scheme of the Company did not meet the Option Incentive Scheme, the
exercise conditions, and due to the resignation of 2022 A Share Option Incentive
some of the incentive recipients, the Company Scheme disclosed by the
cancelled the corresponding 11,164,621 share Company on 30 April 2024, the
options and 28,011,543 share options that had been Announcement of Haier Smart
granted but had not yet been exercised. Home Co., Ltd on the
Completion of Cancellation of
Certain Share Options in the
2021 A Share Option Incentive
Scheme, the 2022 A Share
Option Incentive Scheme and
relevant contents disclosed by
the Company on 28 May 2024.
Introduction of New Phase of A Share and H Share For details, please refer to the
Employee Stock Ownership Plan: In order to 2024 A Share Core Employee
further improve the governance mechanism of the Stock Ownership Plan of Haier
Company, create shareholder value and promote the Smart Home Co., Ltd (Draft),
comprehensive implementation of the Company’s IoT the 2024 H Share Core
smart home ecological brand strategy, the Company Employee Stock Ownership Plan
considered and introduced the 2024 H Share Core of Haier Smart Home Co., Ltd
Employee Stock Ownership Plan of Haier Smart (Draft) disclosed by the
Home Co., Ltd (Draft) and the 2024 A Share Core Company on 30 April 2024 and
Employee Stock Ownership Plan of Haier Smart the Announcement of
Home Co., Ltd (Draft) at the 10th meeting of the Resolutions at the General
11th session of the Board of Directors held by the Meeting and relevant contents
Company on 29 April 2024 and the 2023 Annual disclosed by the Company on
General Meeting held by the Company on 20 June 21 June 2024.
2024. During the reporting period, the Company
promoted the opening of accounts and other related
works for the 2023 A Share and H Share Employee
Stock Ownership Plan.
Haier Smart Home Co., Ltd. Interim Report 2024 51
Section IV Corporate Governance
(II) Incentive events not disclosed in provisional announcements or with subsequent
development
Equity incentive
Applicable √ Not Applicable
Other explanations
Applicable √ Not Applicable
Employee stock ownership plan
Applicable √ Not Applicable
Other incentives
Applicable √ Not applicable
52 Haier Smart Home Co., Ltd. Interim Report 2024
Section V Environmental and Social
Responsibilities
I. ENVIRONMENTAL INFORMATION
(I) Explanation of the environmental protection status of companies and their
important subsidiaries that are key emission units announced by the
environmental protection department
√ Applicable Not Applicable
1. Information on pollutant discharge
√ Applicable Not Applicable
The Company’s direct/indirect non-wholly owned subsidiaries Hefei Haier Refrigerator Co.,
Ltd. (“Hefei Refrigerator”), Qingdao Haier Special Refrigerator Co., Ltd. (“Qingdao Special
Refrigerator”), Wuhan Haier Water Heater Co., Ltd. (“Wuhan Water Heater”), Wuhan Haier
Freezer Co., Ltd (“Wuhan Freezer”), Wuhan Haier Electronics Holding Co., Ltd. (“Wuhan
Air-Conditioning”), Zhengzhou Haier Air-conditioning Co., Ltd. (“Zhengzhou
Air-Conditioning”), Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited (“Jiaozhou
Air-Conditioning”), are among the key emission units announced by the local environmental
protection department. The main information on pollutant discharge is as follows:
(1) Hefei Refrigerator
Main pollutants:
Wastewater
According to the Integrated Wastewater Discharge Standard (GB8978–1996),
Hefei Refrigerator should apply for a pollutant discharge permit and detect 8
types of pollutants (including specific pollutants), namely, total nitrogen (as N),
total phosphorus (as P), suspended solids, PH, chemical oxygen demand
(COD), ammonia nitrogen (NH3-N), five-day biochemical oxygen demand (BOD5),
and animal and vegetable oils.
Exhaust gas. According to Emission Standard of Pollutants for Synthetic Resin
Industry (GB 31572–2015), Hefei Refrigerator should apply for a pollutant
discharge permit and detect pollutants. Main types of atmospheric pollutants:
particle matter, non-methane hydrocarbon, styrene, toluene, ethylbenzene
Way of discharge: continuous discharge
Number and distribution of discharge outlets: one for sewage, at the north
entrance of the Refrigerator Park; 20 for exhaust gas, at the Refrigerator Block
A (nine), Block B (eight) and Phase III Factory (three)
Haier Smart Home Co., Ltd. Interim Report 2024 53
Section V Environmental and Social Responsibilities
Concentration of discharge and discharge standard:
According to the discharge permit, the concentration and total amount of
pollutant discharge subject to approval for the total amount (data for
January-June 2024) are as follows:
Approved Whether it is
Concentration Total amount total amount excessive
No. Name of pollutant of discharge of discharge of discharge discharge
1 COD 93.31 mg/L 16.1 tons General outfalls are No
2 Ammonia nitrogen 12.78 mg/L 2.73 tons not subject to No
3 Total nitrogen 25.05 mg/L 5.07 tons approval for the No
4 Total phosphorus 2.01 mg/L 0.41 tons total discharge No
5 Suspended solids 43 mg/L 8.63 tons amount according No
6 BOD5 56.75 mg/m 11.5 tons to the discharge No
7 pH 7.38 / permit. No
8 Animal and vegetable oils 4.65 mg/L 0.94 tons No
9 Non-methane hydrocarbon 3.62 mg/m 4.33 tons No
10 Particle matter 2.08 mg/m 0.26 tons No
11 Toluene 0.09 mg/m 0.0081 tons No
12 Ethylbenzene 0.017 mg/m 0.0017 tons No
13 Styrene 0.048 mg/m 0.0042 tons No
(2) Qingdao Special Refrigerator
Main Pollutants:
Exhaust gas. In June 2024, according to the Administrative Measures for
Pollutant Discharge Licensing (for Trial Implementation) (HJ 978–2018), Qingdao
Special Refrigerator should re-apply for a pollutant discharge permit with the
management category of simplified management and detect the primary type of
pollutant in the atmosphere, namely non-methane hydrocarbon (VOCs), with the
maximum concentration of discharge not exceeding 60mg/m. Online detection
facilities are installed and networked with the Ecology and Environment Bureau
for exhaust gas emission. Meanwhile, a qualified third-party testing unit is
commissioned to conduct organic exhaust gas concentration manual testing and
issue a report on a quarterly basis.
Wastewater: There is no wastewater generated by the business department, and
the domestic wastewater is discharged into the municipal sewage network
through the sewage pipes in Haier Industrial Park.
Way of discharge: continuous emission
54 Haier Smart Home Co., Ltd. Interim Report 2024
Section V Environmental and Social Responsibilities
Number and distribution of discharge outlets: two in total, one for absorption
exhaust port at the west side of the Special Refrigerator plant roof, which the
exhaust gas treatment facilities were updated, installed and put into use in July
2023, with the upgrading and adoption of activated carbon adsorption and
desorption + regenerative combustion process; and one for foam exhaust port
at the west side of the Special Refrigerator plant roof.
Concentration and total amount of discharge and approved total amount of
discharge:
According to the discharge permit, the concentration and total amount of
pollutant discharge subject to approval for the total amount are as follows:
Approved Whether it is
Concentration Total amount total amount excessive
No. Name of Pollutant of discharge of discharge of discharge discharge
1 Non-methane hydrocarbon 1.13 mg/m 0.108 tons No control regarding No
the total amount of
discharge
Pollutant discharge standards implemented: Volatile Organic Compounds
Discharge Standards Part 7: Other Industries in Shandong Province
(DB37/2801.7–2019)
(3) Wuhan Water Heater
Main Pollutant:
Wastewater. According to the Technical Specification for Application and
Issuance of Pollutant Permit — Wastewater Treatment (for Trial) (HJ 978–2018),
Wuhan Water Heater should apply for a pollutant discharge permit and detect 9
types of pollutants (including specific pollutants), namely, COD, total zinc,
suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygen
demand (BOD5), PH, anionic surface active agent, total phosphorus, and animal
and vegetable oils.
Way of discharge: indirect discharge
Number and distribution of discharge outlets: one, on the southwest of the
wastewater treatment plant, pipeline discharge
Haier Smart Home Co., Ltd. Interim Report 2024 55
Section V Environmental and Social Responsibilities
Concentration and total amount of discharge and approved total amount of
discharge:
According to the discharge permit, the concentration and total amount of
pollutant discharge subject to approval for the total amount are as follows:
Approved Whether it is
Concentration Total amount total amount excessive
No. Name of Pollutant of discharge of discharge of discharge discharge
1 COD 13.74 mg/L 2.05 tons 9.075 tons No
2 Ammonia nitrogen 0.07 mg/L 0.0104 tons 0.9075 tons No
3 Total phosphorus 0.09mg/L 0.0134 tons / No
Pollutant discharge standards implemented: Wastewater Quality Standards for
Discharge to Municipal Sewers (GBT 31962–2015)
(4) Wuhan Freezer
Main pollutants:
Organic exhaust gas. Exhaust gas pollutant discharge refers to the Integrated
Emission Standard of Air Pollutants, and the primary type of pollutant in the
atmosphere detected are namely non-methane hydrocarbon (VOC), with the
maximum concentration of discharge not exceeding 120 mg/m. A qualified
third-party testing unit is commissioned to conduct organic exhaust gas
concentration testing and issue a report on a half-yearly basis.
Way of discharge: continuous discharge
Number and distribution of discharge outlets: two in total, one exhaust port for
door at the south-west side of the plant, one exhaust port for curing at the
south-west side of the plant.
Concentration and total amount of discharge and approved total amount of
discharge: No control regarding the total amount of discharge of organic
exhaust gas
Approved Whether it is
Concentration Total amount total amount excessive
No. Name of Pollutant of discharge of discharge of discharge discharge
1 VOC 5.42 mg/m3 0.16368 tons No control regarding No
the total amount of
discharge
56 Haier Smart Home Co., Ltd. Interim Report 2024
Section V Environmental and Social Responsibilities
(5) Wuhan Air-Conditioning
Main Pollutants:
Organic exhaust gas. Exhaust gas pollutant discharge refers to the Integrated
Emission Standard of Air Pollutants, and the primary type of pollutant in the
atmosphere detected are namely non-methane hydrocarbon (VOC), with the
maximum concentration of discharge not exceeding 120 mg/m. A qualified
third-party testing unit is commissioned to conduct organic exhaust gas
concentration testing and issue a report on a half-yearly basis.
Way of discharge: continuous discharge
Number and distribution of discharge outlets: five in total, one degreasing exhaust
port at the south side of the plant roof, and three stamping exhaust ports at the
south side of the plant roof and one spraying exhaust port at the north side of
the spraying workshop roof.
Concentration and total amount of discharge and approved total amount of
discharge: No control regarding the amount of discharge of organic exhaust gas
and particulate matter
Approved Whether it is
Concentration Total amount total amount excessive
No. Name of Pollutant of discharge of discharge of discharge discharge
1 VOC 0.698 mg/m 0.03523 tons No control regarding No
the total amount of
discharge
(6) Zhengzhou Air-Conditioning
Main Pollutant:
Wastewater. According to the Technical Specification for Application and
Issuance of Pollutant Permit — Wastewater Treatment (for Trial) (HJ 978–2018),
Zhengzhou Air-Conditioning should apply for a pollutant discharge permit and
detect 9 types of pollutants (including specific pollutants), namely, COD, total
zinc, suspended solids, ammonia nitrogen (NH3-N), five-day biochemical oxygen
demand (BOD5), PH, total phosphorus, and animal and vegetable oils.
Way of discharge: indirect discharge
Number and distribution of discharge outlets: one, on the north side of the
air-conditioning wastewater treatment plant, pipeline discharge
Haier Smart Home Co., Ltd. Interim Report 2024 57
Section V Environmental and Social Responsibilities
Concentration and total amount of discharge and approved total amount of
discharge:
According to the discharge permit, the concentration and total amount of
pollutant discharge subject to approval for the total amount are as follows:
Approved Whether it is
Concentration Total amount total amount excessive
No. Name of pollutant of discharge of discharge of discharge discharge
1 COD 29.62 mg/L 1.1 tons / No
2 Ammonia nitrogen 5.79 mg/L 0.035 tons / No
(7) Jiaozhou Air-Conditioning
Main pollutants:
Hazardous waste. According to the national directory, 8 types of hazardous
waste detected are namely: waste oil, sludge, activated carbon, cotton filters,
lightning tubes, soldering flux buckets, paint buckets and forklift battery.
Way of discharge: Hazardous waste is transferred to a qualified hazardous waste
disposal unit for disposal
Total amount of discharge and approved total amount of discharge:
Total amount Total amount Whether it is
No. Name of hazardous waste of transfer of managed plan excessive discharge
(tons) (tons)
1 Cotton filters 0.42 2 No
2 Waste oil 20.22 30 No
3 Soldering flux buckets 1.06 1.5 No
4 Forklift battery 16.3 20 No
5 Sludge 21.08 50 No
6 Paint buckets 0.9 5 No
7 Activated carbon 2.18 6 No
8 Lightning tubes 0.06 0.5 No
Pollutant discharge standards implemented: Directory of National Hazardous
Wastes (Version 2021), Law of the People’s Republic of China on the
Prevention and Control of Environmental Pollution by Solid Waste.
58 Haier Smart Home Co., Ltd. Interim Report 2024
Section V Environmental and Social Responsibilities
2. Construction and operation of pollution prevention and treatment facilities
√ Applicable Not Applicable
Jiaozhou Air-conditioning, Zhengzhou Air-conditioning, Wuhan Freezer, Wuhan Water
Heater, have one, one, one and two wastewater treatment plants with a designed
treatment capacity of 300 tons/day, 550 tons/day, 360 tons/day, 300 tons/day and 260
tons/day, respectively. The construction, maintenance and daily operation of all wastewater
treatment facilities are conducted in accordance with the requirements of national and local
environmental laws and regulations. Information on all wastewater discharge is subject to
24-hour online monitoring and such monitored information is transmitted to environmental
authorities in a real-time manner. All equipment is operating normally, and the discharge of
wastewater is steady and in compliance with standards. In addition, the Company fully
promotes all plants to install exhaust treatment facilities and VOCs online monitoring
facilities. All equipment is operating normally and exhaust produced is treated by the
prevention and treatment facilities before compliant release and is monitored.
3. Environmental impact assessment of construction projects and other environmental
protection administrative permits
√ Applicable Not Applicable
The Company and its subsidiaries execute construction project implementation and
production in accordance with the requirements of laws and regulations and strictly comply
with the three simultaneous requirements of environmental protection for construction
projects in the process of environmental impact assessment, and have passed
environmental assessment acceptance and are not involved in any environmental illegal
conducts such as construction before approval.
4. Emergency plans for environmental incidents
√ Applicable Not Applicable
The Company and its subsidiaries have formulated Emergency Plans for Environmental
Incidents in accordance with the requirements of laws and regulations and organized drills,
and continue to improve and upgrade the plans based on drill results.
Haier Smart Home Co., Ltd. Interim Report 2024 59
Section V Environmental and Social Responsibilities
5. Self-monitoring environmental programs
√ Applicable Not Applicable
All pollutants of the Company are tested regularly, of which the discharge complies with
national and local environmental standard requirements. Wastewater collected is subject to
standard treatment and is released in a compliant manner. It is under real-time monitoring
through the automatic online wastewater monitoring system, which shares its information
with Haier Smart Energy System. In March 2017, the Company passed the upgraded
certification in relation to ISO14001 environment management system; In May 2021, a
professional certification firm was appointed to conduct a review and audit on the operation
of ISO14001 system in 2020, where satisfactory results were obtained to demonstrate its
good operating condition; In May 2022, a review and audit was conducted on the
operation of system in 2021; In May 2023, a recertification audit was conducted on the
operation of system in 2022. In May 2024, a first review and audit was conducted on the
operation of system in 2023.
6. Administrative penalty due to environmental issues during the Reporting Period
Applicable √ Not Applicable
7. Other environmental information that should be disclosed
Applicable √ Not Applicable
(II) Explanation on environmental protection of companies other than major pollutant
emission units
√ Applicable Not Applicable
1. Administrative penalty due to environmental issues
Applicable √ Not Applicable
60 Haier Smart Home Co., Ltd. Interim Report 2024
Section V Environmental and Social Responsibilities
2. Other environmental information disclosure with reference to major pollutant
emission units
√ Applicable Not Applicable
All divisions of the Company execute construction project implementation and production in
accordance with the requirements of laws and regulations and strictly comply with the three
simultaneous requirements of environmental protection for construction projects in the
process of environmental impact assessment, and have passed environmental assessment
acceptance and are not involved in any environmental illegal conducts such as construction
before approval.
Through Haier Smart Energy Center, an energy big data analysis system, the Company
implements centralized dynamic monitoring and digitalized management in respect of major
energy consumption, such as water, electricity and gas, of plants in the China region by
utilizing automatized and informationalized technology and an integrated management
model. It collects precise information on energy resources and completes prediction and
analysis of energy consumption information to optimize energy adjustment, reduce energy
consumption per unit production to achieve low-carbon production.
3. Reasons for failure to disclose other environmental information
Applicable √ Not Applicable
(III) Explanation of the subsequent progress or changes in the disclosure of
environmental information content during the Reporting Period
√ Applicable Not Applicable
The Company will continue to maintain and improve existing results and strictly comply with
existing environmental protection and emission standards to achieve compliant emission.
(IV) Relevant information favorable to ecological protection, pollution prevention and
control and environmental responsibility fulfillment
Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Interim Report 2024 61
Section V Environmental and Social Responsibilities
(V) Measures taken during the Reporting Period to reduce its carbon emission and
their effectiveness
√ Applicable Not Applicable
During the reporting period, the Company’s air-conditioning products pursued green and
low-carbon transformation and achieved significant results, with its carbon management capability
being recognized by industry authorities: Qingdao Haier Air-Conditioner Co., Ltd., a subsidiary of
the Company, was awarded the Carbon Management System Certification issued by the China
Quality Certification Center (CQC), making it the first enterprise in the industry to receive this
certification. Based on the concept of green, low-carbon and sustainable development, Haier
Air-Conditioner establishes and improves its carbon management system in accordance with the
requirements of the carbon management system standard to evaluate the current state of the
company’s carbon management, identify the main sources of greenhouse gas emissions within
the organization, and formulate emission reduction measures to provide a “basis for carbon
management”. The measures include opening up new revenue sources for green carbon
development through high-standard laboratory performance and testing capabilities, etc.; the
realization of carbon emission reduction by vigorously launching research on low-carbon
technologies and promoting their application; and the establishment of a green recycling system
through recycling to realize the reuse of resources and to lay a new track of “carbon reduction
and emission control”. In the future, Haier Air-Conditioner will, based on the current state of its
carbon management, make sustainable improvements and optimizations for greenhouse gas
emission reduction, and implement emission reduction plans in a targeted and planned manner in
terms of laboratory renovation, promotion and application of energy and technology, etc., so as
to enhance its own capabilities while helping the industry in green transformation and upgrading.
II. PARTICULARS ON THE EFFORTS TO CONSOLIDATE AND EXPAND ITS
ACHIEVEMENTS IN POVERTY ALLEVIATION AND RURAL AREA
INVIGORATION
√ Applicable Not Applicable
The Company attaches importance to the work of poverty alleviation and rural revitalization. In
accordance with the series of national planning and filing requirements and within the scope of
authorization of the shareholders’ general meeting on donations and other matters, the Company has
provided targeted support to support rural revitalization. In the first half of 2024, the Company’s capital
expenditure on targeted poverty alleviation amounted to approximately RMB3,870,000, which was
mainly used for educational poverty alleviation, etc. The Company has actively responded to the call of
the government to fulfill its social responsibilities.
62 Haier Smart Home Co., Ltd. Interim Report 2024
Section V Environmental and Social Responsibilities
During the reporting period, Haier Hope Primary School in Bahrain Left Banner held a ceremony for the
“Haier Little Scientists Program”. As another important achievement of Haier’s “Smart Campus
Upgrade Program”, smart scenarios such as smart laundry rooms have been deeply integrated into
school life, bringing children a new smart and healthy campus life experience. In addition to the smart
laundry room, Haier has also built energy utilization scenarios for smart pantry room and green energy
hut, which have comprehensively improved the learning environment of Hope Primary School, and have
also made the development of rural education come to fruition through technology. At present, the
national education digitization strategy has made positive progress, and the construction of campus
informatization is moving towards a new stage of smart campus with application, integration and
innovation. The Company is actively exploring the construction of smart campus, using technology to
give children a new experience of growth, and effectively enhance the sense of achievement and
happiness of teachers and students by adding wings of “intelligence” for the high quality development
of public welfare undertakings in education.
Haier Smart Home Co., Ltd. Interim Report 2024 63
Section VI Significant Issues
I. FULFILLMENT STATUS OF UNDERTAKINGS
(I) The undertakings made by the ultimate controllers, shareholders, related parties,
acquirer as well as the Company and other relevant parties during or up to the
reporting period
√ Applicable Not Applicable
Whether
Any performed in
Background of Type of Date of deadline for Term of a timely and
undertakings undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way
Undertaking related Eliminate the Haier Group During the period from September 2006 to 27 September Yes Long-term Yes
to significant property right Corporation May 2007, the Company issued shares to 2006
reorganization of defects in land Haier Group Corporation (“Haier Group”)
assets etc. to purchase the controlling equity in its
four subsidiaries, namely Qingdao Haier
Air-Conditioner Electronics Co., Ltd. (青島
海爾空調電子有限公司), Hefei Haier
Air-conditioning Co., Limited (合肥海爾空
調器有限公司), Wuhan Haier Electronics
Co., Ltd. (武漢海爾電器股份有限公司),
Guizhou Haier Electronics Co., Ltd. (貴州
海爾電器有限公司). With regard to the
land and property required in the
operation of Qingdao Haier Air-
Conditioner Electronics Co., Ltd. (青島海
爾空調電子有限公司), Hefei Haier
Air-conditioning Co., Limited (合肥海爾空
調器有限公司), Wuhan Haier Electronics
Co., Ltd. (武漢海爾電器股份有限公司)
(the “Covenantees”), Haier Group made an
undertaking (the “2006 Undertaking”).
According to the content of 2006
Undertaking and then condition of each
Covenantee, Haier Group will constantly
assure that Covenantees will lease the
land and property owned by Haier Group
for free. Haier Group will make
compensation in the event that the
Covenantees suffer loss due to the
unavailability of such land and property.
(Note)
Address peer Haier Smart Home Prior to the Transaction (hereinafter “the 31 July 2020 Yes Long-term Yes
competition Co., Ltd. Transaction” refers to the transaction in
relation to the privatisation of Haier
Electronics by Haier Smart Home), Haier
Electric was a controlling subsidiary of the
Company and did not compete with the
Company; after the completion of the
Transaction, Haier Electric became a
wholly-owned or controlling subsidiary of
the Company and no new competition
with the Company existed or will arise.
There is no new peer competition or
potential competition between the
Company and other related parties
controlled by the controlling shareholders
or the de facto controllers of the
Company.
64 Haier Smart Home Co., Ltd. Interim Report 2024
Section VI Significant Issues
Whether
Any performed in
Background of Type of Date of deadline for Term of a timely and
undertakings undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way
Address connected Haier Group 1. The Transaction constitutes a connected 29 July 2020 Yes Long-term Yes
transactions Corporation transaction and the connected transaction
procedures performed under the Transaction
are in compliance with the relevant
regulations. The pricing of the connected
transaction is fair and there are no
circumstances under which the interests of
the listed company and the non-connected
shareholders are prejudiced. 2. Upon
completion of the Transaction, the Company
and its affiliates will take lawful and effective
measures to minimize and regulate the
connected transactions with the listed
company, take the initiative to safeguard the
interests of the listed company and all
shareholders, and refrain from taking
advantages of connected transactions for
improper benefits. 3. Provided that there is no
conflict with laws and regulations, if
connected transactions between the Company
and its affiliates and the listed company occur
or exist which cannot be avoided or for which
there are reasonable reasons, the Company
and its affiliates will legally enter into a
transaction agreement with the listed
company to ensure strict compliance with the
procedures of connected transactions
required by the laws, regulations, regulatory
documents and the articles of association of
the Company, conduct transactions in
accordance with the principles of
marketability and fair prices to ensure the
fairness and compliance of connected
transactions, and refrain from taking
advantages of such connected transactions to
engage in any acts that are detrimental to the
interests of the listed company or its minority
shareholders, and at the same time, comply
with the information disclosure obligations in
accordance with relevant regulations.
Haier Smart Home Co., Ltd. Interim Report 2024 65
Section VI Significant Issues
Whether
Any performed in
Background of Type of Date of deadline for Term of a timely and
undertakings undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way
Address peer Haier Group 1. The Company and its controlling 29 July 2020 Yes Long-term Yes
competition Corporation subsidiary, Haier COSMO Co., Ltd., were
principally engaged in investment business
during the reporting period, and the Company
and its controlling subsidiary, Haier COSMO
Co., Ltd. (including its subsidiaries and
entities with more than 30% shareholding),
have no real or potential competition with
Haier Smart Home; 2. the domestic and
overseas white goods businesses and assets
held by the Company (including the
Company’s subsidiaries and entities with
more than 30% shareholding) have been
injected into Haier Smart Home through asset
consolidation and equity transfer in
accordance with the commitments made by
the Company in January 2011 and the
requirements for adjusting such commitments
as considered and approved by Haier Smart
Home at its 2014 annual general meeting; 3,
Since the acquisition of 100% of Haier New
Zealand Investment Holding Company Limited
(which holds 100% of the shares in Fisher &
Paykel Appliances Holdings Limited) by Haier
Smart Home’s offshore subsidiary, Haier
Singapore Investment Holding Co., Ltd.,
following the completion in July 2018, the
Company (including the Company’s
subsidiaries and entities with more than 30%
shareholding) and Haier Smart Home do not
have any competing relationship in any
business areas both within and outside the
PRC. During the reporting period, the
Company (including the Company’s
subsidiaries and entities with more than 30%
shareholding) did not have any new peer
competition with Haier Smart Home; 4. Upon
completion of the Transaction, the Company
(including the Company’s subsidiaries and
entities with more than 30% shareholding)
and its affiliates do not have any new or
potential peer competition with Haier Smart
Home; 5. During the period when the
Company is the controlling shareholder of
Haier Smart Home and the shares of Haier
Smart Home are listed on the Hong Kong
Stock Exchange, the Company and its other
subsidiaries and entities with more than 30%
shareholding will not operate any business
that competes with the business engaged by
Haier Smart Home and will not engage in real
or potential competition with Haier Smart
Home.
66 Haier Smart Home Co., Ltd. Interim Report 2024
Section VI Significant Issues
Whether
Any performed in
Background of Type of Date of deadline for Term of a timely and
undertakings undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way
Others Haier Group Upon completion of the Transaction, the 29 July 2020 Yes Long-term Yes
Corporation Company will strictly comply with the
Company Law, the Securities Law, the
relevant regulations of the China Securities
Regulatory Commission, the Shanghai
Stock Exchange and the articles of
association of Haier Smart Home, etc.,
fairly exercise shareholders’ rights and
fulfill shareholders’ obligations, refrain from
taking advantage of its shareholding
position for improper benefits, ensure the
listed company will continue to be
completely separate from the Company
and other enterprises on which the
Company exercises control and exerts
significant influence in terms of
management, personnel, assets, finance,
organization and business operations, and
maintain the continued independence of
the listed company in terms of
management, personnel, assets, finance,
organization and business operations.
Upon completion of the Transaction, the
Company will comply with the provisions
of the Notice on Several Issues
concerning Regulating Fund Transactions
between Listed Companies and Their
Affiliates and the External Guarantee of
Listed Companies and the Circular of
China Securities Regulatory Commission
and China Banking Regulatory
Commission on Regulating the External
Guaranties Provided by Listed Companies
to regulate the external guarantees by
listed companies and their subsidiaries,
and will not misappropriate the funds of
the listed company and their subsidiaries.
The Company undertakes to strictly fulfill
the above commitments. In the event that
the interests of the listed company are
damaged as a result of any breach of the
above commitments by the Company and
other enterprises on which the Company
exercises control and exerts significant
influence, the Company will legally bear
the corresponding liability for damage.
Haier Smart Home Co., Ltd. Interim Report 2024 67
Section VI Significant Issues
Whether
Any performed in
Background of Type of Date of deadline for Term of a timely and
undertakings undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way
Address connected HCH (HK) 1. The Transaction constitutes a connected 29 July 2020 Yes Long-term Yes
transactions INVESTMENT transaction and the connected transaction
MANAGEMENT procedures performed under the Transaction
CO., LIMITED are in compliance with the relevant
regulations. The pricing of the connected
transaction is fair and there are no
circumstances under which the interests of
the listed company and the non-connected
shareholders are prejudiced. 2. Upon
completion of the Transaction, the Company
and other enterprises on which the Company
exercises control will take lawful and effective
measures to minimize and regulate the
connected transactions with the listed
company, take the initiative to safeguard the
interests of the listed company and all
shareholders, and refrain from taking
advantages of connected transactions for
improper benefits. 3. Provided that there is no
conflict with laws and regulations, if
connected transactions between the Company
and other enterprises on which the Company
exercise control and the listed company occur
or exist which cannot be avoided or for which
there are reasonable reasons, the Company
and other enterprises on which the Company
exercises control will legally enter into a
transaction agreement with the listed
company to ensure strict compliance with the
procedures of connected transactions
required by the laws, regulations, regulatory
documents and the articles of association of
the Company, conduct transactions in
accordance with the principles of
marketability and fair prices, and refrain from
taking advantages of such connected
transactions to engage in any acts that are
detrimental to the interests of the listed
company or its minority shareholders, and at
the same time, comply with the information
disclosure obligations in accordance with
relevant regulations. 4. Any covenants and
arrangements between the Company and
other enterprises on which the Company
exercise control and the listed company in
relation to connected transactions shall not
prevent the other party from conducting
business or dealing with any third party for its
own benefit and on equal competitive terms
in the market.
68 Haier Smart Home Co., Ltd. Interim Report 2024
Section VI Significant Issues
Whether
Any performed in
Background of Type of Date of deadline for Term of a timely and
undertakings undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way
Undertaking related Eliminate the Haier Group Haier Group Corporation undertakes that it 24 December 2013 Yes Long-term Yes
to refinancing property right Corporation will assure Haier Smart Home and its
defects in land subsidiaries of the constant, stable and
etc. unobstructed use of the leased property.
In the event that Haier Smart Home or
any of its subsidiaries suffers any
economic loss due to the fact that leased
property has no relevant ownership
certificate, Haier Group Corporation will
make compensation to impaired party in a
timely and sufficient way and take all
reasonable and practicable measures to
support the impaired party to recover to
normal operation before the occurrence of
loss. Upon the expiration of relevant
leasing period, Haier Group Corporation
will grant or take practicable measures to
assure Haier Smart Home and its
subsidiaries of priority to continue to lease
the property at a price not higher than the
rent in comparable market at that time.
Haier Group Corporation will assure Haier
Smart Home and its subsidiaries of the
constant, stable, free and unobstructed
use of self-built property and land of the
Group. In the event that Haier Smart
Home or any of its subsidiaries fails to
continue to use self-built property
according to its own will or in original way
due to the fact that self-built property has
no relevant ownership certificate, Haier
Group Corporation will take all reasonable
and practicable measures to eliminate
obstruction and impact, or will support
Haier Smart Home or its affected
subsidiary to obtain alternative property as
soon as possible, if Haier Group
Corporation anticipates it is unable to
cope with or eliminate the external
obstruction and impact with its
reasonable effort. For details, please refer
to the Announcement of Qingdao Haier
Co., Ltd. on the Formation, Current
Situation of the Defective Property, the
Influence on Operation of Issuer Caused
by Uncertainty of Ownership, Solution for
the Defect and Guarantee Measures
(L2014-005) published by the Company
on the four major securities newspapers
and the website of Shanghai Stock
Exchange on 29 March 2014.
Haier Smart Home Co., Ltd. Interim Report 2024 69
Section VI Significant Issues
Whether
Any performed in
Background of Type of Date of deadline for Term of a timely and
undertakings undertakings Covenanter Contents of undertakings undertakings performance undertakings strict way
Undertakings related Others Haier Smart Home The Company will not provide loans or any 15 September Yes The completion of Yes
to equity Co., Ltd other forms of financial assistance, 2021/28 June equity incentive
incentive including guaranteeing their loans, to any 2022 implementation
incentive recipient for acquiring relevant
stock options under this incentive plan.
Other undertakings Asset injection Haier Group Inject the assets of Haier Photoelectric to the December 2015 Yes June 2025 Yes
Corporation Company or dispose such assets through
other ways according to the requirements
of the domestic supervision before June
2025. For more details, please refer to the
Announcement of Haier Smart Home Co.,
Ltd. on the Changes of Some
Commitments on Asset Injection
(L2020-024) published on the four major
securities newspapers and the website of
Shanghai Stock Exchange on 30 April
2020.
Note: During the reporting period, the undertaking was fulfilled since all Covenantees of the undertaking has obtained the real property
ownership certificates.
70 Haier Smart Home Co., Ltd. Interim Report 2024
Section VI Significant Issues
II. NON-OPERATING UTILIZATION OF FUNDS BY CONTROLLING
SHAREHOLDERS AND OTHER RELATED PARTIES DURING THE
REPORTING PERIOD.
Applicable √ Not Applicable
III. INFORMATION ON NON-COMPLIANCE GUARANTEES
Applicable √ Not Applicable
IV. INFORMATION ON INTERIM AUDIT
Applicable √ Not Applicable
V. CHANGES IN MATTERS COVERED BY THE NON-STANDARD AUDIT
OPINION ON THE PREVIOUS YEAR’S ANNUAL REPORT AND ITS
HANDLING
Applicable √ Not Applicable
VI. MATTERS RELATING TO BANKRUPTCY AND RESTRUCTURING
Applicable √ Not Applicable
VII. MATERIAL LITIGATION AND ARBITRATION MATTERS
Material litigation and arbitration matter during the reporting period
√ No material litigation and arbitration matters during the reporting period
VIII. PUNISHMENT AND CORRECTION ON THE LISTED COMPANY AND ITS
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLING
SHAREHOLDERS AND ULTIMATE CONTROLLERS DUE TO SUSPECT
OF LAW VIOLATIONS AND THE ISSUE OF RECTIFICATION
Applicable √ Not applicable
IX. EXPLANATION OF THE INTEGRITY STATUS OF THE COMPANY AND
ITS CONTROLLING SHAREHOLDERS AND ULTIMATE CONTROLLER
DURING THE REPORTING PERIOD
Applicable √ Not applicable
Haier Smart Home Co., Ltd. Interim Report 2024 71
Section VI Significant Issues
X. SIGNIFICANT RELATED-PARTY TRANSACTIONS
(I) Related-party transactions relating to daily operation
1. Matters that have been disclosed in temporary announcements and with no
subsequent progress or change
Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcements and with subsequent
progress or change
Applicable √ Not applicable
3. Matters not disclosed in temporary announcements
Applicable √ Not applicable
(II) Related-party transactions regarding acquisition or disposal of assets/equity
1. Matters disclosed in temporary announcements and with no subsequent progress
or change
Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcements and with subsequent
progress or change
Applicable √ Not applicable
3. Matters not disclosed in temporary announcements
Applicable √ Not applicable
4. If performance agreement is involved, the performance achieved during the reporting
period shall be disclosed
Applicable √ Not applicable
72 Haier Smart Home Co., Ltd. Interim Report 2024
Section VI Significant Issues
(III) Significant related-party transactions of joint external investment
1. Matters that have been disclosed in temporary announcements and with no
subsequent progress or change
Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcements and with subsequent
progress or change
Applicable √ Not applicable
3. Matters not disclosed in temporary announcements
Applicable √ Not applicable
(IV) Amounts due to or from related parties
1. Matters that have been disclosed in temporary announcements and with no
subsequent progress or change
Applicable √ Not applicable
2. Matters that have been disclosed in temporary announcement and with subsequent
progress or change
Applicable √ Not applicable
3. Matters not disclosed in temporary announcements
Applicable √ Not applicable
Haier Smart Home Co., Ltd. Interim Report 2024 73
Section VI Significant Issues
(V) Financial business between the Company and the finance company with which
it has a related relationship, the company’s controlling finance company and
related parties
√ Applicable Not applicable
1. Deposit business
√ Applicable Not applicable
Unit and Currency: RMB
Changes of the period
Total amount Total amount
Maximum daily Range of deposit deposited during withdrawn during Closing
Related party Relationship deposit limit interest Opening balance the period the period balance
Haier Finance Co., Subsidiary of Haier 34 billion 0.00012%to 3.5% 33,654,242,534.50 285,540,013,292.96 285,309,670,757.96 33,884,585,069.50
Ltd. Group
Total / / / 33,654,242,534.50 285,540,013,292.96 285,309,670,757.96 33,884,585,069.50
2. Lending business
√ Applicable Not applicable
Unit and Currency: RMB
Changes of the period
Total Total amount
amount lent repaid
Range of loan Opening during the during the Closing
Related party Relationship Loan limit interest balance period period balance
Haier Finance Subsidiary of 10 billion / 0 0 0 0
Co., Ltd. Haier Group
Total / / / 0 0 0 0
74 Haier Smart Home Co., Ltd. Interim Report 2024
Section VI Significant Issues
3. Trustee business or other finance businesses
√ Applicable Not applicable
Unit and Currency: RMB
Actual number of
Related party Relationship Type of business Total amount occurrence
Haier Finance Co., Subsidiary of Haier Foreign exchange 5.5 billion 213,576,000.00
Ltd. Group derivatives
products
Haier Finance Co., Subsidiary of Haier Service charge 80 million 4,425,427.95
Ltd. Group
4. Other explanations
Applicable √ Not applicable
(VI) Other material related transactions
Applicable √ Not applicable
(VII) Others
Applicable √ Not applicable
Haier Smart Home Co., Ltd. Interim Report 2024 75
Section VI Significant Issues
XI. SIGNIFICANT CONTRACTS AND THEIR EXECUTION
1 Trusteeship, contracting and leasing
Applicable √ Not applicable
During the reporting period, the Company had no material escrow matters. Up to now, the
following entrusted assets that have been approved by the Company’s shareholders’ meeting are
still in effect:
According to Haier Group’s commitment in 2011 on further supporting the development of
Qingdao Haier and resolving peer competition to reduce connected transactions, based on the
fact that Qingdao Haier Optoelectronics Co., Ltd. (青 島 海 爾 光 電 有 限 公 司) and its subsidiaries,
the main body of Haier Group engaging in the color television business, are still in a period of
transformation and integration, and their financial performance has not yet met the Company’s
expectations, Haier Group is unable to complete the transfer before the aforesaid commitment
period. Haier Group intends to entrust the Company with the operation and management of the
escrow assets and pay the Company an annual escrow fee of RMB1 million during the escrow
period.
2 Significant guarantees performed and outstanding during the reporting period
√ Applicable Not Applicable
Unit and Currency: RMB0’000
External guarantees provided by the Company (excluding guarantees for subsidiaries)
Date of
Relationship occurrence Whether
between the of the Whether the Overdue Whether related-
guarantor and guarantee Status of guarantee Whether the amount of there is a party
the listed Secured Amount of (date of Commencement Expiry date Type of principle Collateral has been guarantee is the counter- guarantee
Guarantor company party guarantee agreement) date of guarantee of guarantee guarantee liabilities (if any) fulfilled overdue guarantee guarantee or not Relationship
Total amount of guarantee occurred during the reporting period (excluding guarantees for subsidiaries)
Total balance of guarantee at the end of the reporting period (A) (excluding guarantees for subsidiaries)
Guarantees provided by the Company for subsidiaries
Total amount of guarantees for subsidiaries occurred during the reporting period 1,404,017
Total balance of guarantees for subsidiaries at the end of the reporting period (B) 1,296,712
Total amount of guarantees provided by the Company (including guarantees for subsidiaries)
Total amount of guarantee (A + B) 1,296,712
Ratio of total amount of guarantees to net assets of the Company (%)
Including:
Amount of guarantees for shareholders, ultimate controllers and their related parties (C) 0
Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio exceeding 70% (D) 782,927
The amount of total amount of guarantee in excess of 50% of net assets (E) 0
Total amount of the above three guarantees (C + D + E) 782,927
Explanation of possibly bearing related discharge duty for premature guarantees Nil
Explanation of guarantee status Nil
3 Other major contracts
Applicable √ Not Applicable
76 Haier Smart Home Co., Ltd. Interim Report 2024
Section VI Significant Issues
XII. EXPLANATION OF PROGRESS IN USE OF PROCEEDS
Applicable √ Not Applicable
XIII. EXPLANATION OF OTHER SIGNIFICANT EVENTS
√ Applicable Not Applicable
Entrusted wealth management: By the end of the reporting period, the balance of the Company’s
entrusted wealth management amounted to RMB2.145 billion. Under the premise of ensuring sufficient
capital required by the principal operating activities and daily operations, the Company and some of its
subsidiaries purchased some low-risk wealth management products and structured deposits from major
commercial banks to improve the yield of temporarily-idle funds and the return for shareholders within
the authority of the president’s office meeting and under the condition of ensuring fund safety.
Haier Smart Home Co., Ltd. Interim Report 2024 77
Section VII Changes in Shares and
Information About Shareholders
I. CHANGES IN SHARE CAPITAL
(I) Table of Changes in shares
1. Table of Changes in shares
During the reporting period, there was no change in the total number of shares and share
capital structure of the Company.
2. Statement on the changes in shares
Applicable √ Not Applicable
3. Effect of changes in shares on the financial indicators such as earnings per share
and net assets per share (if any) after the reporting period to the disclosure date
of interim report
Applicable √ Not Applicable
4. Other disclosure deemed necessary by the Company or required by securities
regulatory authorities
Applicable √ Not Applicable
(II) Changes in shares with selling restrictions
Applicable √ Not Applicable
II. INFORMATION ON SHAREHOLDERS
(I) Total number of shareholders:
Total number of ordinary shareholders by the end of the reporting period 112,985
Total number of preferential shareholders with restoration of voting rights N/A
by the end of the reporting period
78 Haier Smart Home Co., Ltd. Interim Report 2024
Section VII Changes in Shares and Information About Shareholders
(II) Table of shareholdings of top ten shareholders, top ten shareholders of tradable
shares (or shareholders without selling restrictions) by the end of the reporting
period
Unit: share
Shareholdings of top ten shareholders (excluding shares lent out under refinancing)
Increase/
decrease Number of Number of
during the shares held shares held
Name of shareholder reporting at the end of Percentage with selling Status of shares pledged, Nature of
(full name) period the period (%) restrictions marked or frozen shareholder
Status of
shares Number
HKSCC NOMINEES LIMITED 2,314,600,081 24.52 Unknown Unknown
Haier COSMO Co., Ltd. 1,258,684,824 13.34 None Domestic non-state-
(海爾卡奧斯股份有限公司) owned legal entity
Haier Group Corporation 1,072,610,764 11.36 None Domestic non-state-
owned legal entity
Hong Kong Securities Clearing 71,261,645 665,064,574 7.05 None Unknown
Co., Ltd.
HCH (HK) INVESTMENT 538,560,000 5.71 None Foreign legal entity
MANAGEMENT CO., LIMITED
China Securities Finance 182,592,654 1.93 None Unknown
Corporation Limited
Qingdao Haier Venture & 172,252,560 1.83 None Domestic non-state-
Investment Information Co., owned legal entity
Ltd. (青島海爾創業投資咨詢
有限公司)
Qingdao Haichuangzhi 133,791,058 1.42 None Domestic non-state-
Management Consulting owned legal entity
Enterprise (Limited
Partnership) (青島海創智管理
咨詢企業（有限合伙）
Industrial and Commercial Bank 14,617,100 60,753,458 0.64 None Unknown
of China -SSE 50 Exchange
Traded Open-End Index
Securities Investment Fund
Clearstream Banking S.A. 58,352,268 0.62 None Unknown
Haier Smart Home Co., Ltd. Interim Report 2024 79
Section VII Changes in Shares and Information About Shareholders
Shareholdings of top ten shareholders without selling restrictions (excluding shares lent
out under refinancing
Number of
tradable shares
held without
selling
Name of shareholder restrictions Class and number of shares
Class Number
HKSCC NOMINEES 2,314,600,081 Overseas listed foreign 2,314,600,081
LIMITED shares
Haier COSMO Co., Ltd. 1,258,684,824 RMB ordinary 1,258,684,824
(海爾卡奧斯股份有限
公 司)
Haier Group 1,072,610,764 RMB ordinary 1,072,610,764
Corporation
Hong Kong Securities 665,064,574 RMB ordinary 665,064,574
Clearing Co., Ltd.
HCH (HK) INVESTMENT 538,560,000 Overseas listed foreign 538,560,000
MANAGEMENT CO., shares
LIMITED
China Securities Finance 182,592,654 RMB ordinary 182,592,654
Corporation Limited
Qingdao Haier Venture & 172,252,560 RMB ordinary 172,252,560
Investment
Information Co., Ltd.
(青島海爾創業投資咨
詢 有 限 公 司)
Qingdao Haichuangzhi 133,791,058 RMB ordinary 133,791,058
Management
Consulting Enterprise
(Limited Partnership)
(青島海創智管理咨詢
企 業（有 限 合 伙）
Industrial and 60,753,458 RMB ordinary 60,753,458
Commercial Bank of
China -SSE 50
Exchange Traded
Open-End Index
Securities Investment
Fund
Clearstream Banking 58,352,268 Overseas listed foreign 58,352,268
S.A. shares
80 Haier Smart Home Co., Ltd. Interim Report 2024
Section VII Changes in Shares and Information About Shareholders
Number of
tradable shares
held without
selling
Name of shareholder restrictions Class and number of shares
Class Number
Explanation of The repurchase accounts of the Company held a total of
repurchase account of 145,238,037 shares.
top ten shareholders
Explanation of delegated Nil
voting rights,
entrusted voting
rights, abstained
voting rights of the
above shareholders
Explanation of related (1) Haier COSMO Co., Ltd. (海 爾 卡 奥 斯 股 份 有 限 公 司) is a
parties or parties subsidiary of Haier Group Corporation. Haier Group
acting in concert Corporation holds 51.20% of its equity. Qingdao Haier
among the aforesaid Venture & Investment Information Co., Ltd. (青 島 海 爾 創 業 投
shareholders 資 咨 詢 有 限 公 司), HCH (HK) INVESTMENT MANAGEMENT
CO., LIMITED and Qingdao Haichuangzhi Management
Consulting Enterprise (Limited Partnership) (青島海創智管理咨
詢 企 業（有 限 合 伙） are parties acting in concert with Haier
Group Corporation; (2) The Company is not aware of the
existence of any connections of other shareholders.
Explanation of Not applicable
preferential
shareholders with
restoration of voting
rights and their
shareholdings
Shareholders holding more than 5% of the shares, top ten shareholders and top ten holders of
outstanding shares without selling restrictions participating in the lending of shares under the
refinancing business
Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Interim Report 2024 81
Section VII Changes in Shares and Information About Shareholders
Changes in top ten shareholders and top ten holders of outstanding shares without selling
restrictions due to lending/returning under refinancing as compared to the previous period
Applicable √ Not Applicable
Number of shares held by top ten shareholders with selling restrictions and the selling
restrictions
Applicable √ Not Applicable
(III) Strategic investors or general legal persons who became the top ten
shareholders due to placing of new shares
Applicable √ Not Applicable
III. DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT
(I) Changes of shareholding of current and retired directors, supervisors and senior
management during the reporting period
Applicable √ Not Applicable
Other explanations
Applicable √ Not Applicable
82 Haier Smart Home Co., Ltd. Interim Report 2024
Section VII Changes in Shares and Information About Shareholders
(II) Incentive share option granted to directors, supervisors and senior management
during the reporting period
√ Applicable Not Applicable
Unit: 0’000 shares
Number of Exercisable Shares from
Number of stock options shares stock options Number of
stock options newly granted options exercised stock options
held at the during the during the during the held at the
beginning of reporting reporting reporting end of the
Name Position the period period period period period
Li Huagang Director 54.83 –18.28 36.56
Gong Wei Director 27.42 –9.14 18.28
Xie Juzhi Senior management 54.83 –18.28 36.56
Li Pan Senior management 27.42 –9.14 18.28
Song Yujun Senior management 18.72 –6.24 12.49
Zhao Yanfeng Senior management 28.09 –9.36 18.73
Huang Xiaowu Senior management 27.42 –9.14 18.28
Wu Yong Senior management 13.71 –4.57 9.14
Li Yang Senior management 27.42 –9.14 18.28
Guan Jiangyong Senior management 13.71 –4.57 9.14
Liu Xiaomei Senior management 8.74 –2.91 5.82
Total / 302.32 –100.77 201.55
Haier Smart Home Co., Ltd. Interim Report 2024 83
Section VII Changes in Shares and Information About Shareholders
(III) Other explanations
Applicable √ Not Applicable
IV. CHANGES IN CONTROLLING SHAREHOLDER AND THE ULTIMATE
CONTROLLER
Applicable √ Not Applicable
84 Haier Smart Home Co., Ltd. Interim Report 2024
Section VIII Relevant Information of
Preferred Shares
Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Interim Report 2024 85
Section IX Relevant Information of
Corporate Bonds
I. CORPORATE BOND (INCLUDING ENTERPRISE BOND) AND
NON-FINANCIAL CORPORATE DEBT FINANCING INSTRUMENTS
Applicable √ Not Applicable
II. CONVERTIBLE CORPORATE BOND
Applicable √ Not Applicable
86 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
I. AUDIT REPORT
Applicable √ Not Applicable
II. FINANCIAL STATEMENTS
Consolidated Balance Sheet
30 June 2024
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items Notes 30 June 2024 31 December 2023
Current assets:
Monetary funds VII.1 54,705,626,157.44 54,486,452,841.14
Provision of settlement fund
Funds lent
Financial assets held for trading VII.2 1,066,569,759.01 953,963,543.83
Derivative financial assets VII.3 86,713,582.93 67,565,829.44
Bills receivable VII.4 7,147,471,192.39 8,621,434,831.39
Accounts receivable VII.5 23,517,845,844.84 20,268,099,436.43
Financing receivables VII.6 1,035,015,815.14 1,238,294,930.51
Prepayments
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other receivables VII.7 2,731,270,164.67 2,649,558,985.05
Including: Interest receivables 676,041,225.16 748,496,020.24
Dividends receivables
Financial assets purchased under resale
agreements
Inventories VII.8 39,453,614,462.10 39,524,006,616.33
Including: Data resources
Contract assets VII.9 300,808,605.96 260,939,408.73
Assets held for sale
Non-current assets due within one year
Other current assets VII.10 4,472,061,327.09 4,550,167,668.68
Total current assets 134,516,996,911.57 132,620,484,091.53
Non-current assets:
Loans and advances granted
Debt investments VII.11 14,477,621,780.97 8,841,233,078.66
Other debt investments
Long-term receivables 351,899,806.17 350,409,496.85
Haier Smart Home Co., Ltd. Interim Report 2024 87
Section X Financial Report
Items Notes 30 June 2024 31 December 2023
Long-term equity investments VII.12 26,038,301,146.49 25,546,793,450.20
Investments in other equity instruments VII.13 6,281,814,366.53 6,403,694,954.77
Other non-current financial assets
Investment properties VII.14 80,227,845.94 98,631,080.77
Fixed assets VII.15 29,686,001,800.40 29,603,936,822.78
Construction in progress VII.16 5,787,636,237.75 5,403,469,596.76
Biological assets for production
Oil and gas assets
Right-of-use assets VII.17 4,815,237,702.43 4,367,081,679.74
Intangible assets VII.18 10,814,254,709.75 11,006,230,700.93
Including: Data resources
Development cost 284,998,053.97 266,490,235.10
Including: Data resources
Goodwill VII.19 24,341,834,392.35 24,289,726,694.80
Long-term prepaid expenses VII.20 628,084,750.01 741,745,517.64
Deferred income tax assets VII.21 1,782,173,574.04 1,805,945,632.16
Other non-current assets VII.22 2,364,161,933.18 2,033,986,945.28
Total non-current assets 127,734,248,099.98 120,759,375,886.44
Total assets 262,251,245,011.55 253,379,859,977.97
Current liabilities:
Short-term borrowings VII.23 10,333,169,856.54 10,318,351,841.88
Borrowings from central bank
Funds borrowed
Financial liabilities held for trading
Derivative financial liabilities VII.24 191,751,522.44 168,625,004.97
Bills payable VII.25 23,389,001,752.35 22,215,726,721.62
Accounts payables VII.26 47,200,496,446.93 47,061,789,173.62
Receipts in advance
Contract liabilities VII.27 3,256,026,994.75 7,731,916,491.54
Disposal of repurchased financial assets
Absorbing deposit and deposit in inter-
bank market
Customer deposits for trading in securities
Amounts due to issuer for securities
underwriting
Payables for staff’s remuneration VII.28 3,896,760,934.55 5,077,517,828.50
Taxes payable VII.29 3,677,057,061.93 2,841,215,524.73
Other payables VII.30 27,248,243,510.90 19,181,569,184.83
Including: Interest payables
Dividends payables 7,515,895,607.63 1,880,719.69
Fees and commissions payable
Reinsurance Accounts payables
Liabilities held for sale
Non-current liabilities due within one year VII.31 5,327,717,384.22 3,732,550,549.23
88 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Items Notes 30 June 2024 31 December 2023
Other current liabilities VII.32 1,095,321,670.22 1,651,239,151.52
Total current liabilities 125,615,547,134.83 119,980,501,472.44
Non-current liabilities:
Deposits for insurance contracts
Long-term borrowings VII.33 18,123,651,118.19 17,936,302,925.77
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities VII.34 3,724,630,519.72 3,286,801,426.17
Long-term payables VII.35 51,160,960.16 57,113,422.78
Long-term payables for staff’s
remuneration VII.36 1,055,014,630.92 1,085,454,839.18
Estimated liabilities VII.37 2,005,235,110.36 1,935,014,042.24
Deferred income VII.38 1,027,202,647.44 1,050,319,606.44
Deferred income tax liabilities VII.21 1,968,954,413.50 2,028,390,554.20
Other non-current liabilities 95,069,810.18 108,218,339.24
Total non-current liabilities 28,050,919,210.47 27,487,615,156.02
Total liabilities 153,666,466,345.30 147,468,116,628.46
Owners’ equity
(or shareholders’ equity):
Paid-in capital (or share capital) VII.39 9,438,114,893.00 9,438,114,893.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve VII.40 23,906,949,506.86 23,762,354,684.05
Less: treasury stock VII.41 5,500,665,317.85 5,034,065,107.42
Other comprehensive income VII.42 1,635,545,031.02 1,969,724,027.01
Special reserve
Surplus reserve VII.43 4,842,338,543.80 4,842,338,543.80
General risk provisions
Undistributed profits VII.44 71,412,017,694.55 68,535,686,494.60
Total equity attributable to owners
(or shareholders) of the Parent Company 105,734,300,351.38 103,514,153,535.04
Minority shareholders’ interests 2,850,478,314.87 2,397,589,814.47
Total owners’ equity
(or shareholders’ equity) 108,584,778,666.25 105,911,743,349.51
Total liabilities and owners’ equity
(or shareholders’ equity) 262,251,245,011.55 253,379,859,977.97
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Haier Smart Home Co., Ltd. Interim Report 2024 89
Section X Financial Report
Balance Sheet of the Parent Company
30 June 2024
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items Notes 30 June 2024 31 December 2023
Current Assets:
Monetary funds 11,222,371,826.58 7,579,640,524.79
Financial assets held for trading
Derivative financial assets
Bills receivable
Accounts receivable XIX.1 1,859,987,722.13 1,625,777,099.03
Financing receivables
Prepayments 3,115,793.21 3,212,938.83
Other receivables XIX.2 21,890,675,172.49 23,649,977,816.57
Including: Interest receivables 141,536,597.40 117,439,655.79
Dividends receivables 872,819,744.23 570,000,000.00
Inventories 6,163,640.83 5,400,498.27
Including: Data resources
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 1,553,369,952.40 1,530,274,566.66
Total current assets 36,535,684,107.64 34,394,283,444.15
Non-current assets:
Debt investments 7,723,497,912.20 2,884,204,032.25
Other debt investments
Long-term receivables
Long-term equity investments XIX.3 56,433,082,587.82 55,828,696,006.06
Investments in other equity instruments 1,619,260,874.04 1,619,260,874.04
Other non-current financial assets
Investment properties
Fixed assets 141,983,596.38 154,588,551.47
Construction in progress 3,614,971.91 6,054.40
Biological assets for production
Oil and gas assets
Right-of-use assets
Intangible assets 38,255,002.98 41,307,540.86
Including: Data resources
Development cost
Including: Data resources
Goodwill
90 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Items Notes 30 June 2024 31 December 2023
Long-term prepaid expenses 3,508,130.34 3,777,722.63
Deferred income tax assets
Other non-current assets 1,498,818,858.08 1,501,734,455.48
Total non-current assets 67,462,021,933.75 62,033,575,237.19
Total assets 103,997,706,041.39 96,427,858,681.34
Current liabilities:
Short-term borrowings
Financial liabilities held for trading
Derivative financial liabilities
Bills payable
Accounts payables 1,326,647,081.32 1,120,671,258.40
Receipts in advance
Contract liabilities 22,930,469.11 22,930,469.11
Payables for staff’s remuneration 8,273,623.07 28,602,784.57
Taxes payable 973,985.01 5,590,668.41
Other payables 58,922,007,427.98 45,012,683,942.96
Including: Interest payable
Dividends payable 7,513,967,094.69
Liabilities held for sale
Non-current liabilities due within one year 1,601,000,000.00 134,000,000.00
Other current liabilities 17,257,623.40 12,486,915.31
Total current liabilities 61,899,090,209.89 46,336,966,038.76
Non-current liabilities:
Long-term borrowings 3,238,500,000.00 3,779,500,000.00
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 58,624.38
Long-term payable
Long-term payables for staff’s
remuneration
Estimated liabilities
Deferred income 12,973,300.00 12,973,300.00
Deferred income tax liabilities 420,053,312.58 420,053,312.58
Other non-current liabilities
Total non-current liabilities 3,671,585,236.96 4,212,526,612.58
Total liabilities 65,570,675,446.85 50,549,492,651.34
Owners’ equity
(or Shareholders’ equity):
Paid-in capital (or share capital) 9,438,114,893.00 9,438,114,893.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 27,446,396,776.65 27,263,651,777.44
Less: treasury stock 3,641,894,152.79 3,175,293,942.36
Haier Smart Home Co., Ltd. Interim Report 2024 91
Section X Financial Report
Items Notes 30 June 2024 31 December 2023
Other comprehensive income 669,143,133.11 630,674,691.95
Special reserve
Surplus reserve 4,237,192,318.35 4,237,192,318.35
Undistributed profits 278,077,626.22 7,484,026,291.62
Total owners’ equity
(or shareholders’ equity) 38,427,030,594.54 45,878,366,030.00
Total liabilities and owners’ equity
(or shareholders’ equity) 103,997,706,041.39 96,427,858,681.34
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
92 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Consolidated Profit Statement
January-June 2024
Unit and Currency: RMB
Items Notes 2024 Interim 2023 Interim
I. Total operating revenue 135,622,549,121.01 131,628,595,912.05
Including: Operating revenue VII.45 135,622,549,121.01 131,628,595,912.05
Interest income
Insurance premiums earned
Fee and commission income
II. Total cost of operations 123,666,371,198.78 121,337,680,704.03
Including: Operating cost VII.45 94,106,431,686.66 91,557,518,745.02
Interest expenses
Fee and commission expenses
Insurance withdrawal payment
Net payment from indemnity
Net provisions withdrew for
insurance contract liability
Insurance policy dividend paid
Reinsurance cost
Taxes and surcharges VII.46 538,267,458.26 533,099,572.52
Selling expenses VII.47 18,687,502,154.89 18,768,944,057.44
Administrative expenses VII.48 5,186,349,563.44 5,461,681,481.50
R&D expenses VII.49 5,088,901,166.88 5,025,786,116.64
Financial expenses VII.50 58,919,168.65 –9,349,269.09
Including: Interest expenses 1,226,384,743.58 875,078,615.27
Interest income 912,438,277.44 614,901,995.27
Add: Other income VII.51 555,087,752.52 601,375,268.80
Investment income
(losses are represented by ‘-’) VII.52 1,039,614,193.70 1,129,768,360.36
Including: investment income of
associates and joint ventures 1,021,852,565.42 1,078,905,972.36
Income generated from the
derecognition of financial assets
measured at amortized cost
(losses are represented by ‘-’)
Exchange gain
(losses are represented by ‘-’)
Gains on net exposure hedges
(losses are represented by ‘-’)
Income from change in fair value
(losses are represented by ‘-’) VII.53 –29,565,597.82 31,271,562.35
Loss on credit impairment
(losses are represented by ‘-’) VII.54 –58,013,951.73 –165,968,929.36
Haier Smart Home Co., Ltd. Interim Report 2024 93
Section X Financial Report
Items Notes 2024 Interim 2023 Interim
Loss on assets impairment
(losses are represented by ‘-’) VII.55 –710,556,264.52 –779,748,575.44
Gain from disposal of assets
(losses are represented by ‘-’) VII.56 –2,583,904.37 –20,647,304.64
III. Operating profit
(losses are represented by ‘-’) 12,750,160,150.01 11,086,965,590.09
Add: non-operating income VII.57 73,423,091.34 58,784,451.89
Less: non-operating expenses VII.58 84,518,604.74 32,299,513.21
IV. Total profit
(total losses are represented by ‘-’) 12,739,064,636.61 11,113,450,528.77
Less: income tax expense VII.59 2,131,741,494.48 2,069,767,775.55
V. Net profit
(net losses are represented by ‘-’) 10,607,323,142.13 9,043,682,753.22
(1) Classification by continuous operation
1. Net profit from continuous operation
(net losses are represented by ‘-’) 10,607,323,142.13 9,043,682,753.22
2. Net profit from discontinued
operation (net losses are
represented by ‘-’)
(2) Classification by ownership of
the equity
1. Net profit attributable to shareholders
of the Parent Company (net losses
are represented by ‘-’) 10,420,218,389.22 8,962,851,469.46
2. Profit or loss attributable to minority
shareholders (net losses are
represented by ‘-’) 187,104,752.91 80,831,283.76
VI. Other comprehensive income, net of tax VII.60 –334,806,467.13 136,824,101.13
(I) Other comprehensive income
attributable to owners of the Parent
Company, net of tax –335,021,596.15 155,051,059.64
1. Other comprehensive income that
cannot be reclassified into the
profit or loss –128,316,608.25 36,663,726.03
(1) Changes arising from
re-measurement of
defined benefit plans –2,491,664.07 32,438,331.87
(2) Other comprehensive income
that cannot be transferred into
profit or loss under equity
method
(3) Changes in fair value of
investments in other equity
instruments –125,824,944.18 4,225,394.16
94 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Items Notes 2024 Interim 2023 Interim
(4) Changes in fair value of credit
risks of the enterprise
2. Other comprehensive income to be
reclassified into the profit or loss –206,704,987.90 118,387,333.61
(1) Other comprehensive income
that can be transferred into
profit or loss under equity
method 23,160,537.38 –15,508,344.88
(2) Changes in fair value of other
debt Investments
(3) Reclassified financial assets that
are credited to other
comprehensive income
(4) Credit impairment provision for
other debt investments
(5) Reserve for cash flow hedging –30,039,858.31 –193,755,242.84
(6) Exchange differences on
translation of financial
statements denominated in
foreign currencies –199,825,666.97 327,650,921.33
(7) Others
(II) Other comprehensive income
attributable to minority shareholders,
net of tax 215,129.02 –18,226,958.51
VII. Total comprehensive income 10,272,516,675.00 9,180,506,854.35
(I) Total comprehensive income
attributable to the owners of
Parent Company 10,085,196,793.07 9,117,902,529.10
(II) Total comprehensive income
attributable to the minority
shareholders 187,319,881.93 62,604,325.25
VIII. Earnings per share:
(I) Basic earnings per share (RMB/share) XXI.1 1.13 0.96
(II) Diluted earnings per share
(RMB/share) XXI.1 1.12 0.96
For business combination under common control occurring in the current period, the net profit of the
acquiree before the combination was RMB0, and the net profit of the acquiree for the previous period
was RMB –1,024,530.38.
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Haier Smart Home Co., Ltd. Interim Report 2024 95
Section X Financial Report
Profit Statement of the Parent Company
January-June 2024
Unit and Currency: RMB
Items Notes 2024 Interim 2023 Interim
I. Operating income XIX.4 251,601,614.76 327,406,706.84
Less: operating cost XIX.4 223,444,233.50 286,220,868.43
Taxes and surcharges 2,634,526.12 3,754,801.82
Selling expenses 21,861,602.21 4,603,666.69
Administration expenses 379,191,355.33 377,868,026.53
R&D expenses 7,802,548.59 6,617,045.16
Financial expenses –179,030,129.87 –92,308,439.54
Including: interest expenses 52,482,308.39 32,509,056.33
Interest income 233,381,967.37 115,693,759.65
Add: other income 4,280,121.77 1,361,535.00
Investment income (losses are
represented by ‘-’) XIX.5 508,175,341.20 400,717,692.54
Including: investment income of
associates and joint ventures 180,476,867.12 144,556,606.76
Derecognition income on
financial assets
measured at amortized
cost (losses are
represented by ‘-’)
Gains on net exposure hedges
(losses are represented by ‘-’)
Income from change in fair value
(losses are represented by ‘-’)
Loss on credit impairment (losses
are represented by ‘-’) 47,441.31
Loss on assets impairment
(losses are represented by ‘-’)
Gain from disposal of assets
(losses are represented by ‘-’)
II. Operating profit
(losses are represented by ‘-’) 308,152,941.85 142,777,406.60
Add: non-operating income 97,965.97
Less: non-operating expenses 134,512.56 78,702.83
III. Total profit
(total losses are represented by ‘-’) 308,018,429.29 142,796,669.74
Less: income tax expenses 1,205.40
IV. Net profit
(net losses are represented by ‘-’) 308,018,429.29 142,795,464.34
96 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Items Notes 2024 Interim 2023 Interim
(I) Net profit from continuous operations
(net losses are represented by ‘-’) 308,018,429.29 142,795,464.34
(II) Net profit from discontinued operations
(net losses are represented by ‘-’)
V. Other comprehensive income, net of tax 38,468,441.16
(I) Other comprehensive income that
cannot be reclassified into the profit or
loss
1. Changes arising from re-
measurement of defined benefit
plans
2. Other comprehensive income that
cannot be transferred into profit or
loss under equity method
3. Changes in fair value of investments
in other equity instruments
4. Changes in fair value of credit risks
of the enterprise
(II) Other comprehensive income to be
reclassified into the profit or loss 38,468,441.16
1. Other comprehensive income that
can be transferred into profit or loss
under equity method 38,468,441.16
2. Changes in fair value of other debt
investments
3. Reclassified financial assets that are
credited to other comprehensive
income
4. Credit impairment provision for other
debt investments
5. Reserve for cash flow hedging
6. Exchange differences on translation
of financial statements denominated
in foreign currencies
7. Others
VI. Total comprehensive income 346,486,870.45 142,795,464.34
VII. Earnings per share:
(I) Basic earnings per share (RMB/share)
(II) Diluted earnings per share
(RMB/share)
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Haier Smart Home Co., Ltd. Interim Report 2024 97
Section X Financial Report
Consolidated Cash Flow Statement
January-June 2024
Unit and Currency: RMB
Items Notes 2024 Interim 2023 Interim
I. Cash flow from operating activities:
Cash received from the sale of goods
and rendering services 137,770,272,988.69 131,288,880,461.26
Net increase in distributor and inter-bank
deposits
Net increase in borrowing from the
central bank
Net cash increase in borrowing from
other financial institutes
Cash received from premiums under
original insurance contract
Net cash received from reinsurance
business
Net increase in deposits of policy holders
and investment
Cash received from interest, fee and
commissions
Net increase in cash borrowed
Net increase in cash received from
repurchase operation
Net cash received from customer
deposits for trading in securities
Refunds of taxes 1,058,338,202.23 1,055,963,172.82
Cash received from other related
operating activities VII.61 1,273,666,446.36 1,004,688,596.01
Sub-total of cash inflows from operating
activities 140,102,277,637.28 133,349,532,230.09
Cash paid on purchase of goods and
services 94,771,705,644.29 90,340,588,373.14
Net increase in loans and advances of
distributors
Net increase in deposits in the PBOC and
inter bank
Cash paid for compensation payments
under original insurance contact
Net increase in cash lent
Cash paid for interest, bank charges and
commissions
Cash paid for insurance policy dividend
98 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Items Notes 2024 Interim 2023 Interim
Cash paid to and on behalf of
employees 16,148,989,199.64 14,745,533,991.16
Cash paid for all types of taxes 7,567,174,632.61 7,628,260,419.66
Cash paid to other operation related
activities VII.61 13,796,150,223.48 13,845,127,911.51
Sub-total of cash outflows from operating
activities 132,284,019,700.02 126,559,510,695.47
Net cash flow from operating activities VII.62 7,818,257,937.26 6,790,021,534.62
II. Cash flow from investing activities:
Cash received from recovery of
investments 9,680,782,079.51 5,129,042,704.70
Cash received from return on
investments 480,478,081.96 484,178,075.61
Net cash received from the disposal of
fixed assets, intangible assets and
other long-term assets 7,717,184.08 74,087,510.81
Net cash received from disposal of
subsidiaries and other operating
entities 2,000,000.00
Other cash received from investment
activities 15,362,098.03
Sub-total of cash inflows from investing
activities 10,168,977,345.55 5,704,670,389.15
Cash paid on purchase of fixed assets,
intangible assets and other long-term
assets 3,891,922,126.47 3,727,907,256.47
Cash paid for investments 13,611,230,146.65 6,303,165,775.56
Net increase in secured loans
Net cash paid on acquisition of
subsidiaries and other operating
entities
Other cash paid on investment activities 6,922,378.31
Sub-total of cash outflows from investing
activities 17,503,152,273.12 10,037,995,410.34
Net cash flow from investing activities –7,334,174,927.57 –4,333,325,021.19
Haier Smart Home Co., Ltd. Interim Report 2024 99
Section X Financial Report
Items Notes 2024 Interim 2023 Interim
III. Cash flow from financing activities:
Cash received from capital contributions 268,874,731.22
Including: cash received from capital
contributions by minority shareholders
of subsidiaries
Cash received from borrowings 5,931,538,006.65 11,553,402,031.97
Other cash received from financing
activities
Sub-total of cash inflows from financing
activities 6,200,412,737.87 11,553,402,031.97
Cash paid on repayment of loans 4,150,675,947.75 10,428,924,467.65
Cash paid on distribution of dividends,
profits or repayment of interest
expenses 1,174,174,474.78 817,299,422.27
Including: dividend and profit paid to
minority shareholders by subsidiaries
Other cash paid to financing activities VII.61 1,066,739,043.45 1,575,176,054.23
Sub-total of cash outflows from
financing activities 6,391,589,465.98 12,821,399,944.15
Net cash flow from financing activities –191,176,728.11 –1,267,997,912.18
IV. Effect of fluctuations in exchange
rates on cash and cash
equivalents –42,182,129.41 482,296,933.74
V. Net increase in cash and
cash equivalents 250,724,152.17 1,670,995,534.99
Add: balance of cash and cash
equivalents at the beginning of the
period VII.62 53,977,310,651.03 53,392,209,857.41
VI. Balance of cash and cash equivalents
at the end of the period VII.62 54,228,034,803.20 55,063,205,392.40
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
100 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Cash Flow Statement of the Parent Company
January-June 2024
Unit and Currency: RMB
Items Notes 2024 Interim 2023 Interim
I. Cash flow from operating activities:
Cash received from the sale of goods and
rendering of services 219,993,729.62 33,292,958.65
Refunds of taxes 38,214.96
Other cash received from operating
activities 164,614,625.43 65,817,539.47
Sub-total of cash inflows from operating
activities 384,646,570.01 99,110,498.12
Cash paid on purchase of goods and
services 80,721,248.11
Cash paid to and on behalf of employees 27,649,816.71 27,717,542.52
Cash paid for all types of taxes 11,299,372.62 16,713,598.66
Other cash paid to operation activities 104,532,697.84 27,993,348.41
Sub-total of cash outflows from
operating activities 143,481,887.17 153,145,737.70
Net cash flow from operating
activities 241,164,682.84 –54,035,239.58
II. Cash flow from investing activities:
Cash received from recovery of
investments 7,222,000,000.00 4,623,000,000.00
Cash received from return on
investments 88,433,946.88 81,202,353.24
Net cash received from the disposal of
fixed assets, intangible assets and
other long-term assets
Net cash received from disposal of
subsidiaries and other operating
entities
Other cash received from investment
activities 389,573,294.54
Sub-total of cash inflows from investing
activities 7,700,007,241.42 4,704,202,353.24
Cash paid on purchase of fixed assets,
intangible assets and other long-term
assets 2,692,652.09 4,137,180.77
Cash paid for investments 12,422,000,000.00 6,647,572,258.00
Net cash paid on acquisition of
subsidiaries and other operating
entities
Haier Smart Home Co., Ltd. Interim Report 2024 101
Section X Financial Report
Items Notes 2024 Interim 2023 Interim
Other cash paid on investment activities 1,057,569,045.00
Sub-total of cash outflows from
investing activities 12,424,692,652.09 7,709,278,483.77
Net cash flow from investing
activities –4,724,685,410.67 –3,005,076,130.53
III. Cash flow from financing activities:
Cash received from capital injections
Cash received from borrowings 940,000,000.00 1,110,000,000.00
Other cash received from financing
activities 7,717,935,238.95 4,223,807,260.09
Sub-total of cash inflows from financing
activities 8,657,935,238.95 5,333,807,260.09
Cash paid on repayment of borrowings 14,000,000.00 7,000,000.00
Cash paid on distribution of dividends,
profits or repayment of interest
expenses 50,962,018.77 32,820,559.74
Other cash paid on financing activities 466,600,210.43 780,445,507.58
Sub-total of cash outflows from
financing activities 531,562,229.20 820,266,067.32
Net cash flow from financing
activities 8,126,373,009.75 4,513,541,192.77
IV. Effect of fluctuations in exchange
rates on cash and cash equivalents –120,980.13 7,043,266.53
V. Net increase in cash and cash
equivalents 3,642,731,301.79 1,461,473,089.19
Add: balance of cash and cash
equivalents at the beginning of the
period 7,579,640,524.79 5,747,356,591.19
VI. Balance of cash and cash
equivalents at the end of the period 11,222,371,826.58 7,208,829,680.38
Person in charge of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
102 Haier Smart Home Co., Ltd. Interim Report 2024
Consolidated Statement of Changes in Owner’s Equity
January-June 2024
Unit and Currency: RMB
2024 Interim
Equity attributable to owners of the Parent Company
Other equity instruments
Other Minority
Paid-in capital Preference Perpetual Capital Less: treasury comprehensive General risk Undistributed shareholders’ Total owners’
Items (or share capital) shares bonds Others reserve stock income Special reserve Surplus reserve provision profits Others Sub-total interests equity
I. Closing balance for the previous period 9,438,114,893.00 23,762,354,684.05 5,034,065,107.42 1,969,724,027.01 4,842,338,543.80 68,535,686,494.60 103,514,153,535.04 2,397,589,814.47 105,911,743,349.51
Add: changes in accounting policies
Error correction for prior period
Others
II. Opening balance for the current year 9,438,114,893.00 23,762,354,684.05 5,034,065,107.42 1,969,724,027.01 4,842,338,543.80 68,535,686,494.60 103,514,153,535.04 2,397,589,814.47 105,911,743,349.51
III. Increase/decrease for the current period
(decrease is represented by ‘-’) 144,594,822.81 466,600,210.43 –334,178,995.99 2,876,331,199.95 2,220,146,816.34 452,888,500.40 2,673,035,316.74
(I) Total comprehensive income –335,021,596.15 10,420,218,389.22 10,085,196,793.07 187,319,881.93 10,272,516,675.00
(II) Capital injection and reduction by
owners 145,437,422.97 466,600,210.43 –321,162,787.46 279,388,310.76 –41,774,476.70
1. Ordinary shares invested by owners 279,388,310.76 279,388,310.76
2. Capital contribution by holders of
other equity instruments
3. Share-based payment included in
owners’ equity 201,405,574.94 201,405,574.94 201,405,574.94
4. Others –55,968,151.97 466,600,210.43 –522,568,362.40 –522,568,362.40
(III) Profit distribution –7,513,967,094.69 –7,513,967,094.69 –13,819,692.29 –7,527,786,786.98
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provision
3. Distribution to owners (or
shareholders) –7,513,967,094.69 –7,513,967,094.69 –13,819,692.29 –7,527,786,786.98
4. Others
(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into
capital (or share capital)
2. Transfer of surplus reserves into
capital (or share capital)
3. Surplus reserves used for
remedying loss
4. Changes in defined benefit plans
carried forward to retained
earnings
5. Other comprehensive income
carried forward to retained
earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
(VI) Others –842,600.16 842,600.16 –29,920,094.58 –29,920,094.58 –29,920,094.58
IV. Closing balance for the period 9,438,114,893.00 23,906,949,506.86 5,500,665,317.85 1,635,545,031.02 4,842,338,543.80 71,412,017,694.55 105,734,300,351.38 2,850,478,314.87 108,584,778,666.25
Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
103
104
2023 Interim
Equity attributable to owners of the Parent Company
Other equity instruments
Other Minority
Paid-in capital Preference Perpetual Capital Less: treasury comprehensive General risk Undistributed shareholders’ Total owners’
Items (or share capital) shares bonds Others reserve stock income Special reserve Surplus reserve provision profits Others Sub-total interests equity
I. Closing balance for the previous period 9,446,598,493.00 23,877,037,324.76 3,857,807,196.38 1,990,683,498.45 4,014,190,623.24 57,983,751,470.60 93,454,454,213.67 1,290,895,044.45 94,745,349,258.12
Add: changes in accounting policies
Error correction for prior period
Others 5,000,000.00 –16,611.23 4,983,388.77 4,983,388.77
II. Opening balance for the current year 9,446,598,493.00 23,882,037,324.76 3,857,807,196.38 1,990,683,498.45 4,014,190,623.24 57,983,734,859.37 93,459,437,602.44 1,290,895,044.45 94,750,332,646.89
III. Increase/decrease for the current period
(decrease is represented by ‘-’) –8,483,600.00 116,689,608.57 714,828,075.38 155,051,059.64 3,677,268,043.83 3,225,697,036.66 22,433,227.25 3,248,130,263.91
(I) Total comprehensive income 155,051,059.64 8,962,851,469.46 9,117,902,529.10 62,604,325.25 9,180,506,854.35
(II) Capital injection and reduction by
owners –8,483,600.00 116,689,608.57 714,828,075.38 –606,622,066.81 –31,896,976.12 –638,519,042.93
1. Ordinary shares invested by owners –31,896,976.12 –31,896,976.12
2. Capital contribution by holders of
Section X Financial Report
other equity instruments
Haier Smart Home Co., Ltd. Interim Report 2024
3. Share-based payment included in
owners’ equity 390,681,368.30 390,681,368.30 390,681,368.30
4. Others –8,483,600.00 –273,991,759.73 714,828,075.38 –997,303,435.11 –997,303,435.11
(III) Profit distribution –5,297,529,553.10 –5,297,529,553.10 –8,274,121.88 –5,305,803,674.98
1. Withdrawal of surplus reserves
2. Withdrawal of general risk
provision
3. Distribution to owners (or
shareholders) –5,297,529,553.10 –5,297,529,553.10 –8,274,121.88 –5,305,803,674.98
4. Others
(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into
capital (or share capital)
2. Transfer of surplus reserves into
capital (or share capital)
3. Surplus reserves used for
remedying loss
4. Changes in defined benefit plans
carried forward to retained
earnings
5. Other comprehensive income
carried forward to retained
earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
(VI) Others 11,946,127.47 11,946,127.47 11,946,127.47
IV. Closing balance for the period 9,438,114,893.00 23,998,726,933.33 4,572,635,271.76 2,145,734,558.09 4,014,190,623.24 61,661,002,903.20 96,685,134,639.10 1,313,328,271.70 97,998,462,910.80
Legal representative of the Company: Li Huagang Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke
Statement of Changes in Owners’ Equity of the Parent Company
January-June 2024
Unit and Currency: RMB
2024 Interim
Other equity instruments
Other
Paid-in capital (or Preference Capital Less: treasury comprehensive Surplus Undistributed Total owners’
Items share capital) shares Perpetual bonds Others reserve stock income Special reserve reserve profits equity
I. Closing balance for the previous period 9,438,114,893.00 27,263,651,777.44 3,175,293,942.36 630,674,691.95 4,237,192,318.35 7,484,026,291.62 45,878,366,030.00
Add: changes in accounting policies
Error correction for prior period
Others
II. Opening balance for the current year 9,438,114,893.00 27,263,651,777.44 3,175,293,942.36 630,674,691.95 4,237,192,318.35 7,484,026,291.62 45,878,366,030.00
III. Increase/decrease for the current period (decrease is
represented by ‘-’) 182,744,999.21 466,600,210.43 38,468,441.16 –7,205,948,665.40 –7,451,335,435.46
(I) Total comprehensive income 38,468,441.16 308,018,429.29 346,486,870.45
(II) Capital injection and reduction by owners 182,744,999.21 466,600,210.43 –283,855,211.22
1. Ordinary shares invested by owners
2. Capital contribution by holders of other equity
instruments
3. Share-based payment included in owners’ equity 182,744,999.21 182,744,999.21
4. Others 466,600,210.43 –466,600,210.43
(III) Profit distribution –7,513,967,094.69 –7,513,967,094.69
1. Withdrawal of surplus reserves
2. Distribution to owners (or shareholders) –7,513,967,094.69 –7,513,967,094.69
3. Others
(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into capital
(or share capital)
2. Transfer of surplus reserves into capital
(or share capital)
3. Surplus reserves used for remedying loss
4. Changes in defined benefit plans carried forward
to retained earnings
5. Other comprehensive income carried forward to
retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
(VI) Others
IV. Closing balance for the period 9,438,114,893.00 27,446,396,776.65 3,641,894,152.79 669,143,133.11 4,237,192,318.35 278,077,626.22 38,427,030,594.54
Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
105
106
2023 Interim
Other equity instruments
Other
Paid-in capital (or Preference Capital Less: treasury comprehensive Surplus Undistributed Total owners’
Items share capital) shares Perpetual bonds Others reserve stock income Special reserve reserve profits equity
I. Closing balance for the previous period 9,446,598,493.00 27,300,899,019.76 2,308,138,558.42 602,091,349.74 3,409,044,397.79 5,328,311,799.62 43,778,806,501.49
Add: changes in accounting policies
Error correction for prior period
Others
II. Opening balance for the current year 9,446,598,493.00 27,300,899,019.76 2,308,138,558.42 602,091,349.74 3,409,044,397.79 5,328,311,799.62 43,778,806,501.49
III. Increase/decrease for the current period (decrease is
represented by ‘-’) –8,483,600.00 186,863,532.59 597,964,898.92 –5,154,734,088.76 –5,574,319,055.09
(I) Total comprehensive income 142,795,464.34 142,795,464.34
(II) Capital injection and reduction by owners –8,483,600.00 186,863,532.59 597,964,898.92 –419,584,966.33
1. Ordinary shares invested by owners
2. Capital contribution by holders of other equity
instruments
Section X Financial Report
3. Share-based payment included in owners’ equity 360,860,541.25 360,860,541.25
Haier Smart Home Co., Ltd. Interim Report 2024
4. Others –8,483,600.00 –173,997,008.66 597,964,898.92 –780,445,507.58
(III) Profit distribution –5,297,529,553.10 –5,297,529,553.10
1. Withdrawal of surplus reserves
2. Distribution to owners (or shareholders) –5,297,529,553.10 –5,297,529,553.10
3. Others
(IV) Internal transfer of owner’s equity
1. Transfer of capital reserves into capital (or share
capital)
2. Transfer of surplus reserves into capital (or share
capital)
3. Surplus reserves used for remedying loss
4. Changes in defined benefit plans carried forward
to retained earnings
5. Other comprehensive income carried forward to
retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
(VI) Others
IV. Closing balance for the period 9,438,114,893.00 27,487,762,552.35 2,906,103,457.34 602,091,349.74 3,409,044,397.79 173,577,710.86 38,204,487,446.40
Legal representative of the Company: Li Huagang
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Section X Financial Report
III. GENERAL INFORMATION OF THE COMPANY
1. Overview of the Company
√ Applicable Not Applicable
The predecessor of Haier Smart Home Co., Ltd (hereinafter referred to as the Company) was
Qingdao Refrigerator Factory, which was established in 1984. As permitted to offering by
People’s Bank of China, Qingdao Branch on 16 December 1989, with the document of Qing Ti
Gai [1989] No. 3 issued on 24 March 1989, based on the reconstruction of the original Qingdao
Refrigerator Factory, a limited company was set up by directional fund raising of RMB150 million.
In March and September 1993, as approved by the document of Qing Gu Ling Zi [1993] No. 2
and No. 9 issued by the pilot leading team of Qingdao joint stock company, the Company was
converted from a directional offering company to a public subscription company and issued
additional 50 million shares to the public and listed with trading on Shanghai Stock Exchange in
November 1993. In October 2018, D-shares in issue of the Company were listed on the China
Europe International Exchange AG. In December 2020, H-shares in issue of the Company were
listed on the Stock Exchange of Hong Kong Limited by way of introduction.
The Company’s registered office is located at the Haier Science and Technology Innovation
Ecological Park of Laoshan District, Qingdao, Shandong Province, and the headquarters is
located at the Haier Science and Technology Innovation Ecological Park of Laoshan District,
Qingdao, Shandong Province.
The Company is mainly engaged in research and development, manufacturing and sales of home
appliances including refrigerators/freezers, kitchen appliances, air-conditioners, laundry appliances
and water appliances, and other smart home business, as well as providing smart home
packaged solutions.
The ultimate controlling parent company of the Company is Haier Group Corporation.
These financial statements have been approved for publication by the Board of the Company on
27 August 2024.
2. Scope of consolidated statements
For details of changes in the scope of consolidated financial statements for the current period,
please refer to “IX. Changes in Consolidation Scope” and “X. Interest in Other Entities” of this
note.
Haier Smart Home Co., Ltd. Interim Report 2024 107
Section X Financial Report
IV. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
1. Basis of preparation
The financial statements of the Company were prepared on the going concern basis according to
the transactions and matters actually occurred, in accordance with the Accounting Standards for
Enterprises — Basic Standards published by the Ministry of Finance, specific accounting
standards, and guidance on application of accounting standards for enterprises, interpretations to
accounting standards for enterprises and other relevant requirements (hereinafter collectively
referred to as the “Accounting Standards for Enterprises”) which issued subsequently, and in
combination with the disclosure provisions of the Rules for the Information Disclosure and
Compilation of Companies Publicly Issuing Securities No. 15: General Provisions for Financial
Report (Revised in 2023) of CSRC as well as the following significant accounting policies and
accounting estimation.
2. Going Concern
√ Applicable Not Applicable
The Company has ability to continue its operation for at least 12 months since the end of the
reporting period and there are no significant events affecting its ability to continue as a going
concern.
V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
Specific accounting policies and accounting estimates:
√ Applicable Not Applicable
According to the characteristics of its production and operation, the Company formulated a series of
specific accounting policies and accounting estimates, including the provisions for impairment for
accounts receivable (Note V.11); the measurement of inventories (Note V.12); the depreciation and
amortization of the investment properties (Note V.15); the depreciation of fixed assets (Note V.16), the
amortization of intangible assets (Note V.19), the criterion for determining of long-term assets
impairment (Note V.20); and the date of revenue recognition (Note V.26), etc.
1. Statement of compliance with Accounting Standards for Enterprises
The financial statements prepared by the Company meet the requirements of the Accounting
Standards for Enterprises, which accurately and completely reflected information relating to the
financial position, results of operations, changes in shareholders’ equity and cash flows of the
Company.
2. Accounting period
The accounting year of the Company is from 1 January each year to 31 December of the same
year in solar calendar.
108 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
3. Operating period
√ Applicable Not Applicable
The Company takes the period from the acquisition of assets for processing to the ultimate
realization of cash or cash equivalents as a normal operating cycle. The Company takes 12
months as an operating period, which is also the classification basis for the liquidity of its assets
and liabilities.
4. Recording currency
Renminbi is the recording currency of the Company
5. Materiality criteria determination method and selection basis
√ Applicable Not Applicable
Case Materiality criteria
Material receivables for which The amount of provision on an individual basis accounts
bad debt provision is for more than 10% of the total bad debt provisions for
individually assessed various types of receivables and is greater than
RMB100 million
Material receivables and bad The amount of recovery or reversal on an individual basis
debt provisions which are accounts for more than 10% of the total amount of
recovered or reversed various types of receivables and is greater than
RMB100 million
Actual write-off of material The amount of write-off on an individual basis accounts
accounts receivable for more than 10% of the total bad debt provisions of
various types of receivables and is greater than
RMB100 million
Material prepayments aged more Prepayment aged more than 1 year on an individual basis
than one year accounts for more than 10% of the total prepayments
and is greater than RMB100 million
Material projects under The ending balance of a project on an individual basis is
construction greater than RMB50 million
Material capitalized R&D The ending balance of a project on an individual basis
projects accounts for more than 10% of the ending balance of
development expenditure and is greater than RMB100
million
Material accounts payable and Accounts payable/other payables with aged more than 1
other payables aged more year on an individual basis account for more than 10%
than one year of the total accounts payable/other payables and are
greater than RMB100 million
Material contract liabilities aged Contract liabilities aged more than 1 year on an individual
more than one year basis account for more than 10% of the total contract
liabilities and are greater than RMB100 million
Haier Smart Home Co., Ltd. Interim Report 2024 109
Section X Financial Report
Case Materiality criteria
Material non-wholly owned The net assets of the subsidiaries account for more than
subsidiaries 5% of the Company’s net assets or the net profits and
losses of the subsidiaries account for more than 10%
of the Company’s consolidated net profit.
Material joint ventures or The book value of long-term equity investment in an
associates individual invested unit accounts for more than 5% of
the Company’s net assets or the investment profits and
losses under the long-term equity investment equity
method account for more than 10% of the Company’s
consolidated net profit.
6. Accounting methods of business combinations under common control and not
under common control
√ Applicable Not Applicable
A business combination is a transaction or event that brings together two or more separate
entities into one reporting entity. Business combinations are classified into business combinations
under common control and business combinations not under common control.
(1) Business combinations under common control
A business combination under common control is a business combination in which all of
the combining entities are ultimately controlled by the same party or parties both before
and after the combination, and that control is not transitory. For business combination
under common control, the party that obtains the control over the other parties on the
combination date is the acquirer, and other parties involving in the business combination
are the transferors. The combination date is the date on which the acquiring party
effectively obtains the control over the party being acquired.
For business combination under common control, the transferor’s assets and liabilities
obtained by the Company (as the acquirer) in a business combination are accounted for at
the carrying amount of the transferor in the ultimate controller’s consolidated financial
statements as at the date of combination, except for adjustments due to differences in
accounting policies. The difference between the carrying amount of the combination
consideration paid by the Company (or the aggregate nominal value of shares issued) and
the carrying amount of net assets obtained in a business combination shall be adjusted to
capital reserve, in case the capital reserve is insufficient for the elimination, the retained
earnings shall be adjusted.
110 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Intermediary fees (such as audit, legal services and valuation consultancy) and other
relevant management fees incurred in the business combination by the Company (as the
acquirer) are credited in profit or loss in the period when they occurred. Trading expenses
in direct relation to the issuance of equity instrument as the consideration for the
combination is written down to the capital reserve (share premium), where the capital
reserve (share premium) is insufficient, and to surplus reserves and undistributed profits in
order. Trading expenses in direct relation to the issuance of debt instrument as the
consideration for the combination is included in the initial recognition amount of the debt
instrument.
(2) Business combinations involving entities not under common control
A business combination not under common control is a business combination in which all
of the combining entities are not ultimately controlled by the same party or parties both
before and after the combination. For business combination not under common control, the
party that obtains the control of the other parties at the combination date is the acquirer;
other parties involving in the business combination are the transferors. The combination
date is the date on which the acquirer effectively obtains control of the transferors.
In business combination involving entities not under common control, the cost of
combination of the Company (as the acquirer) shall be the sum of the assets paid,
obligations incurred or assumed and the fair value of the equity securities issued by the
Company for obtaining control of the transferor at the date of acquisition. Intermediary fees
(such as audit, legal services and valuation consultancy) and other relevant management
fees incurred by the Company for the purpose of business combination are credited in
profit or loss in the period when they occurred. Transaction fees for the equity instruments
or debt instruments issued by the Company as combination consideration is included in the
initial recognition amount of such equity instruments or debt instruments. Contingent
consideration involved shall be recorded as the combination cost based on its fair value on
the acquisition date. Should any new or further evidence arise within 12 months after the
acquisition date and makes it necessary to adjust the contingent consideration on the
acquisition date, the goodwill arising from the business combination shall be amended
accordingly.
The cost of combination and identifiable net assets obtained by the Company (as the
acquirer) in a business combination involving entities not under common control are
measured at fair value on the acquisition date. Where the cost of the combination exceeds
the acquirer’s interest in the fair value of the transferor’s identifiable net assets, the
difference is recognized as goodwill; where the cost of combination is lower than the
acquirer’s interest in the fair value of the transferor’s identifiable net assets, the difference
is initially recognized in profit or loss for the current year after the Company conducted a
review of computation for the identifiable assets, liabilities or fair value of contingent
liabilities and combination cost, and where the combination cost is still lower than the fair
value of the identifiable net assets of the transferor obtained during the course of
combination, then the difference is recorded in the profit and loss.
Haier Smart Home Co., Ltd. Interim Report 2024 111
Section X Financial Report
7. Judgement Criteria for Control and Preparation of Consolidated Financial
Statements
√ Applicable Not Applicable
Judgement Criteria for Control:
The scope of consolidation of consolidated financial statements is on the basis of control. Control
means that the Company has the power over the investee, enjoys variable returns by
participating in relevant activities of the investee, and has the ability to use its power over the
investee to influence the amount of its return. Control refers to the Company’s right over the
investee to enjoy variable returns through involvement in the investee and have the ability to exert
the right to affect those returns The Company will reassess when changes in relevant facts and
circumstances result in changes in the relevant elements involved in the definition of control.
Preparation method of consolidated statements
(1) Scope of consolidated financial statements
The Company incorporated all subsidiaries under its control (including the separate entities
controlled by the Company) into the scope of consolidation financial statements, including
the enterprises under the Company’s control, divisible part in the investees and structured
entities. Control refers to the Company having power over the investee and is entitled to
variable returns from its involvement with the investee and has the ability to use its power
over the investee to affect the amount of those return.
(2) To unify the accounting policies, balance sheets date and accounting periods of the
Company and subsidiaries
When preparing consolidated financial statements, adjustments are made if subsidiaries’
accounting policies or accounting periods are different from that of the Company, in
accordance with the Company’s accounting policies and accounting periods.
112 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(3) Offset matters in the consolidated financial statements
The consolidated financial statements shall be prepared by the Company on the basis of
the financial statements of the Company and subsidiaries and based on other relevant
information. In preparing the consolidated financial statements, all significant balances,
transactions and unrealized profits between the Company and subsidiaries and among
subsidiaries are eliminated. In preparing the consolidated financial statements, the Company
treats the entire enterprise group as one accounting entity and reflects the overall financial
position, operating results and cash flows of the Group in accordance with the
requirements for recognition, measurement and presentation of relevant accounting
standards for enterprises and consistent accounting policies. The owner’s equity of the
subsidiaries not attributable to the Company shall be presented separately as “minority
equity” under the owner’s equity item in the consolidated balance sheet. The minority equity
attributable to net profit or loss of subsidiaries in the current period shall be presented as
“minority interest” under the “net profit” item in the consolidated profit statement. Where the
amount of loss of a subsidiary attributable to the minority shareholders exceeds their share
of the opening balance of owner’s equity of the subsidiary, the excess shall be allocated
against minority equity. The long-term equity investment of the Company held by the
subsidiaries, deemed as treasury stock of the corporate group as well as the reduction of
owners’ equity, shall be presented as “Less: Treasury stock” under the owner’s equity item
in the consolidated balance sheet.
(4) Accounting treatment of subsidiaries acquired from combination
For subsidiaries acquired from business combination under common control of the
Company, the opening amount of the consolidated balance sheet is adjusted, as if the
business combination has taken place since the ultimate controller began its control. The
income, expenses and profits of subsidiaries or business combinations from the beginning
of the current period to the end of the reporting period are included in the consolidated
profit statement. The cash flows from the beginning of the current period to the end of the
reporting period of a subsidiary or business combination are included in the consolidated
cash flow statement, and the related items in the comparative statements are adjusted
Where control can be exercised over the investee under the same control due to additional
investment and other reasons, the Company shall deem the parties participating in the
business combination to have made adjustments in their current status when the ultimate
controller began its control. Equity investments held by the Company before control of the
transferor are recognised for profit or loss, other comprehensive income and other changes
in net assets between the later of the date on which the original equity interest is acquired
and the date on which the Company and the transferor are under the same control and the
date of combination, which are offset against the opening retained earnings or current profit
or loss, respectively, in the period of the comparative statements.
Haier Smart Home Co., Ltd. Interim Report 2024 113
Section X Financial Report
For subsidiaries acquired from business combination under non-common control, the
opening amount of the consolidated balance sheet is not adjusted. The income, expenses
and profits of the subsidiary or business from the date of purchase to the end of the
reporting period are included in the consolidated profit statement. The cash flows of the
subsidiary or business from the date of purchase to the end of the reporting period are
included in the consolidated statement of cash flows. Where control can be exercised over
an investee that is not under the same control due to additional investment or other
reasons, the Company remeasures the equity interest of the investee held before the
purchase date based on the fair value of the equity interest at the purchase date, and the
difference between the fair value and its carrying amount is included in the current
investment income. Where the equity interest in the transferor held before the purchase
date relates to other comprehensive income under the equity method and other changes in
owner’s equity other than net profit or loss, other comprehensive income and profit
distribution, other comprehensive income and other changes in owner’s equity relating
thereto are transferred to investment income of the current period as at the purchase date,
except for other comprehensive income arising from the remeasurement of net liabilities or
changes in net assets of defined benefit plans by the investee.
(5) Dispose of equity interests in subsidiaries achieved in stages until losing control
General treatment
During the reporting period, when the Company disposes of a subsidiary or business,
the income, expenses and profits of that subsidiary or business from the beginning of
the period to the date of disposal are included in the consolidated income statement
of the Company; The cash flows from the beginning of the period to the disposal
date of the subsidiary or operation are included in the consolidated statement of cash
flows of the Company.
When control over the investee is lost due to the disposal of part of the equity
investment or other reasons, the Company remeasures the remaining equity
investment after disposal at its fair value at the date when control is lost. The
difference between the sum of the consideration obtained on disposal of the equity
interest and the fair value of the remaining equity interest, less the sum of the share
of the net assets of the original subsidiary calculated by the Company based on the
original shareholding ratio and goodwill calculated on a continuing basis from the date
of purchase or consolidation, is included in investment income in the period in which
control is lost and goodwill is written off. The Company converts other comprehensive
income relating to the equity investment in the original subsidiary, etc. to investment
income in the current period when control is lost.
114 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Disposal of subsidiaries step by step
Where the Company disposed of equity investment in a subsidiary step by step
through multiple transactions until control is lost, for example, the terms, conditions
and economic impact of each transaction that disposes of the equity investment in a
subsidiary meet one or more of the following conditions, the Company accounts for
multiple transactions as a single transaction:
i. The transactions were entered into simultaneously or with mutual influence in
mind;
ii. The transactions as a whole are capable of achieving a complete commercial
outcome;
iii. The occurrence of one transaction depends on the occurrence of at least one
other transaction;
iv. The transaction is uneconomical by itself but economic when considered in
conjunction with other transactions.
Where each transaction that disposes of an equity investment in a subsidiary until
control is lost is a blanket transaction, the Company accounts for each transaction as
a transaction that disposes of the subsidiary and loses control; However, the
Company recognises the difference between each disposal price before the loss of
control and the share of net assets of the subsidiary corresponding to the disposal of
the investment as other comprehensive income in the consolidated financial
statements and is transferred to profit or loss in the period in which control is lost
when control is lost.
Where each transaction that disposes of an equity investment in a subsidiary until the
loss of control is not a blanket transaction, the relevant policy for partial disposal of
an equity investment in a subsidiary without loss of control is accounted for before
the loss of control by the Company; When control is lost, accounting is performed in
the same manner as would be done for a disposal subsidiary.
(6) Purchase of minority interests in subsidiaries
The difference between the Company’s costs of newly acquired long-term equity
investment resulting from the purchase of minority interests and the share of net assets
attributable to the subsidiary calculated on an ongoing basis from the date of purchase (or
the date of combination) based on the newly increased shareholding ratio, the equity
premium in the capital reserve in the consolidated balance sheet is adjusted, and if the
equity premium in the capital reserve is insufficient to offset, the retained earnings is
adjusted.
Haier Smart Home Co., Ltd. Interim Report 2024 115
Section X Financial Report
(7) Partial disposal of equity investments in subsidiaries without loss of control
The Company adjusts the equity premium in the capital reserve in the consolidated balance
sheet for the difference between the disposal price obtained from the partial disposal of the
long-term equity investment in the subsidiary without loss of control and the share of the
net assets of the subsidiary that would continue to be calculated from the purchase date or
the combination date corresponding to the disposal of the long-term equity investment, or
adjust the retained earnings if the equity premium in the capital reserve is insufficient to
offset.
8. Classification of joint arrangement and accounting methods of joint operations
√ Applicable Not Applicable
A joint arrangement refers to an arrangement jointly controlled by two or more parties. In
accordance with the Company’s rights and obligations under a joint arrangement, the Company
classifies joint arrangements into joint operations and joint ventures.
(1) Joint operations
Joint operations refer to a joint arrangement in which the Company is a party and is
entitled to relevant assets and obligations of this arrangement.
The Company recognizes the following items in relation to its interest in a joint operation,
and accounts the same in accordance with relevant accounting standards for business
enterprises: recognize the assets held solely by the Company, and recognize assets
held jointly by the Company in appropriation to the share of the Company; recognize the
obligations assumed solely by the Company, and recognize obligations assumed jointly by
the Company in appropriation to the share of the Company; recognize revenue from
disposal of joint operations in appropriation to the share of the Company; recognize
revenue from disposal of joint operations in appropriation to the share of the Company;
recognize fees solely occurred by the Company and recognize fees from joint operations in
appropriation to the share of the Company.
When the Company, as a joint venture, invests or sells assets to or purchase assets (the
assets do not constitute a business, the same below) from joint operations, the Company
shall only recognize the part of profit or lost from this transaction attributable to other
parties of joint operations before these assets are sold to a third party. In case of an
impairment loss incurred on these assets which meets the requirements as set out in
Accounting Standards for Business Enterprises No. 8 — Asset Impairment, the Company
shall full recognize the amount of this loss in relation to its investment in or sale of assets
to joint operations or recognize the loss according to the Company’s share of commitment
in relation to the its purchase of assets from joint operations.
(2) Joint ventures
Joint ventures refer to a joint arrangement during which the Company only is entitled to net
assets of this arrangement. Investment in joint venture is accounted for using the equity
method according to the accounting policies referred to under “14. Long-term equity
investment” of Note V.
116 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
9. Recognition standard for cash and cash equivalents
Cash recognized in the cash flow statements represents the cash on hand and deposits available
for payment of the Company at any time.
Cash equivalents recognized in the cash flow statements refer to short-term, highly liquid
investments held by the Company that are readily convertible to known amounts of cash and
which are subject to an insignificant risk on change in value.
10. Foreign currency businesses and translation of foreign currency statements
√ Applicable Not Applicable
(1) Foreign currency transactions
If foreign currency transactions occur, they are translated into the amount of functional
currency by applying the exchange rate at the transaction date.
Monetary items denominated in foreign currencies are translated by the Company into
functional currencies at the rates of exchange ruling at the balance sheet date. All foreign
exchange difference are credited in the profit or loss of the current period, except those
arising from the funds denominated in foreign currency specially borrowed for the
establishment of the qualifying assets are treated based on the principal of capitalization of
borrowing costs.
Non-monetary items in foreign currency measured at historical cost are translated by the
Company using the spot exchange rate prevailing on the date when transaction occurred
and its functional currency shall remain unchanged. Non-monetary items denominated in
foreign currencies that are measured at fair value are translated using the foreign exchange
rate at the date the fair value is determined; the exchange differences between the
translated and original amounts of functional currencies are recognized in the statement of
profit or loss or other comprehensive income as changes in fair value (including changes in
exchange rate).
(2) Translation of foreign currency financial statements
If the functional currencies used as the bookkeeping base currency by the subsidiaries, joint
ventures and associates under the control of the Company are different from that of the
Company, their financial statements denominated in foreign currencies shall be translated to
perform accounting and prepare the consolidated financial statements.
The assets and liabilities of the foreign currency balance sheet of the Company are
translated using the spot exchange rate at the balance sheet date; all items except for
“undistributed profits” of the owner’s equity are translated at the spot exchange rate on the
transaction date. The revenue and expenses in the foreign currency income statement of
the Company are translated using the approximate rate of the spot exchange rate on the
transaction date. Exchange differences on translation of financial statements denominated in
foreign currencies are presented as the “other comprehensive income” in the owner’s
equity of the balance sheet.
Haier Smart Home Co., Ltd. Interim Report 2024 117
Section X Financial Report
Foreign currency cash flow and cash flows of a foreign subsidiary of the Company is
translated using the approximate rate of the spot exchange rate on the date of the cash
flows. The impact of exchange rate changes on cash amount is regarded as a
reconciliation item and reflected separately in the cash flow.
When disposing overseas operations, the translation difference in the foreign currency
financial statements as shown in the owner’s equity of the balance sheet and related to the
overseas operation shall be transferred from owner’s equity to profit or loss in the current
period of disposal. If part of the overseas operations is disposed of, the translation
difference in the foreign currency financial statements of the disposal part shall be
calculated based on the proportion of the disposal and transferred to profit or loss in the
current period of disposal.
11. Financial instruments
√ Applicable Not Applicable
A financial instrument refers to any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity. A financial asset or financial liability and
equity instrument is recognized when the Company becomes a party to the contract of a
financial instrument.
(1) Classification, recognition and measurement of financial assets
On initial recognition of a financial asset, according to the business model for managing
financial assets and the contractual cash flow characteristics of financial assets, the
Company classifies financial assets into: Financial assets measured at amortized cost;
financial assets measured at fair value through other comprehensive income; financial
assets measured at fair value through profit or loss of the current period.
Financial assets are measured at fair value upon initial recognition. For financial assets
measured at fair value through profit and loss of the current period, related transaction
costs are directly included in profit and loss of the current period; for other types of
financial assets, related transaction costs are included in their initial recognized amounts.
For the accounts receivable or bills receivable arising from the sale of products or the
provision of labor services that do not contain or consider the significant financing
components, etc., the Company shall take the consideration amount entitled to be received
as the initial recognized amount.
118 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
1) The debt instruments held by the Company:
Financial assets measured at amortized cost
The Company’s business model for managing such financial assets is: With the
aim of obtaining contractual cash flow, the contractual cash flow characteristics
of such financial assets shall be consistent with the basic lending arrangements,
that is, the cash flow generated on a specific date is only the payment for the
principal and the interest based on the outstanding principal amount. For such
financial assets, the Company recognizes the interest income in accordance
with the effective interest method. Such financial assets are subsequently
measured at amortised cost. The gains or losses arising from amortisation or
impairment are recognised in profit or loss of the current period. Such financial
assets of the Company mainly include cash and cash equivalents, bills
receivable, accounts receivable, other receivables, creditor’s right investment
and long-term receivables. The Company lists the creditor’s rights investments
and long-term receivables matured within one year (inclusive) from the balance
sheet date as non-current assets matured within one year; the creditor’s rights
investments matured within one year (inclusive) when being obtained are listed
as other current assets.
Financial assets measured at fair value through other comprehensive
income
The Company’s business mode for managing such financial assets is: With the
aim of obtaining contractual cash flow and selling the financial assets, the
contractual cash flow characteristics of such financial assets shall be consistent
with the basic lending arrangements. Such financial assets are measured at fair
value through other comprehensive income, but impairment gains and losses,
exchange gains and losses, and interest income calculated by the effective
interest method are included in profit and loss of the current period. Such
financial assets of the Company mainly include financing receivables and other
creditor’s rights investments. The Company lists other creditor’s rights
investments matured within one year (inclusive) from the balance sheet date as
non-current assets matured within one year; other creditor’s rights investments
matured within one year (inclusive) when being obtained are listed as other
current assets.
Haier Smart Home Co., Ltd. Interim Report 2024 119
Section X Financial Report
Financial assets measured at fair value through profit or loss of the
current period
The Company classifies financial assets other than those above measured at
amortized cost and those measured at fair value through other comprehensive
income as financial assets measured at fair value through profit or loss of the
current period. In addition, at the time of initial recognition, in order to eliminate
or significantly reduce accounting mismatch, the Company designated some
financial assets as financial assets measured at fair value through profit or loss
of the current period. Such financial assets are subsequently measured at fair
value and changes in fair value are included in profit or loss of the current
period. Such financial assets that are matured more than one year and are
expected to be held for more than one year from the balance sheet date are
listed as other non-current financial assets.
2) Equity instrument investments of the Company:
The Company classifies equity instrument investments that have no control, joint
control and significant influence on itself as financial assets measured at fair value
through profit or loss of the current period; investments that are expected to be held
for more than one year from the balance sheet date are listed as other non-current
financial assets. In addition, the Company designated some non-trading equity
instrument investments as financial assets measured at fair value through other
comprehensive income, which are listed as other equity instrument investments. Such
designation cannot be revoked once made. The Company includes the relevant
dividends and interest income of such financial assets in profit and loss of the current
period, and changes in fair value are included in other comprehensive income. When
the financial asset is derecognised, the Company transfers the cumulative gain or loss
previously included in other comprehensive income directly to retained earnings and is
not included in profit or loss of the current period.
(2) Classification, recognition and measurement of financial liabilities
On initial recognition, financial instruments or their components issued by the Company are
classified into financial liabilities or equity instruments based on the contractual terms of the
financial instruments and the economic nature, rather than solely on its legal form, together
with the definition of financial liability and equity instruments.
The Company classifies financial liabilities as financial liabilities at fair value through profit
and loss of the current period and other financial liabilities at initial recognition.
Financial liabilities at fair value through profit and loss of the current period are
subsequently measured at fair value. Any gains or losses arising from changes in the fair
value and any interest expenses related to the financial liabilities are recognized in profit or
loss of the current period. The financial liabilities at fair value through profit and loss of the
current period of the Company mainly consist of financial liabilities held for trading.
120 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Other financial liabilities are subsequently measured at amortized costs using effective
interest method. Other financial liabilities of the Company are financial liabilities measured at
amortized cost, including bills payable, accounts payable, other payables, borrowings,
bonds payable, etc. Such financial liabilities are recognized initially at fair value less
transaction costs and subsequently measured using the effective interest method. Financial
liabilities with a maturity of less than one year (inclusive) are listed as current liabilities:
those with maturity of more than one year but are mature within one year (inclusive) from
the balance sheet date are listed as non-current liabilities due within one year; the rest are
presented as non-current liabilities.
(3) Classification and treatment of financial liabilities and equity instruments
The Company classifies financial liabilities and equity instruments on the following
principles: (1) Where the Company is unable to unconditionally avoid delivering cash or
another financial asset to fulfil a contractual obligation, the contractual obligation meets the
definition of a financial liability. Although some financial instruments do not explicitly include
the terms and conditions imposing the contractual obligation to deliver cash or another
financial asset, they may indirectly give rise to the contractual obligation through other
terms and conditions. (2) Where a financial instrument shall or may be settled in the
Company’s own equity instrument, consideration shall be given to whether the Company’s
own equity instrument as used to settle the instrument is a substitute of cash or another
financial asset or the residual interest in the assets of the Company after deducting all of its
liabilities. In the former case, the instrument shall be the Company’s financial liability; in the
latter case, the instrument shall be the equity instrument of the Company. Under certain
circumstances whereby a financial instrument contract stipulates that the Company shall or
may use its own equity instrument to settle the financial instrument, and the amount of the
contractual right or obligation equal to the number of its own equity instruments to be
received or delivered multiplied by their fair value at the time of settlement, the contract
shall be classified as a financial liability, regardless of whether the amount of the
contractual right or obligation is fixed, or fluctuates in full or in partly in response to
changes in a variable other than the market price of the Company’s own equity instruments
(for example an interest rate, a commodity price or a financial instrument price).
When classifying a financial instrument (or a component thereof) in consolidated financial
statements, the Company shall consider all terms and conditions agreed between members
of the Group and the holders of the financial instrument. If the Group as a whole has an
obligation in respect of the instrument to settle it by delivering cash or another financial
asset or in such a way that it would be a financial liability, such instrument shall be
classified as a financial liability.
If the financial instrument or its component is attributable to the financial liability, the
relevant interests, dividends, gains or losses, and gains or losses arising from redemption
or refinancing, shall be recorded in the profit or loss of the current period.
Haier Smart Home Co., Ltd. Interim Report 2024 121
Section X Financial Report
If the financial instrument or its component is attributable to equity instrument, the
Company treats it as change in equity when it is issued (including refinanced), repurchased,
sold or cancelled. Changes in fair value of equity instrument is not recognized by the
Company. Transaction costs related to equity transactions are deducted from equity. The
Company recognizes the distribution to holders of the equity instruments as distribution of
profits, and dividends paid do not affect total amount of shareholders’ equity.
(4) Recognition and measurement on transfer of financial assets
A financial asset shall be de-recognized when one of the following conditions is met: the
contractual right for receiving cash flows from the financial asset is terminated; the
financial asset is transferred, and the risk and rewards of ownership of the financial asset
have been substantially transferred to the transferee; and the financial asset is
transferred; the Company neither transfers nor retains substantially all the risks and rewards
of ownership of the financial asset, but ceases the control over the financial asset. If the
Company neither transfers nor retains substantially all the risks and rewards of ownership of
the financial asset, and the control over the financial asset is not ceased, the financial asset
and the related financial liabilities should be recognized based on the degree of continuing
involvement. The degree of continuing involvement means the level of risks borne by the
Company resulting from the change in value of the financial asset.
On de-recognition of other equity instruments investment, the difference between the
carrying amount and the sum of the consideration received and the cumulative changes in
fair value that had been recognized directly in other comprehensive income is recognized in
the retained earnings. On de-recognition of other financial assets, the difference between
the carrying amount and the sum of the consideration received and the cumulative changes
in fair value that had been recognized directly in other comprehensive income is recognized
in current profit or loss.
For financial assets that are sold with recourse or endorsement, the Company needs to
determine whether the risk and rewards of ownership of the financial asset have been
substantially transferred. If the risk and rewards of ownership of the financial asset have
been substantially transferred, the financial asset shall be derecognized. If the risk and
rewards of ownership of the financial asset have been substantially retained, the financial
asset shall not be de-recognized. If the Company neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset, the Company shall assess
whether the control over the financial asset is retained, and the financial assets shall be
accounted for according to the above paragraphs.
122 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(5) Derecognition of financial liabilities
If the current obligation of a financial liability (or part of it) has been discharged, the
Company derecognizes the financial liability (or part of the financial liability). The Company
(borrower) enters into an agreement with the lender to replace the original financial liability
in the form of a new financial liability, and if the new financial liability is substantially
different from the original financial liability, the original financial liability is derecognized and
the new financial liability is recognized. If the Company makes substantial changes to the
contractual terms of the original financial liability (or a part thereof), the original financial
liability is derecognized and the new financial liability is recognized in accordance with the
revised terms.
If the financial liability (or a part thereof) is derecognized, the difference between the
carrying amount and the consideration paid (including the transferred non-cash assets or
liabilities assumed) is recognized in current profit or loss.
(6) Offsetting financial assets and financial liabilities
When the Company has the legal right to offset recognized financial assets and financial
liabilities, and the legal right can be executed at present, and the Company has a plan to
settle the financial assets and financial liabilities at the same time or at net amount, the
financial assets and financial liabilities can be presented in the balance sheet at net amount
after offsetting. Except for the above circumstances, financial assets and financial liabilities
cannot be offset and shall be presented separately in the balance sheet.
(7) Determination of fair value of financial assets and financial liabilities
Fair value is the amount at which an asset could be sold or a liability could be transferred
between willing parties in an orderly transaction on a measurement date. The fair value of a
financial instrument that is traded in an active market is determined at the quoted price in
the active market. Quoted price in the active market represents quoted price which can be
easily obtained periodically from exchange market, brokers, industry associations or pricing
services agency, etc., which is the transactions amount in arm’s length transactions. The
fair value of a financial instrument that is not traded in an active market is determined by
using a valuation technique. Valuation techniques include using prices of recent market
transactions between knowledgeable and willing parties, reference to the current fair value
of another financial asset that is substantially the same with this instrument, discounted
cash flow analysis and option pricing models, etc. During the valuation, the Company
adopts an applicable valuation technique under current conditions and there are enough
available data and other information to support. Those inputs should be consistent with the
inputs a market participant would use when pricing the asset or liability, and the Company
should maximize the use of relevant observable inputs. When related observable inputs
can’t be acquired or are not feasible to be acquired, then use unobservable inputs.
In summary, the Company categorizes inputs for fair value measurement into three levels
and uses the inputs by the order of Level 1, Level 2 and Level 3. Level 1: quoted prices
(unadjusted) in active markets for identical assets or liabilities at the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly. Level 3: unobservable inputs for the asset or
liability.
Haier Smart Home Co., Ltd. Interim Report 2024 123
Section X Financial Report
(8) Impairment of financial assets
For financial assets measured at amortized cost and debt instrument investments measured
at fair value through other comprehensive income, contract assets and financial guarantee
contracts, the Company recognizes the loss provision based on the expected credit losses.
The Company considers reasonable and reliable information about past events, current
conditions and forecasts of future economic conditions, and takes the risk of default as a
weight, and calculates the probability-weighted amount of the present value of the
difference between the cash flow receivable and the cash flow expected to be received of
the contract to confirm the expected credit losses.
On each balance sheet date, the Company measures the expected credit losses of
financial instruments in different phases. If the credit risk has not increased significantly
since the initial recognition, the financial instruments are in the first phase. The Company
measures the loss provision according to the expected credit losses in the next 12 months;
if credit risk has increased significantly but credit impairment has not yet occurred since the
initial recognition, the financial instruments are in the second phase. The Company
measures the loss provision according to the expected credit losses of the instruments
during the entire duration; if credit impairment has occurred since the initial recognition, the
financial instruments are in the third phase. The Company measures the loss provision
according to the expected credit losses of the instruments during the entire duration.
For financial instruments with lower credit risk on the balance sheet date, the Company
measures the loss provision according to the expected credit losses in the next 12 months,
assuming that its credit risk has not increased significantly since the initial recognition.
For financial instruments in the first phase and second phase and financial instruments with
relatively lower credit risk, the Company calculates interest income based on their book
balance before the deduction of provisions and effective interest rate. For financial
instruments in the third phase, the Company calculates interest income based on their
amortized cost after the impairment provision has been deducted from the book balance
and effective interest rate.
For bills receivable, accounts receivable and contract assets, whether there exist significant
financing components, the Company measures loss provision based on expected credit
loss over the entire duration.
The Company classifies accounts receivable into groups on the basis of shared credit risk
characteristics, and calculates the expected credit losses on groups, the bases of group
determination are as follows:
For each group of bills receivable, the Company applies exposure at default and expected
credit losses rate over the entire duration to calculate the expected credit losses by taking
into account the historical credit losses experience, the existing conditions and forecast of
future economic conditions.
124 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
For each group of accounts receivable, the Company makes the comparison of expected
credit losses rates of accounts receivable in overdue days and over the entire duration to
calculate the expected credit losses by taking into account the historical credit losses
experience, the existing conditions and forecast of future economic conditions.
For each group of other accounts receivable, the Company applies exposure at default and
expected credit losses rate within the next 12 months or over the entire duration to
calculate the expected credit losses by taking into account the historical credit losses
experience, the existing conditions and forecast of future economic conditions.
The Company recognizes the loss impairment provision or reversed in profit or loss of the
current period. For held debt instruments at fair value through other comprehensive
income, the Company recognizes loss/gain on impairment in profit or loss of the current
period, and adjusts other comprehensive income at the same time.
12. Inventory
√ Applicable Not Applicable
(1) Classification of inventory
Inventory refers to finished products and commodities held by the Company in daily
activities for sale, products in progress, materials and supplies consumed in the process of
production or provision of labour services, including mainly raw materials, turnover
materials, materials for commissioned processing work, packaging materials, products in
progress, semi-finished products through in-house manufacturing, finished products
(products in stock) and project construction, among others.
(2) Pricing of dispatch of inventory
The actual cost of inventories upon delivery is calculated using the weighted average
method.
(3) Impairment provision for inventory
At the balance sheet date, inventory is measured at the lower of cost and net realisable
value.
The net realisable value of inventories that can be directly put to sale, including finished
products, commodities and materials for sale is determined as the estimated selling price of
such inventory less estimated selling expenses and related tax expenses; the net realisable
value of or inventories held for production, is determined as the estimated selling price of
finished products manufactured less estimated cost incurred upon completion, estimated
selling expenses and related tax expenses; the net realisable value of inventory held for the
execution of sales contract or labour contract is computed on the basis of the contract
price. If the quantity of inventories held by the Company is more than the quantity ordered
under a sales contract, the net realisable value of the inventories in excess is computed on
the basis of the general selling price.
Haier Smart Home Co., Ltd. Interim Report 2024 125
Section X Financial Report
Inventory impairment provision is made on the basis of individual inventory items, provided
that if certain inventories are related to a series of products manufactured and sold in the
same region with identical or similar end uses or purposes and are difficult to measure
separately with other items, their cost and net realisable value may be measured on an
aggregate basis. Inventories The cost and net realizable value of inventories in large
quantity with low unit prices are measured according to inventory types.
At the balance sheet date, if the cost of inventory of the Company is higher than its net
realisable value, impairment provision is made and charged to current profit or loss. If the
factor causing the write-down of inventory value has been removed, the amount of
write-down should be reversed and transferred out of the previous inventory impairment
provision amount. The reversed amount is included in current profit or loss.
(4) Inventory system
The Company adopts the perpetual inventory system as its inventory system.
(5) Amortisation of low-value consumables and packaging materials
The Company adopts one-off amortisation of its low-value consumables and packaging
materials.
13. Contract assets
√ Applicable Not Applicable
The Company presents the right of the Company to charge consideration from the customer
unconditionally (i.e. only depends on the passage of time) as a receivable, while the
consideration that the Company has the right (and this right depends on factors other than
passage of time) to receive for goods transferred to customers is presented as a contract
assets. If the Company sells two clearly distinguishable goods to the customer, and it has the
right to receive payment because one of the goods has been delivered, but the receipt of such
payment is conditioned on the delivery of another goods, the Company shall recognise such right
to receive payment as contract asset.
For the determination and accounting treatment methods of the expected credit loss of contract
assets, please see Note V.11 “Impairment of financial assets”.
126 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
14. Long-term equity investments
√ Applicable Not Applicable
Long-term equity investments hereunder refer long-term equity investments in which the
Company exercises control, joint control or significant influence over the investee.
(1) Determination of initial investment cost
The initial cost of long-term equity investments acquired through business combination
involving parties under common control should be recognised as the share of the
carrying value of the owner’s equity of the acquired party; the initial cost of long-term
equity investments acquired through business combination involving parties not under
common control should be recognised as the combination costs determined at the
date of acquisition;
The Company invested in other equity investment other than long-term equity
investments acquired through combination, the initial investment cost of long-term
equity investments acquired with cash payment is the acquisition price actually paid;
the initial investment cost of long-term equity investments acquired with the issuance
of equity- based securities is represented by the fair value of equity-based securities;
the initial investment cost of long-term equity investments acquired through debt
restructuring is determined in accordance with relevant provisions under Accounting
Standards for Business Enterprises No.12 — Debt Restructuring; the initial investment
cost acquired in exchange for non-monetary assets shall be determined in
accordance with relevant provisions of the standard.
(2) Subsequent measurement and recognition of profit or loss
Cost method
Long-term equity investments in which the Company is able to exercise control over
the investee is accounted for using the cost method. Under the cost method, the
carrying value of long-term equity investments, other than additional investment or
recouped investment, shall remain constant. The Company declared the distribution of
profit or cash dividend to the investee and calculated the portion of entitlement,
which is recognised as investment income.
Haier Smart Home Co., Ltd. Interim Report 2024 127
Section X Financial Report
Equity method
The equity method is used by the Company to account for long-term equity
investments in associates and joint ventures. Under the equity method, the initial
investment cost is not adjusted for any excess of the initial investment cost over the
share of the net fair value of the investee’s identifiable assets. When the initial
investment cost is less than the share of the fair value of the investment’s identifiable
net assets, the difference is recognised in current profit or loss and the cost of
long-term equity investment is adjusted accordingly.
Under the equity method, share of net profit or losses and other comprehensive
income of the investee are recognised by the Company as investment income and
other comprehensive income, respectively, and the carrying amount of the long-term
equity investment is adjusted accordingly. Share of profit or cash dividend declared
by the investee is charged against the carrying value of the long-term equity
investment; changes in owners’ equity of the investee other than net profit or loss,
other comprehensive income and profit distribution are adjusted against the carrying
value of long-term equity investment and included in capital reserve. Share of net
profit or loss of the investee is recognised by the Company on the basis of the fair
value of the identifiable assets of the investee when the investment is acquired and
adjusted against the net profit of the investee. If the accounting policy and
accounting period of the investee are inconsistent with those of the Company, the
financial statements of the investee is adjusted to align with the accounting policy and
accounting period of the Company, and investment income and other comprehensive
income is recognised accordingly.
Net losses of the investee is recognised by the Company by deducting the carrying
value of the long-term equity investment together with long-term equity that in
substance forms part of the net investment in the investee until it reaches zero.
Moreover, if the Company has incurred obligations to assume additional losses of the
investee, estimated liabilities are recognised according to the obligation expected to
be assumed and charged to current investment loss. If the investee records net profit
in future periods, the Company shall recognise its share of gains after applying such
share of gains to make up for the unrecognised share of loss.
(3) Change of accounting method for long-term equity investment
Change from fair value measurement to the equity method: If an equity investment in
the investee not previously affording control, joint control or significant influence and
accounted for in accordance with the standard for recognition and measurement of
financial instruments becomes capable of affording joint control or significant influence
over the investee as a result of increased shareholding following additional
investment, the accounting method should be changed to the equity method, and the
fair value of the original equity investment determined according to the standard for
recognition and measurement of financial instruments plus the fair value of
consideration paid for the acquisition of the new investment shall be changed the
initial investment cost under the equity method.
128 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Change from fair value measurement or equity method to cost method: if an equity
investment previously held in the investee not previously affording control, joint control
or significant influence and accounted for in accordance with the standard for
recognition and measurement of financial instruments, or a long- term equity
investment previously held in associates or joint ventures becomes capable of
affording control over the investee, it is accounted for long-term equity investment
formed through business combination.
Change from equity method to fair value measurement: if a long-term equity investment
previously held in the investee affording joint control or significant influence ceases to
afford joint control or significant influence as a result of decrease in shareholding
percentage following partial disposal, the remaining equity investment is recognised in
accordance with the standard for recognition and measurement of financial
instruments, and the difference between the fair value at the date of loss of joint
control or significant influence and the carrying value is included in current profit or
loss.
Change from cost method to equity method or fair value measurement: when preparing
separate financial statements, if the Company losses control over an investee due to
disposal of some equity-based investment and other reasons, the Company accounts
for the remaining equity affording joint control or significant influence over an investee
as a result of disposal based on the equity method, and the remaining equity will be
adjusted as if it is accounted for using the equity method from the date of
acquisition; for the remaining equity not affording joint control or significant influence
over an investee as a result of disposal, it is accounted for in accordance with
relevant requirements of Accounting Standards for Business Enterprises No. 22—
Recognition and measurement of financial assets, and the differences between the fair
value and book value on the date when control is lost are included in profit or loss.
When preparing consolidated financial statements, it shall be accounted for in
accordance with relevant requirements of Accounting Standards for Business
Enterprises No.33— Consolidated financial statements.
(4) Bases for determining joint control or significant influence over an investee
Joint control is the contractually agreed sharing of control over an arrangement, which
relevant activities of such arrangement must be decided by unanimously agreement from
parties who share control. If all the parties or a group of parties must act in concert to
decide on the relevant activities of certain arrangement, it can be considered that all parties
or a group of parties have collective control over the arrangement. When determining if
there is any joint control, it should first be determined if the arrangement is controlled
collectively by all parties or a combination of parties, and then determined whether
decisions about activities related to the arrangement must be made by the unanimous
agreement of those parties who have collective control over the arrangement. If there are
two or more party groups that can collectively control certain arrangement, it does not
constitute joint control. When determining if there is any joint control, the relevant
protection rights will not be taken into account.
Haier Smart Home Co., Ltd. Interim Report 2024 129
Section X Financial Report
Significant influence is the power of the investor to participate in the decision-making of an
investee’s financial and operational policies, but neither control nor jointly control the
formulation of such policies with other parties. When determining if there is any significant
influence on the investee, the influence of the voting shares of the investee held directly or
indirectly and the potential voting rights held by the Company and other parties which are
exercisable in the current period and converted to the equity of the investee, including the
warrants, stock options and convertible bonds that are issued by the investee and can be
converted in the current period, shall be taken into account by the Company.
When the Company holds directly or indirectly through the subsidiary 20% (inclusive) to
50% of the voting shares of the investee, it is generally considered to have significant
influence on the investee, unless there is concrete evidence to prove that it cannot
participate in the production and operational decisions of the investee and cannot pose
significant influence in this situation.
The Company usually determines whether there is significant influence on the investee
through the following one or several circumstances:
Representation at the board or similar authority of the investee.
Participation in the decision-making process of the investee’s financial and operational
policies.
Having important transactions with the investee.
Posting of management personnel at the investee.
Providing key technical data to the investee.
Having one or several of the above circumstances does not mean that the Company must
have significant influence on the investee. The Company needs to comprehensively
consider all the facts and circumstances to make an appropriate judgment.
(5) Methods for impairment test and impairment provision
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of a long-term equity investment. If there are indications of impairment, an
impairment test should be performed to ascertain its recoverable amount, and an
impairment provision equivalent to the margin by which the recoverable amount is lower
than the carrying value should be made. Once recognised, impairment loss will not be
reversed in subsequent accounting periods. The recoverable amount is determined as the
higher of net fair value of the long-term equity investment on disposal and present value of
estimated future cash flow.
130 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(6) Disposal of long-term equity investments
Upon the Company’s disposal of long-term equity investments, the difference between the
carrying value and consideration actually acquired is included in current profit or loss. Upon
disposal of long-term equity investment, the portion previously included in other
comprehensive income is accounted for according to the relevant percentage on the same
basis adopted in the direct disposal of the relevant assets or liabilities by the investee.
15. Investment properties
(1) Types and measurement models of investment properties
The Company’s investment properties include the following types: leased land-use rights
and leased buildings.
The Company’s investment properties is initially measured at cost and subsequently on a
cost basis.
(2) Adoption of cost model as accounting policy
Among the Company’s investment properties, leased buildings are subject to depreciation
on a straight-line basis in accordance with accounting policies identical with accounting
policies for fixed assets. Leased land-use rights and land-use rights held for disposal after
appreciation land- use rights in investment properties are amortised using the straight-line
method in accordance with accounting policies identical with fixed asset accounting
policies for intangible assets.
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of an investment property. If there are indications of impairment, an impairment
test should be performed to ascertain its recoverable amount, and an impairment provision
equivalent to the margin by which the recoverable amount is lower than the carrying value
should be made. Once recognised, impairment loss will not be reversed in subsequent
accounting periods.
Where the investment properties are sold, transferred, retired or damaged, the differences
from disposal after deducting the carrying amount and related taxes are recognised in profit
or loss for the current period by the Company. When the Company has evidence indicating
the self-occupied houses and buildings are converted to leasing or leasing out its
properties held for sale under operating leases, the carrying amount of such fixed assets,
intangible assets or inventories before the conversion are transferred to investment
properties. When the Company has evidence indicating the property held to earn rentals or
for capital appreciation are converted to self-occupation or the property intended for
operating lease purpose are open for sale, the carrying amount of such properties before
the conversion are transferred to fixed assets, intangible asset or inventories.
Haier Smart Home Co., Ltd. Interim Report 2024 131
Section X Financial Report
16. Fixed assets
(1) Recognition criteria and measurement of fixed assets
Fixed assets of the Company refer to tangible assets held for the production of
commodities, provision of labour services, lease or operational management with a useful
life of more than one accounting year. Fixed assets are recognised if all of the following
conditions are met:
Economic benefits relating to such fixed assets are likely to flow into the Company;
The cost of the fixed assets can be reliably measured.
Subsequent expenditure incurred for a fixed asset that meets the recognition criteria shall
be included in the cost of the fixed asset, and the carrying amount of the component of
the fixed asset that is replaced shall be derecognised. Otherwise, such expenditure shall be
recognised in profit or loss for the period in which it is incurred.
Fixed assets of the Company are initially measured at cost. The purchase cost of a fixed
asset comprises its purchase price, related taxes and any directly attributable expenditure
for bringing the asset to its working condition for its intended use, such as transportation
costs and installation expenses. If the payment for a purchased fixed asset is deferred
beyond the normal credit terms, the cost of the fixed asset shall be determined based on
the present value of the instalment payments. The difference between the actual payment
and the present value of the purchase price is recognised in profit or loss over the credit
period, except for such difference that is capitalised according to Accounting Standard for
Business Enterprises No. 17 — Borrowing Costs.
(2) Classification and depreciation of fixed assets
The Company’s fixed assets are mainly classified into: buildings, machinery equipment,
transportation equipment and office and other equipment; depreciation is conducted on a
straight-line basis. The useful life and estimated net residual value of fixed assets are
determined based on the nature and use of the fixed assets. At the end of the year, the
useful life and estimated residual value of and depreciation method for fixed assets are
reviewed, and adjustment is made for any difference with the original estimated amount.
Other than fully depreciated fixed assets which remain in use and the land which is
separately priced and recorded, the Company measures depreciation for all fixed assets.
132 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
The type, depreciation method, estimated useful lives, estimated residual values and yearly
depreciation of the Company’s fixed assets are as follows:
Estimated Estimated
useful lives residual
Type of assets Depreciation method (years) values, net
Buildings Life average method 8–40 0–5%
Machinery equipment Life average method 4–20 0–5%
Transportation equipment Life average method 5–10 0–5%
Office and other equipment Life average method 3–10 0–5%
(3) Methods for impairment test and impairment provision for fixed assets
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of fixed assets. If there are indications of impairment, an impairment test should
be performed to ascertain its recoverable amount, and an impairment provision equivalent
to the margin by which the recoverable amount is lower than the carrying value should be
made. Once recognised, impairment loss will not be reversed in subsequent accounting
periods.
(4) Disposal of fixed assets
Fixed assets are derecognised upon disposal, or when no economic benefits are expected
from use or disposal. The difference between gains on disposal, transfer, retirement or
damage of fixed assets, net of their book value and related taxes, are included in profit and
loss.
17. Construction in progress
√ Applicable Not Applicable
(1) Measurement of construction in progress
The cost of the Company’s construction in progress is recognised at actual construction
expenses, including all necessary construction expenses incurred during the construction,
and borrowing costs capitalized before the work reaches the expected conditions for use
and other related costs.
Haier Smart Home Co., Ltd. Interim Report 2024 133
Section X Financial Report
(2) Criteria for and timing of the transfer of construction in progress to fixed assets
The Company’s construction in progress is transferred to fixed assets when the work is
completed and reaches the expected conditions for use. The criteria for judgement of
expected conditions for use should meet one of the following:
The physical construction (including installation) of fixed assets has been completed in
full or substantially completed in full;
Trial production or operation has commenced and the result indicates that the asset
can operate normally or can manufacture compliant products in a consistent manner,
or the trial operation indicates that it can operate or conduct business normally;
The amount of fixed asset expenditure of the construction is minimal or almost certain
not be further incurred;
Fixed assets acquired have reached design or contractual requirements, or are
essentially consistent with design and contractual requirements.
(3) Methods for impairment test and impairment provision for construction in progress
At the balance sheet date, the Company inspects whether there are indications of possible
impairment of construction in progress. If there are indications of impairment, an
impairment test should be performed to ascertain its recoverable amount, and an
impairment provision equivalent to the margin by which the recoverable amount is lower
than the carrying value should be made. Once recognised, impairment loss will not be
reversed in subsequent accounting periods.
The recoverable amount is determined as the higher of net fair value of the asset less
disposal cost and the present value of estimated future cash flow.
18. Borrowing costs
√ Applicable Not Applicable
(1) Principle for recognition of capitalisation of borrowing cost
Borrowing costs incurred by the Company that can be directly attributed to the acquisition
or production of assets qualified for capitalisation are capitalised and included in relevant
asset costs; other borrowing costs are recognised as cost at the amount incurred at the
time of incurrence and charged to current profit or loss. Assets qualified for capitalisation
refer to fixed assets, investment properties and inventory that require a considerably long
period of acquisition or production activities to reach the expected conditions for use or
sale.
134 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(2) Computation of capitalised amounts
Capitalisation period: from the point of time at which the capitalisation of borrowing costs
begins to the point of time at which capitalisation ceases. The period of suspension of
capitalisation of borrowing costs is not included.
Period of suspension of capitalisation: In case of abnormal disruption during the acquisition
or production process for a consecutive period of more than 3 months, the capitalisation
period for borrowing costs should be suspended.
Computation of capitalised amount: For specific borrowings, the amount is determined
as interest expense incurred for the period in respect of the specific borrowing less interest
income received through the deposit of unutilised borrowed funds or investment gains
received through provisional investments; For general borrowings utilised, the amount is
determined as the weighted average amount of the portion of cumulative asset expenses in
excess of the asset expense of specific borrowings multiplied by the capitalisation rate for
the general borrowings utilised, where the capitalisation rate is the weighted average
interest rate of general borrowings; where there is a discount or premium in the
borrowings, the amortisation of such discount or premium for each accounting period is
determined according to the effective interest rate and the interest amount for each period
is adjusted accordingly.
19. Intangible assets
Intangible assets are the identifiable non-monetary assets which have no physical form and are
possessed or controlled by the Company, and are recognized when the following conditions are
met:
it is probable that economic benefits attributable to the intangible assets will flow into the
Company;
the costs of the intangible assets can be measured reliably.
(1) Measurement of intangible assets
Intangible assets of the Company are initially recognized at costs. The actual costs of
purchased intangible assets include the consideration and relevant expenses actually paid.
For intangible assets contributed by investors, relevant actual costs are determined based
on the value agreed in the investment contract or agreement. But if the value agreed in the
investment contract or agreement is not a fair value, the actual costs should be determined
based on the fair value. The cost of a self-developed intangible asset is the total
expenditure incurred in bringing the asset to its intended use. Intangible assets acquired in
a business combination not under common control that are owned by the acquiree but not
recognised in its financial statements are recognised as intangible assets at fair value on
initial recognition of the acquiree’s assets.
Haier Smart Home Co., Ltd. Interim Report 2024 135
Section X Financial Report
Subsequent measurement of intangible assets of the Company: Intangible assets with
finite useful lives are amortized on a straight-line basis; their useful lives and amortization
methods are reviewed at the end of each year, and adjusted accordingly if there is any
variance with the previous estimates; Intangible assets with indefinite useful lives are not
amortized and their useful lives are reviewed at the end of each year. If there is an
objective evidence that the useful life of an intangible asset is finite, an estimation should
be made on the useful life and the intangible asset should be amortized using the straight-
line method.
(2) Criterion of determining indefinite useful life
The useful life of an intangible asset is indefinite if the period in which the asset brings
economic benefits for the Company is unforeseeable, or the useful life could not be
ascertained.
Criterion of determining indefinite useful lives: the period is derived from contractual
rights or other legal rights and there are no explicit years of use stipulated in the contract
or laws and regulations; the period in which the intangible assets generate benefits for
the Company still could not be estimated after considering the industrial practice or
relevant expert opinions.
At the end of each year, the Company reviews the useful lives of the intangible assets with
indefinite useful lives. The assessment is primarily reviewed by relevant departments that
use the intangible assets, using the down-to-top approach, to determine if there are
changes to the determination basis of indefinite useful lives.
(3) Methods of test and provision for impairment of intangible assets
At the balance sheet date, the Company reviews intangible assets to check whether there
is any sign of impairment. If yes, the recoverable amount is recognized through an
impairment test and provision for impairment is made based on the difference between the
carrying value and the recoverable amount.
Impairment loss will not be reversed in subsequent accounting periods once provision is
made for it. The recoverable amount of intangible assets should be based on the higher of
the net fair value of the assets less the disposal expense and the present value of
estimated future cash flow of the assets.
136 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(4) Basis for research and development phases for internal research and development
project and basis for capitalization of expenditure incurred in development stage
As for an internal research and development project, expenditure incurred in the research
stage is recognized in the profit or loss as incurred. Expenses incurred in the development
stage are capitalized only if all of the following conditions are met: the technical
feasibility of completing the intangible assets so that they will be available for use or for
sale; the intention to complete the intangible assets for use or for sale; how the
intangible assets will generate economic benefits, including there is evidence that the
products produced by the intangible assets has a market or the intangible assets
themselves have a market; if the intangible assets are for internal use, there is evidence
that there exists usage for the intangible assets; the availability of adequate technical,
financial and other resources to complete the development and gain the ability to use or
sell the intangible assets; the capability to reliably measure the expenditures attributable
to the development stage of the intangible assets.
Specific standards for distinguishing research stage and development stage of an internal
research and development project: the Company refers to the research stage as the stage
of planned investigation and search for obtaining new technology and knowledge, which
features planning and exploration; before commercial production or other uses, the
Company regards the stage of applying the research achievements and other knowledge in
a plan or design to produce new or substantially improved materials, equipment and
products as development stage, which features pertinence and is very likely to form
results.
All the expenditures incurred on research and development which cannot be distinguished
between research stage and development stage are recognized in the profit or loss.
20. Impairment of long-term assets
√ Applicable Not Applicable
Long-term equity investment, investment properties measured based on cost model, fixed assets,
construction in progress, intangible assets and other long-term assets are tested for impairment
if there is any sign of impairment at the balance sheet date. If the result of the impairment test
indicates that the recoverable amount of the assets is less than the carrying amount, a provision
for impairment will be made based on the difference and will be recorded in impairment loss. The
recoverable amount is the higher of the net fair value of the assets less the disposal expense
and the present value of estimated future cash flow of the assets. Provision for asset impairment
is calculated and recognized on the individual asset basis. If it is not possible to estimate the
recoverable amount of an individual asset, the recoverable amount of the asset group to which
the asset belongs is determined. An asset group is the smallest asset portfolio that can generate
cash inflows independently.
Goodwill arising from a business combination and an intangible asset with an indefinite useful life
is tested for impairment at least at each year end, irrespective of whether there is any indication
that the asset may be impaired. Intangible assets that have not been ready for intended use are
tested for impairment each year.
Haier Smart Home Co., Ltd. Interim Report 2024 137
Section X Financial Report
When the Company carries out impairment test of the goodwill, the carrying amount of the
goodwill, arising from business combination, shall be allocated to the related asset groups on
reasonable basis since the acquisition date, or to the related asset group portfolios if it is difficult
to be allocated to the related asset groups. When the carrying amount of the goodwill is
allocated to the related asset groups or asset group portfolios, it shall be allocated in the
proportion of the fair value of each asset group or asset group portfolio against the total fair
value of related asset groups or asset group portfolios. If it is difficult to measure the fair value
reliably, it shall be allocated in the proportion of the carrying amount of each asset group or
asset group portfolio against the total carrying amount of related asset groups or asset group
portfolios.
When impairment test is made by the Company to the related asset groups or asset group
portfolios including goodwill, if there is a sign that the related asset groups or asset group
portfolios are prone to impair, the Company shall first conduct impairment test on the asset
groups or asset group portfolios excluding goodwill, calculate the recoverable amount and
recognize the corresponding impairment loss by comparing with its carrying amount. The
Company shall then conduct impairment test on the asset groups or asset group portfolios
including goodwill and compare the carrying amount (including the carrying amount of allocated
goodwill) of related asset groups or asset group portfolios with the recoverable amount thereof.
Impairment loss shall be recognized in accordance with the differences when the recoverable
amount of the related asset groups or asset group portfolios is lower than the carrying amount
thereof. The amount of the impairment loss is first reduced by the carrying amount of the
goodwill allocated to the asset group or set of asset groups, and then the carrying amount of
other assets (other than the goodwill) within the asset group or set of asset groups, pro rata
based on the carrying amount of each asset.
Once the above impairment loss on assets is recognized, it shall not be reversed by the
Company in any subsequent accounting period.
21. Long-term prepaid expense
√ Applicable Not Applicable
Long-term prepaid expenses of the Company are expenditures which have incurred but the
benefit period of which is more than one year (exclusive). They are amortized by installments over
the benefit period based on each item under the expenses. If items under the long-term pre-paid
expenses are no longer beneficial to the subsequent accounting periods, the amortized value of
such unamortized items is then fully transferred to the profit or loss.
138 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
22. Contract liabilities
√ Applicable Not Applicable
A contract liability represents the Company’s obligation to transfer goods to a customer for
which the Company has received consideration (or an amount of consideration is due) from the
customer. If the customer has already paid the contract consideration before the Company
transfers goods to the customer or the Company has obtained the unconditional collection right,
the Company will recognise such amount received or receivable as contract liabilities at earlier of
the actual payment by the customer or the amount payable becoming due. Contract assets and
contract liabilities under the same contract are presented on a net basis, and contract assets
and contract liabilities under different contracts are not offset.
23. Staff’s remuneration
Staff’s remunerations are all forms of compensation and other relevant expenditure given by the
Company in exchange for services rendered by employees, including short-term remunerations,
post-employment benefits, termination benefits and other long-term benefits.
(1). Accounting treatment of short-term remunerations
√ Applicable Not Applicable
Short-term remunerations provided by the Company include short-term salaries, bonus,
allowance, subsidies, employee welfare, housing provident fund, labor union fee and
education fee, medical insurance premiums, work-related injury insurance premiums,
maternity insurance premiums, short-term compensated leave, short-term profit-sharing
plans, etc. During the accounting period when employees render services, the Company
shall recognize short-term remunerations that actually incurred as liabilities and credited into
the current profit or loss or the cost of relevant assets on an accrual basis by the benefit
objects.
(2). Accounting treatment of post-employment benefits
√ Applicable Not Applicable
Post-employment benefits mainly include the basic pension insurance, enterprise annuity,
etc., In accordance with the risks and obligations undertaken by the Company, the
post-employment benefits are classified as defined contribution plans and defined benefit
plans.
Defined contribution plans: the Company shall recognize the sinking funds paid on the
balance sheet date to individual entities in exchange for services from employees in the
accounting period as liabilities, and shall credit such funds into the profit or loss or the cost
of relevant assets in accordance with the benefit objects.
Haier Smart Home Co., Ltd. Interim Report 2024 139
Section X Financial Report
Defined benefit plans: the Company determines the cost for providing benefits using the
expected cumulative welfare unit method, with actuarial valuations being carried out by
independent actuary at the interim and annual balance sheet date. The costs for staff’s
remunerations incurred by the defined benefit plans of the Group are categorized as
follows: (1) service cost, including current period service cost, past service cost and
settlement profit or loss. Specifically, current period service cost means the increase of the
present value of defined benefit obligations resulted from the current period services offered
by employees. Past service cost means the increase or decrease of the present value of
defined benefit obligations resulted from the revision of the defined benefit plans related to
the prior period services offered by employees; (2) interest expenses of defined benefit
plans; (3) changes caused by the remeasurement of liabilities for defined benefit plans.
Unless other accounting standards require or permit the credit of the costs for employee
welfare into the cost of assets, the Company will credit (1) and (2) above into the profit or
loss; and recognize (3) above as other comprehensive income and will not transfer it back
to the profit or loss in subsequent accounting periods.
(3). Accounting treatment of termination benefits
√ Applicable Not Applicable
Termination benefits are the indemnity proposal provided by the Company for employees
for the purpose of terminating labor relations with employees before expiry of the labor
contracts or encouraging employees to accept downsizing voluntarily. When the Company
could not unilaterally withdraw the termination benefits provided as a result of plan for
termination of labor relations or the redundancy offer, or upon recognition of costs or
expenses related to a restructuring involving the payment of termination benefits, whichever
is earlier, the staff’s remuneration liabilities arising from such termination benefits are
recognized and included in current profit or loss.
24. Estimated liability
√ Applicable Not Applicable
(1) Criterion for determining of estimated liability
If an obligation in relation to contingencies such as external guarantees, discounting of
commercial acceptance bills, pending litigation or arbitration and product quality assurance
is the present obligation of the Company and the performance of such obligation is likely to
lead to an outflow of economic interests and its amount can be reliably measured, such
obligation shall be recognized as an estimated liability.
140 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(2) Measurement of estimated liability
The estimated liability shall be initially measured according to the best estimate of the
necessary expenses for the performance of the present obligation. If there is a continuous
range for the necessary expenses and if all the outcomes within this range are equally likely
to occur, the best estimate shall be determined according to the middle estimate within the
range.; if there are two or more items involved, the best estimate should be determined
according to all possible outcomes and relevant probabilities.
At the balance sheet date, the carrying value of estimated liabilities should be reviewed. If
there is objective evidence that the carrying value could not reflect in the current best
estimate, the carrying value shall be adjusted to reflect the current best estimate.
If all or part of the expense necessary for settling the provisions is expected to be
compensated by the third party, the amount of compensation is separately recognized as
an asset when it is basically determined to be recoverable, and the recognized amount of
the compensation shall not exceed the carrying amount of the provisions.
25. Share-based payments
√ Applicable Not Applicable
Share-based payments of the Company are transactions in which equity instruments are granted
to employees in exchange for services rendered by employees or for the assumption of liabilities
based on equity instruments. Share-based payments of the Company are equity-settled
share-based payments and cash-settled share-based payments.
For equity-settled share-based payment transaction in return for services from employees, it shall
be measured at the fair value of equity instruments granted to the employees at the date of
grant by the Company. On each balance sheet date within the vesting period, the Company
makes the best estimation of the number of vested equity instruments based on subsequent
information such as the updated changes in the number of employees who are granted to vest
and the achievement of specified performance conditions. Based on the above results, the
services received in the current period are included in the relevant cost or expenses based on
the fair value on the date of grant, with the increase in the capital reserve accordingly. The
recognized relevant cost or expenses and the total amount of owners’ interest shall no longer be
adjusted after the vesting date. However, equity instruments vested immediately after the date of
grant shall be included in the relevant cost or expenses based on its fair value on the date of
grant, with the increase in the capital reserve accordingly.
Haier Smart Home Co., Ltd. Interim Report 2024 141
Section X Financial Report
The cash-settled share-based payment shall be measured at the fair value of liability assumed by
the Company, which is determined based on the shares or other equity instruments. For the
cash-settled share-based payment that may be exercised immediately after the grant, the fair
value of the liability assumed by the Company shall, on the date of the grant, be recognized in
relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled
share-based payment that may be exercised if services are fulfilled during the vesting period or
the specified performance condition is achieved, on each balance sheet date within the vesting
period, the services acquired in the current period shall, based on the best estimate of exercise,
be recognized in relevant costs or expenses at the fair value of the liability assumed by the
Company, and the liabilities shall be adjusted correspondingly. At each balanced sheet date and
the settlement date prior to the settlement of liabilities, the fair value of the liability is
re-measured with its change consolidated in profit/loss.
When there is changes to the Company’s share-based payment plans, if the modification
increases the fair value of the equity instruments granted, corresponding recognition of service
increase in accordance with the increase in the fair value of the equity instruments; if the
modification increases the number of equity instruments granted, the increase in fair value of the
equity instruments is recognized as a corresponding increase in service achieved. Increase in the
fair value of equity instruments refer to the difference between the fair values of the equity
instrument on the modified date before or after the modification. If the Company modifies the
vesting conditions in such manner conductive to the employees, including the shortening of the
vesting period, change or cancellation of the performance conditions (rather than market
conditions), the modified vesting conditions are considered upon the disposal of vesting
conditions. If the modification reduces the total fair value of shares paid or the Company uses
other methods not conductive to employees to modify the terms and conditions of share-based
payment plans, the Company will continue to be accounted for the services obtained in the
accounting treatment, as if the change had not occurred, unless the Company cancelled some or
all of the equity instruments granted.
During the vesting period, if the Company cancel equity instruments granted which will be treated
as accelerating the exercise of rights and any amount to be charged over the remaining vesting
period should be recognized immediately in the profit or loss, while at the same time recognize
the capital reserve. Employees or other parties can choose to meet non-vesting conditions, but
for those that are not met in the vesting period, the Company will treat it as cancellation of
equity instruments granted.
142 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
26. Revenue
Revenue is the total inflow of economic benefits formed by the Company and its subsidiaries
during day-to-day operations which might lead to increase of shareholders’ equity and be
irrelevant to capital invested by shareholders.
The Company and its subsidiaries performed performance obligations stated in the contract, i.e.,
recognized revenue when the client obtains the control right of relevant goods or services.
Where the contract includes two or more performance obligations, during the starting date of the
contract, the Company and its subsidiaries allocate transaction price to various single
performance obligation in accordance with the relevant proportion of separate selling price of
goods or services promised by various single performance obligation, and measure revenue in
accordance with transaction price allocated to various single performance obligation.
Transaction price is the amount of consideration that the Company and its subsidiaries are
expected to be entitled to collect due to transfer of goods and services transferred to the client,
excluding the amount collected for any third party. The transaction price recognized by the
Company and its subsidiaries does not exceed the amount of recognized revenue when relevant
uncertainties are eliminated and might not incur material carrying back. The amount that is
expected to be returned to the client is taken as liability of returned goods and is not recorded
in transaction price.
When one of the following conditions is met, the Company and its subsidiaries perform
performance obligations during a certain time horizon, otherwise, it belongs to fulfilling
performance obligations at a certain time point:
The client simultaneously obtains and consumes economic benefits as the Company and its
subsidiaries perform the contract;
The client is able to control goods under construction during the process of performance of
the Company and its subsidiaries;
Goods produced by the Company and its subsidiaries during the process of performance
have no alternative use, and the Company and its subsidiaries are entitled to collect the
amount for the cumulative completed and performed portion to date during the entire
contractual period.
For the performance obligations performed during a certain time horizon, the Company and its
subsidiaries recognize revenue in accordance with the schedule of performance during such time
horizon. When the schedule of performance can’t be reasonably recognized, where the costs that
have been incurred by the Company and its subsidiaries are estimated to be compensated,
revenue shall be recognized in accordance with the amount of costs that has been incurred until
the schedule of performance can be reasonably confirmed.
Haier Smart Home Co., Ltd. Interim Report 2024 143
Section X Financial Report
For performance obligations performed at a certain time point, the Company and its subsidiaries
recognize revenue at the time point when the client obtains the control right of relevant goods or
services. When judging whether the client has obtained control right over goods or services, the
Company and its subsidiaries will consider the following signs:
The Company and its subsidiaries enjoy the right of instant collection over such goods and
services;
The Company and its subsidiaries have transferred the material objects of such goods to
the client;
The Company and its subsidiaries have transferred statutory ownership right of the goods
or major risks and rewards of the ownership to the client;
The client has accepted such goods or service.
The right that the Company and its subsidiaries are entitled to collect the consideration for
having transferred goods or services to the client (and such right depends on other factors other
than time lapse) is presented as contract asset, and contract asset is provisioned impairment on
the basis of expected credit losses. The right owned by and unconditionally collected from the
client by the Company and its subsidiaries (only depend on time lapse) shall be presented as
accounts receivable. Obligations that the Company and its subsidiaries have collected or shall
collect consideration from the client and shall transfer goods or services to the client are
presented as contractual obligations.
Specific accounting policies relating to major activities that the Company and its subsidiaries
obtain revenue are described as follows:
(1) Sale of goods
Generally, contracts for sale of goods between the Company and its clients only include
performance obligation of transferring the whole machine of home appliance. Generally, on
the basis of taking into account the following factors comprehensively, the Company
recognizes the revenue at the time point of transfer of control right of goods: the right of
instant collection for obtaining goods, transfer of major risks and rewards on ownership of
goods, transfer of statutory ownership of goods, transfer of assets of material objects of
goods, the client’s acceptance of such goods.
144 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(2) Construction contract income
Construction contract between the Company and the client generally includes performance
obligations of construction and installation of commercial air-conditioner and smart home,
because the client is able to control goods under construction during the Company’s
performance process, the Company takes them as performance obligations performed
during a certain time horizon, and recognizes revenue in accordance with the schedule of
performance, and it is an exemption when the schedule of performance can’t be
reasonably confirmed. The Company confirms the schedule of performance of services
provided in accordance with the input method. When the schedule of performance can’t be
reasonably confirmed, where the costs that have been incurred by the Company are
estimated to be compensated, the revenue will be recognized in accordance with the
amount of costs that has been incurred until the schedule of performance can be
reasonably confirmed.
(3) Warranty obligations
According to contractual agreement and regulations of laws, the Company provides quality
assurance for goods sold and project constructed. For guarantee-type quality assurance in
order to ensure the client that goods sold comply with existing standards, the Company
conducts accounting treatment in accordance with estimated liabilities. For service-type
quality assurance in order to ensure the client that we also provide a separate service other
than that the goods sold comply with existing standards, the Company takes it as a
separate performance obligation, and allocates partial transaction price to service-type
quality assurance in accordance with the relevant proportion of separate selling price of
goods and service-type quality assurance, and recognizes revenue when the client obtains
control right over services. When assessing whether quality assurance provides a separate
service other than ensuring the client that the goods sold comply with existing standards,
the Company shall consider factors such as whether such quality assurance is under
statutory requirements or industrial practices, the term of quality assurance and the nature
of the Company’s commitment to perform the tasks.
27. Government grants
√ Applicable Not Applicable
(1) Types of government grants
Government grants refer to the gratuitous monetary assets or non-monetary assets
obtained by the Company from the government, excluding the capital invested by the
government as an owner. The government grants are mainly divided into asset-related
government grants and revenue-related government grants.
Haier Smart Home Co., Ltd. Interim Report 2024 145
Section X Financial Report
(2) Accounting treatment of government grants
Asset-related government grants shall be recognized as deferred income in current profit or
loss on an even basis over the useful life of relevant assets; government grants measured
at nominal amount shall be recognized directly in current profit or loss. Revenue-related
government grants shall be treated as follows: those used to compensate relevant
expenses or losses to be incurred by the enterprise in subsequent periods are recognized
as deferred income and recorded in current profit or loss when such expenses are
recognized; those used to compensate relevant expenses or losses that have been
incurred by the enterprise are recorded directly in current profit or loss.
(3) Basis for determination of asset-related government grant and revenue-related
government grant
If the government grant received by the Company is used for purchase, construction or
other project that forms a long-term asset, it is recognized as asset-related government
grant.
If the government grant received by the Company is not asset-related, it is recognized as
revenue-related government grant.
Government grant received without clear objective shall be classified as asset-related
government grant or revenue-related government grant by:
Government grant subject to a certain project shall be separated according to the
proportion of expenditure budget and capitalization budget, and the proportion shall
be reviewed and modified if necessary on each balance sheet date;
Government grant shall be categorized as revenue-related if its usage is described in
general statement and no specific project is specified in the relevant government
document.
(4) Amortization method and determination of amortization period of deferred revenue
related to government grants
Asset-related government grant received by the Company is recognized as deferred
revenue and is evenly amortized to the profit or loss in the current period over the
estimated useful life of the relevant asset starting from the date when the asset is available
for use.
(5) Recognition of government grants
Government grant measured at the amounts receivable is recognized at the end of the
period when there is clear evidence that the relevant conditions set out in the financial
subsidy policies and regulations are fulfilled and the receipt of such financial subsidy is
assured.
Other government grants other than those measured at the account receivable is
recognized upon actual receipt of such subsidies.
146 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
28. Deferred tax assets/deferred tax liabilities
√ Applicable Not Applicable
Deferred income tax assets and deferred income tax liabilities of the Company are calculated and
recognized based on the differences between the tax bases and the carrying amounts of assets
and liabilities (temporary differences).
(1) Deferred income tax assets are recognized by the Company to the extent that it is probable
that future taxable profits will be available against which the deductible temporary
differences can be utilized. For deductible losses and tax credits that can be carried
forward to future years, deferred income tax assets shall be recognized to the extent that it
is probable that taxable profit will be available in the future to offset the deductible losses
and tax credits. Save as the exceptions, deferred income tax liabilities shall be recognized
for the taxable temporary differences.
(2) Deferred income tax asset of the Company is recognized to the extent that there is enough
taxable income for the deduction of the deductible temporary difference. At the balance
sheet date, if there is sufficient evidence that there will be enough taxable income in the
future for the deduction of the deductible temporary difference, the deferred income tax
asset not recognized in previous accounting period is recognized. If there is no sufficient
evidence that there will be enough taxable income in the future for the deduction of the
deferred income tax asset, the carrying value of the deferred income tax asset is reduced.
(3) The Company recognizes deferred income tax liability for taxable temporary difference arising
from investments in subsidiaries and associated companies, unless the Company could
control the time of reversal of the temporary differences and the temporary differences
would not be probably reversed in the foreseeable future. The Company recognizes
deferred income tax asset for deductible temporary differences arising from investments in
subsidiaries and associated companies, if the temporary difference will be very probably
reversed in the foreseeable future and it is highly probable that taxable income will be
available in the future to deduct the deductible temporary difference.
(4) The Company does not recognize deferred income tax liability for a temporary difference
arising from the initial recognition of goodwill. No deferred income tax asset or deferred
income tax liability is recognized for the temporary differences resulting from the initial
recognition of assets or liabilities due to a transaction other than a business combination,
which affects neither accounting profit nor taxable income (or deductible loss). At the
balance sheet date, deferred income tax assets and deferred income tax liabilities of the
Company are measured at the tax rates that apply to the period when the asset is
expected to be recovered or the liability is expected to be settled.
Haier Smart Home Co., Ltd. Interim Report 2024 147
Section X Financial Report
(5) Deferred income tax assets and deferred income tax liabilities are offset when:
1) deferred tax assets and deferred tax liabilities relate to income taxes levied by the same
taxation authority on the same taxable entity within the Company;
2) such taxable entity within the Company has a legally enforceable right to settle current
income tax assets and current income tax liabilities on a net basis.
29. Leases
√ Applicable Not Applicable
Lease is a contract in which the Company transfers or obtains the right of use of an identified
asset or several identified assets under control for the exchange or payment of consideration
within a certain period of time. At inception of a contract, the Company assesses whether a
contract is, or contains, a lease.
(1) The Company as the lessee
√ Applicable Not Applicable
1) Initial measurement
On the commencement date of the lease term, the Company recognizes its right to
use leased assets over the lease term as right-of-use assets and recognizes the
present value of the lease payments that have not been paid as lease liabilities,
except for short-term leases and low-value leases. The lease payments are
discounted using the implicit interest rate in the lease when calculating the present
value of the lease payments. If that rate cannot be readily determined, the Company
uses its incremental borrowing rate as the discount rate.
Right-of-use assets shall be initially measured at costs. The costs include:
a. initial measurement amount of the lease liabilities;
b. a lease payment paid on or before the date of commencement of the lease term,
where there were lease incentives, such incentives received shall be deducted;
c. initial direct costs incurred by the lessee;
d. costs expected to be incurred by the Company for demolition and removal of
leased assets, restoration of the premises where the leased assets are located,
or restoration of the leased assets to the conditions of the lease terms.
148 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
2) Subsequent measurement
If the Company accrues depreciation for right-of-use assets by reference to the
depreciation policy for fixed assets (see this Note V.16 “Fixed assets” for details), and
can reasonably determine that the ownership of the leased asset can be acquired at
the expiration of the lease term, the Company shall depreciate the leased asset within
its remaining useful life. If the Company cannot reasonably determine that the
ownership of the leased asset can be acquired at the expiration of the lease term, the
Company shall depreciate the leased asset within the lease term or its remaining
useful life, whichever is shorter. For lease liabilities, the Company shall calculate the
interest expenses for each period over the lease term at the fixed periodic interest
rate, and recognize it in current profit or loss or the cost of relevant assets. Variable
lease payments that are not included in the measurement of lease liabilities are
recognized in current profit or loss or the cost of relevant assets when they are
actually incurred. After the commencement date of the lease term, in the event that
there is a change in the substantive fixed payments, a change in expected payment
under a guaranteed residual value, a change in an index or rate used in determining
the lease payments, or a change in the evaluation result or actual exercise of
purchase option, extension option or termination option, the Company remeasures the
lease liabilities based on the present value of the lease payments after the change
and adjusts the carrying value of the right-of-use asset accordingly. If the carrying
amount of the right-of-use asset has been reduced to zero, but a further reduction in
the measurement of the lease liabilities is still warranted, the Company recognizes the
remaining amount of the remeasurement in current profit or loss.
3) Short-term leases and leases of low-value assets
For short-term leases (leases with a term of less than 12 months as of the lease
commencement date) and leases of low-value assets, the Company adopts a
simplified approach by not recognizing the right-of-use assets and lease liabilities, and
instead recognizes the cost of relevant assets or current profit or loss on a
straight-line basis for each period over the lease term.
(2) The Company as the lessor
√ Applicable Not Applicable
The Company classifies leases into finance leases and operating leases based on the
substance of the transaction at the inception date of the lease. A finance lease is a lease
that transfers substantially all the risks and rewards incidental to ownership of the leased
asset. An operating lease is a lease other than a finance lease.
1) Operating leases
The Company uses the straight-line method to recognize lease receipts under
operating leases as rental income for each period during the lease term. Variable
lease payments relating to operating leases that are not recognized as lease receipts
are recognized in current profit or loss when they are actually incurred.
Haier Smart Home Co., Ltd. Interim Report 2024 149
Section X Financial Report
2) Finance leases
On the commencement date of the lease term, the Company recognizes finance lease
receivables and derecognizes finance lease assets. Finance lease receivables are
initially measured at the net investment in the lease (the sum of the unguaranteed
residual value and the present value of the lease receipts not yet received on the
commencement date of the lease term discounted at the interest rate embedded in
the lease), and interest income is recognized over the lease term calculated at a fixed
periodic interest rate. Variable lease payments acquired by the Company that are not
included in the measurement of the net investment in the lease are recognized in
current profit or loss when they are actually incurred.
30. Other significant accounting policies and accounting estimates
√ Applicable Not Applicable
(1) Asset securitisation
The Company has securitised certain receivables to entrust the assets to specific-purpose
entities which would issue such securities to investors. As asset service provider, the
Company is responsible for the provision of maintenance and daily management of the
assets, formulation of annual asset disposal plans, formulation and implementation of asset
disposal plan, signing of relevant asset disposal agreements and preparation asset service
reports on a regular basis.
In applying the accounting policy for the securitisation of financial assets, the Company has
considered the extent to which the risk and reward of the assets have been transferred to
other entities, and the extent to which the Company exercises control over the entity:
When the Company has transferred substantially all risk and reward relating to the
ownership of a financial asset, such financial asset is derecognised;
When the Company retains substantially all risk and reward relating to the ownership
of a financial asset, the Company continues to recognise such financial asset;
If the Company neither transfers nor retains substantially all risk and reward relating to
the ownership of a financial asset, the Company considers whether it has control over
the financial asset. If the Company does not retain control, the financial asset is
derecognised, and the rights and obligations arising from or retained the transfer are
recognised as assets and liabilities, respectively. If the Company retains control, the
financial asset is recognised according to the extent of continued involvement in the
financial assets.
150 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(2) Hedge accounting
Hedge refers, in respect of the risk exposure arising from the company’s management of
specific risks such as foreign exchange risks, interest rate risks, price risks and credit risks,
to risk management activity of designating financial instruments as hedging instruments
such that the change in the fair value or cash flow of the hedging instruments can be
expected to set off the change in the fair value or cash flow of the hedged item.
The hedged item refers to an item designated for hedge against the risk of change in fair
value or cash flow that can be reliably measured.
Hedging instruments are financial instruments designated for hedge, the change in fair value
or cash flow of which is expected to set off the change in the fair value or cash flow of the
hedged item.
The Company assesses whether the hedge relationship fulfills the requirement for hedge
effectiveness at the inception date of the hedge and continuously in subsequent periods.
The effectiveness of hedge refers to the extent to which the change in the fair value or
cash flow of the hedging instruments can offset the change in the fair value or cash flow of
the hedged item caused by the risk against which the hedge is made. The change in the
fair value or cash flow of a hedging instrument in excess or shortfall of the change in the
fair value or cash flow of the hedging instruments can offset the change in the fair value or
cash flow of the hedged item represents the ineffective portion of the hedge.
(3) Significant accounting estimates
In the course of applying accounting policies, the Company is required to make
judgements, estimations and assumptions on the carrying values of statement items that
cannot be accurately measured owing to uncertainties to which operating activities are
subject. Such judgements, estimations and assumptions are made based on the past
experience of the management and taking into consideration of other relevant factors. Such
judgements, estimations and assumptions affect the reported amounts of income,
expenses, assets and liabilities and the disclosure of contingent liabilities as at the balance
sheet date. However, the actual outcome resulting from the uncertainty of such estimates
could be different from the current estimates of the management, thereby resulting in
significant adjustments to the carrying value of the future assets or liabilities affected. The
Company regularly reviews such judgements, estimations and assumptions on a going
concern basis. If the change in accounting estimates affects only the current period in
which the change occurs, the affected amount is recognized for the period in which the
change occurs; if both the current period and future periods are affected, the affected
amount is recognised for the current period and the future periods.
Haier Smart Home Co., Ltd. Interim Report 2024 151
Section X Financial Report
At the balance sheet date, important aspects in which the Company is required to make
judgements, estimations and assumptions on the amount of items on the financial
statements are as follows:
Estimated liabilities
The Company estimates and makes provision for product warranty and estimated
contract loss according to contract terms, existing knowledge and historical
experience. When such contingencies have given rise to a present obligation, and the
performance of such present obligation is likely to result in the outflow of economic
benefit from the Company, the Company recognises estimated liabilities for the
contingencies based on the best estimates of expenses required for the performance
of relevant present obligations. The recognition and measurement of estimated
liabilities is dependent to a large extent on management judgement. In the course of
judgement, the Company is required to assess factors such as risks, uncertainties
and the time value of currency relating to such contingencies. In particular, the
Company recognises estimated liabilities in respect of after-sales undertaking to
customers for return and replacement, maintenance and installation of goods sold.
The recognition of estimated liabilities has taken into account the maintenance
experience and data of the Company for recent years, although past experience in
maintenance may not reflect maintenance in the future. Any increase or decrease in
this provision might affect the profit or loss of future years.
Provision for ECL
The Company measures ECL through default risk exposure and the ECL rate, which
is determined based on the default probability rate and default loss rate. In
determining the ECL rate, the Company uses data such as internal historic credit loss
experience and adjusts the historic data taking into consideration current conditions
and prospective information. When considering prospective information, indicators
adopted by the Company include the risk of economic downside, expected growth in
unemployment rate, and changes in external market conditions, technical conditions
and customer conditions. The Company monitors and reviews the assumptions
relating to ECL computation on a regular basis. There was no significant change to
aforesaid estimation technique and key assumptions during the year.
Impairment provisions for inventory
The Company makes impairment provisions for inventory of which cost is higher than
net realisable value and obsolete and slow-moving inventory based on the lower of
cost and net realisable value according to its inventory accounting policy. The
impairment of inventory to its net realisable value is based on assessment of the
sellability of inventory and its net realisable value. The authentication of inventory
impairment requires the management to obtain conclusive evidence and make
judgment and estimates taking into consideration factors such as the purpose of
inventory and post-balance sheet date events. Any difference between the actual
outcome and the previous estimate will affect the carrying value of inventory and the
charge or reversal of impairment provisions for inventory during the period in which
the estimates are modified.
152 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Fair value of financial instruments
For financial instruments without an active trading market, the Company determines
its fair value using valuation techniques. Such valuation techniques include discounted
cash flow model analysis and others. During the assessment, the Company is
required to make estimates on future cashflow, credit risk, market volatility rate and
relevance and select an appropriate discount rate. Such relevant assumptions are
subject to uncertainty, and any change will affect the fair value of financial
instruments.
Impairment of other equity instrument investments
The Company’s determination of impairment for other equity instrument investments is
largely dependent on the management’s judgment and assumptions to determine
whether impairment should be recognised. In the course of making judgments and
assumptions, the Company is required to assess the extent and duration of the fair
value of the investment being lower than cost, as well as the financial conditions and
short-term business prospects of the investee, including industry conditions,
technological revolution, credit rating, default rate and counterparty risks.
Impairment provision for long-term assets
At the balance sheet date, the Company assesses whether there are indications of
possible impairment of non-current assets other than financial assets. In addition to
the annual impairment test, intangible assets with indefinite useful life are also tested
for impairment when there are indications of the same. Impairment tests on non-
current assets other than financial assets are conducted when there are indications
that its carrying value may not be recoverable. An impairment has occurred when the
carrying value of an asset or asset group is higher than the recoverable amount (the
higher of net fair value less disposal cost and the present value of estimated future
cash flow). The net fair value less disposal cost is determined with reference to the
agreed selling price of similar assets in a fair transaction or observable market prices
less incremental costs attributable directly to the disposal of such asset. In estimating
the present value of future cashflow, significant judgement is required to be made in
respect of the production volume and selling price of the asset or (asset group),
relevant operating cost and discount rate for the computation of present value. The
Company takes into consideration all available relevant information when making
estimates on the recoverable amount, including forecasts on production volume,
selling price and relevant operating costs based on reasonable and justifiable
assumptions. The Company conducts goodwill impairment tests at least annually. This
requires estimates on the present value of future cashflow of asset group or portfolio
of asset groups to which goodwill has been allocated. When making estimates on the
present value of future cashflow, the Company is required to make estimates on
cashflow generated from future asset group or portfolio of asset groups, and at the
same time select an appropriate discount rate to determine the present value of
future cashflow.
Haier Smart Home Co., Ltd. Interim Report 2024 153
Section X Financial Report
Depreciation and amortisation
Depreciation and amortisation of investment properties, fixed assets and intangible
assets is charged on a straight-line basis over their useful life after taking their
residual values into account. The Company reviews the useful life on a regular basis
to determine the amount of depreciation and amortisation charge to be allocated to
each reporting period. The useful life is determined based on past experience relating
to similar assets taking into consideration expected technological upgrades. If there
are significant changes in previous estimates, the depreciation and amortisation
charge for future periods will be adjusted.
Deferred income tax assets
The Company recognises deferred income tax assets in respect of all unutilised tax
losses, to the extent that it is probable that sufficient taxable profit will be available to
offset the loss. This requires the exercise of significant judgement by the Company’s
management to estimate the timing and amount of future taxable profit, taking into
account its tax planning strategy, to determine the amount of deferred income tax
assets to be recognised.
Income tax
In the Company’s usual operating activities, the final tax treatment and computation
of certain transactions are subject to uncertainty. Whether certain items can be
presented on a pretax basis is subject to approval of the competent taxation
authority. If the final confirmed outcome of such taxation matters is different from the
amount of the initial estimates, such difference will affect the current income tax and
deferred income tax for the period of final confirmation.
Provision for sales rebate
The Company and its subsidiaries adopt a sales rebate policy for sales agent
customers. Based on relevant provisions of the sales agreements, vetting of specific
transactions, market conditions, channel inventory level and past experience with
reference to the status of completion of agreed appraisal indicators by sales agent
customers, the Company and its subsidiaries makes estimates on and provision for
sales rebate on a regular basis. The provision of sales rebate involves judgment and
estimation by the management. In the event of any material change in previous
estimates, the aforesaid difference will affect the sales rebate for the period for which
the estimates are changed.
31. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
Applicable √ Not Applicable
(2). Changes in significant accounting estimates
Applicable √ Not Applicable
154 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
VI. TAXATION
1. Main tax categories and rates
√ Applicable Not Applicable
Tax types Basis of taxation Tax rate
Value-added tax Taxable revenue from sales of goods 6%, 9%, 13%
and rendering services
City maintenance and Circulation tax payable 7%
construction tax
(Local) education surcharge Circulation tax payable 1%, 2%, 3%
EIT Taxable income Statutory tax rate
or preferential
rates as follows
2. Preferential tax
√ Applicable Not Applicable
Companies subjected to preferential tax and preferential tax rate:
Company Tax rate Preferential tax
Qingdao Haier Refrigerator Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Qingdao Haier Special Refrigerator 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Dishwasher Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Qingdao Haier Special Freezer Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Qingdao Haier Intelligent Home 15.00% entitled to the preferential taxation
Appliance Technology Co., Ltd. policies as a hi-tech enterprise
Wuhan Haier Electronics Holding 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Wuhan Haier Freezer Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Hefei Haier Refrigerator Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Hefei Haier Air-conditioning Co., 15.00% entitled to the preferential taxation
Limited policies as a hi-tech enterprise
Zhengzhou Haier Air-conditioning 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Shenyang Haier Refrigerator Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Haier Smart Home Co., Ltd. Interim Report 2024 155
Section X Financial Report
Company Tax rate Preferential tax
Qingdao Haier Air-Conditioner 15.00% entitled to the preferential taxation
Electronics Co., Ltd. policies as a hi-tech enterprise
Qingdao Meier Plastic Powder Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Qingdao Hai Gao Design and 15.00% entitled to the preferential taxation
Manufacture Co., Ltd. policies as a hi-tech enterprise
Qingdao Hairi High Technology Co., 15.00% entitled to the preferential taxation
Ltd policies as a hi-tech enterprise
Qingdao Haier (Jiaozhou) Air- 15.00% entitled to the preferential taxation
conditioning Co., Limited policies as a hi-tech enterprise
Qingdao Haier Intelligent Technology 15.00% entitled to the preferential taxation
Development Co., Ltd. policies as a hi-tech enterprise
Foshan Haier Freezer Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Qingdao Haier Central Air 15.00% entitled to the preferential taxation
Conditioning Co., Ltd. policies as a hi-tech enterprise
Haier U+smart Intelligent Technology 15.00% entitled to the preferential taxation
(Beijing) Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Electronic Plastic 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Qingdao Wei Xi Intelligent 15.00% entitled to the preferential taxation
Technology Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Special Refrigerating 15.00% entitled to the preferential taxation
Appliance Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Smart Kitchen 15.00% entitled to the preferential taxation
Appliance Co., Ltd. policies as a hi-tech enterprise
Hefei Haier Air Conditioning 15.00% entitled to the preferential taxation
Electronics Co., Ltd. policies as a hi-tech enterprise
Shanghai Haier Medical Technology 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Shanghai Haier Smart Technology 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Qingdao Yunshang Yuyi IOT 15.00% entitled to the preferential taxation
Technology Co., Ltd. policies as a hi-tech enterprise
Haier (Shanghai) Home Appliance 15.00% entitled to the preferential taxation
Research and Development policies as a hi-tech enterprise
Center Co., Ltd.
Haier (Shenzhen) R&D Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Laiyang Haier Smart Kitchen 15.00% entitled to the preferential taxation
Appliance Co., Ltd. policies as a hi-tech enterprise
Guangdong Haier Intelligent 15.00% entitled to the preferential taxation
Technology Co. Ltd policies as a hi-tech enterprise
156 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Company Tax rate Preferential tax
Dalian Haier Refrigerator Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Qingdao Jijia Cloud Intelligent 15.00% entitled to the preferential taxation
Technology Co., Ltd. policies as a hi-tech enterprise
Hefei Haier Washing Machine Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Qingdao Haier Washing Machine 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Qingdao Jiaonan Haier Washing 15.00% entitled to the preferential taxation
Machine Co., Ltd. policies as a hi-tech enterprise
Foshan Shunde Haier Electric Co., 15.00% entitled to the preferential taxation
Ltd. policies as a hi-tech enterprise
Tianjin Haier Cleaning Electrical 15.00% entitled to the preferential taxation
Appliances Co., Ltd. ( policies as a hi-tech enterprise
)
Qingdao Economic and 15.00% entitled to the preferential taxation
Technological Development Zone policies as a hi-tech enterprise
Haier Water Heater Co., Ltd.
Wuhan Haier Water Heater Co., Ltd. 15.00% entitled to the preferential taxation
policies as a hi-tech enterprise
Foshan Haier Drum Washing 15.00% entitled to the preferential taxation
Machine Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Strauss Water 15.00% entitled to the preferential taxation
Equipment Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Strauss Technology 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier New Energy Electric 15.00% entitled to the preferential taxation
Appliance Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Washing Appliance 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Lexin Cloud 15.00% entitled to the preferential taxation
Technology Co., Ltd. policies as a hi-tech enterprise
Hefei Haier Drum Washing Machine 15.00% entitled to the preferential taxation
Co., Ltd. policies as a hi-tech enterprise
Qingdao Haier Smart Electrics 15.00% entitled to the preferential taxation
Equipment Co. Ltd. policies as a hi-tech enterprise
Qingdao Haier Smart Living 15.00% entitled to the preferential taxation
Appliance Co. Ltd. policies as a hi-tech enterprise
Jiangxi Haier Medical Technology 15.00% entitled to the preferential taxation
Co., Ltd. policies under the Western
Development initiative of the PRC
Chongqing Haier Electrical 15.00% entitled to the preferential taxation
Appliance Sales Co., Ltd. and policies under the Western
some Western companies Development initiative of the PRC
Haier Smart Home Co., Ltd. Interim Report 2024 157
Section X Financial Report
Company Tax rate Preferential tax
Chongqing Haier Air-conditioning 15.00% entitled to the preferential taxation
Co., Ltd. policies under the Western
Development initiative of the PRC
Chongqing Haier Refrigeration 15.00% entitled to the preferential taxation
Appliance Co., Ltd. policies under the Western
Development initiative of the PRC
Chongqing Haier Washing Machine 15.00% entitled to the preferential taxation
Co., Ltd. policies under the Western
Development initiative of the PRC
Guizhou Haier Electronics Co., Ltd. 15.00% entitled to the preferential taxation
policies under the Western
Development initiative of the PRC
Chongqing Hairishun Home 15.00% entitled to the preferential taxation
Appliance Sales Co., Ltd. and policies under the Western
some Western companies Development initiative of the PRC
Chongqing Haier Washing Machine 15.00% entitled to the preferential taxation
Co., Ltd policies under the Western
Development initiative of the PRC
Chongqing Haier Water Heater Co., 15.00% entitled to the preferential taxation
Ltd policies under the Western
Development initiative of the PRC
Chongqing Haier Drum Washing 15.00% entitled to the preferential taxation
Machine Co., Ltd policies under the Western
Development initiative of the PRC
Qingdao Haier Technology Co., Ltd. 10.00% entitled to the preferential taxation
policies as a key software
enterprise
158 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
VII. EXPLANATORY NOTES FOR ITEMS IN CONSOLIDATED FINANCIAL
STATEMENTS
Unless otherwise specified, the following closing balances represent the amount as at 30 June 2024
and opening balances represent the amount as at 31 December 2023; amount for the period
represents the amount from 1 January to 30 June 2024 and amount for the previous period
represents the amount from 1 January to 30 June 2023.
1. Monetary funds
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Cash on hand 937,775.91 541,712.70
Cash in bank 53,682,763,402.56 53,524,177,266.50
Other cash balances 1,021,924,978.97 961,733,861.94
Total 54,705,626,157.44 54,486,452,841.14
Include: total amount of overseas deposits 16,901,018,141.30 15,909,397,682.46
Deposit in Finance Company 21,057,085,069.50 26,276,742,534.50
Other monetary funds mainly included investment fund, deposit on third party payment platforms,
guarantees and other restricted fund, etc.
2. Financial assets held for trading
Items Closing balance Opening balance
Short-term wealth management products 605,849,428.57 487,936,101.81
Investments in equity instruments 189,001,945.95 243,224,439.64
Investment funds 271,718,384.49 222,803,002.38
Total 1,066,569,759.01 953,963,543.83
Haier Smart Home Co., Ltd. Interim Report 2024 159
Section X Financial Report
3. Derivative financial assets
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Forward foreign exchange contracts 79,226,226.47 67,565,829.44
Forward commodity contracts 7,487,356.46
Total 86,713,582.93 67,565,829.44
4. Bills receivable
(1) Details of bills receivable
Items Closing balance Opening balance
Bank acceptance notes 6,965,820,228.21 8,466,159,415.18
Commercial acceptance notes 186,322,599.50 160,607,051.53
Balance of bills receivable 7,152,142,827.71 8,626,766,466.71
Allowance for bad debts 4,671,635.32 5,331,635.32
Bills receivable, net 7,147,471,192.39 8,621,434,831.39
(2) Changes in allowance for bad debts of bills receivable in the current period
Opening Increase for Decrease for Closing
Items balance the current period the current period balance
Provision for
the current Other Write-off/other
period movement Reversal movement
Allowance for bad debts 5,331,635.32 660,000.00 4,671,635.32
Total 5,331,635.32 660,000.00 4,671,635.32
The Company’s bills receivables were mainly generated from daily operation activities such
as sales of commodity, provision of labor, etc., and the allowance for bad debts was
measured based on expected credit loss over the entire duration whether there exist
significant financing components.
The bills receivable pledged by the Company at the end of the period was
RMB4,345,741,682.69 (amount at the beginning of the period: RMB4,389,991,243.14).
160 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
5. Accounts receivable
Accounts receivable are disclosed by aging as follows:
Aging Closing balance Opening balance
Within 1 year 23,267,651,913.42 20,004,004,007.43
1–2 years 584,789,646.99 873,509,449.30
2–3 years 296,388,145.37 510,375,731.48
Over 3 years 195,221,958.02 288,610,175.85
Balance of accounts receivable 24,344,051,663.80 21,676,499,364.06
Allowance for bad debts 826,205,818.96 1,408,399,927.63
Accounts receivable, net 23,517,845,844.84 20,268,099,436.43
By method of provision of allowance for bad debts
√ Applicable Not Applicable
Closing balance
Categories Book balance Allowance for bad debts Carrying value
Percentage of
Amount Percentage (%) Amount provision (%)
Account receivables subject to
provision for bad debts on
a separate basis 221,698,047.42 0.91 219,394,075.36 98.96 2,303,972.06
Account receivables subject to
provision for bad debts on
a collective basis 24,122,353,616.38 99.09 606,811,743.60 2.52 23,515,541,872.78
Total 24,344,051,663.80 100.00 826,205,818.96 3.39 23,517,845,844.84
(continued)
Opening balance
Categories Book balance Allowance for bad debts Carrying value
Percentage of
Amount Percentage (%) Amount provision (%)
Account receivables subject to
provision for bad debts on
a separate basis 866,424,078.12 4.00 864,112,221.06 99.73 2,311,857.06
Account receivables subject to
provision for bad debts on
a collective basis 20,810,075,285.94 96.00 544,287,706.57 2.62 20,265,787,579.37
Total 21,676,499,364.06 100.00 1,408,399,927.63 6.50 20,268,099,436.43
Haier Smart Home Co., Ltd. Interim Report 2024 161
Section X Financial Report
Account receivables subject to provision for bad debts on a separate basis at the end of
the period
Closing balance Reason for provision
Allowance for Percentage of
Name Book balance bad debts provision (%)
18 customers in total 221,698,047.42 219,394,075.36 98.96 The obligors were in
significant financial
difficulty
Total 221,698,047.42 219,394,075.36 98.96
The account receivables of significant individual amount and subject to provision for bad
debts on a separate basis at the end of the period was RMB194,230,825.82 (amount at the
beginning of the period: RMB726,379,640.82).
Account receivables subject to provision for bad debts on a collective basis
√ Applicable Not Applicable
Aging Closing balance
Allowance for Percentage of
Book balance bad debts provision (%)
Within 1 year 23,262,294,162.61 347,867,075.57 1.50
1–2 years 474,702,996.79 70,523,143.57 14.86
2–3 years 205,692,123.90 67,458,532.08 32.80
Over 3 years 179,664,333.08 120,962,992.38 67.33
Total 24,122,353,616.38 606,811,743.60 2.52
(continued)
Aging Opening balance
Allowance for Percentage of
Book balance bad debts provision (%)
Within 1 year 19,975,992,567.68 288,934,773.72 1.45
1–2 years 463,149,665.27 61,273,338.92 13.23
2–3 years 193,271,661.47 72,699,318.58 37.62
Over 3 years 177,661,391.52 121,380,275.35 68.32
Total 20,810,075,285.94 544,287,706.57 2.62
162 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Changes in allowance for bad debts of accounts receivable in the current period:
Opening Increase for Decrease for Closing
Items balance the current period the current period balance
Provision for
the current Other Write-off/other
period movement Reversal movement
Allowance for bad debts 1,408,399,927.63 298,811,112.15 171,528,368.68 709,476,852.14 826,205,818.96
The aggregate amount of the top 5 account receivables and contract assets as at the end
of the period was RMB6,877,703,781.22 (amount at the beginning of the period:
RMB5,525,018,986.65), accounting for 27.83% (at the beginning of the period: 25.11%) of
the book balance of account receivables and contract assets, and the amount of provision
for bad debts was RMB99,835,429.46 (amount at the beginning of the period:
RMB604,983,462.26)
Actual write-off of accounts receivable in the current period
The amount of accounts receivable actually written off in the current period was
RMB708,946,193.17 (amount for the corresponding period: RMB22,054,320.92) and the
amount of significant bad debt write-off of accounts receivable was RMB532,621,082.38.
The Company’s accounts receivable that were terminated due to the transfer of financial
assets in the current period
The amount of accounts receivable that the company terminated at the end of the period
due to the transfer of financial assets was RMB6,793,789,373.81 (amount at the beginning
of the period: RMB6,411,839,897.28) and the transfer method was outright sale factoring/
asset securitization.
Restricted accounts receivable in the current period
The amount of accounts receivable restricted at the end of the period is RMB0.00 (amount
at the beginning of the period: RMB1,255,120.80).
Haier Smart Home Co., Ltd. Interim Report 2024 163
Section X Financial Report
6. Prepayments
(1) Prepayments are presented by aging:
√ Applicable Not Applicable
Unit and Currency: RMB
Aging Closing balance Opening balance
Amount Percentage (%) Amount Percentage (%)
Within 1 year 977,977,335.64 94.48 1,163,325,306.16 93.95
1 to 2 years 20,037,401.91 1.94 56,449,865.29 4.56
2 to 3 years 25,969,921.60 2.51 7,104,895.06 0.57
Over 3 years 11,031,155.99 1.07 11,414,864.00 0.92
Total 1,035,015,815.14 100.00 1,238,294,930.51 100.00
(2) The total amount of the top 5 in the prepayments at the end of the period was
RMB101,422,120.85, accounting for 9.80% of the book balance of prepayment (amount at
the beginning of the period: RMB214,815,987.16, accounting for 17.35%).
(3) There was no significant prepayment aged over 1 year at the end of the period.
7. Other receivables
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Interest receivable 676,041,225.16 748,496,020.24
Other receivables 2,055,228,939.51 1,901,062,964.81
Total 2,731,270,164.67 2,649,558,985.05
164 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Interest receivable
Aging Closing balance Opening balance
Within 1 year 406,049,565.86 473,678,991.02
1–2 years 233,381,098.21 199,801,995.25
2–3 years 29,716,476.71 70,063,170.96
Over 3 years 6,894,084.38 4,951,863.01
Total 676,041,225.16 748,496,020.24
Other receivables
Other receivables are disclosed by aging as follows:
Aging Closing balance Opening balance
Within 1 year 1,438,200,053.99 1,413,423,130.38
1–2 years 95,454,743.11 94,189,862.20
2–3 years 173,417,137.47 204,379,944.75
Over 3 years 360,056,535.77 277,554,421.44
Balance of other receivables 2,067,128,470.34 1,989,547,358.77
Allowance for bad debts 11,899,530.83 88,484,393.96
Other receivables, net 2,055,228,939.51 1,901,062,964.81
Provision of allowance for bad debts based on the general model of expected credit losses
Allowance for bad debts Stage 1 Stage 2 Stage 3 Total
Expected credit Lifetime expected Lifetime expected
losses for the credit losses (not credit losses
coming 12 months credit-impaired) (credit-impaired)
Opening balance 86,830,880.96 1,653,513.00 88,484,393.96
Provision for the current period 2,257,848.98 2,257,848.98
Reversal for the current period 70,866,640.72 70,866,640.72
Write-off and others for
the current period 7,976,071.39 7,976,071.39
Closing balance 10,246,017.83 1,653,513.00 11,899,530.83
Haier Smart Home Co., Ltd. Interim Report 2024 165
Section X Financial Report
Changes in allowance for bad debt provision of other receivables in the current period
Opening Increase for Decrease for Closing
Items balance the current period the current period balance
Provision for
the current Other Write-off/other
period movement Reversal movement
Allowance for bad debts 88,484,393.96 2,257,848.98 70,866,640.72 7,976,071.39 11,899,530.83
The total amount of the top 5 other receivables at the end of the period was
RMB792,676,892.42 (amount at the beginning of the period: RMB671,641,747.67),
accounting for 38.35% of the book balance of other receivables (at the beginning of the
period: 33.76%), and the amount of provision for bad debts was RMB0.00 (amount at the
beginning of the period: RMB3,359,976.38).
Other receivables written off during the period
The amount of other receivables actually written off in the current period was
RMB8,107,151.46 (amount for the corresponding period: RMB18,910,375.10) and no
significant other receivables were written off for bad debts.
Other receivables mainly included deposits, quality guarantees, employee loans, tax refunds,
and advance payments, etc.
8. Inventories
(1) Details of inventories
Items Closing Balance
Impairment
provision of
Book balance inventories Carrying value
Raw materials 5,329,334,853.31 193,489,094.61 5,135,845,758.70
Work in progress 117,170,940.39 117,170,940.39
Finished goods 35,456,614,754.56 1,256,016,991.55 34,200,597,763.01
Total 40,903,120,548.26 1,449,506,086.16 39,453,614,462.10
166 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(Continue)
Items Opening Balance
Impairment
provision of
Book balance inventories Carrying value
Raw materials 5,873,703,173.53 208,533,811.42 5,665,169,362.11
Work in progress 47,535,985.86 47,535,985.86
Finished goods 35,084,012,597.82 1,272,711,329.46 33,811,301,268.36
Total 41,005,251,757.21 1,481,245,140.88 39,524,006,616.33
(2) Impairment provision of inventories
Opening Increase for Decrease for Closing
Items balance the current period the current period balance
Provision for
the current Other Write-off/other
period movement Reversal movement
Raw materials 208,533,811.42 20,952,230.34 35,996,947.15 193,489,094.61
Work in progress
Finished goods 1,272,711,329.46 468,990,442.48 57,902,504.89 427,782,275.50 1,256,016,991.55
Total 1,481,245,140.88 489,942,672.82 57,902,504.89 463,779,222.65 1,449,506,086.16
(3) Details of impairment provision of inventories are as follows
√ Applicable Not Applicable
Specific basis for Reason for reversing or
determining net writing off the impairment
Items realizable value provision of inventories
Raw materials Measurement at the lower Production, use or sales
of cost and net realizable
value
Finished goods Measurement at the lower sales
of cost and net realizable
value
Haier Smart Home Co., Ltd. Interim Report 2024 167
Section X Financial Report
9. Contract assets
(1) Details
Items Closing Balance Opening Balance
Impairment Impairment
Book balance provision Carrying Value Book balance provision Carrying Value
Relating to construction
service contract 366,244,018.29 65,435,412.33 300,808,605.96 327,870,850.30 66,931,441.57 260,939,408.73
Total 366,244,018.29 65,435,412.33 300,808,605.96 327,870,850.30 66,931,441.57 260,939,408.73
(2) Classification by method of provision for bad debts
Categories Closing balance
Book balance Allowance for bad debts Carrying value
Percentage of
Amount Percentage (%) Amount provision (%)
Contract assets subject to
provision for bad debts on
a separate basis 56,845,712.92 15.52 56,845,712.92 100.00
Contract assets subject to
provision for bad debts on
a collective basis 309,398,305.37 84.48 8,589,699.41 2.78 300,808,605.96
Total 366,244,018.29 100.00 65,435,412.33 17.87 300,808,605.96
(Continue)
Categories Opening balance
Book balance Allowance for bad debts Carrying value
Percentage of
Amount Percentage (%) Amount provision (%)
Contract assets subject to
provision for bad debts on a
separate basis 58,419,039.53 17.82 58,419,039.53 100.00
Contract assets subject to
provision for bad debts on a
collective basis 269,451,810.77 82.18 8,512,402.04 3.16 260,939,408.73
Total 327,870,850.30 100.00 66,931,441.57 20.41 260,939,408.73
168 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(3) Contract assets subject to provision for bad debts on a separate basis at the end
of the period
Closing balance Reason for provision
Allowance for Percentage of
Name Book balance bad debts provision (%)
23 customers in total 56,845,712.92 56,845,712.92 100.00 The obligors were in
significant financial
difficulty
Total 56,845,712.92 56,845,712.92 100.00
(4) Contract assets subject to provision for bad debts on a collective basis at the end
of the period
Name Closing balance
Allowance for Percentage of
Book balance bad debts provision (%)
Relating to construction
service contract 309,398,305.37 8,589,699.41 2.78
Total 309,398,305.37 8,589,699.41 2.78
(5) Provision for bad debts on contract assets during the current period
Opening Increase for Decrease for Closing
Items balance the current period the current period balance
Provision for
the current Other Write-off/other
period movement Reversal movement
Relating to construction
service contract 66,931,441.57 211,715.92 1,707,745.16 65,435,412.33
Total 66,931,441.57 211,715.92 1,707,745.16 65,435,412.33
Haier Smart Home Co., Ltd. Interim Report 2024 169
Section X Financial Report
10. Other current assets
(1) Details
Items Closing Balance Opening Balance
Impairment Impairment
Book balance provision Book balance provision
Bank deposit for wealth management
products 1,546,781,584.31 1,530,274,566.66
Deductible taxes 2,606,160,831.54 2,610,660,645.55
Returns cost receivables 547,495,494.30 280,012,125.83 670,702,791.81 325,055,055.98
Others 51,635,542.77 63,584,720.64
Total 4,752,073,452.92 280,012,125.83 4,875,222,724.66 325,055,055.98
(2) Impairment provision
Opening Increase for Decrease for Closing
Items balance the current period the current period balance
Provision for
the current Other Write-off/other
period movement Reversal movement
Returns cost receivables 325,055,055.98 280,012,125.83 325,055,055.98 280,012,125.83
Total 325,055,055.98 280,012,125.83 325,055,055.98 280,012,125.83
11. Debt investments
Items Closing balance Opening balance
Principal Interest Principal Interest
Time deposit — long term 14,127,500,000.00 350,121,780.97 8,677,500,000.00 163,733,078.66
Total 14,127,500,000.00 350,121,780.97 8,677,500,000.00 163,733,078.66
Include: time deposit in
Finance Company 12,827,500,000.00 250,519,003.19 7,377,500,000.00 86,374,745.33
170 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
12. Long-term equity investments
√ Applicable Not Applicable
Investees Increase/decrease for the current period
Adjustment
Investment income in other Declaration of
Investment recognized under comprehensive Other changes cash dividends or
Opening balance increase equity method income in equity profits
Associate
Haier Group Finance Co., Ltd. 7,910,945,697.72 284,445,655.26 7,236.34 –235,200,000.00
Bank of Qingdao Co., Ltd. 3,200,132,708.75 216,344,921.59 97,105,713.92 –76,288,947.20
Wolong Electric (Jinan) Motor Co., Ltd. 177,662,547.04 13,280,662.39
Qingdao Hegang New Material
Technology Co., Ltd. 329,713,566.36 9,652,558.36
Qingdao Haier SAIF Smart Home
Industry Investment Center (Limited
Partnership) 206,764,442.76 –21,738.71 –16,336,866.36
Mitsubishi Heavy Industries Haier
(Qingdao) Air-conditioners Co., Ltd. 663,804,966.31 67,634,912.51
Qingdao Haier Carrier Refrigeration
Equipment Co., Ltd. 412,107,471.53 3,970,476.69
Qingdao Haier Multimedia Co., Ltd. 88,300,000.00
Baoshihua Tong Fang Energy
Technology Co., Ltd. (寶
) 30,326,966.78
Zhengzhou Highly Electric Appliance
Co., Ltd. (鄭州海立電器有限公司) 98,000,000.00 –967,219.23
Zhejiang Futeng Fluid Technology
Co., Ltd. 77,584,161.99
Hongtong Environmental Technology
(Guangzhou) Co., Ltd. (宏通環境技
術（廣州）有限公司) 4,265,965.73 3,000,000.00
Beijing ASU Tech Co., Ltd. 7,919,009.51 –7,919,009.51
Qingdao Haimu Investment
Management Co., Ltd. 2,609,456.57
Qingdao Haimu Smart Home
Investment Partnership (Limited
Partnership) 57,989,007.18
Haineng Wanjia (Shanghai) Technology
Development Co., Ltd. 606,029.71
Qingdao Guochuang Intelligent Home
Appliance Research Institute Co.,
Ltd. 38,574,227.53 509,880.04
Guangzhou Heying Investment
Partnership (Limited Partnership) 194,416,881.32 –31,115,000.00 –12,332,141.88
Qingdao Home Wow Cloud Network
Technology Co., Ltd. 2,192,669.49 589,125.62
Bingji (Shanghai) Corporate
Management Co., Ltd. 1,056,245,062.87 21,313,549.13 –4,463,430.14
Youjin (Shanghai) Corporate
Management Co., Ltd. 1,919,627,387.02 38,751,907.50 –8,115,327.52
RRS (Shanghai) Investment Co., Ltd. 3,489,413,430.96 70,458,013.65 –14,755,140.96
Haier Best Water Technology Co., Ltd. 148,369,638.40 2,411,395.16
Haier Smart Home Co., Ltd. Interim Report 2024 171
Section X Financial Report
Investees Increase/decrease for the current period
Adjustment
Investment income in other Declaration of
Investment recognized under comprehensive Other changes cash dividends or
Opening balance increase equity method income in equity profits
Huizhixiangshun Equity Investment Fund
(Qingdao) Partnership (Limited
Partnership) 238,175,637.03 –24,420,938.73 –12,258,842.15
Qingdao Ririshun Huizhi Investment Co.,
Ltd. 4,083,482.78
Qingdao Xiaoshuai Intelligent
Technology Co., Ltd 6,107,497.56
Qingdao Xinshenghui Technology Co.,
Ltd. 10,005,915.15 379,127.39
Ningbo Beilian Intelligent Technology
Co., Ltd. (寧波貝
) 3,500,000.00
OryginLLC 22,296,931.04 –22,296,931.04
Konan Electronic Co., Ltd. 64,378,952.07 481,688.34 –7,066,692.84 –211,500.00
HNR (Private) Company Limited 111,225,806.51 25,463,571.12 –2,367,152.22
HPZ LIMITED 3,483,576.50 –17,611,035.52 9,801,134.65
Controladora Mabe S.A.de C.V. 5,078,418,321.53 291,024,911.07 –63,639,273.43 –39,311,484.05 –78,031,404.17
Middle East Airconditioning Company,
Limited 7,299,166.60 –46,540.21 50,373.87
Total 25,656,939,084.74 –71,332,869.77 1,026,254,310.20 21,632,498.14 –78,977,524.55 –406,068,717.73
(Continued)
Closing balance of
Investees Increase/decrease for the current period Closing balance impairment provision
The disposal of
Other movement the investment
Associate
Haier Group Finance Co., Ltd. 7,960,198,589.32
Bank of Qingdao Co., Ltd. 3,437,294,397.06
Wolong Electric (Jinan) Motor Co., Ltd. 190,943,209.43
Qingdao Hegang New Material
Technology Co., Ltd. 339,366,124.72
Qingdao Haier SAIF Smart Home
Industry Investment Center (Limited
Partnership) 190,405,837.69
Mitsubishi Heavy Industries Haier
(Qingdao) Air-conditioners Co., Ltd. 731,439,878.82
Qingdao Haier Carrier Refrigeration
Equipment Co., Ltd. 416,077,948.22 –21,000,000.00
Qingdao Haier Multimedia Co., Ltd. 88,300,000.00 –88,300,000.00
Baoshihua Tong Fang Energy
Technology Co., Ltd. (寶
) 30,326,966.78
Zhengzhou Highly Electric Appliance
Co., Ltd. (鄭州海立電器有限公司) 97,032,780.77
172 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Closing balance of
Investees Increase/decrease for the current period Closing balance impairment provision
The disposal of
Other movement the investment
Zhejiang Futeng Fluid Technology
Co., Ltd. 77,584,161.99
Hongtong Environmental Technology
(Guangzhou) Co., Ltd. (宏通環境
技術 廣州 有限公司) 7,265,965.73
Beijing ASU Tech Co., Ltd.
Qingdao Haimu Investment
Management Co., Ltd. 2,609,456.57
Qingdao Haimu Smart Home Investment
Partnership (Limited Partnership) 57,989,007.18
Haineng Wanjia (Shanghai) Technology
Development Co., Ltd. 606,029.71
Qingdao Guochuang Intelligent Home
Appliance Research Institute Co.,
Ltd. 39,084,107.57
Guangzhou Heying Investment
Partnership (Limited Partnership) 150,969,739.44
Qingdao Home Wow Cloud Network
Technology Co., Ltd. 2,781,795.11
Bingji (Shanghai) Corporate
Management Co., Ltd. 1,073,095,181.86
Youjin (Shanghai) Corporate
Management Co., Ltd. 1,950,263,967.00
RRS (Shanghai) Investment Co., Ltd. 3,545,116,303.65
Haier Best Water Technology Co., Ltd. 150,781,033.56
Huizhixiangshun Equity Investment Fund
(Qingdao) Partnership (Limited
Partnership) 201,495,856.15
Qingdao Ririshun Huizhi Investment Co.,
Ltd. 4,083,482.78
Qingdao Xiaoshuai Intelligent
Technology Co., Ltd 6,107,497.56
Qingdao Xinshenghui Technology Co.,
Ltd. 10,385,042.54
Ningbo Beilian Intelligent Technology
Co., Ltd. (寧波貝立安智能科技有限
公司) 3,500,000.00
OryginLLC
Konan Electronic Co., Ltd. 57,582,447.57
HNR (Private) Company Limited 134,322,225.41
HPZ LIMITED –4,326,324.37
Controladora Mabe S.A.de C.V. 5,188,461,070.95
Middle East Airconditioning Company,
Limited 7,303,000.26 –845,634.54
Total 26,148,446,781.03 –110,145,634.54
Haier Smart Home Co., Ltd. Interim Report 2024 173
Section X Financial Report
13. Investments in other equity instruments
(1) Details of investments in other equity instruments at the end of the period:
Items Closing balance Opening balance
SINOPEC Fuel Oil Sales Corporation Limited 1,860,840,776.61 1,986,156,165.17
Haier COSMO IOT Ecosystem Technology
Co., Ltd. 2,817,408,000.00 2,817,408,000.00
Others 1,603,565,589.92 1,600,130,789.60
Total 6,281,814,366.53 6,403,694,954.77
(2) Dividends from investment in other equity instruments during the current period:
Amount for
Items the current period
Others 2,996,902.10
Total 2,996,902.10
14. Investment properties
(1) The changes in investment properties measured at cost this year are as follows:
Houses and
Items buildings Land use rights Total
I. Original book value
1. Opening balance 93,701,271.11 29,370,397.68 123,071,668.79
2. Increase for the current period
(1) External acquisition
(2) Inventories/fixed assets/
construction in progress
transferred in
(3) Increase from business
combinations
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiaries
(3) Other transferring out 24,662,790.64 24,662,790.64
4. Change in foreign exchange rate
and others 61,273.04 61,273.04
5. Closing balance 69,099,753.51 29,370,397.68 98,470,151.19
II. Accumulated depreciation and
accumulated amortization
1. Opening balance 21,095,536.78 3,345,051.24 24,440,588.02
2. Increase for the current period
(1) Provision or amortization 1,792,249.81 292,591.07 2,084,840.88
174 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Houses and
Items buildings Land use rights Total
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiaries
(3) Other transferring out 8,303,139.51 8,303,139.51
4. Change in foreign exchange rate
and others 20,015.86 20,015.86
5. Closing balance 14,604,662.94 3,637,642.31 18,242,305.25
III. Provision for impairment
1. Opening balance
2. Increase for the current period
(1) Provision
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiaries
(3) Other transferring out
4. Change in foreign exchange rate
and others
5. Closing balance
IV. Book value
1. Closing book value 54,495,090.57 25,732,755.37 80,227,845.94
2. Opening book value 72,605,734.33 26,025,346.44 98,631,080.77
(2) The depreciation and amortization amount charge for the period is RMB2,084,840.88 (amount
for the corresponding period: RMB2,321,067.31).
(3) The recoverable amount of the investment real estate of the Company at the end of the
period is not less than its book value, so no provision for impairment is made.
Haier Smart Home Co., Ltd. Interim Report 2024 175
Section X Financial Report
15. Fixed assets
Overall presentation
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Fixed assets 29,686,001,800.40 29,603,936,822.78
Disposals of fixed assets
Total 29,686,001,800.40 29,603,936,822.78
(1) Fixed assets:
Houses and Production Transportation
Items buildings equipment equipment
I. Original book value:
1. Opening balance 15,782,051,556.42 35,404,871,324.48 207,612,314.20
2. Increase for the current period
(1) Acquisition 20,403,115.68 596,411,958.14 6,410,565.37
(2) Construction in progress
transferred in 449,535,662.98 1,231,604,775.63 3,008,176.55
(3) Investment properties
transferred in 24,662,790.64
3. Decrease for the current period
(1) Disposal or write-off 37,840,098.76 340,301,783.30 8,914,483.39
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others –126,847,759.21 –183,858,083.36 164,929.84
5. Closing balance 16,111,965,267.75 36,708,728,191.59 208,281,502.57
II. Accumulated depreciation
1. Opening balance 5,225,383,605.10 18,211,114,029.39 133,831,896.28
2. Increase for the current period
(1) Provision 476,420,594.35 1,441,889,998.82 10,372,122.39
(2) Investment properties
transferred in 8,303,139.51
3. Decrease for the current period
(1) Disposal or write-off 12,765,127.66 266,612,990.36 4,041,959.20
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others –106,266,071.42 24,345,705.71 225,747.64
5. Closing balance 5,591,076,139.88 19,410,736,743.56 140,387,807.11
176 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Houses and Production Transportation
Items buildings equipment equipment
III. Provision for impairment
1. Opening balance 27,599,976.42 17,285,684.25 108,327.40
2. Increase for the current period
(1) Provision
(2) Investment properties
transferred in
3. Decrease for the current period
(1) Disposal or write-off 143,030.07
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others –2,712,441.38 –809,005.35 –4,290.81
5. Closing balance 24,887,535.04 16,333,648.83 104,036.59
IV. Book value
1. Closing book value 10,496,001,592.83 17,281,657,799.20 67,789,658.87
2. Opening book value 10,529,067,974.90 17,176,471,610.84 73,672,090.52
(Continue)
Items Office furniture Others Total
I. Original book value:
1. Opening balance 1,530,251,945.38 3,194,185,544.98 56,118,972,685.46
2. Increase for the current period
(1) Acquisition 44,606,780.57 4,262,875.30 672,095,295.06
(2) Construction in progress
transferred in 91,579,726.54 180,305,551.64 1,956,033,893.34
(3) Investment properties
transferred in 24,662,790.64
3. Decrease for the current period
(1) Disposal or write-off 20,503,156.91 24,263,971.81 431,823,494.17
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others –521,725.19 –75,030,268.46 –386,092,906.38
5. Closing balance 1,645,413,570.39 3,279,459,731.65 57,953,848,263.95
II. Accumulated depreciation
1. Opening Balance 952,669,982.96 1,944,534,313.09 26,467,533,826.82
2. Increase for the current period
(1) Provision 97,377,419.28 149,210,217.94 2,175,270,352.78
(2) Investment properties
transferred in 8,303,139.51
3. Decrease for the current period
(1) Disposal or write-off 14,356,240.56 21,693,376.37 319,469,694.15
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others 3,690,397.44 –29,545,614.14 –107,549,834.77
5. Closing Balance 1,039,381,559.12 2,042,505,540.52 28,224,087,790.19
Haier Smart Home Co., Ltd. Interim Report 2024 177
Section X Financial Report
Items Office furniture Others Total
III. Provision for impairment
1. Opening balance 237,957.13 2,270,090.66 47,502,035.86
2. Increase for the current period
(1) Provision
(2) Investment properties
transferred in
3. Decrease for the current period
(1) Disposal or write-off 143,030.07
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate
and others –24,206.02 –50,388.87 –3,600,332.43
5. Closing balance 213,751.11 2,219,701.79 43,758,673.36
IV. Book value
1. Closing book value 605,818,260.16 1,234,734,489.34 29,686,001,800.40
2. Opening book value 577,344,005.29 1,247,381,141.23 29,603,936,822.78
(2) In the current period, the balance of the construction in progress transferred to the original
value of the fixed assets in a total of RMB1,956,033,893.34 (amount for the corresponding
period: RMB1,387,520,685.77).
(3) As at 30 June 2024, the net book value of the buildings for which the Company has not yet
obtained certificates of title was RMB414 million (amount at the beginning of the period
RMB408 million), and the relevant certificates of title were being processed. The Company
can legally and effectively occupy and operate the above-mentioned buildings for which no
certificates of title have been obtained.
(4) There was no mortgage secured by the fixed assets mortgage at the end of the period, and
there was no mortgage secured by the fixed assets mortgage at the beginning of the
period.
178 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
16. Construction in progress
Overall presentation
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing Balance Opening Balance
Construction in progress 5,787,636,237.75 5,403,469,596.76
Construction materials
Total 5,787,636,237.75 5,403,469,596.76
(1). Construction in progress
√ Applicable Not Applicable
Unit and Currency: RMB
Projects Closing Balance Opening Balance
Impairment Impairment
Book balance Provision Book Value Book balance provision Book Value
Qingdao Refrigeration
Appliance Project 1,144,431,868.01 1,144,431,868.01 914,078,742.21 914,078,742.21
Qingdao Water Ecology
Technology Project 680,458,113.00 680,458,113.00 529,949,339.20 529,949,339.20
Qingdao HVAC Project 583,797,673.00 583,797,673.00 530,979,038.43 530,979,038.43
Europe Candy Project 312,838,404.74 312,838,404.74 1,092,171,521.23 1,092,171,521.23
Eastern European Project 265,757,422.97 265,757,422.97 148,106,777.45 148,106,777.45
America GE Appliances
Project 245,382,044.33 22,763,106.10 222,618,938.23 343,482,203.73 22,622,250.04 320,859,953.69
New Zealand FPA Project 196,161,623.39 196,161,623.39 200,943,871.90 200,943,871.90
Haier Egypt Project 157,012,758.09 157,012,758.09 42,756,778.70 42,756,778.70
Zhengzhou New Energy
Project 149,700,260.33 149,700,260.33 104,122,098.62 104,122,098.62
Haier Thailand Project 125,633,149.71 125,633,149.71
Zhengzhou Air
Conditioner Project 112,880,240.39 112,880,240.39 66,251,489.90 66,251,489.90
Qingdao Air Conditioning
Electronics Project 104,836,279.92 104,836,279.92 135,966,703.60 135,966,703.60
Qingdao Smart
Appliances Project 96,420,595.82 96,420,595.82 78,218,772.30 78,218,772.30
Qingdao Air Conditioner
Project 92,656,794.14 92,656,794.14 73,270,568.99 73,270,568.99
Haier India Project 88,690,748.06 88,690,748.06 44,279,538.79 44,279,538.79
Qingdao New Energy
Appliance Project 71,093,934.21 71,093,934.21 49,653,130.31 49,653,130.31
Foshan Freezer Project 50,999,381.03 50,999,381.03 67,104,763.68 67,104,763.68
Others 1,332,739,757.41 1,091,704.70 1,331,648,052.71 1,005,853,596.36 1,097,088.60 1,004,756,507.76
Total 5,811,491,048.55 23,854,810.80 5,787,636,237.75 5,427,188,935.40 23,719,338.64 5,403,469,596.76
Haier Smart Home Co., Ltd. Interim Report 2024 179
Section X Financial Report
(2). Details of changes of significant construction in progress for the current period
Change in
foreign
Opening Increase for the Transfer to fixed exchange rate
Project name balance current period assets Other decrease and others Closing balance Source of fund
Qingdao Refrigeration Appliance Project 914,078,742.21 293,812,998.43 63,459,872.63 1,144,431,868.01 Self-funding
Qingdao Water Ecology Technology
Project 529,949,339.20 152,338,331.32 1,829,557.52 680,458,113.00 Self-funding
Qingdao HVAC Project 530,979,038.43 52,818,634.57 583,797,673.00 Self-funding
Europe Candy Project 1,092,171,521.23 49,276,448.43 888,438,590.06 59,829,025.14 312,838,404.74 Self-funding
Eastern European Project 148,106,777.45 142,311,833.75 34,659,368.42 9,998,180.19 265,757,422.97 Self-funding
America GE Appliances Project 343,482,203.73 164,979,590.52 264,885,275.10 1,805,525.18 245,382,044.33 Self-funding
New Zealand FPA Project 200,943,871.90 97,832,818.48 96,919,807.86 –5,695,259.13 196,161,623.39 Self-funding
Haier Egypt Project 42,756,778.70 153,322,026.59 797,603.15 –38,268,444.05 157,012,758.09 Self-funding
Zhengzhou New Energy Project 104,122,098.62 52,975,298.79 7,397,137.08 149,700,260.33 Self-funding
Haier Thailand Project 127,306,542.07 –1,673,392.36 125,633,149.71 Self-funding
Zhengzhou Air Conditioner Project 66,251,489.90 56,713,591.86 10,084,841.37 112,880,240.39 Self-funding
Qingdao Air Conditioning Electronics
Project 135,966,703.60 12,257,679.98 43,388,103.66 104,836,279.92 Self-funding
Qingdao Smart Appliances Project 78,218,772.30 26,858,128.31 8,656,304.79 96,420,595.82 Self-funding
Qingdao Air Conditioner Project 73,270,568.99 25,611,813.66 6,225,588.51 92,656,794.14 Self-funding
Haier India Project 44,279,538.79 71,257,113.39 28,632,857.91 1,786,953.79 88,690,748.06 Self-funding
Qingdao New Energy Appliance Project 49,653,130.31 41,834,327.28 20,393,523.38 71,093,934.21 Self-funding
Foshan Freezer Project 67,104,763.68 16,064,201.88 32,169,584.53 50,999,381.03 Self-funding
Others 1,005,853,596.36 783,668,471.30 448,095,877.37 –8,686,432.88 1,332,739,757.41 Self-funding
Total 5,427,188,935.40 2,321,239,850.61 1,956,033,893.34 19,096,155.88 5,811,491,048.55
(3). Impairment provision of construction in progress
Change in
Increase for foreign
Opening the current Transfer to Other exchange rate Closing
Project name balance period fixed assets decrease and others balance
America GE Appliances Project 22,622,250.04 140,856.06 22,763,106.10
Lejia IOT Project 837,735.85 837,735.85
Others 259,352.75 –5,383.90 253,968.85
Total 23,719,338.64 135,472.16 23,854,810.80
180 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
17. Right-of-use assets
Houses and Production Transportation
Items buildings equipment equipment
I. Original book value:
1. Opening balance 4,968,907,125.70 299,098,804.72 269,881,858.76
2. Increase for the current period
(1) Acquisition 1,030,726,489.27 1,870,863.80 49,265,313.93
(2) Increase from business
combinations
3. Decrease for the current period
(1) Disposal 284,781,596.25 6,584,068.87 34,576,962.16
(2) Disposal of subsidiaries
4. Change in foreign exchange rate and
others –20,356,010.46 6,935,927.93 –11,299,492.77
5. Closing balance 5,694,496,008.26 301,321,527.58 273,270,717.76
II. Accumulated depreciation
1. Opening balance 1,705,273,889.25 37,168,018.05 130,842,447.28
2. Increase for the current period
(1) Provision 423,442,479.04 2,831,001.42 40,563,978.40
(2) Increase from business
combinations
3. Decrease for the current period
(1) Disposal 120,395,083.40 6,263,622.69 33,912,771.22
(2) Disposal of subsidiaries
4. Change in foreign exchange rate and
others –20,567,528.19 4,153,159.35 –11,664,110.78
5. Closing balance 1,987,753,756.70 37,888,556.13 125,829,543.68
III. Impairment provision
1. Opening balance
2. Increase for the current period
(1) Provision
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiaries
4. Change in foreign exchange rate and
others
5. Closing balance
IV. Book Value
1. Closing book balance 3,706,742,251.56 263,432,971.45 147,441,174.08
2. Opening book balance 3,263,633,236.45 261,930,786.67 139,039,411.48
Haier Smart Home Co., Ltd. Interim Report 2024 181
Section X Financial Report
(continued)
Items Office furniture Other Total
I. Original book value:
1. Opening balance 415,131,711.53 539,051,832.40 6,492,071,333.11
2. Increase for the current period
(1) Acquisition 8,817,215.77 18,943,952.38 1,109,623,835.15
(2) Increase from business
combinations
3. Decrease for the current period
(1) Disposal 2,637,818.98 4,534,722.41 333,115,168.67
(2) Disposal of subsidiaries
4. Change in foreign exchange rate and
others –1,004,943.21 3,373,644.68 –22,350,873.83
5. Closing balance 420,306,165.11 556,834,707.05 7,246,229,125.76
II. Accumulated depreciation
1. Opening balance 50,526,926.52 201,178,372.27 2,124,989,653.37
2. Increase for the current period
(1) Provision 21,366,174.62 52,787,409.89 540,991,043.37
(2) Increase from business
combinations
3. Decrease for the current period
(1) Disposal 2,637,818.98 4,534,720.74 167,744,017.03
(2) Disposal of subsidiaries
4. Change in foreign exchange rate and
others –40,560,815.93 1,394,039.17 –67,245,256.38
5. Closing balance 28,694,466.23 250,825,100.59 2,430,991,423.33
III. Impairment provision
1. Opening balance
2. Increase for the current period
(1) Provision
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiaries
4. Change in foreign exchange rate and
others
5. Closing balance
IV. Book Value
1. Closing book balance 391,611,698.88 306,009,606.46 4,815,237,702.43
2. Opening book balance 364,604,785.01 337,873,460.13 4,367,081,679.74
182 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
18. Intangible assets
√ Applicable Not Applicable
Proprietary Licenses and
Items technology franchises Land use rights
I. Original book value
1. Opening balance 2,212,581,138.65 4,953,866,789.43 2,192,021,758.06
2. Increase for the current period
(1) Acquisition 19,663,961.53 37,601,220.15
(2) Internal research and development 63,387,616.91
(3) Increase from business
combinations
3. Decrease for the current period
(1) Disposal 5,896,312.91 1,176,803.55
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others –30,878,532.49 9,565,834.00 –8,179,089.63
5. Closing balance 2,245,090,223.07 4,977,200,272.05 2,220,267,085.03
II. Accumulated amortization
1. Opening balance 1,399,798,673.12 1,201,643,295.60 286,482,786.35
2. Increase for the current period
(1) Provision 98,191,433.59 93,810,930.59 21,391,716.61
(2) Increase from business
combinations
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others –15,211,949.29 –3,958,494.36 –274,736.52
5. Closing balance 1,482,778,157.42 1,291,495,731.83 307,599,766.44
III. Impairment provision
1. Opening balance 66,630,354.13
2. Increase for the current period
(1) Provision
(2) Increase from business
combinations
3. Decrease for the current period
(1) Disposal
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others 399,642.46
5. Closing balance 67,029,996.59
IV. Book Value
1. Closing book balance 762,312,065.65 3,618,674,543.63 1,912,667,318.59
2. Opening book balance 812,782,465.53 3,685,593,139.70 1,905,538,971.71
Haier Smart Home Co., Ltd. Interim Report 2024 183
Section X Financial Report
(continued)
Application
management
Items Trademark rights software and others Total
I. Original book value
1. Opening balance 2,688,191,056.20 6,020,210,159.55 18,066,870,901.89
2. Increase for the current period
(1) Acquisition 198,833,390.09 256,098,571.77
(2) Internal research and development 227,451,211.04 290,838,827.95
(3) Increase from business
combinations
3. Decrease for the current period
(1) Disposal 1,813,838.25 8,886,954.71
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others –44,897,220.05 –16,574,133.57 –90,963,141.74
5. Closing balance 2,643,293,836.15 6,428,106,788.86 18,513,958,205.16
II. Accumulated amortization
1. Opening balance 4,082,441,425.43 6,970,366,180.50
2. Increase for the current period
(1) Provision 449,211,098.42 662,605,179.21
(2) Increase from business
combinations
3. Decrease for the current period
(1) Disposal 1,743,506.45 1,743,506.45
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others –2,694,079.93 –22,139,260.10
5. Closing balance 4,527,214,937.47 7,609,088,593.16
III. Impairment provision
1. Opening balance 23,643,666.33 90,274,020.46
2. Increase for the current period
(1) Provision
(2) Increase from business
combinations
3. Decrease for the current period
(1) Disposal 58,760.67 58,760.67
(2) Disposal of subsidiaries
(3) Transfer to hold for sale
4. Change in foreign exchange rate and
others 399,642.46
5. Closing balance 23,584,905.66 90,614,902.25
IV. Book Value
1. Closing book balance 2,643,293,836.15 1,877,306,945.73 10,814,254,709.75
2. Opening book balance 2,688,191,056.20 1,914,125,067.79 11,006,230,700.93
At the end of the period, the intangible assets developed through the Company accounted for
the 21.57% of the original value at the end of the period (accounting for 20.52% at the
beginning of the period).
184 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
19. Goodwill
Change in foreign
Increase for the Decrease for the exchange rate
Items Opening balance current period current period and others Closing balance
GE Appliances 21,046,390,260.10 131,779,576.68 21,178,169,836.78
Candy 2,043,391,984.29 –61,974,639.90 1,981,417,344.39
Others 1,199,944,450.41 –17,697,239.23 1,182,247,211.18
Total 24,289,726,694.80 52,107,697.55 24,341,834,392.35
In the case of a goodwill impairment test, the Company compares the carrying amount of the
relevant asset group or asset group combination (including goodwill) with its recoverable amount.
If the recoverable amount is less than the book value, corresponding difference will be
recognized in profit or loss.
The recoverable amount of the asset group (including goodwill) is calculated with discounted
estimated future cash flow method based on a management-approved 5–15 years budget. Future
cash flows beyond the budget period are estimated using the estimated perpetual annual growth
rate. The perpetual annual growth rate (mainly 1%–2%) adopted by the management is
consistent with industry forecast data and does not exceed the long-term average growth rate of
each product. The management determines the compound income growth rate (mainly 2.33%-
5.32%) and the EBITDA profit margin (mainly 0.99%–12.99%) based on historical experience and
market development forecasts, and adopts the pre-tax interest rate that can reflect the specific
risks of the relevant asset group as the discount rate (mainly 12.79% –16.25%). The management
analyzes the recoverable amount of each asset group based on these assumptions and believes
that there is no need to make provision for goodwill.
Haier Smart Home Co., Ltd. Interim Report 2024 185
Section X Financial Report
20. Long-term amortized expenses
Change in
Amortization foreign
Increase for the for the current Other exchange rate
Items Opening balance current period period decrease and others Closing balance
Renovation fees 356,810,041.83 37,345,735.95 184,847,703.89 5,386.49 209,313,460.38
Improvement expenses on leased
plants 131,110,281.13 23,114,811.46 15,900,256.78 52,401.51 138,377,237.32
Others 253,825,194.68 60,374,749.22 33,534,265.36 –271,626.23 280,394,052.31
Total 741,745,517.64 120,835,296.63 234,282,226.03 –213,838.23 628,084,750.01
21. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets before elimination
Items Closing balance Opening balance
Provision for assets impairment 468,620,891.54 472,765,698.56
Liabilities 2,721,127,075.25 2,647,034,061.96
Internal unrealized earnings eliminated due
to combination 454,487,656.99 707,589,929.59
Uncovered losses 229,848,367.84 230,766,537.22
R&D expenses 1,331,535,838.01 1,171,434,607.38
Others 333,163,076.13 293,113,791.04
Total 5,538,782,905.76 5,522,704,625.75
(2) Deferred income tax liabilities before elimination
Items Closing balance Opening balance
Assets amortisation 4,104,846,683.63 4,067,663,051.78
Remeasurement of fair value of the reaming
equity on the day when the control right
was lost 878,623,804.46 878,623,804.46
Changes in fair value of investments in other
equity instruments 306,500,729.55 306,253,762.39
Others 435,592,527.58 492,608,929.16
Total 5,725,563,745.22 5,745,149,547.79
(3) The deferred income tax assets and the deferred income tax liabilities eliminated at the end
of the period was RMB3,756,609,331.72 (amount at the beginning of the period
RMB3,716,758,993.59).
186 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
22. Other non-current assets
Items Closing balance Opening balance
Prepayments for equipment and land 2,082,290,440.87 1,747,355,221.82
Others 281,871,492.31 286,631,723.46
Total 2,364,161,933.18 2,033,986,945.28
23. Short-term borrowings
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Borrowings — secured by pledge 34,094,566.22
Borrowings — secured by credit 10,333,169,856.54 10,284,257,275.66
Total 10,333,169,856.54 10,318,351,841.88
24. Derivative financial liabilities
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Forward foreign exchange contracts 191,751,522.44 166,573,028.22
Forward commodity contracts 2,051,976.75
Total 191,751,522.44 168,625,004.97
25. Bills payable
√ Applicable Not Applicable
Unit and Currency: RMB
Class Closing balance Opening balance
Commercial acceptance notes 5,957,754,473.51 5,234,670,724.72
Bank acceptance notes 17,431,247,278.84 16,981,055,996.90
Total 23,389,001,752.35 22,215,726,721.62
Haier Smart Home Co., Ltd. Interim Report 2024 187
Section X Financial Report
26. Accounts payables
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Accounts payables 47,200,496,446.93 47,061,789,173.62
Total 47,200,496,446.93 47,061,789,173.62
The book balance at the end of the period was mainly the unpaid expenditures on material and
labour. There were no significant accounts payables aged over 1 year at the end of the period.
27. Contractual liabilities
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Contractual liabilities 3,256,026,994.75 7,731,916,491.54
Total 3,256,026,994.75 7,731,916,491.54
The book balance at the end of the period was mainly due to the advance payment that has
been collected and has not yet performed the contractual obligations. There were no significant
contractual liabilities aged over 1 year at the end of the period.
188 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
28. Payables for staff remuneration
(1). Payables for staff remuneration
√ Applicable Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
I. Short-term remuneration 4,914,688,743.78 14,440,923,916.36 15,625,028,496.57 3,730,584,163.57
II. Post-employment
benefits-defined
contribution plan 24,569,154.56 726,835,986.49 712,049,518.47 39,355,622.58
III. Termination benefits 5,252,101.27 31,701,783.64 32,210,246.72 4,743,638.19
IV. Other benefits due within
one year 133,007,828.89 789,084.25 11,719,402.93 122,077,510.21
Total 5,077,517,828.50 15,200,250,770.74 16,381,007,664.69 3,896,760,934.55
(2). Short-term remuneration
√ Applicable Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
I. Salaries, bonus, allowances
and benefit 3,519,406,555.71 10,900,787,570.71 12,065,434,584.24 2,354,759,542.18
II. Employee welfare 348,954,492.00 537,060,949.24 549,265,229.59 336,750,211.65
III. Social benefit 230,280,822.25 908,912,292.51 924,966,809.00 214,226,305.76
IV. Housing fund 8,312,994.56 321,719,307.63 276,013,793.56 54,018,508.63
V. Labor union fee and
education fund 5,506,272.84 68,801,586.56 66,749,249.95 7,558,609.45
VI. Short-term compensated
leave 266,918,130.07 251,214,218.06 254,613,910.65 263,518,437.48
VII. Others 535,309,476.35 1,452,427,991.65 1,487,984,919.58 499,752,548.42
Total 4,914,688,743.78 14,440,923,916.36 15,625,028,496.57 3,730,584,163.57
Haier Smart Home Co., Ltd. Interim Report 2024 189
Section X Financial Report
(3). Defined contribution plan
√ Applicable Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
1. Basic pension insurance 23,204,541.21 673,535,986.28 658,689,910.46 38,050,617.03
2. Unemployment insurance 244,971.49 18,465,278.44 18,619,494.84 90,755.09
3. Enterprise annuity payment 1,119,641.86 34,834,721.77 34,740,113.17 1,214,250.46
Total 24,569,154.56 726,835,986.49 712,049,518.47 39,355,622.58
(4). Termination benefits
Items Closing balance Opening balance
Termination compensation 4,743,638.19 5,252,101.27
Total 4,743,638.19 5,252,101.27
29. Taxes payable
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Value-added tax 1,229,268,479.46 915,234,725.86
Corporate income tax 2,221,803,320.38 1,555,728,849.24
Individual income tax 108,820,681.28 185,154,739.72
City maintenance and construction tax 32,744,814.68 26,230,124.20
Education surcharge 13,889,353.19 9,117,000.14
The electrical and electronic products waste
treatment fund 2,448.00 89,138,721.00
Other taxes 70,527,964.94 60,611,364.57
Total 3,677,057,061.93 2,841,215,524.73
190 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
30. Other payables
(1). Items breakdown
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Dividends payable 7,515,895,607.63 1,880,719.69
Other payables 19,732,347,903.27 19,179,688,465.14
Total 27,248,243,510.90 19,181,569,184.83
(2). Dividends payable
√ Applicable Not Applicable
Items Closing balance Opening balance
Haier COSMO Co., Ltd. 1,008,596,736.32
Haier Group Corporation 859,493,731.30
Other public shareholders 5,647,805,140.01 1,880,719.69
Total 7,515,895,607.63 1,880,719.69
(3). Other payables
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Other payables 19,732,347,903.27 19,179,688,465.14
Total 19,732,347,903.27 19,179,688,465.14
The closing balance mainly included the incurred but unpaid costs. There were no
significant other payables aged over 1 year at the end of the period.
Haier Smart Home Co., Ltd. Interim Report 2024 191
Section X Financial Report
31. Non-current liabilities due within 1 year
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Long-term borrowings due within 1 year 1,610,273,174.78 146,867,809.53
Long term payables due within 1 year 14,194,548.90 14,105,028.65
Lease liabilities due within 1 year 1,072,407,791.17 1,039,704,621.43
Estimated liabilities due within 1 year 2,630,841,869.37 2,531,873,089.62
Total 5,327,717,384.22 3,732,550,549.23
32. Other current liabilities
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Payable refund 578,348,692.50 639,149,848.05
Tax amount to be transferred to output tax 489,615,722.08 990,618,406.97
Others 27,357,255.64 21,470,896.50
Total 1,095,321,670.22 1,651,239,151.52
33. Long-term borrowings
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
Borrowings — secured by pledge 20,600,000.00
Borrowings — secured by credit 18,103,051,118.19 17,936,302,925.77
Total 18,123,651,118.19 17,936,302,925.77
The interest rates of the Company’s long-term borrowings: 1.60%–7.00%.
192 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
34. Lease liabilities
Items Closing balance Opening balance
Lease liabilities 4,797,038,310.89 4,326,506,047.60
Less: lease liabilities due within one year 1,072,407,791.17 1,039,704,621.43
Total 3,724,630,519.72 3,286,801,426.17
35. Long-term payables
Items Closing balance Opening balance
Investment from CDB development fund 36,500,000.00 36,500,000.00
Others 28,855,509.06 34,718,451.43
Less: long-term payables due within one year 14,194,548.90 14,105,028.65
Total 51,160,960.16 57,113,422.78
Under the Investment Contract of China Development Fund executed by the Company and its
subsidiaries including Qingdao Haier Air Conditioner Gen Corp., Ltd., Qingdao Haier (Jiaozhou)
Air-conditioning Co., Limited together with China Development Fund Co. Ltd. in 2015 and 2016,
China Development Fund Co. Ltd. invested RMB73 million in Qingdao Haier (Jiaozhou)
Air-conditioning Co., Limited. China Development Fund Co. Ltd. obtained an annual return of
1.2% by means of dividends or buyback premium for the above investments. As of the end of
the period, the subsidiaries of the Company made buyback in amount of RMB36.5 million.
36. Long-term employee benefits payable
√ Applicable Not Applicable
(1) Long-term employee benefits payable
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
I. Post-employment benefits: net liability of
defined benefit plans 362,511,797.07 364,213,564.08
II. Termination benefits 542,788,956.07 575,644,959.29
III. Provision for work-related injury
compensation 149,713,877.78 145,596,315.81
Total 1,055,014,630.92 1,085,454,839.18
Haier Smart Home Co., Ltd. Interim Report 2024 193
Section X Financial Report
(2) Defined benefits plans
Some subsidiaries of the Company have set several defined benefit plans for the qualified
staff. Under these plans, the employees are entitled to the retirement benefits agreed in
such defined benefit plans.
These plans are exposed to interest rate risks, changes in life expectancy of the beneficiary
and other risks.
The recent actuarial evaluation of the assets and the present value of defined benefit
obligations under such plans are determined by using the projected unit credit method.
The defined benefit plan of Haier Asia Co., Ltd., a subsidiary of the Company
Actuarial assumptions used in the defined benefit plan
Items Rate
Discount rate 1.00%
Expected rate of return 2.00%
Present value of defined benefit obligations
Items Amount
I. Opening balance 218,042,067.90
II. Defined benefit cost recognized in current profit or loss
1. Current service cost
2. Past service cost
3. Settlement gains (losses are represented by ‘-’)
4. Interest cost
III. Defined benefit cost recognized in other comprehensive
income
1. Actuarial losses (gains are represented by ‘-’)
IV. Other changes –23,774,327.79
1. The consideration paid at the time of settlement
2. Benefit paid
3. Exchange differences –23,774,327.79
V. Closing balance 194,267,740.11
194 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Fair value of plan assets
Items Amount
I. Opening balance 293,597,902.22
II. Defined benefit cost recognized in current profit or
loss
1. Interest income
III. Defined benefit cost recognized in other
comprehensive income
1. Return on plan assets (except those included in net
interests)
2. Changes in impact of asset cap (except those
included in net interests)
IV. Other changes –28,866,719.75
1. Employer contributions 620,221.70
2. Benefit paid 2,686,753.23
3. Exchange differences –32,173,694.68
V. Closing balance 264,731,182.47
Neither the Company’s ordinary shares or bonds, nor the properties occupied by the
Company are included in the plan assets.
Net liability (net asset) of the defined benefit plan
Items Amount
I. Opening balance –75,555,834.32
II. Defined benefit cost recognized in current profit or loss
III. Defined benefit cost recognized in
other comprehensive income
IV. Other changes 5,092,391.96
V. Closing balance –70,463,442.36
The average term for the defined benefit obligation is 11.67 years at the balance
sheet date.
Haier Smart Home Co., Ltd. Interim Report 2024 195
Section X Financial Report
The defined benefit plan of Roper Corporation, a subsidiary of the Company
Roper Corporation, a subsidiary of the Company, has provided post-employment
defined benefit plan of health care benefits to eligible employees.
Actuarial assumptions used in the defined benefit plan
Items Rate
Discount rate 5.18%
Present value of defined benefit obligations
Items Amount
I. Opening balance 79,911,044.37
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 2,606,420.93
1. Current service cost 668,850.77
2. Past service cost
3. Settlement gains (losses are represented by ‘-’)
4. Interest cost 1,937,570.16
IV. Defined benefit cost recognized in other
comprehensive income
1. Actuarial losses (gains are represented by ‘-’)
V. Other changes –13,856,535.05
1. The consideration paid at the time of settlement
2. Benefit paid –5,340,246.23
3. Plan amendments –8,976,054.36
4. Others 459,765.54
5. Exchange differences
VI. Closing balance 68,660,930.25
196 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Net liability (net asset) of the defined benefit plan
Items Amount
I. Opening balance 79,911,044.37
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 2,606,420.93
IV. Defined benefit cost recognized in other
comprehensive income
V. Other changes –13,856,535.05
VI. Closing balance 68,660,930.25
The average term for the defined benefit obligation is 1.83 years at the balance sheet
date.
The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary
of the Company
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided
post-retirement defined benefit plan of health care benefits for the eligible employees.
Actuarial assumptions used in the defined benefit plan
Items Rate
Discount rate 5.19%
Haier Smart Home Co., Ltd. Interim Report 2024 197
Section X Financial Report
Present value of defined benefit obligations
Items Amount
I. Opening balance 165,901,942.17
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 1,455,394.92
1. Current service cost
2. Past service cost
3. Settlement gains (losses are represented by ‘-’)
4. Interest cost 1,455,394.92
IV. Defined benefit cost recognized in other
comprehensive income
1. Actuarial losses (gains are represented by ‘-’)
V. Other changes –10,720,806.50
1. The consideration paid at the time of settlement
2. Benefit paid –11,720,651.90
3. Exchange differences 999,845.40
VI. Closing balance 156,636,530.59
Net liability (net asset) of the defined benefit plan
Items Amount
I. Opening balance 165,901,942.17
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 1,455,394.92
IV. Defined benefit cost recognized in other
comprehensive income
V. Other changes –10,720,806.50
VI. Closing balance 156,636,530.59
198 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary
of the Company
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided
defined benefit plan of pension for the eligible employees.
Actuarial assumptions used in the defined benefit plan
Items Rate
Discount rate 5.21%
Present value of defined benefit obligations
Items Amount
I. Opening balance 108,437,206.49
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 3,614,005.58
1. Current service cost 1,172,138.72
2. Past service cost
3. Settlement gains (losses are represented by ‘-’)
4. Interest cost 2,441,866.86
IV. Defined benefit cost recognized in other
comprehensive income
1. Actuarial losses (gains are represented by ‘-’)
V. Other changes 686,842.49
1. The consideration paid at the time of settlement
2. Benefit paid
3. Exchange differences 686,842.49
VI. Closing balance 112,738,054.56
Haier Smart Home Co., Ltd. Interim Report 2024 199
Section X Financial Report
Fair value of plan assets
Items Amount
I. Opening balance 77,778,096.35
II. Defined benefit cost recognized in current profit or loss 1,289,629.28
1. Interest income 1,289,629.28
III. Defined benefit cost recognized in other
comprehensive income
1. Return on plan assets (except those included in
net interests)
2. Changes in impact of asset cap (except those
included in net interests)
IV. Other changes 10,056,079.94
1. Employer contributions 9,536,854.96
2. Benefit paid
3. Exchange differences 519,224.98
V. Closing balance 89,123,805.57
Net liability (net asset) of the defined benefit plan
Items Amount
I. Opening balance 30,659,110.14
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 2,324,376.30
IV. Defined benefit cost recognized in
other comprehensive income
V. Other changes –9,369,237.45
VI. Closing balance 23,614,248.99
200 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(3) Provision for work-related injury compensation
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, made a provision for
work-related injury claims for the staff injured during the production accidents from
1 January 1991, which was used to pay for the claim made by the injured staff. The
provision was calculated by Beechercarlson Insurance Services, LLC., based on actuarial
method and a discount rate of 3.72%.
Items Amount
I. Opening balance 145,596,315.81
II. Business combination not under common control
III. Compensation recognized in current profit or loss 42,800,498.84
IV. Actual compensation paid for the current period –39,599,814.24
V. Other changes 916,877.37
VI. Closing balance 149,713,877.78
Classification of the balance of defined benefit plans
Items Closing balance Opening balance
Short-term Benefit 21,618,766.02 33,170,713.47
Long-term Benefit 362,511,797.07 364,213,564.08
Total 384,130,563.09 397,384,277.55
37. Estimated liabilities
√ Applicable Not Applicable
Unit and Currency: RMB
Items Opening balance Closing balance
Active litigation 32,259,609.59 31,448,932.56
Others 315,280,800.19 359,408,595.01
Estimation of warranty expenses and
installation fees 1,587,473,632.46 1,614,377,582.79
Total 1,935,014,042.24 2,005,235,110.36
Significant assumption and estimation relating to estimation of warranty expenses and installation
fees: the Company reasonably estimated the warranty expenses and installation fees rate based
on its actual expenses on the warranty expenses and installation fees as well as sales data in the
past. The Company estimated the warranty expenses and installation fees that are likely to be
incurred in the future according to its policies on the warranty expenses and installation fees, as
well as the actual sales data.
Haier Smart Home Co., Ltd. Interim Report 2024 201
Section X Financial Report
38. Deferred income
√ Applicable Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
Government grants 1,050,319,606.44 28,730,084.92 51,847,043.92 1,027,202,647.44
Total 1,050,319,606.44 28,730,084.92 51,847,043.92 1,027,202,647.44
39. Share capital
Increase for the Decrease for the
Share category Opening balance current period current period Closing balance
I. Restricted shares
1. State-owned shares
2. Shares held by domestic
non-state-owned legal entities
3. Shares held by domestic
individuals
4. Shares held by offshore non-state-
owned legal entities
II. Non-restricted shares 9,438,114,893 9,438,114,893
1. Ordinary shares in RMB 6,308,552,654 6,308,552,654
2. Domestic listed foreign Shares
3. Offshore listed foreign Shares 3,129,562,239 3,129,562,239
4. Others
III. Total shares 9,438,114,893 9,438,114,893
40. Capital reserve
√ Applicable Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
Capital premium
(Share capital premium) 21,917,268,456.45 20,227,747.10 21,897,040,709.35
Others capital reserve 1,845,086,227.60 201,405,574.94 36,583,005.03 2,009,908,797.51
Total 23,762,354,684.05 201,405,574.94 56,810,752.13 23,906,949,506.86
The main reasons for the change in other capital reserves: the amortized share-based payment
for the current period included in other capital reserves of RMB201,405,574.94.
202 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
41. Treasury stock
√ Applicable Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
Treasury stock 5,034,065,107.42 466,600,210.43 5,500,665,317.85
Total 5,034,065,107.42 466,600,210.43 5,500,665,317.85
The main reasons for the change in treasury stock: the repurchase of treasury stock for the
current period of RMB466,600,210.43.
42. Other comprehensive income
Items Opening balance Amounts for the current period
Attributable to
Amount before Deduction of Attributable to the minority
current income impact of income parent company shareholders
tax tax after tax after tax Others Closing balance
a –345,568,801.14 21,632,498.14 3,064,710.52 23,160,537.38 1,536,671.28 –609,008.33 –323,017,272.09
b –94,630,058.56 –9,489,873.83 –20,035,460.40 –30,039,858.31 514,524.08 –124,669,916.87
c 929,934,173.30 –201,685,894.65 –199,825,666.97 –1,860,227.68 730,108,506.33
d 1,332,769,480.78 –139,624,374.35 13,823,606.83 –125,824,944.18 24,176.66 1,451,608.49 1,208,396,145.09
e 147,219,232.63 –3,587,107.42 1,095,428.03 –2,491,664.07 –15.32 144,727,568.56
Total 1,969,724,027.01 –332,754,752.11 –2,051,715.02 –335,021,596.15 215,129.02 842,600.16 1,635,545,031.02
Notes:
(1) Item a, b, and c are other comprehensive income that will be reclassified to profit or loss, the details are as follows:
Item a represents other comprehensive income classified to profit and loss under the equity method.
Item b represents cash flow hedge reserves (the effective part of the cash flow hedge profit and loss).
Item c represents exchange differences on translation of financial statements denominated in foreign currencies.
(2) Item d and e are other comprehensive income that cannot be reclassified into profit or loss. Details are as follows:
Item d represents the change in fair value of investments in other equity instruments.
Item e represents changes arising from remeasurement of net liabilities or assets of defined benefit plans.
Haier Smart Home Co., Ltd. Interim Report 2024 203
Section X Financial Report
43. Surplus reserve
√ Applicable Not Applicable
Unit and Currency: RMB
Increase for the Decrease for the
Items Opening balance current period current period Closing balance
Statutory surplus reserve 4,794,681,742.21 4,794,681,742.21
Discretionary surplus reserve 26,042,290.48 26,042,290.48
Reserve fund 11,322,880.64 11,322,880.64
Enterprise expansion fund 10,291,630.47 10,291,630.47
Total 4,842,338,543.80 4,842,338,543.80
Pursuant to the Company Law of the People’s Republic of China and the Articles of Association,
the Company is required to appropriate the statutory surplus reserve at 10% of its net profit of
the year.
44. Undistributed profits
√ Applicable Not Applicable
Items Amounts
Undistributed profits at the end of previous year 68,535,686,494.60
Change in accounting policy
Combination under common control
Undistributed profits at the beginning of the year 68,535,686,494.60
Add: net profit attributable to owners of the parent company 10,420,218,389.22
Other transfer in –29,920,094.58
Adjustment due to implementation of enterprise accounting standard
Profit available for distribution for the year 78,925,984,789.24
Less: appropriation of statutory surplus reserve
Dividend payable for ordinary shares 7,513,967,094.69
Undistributed profits at the end of the period 71,412,017,694.55
204 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
45. Operating income and operating cost
(1) Operating income
Amount for Amount for
the current the previous
Items period period
Primary business 134,840,839,073.23 130,796,620,039.86
Other Business 781,710,047.78 831,975,872.19
Total 135,622,549,121.01 131,628,595,912.05
(2) Primary business income and primary business cost by product category
Categories Amount for the current period Amount for the previous period
Primary Primary Primary Primary
business income business cost business income business cost
Air conditioner 29,010,601,435.70 20,557,799,077.93 27,990,491,459.04 19,980,348,155.19
Refrigerator 40,858,797,164.04 28,298,305,940.21 40,302,800,944.89 27,987,308,901.78
Kitchen appliance 20,121,663,515.89 13,789,690,222.06 19,700,572,437.04 13,561,433,684.52
Water appliance 7,891,692,972.94 4,582,039,373.07 7,458,185,872.45 4,356,557,669.16
Washing machine 29,427,102,302.00 19,746,318,593.29 28,125,479,757.35 18,950,800,863.91
Equipment product and
integrated channel
services 7,530,981,682.66 6,806,340,361.07 7,219,089,569.09 6,542,477,793.42
Total 134,840,839,073.23 93,780,493,567.63 130,796,620,039.86 91,378,927,067.98
46. Taxes and surcharge
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
City maintenance and construction tax 191,604,095.21 211,267,062.08
Education surcharge 109,194,820.89 129,147,500.90
Property tax 47,213,971.89 38,175,443.04
Land use tax 12,543,003.63 11,050,858.77
Stamp duty 150,674,106.29 118,586,969.33
Others 27,037,460.35 24,871,738.40
Total 538,267,458.26 533,099,572.52
Haier Smart Home Co., Ltd. Interim Report 2024 205
Section X Financial Report
47. Selling expenses
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Selling expenses 18,687,502,154.89 18,768,944,057.44
Total 18,687,502,154.89 18,768,944,057.44
The Company’s selling expenses are mainly salary expenses, transportation and storage fees,
advertising and promotion fees, and after-sales expenses.
48. Administrative expenses
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Administrative expenses 5,186,349,563.44 5,461,681,481.50
Total 5,186,349,563.44 5,461,681,481.50
The Company’s administrative expenses are mainly salary expenses, office fees, depreciation and
amortization of assets fees, etc.
206 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
49. R&D expenses
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
R&D expenses 5,088,901,166.88 5,025,786,116.64
Total 5,088,901,166.88 5,025,786,116.64
The Company’s R&D expenses are mainly salary expenses, R&D equipment expenses, inspection
and testing fees.
50. Financial expenses
Amount for Amount for
the current the previous
Items period period
Interest expense 1,226,384,743.58 875,078,615.27
Less: interest income 912,438,277.44 614,901,995.27
Less: cash discount 62,102,125.84 59,172,643.28
Exchange gains or losses
(gains are represented by ‘-’) –262,620,221.08 –288,204,003.86
Others 69,695,049.43 77,850,758.05
Total 58,919,168.65 –9,349,269.09
Interest expenditure in lease liabilities for the current period was RMB86,220,779.23 (amount for
the corresponding period: RMB54,418,808.15).
Haier Smart Home Co., Ltd. Interim Report 2024 207
Section X Financial Report
51. Other income
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Classification by nature period period
Government grants related to revenue 511,077,524.43 557,492,414.79
Government grants related to assets 44,010,228.09 43,882,854.01
Total 555,087,752.52 601,375,268.80
52. Investment income
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Long-term equity investments income calculated
by the equity method 1,021,852,565.42 1,078,905,972.36
Investment income from disposal of long-term
equity investments –14,953,215.38 2,936,581.54
Dividend income on other equity instrument
investments during the holding period 2,996,902.10 17,919,209.85
Income from wealth management products 29,641,941.56 30,006,596.61
Investment income from disposal of financial
assets measured at fair value with changes
included in current profit or loss 76,000.00
Total 1,039,614,193.70 1,129,768,360.36
208 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
53. Gains on changes in fair value
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Source of gains on changes in fair value period period
Changes in fair value of equity investments –54,049,574.20 6,761,392.80
Changes in fair value of fund investments 22,787,943.83 23,806,724.21
Others 1,696,032.55 703,445.34
Total –29,565,597.82 31,271,562.35
54. Credit impairment losses
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Bad debts losses on bills receivable 660,000.00
Bad debts losses on accounts receivable –127,282,743.47 –175,246,952.66
Bad debts losses on other receivables 68,608,791.74 9,278,023.30
Total –58,013,951.73 –165,968,929.36
Haier Smart Home Co., Ltd. Interim Report 2024 209
Section X Financial Report
55. Impairment losses on assets
Amount for Amount for
the current the previous
Items period period
Impairment losses on inventory –432,040,167.93 –499,500,903.59
Impairment losses on other current assets –280,012,125.83 –269,894,630.51
Impairment losses on fixed assets –6,213,746.83
Impairment losses on construction in progress
Impairment losses on intangible assets –28,311.57
Impairment losses on long-term equity investments
Impairment losses on contract assets 1,496,029.24 –4,110,982.94
Total –710,556,264.52 –779,748,575.44
56. Gains on disposal of assets
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Gains on disposal of non-current assets 7,721,308.45 9,697,510.22
Losses on disposal of non-current assets –10,305,212.82 –30,344,814.86
Total –2,583,904.37 –20,647,304.64
210 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
57. Non-operating income
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Total gains on disposal of non-current assets 810,466.84
Quality claims and fines 24,265,721.43 18,063,839.13
Others 49,157,369.91 39,910,145.92
Total 73,423,091.34 58,784,451.89
58. Non-operating expenses
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Total losses on disposal of non-current assets 7,267,905.19 4,986,722.70
Others 77,250,699.55 27,312,790.51
Total 84,518,604.74 32,299,513.21
Haier Smart Home Co., Ltd. Interim Report 2024 211
Section X Financial Report
59. Income tax expenses
(1) Statement of income tax expenses
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Current income tax expense 2,199,317,850.43 1,879,159,857.85
Deferred income tax expense –67,576,355.95 190,607,917.70
Total 2,131,741,494.48 2,069,767,775.55
(2) Reconciliation between accounting profit and income tax expenses
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Total profit 12,739,064,636.61
Income tax expense calculated pursuant to statutory/applicable
tax rate 3,184,766,159.15
Impact from different tax rates applicable to subsidiaries –959,949,025.03
Impact from adjustment to income tax in prior periods –146,905,255.39
Impact from non-taxable income –130,705,109.51
Impact from non-deductible cost, expense and loss 121,770,556.31
Impact from deductible provisional differences or deductible
losses of unrecognized income tax assets for the current
period 113,686,167.41
Others –50,921,998.46
Income tax expense 2,131,741,494.48
60. Other comprehensive income
√ Applicable Not Applicable
Please refer to Note VII.42 for details.
212 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
61. Cash flow statement items
(1). Cash related to operating activities
Other cash received from operating activities
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Deposits and securities 32,807,104.74
Government grants 243,673,605.71
Non-operating income excluding government grants 35,281,847.15
Interest income 797,887,231.43
Others 164,016,657.33
Total 1,273,666,446.36
Other cash paid to operating activities
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Cash paid on selling expenses 10,259,440,644.80
Cash paid on administrative and R&D expenses 3,389,811,709.63
Cash paid on financial expenses 73,404,062.89
Non-operating expenses 13,948,889.93
Others 59,544,916.23
Total 13,796,150,223.48
Haier Smart Home Co., Ltd. Interim Report 2024 213
Section X Financial Report
(2). Cash related to investing activities
Other cash received from significant investing activities
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Redemption of wealth management products and
other financial assets 9,619,248,890.08
Total 9,619,248,890.08
Other cash paid to significant investing activities
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the
Items current period
Purchase of wealth management products and
other financial assets 13,608,230,146.65
Total 13,608,230,146.65
(3). Cash related to financing activities
Other cash paid to financing activities
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for
Items the current period
Repurchase of shares 466,600,210.43
Cash paid to lease 596,535,515.39
Others 3,603,317.63
Total 1,066,739,043.45
214 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Changes of various liabilities arising from financing activities
√ Applicable Not Applicable
Unit and Currency: RMB
Opening Increase for Decrease for Closing
Items balance the current period the current period balance
Non-cash Non-cash
Cash change change Cash change change
Short-term borrowings 10,318,351,841.88 4,170,938,006.65 4,123,128,398.86 32,991,593.13 10,333,169,856.54
Long-term borrowings
(including long-term
borrowings due within
one year) 18,083,170,735.30 1,760,600,000.00 27,547,548.89 82,298,893.44 19,733,924,292.97
Lease liabilities (including
lease liabilities due
within one year) 4,326,506,047.60 1,227,262,838.65 596,535,515.39 160,195,059.97 4,797,038,310.89
Total 32,728,028,624.78 5,931,538,006.65 1,227,262,838.65 4,747,211,463.14 275,485,546.54 34,864,132,460.40
62. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Supplementary information period period
1. Net profit adjusted to cash flow of
operating activities:
Net profit 10,607,323,142.13 9,043,682,753.22
Add: impairment provision for assets 710,556,264.52 779,748,575.44
Losses from credit impairment 58,013,951.73 165,968,929.36
Depreciation of fixed assets, depletion of
oil and gas assets, depreciation of
biological assets for production 2,177,355,193.66 1,939,121,008.62
Amortization of right-of-use assets 540,991,043.37 557,582,081.57
Amortization of intangible assets 662,605,179.21 624,592,081.35
Amortization of long-term prepaid
expenses 234,282,226.03 257,971,298.59
Losses from disposal of fixed assets,
intangible assets and other long-term
assets (gains are represented by “-”) 9,851,809.56 24,823,560.50
Losses from changes of fair value
(gains are represented by “-”) 29,565,597.82 –31,271,562.35
Financial expenses (gains are represented
by “-”) 777,375,820.19 586,874,611.41
Haier Smart Home Co., Ltd. Interim Report 2024 215
Section X Financial Report
Amount for Amount for
the current the previous
Supplementary information period period
Losses from investments (gains are
represented by “-”) –1,039,614,193.70 –1,129,768,360.36
Decrease in deferred income tax assets
(increase is represented by “-”) –20,825,542.97 167,338,912.59
Increase of deferred income tax liabilities
(decrease is represented by “-”) –46,750,812.97 23,269,005.11
Decrease in inventories (increase is
represented by “-”) –361,648,013.68 2,061,410,773.14
Decrease of operational account
receivables (increase is represented by
“-”) –3,544,136,779.13 –7,213,172,804.07
Increase of operational account payables
(decrease is represented by “-”) –3,154,975,564.45 –1,471,582,577.11
Others 178,288,615.94 403,433,247.61
Net cash flow generated from operational
activities 7,818,257,937.26 6,790,021,534.62
2. Significant investment and financing
activities not involving cash inflows
and outflows:
Capital transferred from debts
Convertible corporate bonds due within
one year
Fixed assets under finance lease
3. Net changes of cash and cash
equivalents:
Cash balance at the end of the period 54,228,034,803.20 55,063,205,392.40
Less: cash balance at the beginning of
the period 53,977,310,651.03 53,392,209,857.41
Add: cash equivalents balance at the end
of the period
Less: cash equivalents balance at the
beginning of the period
Net increase of cash and cash
equivalents 250,724,152.17 1,670,995,534.99
216 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(2) Composition of cash and cash equivalents
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing balance Opening balance
I. Cash 54,228,034,803.20 53,977,310,651.03
Including: Cash on hand 937,775.91 541,712.70
Bank deposits always available for
payment 53,682,763,402.56 53,524,177,266.50
Other monetary funds always available for
payment 544,333,624.73 452,591,671.83
II. Cash equivalents
Including: bond investments due within
three months
III. Closing balance of cash and cash
equivalents 54,228,034,803.20 53,977,310,651.03
Including: restricted cash and cash
equivalents used by the parent
company or subsidiaries of
the Group
(3) Monetary funds that are not cash and cash equivalents
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period Reasons
Deposit 369,153,135.96 448,374,520.06 Poor marketability, not readily
Restricted special account deposit 106,101,674.79 54,996,888.29 realizable, or not available
Others 2,336,543.49 5,770,781.76 for payment
Total 477,591,354.24 509,142,190.11 /
Haier Smart Home Co., Ltd. Interim Report 2024 217
Section X Financial Report
63. Monetary items in foreign currency
Items Closing balance Opening balance
Balance in Balance in
foreign foreign
currency Exchange rate Balance in RMB currency Exchange rate Balance in RMB
Monetary funds
USD 1,770,696,255.76 7.1268 12,619,398,075.55 1,706,547,575.50 7.0827 12,086,964,513.02
EUR 49,922,095.88 7.6617 382,488,122.03 175,320,608.19 7.8592 1,377,879,723.86
JPY 5,846,338,259.87 0.044738 261,553,481.07 4,478,977,012.53 0.050213 224,902,872.73
HKD 320,549,474.90 0.9127 292,565,505.74 353,808,079.17 0.9062 320,620,881.34
Others 4,057,224,804.54 2,377,241,597.06
Subtotal 17,613,229,988.93 16,387,609,588.01
Accounts receivables
USD 1,177,948,619.10 7.1268 8,395,004,218.59 1,139,193,238.37 7.0827 8,068,563,949.37
EUR 471,937,540.49 7.6617 3,615,843,853.97 480,196,918.94 7.8592 3,773,963,625.34
JPY 4,914,241,186.46 0.044738 219,853,322.20 4,914,686,701.05 0.050213 246,781,163.32
Others 7,270,396,739.33 4,873,677,549.96
Subtotal 19,501,098,134.09 16,962,986,287.99
Short-term borrowings
USD 541,487,838.95 7.1268 3,859,075,530.64 486,876,813.46 7.0827 3,448,402,406.69
EUR 302,910,481.42 7.6617 2,320,809,235.52 250,039,963.32 7.8592 1,965,114,079.70
JPY 0.044738 2,017,059,526.42 0.050213 101,282,610.00
HKD 2,600,000,000.00 0.9127 2,373,020,000.00 2,600,000,000.00 0.9062 2,356,120,000.00
Others 1,490,905,824.74 1,323,813,159.10
Subtotal 10,043,810,590.90 9,194,732,255.49
Accounts payables
USD 2,022,641,888.30 7.1268 14,414,964,209.57 1,909,489,893.66 7.0827 13,524,344,069.80
EUR 588,652,414.23 7.6617 4,510,078,202.12 621,708,354.09 7.8592 4,886,130,296.44
JPY 6,554,732,131.74 0.044738 293,245,606.11 6,641,786,186.84 0.050213 333,504,009.80
NZD 148,893,213.22 4.3690 650,514,448.58 146,250,125.13 4.4991 657,993,937.97
Others 3,977,630,399.50 3,451,938,860.63
Subtotal 23,846,432,865.88 22,853,911,174.64
Non-current liabilities due within one year
USD 138,505,187.15 7.1268 987,098,767.78 138,292,003.54 7.0827 979,480,773.48
EUR 100,194,794.33 7.6617 767,662,455.72 97,148,817.20 7.8592 763,511,984.14
JPY 1,318,809,690.87 0.044738 59,000,907.95 1,027,109,699.08 0.050213 51,574,259.32
RUB 878,187,729.96 0.0841 73,855,588.09 685,662,519.93 0.0803 55,058,700.35
Others 363,680,646.29 361,870,186.58
Subtotal 2,251,298,365.83 2,211,495,903.87
Long-term borrowings
USD 1,160,002,846.12 7.1268 8,267,108,283.73 1,160,000,000.00 7.0827 8,215,932,000.00
EUR 598,330,327.00 7.6617 4,584,227,466.38 597,689,081.07 7.8592 4,697,358,025.92
Others 1,004,528,830.08 1,034,286,451.77
Subtotal 13,855,864,580.19 13,947,576,477.69
218 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
64. Leases
(1) As lessee
√ Applicable Not Applicable
Variable lease payments not included in the measurement of lease liabilities
√ Applicable Not Applicable
RMB42,756,889.43
Lease expenses of short-term leases or leases of low-value assets which are subject to
simplified treatment
√ Applicable Not Applicable
RMB143,700,848.84
Total cash outflow for leases RMB782,993,253.66 (Unit and Currency: RMB)
The leased assets leased by the Company include housing and buildings, production
equipment, transportation equipment, office equipment and others used in the course of
operations. Some of the leases contain renewal options and termination options.
(2) As lessor
a. Lease incomes from operating leases as lessor for the current period:
RMB1,097,174.74, including incomes related to variable lease payments not included
in lease receipts: nil.
b. Undiscounted lease receipts for the next five years:
Undiscounted lease receipts
Lease receipts per year
Closing amount Opening amount
Within 1 year 2,191,971.43 4,582,971.43
2 to 5 years 304,164.29 2,933,400.00
Over 5 years
Total 2,496,135.72 7,516,371.43
The leased assets leased out by the Company are mainly housing, buildings and land
use rights. For details of changes of the leased assets, please refer to Note VII.14.
Haier Smart Home Co., Ltd. Interim Report 2024 219
Section X Financial Report
VIII. RESEARCH AND DEVELOPMENT EXPENDITURE
(1). By the nature of expenses
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for Amount for
the current the previous
Items period period
Remuneration for the employees 2,403,919,474.56 2,442,959,436.11
Design and development expenses 1,716,711,325.90 1,704,332,781.26
Material input 772,114,921.04 756,845,602.42
Depreciation and amortization 92,904,546.38 98,941,998.45
Organizational operation and others 371,941,185.87 361,790,531.89
Total 5,357,591,453.75 5,364,870,350.13
Including: expensed research and development
expenditure 5,088,901,166.88 5,025,786,116.64
Capitalized research and development expenditure 268,690,286.87 339,084,233.49
(2). Development expenditure on research and development projects eligible for
capitalization
Decrease for the current period
Change in
Recognized as Included in foreign
Opening Increase for the intangible current profit exchange rate Closing
Items balance current period asset and loss and others balance
Home Appliance Intelligent
Interaction Project 97,519,232.72 65,524,861.56 163,044,094.28
OWNERSHIP EXPERIENCE
PROGRAM 48,780,235.20 17,846,556.39 363,238.18 66,990,029.77
Whole House Intelligent Energy
Saving Project 49,104,390.20 49,104,390.20
91ABD.ERP IT PROGRAM 3,340,845.56 14,626,505.90 505,022.10 67,891.34 17,530,220.70
Others 116,849,921.62 121,587,972.82 127,289,711.57 40,225,230.43 151,373,413.30
Total 266,490,235.10 268,690,286.87 290,838,827.95 40,656,359.95 284,998,053.97
220 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
IX. CHANGES OF CONSOLIDATION SCOPE
1. Business combination not under common control
Applicable √ Not Applicable
2. Business combination under common control
Applicable √ Not Applicable
3. Disposal of subsidiary
Whether single disposal of investment in subsidiary will result in losing control power:
Qingdao Beijing Haier Beijing
Hairuijiejing Guangke Digital Yunshang Yilian
Electronics Technology Technology
Co., Ltd. Co., Ltd. Co., Ltd.
(青 島 海 瑞 潔 淨 (北 京 海 爾 廣 科 數 (北 京 雲 裳 衣 聯
Items 電 子 有 限 公 司) 字 技 術 有 限 公 司) 科 技 有 限 公 司)
Equity disposal price — — —
Proportion of equity disposal 51% 55% 51%
Method of equity disposal Cancellation Cancellation Cancellation
Time of loss-of-control March 2024 February 2024 March 2024
Basis for determination the time of
loss-of-control Cancellation Cancellation Cancellation
Difference between consideration
and its share of net assets of the
subsidiary as respect to the
disposal in the consolidated level –3,697,883.69 –941.36 1,286.02
Haier Smart Home Co., Ltd. Interim Report 2024 221
Section X Financial Report
4. Changes of consolidation scope due to other reasons
√ Applicable Not Applicable
(1) During the period, Qingdao Haier Dishwasher Co., Ltd., a subsidiary of the Company,
established a wholly-owned subsidiary, Qingdao Haier Smart Dishwasher Co., Ltd. (青島海
爾 智 慧 洗 碗 機 有 限 公 司).
(2) During the period, Qingdao Haier Air Conditioner Gen Corp., Ltd., a subsidiary of the
Company, established a wholly-owned subsidiary, Zhongshan Haier HV Equipment Co., Ltd.
(中 山 海 爾 暖 通 設 備 有 限 公 司).
(3) During the period, Qingdao Haier Air Conditioner Gen Corp., Ltd., a subsidiary of the
Company, established a wholly-owned subsidiary, Qingdao Haier HV Equipment Technology
Co., Ltd. (青 島 海 爾 暖 通 設 備 科 技 有 限 公 司).
(4) During the period, Hefei Haier Washing Machine Co., Ltd., a subsidiary of the Company,
established a wholly-owned subsidiary, Qingdao Haier Smart Washing Machine Co., Ltd.
(青 島 海 爾 智 慧 洗 衣 機 有 限 公 司).
X. INTERESTS IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group
√ Applicable Not Applicable
Unit and Currency: RMB
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Flourishing Reach Mainland of China British Virgin Group company, which 100.00 Establishment
Limited Islands mainly engage in
investment holding,
the production and
sale of washing
machines and water
heaters, distribution
service
Haier Electronics Group Mainland of China Bermuda Group company, which 100.00 Establishment
Co., Ltd. and Hong Kong mainly engage in
investment holding,
the production and
sale of water
equipment,
distribution service
Haier U.S. Appliance the United States the United States Group company, which 100.00 Establishment
Solutions, Inc. mainly engage in
home appliances
production and
distribution business
222 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Haier Singapore Singapore and Singapore Group company, which 100.00 Business
Investment Holding Co., other overseas mainly engage in combination
Ltd. areas home appliances under common
production and control
distribution business
Haier New Zealand New Zealand New Zealand Group company, which 100.00 Business
Investment Holding mainly engage in combination
Company Limited home appliances under common
production and control
distribution business
Candy S.p.A Europe Italy Group company, which 100.00 Business
mainly engage in combination
home appliances not under
production and common
distribution business control
Qingdao Haier Air Qingdao High-tech Qingdao High-tech Manufacture and sale 92.37 Business
Conditioner Gen Corp., Zone Zone of household combination
Ltd. air-conditioners under common
control
Guizhou Haier Electronics Huichuan District, Huichuan District, Manufacture and sale 59.00 Business
Co., Ltd. Zunyi City, Zunyi City, of refrigerator combination
Guizhou Guizhou under common
Province Province control
Hefei Haier Air- Hefei Haier Hefei Haier Manufacture and sale 100.00 Business
conditioning Co., Industrial Park Industrial Park of air-conditioners combination
Limited under common
control
Wuhan Haier Electronics Wuhan Haier Wuhan Haier Manufacture and sale 59.86 Business
Holding Co., Ltd. Industrial Park Industrial Park of air-conditioners combination
under common
control
Qingdao Haier Qingdao Qingdao Manufacture and sale 97.43 Business
Air-Conditioner Development Development of air-conditioners combination
Electronics Co., Ltd. Zone Zone under common
control
Qingdao Haier Qingdao High-tech Qingdao High-tech Manufacturing of 100.00 Business
Information Plastic Zone Zone plastic products combination
Development Co., Ltd. under common
control
Dalian Haier Precision Dalian Export Dalian Export Manufacture and sale 90.00 Business
Products Co., Ltd. Expressing Zone Expressing Zone of precise plastics combination
under common
control
Hefei Haier Plastic Co., Hefei Economic & Hefei Economic & Manufacture and sale 95.17 4.83 Business
Ltd. Technological Technological of plastic parts combination
Development Development under common
Area Area control
Qingdao Meier Plastic Qingdao Qingdao Manufacture of plastic 40.00 60.00 Business
Powder Co., Ltd. Development Development powder, plastic sheet combination
Zone Zone and high- under common
performance control
coatings
Chongqing Haier Jiangbei District, Jiangbei District, Plastic products, sheet 90.00 10.00 Business
Precision Plastic Co., Chongqing City Chongqing City metal work, combination
Ltd. electronics and under common
hardware control
Haier Smart Home Co., Ltd. Interim Report 2024 223
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Qingdao Haier Qingdao High-tech Qingdao High-tech Manufacture and 97.91 Establishment
Refrigerator Co., Ltd. Zone Zone production of
fluorine-free
refrigerators
Qingdao Haier Pingdu Pingdu Manufacture of 100.00 Establishment
Refrigerator Development Development refrigerators
(International) Co., Ltd. Zone, Qingdao Zone, Qingdao
Qingdao Household Qingdao High-tech Qingdao High-tech Research and 100.00 Establishment
Appliance Technology Zone Zone development of home
and Equipment appliances mold and
Research Institute technological
equipment
Qingdao Haier Whole Set Qingdao High-tech Qingdao High-tech Research, 98.33 Establishment
Home Appliance Zone Zone development and
Service Co., Ltd. sales of health-
related small home
appliance
Qingdao Haier Special Qingdao Qingdao Manufacture and sales 100.00 Establishment
Refrigerator Co., Ltd. Development Development of fluorine-free
Zone Zone refrigerators
Qingdao Haier Qingdao Qingdao Manufacture of dish 99.59 Establishment
Dishwasher Co., Ltd. Development Development washing machine and
Zone Zone gas stove
Qingdao Haier Special Qingdao Qingdao Research, manufacture 96.78 Establishment
Freezer Co., Ltd. Development Development and sales of freezer
Zone Zone and other
refrigeration
products
Dalian Haier Air- Dalian Export Dalian Export Air conditioner 90.00 Establishment
conditioning Co., Ltd. Expressing Zone Expressing Zone processing and
manufacturing
Dalian Haier Refrigerator Dalian Export Dalian Export Refrigerator 100.00 Establishment
Co., Ltd. Expressing Zone Expressing Zone processing and
manufacturing
Qingdao Haier Electronic Qingdao Qingdao Development, 100.00 Establishment
Plastic Co., Ltd. Development Development assembling and sales
Zone Zone of plastics,
electronics and
products
Wuhan Haier Freezer Co., Wuhan Economic Wuhan Economic Research, manufacture 82.93 4.36 Establishment
Ltd & Technological & Technological and sales of freezer
Development Development and other
Zone High-tech Zone High-tech refrigeration
Industrial Park Industrial Park products
Qingdao Haidarui Qingdao High-tech Qingdao High-tech Develop, purchase and 98.00 2.00 Establishment
Procurement Service Zone Zone sell electrical
Co., Ltd. products and
components
Qingdao Haier Intelligent Qingdao High-tech Qingdao High-tech Development and 91.46 1.01 Establishment
Home Appliance Zone Zone application of home
Technology Co., Ltd. appliances,
communication,
electronics and
network engineering
technology
224 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Chongqing Haier Jiangbei District, Jiangbei District, Manufacture and sales 76.92 23.08 Establishment
Air-conditioning Co., Chongqing City Chongqing City of air conditioners
Ltd.
Qingdao Haier Precision Qianwangang Qianwangang Development and 70.00 Establishment
Products Co., Ltd. Road, Jiaonan Road, Jiaonan manufacture of
City City precise plastic, metal
plate, mold and
electronic products
for home appliances
Qingdao Haier Air Jiaonan City, Jiaonan City, Manufacture of home 100.00 Establishment
Conditioning Equipment Qingdao Qingdao appliances and
Co., Ltd. electronics
Dalian Free Trade Zone Dalian Export Dalian Export Domestic trade 100.00 Establishment
Haier Air-conditioning Expressing Zone Expressing Zone
Trading Co., Ltd.
Dalian Free Trade Zone Dalian Export Dalian Export Domestic trade 100.00 Establishment
Haier Refrigerator Expressing Zone Expressing Zone
Trading Co., Ltd.
Chongqing Haier Jiangbei District, Jiangbei District, Sales of home 95.00 5.00 Establishment
Electronics Sales Co., Chongqing City Chongqing City appliances
Ltd.
Chongqing Haier Jiangbei District, Jiangbei District, Processing and 84.95 15.05 Establishment
Refrigeration Appliance Chongqing City Chongqing City manufacturing of
Co., Ltd. refrigerator
Hefei Haier Refrigerator Hefei Haier Hefei Haier Processing and 100.00 Establishment
Co., Ltd. Industrial Park Industrial Park manufacturing of
refrigerator
Qingdao Haier Intelligent Qingdao Qingdao Air-conditioning 100.00 Establishment
Building Technology Development Development engineer
Co., Ltd. Zone Zone
Chongqing Lianmai Jiangbei District, Jiangbei District, Sales of home 51.00 Establishment
Electric Appliance Sales Chongqing City Chongqing City appliances and
Co., Ltd. electronics
(重慶聯邁電器銷售有
限公司)
Qingdao Haier (Jiaozhou) Jiaozhou City, Jiaozhou City, Manufacture and sale 100.00 Establishment
Air-conditioning Co., Qingdao Qingdao of air-conditioners
Limited
Qingdao Haier Jiaozhou City, Jiaozhou City, Manufacture and sales 100.00 Establishment
Component Co., Ltd. Qingdao Qingdao of plastic and precise
sheet metal products
Haier Shareholdings Hong Kong Hong Kong Investment 100.00 Establishment
(Hong Kong) Limited
Harvest International Cayman Islands Cayman Islands Investment 100.00 Establishment
Company
Shenyang Haier Shenbei New Area, Shenbei New Area, Manufacture and sales 100.00 Establishment
Refrigerator Co., Ltd. Shenyang City Shenyang City S of refrigerator
Foshan Haier Freezer Sanshui District, Sanshui District, Manufacture and sales 100.00 Establishment
Co., Ltd. Foshan City Foshan City of refrigerator
Zhengzhou Haier Zhengzhou Zhengzhou Manufacture and sales 100.00 Establishment
Air-conditioning Co., Economic and Economic and of freezer
Ltd. Technological Technological
Development Development
Zone Zone
Haier Smart Home Co., Ltd. Interim Report 2024 225
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Qingdao Haidayuan Qingdao Qingdao Develop, purchase and 100.00 Establishment
Procurement Service Development Development sell electrical
Co., Ltd. Zone Zone products and
components
Qingdao Haier Intelligent Qingdao High-tech Qingdao High-tech Development and 100.00 Establishment
Technology Zone Zone research of home
Development Co., Ltd. appliance products
Qingdao Hairi High Qingdao High-tech Qingdao High-tech Design, manufacture 100.00 Business
Technology Co., Ltd. Zone Zone and sales of product combination
model and mould under common
control
Qingdao Hai Gao Design Qingdao High-tech Qingdao High-tech Industrial design and 75.00 Business
and Manufacture Co., Zone Zone prototype production combination
Ltd. under common
control
Zhongshan Haier HV Zhongshan Zhongshan Sales of home 100.00 Establishment
Equipment Co., Ltd.(中 appliances
山海爾暖通設備有限公
司)
Qingdao Haier HV Qingdao Qingdao Manufacture and sale 100.00 Establishment
Equipment Technology of air conditioning
Co., Ltd.(青島海爾暖通 equipment
設備科技有限公司)
Shanghai Haier Medical Shanghai Shanghai Wholesale and retail of 66.87 Establishment
Technology Co., Ltd. medical facility
Qingdao Haier Qingdao Qingdao Development and sales 100.00 Business
Technology Co., Ltd. of software and combination
information product under common
control
Qingdao Haier Qingdao Qingdao Entrepreneurship 100.00 Establishment
Technology Investment investment and
Co., Ltd. consulting
Qingdao Casarte Smart Qingdao Qingdao Development, 100.00 Establishment
Living Appliances Co., production and sales
Ltd. of appliances
Qingdao Haichuangyuan Qingdao Qingdao Sales of home 100.00 Establishment
Appliances Sales Co., appliances and digital
Ltd. products
Haier Overseas Electric Qingdao Qingdao Sales of home 100.00 Establishment
Appliance Co., Ltd. appliances,
international freight
forwarding
Haier Group (Dalian) Dalian Dalian Sales of home 100.00 Business
Electrical Appliances appliances, combination
Industry Co., Ltd. international freight under common
forwarding control
Qingdao Haier Central Air Qingdao Qingdao Production and sales 100.00 Establishment
Conditioning Co., Ltd. of air and
refrigeration
equipment
Chongqing Haier Home Hefei Hefei Sales of home 100.00 Establishment
Appliance Sale Hefei appliances
Co., Ltd.
Qingdao Weixi Smart Qingdao Qingdao Intelligent sanitary 85.00 Establishment
Technology Co., Ltd. ware
226 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Haier U+smart Intelligent Beijing Beijing Software development 100.00 Establishment
Technology (Beijing)
Co., Ltd.
Haier (Shanghai) Shanghai Shanghai Sales, research and 100.00 Establishment
Electronics Co., Ltd. development of home
appliances
Shanghai Haier Zhongzhi Shanghai Shanghai Business management 100.00 Establishment
Fang Chuang Ke consulting, chuangke
Management Co., Ltd. management
Qingdao Haier Smart Qingdao Qingdao Production and sales 85.82 Establishment
Kitchen Appliance Co., of kitchen smart
Ltd. home appliances
GE Appliance (Shanghai) Shanghai Shanghai Sales of home 100.00 Establishment
Co., Ltd. appliances
Qingdao Haier Special Qingdao Qingdao Production and sales 100.00 Establishment
Refrigerating Appliance of home appliances
Co., Ltd.
Shanghai Zhihan Beijing Beijing Promotion of 100.00 Establishment
Technology Co., Ltd. technological
(上海摯瀚科技有限公 development
司)
Laiyang Haier Smart Laiyang Laiyang Production and sales 100.00 Establishment
Kitchen Appliance Co., of home appliances
Ltd.
Hefei Haier Air Hefei Hefei Production and sales 100.00 Establishment
Conditioning Electronics of home appliances
Co., Ltd.
Haier (Shanghai) Home Shanghai Shanghai Research and 100.00 Establishment
Appliance Research and development of home
Development Center appliances
Co., Ltd.
Haier (Shenzhen) R&D Shenzhen Shenzhen Development, research 100.00 Establishment
Co., Ltd. and technical
services of household
and commercial
electrical
Guangzhou Haier Air Guangdong Guangdong Manufacturing of 100.00 Establishment
Conditioner Co., Ltd. refrigeration and air
conditioning
equipment
Qingdao Yunshang Yuyi Qingdao Qingdao IoT technology 60.00 Establishment
IOT Technology Co., research and
Ltd. development
Qingdao Jijia Cloud Qingdao Qingdao R&D and sales of 80.00 Establishment
Intelligent Technology lighting appliances
Co., Ltd.
Qingdao Haimeihui Qingdao Qingdao Leasing and business 100.00 Establishment
Management services
Consulting Co., Ltd. (青
島海美匯管理咨詢有限
公司)
Wuxi Yunshang Internet Wuxi Wuxi Internet of Things 100.00 Establishment
of Clothing Technology technology R & D
Co., Ltd. (無錫雲裳衣
聯網科技有限公司)
Haier Smart Home Co., Ltd. Interim Report 2024 227
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Qingdao Haidacheng Qingdao Qingdao Develop, purchase and 100.00 Establishment
Procurement Service sell electrical
Co., Ltd. products and
components
Guangdong Haier Guangzhou Guangzhou Scientific research and 76.72 Business
Intelligent Technology technology service combination
Co. Ltd. (廣東海尔智能 sector not under
科技有限公司) common
control
Beijing Haixianghui Beijing Beijing Scientific research and 100.00 Establishment
Technology Co., Ltd. technology service
(北京海享匯科技有限 sector
公司)
Haier Smart Home Qingdao Qingdao Technology 100.00 Establishment
Experience Cloud development of
Ecological Technology smart home
Co., Ltd. (海爾智家體 products, whole
驗雲生態科技有限 furniture
公司) customization, etc.
Haier Smart Home Qingdao Qingdao Technical services, 100.00 Establishment
(Qingdao) Network Co., development,
Ltd. (海爾智家（青島） consulting, transfer,
網絡有限 etc.
公司)
Haier Smart Home Qingdao Qingdao Residential interior 100.00 Establishment
(Qingdao) Network decoration,
Operation Co., Ltd. (海 professional
爾智家（青島）網絡運營 construction
有限公司) operation, special
equipment
installation,
upgrading and repair,
etc.
Qingdao Internet of Wine Qingdao Qingdao Urban distribution and 100.00 Establishment
Technology Co., Ltd. transportation
(青島酒聯網物聯科技 services, import and
有限 export of goods,
公司) technology import
and export and food
business, etc.
Qingdao Linghai Air Qingdao Qingdao Manufacture and 100.00 Establishment
Conditioning Equipment production of air
Co., Ltd. (青島菱海空 conditioner and
調設備有限公司) refrigeration
equipment
Shenzhen Yunshang Shenzhen Shenzhen Import and export 100.00 Establishment
Yilian Technology Co., business, Internet,
Ltd. (深圳雲裳衣聯網 Internet of things, big
科技有限公司) data, AI, AR and
technical services
operation
Qingdao Haixiangxue Qingdao Qingdao Professional 100.00 Establishment
Human Resources Co., intermediary
Ltd. (青島海享學人力 activities
資源有限公司)
228 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Jiangxi Haier Medical Jiangxi Jiangxi Wholesale and retail of 100.00 Establishment
Technology Co., Ltd. medical equipment
Qingdao Haizhi Yunlan Qingdao Qingdao Technical service 100.00 Establishment
Technology Co., Ltd. development
Qingdao Haishengze Qingdao Qingdao Air conditioning 100.00 Establishment
Technology Co., Ltd. equipment technical
services
Qingdao Hailvyuan Qingdao Qingdao Electrical and 100.00 Establishment
Recycling Technology electronic products
Co., Ltd. waste treatment
Qingdao Haier HVAC Qingdao Qingdao Manufacture and sale 75.00 25.00 Establishment
Equipment Co., Ltd. (青 of air-conditioners
島海爾暖通空調設備有
限公司)
Qingdao Haier Home AI Qingdao Qingdao Integrated service of AI 100.00 Establishment
Industry Innovation industry application
Center Co., Ltd. (青島 system
海爾家庭人工智能產業
創新中心有限公司)
Zhejiang Weixi IoT Zhejiang Zhejiang IoT application service 100.00 Establishment
Technology Co., Ltd.
(浙江衛璽物聯科技有
限公司)
Qingdao Haier Quality Qingdao Qingdao Inspection and testing 100.00 Business
Inspection Co., Ltd. (青 of home appliance combination
島海爾質量檢測有限公 under common
司) control
Qingdao Haiyongcheng Qingdao Qingdao Product certification 100.00 Business
Certification Service service combination
Co., Ltd. (青島海永成 under common
認證服務有限 control
公司)
Qingdao Zhonghai Borui Qingdao Qingdao Home appliance 100.00 Business
Testing Technology testing and combination
Service Co., Ltd. (青島 technology under common
中海博睿檢測技術服務 consulting controls
有限公司)
Qingdao Haier Special Qingdao Qingdao Manufacture and sale 100.00 Business
Plastic Development of refrigerator doors combination
Co., Ltd. under common
controls
Qingdao Haizhiling Air Qingdao Qingdao Software development 100.00 Establishment
Conditioning and sale of daily
Engineering Co., Ltd. necessities
(青島海智菱空調工程
有限公司)
Haier Smart Home Qingdao Qingdao Promotion of 100.00 Establishment
(Xiongan, Hebei) energy-saving
Technology Co., Ltd. technology
(海爾智家科技（河北雄
安）有限
公司)
Haier Smart Home Co., Ltd. Interim Report 2024 229
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Qingdao Ruibo Ecological Qingdao Qingdao Environmental and AI 89.13 Establishment
Environmental technology
Technology Co., Ltd. consulting
(青島瑞博生態環保科
技有限公司)
Qingdao Sanyiniao Qingdao Qingdao Technology service 100.00 Establishment
Technology Co., Ltd. and advertisement
(青島三翼鳥科技有限 design
公司)
Qingdao Jingzhi Recycle Qingdao Qingdao Operation of 100.00 Establishment
Environmental dangerous waste
Technology Co., Ltd.
(青島鯨智再生環保科
技有限公司)
Qingdao Yunshang Qingdao Qingdao Professional cleaning 51.00 Establishment
Jieshen Yilian and sale of daily
Technology Co., Ltd. necessities
(青島雲裳潔神衣聯科
技有限公司)
Shanghai Yunshang Yuyi Shanghai Shanghai Professional cleaning 100.00 Establishment
IoT Technology Co., and sale of daily
Ltd. (上海雲裳羽衣物 necessities
聯科技有限公司)
Shijiazhuang Yunshang Shijiazhuang Shijiazhuang Professional cleaning 51.00 Establishment
Yilian Technology Co., and sale of daily
Ltd. (石家莊雲裳衣聯 necessities
科技有限公司)
Nanjing Yunshang Yilian Nanjing Nanjing Professional cleaning 80.00 Establishment
Technology Co., Ltd. and sale of daily
(南京雲裳衣聯科技有 necessities
限公司)
Shanxi Yunshang Yilian Shanxi Shanxi Professional cleaning 51.00 Establishment
Technology Co., Ltd. and sale of daily
(山西雲裳衣聯科技有 necessities
限公司)
Tianjin Yunshang Yilian Tianjin Tianjin Professional cleaning 51.00 Establishment
Technology Co., Ltd. and sale of daily
(天津雲裳衣聯網科技 necessities
有限
公司)
Chongqing Yunshang Chongqing Chongqing Professional cleaning 51.00 Establishment
Haihong Yilian and sale of daily
Technology Co., Ltd. necessities
(重慶雲裳海宏衣聯科
技有限公司)
Chengdu Yunshang Meier Chengdu Chengdu Professional cleaning 80.00 Establishment
Yilian Technology Co., and sale of daily
Ltd. (成都雲裳美爾衣 necessities
聯科技有限公司)
Qingdao Haier Smart Qingdao Qingdao Manufacture, research 100.00 Establishment
Dishwasher Co., Ltd. and development and
(青島海爾智慧洗碗機 sales of home
有限公司) appliances
230 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Principal place of Place of
Name of subsidiary business registration Nature of business Shareholding (%) Acquiring method
Direct Indirect
Chengdu Yunshang Yilian Chengdu Chengdu Professional cleaning 100.00 Establishment
Technology Co., Ltd. and sale of daily
(成都雲裳衣聯科技有 necessities
限公司)
Qingdao Haixiangmian Qingdao Qingdao Sale of food and daily 100.00 Establishment
Technology Co., Ltd. necessities
(青島海享眠科技有限
公司)
Qingdao Haier Kitchen Qingdao Qingdao Technology service 100.00 Establishment
IoT Technology Co., and sale of daily
Ltd. (青島海爾廚聯網 necessities
物聯科技有限
公司)
Tibet Haifeng Intelligent Tibet Tibet Development of 100.00 Establishment
Innovation Technology software and medical
Co., Ltd. (西藏海峰智 equipment
能創新科技有限公司)
Qingdao Haixiangzhi Qingdao Qingdao Manufacturing of home 100.00 Establishment
Technology Co., Ltd. appliances
(青島海享智科技有限
公司)
Qingdao Haier Qingdao Qingdao Manufacturing of home 100.00 Establishment
Refrigeration Appliance appliances
Co., Ltd. (青島海爾製
冷電器有限公司)
Chongqing Haier Chongqing Chongqing Manufacturing of home 100.00 Establishment
Washing Appliance Co., appliances
Ltd. (重慶海爾洗滌電
器有限公司)
Tongfang Energy Beijing Beijing Technology 84.32 Business
Technology development service combination
Development Co., Ltd. not under
(同方能源科技發展有 common
限公司) control
Qingdao Haier Youyang Qingdao Qingdao Technology 51.00 Establishment
Technology Co., Ltd. development service
(青島海爾有養科技有
限公司)
Qingdao Haier Yikang Qingdao Qingdao Technology 100.00 Establishment
Technology Co., Ltd. development service
(青島海爾益康科技有
限公司)
Microenterprises such as All over the All over the Sales of home Establishment
Qingdao Hai Heng Feng country country appliances
Electrical Appliances
Sale & Service Co.,
Ltd.
(2) Material non-wholly owned subsidiaries for the Company
Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Interim Report 2024 231
Section X Financial Report
2. Transactions leading to the change of shareholding in subsidiaries but not losing
the control
√ Applicable Not Applicable
(1) Description of changes in the share of owners’ equity in subsidiaries
√ Applicable Not Applicable
Capital contribution by minority shareholders of the subsidiary of the Company leads to
changes in the Company’s shareholding ratio.
(2) Impact of the transactions on minority interest and the equity attributable to
shareholders of the Company:
Items Others
Total consideration for acquisition/disposal 83,668,779.14
Less: share of net assets of subsidiaries in respect to the
shareholding proportion acquired/disposed 64,283,632.20
Difference –19,385,146.94
Including: adjustment to decrease capital reserve –19,385,146.94
3. Interests in joint ventures and associates
√ Applicable Not Applicable
(1) Joint ventures and associates
Principal place of Place of Accounting treatment
Name of joint venture and associates business registration Nature of business Shareholding of investment
Haier Group Finance Co., Ltd Qingdao Qingdao Financial services 42.00% Equity method
Bank of Qingdao Co., Ltd Qingdao Qingdao Commercial Bank 8.19% Equity method
Wolong Electric (Jinan) Motor Co., Ltd. Jinan Jinan Motor Manufacturing 30.00% Equity method
Qingdao Hegang New Material Technology Qingdao Qingdao Steel plate manufacturing 23.94% Equity method
Co., Ltd. (青島河鋼新材料科技股份有限
公司)
Qingdao Haier SAIF Smart Home Industry Qingdao Qingdao Venture Capital 63.13% Equity method
Investment Center (Limited Partnership)
Mitsubishi Heavy Industries Haier (Qingdao) Qingdao Qingdao Manufacturing of home 45.00% Equity method
Air-conditioners Co., Ltd. appliances
Qingdao Haier Carrier Refrigeration Qingdao Qingdao Manufacturing of home 49.00% Equity method
Equipment Co., Ltd. appliances
Qingdao Haier Multimedia Co., Ltd. Qingdao Qingdao R&D and sales of 20.20% Equity method
television
Zhengzhou Highly Electric Appliance Co., Zhengzhou Zhengzhou Manufacture and sale of 49.00% Equity method
Ltd. (鄭州海立電器有限公司) press
Baoshihua Tong Fang Energy Technology Beijing Beijing Technology service 20.00% Equity method
Co., Ltd. (寶石花同方能源科技有限公司) development
232 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Principal place of Place of Accounting treatment
Name of joint venture and associates business registration Nature of business Shareholding of investment
Zhejiang Futeng Fluid Technology Co., Ltd. Huzhou Huzhou Gas compression 48.00% Equity method
machinery
development and
manufacturing
Hongtong Environmental Technology Guangzhou Guangzhou Machinery and equipment 15.00% Equity method
(Guangzhou) Co., Ltd. (宏通環境技術（廣 development and
州）有限公司) manufacturing
Qingdao Xiaoshuai Intelligent Technology Qingdao Qingdao Information technology 32.13% Equity method
Co., Ltd. (青島小帥智能科技股份有限 development
公司)
Qingdao Haimu Investment Management Qingdao Qingdao Investment management 49.00% Equity method
Co., Ltd.
Qingdao Haimu Smart Home Investment Qingdao Qingdao Investment management 24.00% Equity method
Partnership (Limited Partnership)
Haineng Wanjia (Shanghai) Technology Shanghai Shanghai Construction 20.00% Equity method
Development Co., Ltd.
Qingdao Guochuang Intelligent Household Qingdao Qingdao Development of home 35.51% Equity method
Appliance Research Institute Co., Ltd. appliances
(青島國創智能家電研究院有限公司)
Guangzhou Heying Investment Partnership Guangzhou Guangzhou Investment 49.00% Equity method
(Limited Partnership)
Qingdao Home Wow Cloud Network Qingdao Qingdao Home online service 22.10% Equity method
Technology Co., Ltd
Bingji (Shanghai) Corporate Management Shanghai Shanghai Investment management 45.00% Equity method
Co., Ltd.
Youjin (Shanghai) Corporate Management Shanghai Shanghai Investment management 45.00% Equity method
Co., Ltd
RRS (Shanghai) Investment Co., Ltd. Shanghai Shanghai Investment management 45.00% Equity method
(日日順（上海）投資有限公司)
Haier Best Water Technology Co., Ltd. Qingdao Qingdao Water equipment 49.00% Equity method
(倍世海爾飲水科技有限公司) technology
development service
Huizhixiangshun Equity Investment Fund Qingdao Qingdao Investment management 30.00% Equity method
(Qingdao) Partnership (Limited
Partnership)
Qingdao RRS Huizhi Investment Co., Ltd. Qingdao Qingdao Investment management 50.00% Equity method
Qingdao Xinshenghui Technology Co., Ltd. Qingdao Qingdao Technology service 20.00% Equity method
(青島鑫晟匯科技有限公司) development
Ningbo Beilian Intelligent Technology Co., Ningbo Ningbo Technology service 35.00% Equity method
Ltd. (宁波贝立安智能科技有限公司) development
Konan Electronic Co., Ltd Japan Japan Motor Manufacturing 50.00% Equity method
HPZ LIMITED Nigeria Nigeria Manufacturing of home 25.01% Equity method
appliance
HNR (Private) Company Limited Pakistan Pakistan Manufacturing of home 31.72% Equity method
appliance
Controladora Mabe S.A.de C.V. Mexico Mexico Manufacturing of home 48.41% Equity method
appliance
Middle East Air conditioning Company, Saudi Arabia Saudi Arabia Sales of home appliances 49.00% Equity method
Limited
Haier Smart Home Co., Ltd. Interim Report 2024 233
Section X Financial Report
(2) Key financial information of important associates
√ Applicable Not Applicable
Unit and Currency: RMB
The basic profile of important associates:
Haier Group Finance Co., Ltd. (hereinafter referred to as “Finance company”) was
established by Haier Group Corporation and its three affiliates. Registration place and
principal place of business: No.178–2 Haier Road, Laoshan District, Qingdao City. The
Company’s subsidiaries hold an aggregate of 42.00% equity interest in Finance
Company.
Financial information of important associates:
Items Finance company
Closing balance/ Opening balance/
Amount for the Amount for the
current period previous period
Current assets 58,118,246,068.64 58,471,449,425.14
Non-current assets 16,522,384,591.51 17,215,510,844.97
Total assets 74,640,630,660.15 75,686,960,270.11
Current liabilities 55,104,446,290.29 56,268,320,103.08
Non-current liabilities 583,330,585.96 583,055,172.64
Total liabilities 55,687,776,876.25 56,851,375,275.72
Minority interests
Equity attributable to shareholders of the parent
company 18,952,853,783.90 18,835,584,994.39
Including: share of net assets calculated per
shareholding percentage 7,960,198,589.24 7,910,945,697.64
Operating income 931,067,464.94 903,641,445.71
Net profit 677,251,560.13 753,528,932.20
Other comprehensive income 17,229.38 –21,953,251.63
Total comprehensive income 677,268,789.51 731,575,680.57
Dividend received from associates for the year 235,200,000.00 235,200,000.00
234 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(3) Summarized financial information of insignificant joint ventures and associates
Closing balance/ Opening balance/
Amount for the Amount for the
Investment in associates current period previous period
Bank of Qingdao Co., Ltd. 3,437,294,397.06 3,200,132,708.75
Wolong Electric (Jinan) Motor Co., Ltd. 190,943,209.43 177,662,547.04
Qingdao Hegang New Material Technology Co.,
Ltd. (青 島 河 鋼 新 材 料 科 技 股 份 有 限 公 司) 339,366,124.72 329,713,566.36
Qingdao Haier SAIF Smart Home Industry
Investment Center (Limited Partnership) 190,405,837.69 206,764,442.76
Mitsubishi Heavy Industries Haier (Qingdao)
Airconditioners Co., Ltd. 731,439,878.82 663,804,966.31
Qingdao Haier Carrier Refrigeration Equipment
Co., Ltd. 416,077,948.22 412,107,471.53
Qingdao Haier Multimedia Co., Ltd. 88,300,000.00 88,300,000.00
Baoshihua Tong Fang Energy Technology Co.,
Ltd. (寶 石 花 同 方 能 源 科 技 有 限 公 司) 30,326,966.78 30,326,966.78
Zhengzhou Highly Electric Appliance Co., Ltd.
(鄭 州 海 立 電 器 有 限 公 司) 97,032,780.77 98,000,000.00
Zhejiang Futeng Fluid Technology Co., Ltd. 77,584,161.99 77,584,161.99
Hongtong Environmental Technology (Guangzhou)
Co., Ltd. (宏 通 環 境 技 術（廣 州）有 限 公 司) 7,265,965.73 4,265,965.73
Beijing ASU Tech Co., Ltd. 7,919,009.51
Qingdao Haimu Investment Management Co., Ltd. 2,609,456.57 2,609,456.57
Qingdao Haimu Smart Home Investment
Partnership (Limited Partnership) 57,989,007.18 57,989,007.18
Haineng Wanjia (Shanghai) Technology
Development Co., Ltd. (海 能 萬 嘉（上 海）科 技
發 展 有 限 公 司) 606,029.71 606,029.71
Qingdao Guochuang Intelligent Household
Appliance Research Institute Co., Ltd.
(青 島 國 創 智 能 家 電 研 究 院 有 限 公 司) 39,084,107.57 38,574,227.53
Guangzhou Heying Investment Partnership
(Limited Partnership) 150,969,739.44 194,416,881.32
Qingdao Home Wow Cloud Network Technology
Co., Ltd 2,781,795.11 2,192,669.49
Bingji (Shanghai) Corporate Management Co.,
Ltd. 1,073,095,181.86 1,056,245,062.87
Youjin (Shanghai) Corporate Management Co.,
Ltd 1,950,263,967.00 1,919,627,387.02
Haier Smart Home Co., Ltd. Interim Report 2024 235
Section X Financial Report
Closing balance/ Opening balance/
Amount for the Amount for the
Investment in associates current period previous period
RRS (Shanghai) Investment Co., Ltd.
(日 日 順（上 海）投 資 有 限 公 司) 3,545,116,303.65 3,489,413,430.96
Haier Best Water Technology Co., Ltd.
(倍 世 海 爾 飲 水 科 技 有 限 公 司) 150,781,033.56 148,369,638.40
Huizhixiangshun Equity Investment Fund
(Qingdao) Partnership (Limited Partnership) 201,495,856.15 238,175,637.03
Qingdao RRS Huizhi Investment Co., Ltd. 4,083,482.78 4,083,482.78
Qingdao Xiaoshuai Intelligent Technology Co., Ltd.
(青 島 小 帥 智 能 科 技 股 份 有 限 公 司) 6,107,497.56
Qingdao Xinshenghui Technology Co., Ltd.
(青 島 鑫 晟 匯 科 技 有 限 公 司) 10,385,042.54 10,005,915.15
Ningbo Beilian Intelligent Technology Co., Ltd.
(寧 波 貝 立 安 智 能 科 技 有 限 公 司) 3,500,000.00
Orygin LLC 22,296,931.04
Konan Electronic Co., Ltd 57,582,447.57 64,378,952.07
HNR (Private) Company Limited 134,322,225.41 111,225,806.51
HPZ LIMITED –4,326,324.37 3,483,576.50
Controladora Mabe S.A.de C.V. 5,188,461,070.95 5,078,418,321.53
Middle East Airconditioning Company, Limited 7,303,000.26 7,299,166.60
Total book value of investment 18,188,248,191.71 17,745,993,387.02
Total amount of the following financial data of
associates calculated based on shareholding
percentage
– Net profit 741,808,654.94 775,751,075.57
– Other comprehensive income 21,625,261.80 –6,287,979.19
– Total comprehensive income 763,433,916.74 769,463,096.38
236 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
XI. SEGMENT REPORT
√ Applicable Not Applicable
The Company is principally engaged in manufacture and sales of home appliances and relevant
services business, manufacture of upstream home appliances parts, distribution of products of third
party, logistics and after-sale business.
The Company has five business segments: (1) Household Food Storage and Cooking Solutions: mainly
manufacturing and selling refrigerator/freezers and kitchen appliances; (2) Air Solutions: mainly
manufacturing and selling air conditioners; (3) Household Laundry Management Solutions: mainly
manufacturing and selling washing machines and dryers; (4) Household Water Solutions: mainly
manufacturing and selling water home appliances such as water heaters and water purifiers; (5) Other
business: mainly include channel, equipment components, small home appliance business and others.
The management of the Company assesses operating performance of each segment and allocates
resources according to the division. Sales between segments were mainly based on market price.
Due to centralized management under the headquarters or exclusion from the assessment scope of
segment management, the total assets of segments exclude monetary funds, financial assets held for
trading, derivative financial assets, dividends receivable, held-for-sale financial assets, other current
assets, debt investment, long-term accounts receivable, long-term equity investment, other equity
instruments investment, other non-current financial assets, goodwill and deferred income tax assets;
the total liabilities of segments exclude long-term and short-term borrowings, financial liabilities held for
trading, derivative financial liabilities, taxes payable, interests payable, dividends payable, held-for-sale
liabilities, bonds payable, deferred income tax liabilities and other non-current liabilities; profits of
segments exclude financial expenses, profit or loss in fair value changes, income from investment, and
income on disposal of assets, Non-value-added tax refundable upon imposition component of other
income, non-operating incomes and expenses and income tax.
(1) Information of reportable segments
Segment information for the period
Household Food Storage and
Cooking Solutions
Household Laundry
Management
Segment information Refrigerator/freezers Kitchen appliances Air Solutions Solutions
Segment revenue 41,127,956,870.22 20,275,302,895.20 29,234,848,611.97 29,736,595,881.54
Including: external revenue 41,022,856,775.64 20,228,275,282.99 29,074,828,944.30 29,601,746,705.79
Inter-segment revenue 105,100,094.58 47,027,612.21 160,019,667.67 134,849,175.75
Total segment operating cost 37,588,892,334.62 18,475,056,113.76 27,541,697,922.16 26,646,494,850.28
Segment operating profit 3,539,064,535.60 1,800,246,781.44 1,693,150,689.81 3,090,101,031.26
Total segment assets 52,005,694,950.57 22,654,775,328.51 30,996,742,377.94 32,009,317,554.55
Total segment liabilities 69,940,655,493.31 13,848,570,895.00 25,758,512,565.50 17,757,478,070.87
Haier Smart Home Co., Ltd. Interim Report 2024 237
Section X Financial Report
(continued)
Household Water Inter-segment
Segment information Solutions Other business eliminations Total
Segment revenue 8,106,193,795.05 50,267,171,923.80 –43,125,520,856.77 135,622,549,121.01
Including: external revenue 8,011,173,935.80 7,683,667,476.49 — 135,622,549,121.01
Inter-segment revenue 95,019,859.25 42,583,504,447.31 –43,125,520,856.77 —
Total segment operating cost 6,910,808,149.22 50,202,231,531.52 –43,170,446,222.86 124,194,734,678.70
Segment operating profit 1,195,385,645.83 64,940,392.28 44,925,366.09 11,427,814,442.31
Total segment assets 7,476,419,468.87 74,889,956,696.38 –91,386,277,258.29 128,646,629,118.53
Total segment liabilities 5,907,219,158.13 68,163,639,745.66 –91,284,540,418.29 110,091,535,510.18
Segment information for the corresponding period of last year
Household Food Storage and
Cooking Solutions
Household Laundry
Refrigerator/ Management
Segment information freezers Kitchen appliances Air Solutions Solutions
Segment revenue 40,411,341,041.10 20,205,647,157.99 28,176,850,151.17 28,314,129,699.92
Including: external revenue 40,327,782,569.05 20,187,056,144.99 28,061,662,346.15 28,248,158,381.79
Inter-segment revenue 83,558,472.05 18,591,013.00 115,187,805.02 65,971,318.13
Total segment operating cost 37,449,253,888.22 18,548,446,710.24 26,950,740,655.39 25,757,441,566.16
Segment operating profit 2,962,087,152.88 1,657,200,447.75 1,226,109,495.78 2,556,688,133.76
Total segment assets 46,386,636,541.89 21,182,487,836.50 23,095,120,351.59 31,083,146,812.59
Total segment liabilities 61,738,020,657.75 12,928,214,554.98 22,560,023,701.22 18,456,071,567.13
(continued)
Household Water Inter-segment
Segment information Solutions Other business eliminations Total
Segment revenue 7,606,598,837.87 44,868,417,123.51 –37,954,388,099.51 131,628,595,912.05
Including: external revenue 7,547,568,985.51 7,256,367,484.56 — 131,628,595,912.05
Inter-segment revenue 59,029,852.36 37,612,049,638.95 –37,954,388,099.51 —
Total segment operating cost 6,601,452,862.30 44,823,364,609.07 –38,029,454,448.75 122,101,245,842.63
Segment operating profit 1,005,145,975.57 45,052,514.44 75,066,349.24 9,527,350,069.42
Total segment assets 6,974,086,027.37 72,345,944,832.66 –74,983,515,615.16 126,083,906,787.44
Total segment liabilities 5,952,269,383.29 67,056,680,238.32 –74,838,436,273.16 113,852,843,829.53
238 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(2) Geographical information
“Other countries/regions” in this report refers to all other countries/regions (including Hong Kong
and Macau Special Administration Region and Taiwan) other than the mainland China for the
purpose of information disclosure.
a. External transaction revenue
Amount for the Amount for the
Items current period previous period
Mainland China 64,798,348,696.57 63,326,144,956.04
Other countries/regions 70,824,200,424.44 68,302,450,956.01
Among which:
America 39,079,401,455.27 39,133,384,718.31
Australia 3,224,852,882.97 2,949,512,878.44
South Asia 6,541,908,201.63 5,954,521,760.73
Europe 14,504,641,098.47 13,278,015,975.79
Southeast Asia 3,491,588,857.32 3,107,279,065.87
Middle East and Africa 1,474,675,819.82 1,162,600,377.18
Japan 1,826,967,375.51 1,947,027,593.72
Others 680,164,733.45 770,108,585.97
Total 135,622,549,121.01 131,628,595,912.05
b. Total non-current assets
Items Closing balance Opening balance
Mainland China 22,972,510,062.72 22,369,511,589.93
Other countries/regions 31,488,092,970.71 31,152,060,989.07
Total 54,460,603,033.43 53,521,572,579.00
Total non-current assets exclude: debt investments, long-term receivable, long-term equity
investments, other equity instrument investments, other non-current financial assets,
goodwill and deferred income tax assets.
Haier Smart Home Co., Ltd. Interim Report 2024 239
Section X Financial Report
XII. DISCLOSURE OF FAIR VALUE
1. Assets and liabilities measured at fair value
The level to which the fair value measurement result belongs is determined by the lowest level to
which the input value is significant to the fair value measurement as a whole:
Level 1: Unadjusted quotes for the same asset or liability in an active market.
Level 2: Inputs that are directly or indirectly observable for related assets or liabilities, except for
Level 1 inputs.
Level 3: Unobservable inputs of related assets or liabilities.
At the end of the period
Items Input used for fair value measurement
Quotes in an Important Important
active market observable unobservable
(Level 1) input (Level 2) input (Level 3) Total
Continuously measured at fair
value
Financial assets held for trading 364,456,854.49 605,849,428.57 96,263,475.95 1,066,569,759.01
Including: Bank wealth management
products 605,849,428.57 605,849,428.57
Investment fund 271,718,384.49 271,718,384.49
Investment in equity
instruments 92,738,470.00 96,263,475.95 189,001,945.95
Derivative financial assets 86,713,582.93 86,713,582.93
Including: Forward foreign exchange
contract 79,226,226.47 79,226,226.47
Forward commodity
contracts 7,487,356.46 7,487,356.46
Other equity instruments 20,872,520.46 6,260,941,846.07 6,281,814,366.53
Including: Equity instruments measured
at fair value through other
comprehensive income 20,872,520.46 6,260,941,846.07 6,281,814,366.53
Derivative financial liabilities 191,751,522.44 191,751,522.44
Including: Forward foreign exchange
contract 191,751,522.44 191,751,522.44
240 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
At the beginning of the period
Items Input used for fair value measurement
Quotes in an Important Important
active market observable unobservable
(Level 1) input (Level 2) input (Level 3) Total
Continuously measured at fair
value
Financial assets held for trading 369,591,046.58 487,936,101.81 96,436,395.44 953,963,543.83
Including: Bank wealth management
products 487,936,101.81 487,936,101.81
Investment fund 222,803,002.38 222,803,002.38
Investment in equity
instruments 146,788,044.20 96,436,395.44 243,224,439.64
Derivative financial assets 67,565,829.44 67,565,829.44
Including: Forward foreign exchange
contract 67,565,829.44 67,565,829.44
Other equity instruments 19,988,760.34 6,383,706,194.43 6,403,694,954.77
Including: Equity instruments measured
at fair value through other
comprehensive income 19,988,760.34 6,383,706,194.43 6,403,694,954.77
Derivative financial liabilities 168,625,004.97 168,625,004.97
Including: Forward foreign exchange
contract 166,573,028.22 166,573,028.22
Forward commodity contract 2,051,976.75 2,051,976.75
For financial instruments traded in an active market, the Company determines its fair value based
on its quotes in an active market; for financial instruments not traded in an active market, the
Company uses valuation techniques to determine its fair value.
Haier Smart Home Co., Ltd. Interim Report 2024 241
Section X Financial Report
2. The basis for determining the fair value of the continual Level 2 fair value
measurement items
Fair value at the
Items end of the period Valuation techniques
Financial assets held for trading
Including: Bank wealth management 605,849,428.57 Discounted cash flow
products
Derivative financial assets
Including: Forward foreign exchange 79,226,226.47 Discounted cash flow
contract
Forward commodity contracts 7,487,356.46 Discounted cash flow
Derivative financial liabilities
Including: Forward foreign exchange 191,751,522.44 Discounted cash flow
contract
3. Continual Level 3 fair value measurement major items, the valuation techniques
adopted and information of important parameters
Fair value at the Significant Sensitivity of fair value to
Items end of the period Valuation technique unobservable input Range the input
Other equity instruments
Including:
1. COSMO IoT 2,817,408,000.00 Market approach 1. Average P/S 1. 2.93 to 2.99 1. 1% increase (decrease) in
Technology multiple of peers 2. 27.46% to average P/S multiple of
Co., LTD. 2. Discount for lack 29.46% the Comparable
( 聯 of marketability Companies would result
in increase (decrease) in
) fair value by RMB21.27
million.
2. 1% increase (decrease) in
the lack of marketability
would result in decrease
(increase) in fair value by
RMB29.35 million.
2. SINOPEC Fuel 1,860,840,776.61 Market approach 1. Average P/E 1. 38.24 to 1. 1% increase (decrease) in
Oil Sales multiple of peers 39.01 average P/E multiple of
Corporation 2. Discount for lack 2. 24.55% to the Comparable
Limited ( of marketability 26.55% Companies would result
in increase (decrease) in
) fair value by RMB18.6082
million.
2. 1% increase (decrease) in
the lack of marketability
would result in decrease
(increase) in fair value by
RMB24.9951 million.
242 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
4. Financial instruments not measured at fair value
Financial assets and financial liabilities not measured at fair value include: monetary funds, bills
receivable, accounts receivable, other receivables, other current assets, long-term and short-term
borrowings, bills payable, accounts payable, other payables, long-term payables, bonds payable,
etc. The difference between the book value and the fair value of financial assets and financial
liabilities not measured at fair value at the end of the period is small.
XIII. RELATED PARTIES AND THEIR CONNECTED TRANSACTIONS
(I) Explanation for basis of identifying related party
According to Accounting Standards for Business Enterprises No. 36 — Related Party
Disclosures, parties are considered to be related if one party has the ability to control or jointly
control the other party or exercise significant influence over the other party. Parties (two or more
than two) are also considered to be related if they are subject to common control, joint control
or significant influence from another party.
According to Management Practices for Information Disclosure of Listed Company (China
Securities Regulatory Commission Order No. 182), related legal entity or individual will be
identified as related parties in certain occasions.
(II) Relationships between related parties
1. Information about the parent company and other companies holding shares of the
Company
Voting rights
Type of Registered Legal Relationships Interest in the to the
Name enterprise Registered place capital representative with the Company Company Company
Haier Group Collective Qingdao High-tech 311,180,000 Zhou Yunjie Parent Company 11.36% 11.36%
Corporation ownership Zone Haier Park
company
Haier COSMO Co., Joint-stock Qingdao High-tech 404,500,000 Zhou Yunjie Subsidiary of 13.34% 13.34%
Ltd. (海爾卡奧斯 company Zone Haier Park Parent
股份有限公司) Company
HCH (HK) Investment Private Hong Kong HKD10,000 / Parties acting in 5.71% 5.71%
Management Co., company concert of
Limited Parent
Company
Qingdao Haier Venture Company with Qingdao Free Trade 923,000,000 Zhou Yunjie Parties acting in 1.83% 1.83%
& Investment limited Zone concert of
Information Co., liability Parent
Ltd. Company
Qingdao Haichuangzhi Limited Qingdao High-tech 1,616,120,000 / Parties acting in 1.42% 1.42%
Management partnership Zone Haier Park concert of
Consulting company Parent
Enterprise (Limited Company
Partnership)
Haier International Private Hong Kong HKD 2 / Parties acting in 0.62% 0.62%
Co., Limited company concert of
Parent
Company
Haier Smart Home Co., Ltd. Interim Report 2024 243
Section X Financial Report
2. Subsidiaries of the Company
√ Applicable Not Applicable
The details of the subsidiaries of the Company are detailed in Note X.1. Interests in
subsidiaries.
3. Joint ventures and associates of the Company
√ Applicable Not Applicable
The details of important joint ventures and associates of the Company are detailed in Note
VII.12 and Note X.3.
4. Connected companies with no relationship of control
Name Relationship with the Company
Chongqing Zhonglian Energy Technology Co., Subsidiary of Haier Group
Ltd.
Chongqing Haier Electrical Appliances Sales Co., Subsidiary of Haier Group
Ltd.
Hongkong Gooday Supply Chain Management Subsidiary of Haier Group
Limited
Shanghai Cotai Supply Chain Management Co., Subsidiary of Haier Group
Ltd.
Gooday Supply Chain Technologies Co., Ltd. Subsidiary of Haier Group
Gooday (Qingdao) International Supply Chain Subsidiary of Haier Group
Service Co., Ltd.
Qingdao Goodaymart Supply Chains Co., Ltd. Subsidiary of Haier Group
Qingdao Manniq Intelligent Technology Co., Ltd. Subsidiary of Haier Group
Qingdao Oasis Technology Co., Ltd. Subsidiary of Haier Group
Qingdao Haironghui Commercial Factoring Co.,
Ltd.
(青 島 海 融 匯 商 業 保 理 有 限 公 司) Subsidiary of Haier Group
Qingdao Haier Parts Procurement Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Trading Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Travel Agency Co., Subsidiary of Haier Group
Ltd.
Qingdao Haier Industrial Development Co., Ltd Subsidiary of Haier Group
COSMO Moulds (Qingdao) Co., Ltd. (卡 奧 斯 模 Subsidiary of Haier Group
具（青 島）有 限 公 司)
Hefei Ririshun Logistics Co., Ltd. (合肥日日順物 Subsidiary of Haier Group
流 有 限 公 司)
Qingdao Haier New Materials R & D Co., Ltd. Associate of subsidiary of Haier
Group
HPZ Limited Associate
HNR (Private) Company Limited Associate
Wolong Electric (Jinan) Motor Co., Ltd. Associate
244 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Name Relationship with the Company
Mitsubishi Heavy Industry Haier (Qingdao) Air Associate
Conditioner Co., Ltd.
Controladora Mabe S.A.de C.V. Associate
Qingdao HBIS Composite New Material Co., Subsidiary of associate
Ltd.
Hefei Hegang New Material Technology Co., Subsidiary of associate
Ltd.
(III) Related-party transactions
1. Details of the Company’s procurement of goods and services from related parties are as
follows:
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Related parties current period previous period
Controladora Mabe, S.A.de C.V. 7,687,926,090.90 5,353,771,339.60
Qingdao Haier Parts Procurement Co., Ltd. 3,059,386,453.56 3,608,931,862.86
Gooday Supply Chain Technologies Co., Ltd. 1,972,219,635.41 1,635,118,057.32
HNR (Private) Company Limited 1,729,101,867.08 1,642,887,548.69
Chongqing Haier Electrical Appliances Sales
Co., Ltd. 847,550,618.71 623,669,202.51
Shanghai Cotai Supply Chain Management
Co., Ltd. 712,737,566.32 710,764,662.41
Other related parties 3,544,298,655.85 2,837,630,921.90
Total 19,553,220,887.83 16,412,773,595.29
2. Details of the Company’s sales of goods to related parties are as follows:
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Related parties current period previous period
Controladora Mabe S.A.de C.V. 723,506,543.36 641,206,803.16
HNR (Private) Company Limited 331,070,763.13 910,139,552.47
Qingdao Haier International Trading Co., Ltd. 283,889,750.78 372,641,570.39
Qingdao Haier Parts Procurement Co., Ltd. 238,417,939.07 278,395,066.75
Other related parties 371,847,585.92 372,284,369.32
Total 1,948,732,582.26 2,574,667,362.09
Haier Smart Home Co., Ltd. Interim Report 2024 245
Section X Financial Report
3. Amount of unsettled items of related parties
Closing Opening
Items and name of customers Balance Balance
Bills receivable:
Qingdao Haier Parts Procurement Co., Ltd. 196,664,472.63
Chongqing Haier Electrical Appliances Sales
Co., Ltd. 100,520,000.00
Qingdao Haier International Trading Co., Ltd. 178,000,000.00
Other related parties 19,578,830.33 20,640,531.66
Accounts receivable:
HNR (Private) Company Limited 680,823,286.60 1,191,001,767.66
Qingdao Oasis Technology Co., Ltd. 98,743,874.06 116,266,117.23
Mitsubishi Heavy Industry Haier (Qingdao) Air
Conditioner Co., Ltd. 59,317,651.95 5,467,727.75
HPZ Limited 41,867,299.41 37,410,646.01
Qingdao Haier International Trading Co., Ltd 38,693,364.55 13,320,054.89
Other related parties 199,631,845.53 365,341,125.71
Prepayments:
Qingdao Haier International Trade Co., Ltd. 7,737,990.20 8,594,602.74
COSMO Moulds (Qingdao) Co., Ltd. (卡奧斯模具
（青 島）有 限 公 司) 6,270,889.38 1,380,353.31
HNR (Private) Company Limited 4,620,420.81
Hefei Hegang New Material Technology Co., Ltd. 4,471,168.77 6,241,957.96
Qingdao Haier Parts Procurement Co., Ltd. 2,946,575.37 2,956,547.28
Qingdao Haier International Travel Agency Co.,
Ltd. 2,224,783.21 3,115,793.21
Qingdao Haier Industrial Development Co., Ltd 1,878,840.25 2,501,673.89
Qingdao HBIS Composite New Material Co., Ltd. 1,721,562.19 1,443,538.08
Other related parties 13,908,017.65 14,918,099.11
Other receivables:
Qingdao Haier International Trade Co., Ltd. 56,190,891.19 7,951,101.19
Qingdao Manniq Intelligent Technology Co., Ltd. 32,561,213.58 318,694.51
Controladora Mabe, S.A.de C.V. 20,644,871.11 14,824,407.91
Wuhan Haizhi Real Estate Development Co., Ltd.
(武 漢 海 智 房 地 產 開 發 有 限 公 司) 5,712,459.00 3,200,000.00
Other related parties 28,178,485.95 15,233,663.55
Bills payable:
Qingdao Haier New Materials R & D Co., Ltd. 330,259,945.68 390,891,579.36
Wolong Electric (Jinan) Motor Co., Ltd. 43,179,863.06 30,416,664.00
Qingdao HBIS Composite New Material Co., Ltd. 21,325,751.06 27,781,266.64
Hefei Hegang New Material Technology Co., Ltd. 15,595,879.69 21,795,818.85
246 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Closing Opening
Items and name of customers Balance Balance
Accounts payable:
Controladora Mabe, S.A.de C.V. 1,472,686,933.56 1,017,676,511.30
Qingdao Haironghui Commercial Factoring
Co., Ltd. (青 島 海 融 匯 商 業 保 理 有 限 公 司) 417,697,006.32 367,964,948.49
Qingdao Haier Parts Procurement Co., Ltd. 252,154,899.21 247,164,539.11
HNR (Private) Company Limited 250,069,188.30 225,492,094.68
Qingdao Haier International Trading Co., Ltd. 212,308,791.23 197,267,091.22
Hong Kong Gooday Supply Chain Technologies
Co., Ltd. 124,801,868.02 74,153,281.02
Other related parties 681,423,587.12 703,667,318.78
Contract liabilities:
Wolong Electric (Jinan) Motor Co., Ltd. 38,652,174.62 50,686,531.85
Chongqing Zhonglian Energy Technology
Co., Ltd. 17,210,127.92 17,217,306.92
Mitsubishi Heavy Industry Haier (Qingdao) Air
Conditioner Co., Ltd. 6,818,411.00 4,119,857.00
Other related parties 10,693,897.68 5,981,325.89
Dividends payable:
Haier COSMO Co., Ltd. (海 爾 卡 奧 斯 股 份 有 限
公 司) 1,008,596,736.32
Haier Group Corporation 859,493,731.30
Qingdao Haier Venture & Investment Information
Co., Ltd. (青 島 海 爾 創 業 投 資 咨 詢 ) 138,027,698.85
Qingdao Haichuangzhi Management Consulting
Enterprise (Limited Partnership) (青 島 海 創 智 管
理 咨 詢 企 業 (有 限 合 伙)) 107,208,112.69
Other payables:
Gooday Supply Chain Technologies Co., Ltd. 933,977,156.37 897,015,102.10
Shanghai Cotai Supply Chain Management
Co., Ltd. 160,487,139.16 129,653,209.93
Gooday (Qingdao) International Supply Chain
Service Co., Ltd. 96,558,428.97 64,467,694.39
Qingdao Goodaymart Supply Chains Co., Ltd. 50,667,954.58 45,292,270.93
Qingdao Manniq Intelligent Technology
Co., Ltd. 48,555,926.91 14,038,277.93
Other related parties 283,063,012.99 347,492,658.45
Haier Smart Home Co., Ltd. Interim Report 2024 247
Section X Financial Report
4. Other related-party transactions
(1) On 30 March 2023, Haier Group Corporation and Haier Group Finance Co., Ltd.
(hereafter, the “Finance Company”) renewed the Financial Services Framework
Agreement, and the “resolution on the renewal of the Financial Services Framework
Agreement between Haier Smart Home Co., Ltd. and Haier Group Corporation and
the estimated amount of connected transaction” was considered and passed at the
general meeting. The Financial Services Framework Agreement became effective from
the passing of the resolution.
Various current balances of the Company and the Finance Company are as follows:
Items Closing Balance Opening Balance
Monetary funds deposited at the Finance
Company 21,057,085,069.50 26,276,742,534.50
Debt investments deposited at the Finance
Company 12,827,500,000.00 7,377,500,000.00
Interest receivable from the Finance Company 872,330,240.02 688,144,130.70
Bills issued 8,548,324,901.06 8,909,470,662.88
Foreign exchange derivatives of the Finance
Company 2,059,045.00 –10,143,691.03
Various balances of the Company and the Finance Company are as follows:
Amount for the Amount for the
Items current period previous period
Interest income of the Finance Company 439,523,818.78 353,842,566.54
Interest expense of the Finance Company 413,964.86
Service fee of the Finance Company 4,425,427.95 7,917,428.19
Spot foreign exchange business (foreign
exchange settlement and sale) 2,455,313,888.20 3,287,657,392.00
(2) The lease expense of the Company and its subsidiaries for production and operation
leased from related parties for the current period was RMB57 million (amount for the
corresponding period: RMB49 million).
(3) Haier Group Corporation provided joint liability guarantee for certain bills payable of
the subsidiaries of the Company with the guaranteed amount of RMB2,316 million at
the end of the period (amount at the beginning of the period: RMB2,639 million).
248 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(IV) Pricing Policy
1. Related-party Sales
Some related parties purchase components through the independent procurement platform
of the Company, purchase electrical appliances for sales from the Company, and receive
after-sales services, R&D service, housing rental and other business provided by the
company due to their business needs. In April 2022, according to the implementation of
connected transactions in the early stage and the relevant listing requirements in Hong
Kong, the Company and Haier Group Corporation revised and signed the Product and
Materials Sales Framework Agreement, the Service Provision Framework Agreement and the
Property Leasing Framework Agreement on the basis of the original execution contract,
which agreed on the financial connected transactions. The pricing principle included that
both parties should agree on the price which is not less favourable than those provided by
the Company to the Independent Third Parties on arm’s length to ensure the fairness and
reasonableness of connected transactions. The valid term of the agreement commenced
from 1 January 2023 to 31 December 2025, which can be renewed for another three years
upon expire.
2. Related-party Procurement
In addition to independent procurement platform, the Company entrusted Haier Group
Corporation and its subsidiaries for procurements of part of raw materials. Moreover, the
Company entrusted Haier Group Corporation and its subsidiaries to provide the Company
with logistics and distribution, energy and power, basic research and testing, equipment
leasing, house leasing and maintenance, greening and cleaning, gift procurement, design,
consulting, various ticket booking and other services. In April 2022, according to the
implementation of connected transactions in the early stage and the relevant listing
requirements in Hong Kong, the Company and Haier Group Corporation revised and signed
the Product and Materials Sales Framework Agreement, the Service Provision Framework
Agreement and the Property Leasing Framework Agreement on the basis of the original
execution contract, which agreed on the financial connected transactions. The pricing
principle included that both parties should agree on the price which is not less favourable
than those provided by the Company to the Independent Third Parties on arm’s length to
ensure the fairness and reasonableness of connected transactions. The valid term of the
agreement commenced from 1 January 2023 to 31 December 2025, which can be
renewed for another three years upon expire.
Haier Smart Home Co., Ltd. Interim Report 2024 249
Section X Financial Report
3. Financial aspect
Some of the financial services such as deposit and loan service, discounting service and
foreign exchange derivatives needed by the Company are provided by Haier Group
Corporation, its subsidiaries and other companies. According to the Financial Service
Agreement entered among the Company, Haier Group Corporation and other parties, the
price of financial services is determined by the principle of not less favourable than market
value fair. The Company is entitled to decide whether to keep cooperation relationship with
them with the knowledge of the price prevailing in the market and in combination with its
own interests. While performing the agreement, the Company could also require other
financial service institutions to provide related financial services basing on actual situation.
In order to meet the Company’s demands such as the avoidance of foreign exchange
fluctuation risk, the Company may choose Haier Group Finance Co., Ltd. to provide some
foreign exchange derivative business after comparing with comparable companies. The
Company will uphold the safe and sound, appropriate and reasonable principle, under
which all foreign exchange capital business shall have a normal and reasonable business
background to eliminate speculative operation. At the same time, the Company has
specified the examination and permission rights, management positions and responsibilities
at all levels for its foreign exchange capital business to eradicate the risks of operation by
persons and improved its response speed to risks on the premise that the risks are
effectively controlled. In March 2023, the Company and Haier Group Corporation renewed
the Financial Services Framework Agreement, which agreed on the financial connected
transactions. The pricing principle included the deposit interest rate not lower than the
maximum interest rate of major banks listed and the loan interest rate not less favourable
than the market price to ensure the fairness and reasonableness of connected transactions.
The valid term of the agreement lasts until 31 December 2026, which can be renewed for
another three years upon expire.
4. Others
The Company signed the Intellectual Property Licensing Framework Agreement with Haier
Group Corporation in November 2020. According to the agreement, Haier Group has
agreed to grant or procure its subsidiaries and contact persons to grant the license to the
Company at nil consideration to use all its intellectual property rights, including but not
limited to trademarks, patents, copyrights and logos for the products, packaging, services
and business introduction documents of the Company. The date of the Intellectual Property
Licensing Framework Agreement shall be permanently effective from the listing date. When
such specific intellectual property rights expire and are not renewed by Haier Group, our
right to use certain intellectual property rights under the Intellectual Property Licensing
Framework Agreement will terminate.
250 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
XIV. SHARE-BASED PAYMENTS
1. Overall of share-based payments
√ Applicable Not Applicable
Quantity Unit: shares
Amount Unit and Currency: RMB
Granted during the Exercised during the Vested during the Lapsed during the
current period current period current period current period
Categories of participants Number Amount Number Amount Number Amount Number Amount
Directors and senior management 1,190,523.00 8,352,377.35
Staff 4,258,615.00 108,989,967.14 39,366,889.00 309,703,219.45
Total 4,258,615.00 108,989,967.14 40,557,412.00 318,055,596.80
Outstanding share options or other equity instruments at the end of the period
√ Applicable Not Applicable
Outstanding share options at the end of the period Outstanding other equity instruments at the end of the period
The remaining The remaining
Categories of participants Exercise price contractual term Exercise price contractual term
2021 First Option RMB25.63 per share September 2021 — September
2026
2021 Second Option RMB25.63 per share December 2021 — December
2026
2022 Option RMB23.86 per share June 2022 — June 2026
2022 Stock Ownership Plan A N/A August 2022-August 2024
2022 Stock Ownership Plan H N/A August 2022-August 2024
2023 Stock Ownership Plan A N/A July 2023 — July 2025
2023 Stock Ownership Plan H N/A July 2023 — July 2025
2021 Restricted Shares N/A August 2021 — July 2024
2022 Restricted Shares N/A July 2022 — June 2025
2023 Restricted Shares N/A July 2023— June 2026
2024 Restricted Shares N/A June 2024— May 2027
Haier Smart Home Co., Ltd. Interim Report 2024 251
Section X Financial Report
2. Equity-settled share-based payments
√ Applicable Not Applicable
Unit and Currency: RMB
Method of determining the fair value of equity Closing price of share on the date of grant,
instrument on the date of grant Black-Scholes Model
Important parameters of the fair value of Historical volatility rate, risk-free rate, yield
equity instrument on the date of grant rate
Basis for determining the number of The best estimate of the management
exercisable equity instruments
Reason for significant differences between Nil
current and prior period estimates
Accumulated amount of equity-settled share- RMB1.371 billion
based payment included in the capital
reserve
3. Cash-settled share-based payments
Applicable √ Not Applicable
4. Share-based payments for the current period
√ Applicable Not Applicable
Unit and Currency: RMB
Equity-settled Cash-settled
share-based share-based
Categories of participants payment payment
Director, Senior management 30,742,934.79
Staff 170,662,640.18
Total 201,405,574.97
5. Modification and termination of share-based payments
Applicable √ Not Applicable
252 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
XV. CONTINGENCIES
√ Applicable Not Applicable
As of 27 August 2024, the Company has no significant contingencies that need to be disclosed.
XVI. EVENTS AFTER THE BALANCE SHEET DATE
As of 27 August 2024, the Company has no significant events after the balance sheet date that need
to be disclosed.
XVII. RISKS RELATED TO FINANCIAL INSTRUMENTS
√ Applicable Not Applicable
The book value of various financial instruments on the balance sheet date is as follows:
Financial assets
Items Closing Balance
Financial assets Financial assets
measured at fair measured at fair
value and value and
changes of which changes of which
included in included in other
current profit and Measured at comprehensive
loss amortized cost income Total
Monetary funds 54,705,626,157.44 54,705,626,157.44
Financial assets held for trading 1,066,569,759.01 1,066,569,759.01
Derivative financial assets 86,713,582.93 86,713,582.93
Bills receivable 7,147,471,192.39 7,147,471,192.39
Accounts receivable 23,517,845,844.84 23,517,845,844.84
Other receivables 2,731,270,164.67 2,731,270,164.67
Other current assets 1,546,781,584.31 1,546,781,584.31
Debt investments 14,477,621,780.97 14,477,621,780.97
Long-term receivables 351,899,806.17 351,899,806.17
Other equity instruments 6,281,814,366.53 6,281,814,366.53
Haier Smart Home Co., Ltd. Interim Report 2024 253
Section X Financial Report
Financial assets (continued)
Items Opening Balance
Financial assets Financial assets
measured at fair measured at fair
value and value and
changes of which changes of which
included in included in other
current profit and Measured at comprehensive
loss amortized cost income Total
Monetary funds 54,486,452,841.14 54,486,452,841.14
Financial assets held for trading 953,963,543.83 953,963,543.83
Derivative financial assets 67,565,829.44 67,565,829.44
Bills receivable 8,621,434,831.39 8,621,434,831.39
Accounts receivable 20,268,099,436.43 20,268,099,436.43
Other receivables 2,649,558,985.05 2,649,558,985.05
Other current assets 1,530,274,566.66 1,530,274,566.66
Debt investments 8,841,233,078.66 8,841,233,078.66
Long-term receivables 350,409,496.85 350,409,496.85
Other equity instruments 6,403,694,954.77 6,403,694,954.77
Financial liabilities
Items Closing Balance
Financial Financial
liabilities liabilities
measured at fair measured at
value amortised cost Total
Short-term borrowings 10,333,169,856.54 10,333,169,856.54
Derivative financial liabilities 191,751,522.44 191,751,522.44
Bills payable 23,389,001,752.35 23,389,001,752.35
Accounts payable 47,200,496,446.93 47,200,496,446.93
Other payables 27,248,243,510.90 27,248,243,510.90
Non-current liabilities due in one year 1,610,273,174.78 1,610,273,174.78
Long-term borrowings 18,123,651,118.19 18,123,651,118.19
Long-term payables 51,160,960.16 51,160,960.16
254 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
Financial liabilities (continued)
Items Opening Balance
Financial Financial
liabilities liabilities
measured at fair measured at
value amortised cost Total
Short-term borrowings 10,318,351,841.88 10,318,351,841.88
Derivative financial liabilities 168,625,004.97 168,625,004.97
Bills payable 22,215,726,721.62 22,215,726,721.62
Accounts payable 47,061,789,173.62 47,061,789,173.62
Other payables 19,181,569,184.83 19,181,569,184.83
Non-current liabilities due in one year 146,867,809.53 146,867,809.53
Long-term borrowings 17,936,302,925.77 17,936,302,925.77
Long-term payables 57,113,422.78 57,113,422.78
Please refer to related items in Note VII for details on each of the financial instruments of the
Company. Risks related to these financial instruments and the risk management policies taken by the
Company to mitigate these risks are summarized below. The management of the Company manages
and monitors these risk exposures to ensure the above risks are well under control.
1. Credit risk
The credit risk of the Company mainly arises from bank deposits, bills receivable, accounts
receivable, interest receivable, other receivables and wealth management products.
(1) The Company’s bank deposits and wealth management products are mainly deposited in
Haier Finance Co., Ltd., state-owned banks and other large and medium-sized listed banks.
The interest receivables are mainly the accrued interests from fixed deposits which are
deposited in the above banks. The Group does not believe there is any significant credit
risk due to defaults of its counterparties which would cause any significant loss. (2)
Accounts receivable and bills receivable: The Company only trades with approved and
reputable third parties. All customers who are traded by credit are subject to credit
assessment according to the policies of the Company, and the payment terms shall be
determined on a reasonable basis. The Company monitors the balances of accounts
receivable on an ongoing basis and purchases credit insurance for receivables of large-
amount credit customers in order to ensure the Company is free from material bad debts
risks. (3) Other receivables of the Company mainly include export tax refund, borrowings
and contingency provision. The Company strengthened its management and continuous
monitoring in respect of these receivables and relevant economic business based on
historical data, so as to ensure that the Company’s significant risk of bad debts is
controllable and will be further reduced.
Haier Smart Home Co., Ltd. Interim Report 2024 255
Section X Financial Report
2. Liquidity risk
Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfilling
obligations associated with financial liabilities. To control such risk, the Company utilizes various
financing methods such as notes settlement and bank loans to strive for a balance between
sustainable and flexible financing. It also has obtained bank credit facilities from several
commercial banks to satisfy its needs for working capital and capital expenditures.
3. Exchange rate risk
The Company’s businesses are based in mainland China, USA, Japan, Southeast Asia, South
Asia, central and east Africa, Europe, and Australia, etc. and are settled in RMB, USD, and other
currencies.
The Company’s overseas assets and liabilities denominated in foreign currencies as well as
transactions to be settled in foreign currencies expose the Company to fluctuations in exchange
rates. The Company’s finance department is responsible for monitoring the size of transactions in
foreign currencies and assets and liabilities denominated in foreign currencies to minimize the risk
of exposure to fluctuation in exchange rate; the Company resorts the way of signing forward
foreign exchange contracts to avoid the risk of exchange fluctuation.
4. Interest rate risk
The Company’s interest rate risk arises primarily from its long — and short — term bank loans
and bonds payables which are interest-bearing debts. Financial liabilities with floating interest
rates expose the Company to cash flow interest rate risk, while financial liabilities with fixed
interest rates expose the Company to fair value interest rate risk. The Group determines the
relative proportion of fixed-interest rate and floating interest rate contracts in light of the
prevailing market conditions.
XVIII. OTHER SIGNIFICANT EVENTS
√ Applicable Not Applicable
The Company intends to acquire, through its wholly-owned subsidiary, the commercial refrigeration
business of Carrier Global Corporation, a company listed on the New York Stock Exchange of the
United States of America, at a cash consideration of approximately US$640 million (equivalent to
approximately RMB4,559 million, with the final consideration amount subject to adjustments at
Completion). The transaction has been considered and approved by the President’s Office meeting of
the Company. While it involves an overseas acquisition, it remains conditional to the filing or approval
procedures with relevant domestic and overseas government authorities.
As of 27 August 2024, the Company has no other significant events that need to be disclosed.
256 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
XIX. NOTES TO MAIN ITEMS OF FINANCIAL STATEMENTS OF THE PARENT
COMPANY
1. Accounts receivable
Closing Opening
Aging Balance Balance
Within 1 year 629,729,877.07 715,238,098.86
1–2 years 639,447,810.65 378,071,982.79
2–3 years 185,502,552.24 532,467,268.93
Over 3 years 405,307,733.72
Accounts receivable balance 1,859,987,973.68 1,625,777,350.58
Allowance for bad debts 251.55 251.55
Accounts receivable, net 1,859,987,722.13 1,625,777,099.03
Changes in bad debt provision for accounts receivable in the current period:
√ Applicable Not Applicable
Opening Increase for the current Decrease for the current Closing
Items Balance period period Balance
Provision for Write-off and
the current Other other
period increase Reversal movement
Allowance for bad
debts 251.55 251.55
2. Other receivables
√ Applicable Not Applicable
Unit and Currency: RMB
Items Closing Balance Opening Balance
Interest receivable 141,536,597.40 117,439,655.79
Dividend receivable 872,819,744.23 570,000,000.00
Other receivables 20,876,318,830.86 22,962,538,160.78
Total 21,890,675,172.49 23,649,977,816.57
Haier Smart Home Co., Ltd. Interim Report 2024 257
Section X Financial Report
Interest receivable
Aging Closing Balance Opening Balance
Within 1 year 141,536,597.40 117,439,655.79
More than 1 year
Total 141,536,597.40 117,439,655.79
Dividend receivable
Aging Closing Balance Opening Balance
Within 1 year 872,819,744.23 570,000,000.00
More than 1 year
Total 872,819,744.23 570,000,000.00
Other receivables
The disclosure of other receivables by aging is as follows:
Aging Closing Balance Opening Balance
Within 1 year 10,232,748,179.30 13,256,949,623.31
More than 1 year 10,646,935,534.45 9,708,953,420.36
Other receivables balance 20,879,683,713.75 22,965,903,043.67
Allowance for bad debts 3,364,882.89 3,364,882.89
Other receivables, net 20,876,318,830.86 22,962,538,160.78
Changes in bad debt provision for other receivables in the current period:
Increase for the current Decrease for the current
period period
Provision for Write-off and
Opening the current Other other Closing
Items Balance period increase Reversal movement Balance
Allowance for bad
debts 3,364,882.89 3,364,882.89
258 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
3. Long-term equity investment
√ Applicable Not Applicable
(1) Details of long-term equity investments:
Closing Balance Opening Balance
Provision for Provision for
Items Book balance impairment Book balance impairment
Long-term equity investment
Including: Long-term equity investments in
subsidiaries 53,255,723,686.31 7,100,000.00 52,823,723,686.31 7,100,000.00
Long-term equity investments in
associates 3,293,758,901.51 109,300,000.00 3,121,372,319.75 109,300,000.00
Total 56,549,482,587.82 116,400,000.00 55,945,096,006.06 116,400,000.00
(2) Long-term equity investments to subsidiaries
Increase/ Impairment
decrease for provisions at
the current the end of the
Name of investee Opening Balance period Closing Balance period
I. Subsidiaries:
Chongqing Haier Electronics Sales Co., Ltd. 9,500,000.00 9,500,000.00
Haier Group (Dalian) Electrical Appliances
Industry Co., Ltd 34,735,489.79 34,735,489.79
Qingdao Haier Refrigerator Co., Ltd. 402,667,504.64 402,667,504.64
Qingdao Haier Special Refrigerator Co., Ltd. 426,736,418.99 426,736,418.99
Qingdao Haier Information Plastic Development
Co., Ltd. 102,888,407.30 102,888,407.30
Dalian Haier Precision Products Co., Ltd. 41,836,159.33 41,836,159.33
Hefei Haier Plastic Co., Ltd. 72,350,283.21 72,350,283.21
Qingdao Haier Technology Co., Ltd. 16,817,162.03 16,817,162.03
Qingdao Household Appliance Technology and
Equipment Research Institute 66,778,810.80 66,778,810.80
Qingdao Meier Plastic Powder Co., Ltd. 24,327,257.77 24,327,257.77
Chongqing Haier Precision Plastic Co., Ltd. 47,811,283.24 47,811,283.24
Qingdao Haier Electronic Plastic Co., Ltd. 69,200,000.00 69,200,000.00
Dalian Haier Refrigerator Co., Ltd. 138,600,000.00 138,600,000.00
Dalian Haier Air-conditioning Co., Ltd. 99,000,000.00 99,000,000.00
Hefei Haier Air-conditioning Co., Limited 79,403,123.85 79,403,123.85
Qingdao Haier Refrigerator (International) Co.,
Ltd. 238,758,240.85 238,758,240.85
Qingdao Haier Air-Conditioner Electronics Co.,
Ltd. 1,131,107,944.51 1,131,107,944.51
Qingdao Haier Air Conditioner Gen Corp., Ltd. 220,636,306.02 220,636,306.02
Qingdao Haier Special Freezer Co., Ltd. 471,530,562.76 471,530,562.76
Qingdao Haier Dishwasher Co., Ltd. 206,594,292.82 206,594,292.82
Wuhan Haier Freezer Co., Ltd. 47,310,000.00 47,310,000.00
Wuhan Haier Electronics Holding Co., Ltd. 100,715,445.04 100,715,445.04
Haier Smart Home Co., Ltd. Interim Report 2024 259
Section X Financial Report
Increase/ Impairment
decrease for provisions at
the current the end of the
Name of investee Opening Balance period Closing Balance period
Chongqing Haier Air-conditioning Co., Ltd 100,000,000.00 100,000,000.00
Hefei Haier Refrigerator Co., Ltd. 49,000,000.00 49,000,000.00
Qingdao Haier Whole Set Home Appliance
Service Co., Ltd. 118,000,000.00 118,000,000.00
Chongqing Haier Refrigeration Appliance Co.,
Ltd. 91,750,000.00 91,750,000.00
Haier Shanghai Zhongzhi Fang Chuang Ke
Management Co., Ltd. 2,000,000.00 2,000,000.00
Qingdao Haier Special Refrigerating Appliance
Co., Ltd. 100,000,000.00 100,000,000.00
Haier Shareholdings (Hong Kong) Limited 29,249,228,284.24 432,000,000.00 29,681,228,284.24
Shenyang Haier Refrigerator Co., Ltd. 100,000,000.00 100,000,000.00
Foshan Haier Freezer Co., Ltd. 100,000,000.00 100,000,000.00
Zhengzhou Haier Air-conditioning Co., Ltd. 100,000,000.00 100,000,000.00
Qingdao Haidayuan Procurement Service Co.,
Ltd. 20,000,000.00 20,000,000.00
Qingdao Haier Intelligent Technology
Development Co., Ltd. 130,000,000.00 130,000,000.00
Qingdao Haier Technology Investment Co., Ltd. 410,375,635.00 410,375,635.00
Qingdao Casarte Smart Living Appliances Co.,
Ltd. 10,000,000.00 10,000,000.00
Haier Overseas Electric Appliance Co., Ltd. 500,000,000.00 500,000,000.00
Haier (Shanghai) Electronics Co., Ltd. 12,500,000.00 12,500,000.00
Haier U+smart Intelligent Technology (Beijing)
Co., Ltd. 143,000,000.00 143,000,000.00
Haier Electronics Group Co., Ltd. 3,979,407,602.61 3,979,407,602.61 7,100,000.00
Flourishing Reach Limited (SPVX) 12,751,300,336.02 12,751,300,336.02
Qingdao Haidarui Procurement Service Co., Ltd. 107,800,000.00 107,800,000.00
Qingdao Haier Intelligent Household Appliances
Co., Ltd. 326,400,000.00 326,400,000.00
Qingdao Haidacheng Procurement Service Co.,
Ltd. 100,000,000.00 100,000,000.00
Qingdao Haier Quality Inspection Co., Ltd. 18,657,135.49 18,657,135.49
Qingdao Haier Home AI Industry Innovation
Center Co., Ltd. 100,000,000.00 100,000,000.00
Haier Zhjia Experience Cloud Ecological
Technology Co., Ltd. 100,000,000.00 100,000,000.00
Qingdao Ruibo Ecological Environmental
Technology Co., Ltd. 55,000,000.00 55,000,000.00
Total 52,823,723,686.31 432,000,000.00 53,255,723,686.31 7,100,000.00
260 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
(3) Long-term equity investments to associates
Increase/decrease for the current period
Increased/ Investment
decreased income Impairment
amount for the recognized under provisions at the
Name of investee Opening Balance current period equity method Others Closing Balance end of the period
Wolong Electric (Jinan)
Motor Co., Ltd. 172,054,149.94 13,535,589.54 185,589,739.48
Qingdao Haier SAIF Smart
Home Industry
Investment Center
(Limited Partnership) 206,764,442.76 –21,738.71 –16,336,866.36 190,405,837.69
Bank of Qingdao Co., Ltd. 1,267,732,987.42 85,705,068.73 8,246,581.00 1,361,684,637.15
Mitsubishi Heavy Industries
Haier (Qingdao)
Air-conditioners Co.,
Ltd. 663,804,966.31 67,634,912.51 731,439,878.82
Qingdao Haier Carrier
Refrigeration Equipment
Co., Ltd. 412,107,471.53 3,970,476.69 416,077,948.22 21,000,000.00
Qingdao Haier Multimedia
Co., Ltd 88,300,000.00 88,300,000.00 88,300,000.00
Qingdao HBIS New Material
Technology Co., Ltd. 310,608,301.79 9,652,558.36 320,260,860.15
Total 3,121,372,319.75 180,476,867.12 –8,090,285.36 3,293,758,901.51 109,300,000.00
4. Operating revenue and operating cost
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the current period Amount for the previous period
Items Revenue Cost Revenue Cost
Primary Business 209,681,355.52 183,992,284.05 284,845,756.66 247,445,754.14
Other Business 41,920,259.24 39,451,949.45 42,560,950.18 38,775,114.29
Total 251,601,614.76 223,444,233.50 327,406,706.84 286,220,868.43
Haier Smart Home Co., Ltd. Interim Report 2024 261
Section X Financial Report
5. Investment income
√ Applicable Not Applicable
Unit and Currency: RMB
Amount for the Amount for the
Items current period previous period
Investment income from long-term equity investment
accounted for using cost method 302,819,744.23 228,173,185.59
Long-term equity investments income calculated by the
equity method 180,476,867.12 144,556,606.76
Income from wealth management products 24,878,729.85 27,987,900.19
Investment income from investment in other equity
instrument during the holding period
Total 508,175,341.20 400,717,692.54
XX. APPROVAL OF FINANCIAL REPORT
This financial report was approved for publication by the Board of Directors of the Company on 27
August 2024.
XXI. OTHER SUPPLEMENTARY INFORMATION
1. Basic earnings per share and diluted earnings per share
Amount for the current period Amount for the previous period
Earnings per share Earnings per share
(RMB) (RMB)
Weighted Weighted
average Basic Diluted average Basic Diluted
return on earnings earnings return on earnings earnings
Items net assets per share per share net assets per share per share
Net profit attributable to ordinary
shareholders of the Company 9.67% 1.13 1.12 9.16% 0.96 0.96
Net profit attributable to ordinary
shareholders of the Company
after deduction of non-recurring
profit or loss 9.43% 1.10 1.09 8.80% 0.93 0.92
262 Haier Smart Home Co., Ltd. Interim Report 2024
Section X Financial Report
2. Non-recurring profit or loss
Amount for the Amount for the
Items current period previous period
Net profit attributable to ordinary shareholders of the Parent
Company 10,420,218,389.22 8,962,851,469.46
Less: non-recurring profit or loss 259,713,486.84 358,873,704.88
Net profit attributable to ordinary shareholders of the Parent
Company after deduction of non-recurring profit or loss 10,160,504,902.38 8,603,977,764.58
Breakdown of non-recurring profit and loss for the current period
Non-recurring profit and loss items Amounts for the current period
Profit and loss from disposal of non-current assets -24,802,715.11
Government subsidies included in current profit or loss,
except for government subsidies that are closely related
to the Company’s normal business operations, to be
enjoyed in a fixed amount or fixed quantity based on
the national unified standards 373,800,184.84
Profit from the excess of the fair value of the identifiable
net assets of investee companies on acquisition of the
investment over the cost of investment in the
Company’s subsidiaries, associates and joint ventures
Profit and loss from fair value changes of financial assets
held for trading, financial liabilities held for trading, as
well as investment gains arising from disposal of
financial assets held for trading, financial liabilities held
for trading and financial assets held for sale, except the
effective hedging related to the normal operations of the
Company -29,489,597.82
Other non-operating income and expenses except the
aforementioned items -3,829,918.04
Effect of minority equity interest -9,733,324.65
Effect of income tax -46,231,142.38
Effect of profit from business combination under common
control
Total 259,713,486.84
Chairman: LI Huagang
Board approval submission date: 27 August 2024
Information of amendment
Applicable √ Not Applicable
Haier Smart Home Co., Ltd. Interim Report 2024 263
